Public Storage 2010 Annual Report Download - page 25

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11
ITEM 1A. Risk Factors
In addition to the other information in our Annual Report on Form 10-K, you should consider the risks
described below that we believe may be material to investors in evaluating the Company. This section contains
forward-looking statements, and in considering these statements, you should refer to the qualifications and
limitations on our forward-looking statements that are described in Forward Looking Statements at the beginning
of Item 1.
Since our business consists primarily of acquiring and operating real estate, we are subject to the risks
related to the ownership and operation of real estate that can adversely impact our business and financial
condition.
The value of our investments may be reduced by general risks of real estate ownership. Since we derive
substantially all of our income from real estate operations, we are subject to the general risks of acquiring and
owning real estate-related assets, including:
lack of demand for rental spaces or units in a locale;
changes in general economic or local conditions;
natural disasters, such as earthquakes, hurricanes and floods; which could exceed the aggregate limits of
our insurance coverage;
potential terrorist attacks;
changes in supply of or demand for similar or competing facilities in an area;
the impact of environmental protection laws;
changes in interest rates and availability of permanent mortgage funds which may render the sale of a
nonstrategic property difficult or unattractive including the impact of the current turmoil in the credit
markets;
increases in insurance premiums, property tax assessments and other operating and maintenance
expenses;
transactional costs and liabilities, including transfer taxes;
adverse changes in tax, real estate and zoning laws and regulations; and
tenant and employment-related claims.
In addition, we self-insure certain of our property loss, liability, and workers compensation risks for which
other real estate companies may use third-party insurers. This results in a higher risk of losses that are not covered
by third-party insurance contracts, as described in Note 13 XQGHU ³,QVXUDQFH DQG /RVV ([SRVXUH´ WR RXU
December 31, 2010 consolidated financial statements.
There is significant competition among self-storage facilities and from other storage alternatives. Most of
our properties are self-storage facilities, which generated most of our revenue for the year ended December 31,
2010. Local market conditions play a significant part in how competition will affect us. Competition in the market
areas in which many of our properties are located is significant and has affected our occupancy levels, rental rates
and operating expenses. Any increase in availability of funds for investment in real estate may accelerate
competition. Further development of self-storage facilities may intensify competition among operators of self-
storage facilities in the market areas in which we operate.