Public Storage 2009 Annual Report Download - page 60

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Other Facilities
In addition to the Same Store facilities, at December 31, 2009, we had an additional 92 self-storage
facilities. These facilities include recently acquired facilities, recently developed facilities and facilities that were
recently expanded by adding additional storage units. In general, these facilities are not stabilized with respect to
occupancies or rental rates. As a result of the fill-up process and timing of when the facilities were put into place,
year-over-year changes can be significant.
Rental income, cost of operations, depreciation, net operating income, weighted average square foot
occupancies and realized rents per square foot in the table above represent the operating results following the date
each particular facility began to be included in our consolidated operating results, and in the case of acquired
facilities, do not include any operating results prior to our acquisition of these facilities.
In 2009, we completed one newly developed facility with 64,000 net rentable square feet at a total cost of
$11.9 million and four expansion projects to existing real estate facilities (76,000 net rentable square feet) for an
aggregate cost of $19.1 million, and did not acquire any new properties.
Our acquisitions consist of facilities that have been operating for a number of years as well as newly
constructed facilities that were in the process of filling up to stabilized occupancy levels. In either case, we have
been able to leverage off of our operating strategies and improve the occupancy levels of the facilities or, with
respect to the newly developed facilities, we have been able to accelerate the fill-up pace.
We expect that the Other Facilities will continue to provide earnings growth during 2010, though at a lower
level of growth than that experienced in 2009 and 2008, as these facilities reach stabilization. However, the Other
Facilities are subject to the same occupancy and rate pressures that our Same Store facilities are facing, and
accordingly the pace at which these facilities reach stabilization, and the ultimate level of cash flows to be reached
upon stabilization, may be negatively impacted by the current economic trends.
Because of reduced self-storage demand, and our belief that our capital could be put to use in a more
advantageous manner, our development activities throughout 2009 have been nominal, and we have a nominal
pipeline of new development at December 31, 2009. It is unclear when we might change our strategy with respect
to development activities.
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 the overall fragmentation in the storage
industry. We believe that there may be more opportunities for the acquisition of facilities from distressed sellers
who, due to the constrained credit environment and pressure on cash flows due to the current difficult operating
environment, face covenant violations or cannot refinance their existing debt as it comes due. The timing and
amount of these opportunities will be at least partially dependent upon whether the banks and other lenders elect to
pursue foreclosure, acceleration, or other remedies which would force a sale of the properties of these distressed
owners, rather than extending existing loans or waiving covenant violations. It is our belief that opportunities in
2009 have been limited due at least in part to lenders’ desire to extend these loans rather than foreclose or accelerate.
There can be no assurance that any such opportunities will materialize in the future.