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Public Storage Management Discusses Q2 2012 Results - Earnings Call Transcript

In Q2, Denver and Charlotte markets led the country with revenue growth of 8.7%, followed by Miami and Detroit at 6.6%. Los Angeles, our largest market, grew 4.4%; and San Francisco, our second largest market, grew -- revenues increased by 6.2%.

Given the trends in our occupancies and rates, we expect our Q3 media spend will be comparable to last year. In Europe, same-store NOI improved by 2% despite a challenging operating environment.

We recently completed the purchase of 5 facilities with about 377,000 square feet for $52 million. We're currently under contract to acquire 2 more facilities for about $30 million.

With that, operator, let's open it up for questions.

Question-and-Answer Session


[Operator Instructions] Your first question comes from the line of Christy McElroy of UBS.

Christy McElroy - UBS Investment Bank, Research Division

Just in regards to Europe, your occupancy has slipped a little bit overall even from Q1, but you've still been able to see some decent growth in realized rents. I'm wondering if you could talk a little bit about your overall revenue management strategy there, and what makes sense, sort of given the different environment you're operating in versus the U.S.

Edward John Reyes

Christy, last year, we had some really aggressive promotional discounts in a couple of markets, which we did not do this year because the -- we kind of didn't get the benefit in terms of rate and promotional discounts versus move-in volume, so we've moderated those this year. So you've seen some degradation in occupancy and an uptick in the in-place rents and the rental revenue and lowered promotional discounts. And that varies by market, and the operating results, vary greatly by market, were on a revenue-growth basis. France was down 1.6% on same-store basis, whereas the U.K. was up 3.5% and Belgium was up almost 7%. So it varies by market. So what you're seeing is a blend, but the big picture is better pricing and reduced discounts this year with some impact on move-in volume.

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