Aided by an increase in revenues, Public Storage reported better-than-expected earnings in third-quarter 2014, with core FFO per share rising 9.9% from the year-ago figure. We are encouraged with this earnings growth, thanks to the superior performance of the company's U.S. portfolio. The company's acquisition initiatives helped it carve a niche in the U.S. and European markets. Moreover, we believe that the company has one of the strongest balance sheets in the sector. However, the continuous decline in the European assets' realized annual rent per occupied square foot remains a cause of concern. Also, the company operates in a significantly competitive environment and a substantial construction pipeline increases its operational risks.
Glendale, CA.-based Public Storage is a leading self-storage real estate investment trust (REIT) in the U.S. The company acquires, develops, owns and operates self-storage facilities, generally on a month-to-month basis for business as well as personal use. Public Storage has facilities in 38 states of the U.S. and 7 Western European nations (operated under the "Shurgard" brand).
As of Sep 30, 2014, Public Storage had interests in 2,234 self-storage facilities (spanning around 144 million net rentable square feet) in the U.S. Moreover, the company had 188 storage facilities in Europe (approximately ten million net rentable square feet) operated under the "Shurgard" brand.
Along with its storage operations, as of that date, the company had 42% common equity interest in PS Business Parks a REIT that has commerical properties with approximately 30 million square feet of of commercial space, primarily flex, multi-tenant office and industrial space.
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