Public Storage 1997 Annual Report Download - page 4

Public Storage, Inc. 1997 Annual Report
2
Self-storage companies come in different sizes. The
vision required to lead a local or regional business is
totally different than the vision required at the national
level. Public Storage became a nationwide enterprise by imple-
menting a powerful vision. The vision is to be The First Choice.
To us, being The First Choice means that customers
considering self-storage turn to us first, want us to meet their
storage needs. One of our goals is to build value in our
reputation as well as in our trade name. We believe we have
a reputation for innovation and flexibility, helping us attract
quality personnel, reflected in our employees throughout our
Company. Furthermore, to the investment community being
The First Choice means we are first among our self-storage
real estate investment trust competitors. One of the nation’s
leading financial investment firms recently selected our
Company as its Top REIT Pick for 1998.
Our vision of being The First Choice makes customer
satisfaction a priority. We seek to create a desire in our cus-
tomers to use our services and to tell their friends about us.
We market our business through customer loyalty. Word-of-
mouth advertising is often recognized as the best form of
advertising available, a by-product of striving for customer
satisfaction all the time. A vision is inconsequential without
clear, achievable strategies to realize it. Five distinct perfor-
mance strategies energize our vision: Leadership, low long-
term capital costs, low self-storage operating costs,
diversified operations and successful risk management.
To Our
Shareholders
36 (1)
25 (2)
10 (4)
278
(31)
22 6 37
1
15 (1)
8 (2)
122 (8)
18
(1)
7
10 (2)
15 36
98
2
10
33 (8)
4
65 14 27
18
29
6
7
12
210
2
13
4
35
4
32 (3)
The Public Storage Property System
Self-Storage Facilities=1,073; Business Parks=63 • Figures in Parentheses Denote Business Parks
1960
1980
2000
2020
Changing Demographics
Demand for Goods
Economic Activity
Population Mobility
Self-Storage Industry: Positioned for Growth
In the Right Gear
We believe we have the vision and performance strategies to
support continued expansion in a competitive and dynamic
industry. To maintain industry leadership, we plan to con-
tinue to strengthen the quality and clarity of our vision and
strategies. Although the future has never seemed brighter,
we know that real estate activity flows in cycles. Markets
experience downturns. The relationship between supply and
demand changes. These pressures are magnified by continued
self-storage development and industry consolidation, the
defining trends in the industry today. An overgrowth of self-
storage in a given market could have deleterious effects on
occupancy levels and rental rates in that market. As the
larger owners of self-storage continue to dominate acquisition
and development activities, the competitive landscape
becomes more challenging. These operators can be expected
to use professional management and media advertising,
economies of scale, management efficiencies, quality control,
etc. to improve performance. We remain confident that our
vision and five performance strategies will continue to make
us The First Choice.
As is true in most segments of the real estate industry
in the United States today, the self-storage sector is fragmented.
We estimate the industry is comprised of over 26,000 self-
storage properties, most of which are owned by independent
local operators. We own interests in 1,073 self-storage
properties, making us the largest single self-storage owner
and operator in the country. We have an intensive property
development strategy and strong balance sheet, fundamentals