If the attic or garage are packed, Public Storage can help. The real estate investment trust (REIT) is one of the largest self-storage companies in the US. It operates more than 2,250 storage facilities comprising some 146 million sq. ft. of storage space in the US and more than 190 facilities in Europe (through its Shurgard Europe affiliate). The firm's self-storage properties, located in densely populated areas, generate more than 90% of the company's sales. Public Storage, which was founded in 1980, also rents trucks, and sells moving supplies such as locks, boxes, and packing supplies. It also owns part of publicly traded PS Business Parks, an office building REIT.
The company reports its operations in two segments: Self-storage Operations and Ancillary Operations.
Self-Storage segment accounts for 94% of revenue, and consists of more than 2,230 self-storage facilities owned by the company.
The Ancillary segment re-insures policies against losses to goods stored by customers in their self-storage facilities, and sells merchandise, such as locks and boxes.
California-based Public Storage operates self-storage facilities in 38 US states. As might be expected, Public Storage's biggest markets are the three most populous states. It has more than 420 facilities in California, about 275 in Florida, and about 270 in Texas. Public Storage also owns a 49% stake in Shurgard Europe, which operates more than 200 units in Belgium, Denmark, France, Germany, the Netherlands, Sweden, and the UK.
Sales and Marketing
The company markets its products and services through internet advertising, signage, and banners. Public Storage spent about $25 million on advertising and marketing in 2015, compared to $26.7 million in 2014 and $28 million in 2013.
Public Storage is bringing in money on all fronts. Revenue increased 9% to about $2.4 billion in 2015 from $2.2 billion in 2014. More storage space rented at higher prices fueled the revenue gain. Same-store revenue increased 11% to 2015 from 2014.
Higher revenue in 2015, coupled with higher equity earnings from the company's investments in PSB, Shurgard Europe, and others, pushed net income up 15% to a record-high $1.3 billion.
The company's cash from operations increased to $1.7 billion in 2015 (from $1.6 billion in 2014) thanks mostly to higher earnings, but also because the company adjusted for higher non-cash charges related to depreciation and amortization expenses.
Increasing rental rates to existing customers, generally on an annual basis, is a key component of Public Storage's growth. It also aims to keep average occupancy levels above 90%, and seeks to grow its rental income further through acquisitions and through new facility openings.
Because it's become more expensive to purchase existing facilities in recent years, Public Storage has increasingly been developing its own new self-storage locations and expanding its existing facilities for growth. The company added 1.3 million sq. ft. at a cost of $123.5 million.
Still, Public Storage has continued to pursue property acquisitions in recent years to increase its leasable footprint and grow its rental income. In 2015, it snapped up 17 self-storage facilities with a total of 1.3 million sq. ft. The cost was $185.4 million.
The Shurgard Europe operation was busy with acquisitions in 2014 and 2015, buying 27 facilities with 1.3 sq. ft. in Germany, the Netherlands, and the UK.
In Europe Public Storage owns 49% of Shurgard Europe. In 2011 Shurgard Europe acquired the remaining 80% interest it already didn't own in two joint ventures. The deal gave Shurgard full ownership in 72 self-storage facilities in seven countries. While the company expected big opportunities for growth in the European self-storage industry, prospects for growth were stunted in 2011 as the continent struggled with an economic downturn.