Public Storage is a Maryland real estate investment trust engaged in the ownership, development, and operation of self-storage facilities and other related operations including tenant reinsurance, third-party self-storage management and bridge lending to third-party self-storage owners. The company is the largest owner of self-storage facilities in the United States, with physical presence in most major markets and 40 states. Ownership and operation of self-storage facilities is highly fragmented, and as the largest owner of self-storage facilities, the company believes that it owns approximately 9% of the self-storage square footage in the U.S. and that collectively the four largest self-storage owners in the U.S. own approximately 22%, with the remaining 78% owned by regional and local operators.

The company believes its Public Storage brand awareness, as well as innovative improvements to the customer experience, provide a competitive advantage in acquiring and retaining customers relative to other self-storage operators. The company believes that the economies of scale inherent in this business allow it to operate self-storage facilities at a materially higher level of cash flow per square foot than other operators without its scale. The company also believes its scale, brand name, and technology platform afford it competitive advantages.

The company generates revenue primarily through the lease of storage spaces on a month-to-month basis for personal and business use at its self-storage facilities. Recurring income is generated from rental income, late charges, and administrative fees. Transactional income includes tenant reinsurance premiums, merchandise sales, and third-party property management fees. The company also generates interest income from its bridge lending program. The company's primary customer segments are individuals and businesses seeking storage space.

Self-storage operations generate most of the company's net income. At December 31, 2025, the company held interests in and consolidated 3,171 self-storage facilities (an aggregate of 229 million net rentable square feet of space) operating under the Public Storage name. For the year ended December 31, 2025, total self-storage revenues were $4,489,413,000 ¹ and total self-storage cost of operations was $1,177,038,000 ², resulting in total self-storage net operating income of $3,312,375,000 ³. The Same Store Facilities, consisting of 2,565 facilities, generated revenues of $3,764,833,000 ⁴ and net operating income of $2,828,915,000 ⁵ for the year ended December 31, 2025.

Ancillary operations include tenant reinsurance, merchandise sales, and third-party property management. For the year ended December 31, 2025, total ancillary revenues were $334,700,000 ⁶ and total ancillary cost of operations was $132,937,000 ⁷, resulting in total ancillary net operating income of $201,763,000 ⁸. Tenant reinsurance premium revenue was $250,674,000 ⁹ for the year ended December 31, 2025. At December 31, 2025, the company managed 362 facilities for third parties (with approximately 28.2 million net rentable square feet) and was under contract to manage 84 additional facilities including 78 facilities that are currently under construction. The company implemented a bridge lending program in 2024, and at December 31, 2025, had a bridge loan receivable balance of $142,108,000 ¹⁰ and unfunded loan commitments of $43,900,000 ¹¹. The company holds a 35% interest in Shurgard Self Storage Limited, which at December 31, 2025, owned and operated 332 self-storage facilities (18 million net rentable square feet) located in seven countries in Western Europe.

During 2025, the company acquired 87 self-storage facilities across 21 states with 6.1 million net rentable square feet for $945,600,000 ¹². Since the beginning of 2023, the company acquired a total of 273 facilities with 19.9 million net rentable square feet for $3,900,000,000 ¹³. During 2025, PSOC completed public offerings of $875,000,000 ¹⁴ aggregate principal amount of senior notes in various tranches and maturities and €425,000,000 ¹⁵ of senior notes due 2034. PSOC also repaid at maturity $400,000,000 ¹⁶ aggregate principal amount of floating rate senior notes and €242,000,000 ¹⁷ aggregate principal amount of senior notes. The company has embarked on a solar program and has completed installations on 1,191 facilities through December 31, 2025, spending approximately $71,000,000 ¹⁸ on the program in 2025. The company did not repurchase any common shares in 2025. From the inception of the repurchase program through February 12, 2026, the company has repurchased a total of 24,448,781 ¹⁹ common shares at an aggregate cost of approximately $879,100,000 ²⁰.

In 2025, net income allocable to common shareholders was $1,585,585,000 ²¹ or $9.01 ²² per diluted common share, compared to $1,872,685,000 ²³ or $10.64 ²⁴ per diluted common share in 2024, representing a decrease of $287,100,000 ²⁵ or $1.63 ²⁶ per diluted common share. Total revenues for 2025 were $4,489,413,000 ²⁷ compared to $4,395,993,000 ²⁸ in 2024. Total cost of operations was $1,177,038,000 ²⁹ in 2025 compared to $1,136,720,000 ³⁰ in 2024. Total self-storage net operating income increased $53,100,000 ³¹ in 2025 as compared to 2024. FFO was $15.81 ³² per diluted common share for 2025 compared to $17.19 ³³ per diluted common share for 2024. Core FFO was $16.97 ³⁴ per diluted common share for 2025 compared to $16.67 ³⁵ per diluted common share for 2024.

The company expects Same Store Facilities revenues in 2026 to be modestly below those earned in 2025. The company expects property tax expense to grow in 2026 due primarily to higher assessed values. The company expects on-site property manager payroll expense to decrease in 2026 as compared to 2025 as it continues to enhance operational processes. The company expects lower electricity consumption in 2026 as a result of its continued investment in solar power. The company expects tenant reinsurance operations to grow as it rolls out insurance policies with increased coverage and higher premiums in 2026, and as it continues to increase the tenant base at its newly acquired and developed facilities. The company expects retained cash flow of approximately $605,000,000 ³⁶ for 2026.

The company's ongoing growth strategies consist of improving the operating performance of its existing self-storage facilities, acquiring, expanding and developing facilities, and growing ancillary business activities including tenant reinsurance, third-party management services and its bridge lending program. The company seeks to capitalize on the fragmentation of the self-storage industry through acquiring attractively priced, well-located existing self-storage facilities. The development of new self-storage locations and the expansion of existing facilities have been an important source of its growth. The company plans to increase its development activity when it identifies attractive risk adjusted return profiles with yields above those of acquisitions. The company expects to continue to seek to add projects to maintain and increase its robust pipeline, though its ability to do so continues to be challenged by various constraints such as difficulty in finding projects that meet its risk-adjusted yield expectations and challenges in obtaining building permits for self-storage facilities in certain municipalities.

The company expects industry-wide demand from new tenants in 2026 to be similar to 2025, across a diverse set of markets, subject to potential adverse effects from evolving political and macroeconomic uncertainty, including changes in trade policy and new tariffs, pricing restrictions and microeconomic uncertainty. The company expects to incur corporate transformation costs of approximately $15,000,000 ³⁷ to $20,000,000 ³⁸ as it completes the initiative over the next three years. Beginning in 2026, the company believes this restructuring plan will result in future cost savings of approximately $3,000,000 ³⁹ to $5,000,000 ⁴⁰ annually, although the amount and timing of such savings are subject to change depending on a variety of factors.

The company expects to spend approximately $60,000,000 ⁴¹ in 2026 on its solar program. The company spent $218,000,000 ⁴² of capital expenditures to maintain real estate facilities in 2025 and expects to spend approximately $175,000,000 ⁴³ in 2026. As of December 31, 2025, the company had development and expansion projects at a total cost of approximately $609,900,000 ⁴⁴. Costs incurred through December 31, 2025 were $194,300,000 ⁴⁵, with the remaining cost to complete of $415,600,000 ⁴⁶ expected to be incurred primarily in the next 18 to 24 months. At December 31, 2025, the company had 29 additional facilities in development, which will have a total of 2.6 million net rentable square feet of storage space and have an aggregate development cost totaling approximately $479,500,000 ⁴⁷.

The company's capital allocation priorities include funding property acquisitions, development projects, and maintaining its dividend policy. The company expects retained cash flow of approximately $605,000,000 ⁴⁸ for 2026. The company has $1,500,000,000 ⁴⁹ available borrowing capacity on its revolving line of credit. The company's Board has authorized a share repurchase program of up to 35,000,000 ⁵⁰ common shares, and as of December 31, 2025, there are 10,551,219 ⁵¹ common shares that may yet be repurchased. The company has no current plans to repurchase shares. The annual distribution requirement with respect to the company's preferred shares outstanding at December 31, 2025 is approximately $194,700,000 ⁵² per year.

The company faces headwinds from elevated interest rate levels, which could adversely impact the company and its tenants. Elevated interest rates also adversely impact the relative attractiveness of the dividend yield on the company's common shares. Increases in the company's cost of capital impact its assessment of the yields it considers appropriate to support pursuing property acquisition and development opportunities and thus can impact its external growth prospects. The degree and pace of these changes have had and may continue to have adverse macroeconomic effects that have and may continue to have adverse impacts on the company's tenants, including as a result of economic recession, increased unemployment, and increased financing costs. The company also faces headwinds from international trade disputes, including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation, which could result in inflationary pressures that directly impact its costs, such as costs for steel, lumber and other materials applicable to its development and redevelopment projects.

The company's marketing and pricing strategies may fail to be effective or may be constrained by factors outside of its control. More than half of the company's new storage customers in 2025 were sourced directly or indirectly through unpaid search and paid search campaigns on Google. The predominance of Google in the shopping experience, as well as Google's enabling of additional competitors to bid for placements in self-storage search terms, may reduce the number of new customers that the company can procure, and/or increase its costs to obtain new customers. The company also faces headwinds from local, state, and federal governments that have and may in the future adopt regulations that could adversely impact its operations, including in response to natural disasters and public health crises, such as temporary regulations that impose certain limits on the rents the company could charge at certain of its facilities and the extent to which it could increase rents to existing tenants.

Management's discussion and analysis of financial condition and results of operations highlights that the company's self-storage operations generate most of its net income, and its earnings growth is impacted by the levels of organic growth within its Same Store Facilities as well as within its Acquired Facilities and Newly Developed and Expanded Facilities. Management notes that softness in demand for storage space has led to lower move-in rental rates for new tenants and lower average occupancy in 2025 as compared to 2024, while existing customer behavior was strong with fewer move-outs and lower delinquencies allowing for rental rate increases to tenants over their tenancy. Management states that the company has grown and plans to continue to grow through the acquisition and development of new facilities and expansion of its existing self-storage facilities. Management expects Same Store Facilities revenues in 2026 to be modestly below those earned in 2025. Management expects retained cash flow of approximately $605,000,000 ⁵⁴ for 2026. Management's strategic priorities include improving the operating performance of existing facilities, acquiring, expanding and developing facilities, and growing ancillary business activities including tenant reinsurance, third-party management services and the bridge lending program.

For the year ended December 31, 2025, total self-storage revenues were $4,489,413,000 ⁵⁵ compared to $4,395,993,000 ⁵⁶ for the year ended December 31, 2024. Net income allocable to common shareholders was $1,585,585,000 ⁵⁷ or $9.01 ⁵⁸ per diluted common share for 2025, compared to $1,872,685,000 ⁵⁹ or $10.64 ⁶⁰ per diluted common share for 2024. Total self-storage net operating income was $3,312,375,000 ⁶¹ for 2025 compared to $3,259,273,000 ⁶² for 2024. Depreciation and amortization expense for self-storage operations was $1,151,840,000 ⁶³ for 2025 compared to $1,129,766,000 ⁶⁴ for 2024. Interest expense was $311,000,000 ⁶⁵ for 2025 compared to $297,900,000 ⁶⁶ for 2024. The company recorded foreign currency exchange losses of $215,583,000 ⁶⁷ in 2025 compared to gains of $102,244,000 ⁶⁸ in 2024. Cash and equivalents were $318,095,000 ⁶⁹ at December 31, 2025 compared to $447,416,000 ⁷⁰ at December 31, 2024. Total assets were $20,208,604,000 ⁷¹ at December 31, 2025 compared to $19,754,934,000 ⁷² at December 31, 2024. Notes payable were $10,253,881,000 ⁷³ at December 31, 2025 compared to $9,353,034,000 ⁷⁴ at December 31, 2024. The decrease in net income allocable to common shareholders was due primarily to a $317,800,000 ⁷⁵ increase in foreign currency exchange losses, a $22,100,000 ⁷⁶ increase in depreciation and amortization expense, and a $17,100,000 ⁷⁷ increase in interest expense, partially offset by a $53,100,000 ⁷⁸ increase in self-storage net operating income and a $23,400,000 ⁷⁹ increase in ancillary net operating income.

The company faces significant risks from natural disasters, terrorist attacks, civil unrest, or other events that could damage or otherwise disrupt its ability to operate its facilities, and damage and business interruption losses could exceed the aggregate limits of its insurance coverage. The company's exposure to these types of events is increased by potential tenant claims associated with its tenant reinsurance business, which covers claims for losses related to specified events up to a maximum limit of $5,000 ⁵³ per storage unit. The company also faces risks from elevated interest rate levels, which could adversely impact the company and its tenants, and if the company issued new debt or refinanced its indebtedness, its debt service costs would likely be significantly higher than current financing costs. The company has exposure to increased property tax in California due to the impact of Proposition 13, and if the beneficial effect of Proposition 13 were ended for its properties, its property tax expense could increase substantially. The company's marketing and pricing strategies may fail to be effective, and more than half of its new storage customers in 2025 were sourced directly or indirectly through unpaid search and paid search campaigns on Google, and the predominance of Google in the shopping experience may reduce the number of new customers that the company can procure and/or increase its costs to obtain new customers.