Public Storage 2014 Annual Report Download - page 21

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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 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, 2014, we operated 2,250 self-storage facilities with 1.4 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 percentage of our facilities in close proximity to each
other.
We believe that we have significant market share and concentration in major metropolitan centers,
which increase the cost effectiveness of our promotional programs relative to our competitors. Our large
market share in major metropolitan markets and well-recognized brand name improves our prominence 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, our highly visible facilities, and our facilities’ 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 facilities and by adding more self-
storage space to existing facilities, (iv) participating in the growth of the commercial operations we have an
interest in, primarily 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 (i) 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, (ii) attempting to maximize revenues through evaluating
the appropriate balance between occupancy, rental rates, and promotional discounting and (iii) controlling
operating costs. We believe that our property management personnel, systems, our convenient shopping
options for the customer, our economies of scale, and our advertising programs will continue to enhance
our ability to meet these goals.