Description
Public Storage is an American international self storage company headquartered in Glendale, California, that is run as a real estate investment trust (REIT). It is the largest brand of self-storage services in the US. In 2008, it was the largest of four publicly traded storage REITs. There are more than 2,200 Public Storage self-storage locations in the US, Canada and Europe. It also owns 42 percent of an office parks subsidiary, sells packing supplies, and provides other services. As a REIT, it is owned by real estate investors, who receive more than 90 percent of the company's profits as a return-on-investment.
Public Storage Inc. was founded in 1972 by B. Wayne Hughes and Kenneth Volk Jr. It grew to 1,000 locations by 1989, using funding from investors in real estate limited partnerships (RELPs). The private company was re-structured as a publicly traded REIT in 1995, when Storage Equities merged with Public Storage and adopted its name. In 2006 it acquired Shurgard Storage Centers in a $5.5 billion transaction. Shurgard has since been spun-out in to a separate publicly traded entity, with Public Storage retaining 36.6% of the company.
History
Origins
The idea for Public Storage was conceived by Southern California real estate developer B. Wayne Hughes in the early 1970s. During a trip to Texas, he observed that local real estate developers were doing well creating mini-storage facilities outside of Dallas and Houston. He brought the self-storage concept back with him to California. Hughes partnered with Kenneth Volk and the two founded Public Storage in August 1972 with a $50,000 initial investment, at first calling it "Private Storage Spaces Inc."
The first warehouse was built in 1972 in El Cajon, California. According to Hughes, "Private Storage Spaces Inc." confused people into thinking it was private, so the name was changed to "Public Storage" to match the PS acronym. The founders initially planned to build the storage warehouses as a temporary source of income until the land became more valuable and could be redeveloped for another use.
Within three months, the first location was breaking even with a 35 percent occupancy. The units were rented for a similar price per square foot as apartments or office space, but cost 35 to 50 percent less to build and maintain. A property management subsidiary called Public Storage Management Inc. was formed in 1973. By 1974, 20 locations had been built.
Recent history
Public Storage grew steadily in the early 2000s and was added to the S&P 500 in 2005. In 2006 it acquired Shurgard Storage Centers in a transaction totaling $5.5 billion, acquiring 624 locations, including 141 in Europe. Public Storage had attempted to acquire the company in 2000 and again in 2005, but its offers were rejected. The company has continued to make numerous acquisitions, such as a March 2010 purchase of 30 locations from A-American Self Storage.
