A few comments on Public Storage (PSA)...
Hello everyone! I have enjoyed being a lurker on this thread for a while now and feel that it is time to contribute something!
Public Storage was originally a series of Limited Partnerships that started in the 1970's. I understand that they were actually a play on Southern California land. The storage facilities were just something to do until land prices went up! But the storage facilities were so profitable that the original purpose of the partnerships was forgotten.
I have bought several of these partnerships in the secondary market, and am not impressed with the management. At least as far as the LPs are concerned, they are definitly looking out for themselves, not the limited partners. For example, they sell storage related materials (boxes, tape, locks, etc.) from the facility, but the profits go to a separate company (I believe a privately owned company of the general parnters) not the partnership. Management takes the attitude that the desirability of the facility is enhanced by the availability of these materials, and they do not share any of the profits.
PSA is gradually buying the partnerships up, generally at values below their real value. They send out a new tender offer every year or two, gradually increasing the price, until they have a majority of the shares, and then dictate a buyout price to the remainder of the limited partners. I guess this is good for the stockholders, but sucks for the limited partners who should get a better deal. I should not complain, I have received 20-40% annualized returns on my public storage partnerships, but feel sorry for the original investors who have not fared nearly as well.
If management treats its shareholders as bad as its limited partner investors, I would stay away from this one.
Good Investing to All, and to All a Good Investment!
STEVE |
