By JOE BEL BRUNO
Seeking to increase its market share, Public Storage Inc. has come up with a new twist: They will not only store your old furniture, they’ll pick it up as well.
The company’s new pickup and delivery service is aimed at customers who don’t have the time, energy or pickup trucks to cart their excess belongings to a storage facility.
The sell is convenience just call a toll free number and Public Storage will deliver a 5-by-7 foot storage container to your door, and then cart it off.
Company President Harvey Lenkin says the service is one way to solidify Public Storage as the No. 1 mini-warehouse company in the nation. Most of the industry’s 25,000 mini-warehouse facilities are comprised of small chains, many of them the mom-and-pop variety.
“We need to maintain the ability for us to stay at the forefront,” said Lenkin. “We’re willing to step up and do things that have never been done before. How we access the consumer will continue to change.”
Customers are charged $19 to have the container delivered, another $19 to have it picked it up, and $40 each month to store it. The only difference between the new service and traditional warehouse space is that customers must make an appointment to get into their storage box.
The concept was originally started by Easy Access Self-Storage, which had been marketing pickup/deliver services in Orange County for the past decade. Recognizing the potential, Public Storage acquired the company in 1996.
Now, Public Storage plans to take the idea nationwide. There are currently six local pickup and delivery facilities Los Angeles, Irvine, City of Industry, Gardena, Cypress and Chatsworth serving communities within a 20-mile radius of each.
Each site which fits about 2,000 storage containers is about 75 percent occupied, Lenkin said. Another 60 pickup/delivery sites are expected to open over the next few years in Sacramento, San Francisco, Oakland, San Diego, Houston, Atlanta, Portland, Miami, New York and Washington D.C.
Public Storage currently has more than 1,000 mini-warehouses in 38 states and Canada. In California, there are 150 mini-warehouse facilities and six pickup/delivery facilities.
“They call it a 900-pound gorilla,” said David Barnett, an analyst with Duff & Phelps Co., a Wall Street-based credit rating agency. “They are massive, well organized and growing with a very secure investment strategy.”
Last year, the company’s earned $153 million, up from $70 million the year before. For the fourth quarter ended Dec. 31, net income was $45.9 million, compared with $21.3 million for the like period a year ago.
Real estate is the main strength, Lenkin said. The company has developed more than 67 million square feet of storage and office space, as well as managing 51 business parks throughout the nation.
This growth is spawned mainly by convincing investors to front money to build the projects.
Public Storage collects fees on each new deal and gets up to a 26 percent cut of the sites’ rental fees, with the local partners getting the rest.
Besides being the nation’s grandfather of self-storage sites, Public Storage also is a major real estate syndicator. Since its founding in 1972, it has raised more than $3 billion from investors through dozens of private and public partnerships, real estate investment trusts and other financing vehicles.
“For a real estate company, we are somewhat of a giant we’re the second largest REIT in the nation, with about $3.6 billion in assets,” said Marvin Lotz, the company’s chief finanical officer. “Our business is providing affordable self-storage, but it is our real estate holdings that have made this company strong.”
REITs operate much like closed-end mutual funds, except that the investments are not in stocks but in real estate.
Of the 19 self-storage REITs on the market, 15 of them are former private partnerships affiliated with Public Storage, formerly Storage Equities, which went public in 1980.