What is Public Storage's primary business and market position?

Public Storage is the largest owner and operator of self-storage facilities in the United States, with 2,483 facilities comprising 169 million net rentable square feet as of December 31, 2019. They offer storage spaces for personal and business use on a month-to-month basis.

How does Public Storage fund its growth and operations, given its REIT structure?

As a REIT, Public Storage is required to distribute 100% of its taxable income, limiting retained earnings for reinvestment. Growth is funded through a combination of preferred equity, medium and long-term debt, common equity, and retained operating cash flow (typically $200-$300 million annually, generated from depreciation exceeding maintenance capital expenditures).

What are the key risks facing Public Storage?

Key risks include general real estate ownership risks, economic downturns, significant competition from new developments, increased operating costs (like property taxes), reliance on Google for customer acquisition, potential environmental liabilities, cybersecurity breaches, and specific risks associated with its international investment in Shurgard and its commercial property investment in PS Business Parks.

What is the outlook for revenue growth, and what factors influence it?

In 2019, Same Store Facilities revenue grew 1.4%, primarily driven by increases in realized annual rent per occupied square foot. Revenue growth is influenced by rental rates, occupancy levels, marketing efforts, customer demand, economic conditions, and the supply of new self-storage facilities in key markets. Future growth is expected to come from rent increases for existing tenants and continued stabilization of acquired and developed properties.

Public Storage 10-K FY2019 Annual Report — Revenue, Net Income, EPS

Summary

Public Storage (PSA) is the largest owner and operator of self-storage facilities in the U.S., managing a portfolio of 2,483 facilities as of December 31, 2019. The company operates under a REIT structure, which requires the distribution of 100% of its taxable income to shareholders, making external capital essential for growth. In 2019, PSA continued its growth strategies, focusing on improving existing facilities, acquiring new properties, and developing new facilities and expansions. The company also holds significant investments in PS Business Parks, Inc. (42% equity interest) and Shurgard Self Storage SA (35% equity interest), providing diversification into commercial real estate and European self-storage markets, respectively. Despite a competitive landscape and increasing development of new facilities, PSA's strong brand recognition, economies of scale, and centralized information networks position it to maintain its market leadership.

Financial Highlights

32 data points

Beta

Revenue

$2.86B

Net Income

$1.52B

0.5% Net Margin

EPS (Diluted)

$7.29

Total Assets

$11.37B

Cash & Equivalents

$409.74M

Free Cash Flow

$2.07B

Financial Statements

Beta

Revenue	$2.86B
Operating Expenses	$1.43B
Interest Expense	$45.64M
Net Income	$1.52B
EPS (Basic)	$7.30
EPS (Diluted)	$7.29
Shares Outstanding (Basic)	174.29M
Shares Outstanding (Diluted)	174.53M

Key Highlights

1Public Storage is the largest owner and operator of self-storage facilities in the U.S., with 2,483 facilities and 169 million net rentable square feet as of December 31, 2019.
2The company has a diversified business model including self-storage operations, ancillary operations (reinsurance and merchandise sales), and investments in PS Business Parks (commercial real estate) and Shurgard (European self-storage).
3PSA's growth strategy focuses on improving existing facilities, acquiring new properties, and developing new facilities and expansions. A significant development pipeline of 12 new facilities and 35 expansions was underway.
4The company maintains a strong financial profile with high credit ratings (A/A2 from S&P/Moody's senior debt), enabling access to capital markets for funding growth.
5Increased competition from new self-storage facility development in key markets was noted as a challenge, potentially impacting occupancies and rental rates.
6PSA relies significantly on Google for customer acquisition, with approximately 59% of new customers sourced through Google's search platforms.
7The company is subject to various risks including economic downturns, increased property taxes (especially in California), environmental liabilities, and cybersecurity threats.

Public Storage Annual Report, Year Ended Dec 31, 2019

Summary

Financial Highlights

Key Highlights

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