Public Storage Q3 Net Income Jumps, But YTD Profit Dips on FX Hit

TL;DR

**PSA's Q3 looks good, but don't ignore the massive YTD foreign exchange hit and rising debt – proceed with caution.**

AI Summary

Public Storage reported a significant increase in net income allocable to common shareholders, reaching $461.4 million for the three months ended September 30, 2025, up from $380.7 million in the prior year, representing a 21.2% increase. For the nine months ended September 30, 2025, however, net income allocable to common shareholders decreased to $1.129 billion from $1.308 billion in 2024, a 13.7% decline. Total revenues from self-storage facilities and ancillary operations grew to $1.224 billion for the quarter, a 3.1% increase from $1.188 billion in 2024. The company's total assets increased to $20.114 billion as of September 30, 2025, from $19.755 billion at December 31, 2024, driven by an increase in real estate facilities at cost. A notable change was the substantial foreign currency exchange loss of $213.866 million for the nine months ended September 30, 2025, compared to a loss of $20.580 million in the prior year, significantly impacting overall net income. Public Storage also increased its notes payable to $10.043 billion from $9.353 billion at year-end 2024, indicating increased leverage.

Why It Matters

This mixed performance from Public Storage, a leading REIT, signals a complex environment for investors. While quarterly net income growth is positive, the year-to-date decline, largely due to foreign currency exchange losses, highlights the impact of global economic volatility on even domestic-focused REITs with international investments like Shurgard. Increased leverage through notes payable could also raise concerns about future interest rate sensitivity. For employees and customers, stable revenue growth in self-storage facilities suggests continued demand, but the broader market will watch how Public Storage navigates currency fluctuations and manages its debt in a competitive self-storage landscape.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant foreign currency exchange loss of $213.866 million for the nine months ended September 30, 2025, compared to a loss of $20.580 million in the prior year, which substantially impacted net income. Additionally, notes payable increased by $689.788 million to $10.042 billion from $9.353 billion at December 31, 2024, indicating higher leverage.

Analyst Insight

Investors should closely monitor Public Storage's exposure to foreign currency fluctuations, particularly given its 35% common equity interest in Shurgard. Evaluate the impact of rising interest rates on the increased notes payable and consider if the core self-storage revenue growth can offset these external pressures.

Financial Highlights

revenue

$1.224B

total Assets

$20.114B

total Debt

$10.043B

net Income

$461.4M

eps

$2.62

revenue Growth

+3.1%

Revenue Breakdown

Key Numbers

• $461.4M — Net income allocable to common shareholders (Q3 2025) (Increased 21.2% from $380.7M in Q3 2024)
• $1.129B — Net income allocable to common shareholders (YTD 2025) (Decreased 13.7% from $1.308B in YTD 2024)
• $1.224B — Total revenues (Q3 2025) (Increased 3.1% from $1.188B in Q3 2024)
• $213.866M — Foreign currency exchange loss (YTD 2025) (Significantly higher than $20.580M loss in YTD 2024)
• $10.043B — Notes payable (Sept 30, 2025) (Increased from $9.353B at Dec 31, 2024)
• $20.114B — Total assets (Sept 30, 2025) (Increased from $19.755B at Dec 31, 2024)
• 3,152 — Self-storage facilities owned (Sept 30, 2025) (Located in 40 states in the U.S.)
• 227.7M — Net rentable square feet owned (Sept 30, 2025) (Across 3,152 self-storage facilities)
• 35% — Common equity interest in Shurgard (Represents international investment exposure)
• $2.62 — Diluted net income per common share (Q3 2025) (Increased from $2.16 in Q3 2024)

Key Players & Entities

• Public Storage (company) — Maryland real estate investment trust (REIT)
• PSA OP (company) — operating partnership through which Public Storage conducts business
• PSOC (company) — subsidiary of PSA OP
• Shurgard Self Storage Limited (company) — public company traded on Euronext Brussels, 35% common equity interest held by Public Storage
• New York Stock Exchange (regulator) — exchange where Public Storage common shares and various preferred shares are registered
• $461.4 million (dollar_amount) — net income allocable to common shareholders for Q3 2025
• $1.129 billion (dollar_amount) — net income allocable to common shareholders for the nine months ended September 30, 2025
• $213.866 million (dollar_amount) — foreign currency exchange loss for the nine months ended September 30, 2025
• $10.043 billion (dollar_amount) — notes payable as of September 30, 2025
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Foreign Currency Exchange Rate Fluctuations [high — financial]: The company experienced a substantial foreign currency exchange loss of $213.866 million for the nine months ended September 30, 2025, a significant increase from $20.580 million in the prior year. This volatility directly impacts net income and can be attributed to the company's investment in Shurgard, which operates in Western Europe.
• Increased Leverage [medium — financial]: Notes payable increased to $10.043 billion as of September 30, 2025, from $9.353 billion at the end of 2024. This indicates a growing reliance on debt financing, which could increase financial risk and interest expense.
• Real Estate Development and Acquisition Risks [medium — operational]: The company acquired 74 self-storage facilities for $814.6 million and completed development activities costing $268.8 million in the first nine months of 2025. Risks include integration challenges, market demand for new spaces, and potential impairment of land development parcels, as evidenced by a $3.9 million write-down.
• Competition and Market Saturation [medium — market]: Public Storage operates in a competitive self-storage market with 3,152 facilities across 40 states. While revenue grew 3.1% in Q3 2025, sustained growth depends on managing competition and maintaining occupancy rates across its 227.7 million net rentable square feet.
• REIT Structure and Compliance [low — regulatory]: As a Maryland REIT structured as an UPREIT, Public Storage must comply with specific tax and operational regulations. Any changes in REIT legislation or failure to meet requirements could impact its tax status and financial performance.

Industry Context

The self-storage industry is characterized by a fragmented market with numerous operators, ranging from large national brands like Public Storage to smaller regional players and independent facilities. Key trends include increasing demand for both personal and business storage solutions, driven by factors like mobility, downsizing, and e-commerce growth. Technology adoption for customer management and facility operations is also a growing area of focus.

Regulatory Implications

As a publicly traded REIT, Public Storage is subject to SEC regulations and specific tax laws governing REITs. Compliance with these regulations is crucial for maintaining its tax-advantaged status and operational integrity. Changes in real estate or tax laws could also present regulatory challenges.

What Investors Should Do

1. Monitor foreign currency exposure
2. Analyze debt levels and interest coverage
3. Assess the impact of acquisitions and development
4. Evaluate Shurgard's performance and strategic value

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported Q3 2025 results showing increased net income and revenue for the quarter, but a year-to-date decline in net income due to significant foreign currency losses.
• 2025-09-15: Shurgard Share Issuance — Received 576,984 new Shurgard common shares in exchange for dividend rights, maintaining a 35% equity interest and increasing exposure to European market fluctuations.
• 2025-06-13: Shurgard Share Issuance — Received 576,992 new Shurgard common shares in exchange for dividend rights, impacting the company's investment valuation and foreign currency exposure.
• 2025-01-01: Beginning of Fiscal Year 2025 — Marks the start of the period for which year-to-date financial results are reported, including significant foreign currency losses and increased debt.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. REITs can provide investors with a way to invest in large-scale, income-producing real estate. (Public Storage is structured as a REIT, which has specific tax and operational implications.)

UPREIT

Umbrella Partnership Real Estate Investment Trust. A structure where the REIT's primary assets are partnership interests in an operating partnership, which in turn owns the real estate assets. This structure can offer tax advantages for property owners contributing assets. (Public Storage uses this structure, with PSA OP as its operating partnership, impacting how assets are held and managed.)

Shurgard Basis Differential

The difference between Public Storage's investment basis in Shurgard and its pro-rata share of Shurgard's underlying net assets. This differential is amortized over time, affecting the reported equity in earnings. (This adjustment impacts the reported earnings from its significant investment in Shurgard.)

Net rentable square feet

The total area of self-storage units that are available for rent to customers. (A key metric for measuring the scale and capacity of Public Storage's facility operations.)

Foreign currency exchange loss

A loss incurred when the value of a foreign currency decreases relative to the reporting currency (USD) during a specific period, impacting the translated value of foreign assets, liabilities, or transactions. (A significant factor negatively impacting Public Storage's net income for the nine months ended September 30, 2025.)

Year-Over-Year Comparison

Compared to the prior year, Public Storage reported a strong increase in net income and revenue for the third quarter of 2025. However, year-to-date performance shows a decline in net income, primarily due to a significant increase in foreign currency exchange losses. Total assets have grown, reflecting continued investment in real estate facilities, while total debt has also increased, indicating higher leverage.

Key Financial Figures

• $0.10 — nge on which registered Common Shares, $0.10 par value PSA New York Stock Exchange
• $0.01 — 0 of a 5.150% Cum Pref Share, Series F, $0.01 par value PSAPrF New York Stock Exchang

Filing Documents

• psa-20250930.htm (10-Q) — 2374KB
• psa-93025xex31_1.htm (EX-31.1) — 10KB
• psa-93025xex31_2.htm (EX-31.2) — 10KB
• psa-93025xex32.htm (EX-32) — 8KB
• 0001628280-25-047163.txt ( ) — 9195KB
• psa-20250930.xsd (EX-101.SCH) — 68KB
• psa-20250930_cal.xml (EX-101.CAL) — 81KB
• psa-20250930_def.xml (EX-101.DEF) — 322KB
• psa-20250930_lab.xml (EX-101.LAB) — 747KB
• psa-20250930_pre.xml (EX-101.PRE) — 521KB
• psa-20250930_htm.xml (XML) — 1123KB

FINANCIAL INFORMATION Pages

PART I FINANCIAL INFORMATION Pages

Consolidated Financial Statements (Unaudited)

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 4 Consolidated Statements of Cash Flows 8 Condensed Notes to Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures About Market Risk 53

Item 3. Quantitative and Qualitative Disclosures About Market Risk 53

Controls and Procedures 53

Item 4. Controls and Procedures 53

OTHER INFORMATION (Items 3 and 4 are not applicable)

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

Legal Proceedings 54

Item 1. Legal Proceedings 54

Risk Factors 54

Item 1A. Risk Factors 54

Unregistered Sales of Equity Securities and Use of Proceeds 54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54 Item 5. Other Information 54

Exhibits 54

Item 6. Exhibits 54 PUBLIC STORAGE CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) September 30, 2025 December 31, 2024 (Unaudited) ASSETS (Unaudited) Cash and equivalents $ 296,460 $ 447,416 Real estate facilities, at cost: Land 5,896,029 5,711,685 Buildings 23,815,040 22,767,053 29,711,069 28,478,738 Accumulated depreciation ( 11,199,115 ) ( 10,426,186 ) 18,511,954 18,052,552 Construction in process 267,816 308,101 18,779,770 18,360,653 Investment in unconsolidated real estate entity 383,557 382,490 Goodwill and other intangible assets, net 269,568 282,187 Other assets 384,963 282,188 Total assets $ 20,114,318 $ 19,754,934 LIABILITIES AND EQUITY Notes payable $ 10,042,822 $ 9,353,034 Accrued and other liabilities 664,389 588,248 Total liabilities 10,707,211 9,941,282 Commitments and contingencies (Note 15) 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, 2024) at liquidation preference 4,350,000 4,350,000 Common Shares, $ 0.10 par value, 650,000,000 shares authorized, 175,462,847 shares issued ( 175,408,393 shares at December 31, 2024) 17,546 17,541 Paid-in capital 6,143,166 6,116,113 Accumulated deficit ( 1,150,224 ) ( 699,083 ) Accumulated other comprehensive loss ( 48,365 ) ( 71,965 ) Total Public Storage shareholders' equity 9,312,123 9,712,606 Noncontrolling interests 94,984 101,046 Total equity 9,407,107 9,813,652 Total liabilities and equity $ 20,114,318 $ 19,754,934 See accompanying notes. 1 PUBLIC STORAGE CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues: Self-storage facilities $ 1,138,837 $ 1,110,115 $ 3,360,493 $ 3,295,896 Ancillary operations 85,206 77,643 247,828 222,293 1,224,043 1,187,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 1. Description of the Business Public Storage 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, and other related operations such as tenant reinsurance, merchandise sales, third party management, and bridge lending to third-party self-storage owners, as well as the acquisition and development of additional self-storage space. We are structured as an umbrella partnership REIT, or UPREIT, under which substantially all of our business is conducted through Public Storage OP, L.P. ("PSA OP"), an operating partnership, and its subsidiaries, including Public Storage Operating Company ("PSOC"). 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 equity interests in PSOC. As a limited partnership, PSA OP is a variable interest entity and is consolidated by Public Storage as its primary beneficiary. As of September 30, 2025, Public Storage owned all of the general partner interests and approximately 99.80 % of the limited partnership interests of PSA OP, with the remaining 0.20 % of limited partnership interests owned by certain trustees and officers of the Company. Unless stated otherwise or the context otherwise requires, references to "Public Storage" mean the parent entity, Public Storage, and 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. At September 30, 2025, we owned interests in 3,152 self-storage facilities (with approximately 227.7 million net rentable square feet) located in 40 states in the United States ("U.S.") operating under the Pu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 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, 2024. 3. Real Estate Facilities Activity in real estate facilities during the nine months ended September 30, 2025 is as follows: Nine Months Ended September 30, 2025 (Amounts in thousands) Operating facilities, at cost: Beginning balance $ 28,478,738 Capital expenditures to maintain real estate facilities 138,204 Capital expenditures for energy efficiencies (LED lighting, solar) 49,407 Acquisitions 756,922 Transfers, dispositions, and retirements, net 19,011 Developed or expanded facilities opened for operation 268,787 Ending balance 29,711,069 Accumulated depreciation: Beginning balance ( 10,426,186 ) Depreciation expense ( 777,100 ) Dispositions and retirements 4,171 Ending balance ( 11,199,115 ) Construction in process: Beginning balance 308,101 Costs incurred to develop and expand real estate facilities 233,314 Transfer to Other Assets ( 4,779 ) Write-off of cancelled projects ( 33 ) Developed or expanded facilities opened for operation ( 268,787 ) Ending balance 267,816 Total real estate facilities at September 30, 2025 $ 18,779,770 During the nine months ended September 30, 2025, we acquired 74 self-storage facilities ( 5.2 million net rentable square feet of storage space), for a total cost of $ 814.6 million in cash. Approximately $ 57.6 million of the total cost was allocated to intangible assets. During the nine months ended September 30, 2025, we completed development and redevelopment activities costing $ 268.8 million, adding 1.1 million net rentable square feet of self-storag

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 4. Investment in Unconsolidated Real Estate Entity Throughout all periods presented, we had an approximate 35 % equity interest in Shurgard. On September 15 and June 13, 2025, Shurgard issued 1,192,066 and 1,267,459 new common shares to its shareholders who opted to exchange the cash dividend rights declared on August 13, 2025 and May 14, 2025, respectively, for additional shares. On September 15 and June 13, 2025, we received 576,984 and 576,992 new common shares, respectively, in exchange for all of our dividend rights. At September 30, 2025, we owned 35,773,710 common shares of Shurgard. Based upon the closing price at September 30, 2025 ( 32.25 per share of Shurgard common stock, at 1.174 exchange rate of U.S. Dollars to the Euro), the shares we owned had a market value of approximately $ 1.4 billion. Our equity in earnings of Shurgard comprise our equity share of Shurgard's net income, less amortization of the Shurgard Basis Differential (defined below). During the nine months ended September 30, 2025 and 2024, we received $ 3.7 million and $ 3.2 million of trademark license fees that Shurgard pays to us for the use of the Shurgard trademark, respectively. We eliminated $ 1.3 million and $ 1.1 million of intra-entity profits and losses for the nine months ended September 30, 2025 and 2024, 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 Consolidated Statements of Income. At September 30, 2025, our investment in Shurgard's real estate assets exceeded our pro-rata share of the underlying amounts on Shurgard's balance sheet by $ 32.6 million ($ 62.6 million at December 31, 2024). 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 Differen

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