Public Storage 2012 Annual Report Download - page 24

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6
relative to an internet reservation, enhances our ability to close sales with potential storage
customers.
• Walk-In: Customers can also shop at any one of our facilities. Property managers access the
same information that is available on our website and to our call center agents, and can inform the
customer of storage alternatives at that site or our other nearby storage facilities. Property
managers are extensively trained to maximize the conversion of such “walk in” shoppers into
customers.
Economies of scale: We are the largest provider of self-storage space in the U.S. As of December 31,
2012, we operated 2,078 self-storage facilities in which we had an interest with over one million self-storage spaces
rented. These facilities are generally located in major markets within 38 states in the U.S. The size and scope of our
operations have enabled us to achieve high operating margins and a low level of administrative costs relative to
revenues through the centralization of many functions, such as facility maintenance, employee compensation and
benefits programs, revenue management, as well as the development and documentation of standardized operating
procedures. We also believe that our major market concentration provides managerial efficiencies stemming from
having a large number of facilities in close proximity to each other.
Our market share and concentration in major metropolitan centers makes various promotional and media
programs more cost-beneficial for us than for our competitors. As noted above, approximately 71% of our same-
store revenues for 2012 were in the 20 MSA’s with the highest population levels. Our large market share and well-
recognized brand name increases the likelihood that our facilities will appear prominently in unpaid search results
for “self-storage” in Google and other search engines, and enhances the efficiency of our bidding for paid multiple-
keyword advertising. We can use television advertising in many markets, while most of our competitors cannot do
so cost-effectively.
Brand name recognition: We believe that the “Public Storage” brand name is the most recognized and
established name in the self-storage industry in the U.S, due to our national reach in major markets in 38 states, and
our highly visible facilities, with their distinct orange colored doors and signage, that are located principally in
heavily populated areas. We believe the “Public Storage” name is one of the most frequently used search terms used
by customers using Internet search engines for self-storage. We believe that the “Shurgard” brand, used by
Shurgard Europe, is a similarly established and valuable brand in Europe. We believe that the awareness of our
brand name results in a high percentage of potential storage customers considering our facilities, relative to other
operators.
Growth and Investment Strategies
Our growth strategies consist of: (i) improving the operating performance of our existing self-storage
facilities, (ii) acquiring more facilities, (iii) developing new self-storage space, (iv) participating in the growth of
commercial facilities, primarily through our investment in PSB, and (v) participating in the growth of Shurgard
Europe. While our long-term strategy includes each of these elements, in the short run the level of growth in our
asset base in any period is dependent upon the cost and availability of capital, as well as the relative attractiveness of
investment alternatives.
Improve the operating performance of existing facilities: We seek to increase the net cash flow generated
by our existing self-storage facilities by a) regularly analyzing our call volume, reservation activity, move-in/move-
out rates and other market supply and demand factors and responding by adjusting our marketing activities and
rental rates, b) attempting to maximize revenues through evaluating the appropriate balance between occupancy,
rental rates, and promotional discounting and c) controlling operating costs. We believe that our property
management personnel, systems, our convenient shopping options for the customer, and our media advertising
programs will continue to enhance our ability to meet these goals.
Acquire properties owned or operated by others in the U.S.: We seek to capitalize on the fragmentation of
the self-storage business through acquiring attractively priced, well-located existing self-storage facilities. We