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

0.875% Senior Notes due 2032

PSA32

New York Stock Exchange

0.500% Senior Notes due 2030

PSA30

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.

~~[X]~~

☒ 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).

~~[X]~~

☒ 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

~~[X]~~☒

~~[ ]~~☐

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 ~~[X]~~☒ No

Indicate the number of the registrant’s outstanding common shares of beneficial interest, as of ~~April 26,~~October 28, 2021:

Common Shares of beneficial interest, $0.10 par value per share – ~~174,978,140~~175,354,560 shares

PUBLIC STORAGE

INDEX


PART I	FINANCIAL INFORMATION	Pages

Item 1.	Financial Statements (Unaudited)

	Balance Sheets at ~~March 31,~~September 30, 2021 and December 31, 2020	1

	Statements of Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020	2

	Statements of Comprehensive Income for the Three and Nine Months Ended ~~March 31,~~ September 30, 2021 and 2020	3

	Statements of Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020	~~4-5~~4-7

	Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021 and 2020	~~6-7~~8-9

	Condensed Notes to Financial Statements	~~8-26~~10-27

Item 2.	Management’s Discussion and Analysis of ‎Financial Condition and Results of Operations	~~27-57~~28-58

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5859

Item 4.	Controls and Procedures	5859

PART II	OTHER INFORMATION (Items 3, 4 and 5 are not applicable)

Item 1.	Legal Proceedings	5960

Item 1A.	Risk Factors	5960

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5960

Item 6.	Exhibits	5960

PUBLIC STORAGE

BALANCE SHEETS

(Amounts in thousands, except share data)

March 31,
December 31,
2021
2020
ASSETS
(Unaudited)
Cash and equivalents
$
159,622
$
257,560
Real estate facilities, at cost:
Land
4,432,749
4,375,588
Buildings
13,211,931
12,997,039
17,644,680
17,372,627
Accumulated depreciation
(7,286,332)
(7,152,135)
10,358,348
10,220,492
Construction in process
201,316
188,079
10,559,664
10,408,571
Investments in unconsolidated real estate entities
771,075
773,046
Goodwill and other intangible assets, net
205,061
204,654
Other assets
286,313
172,715
Total assets
$
11,981,735
$
11,816,546
LIABILITIES AND EQUITY
Notes payable
$
2,996,111
$
2,544,992
Preferred shares called for redemption (Note 8)
-
300,000
Accrued and other liabilities
368,309
394,655
Total liabilities
3,364,420
3,239,647
Commitments and contingencies (Note 12)

Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized,
151,700 shares issued (in series) and outstanding,
at liquidation preference
3,792,500
3,792,500
Common Shares, $0.10 par value, 650,000,000 shares authorized,
174,651,004 shares issued and outstanding (174,581,742 shares at
December 31, 2020)
17,465
17,458
Paid-in capital
5,715,254
5,707,101
Accumulated deficit
(877,931)
(914,791)
Accumulated other comprehensive loss
(49,341)
(43,401)
Total Public Storage shareholders’ equity
8,597,947
8,558,867
Noncontrolling interests
19,368
18,032
Total equity
8,617,315
8,576,899
Total liabilities and equity
$
11,981,735
$
11,816,546

‎

Accumulated
Total
Cumulative
Other
Public Storage
Preferred
Common
Paid-in
Accumulated
Comprehensive
Shareholders’
Noncontrolling
Total
Shares
Shares
Capital
Deficit
Loss
Equity
Interests
Equity
Balances at December 31, 2020
$
3,792,500
$
17,458
$
5,707,101
$
(914,791)
$
(43,401)
$
8,558,867
$
18,032
$
8,576,899
Issuance of common shares in connection with
share-based compensation (69,262 shares) (Note 10)
-
7
4,696
-
-
4,703
-
4,703
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)
-
-
3,489
-
-
3,489
-
3,489
Acquisition of noncontrolling interests
-
-
(32)
-
-
(32)
(1)
(33)
Contributions by noncontrolling interests
-
-
-
-
-
-
1,380
1,380
Net income
-
-
-
434,262
-
434,262
-
434,262
Net income allocated to noncontrolling interests
-
-
-
(1,226)
-
(1,226)
1,226
-
Distributions to:
Preferred shareholders (Note 8)
-
-
-
(46,080)
-
(46,080)
-
(46,080)
Noncontrolling interests
-
-
-
-
-
-
(1,269)
(1,269)
Common shareholders and restricted share
unitholders ($2.00 per share)
-
-
-
(350,096)
-
(350,096)
-
(350,096)
Other comprehensive loss (Note 2)
-
-
-
-
(5,940)
(5,940)
-
(5,940)
Balances at March 31, 2021
$
3,792,500
$
17,465
$
5,715,254
$
(877,931)
$
(49,341)
$
8,597,947
$
19,368
$
8,617,315


	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, 2021	$	3,871,250	$	17,486	$	5,764,672	$	(863,742)	$	(46,082)	$	8,743,584	$	19,519	$	8,763,103
Issuance of 5,750 preferred shares (Note 8)	143,750		—		(4,777)		—		—		138,973		—		138,973

Issuance of common shares in connection with share-based compensation (183,823 shares)	—		19		33,795		—		—		33,814		—		33,814
Share-based compensation expense, net of cash paid in lieu of common shares	—		—		15,253		—		—		15,253		—		15,253

Contributions by noncontrolling interests	—		—		—		—		—		—		594		594
Net income	—		—		—		491,628		—		491,628		—		491,628
Net income allocated to noncontrolling interests	—		—		—		(1,537)		—		(1,537)		1,537		—
Distributions to:
Preferred shareholders (Note 8)	—		—		—		(46,237)		—		(46,237)		—		(46,237)
Noncontrolling interests	—		—		—		—		—		—		(1,706)		(1,706)
Common shareholders and restricted share unitholders ($2.00 per share) (Note 8)	—		—		—		(351,226)		—		(351,226)		—		(351,226)
Other comprehensive loss (Note 2)	—		—		—		—		(6,898)		(6,898)		—		(6,898)
Balances at September 30, 2021	$	4,015,000	$	17,505	$	5,808,943	$	(771,114)	$	(52,980)	$	9,017,354	$	19,944	$	9,037,298

~~(Unaudited)~~

Accumulated
Total
Cumulative
Other
Public Storage
Preferred
Common
Paid-in
Accumulated
Comprehensive
Shareholders’
Noncontrolling
Total
Shares
Shares
Capital
Deficit
Loss
Equity
Interests
Equity
Balances at December 31, 2019
$
4,065,000
$
17,442
$
5,710,934
$
(665,575)
$
(64,890)
$
9,062,911
$
16,756
$
9,079,667
Issuance of common shares in connection with
share-based compensation (56,407 shares) (Note 10)
-
6
1,757
-
-
1,763
-
1,763
Cash paid in lieu of common shares, net of
share-based compensation expense (Note 10)
-
-
(2,830)
-
-
(2,830)
-
(2,830)
Contributions by noncontrolling interests
-
-
-
-
-
-
566
566
Net income
-
-
-
367,136
-
367,136
-
367,136
Net income allocated to noncontrolling interests
-
-
-
(980)
-
(980)
980
-
Distributions to equity holders:
Preferred shares (Note 8)
-
-
-
(52,005)
-
(52,005)
-
(52,005)
Noncontrolling interests
-
-
-
-
-
-
(1,172)
(1,172)
Common shareholders and restricted share
unitholders ($2.00 per share)
-
-
-
(349,802)
-
(349,802)
-
(349,802)
Other comprehensive loss (Note 2)
-
-
-
-
(13,115)
(13,115)
-
(13,115)
Balances at March 31, 2020
$
4,065,000
$
17,448
$
5,709,861
$
(701,226)
$
(78,005)
$
9,013,078
$
17,130
$
9,030,208

Amounts at March 31, 2021
Coupon
Effective
Unamortized
Book
Fair
Rate
Rate
Principal
Costs
Value
Value
($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022
2.370%
2.483%
$
500,000
$
(759)
$
499,241
$
513,985
Notes due February 15, 2026
0.875%
1.030%
500,000
(3,617)
496,383
486,291
Notes due September 15, 2027
3.094%
3.218%
500,000
(3,416)
496,584
542,441
Notes due May 1, 2029
3.385%
3.459%
500,000
(2,489)
497,511
546,753
2,000,000
(10,281)
1,989,719
2,089,470
Euro Denominated Unsecured Debt
Notes due April 12, 2024
1.540%
1.540%
117,277
-
117,277
123,425
Notes due November 3, 2025
2.175%
2.175%
283,827
-
283,827
310,117
Notes due January 24, 2032
0.875%
0.978%
586,386
(5,796)
580,590
588,263
987,490
(5,796)
981,694
1,021,805
Mortgage Debt, secured by 27
real estate facilities with a net
book value of $101.2 million
3.944%
3.933%
24,698
-
24,698
26,092
$
3,012,188
$
(16,077)
$
2,996,111
$
3,137,367

Amounts at
December 31, 2020
Book
Fair
Value
Value
($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022
$
499,109
$
517,419
Notes due September 15, 2027
496,452
560,833
Notes due May 1, 2029
497,433
574,833
1,492,994
1,653,085
Euro Denominated Unsecured Debt
Notes due April 12, 2024
122,646
129,192
Notes due November 3, 2025
296,821
323,552
Notes due January 24, 2032
607,301
634,389
1,026,768
1,087,133
Mortgage Debt
25,230
26,958
$
2,544,992
$
2,767,176

Cash paid for interest totaled ~~$19.4~~$49.8 million and ~~$14.1~~$40.2 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020, respectively. Interest capitalized as real estate totaled ~~$0.9~~$2.6 million and $2.5 million for ~~each of~~ the ~~three~~nine month periods ended ~~March 31,~~September 30, 2021 and ~~2020.~~

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

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 2021 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, 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. All statements in this document, other than statements of historical fact, are forward-looking statements which may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” ~~“estimates”~~“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 described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2021 and in our other filings with the SEC including:

•general risks associated with the ownership and operation of real estate, including changes in demand, risk related to development, expansion, and acquisition of self-storage facilities, potential liability for environmental contamination, natural disasters, and adverse changes in laws and regulations governing property tax, real estate, and zoning;

•risks associated with downturns in the national and local economies in the markets in which we operate, including risks related to current economic conditions and the economic health of our customers;

•risks associated with the COVID-19 Pandemic (the “COVID Pandemic”) or similar events, including but not limited to illness or death of our employees or customers, negative impacts to the economic environment and to self-storage customers ~~which~~that could reduce the demand for self-storage or reduce our ability to collect rent, and/or potential regulatory actions to (i) close our facilities if we were determined not to be an “essential business” or for other reasons, (ii) limit our ability to increase rent or otherwise limit the rent we can charge, or (iii) limit our ability to collect rent or evict delinquent tenants;

•the risk that there could be an out-migration of population from certain high-cost major markets, if it is determined that the ability to “work from home,” which has become more prominent during the COVID Pandemic, could allow certain workers to live in less expensive localities, which could negatively impact the occupancies and revenues of our properties in such major high-cost markets;

•the risk that ~~even though many initial restrictions due to the~~more jurisdictions will reinstitute COVID Pandemic ~~have~~restrictions, which were previously eased, ~~they could be reinstituted~~ in response to increases in infections, including as a result of variants such as the Delta variant, or if additional pandemics occur;

•the risk that we could experience a change in the move-out patterns of our long-term customers due to economic uncertainty and increases in unemployment resulting from ~~the COVID Pandemic,~~changes in macro environment, which could lead to lower occupancies and rent “roll down” as long-term customers are replaced with new customers at lower rates;

•the risk of negative impacts on the cost and availability of debt and equity capital as a result of the COVID Pandemic, which could have a material impact upon our capital and growth plans;

•

the risk that the COVID Pandemic could adversely impact our ability to retain and hire employees, including as a result of vaccine or testing mandates;

•the impact of competition from new and existing self-storage and commercial facilities and other storage alternatives;

•the risk that our existing self-storage facilities may be at a disadvantage in competing with newly developed facilities with more visual and customer appeal;



•risks related to increased reliance on Google and Sparefoot as a customer acquisition ~~channel;~~channels;

•difficulties in our ability to successfully evaluate, finance, integrate into our existing operations, and manage properties that we acquire directly or through the acquisition of entities that own and operate self-storage facilities, or to consummate announced acquisitions in the expected timeframe or at all;

•risks associated with international operations including, but not limited to, unfavorable foreign currency rate fluctuations, changes in tax laws, and local and global economic uncertainty that could adversely affect our earnings and cash flows;

•risks related to our participation in joint ventures;

•the impact of the legal and regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing environmental issues, taxes, our tenant reinsurance business, and labor, including risks related to the impact of new laws and regulations;

•risks of increased tax expense associated either with a possible failure by us to qualify as a real estate investment trust (“REIT”), or with challenges to the determination of taxable income for our taxable REIT subsidiaries;

•risks due to ballot initiatives or other actions that could remove the protections of Proposition 13 with respect to our real estate and result in substantial increases in our assessed values and property tax bills in California;

•changes in United States (“U.S.”) federal or state tax laws related to the taxation of REITs and other corporations;

•security breaches, including ransomware, or a failure of our networks, systems or technology could adversely impact our operations or our business, customer, and employee relationships or result in fraudulent payments;

•risks associated with the self-insurance of certain business risks, including property and casualty insurance, employee health insurance, and workers compensation liabilities;

•difficulties in raising capital at a reasonable cost;

•delays and cost overruns on our projects to develop new facilities or expand our existing facilities;

•difficulties in our ability to hire and retain skilled management and staff;

•ineffective succession planning for our CEO, executive management and our other key employees;

•ongoing litigation and other legal and regulatory actions ~~which~~that may divert management’s time and attention, require us to pay damages and expenses, or restrict the operation of our business; and

•economic uncertainty due to the impact of war or terrorism.

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 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 Policies ~~and Estimates~~

The preparation of 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 ~~three~~nine months ended ~~March 31,~~September 30, 2021, there were no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Form 10-K for the year ended December 31, 2020.

Overview

During a significant portion of 2020 and continuing into 2021, the COVID Pandemic has resulted in cessation, curtailment, or impairment of business activities in most sectors of the economy in virtually all markets we operate in, due to governmental “stay at home” orders, risk mitigation procedures, closure of businesses not considered to be “essential,” as well as other direct and indirect impacts, including a rapid and dramatic increase in unemployment in the U.S. While initial government restrictions have been eased or removed in certain markets there remains an ongoing negative impact to the economy.

Our self-storage facilities have remained open to all customer activity. We consider the safety of our employees and customers as our first priority, and have accordingly taken significant steps to ensure safety, including initiating our touchless eRental® leasing platform, developing the ability for customers to access our properties through our mobile app, as well as enforcing social distancing requirements in our property offices and grounds, and providing protective equipment.

Our corporate offices as well as our call centers migrated to a “work from home” environment during the COVID Pandemic. We expect our corporate employees to return to the corporate office in 2021 assuming the risk of the COVID Pandemic recedes. However, we expect that our call centers will remain in a “work from home” environment due to certain favorable aspects of a distributed call center team.

~~The continuing impacts of the COVID Pandemic are described more fully throughout our MD&A which follows.~~

Our self-storage operations generate most of our net income and our earnings growth is most impacted by the level of organic growth within our Same Store Facilities. 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 ~~March 31,~~September 30, 2021, revenues generated by our Same Store Facilities (as defined below) increased 3.4% from the three months ended March 31, 2020. Although our revenue continued to be negatively impacted by the COVID Pandemic including restrictions on rate increases to tenants imposed by local government due to “States14.0% and 9.4%, respectively, while Same Store cost of ~~Emergency”, our demand~~operations decreased. Demand and operating trends have continued to ~~improve. For the three months ended March 31,~~improve, leading to increases in our self-storage rental rates in all markets while maintaining high levels of occupancy. Our operating trends have benefited from our ability to reduce labor costs through technology improvements and reduced need for Internet marketing. At September 30, 2021, ~~same-store occupancy was 95.6%, an increase of 2.8% as compared to the three months ended March 31, 2020, while~~ contract rent per occupied foot ~~at March 31, 2021~~ was 1%10.7% higher and square foot occupancy was 1.2% higher for our Same Store Facilities as compared to ~~March 31,~~September 30, 2020, suggesting continued revenue growth ~~into~~during the remainder of 2021.

In addition to managing our existing facilities for organic growth, we have grown and plan to continue to grow through the acquisition and development of new facilities and ~~expanding~~expansion of our existing self-storage facilities. Since the beginning of 2019, we acquired a total of ~~121~~232 facilities with ~~9.3~~18.5 million net rentable square feet for

~~$1.4~~ $4.1 billion, and ~~we opened newly~~within our non-same store portfolio have developed and expanded self-storage space for a total cost of ~~$563.2 million,~~$1.6 billion, adding ~~5.1~~17.0 million net rentable square feet.

~~Additionally, subsequent to March 31,~~

On April 28, 2021, as part of our portfolio growth, we ~~were under contract to acquire~~acquired the ezStorage portfolio consisting of 48 properties ~~(4.2~~(4.1 million net rentable square feet) for $1.8 billion. These properties are located in submarkets with strong demand drivers and ~~high barriers for new property development~~other desirable characteristics across Washington DC, Virginia, and Maryland. ~~Our development team will assume responsibility~~

Subsequent to September 30, 2021, we are under contract to acquire the All Storage portfolio consisting of 56 properties (7.5 million net rentable square feet) for ~~one property that is under construction~~$1.5 billion. These properties are located in submarkets with strong demand drivers and ~~expand eight additional properties, resulting in an expected 10% increase in square footage through 2023.~~other desirable characteristics across Dallas-Ft. Worth (52 properties) and Oklahoma City. The acquisition, which is subject to the satisfaction of customary closing conditions, is ~~currently~~ expected to close in ~~late April~~two separate tranches, with seven self-storage facilities closing in November 2021 and 49 self-storage facilities closing in December 2021.

Our strong financial profile continues to enable an effective access to capital markets in order to support our growth, and ~~on April 23,~~during the nine months ended September 30, 2021, we ~~completed a~~raised an aggregate of $3.3 billion in three public ~~offering~~debt offerings and $747.5 million in two public offerings of ~~$700 million, $650 million and $650 million aggregate principal amount of senior notes maturing on April 23, 2024, May 1, 2028 and May 1, 2031, respectively.~~our preferred shares.

In order to enhance the competitive position of certain of our facilities relative to local competitors (including newly developed facilities), we have embarked on a multi-year program to rebrand our properties, ~~in order~~ to ~~develop~~include more pronounced, attractive, and clearly identifiable color schemes and signage, as well as to upgrade the configuration and layout of the offices and other customer zones to improve the customer experience. The timing and scope of the program will evolve as the work is executed and we expect to spend approximately ~~$120~~$120.0 million ~~over~~in 2021 on this effort.

Results of Operations

Operating ~~results~~Results for the Three Months Ended ~~March 31,~~September 30, 2021 and 2020

For the three months ended ~~March 31,~~September 30, 2021, net income allocable to our common shareholders was ~~$385.8~~$442.3 million or ~~$2.21~~$2.52 per diluted common share, compared to ~~$313.1~~$246.9 million or ~~$1.79~~$1.41 per diluted common share in 2020 representing an increase of ~~$72.7~~$195.4 million or ~~$0.42~~$1.11 per diluted common share. The increase is due primarily to (i) a ~~$41.1~~$148.7 million increase in self-storage net operating income (described below), (ii) a ~~$36.4~~$82.8 million increase due to the impact of foreign currency exchange gains and losses associated with our Euro denominated debt, (iii) a $23.3 million increase due to the impact of the redemption of preferred shares in the three months ended September 30, 2020, partially offset by ~~(iii)~~(iv) a ~~$11.0~~$50.2 million increase in depreciation and amortization expense.

The ~~$41.1~~$148.7 million increase in self-storage net operating income is a result of a ~~$29.3~~$96.2 million increase in our Same Store Facilities (as defined below), and a ~~$11.8~~$52.5 million increase in our ~~non-Same~~Non-Same Store Facilities (as defined below). Revenues for the Same Store Facilities increased ~~3.4%~~14.0% or ~~$21.1~~$87.8 million in the three months ended ~~March 31,~~September 30, 2021 as compared to 2020, due primarily to higher realized annual rent per available square foot and weighted average square foot

occupancy. Cost of operations for the Same Store Facilities decreased by 4.6% or $8.5 million in the three months ended September 30, 2021 as compared to 2020, due primarily to a 43.3% ($7.0 million) decrease in marketing expenses, an 8.4% ($2.6 million) decrease in on-site property manager payroll, and a change in property tax timing contributing to a 2.7% ($2.0 million) decrease in property tax expense. The increase in net operating income of $52.5 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2020 and 2021 and the fill-up of recently developed and expanded facilities.

Operating Results for the Nine Months Ended September 30, 2021 and 2020

For the nine months ended September 30, 2021, net income allocable to our common shareholders was $1,174.4 million or $6.70 per diluted common share, compared to $806.2 million or $4.62 per diluted common share in 2020 representing an increase of $368.2 million or $2.08 per diluted common share. The increase is due primarily to (i) a $316.7 million increase in self-storage net operating income (described below), (ii) a $125.8 million increase due to the impact of foreign currency exchange gains and losses associated with our Euro denominated debt, partially offset by (iii) a $96.3 million increase in depreciation and amortization expense and (iv) a $25.8 million increase in general and administrative expense due primarily to increased share-based compensation expense.

The $316.7 million increase in self-storage net operating income is a result of a $216.9 million increase in our Same Store Facilities (as defined below), and a $99.8 million increase in our Non-Same Store Facilities (as defined below). Revenues for the Same Store Facilities increased 9.4% or $175.2 million in the nine months ended September 30, 2021 as compared to 2020, due primarily to higher realized annual rent per available square foot and weighted average square foot occupancy. Cost of operations for the Same Store Facilities decreased by ~~4.3%~~7.4% or ~~$8.2~~$41.7 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2021 as compared to 2020, due primarily to (i) a ~~change in property tax timing resulting in an 8.6%~~19.5% ($~~6.2 million) decrease in property expense, a 13.2% ($4.4~~20.0 million) decrease in on-site property manager payroll, ~~partially offset by an increase~~(ii) a 37.1% ($18.0 million) decrease in ~~share-based compensation.~~marketing expenses and (iii) a change in property tax timing contributing to our 6.2% ($13.4 million) decrease in property tax expense. The increase in net operating income of ~~$11.8~~$99.8 million for the ~~non-Same~~Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2020 and 2021 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 the National Association of Real Estate Investment Trusts and are considered helpful measures of REIT performance by REITs and many REIT analysts. FFO represents net income before 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 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 ~~March 31,~~September 30, 2021, FFO was ~~$3.08~~$3.61 per diluted common share, as compared to ~~$2.61~~$2.28 per diluted common share for the same period in 2020, representing an increase of ~~18.0%~~58.3%, or ~~$0.47~~$1.33 per diluted common share.

For the nine months ended September 30, 2021, FFO was $9.69 per diluted common share, as compared to $7.18 per diluted common share for the same period in 2020, representing an increase of 35.0%, or $2.51 per diluted common share.

The following tables reconcile diluted earnings per share to FFO per share and set forth the computation of FFO per share:

Three Months Ended
March 31,
2021
2020
(Amounts in thousands, except per share data)
Reconciliation of Diluted Earnings per Share to
FFO per Share:
Diluted Earnings per Share
$
2.21
$
1.79
Eliminate amounts per share excluded from FFO:
Depreciation and amortization
0.93
0.87
Gains on sale of real estate investments,
including our equity share from
investments
(0.06)
(0.05)
FFO per share
$
3.08
$
2.61
Computation of FFO per Share:
Net income allocable to common shareholders
$
385,810
$
313,134
Eliminate items excluded from FFO:
Depreciation and amortization
145,869
135,137
Depreciation from unconsolidated
real estate investments
17,933
18,243
Depreciation allocated to noncontrolling
interests and restricted share unitholders
(971)
(961)
Gains on sale of real estate investments,
including our equity share from
investments
(9,387)
(9,241)
FFO allocable to common shares
$
539,254
$
456,312
Diluted weighted average common shares
174,840
174,616
FFO per share
$
3.08
$
2.61


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(Amounts in thousands, except per share data)
Reconciliation of Diluted Earnings per Share to FFO per Share:

Diluted Earnings per Share	$	2.52	$	1.41	$	6.70	$	4.62
Eliminate amounts per share excluded from FFO:
Depreciation and amortization	1.17		0.88		3.17		2.63
Gains on sale of real estate investments, including our equity share from investments	(0.08)		(0.01)		(0.18)		(0.07)
FFO per share	$	3.61	$	2.28	$	9.69	$	7.18

Computation of FFO per Share:

Net income allocable to common shareholders	$	442,327	$	246,916	$	1,174,386	$	806,169
Eliminate items excluded from FFO:
Depreciation and amortization	187,611		137,526		505,218		409,484
Depreciation from unconsolidated real estate investments	19,209		17,492		54,485		52,607
Depreciation allocated to noncontrolling interests and restricted share unitholders	(1,318)		(954)		(3,413)		(2,853)
Gains on sale of real estate investments, including our equity share from investments	(12,572)		(3,174)		(31,156)		(12,415)
FFO allocable to common shares	$	635,257	$	397,806	$	1,699,520	$	1,252,992
Diluted weighted average common shares	175,806		174,626		175,398		174,606
FFO per share	$	3.61	$	2.28	$	9.69	$	7.18

We also present “Core FFO per share,” a non-GAAP measure that represents FFO per share excluding the impact of (i) foreign currency exchange gains and losses, (ii) ~~EITF D-42~~ charges related to the redemption of preferred securities, and (iii) certain other ~~significant~~ non-cash and/or nonrecurring income or expense items ~~such as~~primarily representing, with respect to the periods presented below, the impact of loss contingency accruals, casualties, transactional due diligence, and advisory ~~costs.~~ costs . We review Core FFO per share to evaluate our ongoing operating performance and we believe it is used by investors and REIT analysts in a similar manner. However, Core FFO per share is not a substitute for net income per share. Because other REITs may not compute Core FFO per share in the same manner as we do, may not use the same terminology or may not present such a measure, Core FFO per share may not be comparable among REITs.

‎

The following table reconciles FFO per share to Core FFO per share:

Three Months Ended
March 31,
Percentage
2021
2020
Change
FFO per share
$
3.08
$
2.61
18.0%
Eliminate the per share impact of items
excluded from Core FFO, including
our equity share from investments:
Foreign currency exchange gain
(0.26)
(0.05)
Other items
-
0.02
Core FFO per share
$
2.82
$
2.58
9.3%

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 Percentage Change 2021 2020 Percentage Change
FFO per share $ 3.61 $ 2.28 58.3 % $ 9.69 $ 7.18 35.0 %
Eliminate the per share impact of items excluded from Core FFO, including our equity share from investments:
Foreign currency exchange (gain) loss (0.23) 0.24 (0.42) 0.30
Preferred share redemption charge — 0.13 0.10 0.22
Property losses and tenant claims due to casualties 0.03 — 0.03 —
Other items 0.01 (0.02) (0.01) (0.02)
Core FFO per share $ 3.42 $ 2.63 30.0 % $ 9.39 $ 7.68 22.3 %

Analysis of Net Income by Reportable Segment

The following discussion and analysis is presented and organized in accordance with Note 11 to our ~~March 31,~~September 30, 2021 financial statements, “Segment Information.” Accordingly, refer to the table presented in Note 11 in order to reconcile such amounts to our total net income and for further information on our reportable segments.

Self-Storage Operations

Our self-storage operations are analyzed in four groups: (i) the ~~2,278~~2,274 facilities that we have owned and operated on a stabilized basis since January 1, 2019 (the “Same Store Facilities”), (ii) ~~121~~232 facilities we acquired after December 31, 2018 (the “Acquired facilities”), (iii) ~~136~~139 facilities that have been newly developed or expanded, or that ~~had commenced~~we expect to commence expansion by December 31, 2021 (the “Newly developed and expanded facilities”), and (iv) 2833 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2019 (the “Other non-same store facilities”). See Note 11 to our ~~March 31,~~September 30, 2021 financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

Self-Storage Operations
Summary
Three Months Ended March 31,
Percentage
2021
2020
Change
(Dollar amounts and square footage in thousands)
Revenues:
Same Store facilities
$
647,817
$
626,691
3.4%
Acquired facilities
20,169
7,743
160.5%
Newly developed and expanded facilities
42,939
34,701
23.7%
Other non-same store facilities
5,422
5,066
7.0%
716,347
674,201
6.3%
Cost of operations (a):
Same Store facilities
181,012
189,189
(4.3)%
Acquired facilities
10,707
3,706
188.9%
Newly developed and expanded facilities
18,138
16,092
12.7%
Other non-same store facilities
2,248
2,109
6.6%
212,105
211,096
0.5%
Net operating income (b):
Same Store facilities
466,805
437,502
6.7%
Acquired facilities
9,462
4,037
134.4%
Newly developed and expanded facilities
24,801
18,609
33.3%
Other non-same store facilities
3,174
2,957
7.3%
Total net operating income
504,242
463,105
8.9%
Depreciation and amortization expense:
Same Store facilities
(109,407)
(110,317)
(0.8)%
Acquired facilities
(13,755)
(7,318)
88.0%
Newly developed and expanded facilities
(16,335)
(13,168)
24.1%
Other non-same store facilities
(7,362)
(5,097)
44.4%
Total depreciation and
amortization expense
(146,859)
(135,900)
8.1%
Net income (loss):
Same Store facilities
357,398
327,185
9.2%
Acquired facilities
(4,293)
(3,281)
30.8%
Newly developed and expanded facilities
8,466
5,441
55.6%
Other non-same store facilities
(4,188)
(2,140)
95.7%
Total net income
$
357,383
$
327,205
9.2%
Number of facilities at period end:
Same Store facilities
2,278
2,278
-
Acquired facilities
121
53
128.3%
Newly developed and expanded facilities
136
132
3.0%
Other non-same store facilities
28
29
(3.4)%
2,563
2,492
2.8%
Net rentable square footage at period end:
Same Store facilities
148,909
148,909
-
Acquired facilities
9,316
3,893
139.3%
Newly developed and expanded facilities
16,068
14,973
7.3%
Other non-same store facilities
1,872
1,998
(6.3)%
176,165
169,773
3.8%


Self-Storage Operations
Summary	Three Months Ended September 30,						Nine Months Ended September 30,
	2021		2020		Percentage Change		2021		2020		Percentage Change

	(Dollar amounts and square footage in thousands)
Revenues:
Same Store facilities	$	716,050	$	628,286	14.0	%	$	2,042,832	$	1,867,663	9.4	%
Acquired facilities	62,187		11,001		465.3	%	124,751		28,103		343.9	%
Newly developed and expanded facilities	55,100		38,375		43.6	%	145,960		108,449		34.6	%
Other non-same store facilities	7,173		6,287		14.1	%	20,307		18,477		9.9	%
	840,510		683,949		22.9	%	2,333,850		2,022,692		15.4	%
Cost of operations (a):
Same Store facilities	175,609		184,068		(4.6)	%	523,323		565,057		(7.4)	%
Acquired facilities	20,064		4,880		311.1	%	45,918		13,630		236.9	%
Newly developed and expanded facilities	19,059		17,735		7.5	%	55,572		51,016		8.9	%
Other non-same store facilities	2,267		2,496		(9.2)	%	6,886		7,526		(8.5)	%
	216,999		209,179		3.7	%	631,699		637,229		(0.9)	%
Net operating income (b):
Same Store facilities	540,441		444,218		21.7	%	1,519,509		1,302,606		16.7	%
Acquired facilities	42,123		6,121		588.2	%	78,833		14,473		444.7	%
Newly developed and expanded facilities	36,041		20,640		74.6	%	90,388		57,433		57.4	%
Other non-same store facilities	4,906		3,791		29.4	%	13,421		10,951		22.6	%
Total net operating income	623,511		474,770		31.3	%	1,702,151		1,385,463		22.9	%

Depreciation and amortization expense:
Same Store facilities	(112,656)		(112,092)		0.5	%	(332,079)		(333,650)		(0.5)	%
Acquired facilities	(55,986)		(7,223)		675.1	%	(114,297)		(22,292)		412.7	%
Newly developed and expanded facilities	(14,977)		(13,596)		10.2	%	(46,126)		(39,796)		15.9	%
Other non-same store facilities	(4,933)		(5,422)		(9.0)	%	(15,637)		(16,113)		(3.0)	%
Total depreciation and amortization expense	(188,552)		(138,333)		36.3	%	(508,139)		(411,851)		23.4	%

Net income (loss):
Same Store facilities	427,785		332,126		28.8	%	1,187,430		968,956		22.5	%
Acquired facilities	(13,863)		(1,102)		1158.0	%	(35,464)		(7,819)		353.6	%
Newly developed and expanded facilities	21,064		7,044		199.0	%	44,262		17,637		151.0	%
Other non-same store facilities	(27)		(1,631)		(98.3)	%	(2,216)		(5,162)		(57.1)	%
Total net income	$	434,959	$	336,437	29.3	%	$	1,194,012	$	973,612	22.6	%

Number of facilities at period end:
Same Store facilities							2,274		2,274		—
Acquired facilities							232		63		268.3	%
Newly developed and expanded facilities							139		133		4.5	%
Other non-same store facilities							33		34		(2.9)	%
							2,678		2,504		6.9	%
Net rentable square footage at period end:
Same Store facilities							148,695		148,695		—
Acquired facilities							18,524		4,539		308.1	%
Newly developed and expanded facilities							17,000		15,469		9.9	%
Other non-same store facilities							2,158		2,303		(6.3)	%
							186,377		171,006		9.0	%

(a)We revised our prior period financial statements to correct the presentation of share-based compensation expense and dividends paid on RSUs between general and administrative expense and self-storage cost of operations. As a result, we revised our statements of income for the three and nine months ended ~~March 31,~~September 30, 2020 with an increase in self-storage cost of operations of ~~$3.2~~$3.1 million and $9.4 million, respectively, and a corresponding decrease to general and administrative expenses. This immaterial correction had no impact on our total expenses or net income. The correction also had no impact on our balance sheet, statements of comprehensive income, statements of equity, or cash flows as of and for the three and nine months ended ~~March 31,~~September 30, 2020.

(b)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 in evaluating property operating trends. Direct net operating income (a subtotal within NOI) is also a non-GAAP financial measure that excludes the impact of supervisory payroll, centralized management costs and stock 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. We believe that investors and analysts utilize NOI ~~and direct net operating income~~ in a similar manner. ~~These measures are~~NOI is not a substitute for net income, operating cash flow, or other related financial measures, in evaluating our operating results. See Note 11 to our ~~March 31,~~September 30, 2021 financial statements for a reconciliation of NOI to our total net income for all periods presented.

Net operating income from our self-storage operations has increased 8.9% in the three months ended March 31, 2021, as compared to the same period in 2020. The increase is due primarily to increased Same Store revenues driven by a 2.8% increase in average occupancy to 95.6% for the three months ended March 31, 2021 and decreased Same Store expenses, the acquisition and development of new facilities and the fill-up of unstabilized facilities.

Same Store Facilities

The Same Store Facilities consist of facilities ~~that~~we have ~~been~~ owned and operated on a stabilized level of occupancy, revenues, and cost of operations since January 1, 2019. Our Same Store Facilities ~~increased~~decreased from ~~2,221~~2,278 facilities at ~~December 31, 2020~~June 30, 2021 to ~~2,278~~2,274 facilities at ~~March 31,~~September 30, 2021. The composition of our Same Store Facilities allows us to more effectively to evaluate the ongoing performance of our self-storage portfolio in 2019, 2020, and 2021 and exclude the impact of fill-up of unstabilized facilities, which can significantly affect operating trends. We believe ~~the~~investors and analysts use Same Store information ~~is used by investors and REIT analysts~~ 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 of these ~~2,278~~2,274 facilities ~~(148.9~~(148.7 million net rentable square feet) that represent approximately ~~85%~~80% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at ~~March 31,~~September 30, 2021. 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 our same store facilities relative to our self-storage facilities.

Selected Operating Data for the Same Store Facilities (2,274 facilities)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2021		2020		Percentage Change	2021		2020		Percentage Change

	(Dollar amounts in thousands, except for per square foot data)
Revenues (a):
Rental income	$	694,589	$	609,150	14.0%	$	1,982,274	$	1,803,659	9.9%
Late charges and administrative fees	21,461		19,136		12.1%	60,558		64,004		(5.4)%
Total revenues	716,050		628,286		14.0%	2,042,832		1,867,663		9.4%

Direct cost of operations (a):
Property taxes	69,573		71,533		(2.7)%	203,172		216,595		(6.2)%
On-site property manager payroll	28,116		30,701		(8.4)%	82,412		102,390		(19.5)%
Repairs and maintenance	13,078		12,954		1.0%	39,139		37,302		4.9%
Utilities	11,051		11,278		(2.0)%	31,102		31,665		(1.8)%
Marketing	9,143		16,131		(43.3)%	30,535		48,512		(37.1)%
Other direct property costs	18,851		17,071		10.4%	55,433		50,872		9.0%
Total direct cost of operations	149,812		159,668		(6.2)%	441,793		487,336		(9.3)%
Direct net operating income (b)	566,238		468,618		20.8%	1,601,039		1,380,327		16.0%

Indirect cost of operations (a):
Supervisory payroll	(8,320)		(9,831)		(15.4)%	(27,768)		(31,786)		(12.6)%
Centralized management costs	(13,757)		(11,464)		20.0%	(39,990)		(36,510)		9.5%
Share-based compensation	(3,720)		(3,105)		19.8%	(13,772)		(9,425)		46.1%
Net operating income	540,441		444,218		21.7%	1,519,509		1,302,606		16.7%
Depreciation and amortization expense	(112,656)		(112,092)		0.5%	(332,079)		(333,650)		(0.5)%
Net income	$	427,785	$	332,126	28.8%	$	1,187,430	$	968,956	22.5%

Gross margin (before indirect costs, depreciation and amortization expense)	79.1%		74.6%		6.0%	78.4%		73.9%		6.1%

Gross margin (before depreciation and amortization expense)	75.5%		70.7%		6.8%	74.4%		69.7%		6.7%

Weighted average for the period:
Square foot occupancy	96.8%		95.5%		1.4%	96.5%		94.3%		2.3%

Realized annual rental income per (c):
Occupied square foot	$	19.30	$	17.16	12.5%	$	18.42	$	17.16	7.3%
Available square foot	$	18.68	$	16.39	14.0%	$	17.77	$	16.18	9.8%

At September 30:
Square foot occupancy						95.7%		94.6%		1.2%
Annual contract rent per occupied square foot (d)						$	19.56	$	17.67	10.7%

Selected Operating Data for the Same Store Facilities (2,278 facilities)
Three Months Ended March 31,
Percentage
2021
2020
Change
(Dollar amounts in thousands, except for per square foot data)
Revenues:
Rental income
$
627,811
$
600,059
4.6%
Late charges and
administrative fees
20,006
26,632
(24.9)%
Total revenues (a)
647,817
626,691
3.4%
Direct cost of operations (a):
Property taxes
66,555
72,778
(8.6)%
On-site property manager
payroll
28,729
33,106
(13.2)%
Repairs and maintenance
13,031
12,713
2.5%
Utilities
10,745
10,849
(1.0)%
Marketing
14,571
14,808
(1.6)%
Other direct property costs
18,341
16,889
8.6%
Total direct cost of operations
151,972
161,143
(5.7)%
Direct net operating income
495,845
465,548
6.5%
Indirect cost of operations (a):
Supervisory payroll
(9,834)
(10,911)
(9.9)%
Centralized management costs
(13,017)
(13,812)
(5.8)%
Share-based compensation
(6,189)
(3,323)
86.2%
Net operating income
466,805
437,502
6.7%
Depreciation and
amortization expense
(109,407)
(110,317)
(0.8)%
Net income
$
357,398
$
327,185
9.2%
Gross margin (before indirect costs and
depreciation and amortization expense)
76.5%
74.3%
3.0%
Gross margin (before depreciation
and amortization expense)
72.1%
69.8%
3.3%
Weighted average for the period:
Square foot occupancy
95.6%
93.0%
2.8%
Realized annual rental income per (b):
Occupied square foot
$
17.63
$
17.33
1.7%
Available square foot
$
16.86
$
16.12
4.6%
At March 31:
Square foot occupancy
96.0%
92.7%
3.6%
Annual contract rent per
occupied square foot (c)
$
18.06
$
17.88
1.0%

(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.

~~(c)~~(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.

Analysis of Same Store Revenue

We believe a balanced occupancy and rate strategy ~~will maximize~~maximizes our revenues over time. We regularly adjust the rental rates and promotional discounts offered (generally, “$1.00 rent for the first month”), as well as our marketing efforts ~~on the Internet and other channels~~ to maximize revenue from new tenants to replace tenants that vacate.

We typically increase rental rates to our long-term tenants (generally, those ~~that~~who have been with us for at least a year) ~~once per 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 balancing the additional revenue from the increase against the negative impact of incremental move-outs, by considering the customer’s in-place rent and prevailing market rents, among other factors.

Revenues generated by our Same Store Facilities increased ~~by 3.4% in~~14.0% and 9.4% for the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to the same periods in 2020. The increase is due primarily to (i) a 12.5% and 7.3% increase in realized annual rent per occupied square foot for the three and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020, and (ii) a 1.4% and 2.3% increase in average occupancy for the three and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020. The same store revenue growth for the nine months ended September 30, 2021 was partially offset by a 5.4% decrease in late charges and administrative fees as compared to the same period in 2020.

Our growth in revenues, weighted average square foot occupancy, realized annual rent per occupied square foot, and REVPAF for the nine months ended September 30, 2021 as compared to the same period in ~~2020. The increase is due primarily to a 2.8% increase~~2020 was evident in ~~average occupancy, combined with a 1.7% increase in realized rent per occupied foot, offset by a 24.9% decrease in late charges and administrative fees.~~ substantially all of our markets including each of our top 15 markets.

For the three and nine months ended ~~March 31, 2021,~~September 30, 2020, our revenues were impacted by ~~certain restrictions on~~our decision to temporarily curtail our tenant rate ~~increases~~increase program and additional pricing limitations to existing tenants imposed by local governments due to “State of Emergency” declarations in response to the COVID Pandemic and other ~~disasters.~~disasters in the during 2020. Although ~~certain~~most restrictions have recently been lifted, we continue to expect a portion of our revenues to remain impacted throughout 2021.

~~During the three months ended March 31, 2021, 14~~

The increase of ~~our top 15 markets increased revenues, weighted average square foot occupancy,~~ realized annual rent per occupied square foot ~~and REVPAF over~~in the three and nine months ended ~~March 31,~~September 30, 2021 as compared to the same periods in 2020 was due to (i) a 23.5% and 28.1% year over year increase in average rates per square foot charged to new tenants moving in during the three and nine months, as a result of strong customer demand across all markets, combined with (ii) rate increases to existing tenants in 2021 as compared to the curtailed increases in 2020. ~~This growth occurred across broad markets notwithstanding those markets affected by new supply~~At September 30, 2021, annual contract rent per occupied square foot was 10.7% higher as compared to September 30, 2020.

We experienced high occupancy levels ~~and/or COVID related consumer restrictions.~~

throughout the first nine months of 2021. Our average square foot occupancy levels increased 1.4% and 2.3% on a year over year basis during the three and nine months ended September 30, 2021, respectively. At September 30, 2021, our square foot occupancy was 95.7%. The improvement in occupancy trends ~~in the three months ended March 31, 2021~~ was due primarily to improved trends in move-outs, with year over year move-outs down ~~11.3%~~6.1% and 8.9% in the three and nine months ended ~~March 31, 2021.~~September 30, 2021, respectively. This resulted in an increased average length of stay for the three and nine months ended ~~March 31,~~September 30, 2021. An increased average length of stay supports revenue growth, due to more long-term tenants who are eligible for rate increases, and a reduced requirement to replace vacating tenants with new tenants

which can lead to increased promotional costs and decrease our pricing leverage. ~~This trend~~With higher occupancy and pricing trends, we reduced promotional discounts given to ~~an increased length of stay became more pronounced over 2020~~new move-in customers for the three and ~~into~~nine months ended September 30, 2021 ~~due~~by 70.3% and 49.2%, respectively, as compared to the same periods in ~~part, we believe, to effects resulting from the COVID Pandemic such as less consumer mobility.~~

2020.

Demand historically has been higher in the summer months than in the winter months and, as a result, rental rates charged to new tenants have typically been higher in the summer months than in the winter months. Demand fluctuates due to various local and regional factors, including the overall economy. Demand into our system is also impacted by new supply of self-storage space as well as alternatives to self-storage.

‎

Late Charges and Administrative Fees

~~We experienced a 24.9% year over year reduction in late~~

Late charges and administrative fees ~~collected during~~increased 12.1% for the three months ended ~~March 31,~~September 30, 2021 as compared to the same period of 2020 due primarily to delinquent rent fees being waived in 2020 during the COVID Pandemic. Late charges and administrative fees decreased 5.4% year over year for the nine months ended September 30, 2021 due to (i) an acceleration in average collections whereby a greater percentage of tenants paid their monthly rent promptly to avoid the incurrence of such fees and ~~to a lesser extent~~ (ii) reduced move-in administrative fees due to lower move-ins.

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 ~~March 31, 2021.~~September 30, 2021 and 2020. 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,							Three Months Ended September 30,					Nine Months Ended September 30,
	2021		2020		Change			2021		2020		Change	2021		2020		Change
	(amounts in thousands, except for per
	square foot amounts)							(Amounts in thousands, except for per square foot amounts)

Tenants moving in during the period:	Tenants moving in during the period:						Tenants moving in during the period:
Average annual contract rent
per square foot	$	14.95	$	12.91		15.8%
Average annual contract rent per square foot							Average annual contract rent per square foot	$	18.47	$	14.95	23.5%	$	16.92	$	13.21	28.1%
Square footage		24,534		26,185		(6.3)%	Square footage	23,590		26,548		(11.1)%	71,356		80,138		(11.0)%
Contract revenue gained from move-ins							Contract revenue gained from move-ins	$	108,927	$	99,223	9.8%	$	905,508	$	793,967	14.0%
Promotional discounts given	$	16,505	$	20,748		(20.5)%	Promotional discounts given	$	5,858	$	19,697	(70.3)%	$	29,996	$	59,105	(49.2)%

Tenants moving out during the period:	Tenants moving out during the period:						Tenants moving out during the period:
Average annual contract rent
per square foot	$	16.26	$	15.84		2.7%
Average annual contract rent per square foot							Average annual contract rent per square foot	$	18.24	$	15.52	17.5%	$	17.21	$	15.52	10.9%
Square footage		21,842		24,620		(11.3)%	Square footage	24,885		26,496		(6.1)%	68,914		75,611		(8.9)%

Contract revenue lost from move-outs							Contract revenue lost from move-outs	$	113,476	$	102,804	10.4%	$	889,507	$	880,112	1.1%

Revenue Expectations

At ~~March 31,~~September 30, 2021, in place contractual rent was ~~4.6%~~11.9% higher on a year-over-year basis (comprised of a ~~3.6%~~1.2% increase in square foot occupancy and a ~~1.0%~~10.7% increase in annual contract rent per occupied foot).

For the remainder of 2021, we expect continued year-over-year revenue growth ~~over 2021~~ supported by ~~increased~~strength in rates as a result of stable customer demand and modest move out activity. There is more uncertainty in the level of positive growth during the second half of 2021 given challenging comparables over 2020 and risk that customer behavior (particularly the level of move-out activity) returns to pre-Pandemic historical levels.

Notwithstanding our expectations of continued positive revenue growth, we are in a time of significant uncertainty, and there are reasonably possible circumstances and events which could result in actual future revenues being significantly lower than our expectations, including the following:

Storage demand could decline or collection losses could increase due to increased recessionary circumstances, worsening of the COVID Pandemic, the potential confluence of higher seasonal influenza infections and COVID infections, or other factors.

~~The moderation of below-trend move-outs noted above could be sudden and dramatic, and/or disproportionally involve long-term tenants with higher rental rates.~~

~~It is possible that the COVID Pandemic could impact current seasonal demand trends in the short or long term, due to changes in certain factors impacting moving trends, such as potentially fewer~~

demand.

~~college students living on-campus in favor of online learning or an increase in working from home reducing the necessity of moving for employment reasons.~~

Analysis of Same Store Cost of Operations

Cost of operations (excluding depreciation and amortization) decreased ~~4.3%~~4.6% and 7.4% in the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to the same ~~period~~periods in 2020, due primarily to decreased ~~property tax,~~marketing, on-site property manager payroll, and ~~supervisory payroll; offset partially by increased share-based compensation and other direct~~ property ~~costs.~~

tax expense.

Property tax expense decreased ~~8.6%~~2.7% and 6.2% in the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to the same ~~period~~periods in 2020. In 2020 our property tax expense was recognized on an accelerated basis in each of the first three quarters. ~~For~~We expect decreases through the third quarter to be offset by an increase in the fourth quarter of 2021, ~~we expect our future quarterly tax expense to~~resulting in an approximate ~~our 2021 first quarter results, excluding property tax refunds recorded~~increase of 4.8% for the ~~three months ended March~~year ending December 31, 2021 ~~based on current property value assessments and property tax rates. We expect annualized 2021 property tax expense~~compared to ~~increase approximately 5.0% over~~

the same period in 2020, due primarily to higher assessed values and, to a lesser extent, increased tax rates. A summary of our 2020 actual and 2021 estimated quarterly property tax expense is presented below. ~~Amounts~~Amount for ~~each of~~ the three months ended ~~June 30, September 30 and~~ December 31, 2021 ~~are~~is based on our current estimates of 2021’s full-year property tax expense.


								Actual
			Actual			2021		2020
	2021		2020
	(Amounts in thousands)					(Amounts in thousands)
For the three months ended:					For the three months ended:
March 31	$	66,555	$	72,779	March 31	$	66,481	$	72,692

June 30		68,000		72,458	June 30	67,118		72,370

September 30		68,000		71,616	September 30	69,573		71,533

December 31		68,000		41,197	December 31	66,737		41,164
						$	269,909	$	257,759
	$	270,555	$	258,050

~~For the Three Months Ended March 31,~~

Number
Square
Realized Rent per
Realized Rent Per
Net Operating
of
Feet
Occupied Square Foot
Average Occupancy
Available Square Foot
Revenues ($000's)
Income ($000's)
Facilities
(millions)
2021
2020
Change
2021
2020
Change
2021
2020
Change
2021
2020
Change
2021
2020
Change
Los Angeles
214
15.2
$
26.45
$
26.04
1.6%
97.9%
95.2%
2.8%
$
25.89
$
24.79
4.4%
$
100,514
$
97,247
3.4%
$
82,219
$
78,476
4.8%
San Francisco
130
8.1
26.83
26.50
1.2%
97.5%
93.7%
4.1%
26.17
24.84
5.4%
53,906
51,610
4.4%
43,241
40,563
6.6%
New York
91
6.5
26.36
26.10
1.0%
96.0%
93.4%
2.8%
25.30
24.39
3.7%
42,105
41,134
2.4%
29,302
27,056
8.3%
Seattle-Tacoma
129
8.1
20.66
20.35
1.5%
94.9%
92.6%
2.5%
19.61
18.84
4.1%
29,647
28,808
2.9%
22,451
21,470
4.6%
Miami
89
5.5
20.46
20.14
1.6%
96.3%
92.7%
3.9%
19.70
18.67
5.5%
29,563
28,336
4.3%
22,009
19,439
13.2%
Washington DC
87
5.9
21.42
21.26
0.8%
95.1%
92.7%
2.6%
20.37
19.70
3.4%
28,687
28,148
1.9%
20,833
19,905
4.7%
Chicago
83
5.8
15.42
15.16
1.7%
94.9%
91.6%
3.6%
14.62
13.88
5.3%
30,751
29,584
3.9%
16,729
13,846
20.8%
Atlanta
103
6.6
13.38
13.33
0.4%
94.6%
92.0%
2.8%
12.65
12.26
3.2%
21,433
21,105
1.6%
15,518
15,071
3.0%
Dallas-Ft. Worth
92
6.4
13.59
13.51
0.6%
94.8%
92.0%
3.0%
12.89
12.44
3.6%
22,258
21,720
2.5%
15,129
13,846
9.3%
Houston
98
6.4
12.83
12.86
(0.2)%
93.4%
91.2%
2.4%
11.97
11.73
2.0%
19,850
19,676
0.9%
12,273
12,004
2.2%
Philadelphia
56
3.5
17.49
16.67
4.9%
96.7%
94.9%
1.9%
16.92
15.82
7.0%
15,521
14,730
5.4%
10,948
10,002
9.5%
Orlando-Daytona
50
3.8
13.73
13.71
0.1%
95.3%
93.6%
1.8%
13.09
12.84
1.9%
15,220
15,105
0.8%
10,822
10,417
3.9%
West Palm Beach
52
3.5
19.00
18.27
4.0%
96.4%
93.8%
2.8%
18.31
17.14
6.8%
13,505
12,759
5.8%
9,846
9,133
7.8%
Tampa
40
2.9
14.10
13.95
1.1%
95.6%
91.8%
4.1%
13.48
12.81
5.2%
12,155
11,690
4.0%
8,429
7,668
9.9%
Charlotte
70
4.5
11.41
11.25
1.4%
94.8%
91.1%
4.1%
10.81
10.24
5.6%
10,750
10,307
4.3%
7,863
7,389
6.4%
All other markets
894
56.2
14.52
14.17
2.5%
95.4%
93.0%
2.6%
13.85
13.18
5.1%
201,952
194,732
3.7%
139,193
131,217
6.1%
Totals
2,278
148.9
$
17.63
$
17.33
1.7%
95.6%
93.0%
2.8%
$
16.86
$
16.12
4.6%
$
647,817
$
626,691
3.4%
$
466,805
$
437,502
6.7%

DEVELOPED AND EXPANDED
FACILITIES (Continued)
Year Ended March 31,
2021
2020
Change (a)
(Amounts in thousands, except for number of facilities)
Annual contract rent per occupied square foot:
Developed in 2016
$
15.61
$
14.85
5.1%
Developed in 2017 - 2019
12.66
11.78
7.5%
Developed in 2020
11.20
-
-
Developed in 2021
14.25
-
-
Expansions completed before 2020
11.32
10.96
3.3%
Expansions completed in 2020 or 2021
12.42
14.40
(13.8)%
Expansions in process
17.98
18.89
(4.8)%
$
12.93
$
12.74
1.5%
Number of facilities:
Developed in 2016
16
16
-
Developed in 2017 - 2019
45
45
-
Developed in 2020
3
-
3
Developed in 2021
1
-
1
Expansions completed before 2020
44
44
-
Expansions completed in 2020 or 2021
10
10
-
Expansions in process
17
17
-
136
132
4
Net rentable square feet (c):
Developed in 2016
2,141
2,141
-
Developed in 2017 - 2019
5,166
5,166
-
Developed in 2020
347
-
347
Developed in 2021
200
-
200
Expansions completed before 2020
5,822
5,819
3
Expansions completed in 2020 or 2021
1,365
793
572
Expansions in process
1,027
1,054
(27)
16,068
14,973
1,095
As of
‎March 31, 2021
Costs to develop (in thousands):
Developed in 2016
$
257,585
Developed in 2017 - 2019
652,445
Developed in 2020
42,063
Developed in 2021
45,333
Expansions completed before 2020 (d)
381,940
Expansions completed in 2020 or 2021 (d)
96,780
$
1,476,146


	As of September 30, 2021
Costs to develop (in thousands):
Developed in 2016	$	257,585
Developed in 2017	239,871
Developed in 2018	262,187
Developed in 2019	150,387
Developed in 2020	42,063
Developed in 2021	89,125
Expansions completed before 2020 (d)	381,940
Expansions completed in 2020 or 2021 (d)	178,768
	$	1,601,926

(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 ~~16.1~~17.0 million net rentable square feet at ~~March 31,~~September 30, 2021, including ~~5.9~~6.0 million in Texas, ~~2.0~~2.6 million in Florida, ~~1.7~~1.9 million in California, ~~1.4~~1.5 million in Colorado, 1.1 million in Minnesota, 0.8 million in North Carolina, 0.6 million in Washington, 0.4 million in each of Missouri and Virginia, 0.3 million in each of Georgia, Michigan, New Jersey and South Carolina and ~~0.6~~0.5 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.

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, as well as the related construction and development overhead expenses included in general and administrative expense. ~~We believe the level of dilution incurred in 2020 and the first quarter of 2021 will continue at similar levels for the remainder of 2021.~~

Our existing unstabilized facilities continued to fill up in terms of occupancies consistent with our general expectations during the ~~three~~nine months ended ~~March 31,~~September 30, 2021, ~~despite the impact of the COVID Pandemic,~~ and we expect that trend to continue. Our unstabilized facilities are affected by the same market dynamics that affect our Same Store properties. Accordingly, whether we ultimately achieve our yield expectations, and the timeframe for reaching stabilized cash flows, depends largely upon the same factors affecting aggregate demand, move-ins, move-outs, and realized annual rent per occupied square foot for our Same Store Facilities as set forth under “Analysis of Same Store Revenue” above.

At ~~March 31,~~September 30, 2021, we had a development pipeline to develop 1621 new self-storage facilities and expand 2531 existing self-storage facilities, which will add approximately ~~3.4~~4.6 million net rentable square feet at a cost of ~~$510.3~~$730.6 million. ~~We have continued to add projects to our development pipeline in the three months ended March 31, 2021 despite the impact of the COVID Pandemic.~~ We expect to continue to seek to add projects to maintain a 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.

~~Newly Developed Facilities~~

The facilities included under “Developed in 2016” had high occupancies at March 31, 2021, but had 14.1% year over year revenue growth during the three months ended March 31, 2021 which exceeds the 3.4% increase in year over year revenue growth in the Same Store facilities. This outperformance relative to the Same Store Facilities reflects the maturity of the existing tenant base following attainment of high occupancy, illustrating the latter stage of the stabilization process noted above. The annualized yield on cost for these facilities, based upon the net operating income for the three months ended March 31, 2021 was 8.3%.

We typically underwrite new developments to stabilize at approximately an 8.0% NOI yield on cost. ~~We believe the 2017-2019~~Our developed facilities ~~in aggregate, will meet that target on stabilization and~~ have thus far ~~leased-up as expected. The occupancies of facilities developed in 2020 and the first three months of 2021 have~~ leased-up as expected and are at ~~the beginning~~various stages of their revenue stabilization periods. ~~We expect continued growth in these in the~~

~~remainder of 2021 and beyond as they continue to stabilize.~~ The actual annualized yields that we may ~~be achieved~~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, as well as the impact of the COVID Pandemic.~~

supply.

We have 1621 additional newly developed facilities in process, which will have a total of ~~1.4~~1.7 million net rentable square feet of storage space and have an aggregate development cost totaling approximately ~~$224.2~~$272.8 million. We expect these facilities to open over the next 18 to 24 months.

~~Expansions of Existing Facilities~~

The expansion of an existing facility involves the construction of new space on an existing facility, either on existing unused land or through the demolition of existing buildings in order to facilitate densification. The construction

costs for an expanded facility may include, in addition to adding space, adding amenities such as climate control to existing space, improving the visual appeal of the facility, and to a much lesser extent, the replacement of existing doors, roofs, and HVAC.

The return profile on the expansion of existing facilities differs from a new facility, due to a lack of land cost, and there can be less cash flow risk because we have more direct knowledge of the local demand for space on the site as compared to a new facility. However, many expansions involve the demolition of existing revenue-generating space with the loss of the related revenues during the construction and fill-up period.

The facilities under ~~“completed expansions”~~“expansions completed” represent those facilities where the expansions have been completed at ~~March 31, 2021.~~September 30, 2021 We incurred a total of ~~$478.7~~$560.7 million in direct cost to expand these facilities, demolished a total of 1.1 million net rentable square feet of storage space, and built a total of ~~5.2~~5.3 million net rentable square feet of new storage space.

The facilities under “expansions in process” represent those facilities where development is in process at ~~March 31,~~September 30, 2021 or which will commence construction by December 31, 2021. We have a pipeline to add a total of ~~2.0~~2.9 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate direct development cost of ~~$286.1~~$457.8 million.

Analysis of Depreciation and Amortization of Developed and Expanded Facilities

Depreciation and amortization with respect to the Developed and Expanded Facilities totaled ~~$16.3~~$15.0 million and ~~$13.2~~$46.1 million for the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to $13.6 million and ~~2020, respectively.~~$39.8 million for the same periods in 2020. These amounts represent depreciation of the developed buildings and, in the case of the expanded facilities, the legacy depreciation on the existing buildings. With respect to the Developed and Expanded Facilities completed at ~~March 31,~~September 30, 2021, depreciation of buildings is expected to aggregate approximately ~~$45.6~~$62.5 million in the year ending December 31, 2021. There will be additional depreciation of new buildings that are developed or expanded in the remainder of 2021.

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, 2019, due primarily to casualty events such as hurricanes, floods, and fires.

The other non-same store facilities have an aggregate of ~~1.9~~2.2 million net rentable square feet, including ~~0.5~~0.6 million in Texas, 0.3 million in California, 0.2 million in each of ~~California,~~ Georgia, Ohio and Tennessee and ~~0.6~~0.7 million in other states.

The net operating income for these facilities was ~~$3.2~~$4.9 million and ~~$3.0~~$13.4 million in the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to $3.8 million and ~~2020, respectively.~~$11.0 million for the same periods in 2020. During the three and nine months ended ~~March 31,~~September 30, 2021, ~~and 2020,~~ the average occupancy for these facilities totaled ~~87.4%,~~93.1% and ~~77.4%~~91.8%, respectively, as compared to 89.8% and 84.2% for the same periods in 2020, and the realized rent per occupied square feet totaled ~~$12.56~~$14.27 and ~~$12.89, respectively.~~

$13.66, respectively, as compared to $12.77 and $13.31 for the same periods in 2020.

Over the longer term, we expect the growth in operations of these facilities to be similar to that of our Same Store facilities. However, in the short run, year over year comparisons will vary due to the impact of the underlying events which resulted in these facilities being classified as non-same store.

Depreciation and amortization with respect to the other non-same store facilities totaled ~~$7.4~~$4.9 million and ~~$5.1~~$15.6 million for the three and nine months ended ~~March 31,~~September 30, 2021, respectively, as compared to $5.4 million and $16.1 million for the same periods in 2020. We expect that depreciation for the remainder of 2021 will approximate the level experienced in the ~~three~~nine months ended ~~March 31,~~September 30, 2021.

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 in the U.S., management of property owned by unrelated third parties, and the sale of merchandise at our self-storage facilities. The following table sets forth our ancillary operations:


								Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,							2021		2020		Change		2021		2020		Change
	2021		2020		Change
	(Amounts in thousands)							(Amounts in thousands)
Revenues:							Revenues:
Tenant reinsurance premiums	$	39,681	$	34,696	$	4,985	Tenant reinsurance premiums	$	42,774	$	38,698	$	4,076	$	123,271	$	110,327	$	12,944
Merchandise		7,036		7,185		(149)	Merchandise	7,384		8,010		(626)		21,932		23,005		(1,073)
Third party property management		4,198		2,962		1,236	Third party property management	4,263		3,888		375		12,455		10,508		1,947
Total revenues		50,915		44,843		6,072	Total revenues	54,421		50,596		3,825		157,658		143,840		13,818

Cost of Operations:
Cost of operations:							Cost of operations:
Tenant reinsurance		7,824		6,782		1,042	Tenant reinsurance	11,029		6,544		4,485		26,115		20,611		5,504
Merchandise		3,966		4,163		(197)	Merchandise	4,476		4,850		(374)		13,148		13,510		(362)
Third party property management		4,528		2,627		1,901	Third party property management	4,230		3,780		450		12,781		9,960		2,821
Total cost of operations		16,318		13,572		2,746	Total cost of operations	19,735		15,174		4,561		52,044		44,081		7,963

Net operating income
Net operating income (loss):							Net operating income (loss):
Tenant reinsurance		31,857		27,914		3,943	Tenant reinsurance	31,745		32,154		(409)		97,156		89,716		7,440
Merchandise		3,070		3,022		48	Merchandise	2,908		3,160		(252)		8,784		9,495		(711)
Third party property management		(330)		335		(665)	Third party property management	33		108		(75)		(326)		548		(874)

Total net operating income	$	34,597	$	31,271	$	3,326	Total net operating income	$	34,686	$	35,422	$	(736)	$	105,614	$	99,759	$	5,855

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, 2020, 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 Form 10-K for the year ended December 31, 2020.

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.


Maryland			95-3551121
~~Maryland~~	~~95-3551121~~
(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)


	Three Months Ended March 31,
	2021		2020

Revenues:
Self-storage facilities	$	716,347	$	674,201
Ancillary operations		50,915		44,843
		767,262		719,044

Expenses:
Self-storage cost of operations		212,105		211,096
Ancillary cost of operations		16,318		13,572
Depreciation and amortization		146,859		135,900
General and administrative		19,574		17,868
Interest expense		15,250		13,621
		410,106		392,057

Other increases to net income:
Interest and other income		2,852		6,119
Equity in earnings of unconsolidated real estate entities		19,456		23,968
Foreign currency exchange gain		45,385		8,945
Gain on sale of real estate		9,413		1,117
Net income		434,262		367,136
Allocation to noncontrolling interests		(1,226)		(980)
Net income allocable to Public Storage shareholders		433,036		366,156
Allocation of net income to:
Preferred shareholders		(46,080)		(52,005)
Restricted share units		(1,146)		(1,017)
Net income allocable to common shareholders	$	385,810	$	313,134
Net income per common share:
Basic	$	2.21	$	1.80
Diluted	$	2.21	$	1.79

Basic weighted average common shares outstanding		174,611		174,446
Diluted weighted average common shares outstanding		174,840		174,616


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Revenues:
Self-storage facilities	$	840,510	$	683,949	$	2,333,850	$	2,022,692
Ancillary operations	54,421		50,596		157,658		143,840
	894,931		734,545		2,491,508		2,166,532

Expenses:
Self-storage cost of operations	216,999		209,179		631,699		637,229
Ancillary cost of operations	19,735		15,174		52,044		44,081
Depreciation and amortization	188,552		138,333		508,139		411,851
General and administrative	31,682		18,262		78,996		53,234
Interest expense	23,736		14,282		60,980		42,048
	480,704		395,230		1,331,858		1,188,443

Other increases (decreases) to net income:
Interest and other income	3,356		7,192		9,321		18,976
Equity in earnings of unconsolidated real estate entities	32,860		21,240		81,382		62,863
Foreign currency exchange gain (loss)	40,906		(41,900)		73,584		(52,250)
Gain on sale of real estate	279		—		13,683		1,117
Net income	491,628		325,847		1,337,620		1,008,795
Allocation to noncontrolling interests	(1,537)		(980)		(4,067)		(2,849)
Net income allocable to Public Storage shareholders	490,091		324,867		1,333,553		1,005,946
Allocation of net income to:
Preferred shareholders	(46,237)		(53,892)		(138,500)		(158,849)
Preferred shareholders - redemptions (Note 8)	—		(23,313)		(16,989)		(38,382)
Restricted share units	(1,527)		(746)		(3,678)		(2,546)
Net income allocable to common shareholders	$	442,327	$	246,916	$	1,174,386	$	806,169
Net income per common share:
Basic	$	2.53	$	1.41	$	6.72	$	4.62
Diluted	$	2.52	$	1.41	$	6.70	$	4.62

Basic weighted average common shares outstanding	174,926		174,503		174,787		174,481
Diluted weighted average common shares outstanding	175,806		174,626		175,398		174,606


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Net income	$	491,628	$	325,847	$	1,337,620	$	1,008,795
Foreign currency exchange (loss) gain on investment in Shurgard	(6,898)		10,792		(9,579)		2,546
Total comprehensive income	484,730		336,639		1,328,041		1,011,341
Allocation to noncontrolling interests	(1,537)		(980)		(4,067)		(2,849)
Comprehensive income allocable to Public Storage shareholders	$	483,193	$	335,659	$	1,323,974	$	1,008,492


	For the Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	434,262	$	367,136
Adjustments to reconcile net income to net cash flows
from operating activities:
Gain on real estate investment sales		(9,413)		(1,117)
Depreciation and amortization		146,859		135,900
Equity in earnings of unconsolidated real estate entities		(19,456)		(23,968)
Distributions from cumulative equity in earnings of unconsolidated
real estate entities		15,487		15,443
Foreign currency exchange gain		(45,385)		(8,945)
Share-based compensation expense		14,407		5,677
Other		(27,599)		(27,176)
Total adjustments		74,900		95,814
Net cash flows from operating activities		509,162		462,950
Cash flows from investing activities:
Capital expenditures to maintain real estate facilities		(36,551)		(57,504)
Development and expansion of real estate facilities		(61,213)		(47,616)
Acquisition of real estate facilities and intangible assets		(203,108)		(186,183)
Real estate deposits and costs for pending acquisitions		(114,415)		-
Proceeds from sale of real estate investments		11,562		1,399
Net cash flows used in investing activities		(403,725)		(289,904)
Cash flows from financing activities:
Repayments on notes payable		(527)		(497)
Issuance of notes payable, net of issuance costs		496,235		545,151
Issuance of common shares		4,703		1,763
Redemption of preferred shares		(300,000)		-
Cash paid upon vesting of restricted share units		(7,284)		(8,507)
Acquisition of noncontrolling interests		(33)		-
Contributions by noncontrolling interests		1,380		566
Distributions paid to preferred shareholders,
common shareholders and restricted share unitholders		(396,176)		(401,807)
Distributions paid to noncontrolling interests		(1,269)		(1,172)
Net cash flows (used in) provided by financing activities		(202,971)		135,497
Net cash flows (used in) from operating, investing, and financing activities		(97,534)		308,543
Net effect of foreign exchange impact on cash and equivalents, including
restricted cash		178		31
(Decrease) increase in cash and equivalents, including restricted cash	$	(97,356)	$	308,574


	March 31,		December 31,
	2021		2020
ASSETS		(Unaudited)

Cash and equivalents	$	159,622	$	257,560
Real estate facilities, at cost:
Land		4,432,749		4,375,588
Buildings		13,211,931		12,997,039
		17,644,680		17,372,627
Accumulated depreciation		(7,286,332)		(7,152,135)
		10,358,348		10,220,492
Construction in process		201,316		188,079
		10,559,664		10,408,571

Investments in unconsolidated real estate entities		771,075		773,046
Goodwill and other intangible assets, net		205,061		204,654
Other assets		286,313		172,715
Total assets	$	11,981,735	$	11,816,546


LIABILITIES AND EQUITY

Notes payable	$	2,996,111	$	2,544,992
Preferred shares called for redemption (Note 8)		-		300,000
Accrued and other liabilities		368,309		394,655
Total liabilities		3,364,420		3,239,647

Commitments and contingencies (Note 12)

Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized,
151,700 shares issued (in series) and outstanding,
at liquidation preference		3,792,500		3,792,500
Common Shares, $0.10 par value, 650,000,000 shares authorized,
174,651,004 shares issued and outstanding (174,581,742 shares at
December 31, 2020)		17,465		17,458
Paid-in capital		5,715,254		5,707,101
Accumulated deficit		(877,931)		(914,791)
Accumulated other comprehensive loss		(49,341)		(43,401)
Total Public Storage shareholders’ equity		8,597,947		8,558,867
Noncontrolling interests		19,368		18,032
Total equity		8,617,315		8,576,899
Total liabilities and equity	$	11,981,735	$	11,816,546


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS	(Unaudited)

Cash and equivalents	$	958,247	$	257,560
Real estate facilities, at cost:
Land	4,864,520		4,375,588
Buildings	15,592,003		12,997,039
	20,456,523		17,372,627
Accumulated depreciation	(7,598,496)		(7,152,135)
	12,858,027		10,220,492
Construction in process	228,379		188,079
	13,086,406		10,408,571

Investments in unconsolidated real estate entities	779,272		773,046
Goodwill and other intangible assets, net	258,949		204,654
Other assets	201,812		172,715
Total assets	$	15,284,686	$	11,816,546

LIABILITIES AND EQUITY

Notes payable	$	5,773,190	$	2,544,992
Preferred shares called for redemption (Note 8)	—		300,000
Accrued and other liabilities	474,198		394,655
Total liabilities	6,247,388		3,239,647

Commitments and contingencies (Note 12)	0		0

Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 160,600 shares issued (in series) and outstanding, (151,700 at December 31, 2020) at liquidation preference	4,015,000		3,792,500
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,048,260 shares issued and outstanding (174,581,742 shares at December 31, 2020)	17,505		17,458
Paid-in capital	5,808,943		5,707,101
Accumulated deficit	(771,114)		(914,791)
Accumulated other comprehensive loss	(52,980)		(43,401)
Total Public Storage shareholders’ equity	9,017,354		8,558,867
Noncontrolling interests	19,944		18,032
Total equity	9,037,298		8,576,899
Total liabilities and equity	$	15,284,686	$	11,816,546


									Accumulated		Total
	Cumulative								Other		Public Storage
	Preferred		Common		Paid-in		Accumulated		Comprehensive		Shareholders’		Noncontrolling		Total
	Shares		Shares		Capital		Deficit		Loss		Equity		Interests		Equity
Balances at December 31, 2020	$	3,792,500	$	17,458	$	5,707,101	$	(914,791)	$	(43,401)	$	8,558,867	$	18,032	$	8,576,899
Issuance of common shares in connection with
share-based compensation (69,262 shares) (Note 10)		-		7		4,696		-		-		4,703		-		4,703
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)		-		-		3,489		-		-		3,489		-		3,489
Acquisition of noncontrolling interests		-		-		(32)		-		-		(32)		(1)		(33)
Contributions by noncontrolling interests		-		-		-		-		-		-		1,380		1,380
Net income		-		-		-		434,262		-		434,262		-		434,262
Net income allocated to noncontrolling interests		-		-		-		(1,226)		-		(1,226)		1,226		-
Distributions to:
Preferred shareholders (Note 8)		-		-		-		(46,080)		-		(46,080)		-		(46,080)
Noncontrolling interests		-		-		-		-		-		-		(1,269)		(1,269)
Common shareholders and restricted share
unitholders ($2.00 per share)		-		-		-		(350,096)		-		(350,096)		-		(350,096)
Other comprehensive loss (Note 2)		-		-		-		-		(5,940)		(5,940)		-		(5,940)
Balances at March 31, 2021	$	3,792,500	$	17,465	$	5,715,254	$	(877,931)	$	(49,341)	$	8,597,947	$	19,368	$	8,617,315


	For the Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	1,337,620	$	1,008,795
Adjustments to reconcile net income to net cash flows from operating activities:
Gain on sale of real estate	(13,683)		(1,117)
Depreciation and amortization	508,139		411,851
Equity in earnings of unconsolidated real estate entities	(81,382)		(62,863)
Distributions from cumulative equity in earnings of unconsolidated real estate entities	59,251		52,499
Foreign currency exchange (gain) loss	(73,584)		52,250
Share-based compensation expense	47,647		21,535
Other	30,712		47,390
Total adjustments	477,100		521,545
Net cash flows from operating activities	1,814,720		1,530,340
Cash flows from investing activities:
Capital expenditures to maintain real estate facilities	(169,103)		(132,969)
Development and expansion of real estate facilities	(201,527)		(132,476)
Acquisition of real estate facilities and intangible assets	(2,845,284)		(282,417)
Distributions in excess of cumulative equity in earnings from unconsolidated real estate entities	8,765		10,803
Repayment of note receivable	—		7,509
Proceeds from sale of real estate investments	16,070		1,399
Net cash flows used in investing activities	(3,191,079)		(528,151)
Cash flows from financing activities:
Repayments on notes payable	(1,585)		(1,505)
Issuance of notes payable, net of issuance costs	3,300,160		545,151
Issuance of preferred shares	725,311		773,741
Issuance of common shares	81,412		5,505
Redemption of preferred shares	(825,000)		(1,220,000)
Cash paid upon vesting of restricted share units	(10,438)		(9,704)
Acquisition of noncontrolling interests	(33)		(33)
Contributions by noncontrolling interests	2,359		2,291
Distributions paid to preferred shareholders, common shareholders and restricted share unitholders	(1,189,876)		(1,208,321)
Distributions paid to noncontrolling interests	(4,513)		(3,968)
Net cash flows provided by financing activities	2,077,797		(1,116,843)
Net cash flows from operating, investing, and financing activities	701,438		(114,654)
Net effect of foreign exchange impact on cash and equivalents, including restricted cash	313		(192)
Increase (decrease) in cash and equivalents, including restricted cash	$	701,751	$	(114,846)


	Three Months Ended
	March 31,
	2021		2020

Weighted average common shares and equivalents
outstanding:
Basic weighted average common
shares outstanding		174,611		174,446
Net effect of dilutive stock options -
based on treasury stock method		229		170
Diluted weighted average common
shares outstanding		174,840		174,616


	Nine Months Ended September 30, 2021
				~~Three Months Ended~~
~~March 31, 2021~~
(Amounts in thousands)
	Operating facilities, at cost:
	Beginning balance	$	17,372,627
	Capital expenditures to maintain real estate facilities	177,641		~~35,793~~
	Acquisitions	2,741,952		~~196,626~~
	Dispositions	(6,783)		~~(5,760)~~
	Developed or expanded facilities opened for operation	171,086		~~45,394~~
	Ending balance	20,456,523		~~17,644,680~~
	Accumulated depreciation:
	Beginning balance			(7,152,135)
	Depreciation expense	(450,757)		~~(137,808)~~
	Dispositions	4,396		~~3,611~~
	Ending balance	(7,598,496)		~~(7,286,332)~~
	Construction in process:
	Beginning balance	188,079		~~188,079~~
	Costs incurred to develop and expand real estate facilities	211,386		~~58,631~~
	Developed or expanded facilities opened for operation	(171,086)		~~(45,394)~~
	Ending balance	228,379		~~201,316~~
	Total real estate facilities at ~~March 31,~~September 30, 2021	$	13,086,406 ~~10,559,664~~


	Investments in Unconsolidated Real Estate
	Entities at
	March 31, 2021		December 31, 2020

PSB	$	431,252	$	431,963
Shurgard		339,823		341,083
Total	$	771,075	$	773,046


	Investments in Unconsolidated Real Estate Entities at
	September 30, 2021		December 31, 2020

PSB	$	451,336	$	431,963
Shurgard	327,936		341,083
Total	$	779,272	$	773,046


			Amounts at September 30, 2021
	Coupon Rate	Effective Rate	Principal		Unamortized Costs		Book Value		Fair Value

			($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022	2.370%	2.483%	$	500,000	$	(495)	$	499,505	$	509,800
Notes due April 23, 2024	SOFR+0.47%	0.596%	700,000		(1,804)		698,196		704,200
Notes due February 15, 2026	0.875%	1.030%	500,000		(3,246)		496,754		493,515
Notes due September 15, 2027	3.094%	3.218%	500,000		(3,152)		496,848		546,757
Notes due May 1, 2028	1.850%	1.962%	650,000		(4,446)		645,554		653,619
Notes due May 1, 2029	3.385%	3.459%	500,000		(2,334)		497,666		549,252
Notes due May 1, 2031	2.300%	2.419%	650,000		(6,554)		643,446		658,400
			4,000,000		(22,031)		3,977,969		4,115,543

Euro Denominated Unsecured Debt
Notes due April 12, 2024	1.540%	1.540%	115,896		—		115,896		120,868
Notes due November 3, 2025	2.175%	2.175%	280,484		—		280,484		303,644
Notes due September 9, 2030	0.500%	0.640%	811,272		(10,010)		801,262		795,777
Notes due January 24, 2032	0.875%	0.978%	579,480		(5,528)		573,952		581,103
			1,787,132		(15,538)		1,771,594		1,801,392

Mortgage Debt, secured by 27 real estate facilities with a net book value of $96.6 million	3.905%	3.903%	23,627		—		23,627		24,939

			$	5,810,759	$	(37,569)	$	5,773,190	$	5,941,874


	Amounts at
	December 31, 2020
	Book Value		Fair Value
	($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022	$	499,109	$	517,419
Notes due September 15, 2027	496,452		560,833
Notes due May 1, 2029	497,433		574,833
	1,492,994		1,653,085

Euro Denominated Unsecured Debt
Notes due April 12, 2024	122,646		129,192
Notes due November 3, 2025	296,821		323,552
Notes due January 24, 2032	607,301		634,389
	1,026,768		1,087,133

Mortgage Debt	25,230		26,958

	$	2,544,992	$	2,767,176


				At September 30, 2021			At December 31, 2020
Series	Earliest Redemption Date	Dividend Rate		Shares Outstanding	Liquidation Preference		Shares Outstanding	Liquidation Preference

				(Dollar amounts in thousands)
Series C	5/17/2021	5.125	%	—	$	—	8,000	$	200,000
Series D	7/20/2021	4.950	%	—	—		13,000	325,000
Series E	10/14/2021	4.900	%	14,000	350,000		14,000	350,000
Series F	6/2/2022	5.150	%	11,200	280,000		11,200	280,000
Series G	8/9/2022	5.050	%	12,000	300,000		12,000	300,000
Series H	3/11/2024	5.600	%	11,400	285,000		11,400	285,000
Series I	9/12/2024	4.875	%	12,650	316,250		12,650	316,250
Series J	11/15/2024	4.700	%	10,350	258,750		10,350	258,750
Series K	12/20/2024	4.750	%	9,200	230,000		9,200	230,000
Series L	6/17/2025	4.625	%	22,600	565,000		22,600	565,000
Series M	8/14/2025	4.125	%	9,200	230,000		9,200	230,000
Series N	10/6/2025	3.875	%	11,300	282,500		11,300	282,500
Series O	11/17/2025	3.900	%	6,800	170,000		6,800	170,000
Series P	6/16/2026	4.000	%	24,150	603,750		—	—
Series Q	8/17/2026	3.950	%	5,750	143,750		—	—
Total Preferred Shares				160,600	$	4,015,000	151,700	$	3,792,500


Series	Earliest Redemption Date	Dividend Rate	Shares Outstanding	Liquidation Preference

			(Dollar amounts in thousands)
Series C	5/17/2021	5.125%	8,000	$	200,000
Series D	7/20/2021	4.950%	13,000		325,000
Series E	10/14/2021	4.900%	14,000		350,000
Series F	6/2/2022	5.150%	11,200		280,000
Series G	8/9/2022	5.050%	12,000		300,000
Series H	3/11/2024	5.600%	11,400		285,000
Series I	9/12/2024	4.875%	12,650		316,250
Series J	11/15/2024	4.700%	10,350		258,750
Series K	12/20/2024	4.750%	9,200		230,000
Series L	6/17/2025	4.625%	22,600		565,000
Series M	8/14/2025	4.125%	9,200		230,000
Series N	10/6/2025	3.875%	11,300		282,500
Series O	11/17/2025	3.900%	6,800		170,000
Total Preferred Shares			151,700	$	3,792,500


			Amounts at March 31, 2021
	Coupon	Effective			Unamortized			Book		Fair
	Rate	Rate		Principal	Costs			Value		Value
			($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022	2.370%	2.483%	$	500,000	$	(759)	$	499,241	$	513,985
Notes due February 15, 2026	0.875%	1.030%		500,000		(3,617)		496,383		486,291
Notes due September 15, 2027	3.094%	3.218%		500,000		(3,416)		496,584		542,441
Notes due May 1, 2029	3.385%	3.459%		500,000		(2,489)		497,511		546,753
				2,000,000		(10,281)		1,989,719		2,089,470

Euro Denominated Unsecured Debt
Notes due April 12, 2024	1.540%	1.540%		117,277		-		117,277		123,425
Notes due November 3, 2025	2.175%	2.175%		283,827		-		283,827		310,117
Notes due January 24, 2032	0.875%	0.978%		586,386		(5,796)		580,590		588,263
				987,490		(5,796)		981,694		1,021,805

Mortgage Debt, secured by 27
real estate facilities with a net
book value of $101.2 million	3.944%	3.933%		24,698		-		24,698		26,092

			$	3,012,188	$	(16,077)	$	2,996,111	$	3,137,367


	Unsecured Debt		Mortgage Debt		Total

Remainder of 2021	$	—	$	251	$	251
2022	500,000		2,574		502,574
2023	—		19,219		19,219
2024	815,896		124		816,020
2025	280,484		131		280,615
Thereafter	4,190,752		1,328		4,192,080
	$	5,787,132	$	23,627	$	5,810,759
Weighted average effective rate	1.8%		3.9%		1.8%


	Unsecured		Mortgage
	Debt		Debt		Total


Remainder of 2021	$	-	$	1,321	$	1,321
2022		500,000		2,574		502,574
2023		-		19,219		19,219
2024		117,277		124		117,401
2025		283,827		131		283,958
Thereafter		2,086,386		1,329		2,087,715
	$	2,987,490	$	24,698	$	3,012,188
Weighted average effective rate		2.2%		3.9%		2.2%


	Three Months Ended
	March 31,
					Percentage
	2021		2020		Change

FFO per share	$	3.08	$	2.61	18.0%
Eliminate the per share impact of items
excluded from Core FFO, including
our equity share from investments:
Foreign currency exchange gain		(0.26)		(0.05)
Other items		-		0.02
Core FFO per share	$	2.82	$	2.58	9.3%


	For the Quarter Ended
	March 31		June 30		September 30		December 31		Entire Year

	(Amounts in thousands, except for per square foot amounts)
Total revenues:
2021	$	647,817
2020	$	626,691	$	614,418	$	629,169	$	638,149	$	2,508,427

Total cost of operations:
2021	$	181,012
2020	$	189,189	$	192,345	$	184,329	$	146,584	$	712,447

Property taxes:
2021	$	66,555
2020	$	72,778	$	72,458	$	71,616	$	41,197	$	258,049

Repairs and maintenance:
2021	$	13,031
2020	$	12,713	$	11,670	$	12,973	$	13,485	$	50,841

Marketing:
2021	$	14,571
2020	$	14,808	$	17,630	$	16,158	$	13,526	$	62,122

REVPAF:
2021	$	16.86
2020	$	16.12	$	16.01	$	16.39	$	16.62	$	16.29

Weighted average realized annual rent per occupied square foot:
2021	$	17.63
2020	$	17.33	$	17.00	$	17.16	$	17.46	$	17.24

Weighted average occupancy levels for the period:
2021		95.6%
2020		93.0%		94.2%		95.5%		95.2%		94.5%


	As of September 30, 2021		For the Three Months Ended September 30,
	Number of Facilities	Square Feet (millions)	Realized Rent per Occupied Square Foot						Average Occupancy						Realized Rent per Available Square Foot
			2021		2020		Change		2021		2020		Change		2021		2020		Change
Los Angeles	213	15.2	$	27.98	$	25.96	7.8	%	98.4	%	97.4	%	1.0	%	$	27.53	$	25.29	8.9	%
San Francisco	130	8.1	28.57		26.37		8.3	%	97.1	%	97.5	%	(0.4)	%	27.74		25.71		7.9	%
New York	90	6.4	27.94		25.71		8.7	%	96.5	%	96.7	%	(0.2)	%	26.98		24.86		8.5	%
Seattle-Tacoma	87	5.9	22.69		20.26		12.0	%	96.1	%	95.3	%	0.8	%	21.80		19.32		12.8	%
Miami	83	5.8	23.19		19.40		19.5	%	97.5	%	95.5	%	2.1	%	22.60		18.52		22.0	%
Washington DC	89	5.5	23.44		20.98		11.7	%	95.4	%	95.6	%	(0.2)	%	22.37		20.06		11.5	%
Chicago	129	8.1	17.31		14.78		17.1	%	96.2	%	95.6	%	0.6	%	16.66		14.13		17.9	%
Atlanta	98	6.4	15.09		12.99		16.2	%	97.1	%	93.5	%	3.9	%	14.65		12.15		20.6	%
Dallas-Ft. Worth	102	6.6	15.29		13.28		15.1	%	96.2	%	93.7	%	2.7	%	14.71		12.45		18.2	%
Houston	92	6.4	14.12		12.46		13.3	%	94.7	%	92.8	%	2.0	%	13.37		11.56		15.7	%
Orlando-Daytona	70	4.5	15.29		13.49		13.3	%	96.3	%	94.7	%	1.7	%	14.72		12.78		15.2	%
Philadelphia	56	3.5	19.09		16.95		12.6	%	97.5	%	97.0	%	0.5	%	18.62		16.45		13.2	%
West Palm Beach	40	2.9	21.73		17.87		21.6	%	96.6	%	95.3	%	1.4	%	21.00		17.03		23.3	%
Tampa	52	3.5	16.12		13.52		19.2	%	96.7	%	94.3	%	2.5	%	15.59		12.75		22.3	%
Charlotte	50	3.8	12.94		10.97		18.0	%	96.7	%	94.1	%	2.8	%	12.51		10.32		21.2	%
All other markets	893	56.1	16.08		14.13		13.8	%	96.8	%	95.5	%	1.4	%	15.57		13.50		15.3	%
Totals	2,274	148.7	$	19.30	$	17.16	12.5	%	96.8	%	95.5	%	1.4	%	$	18.68	$	16.39	14.0	%



	Number	Square	Realized Rent per								Realized Rent Per										Net Operating
	of	Feet	Occupied Square Foot					Average Occupancy			Available Square Foot					Revenues ($000's)					Income ($000's)
	Facilities	(millions)		2021		2020	Change	2021	2020	Change		2021		2020	Change		2021		2020	Change		2021		2020	Change
Los Angeles	214	15.2	$	26.45	$	26.04	1.6%	97.9%	95.2%	2.8%	$	25.89	$	24.79	4.4%	$	100,514	$	97,247	3.4%	$	82,219	$	78,476	4.8%
San Francisco	130	8.1		26.83		26.50	1.2%	97.5%	93.7%	4.1%		26.17		24.84	5.4%		53,906		51,610	4.4%		43,241		40,563	6.6%
New York	91	6.5		26.36		26.10	1.0%	96.0%	93.4%	2.8%		25.30		24.39	3.7%		42,105		41,134	2.4%		29,302		27,056	8.3%
Seattle-Tacoma	129	8.1		20.66		20.35	1.5%	94.9%	92.6%	2.5%		19.61		18.84	4.1%		29,647		28,808	2.9%		22,451		21,470	4.6%
Miami	89	5.5		20.46		20.14	1.6%	96.3%	92.7%	3.9%		19.70		18.67	5.5%		29,563		28,336	4.3%		22,009		19,439	13.2%
Washington DC	87	5.9		21.42		21.26	0.8%	95.1%	92.7%	2.6%		20.37		19.70	3.4%		28,687		28,148	1.9%		20,833		19,905	4.7%
Chicago	83	5.8		15.42		15.16	1.7%	94.9%	91.6%	3.6%		14.62		13.88	5.3%		30,751		29,584	3.9%		16,729		13,846	20.8%
Atlanta	103	6.6		13.38		13.33	0.4%	94.6%	92.0%	2.8%		12.65		12.26	3.2%		21,433		21,105	1.6%		15,518		15,071	3.0%
Dallas-Ft. Worth	92	6.4		13.59		13.51	0.6%	94.8%	92.0%	3.0%		12.89		12.44	3.6%		22,258		21,720	2.5%		15,129		13,846	9.3%
Houston	98	6.4		12.83		12.86	(0.2)%	93.4%	91.2%	2.4%		11.97		11.73	2.0%		19,850		19,676	0.9%		12,273		12,004	2.2%
Philadelphia	56	3.5		17.49		16.67	4.9%	96.7%	94.9%	1.9%		16.92		15.82	7.0%		15,521		14,730	5.4%		10,948		10,002	9.5%
Orlando-Daytona	50	3.8		13.73		13.71	0.1%	95.3%	93.6%	1.8%		13.09		12.84	1.9%		15,220		15,105	0.8%		10,822		10,417	3.9%
West Palm Beach	52	3.5		19.00		18.27	4.0%	96.4%	93.8%	2.8%		18.31		17.14	6.8%		13,505		12,759	5.8%		9,846		9,133	7.8%
Tampa	40	2.9		14.10		13.95	1.1%	95.6%	91.8%	4.1%		13.48		12.81	5.2%		12,155		11,690	4.0%		8,429		7,668	9.9%
Charlotte	70	4.5		11.41		11.25	1.4%	94.8%	91.1%	4.1%		10.81		10.24	5.6%		10,750		10,307	4.3%		7,863		7,389	6.4%
All other markets	894	56.2		14.52		14.17	2.5%	95.4%	93.0%	2.6%		13.85		13.18	5.1%		201,952		194,732	3.7%		139,193		131,217	6.1%
Totals	2,278	148.9	$	17.63	$	17.33	1.7%	95.6%	93.0%	2.8%	$	16.86	$	16.12	4.6%	$	647,817	$	626,691	3.4%	$	466,805	$	437,502	6.7%


	For the Three Months Ended September 30,
	Revenues ($000's)						Direct Expenses ($000's)						Indirect Expenses ($000's)						Net Operating Income ($000's)
	2021		2020		Change		2021		2020		Change		2021		2020		Change		2021		2020		Change
Los Angeles	$	106,385	$	97,749	8.8	%	$	14,802	$	15,875	(6.8)	%	$	2,503	$	2,351	6.5	%	$	89,080	$	79,523	12.0	%
San Francisco	57,351		52,987		8.2	%	9,243		9,124		1.3	%	1,604		1,501		6.9	%	46,504		42,362		9.8	%
New York	44,463		40,787		9.0	%	10,589		11,598		(8.7)	%	1,304		1,201		8.6	%	32,570		27,988		16.4	%
Seattle-Tacoma	32,951		29,251		12.6	%	5,620		6,091		(7.7)	%	999		1,015		(1.6)	%	26,332		22,145		18.9	%
Miami	33,813		27,763		21.8	%	7,437		7,976		(6.8)	%	959		960		(0.1)	%	25,417		18,827		35.0	%
Washington DC	31,506		28,253		11.5	%	6,622		7,006		(5.5)	%	929		879		5.7	%	23,955		20,368		17.6	%
Chicago	35,024		29,753		17.7	%	13,904		14,020		(0.8)	%	1,396		1,298		7.6	%	19,724		14,435		36.6	%
Atlanta	24,695		20,524		20.3	%	4,414		5,001		(11.7)	%	1,094		1,013		8.0	%	19,187		14,510		32.2	%
Dallas-Ft. Worth	25,106		21,283		18.0	%	5,836		6,747		(13.5)	%	1,037		984		5.4	%	18,233		13,552		34.5	%
Houston	22,119		19,145		15.5	%	7,021		6,921		1.4	%	1,014		954		6.3	%	14,084		11,270		25.0	%
Orlando-Daytona	17,036		14,824		14.9	%	3,309		3,992		(17.1)	%	792		705		12.3	%	12,935		10,127		27.7	%
Philadelphia	17,053		15,075		13.1	%	3,728		4,030		(7.5)	%	651		663		(1.8)	%	12,674		10,382		22.1	%
West Palm Beach	15,436		12,530		23.2	%	3,362		3,258		3.2	%	510		497		2.6	%	11,564		8,775		31.8	%
Tampa	13,999		11,476		22.0	%	3,127		3,442		(9.2)	%	575		510		12.7	%	10,297		7,524		36.9	%
Charlotte	12,404		10,264		20.8	%	2,421		2,420		—	%	511		481		6.2	%	9,472		7,363		28.6	%
All other markets	226,709		196,622		15.3	%	48,377		52,167		(7.3)	%	9,919		9,388		5.7	%	168,413		135,067		24.7	%
Totals	$	716,050	$	628,286	14.0	%	$	149,812	$	159,668	(6.2)	%	$	25,797	$	24,400	5.7	%	$	540,441	$	444,218	21.7	%


	As of September 30, 2021
Costs to acquire (in thousands):
2019 Acquisitions	$	429,850
2020 Acquisitions	796,065
2021 Acquisitions	2,845,284
	$	4,071,199


ACQUIRED FACILITIES (Continued)	As of ‎March 31, 2021
Costs to acquire (in thousands):
2019 Acquisitions	$	429,850
2020 Acquisitions		796,065
2021 Acquisitions		203,108
	$	1,429,023


DEVELOPED AND EXPANDED	DEVELOPED AND EXPANDED						DEVELOPED AND EXPANDED
FACILITIES	Three Months Ended March 31,						FACILITIES	Three Months Ended September 30,						Nine Months Ended September 30,
	2021		2020		Change (a)			2021		2020		Change (a)		2021		2020		Change (a)
	($ amounts in thousands, except for per square foot amounts)
								($ amounts in thousands, except for per square foot amounts)
Revenues (b):							Revenues (b):
Developed in 2016	$	7,772	$	6,809	$	963	Developed in 2016	$	9,241	$	7,237	$	2,004	$	25,459	$	20,942	$	4,517
Developed in 2017 - 2019		14,434		10,637		3,797
Developed in 2017							Developed in 2017	7,317		5,520		1,797		20,021		15,761		4,260
Developed in 2018							Developed in 2018	7,569		5,267		2,302		20,391		14,467		5,924
Developed in 2019							Developed in 2019	3,313		1,831		1,482		8,470		4,349		4,121
Developed in 2020		369		-		369	Developed in 2020	1,062		79		983		2,093		86		2,007
Developed in 2021		4		-		4	Developed in 2021	558		—		558		706		—		706
Expansions completed before 2020		13,722		10,684		3,038	Expansions completed before 2020	17,568		11,978		5,590		46,770		33,738		13,032
Expansions completed in 2020 or 2021		2,298		1,948		350	Expansions completed in 2020 or 2021	6,554		3,935		2,619		16,178		11,601		4,577
Expansions in process		4,340		4,623		(283)	Expansions in process	1,918		2,528		(610)		5,872		7,505		(1,633)
Total revenues		42,939		34,701		8,238	Total revenues	55,100		38,375		16,725		145,960		108,449		37,511

Cost of operations (b):							Cost of operations (b):
Developed in 2016		2,458		2,516		(58)	Developed in 2016	2,384		2,480		(96)		7,214		7,584		(370)
Developed in 2017 - 2019		6,473		6,200		273
Developed in 2017							Developed in 2017	2,540		2,702		(162)		7,461		7,685		(224)
Developed in 2018							Developed in 2018	2,669		2,605		64		7,774		7,993		(219)
Developed in 2019							Developed in 2019	1,222		1,159		63		3,917		3,546		371
Developed in 2020		399		-		399	Developed in 2020	432		157		275		1,275		209		1,066
Developed in 2021		83		-		83	Developed in 2021	400		—		400		890		—		890
Expansions completed before 2020		6,081		5,362		719	Expansions completed before 2020	6,323		6,456		(133)		18,512		17,571		941
Expansions completed in 2020 or 2021		1,385		824		561	Expansions completed in 2020 or 2021	2,615		1,559		1,056		6,981		4,560		2,421
Expansions in process		1,259		1,190		69	Expansions in process	474		617		(143)		1,548		1,868		(320)
Total cost of operations		18,138		16,092		2,046	Total cost of operations	19,059		17,735		1,324		55,572		51,016		4,556

Net operating income (loss):							Net operating income (loss):
Developed in 2016		5,314		4,293		1,021	Developed in 2016	6,857		4,757		2,100		18,245		13,358		4,887
Developed in 2017 - 2019		7,961		4,437		3,524
Developed in 2017							Developed in 2017	4,777		2,818		1,959		12,560		8,076		4,484
Developed in 2018							Developed in 2018	4,900		2,662		2,238		12,617		6,474		6,143
Developed in 2019							Developed in 2019	2,091		672		1,419		4,553		803		3,750
Developed in 2020		(30)		-		(30)	Developed in 2020	630		(78)		708		818		(123)		941
Developed in 2021		(79)		-		(79)	Developed in 2021	158		—		158		(184)		—		(184)
Expansions completed before 2020		7,641		5,322		2,319	Expansions completed before 2020	11,245		5,522		5,723		28,258		16,167		12,091
Expansions completed in 2020 or 2021		913		1,124		(211)	Expansions completed in 2020 or 2021	3,939		2,376		1,563		9,197		7,041		2,156
Expansions in process		3,081		3,433		(352)	Expansions in process	1,444		1,911		(467)		4,324		5,637		(1,313)
Net operating income		24,801		18,609		6,192	Net operating income	36,041		20,640		15,401		90,388		57,433		32,955
Depreciation and
amortization expense		(16,335)		(13,168)		(3,167)
Depreciation and amortization expense							Depreciation and amortization expense	(14,977)		(13,596)		(1,381)		(46,126)		(39,796)		(6,330)
Net income	$	8,466	$	5,441	$	3,025	Net income	$	21,064	$	7,044	$	14,020	$	44,262	$	17,637	$	26,625

At March 31:
Square foot occupancy:
Developed in 2016		94.0%		84.8%		10.8%
Developed in 2017 - 2019		90.6%		71.8%		26.2%
Developed in 2020		55.7%		-		-
Developed in 2021		13.1%		-		-
Expansions completed before 2020		86.0%		67.5%		27.4%
Expansions completed in 2020 or 2021		58.9%		67.3%		(12.5)%
Expansions in process		91.0%		90.4%		0.7%
		85.4%		73.1%		16.8%


DEVELOPED AND EXPANDED FACILITIES (Continued)
	As of September 30,
	2021		2020		Change (a)

	($ amounts in thousands, except for per square foot amounts)
Square foot occupancy:
Developed in 2016	93.0%		91.8%		1.3%
Developed in 2017	91.7%		89.2%		2.8%
Developed in 2018	90.5%		87.1%		3.9%
Developed in 2019	89.9%		84.7%		6.1%
Developed in 2020	90.0%		31.7%		183.9%
Developed in 2021	44.0%		—		—
Expansions completed before 2020	89.9%		82.3%		9.2%
Expansions completed in 2020 or 2021	78.3%		67.1%		16.7%
Expansions in process	82.5%		82.9%		(0.5)%
	87.3%		83.0%		5.2%
Annual contract rent per occupied square foot:
Developed in 2016	$	18.26	$	14.73	24.0%
Developed in 2017	15.35		12.08		27.1%
Developed in 2018	16.18		11.99		34.9%
Developed in 2019	13.65		8.64		58.0%
Developed in 2020	15.16		8.96		69.2%
Developed in 2021	13.64		—		—
Expansions completed before 2020	13.43		10.25		31.0%
Expansions completed in 2020 or 2021	15.33		15.14		1.3%
Expansions in process	20.12		18.59		8.2%
	$	15.15	$	11.99	26.4%
Number of facilities:
Developed in 2016	16		16		—
Developed in 2017	16		16		—
Developed in 2018	18		18		—
Developed in 2019	11		11		—
Developed in 2020	3		2		1
Developed in 2021	4		—		4
Expansions completed before 2020	44		44		—
Expansions completed in 2020 or 2021	19		18		1
Expansions in process	8		8		—
	139		133		6
Net rentable square feet (in thousands) (c):
Developed in 2016	2,141		2,141		—
Developed in 2017	2,040		2,040		—
Developed in 2018	2,069		2,069		—
Developed in 2019	1,057		1,057		—
Developed in 2020	347		246		101
Developed in 2021	502		—		502
Expansions completed before 2020	5,822		5,818		4
Expansions completed in 2020 or 2021	2,576		1,619		957
Expansions in process	446		479		(33)
	17,000		15,469		1,531


DEVELOPED AND EXPANDED
FACILITIES (Continued)	Year Ended March 31,
	2021		2020		Change (a)
	(Amounts in thousands, except for number of facilities)
Annual contract rent per occupied square foot:
Developed in 2016	$	15.61	$	14.85		5.1%
Developed in 2017 - 2019		12.66		11.78		7.5%
Developed in 2020		11.20		-		-
Developed in 2021		14.25		-		-
Expansions completed before 2020		11.32		10.96		3.3%
Expansions completed in 2020 or 2021		12.42		14.40		(13.8)%
Expansions in process		17.98		18.89		(4.8)%
	$	12.93	$	12.74		1.5%
Number of facilities:
Developed in 2016		16		16		-
Developed in 2017 - 2019		45		45		-
Developed in 2020		3		-		3
Developed in 2021		1		-		1
Expansions completed before 2020		44		44		-
Expansions completed in 2020 or 2021		10		10		-
Expansions in process		17		17		-
		136		132		4

Net rentable square feet (c):
Developed in 2016		2,141		2,141		-
Developed in 2017 - 2019		5,166		5,166		-
Developed in 2020		347		-		347
Developed in 2021		200		-		200
Expansions completed before 2020		5,822		5,819		3
Expansions completed in 2020 or 2021		1,365		793		572
Expansions in process		1,027		1,054		(27)
		16,068		14,973		1,095

	As of ‎March 31, 2021
Costs to develop (in thousands):
Developed in 2016	$	257,585
Developed in 2017 - 2019		652,445
Developed in 2020		42,063
Developed in 2021		45,333
Expansions completed before 2020 (d)		381,940
Expansions completed in 2020 or 2021 (d)		96,780
	$	1,476,146


				Remainder
				of
		Total		2021		2022		2023		2024		2025		Thereafter


Interest and principal payments
on debt (1)	$	3,379,057	$	48,430	$	561,848	$	69,580	$	165,781	$	329,533	$	2,203,885

Leases and other commitments (2)		76,573		3,160		3,901		3,614		3,639		3,740		58,519

Construction commitments (3)		110,993		90,154		20,839		-		-		-		-

Total	$	3,566,623	$	141,744	$	586,588	$	73,194	$	169,420	$	333,273	$	2,262,404


	Total		Remainder of 2021		2022		2023		2024		2025		Thereafter

Interest and principal payments on debt (1)	$	6,412,827	$	24,531	$	596,188	$	103,920	$	897,029	$	357,120	$	4,434,039
Leases commitments (2)	66,325		668		3,122		2,966		2,934		2,897		53,738
Construction commitments (3)	134,064		38,313		93,871		1,880		—		—		—
Total	$	6,613,216	$	63,512	$	693,181	$	108,766	$	899,963	$	360,017	$	4,487,777


	Remainder of
	2021			2022		2023		2024		2025		Thereafter		Total

Fixed rate debt	$	1,321	$	502,574	$	19,219	$	117,401	$	283,958	$	2,087,715	$	3,012,188


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

‎

	~~PUBLIC STORAGE~~
	~~INDEX TO EXHIBITS (1)~~
	~~(Items 15(a)(3) and 15(c))~~

3.1	~~Restated Declaration of Trust of Public Storage. Filed herewith.~~

~~3.2~~	~~Amended and Restated Bylaws of Bylaws of Public Storage. Filed herewith.~~

~~10.1~~	Articles Supplementary for Public Storage ~~2021 Equity and Performance-Based Incentive Compensation Plan.~~3.950% Cumulative Preferred Shares, Series Q. Filed as ~~Appendix A~~Exhibit 3.1 to the Company’s ~~2021 Proxy Statement~~Current Report on Form 8-K dated ~~March 16,~~August 10, 2021 and incorporated by reference herein.

4.1		Eighth Supplemental Indenture, dated as of September 9, 2021, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 9, 2021 and incorporated by reference herein.

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. Filed herewith.~~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.
‎

4
		DATED: ~~April 28,~~November 1, 2021
		PUBLIC STORAGE
		By:
	~~By:~~ /s/ H. Thomas Boyle
			H. Thomas Boyle ‎Senior Vice President & Chief Financial Officer ‎(Principal financial officer and duly authorized officer)
‎