PSA 10-K & 10-Q changes, risk factors and insider trading

Natural disasters, such as earthquakes, fires, hurricanes, drought, extreme temperatures and floods, terrorist attacks, civil unrest, and other events that damage our facilities or our customers’tenants’ property, or that make our facilities temporarily unavailable, have in the past and may in the future adversely impact our business and financial results. Damage and business interruption losses could exceed the aggregate limits of our insurance coverage. In addition, because we self-insure a portion of our risks, losses below a certain level may not be covered by insurance. See Note 1416 to our December 31, 20242025 consolidated financial statements for a description of the risks of losses that are not covered by third-party insurance contracts. Our exposure to these types of events is increased by potential tenant claims associated with our tenant reinsurance business. In addition, customer perceptions about the risk of property loss from these events could negatively impact self-storage demand.

We could be subject to increases in property or other taxes, repair and maintenance costs, payroll, utility costs, insurance premiums, workers compensation, and other operating expenses due to various factors such as inflation, labor shortages, commodity and energy price increases, weather, increases to minimum wage rates, supply chain disruptions, and changes to governmental safety and real estate use limitations and other governmental actions. Our property tax expense, which totaled approximately $452.0 million during the year ended December 31, 2024, generally depends upon the assessed value of our real estate facilities as determined by assessors and government agencies and, accordingly, could be subject to substantial increases if such agencies change their valuation approaches or opinions or if new laws are enacted, especially if new approaches are adopted or laws are enacted that result in increased property tax assessments in states or geographies where we have a high concentration of facilities. See also “We have exposure to increased property tax in California” below.

At December 31, 2024, we had a pipeline of development projects totaling $741.6 million (subject to contingencies), and we expect to continue to seek additional development projects. There are significant risks involved in developing self-storage facilities, such as delays, cost increases, or inability to complete development projects due to changes in or failure to meet government or regulatory requirements, failure of revenue to meet our underwriting estimates, delays caused by weather issues, unforeseen site conditions, or personnel problems. Self-storage space is generally not pre-leased, and rent-up of newly developed space can be delayed or ongoing cash flow yields can be reduced due to competition, reductions in storage demand, or other factors.

Our self-storage facilities generate most of our revenue and earnings. Significant competition from self-storage operators, property developers, and other storage alternatives may adversely impact our ability to attract and retain customers and may negatively impact our ability to generate revenue. Competition in the local market areas in which many of our properties are located is significant and affects our occupancy levels, rental rates, and operating expenses, particularly advertising costs. There ismay alsobe an increasing influx of capital from outside financing sources driving more money, development, and supply into the industry. Development of self-storage facilities may increase, which may intensify competition as newly developed facilities are opened. Development of self-storage facilities by other operators could increase, due to increases in availability of funds for investment or other reasons, and further intensify competition.

Interest rates remain elevated compared to recent years and may increase.years. As a result, if we issued new debt or preferred shares or refinanced our indebtedness, our debt service costs or preferred share dividend yields would likely be, based on current interest rates, significantly higher than current financing costs. Elevated interest rates also adversely impact the relative attractiveness of the dividend yield on our common shares. Increases in our cost of capital impact our assessment of the yields we consider appropriate to support pursuing property acquisition and development opportunities and thus can impact our external growth prospects. The degree and pace of these changes have had and may continue to have adverse macroeconomic effects that have and may continue to have adverse impacts on our tenants, including as a result of economic recession, increased unemployment, and increased financing costs. For more information on interest rate risk, see Part II, “Item 7A. Quantitative and Qualitative Disclosures About Market Risk”.

•risk of illness or death of our employees or customerstenants;

•risk that we could experience a change in the move-out patterns of our long-term customerstenants due to economic uncertainty and increases in unemployment, which could lead to lower occupancies and rent “roll down” as long-term customerstenants are replaced with new customerstenants at lower rates; and

WeLocal, state, and federal governments have been and may in the future be adversely impacted by emergencyadopt regulations adopted in response to significant events, such as natural disasters or public health crises, that could adversely impact our operations.

In response to significant events, local,Local, state, and federal governments have and may in the future adopt regulations that could adversely impact our operations.operations, including in response to natural disasters and public health crises. For example, in response to wildfires in 2018, 2019, and early 2025 and floods in 2023, the State of California and some localities in California adopted temporary regulations that imposed certain limits on the rents we could charge at certain of our facilities and the extent to which we could increase rents to existing tenants. Similarly, in response to the COVID-19 pandemic, certain localities adopted restrictions on the use of certain of our facilities, limited our ability to increase rents, limited our ability to collect rent or evict delinquent tenants, and limited our ability to complete development and redevelopment projects. California and other jurisdictions have also adopted regulations restricting our operations relating to pricing methodologies, restrictions on fees, procedures for selling stored property of delinquent tenants, marketing restrictions related to price changes and promotional rates, zoning restrictions and other matters. Similar restrictions could be imposed in the futurefuture, including in response to significant events and these restrictions could adversely impact our operations.

Marketing initiatives, including our increasing dependence on Google to source customers, may fail to be effective and could negatively impact financial performance. ApproximatelyMore 67%than half of our new storage customers in 20242025 were sourced directly or indirectly through “unpaid” search and “paid” search campaigns on Google. We believe that the vast majority of customers searching for self-storage use Google at some stage in their shopping experience. Google is providing tools to allow smaller and less sophisticated operators to bid for search terms, increasing competition for self-storage search terms. The predominance of Google in the shopping experience, as well as Google’s enabling of additional competitors to bid for placements in self-storage search terms, may reduce the number of new customers that we can procure, and/or increase our costs to obtain new customers.

We have approximately 5,900 employees and 2.0 million customers, and we conduct business at facilities in 40 states. As a result, we are subject to the risk of legal claims and proceedings (including class actions) and regulatory enforcement actions across many jurisdictions in the ordinary course of our business and otherwise, and we could incur significant liabilities and substantial legal fees from these actions. Resolution of these claims and actions may divert time and attention of our management and could involve payment of damages or expenses by us, all of which may be significant, and could damage our reputation and our brand. In addition, any such resolution could involve our agreement to terms that restrict the operation of our business. The results of legal proceedings cannot be predicted with certainty. We cannot guarantee that losses incurred in connection with any current or future legal or regulatory proceedings or actions will not exceed any provisions we may have set aside in respect of such proceedings or actions or any available insurance coverage. Any such legal claims, proceedings, and regulatory enforcement actions could negatively impact our operating results, cash flow available for distribution or reinvestment, and/or the price of our common shares.

Our use of or failure to adopt advancements in information technologytechnology, such as artificial intelligence, may hinder or prevent us from achieving strategic objectives or otherwise harm our business.

Our use of or inability to safely and effectively adopt and deliver new technological capabilities and enhancements in line with strategic objectives, including artificial intelligence and machine learning, may put us at a competitive disadvantage; cause us to miss opportunities to innovate, achieve efficiencies, or improve the customer experience; or adversely impact our business, reputation, results of operations, and financial condition. LegislativeFor activityexample, we have begun to utilize artificial intelligence technologies in thevarious privacyaspects area may also result in new laws that are applicable to us and that may hinderof our business, includingwhich byare restrictingsusceptible ourto use of customer data or otherwise regulating the use of algorithmserrors and automatedother processingmalfunctions in ways thatwhich could materially affect our business or lead to significantoperational increases in the cost of compliance. In addition, the use of emerging technologies, including artificial intelligence, entails risks including risks relating to the possibility of intellectual property infringement or misappropriation; data privacy; new or enhanced governmental or regulatory scrutiny, requirements, litigation, or other liability; ethical concerns; negative consumer perceptions as to automationchallenges and artificialreputational intelligence; or other complications or liabilities that could adversely affect our business, reputation, results of operations, or financial results.risks.

We may be harmed if we fail to protect our intellectual property adequately.

We maintain a portfolio of trademarks and trade dress that we believe are fundamental to the success of the Public Storage® brand. While we actively seek to enforce and expandprotect our rights, failure to adequately protect our rights could lead to loss of such trademark and trade dress protection. We also own and may seek to protect other intellectual property, such as propriety systems, processes, data, and other trade secrets that we have collected and developed in the course of operating our business and that we believe provides us with various competitive advantages. Our protections could be inadequate or we could lose rights to our other intellectual property and trade secrets. Competitor use of our trademarks and trade names could lead to likelihood of confusion, tarnishment of our brand, and loss of legal protection for our marks.

Public Storage is a holding company with no direct operations. All of Public Storage’s property ownership, development, and related business operations are conducted through PSOC (which is wholly-owned by PSA OP) and Public Storage has no material assets or liabilities other than its investment in PSA OP. As a result, Public Storage relies on distributions from PSA OP, which in turn relies on distributions from PSOC, to make common and preferred share dividend payments. Although Public Storage currently wholly-owns (directly or indirectly) PSA OP and PSOC, and therefore exercises exclusive control over PSA OP and PSOC, including the authority to cause PSA OP and PSOC to make distributions, in connection with our future acquisition activities or otherwise, PSA OP may issue additional units of limited partnership to third parties, and these limited partners may negotiate for certain rights. In addition, because Public Storage is a holding company, shareholder claims are structurally subordinated to all existing and future liabilities of PSA OP and PSOC and their subsidiaries. Therefore, in the event of a bankruptcy, insolvency, liquidation or reorganization of PSA OP or PSOC, or their subsidiaries, assets of PSA OP or PSOC or the applicable subsidiary will be available to satisfy any claims of our shareholders only after such liabilities and obligations have been satisfied in full.

Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations. The maximum U.S. federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S. stockholders that are individuals, trusts, or estates is generally 20%. Dividends paid by REITs to such stockholders are generally not eligible for that rate,rate but under current tax law,but, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning before January 1, 2026. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of the stock of REITs, including our stock.

Approximately $830.4 million of our 2024 net operating income is from our properties in California, and we incurred approximately $47.8 million in related property tax expense. Due to the impact of Proposition 13, which generally limits increases in assessed values to 2% per year, the assessed value and resulting property tax we pay is less than it would be if the properties were assessed at current estimated market values. From time to time, proposals have been made to reduce the beneficial impact of Proposition 13, most recently in the November 2020 ballot. While this ballot initiative failed, there can be no assurance that future initiatives or other legislative actions will not eliminate or reduce the benefit of Proposition 13 with respect to our properties. If the beneficial effect of Proposition 13 were ended for our properties, our property tax expense could increase substantially, adversely affecting our cash flow from operations and net income.

We maintain an “at the market” offering program under which we may enter into forward sale agreements from time to time to sell common shares and, subject to certain conditions, we have the right to elect physical, cash or net share settlement under these agreements at any time and from time to time, in part or in full. In the event that we elect to settle a forward sale agreement for cash and the settlement price is below the forward sale price, we would be entitled to receive a cash payment from the applicable forward purchaser(s). Under Section 1032 of the Code, generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract,” as defined in the Code by reference to the Securities Exchange Act of 1934, as amended. Although we believe that any amount received by us in exchange for our common shares would qualify for the exemption under Section 1032 of the Code, because it is not entirely clear whether a forward sale agreement qualifies as a “securities futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In the event that we recognize a significant gain from the cash settlement of a forward sale agreement, we might not be able to satisfy the gross income requirements applicable to REITs under the Code. If we were to fail to satisfy one or both of the gross income tests for any taxable year, we may nevertheless qualify as a REIT for such year if we were entitled to relief under certain provisions of the Code. If these relief provisions were inapplicable, we would not qualify to be taxed as a REIT.

During 2024,2025, revenues generated by our Same Store Facilities decreasedremained byrelatively 0.7% ($26.7 million),unchanged, as compared to 2023,2024, while Same Store cost of operations increased by 2.4%1.8% ($20.6$16.6 million). Softness in demand for our storage space has led to lower move-in rental rates for new tenants and lower average occupancy in 20242025 as compared to 2023.2024. Existing customers behavior was strong in 2025 with fewer move-outs and lower delinquencies allowing for rental rate increases to tenants over their tenancy.

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 2022,2023, we acquired a total of 260273 facilities with 18.519.9 million net rentable square feet for $3.7$3.9 billion. Additionally, withinWithin our non-sameNon-Same storeStore portfolio,portfolio (as defined below) as of December 31, 2025, our Newly Developed and Expanded Facilities (as defined below) include a total of 132111 self-storage facilities with 15.813.3 million net rentable square feet. For development and expansions completed by December 31, 2024,2025, we incurred a total cost of $1.6$1.7 billion. During 2024,2025, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 48.1%25.6% ($101.0$59.5 million), as compared to 2023.2024.

In order to enhance the competitive position of certain of our facilities relative to local competitors (including newly developed facilities), we embarked on our multi-year Property of Tomorrow program to (i) rebrand our properties with more pronounced, attractive, and clearly identifiable color schemes and signage and (ii) upgrade the configuration and layout of the offices and other customer zones to improve the customer experience. We completed the program in 2024. We spent approximately $127 million on the program in 2024. We have also embarked on a solar program under which we plan to install solar panels on over 1,4001,600 of our self-storage facilities. We have completed the installations on 7721,191 facilities through December 31, 2024.2025. We spent approximately $54$71 million on the program in 20242025, and expect to spend approximately $50$60 million in 20252026 on this effort.

During 2024,2025, PSOC completed a public offeringofferings of $1.0$875 billionmillion aggregate principal amount of unsecured senior notes in various tranches and maturities and issued €150425 million of senior notes todue institutional investors.2034. PSOC also repaid at maturity $700$400 million aggregate principal amount of floating rate senior notes and €100242 million aggregate principal amount of senior notes. We plan to use the remaining proceeds for general corporate purposes, including to make investments in self-storage facilities.

In 2024, net income allocable to our common shareholders was $1.873$1.9 billion or $10.64 per diluted common share, compared to $1.949$1.9 billion or $11.06 per diluted common share in 2023, representing a decrease of $76.1 million or $0.42 per diluted common share. The decrease iswas due primarily to (i) aan $159.7 million increase in depreciation and amortization expense, (ii) an $86.3 million increase in interest expense, (iii) a $26.0 million increase in general and administrative expense, (iv) an $18.4 million decrease in interest and other income, partially offset by (v) aan $153.4 million increase in foreign currency exchange gains primarily associated with our Euro denominated notes payable and (vi) a $61.6 million increase in self-storage net operating income.

The $61.6 million increase in self-storage net operating income in 2024 as compared to 2023 iswas a result of a $108.9$103.4 million increase attributable to our Non-Same Store Facilities (as defined below),Facilities, partially offset by a $47.3$41.8 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities decreased 0.7%0.6% or $26.7$22.7 million in 2024 as compared to 2023, due primarily to a decline in occupancy and lower realized annual rent per occupied square foot.occupancy. Cost of operations for the Same Store Facilities increased by 2.4%2.1% or $20.6$19.1 million in 2024 as compared to 2023, due primarily to increased property tax expense, marketing expense, and repairs and maintenance expense, partially offset by decreased centralizedindirect managementcost costsof operations, utility expenses and on-site property manager payroll expense. The increase in net operating income of $108.9$103.4 million for the Non-Same Store Facilities iswas due primarily to the impact of facilities acquired in 2024 and 2023.

For the year ended December 31, 2024,2025, FFO was $17.19$15.81 per diluted common share as compared to $16.60$17.19 and $16.46$16.60 per diluted common share for the years ended December 31, 20232024 and 2022,2023, respectively, representing ana increasedecrease in 20242025 of 3.6%,8.0%, or $0.59$1.38 per diluted common share, as compared to 2023.2024.

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 and resolutions, casualties,contingencies, due diligence costs incurred in pursuit of strategic transactions, realized or unrealized gain or loss on private equity investments, reorganizationincome costs,tax acquisitionbenefits integrationfrom costs,the amortizationsale of acquiredsolar nontax real estate-related intangibles,credits, a cash and stock hiring bonus for a new senior executive,executive and our equity shareamortization of taxacquired effectnon ofreal aestate-related change in tax status, unrealized gain on derivatives, merger transaction costs and senior executive severance from our equity investees.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.

Our self-storage operations are analyzed in four groups: (i) the 2,5072,565 facilities that we have owned and operated on a stabilized basis since January 1, 20222023 (the “Same Store Facilities”), (ii) 260273 facilities we acquired since January 1, 20222023 (the “Acquired Facilities”), (iii) 132111 facilities that have been newly developed or expanded, or that had commenced expansion by December 31, 20242025 (the “Newly Developed and Expanded Facilities”), and (iv) 174222 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 20222023 (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.Facilities”. See Note 1315 to our December 31, 20242025 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

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, 2022.2023. Our Same Store Facilities increased from 2,507 facilities at December 31, 2024 to 2,565 at December 31, 2025. The composition of our Same Store Facilities allows us more effectively to evaluate the ongoing performance of our self-storage portfolio in 2022,2023, 2023,2024, and 20242025 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.

We typically increase rental rates to our long-term tenants (generally, those who have been with us for at least sixfive 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’tenants’ in-place rent and prevailing market rents, among other factors.

Comparison of the Year Ended December 31, 20232025 to the Year Ended December 31, 20222024 Revenues generated by our Same Store Facilities increasedremained 4.8%relatively in 2023 asunchanged compared to 2022,2024, due primarily to a 6.4%0.5% increase in realized annual rent per occupied square foot,foot partially offset by a 1.6%0.4% decrease in average occupancy.

The increase in realized annual rent per occupied square foot in 20232025 as compared to 20222024 was due to cumulative rate increases to existing long-term tenants over the past twelve months,months partially offset by a 13.9% decrease in average rates per square foot charged to new tenants moving in whoover replacedthe tenantssame moving out with higher rental rates. At December 31, 2023, annual contract rent per occupied square foot was 0.8% higher as compared to December 31, 2022.period.

The weighted average square foot occupancy for our Same Store Facilities was 93.0%92.0% for 2023,2025, representing a decrease of 1.6%,0.4%, as compared to 2022.2024, Occupancydue levelsto have gradually declined since the second halfsoftening of 2022.demand. In responseresponse, we lowered move-in rental rates and increased promotional activity and advertising spending to increasestimulate move-in activity at our facilities in 20232025 as compared to 2022.2024.

Move-out activities from our tenants were higherlower in 20232025 as compared to 2022.2024. AverageMore lengththan of stayhalf of our tenants remainedhave rented their space for longer than a year at similarDecember high31, levels in 2023 as compared to 2022,2025, which supported our revenue growth from existing long-term tenants.

Late charges and administrative fees increaseddecreased 0.6%1.0% in 2025 and 10.3%increased 0.7% in 2024 and 2023,2024, respectively, in each case as compared to the previous year. The decrease in 2025 was due primarily to lower late charges on delinquent accounts due to lower customer delinquency rates. The increase in 2024 was due primarily to higher late charges and lien fees collected on delinquent accounts. The increase in 2023 was due to higher late charges collected on delinquent accounts and higher administrative fees resulting from higher move-in volumes. Delinquency rates remained at similar levels for 2024 as compared to 2023.

Cost of operations (excluding depreciation and amortization) increased 2.4%1.8% and 4.6%2.1% in 20242025 and 2023,2024, respectively, in each case as compared to the previous year. The increase in 2025 was due primarily to increased property tax expense and indirect cost of operations, partially offset by decreased on-site property manager payroll expense and marketing expense. The increase in 2024 was due primarily to increased property tax expense, marketing expense, and repairs and maintenance expense,expense and marketing expense partially offset by decreased centralized management costs and on-site property manager payroll expense. The increase in 2023 was due primarily to increased property tax expense, marketingutilities expense,expense and otherindirect directcost propertyof costs.operations.

Property tax expense increased 4.7%5.3% and 3.5%4.8% in 20242025 and 2023,2024, respectively, in each case as compared to the previous year, as a result of higher assessed values. We expect property tax expense to grow approximately 5% in 20252026 due primarily to higher assessed values.

On-site property manager payroll expense decreased 3.4%5.0% and 3.3% in 20242025 and 2024, respectively, in each case as compared to 2023the andprevious increasedyear. 2.9%The decreases in 2023each asyear compared to 2022. The decrease in 2024 waswere primarily due to reduction in labor hours driven by the continued implementation of dynamic staffing models based on customer activity levels. The increase in 2023 was primarily due to increases in wage rates as a result of competitive labor conditions experienced in most geographical markets. We expect on-site property manager payroll expense to decrease moderately in 20252026 as compared to 20242025 as we continue to enhance operational processes.

Our utility expense consists primarily of electricity costs, which are dependent upon energy prices and usage levels. Changes in usage levels are driven primarily by weather and temperature. Utility expense decreasedincreased 3.9%1.0% in 2025 and 2.0%decreased 4.2% in 2024 and 2023, respectively, in each case as compared to the previous year, due primarily to our investment in energy saving technology such as solar power and LED lights, which generate favorable returns on investment in the form of lower utility usage.usage, partially offset by increased utility rates in 2025. We expect alower declineelectricity consumption in utility expense in 20252026 as compareda toresult 2024 as we continueof our continued investment in solar power.

Marketing expense includes Internetinternet advertising we utilize through our online paid search programs, television advertisingprograms and the operating costs of our website and telephone reservation center. Internet advertising expense, comprising keyword search fees assessed on a “per click” basis, varies based upon demand for self-storage space, the quantity of people inquiring about self-storage through online search, occupancy levels, the number and aggressiveness of bidding competitors, and other factors. These factors are volatile; accordingly, Internetinternet advertising can increase or decrease significantly in the short-term. We increasedOur marketing expense decreased by 4.4% in 2025 and increased by 13.1% and 42.9% in 2024 and 2023, respectively, in each case as compared to the previous year,year. The decrease in 2025 was primarily bydue to realized cost efficiencies on our online paid search programs utilized to attract new tenants. The increase in 2024 was primarily due to utilizing a higher volume of online paid search programs to attract new tenants. We plan to continue to use internet advertising and other advertising channels to support move-in volumes in 2025.2026.

CentralizedIndirect Cost of Operations represents costs related to our supervisory payroll, centralized management costscosts, representand share-based compensation. Indirect Cost of Operations increased 6.0% in 2025 and decreased 6.4% in 2024 as compared to the previous year primarily related to changes in the administrative and cash compensation expenses for shared general corporate functions to the extent their efforts are devoted to self-storage operations. Such functions include information technology support, hardware, and software, as well as centralized administration of payroll, benefits, training, repairs and maintenance, customer service, pricing and marketing, operational accounting and finance, legal costs, and costs from field management executives. CentralizedThe managementincrease costsin decreased2025 8.0%was primarily driven by increases in personnel-related costs. The decrease in 2024 as compared to 2023 and decreased 5.3% in 2023 as compared to 2022,was primarily driven by achievement of economies of scale from recent acquisitions with centralized management costs allocated over a broader number of self-storage facilities including non-sameNon-Same storeStore facilities.Facilities.

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

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 $151.8 million, NOI of $103.9 million (including Direct NOI of $109.2 million), and average square footage occupancy of 87.7% for 2024.

We remain active in seeking to acquire additional self-storage facilities. Future acquisition volume is likely tomay be impacted by cost of capital and overall macro-economic uncertainties. During 2025, we acquired 87 self-storage facilities across 21 states with 6.1 million net rentable square feet for $945.6 million. Subsequent to December 31, 2024,2025, we acquired or were under contract to acquire ninethree self-storage facilities across sixthree states with 0.70.2 million net rentable square feet for $140.7$20.7 million. Our total acquisitions planned or completed through December 31, 2025, amount to $966.3 million.

We typically underwrite new developments to stabilize at approximately an 8.0% NOI8% 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 “Other Non-Same Store Facilities” represent facilities which, while not newly acquired, developed, or expanded, are not fully stabilized since January 1, 2022,2023, 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.

Depreciation and amortization expense for Self-Storage Operations increased $22.1 million and $159.7 million in 20242025 and 2024, respectively in each case as compared to 2023the andprevious increasedyear. $81.9The millionincrease in 2023 as compared to 2022,was primarily due to newly acquired facilities of $2.7 billion in 2023 and newly developed and expanded facilities.

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $23.1$24.1 million or 11.3%10.6% in 20242025 over 2023,2024, 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 participationcoverage and premium rates in our tenant base at our same store facilities. Tenant reinsurance premium revenue generated from tenants at our Same-StoreSame Store Facilities were $170.0$184.2 million and $163.2$175.0 million in 20242025 and 2023,2024, respectively, representing a 4.2%5.2% year over year increase in 2024.2025.

In addition to the other information in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in our Annual Report on Form 10-K filed for the year ended December 31, 2025, in Part I, Item 1A, Risk Factors, and in our other filings with the SEC. These factors may materially affect our business, financial condition and operating results. There have been no material changes to the risk factors relating to the Company disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, and the risk factors described in the “Risk Factors” section in our Quarterly Report on Form 10-Q for the period ended March 31, 2026, other than those disclosed below.

•the inability to successfully combine the business of NSA with ours in a manner that permits us to achieve the cost savings anticipated to result from the Mergers,Merger, which would result in some anticipated benefits of the MergersMerger not being realized in the time frame currently anticipated or at all;

•the disruption of each company’s ongoing businesses or inconsistencies in services, standards, controls, procedures and policies;

•potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the MergersMerger; and

•performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by completing the MergersMerger and integrating NSA’s and our operations.

Any of these risks could adversely affect our ability to maintain relationships with customers, vendors, employees and other commercial relationships. As a result, the anticipated benefits of the MergersMerger may not be realized fully within the expected time frame or at all or may take longer to realize or cost more than expected, which could adversely affect our business, financial condition, results of operations and growth prospects. In addition, changes in laws and regulations could adversely impact our business, financial condition, results of operations and growth prospects.

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 2026 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, settlement of common shares sold pursuant to forward sale confirmations under our At-the-Market (“ATM”) program; 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, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 filed with the SEC on April 27, 2026, and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, risksfailure associatedto withrealize the expected benefits of the Merger, including the risk that NSA’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected, including our ability to consummate the Merger with NSAretain and thehire timingkey and closing of the Merger including, among other things, NSA’s ability to obtain NSA shareholder approval required to consummate the Merger, the satisfaction or waiver of other conditions to closing in the Merger Agreement, unanticipated difficulties or expenditures relating to the Merger, potential difficulties in employee retention as a result of the Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger and the outcome of legal proceedings instituted against us, our trustees and others related to the Merger,personnel, changes in national self-storage facility development activity, impacts from our strategic corporate transformation initiative, 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.

During the threesix months ended MarchJune 31,30, 2026, 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, 2025.

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).

RevenuesDuring the three and six months ended June 30, 2026, revenues generated by our Same Store Facilities remaineddecreased relativelyby unchanged0.6% for($5.9 threemillion) monthsand ended0.3% March($6.1 31,million), 2026respectively, as compared to the same periodperiods in 2025. Cost of operations for Same Store Facilities decreasedincreased by 1.1%4.4% ($11.1 million) and 1.6% ($8.2 million), respectively, for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025. For the three and six months ended MarchJune 31,30, 2026, realized annual rent per occupied square foot for our Same Store Facilities decreased by 0.3%,0.8% and 0.5%, respectively, while average occupancy increased by 0.4%,0.2% and 0.3%, respectively, as compared to the same periodperiods in 2025.

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 2024, including the ongoing integration of unstabilized properties acquired prior to 2024, we have expanded our portfolio by a total of 286306 facilities with 22.924.5 million net rentable square feet for a cost of $4.3$4.5 billion. Within our non-same store portfolio as of MarchJune 31,30, 2026, our Newly Developed and Expanded Facilities include a total of 120 self-storage facilities with 13.713.8 million net rentable square feet. For development and expansions completed by MarchJune 31,30, 2026, we incurred a total cost of $1.8 billion. During the three and six months ended MarchJune 31,30, 2026, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 29.5%23.3% ($18.5$15.8 million) and 26.3% ($34.3 million), respectively, as compared to the same periodperiods in 2025.

Operating Results for the Three Months Ended MarchJune 31,30, 2026 and 2025

For the three months ended MarchJune 31,30, 2026, net income allocable to our common shareholders was $476.8$450.3 million or $2.71$2.55 per diluted common share, compared to $358.2$309.0 million or $2.04$1.76 per diluted common share for the same period in 2025, representing an increase of $118.6$141.3 million or $0.67$0.79 per diluted common share. The increase is due primarily to (i) a $110.4$163.3 million increase in foreign currency gain primarily associated with our Euro denominated notes payable and (ii) a $20.6$7.2 million increase in self-storageequity netin operatingearnings income,of Shurgard partially offset by (iii) ana $8.0$13.2 million increase in depreciationinterest expense and (iv) an $8.0$18.6 million increase in interestgeneral and administrative expense.

The $20.6$18.8 million increase in self-storage net operating income for the threesix months ended MarchJune 31,30, 2026 as compared to the same period in 2025 is a result of a $17.9$33.1 million increase attributable to our Non-Same Store Facilities (as defined below) reflecting the impact of newly acquired facilities and the lease-up of development/expansion properties.properties, partially offset by a $14.3 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities decreased by 0.3% or $6.1 million in 2026 as compared to 2025, due primarily to lower realized annual rent per occupied square foot partially offset by an increase in average occupancy. Cost of operations for the Same Store Facilities increased by 1.6% or $8.2 million in 2026 as compared to 2025, due primarily to increased property tax expense and indirect cost of operation.

For the three months ended MarchJune 31,30, 2026, FFO was $4.39$4.21 per diluted common share as compared to $3.71$3.44 per diluted common share for the same period in 2025, representing an increase of 18.3%,22.4%, or $0.68$0.77 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, (iii) transaction and integration costs related to the NSA Merger, and (iiiiv) 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, cancelled project write-off, realized or unrealized gain or loss on private equity investments and non-hedge designated derivative transactions, certain CEO transition-related costs, and amortization of acquired non real estate-related intangibles. We review Core FFO and Core FFO per share to evaluate our ongoing operating performanceperformance, 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 terminologyterminology, or may not present such measures, Core FFO and Core FFO per share may not be comparable among REITs.

Our self-storage operations are analyzed in four groups: (i) 2,755 facilities that we have owned and operated on a stabilized basis since January 1, 2024 (the “Same Store Facilities”), (ii) 286306 facilities we acquired since January 1, 2024 or that were acquired prior to 2024 that remain unstabilized since January 1, 2024 (the “Acquired Facilities”), (iii) 120 facilities that have been developed or expanded since January 1, 2021 including those developed or expanded earlier that remain unstabilized since January 1, 2024, or properties that will commence expansion by December 31, 2026 (the “Newly Developed and Expanded Facilities”), and (iv) 15 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2024 (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 MarchJune 31,30, 2026 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

(cb)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.

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, 2024. Our Same Store Facilities increased from 2,565 facilities at December 31, 2025 to 2,755 at MarchJune 31,30, 2026. The composition of our Same Store Facilities allows us more effectively to evaluate the ongoing performance of our self-storage portfolio in 2024, 2025, and 2026 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 2,755 facilities (192.1 million net rentable square feet) that represent approximately 84%83% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at MarchJune 31,30, 2026. 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.

Revenues generated by our Same Store Facilities weredecreased relatively0.6% unchangedand 0.3% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Revenues for the three months ended MarchJune 31,30, 2026 asdecreased compared to the same period in 2025,primarily due primarily to a 0.4% increase in average occupancy, offset by a 0.3%0.8% decrease in realized annual rent per occupied square foot and a 3.9%1.7% decrease in Late Charges and Administrative Fees, partially offset by a 0.2% increase in average occupancy as compared to the same period in 2025. The 0.3% decrease in revenues for the six months ended June 30, 2026 was due primarily to a 0.5% decrease in realized annual rent per occupied square foot and a 2.8% decrease in Late Charges and Administrative Fees, partially offset by a 0.3% increase in average occupancy, as compared to the same period in 2025.

The 0.3%0.8% and 0.5% decrease in realized annual rent per occupied square foot for the three and six months ended MarchJune 31,30, 20262026, as compared to the same periodperiods in 2025, was due to lower average rates per square foot charged to new customers moving in as compared to customers moving out. The weighted average ratessquare foot occupancy for our Same Store Facilities was 92.5% and 92.0% for the three and six months ended June 30, 2026, respectively, representing an increase of 0.2% and 0.3%, respectively, due primarily to an increase in move-in volume net of move-out volumes, as compared to the same periods in 2025. Move-in average annual contract rent per square foot previouslyincreased chargedfor the three months ended June 30, 2026, as compared to customers moving out over the pastsame twelveperiod monthsin partially mitigated by rental rate increases to existing long-term customers.2025.

Move-out activities from our customers decreased for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025. Move-out average annual contract rent per square foot decreased for the three and six months ended MarchJune 31,30, 20262026, as compared to the same periodperiods in 2025.

The following table sets forth average annual contract rent per square foot and total square footage for customers moving in and moving out and churn during the three and six months ended MarchJune 31,30, 2026 and 2025. 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. Churn is defined as units moved out during the period, divided by starting occupied units at the beginning of the period. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of customers moving in who receive the discount.

Late charges and administrative fees decreased 3.9%1.7% and 2.8% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the same periodperiods in 2025, as a result of lower late charges collected on delinquent accounts due to lower customer delinquency rates.rates for both periods.

Cost of operations (excluding depreciation and amortization) decreasedincreased 1.1%4.4% and 1.6% for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 20252025. The year over-year increase for both periods was due primarily to decreasedincreased property tax expense, repairsmarketing expense, other direct property costs and maintenance, and marketing partially offset by increased indirect costs of operation.operations.

Property tax expense decreasedincreased 1.0%5.9% and 2.4% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the same periodperiods in 20252025, dueas toa the timingresult of propertyhigher taxassessed appeals and refunds.values. We expect property tax expense to grow in 2026 due primarily to higher assessed values.

Marketing expense includes internet advertising we utilize through our online paid search programs and the operating costs of our website and telephone reservation center. Internet advertising expense, comprising keyword search fees assessed on a “per click” basis, varies based upon demand for self-storage space, the quantity of people inquiring about self-storage through online search, occupancy levels, the number and aggressiveness of bidding competitors, and other factors. These factors are volatile; accordingly, Internet advertising can increase or decrease significantly in the short-term. Our marketing expense decreasedincreased by 4.5%6.3% and 0.5% for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025. The decreaseincrease wasin primarilymarketing expense is due to realizedutilizing costa efficiencieshigher onvolume ourof online paid search programs utilized to attract new customers.tenants.

Indirect Cost of Operations represents costs related to our supervisory payroll, centralized management costs, and share-based compensation. Indirect Cost of Operations increased 2.4%5.7% and 4.1% for the three and six months ended MarchJune 31,30, 20262026, respectively as compared to the same periodperiods in 2025, primarily related to changes in the administrative and compensation expenses for shared general corporate functions to the extent their efforts are devoted to self-storage operations. Such functions include information technology support, hardware, and software, as well as centralized administration of payroll, benefits, training, repairs and maintenance, customer service, pricing and marketing, operational accounting and finance, legal costs, and costs from field management executives.

We have been active in acquiring facilities in recent years. Our acquired facilities includes a total of 286306 facilities with 22.924.5 million net rentable square feet for a total cost of $4.3$4.5 billion. During the three and six months ended MarchJune 31,30, 2026, these facilities contributed net operating income of $49.2$50.9 million.million and $100.1 million, respectively.

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. During the threesix months ended MarchJune 31,30, 2026, we acquired three23 self-storage facilities across threenine states with 0.21.7 million net rentable square feet for $20.8$243.2 million. Subsequent to MarchJune 31,30, 2026, we acquired or were under contract to acquire 1521 self-storage facilities across foursix states with 1.21.5 million net rentable square feet for $165.5$211.7 million. Our total acquisitions planned or completed through MarchJune 31,30, 2026, amount to $186.3$454.9 million. Additionally, we recently announced our pending acquisition of NSA,PS referCanada and closed our acquisition of NSA. Refer to Note 3 for further details.

Newly Developed and Expanded Facilities

The Newly Developed and Expanded Facilities include 110111 facilities that were developed on new sites or expanded to increase their net rentable square footage that are not fully stabilized.stabilized 10and 9 expansion projects that are currently in process at MarchJune 31,30, 2026. The following table summarizes the development costs with respect to the Newly Developed and Expanded Facilities:

Our Newly Developed and Expanded Facilities includes a total of 120 self-storage facilities with 13.713.8 million net rentable square feet. For development and expansions completed by MarchJune 31,30, 2026, we incurred a total cost of $1.8 billion. During the three and six months ended MarchJune 31,30, 2026, Newly Developed and Expanded Facilities contributed net operating income of $31.8$32.8 million.million and $64.6 million, respectively.

We expect to add a total of 1.01.2 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate development cost of approximately $168.6$208.2 million. At MarchJune 31,30, 2026, we had 2731 additional facilities in development, which we expect will have a total of 2.52.8 million net rentable square feet of storage space and have an aggregate development cost of approximately $449.8$483.5 million. We expect these facilities to open over the next 18 to 24 months.

As of MarchJune 31,30, 2026, we have ongoing development and expansion projects that we estimate will have an aggregate development cost of approximately $618.4$691.7 million.

The Other Non-Same Store Facilities have an aggregate of 1.0 million net rentable square feet at MarchJune 31,30, 2026. As of MarchJune 31,30, 2026 and 2025, the average occupancy for these facilities totaled 83.4%86.8% and 76.9%,75.9%, respectively, and the annual contract rent per occupied square foot totaled $15.80$16.01 and $19.01$18.56 as of MarchJune 31,30, 2026 and 2025, respectively.

Depreciation and amortization expense for Self-Storage Operations increased $8.0$4.5 million and $12.5 million for the three and six months ended MarchJune 31,30, 2026, as compared to the same period in 2025, primarily due to acquired facilities and newly developed and expanded facilities.

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $6.8$7.3 million or 11.3%11.8%, inand $14.0 million or 11.6% for the three and six months ended MarchJune 31,30, 20262026, respectively, over the same periodperiods in 2025, as a result of an increase in our customer base with respect to acquired, newly developed, and expanded facilities and the third party properties we manage, as well as higher insurance coverage and premium rates in our customers base at our same store facilities. Tenant reinsurance premium revenue generated from customers at our Same Store Facilities were $51.8$53.2 million and $48.9$105.0 million infor the three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively, representing a 6.1%6.9% increase.and 6.5% increase, respectively, over the same periods in 2025.

Cost of operations primarily includes claims paid as well as claims adjustment expenses. Claims expenses vary based upon the number of insured customers and the volume of events that drive covered losses, such as burglary, as well as catastrophic weather events affecting multiple properties such as hurricanes and floods. Tenant reinsurance cost of operations increaseddecreased $1.2$0.1 million inand increased $1.1 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared the same periodperiods in 2025, primarily due to increased claim volumes and expenses related to flooding and burglary as well as increased access fees we paid to the third-party owners of properties we manage driven by the significant growth of our third-party property management program.

Third-party property management: At MarchJune 31,30, 2026, in our third-party property management program, we managed 370388 facilities (29.028.0 million net rentable square feet) for unrelated third parties, and were under contract to manage 7175 additional facilities (6.16.2 million net rentable square feet) including 68 facilities that are currently under construction. During the threesix months ended MarchJune 31,30, 2026, we added 2040 facilities to the program and had 1214 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.

Equity in earnings (loss) of unconsolidated real estate entity: We account for theour equity investmentsinvestment in Shurgard using the equity method and record our pro-rata share of theits net income of these entities.income. For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we recognized earnings from our equity method investment in Shurgard of $4.9 million and $11.8 million, respectively, as compared to losses of $2.2 million and earnings of Shurgard of $6.8$1.4 million andfor $3.6the million,same respectively.periods in 2025. Included in our equity earnings from Shurgard were $11.3$10.9 million and $13.3$22.2 million of our share of depreciation and amortization expense for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $17.7 million and 2025,$31.0 respectively.million for the same periods in 2025.

Real estate acquisition and development expense: InFor the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we incurred a total of $2.4$5.2 million and $7.4$7.6 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities.facilities, as compared to $2.5 million and $10.0 million for the same periods in 2025. These amounts are net of $3.0 million and $3.5$6.0 million infor the three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities.facilities, as compared to $3.4 million and $6.8 million for the same periods in 2025. The year-over-year change of real estate acquisition and development expense was primarily due to the recognition of a $3.8 million impairment write-down of certain land development parcels that were marketed for sale during the threesix months ended MarchJune 31,30, 2025.2025, as compared to a $0.2 million impairment recovery for the same period in 2026.

General and administrative expense: GeneralFor the three and six months ended June 30, 2026, general and administrative expense increased $5.2$18.6 million forand the$23.8 threemillion, months ended March 31, 2026respectively, as compared to the same periodperiods in 20252025. dueThe year-over-year increase was primarily related to (i) a $1.9$7.6 million increase in executive severance and CEO transition costs, (ii) a $5.1 million increase in corporate transformation costs, (iiiii) ana $2.6$4.7 million increase in CEOtransaction Transitionand costsintegration costs, and (iiiiv) a $1.9$3.4 million increase in executive labor costs, partially offset by a $1.1 million reduction in legal fees.costs.

We expect to incur corporate transformation costs of approximately $15 to $20 million as we complete the initiative over the next three years. Beginning in 2026, we believe this restructuring plan will result in future annual cost savings of approximately $3 to $5 million annually,million, although the amount and timing of such savings are subject to change depending on a variety of factors.

Interest earned on cash balances decreased $3.5$1.3 million and $4.8 million during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periods in 2025, due primarily to lower average cash balances and lower interest rates earned in 2025. As described in Note 8, during the three and six months ended MarchJune 31,30, 2026, we incurred a $5.3$0.6 million and $5.9 million in unrealized losslosses, respectively, on swaps that did not qualify for hedge accounting. The swaps were subsequently modified and designated as cash flow hedges in the second quarter.