Self Storage Article Directory

Public Storage -- History

Public Storage prides themselves by being a leader in the self storage industry. Wayne Hughes and Ken Volk founded the company; the first storage facility was built in 1972. Today, there are an estimated 2,100 Public Storage properties in the United States and Europe and a grand total of approximately 135 million net rentable square feet.

Public Storage has common and preferred stock on the New York Stock Exchange. The company is also a member of the Forbes Global 2000 and the S&P 500. Public Storage is a self-administered and self-managed REIT that primarily acquires, develops, owns and operates self storage facilities.

The Executive Officers of Public Storage are B. Wayne Hughes, Chairman of the Board; Ronald L. Havner Jr., Vice Chairman, CEO and President; John Reyes, Senior Vice President and CFO; John E Graul, President, Self-Storage Operations; David F. Doll, President, Real Estate Division; John S. Baumann, Senior Vice President and Chief Legal Officer; and Candace N. Krol, Senior Vice President of Human Resources. These officers, along with the thousands of Public Storage employees, are dedicated to leading the way and remaining a leader in the self storage industry.

In staying on track with their goal of remaining the biggest kid on the block, Public Storage announced a merger with Shurgard (another self storage company) in March of 2006. Public Storage announced the completion of the Shurgard acquisition in a press release on August 22, 2006. As agreed upon, Public Storage has redeemed $136 million worth of Shurgard stock and assumed $1.8 billion of debt, which brought the value of the deal to about $5.5 billion. The transaction gave Shurgard shareholders a 39% premium to Shurgard’s undistributed stock price plus the opportunity to gain from the potential of the combined companies. After the deal closed, Shurgard shareholders held 23% of the combined company, which boasts a market cap of nearly $18 billion.

Public Storage had privately approached Shurgard many times to discuss such a merger; however, Shurgard quickly rejected previous offers as inadequate by the Shurgard board. The acquisition completed in 2006 was the outcome of Public Storage’s persistence and vision.

The Public Storage/ Shurgard acquisition created the largest self storage company in the world. Public Storage has said, “This transaction provides Shurgard’s shareholders with a substantial premium for their shares and an opportunity to benefit from participation in the upside potential of the combined entity.”

The company also stated they expect to cut costs by reducing duplicate expenses for Yellow Pages and other advertising, information systems and other back-office functions.

Press releases from Public Storage reported net income of $59,778,000  the 2007 first quarter, compared to net income of $114,216,000 for the same period in 2006. The numbers reflect a decrease of $54,438,000. Public Storage credits decrease to the temporary impact of certain items related to their merger with Shurgard. A similar press release reported net income for the 2007 second quarter as $77,104,000 compared to net income of $128,862,000 for the same period in 2006, reflecting a decrease of $51,758,000. The company credits the second quarter decrease to the same impact of the Shurgard merger, combined with an increase in $35.7 million in depreciation expense related to facilities acquired in the merger. Additionally, the company experienced a $9.6 increase of in general and administrative expenses.

Public Storage announced its selection of Budget Truck Rental as an exclusive third party provider of rental trucks. The goal of this agreement was to provide customers the opportunity to select from a range of moving trucks to meet their storage transportation needs.

Budget Truck Rental will be offered at approximately 200 Public Storage locations in the United States. Avis Budget Group, Inc., parent of Budget Truck Rental, features about 30,000 vehicles with an average vehicle age of roughly 28 months. This makes one of the youngest fleets in the truck rental industry. Both Budget Truck Rental and Public Storage offer a range of packing and moving supplies such as locks, tape, bubble wrap, boxes and more.

Public Storage rents self storage units on a monthly basis. Tenants enjoy furniture storage, household good storage, office storage, appliance storage, boat storage, car storage, RV storage, motorcycle storage, wine storage and more. Tenants can also pay their bill online at the Public Storage website, by calling their toll free number, mailing payment to the local self storage office or delivering payment in person.

As with most self storage providers, tenants lock their belongings in a personal, rentable space and keep the key so that they may return anytime during access hours.

Public Storage adjusts their truck rental rates daily and rates typically go up on the weekends, when there is more demand and traffic. This make moving on the weekend more costly to customers. They also require a $100 deposit on all truck rentals. Customers must also pay additional costs for hand trucks, or dollies, as well as furniture pads.

Public Storage is not a member of the Better Business Bureau, which has raised a red flag for many customers. Upon further investigation into complaints lodged with the Better Business Bureau against Public Storage, each facility with an outstanding complaint is listed as a separate entity and not as a whole unit. Therefore, it is difficult to determine how many of the 200 complaints are unique to the property or which properties have several complaints. 

Complaints  submitted to the Better Business Bureau (BBB) range from stolen items to billing disputes relating to late fees, increases without notification or that overpaid amounts are not refunded as agreed.  Other complaints against the moving company as well as self storage include that items are not delivered on time, rates increased or hidden charges were added to the final cost and inflicting up to twice the quoted amount, causing financial hardship to the customer.

The company responds to some complaints by disputing the allegations and denying credits or refunds. Allegations of theft or missing items are generally ignored, resulting in unresolved and unanswered complaints. There have been a few cases in which the company issued a refund for moving expenses.

The BBB has issued Public Storage an “F” rating; the highest is “AAA” and the lowest is “F”. An “F” rating suggests that one strongly question the company’s reliability for reasons such as:
• Failure to respond to complaints
• Their advertising is grossly misleading
• Not in compliance with registration and licensing requirements
• Complaints containing serious allegations
• Reputation for fraudulent business practices

Ratings reflect the BBB’s conclusions or opinions based on information in their files and their experience with the company.

Additionally, Public Storage has 42 recorded complaints from complaints.com , 7 complaints listed on my3cents.com , and 3 on consumeraffairs.com . These complaints follow suit with those detailed with the BBB and report the complaint as written by the consumer.

Public Storage issued a press release on January 10, 2007, which can be viewed in its entirety on their official website under the “Corporate Info” tab and the “Press Release” option. In the statement, the company admits to “selling the contents contained in a storage space rented by a U.S. soldier while he was serving our country in Iraq.” The company claims that they were not aware that the soldier was on active duty and therefore, sold his items due to late payment. Public Storage stated in the release, “The Company deeply regrets the loss and inconvenience experienced… we have reached a mutually satisfactory agreement and resolved this unfortunate matter.” The company goes on to say, “Public Storage has great respect for the men and women who serve our country. This incident is inconsistent with the Company’s policies… with regard to known active-duty military personnel and resulted from an inability to communicate with the customer at the time.”

The press release was issued after a story appeared in the media. Because of Public Storage’s history of unresolved and unanswered complaints, particularly in the areas of theft, missing or auctioned items,  it begs one to ask if they would have come to an agreement without media intervention.

When considering the allegations and complaints against a business, one must take into account the size of the business. With just over 252 recorded complaints for Public Storage, the world’s largest self storage provider, this equals out to be about 1 complaint for every 10 U.S. facilities. One must consider the disturbing consistency in complaints against the possibility of a handful of irate customers who broke the rules.

Consumers can have peace of mind and be assured a just result of possible complaints by reading the guidelines, rules and terms before entering an agreement. Verbal agreements not reflected in the lease or other materials should be written down and authenticated. Following the parameters of payment and what items are allowed in storage are important and will usually result in a pleasant and convenient experience with a self storage provider.

The vision for self storage was realized in 1972 and has grown to over 2,000 locations. It is clear that the need for self storage is ever-increasing and Public Storage is aimed at growing with demand.

The need for self storage will continue as the amount of living space per capita falls and people collect more stuff. The need to keep all this stuff will only grow as we hold onto Grandma’s things and our baby blankets, and eventually our own children’s paintings and crafts. Public Storage is determined to keep up with the market and lead the industry into the future.

Sarah Little

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