UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [Fee Required]

For the fiscal year ended December 31, 1998
                          -----------------

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]

For the transition period from               to
                              ---------------  ---------------  

Commission File Number 0-14476
                       -------

              PS PARTNERS V, LTD., a California Limited Partnership
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


               California                                       95-3979727
----------------------------------------                  ----------------------
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                       Identification Number)

           701 Western Avenue
          Glendale, California                                  91201-2394
----------------------------------------                  ----------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:  (818) 244-8080

Securities registered pursuant to Section 12(b) of the Act: 
                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
                      -------------------------------------
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes X No
                                       ---  ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy of information  statements
incorporated by reference in Part III of this Form 10-K. [ ]


--------------------------------------------------------------------------------
                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

Forward Looking Statements
--------------------------

         When  used  within  this  document,  the words  "expects,"  "believes,"
"anticipates,"  "should,"  "estimates," and similar  expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the  Securities  Exchange Act of 1933, as amended,  and in Section 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks,  uncertainties,  and other  factors,  which may
cause the actual  results and  performance  of the  Partnership to be materially
different  from those  expressed or implied in the forward  looking  statements.
Such factors include the impact of competition from new and existing real estate
facilities  which could  impact  rents and  occupancy  levels at the real estate
facilities that the Partnership has an interest in; the Partnership's ability to
effectively  compete in the markets that it does  business in; the impact of the
regulatory  environment  as  well  as  national,   state,  and  local  laws  and
regulations including, without limitation, those governing Partnerships; and the
impact of general economic  conditions upon rental rates and occupancy levels at
the real estate facilities that the Partnership has an interest in.

General
-------

         PS Partners V, Ltd.  (the  "Partnership")  is a publicly  held  limited
partnership under the California Revised Limited  Partnership Act. Commencing in
June 1985,  148,000  units of limited  partnership  interest  (the "Units") were
offered to the public in an interstate  offering.  The offering was completed in
November 1985.

         The  Partnership   was  formed  to  invest  in  and  operate   existing
self-service  facilities  offering  storage  space for personal and business use
(the  "mini-warehouses")  and to  invest  up to 40% of the net  proceeds  of the
offering  in  and  operate  existing  office  and  industrial  properties.   The
Partnership's real estate investments consist of wholly-owned  facilities and an
investment  in a general  partnership  (SEI/PSP  V Joint  Ventures,  the  "Joint
Venture")  with  Public  Storage,  Inc.  ("PSI")  (formerly  known  as  "Storage
Equities,  Inc."),  a real  estate  investment  trust  ("REIT")  organized  as a
corporation under the laws of California

         In 1995, there was a series of mergers among Public Storage Management,
Inc. (which was the Partnership's mini-warehouse operator), Public Storage, Inc.
and their  affiliates  (collectively,  "PSMI"),  culminating in the November 16,
1995 merger (the "PSMI Merger") of PSMI into Storage Equities,  Inc. In the PSMI
Merger, Storage Equities,  Inc. was renamed Public Storage, Inc. and it acquired
substantially  all of PSMI's United States real estate operations and became the
operator of the mini warehouses of the Partnership and the Joint Venture.

         The Partnership's general partners (the "General Partners") are PSI and
B. Wayne Hughes  ("Hughes").  PSI became a co-general partner in September 1993,
when PSI acquired the interest of PSI Associates,  Inc. ("PSA"), an affiliate of
PSMI, relating to PSA's general partner capital contribution in the Partnership.
Hughes has been a general partner of the Partnership since its inception. Hughes
is the chairman of the board and chief executive  officer of PSI, and Hughes and
members of his family (the "Hughes  Family") are the major  shareholders of PSI.
The Partnership is managed,  and its investment decisions are made by Hughes and
the  executive  officers  and  directors  of PSI.  The  limited  partners of the
Partnership  have no right to  participate  in the  management or conduct of its
business affairs. PSI believes that it is the largest operator of mini-warehouse
facilities in the United States.

         Through  1996,  the  business  parks of the  Partnership  and the Joint
Venture  were  managed  by Public  Storage  Commercial  Properties  Group,  Inc.
("PSCPG") pursuant to a Management Agreement.  In January 1997, the Partnership,
Joint  Venture,  PSI and other  related  partnerships  transferred a total of 35
business parks to PS Business Parks, L.P. ("PSBPLP"), formerly known as American
Office Park Properties, L.P., an operating partnership formed to own and operate
business  parks in which  PSI has a  significant  interest.  Included  among the
properties  transferred were the business parks of the Partnership and the Joint
Venture in exchange for a partnership  interest in PSBPLP. Until March 17, 1998,
the general  partner of PSBPLP was American  Office Park  Properties,  Inc.,  an

                                       2

<PAGE>

affiliate of PSI. On March 17, 1998,  American Office Park Properties,  Inc. was
merged into Public  Storage  Properties  XI, Inc.,  which changed its name to PS
Business  Parks,  Inc.  ("PSBP").  PSBP is a REIT  affiliated  with PSI,  and is
publicly traded on the American Stock Exchange.  As a result of the merger, PSBP
became the  general  partner of PSBPLP  (which  changed  its name from  American
Office Park Properties, L.P. to PS Business Parks, L.P.). See Item 13.

         PSI's current  relationship with the Partnership includes (i) the joint
ownership of 32 of the  Partnership's 33 properties (which excludes the property
transferred to PSBPLP in January 1997),  (ii) PSI is a co-general  partner along
with Hughes,  who is chairman of the board and chief  executive  officer of PSI,
(iii) as of January 1, 1999, PSI owned approximately 61.39% of the Partnership's
limited  partnership  units and (iv) PSI is the operator of the 33 properties in
which the  Partnership  has an interest  (these 33  properties  are  referred to
collectively hereinafter as the "Mini-Warehouse Properties").

Investments in Facilities 
--------------------------

         The  Partnership  owns  interests  in  33  properties   (excluding  the
properties  transferred  to PSBPLP in January 1997);  32 of such  properties are
owned by the Joint Venture. The Partnership purchased its last property in July,
1986.  Reference  is made to the  table in Item 2 for a summary  of  information
about the Partnership's properties.

         The Partnership believes that its operating results have benefited from
favorable   industry   trends  and  conditions.   Notably,   the  level  of  new
mini-warehouse  construction  has decreased since 1988 while consumer demand has
increased.  In  addition,  in recent  years  consolidation  has  occurred in the
fragmented mini-warehouse industry.

Mini-warehouses
---------------

         Mini-warehouses,  which  comprise  the  majority  of the  Partnership's
investments,  are designed to offer  accessible  storage  space for personal and
business use at a relatively low cost. A user rents a fully enclosed space which
is for the  user's  exclusive  use and to which  only the user has  access on an
unrestricted   basis   during   business   hours.   On-site   operation  is  the
responsibility  of resident  managers who are supervised by area managers.  Some
mini-warehouses  also  include  rentable  uncovered  parking  areas for  vehicle
storage.  Leases for  mini-warehouse  space may be on a long-term or  short-term
basis,  although typically spaces are rented on a month-to-month  basis.  Rental
rates vary according to the location of the property and the size of the storage
space.

         Users of space in  mini-warehouses  include both  individuals and large
and small  businesses.  Individuals  usually  employ  this space for storage of,
among other things, furniture, household appliances,  personal belongings, motor
vehicles,  boats,  campers,  motorcycles and other household  goods.  Businesses
normally employ this space for storage of excess  inventory,  business  records,
seasonal goods, equipment and fixtures.

         The  Mini-Warehouse  Properties  generally  consist  of  three to seven
buildings  containing an aggregate of between 235 to 1,469 storage spaces,  most
of  which  have  between  25 and 400  square  feet  and an  interior  height  of
approximately 8 to 12 feet.

         The Mini-Warehouse Properties experience minor seasonal fluctuations in
the occupancy levels of  mini-warehouses  with occupancies  higher in the summer
months  than  in  the  winter  months.  The  Partnership   believes  that  these
fluctuations result in part from increased moving activity during the summer.

         The Mini-Warehouse  Properties are  geographically  diversified and are
generally  located in heavily  populated  areas and close to  concentrations  of
apartment  complexes,  single family  residences  and  commercial  developments.
However,  there may be  circumstances  in which it may be  appropriate  to own a
property  in a less  populated  area,  for  example,  in an area  that is highly
visible  from a major  thoroughfare  and  close to,  although  not in, a heavily
populated area. Moreover,  in certain population centers,  land costs and zoning
restrictions may create a demand for space in nearby less populated areas.

                                       3

<PAGE>

         As  with  most  other  types  of  real  estate,   the   conversion   of
mini-warehouses to alternative uses in connection with a sale or otherwise would
generally require substantial capital expenditures. However, the Partnership and
the Joint  Venture do not intend to convert  the  Mini-Warehouse  Properties  to
other uses.

Business Parks
--------------

         Through 1996, the  Partnership and the Joint Venture owned and operated
two  business  parks;  one in San  Diego,  California  and one in  Culver  City,
California.  These business parks were  transferred to PSBPLP in January 1997 in
exchange for a partnership interest in PSBPLP.

Investment Objectives and Policies
----------------------------------

         The  Partnership's  objectives are to (i) preserve and protect invested
capital,   (ii)  maximize  the  potential  for  appreciation  in  value  of  its
investments,  (iii)  provide  Federal  income tax  deductions so that during the
early  years of  property  operations  a portion  of cash  distributions  may be
treated  as a  return  of  capital  for tax  purposes,  and  therefore,  may not
represent  taxable  income to the limited  partners,  and (iv)  provide for cash
distributions from operations.

         The  Partnership  will terminate on December 31, 2038 unless  dissolved
earlier.  Under the terms of the general partnership agreement with PSI, PSI has
the right to require the Partnership to sell all of the properties  owned by the
Joint Venture (see Item 12(c)).

         The Partnership  engaged  Lawrence R. Nicholson,  MAI, a principal with
the firm of  Nicholson-Douglas  Realty  Consultants,  Inc. ("NDRC") to perform a
limited  investigation  and appraisal of the properties owned by the Partnership
and the Joint  Venture.  In a letter  appraisal  report dated December 31, 1996,
NDRC  indicated  that,  based on the  assumptions  contained in the report,  the
aggregate market value of the Mini-Warehouse  Properties (consisting not only of
the  Partnership's  interest but also including PSI's interest),  as of November
30, 1996, was $85,100,000. NDRC's report is limited in that NDRC did not inspect
the properties and relied primarily upon the income  capitalization  approach in
arriving at its opinion.  NDRC's aggregate value conclusion  represents the 100%
property  interests,  and  although  not valued  separately,  includes  both the
interest of the Partnership in the  properties,  as well as the interest of PSI,
which owns a joint venture interest (ranging from about 29% to 50%) in 32 of the
Mini-Warehouse  Properties.  The  analytical  process that was undertaken in the
appraisal  included  a review  of the  properties'  unit mix,  rental  rates and
historical financial statements.  Following these reviews, a stabilized level of
net  operating  income  was  projected  for the  Mini-Warehouse  Properties  (an
aggregate  of  $8,312,000.  Value  estimates  were then made using both a direct
capitalization  analysis  ($86,600,000)  and a  discounted  cash  flow  analysis
($85,000,000).  In applying the discounted  cash flow  analysis,  projections of
cash flow from each property were  developed for an 11-year period ending in the
year 2007.  Growth  rates for income and  expenses  were  assumed to be 3.5% per
year. NDRC then used a terminal  capitalization rate of 10.0% to capitalize each
property's  11th year net operating  income into a residual  value at the end of
the holding period.  The ten yearly cash flows plus the residual or reversionary
proceeds  net of sales  costs  were then  discounted  to present  worth  using a
discount rate of 12.5%. In the direct  capitalization  analysis,  NDRC applied a
9.5%  capitalization  rate  to the  mini-warehouses'  stabilized  net  operating
income.  These  value  estimates  were  then  compared  to  an  estimated  value
($84,500,000)  using a regression analysis applied to approximately 300 sales of
mini-warehouses to evaluate the reasonableness of the estimates using the direct
capitalization and discounted cash flow analysis.

         NDRC has prepared other  appraisals for the General  Partners and their
affiliates  and is expected to  continue to prepare  appraisals  for the General
Partners and their affiliates.  No environmental  investigations  were conducted
with  respect to the  limited  investigation  of the  Partnership's  properties.
Accordingly,  NDRC's  appraisal  did not take  into  account  any  environmental
cleanup or other costs that might be incurred in  connection  with a disposition
of the  properties.  Although  there  can be no  assurance,  based  on  recently
completed  environmental  investigations  (see Item 2), the  Partnership  is not
aware of any  environmental  contamination  of its  facilities  material  to its
overall business or financial condition. In addition to assuming compliance with
applicable  environmental laws, the appraisal also assumed,  among other things,
compliance  with  applicable  zoning and use  regulations  and the  existence of
required licenses.

                                       4

<PAGE>

         Limited  Partners  should  recognize that appraisals are opinions as of
the date specified,  are subject to certain  assumptions and the appraised value
of the Partnership's properties may not represent their true worth or realizable
value. There can be no assurance that, if these properties were sold, they would
be sold at the appraised  values;  the sales price might be higher or lower than
the appraised values.

         In August 1997, PSI completed a cash tender offer,  which had commenced
in June  1997,  pursuant  to  which  PSI  acquired  a total  of  13,847  limited
partnership units at $355 per unit.

Operating Strategies
--------------------

         The  Mini-Warehouse  Properties  are  operated by PSI under the "Public
Storage" name, which the Partnership believes is the most recognized name in the
mini-warehouse  industry.  The major  elements  of the  Partnership's  operating
strategies are as follows:

*        Capitalize on Public Storage's name recognition. PSI, together with its
         predecessor,  has more  than 20 years of  operating  experience  in the
         mini-warehouse  business.  PSI has informed the Partnership  that it is
         the largest  mini-warehouse  facility  operator in the United States in
         terms of both number of facilities  and rentable  space  operated.  PSI
         believes  that its  marketing  and  advertising  programs  improve  its
         competitive  position in the market.  PSI's in-house Yellow Pages staff
         designs and places  advertisements  in  approximately  700 directories.
         Commencing  in early  1996,  PSI began to  experiment  with a telephone
         reservation   system  designed  to  provide  added  customer   service.
         Customers  calling  either  PSI's  toll-free  referral  system,   (800)
         44-STORE,   or  a   mini-warehouse   facility  are  directed  to  PSI's
         reservation  system where a trained  representative  discusses with the
         customer space  requirements,  price and location  preferences and also
         informs the customer of other products and services provided by PSI. As
         of December 31, 1998, the telephone  reservation  system was supporting
         rental activity at all of the Partnership's properties. PSI's toll-free
         telephone  referral  system  services  approximately  175,000 calls per
         month from  potential  customers  inquiring  as to the  nearest  Public
         Storage mini-warehouse.

*        Maintain high occupancy levels and increase realized rents.  Subject to
         market conditions,  the Partnership  generally seeks to achieve average
         occupancy levels in excess of 90% and to eliminate  promotions prior to
         increasing  rental rates. The weighted average  occupancy levels at the
         Mini-Warehouse  Properties remained stable at 92% during 1998 and 1997.
         The monthly  average  realized  rent per  occupied  square foot for the
         Mini-Warehouse  Properties  was $.72 in 1998  compared to $.69 in 1997.
         The Partnership has increased rental rates in many markets where it has
         achieved high occupancy levels and eliminated or minimized promotions.

*        Systems  and  controls.  PSI  has  an  organizational  structure  and a
         property  operation system,  "CHAMP"  (Computerized Help and Management
         Program),  which links its corporate  office with each  mini-warehouse.
         This enables PSI to obtain daily  information from each  mini-warehouse
         and to achieve efficiencies in operations and maintain control over its
         space inventory, rental rates, promotional discounts and delinquencies.
         Expense management is achieved through centralized payroll and accounts
         payable  systems and a comprehensive  property tax appeals  department,
         and PSI has an  extensive  internal  audit  program  designed to ensure
         proper handling of cash collections.

*        Professional  property operation.  In addition to the approximately 170
         support  personnel at the Public Storage corporate  offices,  there are
         approximately   2,700  on-site  personnel  who  manage  the  day-to-day
         operations of the  mini-warehouses in the Public Storage system.  These
         on-site personnel are supervised by 120 district managers,  33 regional
         managers and 11 divisional  managers who report to the president of the
         mini-warehouse  property  operator (who has 15 years of experience with
         the Public Storage organization). PSI carefully selects and extensively
         trains  the  operational  and  support  personnel  and  offers  them  a
         progressive  career  path.  See  "Mini-warehouse   Property  Operator."
  
                                       5

<PAGE>

Mini-warehouse Property Operator
--------------------------------

         The  Mini-Warehouse  Properties  are  managed  by  PSI  pursuant  to  a
Management Agreement.

         Under the  supervision of the  Partnership  and the Joint Venture,  PSI
coordinates  the operation of the  facilities,  establishes  rental policies and
rates,  directs  marketing  activity and directs the  purchase of equipment  and
supplies, maintenance activity, and the selection and engagement of all vendors,
supplies and independent contractors.

         PSI engages,  at the expense of the property owners,  employees for the
operation of the owner's  facilities,  including  resident  managers,  assistant
managers, relief managers, and billing and maintenance personnel. Some or all of
these employees may be employed on a part-time basis and may also be employed by
other persons, partnerships,  REITs or other entities owning facilities operated
by PSI.

         In the purchasing of services such as advertising  (including broadcast
media advertising) and insurance, PSI attempts to achieve economies by combining
the resources of the various facilities that it operates. Facilities operated by
PSI  have  historically  carried   comprehensive   insurance,   including  fire,
earthquake, liability and extended coverage.

         PSI has developed systems for space inventory,  accounting and handling
delinquent  accounts,  including a  computerized  network  linking PSI  operated
facilities. Each project manager is furnished with detailed operating procedures
and typically  receives  facilities  management  training from PSI. Form letters
covering a variety of circumstances are also supplied to the project managers. A
record of actions  taken by the project  managers  when  delinquencies  occur is
maintained.

         The  Mini-Warehouse  Properties  are typically  advertised via signage,
yellow pages,  flyers and broadcast media advertising  (television and radio) in
geographic  areas in which many of the facilities are located.  Broadcast  media
and other advertising costs are charged to the facilities  located in geographic
areas affected by the  advertising.  From time to time,  PSI adopts  promotional
programs, such as temporary rent reductions, in selected areas or for individual
facilities.

         For as long as the Management  Agreement is in effect,  PSI has granted
the  Partnership  and the Joint  Venture  non-exclusive  license  to use two PSI
service  marks and related  designs,  including  the "Public  Storage"  name, in
conjunction  with rental and  operation of  facilities  managed  pursuant to the
Management  Agreement.   Upon  termination  of  the  Management  Agreement,  the
Partnership  and the Joint  Venture  would no  longer  have the right to use the
service marks and related designs. The General Partners believe that the loss of
the right to use the  service  marks and related  designs  could have a material
adverse effect on the Partnership's business.

         The  Management   Agreement  with  PSI  provides  that  the  Management
Agreement may be terminated  without cause upon 60 days written notice by either
party.

Business Park Operator
----------------------

         Through  1996,  the  business  parks of the  Partnership  and the Joint
Venture were managed by PSCPG, now known as PS Business Parks, Inc., pursuant to
a Management  Agreement.  In January 1997,  these properties were transferred to
PSBPLP in exchange for a partnership interest.

Competition
-----------

         Competition in the market areas in which the Mini-Warehouse  Properties
operate is  significant,  and affects the occupancy  levels,  rental rates,  and
operating expenses of certain of the facilities.  Competition may be accelerated
by any increase in availability  of funds for investment in real estate.  Recent
increases in plans for  development of  mini-warehouses  are expected to further
intensify competition among mini-warehouse operators in certain market areas. In
addition to competition  from  mini-warehouses  operated by PSI, there are three

                                       6

<PAGE>

other national firms and numerous regional and local operators.  The Partnership
believes  that the  significant  operating  and  financial  experience  of PSI's
executive officers and directors and the "Public Storage" name should enable the
Partnership to continue to compete effectively with other entities.

Other Business Activities
-------------------------

         A corporation  owned by the Hughes Family  reinsures  policies  against
losses  to  goods  stored  by  tenants  in the  Mini-Warehouse  Properties.  The
Partnership  believes that the  availability of insurance  reduces the potential
liability  of the  Partnership  and the Joint  Venture to tenants  for losses to
their goods from theft or destruction.  This  corporation  receives the premiums
and bears the risks associated with the insurance.

         A corporation,  in which PSI had a 95% economic interest and the Hughes
Family has a 5% economic interest, sells locks, boxes, and tape to tenants to be
used in securing  their  spaces and moving their  goods.  PSI believes  that the
availability of locks, boxes, and tape for sale promotes the rental of spaces.

Employees
---------

         There are 111 persons who render  services on behalf of the Partnership
and the Joint  Venture.  These  persons  include  resident  managers,  assistant
managers,  relief managers, area managers, and administrative personnel. Some of
these employees may be employed on a part-time basis and may also be employed by
other persons, partnerships, REITs, or other entities owning facilities operated
by PSI or PSBPLP.

                                       7

<PAGE>

ITEM 2.  PROPERTIES.

         The  following  table sets forth  information  as of December  31, 1998
about the Mini-Warehouse Properties:

<TABLE>
<CAPTION>
                                          Net             Number
                                        Rentable            of                 Date of          Ownership
Location                              Square Feet         Spaces             Acquisition        Percentage
---------------------                 -----------         ------             -----------        ----------
<S>                                      <C>               <C>                <C>                  <C>  
CALIFORNIA
Brea E.                                  82,400            773                02/28/86             60.0%
   Imperial Way
Costa Mesa                               43,500            495                02/21/86             50.0
   Pomona Ave.
Sun Valley                               47,500            482                01/08/86             50.0
  Sheldon St.
Westlake Village
  Agoura Rd.                             36,000            303                05/09/86             60.0

COLORADO
Colorado Springs                         45,000            432                07/15/86            100.0
  Hollow Tree Ct.
Colorado Springs                         58,800            578                02/19/86             50.0
  N. Stinton Rd.
Denver                                   32,300            235                12/06/85             50.0
  Leetsdale Ave.

FLORIDA
Jacksonville                             31,800            331                03/12/86             60.0
  Wiley Rd.

ILLINOIS
Skokie                                   49,500            458                02/27/86             50.0
  McCormick Blvd.

MASSACHUSETTS
Brockton                                 49,800            430                12/03/85             50.0
  Main St.

MISSOURI
St. Louis                                43,900            382                03/28/86             69.7
  Forder Rd.

NEVADA
Las Vegas                                47,200            453                01/17/86             50.0
  S. Highland Dr.
Reno                                     80,800            578                04/01/86             70.6
  Telegraph Rd.

</TABLE>

                                       8

<PAGE>

<TABLE>
<CAPTION>
                                          Net             Number
                                        Rentable            of                 Date of          Ownership
Location                              Square Feet         Spaces             Acquisition        Percentage
---------------------                 -----------         ------             -----------        ----------
<S>                                      <C>               <C>                <C>                  <C>  
NEW JERSEY
Bordentown                               30,500            290                01/16/86             50.0%
  Route 130
Eatontown                                82,400            903                12/31/85             60.0
  Highway 35
Mapleshade                               55,400            510                01/16/86             50.0
  Rudderow Ave.

NEW YORK
Amherst                                  32,000            316                12/31/85             50.0
  Niagra Falls Blvd.

OKLAHOMA
Oklahoma City                            35,500            284                02/20/86             60.0
  N. Pennsylvania
Oklahoma City                            32,700            276                02/28/86             60.3
  NW 39th Expressway

PENNSYLVANIA
Whitehall                                54,300            538                12/03/85             50.0
  MacArthur Rd.

TEXAS
Dallas                                   53,200            453                10/04/85             66.4
   Alvin St.
Dallas                                   65,700            670                10/04/85             66.4
  S. Westmoreland
Ft. Worth                                52,500            500                10/04/85             66.4
  Cockrell St.
Ft. Worth                                58,600            588                10/04/85             66.4
  E. Seminary Dr.
Ft. Worth                                54,200            524                10/04/85             66.4
  W. Beach St.
San Antonio                              53,000            513                10/04/85             66.4
  Callaghan Rd.
San Antonio                              53,100            492                10/04/85             66.4
  Fredericksburg Rd.
San Antonio                              54,000            528                10/04/85             66.4
  Hackberry St.
San Antonio                              56,700            567                10/04/85             66.4
  Wetmore Rd.
San Antonio                              48,700            530                10/04/85             66.4
  Zarzamora Rd.

UTAH
Kearns                                   48,400            489                12/18/85             50.0
  W. Sams Blvd.

</TABLE>

                                       9

<PAGE>

<TABLE>
<CAPTION>
                                          Net             Number
                                        Rentable            of                 Date of          Ownership
Location                              Square Feet         Spaces             Acquisition        Percentage
---------------------                 -----------         ------             -----------        ----------
<S>                                      <C>               <C>                <C>                  <C>  
WASHINGTON
Everett                                  83,100          1,008                11/07/85             50.0%
  Evergreen Way
Seattle                                 132,200          1,474                11/07/85             50.0
  Empire Way South

</TABLE>

         The weighted average occupancy level for the Mini-Warehouse  Properties
remained stable at 92% during 1998 and 1997. The monthly  average  realized rent
per square foot for the  Mini-Warehouse  Properties was $.72 in 1998 compared to
$.69 in 1997.

         Substantially  all of the  facilities  were acquired  prior to the time
that it was customary to conduct environmental investigations in connection with
property  acquisitions.  During  the  fourth  quarter  of 1995,  an  independent
environmental  consulting  firm  completed  environmental   assessments  on  the
Mini-Warehouse  Properties  to  evaluate  the  environmental  condition  of, and
potential environmental  liabilities of, such properties.  Although there can be
no assurance, the Partnership is not aware of any environmental contamination of
any of its  property  sites  which  individually  or in the  aggregate  would be
material to the Partnership's overall business,  financial condition, or results
of operations.

ITEM 3.  LEGAL PROCEEDINGS.

         No material legal  proceeding is pending against the Partnership or the
Joint Venture.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of 1998.

                                       10

<PAGE>

                                     PART II

ITEM 5.  MARKET  FOR  THE  PARTNERSHIP'S  COMMON EQUITY AND RELATED  STOCKHOLDER
         MATTERS.

         The Partnership has no common stock.

         The Units are not listed on any national  securities exchange or quoted
on the NASDAQ System,  and there is no established public trading market for the
Units. Secondary sales activity for the Units has been limited and sporadic. The
General Partners monitor transfers of the Units (a) because the admission of the
transferee as a substitute  limited partner  requires the consent of the General
Partners  under the  Partnership's  Amended and  Restated  Agreement  of Limited
Partnership,  (b) in order to ensure  compliance with safe harbor  provisions to
avoid  treatment  as a "publicly  traded  partnership"  for tax purposes and (c)
because PSI has  purchased  Units.  However,  the  General  Partners do not have
information regarding the prices at which all secondary sale transactions in the
Units have been effectuated.  Various  organizations  offer to purchase and sell
limited  partnership  interests  (including  securities  of the type such as the
Units) in secondary sales transactions. Various publications such as The Stanger
Report  summarize  and  report  information  (on a  monthly,  bimonthly  or less
frequent basis) regarding  secondary sales  transactions in limited  partnership
interests  (including  the Units),  including the prices at which such secondary
sales transactions are effectuated.

         Exclusive of the General Partners'  interest in the Partnership,  as of
December 31, 1998, there were approximately 2,685 record holders of Units.

         The Partnership  makes quarterly  distributions  of all "Cash Available
for  Distribution"   and  will  make   distributions  of  "Cash  from  Sales  or
Refinancing." Cash Available for Distribution is cash flow from all sources less
cash necessary for any obligations or capital improvements or reserves.

         Reference is made to Items 6 and 7 hereof for information on the amount
of such distributions.

                                       11

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.


<TABLE>
<CAPTION>
                                                                  For the Years Ended December 31,
                                              ------------------------------------------------------------------------
                                                 1998            1997           1996            1995            1994
                                              ---------       ---------      ---------       ---------       ---------     
                                                                (In thousands, except per Unit data)

<S>                                            <C>             <C>             <C>            <C>             <C>    
Total Revenues                                 $ 3,930         $ 3,420         $ 3,467        $ 3,644         $ 3,619

Depreciation and amortization                       49              49             521            481             506

Net income                                       3,621           3,118           2,187          2,403           2,336

   Limited partners' share                       3,190           2,692           1,771          1,885           1,918

   General partners' share                         431             426             416            518             418

Limited partners' per unit data (a)

   Net income                                  $ 21.55         $ 18.19         $ 11.97        $ 12.74         $ 12.96

   Cash distributions (b)                      $ 24.00         $ 24.00         $ 24.00        $ 30.02         $ 24.00

As of December 31,
------------------
Cash and cash equivalents                      $ 2,702         $ 1,002           $ 194        $ 1,686         $ 1,513

Total assets                                  $ 36,935        $ 37,306        $ 38,192       $ 39,977        $ 42,529

</TABLE>

a)   Limited  Partners' per unit data is based on the weighted average number of
     units (148,000) outstanding during the period.

b)   The General Partners distributed,  concurrent with the distribution for the
     third  quarter  of  1995,  a  portion  of  the  operating  reserve  of  the
     Partnership estimated to be $6.02 per Unit.

                                       12

<PAGE>

ITEM 7.  MANAGEMENT'S   DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS
--------------------------

         When  used  within  this  document,  the words  "expects,"  "believes,"
"anticipates,"  "should,"  "estimates," and similar  expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the  Securities  Exchange Act of 1933, as amended,  and in Section 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks,  uncertainties,  and other  factors,  which may
cause the actual  results and  performance  of the  Partnership to be materially
different  from those  expressed or implied in the forward  looking  statements.
Such factors include the impact of competition from new and existing real estate
facilities  which could  impact  rents and  occupancy  levels at the real estate
facilities that the Partnership has an interest in; the Partnership's ability to
effectively  compete in the markets that it does  business in; the impact of the
regulatory  environment  as  well  as  national,   state,  and  local  laws  and
regulations including, without limitation, those governing Partnerships; and the
impact of general economic  conditions upon rental rates and occupancy levels at
the real estate facilities that the Partnership has an interest in.

RESULTS OF OPERATIONS
---------------------

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997:

         The  Partnership's  net  income  was  $3,621,000  in 1998  compared  to
$3,118,000 in 1997, representing an increase of $503,000, or 16.1%. The increase
is due primarily to the  Partnership's  share of an improvement in operations of
the   mini-warehouses   in  which  the   Partnership   has  an   interest   (the
"Mini-Warehouse Properties') combined with an increase in interest income.

         PROPERTY OPERATIONS:  Rental income for the Partnership's  wholly-owned
property was $324,000 in 1998 compared to $328,000  during 1997,  representing a
decrease of $4,000,  or 1.2%.  Cost of operations  (including  management  fees)
increased  $9,000,  or 8.0%,  to  $121,000  during  1998 from  $112,000 in 1997.
Accordingly,  for the  Partnership's  mini-warehouse  operations,  property  net
operating  income  decreased  by  $13,000,  or 6.0%,  to  $203,000  in 1998 from
$216,000 in 1997.

         EQUITY IN EARNINGS OF REAL ESTATE ENTITIES:  Equity in earnings of real
estate  entities was  $3,494,000 in 1998 as compared to $3,056,000  during 1997,
representing an increase of $438,000,  or 14.3%.  The increase was due primarily
to the Partnership's  share of improved operating results at the Joint Venture's
mini-warehouse  properties  combined with the  Partnership's  share of increased
operating results of PSBPLP.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996:

         The  Partnership's  net  income  was  $3,118,000  in 1997  compared  to
$2,187,000 in 1996, representing an increase of $931,000, or 42.6%. The increase
is due primarily to the  Partnership's  share of an improvement in operations of
the  Mini-Warehouse  Properties and a decrease in depreciation  allocated to the
Partnership with respect to the Joint Venture.

         PROPERTY OPERATIONS:  Rental income for the Partnership's  wholly-owned
property was $328,000 in 1997 compared to $319,000 during 1996,  representing an
increase of $9,000,  or 2.8%.  Cost of operations  (including  management  fees)
decreased  $3,000,  or 2.6%,  to  $112,000  during  1997 from  $115,000 in 1996.
Accordingly,  for the  Partnership's  mini-warehouse  operations,  property  net
operating  income  increased  by  $12,000,  or 5.9%,  to  $216,000  in 1997 from
$204,000 in 1996.

         As a result  of  contribution  of the  Partnership's  business  park to
PSBPLP in January  1997 in exchange  for  operating  partnership  units,  rental
income and cost of operations, respectively, for the Partnership's business park
was reduced to zero and zero, respectively,  in 1997 from $831,000 and $510,000,
respectively, in 1996.

                                       13

<PAGE>

         EQUITY IN EARNINGS OF REAL ESTATE ENTITIES:  Equity in earnings of real
estate  entities was  $3,056,000 in 1997 as compared to $2,221,000  during 1996,
representing an increase of $835,000,  or 37.6%.  The increase was due primarily
to the impact of the  contribution  of the business parks of the Partnership and
the Joint Venture to PSBPLP in January 1997.

         DEPRECIATION AND AMORTIZATION:  Depreciation and amortization decreased
$472,000 from  $521,000 in 1996 to $49,000 in 1997.  This decrease was primarily
attributable to the impact of the contribution of the Partnership's wholly-owned
business park facility to PSBPLP, offset partially by additional depreciation on
capital expenditures made during 1996 and 1997.

SUPPLEMENTAL PROPERTY DATA
--------------------------

         During 1998 and 1997,  a majority of the  Partnership's  net income was
from the  Partnership's  share of the  operating  results of the  Mini-Warehouse
Properties. Therefore, in order to evaluate the Partnership's operating results,
the General  Partners  analyze the operating  performance of the  Mini-Warehouse
Properties.

         YEAR ENDED  DECEMBER 31, 1998  COMPARED TO THE YEAR ENDED  DECEMBER 31,
1997:  Rental income for the  Mini-Warehouse  Properties was $14,256,000 in 1998
compared to $13,595,000  during 1997,  representing an increase of $661,000,  or
4.9%.  The increase in rental  income was  primarily  attributable  to increased
rental rates. The monthly average realized rent per square foot was $.72 in 1998
compared to $.69 in 1997. The weighted average  occupancy levels remained stable
at 92% during 1998 and 1997.  Cost of  operations  (including  management  fees)
increased $334,000,  or 6.8%, to $5,273,000 during 1998 from $4,939,000 in 1997.
This increase was primarily  attributable to increases in  advertising,  repairs
and  maintenance,  property  tax,  and payroll  expenses.  Accordingly,  for the
Mini-Warehouse Properties,  property net operating income increased by $327,000,
or 3.8%, from $8,656,000 in 1997 to $8,983,000 during 1998.

         YEAR ENDED  DECEMBER 31, 1997  COMPARED TO THE YEAR ENDED  DECEMBER 31,
1996:  Rental income for the  Mini-Warehouse  Properties was $13,595,000 in 1997
compared to $12,780,000  during 1996,  representing an increase of $815,000,  or
6.4%.  The increase in rental  income was  primarily  attributable  to increased
rental  rates,  partially  offset by decreased  average  occupancy  levels.  The
monthly average  realized rent per square foot was $.69 in 1997 compared to $.65
in 1996. The weighted average occupancy levels decreased from 93% in 1996 to 92%
in 1997. Cost of operations  (including  management fees) increased $204,000, or
4.3%,  to  $4,939,000  during 1997 from  $4,735,000  in 1996.  This increase was
primarily attributable to increases in advertising, property tax, and management
expenses. Accordingly, for the Mini-Warehouse Properties, property net operating
income  increased by $611,000,  or 7.6%,  from  $8,045,000 in 1996 to $8,656,000
during 1997.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         The Partnership has adequate sources of cash to finance its operations,
both on a short-term and long-term basis, primarily by internally generated cash
from property  operations and distributions from Real Estate Entities,  combined
with cash on hand at December 31, 1998 of $2,702,000.

         Cash flow from operating  activities and distributions from Real Estate
Entities  ($5,703,000  for the year ended December 31, 1998) has been sufficient
to meet all current obligations of the Partnership.  Total capital  improvements
for  the  Partnership's  wholly-owned  properties  were  $17,000,  $21,000,  and
$201,000 in 1998,  1997, and 1996,  respectively.  During 1999, the  Partnership
anticipates  approximately  $3,000 of capital  improvements to the Partnership's
wholly-owned property. During 1995, the Partnership's property manager commenced
a program to enhance the visual  appearance  of the  mini-warehouse  facilities.
Such enhancements include new signs, exterior color schemes, and improvements to
the rental offices.

                                       14

<PAGE>

         Total  distributions  paid to the  General  Partners  and  the  limited
partners (including per Unit amounts) for 1998 and prior years were as follows:

                                 Total              Per Unit
                               ----------           --------
             1998              $3,986,000            $24.00
             1997               3,987,000             24.00
             1996               3,986,000             24.00
             1995               4,986,000             30.02
             1994               3,987,000             24.00
             1993               3,256,000             19.60
             1992               3,326,000             20.02
             1991               4,224,000             25.43
             1990               3,378,000             20.34
             1989               4,983,000             30.00
             1988               4,983,000             30.00
             1987               4,671,000             28.12
             1986               4,153,000             25.00
             1985               1,192,000              8.22

         The General Partners distributed, concurrent with distributions for the
fourth quarter of 1991, a portion of the operating  reserve of the  Partnership,
and adjusted the on-going  distribution  level.  The operating  reserve that was
distributed  was estimated at $7.25 per Unit. The 1995  distribution  includes a
portion of the operating  reserve of the  Partnership  estimated to be $6.02 per
Unit.  Future   distribution   levels  will  be  based  on  cash  available  for
distributions  (cash flow from all  sources,  less cash  necessary  for  capital
improvement needs and to establish reserves).

IMPACT OF YEAR 2000
-------------------

         The Partnership utilizes PSI's information systems in connection with a
cost  sharing  and  administrative  services  agreement.  PSI has  completed  an
assessment  of  all  of its  hardware  and  software  applications  to  identify
susceptibility  to what is  commonly  referred  to as the  "Y2K  Issue"  whereby
certain computer programs have been written using two digits rather than four to
define the applicable year. Any of PSI's computer  programs or hardware with the
Y2K Issue that have date-sensitive  applications or embedded chips may recognize
a date  using "00" as the year 1900  rather  than the year  2000,  resulting  in
miscalculations or system failure causing disruptions of operations.

         PSI has two phases in its process  with respect to each of its systems;
i)  assessment,  whereby PSI  evaluates  whether the system is Y2K compliant and
identifies  the plan of  action  with  respect  to  remediating  any Y2K  issues
identified  and ii)  implementation,  whereby PSI  completes  the plan of action
prepared in the  assessment  phase and  verifies  that Y2K  compliance  has been
achieved.

         Many of PSI's critical applications,  relative to the direct management
of  properties,  have  recently  been replaced and PSI believes they are already
Year 2000  compliant.  PSI has an  implementation  in process  on the  remaining
critical  applications,  including its general ledger and related systems,  that
are believed to have Y2K issues.  PSI expects the  implementation to be complete
by June  1999.  Contingency  plans  have been  developed  for use in case  PSI's
implementations  are not  completed  on a  timely  basis.  While  PSI  presently
believes  that the impact of the Y2K Issue on its systems can be  mitigated,  if
PSI's plan for ensuring Year 2000 Compliance and the related  contingency  plans
were  to  fail,  be  insufficient,  or not be  implemented  on a  timely  basis,
Partnership operations could be materially impacted.

         Certain  of  PSI's  other  non-computer  related  systems  that  may be
impacted  by the Y2K  Issue,  such as  security  systems,  are  currently  being
evaluated,  and PSI expects  the  evaluation  to be  complete by June 1999.  PSI
expects the  implementation of any required  solutions to be complete in advance
of December 31,  1999.  PSI has not fully  evaluated  the impact of lack of Year

                                       15

<PAGE>

2000  compliance  on these  systems,  but has no reason to believe  that lack of
compliance would materially impact the Partnership's operations.

         The Partnership  exchanges electronic data with certain outside vendors
in the banking and payroll processing areas. The Partnership has been advised by
these  vendors that their  systems are or will be Year 2000  compliant,  but has
requested  a  Year  2000  compliance  certification  from  these  entities.  The
Partnership  is not aware of any other  vendors,  suppliers,  or other  external
agents with a Y2K Issue that would materially impact the  Partnership's  results
of operations,  liquidity, or capital resources. However, the Partnership has no
means of ensuring that external  agents will be Year 2000  compliant,  and there
can be no  assurance  that the  Partnership  has  identified  all such  external
agents.  The inability of external agents to complete their Year 2000 compliance
process in a timely fashion could materially impact the Partnership.  The effect
of non-compliance by external agents is not determinable.

         The cost of the PSI's year 2000 compliance  activities (which primarily
consists of the costs of new systems) to be allocated to the Partnership and the
Joint  Venture  is  estimated  at  approximately   $148,000.   These  costs  are
capitalized.  PSI's  year  2000  compliance  efforts  have not  resulted  in any
significant deferrals in other information system projects.

         The costs of the projects and the date on which PSI and the Partnership
expect  to  achieve  Year  2000  Compliance  are based  upon  management's  best
estimates,  and were derived  utilizing  numerous  assumptions of future events.
There can be no assurance  that these  estimates  will be  achieved,  and actual
results  could  differ  materially  from  those  anticipated.  There  can  be no
assurance  that the  Partnership  or PSI has identified all potential Y2K Issues
either within the Partnership,  at PSI, or at external agents. In addition,  the
impact of the Y2K issue on governmental  entities and utility  providers and the
resultant  impact on the  Partnership,  as well as  disruptions  in the  general
economy, may be material but cannot be reasonably determined or quantified.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT  MARKET RISK.

         None.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The Partnership's  financial  statements are included elsewhere herein.
Reference is made to the Index to Financial  Statements and Financial  Statement
Schedules in Item 14(a).

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

         None

                                       16

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.

         The Partnership has no directors or executive officers.

         The  Partnership's  General Partners are PSI and B. Wayne Hughes.  PSI,
acting through its directors and executive  officers,  and Mr. Hughes manage and
make investment decisions for the Partnership. The Mini-Warehouse Properties are
managed by PSI pursuant to a Management  Agreement.  Through 1996,  the business
parks of the  Partnership and the Joint Venture were managed by a predecessor of
PSBPLP pursuant to a Management Agreement.  In January 1997, the Partnership and
the Joint Venture  transferred  their business parks to PSBPLP in exchange for a
partnership interest in PSBPLP.

         The names of all directors  and executive  officers of PSI, the offices
held by each of them with PSI, and their ages and business experience during the
past five years are as follows:

      Name                                     Positions with PSI
------------------------      -------------------------------------------------
B. Wayne Hughes               Chairman of the Board and Chief Executive Officer
Harvey Lenkin                 President and Director
B. Wayne Hughes, Jr.          Vice President and Director
John Reyes                    Senior Vice President and Chief Financial Officer
Carl B. Phelps                Senior Vice President
Obren B. Gerich               Senior Vice President
Marvin M. Lotz                Senior Vice President
David Goldberg                Senior Vice President and General Counsel
A. Timothy Scott              Senior Vice President and Tax Counsel
David P. Singelyn             Vice President and Treasurer
Sarah Hass                    Vice President and Secretary
Robert J. Abernethy           Director
Dann V. Angeloff              Director
William C. Baker              Director
Thomas J. Barrack Jr.         Director
Uri P. Harkham                Director
Daniel C. Staton              Director

         B. Wayne Hughes, age 65, a general partner of the Partnership, has been
a director of PSI since its  organization in 1980 and was President and Co-Chief
Executive  Officer from 1980 until November 1991 when he became  Chairman of the
Board and sole Chief Executive  Officer.  Mr. Hughes has been active in the real
estate  investment field for over 25 years. He is the father of B. Wayne Hughes,
Jr.

         Harvey Lenkin, age 62, has been employed by PSI for 21 years and became
President and a director of PSI in November 1991. Mr. Lenkin has been a director
of PS Business Parks,  Inc.  ("PSBP"),  an affiliated REIT, since March 16, 1998
and was President of PSBP  (formerly  Public  Storage  Properties XI, Inc.) from
1990  until  March 16,  1998.  He is a member of the Board of  Governors  of the
National Association of Real Estate Investment Trusts (NAREIT).

         B. Wayne Hughes, Jr., age 39 became director of PSI in January 1998. He
has been a Vice President - Acquisitions  of PSI since 1992. He is the son of B.
Wayne Hughes.

         John Reyes, age 38, a certified public  accountant,  joined PSI in 1990
and was  Controller  of PSI from 1992 until  December  1996 when he became Chief
Financial  Officer.  He became a Vice  President  of PSI in November  1995 and a
Senior Vice President of PSI in December 1996.  From 1983 to 1990, Mr. Reyes was
employed by Ernst & Young.

                                       17

<PAGE>

         Carl B.  Phelps,  age 60,  became a  Senior  Vice  President  of PSI in
January  1998  with  overall   responsibility   for  property   acquisition  and
development.  From June 1991 until joining PSI, he was a partner in the law firm
of  Andrews & Kurth,  L.L.P.,  which  performed  legal  services  for PSI.  From
December 1982 through May 1991, his  professional  corporation  was a partner in
the law firm of Sachs & Phelps, then counsel to PSI.

         Obren B. Gerich, age 60, a certified public accountant, has been a Vice
President of PSI since 1980 and became Senior Vice  President of PSI in November
1995. He was Chief Financial Officer of PSI until November 1991.

         Marvin M.  Lotz,  age 56,  has had  overall  responsibility  for Public
Storage's  mini-warehouse  operations  since  1988.  He  became  a  Senior  Vice
President  of PSI  in  November  1995.  Mr.  Lotz  was an  officer  of PSI  with
responsibility for property acquisitions from 1983 until 1988.

         David  Goldberg,  age 49,  joined  PSI's legal  staff in June 1991.  He
became Senior Vice President and General  Counsel of PSI in November 1995.  From
December  1982  until  May  1991,  he was a  partner  in the law firm of Sachs &
Phelps, then counsel to PSI.

         A.  Timothy  Scott,  age 47,  became a Senior  Vice  President  and Tax
Counsel of PSI and Vice President and Tax Counsel of the Public Storage REITs in
November 1996.  From June 1991 until joining PSI, Mr. Scott practiced tax law as
a shareholder of the law firm of Heller,  Ehrman, White & McAuliffe,  counsel to
PSI. Prior to June 1991, his  professional  corporation was a partner in the law
firm of Sachs & Phelps, then counsel to PSI.

         David P.  Singleyn,  age 37, a certified  public  accountant,  has been
employed by PSI since 1989 and became Vice  President  and  Treasurer  of PSI in
November  1995.  From 1987 to 1989,  Mr.  Singelyn was  Controller of Winchell's
Donut Houses, L.P.

         Sarah Hass,  age 43,  became  Secretary  of PSI in February  1992.  She
became  a Vice  President  of PSI in  November  1995.  She  joined  PSI's  legal
department  in June 1991,  rendering  services on behalf of PSI. From 1987 until
May 1991, her professional  corporation was a partner in the law firm of Sachs &
Phelps,  then  counsel to PSI,  and from  April  1986  until June 1987,  she was
associated  with that  firm,  practicing  in the area of  securities  law.  From
September 1979 until  September  1985, Ms. Hass was associated with the law firm
of Rifkind & Sterling, Incorporated.

         Robert J.  Abernethy,  age 59, has been President of American  Standard
Development Company and of Self-Storage  Management  Company,  which develop and
operate mini-warehouses,  since 1976 and 1977,  respectively.  Mr. Abernethy has
been a director  of PSI since its  organization  in 1980.  He is a member of the
board of  trustees  of Johns  Hopkins  University  and a  director  of  Marathon
National Bank. Mr. Abernethy is a former member of the board of directors of the
Los Angeles County  Metropolitan  Transportation  Authority and the Metropolitan
Water District of Southern  California and a former  Planning  Commissioner  and
Telecommunications   Commissioner  and  former  Vice-Chairman  of  the  Economic
Development Commission of the City of Los Angeles.

         Dann V. Angeloff, age 63, has been President of the Angeloff Company, a
corporate  financial  advisory  firm,  since  1976.  The  Angeloff  Company  has
rendered,  and is  expected  to  continue  to  render,  financial  advisory  and
securities  brokerage services for PSI. Mr. Angeloff is the general partner of a
limited partnership that owns a mini-warehouse operated by PSI and which secures
a note  owned  by PSI.  Mr.  Angeloff  has  been a  director  of PSI  since  its
organization  in  1980.  He  is  a  director  of  Balboa  Capital   Corporation,
Compensation   Resource   Group,    Nicholas/Applegate   Growth   Equity   Fund,
Nicholas/Applegate  Mutual Funds, ReadyPac Produce, Inc., Royce Medical Company,
SupraLife International and WorldxChange Communications,  Inc. He was a director
of SPI from 1989 until June 1996.

         William C. Baker,  age 65,  became a director of PSI in November  1991.
Since January 1999, Mr. Baker has been President and Chief Executive  Officer of
Los Angeles Turf Club,  Incorporated,  which operates the Santa Anita  Racetrack
and is wholly-owned subsidiary of Magna International Inc. Since August 1998, he
has been President of Meditrust  Operating  Company,  a paired share real estate
investment trust. From November 1997 until December 1998, he was Chairman of the

                                       18

<PAGE>

Board  and Chief  Executive  Officer  of The  Santa  Anita  Companies,  Inc.,  a
wholly-owned  subsidiary of Meditrust  Operating Company which then operated the
Santa Anita Racetrack.  From August 1996 until November 1997, he was Chairman of
the Board and Chief  Executive  Officer of Santa  Anita  Operating  Company  and
Chairman of the Board of Santa Anita Realty  Enterprises,  Inc.,  the  companies
which were merged with Meditrust in November  1997.  From April 1993 through May
1995, Mr. Baker was President of Red Robin International,  Inc., an operator and
franchiser of casual dining  restaurants  in the United States and Canada.  From
January 1992 through  December 1995 he was Chairman and Chief Executive  Officer
of  Carolina   Restaurant   Enterprises,   Inc.,  a  franchisee   of  Red  Robin
International,  Inc.  Since  1991,  he has been  Chairman  of the Board of Coast
Newport Properties, a real estate brokerage company. From 1976 to 1988, he was a
principal  shareholder  and  Chairman and Chief  Executive  Officer of Del Taco,
Inc., an operator and franchiser of fast food  restaurants  in  California.  Mr.
Baker is a director of Callaway Golf Company and Meditrust Operating Company .

         Thomas J.  Barrack,  Jr., age 51,  became a director of PSI in February
1998.  Mr. Barrack has been the Chairman and Chief  Executive  Officer of Colony
Capital, Inc. since September,  1991. Colony Capital, Inc. is one of the largest
real estate investors in America, having acquired properties in the U.S., Europe
and Asia. Prior to founding Colony Capital, Inc., from 1987 to 1991, Mr. Barrack
was a principal with the Robert M. Bass Group,  Inc.,  the principal  investment
vehicle for Robert M. Bass of Fort Worth,  Texas. From 1985 to 1987, Mr. Barrack
was President of Oxford Ventures, Inc., a Canadian-based real estate development
company.  From  1984 to 1985 he was a  Senior  Vice  President  at E. F.  Hutton
Corporate  Finance in New York.  Mr.  Barrack was appointed by President  Ronald
Reagan as Deputy Under  Secretary at the U.S.  Department  of the Interior  from
1982 to 1983. Mr. Barrack currently is a director of Continental Airlines, Inc.,
Harvey's Acquisition Corp. and Kennedy-Wilson, Inc.

         Uri P.  Harkham,  age 50,  became a director of PSI in March 1993.  Mr.
Harkham  has been the  President  and Chief  Executive  Officer of the  Jonathan
Martin  Fashion  Group,  which  specializes  in  designing,   manufacturing  and
marketing  women's  clothing,  since its  organization in 1976.  Since 1978, Mr.
Harkham has been the Chairman of the Board of Harkham Properties,  a real estate
firm specializing in buying and managing fashion warehouses in Los Angeles.

         Daniel C. Staton, age 46, became a director of PSI on March 12, 1999 in
connection  with the merger of Storage  Trust Realty,  a real estate  investment
trust,  with PSI.  Mr.  Staton was  Chairman of the Board of Trustees of Storage
Trust  Realty from  February  1998 until March 12, 1999 and a Trustee of Storage
Trust Realty from  November 1994 until March 12, 1999. He is President of Walnut
Capital Partners,  an investment and venture capital company. Mr. Staton was the
Chief Operating Officer and Executive Vice President of Duke Realty Investments,
Inc. from 1993 to 1997. He has been a director of Duke Realty Investments,  Inc.
since  1993.  From  1981 to  1993,  Mr.  Staton  was a  principal  owner of Duke
Associates,  the predecessor of Duke Realty  Investments,  Inc. Prior to joining
Duke  Associates in 1981, he was a partner and general manager of his own moving
company,  Gateway Van & Storage, Inc. in St. Louis, Missouri. From 1986 to 1988,
Mr. Staton served as president of the Greater Cincinnati Chapter of the National
Association of Industrial and Office Parks.

         Pursuant to Articles 16 and 17 of the Partnership's Amended Certificate
and Agreement of Limited  Partnership (the "Partnership  Agreement"),  a copy of
which is included in the Partnership's  prospectus included in the Partnership's
Registration Statement, File No. 2-95773, each of the General Partners continues
to serve until (i) death, insanity, insolvency,  bankruptcy or dissolution, (ii)
withdrawal  with the consent of the other general partner and a majority vote of
the  limited  partners,  or (iii)  removal  by a  majority  vote of the  limited
partners.

         Each  director of PSI serves until he resigns or is removed from office
by PSI,  and may  resign or be removed  from  office at any time with or without
cause. Each officer of PSI serves until he resigns or is removed by the board of
directors  of PSI.  Any such officer may resign or be removed from office at any
time with or without cause.

         There  have  been no events  under  any  bankruptcy  act,  no  criminal
proceedings,  and no judgments or injunctions  material to the evaluation of the
ability of any director or executive officer of PSI during the past five years.

                                       19

<PAGE>

Section 16 (a) Beneficial Ownership Reporting Compliance
--------------------------------------------------------

         Based on a review of the  reports  filed  under  Section  16 (a) of the
Securities Exchange Act of 1934 with respect to the Units that were submitted to
the Partnership,  the Partnership  believes that with respect to the fiscal year
ended December 31, 1998, B. Wayne Hughes,  Jr. and Thomas J. Barrack,  Jr., each
of whom is a director of PSI, a General Partner of the  Partnership,  each filed
his Initial Statement of Beneficial  Ownership of Securities on Form 3 after its
due date.

ITEM 11. EXECUTIVE COMPENSATION.

         The Partnership has no subsidiaries, directors or officers. See Item 13
for a  description  of certain  transactions  between  the  Partnership  and the
General Partners and their affiliates.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         (a)      At January 1, 1999, PSI beneficially  owned  more  than  5% or
more of the Units of the Partnership:


     Title                                            Amount of         Percent
      of              Name and Address of             Beneficial          of
     Class             Beneficial Owner               Ownership          Class
-------------     ----------------------------     ----------------     -------

Units of          Public Storage, Inc.
Limited           701 Western Avenue
Partnership       Glendale, CA 91201-2394  (1)     90,859 Units (1)     61.39%
Interest


(1)  These Units are held of record by SEI Arlington Acquisition Corporation,  a
     wholly-owned subsidiary of PSI.

         In August 1997, PSI completed a cash tender offer,  which had commenced
in June  1997,  pursuant  to  which  PSI  acquired  a total  of  13,847  limited
partnership units at $355 per unit.

         The  Partnership  is not aware of any other  beneficial  owners of more
than 5% of the Units.

         (b)      The Partnership has no officers and directors.

         The   General   Partners   (or  their   predecessor-in-interest)   have
contributed  $747,000 to the capital of the  Partnership  representing 1% of the
aggregate capital contributions and as a result participate in the distributions
to the limited partners and in the Partnership's  profits and losses in the same
proportion that the general  partners' capital  contribution  bears to the total
capital  contribution.  Information  regarding  ownership of the Units by PSI, a
General Partner, is set forth under section (a) above.
The directors and executive officers of PSI, as a group, do not own any Units.

         (c) The Partnership knows of no contractual arrangements, the operation
of the terms of which may at a subsequent  date result in a change in control of
the  Partnership,  except  for  articles  16,  17 and 21.1 of the  Partnership's
Amended  Certificate  and Agreement of Limited  Partnership,  a copy of which is
included  in  the  Partnership's   prospectus   included  in  the  Partnership's
Registration  Statement File No. 2-95773.  Those articles provide, in substance,
that the limited  partners  shall have the right,  by majority vote, to remove a
general  partner and that a general  partner may designate a successor  with the
consent of the other general partner and a majority of the limited partners.

                                       20

<PAGE>

         The  Partnership  owns  interests in 33 properties  (which  exclude the
properties  transferred  to PSBPLP in January 1997);  32 of such  properties are
held in a general  partnership  comprised of the  Partnership and PSI. Under the
terms of the partnership  agreement relating to the ownership of the properties,
PSI has the  right to compel a sale of each  property  at any time  after  seven
years from the date of acquisition at not less than its independently determined
fair market value provided the  Partnership  receives its share of the net sales
proceeds  solely in cash. As of December 31, 1998,  PSI has the right to require
the Partnership to sell all of the Joint Venture's properties on these terms.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The Partnership  Agreement provides that the General Partners and their
affiliates are entitled to the following compensation:

1.       Incentive distributions equal to 10% of Cash Flow from Operations.

2.       Provided the limited partners have received distributions equal to 100%
         of their  investment plus a cumulative 8% per year (not  compounded) on
         their investment  (reduced by  distributions  other than from Cash Flow
         from Operations),  subordinated incentive distributions equal to 15% of
         remaining Cash from Sales or Refinancings.

3.       Provided the limited partners have received distributions equal to 100%
         of their  capital  contributions  plus a  cumulative  6% per year  (not
         compounded) on their investment  (reduced by  distributions  other than
         distributions from Cash Flow from Operations), brokerage commissions at
         the  lesser  of 3% of  the  sales  price  of a  property  or  50%  of a
         competitive commission.

         During  1998,  approximately  $399,000  was paid to PSI with respect to
items 1, 2, and 3 above. The Partnership owns interests in 33 properties  (which
exclude  the  properties  transferred  to PSBPLP in  January  1997);  32 of such
properties are held in a general  partnership  comprised of the  Partnership and
PSI.

         The Partnership and the Joint Venture have a Management  Agreement with
PSI pursuant to which the  Partnership and the Joint Venture pay PSI a fee of 6%
of the gross revenues of the mini-warehouse  spaces operated for the Partnership
and the Joint Venture.  During 1998, the  Partnership and the Joint Venture paid
fees of $855,000 to PSI pursuant to the Management Agreement.

         Through 1996, the Partnership  and Joint Venture's  business parks were
managed by a  predecessor  of PSBPLP  pursuant to a Management  Agreement  which
provides for the payment of a fee by the  Partnership and Joint Venture of 5% of
the gross revenues of the commercial  space operated for the Partnership and the
Joint Venture.  In January 1997, the Partnership,  the Joint Venture and PSI and
other related  partnerships  transferred a total of 35 business parks to PSBPLP,
an operating  partnership  formed to own and operate business parks in which PSI
has a significant interest.  Included among the properties  transferred were the
Partnership's  and Joint Venture's  business parks in exchange for a partnership
interest in PSBPLP.  The general partner of PSBPLP is PS Business Parks, Inc., a
REIT traded on the American Stock Exchange.

                                       21

<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)      List of Documents filed as part of the Report.

         1.       Financial  Statements:  See Index to Financial  Statements and
                  Financial Statement Schedules.

         2.       Financial   Statement   Schedules:   See  Index  to  Financial
                  Statements and Financial Statement Schedules.

         3.       Exhibits: See Exhibit Index contained herein.

(b)      Reports on Form 8-K:

         None     

(c)      Exhibits: See Exhibit Index contained herein.

                                       22

<PAGE>

                              PS PARTNERS V, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP
                                INDEX TO EXHIBITS

3.1      Amended  Certificate and Agreement of Limited  Partnership.  Previously
         filed with the Securities  and Exchange  Commission as Exhibit A to the
         Partnership's Prospectus included in Registration Statement No. 2-95773
         and incorporated herein by reference.

10.1     Second  Amended and Restated  Management  Agreement  dated November 16,
         1995,  between the  Partnership  and Public  Storage  Management,  Inc.
         Previously  filed with the  Securities  and Exchange  Commission  as an
         exhibit to PS Partners,  Ltd.'s Annual Report on Form 10-K for the year
         ended December 31, 1996 and incorporated herein by reference.

10.2     Amended  Management  Agreement  dated February 21, 1995 between Storage
         Equities,  Inc. and Public Storage  Commercial  Properties  Group, Inc.
         Previously  filed with the  Securities  and Exchange  Commission  as an
         exhibit to the  Partnership's  Annual  Report on Form 10-K for the year
         ended December 31, 1994, and incorporated herein by reference.

10.3     Participation  Agreement  dated  as of June  20,  1985,  among  Storage
         Equities, Inc., the Partnership,  Public Storage, Inc., B. Wayne Hughes
         and  Kenneth Q. Volk,  Jr.  Previously  filed with the  Securities  and
         Exchange  Commission as an exhibit to Storage  Equities,  Inc.'s Annual
         Report on Form 10-K dated April 18, 1985,  and  incorporated  herein by
         reference.

27       Financial data schedule.  Filed herewith.

                                       23

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the  Partnership  has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                             PS PARTNERS V, LTD.,
                             a California Limited Partnership
Dated:  March 26, 1999       By:   Public Storage, Inc., General Partner

                                   By:   /s/ B Wayne Hughes
                                         --------------------------------------
                                         B. Wayne Hughes, Chairman of the Board

                             By:   /s/ B Wayne Hughes
                                   --------------------------------------
                                   B. Wayne Hughes, General Partner


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Partnership in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

         Signature                                   Capacity                               Date
------------------------------    ------------------------------------------------     --------------

<S>                               <C>                                                  <C> 
/s/ B. Wayne Hughes               Chairman of the Board and Chief                      March 26, 1999
------------------------------    Executive Officer of Public Storage, Inc. and
B. Wayne Hughes                   General Partner (principal executive officer)
                                  

/s/ Harvey Lenkin                 President and Director                               March 26, 1999
------------------------------    of Public Storage, Inc.
Harvey Lenkin                     

/s/ B. Wayne Hughes, Jr.          Vice President and Director                          March 26, 1999
------------------------------    of Public Storage, Inc.
B. Wayne Hughes, Jr.              

/s/ John Reyes                    Senior Vice President and Chief Financial Officer    March 26, 1999
------------------------------    of Public Storage, Inc. (principal financial
John Reyes                        officer and principal accounting officer)
                                  

/s/ Robert J. Abernethy           Director of Public Storage, Inc.                     March 26, 1999
------------------------------
Robert J. Abernethy

/s/ Dann V. Angeloff              Director of Public Storage, Inc.                     March 26, 1999
------------------------------
Dann V. Angeloff

/s/ William C. Baker              Director of Public Storage, Inc.                     March 26, 1999
------------------------------
William C. Baker

                                  Director of Public Storage, Inc.
------------------------------
Thomas J. Barrack, Jr.

/s/ Uri P. Harkham                Director of Public Storage, Inc.                     March 26, 1999
------------------------------
Uri P. Harkham

                                  Director of Public Storage, Inc.
------------------------------
Daniel C. Staton

</TABLE>

                                       24

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership

                          INDEX TO FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES

                                  (Item 14 (a))


                                                                      Page
                                                                   References
                                                                   ----------
PS PARTNERS V, LTD.

     Report of Independent Auditors                                    F-1

     Financial Statements and Schedules:

       Balance Sheets as of December 31, 1998 and 1997                 F-2

       For the years ended December 31, 1998, 1997 and 1996:           F-3

          Statements of Income                                         F-3

          Statements of Partners' Equity                               F-4

          Statements of Cash Flows                                  F-5 - F-6

       Notes to Financial Statements                               F-7 - F-11

       Schedule

          Schedule III - Real Estate and Accumulated Depreciation  F-12 - F-13

Financial  Statements of 50 percent or less owned persons  required  pursuant to
Rule 3-09:

     PS BUSINESS PARKS,  INC. - PS Business Parks, Inc. is a registrant with the
     Securities and Exchange  Commission and its filings can be accessed through
     the Securities and Exchange Commission.

     SEI/PSP V JOINT VENTURES

         Report of Independent Auditors                               F-14

         Financial Statements:

         Balance Sheets as of December 31, 1998 and 1997              F-15

         For the years ended December 31, 1998, 1997 and 1996:

              Statements of Income                                    F-16

              Statements of Partners' Equity                          F-17

              Statements of Cash Flows                             F-18 - F-19

         Notes to Financial Statements                             F-20 - F-23

         Schedule

           Schedule III - Real Estate and Accumulated Depreciation F-24 - F-26

         All other schedules have been omitted since the required information is
not present or not present in amounts  sufficient  to require  submission of the
schedule,  or because the  information  required  is  included in the  financial
statements or the notes thereto.

                                       25

<PAGE>


                         Report of Independent Auditors




The Partners
PS Partners V, Ltd.,
A California Limited Partnership


We have audited the balance sheets of PS Partners V, Ltd., a California  Limited
Partnership  as of  December  31, 1998 and 1997 and the  related  statements  of
income,  partners'  equity,  and cash  flows for each of the three  years in the
period ended December 31, 1998. Our audits also included the financial statement
schedule  listed in the Index at Item  14(a).  These  financial  statements  and
schedule  are  the   responsibility   of  the  Partnership's   management.   Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of PS  Partners  V, Ltd.,  a
California  Limited  Partnership,  at  December  31,  1998  and  1997,  and  the
consolidated  results of its operations and its cash flows for each of the three
years in the period ended  December  31,  1998,  in  conformity  with  generally
accepted  accounting  principles.  Also, in our opinion,  the related  financial
statement  schedule,   when  considered  in  relation  to  the  basic  financial
statements  taken as a whole,  presents  fairly  in all  material  respects  the
information set forth therein.







                                                               ERNST & YOUNG LLP




February 10, 1999
Los Angeles, California

                                      F-1

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership
                                 BALANCE SHEETS
                           December 31, 1998 and 1997


<TABLE>
<CAPTION>
                                                                                          1998              1997
                                                                                   -------------------------------------

                                     ASSETS

<S>                                                                                   <C>                <C>           
Cash and cash equivalents                                                             $    2,702,000     $    1,002,000

Rent and other receivables                                                                     1,000                  -

Real estate facility, at cost:
     Land                                                                                    574,000            574,000
     Buildings and equipment                                                                 973,000            956,000
                                                                                   -------------------------------------
                                                                                           1,547,000          1,530,000

     Less accumulated depreciation                                                          (479,000)          (430,000)
                                                                                   -------------------------------------
                                                                                           1,068,000          1,100,000

Investment in real estate entities                                                        33,161,000         35,190,000

Other assets                                                                                   3,000             14,000
                                                                                   -------------------------------------

                                                                                      $   36,935,000     $   37,306,000
                                                                                   =====================================


                        LIABILITIES AND PARTNERS' EQUITY

Accounts payable                                                                      $       80,000     $       82,000

Advance payments from renters                                                                  9,000             13,000

Partners' equity:
     Limited partners' equity, $500 per unit, 148,000
         units authorized, issued and outstanding                                         36,381,000         36,743,000
     General partners' equity                                                                465,000            468,000
                                                                                   -------------------------------------

             Total partners' equity                                                       36,846,000         37,211,000
                                                                                   -------------------------------------

                                                                                      $   36,935,000     $   37,306,000
                                                                                   =====================================
</TABLE>
                            See accompanying notes.
                                      F-2

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership
                              STATEMENTS OF INCOME
              For the years ended December 31, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                       1998               1997               1996
                                                                ---------------------------------------------------------

REVENUE:

<S>                                                               <C>                <C>                <C>            
Rental income                                                     $       324,000    $       328,000    $     1,150,000
Equity in earnings of real estate entities                              3,494,000          3,056,000          2,221,000
Interest income                                                           112,000             36,000             96,000
                                                                --------------------------------------------------------
                                                                        3,930,000          3,420,000          3,467,000
                                                                --------------------------------------------------------

COSTS AND EXPENSES:

Cost of operations                                                        102,000             92,000            564,000
Management fees                                                            19,000             20,000             61,000
Depreciation and amortization                                              49,000             49,000            521,000
Administrative                                                            139,000            141,000            134,000
                                                                --------------------------------------------------------
                                                                          309,000            302,000          1,280,000
                                                                --------------------------------------------------------

NET INCOME                                                        $     3,621,000    $     3,118,000    $     2,187,000
                                                                ========================================================

Limited partners' share of net income
     ($21.55, $18.19, and $11.97 per unit in
     1998, 1997, and 1996, respectively)                          $     3,190,000    $     2,692,000    $     1,771,000
General partners' share of net income                                     431,000            426,000            416,000
                                                                --------------------------------------------------------
                                                                  $     3,621,000    $     3,118,000    $     2,187,000
                                                                ========================================================
</TABLE>
                            See accompanying notes.
                                      F-3

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership
                         STATEMENTS OF PARTNERS' EQUITY
             For the years ended December 31, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                     Limited            General
                                                                     Partners           Partners            Total
                                                                --------------------------------------------------------

<S>                                                               <C>                <C>                <C>            
Balances at December 31, 1995                                     $    39,384,000    $       495,000    $    39,879,000

Net income                                                              1,771,000            416,000          2,187,000

Distributions                                                          (3,552,000)          (434,000)        (3,986,000)
                                                                --------------------------------------------------------

Balances at December 31, 1996                                          37,603,000            477,000         38,080,000

Net income                                                              2,692,000            426,000          3,118,000

Distributions                                                          (3,552,000)          (435,000)        (3,987,000)
                                                                --------------------------------------------------------

Balances at December 31, 1997                                          36,743,000            468,000         37,211,000

Net income                                                              3,190,000            431,000          3,621,000

Distributions                                                          (3,552,000)          (434,000)        (3,986,000)
                                                                --------------------------------------------------------

Balances at December 31, 1998                                     $    36,381,000    $       465,000    $    36,846,000
                                                                ========================================================
</TABLE>
                            See accompanying notes.
                                      F-4

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                            1998               1997              1996
                                                                      -------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

    <S>                                                                  <C>               <C>                <C>           
    Net income                                                           $    3,621,000    $    3,118,000     $    2,187,000

    Adjustments to reconcile net income to net cash
        provided by operating activities

        Depreciation and amortization                                            49,000            49,000            521,000
        (Increase) decrease in rent and other receivables                        (1,000)           13,000            (13,000)
        Decrease (increase) in other assets                                      11,000            14,000            (15,000)
        (Decrease) increase in accounts payable                                  (2,000)          (15,000)            14,000
        Decrease in advance payments from renters                                (4,000)           (2,000)                 -
        Equity in earnings of real estate entities                           (3,494,000)       (3,056,000)        (2,221,000)
                                                                      -------------------------------------------------------

             Total adjustments                                               (3,441,000)       (2,997,000)        (1,714,000)
                                                                      -------------------------------------------------------

             Net cash provided by operating activities                          180,000           121,000            473,000
                                                                      -------------------------------------------------------

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:

        Distributions from real estate entities                               5,523,000         4,695,000          2,222,000
        Additions to real estate facilities                                     (17,000)          (21,000)          (201,000)
                                                                      -------------------------------------------------------

             Net cash provided by investing activities                        5,506,000         4,674,000          2,021,000
                                                                      -------------------------------------------------------

CASH FLOWS USED IN FINANCING ACTIVITIES:

        Distributions to partners                                            (3,986,000)       (3,987,000)        (3,986,000)
                                                                      -------------------------------------------------------

             Net cash used in financing activities                           (3,986,000)       (3,987,000)        (3,986,000)
                                                                      -------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                          1,700,000           808,000         (1,492,000)

Cash and cash equivalents at the beginning of the period                      1,002,000           194,000          1,686,000
                                                                      -------------------------------------------------------

Cash and cash equivalents at the end of the period                       $    2,702,000    $    1,002,000     $      194,000
                                                                      ========================================================
</TABLE>
                            See accompanying notes.
                                      F-5

<PAGE>

                               PS PARTNERS V, LTD.
                        a California Limited Partnership
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1998, 1997, and 1996
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                  1998           1997           1996
                                                                              -------------------------------------------


Supplemental schedule of noncash investing and financing activities:


    <S>                                                                             <C>         <C>               <C>
    Investment in real estate entities                                              $-          $(6,608,000)      $-

    Transfer of real estate facility for interest in real estate entities,          
    net                                                                              -            6,608,000        -

</TABLE>
                            See accompanying notes.
                                      F-6

<PAGE>

                              PS PARTNERS V, Ltd.,
                        a California Limited Partnership
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1998


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

         Description of Partnership
         --------------------------

                  PS Partners V, Ltd., a  California  Limited  Partnership  (the
         "Partnership")  was formed with the  proceeds of an  interstate  public
         offering.  PSI  Associates  II, Inc.  ("PSA"),  an  affiliate of Public
         Storage Management, Inc., organized the Partnership along with B. Wayne
         Hughes ("Hughes"). In September 1993, Storage Equities, Inc., now known
         as Public Storage, Inc. ("PSI"), a California corporation, acquired the
         interest of PSA relating to its general partner capital contribution in
         the Partnership and was substituted as a co-general partner in place of
         PSA.

                  In 1995,  there was a series of mergers  among Public  Storage
         Management, Inc. (which was the Partnership's mini-warehouse operator),
         Public  Storage,  Inc.  and their  affiliates  (collectively,  "PSMI"),
         culminating in the November 16, 1995 merger (the "PSMI Merger") of PSMI
         into Storage Equities,  Inc. In the PSMI Merger, Storage Equities, Inc.
         was renamed Public Storage,  Inc. and it acquired  substantially all of
         PSMI's United States real estate  operations and became the operator of
         the mini-warehouse properties in which the Partnership has an interest.

                  The  Partnership  has  invested  in  existing   mini-warehouse
         storage facilities which offer  self-service  storage spaces for lease,
         usually on a  month-to-month  basis,  to the  general  public and, to a
         lesser  extent,  in  existing  business  park  facilities  which  offer
         industrial and office space for lease.

                  The Partnership has ownership interests in 33 properties in 14
         states (collectively  referred to as the "Mini-Warehouse  Properties"),
         which exclude two  properties  transferred to PS Business  Parks,  L.P.
         ("PSBPLP") in January 1997. 32 of the properties are owned by SEI/PSP V
         Joint Ventures (the "Joint Venture"), a general partnership between the
         Partnership and PSI. The Partnership is the managing general partner of
         the  Joint  Venture,   with  ownership   interests  in  the  individual
         properties of the Joint Venture ranging from 50% to 70.6%.

                  As used hereinafter, the Joint Venture and PSBPLP are referred
         to as the "Real Estate Entities."

         Basis of Presentation
         ---------------------

                  The   financial   statements   include  the  accounts  of  the
         Partnership.  The accounts of the Joint Venture,  which the Partnership
         does not control,  are not  consolidated  with the  Partnership and the
         Partnership's  interest in the Joint  Venture is  accounted  for on the
         equity method.

                  The Partnership does not control the Joint Venture because PSI
         has  significant  control  rights with respect to the management of the
         properties,  including the right to compel the sale of each property in
         the Joint  Venture and the right to require the  Partnership  to submit
         operating budgets.

                                      F-7

<PAGE>

1.       SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES AND  PARTNERSHIP  MATTERS
         (CONTINUED)

                  Under the terms of the general  partnership  agreement  of the
         Joint Venture all depreciation  and  amortization  with respect to each
         property  is  allocated  solely to the  Partnership  until the  limited
         partners recover their initial capital  contribution.  Thereafter,  all
         depreciation  and  amortization  is  allocated  solely  to PSI until it
         recovers its initial capital contribution.  All remaining  depreciation
         and  amortization is allocated to the Partnership and PSI in proportion
         to their ownership percentages.

                  Under the terms of the  partnership  agreements,  for property
         acquisitions in which PSI issued convertible  securities to the sellers
         for its interest,  PSI's rights to receive cash flow distributions from
         the  partnerships  for any year after the first year of  operation  are
         subordinated  to  cash  distributions  to the  Partnership  equal  to a
         cumulative  annual 7% of its cash  investment (not  compounded).  These
         agreements also specify that upon sale or refinancing of a property for
         more than its original purchase price,  distribution of proceeds to PSI
         is  subordinated  to the return to the Partnership of the amount of its
         cash investment and the 7% distribution described above.

         Depreciation and amortization
         -----------------------------

                  The Partnership and the Joint Venture depreciate the buildings
         and equipment on a straight-line  method over estimated useful lives of
         25 and 5 years, respectively.  Leasing commissions relating to business
         park properties are expensed when incurred.

         Revenue Recognition
         -------------------

                  Property rents are recognized as earned.

         Allocation of Net Income
         ------------------------

                  The  General  Partners'  share of net  income  consists  of an
         amount attributable to their 1% capital  contribution and an additional
         percentage  of cash flow (as defined,  see Note 4) which relates to the
         General  Partners'  share  of cash  distributions  as set  forth in the
         Partnership  Agreement.  All  remaining  net income is allocated to the
         limited partners.

         Per Unit Data
         -------------

                  Per unit data is based on the  number of  limited  partnership
         units (148,000) outstanding during the year.

                                      F-8

<PAGE>


1.       SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES AND  PARTNERSHIP  MATTERS
         (CONTINUED)

         Environmental Cost
         ------------------

                  Substantially  all of the real estate  facilities in which the
         Partnership has an interest were acquired prior to the time that it was
         customary  to  conduct   extensive   environmental   investigations  in
         connection with the property acquisitions. During the fourth quarter of
         1995,  an   independent   environmental   consulting   firm   completed
         environmental  assessments on the Partnership's and the Joint Venture's
         properties  to evaluate the  environmental  condition of, and potential
         environmental liabilities of such properties.  Although there can be no
         assurance,   the   Partnership  is  not  aware  of  any   environmental
         contamination of the Mini-Warehouse Properties which individually or in
         the aggregate would be material to the Partnership's  overall business,
         financial condition, or results of operations.

         Segment Reporting
         -----------------

                  Effective  January 1, 1998, the  Partnership  adopted SFAS No.
         131,   "Disclosure   about   Segments  of  an  Enterprise  and  Related
         Information."  SFAS No. 131  established  standards  for the way public
         business  enterprises  report  information about operating  segments in
         annual financial  statements and requires that those enterprises report
         selected  information  about  operating  segments in interim  financial
         reports.   SFAS  No.  131  also   establishes   standards  for  related
         disclosures  about  products and services,  geographic  areas and major
         customers.  The Partnership only has one reportable  segment as defined
         within  SFAS No.  131,  therefore  the  adoption of SFAS No. 131 had no
         effect on the Partnership's disclosures.

         Use of Estimates
         ----------------

                  The preparation of the financial statements in conformity with
         generally accepted  accounting  principles  requires management to make
         estimates  and  assumptions  that  affect the  amounts  reported in the
         financial  statements  and  accompanying  notes.  Actual  results could
         differ from those estimates.

         Cash Distributions
         ------------------

                  The Partnership Agreement provides for quarterly distributions
         of cash flow from operations (as defined).  Cash distributions per unit
         has remained at $24.00 per year during 1998, 1997, and 1996.

         Cash and Cash Equivalents
         -------------------------

                  For financial  statement purposes,  the Partnership  considers
         all highly liquid investments purchased with a maturity of three months
         or less to be cash equivalents.

2.       REAL ESTATE FACILITIES

                  In 1995,  the  Financial  Accounting  Standards  Board  issued
         Statement of Financial  Accounting Standards No. 121 ("Statement 121"),
         "Accounting for the Impairment of Long-Lived  Assets and for Long-Lived
         Assets to be Disposed of." Statement 121 requires  impairment losses to
         be recorded on long-lived  assets used in operations when indicators of
         impairment are present and the undiscounted  cash flows estimated to be
         generated  by those assets are less than the assets'  carrying  amount.
         Statement 121 also  addresses the method of accounting  for  long-lived
         assets  that are  expected  to be  disposed.  The  Partnership  adopted
         Statement 121 in 1996 and the adoption had no effect.

                                      F-9

<PAGE>


2.       REAL ESTATE FACILITIES (CONTINUED)

                  In January 1997,  the  Partnership,  the Joint Venture and PSI
         and other related partnerships transferred a total of 35 business parks
         to PSBPLP, an operating  partnership formed to own and operate business
         parks in which  PSI has a  significant  interest.  Included  among  the
         properties  transferred were the  Partnership's and the Joint Venture's
         business  parks in exchange for a partnership  interest in PSBPLP.  The
         general partner of PSBPLP is PS Business Parks, Inc. ("PSBP")

3.       INVESTMENT IN REAL ESTATE ENTITIES

                 During  1998,  1997,  and  1996,  the  Partnership   recognized
         earnings from the Real Estate  Entities of  $3,494,000,  $3,056,000 and
         $2,221,000,  respectively,  and received  cash  distributions  totaling
         $5,523,000,  $4,695,000,  and  $2,222,000,  respectively  from the Real
         Estate Entities.

                 The accounting policies of the Real Estate Entities are similar
         to that of the  Partnership.  Summarized  combined  financial data with
         respect to the Real Estate Entities are as follows:

                                                          1998          1997
                                                      ------------   -----------
 For the year ended December 31,
     Total revenues                                   $105,123,000   $45,498,000
     Minority interest in income                        11,208,000     8,566,000
     Net income                                         36,453,000    10,359,000

 At December 31,
     Total assets, net of accumulated depreciation    $768,755,000  $384,357,000
     Total liabilities                                  67,775,000    12,928,000
     Total minority interest                           153,015,000   168,665,000
     Total equity                                      547,965,000   202,764,000

                 The increase in the size of the combined financial position and
         operating  results,  respectively,  of the Real Estate Entities for the
         year ended December 31, 1998 and at December 31, 1998, respectively, as
         compared  to prior  periods,  is the  result of  additional  properties
         purchased by PSBPLP during 1997 and 1998.

                 Financial  statements  of the Joint  Venture are filed with the
         Partnership's  Form 10-K for 1998, in Item 14. PS Business Parks,  Inc.
         is a registrant  with the Securities and Exchange  Commission,  and its
         filings can be accessed through the Securities and Exchange Commission.

4.       GENERAL PARTNERS' EQUITY

                  The General Partners have a 1% interest in the Partnership. In
         addition,   the  General   Partners   have  a  10%   interest  in  cash
         distributions  attributable to operations,  exclusive of  distributions
         attributable to sales and refinancing proceeds.

                  Proceeds  from  sales  and  refinancings  will be  distributed
         entirely to the limited  partners  until the limited  partners  recover
         their  investment plus a cumulative 8% annual return (not  compounded);
         thereafter,  the General  Partners  have a 15%  interest  in  remaining
         proceeds.

                                      F-10

<PAGE>

5.       RELATED PARTY TRANSACTIONS

                  The  Partnership  has a management  agreement with PSI whereby
         PSI operates the Mini-Warehouse Properties for a fee equal to 6% of the
         facilities' monthly gross revenue (as defined).

                  In  January  1997,  the  Partnership  and  the  Joint  Venture
         transferred  their business park facilities to PSBPLP in exchange for a
         partnership interest in PSBPLP.

                  PSI has a significant economic interest in PSBPLP and PSBP.

6.       LEASES

                  The   Partnership   has   invested   primarily   in   existing
         mini-warehouse  storage  facilities  which offer  self-service  storage
         spaces  for lease to the  general  public.  Leases  for such  space are
         usually on a month-to-month basis.

7.       TAXES BASED ON INCOME

                  Taxes based on income are the responsibility of the individual
         partners and,  accordingly,  the Partnership's  financial statements do
         not reflect a provision for such taxes.

                   Unaudited  taxable net income was $3,668,000,  $6,409,000 and
          $1,831,000  for the years  ended  December  31,  1998,  1997 and 1996,
          respectively. The difference between taxable income and book income is
          primarily related to timing differences in depreciation expense.

                                      F-11

<PAGE>

                               PS PARTNERS V, LTD.
                        A CALIFORNIA LIMITED PARTNERSHIP
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
                                                                                                       
                                                                                                       Costs      
                                                                           Initial Cost              subsequent   
                                                                 --------------------------------- to acquisition 
    Date                                                                            Buildings &      Buildings &   
  Acquired                Description              Encumbrances        Land         Improvements    Improvements  
------------------------------------------------------------------------------------------------------------------


    <S>       <C>                                       <C>           <C>              <C>             <C>        
    7/86      Colorado Springs/ Hollow Tree             $-            $574,000         $726,000        $247,000   
                                                  ================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                  
                                                                  Gross Carrying Amount
                                                                   At December 31, 1998
                                                  ---------------------------------------------------------------
    Date                                                             Buildings &                    Accumulated
  Acquired                Description                   Land        Improvements        Total      Depreciation
-----------------------------------------------------------------------------------------------------------------


    <S>       <C>                                       <C>             <C>           <C>               <C>     
    7/86      Colorado Springs/ Hollow Tree             $574,000        $973,000      $1,547,000        $479,000
                                                  ===============================================================
</TABLE>

                                      F-12

<PAGE>

                               PS PARTNERS V, LTD.
                        A CALIFORNIA LIMITED PARTNERSHIP
                           REAL ESTATE RECONCILIATION
                            SCHEDULE III (CONTINUED)

(A)  The  following  is  a  reconciliation  of  cost  and  related   accumulated
     depreciation.

                       GROSS CARRYING COST RECONCILIATION

                                                   Years Ended December 31,
                                       -----------------------------------------
                                           1998           1997           1996
                                       -----------------------------------------

Balance at beginning of the period     $ 1,530,000   $ 12,618,000   $ 12,417,000

Additions during the period:
     Improvements, etc.                     17,000         21,000        201,000

Deductions during the period:
     Disposition of real estate                  -    (11,109,000)             -
                                       -----------------------------------------

Balance at the close of the period     $ 1,547,000   $  1,530,000   $ 12,618,000
                                       =========================================


                    ACCUMULATED DEPRECIATION RECONCILIATION

                                                   Years Ended December 31,
                                       -----------------------------------------
                                          1998          1997            1996
                                       -----------------------------------------

Balance at beginning of the period     $ 430,000    $ 4,882,000     $ 4,361,000

Additions during the period:
     Depreciation                         49,000         49,000         521,000

Deductions during the period:
     Disposition of real estate                -     (4,501,000)              -
                                       -----------------------------------------

Balance at the close of the period     $ 479,000    $   430,000     $ 4,882,000
                                       =========================================


(B) The  aggregate  cost of real  estate  for  Federal  income tax  purposes  is
    $1,579,000.

                                      F-13

<PAGE>

                         Report of Independent Auditors




The Partners
SEI/PSP V Joint Ventures


We have  audited  the  balance  sheets  of the  SEI/PSP V Joint  Ventures  as of
December  31,  1998 and 1997 and the  related  statements  of income,  partners'
equity and cash flows for each of the three years in the period  ended  December
31, 1998. Our audits also included the financial  statement  schedule  listed in
the  Index at Item 14 (a).  These  financial  statements  and  schedule  are the
responsibility  of the Joint  Ventures'  management.  Our  responsibility  is to
express an opinion  on these  financial  statements  and  schedule  based on our
audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of the SEI/PSP V Joint Ventures at
December 31, 1998 and 1997, and the results of its operations and cash flows for
each of the three years in the period ended  December 31,  1998,  in  conformity
with generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements  taken as a whole,  presents  fairly  in all  material  respects  the
information set forth therein.







                                                               ERNST & YOUNG LLP

February 10, 1999
Los Angeles, CA

                                      F-14

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                                 BALANCE SHEETS
                           December 31, 1998 and 1997


<TABLE>
<CAPTION>

                                                                                          1998               1997
                                                                                   --------------------------------------

                                     ASSETS


<S>                                                                                         <C>                 <C>     
Cash and cash equivalents                                                                   $312,000            $236,000

Rent and other receivables                                                                    89,000              82,000

Real estate facilities, at cost:
     Land                                                                                 15,525,000          15,525,000
     Buildings and equipment                                                              56,324,000          55,530,000
                                                                                   --------------------------------------
                                                                                          71,849,000          71,055,000

         Less accumulated depreciation                                                   (29,144,000)        (26,486,000)
                                                                                   --------------------------------------
                                                                                          42,705,000          44,569,000

Investment in real estate entity                                                          16,110,000          15,893,000

Other assets                                                                                 125,000             123,000
                                                                                   --------------------------------------

                                                                                         $59,341,000         $60,903,000
                                                                                   ======================================


                        LIABILITIES AND PARTNERS' EQUITY


Accounts payable                                                                            $866,000            $704,000

Advance payments from renters                                                                415,000             393,000

Partners' equity:
     PS Partners V, Ltd.                                                                  26,379,000          28,471,000
     Public Storage, Inc.                                                                 31,681,000          31,335,000
                                                                                   --------------------------------------

Total partners' equity                                                                    58,060,000          59,806,000
                                                                                   --------------------------------------

                                                                                         $59,341,000         $60,903,000
                                                                                   ======================================
</TABLE>
                            See accompanying notes.
                                      F-15

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                              STATEMENTS OF INCOME
              For the years ended December 31, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                         1998              1997              1996
                                                                   -----------------------------------------------------

REVENUE:

<S>                                                                     <C>               <C>               <C>        
Rental income                                                           $13,932,000       $13,267,000       $14,692,000
Equity in earnings of real estate entity                                    931,000           653,000                 -
                                                                   -----------------------------------------------------
                                                                         14,863,000        13,920,000        14,692,000
                                                                   -----------------------------------------------------

COSTS AND EXPENSES:

Cost of operations                                                        4,316,000         4,031,000         4,669,000
Management fees                                                             836,000           796,000           859,000
Depreciation and amortization                                             2,658,000         2,570,000         3,272,000
Interest expense                                                                  -                 -           214,000
                                                                   -----------------------------------------------------
                                                                          7,810,000         7,397,000         9,014,000
                                                                   -----------------------------------------------------


NET INCOME                                                               $7,053,000        $6,523,000        $5,678,000
                                                                   =====================================================


Partners' share of net income:
          PS Partners V, Ltd.'s share                                    $3,229,000        $2,870,000        $2,221,000
          Public Storage Inc.'s share                                     3,824,000         3,653,000         3,457,000
                                                                   -----------------------------------------------------
                                                                         $7,053,000        $6,523,000        $5,678,000
                                                                   =====================================================
</TABLE>
                            See accompanying notes.
                                      F-16

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                         STATEMENTS OF PARTNERS' EQUITY
             For the years ended December 31, 1998, 1997, and 1996

<TABLE>
<CAPTION>
                                                                   PS Partners        Public Storage
                                                                     V, Ltd.               Inc.              Total
                                                              -----------------------------------------------------------

<S>                                                                  <C>                <C>                <C>        
Balances at December 31, 1995                                        $30,222,000        $30,459,000        $60,681,000

Net income                                                             2,221,000          3,457,000          5,678,000

Distributions                                                         (2,222,000)        (2,859,000)        (5,081,000)

                                                              -----------------------------------------------------------
Balances at December 31, 1996                                         30,221,000         31,057,000         61,278,000

Net income                                                             2,870,000          3,653,000          6,523,000

Distributions                                                         (4,620,000)        (3,375,000)        (7,995,000)

                                                              -----------------------------------------------------------
Balances at December 31, 1997                                         28,471,000         31,335,000         59,806,000

Net income                                                             3,229,000          3,824,000          7,053,000

Distributions                                                         (5,321,000)        (3,478,000)        (8,799,000)
                                                              -----------------------------------------------------------

Balances at December 31, 1998                                        $26,379,000        $31,681,000        $58,060,000
                                                              ===========================================================
</TABLE>
                            See accompanying notes.
                                      F-17

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                              1998            1997            1996
                                                                        -------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                        <C>             <C>             <C>       
Net income                                                                 $7,053,000      $6,523,000      $5,678,000

     Adjustments to reconcile net income to net cash
         provided by operating activities

         Depreciation and amortization                                       2,658,000        2,570,000       3,272,000
         (Increase) decrease in rent and other receivables                      (7,000)          65,000         (70,000)
         (Increase) decrease in other assets                                    (2,000)         132,000         (93,000)
         Increase (decrease) in accounts payable                               162,000           (5,000)        (40,000)
         Increase (decrease) in advance payments from renters                   22,000           (5,000)         (7,000)
         Equity in earnings of real estate entity                             (931,000)        (653,000)              -
                                                                        -------------------------------------------------

              Total adjustments                                              1,902,000        2,104,000       3,062,000
                                                                        -------------------------------------------------

              Net cash provided by operating activities                      8,955,000        8,627,000       8,740,000
                                                                        -------------------------------------------------

CASH FLOWS USED IN  INVESTING ACTIVITIES:

         Distributions from real estate entity                                 714,000          248,000               -
         Additions to real estate facilities                                  (794,000)        (903,000)       (838,000)
                                                                        -------------------------------------------------

              Net cash used in  investing activities                           (80,000)        (655,000)       (838,000)
                                                                        -------------------------------------------------

CASH FLOWS USED IN FINANCING ACTIVITIES:

         Distributions to partners                                          (8,799,000)      (7,995,000)     (5,081,000)
         Principal payments on mortgage note payable                                 -                -      (2,935,000)
                                                                        -------------------------------------------------

              Net cash used in financing activities                         (8,799,000)      (7,995,000)     (8,016,000)
                                                                        -------------------------------------------------

Net increase (decrease) in cash and cash equivalents                            76,000          (23,000)       (114,000)

Cash and cash equivalents at the beginning of the period                       236,000          259,000         373,000
                                                                        -------------------------------------------------

Cash and cash equivalents at the end of the period                            $312,000         $236,000        $259,000
                                                                        =================================================
</TABLE>
                            See accompanying notes.
                                      F-18

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1998, 1997, and 1996
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                  1998            1997          1996
                                                                              -------------------------------------------


Supplemental schedule of noncash investing and financing activities:


     <S>                                                                            <C>       <C>                  <C>
     Investment in real estate entity                                               $-        $(15,488,000)        $-

     Transfer of real estate facility for interest in real estate entity, net        -          15,488,000          -

</TABLE>
                            See accompanying notes.
                                      F-19

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        a California Limited Partnership
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1998

1.       DESCRIPTION OF PARTNERSHIP 

                  SEI/PSP V Joint  Ventures (the "Joint  Venture") was formed on
         December 31, 1990 in connection with the  consolidation  of 22 separate
         general  partnerships  between  Public  Storage  Inc.  ("PSI")  and  PS
         Partners V, Ltd. ("PSP V"). The Joint Venture,  through its predecessor
         general partnerships,  invested in existing  mini-warehouse  facilities
         which  offer  self-service  storage  spaces  for  lease,  usually  on a
         month-to-month basis, to the general public and, to a lesser extent, in
         existing  business park  facilities  which offer  industrial and office
         space for lease.

                  The Joint Venture owns 32 properties  (referred to hereinafter
         as  the  "Mini-Warehouses"),   which  excludes  a  property  which  was
         transferred to PS Business Parks, L.P.  ("PSBPLP") in January 1997. PSP
         V is the  managing  general  partner  of the  Joint  Venture,  with its
         ownership interests in the properties of the Joint Venture ranging from
         50% to 70.6%.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

         Basis of Presentation
         ---------------------

                  The  financial  statements  include the  accounts of the Joint
         Venture.

                  Under the terms of the general  partnership  agreement  of the
         Joint  Venture,   for  property   acquisitions   in  which  PSI  issued
         convertible securities to the sellers for its interest,  PSI's right to
         receive  cash flow  distributions  for any year after the first year of
         operation are  subordinated to cash  distributions  to PSP V equal to a
         cumulative  annual  7% of its  cash  investment  (not  compounded).  In
         addition,  upon sale or  refinancing  of a  property  for more than its
         original   purchase   price,   distribution   of  proceeds  to  PSI  is
         subordinated  to  the  return  to  PSP V of  the  amount  of  its  cash
         investment and the 7% distribution described above.

         Depreciation and amortization
         -----------------------------

                  The Joint Venture depreciates the buildings and equipment on a
         straight-line  method over  estimated  useful  lives of 25 and 5 years,
         respectively.  Leasing commissions relating to business park properties
         are expensed when incurred.

         Revenue Recognition
         -------------------

                  Property rents are recognized as earned.

         Allocation of Net Income to PSP V and PSI
         -----------------------------------------

                  Net income prior to depreciation is allocated to PSP V and PSI
         based upon their relative  ownership  interest in each property and the
         results of each property.

                  Under the terms of the general  partnership  agreement  of the
         Joint Venture all depreciation  and  amortization  with respect to each
         Joint  Venture  is  allocated  solely  to PSP V until it  recovers  its
         initial  capital   contribution.   Thereafter,   all  depreciation  and
         amortization  is allocated  solely to PSI until it recovers its initial
         capital  contribution.  All remaining  depreciation and amortization is
         allocated  to  PSP  V  and  PSI  in  proportion   to  their   ownership
         percentages.

                                      F-20

<PAGE>

2.       SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES AND  PARTNERSHIP  MATTERS
         (CONTINUED)

         Cash Distributions
         ------------------

                  The  general  partnership   agreement  of  the  Joint  Venture
         provides for regular  distributions  of cash flow from  operations  (as
         defined).

         Cash and Cash Equivalents
         -------------------------

                  For financial statement purposes,  the Joint Venture considers
         all highly liquid investments purchased with a maturity of three months
         or less to be cash equivalents.

         Environmental Cost
         ------------------

                  Substantially  all of the real estate  facilities in which the
         Joint Venture has an interest  were acquired  prior to the time that it
         was  customary to conduct  extensive  environmental  investigations  in
         connection with the property acquisitions. During the fourth quarter of
         1995,  an   independent   environmental   consulting   firm   completed
         environmental assessments on the Joint Venture's properties to evaluate
         the environmental condition of, and potential environmental liabilities
         of such  properties.  Although  there  can be no  assurance,  the Joint
         Venture  is  not  aware  of  any  environmental  contamination  of  the
         Mini-Warehouses  which  individually  or  in  the  aggregate  would  be
         material to the Joint Venture's overall business,  financial condition,
         or results of operations.

         Segment Reporting
         -----------------

                  Effective  January 1, 1998, the Joint Venture adopted SFAS No.
         131,   "Disclosure   about   Segments  of  an  Enterprise  and  Related
         Information."  SFAS No. 131  established  standards  for the way public
         business  enterprises  report  information about operating  segments in
         annual financial  statements and requires that those enterprises report
         selected  information  about  operating  segments in interim  financial
         reports.   SFAS  No.  131  also   establishes   standards  for  related
         disclosures  about  products and services,  geographic  areas and major
         customers. The Joint Venture only has one reportable segment as defined
         within  SFAS No.  131,  therefore  the  adoption of SFAS No. 131 had no
         effect on the Joint Venture's disclosures.

         Use of Estimates
         ----------------

                  The preparation of the financial statements in conformity with
         generally accepted  accounting  principles  requires management to make
         estimates  and  assumptions  that  affect the  amounts  reported in the
         financial  statements  and  accompanying  notes.  Actual  results could
         differ from those estimates.

3.       REAL ESTATE FACILITIES

                  In 1995,  the  Financial  Accounting  Standards  Board  issued
         Statement of Financial  Accounting Standards No. 121 ("Statement 121"),
         "Accounting for the Impairment of Long-Lived  Assets and for Long-Lived
         Assets to be Disposed of." Statement 121 requires  impairment losses to
         be recorded on long-lived  assets used in operations when indicators of
         impairment are present and the undiscounted  cash flows estimated to be
         generated  by those assets are less than the assets'  carrying  amount.
         Statement 121 also  addresses the method of accounting  for  long-lived
         assets that are  expected to be  disposed.  The Joint  Venture  adopted
         Statement 121 in 1996 and the adoption had no effect.

                                      F-21

<PAGE>

3.       REAL ESTATE FACILITIES (CONTINUED)

                  In  January  1997,   the  Joint  Venture  and  PSI  and  other
         affiliated partnerships of PSI transferred a total of 35 business parks
         to PSBPLP, an operating  partnership formed to own and operate business
         parks in which  PSI has a  significant  interest.  Included  among  the
         properties  transferred  was  the  Joint  Venture's  business  park  in
         exchange for a partnership  interest in PSBPLP.  The general partner of
         PSBPLP is PS Business Parks, Inc. ("PSBP").

4.       INVESTMENT IN REAL ESTATE ENTITY

                  In 1998 and 1997,  the Joint Venture  recognized  $931,000 and
         $653,000,  respectively,  in equity in earnings  of real estate  entity
         with respect to the investment in PSBPLP, described in Note 3 above.

                  The  accounting  policies of PSBPLP are similar to that of the
         Joint  Venture.  Summarized  combined  financial  data with  respect to
         PSBPLP is as follows:

                                                         1998           1997
                                                     ------------   ------------
For the year ended December 31,
    Total revenues                                    $90,260,000    $31,578,000
    Minority interest in income                        11,208,000      8,566,000
    Net income                                         29,400,000      3,836,000

At December 31,
    Total assets, net of accumulated depreciation    $709,414,000   $323,454,000
    Total liabilities                                  66,494,000     11,831,000
    Total minority interest                           153,015,000    168,665,000
    Total equity                                      489,905,000    142,958,000

                  The  increase in the size of the combined  financial  position
         and operating results,  respectively, of the Real Estate Entity for the
         year ended December 31, 1998 and at December 31, 1998, respectively, as
         compared  to prior  periods,  is the  result of  additional  properties
         purchased by PSBPLP during 1997 and 1998.

                 PS Business  Parks,  Inc.,  which owns PSBPLP,  is a registrant
         with the  Securities  and Exchange  Commission,  and its filings can be
         accessed through the Securities and Exchange Commission.

5.       RELATED PARTY TRANSACTIONS

                  The Joint Venture has a management  agreement with PSI whereby
         PSI  operates  the  Mini-Warehouses  for a  fee  equal  to  6%  of  the
         facilities' monthly gross revenue (as defined).

                  In January 1997,  the Joint Venture  transferred  its business
         park  facility  to PSBPLP in  exchange  for a  partnership  interest in
         PSBPLP. PSI has a significant economic interest in PSBPLP and PSBP.

                                      F-22

<PAGE>

6.       LEASES

                  The  Joint   Venture  has   invested   primarily  in  existing
         mini-warehouse  storage  facilities  which offer  self-service  storage
         spaces  for lease to the  general  public.  Leases  for such  space are
         usually on a month-to-month basis.

7.       TAXES BASED ON INCOME

                  Taxes based on income are the  responsibility of PSP V and PSI
         and,  accordingly,  the Joint  Venture's  financial  statements  do not
         reflect a provision for such taxes.

                  Unaudited  taxable net income was  $5,784,000,  $6,376,000 and
         $5,220,000  for the  years  ended  December  31,  1998,  1997 and 1996,
         respectively.  The difference between taxable income and book income is
         primarily related to timing differences in depreciation expense.

                                      F-23

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        A CALIFORNIA LIMITED PARTNERSHIP
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
                                                                                                       
                                                                                                       Costs      
                                                                           Initial Cost              subsequent   
                                                                 --------------------------------- to acquisition 
    Date                                                                            Buildings &      Buildings &   
  Acquired                Description              Encumbrances        Land         Improvements    Improvements  
------------------------------------------------------------------------------------------------------------------

<S>           <C>                                        <C>          <C>            <C>               <C>        
10/85         San Antonio/ Wetmore Rd.                   $-           $306,000       $1,079,000        $419,000   
10/85         San Antonio/ Callaghan                      -            288,000        1,016,000         346,000   
10/85         San Antonio/ Zarzamora                      -            364,000        1,281,000         412,000   
10/85         San Antonio/ Hackberry                      -            388,000        1,367,000         382,000   
10/85         San Antonio/ Fredericksburg                 -            287,000        1,009,000         376,000   
10/85         Dallas/ S. Westmoreland                     -            474,000        1,670,000         195,000   
10/85         Dallas/ Alvin St.                           -            359,000        1,266,000         168,000   
10/85         Fort Worth/ W. Beach St.                    -            356,000        1,252,000         173,000   
10/85         Fort Worth/ E. Seminary                     -            382,000        1,346,000         179,000   
10/85         Fort Worth/ Cockrell St.                    -            323,000        1,136,000         168,000   
11/85         Everett/ Evergreen                          -            706,000        2,294,000         457,000   
11/85         Seattle/ Empire Way                         -          1,652,000        5,348,000         625,000   
12/85         Amherst/ Niagra Falls                       -            132,000          701,000         246,000   
12/85         West Sams Blvd.                             -            164,000        1,159,000        (264,000)  
3/86          Jacksonville/ Wiley                         -            140,000          510,000         240,000   
12/85          MacArthur Rd.                              -            204,000        1,628,000         155,000   
2/86          Costa Mesa/ Pomona                          -          1,405,000        1,520,000         343,000   
12/85         Brockton/ Main                              -            153,000        2,020,000        (235,000)  
1/86          Mapleshade/ Rudderow                        -            362,000        1,811,000         253,000   
1/86          Bordentown/ Groveville                      -            196,000          981,000         156,000   
12/85         Eatontown/ Hwy 35                           -            308,000        4,067,000         466,000   
2/86          Brea/ Imperial Hwy                          -          1,069,000        2,165,000         356,000   
12/85         Denver/ Leetsdale                           -            603,000          847,000         197,000   
2/86          Skokie/ McCormick                           -            638,000        1,912,000         240,000   
1/86          Sun Valley/ Sheldon                         -            544,000        1,836,000         351,000   
3/86          St. Louis/ Forder                           -            517,000        1,133,000         257,000   
1/86          Las Vegas/ Highland                         -            432,000          848,000         241,000   
5/86          Westlake Village                            -          1,205,000          995,000         216,000   

</TABLE>

<TABLE>
<CAPTION>
                                                                                                       
                                                                Gross Carrying Amount
                                                                 At December 31, 1998
                                                ---------------------------------------------------------------
    Date                                                           Buildings &                   Accumulated
  Acquired                Description                 Land        Improvements        Total      Depreciation
---------------------------------------------------------------------------------------------------------------

<S>           <C>                                     <C>           <C>             <C>               <C>     
10/85         San Antonio/ Wetmore Rd.                $306,000      $1,498,000      $1,804,000        $754,000
10/85         San Antonio/ Callaghan                   288,000       1,362,000       1,650,000         699,000
10/85         San Antonio/ Zarzamora                   364,000       1,693,000       2,057,000         852,000
10/85         San Antonio/ Hackberry                   388,000       1,749,000       2,137,000         885,000
10/85         San Antonio/ Fredericksburg              287,000       1,385,000       1,672,000         713,000
10/85         Dallas/ S. Westmoreland                  474,000       1,865,000       2,339,000         968,000
10/85         Dallas/ Alvin St.                        359,000       1,434,000       1,793,000         746,000
10/85         Fort Worth/ W. Beach St.                 356,000       1,425,000       1,781,000         737,000
10/85         Fort Worth/ E. Seminary                  382,000       1,525,000       1,907,000         796,000
10/85         Fort Worth/ Cockrell St.                 323,000       1,304,000       1,627,000         683,000
11/85         Everett/ Evergreen                       706,000       2,751,000       3,457,000       1,508,000
11/85         Seattle/ Empire Way                    1,652,000       5,973,000       7,625,000       3,161,000
12/85         Amherst/ Niagra Falls                    132,000         947,000       1,079,000         510,000
12/85         West Sams Blvd.                          164,000         895,000       1,059,000         467,000
3/86          Jacksonville/ Wiley                      140,000         750,000         890,000         381,000
12/85          MacArthur Rd.                           204,000       1,783,000       1,987,000         932,000
2/86          Costa Mesa/ Pomona                     1,405,000       1,863,000       3,268,000         968,000
12/85         Brockton/ Main                           153,000       1,785,000       1,938,000         946,000
1/86          Mapleshade/ Rudderow                     362,000       2,064,000       2,426,000       1,062,000
1/86          Bordentown/ Groveville                   196,000       1,137,000       1,333,000         575,000
12/85         Eatontown/ Hwy 35                        308,000       4,533,000       4,841,000       2,347,000
2/86          Brea/ Imperial Hwy                     1,069,000       2,521,000       3,590,000       1,328,000
12/85         Denver/ Leetsdale                        603,000       1,044,000       1,647,000         552,000
2/86          Skokie/ McCormick                        638,000       2,152,000       2,790,000       1,091,000
1/86          Sun Valley/ Sheldon                      544,000       2,187,000       2,731,000       1,118,000
3/86          St. Louis/ Forder                        517,000       1,390,000       1,907,000         705,000
1/86          Las Vegas/ Highland                      432,000       1,089,000       1,521,000         556,000
5/86          Westlake Village                       1,205,000       1,211,000       2,416,000         618,000

</TABLE>
                                      F-24

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        A CALIFORNIA LIMITED PARTNERSHIP
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
                                                                                                       
                                                                                                       Costs      
                                                                           Initial Cost              subsequent   
                                                                 --------------------------------- to acquisition 
    Date                                                                            Buildings &      Buildings &   
  Acquired                Description              Encumbrances        Land         Improvements    Improvements  
------------------------------------------------------------------------------------------------------------------

<S>           <C>                                        <C>          <C>            <C>               <C>        
2/86          Colorado Springs/ Sinton                   $-           $535,000       $1,115,000        $209,000   
2/86          Oklahoma City/ Penn                         -            146,000          829,000         162,000   
2/86          Oklahoma City/ 39th Expressway              -            238,000          812,000         314,000   
4/86          Reno/ Telegraph                             -            649,000        1,051,000         517,000   
                                                  ----------------------------------------------------------------

                      TOTAL                              $-        $15,525,000      $48,004,000      $8,320,000   
                                                  ================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                  
                                                                  Gross Carrying Amount
                                                                   At December 31, 1998
                                                  --------------------------------------------------------------
    Date                                                             Buildings &                    Accumulated
  Acquired                Description                   Land        Improvements        Total      Depreciation
-----------------------------------------------------------------------------------------------------------------

<S>           <C>                                       <C>           <C>             <C>               <C>     
2/86          Colorado Springs/ Sinton                  $535,000      $1,324,000      $1,859,000        $661,000
2/86          Oklahoma City/ Penn                        146,000         991,000       1,137,000         499,000
2/86          Oklahoma City/ 39th Expressway             238,000       1,126,000       1,364,000         544,000
4/86          Reno/ Telegraph                            649,000       1,568,000       2,217,000         782,000
                                                  ---------------------------------------------------------------

                      TOTAL                          $15,525,000     $56,324,000     $71,849,000     $29,144,000
                                                  ===============================================================
</TABLE>

                                      F-25

<PAGE>

                            SEI/PSP V JOINT VENTURES
                        A CALIFORNIA LIMITED PARTNERSHIP
                           REAL ESTATE RECONCILIATION
                            SCHEDULE III (CONTINUED)

(A)  The  following  is  a  reconciliation  of  cost  and  related   accumulated
     depreciation.

                       GROSS CARRYING COST RECONCILIATION

                                                   Years Ended December 31,
                                       -----------------------------------------
                                           1998          1997           1996
                                       -----------------------------------------

Balance at beginning of the period     $ 71,055,000  $ 93,090,000   $ 92,252,000

Additions during the period:
     Improvements, etc.                     794,000       903,000        838,000

Deductions during the period:
     Disposition of real estate                   -   (22,938,000)             -
                                       -----------------------------------------

Balance at the close of the period     $ 71,849,000  $ 71,055,000   $ 93,090,000
                                       =========================================


ACCUMULATED DEPRECIATION RECONCILIATION

                                                   Years Ended December 31,
                                       -----------------------------------------
                                          1998          1997           1996
                                       -----------------------------------------

Balance at beginning of the period     $ 26,486,000  $ 31,366,000   $ 28,094,000

Additions during the period:
     Depreciation                         2,658,000     2,570,000      3,272,000

Deductions during the period:
     Disposition of real estate                   -    (7,450,000)             -
                                       -----------------------------------------

Balance at the close of the period     $ 29,144,000  $ 26,486,000   $ 31,366,000
                                       =========================================


(B) The  aggregate  cost of real  estate  for  Federal  income tax  purposes  is
    $72,142,000.

                                      F-26