Public Storage Completes Transfer of 51% Interest in European Operations to the New...

Public Storage Completes Transfer of 51% Interest in European Operations to the New York Common Retirement Fund

GLENDALE, Calif.--(Business Wire)--
Public Storage (NYSE:PSA) announced the acquisition by the New
York Common Retirement Fund (NYCRF) of a 51% interest in Public
Storage's Shurgard Europe operations for approximately EUR 383.2
million ($606 million), plus an adjustment for operating results of
Shurgard Europe from December 31, 2007 through March 31, 2008.

Public Storage will own the remaining 49% interest and be the
managing member of the newly formed joint venture that will own
Shurgard Europe's operations. The existing Shurgard Europe management
team will continue operations in Brussels, Belgium. The new joint
venture includes Shurgard's 20% equity interest in two existing
ventures which are the subject of previously disclosed arbitration. If
the remaining interests in those ventures can be acquired, they may be
incorporated into the newly-formed entity.

In connection with the transaction, the intercompany debt owed by
Shurgard Europe to Public Storage was modified to (i) fix the interest
rate at 7.5% per year, (ii) adjust the outstanding balance from
approximately EUR 381 million at December 31, 2007 to EUR 391 million
($620 million) as of March 31, 2008, and (iii) modify the term of the
loans to one year with an additional one year extension. In addition,
Public Storage is committed to provide additional loans to Shurgard
Europe, under these terms, up to EUR 305 million to fund Shurgard
Europe's obligations to repay existing third-party indebtedness owed
by the two previously mentioned ventures (a total of EUR 256 million
at December 31, 2007) and the possible acquisition of the remaining
interest in those two ventures. Shurgard Europe intends to repay all
of its intercompany debt to Public Storage through the issuance of
third-party debt as soon as market conditions permit, but no later
than March 31, 2010.

Shurgard Europe also entered into a licensing agreement with
Public Storage effective January 1, 2008, under which it will pay
Public Storage a fee equal to 1.0% of its pro rata share of revenues
in exchange for the rights to use the "Shurgard Europe" trade name.

Public Storage expects to record a gain from the sale; however,
the timing and amount have not yet been determined. In addition, any
increase or decrease in the U.S. dollar versus the Euro is expected to
be recorded as a currency gain or loss on the loan to Shurgard Europe.

Shurgard Europe's operating results for the year ended December
31, 2007 included approximately $194.3 million and $92.2 million,
respectively, of revenues and cost of operations related to the
self-storage facilities; and $17.6 million and $5.2 million,
respectively, of ancillary revenues and cost of operations. Included
in these amounts are approximately $57.0 million and $37.3 million,
respectively, of self-storage revenues and cost of operations, and
$6.1 million and $1.8 million, respectively, in ancillary revenues and
cost of operations, relating to self-storage facilities owned by the
JVs in which Shurgard Europe has a 20% interest. These amounts were
based upon the weighted average exchange rate of the dollar relative
to the Euro of approximately 1.3698 to 1.000.

"Public Storage is very pleased to be teaming up once again with
the New York Common Retirement Fund, a premier institutional investor,
who shares the same goals and objectives with respect to our
investments in Shurgard Europe. In 1998, we teamed up with NYCRF to
successfully expand and take our affiliate, PS Business Parks, Inc.,
public. We believe the European market presents excellent growth
opportunities and look forward to partnering with NYCRF to accelerate
Shurgard Europe's development program and grow the European business,"
said Ronald L. Havner, Jr., President and Chief Executive Officer of
Public Storage.

Steven De Tollenaere, President and Chief Executive Officer of
Shurgard Europe, commented, "We are perfectly positioned with great
shareholders and strong funding to accelerate our development program
and undertake acquisitions, increasing product and brand awareness in
Europe."

About Public Storage and Shurgard Europe

Public Storage, a member of the S&P 500 and the Forbes Global
2000, is a fully integrated, self-administered and self-managed real
estate investment trust that primarily acquires, develops, owns and
operates self-storage facilities. Public Storage's headquarters are
located in Glendale, California. Self-storage facilities for both
companies are located in 38 states and seven Western European nations.
At December 31, 2007, Public Storage had interests in 2,012
self-storage facilities with approximately 126 million net rentable
square feet in the United States and Shurgard Europe had 174 storage
facilities with approximately nine million net rentable square feet in
Europe.

Additional information about Public Storage and Shurgard Europe is
available on the Internet. The respective web sites are
www.publicstorage.com and www.shurgard.eu.

Forward-Looking Statements

This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking
statements are subject to a number of risks and uncertainties, many of
which are beyond Public Storage's control, which could cause actual
results to differ materially from those set forth in, or implied by,
such forward-looking statements. All statements other than statements
of historical fact included in this press release are forward-looking
statements and speak only as of the date of this press release. Public
Storage undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Risks and uncertainties that could impact
these forward looking statements include risks related to
international businesses and the risks the parties will be unable for
any reason to achieve the anticipated benefits of the transaction.
Additional information about risks and uncertainties that could
adversely affect Public Storage's forward-looking statements are
described in reports filed by Public Storage with the Securities and
Exchange Commission, including its 2007 Annual Report on Form 10-K and
subsequent reports on Form 10-Q and Form 8-K.

Public Storage
Clemente Teng
818-244-8080

Copyright Business Wire 2008