Public Storage 1997 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 1997 Public Storage annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 48

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48

33
Public Storage, Inc. 1997 Annual Report
Commercial property operations: The Company’s commercial property operations represent approximately 9% of the Company’s operations
(based on total revenues generated during 1997). The commercial properties are generally composed of multi-tenant office/industrial space
and to a lesser extent suburban office. Commercial property rental income and cost of operations presented on the consolidated statements of
income reflect the operations of the 61 facilities owned by the Company and the Consolidated Entities. The following table summarizes the
operating results (before depreciation) of these facilities for each of the past three years:
Commercial Property Operations: Year Ended December 31, Year Ended December 31,
Percentage Percentage
(Dollar amounts in thousands, except rents per square foot) 1997 1996 Change 1996 1995 Change
Rental income:
Consistent group $17,723 $17,117 3.5% $17,117 $16,974 0.8%
Post-1994 acquisitions 22,852 6,459 253.8% 6,459 1,060 509.3%
40,575 23,576 72.1% 23,576 18,034 30.7%
Cost of operations:
Consistent group 8,018 8,046 (0.3)% 8,046 8,326 (3.4)%
Post-1994 acquisitions 8,647 2,704 219.8% 2,704 525 415.0%
16,665 10,750 55.0% 10,750 8,851 21.5%
Net operating income:
Consistent group 9,705 9,071 7.0% 9,071 8,648 4.9%
Post-1994 acquisitions 14,205 3,755 278.3% 3,755 535 601.9%
$23,910 $12,826 86.4% $12,826 $ 9,183 39.7%
Consistent group data:
Gross margin 54.8% 53.0% 3.6% 53.0% 51.0% 2.0%
Weighted average occupancy 95.5% 96.0% (0.5)% 96.0% 95.9% 0.1%
Average realized annual rent per square foot $ 9.12 $ 8.76 4.1% $ 8.76 $ 8.64 1.4%
Number of facilities (at the end of the period):
Consistent group 17 17 – 17 17 –
Cumulative post-1994 acquisitions 44 18 144.4% 18 3 500.0%
Net rentable square feet (at the end of the period):
Consistent group 1,925 1,925 – 1,925 1,925 –
Cumulative post-1994 acquisitions 4,762 1,120 325.2% 1,120 79 1,317.7%
As indicated in the above table, the Company’s commercial property operations have grown principally as a result of the addition of new
properties over the past three years. The operating results of the consistent group of properties over the past three years has been improving,
with net operating income increasing principally due to improved realized rental rates and declining operating expenses.
As discussed above, effective March 31, 1998, the Company will no longer consolidate PSBP and the Operating Partnership. This will have
the effect of reducing commercial property revenue and cost of operations for those properties owned by PSBP and the Operating Partnership.