Shurgard Self Storage
Shurgard Storage Centers based in the USA was one of the Self Storage pioneers both in North America and in Europe and is now wholly owned by Public Self Storage; however this was not always the case. The company was founded by Chuck Barbo. Chuck Barbos Grandfather emigrated from Norway in 1871to start a logging business and starting businesses was certainly in the blood. However Chuck did not start his career early he first got his education at the University of Washington in Seattle, where he tried to earn a business degree. However he lost interest in this after a very short time and switched to history. He qualified as a teacher and went off to teach kids at a high school in Seattle. This never lasted to long and the draw of business soon resurfaced.
Chuck got the property bug in 1966 when he sold a property north of Seattle and learned that he would earn much more money selling property than teaching kids. Chuck then moved to Olympia, Washington where Shurgard was born. Chuck like Bradley Hughes of Public Storage started off as a property developer and went into partnership with other property developers. In 1971 both Don Daniels and Chuck formed a business called the Barbo-Daniels Group. It was then that they opened a Self Storage facility called B-D Mini Storage. Although Chuck was convinced about the merits of Self Storage it was much more difficult to persuade the banks. With a background in high school teaching it was particularly difficult for Chuck to convince the banks to lend him money. Un-deterred Chuck managed to grow the business and during the 1970s and 1980s but had further problems raising capital via the banks for Self Storage. It was during this time that Chuck found another way f developing the business growth by entering public partnerships to fund construction. Chuck raised over $700 million allowing for another 20 years worth of growth.
In the 1990s Chuck decided to merge his many property concerns into a separate company Shurgard Storage Centers Inc. It also followed that Shurgard would float on the Stock Exchange already converted to a REIT a real estate investment trust. By this time Shurgard had one hundred and thirty nine storage centres in seventeen states. Following the successful floatation of Shurgard Chuck ordered more aggressive expansion; he started by buying 20 already trading centres and opened eight centres organically. With his European roots Chuck made a very bold move in 1994 when he opened an office in Brussels, Belgium to look into the feasibility of opening Self Storage Centres across Europe. When the feasibility study was complete Chuck started up the Shurgard Storage Centres Benelux & Co, giving Chuck a launch pad in Europe.
In 1996 Shurgard had 275 storage centres in the USA and was moving into other types of Self Storage such as the mobile storage concept. This made Shurgard the second largest Self Storage operator in the US. The march of Shurgard continued apace over the 1990s including acquisitions in Washington, Michigan and even France.
With Public Storage still growing far quicker than Shurgard, Chuck took a leaf out of Bradley Hughes book by building up partnerships in order to speed up growth. Chuck got together with Fremont Realty Capital another US REIT business. This allowed Shurgard to purchase several more small chains and lesson the costs of development. However this was never enough to keep pace with Public Storage and Chuck believed he would be able to grow in Europe without the competition from Public Storage. By this time Shurgard had opened 19 Self Storage centres in Europe and again Chuck managed to secure new financing for his expansion from Deutsche Bank, AIG the insurance giant, and Credit Suisse. Not a bad line up of financial backers. This allowed Chuck to open up in France, Belgium, The Netherlands, the UK and Sweden.
Public Storage however surprised Chuck by buying up Shurgard shares in 2000 becoming the largest shareholder very quickly. Chuck and the management of Shurgard Storage Centres did resist and Public Storage backed off, selling the shares. After the Public Storage attempted takeover Shurgard got back to matters at hand and proposed a “Partnership Scheme” which was in affect franchising the name and branding to existing Self Storage businesses across the country. The main difference with Public Storage failed attempt at this strategy was that they wouldnt allow participants in the areas where they had Self Storage Centres. In 2002 Shurgard Storage Centres had over 450 storage centres in Europe and in America and the expansion just continues with the purchase of Morningstar Storage Centres adding another 40 branches to the Shurgard portfolio.
In conclusion Shurgard although not quite ever catching the success of Public Storage, Shurgard have become a powerhouse in the now Global Self Storage industry. Chuck Barbo identified the need for Self Storage in the US and then brought the product to Europe.