NEW YORK, Dec. 14, 2020 /PRNewswire/ -- Elliott
Associates, L.P. and Elliott International, L.P. (together,
"Elliott"), which together have made a substantial investment in
the common stock and economic equivalents of Public Storage (the
"Company" or "PSA"), today announced in a letter that it privately
nominated six trustee candidates to the PSA Board last week.
The PSA Growth Opportunity
Elliott has been engaged in a private dialogue with Public
Storage for more than a month, according to the letter, which
Elliott said was made public in response to incomplete disclosures
regarding its involvement and in order to facilitate a broader
discussion regarding the best path forward for PSA. The letter
makes the case that Public Storage has significantly underperformed
its self-storage REIT peers over the last decade, despite having
numerous structural advantages.
Elliott attributes this underperformance to a failure by PSA to
invest aggressively and to lagging same-store sales growth, both of
which have been exacerbated by substandard corporate governance and
investor communication. The letter suggests that the best path
forward for PSA is increased investment in its stores, its
employees and its customer experience, combined with governance and
investor-communication enhancements to ensure the proper oversight
and transparency regarding the significant value-creation
opportunity that exists.
In the letter, Elliott outlined a set of proposals for Public
Storage, including the following concrete steps:
- Refresh the Board with independent trustees who will add
valuable experience in relevant industries while bringing a diverse
set of skills and perspectives to the Board. The letter noted the
Company announcement yesterday of certain limited steps to refresh
its Board — steps that validate some of the concerns Elliott has
raised privately regarding the current Board's long tenure and lack
of independence. However, the letter asserts that these steps fall
short of the change needed at PSA, which needs to come in
consultation with shareholders to have credibility with investors.
Otherwise, even steps in the right direction will look like
entrenchment and reinforce the perception that the Board is
resistant to self-evaluation and course correction.
- Form a New Board Committee to evaluate PSA's performance
and plan, focusing specifically on organic growth strategy, capital
allocation and balance sheet optimization. The letter notes that
Elliott has worked with many companies on steps to create these
kinds of committees to evaluate, design and implement
value-creative changes.
- Restore Investor Credibility, starting with an investor
day, to reveal the committee's work and lay out a plan for the
future of the Company. According to the letter, an Investor Day
would provide a natural opportunity to publish a robust investor
presentation and articulate a strategy for sustainable value
creation.
The letter concluded by expressing a preference for continued
constructive dialogue with the Company toward a comprehensive plan
to deliver the value-creation opportunity that is possible at
Public Storage today.
The letter and trustee bios can be found in their entirety at
PSAGrowth.com.
The full text of the letter follows:
December 14, 2020
The Board of Trustees
Public Storage
701 Western Avenue
Glendale, CA 91201
Attn: Chairman Ronald L. Havner,
Jr.
Attn: Lead Independent Trustee Gary E.
Pruitt
Dear Members of the Board:
We are writing to you on behalf of Elliott Associates, L.P. and
Elliott International, L.P. (together, "Elliott" or "we"), which
together have made a substantial investment in the common stock and
economic equivalents of Public Storage (the "Company" or "PSA").
Our investment in the Company makes us one of your largest
investors and reflects our belief that Public Storage has a unique
opportunity today to create significant long-term value for all of
its stakeholders.
We want to start by thanking you for taking the time to discuss
our views on PSA's business during these last few weeks. We
appreciate your attention, and we hope to continue this
constructive conversation with the Company. We also want to
reiterate our admiration for Public Storage and the achievements of
B. Wayne Hughes and his successors,
whose entrepreneurship paved the way for what is today a
$40 billion industry. Within that
industry, PSA's first-mover advantage has given it a moat of
irreplaceable assets that continues to provide the Company with a
meaningful competitive advantage, giving rise to the opportunity we
see for PSA today.
We are writing to you publicly today because recent news
reports, as well as the Company's own decision to disclose our
dialogue in a press release, have left current and prospective PSA
stakeholders with incomplete information regarding our involvement.
We therefore thought it best to share some of our research, our
perspectives and our proposals regarding PSA and begin a broader
conversation about the best path forward for the Company.
Public Storage has — and has had for quite some time — the best
assets and platform in the industry. Yet, despite that critical
advantage, its total shareholder return has dramatically
underperformed its peers over the last decade. Through
our time- and
resource-intensive diligence process,
we have concluded that Public Storage's
underperformance derives from two main issues: (i) a failure
to invest more aggressively in its strong asset base and (ii)
lagging sales growth. Substandard corporate governance and
a lackluster investor relations program have compounded these
problems, deepening the underperformance. By underinvesting
in new stores, existing stores, store-level employees, innovation
and customers, the Company has failed to capitalize on the
considerable first-mover advantage, leaving its shareholders to pay
the price of that opportunity cost.
Fortunately, all of the Company's issues are fixable. In fact,
we were pleased to see the Company announce yesterday that it is
taking certain limited steps to refresh its Board — steps that
validate some of the concerns we have raised privately regarding
the current Board's long tenure and lack of independence.
However, these steps fall short of the change needed at PSA.
We believe that only by undergoing a full, honest and comprehensive
review of the Company's strategy and then by taking decisive action
to jump-start performance can Public Storage reclaim its rightful
place as the leader of the self-storage industry.
We have proposed a multi-step plan to set Public Storage on a
path to growth and superior performance — (i) form a truly
independent Board, (ii) empower the Board to review the Company's
strategy and enhance its long-term growth plan, and (iii) rebuild
the Company's credibility with investors. As investors, we
have worked with companies on similar plans with successful
results, and we believe we are uniquely positioned to work with PSA
to regain credibility with investors and create substantial
shareholder value. In addition, we have put forward a slate of
exceptional nominees, who have the experience, skills and
perspectives to help PSA better serve all of its stakeholders.
Given the quality of PSA's assets — and of our nominees — we trust
that a robust and well-designed process will yield a successful
outcome.
Elliott's Investment in Public Storage
Founded in 1977, Elliott is one of the oldest funds of its kind
under continuous management and today manages approximately
$41 billion of capital for both
institutional and individual investors. We are a multi-strategy
firm, and investing in public and private real estate around the
globe is one of our largest and most successful efforts.
Elliott's investment approach is distinguished by our extensive
due diligence, and our efforts on Public Storage have followed this
same approach. Selected examples of our substantial diligence
efforts on PSA include:
- Engagement with a leading management consulting firm to
complete an extensive survey of 2,215 self-storage customers over
four weeks examining the customer decision-making path and
experience, as well as an analysis on the quality of locations,
historical growth, margin profile and online presence at Public
Storage and its public peers;
- Conversations with dozens of external experts from all parts of
the industry value chain (e.g., CEOs, Presidents, Regional
Managers, District Managers);
- A survey of 125 Public Storage and 125 competing Extra Space
locations across the country;
- An extensive shareholder survey, speaking with investors in
both Public Storage and its self-storage peers;
- An analysis of testimonials from leading online review
platforms; and
- Our own hands-on diligence, including renting storage units at
both Public Storage and its peer companies in leading markets.
This work has informed our views on multiple areas PSA can
improve, and we believe that the current management team — along
with a refreshed, independent Board of Trustees — can form a plan
to address PSA's underperformance.
Public Storage's Long-Term Underperformance
Public Storage has significantly underperformed its self-storage
REIT peers over the last decade despite having every
structural advantage possible: the highest brand awareness, the
best (and most) locations, first-mover advantage, regional density
and the most pricing data. The chart below demonstrates the current
cumulative total shareholder return (TSR) of Public Storage versus
its peers as of December 11,
2020:
See "Total Shareholder Return Analysis."
This staggering returns gap was not the result of a single drop,
but rather consistent underperformance, year after year, including
being the worst (8) or second worst performer (2) of the group in
10 out of the last 12 years:
See "Annual Total Shareholder Return Ranking of Self-Storage
Companies."
Shareholders expect this underperformance to continue — a group
of shareholders we surveyed through an independent firm ranked
Public Storage last among close peers on every
qualitative metric, including general store experience, projected
same-store growth, corporate governance, investor communication,
management quality and execution, digital experience and,
critically, pricing optimization.
How Public Storage Got Here
The underperformance illustrated above cannot be attributed to
any structural disadvantage relative to PSA's peers — e.g., a lack
of scale to compete or a lack of institutional knowledge to
identify areas of growth. Instead, our diligence points to two main
drivers for Public Storage's underperformance: (i) a failure to
invest more aggressively in its strong asset base and (ii) lagging
sales growth.
Failure to Invest More Aggressively
PSA's failure to exploit its structural and strategic advantages
and invest more aggressively has been the primary driver of its
underperformance over the last decade. For several decades
following its inception, Public Storage did invest heavily in
expanding its store base, such that by 2010, it owned more than
five times as many self-storage facilities in the United States as its largest competitor.
Despite this commanding footprint, however, Public Storage only
owned 5% of the industry's square footage; 90% was still owned by
regional and local competition, leaving a large opportunity for
further expansion.
During this time, Public Storage's market position also drove
operational success, as regional scale translated into better
pricing and occupancy visibility and fixed-cost leverage in
marketing and G&A. As a result, PSA had the highest return on
capital among publicly traded peers, and that return was
significantly higher than its cost of capital. With a pristine
balance sheet, access to capital, high incremental returns on
capital, an operational edge on competition and a highly fragmented
industry of unsophisticated competition to acquire or out-develop,
Public Storage was primed to dominate the next decade.
Unfortunately, the Company failed to do so.
Ceded Relative Market Share
Instead, Public Storage ceded many of these advantages to
increasingly sophisticated peers. After the storage industry
demonstrated its resilience to economic turmoil and demand started
to outpace stagnant supply in the early 2010s, investors were drawn
to the attractive returns on capital and stable financial
performance storage businesses were generating, bringing in large
amounts of new capital and higher levels of financial and
operational sophistication. Despite all of this activity, the
public REITs' incremental returns on capital remained high, with
Public Storage at the top of the heap.
See "Public Storage Relative Market Share Over Time."
Public Storage took some steps to invest over this period,
increasing its owned store base by 456 stores from 2010 to Q3'20 (a
22% increase) and generating high returns. However, Extra Space
increased its owned stores by 640 stores over the same period — a
217% increase — and CubeSmart and Sovran (now Life Storage)
increased their owned store counts by 45% and 81%, respectively. At
the same time, peers aggressively entered the third-party
management business, an asset-lite approach to building effective
scale through increased access to data, location density and
acquisition pipelines. Taking these additional stores into account,
the peers increased their store counts by an average of 150%, and
Public Storage watched as its effective market share relative to
its closest competitor decreased from 2.5x to 1.4x.
Insufficient Capital Deployment
In our experience, three primary reasons a company would forgo
aggressive deployment of capital into its business are (i) lack of
access to capital, (ii) low returns on incremental capital
investment, or (iii) few opportunities to deploy capital. Over the
past decade, none of these reasons have applied to Public
Storage.
With Public Storage's superior data, scale, fixed-cost leverage,
brand name, regional density and access to high-return development
opportunities, it should have been the preferred buyer of any
seller. However, an overly conservative underwriting model and an
overly conservative approach to leverage hamstrung its growth.
PSA's obsessive focus on an investment-grade credit rating has left
it underlevered compared to its peers, yet it still pays more for
its capital by issuing perpetual preferred equity instead of
accessing the debt markets.
In order to take market share the way they did, Public Storage's
peers raised and deployed significant amounts of capital while PSA
held back, with low leverage yielding lower equity returns. Between
2011 and Q3 2020, for example, Extra Space increased its net debt
by more than 300% and its share count by almost 40%, while Public
Storage increased net debt by 73% and its share count by only 2%.
As a result, Extra Space's invested capital increased by more than
250% while Public Storage's increased by only 48%. Given that
Public Storage had an investment-grade credit rating, billions of
dollars of capital available and the best return on capital of its
peers, the Company's conservative approach to capital deployment
stands in stark contrast to the strategic actions of its peers —
and their total shareholder returns show the result:
See "Invested Capital Growth vs. TSR Over the Last
Decade."
The Company still has an industry-leading platform and a base of
properties that can yield high-return development, so increasing
investment to a level commensurate with its relative scale should
drive accelerated growth.
Third-Party Management
Owned stores do not tell the whole story: Customer brand
awareness and market data are driven by managed stores as well as
owned stores. Between 2010 and today, PSA's self-storage peers were
able to quickly grow their "effective" store base by focusing on
third-party management. Public Storage, by contrast, only recently
entered the third-party management space in 2018. PSA's
self-storage peers have been building acquisition pipelines and
exploiting valuable data from the third-party management space for
more than a decade before PSA entered this business.
The direct financial impact of third-party managed stores is
lower than that of owned stores, but the minimal upfront capital
and incremental "effective scale" through regional market share
made third-party management an attractive endeavor for PSA's peers
in 2010. The better data provided by these third-party management
opportunities also allows for better decision-making: Larger store
bases drive better brand awareness, and the acquisition pipeline
allows for more capital to be deployed to create value. We are
happy to see that the Company has decided to enter the business,
but we question why this Board took so long to see it done and why
the pace of managed store growth is so tepid compared to its
competitors.
Lagging Same-Store Sales Growth
The secondary driver of Public Storage's underperformance has
historically (and more importantly going forward) been lagging
same-store sales growth. The self-storage industry has a low cost
of capital, so small, consistent differences in organic growth can
drive significant valuation discrepancies.
See "Mature Same-Store Growth (2010-2019)."
Poor Store Experience
Our research, surveys and personal experience have shown that
the customer experience at any given Public Storage location
significantly lags peers. We believe this is a direct result of its
conservative approach to costs, including under-incentivizing
retail workers and skimping on store experience. In our view,
targeted spending increases throughout the store base will drive
stronger revenue growth and position Public Storage to thrive and
compete.
Public Storage was rated last on "General Store Experience" in
an investor survey, and our proprietary customer survey showed that
customers rate Public Storage lower on "Cleanest" and "Friendly
Staff" compared to Extra Space. Our side-by-side store visit survey
showed Extra Space stores outperforming directly competing Public
Storage locations on every qualitative measure of store experience
we surveyed. Critically, Public Storage has underinvested in its
employees who are set up to fail with a lack of proper incentives,
training or career advancement opportunities. Investors and
industry participants believe that workers on the ground can drive
improved store performance through increased sales conversion,
upselling, price discrimination and reducing churn. By investing
in its employees, Public Storage can improve its customers'
experience and improve its growth trajectory to match and
ultimately exceed its peers.
Pricing/Occupancy Optimization Algorithm Focuses Too Much On
Occupancy
Self-storage is a balancing act of price and occupancy —
managing the interplay of street rates, promotions, price increases
and churn. There is no doubt that Public Storage and its REIT
competitors all understand this interaction and have strong pricing
algorithms in place. However, we have received consistent feedback
that Public Storage's algorithm is highly sensitive to changes in
occupancy, meaning its focus on industry-leading occupancy may well
be holding it back from maximizing revenue. Current and prospective
investors we have spoken with rated Public Storage last among the
large self-storage REITs on pricing analytics and optimization, and
industry participants consistently noted this dynamic. We are
confident that a review by management and a fresh set of
independent trustees could address this issue, either by adjusting
the algorithm or by proving to investors and industry participants
that the existing algorithm is optimal.
An Opportunity for PSA Growth
We have been encouraged by certain steps that management has
taken: It has increased capital deployment (although still not
proportional to its scale); launched the "Property of Tomorrow"
campaign; raised some unsecured debt; and hired a head of Investor
Relations. More recently, just yesterday and following our private
outreach, the Company announced the replacement of three Trustees
in a nod to our clearly valid concerns about Trustee tenure and
independence. But these incremental changes are not enough. More
ambitious change is needed for investors to have confidence that
today's Company has embraced a new direction for shareholders,
employees and customers alike.
Corporate Governance and Investor Relations
We do not believe that the current Board of Trustees can lead
Public Storage toward long-term success, even with the changes
announced yesterday. Prior to those changes taking effect, PSA's
Board has a 12-year average tenure and lacks a sufficient number of
independent trustees, making it one of the least independent Boards
in the S&P 500. Three members have been on the Board for more
than 20 years, and five members are on boards of related companies
(including the most recently added trustee). Governance and ESG
providers have given poor ratings to Public Storage's governance
structure, and numerous shareholders have expressed their concerns
about the Board's lack of independence in their proxy voting
disclosures. Right now, the Company's Board does not include a
single trustee with self-storage industry experience outside of the
PSA bubble, and the Chairman is the former CEO who presided over
profound underperformance along with the rest of the Board.
Public Storage needs fresh perspectives and leadership. Adapting
to a changing environment — which is an apt description for the
self-storage industry over the last decade — requires new ideas,
independent thinking and an innovative mindset. This Board presided
over the Company while it trailed peers and ceded market share; the
shareholders we surveyed are right to be skeptical that it should
be trusted to evaluate the next stage. That is why, while the new
Trustees represent a step in the right direction, real change needs
to come in consultation with shareholders to have credibility with
investors. Otherwise, even steps in the right direction will look
like entrenchment and reinforce the perception that the Board is
resistant to self-evaluation and course correction.
This lack of credibility with investors is underscored by the
fact that Public Storage does not currently publish an investor
presentation on its website or provide shareholders with meaningful
guidance. PSA's prepared remarks on quarterly earnings calls have
averaged 22 seconds over the last five years. The Company is
both the largest REIT to not give guidance and one of the largest
companies without any kind of investor presentation. Investors we
surveyed rated PSA last among close peers in "Investor
Communication," with one investor even describing it as
"antagonistic." Public Storage's shareholders interactions clearly
need improvement, and as investors with deep experience in helping
companies communicate their stories, we are uniquely positioned to
help.
Our Proposal
We are asking for substantial Board refreshment. As
previously mentioned, by any objective measure, Public
Storage's current Board does not meet the standards of good
corporate governance, and its attempts at self-help simply lack
credibility. We have privately nominated six exceptional and
well-qualified Trustees. They will add valuable experience in
relevant industries, and their diverse skills and perspectives will
put the Board in a better position to serve all of its
stakeholders. (Please see the Appendix to this letter for their
full backgrounds.)
We are also asking the Company to form a new Board committee
to evaluate its performance and plan. We believe it is
imperative that the Board form a committee of independent trustees,
both old and new, with a specific mandate to provide
recommendations on i) the Company's organic growth strategy,
including customer experience, new potential revenue streams and
pricing / occupancy optimization, ii) capital allocation, including
development, redevelopment and acquisitions, dividend and capital
return policy, and minority interests in public equities and iii)
balance sheet optimization.
While we are confident in the case for change, we recognize that
change is usually best led from inside a company. We have worked
with many companies in the past to help them establish these kinds
of committees to evaluate, design and implement value-creative
changes. We are not prescribing or demanding specific changes – as
long as the review process is independent and robust, we are
confident the committee will arrive at the best answers, whether or
not they align with our own findings.
We are asking for the Company to restore its relationship
with Shareholders, starting with an Investor Day in the first half
of 2021. The Investor Day will be an opportunity for the
Company to reveal the Board's conclusions of the committee's work
and chart a new path forward where shareholders are valued
stakeholders. Further, given the Company's historical disappointing
investor communications, an Investor Day would provide an
opportunity to publish a robust investor presentation and make a
clear and compelling case to investors that they should own Public
Storage's stock.
Working Together
Elliott and other investors want Public Storage to invest in its
future by taking steps to create considerable value through growth.
We look forward to engaging with other shareholders regarding our
ideas, and we are committed to a transparent process to keep all
key stakeholders fully informed — which is one reason that we are
publicly sharing this letter and our nominees.
We thank the Board for considering our thoughts and look forward
to continuing our discussions to unlock Public Storage's full
potential. We hope to work constructively with you on the changes
needed at PSA — the changes all PSA stakeholders deserve.
Best Regards,
Johannes Weber
Portfolio Manager
Jeremy Grant
Associate Portfolio Manager
Appendix – Nominees
Benjamin C. Duster, IV,
age 60, has served as the Chief Executive Officer of Cormorant IV
Corporation, LLC ("Cormorant"), a finance operations and strategic
advisory/interim management firm, since founding Cormorant in
August 2014. Through his service at
Cormorant, from August 2016 to
March 2018, Mr. Duster served as the
Chief Executive Officer of CenterLight Health System, Inc., a
private diversified health services, managed care and assisted
living organization. Mr. Duster has served on the boards of
directors of Alaska Communications Systems Groups, Inc. (NASDAQ:
ALSK), a broadband telecom and managed information services
company, since June 2020, Weatherford
International PLC (OTCMKTS: WFTLF), a global oil field services
company, since June 2020, and Cardone
Industries, Inc., a private auto parts aftermarket manufacturer,
since February 2020.
Previously, Mr. Duster served on the boards of directors of
Multi-Fineline Electronics, Inc. (formerly NASDAQ: MFLX), a
provider of flexible printed circuit and component assembly
solutions, from October 2012 to
March 2015, Chorus Aviation Inc.
(OTCMKTS: CHRRF), a company that engages in the airline business,
from March 2010 to August 2014, Ormet Primary Aluminum Corporation,
a manufacturer of alumina and primary aluminum, from November 2007 to January
2014, Accuride Corporation (formerly NYSE: ACW), a
diversified manufacturer and supplier of commercial vehicle
components, from February 2010 to
April 2013, WBL Corporation Limited,
a multinational conglomerate operating in the technology,
automotive, property, and engineering & distribution sectors,
from April 2010 to May 2013, Netia, S.A (WSE: NET), a telecoms
company that provides fixed-line telecommunication services, from
August 2009 to November 2013, Catalyst Paper Corporation
(formerly TSX:CTL.TO), a pulp and paper company, from December 2006 to February
2012, where he served as Chairman of the Board, RCN
Corporation (formerly NASDAQ: RCNI), a telecommunications company
that provides bundled video, high-speed data and voice services,
from December 2004 to August 2010, and Algoma Steel Inc. (formerly
TSX:AGA, most recently Essar Steel Algoma Inc.), an integrated
primary steel producer, from February
2002 to June 2007, where he
served as Chairman of the Board.
Mr. Duster holds a Juris Doctorate from Harvard Law School, Masters of Business
Administration from Harvard Business
School, and Bachelor of Arts in Economics from Yale University.
Craig Macnab, age 64, has
served on the boards of directors of VICI Properties Inc. (NYSE:
VICI), a real estate investment trust specializing in casino
properties, since October 2017,
American Tower Corporation (NYSE: AMT), a real estate investment
trust and an owner and operator of wireless and broadcast
communications infrastructure, since December 2014, and Cadillac Fairview Corporation
Limited, a private company that invests in, owns, and manages
commercial real estate, since January
2011, where he serves as a trustee.
Previously, Mr. Macnab served as Chief Executive Officer of
National Retail Properties, Inc. (NYSE: NNN) ("National Retail
Properties"), a real estate investment trust that acquires, owns,
invests in and develops properties that are leased primarily to
retail tenants, from February 2004
until his retirement in April 2017.
From April 2000 to March 2003, Mr. Macnab served as Chief Executive
Officer and President of JDN Realty Corporation (formerly NYSE:
JDN), a real estate company specializing in the development and
asset management of retail shopping centers. Prior to that, Mr.
Macnab served as President of Tandem Capital Partners LLC, a
private investment company that he founded that provided growth
capital, primarily mezzanine debt, to small public companies, from
1997 to 1999. Earlier in his career, Mr. Macnab was as an
investment banker at Lazard Ltd (NYSE: LAZ) (f/k/a Lazard Freres
& Company), a financial advisory and asset management firm,
served as Co-Head of the Merger and Acquisition Department at J.C.
Bradford & Company, a private investment banking and brokerage
firm, and was General Partner at MacNeil Advisors LP, a private
equity firm. Previously, Mr. Macnab served on the boards of
directors of Forest City Realty Trust, Inc. (NYSE: FCE.A), a real
estate company, from June 2017 to
December 2018, National Retail
Properties, from February 2008 to
April 2017, where he served as
Chairman of the Board, DDR Corporation (formerly NYSE: DDR), a real
estate investment trust, from March
2003 to May 2015, Eclipsys
Corporation (formerly NASDAQ: ECLP), a company that provided
hospitals and other healthcare organizations with various
electronic order and record keeping technologies, from May 2008 to September
2010, when Eclipsys Corporation merged with Allscripts-Misys
Healthcare Solutions, Inc. (n/k/a Allscripts Healthcare Solutions,
Inc.) (NASDAQ: MDRX), JDN Realty Corporation, from 2000 to 2003,
and Per Se Technologies, Inc. (formerly NASDAQ: PSTI), a healthcare
company, from 2002 to 2007.
Mr. Macnab holds a Master of Business Administration from
Drexel University and Bachelor of
Commerce from the University of the Witwatersrand.
Adam S. Metz, age 59, has
served as a non-executive director of Hammerson PLC (LON: HMSO), a
property development and investment company, since July 2019. Previously, Mr. Metz served as
Managing Director and Head of International Real Estate at The
Carlyle Group Inc. (NASDAQ: CG), a private equity, alternative
asset management and financial services company, from September 2013 to April
2018. From March 2011 to
August 2013, Mr. Metz served as a
Senior Advisor at the dedicated real estate equity investment
platform of global alternative asset management firm TPG Capital.
From October 2008 to December 2010, Mr. Metz served as Chief Executive
Officer at General Growth Properties, Inc. (formerly NYSE: GGP)
("General Growth Properties"), a shopping mall operator. From 2003
to 2008, Mr. Metz served as Co-Founding Partner at Polaris Capital
LLC, a private investment management company. From 2000 to 2002,
Mr. Metz served as Executive Vice President and Chief Investment
Officer at Rodamco North America N.V., a closed-end real estate
fund. From 1993 to 2000, Mr. Metz served as Chief Financial Officer
and then as President at Urban Shopping Centers, Inc. (formerly
NYSE: URB), a real estate investment trust. From 1987 to 1993, Mr.
Metz served as Vice President at JMB Realty Corp., a real estate
investment company. From 1983 to 1987, Mr. Metz served as a
corporate lending officer and then as Vice President at First
National Bank of Chicago (formerly
NYSE: FNB), a retail and commercial bank. Mr. Metz has served on
the board of directors of Morgan Stanley Direct Lending Fund, a
public externally managed specialty finance company focused on
lending to middle market companies, since October 2019, in connection with which he also
serves on the board of directors of SL Investment Corp., a sidecar
investment vehicle of the Morgan Stanley Direct Lending Fund, since
September 2020.
Previously, Mr. Metz served on the boards of directors of Forest
City Realty Trust, Inc. (formerly NYSE: FCE.A), a real estate
company, from April 2018 to
January 2019, Parkway Properties Inc.
(formerly NYSE: PKY), a real estate investment firm, from
June 2012 to November 2016, General Growth Properties, from
2005 to 2010, Howard Hughes Corporation (NYSE: HHC), a real estate
development and management company, during 2010 following its spin
off from General Growth Properties, AMLI Residential Properties
Trust (formerly NYSE: AML), a trust specializing in management,
acquisition, development, and co-investment of multifamily
apartment communities, from 2003 to 2004, Aliansce Sonae Shopping
Centers SA (BVMF: ALSO3), a Brazilian shopping mall company, Bally
Total Fitness Holding Corporation (formerly NYSE: BLLY), a fitness
club chain, from 2005 to 2006, and Chiasso Acquisition LLC, a home
furnishing retailer from 2006 to 2008.
Mr. Metz holds a Masters of Management from the Kellogg School
of Management at Northwestern
University, and Bachelor of Arts in History from
Cornell University.
Michelle Millstone-Shroff, age 45, has served as an
independent advisor to various businesses since November 2018, and has served as a Senior Advisor
to McKinsey & Company, a management consulting firm, since
April 2019. From April 2015 to July
2018, Ms. Millstone-Shroff served as the Chief Customer
Experience Officer of Bed Bath & Beyond Inc. (NASDAQ: BBBY)
("Bed Bath"), a chain of domestic merchandise retail stores, and as
the President & Chief Operating Officer of buybuy BABY
("BABY"), a $1+ billion subsidiary of Bed Bath and the nation's
leading retailer of items for infants and toddlers, and also served
as the Chief Operating Officer of BABY from March 2007 until July 2018. Ms.
Millstone-Shroff has served on the boards of directors of Neiman
Marcus Group Inc. (NYSE: NMG.A), a chain of luxury department
stores, since September 2020, Nanit,
a private technology startup that develops smart baby monitor
devices, since December 2019, and
Party City Holdco Inc. (NYSE: PRTY), a vertically-integrated chain
of party stores, since February 2019.
Ms. Millstone-Shroff holds a Masters of Business Administration
from Harvard Business School, a
Bachelor of Science in Strategic Management from The Wharton School
at University of Pennsylvania, and a
Bachelor of Arts in Psychology from University
of Pennsylvania.
Mahbod Nia, age 44, has
been a private investor since October
2019. Previously, Mr. Nia was Chief Executive Officer and
President of NorthStar Realty Europe Corp. ("NRE") (formerly NYSE:
NRE), a publicly traded European focused commercial REIT, from
June 2015 to September 2019 when it was sold to AXA Investment
Managers – Real Assets, and Managing Director and member of the
European Steering Committee at Colony Capital, Inc. (NYSE: CLNY,
formerly Colony NorthStar, Inc.), a global REIT, from January 2017 to September
2019. Prior to that, Mr. Nia served as Managing Director and
Head of European Investments of NorthStar Asset Management Group
Inc. (formerly NYSE: NSAM), a global asset management company, from
July 2014 to January 2017, and acted for PanCap Investment
Partners, a European real estate investment and advisory firm, from
2010 to 2014. From 2007 to 2009, Mr. Nia was Senior Executive
Director in the Real Estate Banking Group at Goldman Sachs (NYSE:
GS), a multinational investment bank and financial services
company. From 2004 to 2007, Mr. Nia was a Senior Associate in the
Real Estate Finance department at Citigroup Inc. (NYSE: C), a
multi-national investment bank and financial services company,
prior to which he served in the investment banking division of
Salomon Brothers (London) beginning in 2000. Mr. Nia serves on
the board of directors of Mack-Cali Realty Corp. (NYSE: CLI), a
publicly traded REIT focused on office and multi-family assets in
New Jersey, since June 2020.
Previously, Mr. Nia served as a member of NRE's board of
directors, from January 2018 to
September 2019. Mr. Nia received a
bachelor's degree in Economics for Business from the University of
Westminster and master's degree in
Economics & Finance from the University of
Warwick.
Rebecca L. Owen, age 58,
has served as chair of the board of directors of Battery Reef, LLC,
a commercial real estate investment and management company, since
she founded the company in January 2019. Previously, Ms. Owen
served in various roles at Clark Enterprises, Inc. ("Clark
Enterprises"), a private investment firm, and its affiliated
companies, including as Senior Vice President of Clark Enterprises,
from April 1995 to January 2019, Chief Legal Officer of Clark
Enterprises, from April 1995 to
December 2017, and President of CEI
Realty, Inc., the real estate investment arm of Clark Enterprises,
from January 2008 to January
2019. Prior to her work with Clark Enterprises and its
affiliates, Ms. Owen practiced as a Commercial Real Estate and
Corporate attorney at law firms Sheehey, Furlong & Behm, from
1994 to 1995, and Pillsbury Winthrop Shaw Pittman LLP (f/k/a Shaw
Pittman Potts and Trowbridge),
from 1987 to 1994. Ms. Owen has served on the board of
directors of Carr Properties, a private real estate investment
trust, since 2013, and on the Real Estate Investment Advisory
Committee of ASB Capital Management, LLC, an institutional real
estate investment firm, since January 2017.
Previously, Ms. Owen served on the boards of directors of
WillScot Mobile Mini Holdings Corp. (NASDAQ: WSC), a specialty
rental services provider in innovative modular space and portable
storage solutions, from April 2019 to
July 2020, Jernigan Capital, Inc.
(NYSE: JCAP), a mortgage and equity real estate investment trust,
from December 2018 until it was
purchased by NextPoint and delisted on November 6, 2020, and Columbia Equity Trust, Inc.
(formerly NYSE: COE), a real estate investment trust, from 2005 to
2007. Ms. Owen has also served on the boards of directors of
the Boys and Girls Club of Greater
Washington, since 2006, and Horizons National Student
Enrichment Program Inc., since January
2017. Ms. Owen received a Juris Doctorate from University of Chicago Law School and Bachelor of
Arts in Economics from Hamilton
College.
About Elliott
Elliott Management Corporation manages approximately
$41 billion of assets. Its flagship
fund, Elliott Associates, L.P., was founded in 1977, making it one
of the oldest funds under continuous management. The Elliott funds'
investors include pension plans, sovereign wealth funds,
endowments, foundations, funds-of-funds, high net worth individuals
and families, and employees of the firm.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Elliott Associates, L.P. ("Elliott Associates") and Elliott
International, L.P. ("Elliott International"), together with the
other participants named herein (collectively, "Elliott"), intend
to file a preliminary proxy statement and an accompanying WHITE
proxy card with the Securities and Exchange Commission ("SEC") to
be used to solicit votes for the election of its slate of
highly-qualified nominees as trustees of Public Storage, a
Maryland real estate investment
trust (the "Company"), at the Company's 2021 annual meeting of
shareholders.
ELLIOTT STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ
THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY
CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR.
The participants in the proxy solicitation are anticipated to be
Elliott Associates, Elliott International, Manchester Securities
Corp. ("Manchester"), Elliott
Investment Management L.P., ("EIM"), Elliott Investment Management
GP LLC ("EIM GP"), Paul E. Singer
("Singer"), Benjamin C. Duster, IV,
Craig Macnab, Adam S. Metz, Michelle Millstone-Shroff,
Mahbod Nia and Rebecca L. Owen.
As of the date hereof, Elliott Associates beneficially owns
653,500 common shares, par value $0.10 per share (the "Common Shares"), of the
Company (itself and through Manchester), including 651,450 Common Shares
underlying certain Derivative Agreements (as defined below). As of
the date hereof, Elliott International beneficially owns 1,524,834
Common Shares, including 1,520,050 Common Shares underlying certain
Derivative Agreements. As of the date hereof, Manchester, a wholly owned subsidiary of
Elliott Associates, beneficially owns 1,000 Common Shares.
EIM, acting as the investment manager to each of Elliott Associates
and Elliott International, may be deemed the beneficial owner of
the 2,178,334 Common Shares beneficially owned in the aggregate by
Elliott Associates (itself and through Manchester) and Elliott International. EIM GP,
as the sole general partner of EIM, may be deemed the beneficial
owner of the 2,178,334 Common Shares beneficially owned in the
aggregate by Elliott Associates (itself and through Manchester) and Elliott International. Singer,
as the sole managing member of EIM GP, may be deemed the beneficial
owner of the 2,178,334 Common Shares beneficially owned in the
aggregate by Elliott Associates (itself and through Manchester) and Elliott International. As of
the date hereof, Mr. Macnab beneficially owns 450 Common Shares
through a trust of which Mr. Macnab serves as trustee. As of the
date hereof, Mr. Metz beneficially owns 875 Common Shares. As
of the date hereof, none of Messrs. Duster or Nia or Mmes.
Millstone-Shroff or Owen beneficially owns any Common Shares.
As of the date hereof, Elliott Associates and Elliott
International have entered into notional principal amount
derivative agreements (the "Derivative Agreements") in the form of
swap agreements with respect to 651,450 and 1,520,050 Common
Shares, respectively, which may be physically settled within 60
days from the date hereof. Prior to the date upon which the
Derivative Agreements are physically settled, such Derivative
Agreements do not provide Elliott Associates or Elliott
International with the power to vote or direct the voting or
dispose of or direct the disposition of or otherwise exercise any
rights in respect of the Common Shares that are referenced in the
Derivative Agreements.
Media Contact:
Stephen
Spruiell
Elliott Management Corporation
(212) 478-2017
sspruiell@elliottmgmt.com
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SOURCE Elliott Management Corp