Public Storage Opens Self-Storage Facility In Colorado Springs

Public Storage (NYSE:PSA) recently unveiled a new storage facility in Colorado Springs. The move comes as part of the company’s effort to expand in this region which is witnessing growing neighborhood.

Located at 3601 Blue Horizon View, Colorado Springs, CO 80908, the new storage facility has more than 700 units, ranging from indoor, climate-controlled units to convenient drive-up outdoor storage. The property is likely to grab attention for its proximity to the busy Powers Boulevard, also known as Highway 21. Moreover, the neighborhood is witnessing a significant number of buildings being built on vacant fields.

Notably, Public Storage’s latest expansion of its footprint in the region is a strategic fit as Colorado Springs is attracting millennials with low unemployment rate, world-class outdoor hiking and skiing and lower cost of living. In the recent years, there is significant growth of new residents in that age group and therefore, even though Public Storage had not added another location there for 19 years, the latest facility marks the second one in Colorado Springs in less than two months. Opened in April, Public Storage 6190 Tutt Blvd., Colorado Springs, CO 80923 offers 1,213 indoor, climate-controlled units.

In fact, Public Storage is one of the largest owners and operators of storage facilities in the United States. The ‘Public Storage’ brand is the most recognized and established name in the self-storage industry, with presence in all major metropolitan markets of the nation.

Not only in Colorado Springs, the company has, in fact, hinged upon strategic acquisitions and expansion efforts to fortify its presence in other key cities. In fact, since the beginning of 2013 through Mar 31, 2019, the company acquired 308 facilities with 21.4 million net rentable square feet from third parties for around $2.7 billion. Additionally, the company opened a newly-developed and expanded self-storage space for $1.4 billion, adding approximately 12.9 million net rentable square feet.

Following Mar 31, 2019, the company acquired or was under contract to acquire 10 self-storage facilities, spanning 0.7 million net rentable square feet of space, for $116.4 million. Also, as of Mar 31, 2019, the company had several facilities in development (1.2 million net rentable square feet), with an estimated cost of $194 million, as well as expansion projects (2.7 million net rentable square feet) worth roughly $318 million.

However, Public Storage operates in a highly fragmented market in the United States, with intense competition from numerous private, regional and local operators. In addition, there is a development boom of self-storage units in many markets. This high supply is likely to intensify competition for this Zacks Rank #3 (Hold) company, curb its power to raise rents and turn on discounting.

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Written By: Zacks Investment Research