Public Storage

ITEM 1A. Risk Factors

In addition to the other information in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in our Annual Report on Form 10-K filed for the year ended December 31, 20245, in Part I, Item 1A, Risk Factors, and in our other filings with the SEC. These factors may materially affect our business, financial condition and operating results. There have been no material changes to the risk factors relating to the Company disclosed in our Annual Report on Form 10-K for the year ended December 31, 20245, other than those disclosed below.

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

Risks Relating to the Mergers

Failure to complete the pending Mergers could have an adverse effect on us.

If the Mergers are not completed, our business, financial condition, results of operations and growth

prospects may be adversely affected and, without realizing any of the benefits of having completed the Mergers, we will be subject to a number of risks, including the following:

the market price of our common shares or preferred shares could decline;

we will have incurred substantial costs relating to the Mergers, such as legal, accounting, financial advisor, filing, printing and mailing fees and integration costs that have already been incurred or will continue to be incurred until the closing of the Mergers, which could adversely affect our business, financial condition, results of operations and growth prospects;

we could be subject to litigation related to any failure to complete the Mergers or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement;

we will not realize the benefit of the time and resources, financial and otherwise, committed by management to matters relating to the Mergers that could have been devoted to pursuing other beneficial opportunities; and

we may experience reputational harm due to the adverse perception of any failure to successfully complete the Mergers or negative reactions from the financial markets or from our customers, vendors, employees and other commercial relationships.

Any of these risks could adversely affect our business, financial condition, results of operations and growth prospects. Similarly, delays in the completion of the Mergers could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with delay and uncertainty about completion of the Mergers and could adversely affect our business, financial condition, results of operations and growth prospects after the Mergers.

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We may not realize the anticipated benefits and synergies from the pending Mergers.

The Mergers involve the combination of two companies that currently operate as independent public companies. While we and NSA will continue to operate independently until the completion of the Mergers, the success of the Mergers will depend, in part, on our ability to realize the anticipated benefits from successfully combining our and NSAs businesses. We plan on devoting substantial management attention and resources to integrating our and NSAs business practices and operations so that we can fully realize the anticipated benefits of the Mergers. Nevertheless, the business and assets acquired may not be successful or continue to grow at the same rate as when operated independently or may require greater resources and investments than originally anticipated. The Mergers could also result in the assumption of unknown or contingent liabilities. Potential difficulties we may encounter in the integration process include the following:

the inability to successfully combine the business of NSA with ours in a manner that permits us to achieve the cost savings anticipated to result from the Mergers, which would result in some anticipated benefits of the Mergers not being realized in the time frame currently anticipated or at all;

the failure to integrate operations and internal systems, programs and controls;

the inability to successfully realize the anticipated value from some of NSAs assets;

lost sales, loss of customers, joint venture partners and other commercial relationships;

the complexities associated with managing the combined company, including the complexity of managing the newly formed JV;

the additional complexities of combining two companies with different histories, cultures, markets, strategies and customer bases;

the failure to retain key employees of either of the two companies that may be difficult to replace;

the disruption of each companys ongoing businesses or inconsistencies in services, standards, controls, procedures and policies;

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Mergers; and

performance shortfalls at one or both of the two companies as a result of the diversion of managements attention caused by completing the Mergers and integrating NSAs and our operations.

Any of these risks could adversely affect our ability to maintain relationships with customers, vendors, employees and other commercial relationships. As a result, the anticipated benefits of the Mergers may not be realized fully within the expected time frame or at all or may take longer to realize or cost more than expected, which could adversely affect our business, financial condition, results of operations and growth prospects. In addition, changes in laws and regulations could adversely impact our business, financial condition, results of operations and growth prospects.

We expect to incur substantial expenses related to the Mergers.

We expect to incur substantial expenses in completing the Mergers and integrating the business, operations, practices, policies and procedures of NSA. While we have assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond our control that could affect the total amount or the timing of integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. The expenses in connection with the Mergers are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

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Following the Mergers, we will have a substantial amount of indebtedness and may need to incur more in the future.

Our total indebtedness as of March 31, 2026 was $10.1 billion. This amount excludes the outstanding indebtedness of NSA, which may be repaid or remain outstanding (or a combination thereof) in connection with the Mergers. The instruments governing our existing indebtedness permit us to incur substantial additional debt, including secured debt, and we may satisfy its capital and liquidity needs through additional borrowings. A high level of indebtedness would require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, thereby reducing the funds available to implement its business strategy and make distributions to our shareholders. A high level of indebtedness on an absolute basis or as a ratio to its cash flow could also have the following consequences:

potential limits on our ability to adjust rapidly to changing market conditions and vulnerability in the event of a downturn in general economic conditions or in the real estate industry;

potential impairment of our ability to obtain additional financing to execute on our business strategy; and

potential downgrade in the rating of our debt securities by one or more rating agencies, which could have the effect of, among other things, limiting our access to capital and increasing its cost of borrowing.

In addition, from time to time, NSA and we mortgage certain of their properties to secure payment of indebtedness. If we are unable to meet its mortgage payments, then the encumbered properties could be foreclosed upon or transferred to the mortgagee with a resulting loss of income and asset value.

Completion of the Mergers is subject to many conditions, and if any of these conditions are not satisfied or waived, the Mergers may not be completed on the currently contemplated timeline or terms, or at all.

The consummation of the Mergers is subject to the satisfaction or waiver of certain conditions, including among others: (i) approval of the NSA Merger by NSAs shareholders; (ii) approval of the Mergers and the other transactions contemplated by the Merger Agreement by holders of NSA OP Units; (iii) the effectiveness of a registration statement on Form S-4 filed by us becoming effective in accordance with the provisions of the Securities Act; (iv) the absence of a law or order restraining, enjoining, rendering illegal or otherwise prohibiting the consummation of the Mergers; and (v) the common shares and the preferred shares of the Company to be issued in the Mergers being approved for listing on the New York Stock Exchange, (vi) the newly formed JV having been formed and (vii) other customary conditions. We cannot provide assurance that the conditions to completing the Mergers will be satisfied or waived, and accordingly, that the Mergers will be completed on the terms or timeline that the parties anticipate or at all. If any condition to the Mergers is not satisfied, it could delay or prevent the Mergers from occurring, which could negatively impact the price of our common shares and preferred shares and our business, financial condition, results of operations and growth prospects, including incurring significant acquisition costs that we would be unable to recover, negative publicity and a negative impression of us in the investment community.

Holders of our common shares will be diluted by the Mergers, if consummated.

The Mergers will dilute the ownership position of holders of our common shares. Consequently, our holders of common shares, as a general matter, will have less voting control and influence over our management and policies after the effective time of the Mergers than they currently exercise over our management and policies.

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An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement, or the transactions contemplated by the Merger Agreement, could have a material adverse impact on our business and our ability to consummate the Mergers.

Transactions like the Mergers are frequently the subject of litigation or other legal proceedings, including actions alleging that either partys board of trustees breached its respective duties to its shareholders or other equityholders by entering into a merger agreement, by failing to obtain a greater value in a transaction for its shareholders or any other claims (contractual or otherwise) arising out of a merger or the transactions related thereto. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse impact on our ability to complete the Mergers or their respective businesses, financial conditions, results of operations and growth prospects, including through the possible diversion of either companys resources or distraction of key personnel.