Good ethics can translate into smart business.
That’s a lesson Kenneth Woolley, the chairman and CEO of Extra Space Storage, shared when he spoke at the Dean’s Convocation for the Jon M. Huntsman School of Business in November.
Ken Woolley (right) talked with students after he spoke at the Dean’s Convocation.
Extra Space Storage is the secondlargest self-storage company in the United States.
Woolley said he built a self-storage facility in Springfield, Mass., in 1987 and sold it to Public Storage with a guarantee that the company would get a certain rate of return on the property. Three years later Public Storage came to him and called his guarantee, meaning he had to pay them $265,000 - money he did not have at the time.
"I told Public Storage I really don’t have the money to pay you," Woolley said. "I know I owe it. Please work with me. I’ll sign a note and try to pay it off over time."
"So, remember, in your business dealings take the high road, be honest with people, stick by your agreements and don’t try to weasel out."
– Kenneth Woolley
He paid the company off a year and a half later. In 1998, he had decided to expand his company dramatically. He went to Prudential Real Estate to ask it to invest $100 million in his company. They asked him for references and someone at Prudential Real Estate phoned the selfstorage company in Springville. Woolley said the company told Prudential that they could trust him.
Woolley said Public Storage told Prudential that other companies had sold them properties and offered them similar guarantees. Unlike Woolley’s company,every other company failed to make good on its commitments. He said Prudential later told him "they made the decision to invest $100 million in our company after they had a conversation with Public Storage about my little $265,000 note."
"So, remember, in your business dealings take the high road, be honest with people, stick by your agreements and don’t try to weasel out," Woolley said.
Later, Prudential Real Estate invested $1.8 billion in Extra Space Storage, helping the company pull off a $2.3 billion deal when it purchased all of Storage USA’s properties.
Woolley was an original investor in Jet Blue and is now the largest shareholder of Maxjet, an all-business-class airline. He has developed 13,000 apartments in the Las Vegas area and is now in the final phase of completing 5,000 apartmentcondo conversions in Las Vegas.