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7
STORE, or telephone numbers provided on the Internet. We believe giving customers
the option to interact with a call center agent, despite the higher marginal cost relative to
an internet reservation, enhances our ability to close sales with potential storage
customers.
x Our Properties: 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, 2013, we operated 2,200 self-storage facilities with over one million self-storage spaces.
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.
We believe 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 2013 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” on major online 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.
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
of our existing self-storage facilities by a) regularly analyzing our call volume, reservation activity, Internet
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 and Internet advertising programs will continue to enhance our
ability to meet these goals.