Self-Service Storage
Public Storage (NYSE:PSA) is the largest owner of self-storage facilities in the U.S., with 2,548 facilities and 175 million rentable square feet in 38 states (2020 10-K, p.5).
PSA benefits from scale, which makes it competitive on price. Its nationwide presence and familiar orange logo give it very valuable name recognition. PSA has made significant investments in customer-friendly Internet technology for online advertising and for making reservations.
Public Storage's dominance is reflected in the company's position as the largest real estate investment trust in the Self-Storage sub-sector of the FTSE Nareit All REITs Index, with an equity market capitalization of $39.786 billion as of 1/31/21. This was considerably more than the combined equity market cap of the other five self-storage REITs in the index.
PSA's strength is complemented by two other investments. PSA owns 42% of PS Business Parks, Inc. (NYSE:PSB), an industrial-focused REIT that offers flex space in multi-tenant buildings in multi-building business parks for manufacturing, product assembly or distribution, typically with adjoining office space. PSA also has a 35% interest in a European business, Shurgard Self Storage SA ("SHUR" on Euronext Brussels).
Public Storage's experienced management team is led by CEO Joseph D. Russell, Jr., 60.
Brief History
Public Storage has a dominant self-storage market position and an A credit rating. Founder Wayne Hughes hated debt and grew the business during the heyday of private investing. Rather than bonds, PSA uses mostly preferred stock that is perpetual but callable, giving PSA maximum flexibility to issue new shares when advantageous. Here's a capsule history of the company:
- 1972--Opened first self-storage facility in California as a partnership of founders Wayne Hughes and Ken Volk.
- 1977--Formed first of many real estate limited partnerships, raising $200,000 to $300,000 annually from 200,000 institutional and individual investors, for a total of $3
