1999 Spotlight on Top Operators

This year in our August issue of Inside Self-Storage, we were pleased to identify 116of the nation's top self-storage operators in our annual Top Operator List. At the verytop of that list are 10 companies that represent superior quality in management, customerservice and development. These companies demonstrate what is possible in the self-storageindustry, and behind each lies a unique story of success...

1. Public Storage Inc.
701 S. Western Ave., Suite 200
Glendale, CA 91201
818.244.8080
Fax 818.241.1792
1,417 facilities
81,000,000+ square feet
851,840 units
Serving 38 states, four provinces in Canada
Founded: 1973
President: Harvey Lenkin
Contact: Harvey Lenkin
www.publicstorage.com

Public StorageInc., with assets of approximately $4 billion, is a fully integrated, self-administeredand self-managed real estate investment trust that acquires, develops, owns and operatesmore than 1,400 self-storage facilities throughout the United States and Canada. Thecompany is the largest owner and operator of self-storage in the nation, with locations inmajor metropolitan markets of 37 states, encompassing 700,000 storage spaces andrepresenting approximately 80 million square feet of rentable space.

Public Storage was founded in 1972 by B. Wayne Hughes, the company's current chairmanand CEO, and Kenneth V. Volk Jr. According to company president Harvey Lenkin, who hasbeen with the company since 1978, "Our products and services are offered toconsumers--we rent storage space and trucks; we sell moving and storage supplies; we havea public-storage pick-up and delivery service as an ancillary business."

Public Storage, with 20 regional offices, employs nearly 5,000 individuals. Based onthe number of properties, Public Storage is approximately three times the size of itslargest public competitor. The company has developed one of the most recognized brandnames and trademarks in the consumer-service industry. Lenkin attributes this success to"a willingness to figure out new ways of doing things, the ability to raise largeamounts of capital in a conservative and prudent manner, and a belief in a valid serviceoffered to customers in a consistent, professional manner." Lenkin says PublicStorage plans to continue to acquire and develop self-storage facilities throughout theUnited States. "We plan to continue to be not only the biggest, but the best in termsof what we offer our customers. The consumer is king. As a word of advice, operatorsshould remember that."

2. Storage USA
165 Madison Ave., Suite 1300
Memphis, TN 38103
901.252.2000
Fax 901.252.2060
490 facilities
32,400,000 square feet
300,000 units
Serving 31 states
Founded: 1985
President: Dean Jernigen
Contact: Russ Williams
www.sus.com

Founded in 1985by its current Chairman and CEO Dean Jernigan, Storage USA Inc. is a fully integrated,self-administered and self-managed real estate investment trust, engaged in themanagement, acquisition, development, construction and franchising of self-storagefacilities. As of June 30, 1999, the company owns, manages or franchises 495 facilitiescontaining 32.8 million square feet in 31 states and the District of Columbia. It is thesecond largest self-storage REIT in the United States.

From the beginning, with one storage facility located in Memphis, Tenn., the companyexpanded steadily over the next few years through the development, acquisition andmanagement of self-storage facilities, virtually doubling in size every other year. OnMarch 16, 1994, Storage USA completed its initial public offering and listed its commonstock on the New York Stock Exchange. Since the initial IPO, Storage USA has grown from 73facilities to its current size.

Storage USA recently announced an agreement in principle with Budget Truck Rentals,whereby it has the exclusive right to receive pre-qualified leads from Budget/Ryder'struck-rental prospects as well as exclusive rights within the self-storage industry tooffer Budget/Ryder truck rentals at its facilities. Storage USA also launched its NationalReservation Center, which handles rollover calls from facilities when the manager is notavailable.

The company's self-storage facilities operate under the Storage USA^® nameand offer low-cost, easily accessible and enclosed storage space for personal and businessuse, primarily on a month-to-month basis. Storage USA strives to be a rent leader in itsmarkets through an emphasis on customer service and satisfaction, employee screening andtraining, incentive-based compensation for its managers, and aggressive marketingprograms. Facilities offer state-of-the-art security, climate-control units and, in mostlocations, resident managers and 24-hour access. The company's commitment to professionalmanagement and customer service is manifested in its Total Storage Satisfaction Guarantee^®--ifany customer is not completely satisfied with his self-storage experience, he needs onlyask the facility manager for a refund.

Over its 14 years of operations, Storage USA has sought to create shareholder valuethrough acquisition and development, including both new construction and expansion ofexisting facilities. The company has been and will continue to be developing facilities inselected markets. In addition, Storage USA offers the industry's most comprehensivefranchise program, with 41 franchised facilities open and operating and another 34 underdevelopment. Each Storage USA facility is computerized and linked by satellite to thecompany's headquarters. Through this technology, all levels of Storage USA management areprovided essential operational reports to monitor and analyze the performance of eachfacility, district and region in the company.

At every Storage USA facility, customers are assured of receiving the best service fromprofessionally trained and courteous staff. Every Storage USA manager and associate istrained to offer customers the highest level of service and to follow the Total StorageSatisfaction Guarantee. Each staff member is completely knowledgeable of his facility, andreceives up-to-date training material on a regular basis to make sure he is fully informedof changes in the industry, as well as to his own facility.

Storage USA recognizes that, in the end, long-term success is really in the hands ofthe people at the properties. The reason the company keeps growing--retaining currentcustomers and attracting new ones--is the relentless focus of its managers on providing"Total Storage Satisfaction." In short, the 1,800 people at Storage USA are itsgreatest strategic advantage.

3. U-Haul International Inc.
2727 N. Central Ave.
Phoenix, AZ 85020
602.263.6811
Fax 602.263.6772
924 facilities
26,624,000 square feet
307,000 units
Serving the United States and Canada
Founded: 1945
President: E.J. "Joe" Shoen
Contact: Carlos Vizcarra
www.uhaul.com

U-Haul wasfounded in 1945 as a practical and economical way for North American families to movetheir household possessions. There existed an obvious widespread need for do-it-yourselfmoving equipment on a one-way, nationwide basis. It was the visionary approach of U-Haulthat recognized this need, acted upon it and literally created an industry.

With $5,000, L.S. Shoen, his wife, Anna Mary Carty Shoen, and their young child movedto the Carty ranch in Ridgefield, Wash. There, with the help of the family, the Shoensbuilt the first U-Haul^® trailers in the fall of 1945, using the ranch'sautomobile garage and milk house as the first manufacturing plant for the budding company.

U-Haul currently maintains 924 self-storage facilities, 1,127 company-owned moving andstorage center locations and more than 14,584 independent dealers across North America.U-Haul self-storage facilities consist of 26,624,000 square feet of storage space in morethan 307,000 units. The company also offers truck and trailer rentals, hitches, boxes andmoving supplies. The company employs 14,400 full-time employees in 110 regional offices,1,100 U-Haul centers and 14,700 independent dealers.

The name U-Haul is as familiar to consumers as Kleenex and Coca-Cola. Branding is thecornerstone of the U-Haul corporate culture and has been for more than 50 years. Thecompany's products are designed and built specifically for household customers, and itscenters are located for convenience and easy access, offering one-stop shopping for movingand storage needs. U-Haul has made a long-term commitment to its customers andshareholders to remain a leader in the moving and storage industry, with the goal toimprove service, acquire new customers and earn their repeat business.

The company's growth strategy is to develop or acquire convenient neighborhoodmoving-and-storage centers to meet customer needs. U-Haul aims to add 34,000 storagerooms, or almost two million square feet, through acquisitions and development during thecurrent fiscal year. The company has 40 new centers under construction in select marketsand has implemented a program to add storage where space exists at existing sites. U-Haulis also actively seeking the acquisition of existing self-storage facilities that meet orcan be upgraded to its standards.

As advice to new owner/developers, U-Haul suggests joining with one of the major brandnames in the industry, which will ensure that they receive more public attention in themarketplace. If new owners plan to remain in the self-storage business and grow, U-Haulsuggests including truck and trailer rentals in their plans, as well as the retailing ofboxes, rope, tape and locks to both moving and storage customers. New owner/developersshould put at least a display pad in front of their storage locations during the planningstages, and they should plan to provide sufficient signage.

4. Shurgard Storage Centers
1155 Valley St., Suite 400
Seattle, WA 98109
206.624.8100
Fax 206.652.3700
350 facilities
22,442,882 square feet
190,000 units
Serving the United States
Founded: 1974
President: Charles K. Barbo
Contact: DeLise Keim
www.shurgard.com

The year was1973. In Olympia, Wash., Chuck Barbo and his founding partner, both aspiringentrepreneurs, saw a unique business opportunity: to provide self-storage inmini-warehouses for communities whose residents have too much stuff, and for businessesthat need to stow boxes of long-forgotten records and documents. Today, Shurgard StorageCenters Inc. is a New York Stock Exchange listed (SHU) real estate investment trust (REIT)and is one of the world's largest operators of storage centers. The company owns ormanages more than 350 locations in more than 22 markets across the country and in Europe,totaling more than 22 million net rentable square feet.

"The company's mission is the same today as it was when we opened our firststorage center more than 25 years ago--be the national leader by setting the standard forthe self-storage market," says Chuck Barbo, president and CEO. "Providing a safehaven for wayward valuables requires a time-tested business plan that is fluid, innovativeand turnkey, thus adapting to the constantly changing storage needs of John Q. Public andtoday's business professional."

Shurgard's business blueprint begins with high-quality, conveniently located and secureself-storage centers infused with exemplary customer service. From this base, Shurgardprovides features and amenities that keep the company at the forefront of customerconvenience, including the following:

During the last 26 years, Barbo and Shurgard have attracted numerous investors and haveundergone the changes that come with growing a company. In its first 20 years, more than$600 million--all equity--was raised from more than 80,000 individual investors in 24separate, real-estate-limited partnerships. In March 1994, a consolidation of 17 of theselimited partnerships was completed and a single, publicly traded REIT was formed. On March24, 1995, Shurgard Inc., the private company that managed Shurgard's storage centers,merged with the Shurgard REIT. This merger resulted in a fully integrated,self-administered and self-managed REIT.

Today, Shurgard continues to grow with an emphasis on development. The company'sdevelopment strategy is to build high-quality stores in premium locations. Althoughemphasis is placed on development, selective acquisitions are also added to the portfolio.

In addition to the 22 domestic markets that Shurgard operates in the United States, thecompany has expanded into Western Europe. Along with its European partners, Shurgardcurrently has a presence in Sweden, France and Belgium. European expansion plans are alsounderway in The Netherlands and the United Kingdom.

Shurgard is aggressively pursuing its plan to open 30 to 35 storage centers in 1999,both domestically and in Europe. Behind this growth is the company's determination to findnew markets needing upscale storage, anticipate customers' growing and changing needs, andredefine and set the standards of what storage is and can be.

"Our vision of continued growth is pretty simple: innovative ideas coming fromenthusiastic individuals. We make it a point to hire quality people and we listen tothem," says Barbo. "Ultimately, front-line employees spot opportunities forgrowth and suggest ways to offer better customer service. They are the eyes and ears ofour company and have a voice in determining the future of Shurgard."

Both Barbo and Shurgard are motivated to provide the best storage opportunities forconsumers today and tomorrow. And, Barbo vows to keeps his employees motivated because heknows, regardless of the global changes in the past two decades, people still have stuff,and someone still has to store it.

5. Sovran Self Storage Inc.
5166 Main St.
Williamsville, NY 14221
716.633.1850
Fax 716.633.1860
221 facilities
12,400,000 square feet
112,000 units
Serving 21 states
Founded: 1983
President: Robert Attea
Contact: David L. Rogers
www.sovranss.com

In 1985, through a limited partnership of which it was a general partner, Sovran'spredecessor developed its first self-storage facility in Florida. On June 26, 1995, SovranSelf Storage Inc. commenced operations effective with the completion of its initial publicoffering of 5,890,000 shares. With the closing of the offering, Sovran purchased 62self-storage facilities that had been owned and managed by Sovran Capital Inc. and theSovran Partnerships. The company has since purchased 159 self-storage properties fromunaffiliated third parties, increasing the total number owned to 221--all of which operateunder the name "Uncle Bob's Self Storage." Since 1985, the primary business ofthe company has been acquiring, developing and operating self-storage facilities.

Sovran's principle officers include Robert J. Attea, chairman of the board and chiefexecutive officer; Kenneth F. Myszka, president and chief operating officer; and David L.Rogers, chief financial officer. These principle officers have been working together inthe acquisition, development and operation of self-storage facilities for more than 14years, during which time they have developed substantial expertise in facility management.

Sovran's external growth strategy is to increase the number of facilities it owns byacquiring suitable facilities in markets in which it already has operations, or to expandin new markets by acquiring several facilities at once in those new markets. The companyalso intends to expand and enhance certain of its existing facilities by buildingadditional storage buildings on presently vacant land and by installing climate controland enhanced security systems at selected sites.

6. U-Store-It
6745 Eagle Road, Suite 300
Middleburg Heights, OH 44130
440.234.0700
Fax 440.234.8776
137 facilities
8,300,000 square feet
70,341 units
Serving 18 states
Founded: 1928
President: Todd C. Amsdell
Contact: Todd C. Amsdell
www.u-store-it.com

A former five-and-dime that was transformed into mini-warehouses has grown into acompany boasting 144 self-storage centers with more than 70,000 units, eight millionsquare feet and 360 employees.

U-Store-It, the Self-Storage Professionals, is a wholly owned subsidiary of the AmsdellCompanies, a multi-faceted real-estate development company headquartered in MiddleburgHeights, Ohio. The Amsdell Company history dates back to 1928 in Oil City, Pa., wherefamily patriarch Carl Vesper Amsdell built oil refineries and steel mills. The Amsdellsons, Robert and Barry, who worked in the company in their teen-age years, took over thefirm in 1973. They entered the storage business in 1975 when they decided to purchase thesite of a large former department store that had gone out of business and transform itinto small warehouse spaces.

The rest, they say, is history. U-Store-It now operates three regionaloffices--Cleveland, Ohio; Naples, Fla.; and Milford, Conn.--and 17 district offices. Oneof the company's largest growth spurts was between 1994 and 1998 when the company usedseveral sources of funding to acquire 133 properties. Future plans call for developing andacquiring additional self-storage centers nationwide.

U-Store-It's number-one selling point is its people. Despite its rapid growth, thecompany hasn't forgotten the importance of human interaction. Therefore, many of itsfacilities have resident managers. "Our vision is to have the finest self-storagecenters providing the best possible service from the most professional people," saysTodd Amsdell, president. "Our vision is backed by the great people who work atU-Store-It."

The company, which received an Award for Excellence from the Self-Storage Association,is also an integral part of each community in which it locates, being involved in localyouth sports programs, and fire and police safety organizations. In July, the AmsdellCompanies donated the use of its corporate jet for the transport of athletes to the 1999Special Olympics World Games in the Raleigh-Durham, N.C., area. "The AmsdellCompanies was thrilled to be a member of the team," says Amsdell. "U-Store-It'sreputation is rooted in honesty and integrity. That's why we are the self-storageprofessionals."

7. Derrel's Mini Storage Inc.
3265 W. Ashlan Ave.
Fresno, CA 93722
559.224.9900
Fax 559.224.1884
36 facilities
5,003,486 square feet
45,432 units
Serving California
Founded: 1968
President: Derrel Ridenour
Contact: Derrel Ridenour

For the ownersof Derrel's Mini Storage Inc., the business of self-storage was a side project that becameall-encompassing. "I come from a manufacturing background," explains companyPresident Derrel Ridenour. "My dad had a metal-fabrication plant back in 1945. Aroundabout 1960, a freeway was going to take our shop, so we bought another location to moveto, yet the freeway wasn't going to be complete for several years, so we decided to buildsome fences and rent some space out for RVs.

Then in 1963, a mini-warehouse opened up here in Fresno with about 60,000 square feet,and it rented in about three months. We decided to keep our guys busy during our slow timeby having them make doors and roofs and building components. We designed our own buildingsand then made the parts."

This peripheral focus on building self-storage facilities continued for several yearsuntil about 1982, when the company shifted its full focus on building storage facilities.Derrel's still continues to manufacture its own building components. "We stillmanufacture our own doors and walls and have our own crews that put them up. We find ourown locations and go through the planning process. We also have our own managementcompany, but only for our own accounts."

Derrel's plans to expand by building approximately 300,000 square feet of self-storageeach year, focusing primarily in California's central valley, from Sacramento toBakersfield. The company has employed a strong radio and TV advertising campaign to targetthis particular area. "About 10 or 15 years ago," says Ridenour, "I decidedthat I had to build a storage facility within a two-mile radius of everyone who heard orsaw our commercials. It was a costly, timely venture, but it really worked out well. Nowwe've become a brand name in the Fresno market."

Derrel's Mini Storage currently has 36 locations and 10 more under development.Ridenour attributes the company's success to "the efficiency of a family operationwhere the owner picks the land, where we do our own designing and manufacturing." Toany new owners or operators, he suggests selecting an "A" location for yoursite, such as one close to a McDonald's. "Those are the ones that are going tosurvive," he says. "You'd also better be able to have a pretty good vacancyfactor figured into your proforma. Try to build where you're able to limit your futurecompetitors--be very selective."

8. Storage Inns Inc.
9909 Clayton Road
St. Louis, MO 63124
314.997.6603
Fax 314.997.0376
100 facilities
5,000,000 square feet
Serving 10 states
Founded: 1973
President: Frank C. Blumeyer Jr.
Contact: Frank C. Blumeyer Jr.

Unlike other top operators of the self-storage industry, Storage Inns Inc. is anassociation of independent owners, founded in 1973 by Frank C. Blumeyer. Although Blumeyerowned a few facilities of his own, he saw potential in a cooperative effort. According toFrank C. Blumeyer Jr., the founder's son and current president of the company, "Yearsago, my father felt that there were too many mom-and-pop operators ofself-storage--independent operators like ourselves. He thought it would be a good idea ifwe banded together under one name and did common advertising in the phone book, madecommon purchases of supplies, etc. So we adopted the name, similar to that of Holiday Inn,and began licensing individual owners, for a modest fee, to use it. And we gave themexpertise on how to build, how and when to sell, that sort of thing."

There are currently 100 facilities licensed by the company and going by the name AStorage Inn. Although the Blumeyers have not solicited any new licensees in a number ofyears, their future plans include the fine tuning of their present operation. Because, inthe past, many new operators would come to them for advice on site selection andfeasibility, they were presented with multiple partnership opportunities. Of the 100facilities now participating in the Storage Inns collective, the Blumeyers have financialinterest in several, including those that they own and manage themselves. It has been avery successful venture for this family-owned business.

"The bottom line is luck, careful site selection and continued, hands-onmanagement," says Blumeyer. "The best advice I could give anyone is to becareful in your site selection and realistic in your proforma. Anybody can make anythinglook good on paper, but that doesn't mean that it's necessarily going to turn out that wayin reality. I could give a list as long as both my arms of people that went broke and losttheir facilities because they were looking at this business through rose-colored glassesand thinking it was a sure thing--it's not."

9. Morningstar Mini Storage
10833 Monroe Road
Matthews, NC 28105
704.847.1919
Fax 704.847.1640
57 facilities
4,300,000 square feet
30,700 units
Serving North and South Carolina
Founded: 1981
President: Stephen E. Benson
Contact: Stephen E. Benson
www.morningstarstorage.com

He sold hisWendy's franchise to Dave Thomas in 1980, but not before he had learned a few lessonsabout customer satisfaction. "The philosophy I've borrowed from Dave Thomas is totake that knob on quality and turn it way up," says Stephen Benson, president ofMorningstar Mini Storage. "What's a little bit different about Morningstar is thatwe've always done all of our own construction as a general contractor. We even do most ofthe subtrades as well. We are not just the operators, we are the owner, the developer, thebuilder and the long-term operator."

Morningstar owns and operates 57 facilities throughout North and South Carolina andemploys approximately 220 staff members. The company also has a partner--Five ArrowsRealty Security, which is a fund managed by the Rothschild Group of London. This allowsMorningstar a $60 million line of credit with which the company plans to double its sizein the next five years while still remaining in the Carolinas. "We really dominatethis market," explains Benson. "Our thought is to stay close to home. It istempting to move over to Richmond or Jacksonville or Atlanta, but we want to stay a day'sdrive away from home. We want to be able to know our employees by face and by name."

Morningstar is a company with some very unique policies. First, the company usesstrictly masonry buildings. Its facilities have no chain-link fencing visible from theroad and, according to Benson, the company has the lowest coverage per square foot,providing for lawn and flowers. "One of the business expenses we've got that no oneelse has is a couple of thousands of dollars for flowers twice a year at eachlocation."

"We like our formula for success," says Benson, "and that is top-endamenities: picnic tables, restrooms, a diaper-changing station, a vending area, payphones,etc. We may not make as much money as the rest of the world, but in the long-term, we wantto keep our market position secure."

The company also boasts a very unique corporate culture and a strong media diet.Morningstar produces its own TV commercials in house and employs a full-time marketingmanager. The company's facility managers, chosen very selectively from a roster ofapplicants with more professional backgrounds, are not bridled by a strict rule book or aset of corporate policies. Instead they are given complete autonomy. Morningstar does notkeep resident managers, nor does it offer an incentive program. But, according to Benson,there is virtually no turnover. "The most interesting thing about Morningstar is ourunbelievable team spirit."

Employees also participate in the company's Share the Load program, where tasks such aspayroll, maintaining computer databases, and ordering documents or uniforms are allhandled by employees at different locations who volunteer to handle that particularresponsibility. "As a result, we have a very small executive staff that can focus onthe real meat of the business," says Benson. "This means I can focus on criticalissues, not details."

Benson believes that, in the past, self-storage may have been a real-estate game, butis not so anymore. "It's a marketing game," he says. "The future will bevery different: It will take a great deal of talent to succeed, and a lot of skill."

10. Dahn Corp.
18552 MacArthur Blvd., Suite 495
Irvine, CA 92612
949.752.1282
Fax 949.752.0301
68 facilities
4,000,000 square feet
40,000 units
Serving nine states
Founded: 1970
President: Brian A. Dahn
Contact: Kathleen N. White

In the 1970s, when the firm was known as C.J. Bonner Corp., Brian A. Dahn and his boss,C. J. Bonner himself, specialized in the construction of new storage facilities. Alongwith Public Storage, the Bonner Corp. held pioneer construction of storage sites inCalifornia. In 1988, when Bonner decided to retire from the industry, Dahn purchased thecompany, changing it's name to Dahn Corp. Today, he remains the president and owner ofthat company.

Dahn Corp. specializes in the acquisition, development and management of self-storagefacilities nationwide. The company operates 68 storage facilities in nine states from onecentral office in Irvine, Calif., where a total of 14 employees are dedicated to makingeach Dahn facility a success. A core of four individuals visits each facility at leastonce every three weeks, meeting with on-site managers, analyzing market conditions andpursuing acquisition leads. They are supported by five administrative and accountingspecialists who are familiar with each facility and manager.

Dahn Corp. has been successful because of its focus on developing and acquiring onlyself-storage facilities--the company does not diversify into other products. Dahn hasmaintained a conservative approach to site selection and financing, and its properties areheld long-term. The company's ability to identify and take advantage of strong markets,while maintaining low overhead, is responsible for its success. In addition, the stabilityof Dahn's workforce has been a strong influence on its prosperity, with the corporateofficers staying an average of 13 years with the company.

The Dahn Corp. continues to develop in the areas where it has existing facilities andwill also expand through the purchase of additional sites. The company is proud of itssuccess and will continue to operate as it has in the past, developing primarily for itsown account and looking forward to future expansion.

According to Kathleen White, senior vice president, "The self-storage industry,like other types of real-estate development, can be extremely rewarding. However, it is ahighly competitive industry, and it can be difficult to develop and manage thefacilities." She points out that some common mistakes made by new owners/developersinclude building at a poor location, bad design, too much debt and improper management."Using a conservative approach can help limit some of the many risks involved in thedevelopment process," she says.