Public Storage 1999 Annual Report Download - page 4

2
To Our Shareholders
We began 1999 with an inquiry,“How can
we make self-storage more valuable, more
meaningful, more useful to more consumers
in more places than ever before?”We knew part of the
answer was to continue managing our business to pro-
mote financial performance, since operational strength
provides competitive advantage.To be sure, we will
concentrate on the growth drivers that made us the
industry’s preeminent self-storage operator:increasing
operating results, accretive asset base expansion strategies,
lowering the cost of capital, reducing operating costs, gen-
erating non-rental revenue through businesses operated
by subsidiaries, retaining cash for property development
and acquisition and our experienced executive leadership.
Successfully implementing these growth drivers benefits
shareholders by improving funds from operations, the
single most important measurement of our financial
performance.
But we also realized that in the 21st century success-
ful operators will become even more focused on the
customer.We knew that a parallel strategy of customer
satisfaction could lead to strong demand for our self-
storage space, and rising occupancy levels could improve
funds from operations. Furthermore, in today’s intensely
competitive self-storage market, it is hard for even supe-
rior operators like Public Storage to build sustainable
advantage on product alone.We believe we can maintain
the gap between our Company and our competitors by
creating breakthroughs in how we interact with customers.
Doing this well means fully satisfying each customer’s
individual need for storage solutions.
As consumers increasingly perceive a sameness of
products and services among self-storage companies, our
intense focus on customer satisfaction can differentiate us
from the rest of the pack. Indeed, sustainable competitive
advantage comes from providing solutions that customers
value and are willing to pay for.To this end, we are
Public Storage, Inc. 1999 Annual Report
focusing more than ever on providing distinct “Points
of Differentiation,” including technologically advanced
asset base expansion strategies, convenient, well-managed
self-storage facilities in metropolitan markets, portable
self-storage and truck operations and retail stores.These
complementary businesses enable us to rent more space
at higher prices.You can see the favorable outcome of
being customer-centered in our operating results and
occupancy levels at the end of 1999.
Our key strengths of most value to our customers
are Focus, Innovation and Flexibility, discussed in detail
beginning on page 4.
Knowing The Cust omer
Our customers expect us to provide solutions to their
unique storage problems. Some of our customers need
us because of a change in their lives, like marriage or
divorce. Some of our customers require a place to store
their possessions during relocation. Some of our cus-
tomers are looking for ways to better organize their lives
but hold on to certain keepsakes for future use. Some of
our customers are do-it-yourselfers and want to rent a
moving truck from us.The reasons are as varied as our
customers are diverse and we respect each customer’s
decision to trust us to supply the best solution. A large
and satisfied customer base is rewarding to us because
we avoid relying on a few major customers or upon
customers in the same or similar business.
Along with our subsidiaries, we have the infrastruc-
ture to meet the demand for accessible, convenient,
well-managed self-storage space, portable self-storage,
truck operations and retail stores.We manage a substan-
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
100,000
2000 2005 2010 2015 2020
200,000
300,000
400,000
PSPUD Tenants
Retirement-Age
Americans
Possible Effects of Changing Demographics
on Public Storage Pickup & Delivery
SM
(PSPUD) Demand
publicstorage.com – making customer satisfaction easier.