Public Storage 2002 Annual Report Download - page 30

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The commercial properties owned by PSB consist of flex space, office space and industrial space. PSB
owns approximately 10.9 million square feet of flex space, which is defined as buildings that are configured with a
combination of part warehouse space and part office space and can be designed to fit a wide variety of uses. The
warehouse component of the flex space has a variety of uses including light manufacturing and assembly, storage
and warehousing, showroom, laboratory, distribution and research and development activities. The office
component of flex space is complementary to the warehouse component by enabling businesses to accommodate
management and production staff in the same facility. PSB also owns approximately 2.2 million square feet of low-
rise suburban office space, generally either in business parks that combine office and flex space or in desirable
submarkets where the economics of the market demand an office build-out, and approximately 1.3 million square
feet of industrial space that have characteristics similar to the warehouse component of the flex space.
Environmental Matters: Our practice is to conduct environmental investigations in connection with
property acquisitions. As a result of environmental investigations of our properties, which commenced in 1995, we
recorded an amount, which in management’s best estimate, will be sufficient to satisfy anticipated costs of known
investigation and remediation requirements. Although there can be no assurance, we are not aware of any
environmental contamination of any of our facilities which individually or in the aggregate would be material to the
Company’s overall business, financial condition, or results of operations.
ITEM 3. Legal Proceedings
Salaam, et. al v. Public Storage, Inc. (filed February 2000) (Superior Court- Sacramento County)
The plaintiffs in this case are suing the Company on behalf of a purported class of California resident
property managers who claim that they were not compensated for all the hours they worked. The named plaintiffs
have indicated that their claims total less than $20,000 in aggregate. This maximum potential liability can only be
increased if a class is certified or if claims are permitted to be brought on behalf of the others under the California
Unfair Business Practices Act. The plaintiffs’ motion for class certification was denied in August 2002; the
plaintiffs have appealed this denial. This denial does not deal with the claim under the California Unfair Business
Practices Act.
The Company is continuing to vigorously contest the claims in this case and intends to resist any expansion
beyond the named plaintiffs on the grounds of lack of commonality of claims. The Company’s resistance will
include opposing the plaintiffs’ appeal of the court’s denial of class certification and opposing the claim on behalf of
others under the California Unfair Business Practices Act.
Henriquez v. Public Storage, Inc. (Filed June 2002; Dismissed January, 2003)(Superior Court – Los Angeles
County)
The plaintiff in this case filed a suit against the Company on behalf of a purported class of renters who
rented self-storage units from the Company. Plaintiff alleged that the Company misrepresents the size of its units
and sought damages and injunctive and declaratory relief under California statutory and common law relating to
consumer protection, unfair competition, fraud and deceit and negligent misrepresentation. In January 2003, the
plaintiff caused this suit to be dismissed. The plaintiff’s attorney has advised that he anticipates filing a similar suit
against the Company on behalf of a new plaintiff. However, the Company cannot presently determine the potential
total damages, if any, or the ultimate outcome of any such litigation. If a new suit is filed, the Company intends to
vigorously contest any claims on which it is based.