Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to our 2025 outlook and all underlying assumptions, our expected acquisition, disposition, development, and redevelopment activity, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and changes in macroeconomic conditions, our strategic priorities, expectations with respect to financing activities, rental rates, cap rates, and yields, leasing expectations, our credit ratings, and all other statements other than statements of historical fact. Such statements are based on management’s beliefs and assumptions made based on information currently available to management and may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.

These forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Risks and uncertainties that may impact future results and performance include, but are not limited to those risks and uncertainties described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2025 and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, changes in national self-storage facility development activity, impacts of natural disasters, adverse changes in laws and regulations including governing property tax, evictions, rental rates, minimum wage levels, and insurance, adverse economic effects from public health emergencies, international military conflicts, international trade disputes (including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation), or similar events impacting public health and/or economic activity, increases in the costs of our primary customer acquisition channels, adverse impacts to us and our customers from high interest rates, inflation, unfavorable foreign currency rate fluctuations, or changes in federal or state tax laws related to the taxation of REITs, security breaches, including ransomware, or a failure of our networks, systems, or technology.

These forward-looking statements speak only as of the date of this report or as of the dates indicated in the statements. All of our forward-looking statements, including those in this report, are qualified in their entirety by this cautionary statement. We expressly disclaim any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, new estimates, or other factors, events or circumstances after the date of these forward-looking statements, except when expressly required by law. Given these risks and uncertainties, you should not rely on any forward-looking statements in this report, or which management may make orally or in writing from time to time, neither as predictions of future events nor guarantees of future performance.

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make judgments, assumptions, and estimates that affect the amounts reported. On an ongoing basis, we evaluate our estimates and assumptions. These estimates and assumptions are based on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances to determine reported amounts of assets, liabilities, revenues, and expenses that are not readily apparent from other sources.

During the three months ended March 31, 2025, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

Our self-storage operations generate most of our net income, and our earnings growth is impacted by the levels of organic growth within our Same Store Facilities (as defined below) as well as within our Acquired Facilities and Newly Developed and Expanded Facilities (both as defined below).

During the three months ended March 31, 2025, revenues generated by our Same Store Facilities increased by 0.1% ($0.5 million), as compared to the same period in 2024, while Same Store cost of operations increased by 0.3% ($0.8 million). For the three months ended March 31, 2025, realized annual rent per occupied square foot for our Same Store Facilities increased by 0.6% while average occupancy decreased by 0.6%, as compared to the same period in 2024.

We have grown and plan to continue to grow through the acquisition and development of new facilities and expansion of our existing self-storage facilities. Since the beginning of 2023, we acquired a total of 195 facilities with 14.5 million net rentable square feet for $3.1 billion. Additionally, within our non-same store portfolio, our Newly Developed and Expanded Facilities include a total of 100 self-storage facilities with 11.8 million net rentable square feet. For development and expansions completed by March 31, 2025, we incurred a total cost of $1.4 billion. During the three months ended March 31, 2025, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 20.2% ($10.8 million), as compared to the same period in 2024.

We have embarked on a solar program under which we plan to install solar panels on over 1,400 of our self-storage facilities. We have completed the installations on 946 facilities through March 31, 2025. We spent approximately $13 million on the program in the three months ended March 31, 2025 and expect to spend approximately $50 million over 2025 on this effort.

On April 6, 2025, Ki Corporation (“Ki”) and Public Storage submitted a non-binding indicative offer to acquire all of the outstanding stapled securities of Abacus Storage King (ASX:ASK) that are not already held by Ki or its subsidiaries (together, the “Ki Group”) for A$1.47 per stapled security. Abacus Storage King is one of the largest self-storage owners in Australia and New Zealand with approximately 126 operating properties, 21 development sites, and 75 managed/licensed properties. The Ki Group is currently ASK’s major securityholder, and each of Ki and Public Storage would have approximately 50% interest following the transaction. Public Storage’s share of the total estimated cost, excluding direct transaction costs, is approximately $586 million (A$970 million), anticipated to be funded with Australian Dollar denominated unsecured debt. The transaction is subject to a number of conditions, including due diligence, negotiation of a definitive agreement, and legal, regulatory, and shareholder approvals. Australia and New Zealand have an established and growing self-storage market that benefits from outsized population inflows, strong economic growth, and rising adoption by consumers. Public Storage would share its expertise and wide-ranging competitive advantages to help enhance Abacus Storage King’s customer experience, operating performance, ancillary businesses, and portfolio growth.

Results of Operations

Operating Results for the Three Months Ended March 31, 2025 and 2024

For the three months ended March 31, 2025, net income allocable to our common shareholders was $358.2 million or $2.04 per diluted common share, compared to $459.2 million or $2.60 per diluted common share for the same period in 2024, representing a decrease of $101.0 million or $0.56 per diluted common share. The decrease is due primarily to (i) a $106.2 million increase in foreign currency exchange losses primarily associated with our Euro denominated notes payable partially offset by (ii) a $13.2 million increase in self-storage net operating income.

The $13.2 million increase in self-storage net operating income in the three months ended March 31, 2025 as compared to the same period in 2024 is a result of a $13.5 million increase attributable to our Non-Same Store Facilities (as defined below), partially offset by a $0.3 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities increased 0.1% or $0.5 million in the three months ended March 31, 2025 as compared to the same period in 2024, due primarily to higher realized annual rent per occupied square foot offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 0.3% or $0.8 million in the three months ended March 31, 2025 as compared to the same period in 2024, due primarily to increased property tax expense offset by decreased on-site property manager payroll expense. The increase in net operating income of $13.5 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2023 and 2024.

Funds from Operations and Core Funds from Operations

Funds from Operations (“FFO”) and FFO per diluted common share (“FFO per share”) are non-GAAP measures defined by Nareit. We believe that FFO and FFO per share are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance. FFO represents net income before real estate-related depreciation and amortization, which is excluded because it is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FFO also excludes gains or losses on sale of real estate assets and real estate impairment charges, which are also based upon historical costs and are impacted by historical depreciation. FFO and FFO per share are not a substitute for net income or earnings per share. FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our consolidated statements of cash flows. In addition, other REITs may compute these measures differently, so comparisons among REITs may not be helpful.

For the three months ended March 31, 2025, FFO was $3.71 per diluted common share as compared to $4.24 per diluted common share for the same period in 2024, representing a decrease of 12.5%, or $0.53 per diluted common share.

We also present “Core FFO” and “Core FFO per share” non-GAAP measures that represent FFO and FFO per share excluding the impact of (i) foreign currency exchange gains and losses, (ii) charges related to the redemption of preferred securities, and (iii) certain other non-cash and/or nonrecurring income or expense items primarily representing, with respect to the periods presented below, the impact of corporate transformation costs, loss contingencies, due diligence costs incurred in pursuit of strategic transactions, unrealized gain or loss on private equity investments, and amortization of acquired non real estate-related intangibles. We review Core FFO and Core FFO per share to evaluate our ongoing operating performance and we believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share in the same manner as we do, may not use the same terminology or may not present such measures, Core FFO and Core FFO per share may not be comparable among REITs.

The following table reconciles net income to FFO and Core FFO and reconciles diluted earnings per share to FFO per share and Core FFO per share:

									Three Months Ended March 31,
																					2025						2024						Percentage Change
																					(Amounts in thousands, except per share data)
Reconciliation of Net Income to FFO and Core FFO:
Net income allocable to common shareholders																					$	358,230					$	459,209					(22.0)		%
Eliminate items excluded from FFO:
Real estate-related depreciation and amortization																					280,009						282,203
Real estate-related depreciation from unconsolidated real estate investment																					13,275						9,756
Real estate-related depreciation allocated to noncontrolling interests and restricted share unitholders and unvested LTIP unitholders																					(2,114)						(1,835)
Impairment write-down of real estate investments																					3,827						—
Gains on sale of real estate investments, including our equity share from investment																					(45)						(871)
FFO allocable to common shares																					$	653,182					$	748,462					(12.7)		%
Eliminate the impact of items excluded from Core FFO, including our equity share from investment:
Foreign currency exchange loss (gain)																					68,695						(37,543)
Unrealized loss (gain) on private equity investments																					873						(1,103)
Corporate transformation costs																					789						—
Other items																					1,058						1,154
Core FFO allocable to common shares																					$	724,597					$	710,970					1.9		%
Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:
Diluted earnings per share																					$	2.04					$	2.60					(21.5)		%
Eliminate amounts per share excluded from FFO:
Real estate-related depreciation and amortization																					1.65						1.65
Impairment write-down of real estate investments																					0.02						—
Gains on sale of real estate investments, including our equity share from investment																					—						(0.01)
FFO per share																					$	3.71					$	4.24					(12.5)		%
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investment:
Foreign currency exchange loss (gain)																					0.39						(0.21)
Unrealized loss (gain) on private equity investments																					0.01						(0.01)
Corporate transformation costs																					—						—
Other items																					0.01						0.01
Core FFO per share																					$	4.12					$	4.03					2.2		%
Diluted weighted average common shares																					175,942						176,350

Analysis of Net Income — Self-Storage Operations

Our self-storage operations are analyzed in four groups: (i) 2,565 facilities that we have owned and operated on a stabilized basis since January 1, 2023 (the “Same Store Facilities”), (ii) 195 facilities we acquired since January 1, 2023 (the “Acquired Facilities”), (iii) 100 facilities that have been newly developed or expanded, or that will commence expansion by December 31, 2025 (the “Newly Developed and Expanded Facilities”), and (iv) 225 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2023 (the “Other Non-Same Store Facilities”). The Acquired Facilities, Newly Developed and Expanded Facilities, and Other Non-Same Store Facilities are collectively referred to as the “Non-Same Store Facilities”. See Note 14 to our March 31, 2025 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

Self-Storage Operations
Summary									Three Months Ended March 31,
																					2025						2024						Percentage Change
																					(Dollar amounts and square footage in thousands)
Revenues:
Same Store Facilities																					$	934,543					$	934,029					0.1		%
Acquired Facilities																					53,117						45,150						17.6		%
Newly Developed and Expanded Facilities																					42,504						36,822						15.4		%
Other Non-Same Store Facilities																					72,834						70,044						4.0		%
																					1,102,998						1,086,045						1.6		%
Cost of operations:
Same Store Facilities																					243,010						242,216						0.3		%
Acquired Facilities																					17,358						16,042						8.2		%
Newly Developed and Expanded Facilities																					14,269						12,702						12.3		%
Other Non-Same Store Facilities																					26,517						26,454						0.2		%
																					301,154						297,414						1.3		%
Net operating income (a):
Same Store Facilities																					691,533						691,813						—		%
Acquired Facilities																					35,759						29,108						22.8		%
Newly Developed and Expanded Facilities																					28,235						24,120						17.1		%
Other Non-Same Store Facilities																					46,317						43,590						6.3		%
Total net operating income																					801,844						788,631						1.7		%
Depreciation and amortization expense:
Same Store Facilities																					177,329						178,002						(0.4)		%
Acquired Facilities																					50,265						54,818						(8.3)		%
Newly Developed and Expanded Facilities																					15,750						12,168						29.4		%
Other Non-Same Store Facilities																					39,371						40,215						(2.1)		%
Total depreciation and amortization expense																					282,715						285,203						(0.9)		%
Net income (loss):
Same Store Facilities																					514,204						513,811						0.1		%
Acquired Facilities																					(14,506)						(25,710)						(43.6)		%
Newly Developed and Expanded Facilities																					12,485						11,952						4.5		%
Other Non-Same Store Facilities																					6,946						3,375						105.8		%
Total net income																					$	519,129					$	503,428					3.1		%
Number of facilities at period end:
Same Store Facilities																					2,565						2,565						—		%
Acquired Facilities																					195						164						18.9		%
Newly Developed and Expanded Facilities																					100						91						9.9		%
Other Non-Same Store Facilities																					225						225						—		%
																					3,085						3,045						1.3		%
Net rentable square footage at period end:
Same Store Facilities																					175,349						175,349						—		%
Acquired Facilities																					14,474						12,067						19.9		%
Newly Developed and Expanded Facilities																					11,775						9,694						21.5		%
Other Non-Same Store Facilities																					21,111						21,290						(0.8)		%
																					222,709						218,400						2.0		%

(a)Net operating income or “NOI” is a non-GAAP financial measure that excludes the impact of depreciation and amortization expense, which is based upon historical real estate costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. We utilize NOI in determining current property values, evaluating property performance, and evaluating property operating trends. We believe that investors and analysts utilize NOI in a similar manner. NOI is not a substitute for net income, operating cash flow, or other related financial measures, in evaluating our operating results. See Note 14 to our March 31, 2025 consolidated financial statements for a reconciliation of NOI to our total net income for all periods presented.

Same Store Facilities

The Same Store Facilities consist of facilities we have owned and operated on a stabilized level of occupancy, revenues, and cost of operations since January 1, 2023. Our Same Store Facilities increased from 2,507 facilities at December 31, 2024 to 2,565 at March 31, 2025. The composition of our Same Store Facilities allows us more effectively to evaluate the ongoing performance of our self-storage portfolio in 2023, 2024, and 2025 and exclude the impact of fill-up of unstabilized facilities, which can significantly affect operating trends. We believe investors and analysts use Same Store Facilities information in a similar manner. However, because other REITs may not compute Same Store Facilities in the same manner as we do, may not use the same terminology or may not present such a measure, Same Store Facilities may not be comparable among REITs.

The following table summarizes the historical operating results (for all periods presented) of these 2,565 facilities (175.3 million net rentable square feet) that represent approximately 79% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at March 31, 2025. It includes various measures and detail that we do not include in the analysis of the developed, acquired, and other non-same store facilities, due to the relative magnitude and importance of the Same Store Facilities relative to our other self-storage facilities.

Selected Operating Data for the Same Store Facilities (2,565 facilities)

									Three Months Ended March 31,
																					2025						2024						Change (e)
																					(Dollar amounts in thousands, except for per square foot data)
Revenues (a):
Rental income																					$	901,702					$	901,742					—%
Late charges and administrative fees																					32,841						32,287						1.7%
Total revenues																					934,543						934,029						0.1%
Direct cost of operations (a):
Property taxes																					97,852						93,798						4.3%
On-site property manager payroll																					31,896						36,416						(12.4)%
Repairs and maintenance																					22,150						20,310						9.1%
Utilities																					14,482						13,463						7.6%
Marketing																					21,868						24,250						(9.8)%
Other direct property costs																					25,722						25,561						0.6%
Total direct cost of operations																					213,970						213,798						0.1%
Direct net operating income (b)																					720,573						720,231						—%
Indirect cost of operations (a):
Supervisory payroll																					(11,105)						(10,772)						3.1%
Centralized management costs																					(15,358)						(14,905)						3.0%
Share-based compensation																					(2,577)						(2,741)						(6.0)%
Net operating income																					691,533						691,813						—%
Depreciation and amortization expense																					(177,329)						(178,002)						(0.4)%
Net income																					$	514,204					$	513,811					0.1%
Gross margin (before indirect costs, depreciation and amortization expense)																					77.1%						77.1%						—%
Gross margin (before depreciation and amortization expense)																					74.0%						74.1%						(0.1)%
Weighted average for the period:
Square foot occupancy																					91.5%						92.1%						(0.6)%
Realized annual rental income per (c):
Occupied square foot																					$	22.48					$	22.34					0.6%
Available square foot																					$	20.57					$	20.57					—%
At March 31:
Square foot occupancy																					91.5%						91.8%						(0.3)%
Annual contract rent per occupied square foot (d)																					$	22.58					$	22.41					0.8%

(a)Revenues and cost of operations do not include tenant reinsurance and merchandise sale revenues and expenses generated at the facilities. See “Ancillary Operations” below for more information.

(b)Direct net operating income (“Direct NOI”), a subtotal within NOI, is a non-GAAP financial measure that excludes the impact of supervisory payroll, centralized management costs, and share-based compensation in addition to depreciation and amortization expense. We utilize direct net operating income in evaluating property performance and in evaluating property operating trends as compared to our competitors.

(c)Realized annual rent per occupied square foot is computed by dividing rental income, before late charges and administrative fees, by the weighted average occupied square feet for the period. Realized annual rent per available square foot (“REVPAF”) is computed by dividing rental income, before late charges and administrative fees, by the total available net rentable square feet for the period. These measures exclude late charges and administrative fees in order to provide a better measure of our ongoing level of revenue. Late charges are dependent upon the level of delinquency, and administrative fees are dependent upon the level of move-ins. In addition, the rates charged for late charges and administrative fees can vary independently from rental rates. These measures take into consideration promotional discounts, which reduce rental income.

(d)Annual contract rent represents the agreed upon monthly rate that is paid by our tenants in place at the time of measurement. Contract rates are initially set in the lease agreement upon move-in, and we adjust them from time to time with notice. Contract rent excludes other fees that are charged on a per-item basis, such as late charges and administrative fees, does not reflect the impact of promotional discounts, and does not reflect the impact of rents that are written off as uncollectible.

(e)Represents the absolute nominal change with respect to gross margin and square foot occupancy, and the percentage change with respect to all other items.

Analysis of Same Store Revenue

We believe a balanced occupancy and rate strategy maximizes our revenues over time. We regularly adjust rental rates and promotional discounts offered (generally, “$1.00 rent for the first month”), as well as our marketing efforts to maximize revenue from new tenants to replace tenants that vacate.

We typically increase rental rates to our long-term tenants (generally, those who have been with us for at least six months) every six to twelve months. As a result, the number of long-term tenants we have in our facilities is an important factor in our revenue growth. The level of rate increases to long-term tenants is based upon evaluating the additional revenue from the increase against the negative impact of incremental move-outs, by considering customers’ in-place rent and prevailing market rents, among other factors.

Revenues generated by our Same Store Facilities increased 0.1% in the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to a 0.6% increase in realized annual rent per occupied square foot offset by a 0.6% decrease in average occupancy.

The 0.6% increase in realized annual rent per occupied square foot in the three months ended March 31, 2025, as compared to the same period in 2024, was due to cumulative rate increases to existing long-term tenants over the past twelve months offset by a decrease in average rates per square foot charged to new tenants moving in over the same period. At March 31, 2025, annual contract rent per occupied square foot was 0.8% higher as compared to March 31, 2024.

The weighted average square foot occupancy for our Same Store Facilities was 91.5% in the three months ended March 31, 2025, representing a decrease of 0.6%, as compared to the same period in 2024. Higher year-over-year customer demand in the three months ended March 31, 2025, coupled with lower move-in rates and increased promotional discounts, led to a higher move-in volume net of move-out volumes, as compared to the same period in 2024. As a result, the year-over-year decline in occupancy at March 31, 2025 of 0.3% was reduced as compared to the year-over-year decline in occupancy at December 31, 2024 of 0.7%.

Move-out activities from our tenants were slightly higher in the three months ended March 31, 2025 as compared to the same period in 2024. More than half of our tenants have rented their space for longer than six months at March 31, 2025, which supported our revenue growth from existing long-term tenants.

Selected Key Move-in and Move-Out Statistical Data

The following table sets forth average annual contract rent per square foot and total square footage for tenants moving in and moving out during the three months ended March 31, 2025 and 2024. Contract rents gained from move-ins and contracts rents lost from move-outs included in the table assume move-in and move-out activities occur at the beginning of each period presented. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of tenants moving in who receive the discount.

									Three Months Ended March 31,
																					2025						2024						Change
																					(Amounts in thousands, except for per square foot amounts)
Tenants moving in during the period:
Average annual contract rent per square foot																					$	12.56					$	13.16					(4.6)%
Square footage																					31,285						30,564						2.4%
Contract rents gained from move-ins																					$	98,235					$	100,556					(2.3)%
Promotional discounts given																					$	15,710					$	14,026					12.0%
Tenants moving out during the period:
Average annual contract rent per square foot																					$	20.32					$	20.66					(1.6)%
Square footage																					29,561						29,424						0.5%
Contract rents lost from move-outs																					$	150,170					$	151,975					(1.2)%

Industry-wide demand was slightly higher in the first quarter of 2025 as compared to the same period in 2024 due to increases in customers who sought storage space for reasons other than home-moving activities. Demand fluctuates due to various local and regional factors, including the overall economy. Demand for our self-storage space is also impacted by new supply of self-storage space and alternatives to self-storage.

We expect industry-wide demand from new customers in 2025 to improve as compared to 2024, subject to potential adverse effects from evolving political and macroeconomic uncertainty including changes in trade policy and new tariffs. Additionally, following the recent wildfires in southern California in early 2025, we anticipate an adverse impact on revenue growth at our self-storage facilities located in Los Angeles County and Ventura County, where a temporary governmental pricing limitation is in place under the “State of Emergency” declarations. These self-storage facilities generated approximately 10% of revenues earned by our Same Store Facilities in 2024. As a result, we expect Same Store Facilities revenues in 2025 to be similar to those earned in 2024.

Late Charges and Administrative Fees

Late charges and administrative fees increased 1.7% for the three months ended March 31, 2025 as compared to the same period in the previous year as a result of higher late charges collected on delinquent accounts and higher administrative fees as a result of higher move-in activities.

Analysis of Same Store Cost of Operations

Cost of operations (excluding depreciation and amortization) increased 0.3% in the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to increased property tax expense, partially offset by decreased on-site property manager payroll expense.

Property tax expense increased 4.3% in the three months ended March 31, 2025, as compared to the same period in 2024, as a result of higher assessed values. We expect property tax expense to grow approximately 5% in 2025 due primarily to higher assessed values.

On-site property manager payroll expense decreased 12.4% in the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to reduction in labor hours driven by the implementation of dynamic staffing models based on customer activity levels. We expect on-site property manager payroll expense to decrease moderately in 2025 as compared to 2024 as we continue to enhance operational processes.

Analysis of Market Trends

The following tables set forth selected market trends in our Same Store Facilities:

Same Store Facilities Operating Trends by Market

			As of March 31, 2025						Three Months Ended March 31,
			Number of Facilities			Square Feet (millions)			Realized Rent per Occupied Square Foot									Average Occupancy									Realized Rent per Available Square Foot
			2025			2024			Change (a)			2025			2024			Change (a)			2025			2024			Change (a)
Los Angeles			217			15.8			$	36.00		$	35.73		0.8		%	94.7		%	95.3		%	(0.6)		%	$	34.08		$	34.06		0.1		%
San Francisco			130			8.0			33.18			31.88			4.1		%	93.6		%	94.8		%	(1.2)		%	31.06			30.22			2.8		%
New York			90			6.6			32.60			31.96			2.0		%	92.7		%	93.7		%	(1.0)		%	30.22			29.94			0.9		%
Washington DC			109			7.3			27.13			26.62			1.9		%	92.1		%	91.6		%	0.5		%	25.00			24.39			2.5		%
Miami			85			6.3			29.87			29.49			1.3		%	93.1		%	93.9		%	(0.8)		%	27.80			27.69			0.4		%
Seattle-Tacoma			95			6.7			26.39			25.26			4.5		%	91.7		%	92.7		%	(1.0)		%	24.20			23.42			3.3		%
Dallas-Ft. Worth			136			10.2			17.76			18.25			(2.7)		%	88.1		%	89.3		%	(1.2)		%	15.64			16.31			(4.1)		%
Houston			128			10.4			16.96			16.67			1.7		%	90.6		%	90.8		%	(0.2)		%	15.37			15.14			1.5		%
Chicago			132			8.4			20.88			20.32			2.8		%	91.4		%	91.9		%	(0.5)		%	19.09			18.68			2.2		%
Atlanta			107			7.1			16.43			17.91			(8.3)		%	87.5		%	87.2		%	0.3		%	14.38			15.61			(7.9)		%
West Palm Beach			42			3.3			25.68			25.63			0.2		%	91.7		%	92.9		%	(1.2)		%	23.54			23.81			(1.1)		%
Orlando-Daytona			72			4.6			18.67			18.92			(1.3)		%	90.5		%	91.2		%	(0.7)		%	16.91			17.26			(2.0)		%
Philadelphia			60			3.9			20.41			20.83			(2.0)		%	92.2		%	91.9		%	0.3		%	18.82			19.14			(1.7)		%
Tampa			56			3.7			19.26			19.26			—		%	92.7		%	90.3		%	2.4		%	17.84			17.40			2.5		%
Charlotte			57			4.4			15.79			16.08			(1.8)		%	89.7		%	90.9		%	(1.2)		%	14.17			14.61			(3.0)		%
Baltimore			40			2.9			23.40			23.75			(1.5)		%	91.7		%	90.8		%	0.9		%	21.46			21.56			(0.5)		%
San Diego			22			2.1			30.09			29.61			1.6		%	93.3		%	94.6		%	(1.3)		%	28.07			28.01			0.2		%
Denver			60			4.1			19.22			19.13			0.5		%	90.2		%	91.3		%	(1.1)		%	17.34			17.46			(0.7)		%
Phoenix			45			3.1			19.42			20.03			(3.0)		%	91.0		%	91.5		%	(0.5)		%	17.68			18.33			(3.5)		%
Detroit			43			3.1			18.26			17.83			2.4		%	91.3		%	92.2		%	(0.9)		%	16.68			16.44			1.5		%
Honolulu			11			0.8			54.35			51.52			5.5		%	95.4		%	96.8		%	(1.4)		%	51.85			49.88			3.9		%
Portland			44			2.3			21.54			21.18			1.7		%	91.9		%	92.7		%	(0.8)		%	19.80			19.64			0.8		%
Boston			27			1.9			28.30			28.06			0.9		%	93.1		%	93.1		%	—		%	26.33			26.14			0.7		%
Minneapolis/St. Paul			50			3.5			16.72			16.39			2.0		%	91.3		%	90.9		%	0.4		%	15.26			14.91			2.3		%
Sacramento			34			2.0			21.48			21.67			(0.9)		%	93.4		%	94.1		%	(0.7)		%	20.06			20.38			(1.6)		%
All other markets			673			42.8			16.19			16.23			(0.2)		%	91.1		%	91.8		%	(0.7)		%	14.75			14.90			(1.0)		%
Totals			2,565			175.3			$	22.48		$	22.34		0.6		%	91.5		%	92.1		%	(0.6)		%	$	20.57		$	20.57		—		%

(a) Represents the absolute nominal change with respect to square foot occupancy, and the percentage change with respect to all other items.

Same Store Facilities Operating Trends by Market (Continued)

			Three Months Ended March 31,
			Revenues ($000's)									Direct Expenses ($000's)									Indirect Expenses ($000's)									Net Operating Income ($000's)
			2025			2024			Change			2025			2024			Change			2025			2024			Change			2025			2024			Change
Los Angeles			$	137,923		$	137,792		0.1		%	$	19,172		$	19,564		(2.0)		%	$	2,610		$	2,845		(8.3)		%	$	116,141		$	115,383		0.7		%
San Francisco			63,771			62,185			2.6		%	10,054			11,152			(9.8)		%	1,533			1,398			9.7		%	52,184			49,635			5.1		%
New York			51,730			51,190			1.1		%	14,431			13,795			4.6		%	1,230			1,114			10.4		%	36,069			36,281			(0.6)		%
Washington DC			47,203			45,969			2.7		%	10,875			9,490			14.6		%	1,276			1,294			(1.4)		%	35,052			35,185			(0.4)		%
Miami			45,003			44,800			0.5		%	10,373			9,046			14.7		%	962			970			(0.8)		%	33,668			34,784			(3.2)		%
Seattle-Tacoma			41,344			39,977			3.4		%	7,875			8,605			(8.5)		%	1,074			1,039			3.4		%	32,395			30,333			6.8		%
Dallas-Ft. Worth			41,593			43,410			(4.2)		%	11,297			10,712			5.5		%	1,496			1,258			18.9		%	28,800			31,440			(8.4)		%
Houston			41,936			41,354			1.4		%	12,274			11,733			4.6		%	1,504			1,382			8.8		%	28,158			28,239			(0.3)		%
Chicago			41,524			40,577			2.3		%	16,729			19,785			(15.4)		%	1,464			1,403			4.3		%	23,331			19,389			20.3		%
Atlanta			26,971			29,161			(7.5)		%	6,153			6,370			(3.4)		%	1,233			1,171			5.3		%	19,585			21,620			(9.4)		%
West Palm Beach			19,967			20,202			(1.2)		%	4,478			4,955			(9.6)		%	497			571			(13.0)		%	14,992			14,676			2.2		%
Orlando-Daytona			20,101			20,489			(1.9)		%	4,403			4,407			(0.1)		%	823			816			0.9		%	14,875			15,266			(2.6)		%
Philadelphia			19,114			19,399			(1.5)		%	5,584			4,876			14.5		%	666			641			3.9		%	12,864			13,882			(7.3)		%
Tampa			17,378			16,946			2.5		%	4,145			4,265			(2.8)		%	587			618			(5.0)		%	12,646			12,063			4.8		%
Charlotte			16,439			16,917			(2.8)		%	3,420			3,406			0.4		%	597			568			5.1		%	12,422			12,943			(4.0)		%
Baltimore			16,517			16,570			(0.3)		%	3,754			3,651			2.8		%	432			445			(2.9)		%	12,331			12,474			(1.1)		%
San Diego			14,804			14,783			0.1		%	2,476			2,335			6.0		%	297			336			(11.6)		%	12,031			12,112			(0.7)		%
Denver			18,689			18,803			(0.6)		%	6,238			5,865			6.4		%	643			644			(0.2)		%	11,808			12,294			(4.0)		%
Phoenix			14,479			15,016			(3.6)		%	2,641			3,159			(16.4)		%	468			496			(5.6)		%	11,370			11,361			0.1		%
Detroit			13,589			13,389			1.5		%	3,054			3,084			(1.0)		%	479			436			9.9		%	10,056			9,869			1.9		%
Honolulu			10,685			10,223			4.5		%	1,409			1,440			(2.2)		%	161			139			15.8		%	9,115			8,644			5.4		%
Portland			11,957			11,864			0.8		%	2,435			2,457			(0.9)		%	460			473			(2.7)		%	9,062			8,934			1.4		%
Boston			12,659			12,552			0.9		%	3,309			3,271			1.2		%	317			349			(9.2)		%	9,033			8,932			1.1		%
Minneapolis/St. Paul			13,672			13,351			2.4		%	4,695			4,933			(4.8)		%	538			494			8.9		%	8,439			7,924			6.5		%
Sacramento			10,195			10,377			(1.8)		%	1,823			1,696			7.5		%	378			388			(2.6)		%	7,994			8,293			(3.6)		%
All other markets			165,300			166,733			(0.9)		%	40,873			39,746			2.8		%	7,315			7,130			2.6		%	117,112			119,857			(2.3)		%
Totals			$	934,543		$	934,029		0.1		%	$	213,970		$	213,798		0.1		%	$	29,040		$	28,418		2.2		%	$	691,533		$	691,813		—		%

Acquired Facilities

The Acquired Facilities represent 195 facilities that we acquired in 2023, 2024, and 2025. As a result of the stabilization process and timing of when these facilities were acquired, year-over-year changes can be significant. The following table summarizes operating data with respect to the Acquired Facilities:

ACQUIRED FACILITIES									Three Months Ended March 31,
																					2025						2024						Change (a)
																					($ amounts in thousands, except for per square foot amounts)
Revenues (b):
2023 Acquisitions																					$	47,458					$	45,150					$	2,308
2024 Acquisitions																					5,009						—						5,009
2025 Acquisitions																					650						—						650
Total revenues																					53,117						45,150						7,967
Cost of operations (b):
2023 Acquisitions																					14,845						16,042						(1,197)
2024 Acquisitions																					2,050						—						2,050
2025 Acquisitions																					463						—						463
Total cost of operations																					17,358						16,042						1,316
Net operating income:
2023 Acquisitions																					32,613						29,108						3,505
2024 Acquisitions																					2,959						—						2,959
2025 Acquisitions																					187						—						187
Net operating income																					35,759						29,108						6,651
Depreciation and amortization expense																					(50,265)						(54,818)						4,553
Net loss																					$	(14,506)					$	(25,710)					$	11,204
At March 31:
Square foot occupancy:
2023 Acquisitions																					86.8%						83.9%						2.9%
2024 Acquisitions																					82.9%						—%						—%
2025 Acquisitions																					57.6%						—%						—%
																					84.9%						83.9%						1.0%
Annual contract rent per occupied square foot:
2023 Acquisitions																					$	17.42					$	17.26					0.9%
2024 Acquisitions																					13.00						—						—%
2025 Acquisitions																					17.87						—						—%
																					$	16.94					$	17.27					(1.9)%
Number of facilities:
2023 Acquisitions																					164						164						—
2024 Acquisitions																					22						—						22
2025 Acquisitions																					9						—						9
																					195						164						31
Net rentable square feet (in thousands):
2023 Acquisitions																					12,067						12,067						—
2024 Acquisitions																					1,666						—						1,666
2025 Acquisitions																					741						—						741
																					14,474						12,067						2,407

ACQUIRED FACILITIES (Continued)

			As of March 31, 2025
Costs to acquire (in thousands):
2023 Acquisitions (c)			$	2,674,840
2024 Acquisitions			267,473
2025 Acquisitions			140,990
			$	3,083,303

(a)Represents the percentage change with respect to annual contract rent per occupied square foot, and the absolute nominal change with respect to all other items.

(b)Revenues and cost of operations do not include tenant reinsurance and merchandise sale revenues and expenses generated at the facilities. See “Ancillary Operations” below for more information.

(c)The amount includes the costs allocated to land, buildings and intangible assets associated with the 127 self-storage facilities from the Simply Acquisition.

We have been active in acquiring facilities in recent years. Since the beginning of 2023, we acquired a total of 195 facilities with 14.5 million net rentable square feet for $3.1 billion. During the three months ended March 31, 2025, these facilities contributed net operating income of $35.8 million.

During 2023, we acquired BREIT Simply Storage LLC (“Simply”), a self-storage company that owned and operated 127 self-storage facilities (9.4 million square feet) and managed 25 self-storage facilities (1.8 million square feet) for third parties, for a purchase price of $2.2 billion in cash. Included in the acquisition results in the table above are the Simply portfolio self-storage revenues of $38.6 million, NOI of $26.6 million (including Direct NOI of $28.0 million), and average square footage occupancy of 87.8% for the three months ended March 31, 2025.

We remain active in seeking to acquire additional self-storage facilities. Future acquisition volume may be impacted by cost of capital and overall macro-economic uncertainties. Subsequent to March 31, 2025, we acquired or were under contract to acquire five self-storage facilities across four states with 0.4 million net rentable square feet for $43.2 million.

Newly Developed and Expanded Facilities

The Newly Developed and Expanded Facilities include 38 facilities that were developed on new sites since January 1, 2020, and 62 facilities expanded to increase their net rentable square footage. Of these expansions, 45 were completed before 2024, 10 were completed in 2024 or 2025, and seven are currently in process at March 31, 2025. The following table summarizes operating data with respect to the Newly Developed and Expanded Facilities:

NEWLY DEVELOPED AND EXPANDED FACILITIES
									Three Months Ended March 31,
																					2025						2024						Change (a)
																					($ amounts in thousands, except for per square foot amounts)
Revenues (b):
Developed in 2020																					$	1,787					$	1,848					$	(61)
Developed in 2021																					3,005						2,834						171
Developed in 2022																					2,782						2,267						515
Developed in 2023																					2,398						906						1,492
Developed in 2024																					796						2						794
Developed in 2025																					26						—						26
Expansions completed before 2024																					25,259						23,024						2,235
Expansions completed in 2024 or 2025																					3,635						2,871						764
Expansions in process																					2,816						3,070						(254)
Total revenues																					42,504						36,822						5,682
Cost of operations (b):
Developed in 2020																					539						434						105
Developed in 2021																					1,016						922						94
Developed in 2022																					990						1,128						(138)
Developed in 2023																					1,429						1,070						359
Developed in 2024																					564						13						551
Developed in 2025																					93						—						93
Expansions completed before 2024																					7,436						7,495						(59)
Expansions completed in 2024 or 2025																					1,605						1,022						583
Expansions in process																					597						618						(21)
Total cost of operations																					14,269						12,702						1,567
Net operating income (loss):
Developed in 2020																					1,248						1,414						(166)
Developed in 2021																					1,989						1,912						77
Developed in 2022																					1,792						1,139						653
Developed in 2023																					969						(164)						1,133
Developed in 2024																					232						(11)						243
Developed in 2025																					(67)						—						(67)
Expansions completed before 2024																					17,823						15,529						2,294
Expansions completed in 2024 or 2025																					2,030						1,849						181
Expansions in process																					2,219						2,452						(233)
Net operating income																					28,235						24,120						4,115
Depreciation and amortization expense																					(15,750)						(12,168)						(3,582)
Net income																					$	12,485					$	11,952					$	533

NEWLY DEVELOPED AND EXPANDED FACILITIES (Continued)
																					As of March 31,
																					2025						2024						Change (a)
																					($ amounts in thousands, except for per square foot amounts)
Square foot occupancy:
Developed in 2020																					89.2%						89.7%						(0.5)%
Developed in 2021																					80.4%						80.4%						—%
Developed in 2022																					87.7%						79.5%						8.2%
Developed in 2023																					80.5%						42.3%						38.2%
Developed in 2024																					55.6%						12.2%						43.4%
Developed in 2025																					16.0%						—%						—%
Expansions completed before 2024																					82.6%						78.6%						4.0%
Expansions completed in 2024 or 2025																					51.4%						76.0%						(24.6)%
Expansions in process																					92.2%						92.5%						(0.3)%
																					76.4%						75.3%						1.1%
Annual contract rent per occupied square foot:
Developed in 2020																					$	22.12					$	22.78					(2.9)%
Developed in 2021																					19.14						20.34						(5.9)%
Developed in 2022																					18.13						16.82						7.8%
Developed in 2023																					10.98						9.62						14.1%
Developed in 2024																					11.25						12.00						(6.3)%
Developed in 2025																					11.98						—						—%
Expansions completed before 2024																					20.42						20.23						0.9%
Expansions completed in 2024 or 2025																					18.00						21.50						(16.3)%
Expansions in process																					26.65						26.55						0.4%
																					$	18.98					$	19.89					(4.6)%
Number of facilities:
Developed in 2020																					3						3						—
Developed in 2021																					6						6						—
Developed in 2022																					8						8						—
Developed in 2023																					11						11						—
Developed in 2024																					7						1						6
Developed in 2025																					3						—						3
Expansions completed before 2024																					45						45						—
Expansions completed in 2024 or 2025																					10						10						—
Expansions in process																					7						7						—
																					100						91						9
Net rentable square feet (in thousands):
Developed in 2020																					347						347						—
Developed in 2021																					760						681						79
Developed in 2022																					631						631						—
Developed in 2023																					1,098						1,098						—
Developed in 2024																					668						49						619
Developed in 2025																					381						—						381
Expansions completed before 2024																					5,834						5,705						129
Expansions completed in 2024 or 2025																					1,608						696						912
Expansions in process																					448						487						(39)
																					11,775						9,694						2,081

			As of March 31, 2025
Costs to develop (in thousands):
Developed in 2020			$	42,063
Developed in 2021			128,435
Developed in 2022			100,089
Developed in 2023			193,766
Developed in 2024			129,669
Developed in 2025			65,408
Expansions completed before 2024 (c)			468,750
Expansions completed in 2024 or 2025 (c)			279,841
			$	1,408,021

(a)Represents the percentage change with respect to annual contract rent per occupied square foot, and the absolute nominal change with respect to all other items.

(b)Revenues and cost of operations do not include tenant reinsurance and merchandise sales generated at the facilities. See “Ancillary Operations” below for more information.

(c)These amounts only include the direct cost incurred to expand and renovate these facilities, and do not include (i) the original cost to develop or acquire the facility or (ii) the lost revenue on space demolished during the construction and fill-up period.

Our Newly Developed and Expanded Facilities includes a total of 100 self-storage facilities of 11.8 million net rentable square feet. For development and expansions completed by March 31, 2025, we incurred a total cost of $1.4 billion. During the three months ended March 31, 2025, Newly Developed and Expanded Facilities contributed net operating income of $28.2 million.

It typically takes at least three to four years for a newly developed or expanded self-storage facility to stabilize with respect to revenues. Physical occupancy can be achieved as early as two to three years following completion of the development or expansion through offering lower rental rates during fill-up. As a result, even after achieving high occupancy, there can still be a period of elevated revenue growth as the tenant base matures and higher rental rates are achieved.

We believe that our development and redevelopment activities generate favorable risk-adjusted returns over the long run. However, in the short run, our earnings are diluted during the construction and stabilization period due to the cost of capital to fund the development cost, the related construction and development overhead expenses included in general and administrative expense, and the net operating loss from newly developed facilities undergoing fill-up.

We typically underwrite new developments to stabilize at approximately an 8% NOI yield on cost (adjusted for impacts from tenant reinsurance and maintenance capital expenditures). Our developed facilities have thus far leased up as expected and are at various stages of their revenue stabilization periods. The actual annualized yields that we may achieve on these facilities upon stabilization will depend on many factors, including local and current market conditions in the vicinity of each property and the level of new and existing supply.

The facilities under “expansions completed” represent those facilities where the expansions have been completed at March 31, 2025. We incurred a total of $748.6 million in direct cost to expand these facilities, demolished a total of 0.5 million net rentable square feet of storage space, and built a total of 4.4 million net rentable square feet of new storage space.

At March 31, 2025, we had 26 additional facilities in development, which will have a total of 2.4 million net rentable square feet of storage space and have an aggregate development cost totaling approximately $492.9 million. We expect these facilities to open over the next 18 to 24 months.

The facilities under “expansion in process” represent those facilities where construction is in process at March 31, 2025, and together with additional future expansion activities primarily related to our Same Store Facilities at March 31, 2025, we expect to add a total of 1.3 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate direct development cost of $172.6 million.

Other Non-Same Store Facilities

The “Other Non-Same Store Facilities” represent facilities which, while not newly acquired, developed, or expanded, are not fully stabilized since January 1, 2023, including facilities acquired prior to 2023 and facilities developed or expanded prior to 2020 undergoing fill-up as well as facilities damaged in casualty events such as hurricanes, floods, and fires.

The Other Non-Same Store Facilities have an aggregate of 21.1 million net rentable square feet at March 31, 2025. During the three months ended March 31, 2025 and 2024, the average occupancy for these facilities totaled 83.8% and 79.4%, respectively, and the realized rent per occupied square foot totaled $15.78 and $15.98, respectively.

Ancillary Operations

Ancillary revenues and expenses include amounts associated with the reinsurance of policies against losses to goods stored by tenants in our self-storage facilities, sale of merchandise at our self-storage facilities, and management of property owned by unrelated third parties. The following table sets forth our ancillary operations:

									Three Months Ended March 31,
																					2025						2024						Change
																					(Amounts in thousands)
Revenues:
Tenant reinsurance premiums																					$	59,731					$	54,116					$	5,615
Merchandise																					6,393						6,586						(193)
Third party property management																					14,062						10,473						3,589
Total revenues																					80,186						71,175						9,011
Cost of operations:
Tenant reinsurance																					12,362						11,698						664
Merchandise																					4,172						5,045						(873)
Third party property management																					14,159						10,326						3,833
Total cost of operations																					30,693						27,069						3,624
Net operating income (loss):
Tenant reinsurance																					47,369						42,418						4,951
Merchandise																					2,221						1,541						680
Third party property management																					(97)						147						(244)
Total net operating income																					$	49,493					$	44,106					$	5,387

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $5.6 million or 10.4% in the three months ended March 31, 2025 over the same period in 2024, as a result of an increase in our tenant base with respect to acquired, newly developed, and expanded facilities and the third party properties we manage, as well as higher insurance participation in our tenant base at our same store facilities. Tenant reinsurance premium revenue generated from tenants at our Same Store Facilities were $44.8 million and $42.9 million in the three months ended March 31, 2025, respectively, representing a 4.4% increase.

Cost of operations primarily includes claims paid as well as claims adjustment expenses. Claims expenses vary based upon the number of insured tenants and the volume of events that drive covered customer losses, such as burglary, as well as catastrophic weather events affecting multiple properties such as hurricanes and floods.

We expect tenant reinsurance operations to grow as we roll out insurance policies with increased coverage and higher premiums in 2025, and as we continue to increase the tenant base at our newly acquired and developed facilities.

Third-party property management: At March 31, 2025, in our third-party property management program, we managed 314 facilities (24.4 million net rentable square feet) for unrelated third parties, and were under contract to manage 96 additional facilities (8.3 million net rentable square feet) including 90 facilities that are currently under construction. During the three months ended March 31, 2025, we added 18 facilities to the program and had 10 facilities exit the program. While we expect this business to increase in scope and size, we do not expect any significant changes in overall profitability of this business in the near term as we seek new properties to manage and are in the earlier stages of fill-up for newly managed properties.

Analysis of items not allocated to segments

Equity in earnings of unconsolidated real estate entity

We account for our equity investment in Shurgard using the equity method and record our pro-rata share of its net income. For the three months ended March 31, 2025 and 2024, we recognized equity in earnings of Shurgard of $3.6 million and $6.1 million, respectively. Included in our equity earnings from Shurgard were $13.3 million and $9.8 million of our share of depreciation and amortization expense for the three months ended March 31, 2025 and 2024, respectively.

For purposes of recording our equity in earnings from Shurgard, the Euro was translated at exchange rates of approximately 1.082 U.S. Dollars per Euro at March 31, 2025 (1.039 at December 31, 2024), and average exchange rates of 1.051 and 1.086 for the three months ended March 31, 2025 and 2024, respectively.

Real estate acquisition and development expense: In the three months ended March 31, 2025, we incurred a total of $7.4 million and $3.7 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities. These amounts are net of $3.5 million and $4.4 million in the three months ended March 31, 2025, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities. The year-over-year increase of real estate acquisition and development expense was primarily due to $3.8 million of impairment write-down of land parcels associated with cancelled development projects during the three months ended March 31, 2025.

General and administrative expense: The following table sets forth our general and administrative expense:

									Three Months Ended March 31,
																					2025						2024						Change
																					(Amounts in thousands)
Share-based compensation expense																					$	5,963					$	6,038					$	(75)
Corporate management costs																					7,633						7,795						(162)
Other costs																					11,588						7,503						4,085
Total																					$	25,184					$	21,336					$	3,848

General and administrative expense increased $3.8 million in the three months ended March 31, 2025, as compared to the same period of 2024 due primarily to 1) increased legal costs associated with nonrecurring corporate legal matters of $2.6 million and 2) $0.8 million of costs recognized in the three months ended March 31, 2025 related to a strategic corporate transformation initiative to modernize the workforce for our corporate functions and relocate certain employees of our corporate functions from Glendale, California, to Dallas, Texas. The initiative is intended to transform our corporate functions, improve efficiency and productivity, enhance collaboration, and align the organizational structure with our long-term growth objectives. While we expect to incur corporate transformation costs, primarily related to severance, retention, cross-training and relocation costs as we complete the initiative over the next two years, we do not expect these costs to have a material impact on our operating results.

Interest and other income: The following table sets forth our interest and other income:

									Three Months Ended March 31,
																					2025						2024						Change
																					(Amounts in thousands)
Interest earned on cash balances																					$	7,907					$	8,640					$	(733)
Commercial operations																					3,015						2,239						776
Unrealized (loss) gain on private equity investments																					(873)						1,103						(1,976)
Other																					3,185						1,984						1,201
Total																					$	13,234					$	13,966					$	(732)

Interest expense: For the three months ended March 31, 2025 and 2024, we incurred $73.6 million and $70.1 million, respectively, of interest on our outstanding notes payable. In determining interest expense, these amounts were offset by capitalized interest of $1.6 million and $2.4 million during the three months ended March 31, 2025 and 2024, respectively, associated with our development activities. The increase of interest expense in the three months ended March 31, 2025 as compared to the same period in 2024 is due to the issuance of U.S. Dollar and Euro denominated unsecured notes in April 2024. At March 31, 2025, we had $9.4 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.1%.

Foreign currency exchange (loss) gain: For the three months ended March 31, 2025 and 2024, we recorded foreign currency losses of $68.7 million and gains of $37.5 million, respectively, representing primarily the changes in the U.S. Dollar equivalent of our Euro-denominated unsecured notes due to fluctuations in exchange rates. The Euro was translated at exchange rates of approximately 1.082 U.S. Dollars per Euro at March 31, 2025, 1.039 at December 31, 2024, 1.079 at March 31, 2024, and 1.104 at December 31, 2023. Future gains and losses on foreign currency will be dependent upon changes in the relative value of the Euro to the U.S. Dollar and the level of Euro-denominated notes payable outstanding.

Income tax expense: We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. For the three months ended March 31, 2025 and 2024, we recorded income tax expense totaling $1.4 million and $1.5 million, respectively, related to income taxes incurred in certain state and local jurisdictions in which we operate.

Liquidity and Capital Resources

Overview and our Sources of Capital

While operating as a REIT allows us to minimize the payment of U.S. federal corporate income tax expense, we are required to distribute at least 90% of our taxable income to our shareholders. Notwithstanding this requirement, our annual operating retained cash flow was approximately $480 million in 2023 and $400 million in 2024. Retained operating cash flow represents our expected cash flow provided by operating activities (including property operating costs and interest payments described below), less shareholder distributions and capital expenditures. We expect retained cash flow of approximately $600 million for 2025.

Capital needs in excess of retained cash flow are met with: (i) medium and long-term debt, (ii) preferred equity, (iii) limited partnership interests, and (iv) common equity. We select among these sources of capital based upon relative cost, availability, the desire for leverage, and considering potential constraints caused by certain features of capital sources, such as debt covenants. We view our line of credit, as well as any short-term bank loans, as bridge financing.

Because raising capital is important to our growth, we endeavor to maintain a strong financial profile characterized by strong credit metrics, including low leverage relative to our total capitalization and operating cash flows. We are one of the highest rated REITs, as rated by major rating agencies Moody’s and Standard & Poor’s. Our senior notes payable have an “A” credit rating by Standard & Poor’s and “A2” by Moody’s. Our credit ratings on each of our series of preferred shares are “A3” by Moody’s and “BBB+” by Standard & Poor’s. Our credit profile enables us to effectively access both the public and private capital markets to raise capital.

Our revolving line of credit has a borrowing limit of $1.5 billion. The revolving line of credit generally serves as a temporary “bridge” financing until we are able to raise longer term capital. As of March 31, 2025 and April 30, 2025, there were no borrowings outstanding on the revolving line of credit; however, we do have approximately $19.6 million of outstanding letters of credit, which limits our borrowing capacity to $1,480.4 million as of April 30, 2025. Our line of credit matures on June 12, 2027.

In December 2024, we implemented an “at the market” offering program pursuant to which we may, from time to time, sell common shares through participating agents up to an aggregate gross sales price of $2.0 billion on the open market or in privately negotiated transactions. Since the inception of the program, we have issued a total of 184,390 common shares on the open market for an aggregate gross sales price of $61.4 million and received net proceeds of approximately $60.3 million after issuance costs (none in 2025 through April 30, 2025).

We believe that we have significant financial flexibility to adapt to changing conditions and opportunities, and we have significant access to sources of capital including debt and preferred equity. Based on our strong credit profile and our substantial current liquidity relative to our capital requirements noted below, we would not expect any potential capital market dislocations to have a material impact upon our expected capital and growth plans over the next 12 months. However, if capital market conditions deteriorate significantly for a long period of time, our access to or cost of debt and preferred equity capital could be negatively impacted and potentially affect future investment activities.

Our current and expected capital resources include: (i) $287.2 million of cash as of March 31, 2025 and (ii) approximately $600 million of expected retained operating cash flow over the next twelve months. Additionally, we have $1,480.4 million available borrowing capacity on our revolving line of credit, which can be used as temporary “bridge” financing until we are able to raise longer term capital. We believe that our cash provided by our operating activities will continue to be sufficient to enable us to meet our ongoing cash requirements for interest payments on debt, maintenance capital expenditures, and distributions to our shareholders for the foreseeable future.

As described below, our current committed cash requirements consist of (i) $43.2 million in property acquisitions currently under contract, (ii) $424.8 million of remaining spending on our current development pipeline, which will be incurred primarily in the next 18 to 24 months, (iii) unfunded loan commitment of $21.0 million under the bridge lending program expected to close in the next twelve months, and (iv) approximately $1.2 billion in scheduled principal repayments on our unsecured notes in the next twelve months. We plan to refinance these unsecured notes as they come due. For our proposed joint acquisition of Abacus Storage King, if consummated, we plan to fund our share of the estimated cost, excluding direct transaction costs, of approximately $586 million (A$970 million) with Australian Dollar denominated unsecured debt. Our cash requirements may increase over the next year as we add projects to our development pipeline and acquire additional properties. Additional potential cash requirements could result from various activities including the redemption of outstanding preferred securities, repurchases of common stock, or merger and acquisition activities, as and to the extent we determine to engage in such activities.

Over the long term, to the extent that our cash requirements exceed our capital resources, we believe we have a variety of possibilities to raise additional capital including issuing common or preferred securities, debt, and limited partnership interests, or entering into joint venture arrangements to acquire or develop facilities.

Cash Requirements

The following summarizes our expected material cash requirements, which comprise (i) contractually obligated expenditures, including payments of principal and interest, (ii) other essential expenditures, including property operating expenses, maintenance capital expenditures and dividends paid in accordance with REIT distribution requirements, and (iii) opportunistic expenditures, including acquisitions and developments and repurchases of our securities. We expect to satisfy these cash requirements through operating cash flow and opportunistic debt and equity financings.

Required Debt Repayments: As of March 31, 2025, the principal outstanding on our debt totaled approximately $9.5 billion, consisting of $7.8 billion of U.S. Dollar denominated unsecured notes payable, $1.7 billion of Euro-denominated unsecured notes payable, and $1.7 million of mortgage notes payable. Approximate principal maturities and interest payments (including $90.0 million in estimated interest on our $1.1 billion variable rate unsecured notes based on rates in effect at March 31, 2025) are as follows (amounts in thousands):

			Principal						Interest						Total
Remainder of 2025			$	661,986					$	194,461					$	856,447
2026			1,150,138						254,510						1,404,648
2027			1,200,146						224,855						1,425,001
2028			1,200,129						185,655						1,385,784
2029			1,000,088						147,641						1,147,729
Thereafter			4,261,935						1,426,500						5,688,435
			$	9,474,422					$	2,433,622					$	11,908,044

We have $400 million of our U.S. Dollar denominated unsecured notes that mature on July 25, 2025, €242 million of our Euro denominated unsecured notes that mature on November 3, 2025, and $500 million of our U.S. Dollar denominated unsecured notes that mature on February 15, 2026. We plan to refinance these unsecured notes as they come due.

Capital Expenditure Requirements: Capital expenditures include general maintenance, major repairs, or replacements to elements of our facilities to keep our facilities in good operating condition and maintain their visual appeal. Capital expenditures do not include costs relating to the development of new facilities or redevelopment of existing facilities to increase their available rentable square footage.

We spent $45 million of capital expenditures to maintain real estate facilities in the first three months of 2025 and expect to spend approximately $150 million in 2025. In addition, we have spent $13 million on the installation of solar panels in the first three months of 2025 and we expect to spend approximately $50 million in 2025.

We believe the capital spent to install solar panels and LED lights will significantly reduce electric utility usage resulting in lower property operating costs.

Requirement to Pay Distributions: For all periods presented herein, we have elected to be treated as a REIT, as defined in the Internal Revenue Code. For each taxable year in which we qualify for taxation as a REIT, we will not be subject to U.S. federal corporate income tax on our “REIT taxable income” (generally, taxable income subject to specified adjustments, including a deduction for dividends paid and excluding our net capital gain) that is distributed to our shareholders. We believe we have met these requirements in all periods presented herein, and we expect to continue to qualify as a REIT. Our consistent, long-term dividend policy has been to distribute our taxable income. Future quarterly distributions with respect to the common shares will continue to be determined based upon our REIT distribution requirements after taking into consideration distributions to the preferred shareholders and will be funded with cash flows from operating activities.

The annual distribution requirement with respect to our preferred shares outstanding at March 31, 2025 is approximately $194.7 million per year.

Real Estate Investment Activities: We continue to seek to acquire additional self-storage facilities from third parties. Subsequent to March 31, 2025, we acquired or were under contract to acquire five self-storage facilities for a total purchase price of $43.2 million.

For our proposed joint acquisition of Abacus Storage King, if consummated, we plan to fund our share of the estimated cost, excluding direct transaction costs, of approximately $586 million (A$970 million) with Australian dollar denominated unsecured debt.

We are actively seeking to acquire additional facilities. However, future acquisition volume will depend upon whether additional owners will be motivated to market their facilities, which will in turn depend upon factors such as economic conditions and the level of seller confidence.

As of March 31, 2025, we had development and expansion projects at a total cost of approximately $665.5 million. Costs incurred through March 31, 2025 were $240.7 million, with the remaining cost to complete of $424.8 million expected to be incurred primarily in the next 18 to 24 months. Some of these projects are subject to contingencies such as entitlement approval. We expect to continue to seek to add projects to maintain and increase our robust pipeline. Our ability to do so continues to be challenged by various constraints such as difficulty in finding projects that meet our risk-adjusted yield expectations and challenges in obtaining building permits for self-storage facilities in certain municipalities.

Bridge loan commitment: We offer bridge loan financing to third-party self-storage owners for operating properties that we manage. As of March 31, 2025, we had an unfunded loan commitment of $21.0 million expected to close in the next twelve months, subject to the satisfaction of certain conditions.

Property Operating Expenses: The direct and indirect cost of our operations impose significant cash requirements. Direct operating costs include property taxes, on-site property manager payroll, repairs and maintenance, utilities, and marketing. Indirect operating costs include supervisory payroll and centralized management costs. The cash requirements from these operating costs will vary year to year based on, among other things, changes in the size of our portfolio and changes in property tax rates and assessed values, wage rates, and marketing costs in our markets.

Redemption of Preferred Securities: Historically, we have taken advantage of refinancing higher coupon preferred securities with lower coupon preferred securities. In the future, we may also elect to finance the redemption of preferred securities with proceeds from the issuance of debt. As of April 30, 2025, we have six series of preferred securities that are eligible for redemption, at our option and with 30 days’ notice: our 5.150% Series F Preferred Shares ($280.0 million), 5.050% Series G Preferred Shares ($300.0 million), 5.600% Series H Preferred Shares ($285.0 million), 4.875% Series I Preferred Shares ($316.3 million), 4.700% Series J Preferred Shares ($258.8 million), and 4.750% Series K Preferred Shares ($230.0 million). See Note 10 to our March 31, 2025 consolidated financial statements for the redemption dates of all of our series of preferred shares. Redemption of such preferred shares will depend upon many factors, including the rate at which we could issue replacement preferred securities. None of our preferred securities are redeemable at the option of the holders.

Repurchases of Common Shares: Our Board has authorized a share repurchase program pursuant to which management may purchase up to 35,000,000 of our common shares on the open market or in privately negotiated transactions. From the inception of the repurchase program through April 30, 2025, we have repurchased a total of 24,448,781 common shares at an aggregate cost of approximately $879.1 million (none in 2025 through April 30, 2025). All the repurchased shares are constructively retired and returned to an authorized and unissued status. Future levels of common share repurchases will be dependent upon our available capital, investment alternatives and the trading price of our common shares.