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PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2009
F-17
4. Real Estate Facilities
Activity in real estate facilities during 2009, 2008 and 2007 is as follows:
2009
2008
2007
(Amounts in thousands)
Operating facilities, at cost:
Beginning balance .....................................................................
$ 10,207,022
$ 11,658,807
$ 11,261,865
Capital improvements................................................................
62,352
76,311
69,102
Acquisition of real estate facilities ............................................
-
52,932
71,258
Newly developed facilities opened for operations .....................
30,978
93,416
156,751
Consolidation of real estate entities .........................................
-
-
14,604
Deconsolidation of real estate entities .......................................
-
-
(42,473)
Disposition of an interest in Shurgard Europe (Note 3) .............
-
(1,766,122)
-
Disposition of real estate facilities .............................................
(9,419)
(1,522)
(4,202)
Impact of foreign exchange rate changes ..................................
2,022
93,200
131,902
Ending balance ..........................................................................
10,292,955
10,207,022
11,658,807
Accumulated depreciation:
Beginning balance .....................................................................
(2,405,473)
(2,128,225)
(1,754,362)
Depreciation expense ................................................................
(332,431)
(347,895)
(371,665)
Disposition of an interest in Shurgard Europe (Note 3) .............
-
72,598
-
Deconsolidation of real estate entities .......................................
-
-
1,064
Disposition of real estate facilities .............................................
4,033
328
1,184
Impact of foreign exchange rate changes ..................................
(578)
(2,279)
(4,446)
Ending balance ..........................................................................
(2,734,449)
(2,405,473)
(2,128,225)
Construction in process:
Beginning balance .....................................................................
20,340
51,972
83,900
Current development .................................................................
14,165
74,611
122,320
Newly developed facilities opened for operation ......................
(30,978)
(93,416)
(156,751)
Disposition of an interest in Shurgard Europe (Note 3) .............
-
(10,886)
-
Write off of development costs .................................................
-
(2,898)
(2,120)
Impact of foreign exchange rate changes ..................................
-
957
4,623
Ending balance ..........................................................................
3,527
20,340
51,972
Total real estate facilities at December 31, ...................................
$ 7,562,033
$ 7,821,889
$ 9,582,554
During 2009, we completed one newly developed facility and various expansion projects to existing facilities at an
aggregate cost of $30,978,000. During 2009, we sold an existing real estate facility as well as disposed of a portion of certain real
estate facilities primarily in connection with condemnation proceedings, for aggregate cash proceeds totaling $11,596,000 and an
other asset valued at $2,941,000. We recorded an aggregate gain of approximately $9,151,000, of which $6,018,000 is included
in discontinued operations and $3,133,000 is included in “gains on disposition of real estate investments, net.”
During 2008, we completed two newly developed facilities at a total cost of $13,431,000, as well as various expansion
projects at a total cost of $46,522,000. During the first quarter of 2008, prior to its deconsolidation, Shurgard Europe opened real
estate facilities at a total cost of $33,463,000. During 2008, we acquired four self-storage facilities in the U.S. from third parties,
and three facilities previously owned by the unconsolidated entities, for an aggregate cost of $55,957,000, consisting of
$43,569,000 in cash, $2,138,000 in existing investments, and assumed mortgage debt totaling $10,250,000. The aggregate cost
was allocated $52,932,000 to real estate facilities and $3,025,000 to intangibles, based upon the estimated relative fair values of
the land, buildings and intangibles. During 2008, we received net proceeds from partial facility disposals as a result of
condemnation proceedings, totaling $2,227,000, and recorded a gain on disposition of $1,283,000. In addition, $250,000,
representing the book value of assets destroyed, was included in the income statement line-item “casualty loss” during 2008.
During 2007, we completed three development and various expansion projects in the U.S. at a total cost of $66,676,000.
Also in 2007, we completed nine development projects in Europe at a total cost of $90,075,000. During 2007, we acquired seven
self-storage facilities in the U.S. from third parties for an aggregate cost of $72,787,000, in cash; $71,258,000 was allocated to
real estate facilities and $1,529,000 was allocated to intangibles, based upon the estimated relative fair values of the land,