Public Storage (PSA) Business

ITEM 1.    Business

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to our 2026 guidance and all underlying assumptions, our expected acquisition, disposition, development, and redevelopment activity, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and changes in macroeconomic conditions, our strategic priorities, expectations with respect to financing activities, rental rates, zoning, cap rates, and yields, leasing expectations, our credit ratings, and all other statements other than statements of historical fact. Such statements are based on management’s beliefs and assumptions made based on information currently available to management and may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.

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

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

General Discussion of our Business

Public Storage is a Maryland real estate investment trust (“REIT”) 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. We are the industry leading owner of self-storage properties, with one of the most recognized brands in the self-storage industry, including our ubiquitous orange color.

On August 14, 2023, we completed a reorganization that resulted in us holding the interests in our facilities through an operating partnership, Public Storage OP, L.P. and its subsidiaries including Public Storage Operating Company, formerly known as Public Storage, which was organized in 1980. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT. After the reorganization, the primary assets of the parent entity, Public Storage, are general partner and limited partner interests in Public Storage OP, L.P.

Unless stated otherwise or the context otherwise requires, references to “Public Storage” mean the parent entity, Public Storage, references to “PSA OP” mean Public Storage OP, L.P., and references to “PSOC” mean Public Storage Operating Company. References to “the Company,” “we,” “us,” and “our” mean collectively Public Storage, PSA OP, PSOC and those entities/subsidiaries owned or controlled by Public Storage, PSA OP, and PSOC.

1

Self-storage Operations:

We acquire, develop, own, and operate self-storage facilities, which offer storage spaces for lease on a month-to-month basis, for personal and business use. We are the largest owner of self-storage facilities in the United States (“U.S.”), with physical presence in most major markets and 40 states. We believe our scale, brand name, and technology platform afford us competitive advantages. At December 31, 2025, we 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.

Other Operations:

We manage insurance programs whereby tenants at our facilities, including those we manage for third parties, have the option of purchasing insurance from a non-affiliated insurance company to cover certain losses to their stored goods. A wholly-owned, consolidated subsidiary of Public Storage fully reinsures these policies and thereby assumes all risk of losses under the policies. This subsidiary receives from the non-affiliated insurance company reinsurance premiums substantially equal to the premiums collected from our tenants. These policies cover claims for losses related to specified events up to a maximum limit of $5,000 per storage unit. We reinsure all risks in this program but purchase insurance from an independent third-party insurer to cover this exposure for a limit of $15.0 million for losses in excess of $10.0 million per occurrence. At December 31, 2025, there were approximately 1.5 million certificates of insurance held by participating self-storage tenants, representing aggregate coverage of approximately $7.2 billion.

At December 31, 2025, we managed 362 facilities for third parties (with approximately 28.2 million net rentable square feet), and were under contract to manage 84 additional facilities including 78 facilities that are currently under construction.

We also offer merchandise for sale at our self-storage facilities, primarily consisting of locks and cardboard boxes, to support customers’ storage needs.

We implemented a lending program in 2024, under which we provide bridge lending financing to third-party self-storage owners for operating properties that we manage. We generally originate bridge loans that are collateralized by operating self-storage properties, have a term of three or four years with two one-year extensions, and have variable interest rates. At December 31, 2025, we had a bridge loan receivable balance of $142.1 million and unfunded loan commitments of $43.9 million, the closing of which is subject to the satisfaction of certain conditions.

We hold a 35% interest in Shurgard Self Storage Limited (“Shurgard”). Shurgard is a public company traded on Euronext Brussels under the “SHUR” symbol. At December 31, 2025, Shurgard owned and operated 332 self-storage facilities (18 million net rentable square feet) located in seven countries in Western Europe under the Shurgard® name.

For all periods presented herein, we have elected to be treated as a REIT, as defined in the Internal Revenue Code of 1986, as amended (the “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 met these requirements in all periods presented herein and we expect to continue to qualify as a REIT.

We file annually with the SEC annual reports on Form 10-K, which include consolidated financial statements certified by our independent registered public accountants. We also file quarterly with the SEC quarterly reports on Form 10-Q, which include unaudited consolidated financial statements. We expect to continue such reporting.

On our website, www.publicstorage.com, we make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, definitive proxy statements, and other reports required to be filed with or furnished to the SEC, as well as all supplements and amendments to those filings, as soon as reasonably practicable after the filings, supplements, and amendments are electronically filed with or furnished to the SEC. The information contained on our website is not a part of, or incorporated by reference into, this Annual Report on Form 10-K.

2

Competition

Ownership and operation of self-storage facilities is highly fragmented. As the largest owner of self-storage facilities, we believe that we own 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. We believe our Public Storage® brand awareness, as well as the innovative improvements we have made to the customer experience described below, provide us with a competitive advantage in acquiring and retaining customers relative to other self-storage operators.

Our facilities compete with nearby self-storage facilities owned by other operators, who use marketing channels, including internet advertising, signage, and banners, and offer services similar to ours. As a result, competition may be significant and can affect the occupancy levels, rental rates, rental income, and operating expenses of our facilities. However, we believe that the economies of scale inherent in this business allow us to operate self-storage facilities at a materially higher level of cash flow per square foot than other operators without our scale.

Technology

We believe technology enables improved customer experience, revenue optimization, and cost efficiencies. Over the past few years, we have invested in additional technologies that we believe have enabled us to operate and compete more effectively by providing customers with an enhanced digital experience.

Convenient shopping experience: Customers can conveniently shop for available storage space, reviewing attributes such as facility location, size, amenities (such as climate-control), and pricing through the following marketing channels:

•Our Website: The online marketing channel is a key source of customers. We believe that many of our other customers who reserved directly through our customer care center or arrived at a facility and moved in without a reservation reviewed our pricing and availability online through our website. We seek to update the structure, layout, and content of our website regularly to enhance our placement in “unpaid” search in Google and related websites, to improve the efficiency of our bids in “paid” search campaigns and visibility on large language model platforms, and to maximize users’ likelihood of reserving space on our website.

•Our Customer Care Center: Our customer care center is staffed by skilled sales specialists and customer service representatives. Customers can reach our customer care center and complete their rental over the phone by calling our advertised toll-free telephone numbers provided on search engines, from our website, the Public Storage App, or from our in-store kiosks. We believe giving customers the option to interact with a live agent, despite the higher marginal cost relative to a reservation made on our website, enhances our ability to close sales with potential customers and results in greater satisfaction. We also have live Internet chat augmented with ChatBot/Virtual Agent capabilities as another channel for our customers to engage our agents, cost effectively improving customer responsiveness.

•Our Properties: Customers can also shop for available space at any one of our facilities. Property managers access the same information that is available on our website and to our customer care center agents and can inform the customer of available space at that site or at our other nearby storage facilities. Property managers are trained to maximize the conversion of such “walk in” shoppers into customers.

eRental® move-in process: To further enhance the move-in experience, we offer our eRental® process whereby prospective tenants (including those who initially reserved a space) can execute their rental agreement from their smartphone or computer and then go directly to their space on the move-in date. Nearly three quarters of our new rental agreements were completed by customers using our eRental® and Rent by Phone process during 2025.

Public Storage App: We maintain an industry leading smartphone application. The Public Storage App provides our tenants with digital access to our properties, as well as payment and other account management functions.

3

Centralized information network: Our centralized reporting and information network enables us to identify changing market conditions and operating trends and analyze tenants data. Our network allows us to quickly change each of our individual property’s pricing and promotions, drive marketing spending, such as the relative level of bidding for various paid search terms on paid search engines, and staff and respond to customer requests more timely.

Growth and Investment Strategies

Our ongoing growth strategies consist of: (i) improving the operating performance of our existing self-storage facilities, (ii) acquiring, expanding and developing facilities, and (iii) growing ancillary business activities including tenant reinsurance, third-party management services and our bridge lending program. While our long-term strategy includes each of these elements, in the short term the level of growth in our asset base in any period is dependent upon the cost and availability of capital, as well as the relative attractiveness of available investment alternatives.

Improve the operating performance of existing facilities: We regularly update and enhance our strategies to increase the net cash flow of our existing self-storage facilities through maximizing revenues and controlling operating costs. We maximize revenues through striking the appropriate balance between occupancy and rates for new and existing tenants by regularly adjusting (i) our promotional and other discounts, (ii) the rental rates we charge to new and existing tenants, and (iii) our marketing spending and intensity. We adjust these pricing and marketing decisions by observing their impact on web and customer care center traffic, reservations, move-ins, move-outs, tenant length of stay, and other indicators of response. The size and scope of our operations have enabled us to achieve high operating margins and a low level of administrative costs relative to revenues through the centralization of many functions, such as facility maintenance, employee compensation and benefits programs, revenue management, and the development and documentation of standardized operating procedures.

Acquire existing properties: We seek to capitalize on the fragmentation of the self-storage industry through acquiring attractively priced, well-located existing self-storage facilities. We believe our presence in and knowledge of substantially all of the major markets in the U.S. enhance our ability to identify attractive acquisition opportunities. Data on the rental rates and occupancy levels of our existing facilities provide us an advantage in evaluating the potential of acquisition opportunities. Our aggressiveness in bidding for marketed facilities depends upon many factors including the potential for future growth, the quality of construction and location, the cash flow we expect from the facility when operated on our platform, how well the facility fits into our current geographic footprint, and our return on capital expectations.

Develop new self-storage facilities and expand existing facilities: The development of new self-storage locations and the expansion of existing facilities have been an important source of our growth. Our operating experience in major markets and experience in stabilizing new properties provide us advantages in developing new facilities. We plan to increase our development activity when we identify attractive risk adjusted return profiles with yields above those of acquisitions. However, our level of development is dependent upon many factors, including the cost and availability of land, the cost and availability of construction materials and labor, zoning and permitting limitations, our cost of capital, the cost of acquiring facilities relative to developing new facilities, and local demand and economic conditions.

Grow ancillary business activities: We pursue growth initiatives aimed at increasing our insurance offering coverage for tenants who choose to protect their stored items against loss. Additionally, as we grow our self-storage portfolio through acquisition, development and third-party management, we have the opportunity to increase the growth profile of our tenant reinsurance business.

Our third party management business enables us to generate revenues through management fees, expand our presence, increase our economies of scale, promote our brand, and enhance our ability to acquire additional facilities over the medium and long-term as a result of strategic relationships forged with third-party owners.

We also provide bridge lending financing to third-party self-storage owners. This program not only enables us to earn interest and other fee income, but we also require the borrower to utilize our third party management program, resulting in additional income from managing the assets and tenant reinsurance.

4

Compliance with Government Regulations

We are subject to various laws, ordinances, and regulations, including various federal, state, and local regulations that apply generally to the ownership of real property and the operation of self-storage facilities. These include various laws and regulations concerning environmental matters, pricing, labor matters, and employee safety and health matters. Further, our insurance activities are subject to state insurance laws and regulations as determined by the insurance commission for each state in accordance with certain federal regulations.

We are committed to a long-term environmental stewardship program that reduces emissions of hazardous materials into the environment and the remediation of identified existing environmental concerns, including environmentally friendly capital initiatives and building and operating properties with high structural resilience and low obsolescence. We accrue environmental assessments and estimated remediation costs when it is probable that such efforts will be required and the related costs can be reasonably estimated. Our current practice is to conduct environmental investigations in connection with property acquisitions. Although there can be no assurance, we are not aware of any environmental contamination of any of our facilities that individually or in the aggregate would be material to our overall business, financial condition, or results of operations.

Refer to Item 1A, “Risk Factors” below for a discussion of certain risks related to government regulations, including risks related to environmental regulations, emergency regulations adopted in response to wildfires, flooding, or public health crises that restrict access to our facilities or the rents we can charge our customers, wage regulations, income tax regulations including relating to REIT qualification, and property tax regulations.

Aside from the regulations discussed therein, we are not aware of any government regulations that have resulted or that we expect will result in compliance costs that had or will have a material effect on our capital expenditures, earnings, or competitive position.

Human Capital Resources

Our employees are the cornerstone of our business and critical to our ability to execute corporate strategies and deliver long-term value for our stakeholders. Our human capital management strategy focuses on attracting, developing, and retaining exceptional talent. We accomplish this by committing to our employees to foster a diverse and inclusive workplace, maintain transparent communication, offer competitive compensation and comprehensive benefits, and provide robust opportunities for career growth and professional development. Guided by our core principles of doing the right thing and upholding integrity in all that we do, we believe this approach strengthens employee engagement and commitment to Public Storage.

We have approximately 5,770 employees, including 4,920 customer facing roles (such as property level and customer care center personnel), 410 field management employees, and 440 employees in our corporate operations.

The following is an overview of our key programs and initiatives aimed at attracting, developing, and retaining top talent. For comprehensive details on these programs, including our sustainability efforts, strategies, commitments, and progress, please refer to our 2025 Sustainability Report, which is available on our website at publicstorage.com. Information contained on our website, including such report, is not part of, nor incorporated by reference into, this Annual Report on Form 10-K.

Inclusive Culture

We are committed to fostering a workplace that values individuals from diverse backgrounds, where every employee feels valued and able to bring their authentic self to our best-in-class team. Public Storage hires based on skills, experience, and character, without regard to age, gender, race, ethnicity, religion, sexual orientation, or any other protected characteristic. We maintain policies regarding equal opportunity, pay-for-performance, discrimination, harassment, and labor (including opposition to child and compulsory labor).

Our dedication to excellence and hiring top talent has cultivated an inclusive workforce that reflects the diversity of the customers we serve.

5

Communication and Engagement

Given the geographically dispersed nature of our business, maintaining clear and consistent communication is essential to ensuring employees feel informed, included, and engaged. We leverage multiple communication channels, including email, newsletters, videos, virtual and in-person meetings, and town halls, to share updates on company strategy, performance, employee recognition, and other key information. We also provide opportunities for employees to engage directly with leadership.

To measure the effectiveness of our engagement strategies, we conduct regular surveys to assess employee commitment, motivation, and overall engagement, as well as to gather feedback. We use this feedback to refine and enhance our policies and programs, including to expand opportunities for career development and advancement.

We believe that the success of our engagement strategies can also be seen through third party surveys and recognition. In 2025, we were proud to be named a Great Place to Work® for the fourth year in a row and recognized by Comparably, Inc. as a “Choice Employer” with an “A+” Culture Score based on employee feedback across 18 culture metrics, among other recognitions.

Compensation, Health, Wellness, and Safety

Public Storage offers comprehensive compensation and benefits programs designed to incentivize, reward, and support our employees. We believe compensation should align with both short and long-term performance objectives while remaining competitive to attract, motivate, and retain the talent essential to our success. Our compensation programs are tailored to specific job groups to ensure market competitiveness and strengthen overall engagement.

Our benefits program offers flexibility, affordability, and meaningful support, enabling employees to choose options that best fit their lives and goals. Full-time employees have access to a comprehensive suite of benefits, including medical, dental, and vision coverage, flexible spending and health savings accounts, income protection plans, and retirement benefits through our 401(k) plan. We complement these with employee support programs, including mental health, life planning tools, and discount programs for fitness, legal services, and home, auto, and pet insurance. We continuously evaluate feedback from our team to refine and enhance our offerings, ensuring they reflect both the changing needs of our workforce and our dedication to fostering a positive, healthy work environment.

We are committed to providing safe self-storage facilities for both customers and employees. To uphold this commitment, we conduct monthly safety training at all properties and annual safety training at our corporate headquarters. In addition, we publicly disclose employee health and safety data in our annual Sustainability Report.

Training and Development

At Public Storage, we recognize that our people are the foundation of our success. To support their growth and engagement, we provide comprehensive training and development programs across all levels of the organization. These programs are designed to equip employees with the skills, tools, and knowledge essential for success, while promoting personal growth and supporting long-term career progression.

Most new hires join Public Storage as Property Managers without prior experience in the self-storage industry. To support their success, we provide a hands-on onboarding program that includes coaching and development. For employees joining in leadership roles, we offer property-level training designed to immerse them in daily operations and build a strong understanding of our business fundamentals.

Beyond onboarding, we provide extensive career development opportunities for existing employees, including management training programs that create pathways for advancement into leadership roles. Many of these programs leverage our online learning platform, which provides a wide range of courses and reference materials for continuous learning.

In addition to formal programs, we emphasize personalized development through one-on-one coaching, job shadowing, and mentoring opportunities, reinforcing our commitment to employee growth and engagement across all levels of the organization.

6

Performance Management and Succession Planning

Our performance management process is designed to foster collaboration between employees and their managers. Together, they plan, monitor, and review objectives and professional growth goals, establishing accountability for short and long-term goals aligned with the Company’s strategy. This continuous process provides regular opportunities for feedback and dialogue to support employee development.

Succession planning remains a priority for management and the Board, and is considered critical to ensuring business continuity and supporting long-term growth. Throughout the year, the executive team reviews the Company’s succession bench strength, evaluates talent, and recommends strategies to develop and prepare future leaders. This proactive approach to talent management is designed to provide employees with opportunities to grow beyond their current roles and responsibilities, strengthening our leadership pipeline and enhancing the Company’s long-term stability and adaptability.

Climate Change and Environmental Stewardship

We are committed to managing climate-related risks and opportunities. Our goal is to operate in a responsible and sustainable manner that aligns with our long-term corporate strategy and promotes our best interests along with those of our stakeholders, including our customers, investors, employees, and the communities in which we do business.

Our management Sustainability Committee guides our commitment to sustainability and has primary responsibility for climate-related activities. The Sustainability Committee reports to our Board and its committees, which oversee all of our sustainability initiatives.

We consider potential environmental impacts—both positive and negative—in our decision making across the business. We measure and monitor our environmental impact and leverage sustainability measures to reduce this impact while achieving cost efficiencies in our operations by implementing a range of energy, water, and waste management initiatives.

Regarding climate, we assess risks and opportunities in conjunction with ongoing operating and risk management processes across the company. We give primary consideration to physical, regulatory, legal, market, and reputational risks. Examples of these risks include heat/water stress, natural disasters, pandemics, temperature change, and regulatory compliance. We are addressing potential heat stress risks (e.g., higher energy costs, more frequent power outages, and impacts on our customers and workforce) through initiatives such as converting to LED lighting, efficient HVAC, and solar power generation installation. We are addressing potential water stress risks (e.g., increased costs and decreased availability) through initiatives such as efficient plumbing systems, low-water use irrigation systems, drought tolerant and native landscaping, water run-off controls, and storm water retention. We address the remaining risks primarily through natural disaster resilient development, redevelopment, and capital expenditures.

We have established a greenhouse gas reduction goal which is described in our 2025 Sustainability Report, which is available on our website at publicstorage.com. The information contained on our website, including such report, is not a part of, or incorporated by reference into, this Annual Report on Form 10-K.

We will continue to utilize our unique competitive advantages in furthering our environmental stewardship efforts and addressing the effects of climate change. Please refer to our Sustainability Report for further information.

Seasonality

We experience minor seasonal fluctuations in the demand for self-storage space, with demand and rental rates generally higher in the summer months than in the winter months. We believe that these fluctuations result in part from increased moving activity during the summer months.