UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ____________.

Commission File Number: 001-33519

Public Storage

(Exact name of registrant as specified in its charter)


Maryland						93-2834996
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

701 Western Avenue, Glendale, California						91201-2349
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (818) 244-8080.

Former name, former address and former fiscal, if changed since last report: N/A

Securities registered pursuant to Section 12b of the Act:

Title of Class

Trading Symbol

Name of each exchange on which registered

Common Shares, $0.10 par value

PSA

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 5.150% Cum Pref Share, Series F, $0.01 par value

PSAPrF

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 5.050% Cum Pref Share, Series G, $0.01 par value

PSAPrG

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 5.600% Cum Pref Share, Series H, $0.01 par value

PSAPrH

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.875% Cum Pref Share, Series I, $0.01 par value

PSAPrI

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.700% Cum Pref Share, Series J, $0.01 par value

PSAPrJ

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.750% Cum Pref Share, Series K, $0.01 par value

PSAPrK

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.625% Cum Pref Share, Series L, $0.01 par value

PSAPrL

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.125% Cum Pref Share, Series M, $0.01 par value

PSAPrM

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 3.875% Cum Pref Share, Series N, $0.01 par value

PSAPrN

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 3.900% Cum Pref Share, Series O, $0.01 par value

PSAPrO

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series P, $0.01 par value

PSAPrP

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 3.950% Cum Pref Share, Series Q, $0.01 par value

PSAPrQ

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series R, $0.01 par value

PSAPrR

New York Stock Exchange

Depositary Shares Each Representing 1/1,000 of a 4.100% Cum Pref Share, Series S, $0.01 par value

PSAPrS

New York Stock Exchange

Guarantee of 0.875% Senior Notes due 2032 issued by Public Storage Operating Company

PSA/32

New York Stock Exchange

Guarantee of 0.500% Senior Notes due 2030 issued by Public Storage Operating Company

PSA/30

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated
filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of the registrant’s outstanding common shares of beneficial interest, as of ~~October~~April 23, ~~2023:~~2024:

Common Shares of beneficial interest, $0.10 par value per share – ~~175,836,162~~175,724,665 shares

~~EXPLANATORY NOTE~~

On August 14, 2023, the registrant completed a corporate reorganization into a holding company structure commonly referred to as an umbrella partnership real estate investment trust, or UPREIT (the “Reorganization”). The Reorganization is described more fully below. For purposes of this Explanatory Note, we refer to the following entities:

•~~“Old PSA” is a Maryland real estate investment trust currently known as Public Storage Operating Company (“PSOC”). Prior to August 14, 2023, Old PSA was known as Public Storage.~~

•~~“New PSA” is a newly-formed Maryland real estate investment trust currently known as Public Storage. It was organized as the parent holding company in connection with the Reorganization.~~

•“PSOP GP” is PSOP GP, LLC, a newly-formed Delaware limited liability company organized as the general partner of PSA OP in connection with the Reorganization. This entity is wholly-owned by New PSA.

•“PSA OP” is Public Storage OP, L.P., a newly-formed Delaware limited partnership organized as the operating partnership in connection with the Reorganization. This entity is currently wholly-owned by PSOP GP, its general partner, and New PSA, its limited partner, and it wholly owns Old PSA.

Prior to August 14, 2023, the business of the registrant was conducted through Old PSA. As a result of the Reorganization, Old PSA became an indirectly wholly owned subsidiary of New PSA. Old PSA is wholly-owned by PSA OP. New PSA currently owns all the limited partnership interest of PSA OP and all the membership interest of PSA OP’s general partner, PSOP GP. In connection with the Reorganization, (i) each outstanding common share and depository receipt underlying preferred share of Old PSA was converted into one equivalent common share or depository receipt underlying preferred share of New PSA with identical rights and terms, and such securities continued to trade on the NYSE under the same ticker symbol, (ii) Old PSA’s name was changed to “Public Storage Operating Company” and New PSA inherited the name “Public Storage”, and (iii) New PSA became the successor filer to Old PSA for Securities and Exchange Commission (“SEC”) reporting purposes. The consolidated assets and liabilities of New PSA immediately following the Reorganization are identical to the consolidated assets and liabilities of Old PSA immediately prior to the Reorganization, and the officers and trustees of New PSA immediately following the Reorganization are identical to the officers and trustees of Old PSA immediately prior to the Reorganization. All material indebtedness of Old PSA immediately prior to the Reorganization remained indebtedness of Old PSA after the Merger. New PSA has provided a full and unconditional guarantee of Old PSA’s obligations under its unsecured notes, its credit facility, and certain other indebtedness. For additional information on the Reorganization, please see our Current Reports on Form 8-K filed on August 2, 2023 and August 14, 2023.

~~Throughout this Quarterly Report, unless the context requires otherwise:~~

•~~the “Company,” “we,” “us” and “our” refer to:~~

◦~~for the period prior to August 14, 2023 (the period preceding the Reorganization),~~ ~~Old PSA~~ ~~and its business and operations conducted through its directly or indirectly owned subsidiaries;~~

◦for the period on or after August 14, 2023 (the period from and following the Reorganization), New PSA and its business and operations conducted through its directly or indirectly owned subsidiaries, including ~~Old PSA; and~~

◦~~in statements regarding qualification as a real estate investment trust (“REIT”), such terms refer solely to Old PSA or New PSA, as applicable.~~

•~~References to “shares” and “shareholders” refer to the shares and shareholders of Old PSA prior to August 14, 2023 and of New PSA on or after August 14, 2023.~~

PUBLIC STORAGE

INDEX


PART I	FINANCIAL INFORMATION	Pages

Item 1.	Consolidated Financial Statements (Unaudited)

	Consolidated Balance Sheets	1

	Consolidated Statements of Income	2

	Consolidated Statements of Comprehensive Income	3

	Consolidated Statements of Equity ~~and Redeemable Noncontrolling Interests~~	4-7

	Consolidated Statements of Cash Flows	86-9

	Condensed Notes to Consolidated Financial Statements	108~~-22~~

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2321~~-49~~

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5044

Item 4.	Controls and Procedures	5044

PART II	OTHER INFORMATION (Items 3 4 and 54 are not applicable)

Item 1.	Legal Proceedings	5145

Item 1A.	Risk Factors	5145

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5145

Item 5.	Other Information	5145

Item 6.	Exhibits	5145

PUBLIC STORAGE

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)


		September 30, 2023		December 31, 2022			March 31, 2024	December 31, 2023
	(Unaudited)
		(Unaudited)
ASSETS

ASSETS

ASSETS	ASSETS

Cash and equivalents	Cash and equivalents	$	629,773	$	775,253
Real estate facilities, at cost:	Real estate facilities, at cost:
Land	Land	5,575,643		5,273,073
Land
Land
Buildings	Buildings	21,421,031		18,946,053
	27,598,160
Accumulated depreciation
	17,926,639
Construction in process
	18,315,917
		26,996,674		24,219,126
Accumulated depreciation		(9,188,151)		(8,554,155)
		17,808,523		15,664,971
Construction in process		457,064		372,992
		18,265,587		16,037,963

Investments in unconsolidated real estate entities
Investments in unconsolidated real estate entities
Investments in unconsolidated real estate entities	Investments in unconsolidated real estate entities	278,131		275,752
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net	414,291		232,517
Other assets	Other assets	287,967		230,822
Total assets	Total assets	$	19,875,749	$	17,552,307

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY

Notes payable	Notes payable	$	9,029,622	$	6,870,826

Accrued and other liabilities	Accrued and other liabilities	644,236		514,680
Accrued and other liabilities
Accrued and other liabilities
Total liabilities	Total liabilities	9,673,858		7,385,506

Commitments and contingencies (Note 15)
Commitments and contingencies (Note 14)						Commitments and contingencies (Note 14)

Equity:	Equity:

Equity:

Equity:
Public Storage shareholders’ equity:	Public Storage shareholders’ equity:					Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 174,000 shares issued (in series) and outstanding, (174,000 shares at December 31, 2022) at liquidation preference		4,350,000		4,350,000
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,501,315 shares issued and outstanding (175,265,668 shares at December 31, 2022)		17,550		17,527
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 174,000 shares issued (in series) and outstanding, (174,000 shares at December 31, 2023) at liquidation preference
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,723,561 shares issued and outstanding (175,670,727 shares at December 31, 2023)
Paid-in capital	Paid-in capital	5,951,794		5,896,423
Accumulated deficit	Accumulated deficit	(130,581)		(110,231)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(81,104)		(80,317)
Total Public Storage shareholders’ equity	Total Public Storage shareholders’ equity	10,107,659		10,073,402
Noncontrolling interests	Noncontrolling interests	94,232		93,399
Total equity	Total equity	10,201,891		10,166,801
Total liabilities and equity	Total liabilities and equity	$	19,875,749	$	17,552,307

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share amounts)

(Unaudited)




		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2023		2022		2023		2022

Revenues:	Revenues:

Revenues:

Revenues:
Self-storage facilities
Self-storage facilities
Self-storage facilities	Self-storage facilities	$	1,078,721	$	1,027,374	$	3,167,025	$	2,917,675
Ancillary operations	Ancillary operations	65,099		60,757		190,797		175,946
Ancillary operations
Ancillary operations
						1,157,220
						1,157,220
						1,157,220
		1,143,820		1,088,131		3,357,822		3,093,621
Expenses:

Expenses:

Expenses:	Expenses:
Self-storage cost of operations	Self-storage cost of operations	267,785		255,470		794,078		738,953
Self-storage cost of operations
Self-storage cost of operations
Ancillary cost of operations
Ancillary cost of operations
Ancillary cost of operations	Ancillary cost of operations	21,159		21,572		63,037		54,297
Depreciation and amortization	Depreciation and amortization	238,748		220,772		682,531		661,608
Depreciation and amortization
Depreciation and amortization
Real estate acquisition and development expense
Real estate acquisition and development expense
Real estate acquisition and development expense
General and administrative	General and administrative	28,625		29,501		79,603		81,401
General and administrative
General and administrative
Interest expense
Interest expense
Interest expense	Interest expense	58,350		34,113		132,530		100,178
		614,667		561,428		1,751,779		1,636,437

Other increases to net income:


Other increases (decreases) to net income:

Other increases (decreases) to net income:

Other increases (decreases) to net income:
Interest and other income
Interest and other income
Interest and other income	Interest and other income	32,295		12,736		69,381		26,394
Equity in earnings of unconsolidated real estate entities	Equity in earnings of unconsolidated real estate entities	7,227		8,180		22,787		100,129
Foreign currency exchange gain		47,880		100,170		19,924		237,270
Equity in earnings of unconsolidated real estate entities
Equity in earnings of unconsolidated real estate entities
Foreign currency exchange gain (loss)
Foreign currency exchange gain (loss)
Foreign currency exchange gain (loss)

Gain on sale of real estate	Gain on sale of real estate	88		1,503		88		1,503
Gain on sale of equity investment in PS Business Parks, Inc.		—		2,128,860		—		2,128,860

Gain on sale of real estate

Gain on sale of real estate

Income before income tax expense

Income before income tax expense

Income before income tax expense
Income tax expense
Income tax expense
Income tax expense
Net income
Net income
Net income	Net income	616,643		2,778,152		1,718,223		3,951,340
Allocation to noncontrolling interests	Allocation to noncontrolling interests	(3,345)		(9,158)		(9,188)		(14,553)
Allocation to noncontrolling interests
Allocation to noncontrolling interests
Net income allocable to Public Storage shareholders
Net income allocable to Public Storage shareholders
Net income allocable to Public Storage shareholders	Net income allocable to Public Storage shareholders	613,298		2,768,994		1,709,035		3,936,787
Allocation of net income to:	Allocation of net income to:
Allocation of net income to:
Allocation of net income to:
Preferred shareholders
Preferred shareholders
Preferred shareholders	Preferred shareholders	(48,678)		(48,678)		(146,029)		(145,716)

Restricted share units		(1,383)		(8,155)		(3,922)		(11,405)
Restricted share units and unvested LTIP units

Restricted share units and unvested LTIP units

Restricted share units and unvested LTIP units
Net income allocable to common shareholders
Net income allocable to common shareholders
Net income allocable to common shareholders	Net income allocable to common shareholders	$	563,237	$	2,712,161	$	1,559,084	$	3,779,666
Net income per common share:	Net income per common share:
Net income per common share:
Net income per common share:
Basic	Basic	$	3.21	$	15.47	$	8.89	$	21.57
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	3.20	$	15.38	$	8.85	$	21.44

Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	175,499		175,283		175,451		175,227

Basic weighted average common shares outstanding

Basic weighted average common shares outstanding
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	176,150		176,328		176,170		176,325
Diluted weighted average common shares outstanding
Diluted weighted average common shares outstanding

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2023 2022 2023 2022
Net income $ 616,643 $ 2,778,152 $ 1,718,223 $ 3,951,340
Foreign currency translation loss on investment in Shurgard (5,958) (17,253) (787) (42,883)
Total comprehensive income 610,685 2,760,899 1,717,436 3,908,457
Allocation to noncontrolling interests (3,345) (9,158) (9,188) (14,553)
Comprehensive income allocable to Public Storage shareholders $ 607,340 $ 2,751,741 $ 1,708,248 $ 3,893,904



	Three Months Ended March 31,
		2024		2023

Net income		$	511,697	$	520,415
Foreign currency translation (loss) gain on investment in Shurgard		(7,275)		3,869
Total comprehensive income		504,422		524,284
Allocation to noncontrolling interests		(2,748)		(2,707)
Comprehensive income allocable to Public Storage shareholders		$	501,674	$	521,577

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF EQUITY ~~AND REDEEMABLE NONCONTROLLING INTERESTS~~

Three Months Ended ~~September 30,~~March 31, 2024

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	Cumulative Preferred Shares		Common Shares		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Public Storage Shareholders' Equity		Noncontrolling Interests		Total Equity
Balances at December 31, 2023	$	4,350,000	$	17,567	$	5,980,760	$	(267,910)	$	(67,239)	$	10,013,178	$	93,768	$	10,106,946


Issuance of common shares in connection with share-based compensation (52,834 shares) (Note 11)	—		5		7,828		—		—		7,833		—		7,833
Taxes withheld upon net share settlement of restricted share units (Note 11)	—		—		(5,328)		—		—		(5,328)		—		(5,328)
Share-based compensation cost (Note 11)	—		—		11,305		—		—		11,305		—		11,305

Contributions by noncontrolling interests	—		—		—		—		—		—		1,327		1,327

Net income	—		—		—		511,697		—		511,697		—		511,697
Net income allocated to noncontrolling interests	—		—		—		(2,749)		—		(2,749)		2,749		—
Reallocation of equity	—		—		(2,959)		—		—		(2,959)		2,959		—
Distributions to:
Preferred shareholders (Note 9)	—		—		—		(48,678)		—		(48,678)		—		(48,678)
Noncontrolling interests	—		—		—		—		—		—		(4,166)		(4,166)
Common shareholders, restricted share unitholders and unvested LTIP unitholders ($3.00 per share/unit) (Note 9)	—		—		—		(528,363)		—		(528,363)		—		(528,363)
Other comprehensive loss	—		—		—		—		(7,274)		(7,274)		(1)		(7,275)
Balances at March 31, 2024	$	4,350,000	$	17,572	$	5,991,606	$	(336,003)	$	(74,513)	$	9,948,662	$	96,636	$	10,045,298

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended March 31, 2023

(Amounts in thousands, except share and per share amounts)

(Unaudited)

Cumulative Preferred Shares Common Shares Paid-in Capital Accumulated Deficit Accumulated
Other Comprehensive Loss Total
Public Storage Shareholders' Equity Noncontrolling Interests Total Equity
Balances at June 30, 2023 $ 4,350,000 $ 17,549 $ 5,940,945 $ (167,404) $ (75,146) $ 10,065,944 $ 92,627 $ 10,158,571
Issuance of common shares in connection with share-based compensation (8,429 shares) — 1 1,105 — — 1,106 — 1,106
Taxes withheld upon net share settlement of restricted share units — — (644) — — (644) — (644)
Share-based compensation expense — — 10,388 — — 10,388 — 10,388
Contributions by noncontrolling interests — — — — — — 1,908 1,908
Net income — — — 616,643 — 616,643 — 616,643
Net income allocated to noncontrolling interests — — — (3,345) — (3,345) 3,345 —
Distributions to:
Preferred shareholders (Note 10) — — — (48,678) — (48,678) — (48,678)
Noncontrolling interests — — — — — — (3,648) (3,648)
Common shareholders and restricted share unitholders ($3.00 per share) (Note 10) — — — (527,797) — (527,797) — (527,797)
Other comprehensive loss — — — — (5,958) (5,958) — (5,958)
Balances at September 30, 2023 $ 4,350,000 $ 17,550 $ 5,951,794 $ (130,581) $ (81,104) $ 10,107,659 $ 94,232 $ 10,201,891

~~See accompanying notes.~~

~~PUBLIC STORAGE~~

~~CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS~~

~~Three Months Ended September 30, 2022~~

~~(Amounts in thousands, except share and per share amounts)~~

~~(Unaudited)~~

Cumulative Preferred Shares Common Shares Paid-in Capital Accumulated Deficit Accumulated
Other Comprehensive Loss Total
Public Storage Shareholders' Equity Noncontrolling Interests Total Equity Redeemable Noncontrolling Interests
Balances at June 30, 2022 $ 4,350,000 $ 17,524 $ 5,848,632 $ (182,213) $ (79,217) $ 9,954,726 $ 93,622 $ 10,048,348 $ —
Issuance of common shares in connection with share-based compensation (97,189 shares) — 10 16,445 — — 16,455 — 16,455 —
Taxes withheld upon net share settlement of restricted share units — — (779) — — (779) — (779) —
Share-based compensation expense — — 14,441 — — 14,441 — 14,441 —
Contributions by noncontrolling interests — — — — — — 561 561 —
Net income — — — 2,778,152 — 2,778,152 — 2,778,152 —
Net income allocated to noncontrolling interests — — — (9,158) — (9,158) 9,158 — —
Distributions to:
Preferred shareholders — — — (48,678) — (48,678) — (48,678) —
Noncontrolling interests — — — — — — (9,756) (9,756) —
Common shareholders and restricted share unitholders ($15.15 per share) — — — (2,660,734) — (2,660,734) — (2,660,734) —
Other comprehensive loss — — — — (17,253) (17,253) — (17,253) —
Balances at September 30, 2022 $ 4,350,000 $ 17,534 $ 5,878,739 $ (122,631) $ (96,470) $ 10,027,172 $ 93,585 $ 10,120,757 $ —

~~See accompanying notes.~~

~~PUBLIC STORAGE~~

~~CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS~~

~~Nine Months Ended September 30, 2023~~

~~(Amounts in thousands, except share and per share amounts)~~

~~(Unaudited)~~

Cumulative Preferred Shares Common Shares Paid-in Capital Accumulated Deficit Accumulated
Other Comprehensive Loss Total
Public Storage Shareholders' Equity Noncontrolling Interests Total Equity
Balances at December 31, 2022 $ 4,350,000 $ 17,527 $ 5,896,423 $ (110,231) $ (80,317) $ 10,073,402 $ 93,399 $ 10,166,801
Issuance of common shares in connection with share-based compensation (235,647 shares) (Note 12) — 23 31,267 — — 31,290 — 31,290
Taxes withheld upon net share settlement of restricted share units (Note 12) — — (10,040) — — (10,040) — (10,040)
Share-based compensation cost (Note 12) — — 34,144 — — 34,144 — 34,144
Contributions by noncontrolling interests — — — — — — 2,641 2,641
Net income — — — 1,718,223 — 1,718,223 — 1,718,223
Net income allocated to noncontrolling interests — — — (9,188) — (9,188) 9,188 —
Distributions to:
Preferred shareholders (Note 10) — — — (146,029) — (146,029) — (146,029)
Noncontrolling interests — — — — — — (10,996) (10,996)
Common shareholders and restricted share unitholders ($9.00 per share) (Note 10) — — — (1,583,356) — (1,583,356) — (1,583,356)
Other comprehensive loss — — — — (787) (787) — (787)
Balances at September 30, 2023 $ 4,350,000 $ 17,550 $ 5,951,794 $ (130,581) $ (81,104) $ 10,107,659 $ 94,232 $ 10,201,891

~~See accompanying notes.~~

~~PUBLIC STORAGE~~

~~CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS~~

~~Nine Months Ended September 30, 2022~~

~~(Amounts in thousands, except share and per share amounts)~~

~~(Unaudited)~~


		Cumulative Preferred Shares		Common Shares		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Public Storage Shareholders' Equity		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
Balances at December 31, 2021		$	4,100,000	$	17,513	$	5,821,667	$	(550,416)	$	(53,587)	$	9,335,177	$	20,112	$	9,355,289	$	68,249
Issuance of 10,000 preferred shares		250,000		—		(7,168)		—		—		242,832		—		242,832		—

Issuance of common shares in connection with share-based compensation (201,997 shares)		—		21		27,994		—		—		28,015		—		28,015		—

Balances at December 31, 2022
Balances at December 31, 2022
Balances at December 31, 2022

Issuance of common shares in connection with share-based compensation (200,554 shares)

Issuance of common shares in connection with share-based compensation (200,554 shares)

Issuance of common shares in connection with share-based compensation (200,554 shares)
Taxes withheld upon net settlement of restricted share units	Taxes withheld upon net settlement of restricted share units	—		—		(12,989)		—		—		(12,989)		—		(12,989)		—
Taxes withheld upon net settlement of restricted share units
Taxes withheld upon net settlement of restricted share units
Share-based compensation cost
Share-based compensation cost
Share-based compensation cost	Share-based compensation cost	—		—		49,235		—		—		49,235		—		49,235		—

Contributions by noncontrolling interests	Contributions by noncontrolling interests	—		—		—		—		—		—		6,698		6,698		15,426
Reclassification from redeemable noncontrolling interests to noncontrolling interests		—		—		—		—		—		—		83,826		83,826		(83,826)

Contributions by noncontrolling interests

Contributions by noncontrolling interests

Net income

Net income

Net income	Net income	—		—		—		3,951,340		—		3,951,340		—		3,951,340		—
Net income allocated to noncontrolling interests	Net income allocated to noncontrolling interests	—		—		—		(14,553)		—		(14,553)		13,893		(660)		660
Net income allocated to noncontrolling interests
Net income allocated to noncontrolling interests
Distributions to:
Distributions to:
Distributions to:	Distributions to:
Preferred shareholders	Preferred shareholders	—		—		—		(145,716)		—		(145,716)		—		(145,716)		—
Preferred shareholders
Preferred shareholders
Noncontrolling interests	Noncontrolling interests	—		—		—		—		—		—		(30,944)		(30,944)		(509)
Common shareholders and restricted share unitholders ($19.15 per share)		—		—		—		(3,363,286)		—		(3,363,286)		—		(3,363,286)		—
Other comprehensive loss		—		—		—		—		(42,883)		(42,883)		—		(42,883)		—
Balances at September 30, 2022		$	4,350,000	$	17,534	$	5,878,739	$	(122,631)	$	(96,470)	$	10,027,172	$	93,585	$	10,120,757	$	—
Noncontrolling interests
Noncontrolling interests
Common shareholders and restricted share unitholders ($3.00 per share)
Common shareholders and restricted share unitholders ($3.00 per share)
Common shareholders and restricted share unitholders ($3.00 per share)
Other comprehensive income
Other comprehensive income
Other comprehensive income
Balances at March 31, 2023
Balances at March 31, 2023
Balances at March 31, 2023

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

2023

2022

Cash flows from operating activities:

Net income

1,718,223

3,951,340

Adjustments to reconcile net income to net cash flows from operating activities:

Gain on sale of equity investment in PS Business Parks, Inc.

—

(2,128,860)

Adjustments to reconcile net income to net cash flows from operating activities:

Gain on sale of real estate

(88)

(1,503)

Depreciation and amortization

682,531

661,608

Depreciation and amortization

Equity in earnings of unconsolidated real estate entities

(22,787)

(100,129)

Distributions from cumulative equity in earnings of unconsolidated real estate entities

17,663

134,460

Unrealized foreign currency exchange gain

(19,937)

(236,698)

Distributions from cumulative equity in earnings of unconsolidated real estate entities

Unrealized foreign currency exchange (gain) loss

Share-based compensation expense

31,309

44,597

Other non-cash adjustments

10,205

6,213

Other non-cash adjustments

Changes in operating assets and liabilities, excluding the impact of acquisitions:

Other assets

(40,719)

(41,123)

Other assets

Accrued and other liabilities

78,564

90,885

Net cash flows from operating activities

2,454,964

2,380,790

Net cash flows from operating activities

Cash flows from investing activities:

Capital expenditures to maintain real estate facilities

(157,967)

(163,702)

Capital expenditures to maintain real estate facilities

Capital expenditures for property enhancements

(119,360)

(137,550)

Capital expenditures for energy efficiencies (LED lighting, solar)

(45,772)

(36,644)

Capital expenditures for energy efficiencies (LED lighting, solar)

Development and expansion of real estate facilities

(248,977)

(231,483)

Acquisition of real estate facilities and intangible assets

(301,324)

(529,357)

Acquisition of BREIT Simply Storage LLC, net of cash acquired

(2,178,151)

—

Distributions in excess of cumulative equity in earnings from unconsolidated real estate entities

3,165

13,670

Acquisition of real estate facilities and intangible assets

Proceeds from sale of real estate investments

101

1,543

Proceeds from sale of equity investment in PS Business Parks, Inc.

—

2,636,011

Net cash flows (used in) from investing activities

(3,048,285)

1,552,488

Proceeds from sale of real estate investments

Net cash flows used in investing activities

Cash flows from financing activities:

Issuance costs on amendment of credit facility

(8,377)

—

Cash flows from financing activities:

Repayments of notes payable

(8,229)

(502,270)

Issuance of notes payable, net of issuance costs

2,181,273

—

Issuance of preferred shares

—

242,832

Repayments of notes payable

Issuance of common shares in connection with share-based compensation

31,099

27,913

Taxes paid upon net share settlement of restricted share units

(10,040)

(12,989)

Taxes paid upon net share settlement of restricted share units

Contributions by noncontrolling interests

2,641

1,659

Distributions paid to preferred shareholders, common shareholders and restricted share unitholders

(1,728,852)

(3,508,581)

Contributions by noncontrolling interests

Distributions paid to preferred shareholders, common shareholders, restricted share unitholders and unvested LTIP unitholders

Distributions paid to noncontrolling interests

(10,996)

(31,453)

Net cash flows from (used) in financing activities

448,519

(3,782,889)

Distributions paid to noncontrolling interests

Net cash flows used in financing activities

Net (decrease) increase in cash and equivalents, including restricted cash

(144,802)

150,389

Net decrease in cash and equivalents, including restricted cash

See accompanying notes.

PUBLIC STORAGE

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

2023

2022

Cash and equivalents, including restricted cash at beginning of the period:

Cash and equivalents

775,253

734,599

Cash and equivalents

Restricted cash included in other assets

Cash and equivalents, including restricted cash at end of the period:

Cash and equivalents

Restricted cash included in other assets

29,904

26,691

805,157

761,290

Cash and equivalents, including restricted cash at end of the period:

Cash and equivalents

629,773

883,787

Restricted cash included in other assets

30,582

27,892

660,355

911,679

Supplemental schedule of non-cash investing and financing activities:

Costs incurred during the period remaining unpaid at period end for:

Capital expenditures to maintain real estate facilities

(10,405)

(6,429)

Capital expenditures to maintain real estate facilities

Capital expenditures for property enhancements

(4,637)

(6,829)

Capital expenditures for energy efficiencies (LED lighting, solar)

(574)

(996)

Capital expenditures for energy efficiencies (LED lighting, solar)

Construction or expansion of real estate facilities

(66,788)

(71,006)

Real estate acquired in exchange for noncontrolling interests

—

(19,865)

Construction or expansion of real estate facilities

Supplemental cash flow information:

Cash paid for interest, net of amounts capitalized

Cash paid for income taxes, net of refunds

See accompanying notes.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2023~~March 31, 2024

(Unaudited)

1.Description of the Business

Public Storage (referred to herein as “the Company,” “we,” “us,” or “our”) is a Maryland real estate investment trust (“REIT”) engaged in the ownership and operation of self-storage facilities that offer storage spaces for lease, generally on a month-to-month basis, for personal and business use, ancillary activities such as tenant reinsurance, merchandise sales, and third party management, as well as the acquisition and development of additional self-storage space.

~~As described in greater detail in the Explanatory Note to this Quarterly Report on Form 10-Q, on~~Effective August 14, 2023, ~~the Company completed a reorganization in~~we are structured as an umbrella partnership REIT, or UPREIT, under which ~~its interest in its facilities~~substantially all of our business is ~~now held~~conducted through ~~an operating partnership,~~ Public Storage OP, L.P. (“PSA OP”), an operating partnership, and its subsidiaries including Public Storage Operating Company (“PSOC”)~~, formerly known as Public Storage. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.~~. The reorganization was accounted for as a transaction between entities under common control and there was no change in the Company’s total assets, liabilities or results of operations. Subsequent to the reorganization, the primary assets of the parent entity, Public Storage, are general partner and limited partner interests in PSA OP, which holds all of the Company’s assets through its ownership of all of the membership interests in PSOC. As a limited partnership, PSA OP is a variable interest entity and is consolidated by the Company as its primary beneficiary. As of ~~September 30, 2023,~~March 31, 2024, the Company owned all of the general partner interests and approximately 99.95% of the limited partnership interests of PSA ~~OP.~~OP, with the remaining 0.05% of limited partnership interests owned by certain trustees and officers of the Company.

At ~~September 30, 2023,~~March 31, 2024, we owned equity interests in ~~3,028~~3,045 self-storage facilities (with approximately ~~216.5~~218.4 million net rentable square feet) located in 40 states in the United States (“U.S.”) operating under the Public Storage® name, and ~~1.2~~1.1 million net rentable square feet of commercial and retail space. In addition, we managed 235 facilities for third parties at March 31, 2024.

At ~~September 30, 2023,~~March 31, 2024, we owned a 35% common equity interest in Shurgard Self Storage Limited (“Shurgard”), a public company traded on the Euronext Brussels under the “SHUR” symbol, which owned ~~267~~279 self-storage facilities (with approximately 15 million net rentable square feet) located in seven Western European countries, all operating under the Shurgard® name.

2.Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

We have prepared the accompanying interim consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Accounting Standards Codification of the Financial Accounting Standards Board, and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, the interim consolidated financial statements presented herein reflect all adjustments, primarily of a normal recurring nature, that are necessary to present fairly the interim consolidated financial statements. Because they do not include all of the disclosures required by GAAP for complete annual financial statements, these interim consolidated financial statements should be read together with the audited Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Certain amounts previously reported in our ~~September 30, 2022~~March 31, 2023 Consolidated Statements of Income have been reclassified to conform to the March 31, 2024 presentation, with respect to the separate presentation of real estate acquisition and development expense in the amount of $5.5 million for the three months ended March 31, 2023, previously included in general and administrative expense. The reclassification had no impact on our net income.

Certain amounts previously reported in our March 31, 2023 Statements of Cash Flows have been reclassified to conform to the ~~September 30, 2023~~March 31, 2024 presentation, with respect to the ~~separate presentation of changes in operating assets and liabilities in the cash flows from operating activities section and~~ major types of capital expenditures in the cash flows from investing activities section. The reclassifications did not affect the subtotals for cash flows from operating, investing or financing activities.

Disclosures of the number and square footage of facilities, as well as the number and coverage of tenant reinsurance policies (Note ~~15)~~14) are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Operating results for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2023.~~

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

2024.

Summary of Significant Accounting Policies

There have been no significant changes to the Company's significant accounting policies described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in Notes to Consolidated Financial Statements included in Item 8 of Part II of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

3.~~Simply Acquisition~~

On September 13, 2023, we acquired all the membership interests of BREIT Simply Storage LLC, a self-storage company that owns and operates 127 self-storage facilities (9.4 million net rentable square feet) and manages 25 self-storage facilities for third parties, for a purchase price of $2.2 billion in cash, including cash acquired of $6.0 million and direct transaction costs of $9.6 million (the “Simply Acquisition”).

We accounted for the Simply Acquisition as an asset acquisition because substantially all the fair value of the gross assets acquired is concentrated in the real estate assets and intangible assets associated with the self-storage facilities, which are determined to be similar in nature. As a result, the direct transaction costs of $9.6 million were capitalized to the basis of the acquired properties.

The total purchase price was allocated to the individual assets acquired and liabilities assumed based on their relative fair values. The total purchase price, including direct transaction costs, was allocated as follows (in thousands):


~~Cash~~	$	~~6,032~~
~~Real estate facilities:~~
~~Land~~	~~229,396~~
~~Buildings~~	~~1,762,752~~
~~Construction in process~~	~~2,922~~
~~Intangible assets:~~
~~Acquired customers in place~~	~~209,516~~
~~Non real estate-related contracts~~	~~4,750~~
~~Other assets~~	~~12,046~~
~~Accrued and other liabilities~~	~~(43,231)~~

~~Total purchase price, including direct transaction costs~~	$	~~2,184,183~~

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

4.Real Estate Facilities

Activity in real estate facilities during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 is as follows:

Three Months Ended March 31, 2024

~~Nine Months Ended September 30, 2023~~

(Amounts in thousands)

Operating facilities, at cost:

Beginning balance

~~24,219,126~~27,465,238

Capital expenditures to maintain real estate facilities

~~153,120~~58,056

Capital expenditures for property enhancements

~~124,298~~27,626

Capital expenditures for energy efficiencies (LED lighting, solar)

~~46,357~~13,760

~~Acquisitions~~

~~2,284,590~~

Dispositions and other

~~(3,461)~~(1,549)

Developed or expanded facilities opened for operation

~~172,644~~35,029

Ending balance

~~26,996,674~~27,598,160

Accumulated depreciation:

Beginning balance

~~(8,554,155)~~(9,423,974)

Depreciation expense

~~(636,631)~~(247,547)

~~Dispositions and other~~

~~2,635~~

Ending balance

~~(9,188,151)~~(9,671,521)

Construction in process:

Beginning balance

~~372,992~~345,453

Costs incurred to develop and expand real estate facilities

~~257,527~~79,322

~~Acquisitions~~

~~2,922~~

Write-off of cancelled projects

~~(3,733)~~(468)

Developed or expanded facilities opened for operation

~~(172,644)~~(35,029)

Ending balance

~~457,064~~389,278

Total real estate facilities at ~~September 30, 2023~~March 31, 2024

~~18,265,587~~18,315,917

During the ~~nine~~three months ended ~~September 30, 2023, in addition to the Simply Acquisition,~~March 31, 2024, we acquired 26 self-storage facilities (1.9 million net rentable square feet of storage space), for a total cost of $301.3 million in cash. Approximately $8.9 million of the total cost was allocated to intangible assets.

We completed development and redevelopment activities costing ~~$172.6~~$35.0 million, ~~during the nine months ended September 30, 2023,~~ adding ~~0.9~~0.3 million net rentable square feet of self-storage space. Construction in process at ~~September 30, 2023~~March 31, 2024 consisted of projects to develop new self-storage facilities and expand existing self-storage facilities.

In the three months ended March 31, 2024, we sold a land parcel for $2.4 million in cash and recorded gains on sale of real estate of $0.9 million.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2023~~March 31, 2024

(Unaudited)

5.4.Investments in Unconsolidated Real Estate Entities

~~The following table sets forth our equity in earnings of the Unconsolidated Real Estate Entities (amounts in thousands):~~

Equity in Earnings of Unconsolidated Real Estate Entities for the
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Shurgard $ 7,227 $ 4,594 $ 22,787 $ 19,533
PSB — 3,586 — 80,596
Total $ 7,227 $ 8,180 $ 22,787 $ 100,129

~~Investment in Shurgard~~

~~Our investment in Shurgard was $278.1 million and $275.8 million as of September 30, 2023 and December 31, 2022, respectively.~~

Throughout all periods presented, we ~~effectively owned 31,268,459 Shurgard common shares, representing~~had a 35% equity interest in Shurgard. On November 14, 2023, Shurgard issued 8,163,265 new common shares to institutional investors. Public Storage participated on a pro-rata basis in the offering and acquired 2,863,674 common shares for a cost of $112.6 million, maintaining our 35% equity interest in Shurgard. As a result of the offering, Shurgard common shares that we effectively owned increased from 31,268,459 to 34,132,133 as of March 31, 2024.

Based upon the closing price at ~~September 30, 2023~~March 31, 2024 (€~~37.50~~41.38 per share of Shurgard common stock, at ~~1.057~~1.079 exchange rate of U.S. Dollars to the Euro), the shares we owned had a market value of approximately ~~$1.2~~$1.5 billion.

Our equity in earnings of Shurgard comprised our equity share of Shurgard’s net income, less amortization of the Shurgard Basis Differential (defined below). During the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ we received ~~$2.8~~$1.0 million and ~~$2.6~~$0.9 million of trademark license fees that Shurgard pays to us for the use of the Shurgard® trademark, respectively. We eliminated ~~$1.0~~$0.4 million and ~~$0.9~~$0.3 million of intra-entity profits and losses for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively, representing our equity share of the trademark license fees. We classify the remaining license fees we receive from Shurgard as interest and other income on our income statement.

During the nine months ended September 30, 2023 and 2022, we received cash dividend distributions from Shurgard totaling $19.8 million and $37.8 million, respectively. Approximately $3.2 million and $13.7 million of total cash distributions from Shurgard during the nine months ended September 30, 2023 and 2022, respectively, represented distributions in excess of cumulative equity in earnings from Shurgard, which was classified within cash flows from investing activities in the Consolidated Statements of Cash Flows.

At ~~September 30, 2023,~~March 31, 2024, our investment in Shurgard’s real estate assets exceeded our pro-rata share of the underlying amounts on Shurgard’s balance sheet by approximately ~~$63.2~~$61.3 million ($~~67.8~~63.7 million at December 31, ~~2022)~~2023). This differential (the “Shurgard Basis Differential”) includes our basis adjustments in Shurgard’s real estate assets net of related deferred income taxes. The Shurgard Basis Differential is being amortized as a reduction to equity in earnings of the Unconsolidated Real Estate Entities. Such amortization totaled approximately ~~$4.6~~$2.4 million and ~~$9.0~~$4.5 million during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively.

As of ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ we translated the book value of our investment in Shurgard from Euro to U.S. Dollars and recorded ~~$0.8 million and $42.9~~$7.3 million other comprehensive loss and $3.9 million other comprehensive income during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively.

~~Investment in PSB~~

On July 20, 2022, in connection with the closing of the merger of PS Business Parks, Inc. (“PSB”) with affiliates of Blackstone Real Estate (“Blackstone”), we completed the sale of our 41% common equity interest in PSB in its entirety. At the close of the merger transaction, we received a total of $2.7 billion of cash proceeds and recognized a gain of $2.1 billion during the third quarter of 2022.

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

During the nine months ended September 30, 2022, we received cash distributions from PSB totaling $109.5 million, which were classified within cash flows from operating activities in the Consolidated Statements of Cash flows. Since the sale of PSB in July 2022, we no longer recognize equity in earnings or receive cash distributions from PSB.

6.5.Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following (amounts in thousands):


		At September 30, 2023						At December 31, 2022
		Gross Book Value		Accumulated Amortization		Net Book Value		Gross Book Value		Accumulated Amortization		Net Book Value
	At March 31, 2024															At March 31, 2024			At December 31, 2023
	Gross Book Value													Gross Book Value	Accumulated Amortization		Net Book Value	Gross Book Value		Accumulated Amortization	Net Book Value
Goodwill	Goodwill	$	165,843	$	—	$	165,843	$	165,843	$	—	$	165,843
Shurgard® Trade Name	Shurgard® Trade Name	18,824		—		18,824		18,824		—		18,824
Finite-lived intangible assets, subject to amortization	Finite-lived intangible assets, subject to amortization	981,254		(751,630)		229,624		758,106		(710,256)		47,850
Total goodwill and other intangible assets	Total goodwill and other intangible assets	$	1,165,921	$	(751,630)	$	414,291	$	942,773	$	(710,256)	$	232,517

Finite-lived intangible assets consist primarily of acquired customers in place. Amortization expense related to intangible assets subject to amortization was ~~$16.0~~$35.8 million and ~~$41.4~~$14.6 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, respectively, and $20.0 million and $78.2 million for the same periods in 2022. During the nine months ended September 30, 2023, intangibles increased $223.1 million, in connection with the Simply Acquisition (Note 3) and the acquisition of real estate facilities (Note 4).respectively.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

The estimated future amortization expense for our finite-lived intangible assets at ~~September 30, 2023~~March 31, 2024 is as follows (amounts in thousands):


Year	Year	Amount		Year	Amount
Remainder of 2023		$	39,491
2024		108,871
Remainder of 2024
2025	2025	56,693
2026	2026	18,013
2027	2027	2,687
2028
Thereafter	Thereafter	3,869
Total	Total	$	229,624

7.6.Credit Facility

On June 12, 2023, PSOC entered into an amended revolving credit agreement (the “Credit Facility”), which ~~increases~~increased our borrowing limit from $500 million to $1.5 billion and ~~extends~~extended the maturity date from April 19, 2024 to June 12, 2027. We have the option to further extend the maturity date by up to one additional year with additional extension fees up to 0.125% of the extended commitment amount. Amounts drawn on the Credit Facility bear annual interest at rates ranging from SOFR plus 0.65% to SOFR plus 1.40% depending upon our credit rating (SOFR plus 0.70% at ~~September 30, 2023)~~March 31, 2024). We are also required to pay a quarterly facility fee ranging from 0.10% per annum to 0.30% per annum depending upon our credit rating (0.10% per annum at ~~September 30, 2023)~~March 31, 2024). At ~~September~~March 31, 2024 and April 30, ~~2023 and October 30, 2023,~~2024, we had no outstanding borrowings under this Credit Facility. We had undrawn standby letters of credit, which reduce our borrowing capacity, totaling $14.6 million at ~~September 30, 2023~~March 31, 2024 ($~~18.6~~14.6 million at December 31, ~~2022 under the previous credit facility)~~2023). The Credit Facility has various customary restrictive covenants with which we were in compliance at September 30, 2023. We incurred a total of $8.4 million of issuance costs associated with the amended Credit Facility, which is classified as Other Assets on the Consolidated Balance Sheets and will be amortized as Interest Expense on the Consolidated Statement of Income through June 12, 2027.

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

March 31, 2024.

Public Storage has provided a full and unconditional guarantee of PSOC’s obligations under the Credit Facility.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

7.Notes Payable

Our notes payable (all of which were issued by PSOC), are reflected net of issuance costs (including original issue discounts), which are amortized as interest expense on the effective interest method over the term of each respective note. Our notes payable at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 are set forth in the tables below:


																			Amounts at March 31, 2024				Amounts at December 31, 2023
																Coupon Rate	Effective Rate		Principal	Unamortized Costs	Book Value	Fair Value		Book Value	Fair Value
				Amounts at September 30, 2023								Amounts at December 31, 2022
		Coupon Rate	Effective Rate	Principal		Unamortized Costs		Book Value		Fair Value		Book Value		Fair Value

				($ amounts in thousands)														($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt	U.S. Dollar Denominated Unsecured Debt

Notes due April 23, 2024

Notes due April 23, 2024

Notes due April 23, 2024	Notes due April 23, 2024	SOFR+0.47%	5.791%	$	700,000	$	(397)	$	699,603	$	699,950	$	699,075	$	691,309
Notes due July 25, 2025	Notes due July 25, 2025	SOFR+0.60%	5.932%	400,000		(1,481)		398,519		400,277		—		—
Notes due February 15, 2026	Notes due February 15, 2026	0.875%	1.030%	500,000		(1,766)		498,234		448,646		497,678		441,849
Notes due November 9, 2026	Notes due November 9, 2026	1.500%	1.640%	650,000		(2,704)		647,296		580,053		646,643		578,899
Notes due September 15, 2027	Notes due September 15, 2027	3.094%	3.218%	500,000		(2,096)		497,904		460,565		497,508		466,029
Notes due May 1, 2028	Notes due May 1, 2028	1.850%	1.962%	650,000		(3,091)		646,909		556,154		646,401		558,197
Notes due November 9, 2028	Notes due November 9, 2028	1.950%	2.044%	550,000		(2,457)		547,543		465,373		547,182		468,509
Notes due January 15, 2029	Notes due January 15, 2029	5.125%	5.260%	500,000		(3,093)		496,907		491,674		—		—
Notes due May 1, 2029	Notes due May 1, 2029	3.385%	3.459%	500,000		(1,714)		498,286		450,606		498,053		456,855
Notes due May 1, 2031	Notes due May 1, 2031	2.300%	2.419%	650,000		(5,183)		644,817		517,832		644,303		530,390
Notes due November 9, 2031	Notes due November 9, 2031	2.250%	2.322%	550,000		(2,872)		547,128		429,370		546,866		443,514
Notes due August 1, 2033	Notes due August 1, 2033	5.100%	5.207%	700,000		(5,697)		694,303		669,161		—		—
Notes due August 1, 2053	Notes due August 1, 2053	5.350%	5.442%	600,000		(8,050)		591,950		546,860		—		—
				7,450,000		(40,601)		7,409,399		6,716,521		5,223,709		4,635,551

Euro Denominated Unsecured Debt	Euro Denominated Unsecured Debt
Euro Denominated Unsecured Debt
Euro Denominated Unsecured Debt
Notes due April 12, 2024
Notes due April 12, 2024
Notes due April 12, 2024	Notes due April 12, 2024	1.540%	1.540%	105,744		—		105,744		103,939		107,035		104,344
Notes due November 3, 2025	Notes due November 3, 2025	2.175%	2.175%	255,915		—		255,915		244,650		259,039		246,119
Notes due September 9, 2030	Notes due September 9, 2030	0.500%	0.640%	740,208		(7,771)		732,437		566,585		740,634		566,204
Notes due January 24, 2032	Notes due January 24, 2032	0.875%	0.978%	528,720		(4,456)		524,264		396,406		530,317		396,297
				1,630,587		(12,227)		1,618,360		1,311,580		1,637,025		1,312,964

Mortgage Debt, secured by 2 real estate facilities with a net book value of $11.7 million		4.414%	4.414%	1,863		—		1,863		1,653		10,092		9,568
Mortgage Debt, secured by 2 real estate facilities with a net book value of $11.5 million
Mortgage Debt, secured by 2 real estate facilities with a net book value of $11.5 million
Mortgage Debt, secured by 2 real estate facilities with a net book value of $11.5 million

				$	9,082,450	$	(52,828)	$	9,029,622	$	8,029,754	$	6,870,826	$	5,958,083

Public Storage has provided a full and unconditional guarantee of PSOC’s obligations under each series of unsecured notes.

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

U.S. Dollar Denominated Unsecured Notes

On July 26, 2023, we completed a public offering of $400 million, $500 million, $700 million, and $600 million aggregate principal amount of unsecured senior notes bearing interest at an annual rate of Compounded SOFR + 0.60% (reset quarterly), 5.125%, 5.100%, and 5.350%, respectively, and maturing on July 25, 2025, January 15, 2029, August 1, 2033, and August 1, 2053, respectively. Interest on the 2025 notes is payable quarterly, commencing on October 25, 2023. Interest on the 2029 notes is payable semi-annually, commencing on January 15, 2024. Interest on the 2033 notes and 2053 notes is payable semi-annually, commencing on February 1, 2024. In connection with the offering, we incurred a total of $18.7 million in costs.

The U.S. Dollar denominated unsecured notes (the “U.S. Dollar Denominated Unsecured Notes”) have various financial covenants with which we were in compliance at ~~September 30, 2023.~~March 31, 2024. Included in these covenants are (a) a maximum Debt to Total Assets of 65% (approximately ~~16%~~17% at ~~September 30, 2023)~~March 31, 2024) and (b) a minimum ratio of Adjusted EBITDA to Interest Expense of 1.5x (approximately ~~21x~~15x for the twelve months ended ~~September 30, 2023)~~March 31, 2024) as well as covenants limiting the amount we can encumber our properties with mortgage debt.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Euro Denominated Unsecured Notes

~~Our~~At March 31, 2024, our Euro denominated unsecured notes (the “Euro Notes”) ~~consist~~consisted of four tranches: (i) €242.0 million issued to institutional investors on November 3, 2015, (ii) €100.0 million issued to institutional investors on April 12, 2016, (iii) €500.0 million issued in a public offering on January 24, 2020, and (iv) €700.0 million issued in a public offering on September 9, 2021. The Euro Notes have financial covenants similar to those of the U.S. Dollar Denominated Unsecured Notes.

We reflect changes in the U.S. Dollar equivalent of the amount payable including the associated interest, as a result of changes in foreign exchange rates as “Foreign currency exchange ~~gain”~~gain (loss)” on our income statement (gains of ~~$48.2~~$37.8 million and ~~$20.1~~losses of $27.1 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~respectively, as compared to gains of $100.9 million and $239.2 million for the three and nine months ended September 30, 2022,~~ respectively).

Mortgage Notes

We assumed our non-recourse mortgage debt in connection with property acquisitions, and we recorded such debt at fair value with any premium or discount to the stated note balance amortized using the effective interest method.

At ~~September 30, 2023,~~March 31, 2024, the related contractual interest rates of our mortgage notes are fixed, ranging between 3.9% and 7.1%, and mature between September 1, 2028 and July 1, 2030.

At ~~September 30, 2023,~~March 31, 2024, approximate principal maturities of our Notes Payable are as follows (amounts in thousands):


		Unsecured Debt		Mortgage Debt		Total			Unsecured Debt				Mortgage Debt				Total

Remainder of 2023		$	—	$	30	$	30
2024		805,744		124		805,868
Remainder of 2024
Remainder of 2024
Remainder of 2024									$	807,930			$	88			$	808,018
2025	2025	655,915		131		656,046		2025	661,205				131				661,336
2026	2026	1,150,000		138		1,150,138		2026	1,150,000				138				1,150,138
2027	2027	500,000		146		500,146		2027	500,000				146				500,146
2028								2028	1,200,000				129				1,200,129
Thereafter	Thereafter	5,968,928		1,294		5,970,222		Thereafter	4,795,158				1,165				4,796,323
		$	9,080,587	$	1,863	$	9,082,450
	$										$	9,114,293			$	1,797			$	9,116,090
Weighted average effective rate	Weighted average effective rate	3.1%		4.4%		3.1%		Weighted average effective rate	3.1%				4.4%				3.1%

~~Cash paid for interest totaled $97.5 million and $87.6 million for the nine months ended September 30, 2023 and 2022, respectively.~~ Interest capitalized as real estate totaled ~~$6.8~~$2.4 million and ~~$4.2~~$1.7 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively.

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

9.8.Noncontrolling Interests

There are noncontrolling interests related to several subsidiaries of PSOC we consolidate of which we do not own 100% of the equity. At ~~September 30, 2023,~~March 31, 2024, certain of these subsidiaries have issued 499,966 partnership units to third-parties that are ~~convertible~~redeemable by the holders on a one-for-one basis ~~(subject to certain limitations) into~~for common shares of the Company or cash at our option. The holders of these partnership units are entitled to receive the ~~request~~same per-unit cash distributions equal to the dividends paid on our common shares.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Noncontrolling interests also include the partnership interests of PSA OP not owned by the Company, including common units (“OP Units”) and vested LTIP units (“LTIP Units”) from equity awards we issue to certain officers and trustees of the ~~unitholder.~~Company (see Note 11 Share-based Compensation). Vested LTIP Units (subject to certain conditions) may be further converted into the same number of OP Units of PSA OP, which are redeemable by the holders on a one-for-one basis for common shares of the Company or cash at our option. The holders of OP Units and vested LTIP Units are entitled to receive per-unit cash distributions equal to the per-share dividends received by our common shareholders. At March 31, 2024, approximately 0.05% of the partnership interests of PSA OP, representing 83,051 Vested LTIP Units, were not owned by the Company. We adjust the balance of noncontrolling interests of PSA OP to reflect their proportionate share of the net assets of PSA OP as of the end of each period.

~~10.~~9.Shareholders’ Equity

Preferred Shares

At ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, we had the following series of Cumulative Preferred Shares (“Preferred Shares”) outstanding:


					At September 30, 2023			At December 31, 2022							At March 31, 2024			At December 31, 2023
Series	Series	Earliest Redemption Date	Dividend Rate		Shares Outstanding	Liquidation Preference		Shares Outstanding	Liquidation Preference		Series	Earliest Redemption Date	Dividend Rate			Shares Outstanding	Liquidation Preference		Shares Outstanding	Liquidation Preference



					(Dollar amounts in thousands)									(Dollar amounts in thousands)
Series F	Series F	6/2/2022	5.150	%	11,200	$	280,000	11,200	$	280,000
Series G	Series G	8/9/2022	5.050	%	12,000	300,000		12,000	300,000
Series H	Series H	3/11/2024	5.600	%	11,400	285,000		11,400	285,000
Series I	Series I	9/12/2024	4.875	%	12,650	316,250		12,650	316,250
Series J	Series J	11/15/2024	4.700	%	10,350	258,750		10,350	258,750
Series K	Series K	12/20/2024	4.750	%	9,200	230,000		9,200	230,000
Series L	Series L	6/17/2025	4.625	%	22,600	565,000		22,600	565,000
Series M	Series M	8/14/2025	4.125	%	9,200	230,000		9,200	230,000
Series N	Series N	10/6/2025	3.875	%	11,300	282,500		11,300	282,500
Series O	Series O	11/17/2025	3.900	%	6,800	170,000		6,800	170,000
Series P	Series P	6/16/2026	4.000	%	24,150	603,750		24,150	603,750
Series Q	Series Q	8/17/2026	3.950	%	5,750	143,750		5,750	143,750
Series R	Series R	11/19/2026	4.000	%	17,400	435,000		17,400	435,000
Series S	Series S	1/13/2027	4.100	%	10,000	250,000		10,000	250,000
Total Preferred Shares	Total Preferred Shares				174,000	$	4,350,000	174,000	$	4,350,000

The holders of our Preferred Shares have general preference rights with respect to liquidation, quarterly distributions, and any accumulated unpaid distributions. Except as noted below, holders of the Preferred Shares do not have voting rights. In the event of a cumulative arrearage equal to six quarterly dividends, holders of all outstanding series of preferred shares (voting as a single class without regard to series) will have the right to elect two additional members to serve on our Board of Trustees (our “Board”) until the arrearage has been cured. At ~~September 30, 2023,~~March 31, 2024, there were no dividends in arrears. The affirmative vote of at least 66.67% of the outstanding shares of a series of Preferred Shares is required for any material and adverse amendment to the terms of such series. The affirmative vote of at least 66.67% of the outstanding shares of all of our Preferred Shares, voting as a single class, is required to issue shares ranking senior to our Preferred Shares.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Except under certain conditions relating to the Company’s qualification as a REIT, the Preferred Shares are not redeemable prior to the dates indicated on the table above. On or after the respective dates, each of the series of Preferred Shares is redeemable at our option, in whole or in part, at $25.00 per depositary share, plus accrued and unpaid dividends. Holders of the Preferred Shares cannot require us to redeem such shares.

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

Upon issuance of our Preferred Shares, we classify the liquidation value as preferred equity on our consolidated balance sheet with any issuance costs recorded as a reduction to Paid-in capital.

Dividends and Distributions

On February 4, 2023, our Board declared a 50% increase in its regular common quarterly dividend from $2.00 to $3.00 per share. The distribution equates to an annualized increase to the Company’s regular common dividend from $8.00 to $12.00 per share.

~~Common share dividends paid, including amounts~~Dividends and distributions paid to our common shareholders, restricted share unitholders, ~~and~~ deferred share unitholders, and unvested LTIP unitholders, totaled $528.1 million ($3.00 per share/unit) and $527.6 million ($3.00 per ~~share) and $2.7 billion ($15.15 per share)~~share/unit) for the three months ended ~~September 30,~~March 31, 2024 and 2023, respectively. In addition, we accrued $0.3 million and ~~2022, respectively,~~$0.2 million of dividends and ~~$1.6 billion ($9.00 per share)~~distributions to holders of unearned performance-based restricted share units and ~~$3.4 billion ($19.15 per share)~~LTIP Units for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. Preferred share dividends ~~paid~~ totaled $48.7 million for each of the three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022, and $146.0 million and $145.7 million for the nine months ended September 30, 2023 and 2022, respectively.~~2023.

~~11.~~10.Related Party Transactions

At ~~September 30, 2023,~~March 31, 2024, Tamara Hughes Gustavson, a current member of our Board, held less than a 0.1% equity interest in, and is a manager of, a limited liability company that owns 6566 self-storage facilities in Canada. Two of Ms. Gustavson’s adult children ~~owned~~own the remaining equity interest in the limited liability company. These facilities operate under the Public Storage® tradename, which we license to the owners of these facilities for use in Canada on a royalty-free, non-exclusive basis. We have no ownership interest in these facilities and we do not own or operate any facilities in Canada. If we chose to acquire or develop our own facilities in Canada, we would have to share the use of the Public Storage® name in Canada. We have a right of first refusal, subject to limitations, to acquire the stock or assets of the corporation engaged in the operation of these facilities if their owners agree to sell them. Our subsidiaries reinsure risks relating to loss of goods stored by customers in these facilities, and have received premium payments of approximately ~~$1.6 million and $1.7~~$0.5 million for each of the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022, respectively.~~2023.

~~12.~~11.Share-Based Compensation

Under various share-based compensation plans and under terms established or modified by our Board or a committee thereof, we grant equity awards to trustees, officers, and key employees, including non-qualified options to purchase the Company’s common shares, restricted share units (“RSUs”), deferred share units (“DSUs”), and unrestricted common shares issued in lieu of trustee compensation.

In February 2024, we amended our 2021 Equity and Performance-Based Incentive Plan to further provide for the grant of awards to certain officers and trustees of the Company in the form of LTIP Units and appreciation-only LTIP Units (“AO LTIP Units”) of PSA OP. LTIP Units are structured as “profit interests” for U.S. federal income tax purposes. During the three months ended March 31, 2024, we issued LTIP Units and AO LTIP Units in substitution for 156,632 RSUs and 2,102,424 stock options, respectively. The LTIP Units and AO LTIP Units issued have the same vesting conditions as the original awards and remain classified as equity awards. The fair value of the LTIP Units and AO LTIP Units issued is materially the same as the original awards immediately before the substitution. As a result, we did not adjust the share-based compensation costs associated with these substituted awards.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

We recorded share-based compensation expense associated with our equity awards in the various expense categories in the Consolidated Statements of Income as set forth in the following table. In addition, ~~$0.5~~$0.6 million and ~~$1.8~~$0.7 million of share-based compensation cost was capitalized as real estate facilities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~respectively, as compared to $0.4 million and $2.4 million for the same periods of 2022,~~ respectively.




										Three Months Ended March 31,





		Three Months Ended September 30,				Nine Months Ended September 30,

		2023		2022		2023		2022

		(Amounts in thousands)									(Amounts in thousands)

Self-storage cost of operations	Self-storage cost of operations	$	2,964	$	4,203	$	10,316	$	13,740
Self-storage cost of operations
Self-storage cost of operations
Ancillary cost of operations	Ancillary cost of operations	320		203		960		690
Ancillary cost of operations
Ancillary cost of operations
Real estate acquisition and development expense
Real estate acquisition and development expense
Real estate acquisition and development expense
General and administrative
General and administrative
General and administrative	General and administrative	6,231		9,335		20,033		30,167
Total	Total	$	9,515	$	13,741	$	31,309	$	44,597
Total
Total

~~PUBLIC STORAGE~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2023~~

~~(Unaudited)~~

Included in share-based compensation is $0.5 million and $2.6 million during the three and nine months ended September 30, 2023, respectively, as compared to $2.9 million and $12.4 million for the same periods in 2022, respectively, in connection with retirement acceleration as discussed in Note 2 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.

As of ~~September 30, 2023,~~March 31, 2024, there was ~~$76.8~~$91.6 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of three years.

~~Stock Options~~Restricted Share Units and LTIP Units

We have service-based and performance-based ~~stock options outstanding.~~RSUs and LTIP Units outstanding, which generally vest over 5 to 8 years from the grant date. Performance-based ~~stock options~~RSUs and LTIP Units outstanding vest upon meeting certain performance conditions or market conditions. ~~Stock options generally vest over 3 to 5 years, expire 10 years after~~Upon vesting, the ~~grant date, and have an exercise price~~grantee of RSUs receives new common shares equal to the ~~closing trading price~~number of vested RSUs, less common shares withheld to satisfy the grantee’s statutory tax liabilities arising from the vesting. Vested LTIP Units represent noncontrolling interests of PSA OP and may be converted, subject to the satisfaction of all applicable vesting conditions, on a one-for-one basis into common units of PSA OP, which are exchangeable by the holders for cash, or at the Company’s election, on a one-for-one basis into common shares of the Company. Holders of RSUs and LTIP Units are entitled to receive per-unit cash distributions equal to the per-share dividends received by our common ~~shares~~shareholders, except that holders of performance-based awards are not entitled to receive the full distributions until expiration of the applicable performance period, at which time holders of any earned performance-based awards are entitled to receive a catch-up distribution for the periods prior to such time.

Below is a summary of award activity issued in the form of RSUs and LTIP Units for the three months ended March 31, 2024.


	Service-Based	Performance-Based (a)	Total

Unvested awards outstanding January 1, 2024	322,648	94,013	416,661
Granted (b)	4,470	34,550	39,020
Vested (c)	(55,481)	(9,250)	(64,731)
Forfeited	(7,365)	—	(7,365)
Unvested awards outstanding March 31, 2024	264,272	119,313	383,585

(a)Number of performance-based awards are presented based on the ~~grant date. New shares are issued for options exercised. Employees cannot require~~target performance pursuant to the ~~Company~~terms of each applicable award when granted and adjusted to ~~settle their~~the actual number of awards ~~in cash.~~earned based on the actual performance.

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

(b)During the ~~nine~~three months ended ~~September 30, 2023, 177,168 stock options~~March 31, 2024, 34,550 performance-based LTIP Unit awards (at target) were granted ~~178,511 options were exercised, and 45,315 options were forfeited. A total of 3,117,825 stock options were outstanding at September 30, 2023 (3,164,483 at December 31, 2022).~~

During the nine months ended September 30, 2023, we granted 60,000 stock options in connection with non-management trustee compensation. For the remaining 117,168 stock options granted during the nine months ended September 30, 2023,to certain executive officers, where vesting is dependent upon meeting certain market conditions over ~~the~~a three-year period from March ~~15, 2023~~5, 2024 through March ~~14, 2026,~~4, 2027, with continued service-based vesting through the first quarter of ~~2028.~~2029. These ~~stock options~~LTIP Unit awards require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning upfrom zero to ~~200%~~a maximum of 69,100 LTIP Units.

For the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, we incurred share-based compensation cost for ~~outstanding stock options~~RSUs and LTIP Units of ~~$3.6 million~~$7.9 million.

Stock Options and ~~$11.3 million, respectively, as compared to $4.2 million and $15.8 million for the same periods in 2022.~~

~~Restricted Share~~AO LTIP Units

We have service-based and performance-based ~~RSUs outstanding, which generally vest over 5 to 8 years from the grant date.~~stock options and AO LTIP Units outstanding. Performance-based ~~RSUs outstanding~~stock options and AO LTIP Units vest upon meeting certain performance conditions or market conditions. ~~Upon vesting,~~Stock options and AO LTIP Units generally vest over 3 to 5 years, expire 10 years after the ~~grantee receives new common shares~~grant date, and have an exercise or conversion price equal to the closing trading price of our common shares on the grant date. Common shares of the Company are issued for options exercised and vested LTIP Units are issued for AO LTIP Units converted. Employees cannot require the Company to settle their awards in cash.

Below is a summary of award activity issued in the form of stock options and AO LTIP Units for the three months ended March 31, 2024.


	Service-Based	Performance-Based (a)	Total

Awards outstanding January 1, 2024	1,629,742	1,421,479	3,051,221
Granted (b)	64,278	63,717	127,995
Exercised or converted (c)	(111,048)	(27,616)	(138,664)
Awards outstanding March 31, 2024	1,582,972	1,457,580	3,040,552
Awards exercisable at March 31, 2024	1,394,671	885,994	2,280,665

(a)Number of performance-based awards are presented based on the target performance pursuant to the terms of each applicable award when granted and adjusted to the actual number of ~~vested RSUs, less common shares withheld to satisfy~~awards earned based on the ~~grantee’s statutory tax liabilities arising from the vesting.~~actual performance.

(b)During the ~~nine~~three months ended ~~September 30, 2023, 42,452 RSUs~~March 31, 2024, 64,278 of service-based and 63,717 of performance-based AO LTIP Unit awards (at target) were granted ~~30,148 RSUs were forfeited and 77,400 RSUs vested.~~to certain executive officers. The vesting ~~resulted in~~of the ~~issuance of 55,595 common shares. A total of 410,951 RSUs were outstanding at September 30, 2023 (476,047 at December 31, 2022).~~

~~Among the 42,452 RSUs granted during the nine months ended September 30, 2023, 37,211 RSUs were awarded where vesting~~performance-based AO LTIP Unit awards is dependent upon meeting certain market conditions over a three-year period from March ~~15, 2023~~5, 2024 through March ~~14, 2026,~~4, 2027, with continued service-based vesting through the first quarter of ~~2028.~~2029. These ~~RSUs~~performance-based AO LTIP Unit awards require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning upfrom zero to ~~200%~~a maximum of 127,434 AO LTIP Units.

~~Also included~~exercise of stock options. 44,058 vested LTIP Units were issued upon conversion of 103,275 AO LTIP Units in the ~~RSUs granted during the nine~~three months ended ~~September 30, 2023 are 5,241 service-based RSUs.~~March 31, 2024.

For the three months ended March 31, 2024, we incurred share-based compensation cost for stock options and AO LTIP Units of $2.9 million.

1917

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2023~~March 31, 2024

(Unaudited)

For the three and nine months ended September 30, 2023, we incurred share-based compensation cost for RSUs of $6.3 million and $21.1 million, respectively, as compared to $9.7 million and $30.6 million for the same periods in 2022.

Trustee Deferral Program

Non-management trustees may elect to receive all or a portion of their cash retainers in cash, unrestricted common shares, or fully-vested DSUs to be settled at a specified future date. Unrestricted common shares and/or DSUs will be granted to the non-management trustee on the last day of each calendar quarter based on the cash retainer earned for that quarter and converted into a number of shares or units based on the applicable closing price of our common shares on such date. During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, we granted ~~1,590~~560 DSUs and ~~674~~115 unrestricted common shares. During the ~~nine~~three months ended ~~September 30, 2023, 867~~March 31, 2024, 416 previously granted DSUs were settled in common shares. A total of ~~10,274~~10,913 DSUs were outstanding at ~~September 30, 2023 (9,551~~March 31, 2024 (10,769 at December 31, ~~2022)~~2023).

~~13.~~12.Net Income per Common Share

We allocate net income to (i) noncontrolling interests based upon their contractual rights in the respective subsidiaries or for participating noncontrolling interests based upon their participation in both distributed and undistributed earnings of the Company, (ii) preferred shareholders, for distributions paid or payable, (iii) preferred shareholders, to the extent redemption cost exceeds the related original net issuance proceeds (a “preferred share redemption charge”), and (iv) RSUs and unvested LTIP Units, for non-forfeitable dividends and distributions paid and adjusted for participation rights in undistributed earnings of the Company.

We calculate basic and diluted net income per common share based upon net income allocable to common shareholders, divided by (i) weighted average common shares for basic net income per common share, and (ii) weighted average common shares adjusted for the impact of dilutive stock options and AO LTIP Units outstanding for diluted net income per common share. Stock options and AO LTIP Units representing ~~317,062~~443,336 common shares were excluded from the computation of diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, as compared to ~~147,344~~264,512 common shares for the same ~~periods~~period in ~~2022,~~2023, because their effect would have been antidilutive.

The following table reconciles the numerators and denominators of the basic and diluted net income per common shares computation for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively (in thousands, except per share amounts):




										Three Months Ended March 31,

		Three Months Ended September 30,				Nine Months Ended September 30,

		2023		2022		2023		2022
Numerator for basic and dilutive net income per common share – net income allocable to common shareholders	Numerator for basic and dilutive net income per common share – net income allocable to common shareholders	$	563,237	$	2,712,161	$	1,559,084	$	3,779,666
Numerator for basic and dilutive net income per common share – net income allocable to common shareholders
Numerator for basic and dilutive net income per common share – net income allocable to common shareholders

Denominator for basic net income per share - weighted average common shares outstanding	Denominator for basic net income per share - weighted average common shares outstanding	175,499		175,283		175,451		175,227
Net effect of dilutive stock options - based on treasury stock method		651		1,045		719		1,098

Denominator for basic net income per share - weighted average common shares outstanding

Denominator for basic net income per share - weighted average common shares outstanding
Net effect of dilutive stock options and AO LTIP Units - based on treasury stock method
Net effect of dilutive stock options and AO LTIP Units - based on treasury stock method
Net effect of dilutive stock options and AO LTIP Units - based on treasury stock method
Denominator for dilutive net income per share - weighted average common shares outstanding
Denominator for dilutive net income per share - weighted average common shares outstanding
Denominator for dilutive net income per share - weighted average common shares outstanding	Denominator for dilutive net income per share - weighted average common shares outstanding	176,150		176,328		176,170		176,325

Net income per common share:	Net income per common share:

Net income per common share:

Net income per common share:
Basic
Basic
Basic	Basic	$	3.21	$	15.47	$	8.89	$	21.57
Dilutive	Dilutive	$	3.20	$	15.38	$	8.85	$	21.44
Dilutive
Dilutive

2018

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2023~~March 31, 2024

(Unaudited)

~~14.~~13.Segment Information

Our operating segments reflect the significant components of our operations where discrete financial information is evaluated separately by our chief operating decision maker.

Self-Storage Operations

The Self-Storage Operations reportable segment reflects the aggregated rental operations from the self-storage facilities we own ~~from~~through the following operating segments: (i) Same Store Facilities, (ii) Acquired Facilities, (iii) Newly Developed and Expanded Facilities, and (iv) Other Non-Same Store Facilities. The presentation in the table below sets forth the Net Operating Income (“NOI”) of this reportable segment, as well as the related depreciation expense. For all periods presented, substantially all of our real estate facilities, goodwill and other intangible assets, other assets, and accrued and other liabilities are associated with the Self-Storage Operations reportable segment.

Ancillary Operations

The Ancillary Operations reflects the combined operations of our tenant reinsurance, merchandise sales, and third party property management operating segments.

Presentation of Segment Information

The following table reconciles NOI and net income attributable to our reportable segment to our consolidated net income:




										Three Months Ended March 31,





		Three Months Ended September 30,				Nine Months Ended September 30,

		2023		2022		2023		2022

		(amounts in thousands)									(amounts in thousands)
Self-Storage Operations Reportable Segment	Self-Storage Operations Reportable Segment
Revenue	Revenue	$	1,078,721	$	1,027,374	$	3,167,025	$	2,917,675
Revenue
Revenue
Cost of operations
Cost of operations
Cost of operations	Cost of operations	(267,785)		(255,470)		(794,078)		(738,953)
Net operating income	Net operating income	810,936		771,904		2,372,947		2,178,722
Net operating income
Net operating income
Depreciation and amortization	Depreciation and amortization	(238,748)		(220,772)		(682,531)		(661,608)
Depreciation and amortization
Depreciation and amortization
Net income
Net income
Net income	Net income	572,188		551,132		1,690,416		1,517,114

Ancillary Operations	Ancillary Operations

Ancillary Operations

Ancillary Operations
Revenue
Revenue
Revenue	Revenue	65,099		60,757		190,797		175,946
Cost of operations	Cost of operations	(21,159)		(21,572)		(63,037)		(54,297)
Cost of operations
Cost of operations
Net operating income
Net operating income
Net operating income	Net operating income	43,940		39,185		127,760		121,649

Total net income allocated to segments	Total net income allocated to segments	616,128		590,317		1,818,176		1,638,763

Total net income allocated to segments

Total net income allocated to segments

Other items not allocated to segments:	Other items not allocated to segments:

Other items not allocated to segments:

Other items not allocated to segments:
Real estate acquisition and development expense
Real estate acquisition and development expense
Real estate acquisition and development expense
General and administrative
General and administrative
General and administrative	General and administrative	(28,625)		(29,501)		(79,603)		(81,401)
Interest and other income	Interest and other income	32,295		12,736		69,381		26,394
Interest and other income
Interest and other income
Interest expense
Interest expense
Interest expense	Interest expense	(58,350)		(34,113)		(132,530)		(100,178)
Equity in earnings of unconsolidated real estate entities	Equity in earnings of unconsolidated real estate entities	7,227		8,180		22,787		100,129
Foreign currency exchange gain		47,880		100,170		19,924		237,270
Equity in earnings of unconsolidated real estate entities
Equity in earnings of unconsolidated real estate entities
Foreign currency exchange gain (loss)
Foreign currency exchange gain (loss)
Foreign currency exchange gain (loss)

Gain on sale of real estate	Gain on sale of real estate	88		1,503		88		1,503
Gain on sale of equity investment in PS Business Parks, Inc.		—		2,128,860		—		2,128,860

Gain on sale of real estate

Gain on sale of real estate

Income tax expense

Income tax expense

Income tax expense
Net income	Net income	$	616,643	$	2,778,152	$	1,718,223	$	3,951,340
Net income
Net income

2119

PUBLIC STORAGE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2023~~March 31, 2024

(Unaudited)

~~15.~~14.Commitments and Contingencies

Contingent Losses

We are a party to various legal proceedings and subject to various claims and complaints; however, we believe that the likelihood of these contingencies resulting in a material loss to the Company, either individually or in the aggregate, is remote.

Insurance and Loss Exposure

We carry property, earthquake, general liability, employee medical insurance, and workers compensation coverage through internationally recognized insurance carriers, subject to deductibles. Our deductible for general liability is $2.0 million per occurrence. Our annual deductible for property loss is $25.0 million per occurrence. This deductible decreases to $5.0 million once we reach $35.0 million in aggregate losses for occurrences that exceed $5.0 million. Insurance carriers’ aggregate limits on these policies of $75.0 million for property losses and $102.0 million for general liability losses are higher than estimates of maximum probable losses that could occur from individual catastrophic events determined in recent engineering and actuarial studies; however, in case of multiple catastrophic events, these limits could be exceeded.

We reinsure a program that provides insurance to our customers from an independent third-party insurer. This program covers customer claims for losses to goods stored at our facilities as a result of specific named perils (earthquakes are not covered by this program), up to a maximum limit of $5,000 per storage unit. We reinsure all risks in this program, but purchase insurance to cover this exposure for a limit of $15.0 million for losses in excess of $5.0 million per occurrence. We are subject to licensing requirements and regulations in all states. Customers participate in the program at their option. At ~~September 30, 2023,~~March 31, 2024, there were approximately 1.4 million certificates held by our self-storage customers, representing aggregate coverage of approximately ~~$6.1~~$6.5 billion.

Commitments

We have construction commitments representing future expected payments for construction under contract totaling ~~$199.8~~$143.4 million at ~~September 30, 2023.~~March 31, 2024. We expect to pay approximately ~~$42.3~~$113.5 million in the remainder of ~~2023, $152.1 million in~~ 2024 and ~~$5.4~~$29.9 million in 2025 for these construction commitments.

We have future contractual payments on land, equipment and office space under various lease commitments totaling ~~$65.0~~$64.4 million at ~~September 30, 2023.~~March 31, 2024. We expect to pay approximately ~~$0.8~~$2.9 million in the remainder of ~~2023, $3.6~~2024, $4.1 million in ~~each of 2024,~~ 2025, ~~and~~$4.0 million in 2026, $2.6 million in 2027, $2.5 million in 2028, and ~~$50.8~~$48.3 million thereafter for these commitments.

~~16.~~15.Subsequent Events

On April 11, 2024, PSOC issued €150 million of senior notes to institutional investors, bearing interest at a fixed rate of 4.080% and maturing on April 11, 2039. The senior notes are guaranteed by Public Storage. We received $162.6 million of net proceeds from the issuance after converting the Euros to U.S. Dollars. On April 11, 2024, we repaid PSOC’s €100 million 1.540% senior notes due April 12, 2024 to the same institutional investors for $108.4 million.

On April 16, 2024, PSOC completed a public offering of $1.0 billion aggregate principal amount of senior notes, including $700 million aggregate principal amount of floating rate senior notes bearing interest at a rate of Compounded SOFR + 0.70% (reset quarterly) maturing on April 16, 2027 and $300 million aggregate principal amount of senior notes bearing interest at a fixed annual rate of 5.350% maturing on August 1, 2053. The 2053 notes constitute a further issuance of, and form a single series with, our outstanding 5.350% senior notes due 2053 issued on July 26, 2023 in the aggregate principal amount of $600 million. These senior notes are guaranteed by Public Storage. We received $988.5 million of net proceeds from the offering. On April 23, 2024, we repaid our outstanding $700 million aggregate principal amount of floating rate senior notes at maturity.

Subsequent to ~~September 30, 2023,~~March 31, 2024, we acquired or were under contract to acquire ~~eleven~~four self-storage facilities across ~~eight~~four states with ~~0.8~~0.3 million net rentable square feet, for ~~$170.3~~$34.6 million.

2220

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

On August 14, 2023, the Company completed its corporate reorganization into a holding company structure commonly referred to as an umbrella partnership real estate investment trust, or UPREIT. Following the Reorganization, substantially all of our business is conducted through Public Storage OP, L.P., a Delaware limited partnership (“PSA OP”) and its subsidiaries, including Public Storage Operating Company (“PSOC”), formerly known as Public Storage. The parent entity, Public Storage, does not have material assets or liabilities, other than through its limited partnership interest of PSA OP and all the membership interest of PSA OP’s general partner, PSOP GP, LLC, a Delaware limited liability company (“PSOP GP”).

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. Such forward-looking statements include statements relating to our ~~2023~~2024 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 ~~a potential future recession,~~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. Factors and risks that may impact future results and performance include, but are not limited to those factors and risks described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 filed with the Securities and Exchange Commission (the “SEC”) on February ~~21, 2023~~20, 2024 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, 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 because 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 ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, 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, ~~2022.~~2023.

2321

Overview

~~Our self-storage operations generate most of our net income, and our earnings growth is impacted~~During the three months ended March 31, 2024, revenues generated by ~~the levels of 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). Accordingly, a significant portion of management’s time is devoted to maximizing cash flows from our existing self-storage facility portfolio.

~~During the three and nine months ended September 30, 2023, revenues generated by our Same Store Facilities~~ increased by ~~2.5%~~0.1% ($~~21.1~~0.6 million) ~~and 6.1% ($147.5 million)~~, ~~respectively,~~ as compared to the same ~~periods~~period in ~~2022,~~2023, while Same Store cost of operations increased by ~~2.8%~~4.8% ($~~5.5~~10.9 million) ~~and 4.5% ($26.1 million), respectively.~~. Demand and operating trends softened in the second half of 2022 continuing through 2023 ~~as compared to what~~and the first quarter of 2024, and we ~~experienced in 2020 and 2021. We~~ expect these trends to ~~lead to moderating levels~~continue and stabilize in the second half of ~~income growth through 2023.~~2024.

~~In addition to managing our existing facilities for organic growth, we~~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 ~~2021,~~2022, we acquired a total of ~~459~~238 facilities with ~~38.0~~16.8 million net rentable square feet for ~~$8.3~~$3.4 billion. Additionally, within our non-same store portfolio, ~~we have developed~~our Newly Developed and ~~expanded~~Expanded Facilities (as defined below) include a total of ~~140~~123 self-storage facilities ~~of 16.3~~with 14.3 million net rentable square ~~feet for~~feet. For development and expansions completed by March 31, 2024, we incurred a total cost of ~~$1.4~~$1.3 billion. During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, combined net operating income generated by our Acquired Facilities (as defined below) and Newly Developed and Expanded Facilities increased ~~23.8%~~82.7% ($~~23.9~~32.5 million) ~~and 26.2% ($71.0 million)~~, ~~respectively,~~ as compared to the same ~~periods~~period in ~~2022.~~

On September 13, 2023, we acquired BREIT Simply Storage LLC, a self-storage company that owns and operates 127 self-storage facilities (9.4 million square feet) and manages 25 self-storage facilities for third parties, for a purchase price of $2.2 billion in cash (the “Simply Acquisition”). The 127 wholly-owned facilities are geographically diversified across 18 states and located in submarkets with strong demand drivers and other desirable characteristics.

~~In connection with the Simply Acquisition, on July 26, 2023, we completed a public offering of $2.2 billion aggregate principal amount of unsecured senior notes in various tranches and maturities.~~2023.

We have experienced recent inflationary impacts on our cost of operations including labor, utilities, and repairs and maintenance, and costs of development and expansion activities, and we ~~may continue~~expect to experience such impacts in the future. We have implemented various initiatives to manage the adverse impacts, such as enhancements in operational processes and investments in technology to reduce payroll hours, achievement of economies of scale from recent acquisitions with supervisory payroll and centralized management costs allocated over a broader number of self-storage facilities, and investments in solar power and LED lights to lower utility usage.

In order to enhance the competitive position of certain of our facilities relative to local competitors (including newly developed facilities), we have 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 ~~(ii) enhance the energy efficiency of our properties,~~ and ~~(iii)~~(ii) upgrade the configuration and layout of the offices and other customer zones to improve the customer experience. We expect to complete the program in 2024. We spent approximately ~~$119~~$25 million on the program in the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and expect to spend approximately $150 million over ~~2023~~2024 on this effort. We have also embarked on a solar program under which we plan to install solar panels on over 1,000 of our self-storage facilities. We have completed the installations on ~~395~~519 facilities through ~~September 30, 2023.~~March 31, 2024. We spent approximately ~~$38~~$13 million on the program in the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and expect to spend ~~$54~~$100 million over ~~2023~~2024 on this effort.

2422

Results of Operations

Operating Results for the Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

For the three months ended ~~September 30, 2023,~~March 31, 2024, net income allocable to our common shareholders was ~~$563.2~~$459.2 million or ~~$3.20~~$2.60 per diluted common share, compared to ~~$2.7 billion~~$467.6 million or ~~$15.38~~$2.65 per diluted common share for the same period in ~~2022,~~2023, representing a decrease of ~~$2.1 billion~~$8.4 million or ~~$12.18~~$0.05 per diluted common share. The decrease is due primarily to (i) a ~~$2.1 billion gain on sale of our equity investment~~$63.6 million increase in ~~PSB in July 2022,~~depreciation and amortization expense and (ii) a ~~$52.3~~$31.7 million ~~decrease~~increase in interest expense, partially offset by (iii) a $64.4 million increase in foreign currency exchange gains primarily associated with our Euro denominated notes payable and ~~(iii) a $24.2 million increase in interest expense, partially offset by~~ (iv) a ~~$39.0~~$25.1 million increase in self-storage net operating ~~income and (v) a $19.6 million increase in interest and other~~ income.

The ~~$39.0~~$25.1 million increase in self-storage net operating income in the three months ended ~~September 30, 2023~~March 31, 2024 as compared to the same period in ~~2022~~2023 is a result of a ~~$15.7 million increase attributable to our Same Store Facilities and a $23.3~~$35.4 million increase attributable to our non-same store ~~facilities.~~facilities, partially offset by a $10.3 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities increased ~~2.5%~~0.1% or ~~$21.1~~$0.6 million in the three months ended ~~September 30, 2023~~March 31, 2024 as compared to the same period in ~~2022,~~2023, due primarily to a higher realized annual rent per occupied square foot, partially offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by ~~2.8%~~4.8% or ~~$5.5~~$10.9 million in the three months ended ~~September 30, 2023~~March 31, 2024 as compared to the same period in ~~2022,~~2023, due primarily to increased property tax expense and marketing expense. The increase in net operating income of ~~$23.3~~$35.4 million for the non-same store facilities is due primarily to the impact of facilities acquired in ~~2021, 2022, and~~ 2023 and the fill-up of recently developed and expanded facilities.

~~Operating Results for the Nine Months Ended September 30, 2023 and 2022~~

For the nine months ended September 30, 2023, net income allocable to our common shareholders was $1.6 billion or $8.85 per diluted common share, compared to $3.8 billion or $21.44 per diluted common share for the same period in 2022, representing a decrease of $2.2 billion or $12.59 per diluted common share. The decrease is due primarily to (i) a $2.1 billion gain on sale of our equity investment in PSB in July 2022, (ii) a $217.3 million decrease in foreign currency exchange gains primarily associated with our Euro denominated notes payable, (iii) a $77.3 million decrease in equity in earnings of unconsolidated real estate entities due to our sale of PSB in July 2022, and (iv) a $32.4 million increase in interest expense, partially offset by (v) a $194.2 million increase in self-storage net operating income and (vi) a $43.0 million increase in interest and other income.

The $194.2 million increase in self-storage net operating income in the nine months ended September 30, 2023 as compared to the same period in 2022 is a result of a $121.4 million increase attributable to our Same Store Facilities and a $72.8 million increase attributable to our non-same store facilities. Revenues for the Same Store Facilities increased 6.1% or $147.5 million in the nine months ended September 30, 2023 as compared to the same period in 2022, due primarily to higher realized annual rent per occupied square foot, partially offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 4.5% or $26.1 million in the nine months ended September 30, 2023 as compared to the same period in 2022, due primarily to increased property tax expense, marketing expense, and other direct property costs. The increase in net operating income of $72.8 million for the non-same store facilities is due primarily to the impact of facilities acquired in 2021 and 2022 and the fill-up of recently developed and expanded facilities.

Funds from Operations and Core Funds from Operations

Funds from Operations (“FFO”) and 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 ~~September 30, 2023,~~March 31, 2024, FFO was ~~$4.58~~$4.24 per diluted common share as compared to ~~$4.66~~$3.94 per diluted common share for the same period in ~~2022,~~2023, representing ~~a decrease~~an increase of ~~1.7%~~7.6%, or ~~$0.08~~$0.30 per diluted common share.

For the nine months ended September 30, 2023, FFO was $12.82 per diluted common share as compared to $13.08 per diluted common share for the same period in 2022, representing a decrease of 2.0%, or $0.26 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 loss contingency ~~resolution,~~resolutions, due diligence costs incurred in pursuit of strategic transactions, unrealized gain on private equity investments, ~~UPREIT reorganization costs, Simply integration costs,~~and amortization of acquired non real estate-related intangibles from the Simply Acquisition, property losses and tenant claims due to casualties and our equity share of deferred tax benefits of a change in tax status and severance of a senior executive 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.

2623

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 September 30,						Nine Months Ended September 30,
		2023		2022		Percentage Change		2023		2022		Percentage Change

		(Amounts in thousands, except per share data)






								(Amounts in thousands, except per share data)

								(Amounts in thousands, except per share data)

								(Amounts in thousands, except per share data)
Reconciliation of Net Income to FFO and Core FFO:	Reconciliation of Net Income to FFO and Core FFO:
Net income allocable to common shareholders	Net income allocable to common shareholders	$	563,237	$	2,712,161	(79.2)	%	$	1,559,084	$	3,779,666	(58.8)	%
Net income allocable to common shareholders
Net income allocable to common shareholders
Eliminate items excluded from FFO:
Eliminate items excluded from FFO:
Eliminate items excluded from FFO:	Eliminate items excluded from FFO:
Real estate-related depreciation and amortization	Real estate-related depreciation and amortization	237,098		218,963				677,856		657,131
Depreciation from unconsolidated real estate investments		8,457		10,599				26,141		44,985
Depreciation allocated to noncontrolling interests and restricted share unitholders		(1,612)		(1,843)				(4,817)		(4,841)
Real estate-related depreciation and amortization
Real estate-related depreciation and amortization
Real estate-related depreciation from unconsolidated real estate investments
Real estate-related depreciation from unconsolidated real estate investments
Real estate-related depreciation from unconsolidated real estate investments
Real estate-related depreciation allocated to noncontrolling interests and restricted share unitholders and unvested LTIP unitholders
Real estate-related depreciation allocated to noncontrolling interests and restricted share unitholders and unvested LTIP unitholders
Real estate-related depreciation allocated to noncontrolling interests and restricted share unitholders and unvested LTIP unitholders
Gains on sale of real estate investments, including our equity share from investments	Gains on sale of real estate investments, including our equity share from investments	(167)		(1,219)				(239)		(54,403)
Gain on sale of equity investment in PS Business Parks, Inc.		—		(2,116,839)				—		(2,116,839)
Gains on sale of real estate investments, including our equity share from investments
Gains on sale of real estate investments, including our equity share from investments

FFO allocable to common shares

FFO allocable to common shares

FFO allocable to common shares	FFO allocable to common shares	$	807,013	$	821,822	(1.8)	%	$	2,258,025	$	2,305,699	(2.1)	%
Eliminate the impact of items excluded from Core FFO, including our equity share from investments:	Eliminate the impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange gain		(47,880)		(100,170)				(19,924)		(237,270)
Eliminate the impact of items excluded from Core FFO, including our equity share from investments:
Eliminate the impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange (gain) loss
Foreign currency exchange (gain) loss
Foreign currency exchange (gain) loss

Property losses and tenant claims due to casualties		—		6,118				—		6,118

Other items

Other items

Other items	Other items	3,804		(344)				(2,422)		422
Core FFO allocable to common shares	Core FFO allocable to common shares	$	762,937	$	727,426	4.9	%	$	2,235,679	$	2,074,969	7.7	%
Core FFO allocable to common shares
Core FFO allocable to common shares

Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:

Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:

Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:	Reconciliation of Diluted Earnings per Share to FFO per Share and Core FFO per Share:
Diluted earnings per share	Diluted earnings per share	$	3.20	$	15.38	(79.2)	%	$	8.85	$	21.44	(58.7)	%
Diluted earnings per share
Diluted earnings per share
Eliminate amounts per share excluded from FFO:
Eliminate amounts per share excluded from FFO:
Eliminate amounts per share excluded from FFO:	Eliminate amounts per share excluded from FFO:
Real estate-related depreciation and amortization	Real estate-related depreciation and amortization	1.38		1.29				3.97		3.95
Real estate-related depreciation and amortization
Real estate-related depreciation and amortization
Gains on sale of real estate investments, including our equity share from investments	Gains on sale of real estate investments, including our equity share from investments	—		(0.01)				—		(0.31)
Gain on sale of equity investment in PS Business Parks, Inc.		—		(12.00)				—		(12.00)
Gains on sale of real estate investments, including our equity share from investments
Gains on sale of real estate investments, including our equity share from investments

FFO per share

FFO per share

FFO per share	FFO per share	$	4.58	$	4.66	(1.7)	%	$	12.82	$	13.08	(2.0)	%
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:	Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange gain		(0.27)		(0.57)				(0.11)		(1.35)
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange (gain) loss
Foreign currency exchange (gain) loss
Foreign currency exchange (gain) loss

Property losses and tenant claims due to casualties		—		0.04				—		0.04

Other items

Other items

Other items	Other items	0.02		—				(0.02)		—
Core FFO per share	Core FFO per share	$	4.33	$	4.13	4.8	%	$	12.69	$	11.77	7.8	%
Core FFO per share
Core FFO per share

Diluted weighted average common shares	Diluted weighted average common shares	176,150		176,328				176,170		176,325

Diluted weighted average common shares

Diluted weighted average common shares

Analysis of Net Income — Self-Storage Operations

Our self-storage operations are analyzed in four groups: (i) the ~~2,343~~2,507 facilities that we have owned and operated on a stabilized basis since January 1, ~~2021~~2022 (the “Same Store Facilities”), (ii) ~~459~~238 facilities we acquired since January 1, ~~2021~~2022 (the “Acquired Facilities”), (iii) ~~140~~123 facilities that have been newly developed or expanded, or that will commence expansion by December 31, ~~2023~~2024 (the “Newly Developed and Expanded Facilities”), and (iv) 86177 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, ~~2021~~2022 (the “Other Non-same Store Facilities”). See Note 1413 to our ~~September 30, 2023~~March 31, 2024 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

2724


Self-Storage Operations	Self-Storage Operations
Self-Storage Operations
Self-Storage Operations
Summary	Summary	Three Months Ended September 30,						Nine Months Ended September 30,
Summary
Summary









		2023		2022		Percentage Change		2023		2022		Percentage Change

		(Dollar amounts and square footage in thousands)												(Dollar amounts and square footage in thousands)
Revenues:	Revenues:
Same Store Facilities	Same Store Facilities	$	869,715	$	848,596	2.5	%	$	2,580,649	$	2,433,134	6.1	%
Same Store Facilities
Same Store Facilities
Acquired Facilities
Acquired Facilities
Acquired Facilities	Acquired Facilities	112,501		88,871		26.6	%	306,298		235,259		30.2	%
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities	67,758		61,278		10.6	%	195,233		169,211		15.4	%
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Other Non-Same Store Facilities	Other Non-Same Store Facilities	28,747		28,629		0.4	%	84,845		80,071		6.0	%
		1,078,721		1,027,374		5.0	%	3,167,025		2,917,675		8.5	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
								1,086,045
								1,086,045
								1,086,045
Cost of operations:
Cost of operations:
Cost of operations:	Cost of operations:
Same Store Facilities	Same Store Facilities	202,407		196,955		2.8	%	605,491		579,343		4.5	%
Same Store Facilities
Same Store Facilities
Acquired Facilities
Acquired Facilities
Acquired Facilities	Acquired Facilities	35,601		31,278		13.8	%	100,316		82,092		22.2	%
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities	20,188		18,319		10.2	%	58,937		51,138		15.3	%
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Other Non-Same Store Facilities	Other Non-Same Store Facilities	9,589		8,918		7.5	%	29,334		26,380		11.2	%
		267,785		255,470		4.8	%	794,078		738,953		7.5	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
								297,414
								297,414
								297,414
Net operating income (a):
Net operating income (a):
Net operating income (a):	Net operating income (a):
Same Store Facilities	Same Store Facilities	667,308		651,641		2.4	%	1,975,158		1,853,791		6.5	%
Same Store Facilities
Same Store Facilities
Acquired Facilities
Acquired Facilities
Acquired Facilities	Acquired Facilities	76,900		57,593		33.5	%	205,982		153,167		34.5	%
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities	47,570		42,959		10.7	%	136,296		118,073		15.4	%
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Other Non-Same Store Facilities	Other Non-Same Store Facilities	19,158		19,711		(2.8)	%	55,511		53,691		3.4	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
Total net operating income
Total net operating income
Total net operating income	Total net operating income	810,936		771,904		5.1	%	2,372,947		2,178,722		8.9	%

Depreciation and amortization expense:	Depreciation and amortization expense:

Depreciation and amortization expense:

Depreciation and amortization expense:
Same Store Facilities
Same Store Facilities
Same Store Facilities	Same Store Facilities	133,861		126,575		5.8	%	390,456		371,453		5.1	%
Acquired Facilities	Acquired Facilities	75,790		67,529		12.2	%	207,499		213,791		(2.9)	%
Acquired Facilities
Acquired Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities	15,368		13,001		18.2	%	44,755		37,845		18.3	%
Other Non-Same Store Facilities	Other Non-Same Store Facilities	13,729		13,667		0.5	%	39,821		38,519		3.4	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
Total depreciation and amortization expense
Total depreciation and amortization expense
Total depreciation and amortization expense	Total depreciation and amortization expense	238,748		220,772		8.1	%	682,531		661,608		3.2	%

Net income (loss):	Net income (loss):

Net income (loss):

Net income (loss):
Same Store Facilities
Same Store Facilities
Same Store Facilities	Same Store Facilities	533,447		525,066		1.6	%	1,584,702		1,482,338		6.9	%
Acquired Facilities	Acquired Facilities	1,110		(9,936)		(111.2)	%	(1,517)		(60,624)		(97.5)	%
Acquired Facilities
Acquired Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities	32,202		29,958		7.5	%	91,541		80,228		14.1	%
Other Non-Same Store Facilities	Other Non-Same Store Facilities	5,429		6,044		(10.2)	%	15,690		15,172		3.4	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
Total net income
Total net income
Total net income	Total net income	$	572,188	$	551,132	3.8	%	$	1,690,416	$	1,517,114	11.4	%

Number of facilities at period end:	Number of facilities at period end:

Number of facilities at period end:

Number of facilities at period end:
Same Store Facilities
Same Store Facilities
Same Store Facilities	Same Store Facilities							2,343		2,343		—	%
Acquired Facilities	Acquired Facilities							459		276		66.3	%
Acquired Facilities
Acquired Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities							140		131		6.9	%
Other Non-Same Store Facilities	Other Non-Same Store Facilities							86		86		—	%
								3,028		2,836		6.8	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
								3,045
								3,045
								3,045
Net rentable square footage at period end:
Net rentable square footage at period end:
Net rentable square footage at period end:	Net rentable square footage at period end:
Same Store Facilities	Same Store Facilities							155,112		155,112		—	%
Same Store Facilities
Same Store Facilities
Acquired Facilities
Acquired Facilities
Acquired Facilities	Acquired Facilities							38,045		24,997		52.2	%
Newly Developed and Expanded Facilities	Newly Developed and Expanded Facilities							16,296		14,991		8.7	%
Newly Developed and Expanded Facilities
Newly Developed and Expanded Facilities
Other Non-Same Store Facilities	Other Non-Same Store Facilities							7,049		7,078		(0.4)	%
								216,502		202,178		7.1	%
Other Non-Same Store Facilities
Other Non-Same Store Facilities
								218,400
								218,400
								218,400

2825

(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 1413 to our ~~September 30, 2023~~March 31, 2024 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, ~~2021.~~2022. Our Same Store Facilities increased from 2,339 facilities at December 31, 2023 to 2,507 at March 31, 2024. The composition of our Same Store Facilities allows us more effectively to evaluate the ongoing performance of our self-storage portfolio in ~~2021,~~ 2022, 2023, and ~~2023~~2024 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 ~~2,343~~2,507 facilities ~~(155.1~~(170.0 million net rentable square feet) that represent approximately ~~72%~~78% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at ~~September 30, 2023.~~March 31, 2024. 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.

2926

Selected Operating Data for the Same Store Facilities ~~(2,343~~(2,507 facilities)












		Three Months Ended September 30,					Nine Months Ended September 30,
		2023		2022		Percentage Change	2023		2022		Percentage Change

		(Dollar amounts in thousands, except for per square foot data)										(Dollar amounts in thousands, except for per square foot data)
Revenues (a):	Revenues (a):
Rental income	Rental income	$	840,066	$	820,805	2.3%	$	2,494,408	$	2,355,968	5.9%
Rental income
Rental income
Late charges and administrative fees	Late charges and administrative fees	29,649		27,791		6.7%	86,241		77,166		11.8%
Late charges and administrative fees
Late charges and administrative fees
Total revenues
Total revenues
Total revenues	Total revenues	869,715		848,596		2.5%	2,580,649		2,433,134		6.1%

Direct cost of operations (a):	Direct cost of operations (a):

Direct cost of operations (a):

Direct cost of operations (a):
Property taxes
Property taxes
Property taxes	Property taxes	77,988		75,550		3.2%	231,846		223,076		3.9%
On-site property manager payroll	On-site property manager payroll	31,311		30,572		2.4%	95,328		92,865		2.7%
On-site property manager payroll
On-site property manager payroll
Repairs and maintenance
Repairs and maintenance
Repairs and maintenance	Repairs and maintenance	14,775		15,092		(2.1)%	47,440		44,668		6.2%
Utilities	Utilities	12,023		12,661		(5.0)%	34,647		35,214		(1.6)%
Utilities
Utilities
Marketing
Marketing
Marketing	Marketing	18,024		12,982		38.8%	48,027		33,781		42.2%
Other direct property costs	Other direct property costs	22,595		21,549		4.9%	67,857		63,163		7.4%
Other direct property costs
Other direct property costs
Total direct cost of operations	Total direct cost of operations	176,716		168,406		4.9%	525,145		492,767		6.6%
Total direct cost of operations
Total direct cost of operations
Direct net operating income (b)
Direct net operating income (b)
Direct net operating income (b)	Direct net operating income (b)	692,999		680,190		1.9%	2,055,504		1,940,367		5.9%

Indirect cost of operations (a):	Indirect cost of operations (a):

Indirect cost of operations (a):

Indirect cost of operations (a):
Supervisory payroll
Supervisory payroll
Supervisory payroll	Supervisory payroll	(8,091)		(8,622)		(6.2)%	(25,783)		(27,594)		(6.6)%
Centralized management costs	Centralized management costs	(15,241)		(16,510)		(7.7)%	(46,335)		(47,700)		(2.9)%
Centralized management costs
Centralized management costs
Share-based compensation
Share-based compensation
Share-based compensation	Share-based compensation	(2,359)		(3,417)		(31.0)%	(8,228)		(11,282)		(27.1)%
Net operating income	Net operating income	667,308		651,641		2.4%	1,975,158		1,853,791		6.5%
Net operating income
Net operating income
Depreciation and amortization expense
Depreciation and amortization expense
Depreciation and amortization expense	Depreciation and amortization expense	(133,861)		(126,575)		5.8%	(390,456)		(371,453)		5.1%
Net income	Net income	$	533,447	$	525,066	1.6%	$	1,584,702	$	1,482,338	6.9%
Net income
Net income

Gross margin (before indirect costs, depreciation and amortization expense)

Gross margin (before indirect costs, depreciation and amortization expense)

Gross margin (before indirect costs, depreciation and amortization expense)	Gross margin (before indirect costs, depreciation and amortization expense)	79.7%		80.2%		(0.6)%	79.7%		79.7%		—%

Gross margin (before depreciation and amortization expense)	Gross margin (before depreciation and amortization expense)	76.7%		76.8%		(0.1)%	76.5%		76.2%		0.4%

Gross margin (before depreciation and amortization expense)

Gross margin (before depreciation and amortization expense)

Weighted average for the period:	Weighted average for the period:

Weighted average for the period:

Weighted average for the period:
Square foot occupancy
Square foot occupancy
Square foot occupancy	Square foot occupancy	93.4%		94.5%		(1.2)%	93.4%		95.3%		(2.0)%

Realized annual rental income per (c):	Realized annual rental income per (c):

Realized annual rental income per (c):

Realized annual rental income per (c):
Occupied square foot
Occupied square foot
Occupied square foot	Occupied square foot	$	23.20	$	22.38	3.7%	$	22.94	$	21.25	8.0%
Available square foot	Available square foot	$	21.65	$	21.16	2.3%	$	21.43	$	20.24	5.9%
Available square foot
Available square foot

At September 30:
At March 31:

At March 31:

At March 31:
Square foot occupancy
Square foot occupancy
Square foot occupancy	Square foot occupancy						92.1%		93.3%		(1.3)%
Annual contract rent per occupied square foot (d)	Annual contract rent per occupied square foot (d)						$	23.44	$	22.82	2.7%
Annual contract rent per occupied square foot (d)
Annual contract rent per occupied square foot (d)

3027

(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 a year) 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 ~~2.5% and 6.1%~~0.1% in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2022. The increase is~~2023, primarily due ~~primarily~~ to ~~(i)~~ a ~~3.7% and 8.0%~~0.8% increase in realized annual rent per occupied square foot, ~~for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022,~~ partially offset by ~~(ii)~~ a ~~1.2% and 2.0%~~0.8% decrease in average ~~occupancy for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022.~~occupancy.

The increase in realized annual rent per occupied square foot in the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 as compared to the same ~~periods~~period in ~~2022~~2023 was due to cumulative rate increases to existing long-term tenants over the past twelve months, partially offset by a ~~16.0% and 12.8%~~ decrease in average rates per square foot charged to new tenants moving in ~~respectively.~~over the same period. The growth rate in realized annual rent per occupied square foot has decelerated since the second half of 2022 from lower move-in rates and increased promotion discounts offered in order to replace tenants that vacate. At ~~September 30, 2023,~~March 31, 2024, annual contract rent per occupied square foot was ~~2.7% higher~~0.3% lower as compared to ~~September 30, 2022.~~March 31, 2023.

Occupancy levels ~~although strong,~~ have gradually declined since the second half of 2022 and are returning to 2019 levels, which were not impacted by COVID-19 pandemic, as ~~move-out activity increased and~~ customer demand softened. The weighted average square foot occupancy for our ~~same store facilities~~Same Store Facilities was ~~93.4% for each of~~92.1% in the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, representing a decrease of ~~1.2% and 2.0%~~0.8%, ~~respectively,~~ as compared to the same ~~periods~~period in ~~2022. We~~2023. During the three months ended March 31, 2024, we lowered move-in rental rates and increased ~~promotional activity and~~ advertising spending to ~~increase~~stimulate move-in activity at our ~~facilities, which led to~~facilities. As a ~~year-over-year 6.0% and 10.6% increase in~~result, move-in ~~volumes that more than offset the year-over-year 2.9% and 7.6% increase in move-out volumes for the three and nine months ended September 30, 2023, respectively. Move-in~~ volumes net of move-out volumes were higher in the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 as compared to the same period in ~~2022, which reduced the year-over-year decline in occupancy levels between December 31, 2022 and September 30,~~ 2023.

Move-out activities from our tenants were ~~higher~~lower in the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 as compared to the same ~~periods~~period in ~~2022, returning to pre-2020 levels.~~2023. Average length of stay of our tenants remained at similar high levels in the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 as compared to the same ~~periods~~period in ~~2022,~~2023, which supported our revenue growth by contributing to the number of tenants eligible for rental rate increases.

3128

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, 2024 and 2023. It 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,

		2024		2023		Change

		(Amounts in thousands, except for per square foot amounts)

Tenants moving in during the period:
Average annual contract rent per square foot		$	13.23	$	15.81	(16.3)%
Square footage		29,644		29,892		(0.8)%
Contract rents gained from move-ins		$	98,048	$	118,148	(17.0)%
Promotional discounts given		$	13,488	$	17,791	(24.2)%

Tenants moving out during the period:
Average annual contract rent per square foot		$	20.78	$	21.02	(1.1)%
Square footage		28,572		29,021		(1.5)%
Contract rents lost from move-outs		$	148,432	$	152,505	(2.7)%

Demand was weaker in the ~~summer months~~first quarter of 2024 compared to the same period in 2023 ~~was~~ impacted by the lower home-moving activities due to limited housing market transaction volumes. ~~More typical seasonal patterns of demand with lower demand in the winter months returned in 2022 and is expected to continue.~~ Demand fluctuates due to various local and regional factors, including the overall economy. Demand for our facilities is also impacted by new supply of self-storage space and alternatives to self-storage.

Industry-wide demand from new customers for storage space at March 31, 2024 is below the level at March 31, 2023. We ~~expect weaker~~will mitigate the lower industry-wide demand ~~in the remainder of 2023 as compared to 2022 driven~~from new customers for storage space by a weaker macroeconomic outlook and more limited home-moving activities, with move-out activities and occupancy levels returning to pre-2020 levels. To mitigate the negative impact of macroeconomic challenges, we will continuecontinuing to support ~~demand levels for our self-storage facilities~~new customer move-ins with increased marketing expense, ~~lowering~~lower rental rates to new customers, and increased promotional discounting. We expect industry-wide demand from new customers to stabilize during the year. We also anticipate fewer completions of new self-storage facilities nationally, reducing the competitive impact of new supply on customer acquisition. As a result of stabilizing new customer demand during the year, stable existing customer behavior, and lower impact from new competitive supply, we ~~expect revenue growth~~anticipate same store revenues in 2024 will be similar to ~~decline significantly through the course of 2023 as compared to high levels of growth~~those earned in ~~2022 and 2021, including the potential for year-over-year declines in revenue in the fourth quarter of~~ 2023.

Late Charges and Administrative Fees

Late charges and administrative fees increased ~~6.7% and 11.8%~~2.6% for the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2022, due to (i)~~2023 as a result of higher late charges collected on delinquent accounts driven by more delinquent ~~accounts and to a lesser extent (ii) higher administrative fees resulting from higher move-in volumes. Delinquency levels at our same store properties remain below pre-2020 levels.~~

~~Selected Key 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 and nine months ended September 30, 2023 and 2022. It 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 September 30, Nine Months Ended September 30,
2023 2022 Change 2023 2022 Change
(Amounts in thousands, except for per square foot amounts)
Tenants moving in during the period:
Average annual contract rent per square foot $ 15.96 $ 18.99 (16.0)% $ 16.21 $ 18.60 (12.8)%
Square footage 28,477 26,869 6.0% 84,267 76,218 10.6%
Contract rents gained from move-ins $ 113,623 $ 127,561 (10.9)% $ 1,024,476 $ 1,063,241 (3.6)%
Promotional discounts given $ 14,217 $ 13,886 2.4% $ 44,835 $ 36,822 21.8%
Tenants moving out during the period:
Average annual contract rent per square foot $ 21.64 $ 21.40 1.1% $ 21.40 $ 20.41 4.9%
Square footage 29,980 29,146 2.9% 84,312 78,336 7.6%
Contract rents lost from move-outs $ 162,192 $ 155,931 4.0% $ 1,353,208 $ 1,199,128 12.8%

accounts.

3229

Analysis of Same Store Cost of Operations

Cost of operations (excluding depreciation and amortization) increased ~~2.8% and 4.5%~~4.8% in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2022. The increase during the three-month period is~~2023, due primarily to increased property tax expense and marketing ~~expense, while the increase during the nine-month period is due primarily to increased property tax expense, marketing expense, and other direct property costs.~~expense.

Property tax expense increased ~~3.2% and 3.9%~~7.4% in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2022,~~2023, as a result of higher assessed values. We expect property tax expense to grow ~~5.8%~~5% in ~~2023~~2024 due primarily to higher assessed values.

On-site property manager payroll expense increased 2.4% and 2.7% in the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022, due primarily to increases in wage rates as a result of competitive labor conditions experienced in most geographical markets. We expect an inflationary increase in on-site property manager payroll expense in 2023 driven by increased wage rates, partially offset by expected reduction in labor hours driven by revisions in operational processes.

Marketing expense includes Internet advertising we utilize through our online paid search programs, television advertising and the operating costs of our 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. We increased marketing expense by ~~38.8% and 42.2%~~40.4% in the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024, as compared to the same period in 2023, ~~respectively,~~ by utilizing a higher volume of online paid search programs to attract new ~~tenants, as compared~~tenants. We plan to ~~the same periods in 2022 when we refrained from~~continue to use internet advertising ~~due~~and other advertising channels to ~~strong demand and high occupancy levels in many of our same store properties.~~

Other direct property costs include administrative expenses specific to each self-storage facility, such as property loss, telephone and data communication lines, business license costs, bank charges related to processing the facilities’ cash receipts, tenant mailings, credit card fees, eviction costs, and the cost of operating each property’s rental office. These costs increased 4.9% and 7.4% in the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. These increases were due primarily to an increase in credit card fees as a result of year-over-year increases in revenues, and to a lesser extent, a long-term trend of more customers paying with credit cards rather than cash, checks, or other methods of payment with lower transaction costs. We expect a moderate increase in other direct property costssupport move-in volumes in the remainder of ~~2023 primarily driven by an increase in credit card fees.~~2024.

3330

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 September 30, 2023		Three Months Ended September 30,																			As of March 31, 2024		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							Number of Facilities	Square Feet (millions)	Realized Rent per Occupied Square Foot							Average Occupancy						Realized Rent per Available Square Foot
				2023		2022		Change		2023		2022		Change		2023		2022		Change					2024		2023		Change (a)			2024		2023		Change (a)		2024		2023		Change (a)
Los Angeles	Los Angeles	214	15.5	$	36.40	$	33.87	7.5	%	95.0	%	96.5	%	(1.6)	%	$	34.59	$	32.68	5.8	%	Los Angeles	218	15.9	$	35.66	$	34.92	2.1	2.1	%	95.3	%	95.8	%	(0.5)	%	$	33.98	$	33.46	1.6	1.6	%
San Francisco	San Francisco	129	7.9	32.70		32.16		1.7	%	94.4	%	94.9	%	(0.5)	%	30.88		30.52		1.2	%	San Francisco	130	8.1	31.88		31.93	31.93	(0.2)	(0.2)	%	94.8	%	94.2	%	0.6	%	30.22		30.07	30.07	0.5	0.5	%
New York	New York	92	6.8	32.35		31.51		2.7	%	93.6	%	94.2	%	(0.6)	%	30.29		29.67		2.1	%	New York	91	6.7	31.90		31.72	31.72	0.6	0.6	%	93.7	%	92.8	%	0.9	%	29.88		29.45	29.45	1.5	1.5	%
Washington DC																						Washington DC	109	7.3	26.62		26.31		1.2		%	91.6	%	90.7	%	0.9	%	24.39		23.85		2.3		%
Miami	Miami	87	6.2	30.43		29.25		4.0	%	93.2	%	94.8	%	(1.7)	%	28.37		27.73		2.3	%	Miami	87	6.3	29.60		29.63	29.63	(0.1)	(0.1)	%	93.8	%	93.6	%	0.2	%	27.76		27.72	27.72	0.1	0.1	%
Dallas-Ft. Worth																						Dallas-Ft. Worth	130	9.7	18.28		17.78		2.8		%	89.5	%	92.2	%	(2.7)	%	16.36		16.38		(0.1)		%
Seattle-Tacoma	Seattle-Tacoma	89	6.0	26.32		26.00		1.2	%	93.0	%	94.0	%	(1.1)	%	24.47		24.44		0.1	%	Seattle-Tacoma	92	6.3	25.12		25.66	25.66	(2.1)	(2.1)	%	92.8	%	92.3	%	0.5	%	23.31		23.68	23.68	(1.6)	(1.6)	%
Washington DC		90	5.5	26.93		26.20		2.8	%	93.1	%	93.4	%	(0.3)	%	25.07		24.47		2.5	%
Dallas-Ft. Worth		111	7.6	18.84		17.82		5.7	%	91.8	%	94.1	%	(2.4)	%	17.30		16.77		3.2	%
Houston																						Houston	117	9.2	16.89		16.44		2.7		%	90.8	%	91.6	%	(0.8)	%	15.34		15.07		1.8		%
Atlanta																						Atlanta	107	7.1	17.91		17.94		(0.2)		%	87.2	%	90.9	%	(3.7)	%	15.61		16.30		(4.2)		%
Chicago	Chicago	130	8.2	20.42		20.06		1.8	%	94.0	%	93.4	%	0.6	%	19.18		18.73		2.4	%	Chicago	131	8.3	20.37		20.09	20.09	1.4	1.4	%	92.0	%	91.4	%	0.6	%	18.74		18.36	18.36	2.1	2.1	%
Atlanta		103	6.8	18.21		18.01		1.1	%	91.7	%	93.6	%	(2.0)	%	16.69		16.85		(0.9)	%
Houston		101	7.5	17.21		16.36		5.2	%	92.1	%	93.2	%	(1.2)	%	15.85		15.26		3.9	%
Orlando-Daytona	Orlando-Daytona	69	4.4	19.85		18.75		5.9	%	93.0	%	95.6	%	(2.7)	%	18.46		17.93		3.0	%	Orlando-Daytona	69	4.4	19.05		19.42	19.42	(1.9)	(1.9)	%	91.4	%	94.9	%	(3.5)	%	17.40		18.42	18.42	(5.5)	(5.5)	%
West Palm Beach																						West Palm Beach	41	3.1	25.97		26.25		(1.1)		%	92.8	%	93.6	%	(0.8)	%	24.11		24.57		(1.9)		%
Philadelphia	Philadelphia	56	3.5	21.51		21.60		(0.4)	%	93.6	%	93.7	%	(0.1)	%	20.13		20.23		(0.5)	%	Philadelphia	57	3.6	21.21		21.51	21.51	(1.4)	(1.4)	%	92.1	%	92.3	%	(0.2)	%	19.53		19.85	19.85	(1.6)	(1.6)	%
West Palm Beach		39	2.8	26.83		25.92		3.5	%	93.1	%	95.0	%	(2.0)	%	24.99		24.62		1.5	%
Tampa		53	3.5	20.27		19.61		3.4	%	91.3	%	94.5	%	(3.4)	%	18.50		18.53		(0.2)	%
Charlotte	Charlotte	52	3.9	16.38		15.62		4.9	%	93.0	%	95.0	%	(2.1)	%	15.23		14.85		2.6	%	Charlotte	55	4.2	16.09		15.93	15.93	1.0	1.0	%	90.8	%	93.0	%	(2.2)	%	14.61		14.81	14.81	(1.4)	(1.4)	%
Baltimore																						Baltimore	38	2.8	23.55		23.56		—		%	90.8	%	90.7	%	0.1	%	21.39		21.36		0.1		%
All other markets	All other markets	928	59.0	18.93		18.42		2.8	%	93.5	%	94.5	%	(1.1)	%	17.70		17.40		1.7	%	All other markets	1,035	67.0	18.41		18.34	18.34	0.4	0.4	%	92.0	%	92.9	%	(0.9)	%	16.94		17.04	17.04	(0.6)	(0.6)	%
Totals	Totals	2,343	155.1	$	23.20	$	22.38	3.7	%	93.4	%	94.5	%	(1.2)	%	$	21.65	$	21.16	2.3	%	Totals	2,507	170.0	$	22.53	$	22.35	0.8	0.8	%	92.1	%	92.9	%	(0.8)	%	$	20.76	$	20.76	—	—	%

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

3431

Same Store Facilities Operating Trends by Market (Continued)


		Three Months Ended September 30,																									Three Months Ended March 31,
		Revenues ($000's)						Direct Expenses ($000's)						Indirect Expenses ($000's)						Net Operating Income ($000's)							Revenues ($000's)							Direct Expenses ($000's)							Indirect Expenses ($000's)							Net Operating Income ($000's)
		2023		2022		Change		2023		2022		Change		2023		2022		Change		2023		2022		Change			2024		2023		Change			2024		2023		Change			2024		2023		Change			2024		2023		Change
Los Angeles	Los Angeles	$	137,487	$	129,706	6.0	%	$	17,962	$	16,669	7.8	%	$	2,764	$	2,888	(4.3)	%	$	116,761	$	110,149	6.0	%	Los Angeles	$	138,217	$	135,996	1.6	1.6	%	$	19,641	$	18,216	7.8	7.8	%	$	2,856	$	2,917	(2.1)	(2.1)	%	$	115,720	$	114,863	0.7	0.7	%
San Francisco	San Francisco	62,276		61,544		1.2	%	9,453		9,197		2.8	%	1,407		1,617		(13.0)	%	51,416		50,730		1.4	%	San Francisco	62,185		61,779	61,779	0.7	0.7	%	11,153		9,930	9,930	12.3	12.3	%	1,397		1,624	1,624	(14.0)	(14.0)	%	49,635		50,225	50,225	(1.2)	(1.2)	%
New York	New York	52,750		51,385		2.7	%	12,233		11,799		3.7	%	1,148		1,348		(14.8)	%	39,369		38,238		3.0	%	New York	51,475		50,565	50,565	1.8	1.8	%	13,890		13,150	13,150	5.6	5.6	%	1,123		1,321	1,321	(15.0)	(15.0)	%	36,462		36,094	36,094	1.0	1.0	%
Washington DC																										Washington DC	45,969		44,950		2.3		%	9,489		9,343		1.6		%	1,295		1,313		(1.4)		%	35,185		34,294		2.6		%
Miami	Miami	45,695		44,565		2.5	%	8,815		8,098		8.9	%	980		1,054		(7.0)	%	35,900		35,413		1.4	%	Miami	45,208		45,122	45,122	0.2	0.2	%	9,078		7,976	7,976	13.8	13.8	%	986		1,087	1,087	(9.3)	(9.3)	%	35,144		36,059	36,059	(2.5)	(2.5)	%
Dallas-Ft. Worth																										Dallas-Ft. Worth	41,555		41,635		(0.2)		%	10,125		10,206		(0.8)		%	1,202		1,458		(17.6)		%	30,228		29,971		0.9		%
Seattle-Tacoma	Seattle-Tacoma	37,905		37,891		—	%	6,567		6,229		5.4	%	912		1,034		(11.8)	%	30,426		30,628		(0.7)	%	Seattle-Tacoma	37,773		38,366	38,366	(1.5)	(1.5)	%	8,199		7,183	7,183	14.1	14.1	%	1,000		1,062	1,062	(5.8)	(5.8)	%	28,574		30,121	30,121	(5.1)	(5.1)	%
Washington DC		35,869		34,937		2.7	%	7,083		7,197		(1.6)	%	981		1,030		(4.8)	%	27,805		26,710		4.1	%
Dallas-Ft. Worth		34,381		33,272		3.3	%	7,565		7,501		0.9	%	1,134		1,187		(4.5)	%	25,682		24,584		4.5	%
Houston																										Houston	36,953		36,278		1.9		%	10,349		10,115		2.3		%	1,247		1,323		(5.7)		%	25,357		24,840		2.1		%
Atlanta																										Atlanta	29,161		30,373		(4.0)		%	6,370		6,467		(1.5)		%	1,171		1,279		(8.4)		%	21,620		22,627		(4.5)		%
Chicago	Chicago	40,768		39,718		2.6	%	15,661		14,482		8.1	%	1,367		1,458		(6.2)	%	23,740		23,778		(0.2)	%	Chicago	40,195		39,386	39,386	2.1	2.1	%	19,597		16,674	16,674	17.5	17.5	%	1,391		1,439	1,439	(3.3)	(3.3)	%	19,207		21,273	21,273	(9.7)	(9.7)	%
Atlanta		29,815		29,967		(0.5)	%	6,279		5,747		9.3	%	1,077		1,173		(8.2)	%	22,459		23,047		(2.6)	%
Houston		30,959		29,829		3.8	%	8,839		8,500		4.0	%	1,039		1,137		(8.6)	%	21,081		20,192		4.4	%
Orlando-Daytona	Orlando-Daytona	21,099		20,453		3.2	%	4,286		3,903		9.8	%	769		861		(10.7)	%	16,044		15,689		2.3	%	Orlando-Daytona	19,904		21,047	21,047	(5.4)	(5.4)	%	4,289		4,071	4,071	5.4	5.4	%	785		860	860	(8.7)	(8.7)	%	14,830		16,116	16,116	(8.0)	(8.0)	%
West Palm Beach																										West Palm Beach	19,132		19,500		(1.9)		%	4,644		4,175		11.2		%	547		563		(2.8)		%	13,941		14,762		(5.6)		%
Philadelphia	Philadelphia	18,528		18,605		(0.4)	%	3,987		3,924		1.6	%	574		671		(14.5)	%	13,967		14,010		(0.3)	%	Philadelphia	18,587		18,878	18,878	(1.5)	(1.5)	%	4,557		4,328	4,328	5.3	5.3	%	596		702	702	(15.1)	(15.1)	%	13,434		13,848	13,848	(3.0)	(3.0)	%
West Palm Beach		18,051		17,763		1.6	%	3,694		3,798		(2.7)	%	466		503		(7.4)	%	13,891		13,462		3.2	%
Tampa		16,875		16,898		(0.1)	%	3,825		3,603		6.2	%	566		596		(5.0)	%	12,484		12,699		(1.7)	%
Charlotte	Charlotte	15,682		15,239		2.9	%	2,941		2,565		14.7	%	480		595		(19.3)	%	12,261		12,079		1.5	%	Charlotte	15,905		16,098	16,098	(1.2)	(1.2)	%	3,212		3,009	3,009	6.7	6.7	%	543		631	631	(13.9)	(13.9)	%	12,150		12,458	12,458	(2.5)	(2.5)	%
Baltimore																										Baltimore	15,878		15,828		0.3		%	3,515		2,960		18.8		%	432		435		(0.7)		%	11,931		12,433		(4.0)		%
All other markets	All other markets	271,575		266,824		1.8	%	57,526		55,194		4.2	%	10,027		11,397		(12.0)	%	204,022		200,233		1.9	%	All other markets	294,988		296,712	296,712	(0.6)	(0.6)	%	69,838		66,616	66,616	4.8	4.8	%	11,156		12,359	12,359	(9.7)	(9.7)	%	213,994		217,737	217,737	(1.7)	(1.7)	%
Totals	Totals	$	869,715	$	848,596	2.5	%	$	176,716	$	168,406	4.9	%	$	25,691	$	28,549	(10.0)	%	$	667,308	$	651,641	2.4	%	Totals	$	913,085	$	912,513	0.1	0.1	%	$	207,946	$	194,419	7.0	7.0	%	$	27,727	$	30,373	(8.7)	(8.7)	%	$	677,412	$	687,721	(1.5)	(1.5)	%

~~Same Store Facilities Operating Trends by Market (Continued)~~

As of September 30, 2023 Nine Months Ended September 30,
Number
of
Facilities Square
Feet
(millions) Realized Rent per
Occupied Square Foot Average Occupancy Realized Rent per
Available Square Foot
2023 2022 Change 2023 2022 Change 2023 2022 Change
Los Angeles 214 15.5 $ 35.83 $ 31.63 13.3 % 95.5 % 97.1 % (1.6) % $ 34.20 $ 30.71 11.4 %
San Francisco 129 7.9 32.48 30.98 4.8 % 94.3 % 95.5 % (1.3) % 30.64 29.61 3.5 %
New York 92 6.8 32.11 30.06 6.8 % 93.2 % 94.9 % (1.8) % 29.93 28.51 5.0 %
Miami 87 6.2 30.13 27.58 9.2 % 93.4 % 96.1 % (2.8) % 28.15 26.51 6.2 %
Seattle-Tacoma 89 6.0 26.18 24.74 5.8 % 92.6 % 94.7 % (2.2) % 24.25 23.42 3.5 %
Washington DC 90 5.5 26.53 25.14 5.5 % 92.7 % 93.9 % (1.3) % 24.59 23.61 4.2 %
Dallas-Ft. Worth 111 7.6 18.48 16.90 9.3 % 92.6 % 94.8 % (2.3) % 17.11 16.03 6.7 %
Chicago 130 8.2 20.20 18.97 6.5 % 93.1 % 94.4 % (1.4) % 18.81 17.91 5.0 %
Atlanta 103 6.8 18.11 17.07 6.1 % 91.5 % 94.5 % (3.2) % 16.57 16.14 2.7 %
Houston 101 7.5 16.98 15.52 9.4 % 92.1 % 93.9 % (1.9) % 15.63 14.58 7.2 %
Orlando-Daytona 69 4.4 19.72 17.58 12.2 % 93.9 % 96.2 % (2.4) % 18.52 16.91 9.5 %
Philadelphia 56 3.5 21.53 20.67 4.2 % 93.2 % 95.1 % (2.0) % 20.07 19.66 2.1 %
West Palm Beach 39 2.8 26.51 24.60 7.8 % 93.7 % 96.2 % (2.6) % 24.84 23.67 4.9 %
Tampa 53 3.5 20.09 18.58 8.1 % 92.3 % 95.3 % (3.1) % 18.54 17.71 4.7 %
Charlotte 52 3.9 16.15 14.73 9.6 % 93.3 % 95.4 % (2.2) % 15.07 14.06 7.2 %
All other markets 928 59.0 18.73 17.57 6.6 % 93.5 % 95.2 % (1.8) % 17.52 16.72 4.8 %
Totals 2,343 155.1 $ 22.94 $ 21.25 8.0 % 93.4 % 95.3 % (2.0) % $ 21.43 $ 20.24 5.9 %

~~Same Store Facilities Operating Trends by Market (Continued)~~

Nine Months Ended September 30,
Revenues ($000's) Direct Expenses ($000's) Indirect Expenses ($000's) Net Operating Income ($000's)
2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change
Los Angeles $ 407,515 $ 365,483 11.5 % $ 52,436 $ 48,202 8.8 % $ 8,262 $ 8,622 (4.2) % $ 346,817 $ 308,659 12.4 %
San Francisco 185,391 178,986 3.6 % 28,900 26,546 8.9 % 4,457 5,084 (12.3) % 152,034 147,356 3.2 %
New York 156,018 148,437 5.1 % 37,229 36,217 2.8 % 3,673 4,176 (12.0) % 115,116 108,044 6.5 %
Miami 135,910 127,521 6.6 % 24,787 22,906 8.2 % 3,105 3,244 (4.3) % 108,018 101,371 6.6 %
Seattle-Tacoma 112,608 108,811 3.5 % 19,962 18,467 8.1 % 2,916 3,082 (5.4) % 89,730 87,262 2.8 %
Washington DC 105,463 101,040 4.4 % 21,150 21,157 — % 3,027 3,107 (2.6) % 81,286 76,776 5.9 %
Dallas-Ft. Worth 101,950 95,221 7.1 % 22,675 21,671 4.6 % 3,499 3,625 (3.5) % 75,776 69,925 8.4 %
Chicago 119,792 113,722 5.3 % 47,602 43,718 8.9 % 4,175 4,501 (7.2) % 68,015 65,503 3.8 %
Atlanta 88,684 85,999 3.1 % 18,422 16,725 10.1 % 3,438 3,648 (5.8) % 66,824 65,626 1.8 %
Houston 91,522 85,206 7.4 % 25,467 24,214 5.2 % 3,217 3,437 (6.4) % 62,838 57,555 9.2 %
Orlando-Daytona 63,453 57,893 9.6 % 12,298 11,151 10.3 % 2,433 2,610 (6.8) % 48,722 44,132 10.4 %
Philadelphia 55,405 54,176 2.3 % 11,836 11,941 (0.9) % 1,905 2,038 (6.5) % 41,664 40,197 3.6 %
West Palm Beach 53,776 51,195 5.0 % 11,245 10,381 8.3 % 1,504 1,519 (1.0) % 41,027 39,295 4.4 %
Tampa 50,771 48,376 5.0 % 11,025 10,115 9.0 % 1,769 1,860 (4.9) % 37,977 36,401 4.3 %
Charlotte 46,478 43,234 7.5 % 8,522 7,378 15.5 % 1,571 1,798 (12.6) % 36,385 34,058 6.8 %
All other markets 805,913 767,834 5.0 % 171,589 161,978 5.9 % 31,395 34,225 (8.3) % 602,929 571,631 5.5 %
Totals $ 2,580,649 $ 2,433,134 6.1 % $ 525,145 $ 492,767 6.6 % $ 80,346 $ 86,576 (7.2) % $ 1,975,158 $ 1,853,791 6.5 %

3732

Acquired Facilities

The Acquired Facilities represent ~~459~~238 facilities that we acquired in ~~2021,~~ 2022, 2023, and ~~2023.~~2024. 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	ACQUIRED FACILITIES	Three Months Ended September 30,						Nine Months Ended September 30,
ACQUIRED FACILITIES
ACQUIRED FACILITIES
								2024
								2024
								2024
		2023		2022		Change (a)		2023		2022		Change (a)
								($ amounts in thousands, except for per square foot amounts)

								($ amounts in thousands, except for per square foot amounts)
		($ amounts in thousands, except for per square foot amounts)
								($ amounts in thousands, except for per square foot amounts)
Revenues (b):	Revenues (b):
2021 Acquisitions		$	88,818	$	84,008	$	4,810	$	257,403	$	228,183	$	29,220
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions	13,061		4,863		8,198		36,857		7,076		29,781
2023 Acquisitions	2023 Acquisitions	10,622		—		10,622		12,038		—		12,038
2023 Acquisitions
2023 Acquisitions

Total revenues

Total revenues

Total revenues	Total revenues	112,501		88,871		23,630		306,298		235,259		71,039

Cost of operations (b):	Cost of operations (b):
2021 Acquisitions		27,368		28,679		(1,311)		80,656		77,936		2,720

Cost of operations (b):

Cost of operations (b):
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions	5,304		2,599		2,705		16,166		4,156		12,010
2023 Acquisitions	2023 Acquisitions	2,929		—		2,929		3,494		—		3,494
2023 Acquisitions
2023 Acquisitions

Total cost of operations

Total cost of operations

Total cost of operations	Total cost of operations	35,601		31,278		4,323		100,316		82,092		18,224

Net operating income:	Net operating income:
2021 Acquisitions		61,450		55,329		6,121		176,747		150,247		26,500

Net operating income:

Net operating income:
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions	7,757		2,264		5,493		20,691		2,920		17,771
2023 Acquisitions	2023 Acquisitions	7,693		—		7,693		8,544		—		8,544
2023 Acquisitions
2023 Acquisitions

Net operating income

Net operating income

Net operating income	Net operating income	76,900		57,593		19,307		205,982		153,167		52,815
Depreciation and amortization expense	Depreciation and amortization expense	(75,790)		(67,529)		(8,261)		(207,499)		(213,791)		6,292
Net income (loss)		$	1,110	$	(9,936)	$	11,046	$	(1,517)	$	(60,624)	$	59,107
Depreciation and amortization expense
Depreciation and amortization expense
Net loss
Net loss
Net loss

At September 30:
At March 31:

At March 31:

At March 31:
Square foot occupancy:	Square foot occupancy:
2021 Acquisitions								83.4%		85.5%		(2.5)%
Square foot occupancy:
Square foot occupancy:
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions							84.4%		78.8%		7.1%
2023 Acquisitions	2023 Acquisitions							85.2%		—%		—%
2023 Acquisitions
2023 Acquisitions
								84.1%		84.7%		(0.7)%
								83.6%

								83.6%

								83.6%
Annual contract rent per occupied square foot:	Annual contract rent per occupied square foot:
2021 Acquisitions								$	18.75	$	17.72	5.8%
Annual contract rent per occupied square foot:
Annual contract rent per occupied square foot:
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions							13.02		11.11		17.2%
2023 Acquisitions	2023 Acquisitions							16.29		—		—%
2023 Acquisitions
2023 Acquisitions
								$	17.29	$	16.95	2.0%
								$

								$

								$
Number of facilities:	Number of facilities:
2021 Acquisitions								232		232		—
Number of facilities:
Number of facilities:
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions							74		44		30
2023 Acquisitions	2023 Acquisitions							153		—		153
2023 Acquisitions
2023 Acquisitions
								459		276		183
Net rentable square feet (in thousands) (c):
2021 Acquisitions (d)								22,009		21,830		179
								238

								238

								238
Net rentable square feet (in thousands):
Net rentable square feet (in thousands):
Net rentable square feet (in thousands):
2022 Acquisitions
2022 Acquisitions
2022 Acquisitions	2022 Acquisitions							4,740		3,167		1,573
2023 Acquisitions	2023 Acquisitions							11,296		—		11,296
2023 Acquisitions
2023 Acquisitions
								38,045		24,997		13,048
								16,807

								16,807

								16,807

3833

ACQUIRED FACILITIES (Continued)


	As of March 31, 2024						As of March 31, 2024
Costs to acquire (in thousands):				Costs to acquire (in thousands):
2022 Acquisitions				2022 Acquisitions	$	730,957
2023 Acquisitions				2023 Acquisitions	2,674,840

		As of September 30, 2023
Costs to acquire (in thousands):
2021 Acquisitions (d)		$	5,115,276
2022 Acquisitions		730,957
2023 Acquisitions (e)		2,502,988
		$	8,349,221
					$	3,405,797

(a)Represents the percentage change with respect to ~~square foot occupancy and~~ 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 Acquired Facilities have an aggregate of approximately 38.0 million net rentable square feet, including 13.9 million in Texas, 3.9 million in Maryland, 3.0 million in Florida, 1.9 million in Oklahoma, 1.3 million in South Carolina, 1.2 million in each of North Carolina and Virginia, 1.0 million in Indiana, 0.8 million in Tennessee, 0.7 million in each of California, Georgia, Idaho, and Ohio, 0.6 million in each of Arizona, Colorado, and Michigan, 0.5 million in each of Illinois, Minnesota, Nebraska, New Jersey, and Washington, 0.4 million in each of Mississippi and Oregon, 0.3 million in each of Nevada and New York, and 1.3 million in other states.

~~(d)We have completed the expansion projects on facilities acquired in 2021 for $26.8 million, adding 179,000 net rentable square feet of storage space as of September 30, 2023.~~

~~(e)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 ~~2021,~~2022, we acquired a total of ~~459~~238 facilities with ~~38.0~~16.8 million net rentable square feet for ~~$8.3~~$3.4 billion. During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, these facilities contributed net operating income of ~~$76.9 million and $206.0 million, respectively, consistent with our original underwritten expectations.~~$37.2 million.

~~On September 13,~~During 2023, we acquired BREIT Simply Storage LLC, a self-storage company that owns and operates 127 self-storage facilities (9.4 million square feet) and manages 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 ~~2023~~ Acquisition results in the table above are the Simply portfolio self-storage revenues of ~~$7.1~~$37.8 million, NOI of ~~$5.8~~$24.9 million (including Direct NOI of ~~$6.2~~$26.2 million), and average square footage occupancy of ~~89.0%~~86.3% for the three months ended ~~September 30, 2023.~~

During 2021, we acquired the ezStorage portfolio, consisting of 48 properties (4.1 million net rentable square feet) for acquisition cost of $1.8 billion. As of September 30, 2023, we have completed the expansion projects on four properties of this portfolio for $26.4 million, adding 169,000 net rentable square feet of storage space. Included in the Acquisition results in the table above are ezStorage portfolio revenues of $78.3 million, NOI of $61.4 million (including Direct NOI of $63.2 million), and average square footage occupancy of 86.5% for the nine months ended September 30, 2023.

During 2021, we acquired the All Storage portfolio, consisting of 56 properties (7.5 million net rentable square feet) for $1.5 billion. Included in the Acquisition results in the table above are All Storage portfolio revenues of $66.4 million, NOI of $42.4 million (including Direct NOI of $44.6 million), and average square footage occupancy of 78.3% for the nine months ended September 30, 2023.March 31, 2024.

We remain active in seeking to acquire additional self-storage facilities. ~~Subsequent to September 30, 2023, we acquired or were under contract to acquire eleven self-storage facilities across eight states with 0.8 million net rentable square feet, for $170.3 million.~~ Future acquisition volume is likely to be impacted by increasing cost of capital requirements and overall macro-economic uncertainties. Subsequent to March 31, 2024, we acquired or were under contract to acquire four self-storage facilities across four states with 0.3 million net rentable square feet, for $34.6 million.

3934

Newly Developed and Expanded Facilities

The ~~developed~~Newly Developed and ~~expanded facilities~~Expanded Facilities include 5240 facilities that were developed on new sites since January 1, ~~2018,~~2019, and 8883 facilities expanded to increase their net rentable square footage. Of these expansions, 6164 were completed before ~~2022, 17~~2023, 10 were completed in ~~2022~~2023 or ~~2023,~~2024, and 10nine are currently in process at ~~September 30, 2023.~~March 31, 2024. The following table summarizes operating data with respect to the Newly Developed and Expanded Facilities:

DEVELOPED AND EXPANDED FACILITIES
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 Change (a) 2023 2022 Change (a)
($ amounts in thousands, except for per square foot amounts)
Revenues (b):
Developed in 2018 $ 10,275 $ 9,712 $ 563 $ 30,083 $ 26,995 $ 3,088
Developed in 2019 4,672 4,423 249 13,588 12,046 1,542
Developed in 2020 1,912 1,782 130 5,743 4,940 803
Developed in 2021 2,888 2,390 498 8,254 5,750 2,504
Developed in 2022 2,031 137 1,894 4,714 137 4,577
Developed in 2023 307 — 307 470 — 470
Expansions completed before 2022 35,423 33,755 1,668 103,798 93,370 10,428
Expansions completed in 2022 or 2023 6,406 4,577 1,829 17,227 12,358 4,869
Expansions in process 3,844 4,502 (658) 11,356 13,615 (2,259)
     Total revenues 67,758 61,278 6,480 195,233 169,211 26,022
Cost of operations (b):
Developed in 2018 2,989 2,896 93 8,657 7,883 774
Developed in 2019 1,477 1,395 82 4,438 4,267 171
Developed in 2020 493 456 37 1,367 1,311 56
Developed in 2021 911 1,010 (99) 2,753 2,697 56
Developed in 2022 1,030 236 794 2,975 236 2,739
Developed in 2023 343 — 343 838 — 838
Expansions completed before 2022 10,255 10,218 37 30,155 28,766 1,389
Expansions completed in 2022 or 2023 2,003 1,214 789 5,599 3,364 2,235
Expansions in process 687 894 (207) 2,155 2,614 (459)
     Total cost of operations 20,188 18,319 1,869 58,937 51,138 7,799
Net operating income (loss):
Developed in 2018 7,286 6,816 470 21,426 19,112 2,314
Developed in 2019 3,195 3,028 167 9,150 7,779 1,371
Developed in 2020 1,419 1,326 93 4,376 3,629 747
Developed in 2021 1,977 1,380 597 5,501 3,053 2,448
Developed in 2022 1,001 (99) 1,100 1,739 (99) 1,838
Developed in 2023 (36) — (36) (368) — (368)
Expansions completed before 2022 25,168 23,537 1,631 73,643 64,604 9,039
Expansions completed in 2022 or 2023 4,403 3,363 1,040 11,628 8,994 2,634
Expansions in process 3,157 3,608 (451) 9,201 11,001 (1,800)
     Net operating income 47,570 42,959 4,611 136,296 118,073 18,223
Depreciation and amortization expense (15,368) (13,001) (2,367) (44,755) (37,845) (6,910)
     Net income $ 32,202 $ 29,958 $ 2,244 $ 91,541 $ 80,228 $ 11,313


NEWLY DEVELOPED AND EXPANDED FACILITIES
	Three Months Ended March 31,
		2024		2023		Change (a)

		($ amounts in thousands, except for per square foot amounts)
Revenues (b):
Developed in 2019		$	4,411	$	4,375	$	36
Developed in 2020		1,848		1,901		(53)
Developed in 2021		2,834		2,609		225
Developed in 2022		2,267		1,086		1,181
Developed in 2023		906		25		881
Developed in 2024		2		—		2
Expansions completed before 2023		28,466		27,887		579
Expansions completed in 2023 or 2024		8,515		6,343		2,172
Expansions in process		3,617		4,409		(792)
Total revenues		52,866		48,635		4,231

Cost of operations (b):
Developed in 2019		1,537		1,507		30
Developed in 2020		434		424		10
Developed in 2021		922		917		5
Developed in 2022		1,128		983		145
Developed in 2023		1,070		229		841
Developed in 2024		13		—		13
Expansions completed before 2023		8,709		8,488		221
Expansions completed in 2023 or 2024		3,525		2,015		1,510
Expansions in process		911		1,008		(97)
Total cost of operations		18,249		15,571		2,678

Net operating income (loss):
Developed in 2019		2,874		2,868		6
Developed in 2020		1,414		1,477		(63)
Developed in 2021		1,912		1,692		220
Developed in 2022		1,139		103		1,036
Developed in 2023		(164)		(204)		40
Developed in 2024		(11)		—		(11)
Expansions completed before 2023		19,757		19,399		358
Expansions completed in 2023 or 2024		4,990		4,328		662
Expansions in process		2,706		3,401		(695)
Net operating income		34,617		33,064		1,553
Depreciation and amortization expense		(14,784)		(11,562)		(3,222)
Net income		$	19,833	$	21,502	$	(1,669)

4035


DEVELOPED AND EXPANDED FACILITIES (Continued)
NEWLY DEVELOPED AND EXPANDED FACILITIES (Continued)
NEWLY DEVELOPED AND EXPANDED FACILITIES (Continued)
NEWLY DEVELOPED AND EXPANDED FACILITIES (Continued)








		As of September 30,
		2023		2022		Change (a)

		($ amounts in thousands, except for per square foot amounts)					($ amounts in thousands, except for per square foot amounts)
Square foot occupancy:	Square foot occupancy:
Developed in 2018		88.3%		89.4%		(1.2)%
Developed in 2019
Developed in 2019
Developed in 2019	Developed in 2019	87.0%		88.4%		(1.6)%
Developed in 2020	Developed in 2020	91.7%		93.1%		(1.5)%
Developed in 2020
Developed in 2020
Developed in 2021
Developed in 2021
Developed in 2021	Developed in 2021	86.7%		82.7%		4.8%
Developed in 2022	Developed in 2022	79.8%		25.8%		209.3%
Developed in 2022
Developed in 2022
Developed in 2023	Developed in 2023	37.2%		—%		—%
Expansions completed before 2022		87.8%		88.4%		(0.7)%
Expansions completed in 2022 or 2023		75.9%		73.5%		3.3%
Developed in 2023
Developed in 2023
Developed in 2024
Developed in 2024
Developed in 2024
Expansions completed before 2023
Expansions completed before 2023
Expansions completed before 2023
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions in process
Expansions in process
Expansions in process
		78.0%
		78.0%
		78.0%
Annual contract rent per occupied square foot:
Annual contract rent per occupied square foot:
Annual contract rent per occupied square foot:
Developed in 2019
Developed in 2019
Developed in 2019
Developed in 2020
Developed in 2020
Developed in 2020
Developed in 2021
Developed in 2021
Developed in 2021
Developed in 2022
Developed in 2022
Developed in 2022
Developed in 2023
Developed in 2023
Developed in 2023
Developed in 2024
Developed in 2024
Developed in 2024
Expansions completed before 2023
Expansions completed before 2023
Expansions completed before 2023
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions in process
Expansions in process
Expansions in process	Expansions in process	85.3%		85.7%		(0.5)%
		84.6%		85.2%		(0.7)%
Annual contract rent per occupied square foot:
Developed in 2018		$	21.71	$	20.72	4.8%


Number of facilities:
Number of facilities:
Number of facilities:
Developed in 2019
Developed in 2019
Developed in 2019	Developed in 2019	19.08		18.20		4.8%
Developed in 2020	Developed in 2020	22.95		21.46		6.9%
Developed in 2020
Developed in 2020
Developed in 2021
Developed in 2021
Developed in 2021	Developed in 2021	19.24		17.72		8.6%
Developed in 2022	Developed in 2022	15.62		16.19		(3.5)%
Developed in 2022
Developed in 2022
Developed in 2023	Developed in 2023	9.81		—		—%
Expansions completed before 2022		18.49		17.85		3.6%
Expansions completed in 2022 or 2023		18.28		18.43		(0.8)%
Developed in 2023
Developed in 2023
Developed in 2024
Developed in 2024
Developed in 2024
Expansions completed before 2023
Expansions completed before 2023
Expansions completed before 2023
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions in process
Expansions in process
Expansions in process	Expansions in process	29.84		29.27		1.9%
		$	18.94	$	18.38	3.0%
Number of facilities:
Developed in 2018		18		18		—


Net rentable square feet (in thousands):
Net rentable square feet (in thousands):
Net rentable square feet (in thousands):
Developed in 2019
Developed in 2019
Developed in 2019	Developed in 2019	11		11		—
Developed in 2020	Developed in 2020	3		3		—
Developed in 2020
Developed in 2020
Developed in 2021
Developed in 2021
Developed in 2021	Developed in 2021	6		6		—
Developed in 2022	Developed in 2022	8		5		3
Developed in 2022
Developed in 2022
Developed in 2023	Developed in 2023	6		—		6
Expansions completed before 2022		61		61		—
Expansions completed in 2022 or 2023		17		17		—
Developed in 2023
Developed in 2023
Developed in 2024
Developed in 2024
Developed in 2024
Expansions completed before 2023
Expansions completed before 2023
Expansions completed before 2023
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions completed in 2023 or 2024
Expansions in process
Expansions in process
Expansions in process	Expansions in process	10		10		—
		140		131		9
Net rentable square feet (in thousands) (c):
Developed in 2018		2,069		2,069		—
Developed in 2019		1,057		1,057		—
Developed in 2020		347		347		—
Developed in 2021		681		681		—
Developed in 2022		631		399		232
Developed in 2023		595		—		595
Expansions completed before 2022		8,399		8,382		17
Expansions completed in 2022 or 2023		1,905		1,432		473
Expansions in process		612		624		(12)
		16,296		14,991		1,305

4136


		As of September 30, 2023			As of March 31, 2024
Costs to develop (in thousands):	Costs to develop (in thousands):			Costs to develop (in thousands):
Developed in 2018		$	262,187
Developed in 2019	Developed in 2019	150,387		Developed in 2019	$	150,387
Developed in 2020	Developed in 2020	42,063		Developed in 2020	42,063
Developed in 2021	Developed in 2021	115,632		Developed in 2021	115,632
Developed in 2022	Developed in 2022	100,089		Developed in 2022	100,089
Developed in 2023	Developed in 2023	99,893		Developed in 2023	193,766
Expansions completed before 2022 (d)		506,594
Expansions completed in 2022 or 2023 (d)		173,125
Developed in 2024				Developed in 2024	10,640
Expansions completed before 2023 (c)				Expansions completed before 2023 (c)	543,636
Expansions completed in 2023 or 2024 (c)				Expansions completed in 2023 or 2024 (c)	175,535
		$	1,449,970		$	1,331,748

(a)Represents the percentage change with respect to ~~square foot occupancy and~~ 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)The facilities included above have an aggregate of approximately 16.3 million net rentable square feet at September 30, 2023, including 3.9 million in Texas, 3.0 million in Florida, 2.4 million in California, 1.4 million in each of Colorado and Minnesota, 0.8 million in North Carolina, 0.7 million in Michigan, 0.4 million in Missouri, 0.3 million in each of New Jersey, South Carolina, Virginia, and Washington, and 1.1 million in other states.

~~(d)~~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 123 self-storage facilities of 14.3 million net rentable square feet. For development and expansions completed by March 31, 2024, we incurred a total cost of $1.3 billion. During the three months ended March 31, 2024, Newly Developed and Expanded Facilities contributed net operating income of $34.6 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 8.0% NOI yield on cost. 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 ~~September 30, 2023.~~March 31, 2024. We incurred a total of ~~$679.7~~$719.2 million in direct cost to expand these facilities, demolished a total of ~~1.2~~1.1 million net rentable square feet of storage space, and built a total of ~~6.5~~6.2 million net rentable square feet of new storage space.

At ~~September 30, 2023,~~March 31, 2024, we had 2421 additional facilities in development, which will have a total of ~~2.4~~2.2 million net rentable square feet of storage space and have an aggregate development cost totaling approximately ~~$501.8~~$432.9 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 ~~September 30, 2023,~~March 31, 2024, and together with additional future expansion activities primarily related to our Same Store Facilities at ~~September 30, 2023,~~March 31, 2024, we expect to add a total of ~~2.2~~1.5 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate direct development cost of ~~$450.3~~$350.1 million.

4237

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, ~~2021,~~2022, including facilities 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 ~~7.0~~17.3 million net rentable square feet including 1.2 million in Texas, 0.5 million in Pennsylvania, 0.4 million in each of California, Illinois, Michigan, Minnesota, Ohio, and Washington, 0.3 million in each of Arizona, Florida, and South Carolina, 0.2 million in each of Alabama, Colorado, Georgia, Missouri, and Virginia, and 1.0 million in other states.

at March 31, 2024. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the average occupancy for these facilities totaled ~~89.4%~~79.7% and ~~88.1%~~80.6%, respectively, ~~as compared to 91.4% and 90.7% for the same periods in 2022,~~ and the realized rent per occupied square foot totaled ~~$18.45~~$17.08 and ~~$18.22, respectively, as compared to $17.58 and $16.45 for the same periods in 2022.~~$16.05, respectively.

Depreciation and amortization expense

Depreciation and amortization expense for Self-Storage Operations increased ~~$18.0 million and $20.9~~$63.6 million in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same ~~periods~~period in ~~2022,~~2023, due to newly acquired facilities of $2.7 billion in 2023. We expect continued increases in depreciation expense in the remainder of 2024 as a result of elevated levels of capital expenditures and new facilities that are ~~recently~~ acquired, ~~and developed.~~developed or expanded over 2024.

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,

								Three Months Ended March 31,

								Three Months Ended March 31,
		Three Months Ended September 30,						Nine Months Ended September 30,								2024			2023			Change

		2023		2022		Change		2023		2022		Change

		(Amounts in thousands)													(Amounts in thousands)
Revenues:	Revenues:
Tenant reinsurance premiums	Tenant reinsurance premiums	$	51,355	$	47,960	$	3,395	$	151,025	$	139,842	$	11,183
Tenant reinsurance premiums
Tenant reinsurance premiums																$	54,116		$	49,298		$	4,818
Merchandise	Merchandise	6,999		7,378		(379)		21,114		21,783		(669)		Merchandise		6,586			6,820			(234)
Third party property management	Third party property management	6,745		5,419		1,326		18,658		14,321		4,337		Third party property management		10,473			5,930			4,543
Total revenues	Total revenues	65,099		60,757		4,342		190,797		175,946		14,851		Total revenues		71,175			62,048			9,127
Cost of operations:	Cost of operations:
Tenant reinsurance
Tenant reinsurance
Tenant reinsurance	Tenant reinsurance	10,300		12,191		(1,891)		31,771		27,666		4,105			11,698			9,572			2,126
Merchandise	Merchandise	4,247		4,517		(270)		12,947		12,948		(1)		Merchandise		5,045			4,213			832
Third party property management	Third party property management	6,612		4,864		1,748		18,319		13,683		4,636		Third party property management		10,326			5,891			4,435
Total cost of operations	Total cost of operations	21,159		21,572		(413)		63,037		54,297		8,740		Total cost of operations		27,069			19,676			7,393
Net operating income:	Net operating income:
Tenant reinsurance	Tenant reinsurance	41,055		35,769		5,286		119,254		112,176		7,078
Tenant reinsurance
Tenant reinsurance																42,418			39,726			2,692
Merchandise	Merchandise	2,752		2,861		(109)		8,167		8,835		(668)		Merchandise		1,541			2,607			(1,066)
Third party property management	Third party property management	133		555		(422)		339		638		(299)		Third party property management		147			39			108
Total net operating income	Total net operating income	$	43,940	$	39,185	$	4,755	$	127,760	$	121,649	$	6,111	Total net operating income		$	44,106		$	42,372		$	1,734

Tenant reinsurance operations: Tenant reinsurance premium revenue increased ~~$3.4~~$4.8 million or ~~7.1% for~~9.8% in the three months ended ~~September 30, 2023, and increased $11.2 million or 8.0% for the nine months ended September 30, 2023, in each case as compared to~~March 31, 2024 over the same period in ~~2022,~~2023, 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.~~manage, as well as the increase of average premiums charged per customer at our same store facilities. Tenant reinsurance premium revenue generated from tenants at our Same-Store Facilities were ~~$37.7~~$41.6 million and ~~$112.2~~$40.2 million ~~for~~in the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, respectively, ~~as compared to $36.4 million and $108.2 million for the same periods in 2022,~~ representing ~~an increase of 3.6% and 3.7%, respectively.~~a 3.5% increase.

We expect future growth will come primarily from customers of newly acquired and developed facilities and the increase of tenant insurance participation at our ~~same store facilities.~~Same Store Facilities.

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. Tenant reinsurance cost of operations increased ~~$4.1~~$2.1 million for the ~~nine~~three months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to the same period in ~~2022,~~2023, primarily due to increased claim expenses related to ~~fire~~burglary events and ~~flooding events.~~increased access fees we paid to the third-party owners of properties we manage driven by the growth of our third-party property management program.

Third-party property management: At ~~September 30, 2023,~~March 31, 2024, in our third-party property management program, we managed ~~168~~235 facilities for unrelated third parties, and were under contract to manage 90132 additional facilities including 85119 facilities that are currently under construction. During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, we added 8046 facilities to the program ~~(including 25 third-party facilities from the Simply Acquisition), acquired one facility from the program,~~ and had 13three properties exit the ~~program due to sales to other buyers.~~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 entities

We account for the equity investments in Shurgard ~~and PSB (prior to the sale of our investment in PSB)~~ using the equity method and record our pro-rata share of the net income of these entities. ~~The following table,~~For the three months ended March 31, 2024 and ~~the discussion below, sets forth our~~2023, we recognized equity in earnings of ~~unconsolidated real estate entities:~~Shurgard of $6.1 million and $6.0 million, respectively. Included in our equity earnings from Shurgard were $9.8 million and $8.5 million of our share of depreciation and amortization expense for the three months ended March 31, 2024 and 2023, respectively.

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 Change 2023 2022 Change
(Amounts in thousands)
Equity in earnings:
Shurgard $ 7,227 $ 4,594 $ 2,633 $ 22,787 $ 19,533 $ 3,254
PSB — 3,586 (3,586) — 80,596 (80,596)
Total equity in earnings $ 7,227 $ 8,180 $ (953) $ 22,787 $ 100,129 $ (77,342)

~~Investment in Shurgard:~~For purposes of recording our equity in earnings from Shurgard, the Euro was translated at exchange rates of approximately ~~1.057~~1.079 U.S. Dollars per Euro at ~~September 30, 2023 (1.070~~March 31, 2024 (1.104 at December 31, ~~2022)~~2023), and average exchange rates of ~~1.088~~1.086 and ~~1.008~~1.073 for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and average exchange rates of 1.083 and 1.065 for the nine months ended September 30, 2023 and 2022,~~ respectively.

Included in our equity earnings from Shurgard for the nine months ended September 30, 2022 is our equity share of gains on sale of real estate totaling $3.5 million (none for the same periods in 2023). Also included were $8.5 million and $26.1 million of our share of depreciation and amortization expense for the three and nine months ended September 30, 2023, respectively, as compared to $8.6 million and $23.6 million for the same periods in 2022.

~~Investment in PSB:~~Real estate acquisition and development expense: On July 20, 2022, in connection with the closing of the merger of PSB with Blackstone, we completed the sale of our 41% common equity interest in PSB in its entirety. At the close of the merger transaction, we received a total of $2.7 billion of cash proceeds and recognized a gain of $2.1 billion during the third quarter of 2022.

~~Included in our equity earnings from PSB for the nine months ended September 30, 2022 is our equity share of gains on sale of real estate totaling $49.1 million (none for~~In the three months ended ~~September 30, 2022). Our equity share~~March 31, 2024 and 2023, we incurred a total of ~~earnings from PSB contributed $5.6~~$3.7 million and ~~$57.7~~$5.5 million, respectively, of internal and external expenses related to ~~Core FFO~~our acquisition and development of real estate facilities. These amounts are net of $4.4 million and $4.5 million in the three ~~and nine~~ months ended ~~September 30, 2022. Since~~March 31, 2024 and 2023, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities. During the ~~sale~~three months ended March 31, 2024 and 2023, we wrote off a total of ~~PSB~~$0.4 million and $2.5 million, respectively, of accumulated development costs related to cancelled development and redevelopment projects as well as due diligence costs incurred in ~~July 2022, we no longer recognize equity in earnings from PSB.~~pursuit of strategic transactions.

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

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 Change 2023 2022 Change
(Amounts in thousands)
Share-based compensation expense $ 6,231 $ 9,335 $ (3,104) $ 20,033 $ 30,167 $ (10,134)
Development and acquisition costs 4,757 2,571 2,186 12,803 9,085 3,718
Federal and State tax expense and related compliance costs 2,903 5,546 (2,643) 9,280 11,661 (2,381)
Legal costs 658 1,100 (442) 2,433 2,320 113
Corporate management costs 5,970 4,994 976 18,522 15,335 3,187
Other costs 8,106 5,955 2,151 16,532 12,833 3,699
Total $ 28,625 $ 29,501 $ (876) $ 79,603 $ 81,401 $ (1,798)


	Three Months Ended March 31,

		2024		2023		Change

		(Amounts in thousands)

Share-based compensation expense		$	6,038	$	5,280	$	758



Corporate management costs		8,139		6,979		1,160
Other costs		7,159		4,699		2,460
Total		$	21,336	$	16,958	$	4,378

General and administrative expense ~~decreased $0.9 million and $1.8~~increased $4.4 million in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024 as compared to the same period in ~~2022~~2023 due primarily to (i) a decrease in share-based compensation expense driven by the absence of comparable accelerated compensation expense recognized for awards granted to corporate management personnel who are eligible for immediate vesting of their outstanding awards upon retirement, (ii) a decrease in State and local tax expense driven by lower projected annual taxable income, partially offset by (iii) an increase in development and acquisition costs driven by higher write-off of costs related to cancelled development and expansion projects, (iv) an increase in other costs driven by higher spending in IT applications and software development and ~~costs incurred for UPREIT reorganization, and (v)~~(ii) an increase in corporate management costs driven by higher payroll costs.

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


				Three Months Ended March 31,
				Three Months Ended March 31,
				Three Months Ended March 31,
		Three Months Ended September 30,						Nine Months Ended September 30,
								2024
								2024
								2024						2023	Change

								(Amounts in thousands)
								(Amounts in thousands)
								(Amounts in thousands)
		2023		2022		Change		2023		2022		Change

		(Amounts in thousands)

Interest earned on cash balances
Interest earned on cash balances
Interest earned on cash balances	Interest earned on cash balances	$	28,515	$	8,149	$	20,366	$	53,619	$	10,307	$	43,312
Commercial operations	Commercial operations	2,143		3,011		(868)		7,110		7,259		(149)
Unrealized gain on private equity investments	Unrealized gain on private equity investments	122		344		(222)		2,615		4,641		(2,026)
Other	Other	1,515		1,232		283		6,037		4,187		1,850
Total	Total	$	32,295	$	12,736	$	19,559	$	69,381	$	26,394	$	42,987

Interest earned on cash balances ~~increased $20.4 million and $43.3~~decreased $3.2 million in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024 as compared to the same ~~periods~~period in ~~2022~~2023, due primarily to ~~higher~~lower average cash balances ~~resulting from temporary cash held from the issuance of $2.2 billion unsecured senior notes on July 26, 2023 until the funding of the Simply Acquisition on September 13, 2023 and~~partially offset by higher interest rates ~~in the financial markets in 2023 as compared to 2022.~~earned.

Interest expense: For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, we incurred ~~$61.4~~$70.1 million and ~~$139.3~~$37.8 million, respectively, of interest on our outstanding notes ~~payable, as compared to $35.8 million and $104.4 million for the same periods in 2022.~~payable. In determining interest expense, these amounts were offset by capitalized interest of ~~$3.0~~$2.4 million and ~~$6.8~~$1.7 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, respectively, associated with our development ~~activities, as compared to $1.7 million and $4.2 million for the same periods in 2022.~~activities. The increase of interest expense in the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 as compared to the same ~~periods~~period in ~~2022~~2023 is due to the issuance of $2.2 billion of notes payable in July 2023 and the increase of Compounded SOFR on our $700.0 million variable rate unsecured notes issued in April ~~2021, partially offset by the interest savings on the $500.0 million unsecured notes redeemed in August 2022.~~2021. At ~~September 30, 2023,~~March 31, 2024, we had ~~$9.0~~$9.1 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.1%.

Foreign ~~Currency Exchange Gain:~~currency exchange gain (loss): For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, we recorded foreign currency gains of ~~$47.9~~$37.5 million and ~~$19.9~~losses of $26.9 million, respectively, representing primarily the changes in the U.S. Dollar equivalent of our Euro-denominated unsecured notes due to fluctuations in exchange rates. ~~For the three and nine months ended September 30, 2022, we recorded foreign currency gains of $100.2 million and $237.3 million, respectively.~~ The Euro was translated at exchange rates of approximately ~~1.057~~1.079 U.S. Dollars per Euro at ~~September 30,~~March 31, 2024, 1.104 at December 31, 2023, 1.088 at March 31, 2023, and 1.070 at December 31, ~~2022, 0.980 at September 30, 2022 and 1.134 at December 31, 2021.~~2022. 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.

Gain on sale of real estate: In the three months ended March 31, 2024, we sold a land parcel for $2.4 million in cash and recorded gains on sale of real estate of $0.9 million (none in the three months ended March 31, 2023).

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, 2024 and 2023, we recorded income tax expense totaling $1.5 million and $3.1 million, respectively, related to our taxable REIT subsidiaries and in the state and local jurisdictions in which we operate. The year-over-year changes of income tax expense in the first quarter of 2024 were primarily driven by changes in state income tax, due to fluctuations of taxable income in certain states where there are differences between federal and state tax laws.

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 ~~increased from $200 million to $300 million per year in recent years to~~was approximately $700 million in 2021, ~~and~~ $1 billion in ~~2022.~~2022 and $480 million for 2023 after a 50% increase in annual dividend in 2023. 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 ~~$500~~$450 million for ~~2023.~~2024.

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.

On June 12, 2023, we amended our revolving line of credit, increasing the borrowing limit from $500 million to $1.5 billion. We increased the size of the revolving line of credit and its associated lender base given our increased levels of debt maturities in coming years and to serve as temporary “bridge” financing until we are able to raise longer term capital. As of ~~September 30, 2023 and October 30, 2023,~~March 31, 2024, there were no borrowings outstanding on the revolving line of credit; however, we do have approximately $14.6 million of outstanding letters of credit, which limits our borrowing capacity to $1,485.4 million as of ~~October~~April 30, ~~2023.~~2024. Our line of credit matures on June 12, 2027.

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. While the costs of financing have increased recently, 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 ~~deteriorated~~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) ~~$629.8~~$271.6 million of cash as of ~~September 30, 2023 and~~March 31, 2024, (ii) approximately ~~$400~~$340 million toof net cash proceeds we will retain from the issuance of unsecured senior notes in April 2024 after repayment of $808 million of our unsecured notes due in April 2024, and (iii) approximately $450 million of expected retained operating cash flow over the next twelve months. Additionally, we have $1,485.4 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) ~~$170.3 million in property acquisitions currently under contract, (ii) $495.0~~$393.7 million of remaining spending on our current development pipeline, which will be incurred primarily in the next 18 to 24 months and ~~(iii) $806~~(ii) $34.6 million in scheduled principal repayments on our unsecured and mortgage notes in the next twelve months, including $700 million of our U.S. Dollar denominated unsecured notes that mature on April 23, 2024 and €100 million of our Euro denominated unsecured notes that mature on April 12, 2024. We plan to refinance these unsecured notes as they come due in April 2024.property acquisitions currently under contract. 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 ~~September 30, 2023,~~March 31, 2024, the principal outstanding on our debt totaled approximately $9.1 billion, consisting of $7.5 billion of U.S. Dollar denominated unsecured notes payable, ~~$1.6~~$1.7 billion of Euro-denominated unsecured notes payable, and ~~$1.9~~$1.8 million of mortgage notes payable. Approximate principal maturities and interest payments (including ~~$78.7~~$46.4 million in estimated interest on our $1.1 billion variable rate unsecured notes based on rates in effect at ~~September 30, 2023)~~March 31, 2024) are as follows (amounts in thousands):


		Principal		Interest		Total
Remainder of 2023		$	30	$	58,237	$	58,267
2024		805,868		249,752		1,055,620
	Principal												Principal					Interest					Total
Remainder of 2024								Remainder of 2024	$	808,018				$	172,073				$	980,091
2025	2025	656,046		221,978		878,024		2025	661,336					222,314					883,650
2026	2026	1,150,138		196,223		1,346,361		2026	1,150,138					196,395					1,346,533
2027	2027	500,146		184,278		684,424		2027	500,146					184,450					684,596
2028								2028	1,200,129					162,960					1,363,089
Thereafter	Thereafter	5,970,222		1,265,537		7,235,759		Thereafter	4,796,323					1,103,285					5,899,608
		$	9,082,450	$	2,176,005	$	11,258,455
	$										$	9,116,090				$	2,041,477				$	11,157,567

On April 11, 2024, PSOC issued €150 million of senior notes to institutional investors, bearing interest at a fixed rate of 4.080% and maturing on April 11, 2039. The senior notes are guaranteed by Public Storage. We ~~have~~received $162.6 million of net proceeds from the issuance after converting the Euros to U.S. Dollars. On April 11, 2024, we repaid PSOC’s €100 million 1.540% senior notes due April 12, 2024 to the same institutional investors for $108.4 million.

On April 16, 2024, PSOC completed a public offering of $1.0 billion aggregate principal amount of senior notes, including $700 million aggregate principal amount of floating rate senior notes bearing interest at a rate of Compounded SOFR + 0.70% (reset quarterly) maturing on April 16, 2027 and $300 million aggregate principal amount of senior notes bearing interest at a fixed annual rate of 5.350% maturing on August 1, 2053. The 2053 notes constitute a further issuance of, and form a single series with, our ~~U.S. Dollar denominated unsecured~~outstanding 5.350% senior notes ~~that mature~~due 2053 issued on July 26, 2023 in the aggregate principal amount of $600 million. These senior notes are guaranteed by Public Storage. We received $988.5 million of net proceeds from the offering. On April 23, 2024, ~~and €100~~we repaid our outstanding $700 million aggregate principal amount of ~~our Euro denominated unsecured~~floating rate senior notes ~~that mature on April 12, 2024. We plan to refinance these unsecured notes as they come due in April 2024.~~at maturity.

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 ~~$158~~$66 million of capital expenditures to maintain real estate facilities in the first ~~nine~~three months of ~~2023~~2024 and expect to spend approximately ~~$200~~$180 million in ~~2023.~~2024. In addition to standard capital repairs of building elements reaching the end of their useful lives, our capital expenditures in recent years have included incremental expenditures to enhance the competitive position of certain of our facilities relative to local competitors pursuant to a multi-year Property of Tomorrow program. Such investments include development of more pronounced, attractive, and clearly identifiable color schemes and signage and upgrades to the configuration and layout of the offices and other customer zones to improve the customer experience. We spent approximately ~~$119~~$25 million in the first ~~nine~~three months of ~~2023~~2024 and expect to spend $150 million in ~~2023~~2024 on this effort. In addition, we have spent ~~$46~~$13 million ~~in LED lighting and~~on the installation of solar panels in the ~~nine~~first three months ~~ended September 30, 2023~~of 2024 and we expect to spend ~~$60~~$120 million in ~~2023.~~2024.

~~We believe that these incremental investments improve customer satisfaction, the attractiveness and competitiveness of our facilities~~The capital spent to ~~new and existing customers and, in the case of LED lighting and~~install solar panels and LED lights will 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 ~~September 30, 2023~~March 31, 2024 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 ~~September 30, 2023,~~March 31, 2024, we acquired or were under contract to acquire ~~eleven~~four self-storage facilities for a total purchase price of ~~$170.3~~$34.6 million.

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 ~~September 30, 2023,~~March 31, 2024, we had development and expansion projects at a total cost of approximately ~~$952.1~~$783.0 million. Costs incurred through ~~September 30, 2023~~March 31, 2024 were ~~$457.1~~$389.3 million, with the remaining cost to complete of ~~$495.0~~$393.7 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.

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 ~~October~~April 30, ~~2023,~~2024, we have ~~two~~three 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) ~~and our~~, 5.050% Series G Preferred Shares ($300.0 million), and 5.600% Series H Preferred Shares ($285.0 million). See Note 109 to our ~~September 30, 2023~~March 31, 2024 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 management to repurchase up to 35,000,000 of our common shares on the open market or in privately negotiated transactions. During ~~nine~~the three months ended ~~September 30, 2023,~~March 31, 2024, we did not repurchase any of our common shares. From the inception of the repurchase program through ~~October~~April 30, ~~2023,~~2024, we have repurchased a total of 23,721,916 common shares at an aggregate cost of approximately $679.1 million. We have no current plans to repurchase shares; however future levels of common share repurchases will be dependent upon our available capital, investment alternatives and the trading price of our common shares.

4943

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

To limit our exposure to market risk, we are capitalized primarily with preferred and common equity. Our preferred shares are redeemable at our option generally five years after issuance, but the holder has no redemption option. Our debt, which totals approximately ~~$9.0~~$9.1 billion at ~~September 30, 2023,~~March 31, 2024, is the only market-risk sensitive portion of our capital structure.

The fair value of our debt at ~~September 30, 2023~~March 31, 2024 is approximately ~~$8.0~~$8.4 billion. The table below summarizes the annual maturities of our debt, which had a weighted average effective rate of 3.1% at ~~September 30, 2023.~~March 31, 2024. See Note 87 to our ~~September 30, 2023~~March 31, 2024 consolidated financial statements for further information regarding our debt (amounts in thousands).

Remainder of 2023 2024 2025 2026 2027 Thereafter Total
Debt $ 30 $ 805,868 $ 656,046 $ 1,150,138 $ 500,146 $ 5,970,222 $ 9,082,450


	Remainder of 2024		2025		2026		2027		2028		Thereafter		Total

Debt	$	808,018	$	661,336	$	1,150,138	$	500,146	$	1,200,129	$	4,796,323	$	9,116,090

We have foreign currency exposure at ~~September 30, 2023~~March 31, 2024 related to (i) our investment in Shurgard, with a book value of ~~$278.1~~$389.0 million, and a fair value of ~~$1.2~~$1.5 billion based upon the closing price of Shurgard’s stock on ~~September 30, 2023,~~March 31, 2024, and (ii) €1.5 billion ($~~1.6~~1.7 billion) of Euro-denominated unsecured notes payable, providing a natural hedge against the fair value of our investment in Shurgard.

ITEM 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance. We also have investments in certain unconsolidated real estate entities and because we do not control these entities, our disclosure controls and procedures with respect to such entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at a reasonable assurance level.

Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5044

Part II. OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 1A. Risk Factors

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, ~~2022,~~2023, 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, ~~2022.~~2023.

In addition, in considering the forward-looking statements contained in this Quarterly Report on Form 10-Q and elsewhere, you should refer to the qualifications and limitations on our forward-looking statements that are described in Forward-Looking Statements at the beginning of Part I, Item 2 of this Quarterly Report on Form 10-Q.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Common Share Repurchases

Our Board has authorized management to repurchase 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 ~~October~~April 30, ~~2023,~~2024, we have repurchased a total of 23,721,916 common shares (all purchased prior to 2010) at an aggregate cost of approximately $679.1 million. Our common share repurchase program does not have an expiration date and there are 11,278,084 common shares that may yet be repurchased under our repurchase program as of ~~September 30, 2023.~~March 31, 2024. We have no current plans to repurchase shares; however, future levels of common share repurchases will be dependent upon our available capital, investment alternatives, and the trading price of our common shares.

ITEM 5. Other Information

During the three months ended ~~September 30, 2023,~~March 31, 2024, no trustee or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. Exhibits

Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index which is incorporated herein by reference.

5145

PUBLIC STORAGE

INDEX TO EXHIBITS (1)

(Items 15(a)(3) and 15(c))


~~2.1~~			Agreement and Plan of Merger, dated August 2, 2023, by and among Public Storage, New PSA and PSA Merger Sub. Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated August 2, 2023 and incorporated herein by reference.

~~3.1~~			Amended and Restated Declaration of Trust of Public Storage, dated August 14, 2023. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 14, 2023 and incorporated herein by reference.

~~3.2~~			~~Amended and Restated Bylaws of Public Storage. Filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K dated August 14, 2023 and incorporated herein by reference.~~

~~3.3~~			~~Articles of Merger. Filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K dated August 14, 2023 and incorporated herein by reference.~~

~~3.4~~			~~Articles Supplementary of Public Storage, dated August 2, 2023. Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 2, 2023 and incorporated herein by reference.~~

4.1			~~Amended and Restated~~Seventeenth Supplemental Indenture, dated as of ~~August 14, 2023,~~April 16, 2024, among Public Storage Operating Company, Public Storage ~~Operating Company~~ and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee. Filed as Exhibit ~~A to~~ ~~Exhibit 4.1~~4.2 to the Company’s Current Report on Form 8-K dated ~~August 14, 2023~~April 11, 2024 and incorporated herein by ~~reference herein.~~reference.

4.2			~~Twelfth~~Eighteenth Supplemental Indenture, dated as of ~~July 26, 2023, between~~April 16, 2024, among Public Storage Operating Company, Public Storage, and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as ~~trustee, including the form of Global Note representing the 2033 Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated July 26, 2023 and incorporated herein by reference.~~

~~4.3~~			Thirteenth Supplemental Indenture, dated as of July 26, 2023, between Public Storage and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including the form of Global Note representing the 2029 Notes.trustee. Filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated ~~July 26, 2023~~April 11, 2024 and incorporated herein by reference.

~~4.4~~10.1			~~Fourteenth Supplemental Indenture,~~Amended and Restated Agreement of Limited Partnership of Public Storage OP, L.P., dated as of ~~July 26, 2023, between~~February 14, 2024. Filed herewith.

10.2*			Restated Public Storage 2021 Equity and ~~Computershare Trust~~Performance-Based Incentive Compensation Plan. Filed herewith.

10.3*			Form of Time-Based Public Storage OP, L.P. LTIP Unit Agreement. Filed herewith.

10.4*			Form of Performance-Based Public Storage OP, L.P. LTIP Unit Agreement. Filed herewith.

10.5*			Form of Time-Based Public Storage OP, L.P. AO LTIP Unit Agreement. Filed herewith.

10.6*			Form of Performance-Based Public Storage OP, L.P. AO LTIP Unit Agreement. Filed herewith.

10.7			Note Purchase Agreement, dated as of April 11, 2024, by and among Public Storage Operating Company ~~N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including~~and the ~~form of Global Note representing the 2033 Notes.~~Purchasers party thereto. Filed as Exhibit ~~4.4~~10.1 to the Company’s Current Report on Form 8-K dated ~~July 26, 2023~~April 11, 2024 and incorporated herein by reference.

~~4.5~~			Fifteenth Supplemental Indenture, dated as of July 26, 2023, between Public Storage and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including the form of Global Note representing the 2053 Notes. Filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K dated July 26, 2023 and incorporated herein by reference.

~~4.6~~			Sixteenth Supplemental Indenture, dated August 14, 2023, by and among Old PSA, New PSA and Computershare Trust Company, N.A. Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 14, 2023 and incorporated herein by reference.

~~10.1~~			~~Parent Guarantee, dated as of August 14, 2023, by Public Storage. Filed as Exhibit~~ 10 ~~.1 to the Company’s Current Report on Form 8-K dated August 14, 2023 and incorporated herein by reference.~~

~~10.2~~			~~Amendment No. 1 to 2015 Note Purchase Agreement, dated as of July 28, 2023, by and among Public Storage and the signatories thereto. Filed herewith.~~


~~10.3~~			~~Amendment No. 1 to 2016 Note Purchase Agreement, dated as of July 28, 2023, by and among Public Storage and the signatories thereto. Filed herewith.~~

31.1			Rule 13a – 14(a) Certification. Filed herewith.

31.2			Rule 13a – 14(a) Certification. Filed herewith.

32			Section 1350 Certifications. Filed herewith.

101 .INS			Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101 .SCH			Inline XBRL Taxonomy Extension Schema. Filed herewith.

101 .CAL			Inline XBRL Taxonomy Extension Calculation Linkbase. Filed herewith.

101 .DEF			Inline XBRL Taxonomy Extension Definition Linkbase. Filed herewith.

101 .LAB			Inline XBRL Taxonomy Extension Label Linkbase. Filed herewith.

101 .PRE			Inline XBRL Taxonomy Extension Presentation Link. Filed herewith.

104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_ (1) SEC			File No. 001-33519 unless otherwise indicated.

*			Denotes management compensatory plan or arrangement.

5346

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			DATED: ~~October~~April 30, ~~2023~~2024
			PUBLIC STORAGE
			By:			/s/ H. Thomas Boyle
						H. Thomas Boyle Senior Vice President, Chief Financial and Investment Officer

5447


DEVELOPED AND EXPANDED FACILITIES
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		Change (a)		2023		2022		Change (a)

	($ amounts in thousands, except for per square foot amounts)
Revenues (b):
Developed in 2018	$	10,275	$	9,712	$	563	$	30,083	$	26,995	$	3,088
Developed in 2019	4,672		4,423		249		13,588		12,046		1,542
Developed in 2020	1,912		1,782		130		5,743		4,940		803
Developed in 2021	2,888		2,390		498		8,254		5,750		2,504
Developed in 2022	2,031		137		1,894		4,714		137		4,577
Developed in 2023	307		—		307		470		—		470
Expansions completed before 2022	35,423		33,755		1,668		103,798		93,370		10,428
Expansions completed in 2022 or 2023	6,406		4,577		1,829		17,227		12,358		4,869
Expansions in process	3,844		4,502		(658)		11,356		13,615		(2,259)
Total revenues	67,758		61,278		6,480		195,233		169,211		26,022

Cost of operations (b):
Developed in 2018	2,989		2,896		93		8,657		7,883		774
Developed in 2019	1,477		1,395		82		4,438		4,267		171
Developed in 2020	493		456		37		1,367		1,311		56
Developed in 2021	911		1,010		(99)		2,753		2,697		56
Developed in 2022	1,030		236		794		2,975		236		2,739
Developed in 2023	343		—		343		838		—		838
Expansions completed before 2022	10,255		10,218		37		30,155		28,766		1,389
Expansions completed in 2022 or 2023	2,003		1,214		789		5,599		3,364		2,235
Expansions in process	687		894		(207)		2,155		2,614		(459)
Total cost of operations	20,188		18,319		1,869		58,937		51,138		7,799

Net operating income (loss):
Developed in 2018	7,286		6,816		470		21,426		19,112		2,314
Developed in 2019	3,195		3,028		167		9,150		7,779		1,371
Developed in 2020	1,419		1,326		93		4,376		3,629		747
Developed in 2021	1,977		1,380		597		5,501		3,053		2,448
Developed in 2022	1,001		(99)		1,100		1,739		(99)		1,838
Developed in 2023	(36)		—		(36)		(368)		—		(368)
Expansions completed before 2022	25,168		23,537		1,631		73,643		64,604		9,039
Expansions completed in 2022 or 2023	4,403		3,363		1,040		11,628		8,994		2,634
Expansions in process	3,157		3,608		(451)		9,201		11,001		(1,800)
Net operating income	47,570		42,959		4,611		136,296		118,073		18,223
Depreciation and amortization expense	(15,368)		(13,001)		(2,367)		(44,755)		(37,845)		(6,910)
Net income	$	32,202	$	29,958	$	2,244	$	91,541	$	80,228	$	11,313