Public Storage 2010 Annual Report Download - page 20

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On-line reservation and marketing system: We also provide customers the ability to review space
availability, pricing, and make reservations online through our website, www.publicstorage.com. We invest
extensively in advertising on the Internet, primarily through the use of search engines.
Economies of scale: We are the largest provider of self-storage space in the U.S. As of December 31,
2010, we operated 2,048 self-storage facilities in which we had an interest with over one million self-storage spaces
rented. These facilities are generally located in major markets within 38 states in the U.S. The size and scope of
our operations have enabled us to achieve high operating margins and a low level of administrative costs relative to
revenues through the centralization of many functions with specialists, such as facility maintenance, employee
compensation and benefits programs, pricing of our product, as well as the development and documentation of
standardized operating procedures. We also believe that our major market concentration provides managerial
efficiencies stemming from having a large number of facilities in close proximity to each other.
The concentration of most of our properties in major metropolitan centers makes various promotional and
media programs, such as yellow pages, Internet keyword bidding, and television advertising, more economical for us
than for our competitors. We can economically purchase large, prominent, well-placed yellow page ads that allow
us to reach the consumer more effectively than smaller operators. Our large market share relative to our
competitors, along with our well-recognized brand name, increases the likelihood that our facilities will appear in
response to queries in search engines such as Google, and allows us to bid aggressively and efficiently for multiple-
keyword advertising. In addition, we are able to market efficiently using television as a media source.
Brand name recognition: 2XU RSHUDWLRQV LQ WKH 86 DUH FRQGXFWHG XQGHU WKH ³3XEOLF 6WRUDJH´ EUDQG
name, which we believe is the most recognized and established name in the self-storage industry in the U.S. Our
storage operations within the U.S. are conducted in major markets in 38 states, giving us national recognition and
prominence. Our facilities tend to be highly visible and located in heavily populated areas, improving the local
awareness of our brand. :HEHOLHYHWKDWWKH³6KXUJDUG´EUDQGXVHGE\6KXUJDUG(XURSHLVDVLPLODUO\HVWDEOLVKHG
and valuable brand.
Complementary ancillary operations: We also sell retail items associated with the storage business (locks,
cardboard boxes and packing supplies) and reinsure policies issued to our tenants against lost or damaged goods
stored by our tenants. We believe these activities supplement our existing self-storage business by further meeting
the needs of our customers.
Growth and Investment Strategies
Our growth strategies consist of: (i) improving the operating performance of our existing self-storage
facilities, (ii) acquiring facilities, (iii) developing or redeveloping existing real estate facilities, (iv) participating in
the growth of commercial facilities, primarily through our investment in PSB, and (v) participate in the growth of
Shurgard Europe. While our long-term strategy includes each of these elements, in the short run the level of growth
in our asset base in any period is dependent upon the cost and availability of capital, as well as the relative
attractiveness of investment alternatives.
Improve the operating performance of existing facilities: We seek to increase the net cash flow generated
by our existing self-storage facilities by a) regularly evaluating our call volume, reservation activity, and move-
in/move-out rates for each of our facilities relative to our marketing activities, b) evaluating market supply and
demand factors and, based upon these analyses, adjusting our marketing activities and rental rates, c) attempting to
maximize revenues through evaluating the appropriate balance between occupancy, rental rates, and promotional
discounting and d) controlling operating costs. We believe that our property management personnel and systems,
combined with our national telephone reservation system and media advertising programs will continue to enhance
our ability to meet these goals. See Item 7. ³0DQDJHPHQW¶V'LVFXVVLRQDQG$QDO\VLV´EHORZIRUIXUWKHULQIRUPDWLRQ
regarding our expectation in the short-run with respect to our operating results.
Acquire properties owned or operated by others in the U.S.: We seek to expand our portfolio by acquiring
well-located facilities, at generally attractive pricing. We believe our presence in and knowledge of substantially all
of the major markets in the U.S. enhances our ability to identify attractive acquisition opportunities and capitalize on