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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ____________ to ____________.
Commission File Number: 001-33519
Public Storage
(Exact name of registrant as specified in its charter)
Maryland95-3551121
(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)
Registrant’s telephone number, including area code: (818) 244-8080.
Former name, former address and former fiscal, if changed since last report: N/A
Securities registered pursuant to Section 12b of the Act:
Title of ClassTrading SymbolName of each exchange on which registered
Common Shares, $0.10 par valuePSANew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.150% Cum Pref Share, Series F, $0.01 par valuePSAPrFNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.050% Cum Pref Share, Series G, $0.01 par valuePSAPrGNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.600% Cum Pref Share, Series H, $0.01 par valuePSAPrHNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.875% Cum Pref Share, Series I, $0.01 par valuePSAPrINew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.700% Cum Pref Share, Series J, $0.01 par valuePSAPrJNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.750% Cum Pref Share, Series K, $0.01 par valuePSAPrKNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.625% Cum Pref Share, Series L, $0.01 par valuePSAPrLNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.125% Cum Pref Share, Series M, $0.01 par valuePSAPrMNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.875% Cum Pref Share, Series N, $0.01 par valuePSAPrNNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.900% Cum Pref Share, Series O, $0.01 par valuePSAPrONew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series P, $0.01 par valuePSAPrPNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.950% Cum Pref Share, Series Q, $0.01 par valuePSAPrQNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series R, $0.01 par valuePSAPrRNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.100% Cum Pref Share, Series S, $0.01 par valuePSAPrSNew York Stock Exchange
0.875% Senior Notes due 2032PSA32New York Stock Exchange
0.500% Senior Notes due 2030PSA30New 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.
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).
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 filerAccelerated
filer
Non-accelerated filerSmaller reporting companyEmerging growth company
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 No
Indicate the number of the registrant’s outstanding common shares of beneficial interest, as of October 27, 2022:
Common Shares of beneficial interest, $0.10 par value per share – 175,638,388 shares



PUBLIC STORAGE
INDEX
PART IFINANCIAL INFORMATIONPages
Item 1.Consolidated Financial Statements (Unaudited) 
 Consolidated Balance Sheets
 Consolidated Statements of Income
 Consolidated Statements of Comprehensive Income
 Consolidated Statements of Equity and Redeemable Noncontrolling Interests
4-7
 Consolidated Statements of Cash Flows
8-9
 Condensed Notes to Consolidated Financial Statements
10-23
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
24-51
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II
OTHER INFORMATION (Items 3, 4 and 5 are not applicable)
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits





PUBLIC STORAGE
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

 September 30,
2022
December 31,
2021
(Unaudited)
ASSETS  
    
Cash and equivalents$883,787 $734,599 
Real estate facilities, at cost:
Land5,240,841 5,134,060 
Buildings18,535,053 17,673,773 
23,775,894 22,807,833 
Accumulated depreciation (8,346,598)(7,773,308)
15,429,296 15,034,525 
Construction in process406,354 272,471 
15,835,650 15,306,996 
Investments in unconsolidated real estate entities252,648 828,763 
Goodwill and other intangible assets, net239,811 302,894 
Other assets239,024 207,656 
Total assets $17,450,920 $17,380,908 
     
LIABILITIES AND EQUITY    
    
Notes payable$6,740,451 $7,475,279 
Accrued and other liabilities589,712 482,091 
Total liabilities7,330,163 7,957,370 
    
Commitments and contingencies (Note 14)
  
  
Redeemable noncontrolling interests 68,249 
     
Equity:    
Public Storage shareholders’ equity:    
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 174,000 shares issued (in series) and outstanding, (164,000 at December 31, 2021) at liquidation preference
4,350,000 4,100,000 
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,336,452 shares issued and outstanding (175,134,455 shares at December 31, 2021)
17,534 17,513 
Paid-in capital 5,878,739 5,821,667 
Accumulated deficit (122,631)(550,416)
Accumulated other comprehensive loss(96,470)(53,587)
Total Public Storage shareholders’ equity 10,027,172 9,335,177 
Noncontrolling interests93,585 20,112 
Total equity10,120,757 9,355,289 
Total liabilities, redeemable noncontrolling interests and equity$17,450,920 $17,380,908 

See accompanying notes.
1


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
(Unaudited)

 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Revenues:
Self-storage facilities $1,027,374 $840,510 $2,917,675 $2,333,850 
Ancillary operations 60,757 54,421 175,946 157,658 
1,088,131 894,931 3,093,621 2,491,508 
Expenses:
Self-storage cost of operations 255,470 216,999 738,953 631,699 
Ancillary cost of operations 21,572 19,735 54,297 52,044 
Depreciation and amortization 220,772 188,552 661,608 508,139 
General and administrative 29,501 31,682 81,401 78,996 
Interest expense 34,113 23,736 100,178 60,980 
 561,428 480,704 1,636,437 1,331,858 
Other increases to net income:
Interest and other income 12,736 3,356 26,394 9,321 
Equity in earnings of unconsolidated real estate entities 8,180 32,860 100,129 81,382 
Foreign currency exchange gain100,170 40,906 237,270 73,584 
Gain on sale of real estate 1,503 279 1,503 13,683 
Gain on sale of equity investment in PS Business Parks, Inc.2,128,860  2,128,860  
Net income 2,778,152 491,628 3,951,340 1,337,620 
Allocation to noncontrolling interests (9,158)(1,537)(14,553)(4,067)
Net income allocable to Public Storage shareholders 2,768,994 490,091 3,936,787 1,333,553 
Allocation of net income to:
Preferred shareholders(48,678)(46,237)(145,716)(138,500)
Preferred shareholders - redemptions   (16,989)
Restricted share units (8,155)(1,527)(11,405)(3,678)
Net income allocable to common shareholders$2,712,161 $442,327 $3,779,666 $1,174,386 
Net income per common share:
Basic$15.47 $2.53 $21.57 $6.72 
Diluted$15.38 $2.52 $21.44 $6.70 
Basic weighted average common shares outstanding 175,283174,926175,227174,787
Diluted weighted average common shares outstanding176,328175,806176,325175,398

See accompanying notes.
2


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)

 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net income $2,778,152 $491,628 $3,951,340 $1,337,620 
Foreign currency exchange loss on investment in Shurgard(17,253)(6,898)(42,883)(9,579)
Total comprehensive income 2,760,899 484,730 3,908,457 1,328,041 
Allocation to noncontrolling interests (9,158)(1,537)(14,553)(4,067)
Comprehensive income allocable to Public Storage shareholders$2,751,741 $483,193 $3,893,904 $1,323,974 

See accompanying notes.
3


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Three Months Ended September 30, 2022
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss
Total
Public Storage Shareholders' Equity
Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balances at June 30, 2022
$4,350,000 $17,524 $5,848,632 $(182,213)$(79,217)$9,954,726 $93,622 $10,048,348 $ 
Issuance of common shares in connection with share-based compensation (97,189 shares)
— 10 16,445 — — 16,455 — 16,455 — 
Taxes withheld upon net share settlement of restricted share units— — (779)— — (779)— (779)— 
Share-based compensation expense— — 14,441 — — 14,441 — 14,441 — 
Contributions by noncontrolling interests— — — — — — 561 561 — 
Net income — — — 2,778,152 — 2,778,152 — 2,778,152 — 
Net income allocated to noncontrolling interests — — — (9,158)— (9,158)9,158 — — 
Distributions to:
Preferred shareholders (Note 9) — — — (48,678)— (48,678)— (48,678)— 
Noncontrolling interests — — — — — — (9,756)(9,756)— 
Common shareholders and restricted share unitholders ($15.15 per share) (Note 9)
— — — (2,660,734)— (2,660,734)— (2,660,734)— 
Other comprehensive loss— — — — (17,253)(17,253)— (17,253)— 
Balances at September 30, 2022
$4,350,000 $17,534 $5,878,739 $(122,631)$(96,470)$10,027,172 $93,585 $10,120,757 $ 
See accompanying notes.
4


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Three Months Ended September 30, 2021
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss
Total
Public Storage Shareholders' Equity
Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
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
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— — — (46,237)— (46,237)— (46,237)— 
Noncontrolling interests — — — — — — (1,706)(1,706)— 
Common shareholders and restricted share unitholders ($2.00 per share)
— — — (351,226)— (351,226)— (351,226)— 
Other comprehensive loss— — — — (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 $ 
See accompanying notes.
5


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Nine Months Ended September 30, 2022
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss
Total
Public Storage Shareholders' Equity
Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balances at December 31, 2021
$4,100,000 $17,513 $5,821,667 $(550,416)$(53,587)$9,335,177 $20,112 $9,355,289 $68,249 
Issuance of 10,000 preferred shares (Note 9)
250,000 — (7,168)— — 242,832 — 242,832 — 
Issuance of common shares in connection with share-based compensation (201,997 shares) (Note 11)
— 21 27,994 — — 28,015 — 28,015 — 
Taxes withheld upon net share settlement of restricted share units (Note 11)— — (12,989)— — (12,989)— (12,989)— 
Share-based compensation expense (Note 11)— — 49,235 — — 49,235 — 49,235 — 
Contributions by noncontrolling interests— — — — — — 6,698 6,698 15,426 
Reclassification from redeemable noncontrolling interests to noncontrolling interests83,826 83,826 (83,826)
Net income — — — 3,951,340 — 3,951,340 — 3,951,340 — 
Net income allocated to noncontrolling interests — — — (14,553)— (14,553)13,893 (660)660 
Distributions to:
Preferred shareholders (Note 9)— — — (145,716)— (145,716)— (145,716)— 
Noncontrolling interests — — — — — — (30,944)(30,944)(509)
Common shareholders and restricted share unitholders ($19.15 per share) (Note 9)
— — — (3,363,286)— (3,363,286)— (3,363,286)— 
Other comprehensive loss— — — — (42,883)(42,883)— (42,883)— 
Balances at September 30, 2022
$4,350,000 $17,534 $5,878,739 $(122,631)$(96,470)$10,027,172 $93,585 $10,120,757 $ 
See accompanying notes.
6


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Nine Months Ended September 30, 2021
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss
Total
Public Storage Shareholders' Equity
Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
                 
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 29,900 preferred shares
747,500 — (22,189)— — 725,311 — 725,311 — 
Redemption and shares called for redemption of 21,000 preferred shares
(525,000)— — — — (525,000)— (525,000)— 
Issuance of common shares in connection with share-based compensation (466,518 shares)
— 47 81,365 — — 81,412 — 81,412 — 
Share-based compensation expense, net of cash paid in lieu of common shares
— — 42,698 — — 42,698 — 42,698 — 
Acquisition of noncontrolling interests— — (32)— — (32)(1)(33)— 
Contributions by noncontrolling interests— — — — — — 2,359 2,359 — 
Net income — — — 1,337,620 — 1,337,620 — 1,337,620 — 
Net income allocated to noncontrolling interests — — — (4,067)— (4,067)4,067 — — 
Distributions to:
Preferred shareholders— — — (138,500)— (138,500)— (138,500)— 
Noncontrolling interests — — — — — — (4,513)(4,513)— 
Common shareholders and restricted share unitholders ($6.00 per share)
— — — (1,051,376)— (1,051,376)— (1,051,376)— 
Other comprehensive loss— — — — (9,579)(9,579)— (9,579)— 
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 $ 

See accompanying notes.
7


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 For the Nine Months Ended September 30,
 20222021
Cash flows from operating activities:    
Net income $3,951,340 $1,337,620 
Adjustments to reconcile net income to net cash flows from operating activities:
Gain on sale of equity investment in PS Business Parks, Inc.(2,128,860) 
Gain on sale of real estate(1,503)(13,683)
Depreciation and amortization661,608 508,139 
Equity in earnings of unconsolidated real estate entities(100,129)(81,382)
Distributions from cumulative equity in earnings of unconsolidated real estate entities134,460 59,251 
Unrealized foreign currency exchange gain(236,698)(73,584)
Share-based compensation expense44,597 47,647 
Other 55,975 30,712 
Total adjustments (1,570,550)477,100 
Net cash flows from operating activities 2,380,790 1,814,720 
Cash flows from investing activities:
Capital expenditures to maintain real estate facilities(337,896)(169,103)
Development and expansion of real estate facilities(231,483)(201,527)
Acquisition of real estate facilities and intangible assets(529,357)(2,845,284)
Distributions in excess of cumulative equity in earnings from unconsolidated real estate entities13,670 8,765 
Proceeds from sale of real estate investments1,543 16,070 
Proceeds from sale of equity investment in PS Business Parks, Inc.2,636,011  
Net cash flows from (used in) investing activities 1,552,488 (3,191,079)
Cash flows from financing activities:
Repayments on notes payable(502,270)(1,585)
Issuance of notes payable, net of issuance costs 3,300,160 
Issuance of preferred shares 242,832 725,311 
Issuance of common shares in connection with share-based compensation27,913 81,412 
Redemption of preferred shares  (825,000)
Taxes paid upon net share settlement of restricted share units(12,989)(10,438)
Acquisition of noncontrolling interests  (33)
Contributions by noncontrolling interests 1,659 2,359 
Distributions paid to preferred shareholders, common shareholders and restricted share unitholders(3,508,581)(1,189,876)
Distributions paid to noncontrolling interests (31,453)(4,513)
Net cash flows (used in) from financing activities (3,782,889)2,077,797 
Net cash flows from operating, investing, and financing activities 150,389 701,438 
Net effect of foreign exchange impact on cash and equivalents, including restricted cash 313 
Increase in cash and equivalents, including restricted cash $150,389 $701,751 
See accompanying notes.
8


PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 For the Nine Months Ended September 30,
 20222021
Cash and equivalents, including restricted cash at beginning of the period:
Cash and equivalents $734,599 $257,560 
Restricted cash included in other assets26,691 25,040 
$761,290 $282,600 
Cash and equivalents, including restricted cash at end of the period:
Cash and equivalents $883,787 $958,247 
Restricted cash included in other assets27,892 26,104 
 $911,679 $984,351 
Supplemental schedule of non-cash investing and financing activities:
Costs incurred during the period remaining unpaid at period end for:
Capital expenditures to maintain real estate facilities $(14,254)$(18,243)
Construction or expansion of real estate facilities(71,006)(39,305)
Real estate acquired in exchange for noncontrolling interests(19,865) 

See accompanying notes.
9


PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)


1.Description of the Business
Public Storage (referred to herein as “the Company,” “we,” “us,” or “our”), a Maryland real estate investment trust (“REIT”), was organized in 1980. Our principal business activities include the ownership and operation of self-storage facilities that offer storage spaces for lease, generally on a month-to-month basis, for personal and business use, ancillary activities such as tenant reinsurance, merchandise sales, and third party management, as well as the acquisition and development of additional self-storage space.
At September 30, 2022, we had direct and indirect equity interests in 2,836 self-storage facilities (with approximately 202.2 million net rentable square feet) located in 40 states in the United States (“U.S.”) operating under the Public Storage® name, and 1.2 million net rentable square feet of commercial and retail space.
At September 30, 2022, we owned a 35% common equity interest in Shurgard Self Storage SA (“Shurgard”), a public company traded on the Euronext Brussels under the “SHUR” symbol, which owned 259 self-storage facilities (with approximately 14 million net rentable square feet) located in seven Western European countries, all operating under the Shurgard® name.
On July 20, 2022, in connection with the closing of PS Business Parks, Inc.’s (“PSB”) merger transaction with affiliates of Blackstone Real Estate (“Blackstone”), we completed the sale of our 41% common equity interest in PSB in its entirety. Prior to the merger transaction, PSB was a REIT traded on the New York Stock Exchange under the “PSB” symbol, which owned commercial properties, primarily multi-tenant industrial, flex, and office space. Refer to Note 4. Investments in Unconsolidated Real Estate Entities for transaction information and our accounting treatment of the sale.
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
We have prepared the accompanying interim consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Accounting Standards Codification of the Financial Accounting Standards Board (“FASB”), and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, the interim consolidated financial statements presented herein reflect all adjustments, primarily of a normal recurring nature, that are necessary to present fairly the interim consolidated financial statements. Because they do not include all of the disclosures required by GAAP for complete annual financial statements, these interim consolidated financial statements should be read together with the audited Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Disclosures of the number and square footage of facilities, as well as the number and coverage of tenant reinsurance policies (Note 14) are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).
Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Summary of Significant Accounting Policies
There have been no significant changes to the Company's significant accounting policies described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in Notes to Consolidated Financial Statements included in Item 8 of Part II of the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
10


PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)

3.Real Estate Facilities

Activity in real estate facilities during the nine months ended September 30, 2022 is as follows:
Nine Months Ended September 30, 2022
 (Amounts in thousands)
Operating facilities, at cost:
Beginning balance $22,807,833 
Capital expenditures to maintain real estate facilities329,253 
Acquisitions 514,541 
Dispositions(1,704)
Developed or expanded facilities opened for operation125,971 
Ending balance 23,775,894 
Accumulated depreciation:
Beginning balance (7,773,308)
Depreciation expense (574,374)
Dispositions1,084 
Ending balance (8,346,598)
Construction in process:
Beginning balance 272,471 
Costs incurred to develop and expand real estate facilities259,854 
Developed or expanded facilities opened for operation(125,971)
Ending balance 406,354 
Total real estate facilities at September 30, 2022
$15,835,650 
During the nine months ended September 30, 2022, we acquired 44 self-storage facilities (3.2 million net rentable square feet of storage space), for a total cost of $501.9 million, consisting of $482.0 million in cash and $19.9 million in partnership units in our subsidiary. Approximately $14.4 million of the total cost was allocated to intangible assets. We completed development and redevelopment activities costing $126.0 million during the nine months ended September 30, 2022, adding 0.9 million net rentable square feet of self-storage space. Construction in process at September 30, 2022 consisted of projects to develop new self-storage facilities and expand existing self-storage facilities.
Additionally, on July 8, 2022, we acquired from PSB the commercial interests in five properties at three sites jointly occupied with certain of our self-storage facilities located in Maryland and Virginia, for $47.3 million. We recognized $27.0 million of real estate assets and $0.7 million of intangibles for the properties acquired, representing the cost of these commercial properties that we did not have interest in through our equity investment in PSB. We recognized the remaining $19.6 million as an increase to our basis in our equity investment in PSB, which represents the elimination of our portion of the gain recorded by PSB.
During the nine months ended September 30, 2022, we sold portions of real estate facilities in connection with eminent domain proceedings for $1.5 million in cash proceeds and recorded a related gain on sale of real estate of approximately $1.5 million.
11


PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)

4.Investments in Unconsolidated Real Estate Entities
The following tables set forth our investments in, and equity in earnings of, the Unconsolidated Real Estate Entities (amounts in thousands):
 Investments in Unconsolidated Real Estate Entities at
 September 30, 2022December 31, 2021
PSB $$515,312
Shurgard252,648313,451
Total $252,648$828,763

 Equity in Earnings of Unconsolidated Real Estate Entities for the
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
PSB $3,586$27,110$80,596$62,494
Shurgard4,5945,75019,53318,888
Total $8,180$32,860$100,129$81,382

Investment in PSB
Prior to the sale of our equity investment in PSB in its entirety on July 20, 2022, we owned 7,158,354 shares of PSB’s common stock and 7,305,355 limited partnership units in an operating partnership controlled by PSB, representing a 41% common equity interest in PSB.
On April 24, 2022, PSB entered into an Agreement and Plan of Merger whereby affiliates of Blackstone agreed to acquire all outstanding shares of PSB’s common stock for $187.50 per share in cash. On July 20, 2022, PSB announced that it completed the merger transaction with Blackstone. Each share of PSB common stock and each common unit of partnership interest we held in PSB were converted into the right to receive the merger consideration of $187.50 per share or unit, including a $5.25 closing cash dividend per share or unit, and a $0.22 prorated quarterly cash dividend per share or unit, for a total of $187.72 per share or unit. At the close of the merger transaction, we received a total of $2.7 billion of cash proceeds and recognized a gain of $2.1 billion, which was classified within gain on sale of equity investment in PS Business Parks, Inc. in the Consolidated Statement of Income.
We classified the proceeds from the merger consideration of $2.6 billion or $182.25 per share or unit within cash flows from investing activities in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2022. During the nine months ended September 30, 2022 and 2021, we received cash distributions from PSB totaling $109.5 million and $45.6 million, respectively, which were classified within cash flows from operating activities in the Consolidated Statements of Cash Flows.
Investment in Shurgard
Throughout all periods presented, we effectively owned, directly and indirectly 31,268,459 Shurgard common shares, representing a 35% equity interest in Shurgard.
Based upon the closing price at September 30, 2022 (€41.60 per share of Shurgard common stock, at 0.980 exchange rate of U.S. Dollars to the Euro), the shares we owned had a market value of approximately $1.3 billion.
Our equity in earnings of Shurgard comprised our equity share of Shurgard’s net income, less amortization of the Shurgard Basis Differential (defined below). For each of the nine months ended September 30, 2022 and 2021, we received $2.6 million of trademark license fees that Shurgard pays to us for the use of the Shurgard® trademark. We eliminated $0.9 million of intra-entity profits and losses for each of the nine months ended September 30, 2022 and
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PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)

2021, representing our equity share of the trademark license fees. We classify the remaining license fees we receive from Shurgard as interest and other income on our income statement.
During the nine months ended September 30, 2022 and 2021, we received cash dividends from Shurgard totaling $37.8 million and $21.5 million, respectively. Approximately $13.7 million and $8.8 million of total cash distributions from Shurgard during the nine months ended September 30, 2022 and 2021, respectively, represented distributions in excess of cumulative equity in earnings from Shurgard, which was classified within cash flows from investing activities in the Consolidated Statements of Cash Flows.
At September 30, 2022, our investment in Shurgard’s real estate assets exceeded our pro-rata share of the underlying amounts on Shurgard’s balance sheet by approximately $65.7 million ($74.7 million at December 31, 2021). This differential (the “Shurgard Basis Differential”) includes our basis adjustments in Shurgard’s real estate assets net of related deferred income taxes. The Shurgard Basis Differential is being amortized as a reduction to equity in earnings of the Unconsolidated Real Estate Entities. Such amortization totaled approximately $9.0 million and $7.3 million during the nine months ended September 30, 2022 and 2021, respectively.
Shurgard is a publicly held entity trading on Euronext Brussels under the symbol “SHUR”.
5.Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following (amounts in thousands):
At September 30, 2022At December 31, 2021
Gross Book ValueAccumulated AmortizationNet Book ValueGross Book ValueAccumulated AmortizationNet Book Value
Goodwill$165,843 $— $165,843 $165,843