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

     For the fiscal year ended December 31, 2006.

 or

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

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

                         Commission File Number: 1-8389

                              PUBLIC STORAGE, INC.
             (Exact name of Registrant as specified in its charter)

                   California                          95-3551121
  ----------------------------------     ---------------------------------------
  (State or other jurisdiction of        (I.R.S. Employer Identification Number)
   incorporation or organization)

               701 Western Avenue, Glendale, California 91201-2349
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

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


           Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>

                                                                                          Name of each exchange
                                Title of each class                                        on which registered
--------------------------------------------------------------------------------        --------------------------
<S>                                                                                      <C>
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
     Preferred Stock, Series T, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
     Preferred Stock, Series U, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.500% Cumulative
     Preferred Stock, Series V $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.500% Cumulative
     Preferred Stock, Series W $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
     Preferred Stock, Series X $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.250% Cumulative
     Preferred Stock, Series Z $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.125% Cumulative
     Preferred Stock, Series A $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.125% Cumulative
     Preferred Stock, Series B $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.600% Cumulative
     Preferred Stock, Series C $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.180% Cumulative
     Preferred Stock, Series D $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.750% Cumulative
     Preferred Stock, Series E $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
     Preferred Stock, Series F $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.000% Cumulative
     Preferred Stock, Series G $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.950% Cumulative
     Preferred Stock, Series H $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.250% Cumulative
     Preferred Stock, Series I $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.250% Cumulative
     Preferred Stock, Series K $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.750% Cumulative
     Preferred Stock, Series L $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.625% Cumulative              New York Stock Exchange
     Preferred Stock, Series M $.01 par value...................................
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A,
     $.01 par value.............................................................         New York Stock Exchange
Common Stock, $.10 par value....................................................         New York Stock Exchange

</TABLE>
                                       1
<PAGE>

Securities  registered  pursuant  to Section  12(g) of the Act:  None  (Title of
class)

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.

                                 Yes [X] No [ ]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Exchange Act.

                                 Yes [ ] No [X]

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 or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                 Yes [ ] No [X]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer (as defined in Rule 12b-2 of the
Exchange Act).

  Large Accelerated Filer [X] Accelerated Filer [ ] Non-accelerated Filer [ ]

The  aggregate  market value of the voting and  non-voting  common stock held by
non-affiliates of the Registrant as of June 30, 2006:

Common Stock, $0.10 Par Value - $6,207,100,000  (computed on the basis of $75.90
per share which was the  reported  closing  sale price of the  Company's  Common
Stock on the New York Stock Exchange on June 30, 2006.

Depositary Shares Each Representing  1/1,000 of a Share of Equity Stock,  Series
A,  $.01 Par Value -  $198,175,000  (computed  on the basis of $26.70  per share
which  was the  reported  closing  sale  price  of the  Depositary  Shares  each
Representing  1/1,000 of a Share of Equity Stock, Series A on the New York Stock
Exchange on June 30, 2006.

         As of February 26,  2007,  the number of  outstanding  shares of Common
Stock,  $.10 par value,  was  170,388,218  shares and the number of outstanding
Depositary Shares Each Representing  1/1,000 of a Share of Equity Stock,  Series
A, $.01 par value, was 8,744,193 (representing 8,744.193 shares of Equity Stock,
Series A)

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive  proxy  statement to be filed in connection  with the
Annual Meeting of Shareholders to be held in 2007 are  incorporated by reference
into Part III of this Annual Report on Form 10-K.

                                       2

<PAGE>

                                     PART I

ITEM 1.  Business
         --------

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

         All  statements in this document,  other than  statements of historical
fact, are  forward-looking  statements which may be identified by the use of the
words "expects,"  "believes,"  "anticipates,"  "should," "estimates" and similar
expressions.  These  forward-looking  statements involve known and unknown risks
and  uncertainties,   which  may  cause  Public  Storage's  actual  results  and
performance to be materially  different  from those  expressed or implied in the
forward-looking statements. Factors and risks that may impact future results and
performance are described in Item 1A, "Risk Factors".  These risks include,  but
are not limited to, the  following:  risks  related to the merger with  Shurgard
including difficulties that may be encountered in integrating Public Storage and
Shurgard,  loss of  personnel  as a result of the merger,  and the impact of the
merger on  occupancy  and rental  rates,  the  inability to realize or delays in
realizing  expected  results  from the  merger,  unanticipated  operating  costs
resulting from the merger, and risks associated with  international  operations;
changes in  general  economic  conditions  and in the  markets  in which  Public
Storage  operates;  the impact of competition  from new and existing storage and
commercial facilities and other storage  alternatives,  which could impact rents
and occupancy levels at our facilities; difficulties in Public Storage's ability
to evaluate,  finance and integrate  acquired and developed  properties into its
existing  operations  and to fill up those  properties,  which  could  adversely
affect our  profitability;  the impact of the regulatory  environment as well as
national,  state, and local laws and regulations including,  without limitation,
those governing Real Estate Investment Trusts, which could increase our expenses
and reduce cash  available for  distribution;  consumers'  failure to accept the
containerized  storage  concept;  difficulties  in raising capital at reasonable
rates,  which  would  impede  our  ability  to grow;  delays in the  development
process; economic uncertainty due to the impact of war or terrorism. We disclaim
any  obligation  to update  publicly  or  otherwise  revise any  forward-looking
statements,  whether as a result of new  information,  new  estimates,  or other
factors,  events or circumstances after the date of this document,  except where
expressly required by law.

GENERAL
-------

         Public Storage, Inc. (the "Company" or "we" or "our") is an equity real
estate  investment trust ("REIT")  organized as a corporation  under the laws of
California on July 10, 1980. We are a fully  integrated,  self-administered  and
self-managed  REIT  that  acquires,  develops,  owns and  operates  self-storage
facilities.  We are the largest owner and operator of self-storage  space in the
United  States.  Our common stock is traded on the New York Stock Exchange under
the symbol "PSA".  On August 22, 2006, the Company merged with Shurgard  Storage
Centers,  Inc.,  ("Shurgard"),  a REIT which had an interest in 487 self-storage
facilities  located in the United  States  ("U.S.")  and had an  interest in 160
self-storage  facilities  in Europe.  See Note 3 to our  consolidated  financial
statements  included  elsewhere  in this  report for further  discussion  of our
merger with Shurgard.

         At December 31, 2006,  we had direct and indirect  equity  interests in
2,003  self-storage  facilities  located in 38 states within the U.S.  operating
under the  "Public  Storage"  name  containing  approximately  125  million  net
rentable square feet of space, and 166 self-storage  facilities located in seven
Western  European  countries which operate under the "Shurgard  Storage Centers"
name containing  approximately 8.7 million net rentable square feet of space. We
also have direct and indirect equity  interests in  approximately 20 million net
rentable  square  feet of  commercial  space  located  in 11  states in the U.S.
operated under the "PS Business Parks" and Public Storage, Inc. brands.

         We currently operate within three reportable  segments:  self-storage -
Domestic  operations,  self-storage - European operations and domestic ancillary
operations.  These segments are organized  generally  based upon their operating
characteristics.  The  self-storage  -  Domestic  segment  comprises  the direct
ownership,  development,  and operation of traditional storage facilities in the
U.S.,  and the  ownership  of equity  interests  in  entities  that own  storage
properties in the U.S. The self-storage - European segment  comprises the direct
ownership,  development,  and operation of storage  facilities in Europe that we
acquired in the merger with Shurgard. The ancillary operations segment includes

                                       3
<PAGE>

the following  sources of operating  income:  (i)  containerized  storage,  (ii)
commercial  property  operations,  which reflects our interest in the ownership,
operation,  and  management of commercial  properties  (iii) the  reinsurance of
policies  against  losses  to  goods  stored  by  tenants  in  our  self-storage
facilities,  (iv) sale of merchandise at our self-storage facilities,  (v) truck
rentals at our  self-storage  facilities and (vi) management of facilities owned
by  third-party  owners and  facilities  owned by  entities  in which we have an
interest, but are not consolidated. The vast majority of the commercial property
operations are conducted through PS Business Parks, Inc. ("PSB"),  and to a much
lesser  extent the Company and certain of its  unconsolidated  subsidiaries  own
commercial  space,  managed by PSB,  within  facilities that combine storage and
commercial space for rent. See Note 15 to our consolidated  financial statements
for further discussion of our reportable segments.

         We also have a 44% ownership interest in PSB, which, as of December 31,
2006, owned and operated  commercial  properties  containing  approximately 18.7
million net rentable square feet of commercial space. PS Business Parks, Inc. is
a publicly  traded REIT whose common stock trades on the American Stock Exchange
under the symbol "PSB."

         We have elected to be taxed as a REIT under the  Internal  Revenue Code
of 1986,  as amended.  To the extent  that we continue to qualify as a REIT,  we
will not be subject to tax,  with  certain  limited  exceptions,  on the taxable
income that is distributed to our shareholders.

         We have reported  annually to the  Securities  and Exchange  Commission
("SEC")  on  Form  10-K,  which  includes  financial   statements  certified  by
independent  public  accountants.  We have also reported quarterly to the SEC on
Form 10-Q, which included unaudited  financial  statements with such filings. We
expect to continue such reporting.

         Our website is  www.publicstorage.com,  and we make  available  free of
charge  on our  website  our  reports  on Forms  10-K,  10-Q,  and 8-K,  and all
amendments to those reports as soon as reasonably  practicable after the reports
and amendments are electronically filed with or furnished to the SEC.

                                       4

<PAGE>

MANAGEMENT
----------

         Ronald L.  Havner,  Jr. (49) has been Vice  Chairman,  Chief  Executive
Officer and a director of the Company since November 7, 2002 and President since
July 1, 2005.  Mr.  Havner joined  Public  Storage,  Inc. in 1986 and has held a
variety of  positions,  including  Chairman  of the Board of  Directors  for the
Company's affiliate, PS Business Parks, Inc., a position he has held since March
1998.

         B. Wayne Hughes (73) is Chairman of the Board of Directors,  a position
he has held since 1991. Mr. Hughes  established the Public Storage  organization
in 1972 and has managed the Company through several market cycles.

         Our executive  management  team and their years of experience  with the
Company are as follows: John Reyes (46), Senior Vice President - Chief Financial
Officer,  16 years;  John S. Baumann (46),  Senior Vice  President - Chief Legal
Officer,  who joined the Company in June 2003;  John E. Graul (55),  Senior Vice
President  and  President,  Self-Storage  Operations,  who joined the Company in
February 2004;  Candace N. Krol (45),  Senior Vice President of Human Resources,
who joined the  Company in  September  2005 and David F. Doll (48),  Senior Vice
President and President,  Real Estate Group,  who joined the Company in February
2005.

         Our senior  management  has a  significant  ownership  position  in the
Company  with  executive   officers,   directors  and  their   families   owning
approximately  45.6 million shares or 27% of the common stock as of February 28,
2007.

INVESTMENT OBJECTIVE
--------------------

         Our primary objective is to increase the intrinsic value of the Company
through  internal  growth (by increasing net income,  funds from  operations and
cash available for  distribution)  and  acquisitions  of additional  real estate
investments  and  development  of real estate  facilities.  We believe  that our
access  to  capital,   geographic  diversification  and  operating  efficiencies
resulting from our size will enhance our ability to achieve this objective.

COMPETITION
-----------

         Competition in the market areas in which we operate is significant  and
affects  the  occupancy  levels,  rental  rates and  operating  expenses  of our
facilities.  Development  of new  self-storage  facilities has  intensified  the
competition among storage operators in many market areas in which we operate.

         In seeking investments,  we compete with a wide variety of institutions
and other  investors.  The  increase in the amount of funds  available  for real
estate  investments  has  increased   competition  for  ownership  interests  in
facilities and may reduce yields on acquisitions.

         We believe that the significant  operating and financial  experience of
our executive officers and directors,  combined with the Company's  conservative
capital structure, national investment scope, geographic diversity, economies of
scale  and  the  "Public  Storage"  brand  name,  should  enable  us to  compete
effectively with other entities.

         In recent years consolidation has occurred in the fragmented
self-storage industry. In addition to the Company, there are other publicly
traded REITs and numerous private regional and local operators operating in the
self-storage industry. We believe that we are well positioned to capitalize on
this consolidation trend due to our demonstrated access to capital and national
presence.

                                       5

<PAGE>

BUSINESS ATTRIBUTES
-------------------

         We  believe  that  the  Company   possesses  several  primary  business
attributes that permit us to compete effectively:

         COMPREHENSIVE  DISTRIBUTION  SYSTEM AND NATIONAL TELEPHONE  RESERVATION
SYSTEM:  Our  facilities  are  part  of  a  comprehensive   distribution  system
encompassing  standardized  procedures,  integrated  reporting  and  information
networks and  centralized  marketing.  During 2004, we  implemented  an upgraded
information  system  platform,  which has enabled us to more  quickly  adapt our
pricing and marketing efforts to changing market  conditions.  This distribution
system,  among other  benefits,  is designed to maximize  revenue and  occupancy
levels through automated pricing.

         A  significant  component  of our  distribution  system is our national
telephone reservation center, which provides added customer service and helps to
maximize utilization of available  self-storage space.  Customers calling either
the toll-free telephone referral system, (800) 44-STORE,  or a storage facility,
are directed to the national reservation system. A representative discusses with
the customer space requirements, price and location preferences and also informs
the  customer of other  products  and  services  provided by the Company and its
subsidiaries. We believe that the national telephone reservation system enhances
our ability to market storage space.

         ECONOMIES OF SCALE: We are the largest  provider of self-storage  space
in the industry.  As of December 31, 2006, we operated 2,169 storage  facilities
in which we had an interest  and managed 29  self-storage  facilities  for third
parties.  These facilities are in markets within 38 states in the U.S. and seven
Western European  countries.  At December 31, 2006, we had over 1,102,000 spaces
rented.  The size and scope of our operations  have enabled us to achieve a high
level of  profit  margins  and low level of  administrative  costs  relative  to
revenues.

         Our size in many  markets  has enabled us to market  efficiently  using
television  as a media source.  We believe the high cost of television  makes it
impractical  for our  competitors  to use this  form of media  without  the high
concentration of facilities in markets.

         BRAND NAME RECOGNITION:  Our operations are conducted under the "Public
Storage" brand name,  which we believe is the most  recognized  and  established
name in the self-storage  industry in the U.S. Our storage operations within the
U.S. are conducted in 38 states,  giving us national recognition and prominence.
We focus our operations within those states in the major  metropolitan  markets.
This   concentration   establishes  us  as  one  of  the  largest  providers  of
self-storage space in virtually all markets that we operate in and enables us to
use a variety of promotional activities,  such as television advertising as well
as targeted  discounting  and referrals  which are  generally  not  economically
viable for most of our competitors.

         The self-storage industry in Europe is still relatively new as compared
to the U.S. Customer awareness of the product in Europe is emerging.  All of our
facilities  in Europe are  operating  under the  "Shurgard"  brand  name.  While
competition in Europe has been increasing,  we believe we are the single largest
self-storage operators in Europe as of December 31, 2006.

         RETAIL  OPERATIONS:  Through a taxable REIT subsidiary,  we sell retail
items  associated  with the  storage  business  and rent  trucks at our  storage
facilities.  In order to supplement  and  strengthen  the existing  self-storage
business  by further  meeting  the needs of storage  customers,  we  continue to
expand our retail activities.

         In addition,  full-service  retail stores have been retrofitted to some
existing   storage  facility  rental  offices  or  "built-in"  as  part  of  the
development of new storage  facilities,  both in high traffic,  high  visibility
locations. The strategic objective of these retail stores is to provide a retail
environment  to (i) rent spaces for the  attached  storage  facility,  (ii) rent
spaces for the other Public Storage facilities in adjacent neighborhoods,  (iii)
sell locks,  boxes and packing  materials  and (iv) rent trucks and other moving
equipment.

         TENANT  INSURANCE  PROGRAM:  Through  a  taxable  REIT  subsidiary,  PS
Insurance  Company Ltd.  ("PSIC"),  we reinsure  policies  issued to our tenants

                                       6
<PAGE>

against lost or damaged goods stored by tenants in our storage facilities.  This
subsidiary  receives  the  premiums  and  bears the  risks  associated  with the
re-insurance.  We believe that this insurance  operation further supplements and
strengthens the existing self-storage business and provides an additional source
of earnings for the Company.

GROWTH AND INVESTMENT STRATEGIES
--------------------------------

         Our  growth   strategies   consist  of:  (i)  improving  the  operating
performance of our existing self-storage properties, (ii) acquiring interests in
properties that are owned or operated by others, (iii) expanding and repackaging
existing real estate facilities,  (iv) developing properties in selected markets
and (v) participating in the growth of commercial  facilities owned primarily by
PSB. These strategies are described as follows:

         IMPROVE THE OPERATING  PERFORMANCE OF EXISTING  PROPERTIES:  We seek to
increase the net cash flow generated by our existing self-storage  properties by
a)  regularly   evaluating   our  call   volume,   reservation   activity,   and
move-in/move-out  rates for each of our  properties  relative  to our  marketing
activities, b) evaluating market supply and demand factors and, based upon these
analyses,  adjusting our marketing activities and rental rates, c) attempting to
maximize revenues through evaluating the appropriate  balance between occupancy,
rental rates, and promotional  discounting and d) controlling expense levels. We
believe that our property  management  personnel and systems,  combined with the
national telephone  reservation  system, will continue to enhance our ability to
meet these goals.

         In  connection   with  the  merger  with  Shurgard,   we  acquired  487
self-storage facilities located in the United States. Substantially all of these
facilities  are located in the same  markets  that we  currently  operate in. We
believe that the merger will provide us with additional  economies of scale with
respect  to  certain  operating  costs that will  ultimately  improve  operating
margins. In addition, on August 31, 2006, the average occupancy level of the 487
self-storage  facilities  was  approximately  84.4% as compared to our  existing
portfolio's  89.7%.  We believe  that we will be able to  increase  the  average
occupancy level of the acquired portfolio to those experienced by our own. These
potential  benefits will take time to develop and there can be no assurance that
we will be able to such benefits.

         ACQUIRE PROPERTIES OWNED OR OPERATED BY OTHERS: We believe our presence
in and knowledge of substantially  all of the major markets in the United States
enhances  our  ability to  identify  attractive  acquisition  opportunities  and
capitalize  on the  overall  fragmentation  in  the  self-storage  industry.  We
maintain local market information on rates, occupancy and competition in each of
the markets in which we operate.

         EXPAND  AND  REPACKAGE  EXISTING  REAL  ESTATE  FACILITIES:  We  have a
substantial  number of facilities that were developed and constructed 20 or more
years ago based upon local  competitive and  demographic  conditions in place at
that time.  Since such conditions may have changed,  there are  opportunities to
expand and further invest into our existing  self-storage  locations,  either by
improving their visual and structural  appeal,  or by expanding these facilities
at a per  square  foot cost that is  typically  less than the cost  incurred  in
developing a new  location.  In  addition,  there are  opportunities  to convert
existing vacant space previously used by our  containerized  storage  facilities
into traditional self-storage space. At December 31, 2006, we have identified 48
such  projects to expand or  repackage  our  existing  facilities  in the United
States, for an aggregate cost of approximately $187.6 million, which will add an
aggregate of  approximately  2,256,000 net rentable  square feet.  Completion of
these projects is subject to  contingencies,  including  obtaining  governmental
agency approvals.  We continue to evaluate our existing real estate portfolio to
identify additional expansion and repackaging opportunities.

         DEVELOP PROPERTIES IN SELECTED MARKET:  Since 1995, the Company and its
joint  venture  partnerships  (described  below in  "Financing  of the Company's
Growth  Strategies") have opened a total of 151 facilities in the United States.
During 2006,  these  facilities  contributed  significantly to the growth in our
earnings as they continued to gain occupancy and grow their revenues.  We expect
that these facilities will continue to provide growth to our earnings into 2007.
As of  December  31,  2006,  we  have  no  new  self-storage  facilities  in the
development  "pipeline"  in the U.S. As of December  31, 2006,  our  development
"pipeline" in Europe is comprised of eight new self-storage facilities with an

                                       7
<PAGE>

aggregate  estimated cost of  approximately  $78.5 million,  and an aggregate of
389,000 net rentable  square feet. In 2005 and 2006,  our rate of development of
new self-storage  facilities has declined due to increases in construction cost,
increases in competition with retail,  condominium,  and apartment operators for
quality  self-storage  sites in urban  locations,  and more difficult zoning and
permitting  requirements.  However, we will continue to seek favorable sites and
markets for development.

         PARTICIPATE IN THE GROWTH OF COMMERCIAL  FACILITIES  PRIMARILY  THROUGH
OUR OWNERSHIP IN PS BUSINESS PARKS, INC.: We own a 44% common equity interest in
PSB and its  operating  partnership  (PS  Business  Parks Inc.  and the  related
operating  partnership are hereinafter referred to collectively as "PSB") which,
December 31, 2006,  consisted of 5,418,273  shares of common stock and 7,305,355
limited partnership units in the Operating Partnership.  The limited partnership
units are  convertible  at our  option,  subject  to  certain  conditions,  on a
one-for-one  basis into PSB common  stock.  At December 31, 2006,  PSB owned and
operated approximately 18.7 million net rentable square feet of commercial space
located in eight states.

         ACQUIRE ADDITIONAL  PARTNERSHIPS  INTERESTS IN AFFILIATED ENTITIES: The
acquisition of interests in facilities that we have an ownership interest in and
operate  has  historically  comprised  a  significant  component  of our growth.
However, the pool of such available acquisitions has continued to decrease as we
have acquired such remaining  interests over the years. The potential  remaining
acquisition  opportunities  principally include the remaining 78% that we do not
own in the 22 properties owned by the "Other Investments" described in Note 6 to
the  consolidated  financial  statements for the year ended December 31, 2006 as
well as the  "Other  Consolidated  Partnerships"  and  Shurgard  Joint  Ventures
described in Note 11 to the consolidated financial statements for the year ended
December 31, 2006. Accordingly, we do not expect such acquisitions to comprise a
significant component of our growth going forward.

         POLICIES  WITH  RESPECT  TO  INVESTING  ACTIVITIES:  Following  are our
policies with respect to certain other investing  strategies,  each of which may
be entered into without a vote of shareholders:

o            Making loans to other  entities:  We have made loans in  connection
             with the sale of properties,  have made short-term  loans to PSB in
             the last three years and may make loans to third parties as part of
             our investment objectives.  However, we do not expect such items to
             be a significant part of our investing activities.

o            Investing  in the  securities  of other  issuers for the purpose of
             exercising  control:  There have been two instances in the past six
             years where we invested in the securities of another  publicly-held
             REIT,  one which  resulted in control of that REIT (the merger with
             Storage Trust,  Inc. in 1999),  and one that did not,  resulting in
             the sale of these  securities on the open market.  We may engage in
             these  activities  in the future as a component  of our real estate
             acquisition  strategy. We also own partnership interests in various
             consolidated and unconsolidated  partnerships.  See "Investments in
             Real Estate and Real Estate Entities."

o            Underwriting  securities of other  issuers:  We have not engaged in
             this activity in the last three years,  and do not intend to in the
             future.

o            Short-term  investing:  We have not engaged in  investments in real
             estate or real estate  entities on a  short-term  basis in the last
             three years with the exception of the aforementioned investments in
             the  securities  of other  REITs.  Instead,  historically,  we have
             acquired real estate assets and held them for an extended period of
             time. We do not anticipate any such short-term investments.

o            Repurchasing or reacquiring our common shares or other  securities:
             The Board of Directors has authorized  the repurchase  from time to
             time of up to  25,000,000  shares of our  common  stock on the open
             market  or  in  privately  negotiated  transactions.   Cumulatively
             through  February 28, 2007,  we  repurchased  a total of 22,201,720
             shares of  common  stock  under  this  authorization.  Cumulatively
             through  February  28,  2007,  we have  called  for  redemption  or
             repurchased  $2.5  billion of our senior  preferred  stock and $165
             million of our preferred partnership units for cash, representing a
             refinancing  of  these  securities  into   lower-coupon   preferred
             securities.  Any future repurchases of our common stock will depend
             primarily upon the  attractiveness  of repurchases  compared to our
             other investment alternatives. Future redemptions or repurchases of
             our  preferred   securities,   which  will  become   available  for
             redemption or repurchase on their  respective  call dates,  will be
             dependent upon the spread between market rates and the coupon rates
             of these securities.

                                       8
<PAGE>

FINANCING OF THE COMPANY'S GROWTH STRATEGIES

         OVERVIEW  OF  FINANCING  STRATEGY:  Over the past  three  years we have
funded  substantially  all of the cash portion  (represented  by our acquisition
cost less debt assumed,  as described below) of our acquisitions,  excluding the
merger with  Shurgard,  for which we issued 0.82 shares of our common  stock for
each  share of  Shurgard  common  stock  owned by  Shurgard  shareholders,  with
permanent  capital  (predominantly  retained cash flow and the net proceeds from
the  issuance  of  preferred  securities).  We  have  elected  to use  preferred
securities as a form of leverage despite the fact that the dividend rates of our
preferred securities exceed the prevailing market interest rates on conventional
debt,  because of certain  benefits  described in  "Management's  Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity  and Capital
Resources." Our present intent is to continue to finance  substantially  all our
growth with permanent capital.

         BORROWINGS: We have in the past used our $200 million revolving line of
credit described below under "Borrowings" as temporary "bridge"  financing,  and
repaid those amounts with  permanent  capital.  In 2006, in connection  with the
merger with  Shurgard,  we assumed i)  Shurgard's  domestic and  European  notes
payable  and  capital  leases  with a fair value on the date of  acquisition  of
approximately  $1,396,777,000  of which  $67,275,000  was repaid  following  the
merger and ii) Shurgard's line of credit totaling $603,772,000, which was repaid
following  the merger.  On December  27,  2006,  we entered  into a $300 million
unsecured  short-term  credit agreement with a commercial bank.  Pursuant to the
credit  agreement,  we borrowed  $300 million.  On January 10, 2007,  borrowings
under this facility were repaid in full and at such time the credit facility was
terminated.  During 2004, we assumed  long-term  secured mortgage notes of $94.7
million in  connection  with property  acquisitions.  Prior to 2004, we incurred
long-term  debt during the merger with Storage  Trust in 1999 wherein we assumed
$100  million in senior  unsecured  notes.  We were unable to prepay  these debt
balances  either  because  of the nature of the loan terms or because it was not
economically  advantageous  to do so.  While it is not our present  intention to
issue additional debt as a long-term financing strategy, we have broad powers to
borrow in  furtherance  of our  objectives  without a vote of our  shareholders.
These powers are subject to a limitation  on unsecured  borrowings in our Bylaws
described in "Limitations on Borrowings" below.

         ISSUANCE OF SENIOR  SECURITIES:  We have in the last three  years,  and
expect to  continue,  to issue  additional  series of  preferred  stock that are
senior to our Common  Stock and Equity  Stock.  At  December  31,  2006,  we had
approximately $2.9 billion of preferred stock outstanding,  excluding two series
that were called for  redemption in December 2006 and  subsequently  redeemed on
January 18, 2007 and February 20,  2007,  respectively,  and prior to issuing an
additional $500 million of preferred stock in January 2007. The preferred stock,
which was  issued in series,  has  general  preference  rights  with  respect to
liquidation  and  quarterly  distributions.  We  intend  to  continue  to  issue
preferred securities without a vote of our common shareholders.

         ISSUANCE OF SECURITIES  IN EXCHANGE FOR  PROPERTY:  We have issued both
common and preferred equity in exchange for real estate and other investments in
the last three years.  On October 12,  2004,  we issued $25 million in preferred
units in conjunction  with the  acquisition of a self-storage  business.  Future
issuances  will be dependent upon market  conditions at the time,  including the
market prices of our equity securities.

         JOINT VENTURE FINANCING: We entered into two separate development joint
venture partnerships since 1997 in order to provide development  financing.  The
first development joint venture  partnership was formed in 1997 and completed in
2001.

         In November  1999,  we formed PSAC  Development  Partners,  L.P.,  (the
"Consolidated  Development  Joint  Venture") with a joint venture partner ("PSAC
Storage  Investors,  LLC") whose  partners  include a third party  institutional
investor, owning approximately 35%, and Mr. Hughes, owning approximately 65%, to
develop  approximately  $100  million of storage  facilities.  The  Consolidated
Development Joint Venture completed construction on 22 storage facilities with a

                                       9
<PAGE>

total cost of  approximately  $108.6 million.  On August 5, 2005 we acquired the
third  party  institutional  investor's  partnership  interest  in PSAC  Storage
Investors, LLC for approximately $41.4 million in cash, and on November 17, 2005
we acquired Mr. Hughes' interest for an aggregate of $64.5 million in cash.

         In January 2004, we entered into a joint  venture  partnership  with an
institutional  investor  for the purpose of  acquiring  up to $125.0  million of
existing  self-storage  properties  in the United States from third parties (the
"Acquisition  Joint  Venture").  The  venture  is funded  entirely  with  equity
consisting of 30% from the Company and 70% from the institutional  investor. For
a six-month  period  beginning 54 months after  formation,  we have the right to
acquire our joint venture partner's  interest based upon the market value of the
properties.  If we do not exercise  our option,  our joint  venture  partner can
elect to purchase  our  interest  in the  properties  during a six-month  period
commencing upon expiration of our six-month option period.  If our joint venture
partner fails to exercise its option, the partnership will be liquidated and the
proceeds  will be  distributed  to the partners  according to the joint  venture
agreement.  As of  December  31,  2006,  the  Acquisition  Joint  Venture  owned
interests  in a  total  of  12  self-storage  facilities.  See  Note  9  to  our
consolidated financial statements at December 31, 2006 for further discussion of
the  accounting  for  the  Acquisition  Joint  Venture.  We do  not  expect  the
Acquisition Joint Venture to acquire any additional facilities.

         We may continue to form  additional  joint  ventures to facilitate  the
funding of future developments or acquisitions.

         Disposition   of   properties:   We   historically   have  disposed  of
self-storage facilities only because of condemnation  proceedings,  which compel
us to sell.  We do not  presently  expect  to sell  any  significant  number  of
self-storage  facilities in the future, though there can be no assurance that we
will not.

INVESTMENTS IN REAL ESTATE AND REAL ESTATE ENTITIES
---------------------------------------------------

         Investment  Policies and  Practices  with  respect to our  investments:
Following  are our  investment  practices and policies  which,  though we do not
anticipate any significant alteration,  can be changed by the Board of Directors
without a shareholder vote:

o            Our   investments   primarily   consist  of  direct   ownership  of
             self-storage  properties (the nature of our self-storage properties
             is described in Item 2, "Properties"), as well as partial interests
             in entities that own self-storage  properties,  which are primarily
             located in the United States.

o            Our investments are acquired both for income and for capital gain.

o            Our  partial  ownership  interests  primarily  reflect  general and
             limited  partnership  interests in entities  that own  self-storage
             facilities that are managed by us under the "Public  Storage" brand
             name.

o            Additional  acquired  interests  in real  estate  (other  than  the
             acquisition  properties  from third  parties)  will include  common
             equity interests in entities in which we already have an interest.

o            To a  lesser  extent,  we have  interests  in  existing  commercial
             properties   (described  in  Item  2,   "Properties"),   containing
             commercial  and  industrial  rental  space,  primarily  through our
             investment in PSB.

o            We have a  "pipeline"  of 56  development  projects,  including  48
             expansions of real estate facilities, for a total estimated cost of
             approximately  $266  million.  See  "Management's   Discussion  and
             Analysis  of  Financial  Condition  and  Results  of  Operations  -
             Liquidity and Capital Resources."

         The following  table  outlines our ownership  interest in  self-storage
facilities in the U.S. at December 31, 2006:

                                       10
<PAGE>


                                                             Net Rentable Square
                                               Number of      Footage of Storage
                                                Storage             Space
                                               Facilities       (in thousands)
                                              -----------    -------------------
Consolidated self-storage facilities:
   Wholly-owned by the Company...............     1,490              95,005
   Other consolidated facilities.............       491              28,998
                                              -----------    -------------------
                                                  1,981             124,003

 Facilities owned by unconsolidated entities.        22               1,427
                                              -----------    -------------------
 Total self-storage facilities in which the
   Company has an ownership interest.........     2,003             125,430
                                              ===========    ===================

         The following table outlines our ownership interest in self-storage
facilities in Europe at December 31, 2006:


                                                             Net Rentable Square
                                               Number of      Footage of Storage
                                                Storage            Space
                                               Facilities      (in thousands)
                                              -----------    -------------------
Consolidated self-storage facilities:
   Wholly-owned by the Company...............       103               5,581
   Other consolidated facilities.............        63               3,108
                                              -----------    -------------------
 Total self-storage facilities in which the
   Company has an ownership interest.........       166               8,689
                                              ===========    ===================

         In addition to our interest in self-storage  facilities noted above, we
own six commercial  facilities  with an aggregate of 520,000 net rentable square
feet,  three  industrial  facilities  with an  aggregate of 244,000 net rentable
square feet used by the continuing  containerized  storage operations,  and have
1,041,000  net  rentable  square  feet of  commercial  space at  certain  of the
self-storage  facilities.  The Company and the entities it controls  also have a
44% common  interest  in PSB,  which at  December  31,  2006 owned and  operated
approximately 18.7 million net rentable square feet of commercial space.

FACILITIES OWNED BY CONTROLLED ENTITIES
---------------------------------------

         In addition to our direct ownership of 1,490 self-storage facilities at
December 31, 2006, we had controlling  ownership interests in 52 entities owning
an aggregate of 491 storage facilities in the U.S. and 63 in Europe.  Because of
our controlling  interest in each of these entities,  we consolidate the assets,
liabilities,  and  results of  operations  of these  entities  on our  financial
statements.

         Through  the  merger  with  Shurgard,  we  acquired  two joint  venture
entities: First Shurgard SPRI (First Shurgard) formed in January 2003 and Second
Shurgard SPRL (Second  Shurgard)  formed in May 2004.  These joint ventures were
expected  to develop or acquire up to  approximately  75 storage  facilities  in
Europe.  Shurgard Europe has a 20% interest in each of these  ventures.  We have
determined  that First Shurgard and Second  Shurgard are each Variable  Interest
Entities  (See  Note  2  to  our  December  31,  2006   consolidated   financial
statements),  and  that  we are  the  primary  beneficiary.  Accordingly,  First
Shurgard  and  Second  Shurgard  have  been  consolidated  in  our  consolidated
financial statements since the acquisition date. See Note 11 to our consolidated
financial statements included elsewhere in this report for further discussion of
the joint ventures acquired in the merger with Shurgard.

         On September 5, 2006, we informed the joint  venture  partners of First
Shurgard and Second  Shurgard of our  intention to purchase  their  interests in
First  Shurgard and Second  Shurgard,  pursuant to an "exit  procedure"  that we
believe is provided for in the respective agreements. Our joint venture partners

                                       11
<PAGE>

currently  contest  whether we have the right to purchase their  interests under
this procedure and,  accordingly,  it is uncertain as to whether we will acquire
their interests  pursuant to these provisions.  On January 17, 2007, we filed an
arbitration request to compel arbitration of the matter.

         Following the merger with Shurgard,  we acquired the minority interests
in certain of  Shurgard's  joint  ventures,  for an aggregate  of  approximately
$62,300,000  in  cash.  As a result  of  these  transactions,  we  obtained  the
remaining interest in a total of 68 facilities located in the U.S.

FACILITIES OWNED BY UNCONSOLIDATED ENTITIES
-------------------------------------------

         At  December  31,  2006,  we had  ownership  interests  in PSB and five
limited partnerships (collectively the "Unconsolidated Entities"). Our ownership
interest in these entities is less than 50%.

         Due to our limited  ownership  interest  and  limited  control of these
entities,  we do not  consolidate  the accounts of these  entities for financial
reporting  purposes and we account for such investments using the equity method.
PSB,  which  files  financial   statements  with  the  Securities  and  Exchange
Commission,  has  debt  and  other  obligations  that  are not  included  in our
consolidated financial statements. The five limited partnerships do not have any
significant amounts of debt or other obligations. See Note 6 to our consolidated
financial statements for the year ended December 31, 2006 for further disclosure
regarding the assets and liabilities of the Unconsolidated Entities.

         The following  chart sets forth,  as of December 31, 2006, the entities
in which we have a  controlling  interest  and the  entities  in which we have a
minority interest:

                                       12

<PAGE>

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------
          Subsidiaries (Controlled Entities)                          Entities in which we have
                    of the Company                          a Minority Interest (Unconsolidated Entities)
------------------------------------------------------------------------------------------------------------
<S>                                                     <C>
Capital Hill Partners, A Limited Partnership            Public Storage Alameda, Ltd.  (5)
Carson Storage Partners, Ltd.                           Public Storage Glendale Freeway, Ltd. (10)
Carson Storage Ventures                                 Metropublic Storage Fund (11)
Connecticut Storage Fund                                PS Business Parks, Inc.  (12)
Del Amo Storage Partners, Ltd.                          Public Storage Crescent Fund, Ltd. (13)
Downey Storage Partners, Ltd.  (1)                      PSAF Acquisition Partners, Ltd.
Huntington Beach Storage Partners, Ltd.
Monterey Park Properties, Ltd.  (2)
PS Orangeco Partnerships, Inc.
PS Partners, Ltd.
PS Partners VIII, Ltd.
PS Texas Holdings, II, Ltd.
Public Storage Properties IV, Ltd. (3)
Public Storage Properties V, Ltd. (4)
PSA Institutional Partners, L.P.
PS HKBF, LLC
Public Storage Euro Fund III, Ltd. (5)
Public Storage Euro Fund IV, Ltd. (5)
Public Storage Euro Fund V, Ltd. (5)
Public Storage Euro Fund VI, Ltd. (5)
Public Storage Euro Fund VII, Ltd. (5)
Public Storage Euro Fund VIII, Ltd. (5)
Public Storage Euro Fund IX, Ltd. (5)
Public Storage Euro Fund X, Ltd. (5)
Public Storage Euro Fund XI, Ltd. (5)
Public Storage Euro Fund XII, Ltd. (5)
Public Storage Euro Fund XIII, Ltd. (5)
Public Storage German Fund II, Ltd. (5)
Public Storage Institutional Fund
Public Storage Institutional Fund III
Public Storage Partners, Ltd. (6)
Public Storage Partners II, Ltd. (7)
Public Storage Properties, Ltd. (8)
Secure Mini-Storage
Shurgard/Canyon Park Self Storage, Ltd.
Shurgard-Freeman Franklin/Rivergate JV
Shurgard-Freeman Hermitage JV
Shurgard-Freeman Hickory Hollow JV
Shurgard-Freeman Medical Center JV
Shurgard-Freeman Memphis LLC
Shurgard-Freeman South Main JV
Shurgard-Freeman Stones River JV
Shurgard Resco LLC
Shurgard Resco II, LLC
Shurgard Resco III, LLC
Shurgard TRC Self Storage Development LLC
STOR-Re Mutual Insurance Company, Inc.
Storage Trust Properties, L.P.
Van Nuys Storage Partners, Ltd.  (9)
Whittier Storage Partners, Ltd.
First Shurgard SPRI
Second Shurgard SPRL

</TABLE>

(1)  B. Wayne Hughes owns approximately 2.8% of the limited partnership interest
     of this entity.
(2)  B. Wayne Hughes owns approximately 4.4% of the limited partnership interest
     of this entity.
(3)  The Hughes  Family owns 20% of the general  partner  interests and 15.5% of
     the limited partnership interests of this entity.

                                       13

<PAGE>

(4)  The Hughes  Family owns 20% of the general  partner  interests and 11.4% of
     the limited partnership interests of this entity.
(5)  B. Wayne Hughes owns  approximately  20% of the general partner interest of
     these entities.
(6)  The Hughes  Family  owns  approximately  24.3% of the  limited  partnership
     interest of this entity.
(7)  The Hughes  Family  owns  approximately  11.9% of the  limited  partnership
     interest of this entity.
(8)  The Hughes  Family owns 20% of the general  partner  interests and 30.5% of
     the limited partnership interests of this entity.
(9)  B.  Wayne  Hughes  owns  approximately  17.4%  of the  limited  partnership
     interest of this entity.
(10) B. Wayne Hughes is a general partner in this entity and owns a 0.02% equity
     interest.
(11) B. Wayne Hughes is a general  partner of this  entity,  and has no economic
     interest.
(12) B. Wayne Hughes owns approximately 0.5% of the common shares of PS Business
     Parks, Inc.
(13) B.  Wayne  Hughes  owns  approximately  17.9%  of the  general  partnership
     interest of this entity.
                                       14

<PAGE>

PROHIBITED INVESTMENTS AND ACTIVITIES
-------------------------------------

         Our  Bylaws  prohibit  us  from  purchasing  properties  in  which  the
Company's officers or directors have an interest,  or from selling properties to
such  persons,  unless  the  transactions  are  approved  by a  majority  of the
independent  directors  and are  fair to the  Company  based  on an  independent
appraisal.  This Bylaw provision may be changed with shareholder  approval.  See
"Limitations on Debt" below for other restrictions in the Bylaws.

BORROWINGS
----------

         We  have  a  $200  million   revolving  line  of  credit  (the  "Credit
Agreement")  that  has a  maturity  date of April 1,  2007 and  bears an  annual
interest  rate ranging from the London  Interbank  Offered Rate  ("LIBOR")  plus
0.50% to LIBOR plus 1.20%  depending on our credit  ratings (LIBOR plus 0.50% as
of  December  31,  2006).  In  addition,  we are  required  to  pay a  quarterly
commitment fee ranging from 0.15% per annum to 0.30% per annum  depending on our
credit  ratings  (the fee was 0.15%  per  annum as of  December  31,  2006).  At
December 31, 2006, we had $45 million in outstanding  borrowings  under our $200
million  bank line of  credit.  At  February  28,  2007,  we had $80  million in
outstanding borrowings on our line of credit.

         The Credit Agreement includes various  covenants,  the more significant
of which require us to (i) maintain a balance sheet  leverage ratio of less than
0.55 to 1.00, (ii) maintain certain quarterly interest and fixed-charge coverage
ratios (as  defined) of not less than 2.25 to 1.0 and 1.5 to 1.0,  respectively,
and (iii)  maintain  a minimum  total  shareholders'  equity  (as  defined).  In
addition,  we are limited in our ability to incur additional  borrowings (we are
required to maintain  unencumbered  assets with an aggregate book value equal to
or greater than 1.5 times our unsecured  recourse  debt).  We were in compliance
with all the covenants of the Credit Agreement at December 31, 2006.

         This credit facility expires on April 10, 2007. We are currently in the
process of obtaining a new credit  facility  which we anticipate  will have $300
million of available borrowing  capacity,  as well as improved financing spreads
and  covenants.  We expect the new credit  facility  to be in place prior to the
expiration of the existing facility.

         On  December  27,  2006,  we  entered  into  a $300  million  unsecured
short-term  credit  agreement  with a  commercial  bank.  Pursuant to the credit
agreement,  we borrowed $300 million and had this amount outstanding at December
31, 2006.

         At  December  31,  2006,  in addition  to  borrowings  under our credit
facilities we had (i) $475.4  million of unsecured  notes  payable,  (ii) $266.7
million of  mortgage  notes  secured by  facilities  in the U.S.,  (iii)  $717.7
million of notes payable secured by facilities  located in Europe and (iv) other
miscellaneous debt totaling $43.9 million.

         Our debt level is much higher than we are accustomed to and is a result
of assuming $1.3 billion of debt we have at December 31, 2006 that we assumed in
our merger with Shurgard.

         Our goal is to  continue to reduce the level of debt  outstanding  to a
level that is  acceptable  to us. In this regard,  on January 2, 2007 we retired
approximately  $429  million  of notes  payable  that was  secured by 102 of our
facilities  located in Europe.  In  addition,  on January 10,  2007,  we retired
$300.0  million  of  borrowings  on a  bank  credit  facility  and  subsequently
terminated the facility.  We financed the repayments  with the net proceeds from
the issuance of preferred  stock that was issued in early  January 2007 combined
with additional cash on hand.

         Subject  to  a  limitation  on  unsecured   borrowings  in  our  Bylaws
(described  below), we have broad powers to borrow in support of our objectives.
We have incurred in the past, and may incur in the future,  both  short-term and
long-term  indebtedness  to increase our funds  available for investment in real
estate, capital expenditures and distributions.

LIMITATIONS ON DEBT
-------------------

         The Bylaws  provide that the Board of Directors  shall not authorize or
permit the  incurrence of any  obligation by the Company,  which would cause our
"Asset  Coverage" of our unsecured  indebtedness to become less than 300%. Asset
Coverage is defined in the Bylaws as the ratio  (expressed as a  percentage)  by

                                       15
<PAGE>

which the value of the total  assets (as  defined in the  Bylaws) of the Company
less the Company's  liabilities  (except  liabilities for unsecured  borrowings)
bears to the aggregate amount of all unsecured  borrowings of the Company.  This
Bylaw provision may be changed only upon a shareholder vote.

         Our  Bylaws  prohibit  us from  issuing  debt  securities  in a  public
offering  unless our "cash  flow"  (which  for this  purpose  means net  income,
exclusive of  extraordinary  items,  plus  depreciation)  for the most recent 12
months for which financial statements are available,  adjusted to give effect to
the anticipated  use of the proceeds from the proposed sale of debt  securities,
would be sufficient to pay the interest on such securities. This Bylaw provision
may be changed only upon a shareholder vote.

         Without  the  consent  of  holders  of the  various  series  of  Senior
Preferred  Stock,  we may not take any action  that  would  result in a ratio of
"Debt" to "Assets" (the "Debt Ratio") in excess of 50%. As of December 31, 2006,
the Debt Ratio was approximately  16%. "Debt" means the liabilities  (other than
"accrued  and other  liabilities"  and  "minority  interest")  that  should,  in
accordance with accounting  principles  generally accepted in the United States,
be reflected on our  consolidated  balance  sheet at the time of  determination.
"Assets" means our total assets before a reduction for accumulated  depreciation
and amortization that should, in accordance with generally  accepted  accounting
principles,  be  reflected  on the  consolidated  balance  sheet  at the time of
determination.

         Our bank and senior unsecured debt agreements contain various financial
covenants,  including  limitations on the level of  indebtedness of 30% of total
capitalization (as defined) and the prohibition of the payment of dividends upon
the occurrence of an event of default (as defined).

EMPLOYEES
---------

         We have  approximately  6,000 employees in the United States and Europe
at December  31, 2006 who render  services on behalf of the  Company,  primarily
personnel engaged in property operations.  None of our employees in the U.S. are
covered by a  collective  bargaining  agreement.  Two  countries  in Europe have
employees  represented  through an internal  collective  bargaining  council. We
believe that our relations with our employees are generally good.

FEDERAL INCOME TAX
------------------

         We believe that we have operated, and intend to continue to operate, in
such a manner as to qualify as a REIT under the  Internal  Revenue Code of 1986,
but no  assurance  can be given  that we will at all  times so  qualify.  To the
extent that we continue to qualify as a REIT, we will not be taxed, with certain
limited  exceptions,  on the taxable  income  (including  gains from the sale of
securities and properties) that we distribute to our  shareholders.  Our taxable
REIT subsidiaries will be taxed on their taxable income.

         For Federal tax purposes,  our  distributions  to our  shareholders are
treated by the shareholders as ordinary income, capital gains, return of capital
or a combination thereof. Ordinary income dividends to our shareholders will not
generally be eligible for the lower tax rates that apply to "qualified  dividend
income."

INSURANCE
---------

         We believe our properties are adequately  insured.  Our facilities have
historically carried comprehensive  insurance,  including property,  earthquake,
general  liability  and  workers  compensation,  through  nationally  recognized
insurance carriers and through our captive insurance programs (described below).
Our captive insurance programs also insure affiliates of the Company.

         For losses  incurred  prior to April 1,  2004,  our  captive  insurance
activities  were  conducted  through  STOR-Re  Mutual  Insurance  Company,  Inc.
("STOR-Re"),  an association captive insurance company owned by the Company, the
Consolidated  Entities,  and the  Unconsolidated  Entities.  For losses incurred
after March 31, 2004,  these activities were conducted by an entity wholly owned
by the Company, PS Insurance Company Hawaii, Ltd. ("PSIC-H").

                                       16
<PAGE>

         The Company,  STOR-Re,  PSIC-H and its  affiliates'  maximum  aggregate
annual  exposure  for  losses  that are below the  deductibles  set forth in the
third-party insurance contracts,  assuming multiple significant events occur, is
approximately  $35  million.  In  addition,  if losses  exhaust the  third-party
insurers' limit of coverage of $125 million for property  coverage (a maximum of
$80 million with respect to  earthquake  coverage)  and $102 million for general
liability, our exposure could be greater. These limits are higher than estimates
of maximum probable losses that could occur from individual  catastrophic events
(i.e. earthquake and wind damage) determined in recent engineering and actuarial
studies.

         Our tenant  insurance  program  reinsures  policies  against claims for
losses to goods  stored by tenants at our  self-storage  facilities.  Throughout
2004 and 2005, we had third-party  insurance  coverage for claims paid exceeding
$500,000  resulting  from  any  individual  event,  to a limit  of  $10,000,000.
Effective  January 1, 2006,  such  coverage  was  revised to cover  claims  paid
exceeding  $1,500,000  resulting  from  any  individual  event,  to a  limit  of
$9,000,000.  At  December  31,  2006,  we had  approximately  403,000  reinsured
policies  outstanding  representing  aggregate  coverage of  approximately  $1.0
billion.

ITEM 1A. RISK FACTORS
         ------------

         In  addition  to the other  information  in our Form  10-K,  you should
consider the following factors in evaluating the Company:

WE ARE SUBJECT TO ADDITIONAL RISKS AS A RESULT OF THE SHURGARD MERGER.

         In addition to the general risks related to real estate described below
which may also adversely impact  Shurgard's  operations,  we are also subject to
the  following  risks in  connection  with the Shurgard  merger and  integrating
Shurgard into our operations, including without limitation the following:

     o   difficulties in completing the integration of operations,  technologies
         and personnel of Shurgard;

     o   inability to realize or delays in realizing expected synergies;

     o   unanticipated operating costs;

     o   diversion  of our  management's  attention  away  from  other  business
         concerns;

     o   exposure  to  any  undisclosed  or  unknown  potential  liabilities  of
         Shurgard and;

     o   risks  related to real estate  markets in Europe  which are new markets
         for us.

         We have never undertaken to integrate a company as large as Shurgard or
one with overseas operations. The success of the merger will depend, in part, on
our  ability  to  realize  the  anticipated  cost  savings  from  combining  the
businesses of Public Storage and Shurgard.  However,  to realize the anticipated
benefits from the merger,  we must  successfully  compare the combination of the
businesses  of Public  Storage and Shurgard in a manner that permits  those cost
savings  to be  realized.  If we are not  able  to  successfully  achieve  these
objectives,  the anticipated benefits of the merger may not be realized fully or
at all or may take longer or cost more to realize than expected.  It is possible
that the  integration  process  could  result in a decline in  occupancy  and/or
rental  rates,   the  disruption  of  each  company's   ongoing   businesses  or
inconsistencies  in standards,  controls,  procedures,  practices,  policies and
compensation   arrangements  that  adversely  affect  our  ability  to  maintain
relationships with tenants and employees or to achieve the anticipated  benefits
of the merger.  Further,  the size of the  transaction  may make  completing the
integration of Public Storage and Shurgard difficult,  expensive and disruptive,
adversely   affecting  the  combined  company's   revenues  and  earnings,   and
implementation of merger integration efforts may divert  management's  attention
from other strategic priorities.  In addition, the merger was structured so that
it should have been a taxable  transaction for U.S. Federal income tax purposes.
As a result,  the combined  company  should have the benefit of a step-up in tax
basis in  Shurgard's  assets.  It is  possible  that the IRS may  challenge  the
step-up in basis.  If such challenge were  sustained,  we would not achieve this
benefit,  which  would  reduce our  depreciation  deductions  and our ability to
retain cash flow.

                                       17
<PAGE>

         We also acquired Shurgard's  international  operations in Europe, which
consist principally of facilities that have been completed in the last few years
and are in various stages of fill-up.  Shurgard's  international operations have
not  been  profitable,  and  there  is no  assurance  they  will  ultimately  be
profitable.  Also,  Shurgard  had a  number  of  non-stabilized  properties  and
construction  activity,  and delays in construction  and fill-up could result in
additional costs. We have limited experience in European  operations,  which may
adversely impact our ability to operate profitably in Europe. In addition, these
operations  have specific  inherent  risks,  including  without  limitation  the
following:

     o   currency risks,  including  currency  fluctuations and risks related to
         foreign currency hedging activities;

     o   unexpected changes in legislative and regulatory requirements;

     o   potentially adverse tax burdens;

     o   burdens of complying with different permitting standards, environmental
         and labor laws and a wide variety of foreign laws;

     o   obstacles to the repatriation of earnings and cash;

     o   regional, national and local political uncertainty;

     o   economic slowdown and/or downturn in foreign markets;

     o   difficulties in staffing and managing international operations;

     o   reduced protection for intellectual property in some countries; and

     o   inability to  effectively  control less than wholly owned  partnerships
         and joint ventures.

         Shurgard also held many of its  properties  through  interests in joint
ventures  that we acquired  and which have  additional  risks,  including  risks
related to the financial  strength,  common  business  goals and  strategies and
cooperation  of the  venture  partner,  as well as the  inability  to take  some
actions that may require approval by the venture partner. In addition,  Shurgard
held  substantially  all of its real  estate  investments  in Europe  indirectly
through  partnerships  and  joint  venture  arrangements.  If we are  unable  to
effectively  control  these  indirect  investments,  there  is a risk  that  our
ownership of the joint  ventures  could cause us to lose our REIT status.  These
investments  also carry the risks that we may not control the legal  entity that
has title to the real estate,  that the enterprise in which we invested may have
liabilities that weren't  disclosed at the time of the investment,  and the risk
that these  investments may not be easily sold or readily accepted as collateral
by our lenders.

         As a share of total  operations,  particularly in Europe,  Shurgard had
more recently developed properties whose occupancies have not stabilized and had
more construction activity than Public Storage,  which increase costs. Delays in
construction and fill-up could result in additional cost.

         Some of the  facilities  we  acquired  in the  Shurgard  merger will be
subject to property tax reappraisal that could increase property tax expense and
adversely  affect our  profitability.  Up to 17% of the domestic  properties  we
acquired  in the  merger are  located  in  jurisdictions  that may  provide  for
property  tax  reappraisal  upon a change  of  ownership  and so may face such a
reassessment.

         We have assumed based on public  filings that  Shurgard  qualified as a
real estate  investment  trust for United  States  federal  income tax purposes,
referred  to  hereinafter  as a REIT and that we  would be able to  continue  to
qualify as a REIT following the Shurgard merger.  However, if Shurgard failed to
qualify as a REIT, we generally would have succeeded to or incurred  significant
tax  liabilities  (including  the  significant  tax  liability  that  would have
resulted from the deemed sale of assets by Shurgard  pursuant to the merger) and
we could possibly lose our REIT status should disqualifying  activities continue
after the Shurgard merger.

         The Shurgard debt  agreements we assumed also have covenants that could
limit our  activities.  Failure  to comply  with such  covenants  could  cause a
default under the applicable  debt  agreement,  which could allow the lenders or
other debt holders to declare all borrowings outstanding to be due and payable.

PUBLIC STORAGE SHAREHOLDERS INCURRED IMMEDIATE DILUTION FOLLOWING COMPLETION OF
THE SHURGARD MERGER.

                                       18
<PAGE>

         Public Storage  shareholders  incurred immediate dilution in connection
with the merger.  During 2005, Public Storage shareholders would have incurred a
loss of $0.80 per share  (diluted) on a pro forma basis  compared to earnings of
$1.97 per share  (diluted)  on a  historical  basis  primarily as a result of an
increase in depreciation and amortization expense.

THE HUGHES FAMILY COULD CONTROL US AND TAKE ACTIONS ADVERSE TO OTHER
SHAREHOLDERS.

         At December 31, 2006,  B. Wayne  Hughes,  Chairman of the Board and his
family  (the  "Hughes  family")  owned  approximately  26.7%  of  our  aggregate
outstanding  shares of common  stock.  Consequently,  the  Hughes  family  could
control  matters  submitted to a vote of our  shareholders,  including  electing
directors, amending our organizational documents, dissolving and approving other
extraordinary transactions, such as a takeover attempt, even though such actions
may not be favorable to the other common shareholders.

PROVISIONS IN OUR ORGANIZATIONAL DOCUMENTS MAY PREVENT CHANGES IN CONTROL.

         Restrictions in our organizational  documents may further limit changes
in  control.  Unless  our  Board  of  Directors  waives  these  limitations,  no
shareholder may own more than (1) 2.0% of our  outstanding  shares of our common
stock or (2) 9.9% of the  outstanding  shares  of each  class or  series  of our
preferred or equity  stock.  Our  organizational  documents  in effect  provide,
however,  that the Hughes  family may  continue  to own the shares of our common
stock  held by them  at the  time of the  1995  reorganization.  Our  Board  has
authorized the Hughes family to acquire additional shares of our common stock to
maintain their pre-merger holding percentage. These limitations are designed, to
the extent possible, to avoid a concentration of ownership that might jeopardize
our  ability  to  qualify  as a real  estate  investment  trust or  REIT.  These
limitations,  however,  also may make a change  of  control  significantly  more
difficult (if not impossible)  even if it would be favorable to the interests of
our public shareholders.  These provisions will prevent future takeover attempts
not  approved  by our  board  of  directors  even if a  majority  of our  public
shareholders  deem it to be in their best interests because they would receive a
premium  for  their  shares  over the  shares'  then  market  value or for other
reasons.

WE WOULD INCUR ADVERSE TAX CONSEQUENCES IF WE OR SHURGARD FAILED TO QUALIFY AS A
REIT.

         We have assumed,  based on public filings, that Shurgard qualified as a
real estate  investment  trust for United  States  federal  income tax purposes,
referred  to  hereinafter  as a REIT,  and that we will be able to  continue  to
qualify as a REIT following the Shurgard merger.  However, if Shurgard failed to
qualify as a REIT, we generally would have succeeded to or incurred  significant
tax  liabilities  (including  the  significant  tax  liability  that  would have
resulted from the deemed sale of assets by Shurgard  pursuant to the merger) and
we could possibly lose our REIT status should disqualifying  activities continue
after the Shurgard merger.

         Investors  are also  subject  to the risk that we may not  qualify as a
REIT.  REITs are subject to a range of complex  organizational  and  operational
requirements.  As a REIT, we must  distribute with respect to each year at least
90% of our REIT taxable income to our shareholders.  Other restrictions apply to
our  income and  assets.  Our REIT  status is also  dependent  upon the  ongoing
qualification of our affiliate,  PS Business Parks, Inc., as a REIT, as a result
of our substantial ownership interest in that company.

         For any  taxable  year that we fail to qualify as a REIT and are unable
to avail  ourselves  of certain  savings  provisions  set forth in the  Internal
Revenue Code of 1986,  we would be subject to federal  income tax at the regular
corporate  rates  on all of our  taxable  income,  whether  or not we  make  any
distributions to our  shareholders.  Those taxes would reduce the amount of cash
available for  distribution to our  shareholders or for  reinvestment  and would
adversely  affect our  earnings.  As a result,  our failure to qualify as a REIT
during any  taxable  year could have a material  adverse  effect upon us and our
shareholders.  Furthermore, unless certain relief provisions apply, we would not
be eligible to elect REIT status again until the fifth  taxable year that begins
after the first year for which we fail to qualify.

WE MAY PAY SOME TAXES, REDUCING CASH AVAILABLE FOR SHAREHOLDERS.

         Even if we qualify as a REIT for federal  income tax  purposes,  we are
required to pay some federal,  state and local taxes on our income and property.
Several  corporate  subsidiaries  of the Company  have  elected to be treated as
"taxable REIT subsidiaries" of the Company for federal income tax purposes since

                                       19
<PAGE>

January 1, 2001. A taxable REIT  subsidiary is taxable as a regular  corporation
and is limited in its ability to deduct  interest  payments made to us in excess
of a certain  amount.  In  addition,  if we  receive  certain  payments  and the
economic  arrangements  among  our  taxable  REIT  subsidiaries  and us are  not
comparable to similar arrangements among unrelated parties we will be subject to
a 100%  penalty  tax on those  payments.  To the extent  that the Company or any
taxable REIT  subsidiary  is required to pay federal,  state or local taxes,  we
will have less cash available for distribution to shareholders.

WE HAVE BECOME INCREASINGLY DEPENDENT UPON AUTOMATED PROCESSES AND THE INTERNET
AND ARE FACED WITH SECURITY SYSTEM RISKS.

         We have become  increasingly  centralized  and dependent upon automated
information technology processes.  As a result, we could be severely impacted by
a catastrophic occurrence,  such as a natural disaster or a terrorist attack. In
addition,  a portion of our business operations are conducted over the Internet,
increasing the risk of viruses that could cause system  failures and disruptions
of operations.  Experienced  computer  programmers  may be able to penetrate our
network security and misappropriate our confidential information,  create system
disruptions or cause shutdowns.

CERTAIN SECURITIES HAVE A LIQUIDATION PREFERENCE OVER OUR COMMON STOCK AND
EQUITY STOCK, SERIES A.

         If we liquidated, holders of our preferred securities would be entitled
to receive liquidating distributions, plus any accrued and unpaid distributions,
before any  distribution of assets to the holders of our common stock and equity
stock, series A. Holders of preferred  securities are entitled to receive,  when
declared by our board of directors,  cash distributions in preference to holders
of our common stock and equity stock, Series A.

SINCE OUR BUSINESS CONSISTS PRIMARILY OF ACQUIRING AND OPERATING REAL ESTATE, WE
ARE SUBJECT TO REAL ESTATE OPERATING RISKS.

         The value of our  investments  may be reduced by general  risks of real
estate  ownership.  Since we derive  substantially  all of our income  from real
estate  operations,  we  are  subject  to  the  general  risks  of  owning  real
estate-related assets, including: o lack of demand for rental spaces or units in
a locale;

     o   changes in general economic or local conditions;

     o   natural disasters, such as earthquakes;

     o   potential terrorist attacks;

     o   changes in supply of or demand for similar or competing  facilities  in
         an area;

     o   the impact of environmental protection laws;

     o   changes in interest rates and availability of permanent  mortgage funds
         which may  render the sale or  financing  of a  property  difficult  or
         unattractive;

     o   changes in tax, real estate and zoning laws; and

     o   tenant claims.

         In addition,  we self-insure  certain of our property loss,  liability,
and workers  compensation  risks for which other real estate  companies  may use
third-party  insurers.  This  results  in a higher  risk of losses  that are not
covered  by  third-party  insurance  contracts,  as  described  in Note 17 under
"Insurance  and Loss  Exposure"  to our  consolidated  financial  statements  at
December 31, 2006.

         There is significant competition among self-storage facilities and from
other storage alternatives.  Most of our properties are self-storage facilities,
which generated most of our revenue for the year ended December 31, 2006.  Local
market  conditions will play a significant  part in how competition  will affect
us.  Competition in the market areas in which many of our properties are located
from other self-storage facilities and other storage alternatives is significant

                                       20
<PAGE>

and has affected the occupancy  levels,  rental rates and operating  expenses of
some of our properties.  Any increase in availability of funds for investment in
real estate may accelerate  competition.  Further  development  of  self-storage
facilities may intensify competition among operators of self-storage  facilities
in the market areas in which we operate.

         We may incur  significant  environmental  costs and liabilities.  As an
owner and operator of real properties,  under various  federal,  state and local
environmental  laws,  we are  required  to clean up spills or other  releases of
hazardous or toxic substances on or from our properties.  Certain  environmental
laws impose liability  whether or not the owner knew of, or was responsible for,
the presence of the hazardous or toxic substances.  In some cases, liability may
not be limited to the value of the property.  The presence of these  substances,
or the failure to properly remediate any resulting  contamination,  whether from
environmental  or microbial  issues,  also may  adversely  affect the owner's or
operator's ability to sell, lease or operate its property or to borrow using its
property as collateral.

         We have conducted preliminary  environmental assessments of most of our
properties (and intend to conduct these  assessments in connection with property
acquisitions)  to  evaluate  the  environmental   condition  of,  and  potential
environmental  liabilities  associated with, our properties.  These  assessments
generally  consist  of an  investigation  of  environmental  conditions  at  the
property (not including soil or groundwater sampling or analysis),  as well as a
review of available  information  regarding the site and publicly available data
regarding  conditions at other sites in the vicinity.  In connection  with these
property assessments,  our operations and recent property acquisitions,  we have
become aware that prior  operations  or  activities  at some  facilities or from
nearby  locations  have or may have  resulted  in  contamination  to the soil or
groundwater at these facilities.  In this regard,  some of our facilities are or
may be the subject of federal or state  environment  investigations  or remedial
actions. We have obtained,  with respect to recent  acquisitions,  and intend to
obtain  with  respect to pending or future  acquisitions,  appropriate  purchase
price  adjustments or  indemnifications  that we believe are sufficient to cover
any related potential liability. Although we cannot provide any assurance, based
on the preliminary environmental assessments, we believe we have funds available
to  cover  any  liability   from   environmental   contamination   or  potential
contamination  and we are not aware of any  environmental  contamination  of our
facilities  material to our overall business,  financial condition or results of
operation.

         There has been an increasing  number of claims and  litigation  against
owners and  managers of rental  properties  relating  to moisture  infiltration,
which can result in mold or other property  damage.  When we receive a complaint
concerning  moisture  infiltration,  condensation or mold problems and/or become
aware that an air quality concern exists,  we implement  corrective  measures in
accordance  with  guidelines and protocols we have developed with the assistance
of outside  experts.  We seek to work  proactively  with our  tenants to resolve
moisture  infiltration  and  mold-related  issues,  subject  to our  contractual
limitations on liability for such claims. However, we can make no assurance that
material legal claims relating to moisture  infiltration and the presence of, or
exposure to, mold will not arise in the future.

         Delays in development  and fill-up of our  properties  would reduce our
profitability.  Since January 1, 2002, through December 31, 2006, we have opened
46  newly  developed  self-storage  facilities.  In  addition,  our  development
"pipeline"  in the United  States and Europe at December  31, 2006 consist of 56
projects  with  total  estimated  costs  of  $266  million.  We  anticipate  the
development  of these  56  projects  to be  completed  in the  next  two  years.
Construction  delays  due to  weather,  unforeseen  site  conditions,  personnel
problems,  and other factors,  as well as cost overruns,  would adversely affect
our  profitability.  Delays in the rent-up of newly  developed  facilities  as a
result  of  competition  or  other  factors  would  also  adversely  impact  our
profitability.

         Property   taxes  can  increase  and  cause  a  decline  in  yields  on
investments.  Each of our  properties is subject to real property  taxes.  These
real property  taxes may increase in the future as property tax rates change and
as our properties are assessed or reassessed by tax authorities.  Such increases
could adversely impact our profitability.

         We must comply with the Americans  with  Disabilities  Act and fire and
safety  regulations,   which  can  require  significant  expenditures.  All  our
properties must comply with the Americans with Disabilities Act and with related
regulations  (the  "ADA").  The ADA has  separate  compliance  requirements  for
"public accommodations" and "commercial facilities," but generally requires that
buildings be made  accessible to persons with  disabilities.  Various state laws
impose similar  requirements.  A failure to comply with the ADA or similar state
laws could result in  government  imposed fines on us and could award damages to
individuals affected by the failure. In addition, we must operate our properties
in compliance with numerous local fire and safety  regulations,  building codes,
and other land use regulations.  Compliance with these  requirements can require

                                       21
<PAGE>

us to spend  substantial  amounts of money,  which would  reduce cash  otherwise
available  for  distribution  to  shareholders.  Failure  to comply  with  these
requirements could also affect the marketability of our real estate facilities.

         Any  failure  by  us  to  manage  acquisitions  and  other  significant
transactions  successfully could negatively impact our financial results.  As an
increasing part of our business,  we acquire other self-storage  facilities.  We
also  evaluate  from  time to time  other  significant  transactions.  If  these
facilities are not properly  integrated into our system,  our financial  results
may suffer.

         We incur liability from employment related claims. From time to time we
must resolve employment related claims by corporate level and field personnel.

WE HAVE NO INTEREST IN CANADIAN SELF-STORAGE FACILITIES OWNED BY THE HUGHES
FAMILY.

         The  Hughes   Family  has   ownership   interests   in,  and  operates,
approximately  44  self-storage  facilities  in Canada  under  the name  "Public
Storage." We currently do not own any  interests in these  facilities  nor do we
own any  facilities  in Canada.  We have a right of first refusal to acquire the
stock or assets of the corporation  engaged in the operation of the self-storage
facilities  in Canada if the  Hughes  family or the  corporation  agrees to sell
them.  However,  we  have  no  ownership  interest  in the  operations  of  this
corporation,  have no right to acquire  their stock or assets  unless the Hughes
family decides to sell, and receive no benefit from the profits and increases in
value of the Canadian self-storage facilities.

         Prior to December  31,  2003,  Company  personnel  were  engaged in the
supervision  and  the  operation  of  these   properties  and  provided  certain
administrative  services for the Canadian  owners,  and certain other  services,
primarily tax services,  with respect to certain other Hughes Family  interests.
The  Hughes  Family  and the  Canadian  owners  reimbursed  us at cost for these
services in the amount of $542,499 with respect to the Canadian  operations  and
$151,063 for other services during 2003 (in United States  dollars).  There were
conflicts  of interest  in  allocating  time of our  personnel  between  Company
properties,  the Canadian properties, and certain other Hughes Family interests.
The sharing of Company  personnel with the Canadian  entities was  substantially
eliminated by December 31, 2003.

         Through our  subsidiaries,  we continue to reinsure  risks  relating to
loss of goods stored by tenants in the  self-storage  facilities  in Canada.  We
acquired  the tenant  insurance  business  on  December  31,  2001  through  our
acquisition  of PSIC.  For each of the years ended  December  31, 2006 and 2005,
PSIC received  $989,000 and $1,052,000  respectively,  in  reinsurance  premiums
attributable  to the Canadian  Facilities.  Since PSIC's right to provide tenant
reinsurance to the Canadian  Facilities may be qualified,  there is no assurance
that these premiums will continue.

INCREASES IN INTEREST RATES MAY ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK.

         One of the factors that influences the market price of our common stock
and our other securities is the annual rate of distributions  that we pay on the
securities,  as compared with interest  rates. An increase in interest rates may
lead purchasers of REIT shares to demand higher annual distribution rates, which
could  adversely  affect  the  market  price  of  our  common  stock  and  other
securities.

TERRORIST  ATTACKS  AND THE  POSSIBILITY  OF WIDER  ARMED  CONFLICT  MAY HAVE AN
ADVERSE  IMPACT ON OUR BUSINESS  AND  OPERATING  RESULTS AND COULD  DECREASE THE
VALUE OF OUR ASSETS.

         Terrorist attacks and other acts of violence or war, such as those that
took place on September 11, 2001,  could have a material  adverse  impact on our
business and operating results. There can be no assurance that there will not be
further  terrorist  attacks  against  the  United  States or its  businesses  or
interests.  Attacks or armed  conflicts that directly  impact one or more of our
properties  could  significantly  affect our ability to operate those properties
and thereby  impair our operating  results.  Further,  we may not have insurance
coverage for losses  caused by a terrorist  attack.  Such  insurance  may not be
available,  or if it is  available  and  we  decide  to  obtain  such  terrorist
coverage,  the cost for the insurance may be significant in  relationship to the
risk  overall.  In  addition,  the adverse  effects  that such  violent acts and
threats  of  future  attacks  could  have on the  United  States  economy  could
similarly  have a  material  adverse  effect  on our  business  and  results  of
operations.  Finally,  further  terrorist  acts could cause the United States to
enter into a wider armed  conflict,  which could further impact our business and
operating results.

                                       22
<PAGE>

DEVELOPMENTS IN CALIFORNIA MAY HAVE AN ADVERSE IMPACT ON OUR BUSINESS.

         We are headquartered in, and approximately  one-fifth of our properties
in the United States are located in, California.  California is facing budgetary
problems.  Action that may be taken in response  to these  problems,  such as an
increase in property taxes on commercial properties,  could adversely impact our
business and results of operations.  In addition, we could be adversely impacted
by efforts to reenact  legislation  mandating medical insurance for employees of
California businesses and members of their families.


ITEM 1B. UNRESOLVED STAFF COMMENTS
         -------------------------

         Not applicable.

                                       23

<PAGE>

ITEM 2.  PROPERTIES

         At December 31, 2006, we had direct and indirect ownership interests in
2,003 and 166 storage  facilities located in 38 states within the U.S. and seven
Western European nations, respectively:

                                              At December 31, 2006
                                  -----------------------------------------
                                  Number of Storage     Net Rentable Square
                                    Facilities (a)      Feet (in thousands)
                                  -------------------- --------------------
United States:

California:
     Southern...............                 198                 13,399
     Northern...............                 170                  9,845
Texas.......................                 235                 15,375
Florida.....................                 191                 12,452
Illinois....................                 123                  7,800
Washington..................                  91                  5,954
Georgia.....................                  90                  5,835
North Carolina..............                  69                  4,775
Virginia....................                  78                  4,407
New York....................                  61                  3,921
Colorado....................                  60                  3,810
New Jersey..................                  56                  3,492
Maryland....................                  55                  3,085
Minnesota...................                  44                  2,990
Michigan....................                  43                  2,755
Arizona.....................                  37                  2,259
Missouri....................                  38                  2,144
South Carolina..............                  40                  2,131
Oregon......................                  38                  1,955
Tennessee...................                  33                  1,883
Indiana.....................                  31                  1,880
Pennsylvania................                  28                  1,867
Ohio........................                  30                  1,860
Nevada......................                  22                  1,404
Kansas......................                  22                  1,310
Massachusetts...............                  19                  1,179
Wisconsin...................                  16                  1,030
Other states (12 states)....                  85                  4,633
                                  -------------------- --------------------
     Total - U.S............               2,003                125,430
                                  -------------------- --------------------
Europe:

France......................                  50                  2,606
Netherlands.................                  32                  1,664
Sweden......................                  25                  1,335
Belgium.....................                  21                  1,219
United Kingdom..............                  19                    905
Germany.....................                  11                    550
Denmark.....................                   8                    410
                                  -------------------- --------------------
     Total - Europe.........                 166                  8,689
                                  -------------------- --------------------
     Grand Total............               2,169                134,119
                                  ==================== ====================

(a)  Includes 2,147  self-storage  facilities  owned by the Company and entities
     consolidated with the Company. The remaining 22 facilities are self-storage
     facilities owned by entities in which the Company has an interest; however,
     the Company does not  consolidate  such  entities.  See Schedule  III: Real
     Estate and Accumulated Depreciation in the Company's 2006 financials, for a
     complete list of properties consolidated by the Company.

                                       24
<PAGE>

         Our facilities are generally operated to maximize cash flow through the
regular  review and, when  warranted by market  conditions,  adjustment of rents
charged to our  tenants.  For the year ended  December  31,  2006,  the weighted
average  occupancy level and the average total rental income per rentable square
foot  for  our  self-storage  facilities  were  approximately  89%  and  $12.39,
respectively in the U.S. and 76% and $23.30, respectively in Europe. Included in
the 2,169 storage  facilities  are 46 newly  developed  facilities  opened since
January 1, 2002.

         At December 31,  2006,  263 of our  facilities  were  encumbered  by an
aggregate of $984.3 million in mortgage notes payable.

         We have no specific policy as to the maximum size of any one particular
self-storage facility.  However, none of our facilities involves, or is expected
to involve, 1% or more of our total assets, gross revenues or net income.

         DESCRIPTION OF SELF-STORAGE FACILITIES:  Self-storage facilities, which
comprise  the  majority of our  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 property  managers who are  supervised  by
district managers.  Some self-storage facilities also include rentable uncovered
parking  areas  for  vehicle  storage,  as well as space  for  portable  storage
containers.  Leases  for  storage  facility  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,  the size of
the storage space and length of stay. All of our self-storage  facilities in the
United  States are operated  under the "Public  Storage"  brand name,  while our
facilities in Europe are operated under the "Shurgard" brand name.

         Users of space  in  self-storage  facilities  include  individuals  and
businesses.  Individuals  usually  obtain this space for  storage of  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.

         Our  self-storage  facilities  generally  consist  of  three  to  seven
buildings  containing an aggregate of between 350 to 750 storage spaces, most of
which  have  between  25  and  400  square  feet  and  an  interior   height  of
approximately 8 to 12 feet.

         We experience  minor seasonal  fluctuations in the occupancy  levels of
self-storage  facilities with occupancies  generally higher in the summer months
than in the winter  months.  We believe that these  fluctuations  result in part
from increased moving activity during the summer months.

         Our  self-storage  facilities are  geographically  diversified  and are
located  primarily  in or near  major  metropolitan  markets in 38 states in the
United States and seven Western  European  nations.  Generally our  self-storage
facilities are 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.

         Competition from other  self-storage  facilities as well as other forms
of storage in the market  areas in which many of our  properties  are located is
significant and has affected the occupancy  levels,  rental rates, and operating
expenses of many of our properties.

         Since  our  investments  are  primarily  self-storage  facilities,  our
ability to preserve our  investments  and achieve our objectives is dependent in
large part upon success in this field. Historically, upon stabilization after an
initial fill-up period, our self-storage facility interests have generally shown
a high degree of consistency in generating cash flows, despite changing economic
conditions.  We believe that our self-storage  facilities,  upon  stabilization,
have  attractive  characteristics  consisting  of high profit  margins,  a broad
tenant base and low levels of capital  expenditures  to maintain their condition
and appearance.

                                       25
<PAGE>

         Commercial   Properties:   In  addition  to  our   interests  in  2,169
self-storage  facilities,  we have an interest in PSB, which, as of December 31,
2006, owns and operates  approximately  18.7 million net rentable square feet in
eight states. At December 31, 2006, our investment in PSB represents 2.5% of our
total  assets based upon book value of $283.7  million.  The market value of our
investment  in  PSB  at  December  31,  2006  of  approximately  $899.7  million
represents  8.0% of the book value of our total  assets at December  31, 2006 of
approximately $11.2 billion. We also directly own six commercial properties with
520,000 net rentable  square feet,  have  1,041,000 net rentable  square feet of
commercial space that is located at certain of the self-storage facilities,  and
own three industrial facilities with an aggregate of 244,000 net rentable square
feet that are being used by the continuing containerized storage operations.

         The commercial  properties  owned by PSB consist of flex space,  office
space  and  industrial  space.  Flex  space is  defined  as  buildings  that are
configured  with a combination of part warehouse space and part office space and
can be designed to fit a wide variety of uses.  The  warehouse  component of the
flex space has a variety of uses  including  light  manufacturing  and assembly,
storage and  warehousing,  showroom,  laboratory,  distribution and research and
development  activities.  The office component of flex space is complementary to
the warehouse  component by enabling  businesses to  accommodate  management and
production  staff in the same facility.  PSB also owns low-rise  suburban office
space,  generally either in business parks that combine office and flex space or
in  desirable  submarkets  where the  economics  of the market  demand an office
build-out.  PSB also owns industrial space that has  characteristics  similar to
the warehouse component of the flex space.

         ENVIRONMENTAL   MATTERS:   Our   policy  is  to  accrue   environmental
assessments and estimated remediation cost when it is probable that such efforts
will be required and the related costs can be reasonably estimated.  Our current
practice is to conduct environmental  investigations in connection with property
acquisitions.  Although  there  can be no  assurance,  we are not  aware  of any
environmental  contamination of any of our facilities,  which individually or in
the aggregate would be material to our overall business, financial condition, or
results of operations.

ITEM 3.  LEGAL PROCEEDINGS

     Serrao v.  Public  Storage,  Inc.  (filed  April 2003)
     ------------------------------------------------------
     (Superior  Court of California - Orange County)
     -----------------------------------------------

         The  plaintiff  in this case filed a suit against the Company on behalf
of a putative class of renters who rented  self-storage  units from the Company.
Plaintiff alleges that the Company misrepresented the size of its storage units,
has  brought  claims  under  California  statutory  and common law  relating  to
consumer protection, fraud, unfair competition, and negligent misrepresentation,
and is seeking  monetary  damages,  restitution,  and declaratory and injunctive
relief.

         The claim in this case is  substantially  similar to those in Henriquez
v. Public Storage,  Inc., which was disclosed in prior reports. In January 2003,
the plaintiff caused the Henriquez action to be dismissed.

         Based upon the  uncertainty  inherent in any putative class action,  we
cannot  presently  determine  the  potential  damages,  if any, or the  ultimate
outcome of this litigation. On November 3, 2003, the court granted our motion to
strike the plaintiff's  nationwide  class  allegations and to limit any putative
class to California  residents only. In August 2005, we filed a motion to remove
the case to federal court, but the case has been remanded to the Superior Court.
We are  vigorously  contesting  the claims  upon  which  this  lawsuit is based,
including class certification efforts.

     Drake v. Shurgard  Storage  Centers,  Inc. (filed September 2002)
     -----------------------------------------------------------------
     (Superior Court of California - Orange County)
     ----------------------------------------------

                                       26
<PAGE>

         This is a companion  case to the Serrao  matter  discussed  above.  The
plaintiff  alleges the same set of operative  facts and seeks the same relief as
in Serrao against Shurgard Storage Centers, Inc.  ("Shurgard"),  whose liability
Public  Storage  assumed  following the merger of Public Storage and Shurgard on
August 22, 2006.  There is currently  pending a motion for class  certification,
which has yet to be ruled on. We cannot presently  determine the potential total
damages,  if any,  or the  ultimate  outcome of the  litigation.  We  vigorously
contested the motion for class  certification  and will  vigorously  defend this
action.

     Potter,  et al v.  Hughes,  et al  (filed  December  2004)
     ----------------------------------------------------------
     (United  States District Court - Central District of California)
     ----------------------------------------------------------------

         In November  2002,  a  shareholder  of the Company made a demand on the
Board of Directors  challenging the fairness of the Company's  acquisition of PS
Insurance Company,  Ltd. ("PSIC") and related matters. PSIC was previously owned
by the Hughes Family. In June 2003, following the filing by the Hughes Family of
a complaint for declaratory relief asking the court to find that the acquisition
of PSIC and related matters were fair to the Company, it was ruled that the PSIC
transaction  was just and  reasonable  as to the Company  and  holding  that the
Hughes Family was not required to make any payment to the Company.

         At the end of December 2004, the same shareholder referred to above and
a second  shareholder filed this  shareholder's  derivative  complaint naming as
defendants  the  Company's  directors  (and two former  directors)  and  certain
officers of the Company.  The matters alleged in this complaint  relate to PSIC,
the Hughes  Family's  Canadian  self-storage  operations  and the Company's 1995
reorganization.  In July  2006,  the Court  granted  the  defendants'  motion to
dismiss the amended Complaint without leave to amend. In August 2006, Plaintiffs
filed a notice  of appeal  of the  Court's  decision.  The  appeal is  currently
pending.  We believe the litigation will not have any financially adverse effect
on the  Company  (other  than the  costs  and  other  expenses  relating  to the
lawsuit).

                                       27
<PAGE>

     Brinkley v. Public  Storage, Inc. (filed April 2005)
     ----------------------------------------------------
     (Superior Court of California - Los Angeles County)
     ---------------------------------------------------

         The  plaintiff  sued the  Company  on  behalf of a  purported  class of
California  non-exempt  employees based on various California wage and hour laws
and seeking  monetary damages and injunctive  relief.  In May 2006, a motion for
class  certification  was filed  seeking to certify five  subclasses.  Plaintiff
sought certification for alleged meal period violations, rest period violations,
failure to pay for travel time,  failure to pay for mileage  reimbursement,  and
for wage  statement  violations.  In October 2006, the Court declined to certify
three out of the five subclasses.  The Court did,  however,  certify  subclasses
based  on  alleged  meal  period  and wage  statement  violations.  The  maximum
potential  liability  cannot  presently be  estimated.  We intend to  vigorously
contest  the  substantive  merits  of the two  remaining  subclasses  that  were
certified.

     Simas v. Public  Storage, Inc. (filed  January 2006)
     ----------------------------------------------------
     (Superior Court of California - Orange County)
     ----------------------------------------------

         The  plaintiff  brings this  action  against the Company on behalf of a
purported class who bought insurance coverage at Company's  facilities  alleging
that the Company does not have a license to offer,  sell and/or transact storage
insurance.  The action was  originally  brought  under  California  Business and
Professions  Code  Section  17200  and seeks  retention,  monetary  damages  and
injunctive  relief.  The Company  filed a demurrer to the  complaint.  While the
demurrer was pending, Plaintiff amended the complaint to allege a national class
and claims for  unfair  business  practices,  unjust  enrichment,  money had and
received, and negligent and intentional misrepresentation. Ultimately all claims
except for unjust  enrichment  were  dismissed.  There is  currently  a demurrer
pending on  Plaintiff's  amended  allegations  as to unjust  enrichment.  We are
vigorously contesting the claims upon which this lawsuit is based, including any
efforts for class certification.

         Other Items
         -----------

         We are a party to various claims,  complaints,  and other legal actions
that have arisen in the normal course of business from time to time that are not
described  above. We believe that it is unlikely that the outcome of these other
pending  legal  proceedings  including  employment  and  tenant  claims,  in the
aggregate,  will have a material adverse impact upon our operations or financial
position.

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

         We did not  submit  any  matter to a vote of  security  holders  in the
fourth quarter of the fiscal year ended December 31, 2006.

                                       28


<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS
         --------------------------------------------------------------------
         AND ISSUER PURCHASES OF EQUITY SECURITIES
         -----------------------------------------

a. Market Price of the Registrant's Common Equity:

               Our  Common  Stock  (NYSE:  PSA) has been  listed on the New York
         Stock  Exchange  since  October 19, 1984.  Our  Depositary  Shares each
         representing  1/1,000 of a share of Equity Stock,  Series A (NYSE:PSAA)
         (see section c. below) have been listed on the New York Stock  Exchange
         since February 14, 2000.

               The  following  table sets forth the high and low sales prices of
         Common  Stock on the New York Stock  Exchange  composite  tapes for the
         applicable periods.

                                                              Range
                                                --------------------------------
         Year                 Quarter               High                  Low
        ------                -------           -------------        -----------
         2005                   1st              $  59.490           $  51.500
                                2nd                 64.500              55.300
                                3rd                 70.450              59.700
                                4th                 72.020              61.360

         2006                   1st                 84.620              67.720
                                2nd                 81.400              70.260
                                3rd                 89.250              75.440
                                4th                 98.050              85.170

               The  following  table sets forth the high and low sales prices of
         Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock,
         Series  A on the  New  York  Stock  Exchange  composite  tapes  for the
         applicable periods.

                                                              Range
                                                --------------------------------
         Year                 Quarter               High                  Low
        ------                -------           -------------        -----------
         2005                    1st             $  29.950           $  27.800
                                 2nd                29.000              27.210
                                 3rd                28.900              27.610
                                 4th                28.650              27.380

         2006                    1st                27.760              26.200
                                 2nd                27.250              25.600
                                 3rd                28.080              26.350
                                 4th                27.700              26.180

               As of February 15, 2007, there were approximately  25,258 holders
         of  record  of  Common  Stock  and  approximately   10,786  holders  of
         Depositary Shares Each Representing 1/1,000 of a share of Equity Stock,
         Series A.

b.       Dividends

               We have paid quarterly  distributions to our  shareholders  since
         1981,  our first  full year of  operations.  Overall  distributions  on
         Common Stock for 2006 amounted to $298.2  million or $2.00 per share of
         Common Stock.

               Holders of Common  Stock are  entitled  to receive  distributions
         when and if declared by our Board of Directors out of any funds legally
         available  for that  purpose.  In order to maintain our REIT status for

         federal income tax purposes, we are generally required to pay dividends
         at least  equal  to 90% of our real  estate  investment  trust  taxable
         income for the taxable year (for this purpose,  certain  dividends paid
         in the  subsequent  year may be taken into  account).  We intend to pay
         distributions sufficient to permit us to maintain our REIT status.

                                       29
<PAGE>

               For Federal income tax purposes,  distributions  to  shareholders
         are treated as ordinary income,  capital gains,  return of capital or a
         combination  thereof.  For  2006,  the  dividends  paid  to the  common
         shareholders ($2.00 per share), on all the various classes of preferred
         stock, and on our Equity Stock, Series A were classified as follows:
<TABLE>
<CAPTION>

                                1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                              ---------------   -------------     --------------    ---------------
<S>                            <C>               <C>               <C>                <C>
Ordinary Income..........      100.0000%         100.0000%         100.0000%          100.0000%
Long-term Capital Gain...      0.0000%           0.0000%           0.0000%            0.0000%
                              ---------------   -------------     --------------    ---------------
Total....................      100.0000%         100.0000%         100.0000%          100.0000%
                              ===============   =============     ==============    ===============
</TABLE>

               For 2005,  the dividends paid to the common  shareholders  ($1.90
         per share),  on all the various classes of preferred  stock, and on our
         Equity Stock, Series A were classified as follows:

<TABLE>
<CAPTION>

                                1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                              ---------------   -------------     --------------    ---------------
<S>                            <C>               <C>               <C>                <C>
Ordinary Income..........      98.5488%          99.3947%          99.9589%           100.0000%
Long-term Capital Gain...      1.4512%           0.6053%           0.0411%            0.0000%
                              ---------------   -------------     --------------    ---------------
Total....................      100.0000%         100.0000%         100.0000%          100.0000%
                              ===============   =============     ==============    ===============
</TABLE>

               A  percentage  of the  long-term  capital  gain  is  unrecaptured
         Section 1250 gain for each quarter of 2005 as follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                ---------------   -------------     --------------    ---------------
<S>                                <C>               <C>               <C>                <C>
Unrecaptured ss.1250 Gain..        7.3110%           0.0000%           8.0542%            0.0000%
                                ===============   =============     ==============    ===============
</TABLE>


               For the corporate shareholders a portion of the long-term capital
         gain is required to be recaptured as ordinary income.  For each quarter
         of 2005 the percentage is as follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                ---------------   -------------     --------------    ---------------
<S>                                <C>               <C>               <C>                <C>
IRC ss.291 Recapture.......        1.4621%           0.0000%           1.6121%            0.0000%
                                ===============   =============     ==============    ===============
</TABLE>

               The  Jobs  and  Growth  Tax  Relief  Reconciliation  Act of  2003
         introduced a new rule that reduces the tax rate for "qualified dividend
         income."  Generally,  qualified  dividend  income  is  dividend  income
         received  from a  corporation  that  has been  taxed  on the  dividends
         distributed to its  shareholders.  Public  Storage,  Inc, as a REIT, is
         generally  not  taxed  on  dividends  it  distributes  annually  to its
         shareholders,  and therefore the dividends shareholders receive are not
         qualified dividend income subject to the lower rates.

c.       Equity Stock

               The Company is authorized to issue  200,000,000  shares of Equity
         Stock. The Articles of Incorporation  provide that the Equity Stock may
         be issued  from time to time in one or more  series and gives the Board
         of Directors  broad  authority  to fix the  dividend  and  distribution
         rights,   conversion  and  voting  rights,  redemption  provisions  and
         liquidation rights of each series of Equity Stock.

               In April  2001,  we  completed  a public  offering  of  2,210,500
         depositary shares each representing 1/1,000 of a share of Equity Stock,
         Series A,  ("Equity  Stock A")  raising net  proceeds of  approximately
         $51,836,000.  In May 2001,  we completed a direct  placement of 830,000

                                       30
<PAGE>

         depositary shares,  raising net proceeds of approximately  $20,294,000.
         In November 2001, we completed a direct placement of 100,000 depositary
         shares,  raising net proceeds of approximately  $2,690,000.  In January
         2000, we issued 4,300,555  depositary  shares (2,200,555 shares as part
         of a special  distribution  declared on November 15, 1999 and 2,100,000
         shares in a  separate  public  offering).  In  addition,  in the second
         quarter of 2000, we issued 52,547  depositary shares to a related party
         in  connection  with the  acquisition  of real  estate  facilities.  In
         December  2000,  we  issued  1,282,500  depositary  shares  in a public
         offering.  All of the issuances of the depositary  shares  described in
         this paragraph were registered  under the Securities Act at the time of
         issuance.

               At  December  31,  2006,  we  had  8,744,193   depositary  shares
         outstanding,  each  representing  1/1,000 of a share of Equity Stock A.
         The Equity  Stock A ranks on a parity with  common  stock and junior to
         the  Senior   Preferred  Stock  with  respect  to   distributions   and
         liquidation and has a liquidation amount which cannot exceed $24.50 per
         share. Distributions with respect to each depositary share shall be the
         lesser of: a) five times the per share  dividend on the Common Stock or
         b) $2.45 per annum.  Except in order to preserve the Company's  Federal
         income tax status as a REIT,  we may not redeem the  depositary  shares
         before  March 31,  2010.  On or after  March 31,  2010,  we may, at our
         option, redeem the depositary shares at $24.50 per depositary share. If
         the Company fails to preserve its Federal  income tax status as a REIT,
         each  depositary  share will be  convertible  into 0.956  shares of our
         common stock. The depositary  shares are otherwise not convertible into
         common stock.  Holders of depositary shares vote as a single class with
         our holders of common stock on shareholder  matters, but the depositary
         shares have the equivalent of one-tenth of a vote per depositary share.
         We have no obligation to pay  distributions on the depositary shares if
         no distributions are paid to common shareholders.

               In November  1999,  we sold  $100,000,000  (4,289,544  shares) of
         Equity Stock,  Series AAA ("Equity  Stock AAA") to a newly formed joint
         venture.  The Equity  Stock AAA ranks on a parity with common stock and
         junior to the Senior Preferred Stock with respect to general preference
         rights,  and  has  liquidation  amount  equal  to  120%  of the  amount
         distributed to each common share.  Annual  distributions  per share are
         equal to the lesser of (i) five times the amount paid per common  share
         or (ii)  $2.1564.  We have no  obligation  to pay  distributions  if no
         distributions are paid to common shareholders.

                                       31

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                                          For the year ended December 31,
                                                    ----------------------------------------------------------------------------
                                                       2006 (1)       2005 (1)        2004 (1)        2003 (1)       2002 (1)
                                                    -------------- -------------   --------------  --------------  -------------
                                                                   (Amounts in thousands, except per share data)
Revenues:
<S>                                                   <C>            <C>              <C>             <C>             <C>
  Rental income and ancillary operations........      $1,349,856     $1,043,600       $952,766        $890,350        $845,273
  Interest and other income.....................          31,799         16,447          5,391           2,537           5,210
                                                    -------------- -------------   --------------  --------------  -------------
                                                       1,381,655      1,060,047        958,157         892,887         850,483
                                                    -------------- -------------   --------------  --------------  -------------
Expenses:
   Cost of operations (excluding depreciation)..         500,560        378,301        361,944         340,871         309,491
  Depreciation and amortization.................         437,984        196,232        182,890         183,863         175,524
  General and administrative....................          84,661         21,115         18,813          17,127          15,619
  Interest expense..............................          33,062          8,216            760           1,121           3,809
                                                    -------------- -------------   --------------  --------------  -------------
                                                       1,056,267        603,864        564,407         542,982         504,443
                                                    -------------- -------------   --------------  --------------  -------------
Income from continuing operations before equity
  in earnings of real estate entities, gain
  (loss) on disposition of real estate
  investments and casualty loss and minority
  interest in income............................         325,388        456,183        393,750         349,905         346,040
Equity in earnings of real estate entities......          11,895         24,883         22,564          24,966          29,888
Gain(loss) on disposition of real estate
  investments and casualty loss.................           2,177          1,182             67           1,007          (2,541)
Foreign currency exchange gain (loss)                        336              -              -               -               -
Income from derivatives, net                               3,926              -              -               -               -
Minority interest in income (3).................         (31,883)       (32,651)       (49,913)        (43,703)        (44,087)
                                                    -------------- -------------   --------------  --------------  -------------
Income from continuing operations...............         311,839        449,597        366,468         332,175         329,300
Cumulative effect of change in accounting
  principle.....................................             578              -              -               -               -
Discontinued operations (2).....................           1,609          6,796           (255)          4,478         (10,562)
                                                    -------------- -------------   --------------  --------------  -------------
Net income......................................        $314,026       $456,393       $366,213        $336,653        $318,738
                                                    ============== =============   ==============  ==============  =============

PER COMMON SHARE:
Distributions...................................          $2.00           $1.90          $1.80           $1.80           $1.80

Net income - Basic..............................          $0.33           $1.98          $1.39           $1.29           $1.15
Net income - Diluted............................          $0.33           $1.97          $1.38           $1.28           $1.14

Weighted average common shares - Basic..........         142,760        128,159        127,836         125,181         123,005
Weighted average common shares - Diluted........         143,715        128,819        128,681         126,517         124,571


BALANCE SHEET DATA:
Total assets....................................     $11,198,473     $5,552,486     $5,204,790      $4,968,069      $4,843,662
Total debt......................................      $1,848,542       $149,647       $145,614         $76,030        $115,867
Minority interest (other partnership interests).        $181,030        $28,970       $118,903        $141,137        $154,499
Minority interest (preferred partnership                $325,000       $225,000       $310,000        $285,000        $285,000
interests)......................................
Shareholders' equity............................      $8,208,045     $4,817,009     $4,429,967      $4,219,799      $4,158,969


OTHER DATA:
Net cash provided by operating activities.......        $791,700       $692,048       $616,664        $571,387        $591,283
Net cash used in investing activities...........       $(487,496)     $(443,656)     $(157,638)      $(205,133)      $(325,786)
Net cash used in financing activities...........       $(244,395)     $(121,146)     $(297,604)      $(264,545)      $(211,720)

</TABLE>



(1)  During 2006,  2005, 2004, 2003 and 2002, we completed  several  significant
     asset acquisitions,  business combinations and equity transactions. See our
     consolidated financial statements and notes thereto.

(2)  Commencing  January 1, 2002,  we adopted and modified a business  plan that
     included   the   closure  or   consolidation   of   certain   non-strategic
     containerized  storage facilities.  We sold two commercial properties - one
     in  2002,  the  other  in  2004.  During  2003  we sold  five  self-storage
     facilities. The historical operations of these facilities are classified as
     discontinued  operations,  with  the  rental  income,  cost of  operations,
     depreciation  expense and gain or loss on disposition  of these  facilities
     for  current and prior  periods  included  in the  line-item  "Discontinued
     Operations" on the consolidated income statement.

                                       32
<PAGE>

(3)  During 2004, holders of $200,000,000 of our Series N preferred  partnership
     units agreed to a restructuring  which included reducing their distribution
     rate  from  9.5%  to  6.4%  in  exchange  for  a  special  distribution  of
     $8,000,000.  This special  distribution,  combined with $2,063,000 in costs
     incurred at the time the units were  originally  issued  that were  charged
     against income in accordance with the Securities and Exchange  Commission's
     clarification  of EITF Topic D-42,  are  included  in minority  interest in
     income.

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

         The following  discussion  and analysis  should be read in  conjunction
with our consolidated financial statements and notes thereto.

         FORWARD LOOKING STATEMENTS: All statements in this document, other than
statements of  historical  fact,  are  forward-looking  statements  which may be
identified  by the  use  of  the  words  "expects,"  "believes,"  "anticipates,"
"should," "estimates" and similar expressions.  These forward-looking statements
involve  known and  unknown  risks  and  uncertainties,  which may cause  Public
Storage's  actual results and performance to be materially  different from those
expressed or implied in the forward-looking  statements.  Factors and risks that
may impact  future  results and  performance  are  described  in Item 1A,  "Risk
Factors" in Part I of this Annual Report on Form 10-K. These risks include,  but
are not limited to, the  following:  risks  related to the merger with  Shurgard
including difficulties that may be encountered in integrating Public Storage and
Shurgard,  loss of  personnel  as a result of the merger,  and the impact of the
merger on  occupancy  and rental  rates,  the  inability to realize or delays in
realizing  expected  results  from the  merger,  unanticipated  operating  costs
resulting from the merger, and risks associated with  international  operations;
changes in  general  economic  conditions  and in the  markets  in which  Public
Storage  operates;  the impact of competition  from new and existing storage and
commercial facilities and other storage  alternatives,  which could impact rents
and occupancy levels at our facilities; difficulties in Public Storage's ability
to evaluate,  finance and integrate  acquired and developed  properties into its
existing  operations  and to fill up those  properties,  which  could  adversely
affect our  profitability;  the impact of the regulatory  environment as well as
national,  state, and local laws and regulations including,  without limitation,
those governing Real Estate Investment Trusts, which could increase our expenses
and reduce cash  available for  distribution;  consumers'  failure to accept the
containerized  storage  concept;  difficulties  in raising capital at reasonable
rates,  which  would  impede  our  ability  to grow;  delays in the  development
process; economic uncertainty due to the impact of war or terrorism. We disclaim
any  obligation  to update  publicly  or  otherwise  revise any  forward-looking
statements,  whether as a result of new  information,  new  estimates,  or other
factors,  events or circumstances after the date of this document,  except where
expressly required by law.

         OVERVIEW

         In the United States,  the self-storage  industry is highly  fragmented
and  is  composed  predominantly  of  numerous  local  and  regional  operators.
Competition in the markets in which we operate is significant  and has increased
over the past  several  years  due to  additional  development  of  self-storage
facilities as well as the  expansion of the  containerized  storage  business by
competitors.  We believe  that the  increase in  competition  has had a negative
impact on our  occupancy  levels and rental rates in many markets.  However,  we
believe that we possess several distinguishing characteristics that enable us to
compete effectively with other owners and operators.

         We are the largest owner and operator of self-storage facilities in the
United  States with direct and indirect  ownership  interests as of December 31,
2006 in 2,003 self-storage  facilities containing  approximately 125 million net
rentable  square feet.  All of our  facilities in the United States are operated
under the "Public  Storage" brand name,  which we believe is the most recognized
and  established  name  in the  self-storage  industry.  Located  in  the  major
metropolitan   markets   of  38  states,   our   self-storage   facilities   are
geographically  diverse,  giving us national  recognition and  prominence.  This
concentration  establishes us as one of the dominant  providers of  self-storage
space in most  markets  in which we operate  and  enables us to use a variety of
promotional  activities,  such as  television  advertising  as well as  targeted
discounting and referrals,  which are generally not economically  viable to most
of our competitors. In addition, we believe that the geographic diversity of the
portfolio  reduces the impact from  regional  economic  downturns and provides a
greater degree of revenue stability.

         On August 22,  2006,  we merged with  Shurgard  Storage  Centers,  Inc.
("Shurgard"). As a result of the merger, we acquired 487 self-storage facilities

                                       33
<PAGE>

located in the United States and 166  facilities  located in seven  countries in
Western Europe. This marks the first time we have owned self-storage  facilities
outside of the  United  States.  The  self-storage  industry  in Europe is still
relatively  new as compared to the United States where it is a mature  industry.
Customer  awareness of the product in Europe is emerging.  All of our facilities
in Europe are operating under the "Shurgard"  brand name.  While  competition in
Europe has been  increasing,  we believe we are the single largest  self-storage
operator in Europe as of December 31, 2006.

         We will continue to focus our growth  strategies  on: (i) improving the
operating  performance of our existing self-storage  properties,  (ii) acquiring
self-storage  properties  owned and  operated  by others,  (iii)  expanding  and
repackaging   our  existing   self-storage   facilities,   (iv)  developing  new
self-storage  locations,  and (v)  participating  in the  growth of PS  Business
Parks, Inc. ("PSB"). Major elements of these strategies are as follows:

     o       We  will  focus  on  enhancing  the  operating  performance  of our
             self-storage  properties,  primarily  through increases in revenues
             achieved  through the telephone  reservation  center and associated
             marketing efforts, as well as management of expense growth.

             As indicated above, in connection with the merger with Shurgard, we
             acquired 487 self-storage  facilities located in the United States.
             Substantially  all of  these  facilities  are  located  in the same
             markets  that we  currently  operate in. We believe that the merger
             will provide us with additional  economies of scale with respect to
             certain  operating  costs that will  ultimately  improve  operating
             margins.  In addition,  at August 31, 2006,  the average  occupancy
             level of the 487 self-storage facilities was approximately 84.4% as
             compared to our existing portfolio's 89.7%. We believe that we will
             be able to increase  the average  occupancy  level of the  acquired
             portfolio to those experienced by our own. These potential benefits
             will take time to  develop  and there can be no  assurance  that we
             will be able to such benefits.

             In Europe, we believe there is opportunity to enhance the operating
             performance.  Since the merger closed, our European  management has
             upgraded systems, reduce overhead costs, and improve revenue growth
             by both improving occupancy levels and rental rates.

     o       We will  acquire  facilities  from  third  parties.  Aside from the
             Shurgard merger,  during 2004, 2005 and 2006, we acquired interests
             in 89  self-storage  facilities  from third parties at an aggregate
             cost of  approximately  $618 million.  We believe that our national
             telephone  reservation  system and our  marketing  and  promotional
             activities  present an  opportunity  to increase  revenues at these
             facilities through higher occupancies, as well as cost efficiencies
             through  greater  critical  mass.   During  2006,  our  acquisition
             activities slowed down significantly,  primarily because we focused
             our attention on the merger with Shurgard. Notwithstanding, finding
             high quality  self-storage  facilities,  in desirable  markets,  at
             attractive prices is becoming more difficult.

     o       We will  look to  expand  and  further  invest  into  our  existing
             self-storage locations by (i) improving their visual and structural
             appeal,  (ii) expanding our  facilities'  density,  at a per-square
             foot cost that is favorable compared to a ground-up development, to
             take  advantage of  increases in local demand since the  facilities
             were  developed,   and  (iii)  converting   existing  vacant  space
             previously  used  by  our  containerized  storage  operations  into
             traditional  self-storage  space.  At December 31, 2006,  we have a
             "pipeline"  of 48 such  projects in the United  States to expand or
             repackage our existing facilities, and to convert substantially all
             of the remaining vacant space previously used by our  containerized
             storage operations, for an aggregate of approximately $188 million,
             which will add  approximately  2,256,000 net rentable  square feet.
             Completion of these projects is subject to contingencies, including
             obtaining  governmental  agency approvals.  We continue to evaluate
             our existing real estate portfolio to identify additional expansion
             and repackaging opportunities.

                                       34
<PAGE>

     o       In 2005 and  2006,  our  rate of  development  of new  self-storage
             facilities  has declined due to  increases  in  construction  cost,
             increases in competition  with retail,  condominium,  and apartment
             operators for quality  self-storage  sites in urban locations,  and
             more  difficult  zoning  and  permitting  requirements.   We  will,
             however,   continue  to  seek  favorable   sites  and  markets  for
             development.

     o       Through our  investment in PSB, we will continue to  participate in
             the potential growth of this company's  investment in approximately
             18.7  million  net  rentable  square  feet of  commercial  space at
             December 31, 2006.

         CRITICAL ACCOUNTING POLICIES

         Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses our consolidated  financial statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States ("GAAP").  The preparation of our financial statements and related
disclosures  in  conformity  with GAAP and our  discussion  and  analysis of our
financial  condition  and  results of  operations  requires  management  to make
judgments,  assumptions  and estimates  that affect the amounts  reported in our
consolidated  financial  statements  and  accompanying  notes.  Note  2  to  our
consolidated  financial  statements in Item 8 of this Form 10-K  summarizes  the
significant  accounting  policies  and methods  used in the  preparation  of our
consolidated financial statements and related disclosures.

         Management  believes the  following  are critical  accounting  policies
whose application has a material impact on the Company's financial presentation.
That is, they are both important to the portrayal of our financial condition and
results,  and they require  management to make  judgments  and  estimates  about
matters that are inherently uncertain.

         QUALIFICATION  AS A REIT - INCOME TAX EXPENSE:  We believe that we have
been  organized  and  operated,  and we  intend to  continue  to  operate,  as a
qualifying Real Estate Investment Trust ("REIT") under the Internal Revenue Code
and applicable state laws. We also believe that Shurgard  qualified as a REIT. A
qualifying  REIT  generally  does not pay  corporate  level  income taxes on its
taxable income that is distributed to its shareholders,  and accordingly,  we do
not pay income tax on the share of our taxable income that is distributed to our
shareholders.

         We therefore do not estimate or accrue any federal  income tax expense.
This estimate could be incorrect,  because due to the complex nature of the REIT
qualification requirements, the ongoing importance of factual determinations and
the  possibility  of future changes in our  circumstances,  we cannot be assured
that we actually have satisfied or will satisfy the requirements for taxation as
a REIT for any  particular  taxable  year.  For any taxable year that we fail or
have failed to qualify as a REIT and applicable relief provisions did not apply,
we would be taxed at the regular  corporate  rates on all of our taxable income,
whether  or not we made or  make  any  distributions  to our  shareholders.  Any
resulting  requirement  to pay corporate  income tax,  including any  applicable
penalties or interest,  could have a material  adverse  impact on our  financial
condition or results of  operations.  Unless  entitled to relief under  specific
statutory provisions,  we also would be disqualified from taxation as a REIT for
the four taxable years following the year during which  qualification  was lost.
There can be no assurance that we would be entitled to any statutory  relief. In
addition,  if  Shurgard  failed to qualify as a REIT,  we  generally  would have
succeeded to or incurred significant tax liabilities.

         IMPAIRMENT  OF  LONG-LIVED  ASSETS:  Substantially  all of  our  assets
consist  of  long-lived  assets,  including  real  estate,  goodwill,  and other
intangible  assets.  We evaluate our goodwill for impairment on an annual basis,
and on a quarterly basis evaluate other  long-lived  assets for  impairment.  As
described in Note 2 to our consolidated financial statements,  the evaluation of
goodwill  for  impairment  entails  valuation  of the  reporting  unit to  which
goodwill  is  allocated,  which  involves  significant  judgment  in the area of
projecting  earnings,  determining  appropriate  price-earnings  multiples,  and
discount  rates.  In addition,  the  evaluation of other  long-lived  assets for
impairment requires determining whether indicators of impairment exist, which is
a  subjective  process.  When  any  indicators  of  impairment  are  found,  the
evaluation  of  such  long-lived  assets  then  entails  projections  of  future
operating cash flows, which also involves  significant  judgment.  We identified
impairment  charges in the year ended  December  31, 2004 related to our plan to
close and consolidate certain  containerized  storage facilities - see Note 4 to
our consolidated financial statements. Future events, or facts and circumstances
that  currently  exist,  that we have  not yet  identified,  could  cause  us to
conclude in the future that other long-lived assets are impaired.  Any resulting
impairment loss could have a material adverse impact on our financial  condition
and results of operations.

                                       35
<PAGE>

         ESTIMATED USEFUL LIVES OF LONG-LIVED  ASSETS:  Substantially all of our
assets consist of depreciable, long-lived assets. We record depreciation expense
with respect to these assets based upon their estimated useful lives. Any change
in the estimated useful lives of those assets,  caused by functional or economic
obsolescence  or other  factors,  could  have a material  adverse  impact on our
financial condition or results of operations.

         ESTIMATED  LEVEL OF RETAINED RISK AND UNPAID TENANT CLAIM  LIABILITIES:
As  described in Notes 2 and 17 to our  consolidated  financial  statements,  we
retain certain risks with respect to property perils, legal liability, and other
such risks.  In addition,  a  wholly-owned  subsidiary of the Company  reinsures
policies   against  claims  for  losses  to  goods  stored  by  tenants  in  our
self-storage facilities.  In connection with these risks, we accrue losses based
upon the estimated level of losses incurred using certain actuarial  assumptions
followed  in the  insurance  industry  and  based  on  recommendations  from  an
independent actuary that is a member of the American Academy of Actuaries. While
we believe  that the amounts of the accrued  losses are  adequate,  the ultimate
liability may be in excess of or less than the amounts recorded. At December 31,
2006,  we had  approximately  403,000  reinsured  policies in the United  States
outstanding representing aggregate coverage of approximately $1 billion.

         ACCRUALS  FOR  CONTINGENCIES:  We are  exposed  to  business  and legal
liability  risks with respect to events that have  occurred,  but in  accordance
with GAAP, we have not accrued for such potential  liabilities  because the loss
is either  not  probable  or not  estimable  or  because we are not aware of the
event.  Future events and the result of pending  litigation could result in such
potential  losses becoming  probable and estimable,  which could have a material
adverse  impact on our  financial  condition or results of  operations.  Some of
these potential  losses,  of which we are aware, are described in Note 17 to our
consolidated financial statements.

         ACCRUALS FOR OPERATING EXPENSES: We accrue for property tax expense and
certain other operating  expenses based upon estimates and historical trends and
current and anticipated  local and state government  rules and  regulations.  If
these estimates and assumptions are incorrect,  our expenses could be misstated.
Cost of operations,  interest expense,  general and administrative  expense,  as
well as television, yellow page, and other advertising expenditures are expensed
as incurred.

         VALUATION OF DERIVATIVES:  As described in our  Significant  Accounting
Policies in Note 2 to our  consolidated  financial  statements,  our  derivative
instruments are not considered  effective  hedges.  Accordingly,  any changes in
value of these  derivatives  are  reflected  as an  increase  or decrease in net
income.  The determination of the value of derivatives is based upon significant
judgment and assumptions  including interest rates, currency rates, and expected
rates of return.  The actual value of derivative  instruments  is dependent upon
many factors that our judgments  and  assumptions  may not consider,  or may not
consider effectively.

         VALUATION  OF  ASSETS  AND  LIABILITIES  ACQUIRED  IN THE  MERGER  WITH
SHURGARD:  In recording the merger with Shurgard, we have estimated the value of
real estate, intangible assets, debt, and the other assets and other liabilities
of Shurgard  that we acquired.  In addition,  we have  estimated the fair market
value of the 38.9 million  shares that we issued to the  Shurgard  shareholders.
These value estimates are based upon many assumptions, including interest rates,
market values of land and  buildings in the United States and Europe,  estimated
future  cash flows  from the tenant  base in place,  and the  recoverability  of
certain  assets.  While we believe that the  assumptions we used are reasonable,
these  assumptions are subject to a significant  degree of judgment,  and others
could come to materially different conclusions as to value. If these assumptions
were computed differently,  our depreciation and amortization expense,  interest
expense, real estate, debt, and intangible assets could be materially different.
Further, these valuation estimates are preliminary, subject to further analysis,
and could change.

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

         NET  INCOME:  Net  income  for the year  ended  December  31,  2006 was
$314,026,000 compared to $456,393,000 for the same period in 2005,  representing
a  decrease  of  $142,367,000,  or  31%.  This  decrease  is  primarily  due  to
significant  increases in depreciation  and  amortization  expense,  general and
administrative  expense and  interest  expense.  Depreciation  and  amortization

                                       36
<PAGE>

increased by  approximately  $242 million due  primarily to the addition of real
estate facilities and intangible assets acquired in the merger with Shurgard and
the corresponding  depreciation and amortization related to such assets. General
and  administrative  expense increased by approximately $64 million  principally
from incurring  approximately $44 million in integration expenses related to the
Shurgard merger.  At December 31, 2006, we have $1.3 billion of debt outstanding
that was assumed in the  Shurgard  merger,  and, as a result,  interest  expense
increased by approximately $25 million.

         Net  income  for the year  ended  December  31,  2005 was  $456,393,000
compared to $366,213,000  for the same period in 2004,  representing an increase
of $90,180,000, or 25%. This increase is primarily due to improved net operating
income (before  depreciation)  from our Same Store, newly developed and acquired
self-storage facilities, reduced minority interest in income, increased gains on
the  disposition of real estate assets and higher interest  income.  These items
were partially  offset by increases in depreciation  associated with acquisition
and development  activities,  general and administrative  expense,  and interest
expense.

         ALLOCATIONS OF INCOME AMONG  SHAREHOLDERS:  In computing the net income
allocable to common  shareholders  for each period,  we have  deducted  from net
income (i)  distributions  paid to the  holders of the  Equity  Stock,  Series A
totaling $21,424,000 in 2006,  $21,443,000 in 2005 and $21,501,000 in 2004, (ii)
distributions paid to our preferred  shareholders totaling $214,218,000 in 2006,
$173,017,000 in 2005 and  $157,925,000  in 2004, and (iii) amounts  allocated to
preferred  shareholders in connection with preferred stock redemption activities
as  described  below,  totaling  $31,493,000  in  2006,  $7,538,000  in 2005 and
$8,724,000 in 2004. The year-over-year increase in the distributions paid to our
preferred   shareholders  is  due  to  the  issuance  of  additional   preferred
securities,  partially offset by the redemption of preferred securities that had
higher dividend rates than the newly issued preferred securities.

         NET INCOME PER SHARE: Net income  allocable to our common  shareholders
(after  allocating  net income to our  preferred  and equity  shareholders)  was
$46,891,000  or $0.33 per  common  share on a diluted  basis for the year  ended
December  31,  2006  compared  to  $254,395,000  or $1.97 per common  share on a
diluted basis for the same period in 2005,  representing a decrease of $1.64 per
common  share,  or a decrease of 83%. The  decreases in net income  allocable to
common  shareholders  and earnings per common diluted share are due primarily to
the impact of the factors  described  above,  in addition  to  increased  income
allocated to preferred  shareholders,  described below. Weighted average diluted
shares   increased  to  143,715,000  for  year  ended  December  31,  2006  from
128,819,000  for the year ended  December  31,  2005.  The  increase in weighted
average  diluted shares is due primarily to the issuance of  approximately  38.9
million shares in the merger with  Shurgard,  which are included in our weighted
averages shares from August 22, 2006 through December 31, 2006.

         Net income was $1.97 per  diluted  common  share for 2005  compared  to
$1.38 per diluted common share for 2004.  This increase was  attributable to the
factors denoted above with respect to net income offset partially by an increase
in income  allocated  to preferred  shareholders,  as  described  above,  and an
increase in diluted shares  outstanding  from 128,681,000 in 2004 to 128,819,000
in 2005. The increase in shares outstanding was due primarily to the issuance of
shares in connection with the exercise of employee stock options.

         As described more fully under "Liquidity and Capital  Resources" below,
we have approximately $172,500,000 in higher coupon preferred stock that becomes
available for redemption  during 2007.  While there is no assurance that we will
be able to raise the necessary  capital and at appropriate rates to redeem these
securities,  if we do redeem  these  securities,  we expect  allocations  to our
preferred  shareholders  based upon  distributions  paid to  decrease.  However,
during  2007  there  would  be  an   additional   allocation  to  the  preferred
shareholders of approximately $5.6 million if these redemptions are completed.

REAL ESTATE OPERATIONS
--------------------------------------------------------------------------------

         Domestic Self-Storage Operations:  Our domestic self-storage operations
are by far the  largest  component  of our  operating  activities,  representing
approximately  90% of our total  revenues  generated for the year ended December
31, 2006. Rental income with respect to our domestic self-storage operations has

                                       37
<PAGE>

grown from  $951,370,000  in 2005 to  $1,180,234,000  in 2006,  representing  an
increase  of   $228,864,000,   or  approximately   24.1%.   The   year-over-year
improvements  in rental income are due to  improvements  in the  performance  of
those  facilities  that we owned  prior to  January  1, 2004 (our  "Same  Store"
facilities), and the addition of new facilities to our portfolio, either through
our acquisition or development activities.

         To enhance year-over-year comparisons,  the following table summarizes,
and the  ensuing  discussion  describes  the  operating  results of these  three
groups, our Same Store group, acquisition facilities and development facilities.

Domestic self - storage operations summary:
<TABLE>
<CAPTION>

                                                          Year Ended December 31,                Year Ended December 31,
                                                   ------------------------------------- ---------------------------------------
                                                                              Percentage                             Percentage
                                                        2006         2005       Change        2005         2004        Change
                                                   ------------- ----------- ----------- ----------- ------------   ------------
                                                                           (Dollar amounts in thousands)
Rental income:
<S>                                                 <C>          <C>              <C>    <C>          <C>                 <C>
   Same Store Facilities.......................     $  859,776   $  818,378       5.1%   $  818,378   $  779,259          5.0%
   Acquired Facilities.........................        207,746       39,691      423.4%      39,691        4,705        743.6%
   Development Facilities......................        112,712       93,301       20.8%      93,301       77,701         20.1%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
     Total rental income.......................      1,180,234      951,370       24.1%     951,370      861,665         10.4%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
Cost of operations before depreciation and
    amortization (a):
   Same Store Facilities.......................        284,624      271,330        4.9%     271,330      270,261          0.4%
   Acquired Facilities.........................         76,084       16,780      353.4%      16,780        1,606        944.8%
   Development Facilities......................         38,052       32,479       17.2%      32,479       28,488         14.0%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
      Total cost of operations.................        398,760      320,589       24.4%     320,589      300,355          6.7%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
Net operating income before depreciation and
    amortization(a):
   Same Store Facilities.......................        575,152      547,048        5.1%     547,048      508,998          7.5%
   Acquired Facilities.........................        131,662       22,911      474.7%      22,911        3,099        639.3%
   Development Facilities......................         74,660       60,822       22.7%      60,822       49,213         23.6%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
   Total net operating income before
        depreciation and amortization (a)......        781,474      630,781       23.9%     630,781      561,310         12.4%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
Depreciation and amortization expense:
   Same Store Facilities.......................       (150,487)    (156,832)      (4.0)%   (156,832)    (153,405)         2.2%
   Acquired Facilities.........................       (196,393)     (10,120)   1,840.6%     (10,120)        (892)     1,034.5%
   Development Facilities......................        (27,963)     (24,150)      15.8%     (24,150)     (21,933)        10.1%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
   Total depreciation and amortization expense.       (374,843)    (191,102)      96.2%    (191,102)    (176,230)         8.4%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
Net operating income (loss):
   Same Store Facilities.......................        424,665      390,216        8.8%     390,216      355,593          9.7%
   Acquired Facilities.........................        (64,731)      12,791     (606.1)%     12,791        2,207        479.6%
   Development Facilities......................         46,697       36,672       27.3%      36,672       27,280         34.4%
                                                   ------------- ----------- ----------- ----------- ------------   ------------
   Total net operating income..................       $406,631    $ 439,679       (7.5)% $  439,679    $ 385,080         14.2%
                                                   ============= =========== =========== =========== ============   =============
Weighted average for the fiscal year...........         88.6%        89.6%        (1.1)%      89.9%        90.0%         (0.1)%
Number of self-storage facilities (at end of
period)........................................         1,981        1,461         35.6%      1,461        1,423          2.7%
Net rentable square feet (in thousands, at end
   of period):.................................       124,003       89,023         39.3%     89,023       85,149          4.5%

</TABLE>

(a)  Total net operating income before depreciation and amortization, which is a
     non-GAAP measure,  for our self-storage  segment is presented in Note 15 to
     our  December  31,  2006  consolidated   financial   statements,   "Segment
     Information,"  which  includes a  reconciliation  of net  operating  income
     before  depreciation  and amortization for this segment to our consolidated
     net income.

                                       38

<PAGE>

         In the above  table,  the  significant  changes  in  various  operating
metrics in 2006 as compared to 2005,  is  primarily  due to the  acquisition  of
self-storage  facilities in connection  with the merger with Shurgard  which was
completed  on  August  22,  2006  (see  Note  3 to  the  consolidated  financial
statements).   As  a  result  of  the  merger,  we  acquired  interests  in  487
self-storage  facilities  (32.3 million net rentable square feet) located in the
United States,  including 459 wholly-owned facilities and 28 facilities owned by
joint ventures in which we have an interest. The operating results of all of the
facilities  acquired in the merger and located in the United States are included
in our financial statements and in the above table for the period from the close
of the merger through December 31, 2006.

         Immediately  preceding  the close of the  merger,  all of the  acquired
facilities in the United  States were  integrated  into our property  management
systems,  centralized  pricing  systems,  national  call  center,  and  website.
Temporary  signage,  re-branding  the  facilities  from  "Shurgard"  to  "Public
Storage",  was also put into place  immediately  after the close of the  merger.
Over the past few months,  we have been  replacing  the  temporary  signage with
permanent signage and we anticipate that this process will be completed by March
31, 2007.

         In the field our property  management  personnel  worked  diligently to
absorb this large  acquisition of  facilities.  Training and hiring new property
managers were key elements for the successful integration process. New employees
needed to be trained on how to use our  property  management  systems and follow
our operating  policies and procedures.  As expected in a merger of this nature,
immediately  following the close of the merger turnover at the property  manager
level was higher than we normally experience.  In anticipation of such turnover,
we hired  additional  "bench"  property  managers to fill openings when turnover
occurred.  Although this strategy was effective at keeping properties opened for
business,  it did result in  incurring  additional  payroll  costs in the fourth
quarter of 2006 due to the additional head count.

         As a result  of the  merger,  the  amount  of  vacant  space  increased
significantly in our system.  The acquired Shurgard  portfolio of 487 facilities
in the United States had in aggregate  average square foot occupancy of 84.4% at
August 31, 2006 as compared to 89.7% for the existing Public Storage  portfolio.
Average rental rates were approximately the same for each of the portfolios. One
of our goals is to improve rental income generated by the Shurgard  portfolio by
improving its overall  occupancy level to the occupancy level experienced by our
existing portfolio. In order to increase move-in volumes and ultimately increase
occupancy  levels as quickly as  possible,  we began to be much more  aggressive
with our pricing, promotional discounts and marketing programs during the fourth
quarter  of 2006 and into the  2007.  This  strategy  has put some  pressure  on
occupancies  and rental rate growth on the Public Storage Same Store  facilities
(as discussed below) as we shift demand to the other properties and as we adjust
the level of  discounts  and monthly  rents.  Compounding  the  difficulties  in
improving  the  occupancy  levels of the  Shurgard  portfolio is that the fourth
quarter is seasonally the lowest with respect to demand for storage space.

         It is often  difficult  to see the  benefits  of these  programs in the
short-term  as  promotional  discounts and marketing  expense  adversely  affect
earnings in the month the customer  moves in. Our  strategy  will be to continue
with aggressive pricing,  promotional discounts and marketing to improve overall
occupancy levels.

         We continue to believe that the  acquisition of the Shurgard  portfolio
will provide operational  efficiencies,  specifically in the areas of marketing,
national call center, and indirect overhead costs that support the operations of
the  facilities.  Such  efficiencies  have yet to be realized  due to the recent
integration,  increased  property  manager  head count and  increased  marketing
costs, as noted above.

         In the discussion  that follows,  we present  realized  annual rent per
occupied square foot,  which is computed by dividing rental income,  before late
charges and administrative fees, by the weighted average occupied square footage
for the period.  We also present  annualized  rental income per available square
foot ("REVPAF"),  which represents annualized rental income, before late charges
and  administrative  fees,  divided by total available net rentable square feet.
Late charges and  administrative  fees are excluded to more effectively  measure
our ongoing level of revenue associated with the leasing of the units.

         Domestic - Same Store Facilities

         The Same  Store  Facilities  contain  approximately  73.9  million  net
rentable  square  feet,  representing  approximately  60% of the  aggregate  net
rentable  square  feet  of our  consolidated  domestic  self-storage  portfolio.

                                       39
<PAGE>

Revenues and operating expenses with respect to this group of properties are set
forth in the above Self-Storage  Operations table under the caption, "Same Store
Facilities."  These facilities are included in the Same Store Facilities because
they are all  stabilized  and owned since January 1, 2004 and therefore  provide
meaningful  comparative  data for 2004,  2005 and 2006. The following table sets
forth additional operating data with respect to the Same Store Facilities:


SAME STORE FACILITIES
<TABLE>
<CAPTION>

                                                               Year Ended December 31,                 Year Ended December 31,
                                                        -------------------------------------  -------------------------------------
                                                                                   Percentage                             Percentage
                                                            2006         2005        Change        2005         2004        Change
                                                        ------------- ----------- -----------  ------------- ----------- -----------
                                                               (Dollar amounts in thousands, except weighted average amounts)

<S>                                                      <C>           <C>            <C>     <C>           <C>              <C>
Rental income......................................      $  821,204    $ 782,076      5.0%    $   782,076   $  746,461       4.8%
Late charges and administrative fees collected.....          38,572       36,302      6.3%         36,302       32,798      10.7%
                                                        ------------- ----------- -----------  ------------- ----------- -----------
   Total rental income.............................         859,776      818,378      5.1%        818,378      779,259       5.0%
                                                        ------------- ----------- -----------  ------------- ----------- -----------
Cost of operations before depreciation and amortization:
     Payroll expense...............................          86,919       82,468      5.4%         82,468       83,984      (1.8)%
     Property taxes................................          78,152       74,931      4.3%         74,931       72,986       2.7%
     Repairs and maintenance.......................          27,980       26,237      6.6%         26,237       26,294      (0.2)%
     Advertising and promotion.....................          25,194       23,862      5.6%         23,862       22,338       6.8%
     Utilities.....................................          18,822       17,426      8.0%         17,426       16,168       7.8%
     Property insurance............................           8,937        8,125     10.0%          8,125        9,090     (10.6)%
     Telephone reservation center..................           7,932        7,960     (0.4)%         7,960       10,699     (25.6)%
     Other cost of management......................          30,688       30,321      1.2%         30,321       28,702       5.6%
                                                        ------------- ----------- -----------  ------------- ----------- -----------
   Total cost of operations........................         284,624      271,330      4.9%        271,330      270,261       0.4%
                                                        ------------- ----------- -----------  ------------- ----------- -----------
Net operating income before depreciation and
amortization (e)...................................         575,152      547,048      5.1%        547,048      508,998       7.5%
Depreciation and amortization......................        (150,487)    (156,832)    (4.0)%      (156,832)    (153,405)      2.2%
                                                        ------------- ----------- -----------  ------------- ----------- -----------
 Net operating income..............................      $   424,665  $  390,216      8.8%    $   390,216  $   355,593       9.7%
                                                        ============= =========== ===========  ============= =========== ===========
Gross margin (before depreciation and amortization)          66.9%        66.8%       0.1%         66.8%        65.3%        2.3%

Weighted average for the fiscal year:
   Square foot occupancy (a).......................          90.9%        91.1%      (0.2)%        91.1%        91.0%        0.1%
   Realized annual rent per occupied square foot (b)        $12.22       $11.61       5.3%        $11.61       $11.09        4.7%
   REVPAF (c)......................................         $11.11       $10.58       5.0%        $10.58       $10.09        4.9%

 Weighted average at December 31:
   Square foot occupancy...........................          89.4%        89.8%      (0.4)%        89.8%        90.1%       (0.3)%
   In place annual rent per occupied square foot (d)        $13.32       $12.86       3.6%        $12.86       $12.21        5.3%

Total net rentable square feet (in thousands)......         73,946       73,946                   73,946       73,946

</TABLE>

(a)  Square foot occupancies  represent  weighted average  occupancy levels over
     the entire period.

(b)  Realized  annual  rent per  occupied  square  foot is  computed by dividing
     rental  income,  prior to late  charges  and  administrative  fees,  by the
     weighted  average  occupied square footage for the period.  Realized annual
     rent  per  occupied  square  foot  takes  into  consideration   promotional
     discounts,  credit card fees and other costs that reduce rental income from
     the contractual amounts due.

(c)  Annualized  rental income per available  square foot ("REVPAF")  represents
     annualized rental income,  prior to late charges and  administrative  fees,
     divided by total available net rentable square feet.

(d)  In place  annual  rent  per  occupied  square  foot  represents  annualized
     contractual   rents  per  occupied  square  foot  without   reductions  for
     promotional discounts, and excludes late charges and administrative fees.

(e)  Total net operating income before depreciation and amortization, which is a
     non-GAAP measure, for our Same Store facilities represents a portion of our
     total self-storage  segment's net operating income before  depreciation and
     amortization,  and  is  reconciled  to  the  segment  total  in  the  table
     "self-storage  operations  summary"  above. A  reconciliation  of our total
     self-storage   segment's  net  operating  income  before  depreciation  and
     amortization  to  consolidated  net  income is  included  in Note 15 to our
     December 31, 2006 consolidated financial statements, "Segment Information."

                                       40
<PAGE>

         Rental income increased approximately 5.1% in 2006 as compared to 2005.
This increase was  primarily  attributable  to higher  average  realized  annual
rental  rates per  occupied  square  foot,  which  were  5.3%  higher in 2006 as
compared to 2005,  offset partially by slightly lower occupancy  levels.  Rental
income increased  approximately  5.0% in 2005 as compared to 2004. This increase
was primarily  attributable  to higher average  realized annual rental rates per
occupied  square foot,  which were 4.7% higher in 2005 as compared to 2004.  Our
occupancy  levels remained flat on a year-over-year  basis at approximately  91%
for each period.

         In 2005,  the  quarterly  year-over-year  growth in rental  income  was
consistent for each quarter: 5.1% for the quarter ended March 31, 2005, 4.9% for
the quarter ended June 30, 2005,  5.0% for the quarter ended  September 30, 2005
and 5.1% for the quarter ended  December 31, 2005.  These trends  continued into
2006, as rental income growth was 5.1% for the quarter ended March 31, 2006, and
started  accelerating  to 5.7% for the quarter  ended June 30, 2006 and 6.1% for
the quarter ended  September 30, 2006.  For the quarter ended December 31, 2006,
the  year-over-year  growth in rental income slowed to 3.4%.  This  reduction in
growth was the result of lower  occupancy  levels  combined  with a reduction in
year-over-year growth in realized rents.

         It is difficult for us to pin point the exact causes for this slow down
and to the degree that such causes have negatively affected the growth in rental
income. We believe,  however,  that the reduction was due to a number of factors
including; (i) the increased number of vacant spaces added to our overall system
as a result of the Shurgard merger, (ii) hurricane activity that created unusual
demand  for  storage  space in our  Florida  markets  in 2005 and  2004,  making
year-over-year trends in 2006 less favorable, (iii) general economic conditions,
specifically  the slow down in  housing  sales  and  moving  activity,  and (iv)
increased competition. Many of these factors are beyond our control.

         As indicated  above,  it is our  objective to close the  occupancy  gap
between the acquired  Shurgard  properties  versus the Public  Storage  existing
portfolio.  We  believe,  at least in the short  term,  this  strategy  will put
pressure  on  occupancies  and rental  rate  growth on our  existing  Same Store
facilities as demand appears to have shifted  somewhat to the acquired  Shurgard
facilities as we adjust the level of discounts and monthly rents at the acquired
Shurgard  facilities  to accelerate  occupancy  growth.  Notwithstanding,  it is
important for us to maintain our occupancy  levels in our Same Store  portfolio,
accordingly,  we have  adjusted  rental  rates  and  the  level  of  promotional
discounts offered to new tenants as a means to expand move-in volumes throughout
the entire portfolio.  It has been, and will continue to be,  challenging in the
near term to maintain  occupancy  levels at our Same Store group of  facilities,
while at the same time  trying to rapidly  improve the  occupancy  levels of the
acquired  Shurgard  facilities.  Compounding  this  challenge is that the months
following  the close of the  merger  are  months  when  demand  for  storage  is
typically weak. We experience  seasonal  fluctuations in the occupancy levels of
self-storage  facilities with occupancies  generally higher in the summer months
than in the winter  months.  We believe that these  fluctuations  result in part
from increased moving activity during the summer.

         Cost of operations (excluding  depreciation and amortization) increased
by 4.9% in 2006 as  compared  to the same  period  in 2005.  Cost of  operations
increased by 0.4% in 2005 as compared to 2004.

         Payroll  expense has  increased  5.4% in 2006 as compared to 2005,  due
principally  to higher wage rates  required for some of our job  classifications
because of a tighter labor market in several market areas, higher overtime hours
required  due to  understaffing  issues,  and the  absence of an  adjustment  to
workers compensation made in 2005. The underlying  compensation to our personnel
increased in 2004 and 2005,  as our field  organization  focused upon  improving
customer  service  and  productivity.  However,  over the last few years we have
bolstered  our safety  programs  and improved  our workers  compensation  claims
management  skills.  These  efforts had a positive  impact on  reducing  workers
compensation claims, and reduced the level of liability for future claims during
2005. This resulted in a significant  reduction in workers  compensation expense
in 2005 and 2004 with the adjustment  being much higher in 2005 and resulting in
a decrease in overall payroll expense as compared to 2004.

         Repairs and maintenance expenditures increased 6.6% in 2006 as compared
to 2005. During the second quarter, we experienced higher repair and maintenance
costs to address certain deferred maintenance issues localized to a few markets.
We expect this trend to continue in 2007. Repairs and maintenance  includes snow
removal costs, which decreased $769,000 or 37% in 2006 as compared to 2005. Snow
removal  costs had  increased  in 2005 as  compared  to 2004,  however,  overall
repairs and maintenance costs were flat.

         Advertising and promotion is comprised principally of media (television
and radio),  yellow page, and internet  advertising.  Advertising  and promotion
costs  increased 5.6% in 2006 as compared to 2005 as we  significantly  expanded

                                       41
<PAGE>

our media programs to advertise our aggressive pricing and promotional  discount
programs in order to improve incremental move-in volumes throughout the domestic
portfolio. Advertising and promotion costs increased 6.8% in 2005 as compared to
2004.  Yellow  page  advertising  has  stayed  relatively  stable in each of the
periods.  Media  advertising,   principally   television,   has  increased  from
$10,458,000 in 2004 to $10,998,000 in 2005 and $11,275,000 in 2006. Our internet
advertising  expense has  continued to increase as a  percentage  of our overall
expenditures,  increasing  from  $704,000  in 2004  to  $1,984,000  in 2005  and
$2,779,000 in 2006. We expect that internet advertising will continue to grow as
that marketing channel becomes a more important source of new tenants,  and that
yellow page advertising will remain relatively stable.  Future media advertising
expenditures  are not  determinable  at this time, and will be driven in part by
demand  for  our  self-storage  spaces  as well as our  evaluation  of the  most
effective mix of yellow page, media, and internet advertising.

         As described below under  "Shurgard  Domestic  Same-Store  Facilities,"
certain cost savings in the area of yellow page advertising,  payroll,  and call
center  expenses will benefit the  same-store  facilities as these  benefits are
allocated among all the facilities in our portfolio.

         Utility  expenses   increased  7.8%  in  2005  and  8.0%  in  2006  due
principally  to higher energy  costs.  These levels of increases are expected to
persist during 2007.

         Insurance   expense  increased  10.0%  in  2006  as  compared  to  2005
reflecting  significant increases in property insurance resulting primarily from
the hurricanes  experienced in 2005.  These rate increases became effective with
our policy year starting April 1, 2006. We expect to realize  certain  economies
due to the merger  with  Shurgard  and,  accordingly,  expect the  increases  to
moderate in the first quarter of 2007. In 2005, insurance expense declined 10.6%
as compared to 2004 due to improved cost  controls as well as a somewhat  softer
insurance market allowing us to get improved premiums on our policies.

         Telephone reservation center costs were $10,699,000 in 2004, $7,960,000
in 2005 and  $7,932,000  in 2006.  During  the  last  half of 2006,  we began to
realize  certain  benefits from increased  staffing  through  better  conversion
ratios and lower  temporary  staffing  costs.  We believe that the 2005 and 2006
expenses  represents  the  stabilized  level of  expenditures  for our telephone
reservation  center given the current number of  self-storage  facilities in our
portfolio and the related call volume.

         The following table summarizes  selected quarterly  financial data with
respect to the Same Store Facilities:

                                       42
<PAGE>

<TABLE>
<CAPTION>

                                               For the Quarter Ended
                     -----------------------------------------------------------------------
                         March 31            June 30       September 30         December 31        Entire Year
                     ----------------  ----------------- -----------------  ---------------- -------------------
                             (Amounts in thousands, except for per square foot amount)
Total rental income:
<S>                   <C>                <C>                 <C>                 <C>               <C>
     2006             $   208,228        $   214,832         $  221,386          $  215,330        $   859,776
     2005             $   198,059        $   203,302         $  208,745          $  208,272        $   818,378
     2004             $   188,535        $   193,833         $  198,754          $  198,137        $   779,259

Total cost of operations
(excluding depreciation
and amortization):
     2006             $    72,030        $    72,749         $   71,115          $   68,730        $   284,624
     2005             $    69,991        $    67,736         $   67,730          $   65,873        $   271,330
     2004             $    68,439        $    67,057         $   66,514          $   68,251        $   270,261

Property tax expense:
     2006             $    20,663        $    19,346         $   20,376          $   17,767        $    78,152
     2005             $    19,931        $    18,402         $   19,573          $   17,025        $    74,931
     2004             $    19,379        $    17,745         $   18,746          $   17,116        $    72,986

Media advertising expense:
     2006             $     3,978        $     2,611         $    1,002          $    3,684        $    11,275
     2005             $     3,588        $     2,955         $    2,314          $    2,141        $    10,998
     2004             $     3,377        $     1,972         $    2,019          $    3,090        $    10,458

REVPAF:
     2006             $    10.77         $    11.10          $   11.43           $    11.12        $    11.11
     2005             $    10.25         $    10.52          $   10.77           $    10.76        $    10.58
     2004             $     9.76         $    10.05          $   10.31           $    10.27        $    10.09

Weighted average realized
 annual rent per occupied
 square foot:
     2006             $    11.94         $    12.05          $   12.50           $    12.39        $    12.22
     2005             $    11.41         $    11.42          $   11.75           $    11.89        $    11.61
     2004             $    10.88         $    10.98          $   11.21           $    11.31        $    11.09

Weighted average occupancy
 levels for the period:
     2006                 90.2%              92.1%               91.4%               89.8%              90.9%
     2005                 89.9%              92.1%               91.7%               90.5%              91.1%
     2004                 89.7%              91.5%               91.9%               90.8%              91.0%

</TABLE>

                                       43

<PAGE>

ANALYSIS OF REGIONAL TRENDS

The following table sets forth regional trends in our Same Store Facilities:
<TABLE>
<CAPTION>

                                                Year Ended December 31,                 Year Ended December 31,
                                        --------------------------------------- ---------------------------------------
                                            2006         2005         Change        2005         2004        Change
                                        ------------- ------------- ----------- ------------ ------------- ------------
                                                  (Amounts in thousands, except for weighted average data)

Same Store Facilities Operating Trends
by Region
Rental income:
<S>                                      <C>           <C>               <C>     <C>           <C>               <C>
   Southern California
   (126 facilities).................     $   140,578   $  134,303        4.7%    $  134,303    $  126,016        6.6%
   Northern California
   (127 facilities).................         104,103       98,758        5.4%        98,758        95,095        3.9%
   Texas  (149 facilities)..........          75,787       71,986        5.3%        71,986        70,213        2.5%
   Florida  (130 facilities)........          89,414       83,473        7.1%        83,473        75,594       10.4%
   Illinois  (91 facilities)........          63,630       61,128        4.1%        61,128        59,238        3.2%
   Georgia  (58 facilities).........          29,688       27,507        7.9%        27,507        25,585        7.5%
   All other states  (585 facilities)        356,576      341,223        4.5%       341,223       327,518        4.2%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total rental income.................         859,776      818,378        5.1%       818,378       779,259        5.0%

Cost of operations before depreciation and amortization:
   Southern California..............          31,381       29,265        7.2%        29,265        29,786       (1.7)%
   Northern California..............          27,078       25,591        5.8%        25,591        25,097        2.0%
   Texas............................          33,439       31,030        7.8%        31,030        31,000        0.1%
   Florida..........................          29,924       28,024        6.8%        28,024        29,247       (4.2)%
   Illinois.........................          27,778       24,859       11.7%        24,859        26,118       (4.8)%
   Georgia..........................          10,098        9,511        6.2%         9,511         9,455        0.6%
   All other states.................         124,926      123,050        1.5%       123,050       119,558        2.9%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total cost of operations............         284,624      271,330        4.9%       271,330       270,261        0.4%

Net operating income before depreciation and amortization:
   Southern California..............         109,197      105,038        4.0%       105,038        96,230        9.2%
   Northern California..............          77,025       73,167        5.3%        73,167        69,998        4.5%
   Texas............................          42,348       40,956        3.4%        40,956        39,213        4.4%
   Florida..........................          59,490       55,449        7.3%        55,449        46,347       19.6%
   Illinois.........................          35,852       36,269       (1.1)%       36,269        33,120        9.5%
   Georgia..........................          19,590       17,996        8.9%        17,996        16,130       11.6%
   All other states.................         231,650      218,173        6.2%       218,173       207,960        4.9%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total net operating income before
   depreciation and amortization....     $   575,152  $   547,048        5.1     $  547,048    $  508,998        7.5%

Weighted average occupancy:
   Southern California..............          91.2%        92.3%         (1.2)%      92.3%         92.1%         0.2%
   Northern California..............          90.2%        90.5%         (0.3)%      90.5%         89.3%         1.3%
   Texas............................          90.8%        90.0%          0.9%       90.0%         90.1%        (0.1)%
   Florida..........................          92.9%        93.2%         (0.3)%      93.2%         92.4%         0.9%
   Illinois.........................          89.4%        89.5%         (0.1)%      89.5%         89.9%        (0.4)%
   Georgia..........................          92.3%        92.4%         (0.1)%      92.4%         91.5%         1.0%
   All other states.................          90.6%        90.8%         (0.2)%      90.8%         91.2%        (0.4)%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total weighted average occupancy....          90.9%        91.1%         (0.2)%      91.1%         91.0%         0.1%

REVPAF:
   Southern California..............     $     17.10   $   16.33         4.7%    $    16.33    $   15.34         6.5%
   Northern California..............           14.42       13.68         5.4%         13.68        13.20         3.6%
   Texas............................            7.79        7.42         5.0%          7.42         7.25         2.3%
   Florida..........................           11.43       10.68         7.0%         10.68         9.62        11.0%
   Illinois.........................           10.96       10.53         4.1%         10.53        10.25         2.7%
   Georgia..........................            8.34        7.76         7.5%          7.76         7.23         7.3%
   All other states.................           10.14        9.71         4.4%          9.71         9.35         3.9%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total REVPAF........................     $     11.11   $   10.58         5.0%    $    10.58    $   10.09         4.9%

</TABLE>

                                       44

<PAGE>

<TABLE>
<CAPTION>

   Same Store Facilities Operating
   Trends by Region (Continued)
                                               Year Ended December 31,                Year Ended December 31,
                                        --------------------------------------- ---------------------------------------
                                            2006         2005         Change        2005         2004        Change
                                        ------------- ------------- ----------- ------------ ------------- ------------
Realized annual rent per occupied square foot:
<S>                                        <C>          <C>              <C>       <C>          <C>              <C>
   Southern California..............       $  18.75     $  17.69         6.0%      $  17.69     $  16.66         6.2%
   Northern California..............          15.98        15.12         5.7%         15.12        14.78         2.3%
   Texas............................           8.58         8.24         4.1%          8.24         8.05         2.4%
   Florida..........................          12.31        11.46         7.4%         11.46        10.42        10.0%
   Illinois.........................          12.26        11.77         4.2%         11.77        11.41         3.2%
   Georgia..........................           9.04         8.40         7.6%          8.40         7.90         6.3%
   All other states.................          11.20        10.69         4.8%         10.69        10.25         4.3%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total realized rent per square foot.       $  12.22     $  11.61         5.3%      $  11.61     $  11.09         4.7%
                                        ============= ============= =========== ============ ============= ============
In place annual rent per occupied square foot at December 31:
Southern California.................       $  20.31     $  19.46         4.3%      $  19.46      $  18.26        6.6%
Northern California.................          17.38        16.73         3.9%         16.73         16.00        4.5%
Texas...............................           9.38         9.06         3.6%          9.06          8.72        3.8%
Florida.............................          13.40        12.71         5.4%         12.71         11.67        8.9%
Illinois............................          13.36        12.90         3.5%         12.90         12.52        2.9%
Georgia.............................          10.15         9.48         7.0%          9.48          8.87        6.8%
All other states....................          12.21        11.86         2.9%         11.86         11.32        4.8%
                                        ------------- ------------- ----------- ------------ ------------- ------------
Total in place rent per occupied
square foot:........................       $  13.32     $  12.86         3.6%      $  12.86      $  12.21        5.3%
                                        ============= ============= =========== ============ ============= ============
</TABLE>

         The Southern California Market consists  principally of the greater Los
Angeles area and San Diego, and has historically  been a source of strong growth
due to its  diverse  economy  and  continued  population  growth.  In  addition,
barriers  to entry  in the form of  difficult  permitting  requirements  tend to
reduce the potential for increased  competition in the infill locations where we
focus our operations.

         The Northern  California  market consists  principally of San Francisco
and  related  peripheral  areas.  While  this  area has a  vibrant  economy  and
relatively  strong  population  growth,  it has been subject to general economic
conditions,  principally  issues  associated  with  the  technology  sector.  In
addition, there has been increased competition in the areas that we do business,
principally in the peripheral areas near San Francisco,  due to new supply. As a
result,  revenue  growth in this  area has been  average  relative  to our other
markets.

         The Texas market principally includes Dallas,  Houston and San Antonio.
This  market  has  historically  been  subject  to  volatility  due  to  minimal
regulatory restraint upon building,  which results in cycles of overbuilding and
absorption. For the last few years, we have been in a period of increased supply
and competition in the areas we operate, and as a result revenue growth has been
average relative to other markets.

         The Florida market principally includes Miami, Orlando, Tampa, and West
Palm Beach.  These markets have been our strongest in terms of revenue growth in
2006,  due in part to increased  moving and storage  demand  resulting  from the
impact of hurricane activity in 2005 and 2004. In addition, over the longer term
we believe that this market benefits from continued strong population growth and
barriers  to entry.  We expect  growth in revenues  during 2007 to moderate  due
primarily to the lack of hurricane  activity during the 2006 season resulting in
difficult year-over-year comparisons.

         The Illinois market is composed principally of Chicago.  Revenue growth
has been weak in Chicago due, we believe, to increased competition from building
that is comprised  principally of conversions of industrial type facilities into
self-storage facilities, as well as weaker population growth.

                                       45
<PAGE>

         Georgia, which includes principally Atlanta, has been benefiting from a
reduction in new supply relative to population growth in the last few years and,
as a result,  revenue  growth has been  favorable  in the last three  years.  We
believe that these  conditions  should  continue and expect Atlanta to be one of
our strongest markets in 2007.

         Domestic - Acquired Self-Storage Facilities

         During  2004,  2005  and  2006,  in  addition  to the 487  self-storage
facilities  we  acquired  in the  Shurgard  merger,  we  acquired  a total of 89
self-storage  facilities  containing  6,383,000 net rentable square feet.  Also,
commencing January 1, 2006, we began consolidating the accounts of 16 facilities
previously  accounted for on the equity method.  The following table  summarizes
operating data with respect to these facilities.

DOMESTIC -ACQUIRED SELF-STORAGE FACILITIES
<TABLE>
<CAPTION>

                                                              Year Ended December 31,                 Year Ended December 31,
                                                       --------------------------------------- -------------------------------------
                                                            2006        2005         Change         2005       2004         Change
                                                       ------------- ------------ ------------ ----------- ------------- -----------
                                                                 (Dollar amounts in thousands, except square foot amounts)
Rental income:
   Facilities acquired in 2006:
<S>                                                     <C>          <C>           <C>          <C>          <C>          <C>
      Facilities acquired in merger with Shurgard       $  128,131   $      -      $ 128,131    $      -     $      -     $      -
      Newly consolidated.........................           14,610          -         14,610           -            -            -
      Other acquisitions.........................            6,246          -          6,246           -            -            -
   Facilities acquired in 2005...................           24,949      9,285         15,664       9,285            -        9,285
   Facilities acquired in 2004...................           33,810     30,406          3,404      30,406        4,705       25,701
                                                       ------------- ------------ ------------ ----------- ------------- -----------
   Total rental income...........................          207,746     39,691        168,055      39,691        4,705       34,986
                                                       ------------- ------------ ------------ ----------- ------------- -----------
Cost of operations before depreciation and
    amortization :
   Facilities acquired in 2006:
      Facilities acquired in merger with Shurgard           47,362          -         47,362           -            -            -
      Newly consolidated.........................            3,515          -          3,515           -            -            -
      Other acquisitions.........................            2,974          -          2,974           -            -            -
   Facilities acquired in 2005...................            9,703      4,148          5,555       4,148            -        4,148
   Facilities acquired in 2004...................           12,530     12,632           (102)     12,632        1,606       11,026
                                                       ------------- ------------ ------------ ----------- ------------- -----------
   Total cost of operations......................           76,084     16,780         59,304      16,780        1,606       15,174
                                                       ------------- ------------ ------------ ----------- ------------- -----------
Net operating income before depreciation and
    amortization:
   Facilities acquired in 2006:
      Facilities acquired in merger with Shurgard           80,769          -         80,769           -            -            -
      Newly consolidated.........................           11,095          -         11,095           -            -            -
      Other acquisitions.........................            3,272          -          3,272           -            -            -
   Facilities acquired in 2005...................           15,246      5,137         10,109       5,137            -        5,137
   Facilities acquired in 2004...................           21,280     17,774          3,506      17,774        3,099       14,675
                                                       ------------- ------------ ------------ ----------- ------------- -----------
   Total net operating income before depreciation and
   amortization (a)..............................          131,662     22,911        108,751      22,911        3,099       19,812
Depreciation and amortization....................         (196,393)   (10,120)      (186,273)    (10,120)        (892)      (9,228)
                                                       ------------- ------------ ------------ ----------- ------------- -----------
   Net operating income (loss)...................       $  (64,731)  $ 12,791      $ (77,522)   $ 12,791     $  2,207     $ 10,584
                                                       ============= ============ ============ =========== ============= ===========
Weighted average square foot occupancy during the
period:
   Facilities acquired in 2006:
      Facilities acquired in merger..............           84.4%         -             -            -            -            -
      Newly consolidated.........................           88.5%         -             -            -            -            -
      Other acquisitions.........................           71.2%         -             -            -            -            -
   Facilities acquired in 2005...................           84.7%        86.8%         (2.4)%       86.8%         -            -
   Facilities acquired in 2004...................           88.1%        87.0%          1.3%        87.0%        80.4%         8.2%
                                                       ------------- ------------ ------------ ----------- ------------- -----------
                                                            84.8%        87.0%         (2.5)%       87.0%        80.4%         8.2%
                                                       ============= ============ ============ =========== ============= ===========
Weighted average realized annual rent per occupied
square foot for the period:
   Facilities acquired in 2006:
      Facilities acquired in merger..............      $    12.75    $    -             -      $            $                  -
      Newly consolidated.........................           16.53         -             -              -          -            -
      Other acquisitions.........................           13.17         -             -              -          -            -
   Self-storage facilities acquired in 2005......           11.74        10.17         15.4%        10.17         -            -
   Self-storage facilities acquired in 2004......           11.84        10.80          9.6%        10.80         9.51        13.6%
                                                       ------------- ------------ ------------ ----------- ------------- -----------
                                                       $    12.65    $   10.65         18.8%    $   10.65   $     9.51        12.0%
                                                       ============= ============ ============ =========== ============= ===========
</TABLE>

                                       46

<PAGE>
<TABLE>
<CAPTION>

In place annual rent per occupied square foot at
December 31:
   Facilities acquired in 2006:
<S>                                                    <C>           <C>                       <C>          <C>
      Facilities acquired in merger..............      $    13.71    $    -             -      $      -     $     -            -
      Newly consolidated.........................           18.46         -             -             -           -            -
      Other acquisitions.........................           14.31         -             -             -           -            -
   Self-storage facilities acquired in 2005......           13.25        12.00         10.4%        12.00         -            -
   Self-storage facilities acquired in 2004......           12.97        12.14          6.8%        12.14        11.47         5.8%
                                                       ------------- ------------ ------------ ----------- ------------- -----------
                                                       $    13.76    $   12.08         13.9%   $    12.08   $    11.47         5.3%
                                                       ============= ============ ============ =========== ============= ===========

At December 31:
    Number of Facilities ........................             592           77           515           77           45           32
    Net rentable square feet.....................          39,531        5,511        34,020        5,511        3,109        2,402
    Cumulative acquisition cost..................      $5,527,546    $ 514,036    $5,013,510   $  514,036   $  259,487     $254,549

</TABLE>

(a)  Total  net  operating  income  before  depreciation,  which  is a  non-GAAP
     measure, for our self-storage  facilities represents a portion of our total
     self-storage  segment's net operating  income before  depreciation,  and is
     denoted  in  the  table   "self-storage   operations   summary"   above.  A
     reconciliation  of our total  self-storage  segment's net operating  income
     before  depreciation to  consolidated  net income is included in Note 15 to
     our  December  31,  2006  consolidated   financial   statements,   "Segment
     Information."

         The acquisitions were acquired at various dates throughout each period.
Accordingly,  rental  income,  cost of operations,  depreciation,  net operating
income,  weighted  average square foot occupancies and realized rents per square
foot  represent the operating  results for the partial  period that we owned the
facilities  during the year acquired.  In addition,  in place rents per occupied
square foot at December 31, 2006,  2005 and 2004,  reflect the amounts for those
facilities we owned at each of those respective dates.

         During  2004,  we acquired a total of 45  self-storage  facilities  for
approximately  $259,487,000,  containing an aggregate of approximately 3,109,000
net rentable  square feet and are located  principally  in the Buffalo,  Dallas,
Miami, Milwaukee, and Minneapolis metropolitan areas.

         During  2005,  we  acquired  a  total  of 32  self-storage  facilities,
principally  in   single-property   transactions,   for  an  aggregate  cost  of
$254,549,000.  These facilities contain in the aggregate approximately 2,390,000
net rentable  square feet and are located  principally in the Atlanta,  Chicago,
Miami, and New York metropolitan areas.

         For  the  year  ended  December  31,  2006,  in  addition  to  the  487
self-storage  facilities we acquired in the merger with Shurgard,  we acquired a
total of 12  self-storage  facilities,  each in a  single-property  transaction.
These 12  facilities  contain in  aggregate  approximately  877,000 net rentable
square feet and were  acquired for an  aggregate  cost of  $103,544,000.  The 12
facilities are located in California, Florida, Illinois, New York, Virginia, New
Jersey, Delaware, Georgia and Colorado.

         Effective  January 1, 2006, as described in Note 2 to our  consolidated
financial   statements,   we  are   including  the  accounts  of  three  limited
partnerships  that we had  previously  accounted  for under the equity method of
accounting.  The three limited  partnerships  collectively own 16 facilities and
have an aggregate of 879,000 net rentable  square  feet.  These  facilities  are
substantially  all mature facilities that we have managed and had an interest in
for several years. Accordingly,  their future operating characteristics and past
operating history are similar to those of our Same Store facilities.

                                       47
<PAGE>

         We believe our presence in and  knowledge of  substantially  all of the
major markets in the United States  enhances our ability to identify  attractive
acquisition  opportunities  and capitalize on the overall  fragmentation  in the
storage  industry.  Our  acquisitions  consist  of  facilities  that  have  been
operating  for a number of years as well as newly  constructed  facilities  that
were in the  process of filling up to  stabilized  occupancy  levels.  In either
case, we have been able to leverage off of our operating  strategies and improve
the occupancy  levels of the facilities,  or with respect to the newly developed
facilities we have been able to accelerate the fill-up pace.

         We expect  that our  acquisitions  will  continue  to provide  earnings
growth  during  2007 as these  facilities  continue to improve  their  occupancy
levels as well as realized rental rates.

         The 487  self-storage  facilities in the U.S.  acquired in the Shurgard
merger are  located  in 23 states and  contain in  aggregate  32.3  million  net
rentable  square feet.  The operating data presented in the table above reflects
the historical  data from August 22, 2006 through  December 31, 2006, the period
owned and operated by Public  Storage.  Many of these new  acquired  facilities,
however,  have been operating at a stabilized  occupancy level for several years
under the Shurgard system and then under the Public Storage system following the
merger. To provide additional  comparative  operating data, the table below sets
forth  the  operations  of the 366  facilities  that have  been  operating  at a
stabilized  basis (the  "Shurgard  Domestic  Same  Stores") from August 22, 2006
through  December  31,  2006,  the period  operated  under  Public  Storage  and
consolidated  in our financial  statements,  and then for 2004,  2005,  and 2006
including the time period when the  facilities  were  operated by Shurgard.  The
data presented  does not reflect the actual  results  included in our operations
for the years ended  December  31,  2006,  2005 and 2004 and does not purport to
project results of operations for any future date or period.


Selected Operating Data for the 366 facilities
 operated by Shurgard on a stabilized basis since
January 1, 2004  ("Shurgard  Domestic  Same Store
Facilities"): (a)
<TABLE>
<CAPTION>

                                                    From August
                                                     22, 2006      Year Ended December 31 (a)          Year Ended December 31 (a)
                                                      through    ---------------------------------- --------------------------------
                                                   December 31,                          Percentage                       Percentage
                                                     2006 (b)       2006        2005       Change      2005        2004     Change
                                                  -------------- ----------- ----------- ---------- ----------- --------- ----------
                                                               (Dollar amounts in thousands, except square foot amounts)

<S>                                                <C>           <C>          <C>           <C>     <C>         <C>            <C>
Total rental income (c)........................    $  107,961    $ 273,537    $ 261,309     4.7%    $ 261,309   $  248,571     5.1%
Total cost of operations (excluding
  depreciation)(c).............................        40,650      103,250      101,693     1.5%      101,693       93,950     8.2%
                                                  -------------- ----------- ----------- ---------- ----------- --------- ----------
Net operating income (excluding depreciation) (d)  $   67,311    $ 170,287    $ 159,616     6.7%    $ 159,616   $  154,621     3.2%
                                                  ============== =========== =========== ========== =========== ========= ==========
Gross margin (before depreciation).............          62.3%       62.3%        61.1%     2.0%        61.1%        62.2%    (1.8)%

Weighted average for the period:
   Square foot occupancy (e)...................          85.3%       84.6%        85.2%    (0.7)%       85.2%        84.7%    (0.6)%
   Realized annual rent per occupied square foot
        (f)....................................    $    14.54   $   13.34    $   12.64      5.5%    $  12.64   $    12.08      4.6%
   REVPAF (g) (h)..............................    $    12.40   $   11.28    $   10.77      4.7%    $  10.77   $    10.23      5.3%

Weighted average at December 31:
   Square foot occupancy.......................          85.5%       85.5%        84.0%     1.8%        84.0%        85.8%    (2.1)%
   Total net rentable square feet (in thousands)       23,425      23,425       23,425        -       23,425       23,425       -

</TABLE>

(a)  Operating data reflects the operations of these  facilities  without regard
     to the time period in which Public Storage owned the facilities.

(b)  Operating  data from August 22, 2006 through  December 31, 2006  represents
     the period  when the  facilities  were owned by Public  Storage,  and these
     amounts are included in the Company's operating results.

(c)  Revenues  and cost of  operations  do not include  ancillary  revenues  and
     expenses  generated at the facilities  with respect to tenant  reinsurance,
     and retail sales and truck rentals. "Other costs of management" included in
     cost of operations  principally  represents all the indirect costs incurred
     in the operations of the  facilities.  Indirect costs  principally  include
     supervisory  costs and  corporate  overhead  cost  incurred  to support the
     operating activities of the facilities. These amounts presented herein will

                                       48
<PAGE>

     not necessarily compare to amounts previously  presented by Shurgard in its
     public  reporting  due to  differences  in  classification  of revenues and
     expenses,  including  tenant  reinsurance,  retail  sales and truck  rental
     activities  which are  included on our income  statement  under  "ancillary
     operations"  but were  previously  presented  by Shurgard  as  self-storage
     revenue and operating expenses.

(d)  Net  operating  income  (before   depreciation)  or  "NOI"  is  a  non-GAAP
     (generally accepted accounting  principles) financial measure that excludes
     the impact of depreciation  expense.  Although depreciation is an operating
     expense,  we  believe  that  NOI  is  a  meaningful  measure  of  operating
     performance,  because we utilize NOI in making  decisions  with  respect to
     capital  allocations,  in  determining  current  property  values,  segment
     performance,  and comparing  period-to-period and market-to-market property
     operating  results.  NOI is not a substitute for net operating income after
     depreciation  in evaluating  our operating  results.  We have not presented
     depreciation  expense for these facilities because the depreciation expense
     is based upon historical cost, which is substantially  different before the
     merger and after.

(e)  Square foot occupancies  represent  weighted average  occupancy levels over
     the entire period.

(f)  Realized  annual rent per occupied  square foot is computed by  annualizing
     the result of  dividing  rental  income by the  weighted  average  occupied
     square  footage for the period.  Realized  annual rent per occupied  square
     foot takes into  consideration  promotional  discounts and other costs that
     reduce rental income from the contractual amounts due.

(g)  Annualized  rental income per available  square foot ("REVPAF")  represents
     annualized  rental income  divided by total  available net rentable  square
     feet.

(h)  Late charges and  administrative  fees are excluded from the computation of
     realized annual rent per occupied square foot and REVPAF because  exclusion
     of these amounts provides a better measure of our ongoing level of revenue,
     by  excluding  the   volatility  of  late  charges,   which  are  dependent
     principally upon the level of tenant delinquency,  and administrative fees,
     which are dependent  principally  upon the absolute level of move-ins for a
     period.

         As noted above,  our 1,266  Same-Store  facilities  had  occupancies of
approximately  89.4% at December 31, 2006, as compared to 85.5% for the acquired
Shurgard  Domestic  Same  Store  portfolio.  It is our  objective  to close this
occupancy gap in order to increase  REVPAF.  In  attempting  to accomplish  this
objective, we have significantly expanded our domestic pricing, promotional, and
media programs, and aggregate media costs increased  significantly in the fourth
quarter of 2006 versus the  aggregate  level of spending  incurred in the fourth
quarter of 2005.  There can be no assurance  that we will meet our objectives or
that any increase in  occupancies  will not be offset by lower realized rent per
occupied  square foot either due to promotional  discounts or lower monthly rent
in the acquired Shurgard facilities or the Same Store facilities.

         On the date of the merger,  we  successfully  installed  our  real-time
property  operation system at all U.S. Shurgard  locations.  As a result,  these
facilities are integrated into our national call center, website, and management
structure.  The integration of these facilities into our operations  should have
additional benefits and cost savings.

         Beginning  January 2007,  all field  personnel  will be under a revised
Public Storage compensation and benefit plan. The cost savings from implementing
the new plan along with a more  efficient  staffing  mix are  expected  to be in
excess of $5 million per year.

         Marketing  costs,  exclusive  of  media,  will be lower as a result  of
combining Yellow Page advertising and terminating Shurgard's marketing programs.
There will be  approximately  $5 million in savings  that will phase in over the
next year as a result of eliminating  yellow page expenses incurred by Shurgard,
there will also be lower per-property  expenses for all of the facilities in our
portfolio as costs are spread over a larger base. We expect property tax expense
to be higher  than  that  experienced  by  Shurgard  due to  higher  assessments
following the merger.

Domestic - Development Self-Storage Facilities
----------------------------------------------

         We  have a  total  of 123  facilities  which  are  unstabilized  due to
development activities.

         We have 46 of these facilities that have been developed from the ground
up between 2002 and 2006. At December 31, 2006, these newly developed facilities
have an aggregate of 3,345,000 net rentable square feet of  self-storage  space,
and were developed at an aggregate cost of  $371,741,000.  These  facilities are
presented in the table below based upon the year of opening.

                                       49
<PAGE>

         We also have 77 facilities  that were  originally  opened prior to 2002
that  have been  expanded  or are in the  process  of being  expanded  (these 77
facilities are referred to as the "Expansion  Facilities" below). In addition to
entirely  self-storage   facilities,   this  group  of  facilities  includes  17
facilities  that  were  developed   originally  to  combine   self-storage   and
containerized  storage space, but have been substantially all converted entirely
to  self-storage  space at December 31, 2006.  We have  incurred an aggregate of
$127,553,000  during  the  three  years  ended  December  31,  2006  to  expand,
repurpose,  or  otherwise  enhance the revenue  generating  capacity of these 77
Expansion Facilities.

         The  following  table sets forth the  operating  results  and  selected
operating data with respect to the Developed and Expansion Facilities:

DOMESTIC - DEVELOPMENT SELF-STORAGE FACILITIES
<TABLE>
<CAPTION>

                                                           Year Ended December 31,                 Year Ended December 31,
                                                  ---------------------------------------- -----------------------------------------
                                                       2006          2005         Change        2005         2004        Change
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                      (Amounts in thousands, except per square foot amounts and facility count)
Rental income:
<S>                                                 <C>           <C>            <C>         <C>           <C>          <C>
  Facilities opened in 2006....................     $    1,056    $        -     $  1,056    $        -    $        -   $        -
  Facilities opened in 2005....................          2,599           464        2,135           464             -          464
  Facilities opened in 2004....................          7,431         5,336        2,095         5,336         1,234        4,102
  Facilities opened in 2003 and 2002...........         27,842        24,803        3,039        24,803        19,049        5,754
  Expansion facilities.........................         73,784        62,698       11,086        62,698        57,418        5,280
                                                  -------------- ------------ ------------ ------------- ------------- -------------
     Total rental income.......................        112,712        93,301       19,411        93,301        77,701       15,600
                                                  -------------- ------------ ------------ ------------- ------------- -------------
Cost of operations before depreciation:
  Facilities opened in 2006....................            959             -          959             -             -            -
  Facilities opened in 2005....................          1,734           568        1,166           568             -          568
  Facilities opened in 2004....................          2,277         2,068          209         2,068         1,149          919
  Facilities opened in 2003 and 2002...........          8,219         8,347         (128)        8,347         7,797          550
  Expansion facilities.........................         24,863        21,496        3,367        21,496        19,542        1,954
                                                  -------------- ------------ ------------ ------------- ------------- -------------
     Total cost of operations before depreciation       38,052        32,479        5,573        32,479        28,488        3,991
                                                  -------------- ------------ ------------ ------------- ------------- -------------
Net operating income before depreciation:
  Facilities opened in 2006....................     $       97    $        -     $     97    $        -    $        -   $        -
  Facilities opened in 2005....................            865          (104)         969          (104)            -         (104)
  Facilities opened in 2004....................          5,154         3,268        1,886         3,268            85        3,183
  Facilities opened in 2003 and 2002...........         19,623        16,456        3,167        16,456        11,252        5,204
  Expansion facilities.........................         48,921        41,202        7,719        41,202        37,876        3,326
                                                  -------------- ------------ ------------ ------------- ------------- -------------
   Net operating income before depreciation (a)         74,660        60,822       13,838        60,822        49,213       11,609
 Depreciation..................................        (27,963)      (24,150)      (3,813)      (24,150)      (21,933)      (2,217)
                                                  -------------- ------------ ------------ ------------- ------------- -------------
   Net operating income........................     $   46,697    $   36,672     $ 10,025    $   36,672    $   27,280   $    9,392
                                                  ============== ============ ============ ============= ============= =============

Weighted average square foot occupancy during
the period:
  Self-storage facilities opened in 2006.......          28.5%          -            -            -             -            -
  Self-storage facilities opened in 2005.......          45.7%         26.9%       69.9%        26.9%           -            -
  Self-storage facilities opened in 2004.......          87.9%         74.2%       18.5%        74.2%         35.2%       110.8%
  Self-storage facilities opened in 2003 and 2002        91.8%         90.5%        1.4%        90.5%         89.1%         1.6%
  Expansion facilities.........................          80.2%         77.0%        4.2%        77.0%         81.2%        (5.2)%
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                         79.1%         82.8%       (4.5)%       82.8%         76.3%         8.5%
                                                  ============== ============ ============ ============= ============= =============
Weighted average realized rent per occupied
square foot during the period (b):
  Self-storage facilities opened in 2006.......         $14.71       $  -            -        $    -       $    -            -
  Self-storage facilities opened in 2005.......          11.60          8.47       37.0%        8.47            -            -
  Self-storage facilities opened in 2004.......          16.19         14.12       14.7%       14.12        10.97        28.7%
  Self-storage facilities opened in 2003 and 2002        15.05         13.55       11.1%       13.55        12.49         8.5%
  Expansion facilities.........................          12.59         11.97        5.2%       11.97        12.47        (4.0)%
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                        $14.92        $13.52       10.4%      $13.52       $12.31         9.8%
                                                  ============== ============ ============ ============= ============= =============
In place annual rent per occupied square foot at
December 31 (c):
  Self-storage facilities opened in 2006.......         $22.75       $  -              -      $    -       $    -            -
  Self-storage facilities opened in 2005.......          14.60         12.90       13.2%       12.90            -            -
  Self-storage facilities opened in 2004.......          17.76         16.78        5.8%       16.78        16.02         4.7%
  Self-storage facilities opened in 2003 and 2002        16.44         15.28        7.6%       15.28        14.16         7.9%
  Expansion facilities.........................          14.09         13.48        4.5%       13.48        13.68        (1.5)%
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                        $16.85        $15.41        9.3%      $15.41       $14.53         6.0%
                                                  ============== ============ ============ ============= ============= =============
</TABLE>

                                       50
<PAGE>
<TABLE>
<CAPTION>

Number of facilities at December 31:
<S>                                                          <C>                        <C>
  Facilities opened in 2006....................              5             -            5             -             -            -
  Facilities opened in 2005....................              6             6            -             6             -            6
  Facilities opened in 2004....................              7             7            -             7             7            -
  Facilities opened in 2003 and 2002...........             28            28            -            28            28            -
  Expansion facilities.........................             77            77            -            77            77            -
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                           123           118            5           118           112            6
                                                  ============== ============ ============ ============= ============= =============
Square Footage at December 31:
  Facilities opened in 2006....................            440             -          440             -             -            -
  Facilities opened in 2005....................            463           463            -           463             -          463
  Facilities opened in 2004....................            505           505            -           505           505            -
  Facilities opened in 2003 and 2002...........          1,937         1,937            -         1,937         1,937            -
  Expansion facilities.........................          7,181         6,661          520         6,661         5,652        1,009
                                                  -------------- ------------ ------------ ------------- ------------- -------------
                                                        10,526         9,566          960         9,566         8,094        1,472
                                                  ============== ============ ============ ============= ============= =============
Cumulative development cost at December 31:
  Facilities opened in 2006....................     $   68,962    $        -     $ 68,962    $        -    $        -   $        -
  Facilities opened in 2005....................         37,857        37,073          784        37,073             -       37,073
  Facilities opened in 2004....................         60,579        60,579            -        60,579        60,579            -
  Facilities opened in 2003 and 2002...........        204,343       204,343            -       204,343       204,343            -
  Expansion facilities (d).....................        127,553        82,253       45,300        82,253        32,438       49,815
                                                  -------------- ------------ ------------ ------------- ------------- -------------
   Net operating income........................     $  499,294    $  384,248     $115,046    $  384,248    $  297,360   $   86,888
                                                  ============== ============ ============ ============= ============= =============

</TABLE>

(a)  Total  net  operating  income  before  depreciation,  which  is a  non-GAAP
     measure, for our developed self-storage  facilities represents a portion of
     our total self-storage  segment's net operating income before depreciation,
     and is denoted in the table  "self-storage  operations  summary"  above.  A
     reconciliation  of our total  self-storage  segment's net operating  income
     before  depreciation to  consolidated  net income is included in Note 15 to
     our  December  31,  2006  consolidated   financial   statements,   "Segment
     Information."

(b)  Realized  annual  rent per  occupied  square  foot is  computed by dividing
     rental  income,  prior to late  charges  and  administrative  fees,  by the
     weighted  average  occupied square footage for the period.  Realized annual
     rent  per  occupied  square  foot  takes  into  consideration   promotional
     discounts,  credit card fees and other costs that reduce rental income from
     the  contractual  amounts  due, and  therefore  amounts for the years ended
     December 31, 2006,  2005 and 2004 may not be comparable to the same periods
     in prior years for self-storage  facilities  opened in 2006, 2005 and 2004.
     We typically provide significant  promotional discounts to new tenants when
     a facility  first opens for  operations.  As facilities  reach a stabilized
     occupancy   level,   the  amounts  of  discounts   given  will  be  reduced
     significantly.

(c)  In place  annual  rent  per  occupied  square  foot  represents  annualized
     contractual   rents  per  occupied  square  foot  without   reductions  for
     promotional discounts, and excludes late charges and administrative fees.

(d)  We have spent an  aggregate  of  approximately  $127,553,000  to expand the
     square  footage  or  otherwise  enhance  the  revenue  potential  of  these
     facilities  during  the  three  years  ended  December  31,  2006 of  these
     facilities,  adding an  aggregate of  2,373,000  net rentable  self-storage
     space.

                                       51
<PAGE>

         Unlike  many other  forms of real  estate,  we are unable to  pre-lease
newly developed storage space due to the nature of our tenants.  Accordingly, at
the time newly developed space first opens, it is entirely vacant  generating no
rental income. Historically, we estimated that on average it takes approximately
24 to 36 months for a newly  developed  facility to fill up and reach a targeted
occupancy level of approximately 90%.

         As  these   facilities   approach  the  targeted   occupancy  level  of
approximately 90%, rates are increased,  resulting in further improvement in net
operating income as the existing  tenants,  which moved in at lower rates,  have
their rates  increased or are replaced by new tenants paying higher rates.  This
process of reaching stabilized rental rates can take approximately another 12 to
24 months  following the time when the facilities  reach a stabilized  occupancy
level of 90%. In addition,  move-in discounts have a more pronounced effect upon
realized  rental  rates  for  the  newly  developed  facilities,   because  such
facilities tend to have a higher ratio of newer tenants.

         Property  operating  expenses  are  substantially   fixed,   consisting
primarily of payroll, property taxes, utilities, and marketing costs. The rental
revenue of a newly  developed  facility  will  generally  not cover its property
operating expenses  (excluding  depreciation)  until the facility has reached an
occupancy level of approximately 30% to 35%.  However,  at that occupancy level,
the rental  revenues from the facility are still not sufficient to cover related
depreciation  expense  and  cost  of  capital  with  respect  to the  facility's
development  cost.  During  construction  of  the  self-storage   facility,   we
capitalize  interest  costs  and  include  such  cost  as  part  of the  overall
development  cost of the  facility.  Once the facility is opened for  operations
interest is no longer capitalized.

         The annualized yield on costs for the 46 newly developed facilities for
the  year  ended  December  31,  2006,  based  on net  operating  income  before
depreciation,  was  approximately  6.9%,  which is lower than our ultimate yield
expectations.  We expect  these  yields to  increase as these  facilities  reach
stabilization of both occupancy levels and realized rents.  Properties that were
developed  before 2005 have  contributed  greatly to our  earnings  growth.  The
growth in properties  developed in 2004 was principally due to occupancy growth,
and growth for  properties  developed in 2003 and 2002 were due  principally  to
rate increases.  We expect that these facilities will continue to provide growth
to our earnings.

         Development  of  self-storage  facilities  causes  short-term  earnings
dilution  because,  as  mentioned  above,  of the  extended  time to stabilize a
self-storage  facility. We have developed self-storage  facilities,  despite the
short-term  earnings dilution,  because it is advantageous for us to continue to
expand our asset base and benefit from the resulting  increased  critical  mass,
with facilities that will improve our portfolio's  overall average  construction
and location quality.

         The decision to commence  development  of any  particular  self-storage
location  is based upon  several  factors  with  respect  to that local  market,
including  our  estimate  of current  and future  general  economic  conditions,
demographic  conditions,  population  growth,  the  likelihood  of and  cost  of
obtaining  permits,  construction  costs,  as well as the level of demand at our
existing self-storage  facilities in proximity to the prospective facility.  Our
level of new development starts has declined significantly in the last few years
due to increases in construction  costs,  increases in competition  with retail,
condominium,  and apartment  operators for quality  construction  sites in urban
locations,  and more  difficult  zoning and permitting  requirements,  which has
reduced the number of attractive sites available for development and reduced our
development  of  facilities.  It is unclear when, or if, these  conditions  will
improve.

SHURGARD EUROPEAN OPERATING DATA
--------------------------------

         In the merger with  Shurgard,  we acquired  160  facilities  located in
seven  European  countries  with an aggregate of 8,385,000  net rentable  square
feet.  During the last three  months of 2006,  six  additional  facilities  were
opened in Europe with an  aggregate of 306,000 net  rentable  square  feet.  The
following chart sets forth the operations of the Shurgard Facilities from August
22, 2006 through December 31, 2006, the period operated under Public Storage and
consolidated in our financial statements (amounts in thousands):

                                       52
<PAGE>

                                                       From August 22,
                                                        2006 through
                                                      December 31, 2006
                                                      ------------------
   Rental income:
      Same Store - 96 facilities................      $        41,132
      Non-Same Store - 70 facilities............               18,583
                                                      ------------------
   Total rental income..........................               59,715

   Cost of operations (excluding depreciation):
      Same Store................................               17,302
      Non-Same Store............................               13,134
                                                      ------------------
   Total cost of operations.....................               30,436

   Net operating income before depreciation (a):
      Same Store................................               23,830
      Non-Same Store............................                5,449
                                                      ------------------
   Total net operating income before
   depreciation.................................               29,279

   Depreciation and amortization................              (59,803)
                                                      ------------------
      Net operating loss........................      $       (30,524)
                                                      ==================
   Weighted average square foot occupancy
   during the period:...........................                81.1%

   Weighted average realized annual rent per
   occupied square foot for the period:.........      $         23.30

   In place annual rent per occupied square
   foot at December 31:.........................      $         23.12

(a)  Total  net  operating  income  before  depreciation,  which  is a  non-GAAP
     measure, for our commercial property segment is presented in Note 15 to our
     condensed consolidated  financial statements,  "Segment Information," which
     includes a reconciliation  of net operating income before  depreciation for
     this segment to our consolidated net income.

         The operating  data presented in the table below reflect the historical
data through August 22, 2006, the period for which the facilities  were operated
under Shurgard  combined with the  historical  data from August 22, 2006 through
December 31, 2006, the period  operated under Public Storage.  Accordingly,  the
data  presented  below does not  reflect  the  actual  results  included  in our
operations for the years ended December 31, 2006, 2005 and 2004. We have applied
our  definition of what  qualifies as a Same Store.  As a result,  the number of
properties  included in the Shurgard European Same Store portfolio has decreased
from 123  facilities  (as reported by Shurgard in the second quarter of 2006) to
96 facilities as is currently being reported.

SELECTED  OPERATING  DATA  FOR  THE  96  FACILITIES
---------------------------------------------------
OPERATED BY SHURGARD  EUROPE ON A  STABILIZED  BASIS
----------------------------------------------------
SINCE   JANUARY   1,  2004   ("EUROPE   SAME  STORE
---------------------------------------------------
FACILITIES"): (a)
----------------
<TABLE>
<CAPTION>

                                                             Year Ended December 31,                  Year Ended December 31,
                                                     -------------------------------------   ---------------------------------------
                                                                                Percentage                                Percentage
                                                        2006          2005        Change         2005          2004         Change
                                                     ------------ ------------ -----------   ------------ ------------   -----------
                                                     (Dollar amounts in thousands, except weighted average data, utilizing constant
                                                                                   exchange rates) (b)
Revenues:
<S>                                                   <C>           <C>              <C>      <C>           <C>             <C>
    Rental income.................................    $  106,581    $   94,455       12.8%    $   94,455    $  83,722       12.8%
    Late charges and administrative fees collected         1,033           881       17.3%           881          689       27.9%
                                                     ------------ ------------ -----------   ------------ ------------   -----------
    Total revenues (c)............................       107,614        95,336       12.9%        95,336       84,411       12.9%

Cost of operations (excluding depreciation):
    Property taxes ...............................         4,912         4,571        7.5%         4,571        4,325        5.7%
    Payroll expense...............................        21,104        21,558      (2.1)%        21,558       21,236        1.5%
    Advertising and promotion.....................         5,353         7,016     (23.7)%         7,016        7,156       (2.0)%
    Utilities.....................................         2,959         2,769        6.9%         2,769        2,462       12.5%
    Repairs and maintenance.......................         3,303         3,246        1.8%         3,246        3,752      (13.5)%
    Property insurance............................         1,432         1,522      (5.9)%         1,522        1,452        4.8%
    Leasehold expense.............................         2,459         2,327        5.7%         2,327        1,897       22.7%
    Other costs of management.....................         8,852        10,414     (15.0)%        10,414        9,927        4.9%
                                                     ------------ ------------ -----------   ------------ ------------   -----------
  Total cost of operations (c)....................        50,374        53,423      (5.7)%        53,423       52,207        2.3%
                                                     ------------ ------------ -----------   ------------ ------------   -----------
   Net operating income (excluding depreciation) (d)  $  57,240     $  41,913        36.6%    $  41,913    $   32,204       30.1%

Gross margin (before depreciation)................         53.2%         44.0%       20.9%         44.0%         38.2%      15.2%
Weighted average for the period:
  Square foot occupancy (e).......................         85.2%         78.5%        8.5%         78.5%         69.1%      13.6%
  Realized annual rent per occupied square foot (f)   $    23.64    $    22.74        4.0%    $    22.74    $    22.90      (0.7)%
  REVPAF (g) (h)..................................    $    20.14    $    17.85       12.8%    $    17.85    $    15.82      12.8%

Weighted average at December 31:
  Square foot occupancy...........................         89.1%         82.2%        8.4%         82.2%         71.9%      14.3%
  In place annual rent per occupied square foot (i)   $    22.61    $    21.72        4.1%    $    21.72    $    22.00      (1.3)%
Total net rentable square feet (in thousands).....         5,291         5,291          -          5,291         5,291         -

</TABLE>

                                       53
<PAGE>

(a)  Operating data reflects the operations of these  facilities  without regard
     to the time period in which Public Storage owned the  facilities;  only the
     amounts  for the period  August 23,  2006  through  December  31,  2006 are
     included in our consolidated operating results.

(b)  Amounts for all periods have been translated from local  currencies to U.S.
     dollars at a constant exchange rate of 1.26 US Dollars to Euros.

(c)  Revenues  and cost of  operations  do not include  ancillary  revenues  and
     expenses generated at the facilities with respect to tenant reinsurance and
     retail sales.  "Other costs of  management"  included in cost of operations
     principally represents all the indirect costs incurred in the operations of
     the facilities.  Indirect costs principally  include  supervisory costs and
     corporate overhead cost incurred to support the operating activities of the
     facilities.  These amounts  presented herein will not necessary  compare to
     amounts  previously  presented by Shurgard in its public  reporting  due to
     differences in  classification  of revenues and expenses,  including tenant
     reinsurance,  retail sales, and truck rental  activities which are included
     on our income  statement under  "ancillary  operations" but were previously
     presented by Shurgard as self-storage revenue and operating expenses.

(d)  Net  operating  income  (before   depreciation)  or  "NOI"  is  a  non-GAAP
     (generally accepted accounting  principles) financial measure that excludes
     the impact of depreciation  expense.  Although depreciation is an operating
     expense,  we  believe  that  NOI  is  a  meaningful  measure  of  operating
     performance,  because we utilize NOI in making  decisions  with  respect to
     capital  allocations,  in  determining  current  property  values,  segment
     performance,  and comparing  period-to-period and market-to-market property
     operating  results.  NOI is not a substitute for net operating income after
     depreciation in evaluating our operating results.

(e)  Square foot occupancies  represent  weighted average  occupancy levels over
     the entire period.

(f)  Realized  annual rent per occupied  square foot is computed by  annualizing
     the result of  dividing  rental  income by the  weighted  average  occupied
     square  footage for the period.  Realized  annual rent per occupied  square
     foot takes into  consideration  promotional  discounts and other costs that
     reduce rental income from the contractual amounts due.

(g)  Annualized  rental income per available  square foot ("REVPAF")  represents
     annualized  rental income  divided by total  available net rentable  square
     feet.

(h)  Late charges and  administrative  fees are excluded from the computation of
     realized annual rent per occupied square foot and REVPAF because  exclusion
     of these amounts provides a better measure of our ongoing level of revenue,
     by  excluding  the   volatility  of  late  charges,   which  are  dependent
     principally upon the level of tenant delinquency,  and administrative fees,
     which are dependent  principally  upon the absolute level of move-ins for a
     period.

(i)  In place  annual  rent  per  occupied  square  foot  represents  annualized
     contractual   rents  per  occupied  square  foot  without   reductions  for
     promotional discounts, and excludes late charges and administrative fees.

         The European team is selectively  adapting various operating strategies
we use in the United States and incorporating them into their operating model.

                                       54
<PAGE>

The following table sets forth certain regional trends in the Europe Same Store
facilities:
<TABLE>
<CAPTION>

                                                          Year Ended December 31,                Year Ended December 31,
                                                   ------------------------------------  -----------------------------------------
                                                                             Percentage                                Percentage
                                                      2006         2005         Change       2005          2004          Change
                                                   ------------ ----------- -----------  ----------- -------------   -------------
                                                           (Dollar amounts in thousands, except per square foot amounts)
Rental income:
<S>                                                 <C>          <C>             <C>     <C>          <C>                  <C>
   Belgium.....................................     $   13,498   $   12,830      5.2%    $   12,830   $   12,362           3.8%
   Denmark.....................................          4,740        4,034      17.5%        4,034        3,151          28.0%
   France......................................         27,657       25,623       7.9%       25,623       22,888          11.9%
   Netherlands.................................         21,303       18,261      16.7%       18,261       15,427          18.4%
   Sweden......................................         23,045       19,457      18.4%       19,457       16,872          15.3%
   United Kingdom..............................         17,371       15,131      14.8%       15,131       13,711          10.3%
                                                   ------------ ----------- -----------  ----------- -------------   -------------
     Total rental income.......................       $107,614      $95,336      12.9%   $   95,336   $   84,411          12.9%
                                                   ============ =========== ===========  =========== =============   =============
Cost of operations before depreciation and
    amortization (a):
   Belgium.....................................     $    6,837   $    6,662       2.6%$       6,662   $    6,661             -
   Denmark.....................................          2,401        2,610      (8.0)%       2,610        2,845          (8.3)%
   France......................................         13,425       14,468      (7.2)%      14,468       14,116           2.5%
   Netherlands.................................          9,988       10,921      (8.5)%      10,921       10,582           3.2%
   Sweden......................................         10,099       11,213      (9.9)%      11,213       10,433           7.5%
   United Kingdom..............................          7,624        7,549       1.0%        7,549        7,570          (0.3)%
                                                   ------------ ----------- -----------  ----------- -------------   -------------
     Total cost of operations before
     depreciation and amortization.............        $50,374      $53,423       (5.7)%  $  53,423   $   52,207           2.3%
                                                   ============ =========== ===========  =========== =============   =============
Weighted average occupancy levels for the period:
   Belgium.....................................          80.6%        76.4%        5.5%        76.4%        72.5%          5.4%
   Denmark.....................................          90.8%        85.4%        6.3%        85.4%        66.8%         27.8%
   France......................................          87.3%        83.4%        4.7%        83.4%        75.5%         10.5%
   Netherlands.................................          83.3%        72.3%       15.2%        72.3%        59.7%         21.1%
   Sweden......................................          89.3%        80.9%       10.4%        80.9%        70.6%         14.6%
   United Kingdom..............................          82.7%        76.8%        7.7%        76.8%        66.8%         15.0%
                                                   ------------ ----------- -----------  ----------- -------------   -------------
                                                         85.2%        78.5%        8.5%        78.5%        69.1%         13.6%
                                                   ============ =========== ===========  =========== =============   =============
Weighted average realized annual rent per
    occupied square foot:
   Belgium.....................................         $16.56       $16.63       (0.4)%      $16.63       $16.90         (1.6)%
   Denmark.....................................         $24.55       $22.18       10.7%       $22.18       $22.18            -
   France......................................         $25.31       $24.55        3.1%       $24.55       $24.29          1.1%
   Netherlands.................................         $21.62       $21.37        1.2%       $21.37       $21.91         (2.5)%
   Sweden......................................         $22.67       $21.13        7.3%       $21.13       $20.97          0.8%
   United Kingdom..............................         $38.49       $36.14        6.5%       $36.14       $37.65         (4.0)%
                                                   ------------ ----------- -----------  ----------- -------------   -------------
                                                        $23.64       $22.74        4.0%       $22.74       $22.90         (0.7)%
                                                   ============ =========== ===========  =========== =============   =============
</TABLE>

                                       55

<PAGE>
<TABLE>
<CAPTION>

Net rentable square feet (in thousands):
<S>                                                     <C>          <C>                       <C>          <C>
   Belgium.....................................         1,001        1,001            -        1,001        1,001             -
   Denmark.....................................           211          211            -          211          211             -
   France......................................         1,234        1,234            -        1,234        1,234             -
   Netherlands.................................         1,173        1,173            -        1,173        1,173             -
   Sweden......................................         1,130        1,130            -        1,130        1,130             -
   United Kingdom..............................           542          542            -          542          542             -
                                                   ------------ ----------- -----------  ----------- -------------   -------------
                                                        5,291        5,291            -        5,291        5,291             -
                                                   ============ =========== ===========  =========== =============   =============
Number of facilities:
   Belgium.....................................            17           17            -           17           17             -
   Denmark.....................................             4            4            -            4            4             -
   France......................................            23           23            -           23           23             -
   Netherlands.................................            22           22            -           22           22             -
   Sweden......................................            20           20            -           20           20             -
   United Kingdom..............................            10           10            -           10           10             -
                                                   ------------ ----------- -----------  ----------- -------------   -------------
                                                           96           96            -           96           96             -
                                                   ============ =========== ===========  =========== =============   =============
</TABLE>


                                       56

<PAGE>

         ANCILLARY OPERATIONS:  Ancillary operations include (i) the reinsurance
of  policies  against  losses to goods  stored by  tenants  in our  self-storage
facilities,  (ii) sale of  merchandise  at our  self-storage  facilities,  (iii)
containerized  storage  operations,  (iv)  truck  rentals  at  our  self-storage
facilities  and (v)  commercial  property  operations,  and (vi)  management  of
facilities  owned by third-party  owners and facilities owned by affiliates that
are not included in our consolidated financial statements.


         The following table sets forth our ancillary operations:
<TABLE>
<CAPTION>

                                           Year Ended December 31,                  Year Ended December 31,
                                        ---------------------------               -------------------------
                                             2006          2005       Change           2005         2004       Change
                                        ------------   ------------ -----------   ------------ ------------ ------------
                                                                      (Amounts in thousands)
Revenues:
<S>                                      <C>            <C>          <C>            <C>         <C>          <C>
    Tenant reinsurance premiums.....     $  37,520      $  $24,889   $  12,631      $  24,889   $   24,243   $   646
    Merchandise sales...............        26,806          22,464       4,342         22,464       21,336     1,128
    Containerized storage ..........        16,454          16,497         (43)        16,497       19,355    (2,858)
    Truck rentals...................        13,689          13,853        (164)        13,853       12,646     1,207
    Commercial property operations..        12,966          11,560       1,406         11,560       10,750       810
    Property management.............         2,472           2,967        (495)         2,967        2,771       196
                                        ------------   ------------ -----------   ------------ ------------ ------------
       Total revenues...............       109,907          92,230      17,677         92,230       91,101     1,129
                                        ------------   ------------ -----------   ------------ ------------ ------------
Cost of operations:
    Tenant reinsurance..............        14,794           8,234       6,560          8,234       13,508    (5,274)
    Merchandise sales...............        23,204          18,773       4,431         18,773       18,901      (128)
    Containerized storage                   15,334          12,886       2,448         12,886       11,774     1,112
    Truck rentals...................        12,622          12,733        (111)        12,733       12,421       312
    Commercial property operations..         5,223           4,448         775          4,448        4,328       120
    Property management.............           187             638        (451)           638          657       (19)
                                        ------------   ------------ -----------   ------------ ------------ ------------
       Total cost of operations.....        71,364          57,712      13,652         57,712       61,589    (3,877)
                                        ------------   ------------ -----------   ------------ ------------ ------------
Depreciation:
    Tenant reinsurance..............             -               -           -              -            -         -
    Merchandise sales...............             -               -           -              -            -         -
    Containerized storage...........          (897)         (2,808)      1,911         (2,808)      (4,546)    1,738
    Truck rentals...................             -               -           -              -            -         -
    Commercial property operations..        (2,441)         (2,322)       (119)        (2,322)      (2,114)     (208)
    Property management.............             -               -           -              -            -         -
                                        ------------   ------------ -----------   ------------ ------------ ------------
       Total depreciation...........        (3,338)         (5,130)      1,792         (5,130)      (6,660)    1,530
                                        ------------   ------------ -----------   ------------ ------------ ------------
Net Income:
    Tenant reinsurance..............        22,726          16,655       6,071         16,655       10,735     5,920
    Merchandise sales...............         3,602           3,691         (89)         3,691        2,435     1,256
    Containerized storage...........           223             803        (580)           803        3,035    (2,232)
    Truck rentals...................         1,067           1,120         (53)         1,120          225       895
    Commercial property operations..         5,302           4,790        (512)         4,790        4,308       482
    Property management.............         2,285           2,329         (44)         2,329        2,114       215
                                        ------------   ------------ -----------   ------------ ------------ ------------
    Total net income................     $  35,205      $   29,388   $   5,817      $  29,388   $   22,852   $ 6,536
                                        ============   ============ ===========   ============ ============ ============
</TABLE>



         TENANT REINSURANCE  OPERATIONS:  We reinsure policies offered through a
non-affiliated insurance broker against losses to goods stored by tenants in our
self-storage  facilities.  Revenues  are  comprised  of fees  charged to tenants
electing such policies.  Cost of operations  primarily includes claims paid that
are not covered by our outside third-party insurers, as well as claims adjusting
expenses.

                                       57
<PAGE>

         The future level of tenant  reinsurance  revenues is largely  dependent
upon the number of new tenants electing to purchase  policies,  premiums charged
for such insurance and existing tenant  retention to continue  participating  in
the insurance  program.  For the years ended  December 31, 2006,  2005 and 2004,
approximately 35.1%, 32.4% and 35.0%,  respectively,  of our self-storage tenant
base had such policies.  During 2005 and 2004, we  experienced  damage caused by
hurricanes to several of our facilities in our Florida and New Orleans  markets.
As a result of such damage,  we recorded  estimated  tenant claim expense during
the quarter in which the damage occurred. As time progressed,  the tenant claims
liabilities  were adjusted,  either  increasing or decreasing  the  liabilities,
based on actual claims history. As a result of these adjustments, we experienced
significant   volatility  in  our  reported   quarterly   cost  of   operations,
particularly  with respect to 2005.  In 2004,  we recorded an estimated  loss of
approximately  $1,500,000  with respect to potential  tenant insured losses as a
result of several hurricanes  affecting the southeastern  United States.  During
2005,  we determined  that this accrual was too high based upon claims  history,
and accordingly we reduced the estimated liability by approximately $500,000 and
reduced cost of operations in 2005 by a corresponding amount.

         The future cost of  operations  will be  dependent  primarily  upon the
level of losses incurred,  including the level of catastrophic  events,  such as
hurricanes, that occur and affect our properties.

         For the year December 31, 2006, tenant reinsurance revenues and cost of
operations, respectively, included $3,243,000 and $1,285,000 with respect to the
Shurgard facilities we acquired in the U.S., and $2,732,000 and $995,000 for the
Shurgard facilities in Europe.

         MERCHANDISE AND TRUCK RENTAL OPERATIONS:  One of our subsidiaries sells
locks, boxes, and packing supplies to our tenants as well as the general public.
Revenues and cost of operations  for these  activities are included in the table
above as "Merchandise Sales." In addition, at selected locations, our subsidiary
maintains trucks on site for rent to our self-storage  customers and the general
public on a short-term basis for local use. In addition, we also act as an agent
for a national  truck rental company to provide their rental trucks to customers
for long-distance  use. The revenues and cost of operations for these activities
are included in the table above as "Truck rentals."

         These  activities  generally  serve as an adjunct  to our  self-storage
operations  providing  our  tenants  with goods and  services  that they need in
connection with moving and storing their goods.

         The revenues and expenses of these activities have remained  relatively
stable  through the three years ended  December 31, 2006,  2005,  and 2004.  The
primary  factors  impacting the level of  operations of these  activities is the
level of customer and tenant traffic at our self-storage  facilities,  including
the level of move-ins.

         For the year ended December 31, 2006,  merchandise revenues and related
cost of  operations,  respectively,  included  $2,674,000  and  $1,664,000  with
respect  to the  Shurgard  facilities  we  acquired  in the United  States,  and
$2,390,000 and $1,216,000 for the Shurgard facilities in Europe.

         For the year  ended  December  31,  2006,  truck  revenues  and cost of
operations,  respectively,  included  $795,000 and $924,000  with respect to the
Shurgard facilities we acquired in the U.S.

         CONTAINERIZED   STORAGE   OPERATIONS:   We  have  closed  many  of  our
containerized  storage  facilities  since 2002,  and have refined our market and
product focus to 13 facilities  located in eight densely  populated markets with
above-average  rent and income.  The  operations  with respect to the facilities
other than the 13 ongoing  facilities are included in "Discontinued  Operations"
on our income  statement.  The  operations  of the 13 remaining  facilities  are
included in continuing operations and are reflected on the table above.

         Rental and other income includes monthly rental charges to customers
for storage of the containers, service fees charged for pickup and delivery of
containers to customers' homes and businesses and certain non-core services
which were eliminated, such as handling and packing customers' goods from city
to city. At December 31, 2006, there were approximately 19,937 occupied
containers in the continuing facilities.

                                       58
<PAGE>

         Direct operating costs principally  includes  payroll,  equipment lease
expense,  utilities and vehicle expenses (fuel and insurance).  Direct operating
costs  for  the  year  ended  December  31,  2006  also  includes  approximately
$1,780,000 in research and development costs. No such costs were incurred during
2005 and 2004.  Facility  lease expense has increased  significantly  as we have
moved the operations from wholly-owned combination facilities to facilities that
we lease from third parties.

         There can be no assurance as to the level of the containerized  storage
business's   expansion,   level  of  gross   rentals,   level  of  move-outs  or
profitability.  We continue to evaluate the business operations,  and additional
facilities may be closed.

         COMMERCIAL PROPERTY OPERATIONS: Commercial property operations included
in our consolidated  financial  statements include commercial space owned by the
Company and entities consolidated by the Company. We have a much larger interest
in commercial  properties  through our ownership interest in PSB. Our investment
in PSB is accounted for using the equity method of accounting,  and  accordingly
our share of PSB's  earnings is  reflected as "Equity in earnings of real estate
entities", see below.

         Our  commercial  operations  are  comprised of  1,561,000  net rentable
square feet of commercial space which is principally  operated at certain of the
self-storage facilities.

         Our commercial property operations consist primarily of facilities that
are at a stabilized level of operations, and generally reflect the conditions in
the markets in which they operate.  We do not expect any  significant  growth in
net operating income from this segment of our business for 2007.

         Equity  in  earnings  of  real  estate  entities:  In  addition  to our
ownership  of equity  interests  in PSB, we had general and limited  partnership
interests in five limited partnerships at December 31, 2006 (PSB and the limited
partnerships are collectively referred to as the "Unconsolidated Entities"). Due
to our limited ownership  interest and limited control of these entities,  we do
not consolidate the accounts of these entities for financial reporting purposes,
and account for such investments using the equity method.

         Equity in earnings of real estate  entities for the year ended December
31, 2006 consists of our pro-rata  share of the  Unconsolidated  Entities  based
upon our ownership  interest for the period.  The following table sets forth the
significant components of equity in earnings of real estate entities:

<TABLE>
<CAPTION>

Historical summary:
-------------------                            Year Ended December 31,                   Year Ended December 31,
                                              ------------------------                 -------------------------
                                                  2006         2005        Change           2005         2004        Change
                                              ------------ ----------- ------------    ------------- -----------  -------------
                                                                           (Amounts in thousands)
Property operations:
<S>                                           <C>           <C>         <C>              <C>          <C>          <C>
  PSB....................................     $  73,850     $  68,768   $   5,082        $  68,768    $  68,545    $     223
  Acquisition Joint Venture..............           411           277         134              277           23          254
  Newly consolidated partnerships (1)....             -         5,229      (5,229)           5,229        4,980          249
  Other Investments (2)..................         2,845         2,674         171            2,674        1,607        1,067
                                              ------------ ----------- ------------    ------------- -----------  -------------
                                                 77,106        76,948         158           76,948       75,155        1,793
                                              ------------ ----------- ------------    ------------- -----------  -------------
Depreciation:
  PSB....................................       (37,919)      (33,593)     (4,326)         (33,593)     (32,063)      (1,530)
  Acquisition Joint Venture..............          (276)         (269)         (7)            (269)         (96)        (173)
  Newly consolidated partnerships (1)....             -          (839)        839             (839)        (896)          57
  Other Investments (2)..................          (695)         (724)         29             (724)        (665)         (59)
                                              ------------ ----------- ------------    ------------- -----------  -------------
                                                (38,890)      (35,425)     (3,465)         (35,425)     (33,720)      (1,705)
                                              ------------ ----------- ------------    ------------- -----------  -------------
Other: (3)
  PSB (4)................................       (26,167)      (16,418)     (9,749)         (16,418)     (19,587)       3,169
  Newly consolidated partnerships (1)....             -          (143)        143             (143)        (127)         (16)
  Other Investments (2)..................          (154)          (79)        (75)             (79)         843         (922)
                                              ------------ ----------- ------------    ------------- -----------  -------------
                                                (26,321)      (16,640)     (9,681)         (16,640)     (18,871)       2,231
                                              ------------ ----------- ------------    ------------- -----------  -------------
Total equity in earnings of real estate entities:
  PSB....................................         9,764        18,757      (8,993)          18,757       16,895        1,862
  Acquisition Joint Venture..............           135             8         127                8          (73)          81
  Newly consolidated partnerships (1)....             -         4,247      (4,247)           4,247        3,957          290
  Other Investments (2)..................         1,996         1,871         125            1,871        1,785           86
                                              ------------ ----------- ------------    ------------- -----------  -------------
                                               $ 11,895      $ 24,883   $ (12,988)         $24,883      $22,564    $   2,319
                                              ============ =========== ============    ============= ===========  =============
</TABLE>

                                       59
<PAGE>

(1)  As described more fully in Note 2 to our consolidated financial statements,
     we commenced  consolidating the accounts of three limited partnerships that
     we had  previously  accounted  for under the equity  method of  accounting.
     Accordingly,  equity in income with  respect to these  partnerships  ceased
     effective January 1, 2006.

(2)  Amounts  primarily reflect equity in earnings recorded for investments that
     have been held consistently throughout each of the years ended December 31,
     2006, 2005 and 2004.

(3)  "Other" reflects our share of general and administrative expense,  interest
     expense, interest income, and other non-property;  non-depreciation related
     operating results of these entities.

(4)  "Other"  with respect to PSB also  includes our pro-rata  share of gains on
     sale of real estate assets, impairment charges relating to pending sales of
     real estate and the impact of PSB's application of the SEC's  clarification
     of EITF Topic D-42 on redemptions of preferred securities.

         Equity in earnings of PSB represents our pro rata share  (approximately
44% throughout the years ended December 31, 2006, 2005 and 2004) of the earnings
of PSB.  Throughout  2004, 2005 and 2006, we owned  5,418,273  common shares and
7,305,355  operating  partnership units (units which are convertible into common
shares on a  one-for-one  basis) in PSB. At  December  31,  2006,  PSB owned and
operated 18.7 million net rentable  square feet of  commercial  space located in
eight  states.  PSB also  manages  commercial  space  owned by the  Company  and
affiliated  entities at  December  31,  2006  pursuant  to  property  management
agreements.

         Equity in earnings of real estate entities  includes our pro rata share
of the net  impact of  gains/losses  on sales of assets and  impairment  charges
relating to the  impending  sale of real  estate  assets as well as our pro rata
share of the impact of the  application  of EITF Topic  D-42 on  redemptions  of
preferred  securities  recorded by PSB.  Our net pro rata share from these items
resulted in a net  increase  (decrease)  of equity in earnings of  ($1,042,000),
$7,727,000 and $4,544,000 for the years ended December 31, 2006,  2005 and 2004,
respectively.

         The impact of the PSB items discussed above led to a decrease in equity
in earnings of real estate entities totaling $12,988,000 when comparing the year
ended December 31, 2006 to the same period in 2005.  These PSB items also led to
an increase in equity in earnings of real estate  entities  totaling  $2,319,000
when  comparing the year ended  December 31, 2005 to the same period in 2004. In
addition,  equity  in  earnings  real  estate  entities  decreased  due  to  our
consolidation  of  three  limited  partnerships  effective  January  1,  2006 as
described in Note 2 to our  consolidated  financial  statements.  As a result of
this  consolidation,  equity in income with respect to these partnerships ceased
effective January 1, 2006.

         Our future equity income from PSB will be dependent entirely upon PSB's
operating results.  Our investment in PSB provides us with some  diversification
into another asset type. We have no plans of disposing of our investment in PSB.
PSB's filings and selected  financial  information  can be accessed  through the
Securities and Exchange Commission, and on its website, www.psbusinessparks.com.

         In January 2004, we entered into a joint  venture  partnership  with an
institutional  investor  for the purpose of  acquiring  up to $125.0  million of
existing  self-storage  properties  in the United States from third parties (the
"Acquisition  Joint  Venture").  The  venture  is funded  entirely  with  equity
consisting of 30% from us and 70% from the institutional  investor. As described
more fully in Note 9 to our consolidated financial statements for the year ended
December 31, 2006,  our  pro-rata  share of earnings  with respect to two of the
facilities acquired directly from third parties by the Acquisition Joint Venture
in 2004, at an aggregate cost of $9,086,000, are reflected in Equity in Earnings
in the table above. Our initial investment in the Acquisition Joint Venture with
respect to these two facilities was approximately $2,930,000.  Our future equity
in earnings with respect to the Acquisition Joint Venture will be dependent upon
the level of earnings generated by these two properties.

         The  "Other  Investments"  are  comprised  primarily  of our  equity in
earnings  from  four  limited  partnerships,  for  which we held an  approximate
consistent level of equity interest  throughout 2004, 2005 and 2006. The Company
formed these limited  partnerships during the 1980's. We are the general partner
in  each  limited  partnership,  and  manage  each  of  these  facilities  for a

                                       60
<PAGE>

management fee that is included in "Ancillary  operations." The limited partners
consist  of  numerous  individual  investors,   including  the  Company,   which
throughout the 1990's acquired units of limited  partnership  interests in these
limited partnerships in various transactions.

         Our future  earnings  with respect to the "Other  Investments"  will be
dependent  upon the operating  results of the 20  self-storage  facilities  that
these  entities  own. The  operating  characteristics  of these  facilities  are
similar to those of the Company's  self-storage  facilities,  and are subject to
the same operational issues as the Same Store Facilities as discussed above. See
Note 6 to our  consolidated  financial  statements for the operating  results of
these entities for the years ended December 31, 2006, 2005 and 2004.

OTHER INCOME AND EXPENSE ITEMS
--------------------------------------------------------------------------------

         INTEREST AND OTHER  INCOME:  Interest and other income was  $31,799,000
for the year ended  December  31, 2006 as compared to  $16,447,000  for the same
period in 2005 and $5,391,000 in 2004. These increases are due to earning higher
interest  rates on invested cash balances  combined  with  significantly  higher
average  cash  balances  invested  in  interest-bearing  accounts as compared to
respective prior year periods.

         As discussed more fully in "Liquidity and Capital  Resources" below, at
December 31, 2006, we had cash balances totaling  approximately  $555.6 million.
In addition,  during the first quarter of 2007, we issued  approximately  $500.0
million of our 6.625% Series M Cumulative Preferred Stock. The net proceeds from
this issuance and our December 31, 2006 cash balances will be used  primarily to
fund future development,  acquisition,  and preferred redemption activities (see
also "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources"). In the interim, the net proceeds
from our cash  balances  are  expected to earn  interest  income  (currently  at
approximately  5.3% at December 31, 2006) relative to the corresponding  divided
requirement  (approximately  6.625%  with  respect  to our  Series M  Cumulative
Preferred  Stock).  This  difference  will result in an  estimated  reduction to
earnings per common share. In addition,  we may issue additional preferred stock
during the early part of 2007,  raising the necessary  funds in  anticipation of
the potential redemption of approximately  $172,500,000 in higher-rate preferred
stock that becomes  available for  redemption in September  2007.  This issuance
similarly  will have a negative  impact on earnings per share until the proceeds
are utilized.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
was $437,984,000, $196,232,000 and $182,890,000 for the years ended December 31,
2006, 2005 and 2004, respectively.

         The  increase  in  depreciation  and  amortization  for the year  ended
December  31, 2006,  as compared to the same period in 2005 is due  primarily to
$175,944,000 in amortization expense recorded during the year ended December 31,
2006 on the  intangible  assets  for the value of the  storage  tenants in place
which we acquired in the Shurgard  merger.  Intangible  assets of  $530,528,000,
represented  by the  value of the  storage  tenants  in place at the time of the
merger  are being  amortized  relative  to the  expected  future  benefit of the
tenants  in  place to each  period.  Other  intangible  assets  of  $34,813,000,
represented  by the land leases with rent  payments  that are below market value
are being  amortized over the life of the  underlying  leases.  Amortization  of
these   finite-lived   intangible   assets  is  expected  to  be   approximately
$243,282,000 during 2007.

         The remainder of the increase in depreciation  and amortization for the
year ended  December  31,  2006 as  compared  to the same  period in 2005 is due
primarily to assets  acquired in the Shurgard  merger and to our newly developed
and  acquired  facilities.  See  Notes  2 and 3 to  our  consolidated  financial
statements for further  discussion of the Shurgard merger and the acquisition of
tangible and  intangible  assets.  The increase  from 2004 to 2005 is due to the
acquisition and development of additional real estate facilities.

         Also included in  depreciation  and  amortization  expense for the year
ended  December  31,  2006  is  $1,651,000   related  to  the   amortization  of
intangibles,  and  $6,604,000  for each of the years ended December 31, 2005 and
2004. Amortization ceased as of April 1, 2006, as described more fully in Note 2
to our consolidated financial statements.

                                       61
<PAGE>

         General and administrative expense:  General and administrative expense
was  $84,661,000,  $21,115,000  and $18,813,000 for the years ended December 31,
2006, 2005 and 2004 respectively. General and administrative expense principally
consists of Shurgard  merger  integration  costs,  state income taxes,  investor
relations expenses and corporate and executive  salaries.  In addition,  general
and  administrative  expenses  includes  expenses  that  vary  depending  on the
Company's activity levels in certain areas, such as overhead associated with the
acquisition and development of real estate  facilities,  employee  severance and
stock-based compensation, and product research and development expenditures.

         General and administrative expense for the year ended December 31, 2006
include costs and expenses totaling  $47,405,000 incurred in connection with the
integration  of Shurgard and Public  Storage,  costs for  cancelled  development
projects in the U.S. and Europe totaling  $10,211,000  and contract  termination
fees of $2,413,000.  We expect to incur  approximately  $5 million in additional
merger integration costs through June 30, 2007.

         Restricted  stock and stock option  expense  amounted to  approximately
$6,309,000, $4,758,000 and $2,963,000 for the year ended December 31, 2006, 2005
and 2004, respectively.

         INTEREST  EXPENSE:  Interest expense was $33,062,000 for the year ended
December 31,  2006,  as compared to  $8,216,000  for the same period in 2005 and
$760,000 in 2004.  The increase in interest  expense in 2006 is primarily due to
$24,855,000 in interest incurred on the debt and other obligations we assumed in
the  Shurgard  merger  partially  offset by a decrease  of  $893,000 in interest
expense due to lower balances on our outstanding  notes.  See also Notes 8 and 9
to our  consolidated  financial  statements for a schedule of our debt balances,
principal repayment requirements, and average interest rates.

         During the year ended December 31, 2006, we paid $1,900,000  related to
interest  rate and  currency  swaps  acquired in the  Shurgard  merger.  We have
included  this  $1,900,000 as a reduction of income on  derivatives,  net on our
consolidated  statement of operations  for the year ended December 31, 2006. See
discussion below under Income from Derivatives, net.

         The increase in interest expense in 2005 compared to 2004 was caused by
the   assumption  of  mortgage   notes  payable  in  connection   with  property
acquisitions  in the fourth  quarter of 2004,  interest  expense with respect to
debt due a joint venture  partner,  interest  expense paid to a related party in
2005 and a decrease in  capitalized  interest  due to lower  average  in-process
development balances.

         During the later part of 2004, we assumed  mortgage  notes payable with
an aggregate  principal  balance of $94.7 million and having an average interest
rate of approximately 5.2% in connection with property acquisitions. We incurred
interest  expense with respect to these  mortgage  notes of $879,000 in 2004 for
the partial  period these notes became our  liabilities.  Interest  expense with
respect to these  mortgage  notes  totaled  $4,739,000 in 2005,  representing  a
year-over-year increase of $3,860,000.

         As  described  more  fully  in  Note 11 to the  consolidated  financial
statements,  during 2005 we incurred  interest expense totaling  $1,458,000 with
respect to debt due a related party.  This debt was extinguished on November 17,
2005.

         Capitalized   interest  expense  totaled  $2,716,000,   $2,820,000  and
$3,617,000 for the years ended December 31, 2006,  2005 and 2004,  respectively,
in  connection  with  our  development  activities.  Included  in  the  interest
capitalized for 2006 is $935,000 in connection  with our development  activities
in Europe.

         MINORITY INTEREST IN INCOME: Minority interest in income represents the
income that is allocable to equity interests in the Consolidated Entities, which
are not owned by the Company.  The following table summarizes  minority interest
in income for each of the three years ended December 31, 2006:

                                       62
<PAGE>

<TABLE>
<CAPTION>

                                                      Year Ended                               Year Ended
                                                      December 31,                             December 31,
                                                 ------------------------                 -------------------------
                                                  2006           2005         Change        2005           2004          Change
                                                 ----------   -----------   ----------    ----------   ------------    ------------
                                                                             (Amounts in thousands)
Preferred partnership interests:
<S>                                              <C>           <C>           <C>           <C>           <C>             <C>
   Ongoing distributions (a).................    $ 19,055      $   16,147    $  2,908      $ 16,147      $   22,423      $ (6,276)
   Special Distribution and EITF Topic D-42 (b)         -             874        (874)          874          10,063        (9,189)
Acquired minority interests (c)..............           -           1,197      (1,197)        1,197           4,048        (2,851)
Newly consolidated partnerships (d)..........       5,259               -       5,259             -               -             -
Convertible Partnership Units (e)............         151             469        (318)          469             328           141
Shurgard U.S. minority interests (f).........         417               -         417             -               -             -
Shurgard European minority interests (g).....      (3,631)              -      (3,631)            -               -             -
Other minority interests (h).................      10,632          13,964      (3,332)       13,964          13,051           913
                                                 ----------   -----------   ----------    ----------   ------------    ------------
    Total minority interests in income.......    $ 31,883      $   32,651   $    (768)    $  32,651      $   49,913     $ (17,262)
                                                 ==========   ===========   ==========    ==========   ============    ============
</TABLE>


(a)  The increase in ongoing  distributions is due to the issuance of additional
     preferred  partnership units offset by the redemption of $40,000,000 of our
     9.5% Series N  Preferred  Units on March 17,  2005 and  $45,000,000  of our
     9.125% Series O Preferred units on March 29, 2005.

(b)  In accordance with the Securities and Exchange Commissions clarification of
     EITF Topic D-42,  are  original  issuance  costs with  respect to our first
     quarter of 2005 redemption of preferred units included in minority interest
     in  income  for the  year s ended  December  31,  2005 and  2004,  totaling
     $874,000  and  $2,063,000,  respectively.  Amounts for 2004 also  include a
     special distribution of $8,000,000 described below.

(c)  These  amounts  reflect  income  allocated to minority  interests  that the
     Company  acquired in 2005 and are no longer  outstanding  at  December  31,
     2006.  Included in income allocated to the Acquired  minority  interests is
     $295,000  and  $1,197,000  in  depreciation  expense  for the  years  ended
     December 31, 2005 and 2004, respectively.

(d)  These  amounts  reflect  income  allocated to minority  interests for three
     entities that we commenced consolidating the accounts for effective January
     1, 2006 (see Note 2 to our consolidated financial statements).  Included in
     minority  interest  in income  for the year  ended  December  31,  2006 was
     $32,000 in depreciation expense.

(e)  These amounts reflect the minority interests represented by the Convertible
     Partnership Units (see Note 11 to our consolidated  financial  statements).
     Included  in income  allocated  to the  Convertible  Partnership  Units was
     $710,000, $385,000 and $333,000 in depreciation expense for the years ended
     December 31, 2006, 2005 and 2004, respectively.

(f)  These amounts reflect income allocated to minority interests in entities we
     acquired in the merger with Shurgard,  and include  $55,000 in depreciation
     in the year ended December 31, 2006.

(g)  These amounts reflect income allocated to minority  interests from entities
     we acquired in the merger with Shurgard.  These  interests  include the 80%
     partner's  interests in the European  joint  ventures,  First  Shurgard and
     Second Shurgard,  as well as those in domestic joint ventures.  Included in
     minority  interest in income is $3,013,000  for the year ended December 31,
     2006 in depreciation.

(h)  These amounts  reflect  income  allocated to minority  interests  that were
     outstanding consistently throughout the years ended December 31, 2006, 2005
     and 2004. Included in minority interest in income is $828,000, $897,000 and
     $697,000 in  depreciation  expense for the years ended  December  31, 2006,
     2005 and 2004,  respectively,  as well as gain on sale of  assets  totaling
     $251,000 in 2005 (none in 2006 or 2004).

         Other minority interests reflect income allocated to minority interests
that have maintained a consistent  level of interest  throughout  2004, 2005 and
2006, comprised of investments in the Consolidated  Entities described in Note 6
to our consolidated financial statements. The level of income allocated to these
interests in the future is dependent  upon the operating  results of the storage
facilities  that these entities own, as well as any minority  interests that the
Company acquires in the future.

         Income has been allocated to our Preferred  partnership interests based
upon (i) "Ongoing  distributions",  representing  distributions  paid during the
period and (ii)  "Redemptions of preferred  units"  representing the differences
between the redemption  amount and the carrying amount of preferred  partnership
units that have been  redeemed.  The reduction in income  allocated to preferred
partnership  interests for ongoing  distributions and for redemptions are due to
the following issuances and redemptions of our preferred units:

                                       63
<PAGE>

         On May 9, 2006, one of our Consolidated Entities issued $100,000,000 of
its  7.25%  Series  J  Preferred   Partnership   Units.   Accordingly,   ongoing
distributions  with  respect to preferred  partnership  interest are expected to
increase.

         In March 2005,  we redeemed  our 9.5% Series N Preferred  Units  ($40.0
million) and our 9.125%  Series O Preferred  Units ($45.0  million) for cash. We
allocated  $874,000  to  the  minority  interests,   reflected  as  "allocations
associated  with  redemptions"  with respect to these  redemptions in accordance
with EITF  Topic  D-42,  representing  the  excess of the  stated  amount of the
preferred  units  over  their  carrying  amount.  This  reduced  annual  ongoing
distributions following the redemption by approximately $7,906,000.

         In December 2004, we issued $25,000,000 of our 6.25% Series Z Preferred
Units in connection with a property portfolio acquisition. This increased annual
ongoing distributions following issuance by approximately $1,563,000.

         On March 22, 2004,  certain investors who held $200 million of our 9.5%
Series N Cumulative Redeemable Perpetual Preferred Units agreed, in exchange for
a special distribution of $8,000,000, to a reduction in the distribution rate on
their preferred units from 9.50% per year to 6.40% per year, and an extension of
the call date for  these  securities  to March  17,  2010.  The  investors  also
received  their  distribution  that  accrued  from  January 1, 2004  through the
effective date of the exchange.  The $8,000,000 special  distribution,  combined
with  $2,063,000,  representing the excess of the stated amount of the preferred
units over their carrying  amount,  is reflected  above in  "Redemptions."  This
transaction  reduced  ongoing  annual  distributions  after  March  22,  2004 by
approximately $6.2 million.

         On August 5, 2005, we acquired the institutional  investors interest in
PSAC  Investors,  LLC.  As  part  of  the  acquisition,  we  also  obtained  and
subsequently  exercised  the  right to  acquire  Mr.  Hughes'  interest  in PSAC
Investors,  LLC  which  we  acquired  November  17,  2005  (see  Note  9 to  our
consolidated financial  statements).  As a result of these events: (i) we ceased
allocating  income  to  minority  interests  with  respect  to the  Consolidated
Development  Joint  Venture  effective  August  5,  2005,  and (ii) Mr.  Hughes'
interest in the Consolidated Development Joint Venture was classified as debt on
our  balance  sheet and income  with  respect  to Mr.  Hughes'  interest  in the
Consolidated  Development  Joint  Venture  for the  period  from  August 5, 2005
through  November  17,  2005,  has been  classified  as interest  expense on our
consolidated statements of income.

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

         We believe that our internally generated net cash provided by operating
activities  will  continue to be  sufficient  to enable us to meet our operating
expenses,  capital improvements,  debt service requirements and distributions to
shareholders for the foreseeable future.

         Operating as a real estate  investment  trust ("REIT"),  our ability to
retain cash flow for reinvestment is restricted. In order for us to maintain our
REIT status,  a substantial  portion of our operating  cash flow must be used to
make  distributions to our shareholders (see "Requirement to Pay  Distributions"
below). However, despite the significant distribution requirements, we have been
able to retain a significant  amount of our operating  cash flow.  The following
table  summarizes our ability to fund  distributions  to the minority  interest,
capital  improvements  to maintain  our  facilities,  and  distributions  to our
shareholders  through the use of cash  provided  by  operating  activities.  The
remaining  cash flow  generated is available to make both scheduled and optional
principal payments on debt and for reinvestment.

                                       64
<PAGE>
<TABLE>
<CAPTION>

                                                                                  For the Year Ended December 31,
                                                                              -----------------------------------------
                                                                                 2006           2005           2004
                                                                              ------------   ------------  ------------
                                                                                       (Amount in thousands)
<S>                                                                            <C>             <C>            <C>
Net cash provided by operating activities.............................         $791,700        $692,048       $616,664

Allocable to minority interests (Preferred Units) - ongoing distributions       (19,055)        (16,147)       (22,423)
Allocable to minority interests (Preferred Units) - special distribution
   (a)................................................................                -               -         (8,000)
Allocable to minority interests (common equity).......................          (16,300)        (18,177)       (21,349)
                                                                              ------------   ------------  ------------
Cash from operations allocable to our shareholders....................          756,345         657,724        564,892

Capital improvements to maintain our facilities.......................          (79,326)        (25,890)       (35,868)
                                                                              ------------   ------------  ------------
Remaining operating cash flow available for distributions to our
   shareholders.......................................................          677,019         631,834        529,024

Distributions paid:
   Preferred stock dividends..........................................         (214,218)       (173,017)      (157,925)
   Equity Stock, Series A dividends...................................          (21,424)        (21,443)       (21,501)
   Common shareholders................................................         (298,219)       (244,200)      (230,834)
                                                                              ------------   ------------  ------------
Cash available for principal payments on debt and reinvestment........         $143,158        $193,174       $118,764
                                                                              ============   ============  ============

</TABLE>

(a)  The $8.0 million special  distribution was paid to a unitholder of our 9.5%
     Series N Cumulative  Redeemable  Perpetual  Preferred  Units in conjunction
     with a March 22,  2004  agreement  that,  among other  things,  lowered the
     distribution rate from 9.5% to 6.4%.

         Cash available for principal payments on debt and reinvestment declined
from $193.2  million in 2005 to $143.2  million in 2006  principally  due to the
impact of merger  integration  expenses of  approximately  $47.4 million for the
year  ended  December  31,  2006,  as well as the  impact of paying  two  entire
quarters'  distribution  to the 38.9 million  shares  issued to former  Shurgard
shareholders  while the operating cash flows were reflected only from August 22,
2006 through December 31, 2006.

         Our financial  profile is characterized by a low level of debt-to-total
capitalization  and a  conservative  dividend  payout  ratio with respect to the
common stock. We expect to fund our growth  strategies and debt obligations with
(i) cash on hand at December 31, 2006, (ii) internally  generated  retained cash
flows and (iii) proceeds from issuing equity securities. In general, our current
strategy is to continue to finance  our growth with  permanent  capital;  either
common or preferred equity.

         Over the past three  years,  we have  funded  substantially  all of our
acquisitions with permanent capital (both common and preferred  securities).  We
have elected to use preferred  securities as a form of leverage despite the fact
that the dividend rates of our preferred securities exceed the prevailing market
interest rates on conventional debt. We have chosen this method of financing for
the following  reasons:  (i) under the REIT structure,  a significant  amount of
operating  cash flow  needs to be  distributed  to our  shareholders,  making it
difficult  to repay debt with  operating  cash flow  alone,  (ii) our  perpetual
preferred  stock has no sinking fund  requirement  or maturity date and does not
require  redemption,  all of which eliminate any future refinancing risks, (iii)
after the end of a non-call  period,  we have the option to redeem the preferred
stock at any time,  which enable us to refinance  higher coupon  preferred stock
with new preferred  stock at lower rates if  appropriate,  (iv) preferred  stock
does not contain covenants,  thus allowing us to maintain significant  financial
flexibility,  and (v) dividends on the preferred stock can be applied to satisfy
our REIT distribution requirements.

         Our credit ratings on each of our series of Cumulative  Preferred Stock
are "Baa1" by Moody's and "BBB+" by Standard & Poor's.

         We also have a $200  million  line of credit  that we use as  temporary
"bridge"  financing.  At December  31, 2006,  we had $45 million in  outstanding
borrowings  under this credit  facility  which has  increased  to $80 million at
February  28,  2007.  This credit  facility  expires on April 10,  2007.  We are
currently in the process of obtaining a new credit  facility which we anticipate
will have $300  million of  available  borrowing  capacity,  as well as improved
financing  spreads  and  covenants.  We expect the new credit  facility to be in
place prior to the expiration of the existing facility.

         RECENT  ISSUANCE  OF  PREFERRED  STOCK  AND  PROJECTED   REDEMPTION  OF
PREFERRED  SECURITIES:  One of our  financing  objectives  over the past several
years has been to  reduce  our  average  cost of  capital  with  respect  to our
preferred  securities.  Accordingly,  we have  redeemed  higher  rate  preferred
securities  outstanding  and have financed the  redemption  with cash on-hand or
from the proceeds from the issuance of lower rate preferred securities.

                                       65
<PAGE>

         We believe that our size and financial flexibility enables us to access
capital when appropriate. Since the beginning of 2004 through December 31, 2006,
we have raised approximately $2.4 billion of our Cumulative Preferred Stock, and
used  approximately  $1.3  billion  of these  net  proceeds  in order to  redeem
higher-coupon preferred securities.

         On  January  18,  2007,  we  redeemed  our 7.625%  Series T  Cumulative
Preferred  Stock  totaling  $152.2 million and on February 20, 2007, we redeemed
our 7.625% Series U Cumulative  Preferred Stock totaling  $150.0 million.  These
redemptions  were funded with cash on hand and funds raised through the issuance
of $500  million of our 6.625%  Series M  preferred  stock.  In  addition to the
Series T and U Preferred  securities,  we currently  have  approximately  $172.5
million of additional  preferred securities that become redeemable at our option
in 2007.

         From  time-to-time,  we may raise additional  capital primarily through
the issuance of lower rate  preferred  securities,  in advance of the redemption
dates to ensure that we have  available  funds to redeem these  securities.  The
timing and our ability to issue additional preferred securities are dependent on
many factors.  There is no assurance that we will be able to raise the necessary
capital and at appropriate rates to redeem these securities.

         REQUIREMENT  TO PAY  DISTRIBUTIONS:  We have  operated,  and  intend to
continue to operate, in such a manner as to qualify as a REIT under the Internal
Revenue Code of 1986, but no assurance can be given that we will at all times so
qualify.  To the extent that the Company continues to qualify as a REIT, we will
not be taxed,  with certain  limited  exceptions,  on the taxable income that is
distributed  to our  shareholders,  provided  that at least  90% of our  taxable
income is so  distributed to our  shareholders  prior to filing of the Company's
tax return. We have satisfied the REIT distribution requirement since 1980.

         Aggregate  dividends  paid during 2006  totaled  $214.2  million to the
holders of our Cumulative  Preferred Stock, $298.2 million to the holders of our
Common  Stock and $21.4  million to the holders of our Equity  Stock,  Series A.
Although we have not finalized the  calculation of our 2006 taxable  income,  we
believe that the aggregate dividends paid in 2006 to our shareholders enabled us
to continue to meet our REIT distribution requirements.

         During 2006, we paid distributions  totaling $19.1 million with respect
to  our  Preferred   Partnership   Units.  We  estimate  the  2007  distribution
requirements  with respect to the preferred  partnership  units  outstanding  at
December 31, 2006, to be approximately $21.6 million.

         For 2007,  distributions  with  respect to the Common  Stock and Equity
Stock, Series A will be determined based upon our REIT distribution requirements
after taking into consideration distributions to the preferred shareholders.  We
anticipate  that, at a minimum,  quarterly  distributions  per common share will
remain at $0.50 per common  share.  For the first  quarter of 2007,  a quarterly
distribution  of $0.50  per  common  share  has been  declared  by our  Board of
Directors.

         With respect to the  depositary  shares of Equity  Stock,  Series A, we
have no  obligation to pay  distributions  if no  distributions  are paid to the
common  shareholders.  To the extent that we do pay common  distributions in any
year, the holders of the depositary shares receive annual distributions equal to
the lesser of (i) five times the per share  dividend on the common stock or (ii)
$2.45. The depositary shares are non-cumulative, and have no preference over our
Common Stock either as to dividends or in liquidation.

         CAPITAL  IMPROVEMENT  REQUIREMENTS:   During  2007,  we  have  budgeted
approximately $65 million for capital  improvements for our facilities.  Capital
improvements include major repairs or replacements to the facilities, which keep
the  facilities in good  operating  condition and maintain  their visual appeal.
Capital  improvements  do not  include  costs  relating  to the  development  or
expansion of facilities.

         DEBT  SERVICE  REQUIREMENTS:  At  December  31,  2006,  we  have  total
outstanding  debt of approximately  $1.8 billion.  We do not believe we have any
significant refinancing risks with respect to our debt.

         In connection with the Shurgard merger, we assumed  approximately  $2.0
billion of debt from Shurgard and its affiliates.  Through December 31, 2006, we
have retired  approximately  $671.0 million of such debt. On January 2, 2007, we
retired an  additional  approximately  $429  million of such debt,  as discussed
below.

                                       66
<PAGE>

         In late December  2006, we entered into a short-term  unsecured  bridge
loan with a commercial  bank for  borrowings up to $300 million and  immediately
borrowed the entire amount, increasing our cash balances to $555.6 million as of
December 31, 2006. A substantial portion of this cash was utilized on January 2,
2007,  to retire  approximately  $429 million of debt assumed from Shurgard that
was secured by substantially all of our wholly-owned  facilities in Europe.  The
bridge loan was subsequently  repaid and terminated on January 10, 2007 with the
proceeds from the issuance of preferred securities.

         Our  portfolio  of  real  estate   facilities   remains   substantially
unencumbered.  At December 31, 2006, we have domestic  mortgage debt outstanding
of $266.7 million, which encumbers 102 self-storage facilities with an aggregate
net book value of  approximately  $674.9  million.  In Europe,  mortgage debt at
December 31, 2006 totaled of $724.3 million, which encumbers 161 facilities with
an aggregate net book value of approximately  $1.4 billion at December 31, 2006.
As indicated above, on January 2, 2007, we retired approximately $429 million of
the debt in Europe which had encumbered a total of 101 facilities.

         We anticipate that our retained operating cash flow will continue to be
sufficient to enable us to make scheduled principal payments. See Notes 8 and 9
to our consolidated financial statements for approximate principal maturities of
such borrowings. It is our current intention to fully amortize our outstanding
debt as opposed to refinance debt maturities with additional debt.
Alternatively, we may prepay debt and finance such prepayments with retained
operating cash flow or proceeds from the issuance of preferred securities.

         ACQUISITION  AND  DEVELOPMENT  OF  FACILITIES:  During  2007,  we  will
continue  to seek to  acquire  additional  self-storage  facilities  from  third
parties;  however,  it is  difficult  to  estimate  the  amount  of third  party
acquisitions we will undertake.

         At December 31, 2006, we have a development "pipeline" of 48 projects
in the U.S. consisting of self-storage facilities, conversion of space at
facilities that was previously used for containerized storage and expansions to
existing self-storage facilities. At December 31, 2006, we have acquired the
land for all of these projects.

         The development  and fill-up of these storage  facilities is subject to
significant  contingencies such as obtaining appropriate governmental approvals.
We estimate that the amount remaining to be spent to complete  development to be
approximately  $185  million and will be incurred  over the next 24 months.  The
following table sets forth certain  information  with respect to our development
pipeline.

                                       67
<PAGE>


DEVELOPMENT PIPELINE SUMMARY
AS OF DECEMBER 31, 2006
<TABLE>
<CAPTION>

                                                                             Total
                                                    Number      Net        estimated      Costs incurred
                                                      of      rentable     development        through         Costs to
                                                   projects   sq. ft.        costs          12/31/06         complete
                                                  ----------  --------   --------------  ----------------  ---------------
                                                                  (Amounts in thousands, except number of projects)
<S>                                                   <C>         <C>       <C>            <C>              <C>
    U.S. under construction                           15          610       $  46,747      $    31,833      $    14,914
    U.S. in development, land acquired                33        1,646         140,869            7,669          133,200
    Europe under construction, land acquired           8          389          78,465           41,916           36,549
                                                  ----------  --------   --------------  ----------------  ---------------
    Total Development Pipeline                        56        2,645       $ 266,081      $    81,418      $   184,663
                                                  ==========  ========   ==============  ================  ===============
</TABLE>

         We also have five  parcels of land held for  development  in the United
States with an aggregate cost of $8,620,000 at December 31, 2006.

         The development  and fill-up of these storage  facilities is subject to
significant  contingencies such as obtaining appropriate governmental approvals.
We estimate that the amount  remaining to be spent to complete  development will
be incurred over the next 24 months.  Substantially  all of the future costs for
the European projects will be funded by the Shurgard European Joint Ventures, in
which we have a 20% interest,  and which have a substantial degree of funding by
debt.

                                       68

<PAGE>

CONTRACTUAL OBLIGATIONS

         Our significant contractual obligations at December 31, 2006 and their
impact on our cash flows and liquidity are summarized below for the years ending
December 31 (amounts in thousands):

<TABLE>
<CAPTION>

                                      Total           2007         2008          2009          2010         2011       Thereafter
                                   ------------   ------------  ------------ ------------   -----------  -----------  --------------
  Long-term debt:
<S>                                <C>             <C>           <C>          <C>             <C>         <C>          <C>
    Public Storage (1) .........   $   130,143     $   20,868    $    9,597   $    9,515      $  9,281    $   22,935   $    57,947
    Shurgard U.S. (2)...........       816,514         92,381        58,896       39,057        47,017       233,262       345,901
    Shurgard Europe (2).........       756,271        453,169       183,379      119,723             -             -             -

  Line of credit and other
  short-term bank financing (3).       345,676        345,676             -            -             -             -             -

  Preferred stock called for
  redemption (4)                       304,255        304,255             -            -             -             -             -

  Capital leases (5)............        40,774            674           714          728           675         1,307        36,676

  Operating leases:
    Public Storage (6)..........        66,943         10,687         9,414        5,907         2,840         1,910        36,185
    Shurgard U.S. (6)...........        64,467          5,437         3,883        3,713         3,779         3,824        43,831
    Shurgard Europe (6).........       146,465          5,623         5,683        5,523         4,831         4,724       120,081

  Construction commitments (7)..        51,463         40,834        10,629            -             -             -             -
                                   ------------   ------------  ------------ ------------   -----------  -----------  --------------
  Total.........................   $ 2,722,971     $1,279,604    $  282,195   $  184,166     $  68,423    $  267,962   $   640,621
                                   ============   ============  ============ ============   ===========  ===========  ==============
</TABLE>


(1)  Amounts  include  interest  payments  on our notes  payable  based on their
     contractual terms. See Note 8 to our consolidated  financial statements for
     additional  information on our notes payable. Debt to Joint Venture Partner
     is not  reflected  since we have not  exercised  our option to acquire  our
     partner's interest.

(2)  Amounts  include  interest  payments  on our notes  payable  based on their
     contractual  terms that we assumed in the merger with Shurgard.  On January
     2, 2007,  we prepaid  the  (euro)325  million  collateralized  notes  ($429
     million  at  December  31,  2006)  at our  European  operations  that  were
     otherwise  payable in 2011.  Accordingly,  we have not  included  any other
     payments on the (euro)325 million  collateralized  for any other periods in
     the table above.  See Note 8 to our consolidated  financial  statements for
     additional information on our notes payable.

(3)  Amounts include  borrowings under our $200 million revolving line of credit
     and $300 million short-term bank financing.  See Note 7 to our consolidated
     financial  statements for additional  information on our line of credit and
     other short-term bank financing.

(4)  In  December  2006,  we called  for  redemption  our  Series T and Series U
     Cumulative Preferred Stock, at par, plus accrued dividends. Amounts include
     the aggregated  redemption value of $302,150,000 of these two series,  plus
     $2,105,000 in accrued dividends.

(5)  This  line item  reflects  amounts  due on five  European  properties  with
     commitments  extending  to April 2052 that we  assumed  in the merger  with
     Shurgard.


(6)  We lease trucks,  land,  equipment and office space under various operating
     leases. Certain leases are cancelable with substantial penalties.

(7)  Includes   obligations  for  facilities  currently  under  construction  at
     December 31, 2006 as described above under  "Acquisition and Development of
     Real Estate Facilities."

                                       69
<PAGE>

         In January 2004, we entered into a joint  venture  partnership  with an
institutional  investor  for the  purpose of  acquiring  up to  $125,000,000  of
existing   self-storage   properties   in  the  U.S.  from  third  parties  (the
"Acquisition  Joint  Venture").  As  described  more  fully  in  Note  9 to  our
consolidated  financial  statements,  our partner's  equity  contributions  with
respect to certain  transactions  are classified as debt under the caption "Debt
to Joint Venture  Partner" in our consolidated  balance sheets.  At December 31,
2006, our Debt to Joint Venture Partner was $37,258,000.  For a six-month period
beginning 54 months after formation,  we have the right to acquire our partner's
interest  based upon the market value of the  properties.  If we do not exercise
our option,  our partner can elect to purchase  our  interest in the  properties
during a six-month  period  commencing upon  expiration of our six-month  option
period.  If our partner  fails to exercise  its option,  the  Acquisition  Joint
Venture will be liquidated  and the proceeds will be distributed to the partners
according to the joint venture agreement. We have not included our Debt to Joint
Venture  Partner as a contractual  obligation in the table above,  since we only
have the right, rather than a contractual  obligation,  to acquire our partner's
interest.

         In  January   2007,   we  entered  into  a  contract  to  purchase  one
self-storage  facility in Hawaii  (total  approximate  net rental square feet of
79,000)  at an  aggregate  cost of  $22,500,000.  This  contract  is  subject to
significant contingencies,  and there is no assurance that this facility will be
acquired.

OFF-BALANCE SHEET ARRANGEMENTS

         At December 31,  2006,  we had no  off-balance  sheet  arrangements  as
defined under Regulation S-K 303(a)(4) and the instructions thereto.


         Stock  Repurchase  Program:  Our Board of Directors has  authorized the
repurchase  from time to time of up to 25,000,000  shares of our common stock on
the open  market  or in  privately  negotiated  transactions.  During  2004,  we
repurchased  445,700 shares for  approximately  $20.3  million.  During 2005, we
repurchased  84,000 shares for approximately  $5.0 million.  During 2006, we did
not repurchase any shares.  From the inception of the repurchase program through
December 31, 2006, we have  repurchased  a total of 22,201,720  shares of common
stock at an aggregate cost of approximately $567.2 million.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         To limit our  exposure  to market  risk,  we  principally  finance  our
operations and growth with permanent equity capital  consisting either of common
stock or preferred  stock.  At December 31,  2006,  our debt as a percentage  of
total shareholders' equity (based on book values) was 26.2%.

         Our  preferred  stock is not  redeemable  at the option of the holders.
Except under certain  conditions  relating to the Company's  qualification  as a
REIT,  the  Preferred  Stock  is not  redeemable  by the  Company  prior  to the
following  dates:  Series V - September  30,  2007,  Series W - October 6, 2008,
Series X - November  13, 2008,  Series Y - January 2, 2009,  Series Z - March 5,
2009,  Series A - March 31, 2009, Series B - June 30, 2009, Series C - September
13, 2009,  Series D - February 28, 2010,  Series E - April 27, 2010,  Series F -
August 23,  2010,  Series G - December  12,  2010,  Series H - January 19, 2011,
Series I - May 3, 2011,  Series K - August 8, 2011,  Series L - October 20, 2011
and Series M - January 9, 2012. On or after the  respective  dates,  each of the
series of Preferred  Stock will be redeemable  at the option of the Company,  in
whole or in  part,  at $25 per  depositary  share  (or  share in the case of the
Series Y), plus accrued and unpaid dividends through the redemption date.

         Our market risk  sensitive  instruments  include notes  payable,  which
totaled  $1,466,284,000  at December 31, 2006.  The table below  summarizes  the
annual debt  maturities and  weighted-average  interest rates on our outstanding
debt,  excluding  the debt acquired in the merger with  Shurgard,  at the end of
each year (dollar amounts in thousands):

                                       70
<PAGE>

<TABLE>
<CAPTION>

                            2007        2008        2009        2010       2011     Thereafter      Total      Fair Value
                          ----------  ---------    ---------  ---------   --------  ----------    ----------  ------------
<S>                       <C>         <C>          <C>        <C>          <C>        <C>         <C>          <C>
 Fixed rate debt (a)....  $  16,098   $   5,155    $  5,358   $   5,404    $19,704    $50,970     $  102,689   $   100,249
 Variable rate debt (b).    345,000           -           -           -          -          -        345,000       345,000
                          ----------  ---------    ---------  ---------   --------  ----------    ----------  ------------
                          $ 361,098   $   5,155    $  5,358   $   5,404    $19,704    $50,970     $  447,689   $   445,249
                          ==========  =========    =========  =========   ========  ==========    ==========  ============
</TABLE>

(a)  Average  interest rate of 5.25%.

(b)  Amounts include  borrowings  under our line of credit and other  short-term
     bank  financings,  which expire in 2007,  which incurred  average  variable
     interest rates at December 31, 2006 of 5.66%.

         We are exposed to changes in interest rates primarily from the floating
rate debt arrangements we acquired in the merger with Shurgard.

         We have foreign  currency  exposures  related to our  investment in the
construction, acquisition, and operation of storage centers in countries outside
the U.S. to the extent such  activities are financed with financial  instruments
or equity denominated in non-functional  currencies. The aggregate book value of
our real estate and intangibles was  approximately  $1.6 billion at December 31,
2006.  Since all foreign debt is  denominated  in the  corresponding  functional
currency,  our currency  exposure is limited to our equity  investment  in those
countries.  Countries  in  which  Shurgard  had  exposure  to  foreign  currency
fluctuations include Belgium, France, the Netherlands,  Sweden, Denmark, Germany
and the United Kingdom.

         The table below summarizes annual debt maturities and  weighted-average
interest rates on outstanding  debt that we acquired in the merger with Shurgard
at the end of each year  (based  on  relevant  LIBOR of 5.30%  and a EURIBOR  of
3.633% at  December  31, 2006 and the  applicable  forward  curve for  following
years) and fair values required to evaluate our expected  cash-flows  under debt
agreements  and our  sensitivity  to interest  rate changes at December 31, 2006
(dollar amounts in thousands).

<TABLE>
<CAPTION>

                             2007       2008        2009         2010        2011     Thereafter      Total      Fair Value
                          ---------- ----------  ----------- -----------  ---------- ------------  ----------- -------------

<S>                       <C>        <C>          <C>          <C>        <C>         <C>           <C>           <C>
 Fixed rate debt........  $ 56,386   $  25,687    $   7,175    $  9,230   $ 209,311   $ 323,100     $ 630,889     $642,315
 Average interest rate..      6.61%       6.61%        6.60%       6.61%       5.88%       5.88%
----------------------------------------------------------------------------------------------------------------------------
 Variable rate debt.....  $    892   $     326    $     349    $  6,861   $       -   $       -        $8,428     $  8,428
 Average interest rate..      7.30%       7.08%        7.07%       7.19%
----------------------------------------------------------------------------------------------------------------------------
 Variable rate EURIBOR
   debt (1).............  $431,135   $ 170,449    $ 116,094    $      -   $       -   $       -     $ 717,678     $717,678
 Average interest rate..      6.07%       6.23%        6.25%
----------------------------------------------------------------------------------------------------------------------------
 Interest rate swaps
 Swap on EURIBOR........  $      -   $     314    $   1,041    $      -   $   4,908   $       -     $   6,263     $  6,263

</TABLE>

(1)  First   Shurgard  and  Second   Shurgard  have  senior  credit   agreements
     denominated  in euros to borrow,  in  aggregate,  up to  (euro)271  million
     ($357.5  million as of December 31,  2006).  As of December  31, 2006,  the
     available  amount under those credit  facilities was in aggregate  (euro)52
     million ($68.6 million).

         At December 31, 2006,  through our merger with Shurgard,  we were party
to pay-fixed,  receive-variable  interest rate swaps. The notional amounts,  the
weighted-average  pay rates and the terms of these  agreements are summarized as
follows:

                                       71
<PAGE>
<TABLE>
<CAPTION>

                                     2007         2008        2009        2010      2011    Thereafter
                                  ------------ ----------- ---------- ---------- --------- ----------
<S>                                <C>         <C>          <C>       <C>         <C>          <C>
 Notional amounts (in millions)..  $   748.1   $  653.4     $ 520.2   $   428.8   $   -        $ -
 Weighted average interest rate..      4.99%      4.83%       4.54%       4.23%       -          -

</TABLE>


         Based on our outstanding  variable-rate  EURIBOR debt and interest rate
swaps at December 31, 2006, a hypothetical increase in the interest rates of 100
basis points would cause the value of our  derivative  financial  instruments to
increase by $24.5 million.  Conversely,  a hypothetical decrease in the interest
rates of 100 basis  points  would  cause the value of our  derivative  financial
instruments to decrease by $25.0 million.

         On January 2, 2007,  we prepaid the  (euro)325  million  collateralized
notes ($429 million at December 31, 2006) at our European  operations  that were
otherwise  payable in 2011. To fund the  prepayment  of these notes,  we entered
into and used proceeds from a $300 million bridge loan, which was fully drawn at
year end 2006,  together with borrowings of approximately  $45 million under our
existing  revolving credit  agreement and cash on hand.  Subsequently in January
2007,  both the bridge loan and revolver  credit  facility were repaid.  We also
terminated the related European currency and interest rate hedges.  Accordingly,
the remaining debt in Europe relates to the joint venture  properties,  in which
we  have a 20%  equity  interest,  but  which  are  consolidated  for  financial
reporting purposes.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  financial  statements  of the  Company at  December  31,  2006 and
December 31, 2005 and for each of the three years in the period  ended  December
31,  2006 and the report of Ernst & Young  LLP,  Independent  Registered  Public
Accounting  Firm,  thereon and the related  financial  statement  schedule,  are
included  elsewhere  herein.  Reference  is  made  to  the  Index  to  Financial
Statements and Schedules in Item 15.

ITEM 9.  CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

         The Company  maintains  disclosure  controls  and  procedures  that are
designed to ensure that  information  required  to be  disclosed  in reports the
Company  files and  submits  under the  Exchange  Act, is  recorded,  processed,
summarized and reported within the time periods specified in accordance with SEC
guidelines  and  that  such   information  is   communicated  to  the  Company's
management,  including its Chief Executive Officer and Chief Financial  Officer,
to allow timely decisions  regarding required disclosure based on the definition
of "disclosure  controls and procedures" in Rules 13a-15(e) of the Exchange Act.
In designing and evaluating the disclosure  controls and procedures,  management
recognized  that any controls and  procedures,  no matter how well  designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives  and  management  necessarily  was  required to apply its judgment in
evaluating the cost-benefit  relationship of possible controls and procedures in
reaching that level of reasonable  assurance.  Also, the Company has investments
in certain  unconsolidated  entities.  As the Company does not control or manage
these  entities,  its disclosure  controls and  procedures  with respect to such
entities are substantially  more limited than those it maintains with respect to
its consolidated subsidiaries.

         As of December 31, 2006, the Company  carried out an evaluation,  under
the  supervision  and  with  the  participation  of  the  Company's  management,
including  the  Company's  Chief  Executive  Officer  and  the  Company's  Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Act of 1934 as amended).  The scope
of  our  evaluation  excluded  the  operations  of  Shurgard   Self-Storage  SCA
("Shurgard Europe"), our subsidiary based in Europe. For the year ended December
31,  2006,  our total  revenues  were $1.4  billion,  of which  Shurgard  Europe
represented  $65  million;  our total net assets at December  31, 2006 were $8.2
billion,  of which  Shurgard  Europe  represented  $445  million.  Based on that
evaluation,  and considering the relative significance of Shurgard Europe to our
operations,  the Company's Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's  disclosure  controls and procedures were effective
as of December 31, 2006.

                                       72
<PAGE>

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Our management is responsible for establishing and maintaining adequate
internal control over financial  reporting,  as such term is defined in Exchange
Act Rules  13a-15(f).  Under the supervision and with the  participation  of our
management,  including our Chief Executive Officer and Chief Financial  Officer,
we conducted an evaluation  of the  effectiveness  of our internal  control over
financial  reporting  based  on the  framework  in  Internal  Control-Integrated
Framework  issued by the Committee on Sponsoring  Organizations  of the Treadway
Commission.  The scope of our  evaluation  excluded the  operations  of Shurgard
Self-Storage SCA ("Shurgard  Europe"),  our subsidiary based in Europe.  For the
year ended  December 31, 2006,  our total  revenues were $1.4 billion,  of which
Shurgard Europe  represented  $65 million;  our total net assets at December 31,
2006 were $8.2 billion, of which Shurgard Europe represented $445 million. Based
on our evaluation under the framework in Internal Control-Integrated  Framework,
and considering the relative  significance  of Shurgard  Europe,  our management
concluded that our internal control over financial reporting was effective as of
December 31, 2006.

         Our  management's  assessment  of the  effectiveness  of  our  internal
control  over  financial  reporting  as of December 31, 2006 has been audited by
Ernst & Young LLP, an independent  registered  public accounting firm, as stated
in their report which is included herein.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

         There have not been any changes in our internal  control over financial
reporting (as such term is defined in Rules  13a-15(f)  and 15d-15(f)  under the
Exchange  Act)  during  the  quarter  to which  this  report  relates  that have
materially affected, or are reasonable likely to materially affect, our internal
control over financial reporting.

ITEM 9B. OTHER INFORMATION

         Not Applicable.

                                       73

<PAGE>

             Report of Independent Registered Public Accounting Firm



The Board of Directors and Shareholders of Public Storage, Inc.:

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal Control Over Financial  Reporting,  that Public
Storage,  Inc. maintained effective internal control over financial reporting as
of   December   31,   2006,   based  on   criteria   established   in   Internal
Control--Integrated   Framework   issued   by  the   Committee   of   Sponsoring
Organizations  of the Treadway  Commission (the COSO criteria).  Public Storage,
Inc.'s management is responsible for maintaining effective internal control over
financial  reporting  and for its  assessment of the  effectiveness  of internal
control over financial reporting. Our responsibility is to express an opinion on
management's  assessment  and an opinion on the  effectiveness  of the company's
internal control over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

         As  indicated  in the  accompanying  Management's  Report  on  Internal
Controls,  management's  assessment of and  conclusion on the  effectiveness  of
internal control over financial  reporting did not include the internal controls
of Shurgard  Self  Storage SCA and  subsidiaries,  which is included in the 2006
consolidated financial statements of Public Storage, Inc. and constituted $2,108
million and $445 million of total and net assets,  respectively,  as of December
31, 2006 and $65 million of revenues  and a net loss of $43 million for the year
then ended.  Our audit of internal  control over  financial  reporting of Public
Storage,  Inc.  and  subsidiaries  also did not  include  an  evaluation  of the
internal  control  over  financial  reporting  of Shurgard  Self Storage SCA and
subsidiaries.

In our opinion,  management's  assessment that Public Storage,  Inc.  maintained
effective internal control over financial  reporting as of December 31, 2006, is
fairly stated, in all material  respects,  based on the COSO criteria.  Also, in
our  opinion,  Public  Storage,  Inc.  maintained,  in  all  material  respects,
effective  internal  control over  financial  reporting as of December 31, 2006,
based on the COSO criteria.

                                       74

<PAGE>

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
Public  Storage,  Inc.  as of  December  31,  2006  and  2005,  and the  related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2006 of Public Storage, Inc.
and our report dated March 10, 2006 expressed an unqualified opinion thereon.

                                                               Ernst & Young LLP

Los Angeles, CA
February 28, 2007

                                       75

<PAGE>

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

         The  information  required by this item with  respect to  directors  is
hereby  incorporated  by reference to the  material  appearing in the  Company's
definitive  proxy statement  filed in connection  with the annual  shareholders'
meeting  scheduled to be held on May 3, 2007 (the "Proxy  Statement")  under the
caption "Election of Directors."

         The  information  required by this item with respect to the  nominating
process,  the audit committee and the audit committee financial expert is hereby
incorporated by reference to the material appearing in the Proxy Statement under
the caption "Corporate Governance."

         The  information  required by this item with  respect to Section  16(a)
compliance is hereby  incorporated by reference to the material appearing in the
Proxy Statement under the caption "Section 16(a) Beneficial  Ownership Reporting
Compliance."

         The information  required by this item with respect to a code of ethics
is hereby  incorporated  by  reference  to the  material  appearing in the Proxy
Statement under the caption "Corporate Governance." Any amendments to or waivers
of the  code of  ethics  granted  to the  Company's  executive  officers  or the
controller  will be  published  promptly on our website or by other  appropriate
means in accordance with SEC rules and regulations.

         The  following  is a  biographical  summary  of the  current  executive
officers of the Company:

         Ronald  L.  Havner,  Jr.,  age 49,  has been the  Vice-Chairman,  Chief
Executive  Officer  and a director of Public  Storage  since  November  2002 and
President  since July 1, 2005.  Mr.  Havner has been  Chairman of the  Company's
affiliate,  PS  Business  Parks,  Inc.  (PSB),  since  March  1998 and was Chief
Executive  Officer of PSB from March 1998 until August 2003.  Mr.  Havner joined
Public  Storage in 1986.  He is also a member of the Board of Governors  and the
Executive  Committee  of the  National  Association  of Real  Estate  Investment
Trusts,  Inc.  (NAREIT)  and a  director  of  Pac  Van  Inc.  and  Union  BanCal
Corporation.

         John Reyes, age 46, a certified public  accountant,  joined the Company
in 1990 and was  Controller of the Company from 1992 until December 1996 when he
became Chief  Financial  Officer.  He became a Vice  President of the Company in
November 1995 and a Senior Vice President of the Company in December 1996.  From
1983 to 1990, Mr. Reyes was employed by Ernst & Young.

         John S. Baumann,  age 46, became Senior Vice  President and Chief Legal
Officer of the Company in June 2003.  From 1998 to 2002,  Mr. Baumann was Senior
Vice  President  and General  Counsel of Syncor  International  Corporation,  an
international  high technology health care services company.  From 1995 to 1998,
he was Associate General Counsel of KPMG LLP, an international  accounting,  tax
and consulting firm.

         John E. Graul,  age 55,  became Senior Vice  President  and  President,
Self-Storage  Operations,  in February 2004, with overall responsibility for the
Company's national  operations.  From 1982 until joining the Company,  Mr. Graul
was employed by  McDonald's  Corporation  where he served in various  management
positions,  most recently as Vice President and General Manager - Pacific Sierra
Region.

         David F. Doll, age 48, became Senior Vice President and President, Real
Estate Group,  in February 2005, with  responsibility  for Company's real estate
activities,  including property  acquisitions,  developments,  and repackagings.
Before  joining the Company,  Mr. Doll was Senior  Executive  Vice  President of
Development for Westfield Corporation,  a major international owner and operator
of shopping malls, where he was employed since 1995.

                                       76
<PAGE>

         Candace N. Krol, age 45, became Senior Vice Present of Human Resources
in September 2005. From 1985 until joining the Company, Ms. Krol was employed by
Parsons Corporation, a global engineering and construction firm, where she
served in various management positions, most recently as Vice President of Human
Resources for the Infrastructure and Technology global business unit.


ITEM 11. EXECUTIVE COMPENSATION

         The  information  required  by this  item  is  hereby  incorporated  by
reference to the material  appearing in the Proxy  Statement  under the captions
"Corporate  Governance,"  "Executive   Compensation,"   "Compensation  Committee
Interlocks  and  Insider   Participation,"   and  "Report  of  the  Compensation
Committee."

                                       77

<PAGE>

ITEM 12. SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         -------------------------------------------------------------------
         RELATED SHAREHOLDER MATTERS
         ---------------------------

         The  information  required  by this  item  is  hereby  incorporated  by
reference to the material  appearing in the Proxy  Statement  under the captions
"Stock Ownership of Certain Beneficial Owners and Management."

         The following  table sets forth  information as of December 31, 2006 on
the Company's equity compensation plans:
<TABLE>
<CAPTION>

                                           Number of
                                       securities to be         Weighted
                                          issued upon           average            Number of
                                          exercise of        exercise price        securities
                                          outstanding        of outstanding   remaining available
                                           options,             options,      for future issuance
                                         warrants and         warrants and        under equity
                                            rights               rights        compensation plans
                                      -----------------     ----------------  --------------------
 Equity  compensation  plans approved
<S>                                         <C>                   <C>               <C>
 by security holders (a).............       2,149,535   (b)       $ 58.28           1,499,700

 Equity    compensation   plans   not
 approved by security holders (c)....          69,869             $ 23.33             831,671

</TABLE>

         The Company's stock option and stock incentive plans are described more
fully in Note 14 to the consolidated financial statements.  All plans other than
the  2000  and  2001  Non-Executive/Non-Director  Plans,  were  approved  by the
Company's shareholders.

         Includes 616,470 restricted stock units that, if and when vested,  will
be settled in shares of common stock of the Company on a one for one basis.

         The  outstanding  options  granted  under  plans  not  approved  by the
Company's   shareholders   were  granted  under  the  Company's  2000  and  2001
Non-Executive/Non-Director  Plan,  which  does not  allow  participation  by the
Company's  executive officers and directors.  The principal terms of these plans
are as follows:  (1) 2,500,000 shares of common stock were authorized for grant,
(2) this plan is administered by the Equity Awards Committee, except that grants
in excess of 100,000 shares to any one person requires approval by the Executive
Equity  Awards  Committee,  (3) options are granted at fair market  value on the
date of grant,  (4) options have a ten year term and (5) options vest over three
years in equal installments, or as indicated by the applicable grant agreement.


ITEM 13. CERTAIN   RELATIONSHIPS  AND  RELATED  TRANSACTIONS  AND  DIRECTOR
         ------------------------------------------------------------------
         INDEPENDENCE
         ------------

         The  information  required  by this  item  is  hereby  incorporated  by
reference to the material  appearing in the Proxy  Statement  under the captions
"Corporate  Governance" and "Certain  Relationships and Related Transactions and
Legal Proceedings."


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by this item with respect to fees and services
provided  by the  Company's  independent  auditors  is  hereby  incorporated  by
reference to the material  appearing  in the Proxy  Statement  under the caption
"Ratification of  Auditors--Fees  Billed to the Company by Ernst & Young LLP for
2006 and 2005".

                                       78

<PAGE>

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
         ------------------------------------------

a. 1. Financial Statements

         The financial  statements listed in the accompanying Index to Financial
         Statements and Schedules hereof are filed as part of this report.

   2. Financial Statement Schedules

         The financial  statements schedules listed in the accompanying Index to
         Financial Statements and Schedules are filed as part of this report.

   3. Exhibits

         See Index to Exhibits contained herein.

b. Exhibits:

         See Index to Exhibits contained herein.

c. Financial Statement Schedules

         Not applicable.

                                       79

<PAGE>

                              PUBLIC STORAGE, INC.

                              INDEX TO EXHIBITS(1)

                           (Items 15(a)(3) and 15(c))


3.1    Restated Articles of Incorporation of Storage  Equities,  Inc. Filed with
       Registrant's  Registration  Statement on Form S-4 (SEC File No. 33-54557)
       and incorporated herein by reference.

3.2    Certificate  of  Amendment  of  Articles  of   Incorporation  of  Storage
       Equities,  Inc. Filed with  Registrant's  Registration  Statement on Form
       S-3/A (SEC File No. 33-63947) and incorporated herein by reference.

3.3    Certificate of Amendment of Articles of  Incorporation of Public Storage,
       Inc. Filed with Registrant's Registration Statement on Form S-3 (SEC File
       No. 333-18395) and incorporated herein by reference.

3.4    Certificate of Determination  of Preferences of 10% Cumulative  Preferred
       Stock,  Series  A of  Storage  Equities,  Inc.  Filed  with  Registrant's
       Registration   Statement  on  Form  S-4  (SEC  File  No.   33-54557)  and
       incorporated herein by reference.

3.5    Amendment  to  Certificate  of   Determination   of  Preferences  of  10%
       Cumulative  Preferred Stock, Series A of Public Storage,  Inc. Filed with
       the  Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended March 31, 2004 and incorporated herein by reference.

3.6    Certificate of Determination of Preferences of 9.20% Cumulative Preferred
       Stock,  Series  B of  Storage  Equities,  Inc.  Filed  with  Registrant's
       Registration   Statement  on  Form  S-4  (SEC  File  No.   33-54557)  and
       incorporated herein by reference.

3.7    Amendment  to  Certificate  of  Determination  of  Preferences  of  9.20%
       Cumulative Preferred Stock, Series B of Storage Equities, Inc. Filed with
       Registrant's  Registration  Statement on Form S-4 (SEC File No. 33-56925)
       and incorporated herein by reference.

3.8    Amendment  to  Certificate  of  Determination  of  Preferences  of  9.20%
       Cumulative  Preferred Stock, Series B of Public Storage,  Inc. Filed with
       the  Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended June 30, 2004 and incorporated herein by reference.

3.9    Certificate  of  Determination   of  Preferences  of  8.25%   Convertible
       Preferred  Stock  of  Public  Storage,   Inc.  Filed  with   Registrant's
       Registration   Statement  on  Form  S-4  (SEC  File  No.   33-54557)  and
       incorporated herein by reference.

3.10   Certificate of Determination of Preferences of Adjustable Rate Cumulative
       Preferred  Stock,   Series  C  of  Storage  Equities,   Inc.  Filed  with
       Registrant's  Registration  Statement on Form S-4 (SEC File No. 33-54557)
       and incorporated herein by reference.

3.11   Amendment to  Certificate of  Determination  of Preferences of Adjustable
       Rate Cumulative  Preferred Stock, Series C of Public Storage,  Inc. Filed
       with Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended September 30, 2004 and incorporated herein by reference.

3.12   Certificate of Determination of Preferences of 9.50% Cumulative Preferred
       Stock,  Series  D of  Storage  Equities,  Inc.  Filed  with  Registrant's
       Registration  Statement  on Form 8-A/A  relating to the 9.50%  Cumulative
       Preferred Stock, Series D and incorporated herein by reference.

                                       80
<PAGE>

3.13   Amendment  to  Certificate  of  Determination  of  Preferences  of  9.50%
       Cumulative  Preferred Stock, Series D of Public Storage,  Inc. Filed with
       Registrant's  Annual Report on Form 10-K for the year ended  December 31,
       2004 and incorporated herein by reference.

3.14   Certificate of Determination  of Preferences of 10% Cumulative  Preferred
       Stock,  Series  E of  Storage  Equities,  Inc.  Filed  with  Registrant's
       Registration  Statement  on Form  8-A/A  relating  to the 10%  Cumulative
       Preferred Stock, Series E and incorporated herein by reference.

3.15   Amendment  to  Certificate  of   Determination   of  Preferences  of  10%
       Cumulative  Preferred Stock, Series E of Public Storage,  Inc. Filed with
       Registrant's  Current  Report  on Form  8-K  dated  April  25,  2005  and
       incorporated herein by reference.

3.16   Certificate of Determination of Preferences of 9.75% Cumulative Preferred
       Stock,  Series  F of  Storage  Equities,  Inc.  Filed  with  Registrant's
       Registration  Statement  on Form 8-A/A  relating to the 9.75%  Cumulative
       Preferred Stock, Series F and incorporated herein by reference.

3.17   Amendment  to  Certificate  of  Determination  of  Preferences  of 9.750%
       Cumulative  Preferred Stock, Series F of Public Storage,  Inc. Filed with
       Registrant's  Current  Report  on Form  8-K  dated  August  17,  2005 and
       incorporated herein by reference.

3.18   Certificate  of  Determination   of  Preferences  of  8-7/8%   Cumulative
       Preferred Stock, Series G of Public Storage, Inc. Filed with Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each  Representing  1/1,000  of a Share of  8-7/8%  Cumulative  Preferred
       Stock, Series G and incorporated herein by reference.

3.19   Certificate of Determination of Preferences of 8.45% Cumulative Preferred
       Stock,  Series  H  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each Representing 1/1,000 of a Share of 8.45% Cumulative Preferred Stock,
       Series H and incorporated herein by reference.

3.20   Certificate of  Determination  of  Preferences  of Convertible  Preferred
       Stock,  Series  CC  of  Public  Storage,  Inc.  Filed  with  Registrant's
       Registration   Statement  on  Form  S-4  (SEC  File  No.  333-03749)  and
       incorporated herein by reference.

3.21   Certificate of Correction of Certificate of  Determination of Preferences
       of Convertible  Participating  Preferred  Stock of Public  Storage,  Inc.
       Filed with Registrant's  Registration Statement on Form S-4 (SEC File No.
       333-08791) and incorporated herein by reference.

3.22   Certificate  of   Determination  of  Preferences  of  8  5/8%  Cumulative
       Preferred Stock, Series I of Public Storage, Inc. Filed with Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each  Representing  1/1,000  of a Share  of 8 5/8%  Cumulative  Preferred
       Stock, Series I and incorporated herein by reference.

3.23   Certificate of Determination of Equity Stock, Series A of Public Storage,
       Inc.  Filed  with  Registrant's  Quarterly  Report  on Form  10-Q for the
       quarterly  period  ended  June  30,  1997  and  incorporated   herein  by
       reference.

3.24   Certificate of  Determination  of Preferences of 8% Cumulative  Preferred
       Stock,  Series  J  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each  Representing  1/1,000 of a Share of 8% Cumulative  Preferred Stock,
       Series J and incorporated herein by reference.

                                       81
<PAGE>

3.25   Certificate of Correction of Certificate of  Determination of Preferences
       of 8.25% Convertible  Preferred Stock of Public Storage,  Inc. Filed with
       Registrant's  Registration Statement on Form S-4 (SEC File No. 333-61045)
       and incorporated herein by reference.

3.26   Certificate  of   Determination  of  Preferences  of  8  1/4%  Cumulative
       Preferred Stock, Series K of Public Storage, Inc. Filed with Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each  Representing  1/1,000  of a Share  of 8 1/4%  Cumulative  Preferred
       Stock, Series K and incorporated herein by reference.

3.27   Certificate  of   Determination  of  Preferences  of  8  1/4%  Cumulative
       Preferred Stock, Series L of Public Storage, Inc. Filed with Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each  Representing  1/1,000  of a Share  of 8 1/4%  Cumulative  Preferred
       Stock, Series L and incorporated herein by reference.

3.28   Certificate of Determination of Preferences of 8.75% Cumulative Preferred
       Stock,  Series  M  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration  Statement on Form 8-A/A relating to the  Depositary  Shares
       Each Representing 1/1,000 of a Share of 8.75% Cumulative Preferred Stock,
       Series M and incorporated herein by reference.

3.29   Certificate  of  Determination  of  Equity  Stock,  Series  AA of  Public
       Storage,  Inc. Filed with Registrant's  Quarterly Report on Form 10-Q for
       the quarterly period ended September 30, 1999 and incorporated  herein by
       reference.

3.30   Certificate  Decreasing  Shares  Constituting  Equity Stock,  Series A of
       Public Storage,  Inc. Filed with  Registrant's  Quarterly  Report on Form
       10-Q for the quarterly  period ended September 30, 1999 and  incorporated
       herein by reference.

3.31   Certificate of Determination of Equity Stock, Series A of Public Storage,
       Inc.  Filed  with  Registrant's  Quarterly  Report  on Form  10-Q for the
       quarterly  period ended  September  30, 1999 and  incorporated  herein by
       reference.

3.32   Certificate of Amendment of Certificate of Determination of Equity Stock,
       Series A of Public Storage, Inc. Filed with Registrant's Quarterly Report
       on  Form  10-Q  for  the  quarterly   period  ended  June  30,  2001  and
       incorporated herein by reference.

3.33   Certificate  of  Determination  of  Equity  Stock,  Series  AAA of Public
       Storage,  Inc. Filed with  Registrant's  Current Report on Form 8-K dated
       November 15, 1999 and incorporated herein by reference.

3.34   Certificate of Determination of Preferences of 9.5% Cumulative  Preferred
       Stock,  Series N of Public Storage,  Inc. Filed with Registrant's  Annual
       Report on Form 10-K for the year ended December 31, 1999 and incorporated
       herein by reference.

3.35   Certificate  of  Determination   of  Preferences  of  9.125%   Cumulative
       Preferred Stock, Series O of Public Storage, Inc. Filed with Registrant's
       Quarterly  Report on Form 10-Q for the  quarterly  period ended March 31,
       2000 and incorporated herein by reference.

3.36   Certificate of Determination of Preferences of 8.75% Cumulative Preferred
       Stock, Series P of Public Storage, Inc. Filed with Registrant's Quarterly
       Report on Form 10-Q for the  quarterly  period  ended  June 30,  2000 and
       incorporated herein by reference.

                                       82
<PAGE>

3.37   Certificate  of  Determination   of  Preferences  of  8.600%   Cumulative
       Preferred Stock, Series Q of Public Storage, Inc. Filed with Registrant's
       Registration  Statement  on Form 8-A/A (No.  001-08389)  relating  to the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  8.600%
       Cumulative   Preferred  Stock,   Series  Q  and  incorporated  herein  by
       reference.

3.38   Certificate of Amendment of Certificate of Determination of Equity Stock,
       Series A of Public Storage, Inc. Filed with Registrant's Quarterly Report
       on  Form  10-Q  for  the  quarterly   period  ended  June  30,  2001  and
       incorporated herein by reference.

3.39   Certificate  of  Determination   of  Preferences  of  8.000%   Cumulative
       Preferred Stock, Series R of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 8.000%  Cumulative  Preferred  Stock,
       Series R and incorporated herein by reference.

3.40   Certificate  of  Determination   of  Preferences  of  7.875%   Cumulative
       Preferred Stock, Series S of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.875%  Cumulative  Preferred  Stock,
       Series S and incorporated herein by reference.

3.41   Certificate  of  Determination   of  Preferences  of  7.625%   Cumulative
       Preferred Stock, Series T of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.625%  Cumulative  Preferred  Stock,
       Series T and incorporated herein by reference.

3.42   Certificate  of  Determination   of  Preferences  of  7.625%   Cumulative
       Preferred Stock, Series U of Public Storage, Inc. Filed with Registrant's
       Registration  Statement  on Form 8-A relating to  Depositary  Shares Each
       Representing  1/1,000 of a Share of 7.625%  Cumulative  Preferred  Stock,
       Series U and incorporated herein by reference.

3.43   Amendment  to  Certificate  of  Determination  of  Preferences  of 7.625%
       Cumulative  Preferred Stock, Series T of Public Storage,  Inc. Filed with
       Registrant's Quarterly Report on Form 10-Q for the quarterly period ended
       September 30, 2002 and incorporated herein by reference.

3.44   Certificate  of  Determination   of  Preferences  of  7.500%   Cumulative
       Preferred Stock, Series V of Public Storage, Inc. Filed with Registrant's
       Registration  Statement Form 8-A relating to the  Depositary  Shares Each
       Representing  1/1,000 of a Share of 7.500%  Cumulative  Preferred  Stock,
       Series V and incorporated herein by reference.

3.45   Certificate  of  Determination   of  Preferences  of  6.500%   Cumulative
       Preferred Stock, Series W of Public Storage, Inc. Filed with Registrant's
       Registration  Statement Form 8-A relating to the  Depositary  Shares Each
       Representing  1/1,000 of a Share of 6.500%  Cumulative  Preferred  Stock,
       Series W and incorporated herein by reference.

3.46   Certificate of Determination of Preferences  6.450% Cumulative  Preferred
       Stock,  Series  X  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 6.450%  Cumulative  Preferred  Stock,
       Series X and incorporated herein by reference.

3.47   Certificate of Determination of Preferences of 6.85% Cumulative Preferred
       Stock,  Series Y of Public  Storage,  Inc.  Filed  with the  Registrant's
       Quarterly  Report on Form 10-Q for the  quarterly  period ended March 31,
       2004 and incorporated herein by reference.

3.48   Certificate  of  Determination   of  Preferences  of  6.250%   Cumulative
       Preferred Stock, Series Z of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 6.250%  Cumulative  Preferred  Stock,
       Series Z and incorporated herein by reference.

3.49   Certificate  of  Determination   of  Preferences  of  6.125%   Cumulative
       Preferred Stock, Series A of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 6.125%  Cumulative  Preferred  Stock,
       Series A and incorporated herein by reference.

                                       83
<PAGE>

3.50   Certificate of Determination of Preferences of 6.40% Cumulative Preferred
       Stock,  Series  NN  of  Public  Storage,  Inc.  Filed  with  Registrant's
       Quarterly  Report on Form 10-Q for the  quarterly  period ended March 31,
       2004 and incorporated herein by reference.

3.51   Certificate  of  Determination   of  Preferences  of  7.125%   Cumulative
       Preferred Stock, Series B of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.125%  Cumulative  Preferred  Stock,
       Series B and incorporated herein by reference.

3.52   Certificate of Determination of Preferences of 6.60% Cumulative Preferred
       Stock,  Series  C  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.60%  Cumulative  Preferred  Stock,
       Series C and incorporated herein by reference.

3.53   Certificate of Determination of Preferences of 6.18% Cumulative Preferred
       Stock,  Series  D  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.18%  Cumulative  Preferred  Stock,
       Series D and incorporated herein by reference.

3.54   Certificate of Determination of Preferences of 6.75% Cumulative Preferred
       Stock,  Series  E  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a share of 6.75%  Cumulative  Preferred  Stock,
       Series E and incorporated herein by reference.

3.55   Certificate of Determination of Preferences of 6.45% Cumulative Preferred
       Stock,  Series  F  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.45%  Cumulative  Preferred  Stock,
       Series F and incorporated herein by reference.

3.56   Amendment to Certificate of Determination of Preferences 6.45% Cumulative
       Preferred Stock, Series F of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.45%  Cumulative  Preferred  Stock,
       Series F and incorporated herein by reference.

3.57   Certificate of Determination of Preferences of 7.00% Cumulative Preferred
       Stock,  Series  G  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 7.00%  Cumulative  Preferred  Stock,
       Series G and incorporated herein by reference.

3.58   Certificate of Determination of Preferences of 6.95% Cumulative Preferred
       Stock,  Series  H  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.95%  Cumulative  Preferred  Stock,
       Series H and incorporated herein by reference.

3.59   Certificate of Determination of Preferences of 7.25% Cumulative Preferred
       Stock,  Series  I  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 7.25%  Cumulative  Preferred  Stock,
       Series I and incorporated herein by reference.

3.60   Certificate of Determination of Preferences of 7.25% Cumulative Preferred
       Stock,  Series  J  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 7.25%  Cumulative  Preferred  Stock,
       Series J and incorporated herein by reference.

                                       84
<PAGE>

3.61   Certificate of Determination of Preferences of 7.25% Cumulative Preferred
       Stock,  Series  K  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 7.25%  Cumulative  Preferred  Stock,
       Series K and incorporated herein by reference.

3.62   Certificate of Determination of Preferences of 6.75% Cumulative Preferred
       Stock,  Series  L  of  Public  Storage,   Inc.  Filed  with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a Share of 6.75%  Cumulative  Preferred  Stock,
       Series L and incorporated herein by reference.

3.63   Certificate  of  Determination   of  Preferences  of  6.625%   Cumulative
       Preferred Stock, Series M of Public Storage, Inc. Filed with Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 6.625%  Cumulative  Preferred  Stock,
       Series M and incorporated herein by reference

3.64   Amendment to Certificate of Determination of Determination of Preferences
       of Cumulative  Preferred Stock, Series G (8.875%), H (8.45%), I (8.625%),
       J (8%),  K (8.25%),  L (8.25%),  M (8.75%),  N (9.5%),  O (9.125%)  and P
       (8.75%) of Public Storage, Inc. Filed with Registrant's Current Report on
       Form 8-K dated November 22, 2005 and incorporated herein by reference.

3.65   Amendment to Certificate of Determination of Determination of Preferences
       of Cumulative  Preferred Stock,  Series Q (8.60%) and R (8.00%) of Public
       Storage,  Inc. Filed with  Registrant's  Current Report on Form 8-K dated
       October 18, 2006 and incorporated herein by reference.

3.66   Amendment to Certificate of Determination of Determination of Preferences
       of Cumulative Preferred Stock, Series S (7.875%). Filed with Registrant's
       Current Report on Form 8-K dated January 4, 2007 and incorporated  herein
       by reference.

3.67   Revised  Bylaws  of  Storage  Equities,   Inc.  Filed  with  Registrant's
       Registration  Statement  on  Form  S-4/A  (SEC  File  No.  33-64971)  and
       incorporated herein by reference.

3.68   Amendment to Bylaws of Public Storage, Inc. adopted on May 9, 1996. Filed
       with  Registrant's  Registration  Statement  on Form  S-4  (Sec  File No.
       333-03749) and incorporated herein by reference.

3.69   Amendment  to Bylaws of Public  Storage,  Inc.  adopted on June 26, 1997.
       Filed with  Registrant's  Registration  Statement on Form S-3/A (SEC File
       No. 333-41123) and incorporated herein by reference.

3.70   Amendment to Bylaws of Public Storage,  Inc.  adopted on January 6, 1998.
       Filed with  Registrant's  Registration  Statement on Form S-3/A (SEC File
       No. 333-41123) and incorporated herein by reference.

3.71   Amendment to Bylaws of Public Storage, Inc. adopted on February 10, 1998.
       Filed with  Registrant's  Current  Report on Form 8-K dated  February 10,
       1998 and incorporated herein by reference.

3.72   Amendment  to Bylaws of Public  Storage,  Inc.  adopted on March 4, 1999.
       Filed with  Registrant's  Current  Report on Form 8-K dated March 4, 1999
       and incorporated herein by reference.

3.73   Amendment to Bylaws of Public Storage, Inc. adopted on May 6, 1999. Filed
       with Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended March 31, 1999 and incorporated herein by reference.

                                       85
<PAGE>

3.74   Amendment to Bylaws of Public Storage,  Inc. adopted on November 7, 2002.
       Filed with  Registrant's  Quarterly Report on Form 10-Q for the quarterly
       period ended September 30, 2002 and incorporated herein by reference.

3.75   Amendment to Bylaws of Public Storage, Inc. adopted on May 8, 2003. Filed
       with Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended March 31, 2003 and incorporated herein by reference.

3.76   Amendment to Bylaws of Public  Storage,  Inc.  adopted on August 5, 2003.
       Filed with  Registrant's  Quarterly Report on Form 10-Q for the quarterly
       period ended June 30, 2003 and incorporated herein by reference.

3.77   Amendment to Bylaws of Public  Storage,  Inc.  adopted on March 11, 2004.
       Filed  with  Registrant's  Annual  Report on Form 10-K for the year ended
       December 31, 2003 and incorporated herein by reference.

3.78   Amendment to Bylaws of Public Storage,  Inc.  effective  August 22, 2006.
       Filed with  Registrant's  Report on Form 8-K filed on August 23, 2006 and
       incorporated herein by reference.

3.79   Amendment to Bylaws of Public Storage,  Inc.  effective  January 1, 2007.
       Filed with Registrant's Report on Form 8-K filed on December 28, 2006 and
       incorporated herein by reference.

10.1   Amended  Management  Agreement  between  Registrant  and  Public  Storage
       Commercial  Properties  Group,  Inc. dated as of February 21, 1995. Filed
       with Registrant's  Annual Report on Form 10-K for the year ended December
       31, 1994 and incorporated herein by reference.

10.2   Second Amended and Restated Management  Agreement by and among Registrant
       and the entities listed therein dated as of November 16, 1995. Filed with
       PS  Partners,  Ltd.'s  Annual  Report  on Form  10-K for the  year  ended
       December 31, 1996 (SEC File No.  001-11186)  and  incorporated  herein by
       reference.

10.3   Limited Partnership  Agreement of PSAF Development  Partners,  L.P. Filed
       with Registrant's  Quarterly Report on Form 10-Q for the quarterly period
       ended March 31, 1997 and incorporated herein by reference.

10.4   Agreement of Limited Partnership of PS Business Parks, L.P. Filed with PS
       Business Parks,  Inc.'s  Quarterly  Report on Form 10-Q for the quarterly
       period  ended June 30,  1998 (SEC File No.  001-10709)  and  incorporated
       herein by reference.

10.5   Amended and Restated  Agreement of Limited  Partnership  of Storage Trust
       Properties,  L.P.  (March 12, 1999).  Filed with  Registrant's  Quarterly
       Report on Form 10-Q for the  quarterly  period  ended  June 30,  1999 and
       incorporated herein by reference.

10.6   Limited Partnership  Agreement of PSAC Development  Partners,  L.P. Filed
       with Registrant's  Current Report on Form 8-K dated November 15, 1999 and
       incorporated herein by reference.

10.7   Agreement of Limited Liability Company of PSAC Storage Investors,  L.L.C.
       Filed with  Registrant's  Current  Report on Form 8-K dated  November 15,
       1999 and incorporated herein by reference.

10.8   Amended  and   Restated   Agreement   of  Limited   Partnership   of  PSA
       Institutional  Partners,  L.P. Filed with  Registrant's  Annual Report on
       Form 10-K for the year ended December 31, 1999 and incorporated herein by
       reference.

10.9   Amendment to Amended and Restated Agreement of Limited Partnership of PSA
       Institutional  Partners, L.P. Filed with Registrant's Quarterly Report on
       Form 10-Q for the quarterly  period ended June 30, 2000 and  incorporated
       herein by reference.

                                       86
<PAGE>

10.10  Second Amendment to Amended and Restated Agreement of Limited Partnership
       of PSA Institutional  Partners,  L.P. Filed with  Registrant's  Quarterly
       Report on Form 10-Q for the  quarterly  period  ended  March 31, 2004 and
       incorporated herein by reference.

10.11  Third Amendment to Amended and Restated Agreement of Limited  Partnership
       of PSA Institutional  Partners,  L.P. Filed with  Registrant's  Quarterly
       Report on Form 10-Q for the quarterly period ended September 30, 2004 and
       incorporated herein by reference.

10.12  Limited Partnership  Agreement of PSAF Acquisition  Partners,  L.P. Filed
       with Registrant's  Annual Report on Form 10-K for the year ended December
       31, 2003 and incorporated herein by reference.

10.13  Credit  Agreement  by and among  Registrant,  Wells Fargo Bank,  National
       Association, as agent, and the financial institutions party thereto dated
       as of November 1, 2001. Filed with Registrant's  Quarterly Report on Form
       10-Q for the quarterly  period ended September 30, 2001 and  incorporated
       herein by reference.

10.14  Second Amendment to Credit Agreement by and among Registrant, Wells Fargo
       Bank,  National  Association,  as agent,  and the financial  institutions
       party  thereto  dated as of  March  25,  2004.  Filed  with  Registrant's
       Quarterly  Report on Form 10-Q for the  quarterly  period ended March 31,
       2004 and incorporated herein by reference.

10.15    Note Purchase Agreement with respect to $100,000,000 of Senior Notes of
         Storage Trust Properties, L.P. dated as of January 20, 1997. Filed with
         Storage Trust Realty's Annual Report on Form 10-K for the year ended
         December 31, 1996 (SEC File No. 001-13462) and incorporated herein by
         reference.

10.16  Agreement  and  Plan  of  Merger  by  and  among  Storage  Trust  Realty,
       Registrant  and Newco Merger  Subsidiary,  Inc.  dated as of November 12,
       1998.  Filed with  Registrant's  Registration  Statement on Form S-4 (SEC
       File No. 333-68543) and incorporated herein by reference.

10.17  Amendment  No. 1 to  Agreement  and Plan of Merger  by and among  Storage
       Trust Realty,  Registrant,  Newco Merger Subsidiary,  Inc. and STR Merger
       Subsidiary,  Inc. dated as of January 19, 1999.  Filed with  Registrant's
       Registration  Statement  on Form  S-4/A  (SEC  File  No.  333-68543)  and
       incorporated herein by reference.

10.18  Deposit  Agreement  dated  as  of  January  14,  2000  among  Registrant,
       BankBoston,  N.A. and the holders of the depositary  receipts  evidencing
       the  Depositary  Shares  Each  Representing  1/1,000 of a Share of Equity
       Stock, Series A. Filed with Registrant's  Registration  Statement on Form
       8-A/A relating to the Depositary  Shares Each  Representing  1/1,000 of a
       Share of Equity Stock, Series A and incorporated herein by reference.

10.19  Deposit  Agreement  dated  as  of  January  18,  2002  among  Registrant,
       Equiserve Trust Company,  N.A. and the holders of the depositary receipts
       evidencing the Depositary Shares Each Representing  1/1,000 of a Share of
       7.625%  Cumulative  Preferred  Stock,  Series T. Filed with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.625%  Cumulative  Preferred  Stock,
       Series T and incorporated herein by reference.

10.20  Deposit  Agreement  dated  as of  February  19,  2002  among  Registrant,
       Equiserve Trust Company,  N.A. and the holders of the depositary receipts
       evidencing the Depositary Shares Each Representing  1/1,000 of a Share of
       7.625%  Cumulative  Preferred  Stock,  Series U. Filed with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.625%  Cumulative  Preferred  Stock,
       Series U and incorporated herein by reference.

10.21  Deposit  Agreement  dated as of  September  30,  2002  among  Registrant,
       Equiserve Trust Company,  N.A. and the holders of the depositary receipts
       evidencing the Depositary Shares Each Representing  1/1,000 of a Share of
       7.500%  Cumulative  Preferred  Stock,  Series V. Filed with  Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000 of a Share of 7.500%  Cumulative  Preferred  Stock,
       Series V and incorporated herein by reference.

                                       87
<PAGE>

10.22  Deposit   Agreement  dated  as  of  October  6,  2003  among  Registrant,
       Equiserve,  Inc.,  Equiserve  Trust Company,  N.A. and the holders of the
       depositary  receipts  evidencing the Depositary  Shares Each Representing
       1/1,000 of a Share of 6.500% Cumulative  Preferred Stock, Series W. Filed
       with  Registrant's  Registration  Statement  on Form 8-A  relating to the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  6.500%
       Cumulative   Preferred  Stock,   Series  W  and  incorporated  herein  by
       reference.

10.23  Deposit  Agreement  dated  as of  November  13,  2003  among  Registrant,
       Equiserve,  Inc.,  Equiserve  Trust Company,  N.A. and the holders of the
       depositary  receipts  evidencing the Depositary  Shares Each Representing
       1/1,000 of a Share of 6.450% Cumulative  Preferred Stock, Series X. Filed
       with  Registrant's  Registration  Statement  on Form 8-A  relating to the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  6.450%
       Cumulative   Preferred  Stock,   Series  X  and  incorporated  herein  by
       reference.

10.24  Deposit Agreement dated as of March 5, 2004 among Registrant,  Equiserve,
       Inc.,  Equiserve  Trust  Company,  N.A. and the holders of the depositary
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       Share  of  6.250%  Cumulative  Preferred  Stock,  Series  Z.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  6.250%
       Cumulative   Preferred  Stock,   Series  Z  and  incorporated  herein  by
       reference.

10.25  Deposit Agreement dated as of March 31, 2004 among Registrant, Equiserve,
       Inc.,  Equiserve  Trust  Company,  N.A. and the holders of the depositary
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       Share  of  6.125%  Cumulative  Preferred  Stock,  Series  A.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  6.125%
       Cumulative   Preferred  Stock,   Series  A  and  incorporated  herein  by
       reference.

10.26  Deposit Agreement dated as of June 30, 2004 among Registrant,  Equiserve,
       Inc.,  Equiserve  Trust  Company,  N.A. and the holders of the depositary
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       Share  of  7.125%  Cumulative  Preferred  Stock,  Series  B.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing  1/1,000  of  a  Share  of  7.125%
       Cumulative   Preferred  Stock,   Series  B  and  incorporated  herein  by
       reference.

10.27  Deposit  Agreement  dated as of  September  13,  2004  among  Registrant,
       Equiserve,  Inc.,  Equiserve  Trust Company,  N.A. and the holders of the
       depositary  receipts  evidencing the Depositary  Shares Each Representing
       1/1,000 of a Share of 6.60% Cumulative  Preferred Stock,  Series C. Filed
       with  Registrant's  Registration  Statement  on Form 8-A  relating to the
       Depositary  Shares  Each  Representing   1/1,000  of  a  Share  of  6.60%
       Cumulative   Preferred  Stock,   Series  C  and  incorporated  herein  by
       reference.

10.28  Deposit  Agreement  dated  as of  February  28,  2005  among  Registrant,
       Equiserve,  Inc.,  Equiserve  Trust Company,  N.A. and the holders of the
       depositary  receipts  evidencing the Depositary  Shares Each Representing
       1/1,000 of a Share of 6.18% Cumulative  Preferred Stock,  Series D. Filed
       with  Registrant's  Registration  Statement  on Form 8-A  relating to the
       Depositary  Shares  Each  Representing   1/1,000  of  a  Share  of  6.18%
       Cumulative   Preferred  Stock,   Series  D  and  incorporated  herein  by
       reference.

10.29  Deposit Agreement dated as of April 27, 2005 among Registrant, Equiserve,
       Inc.,  Equiserve  Trust  Company,  N.A. and the holders of the depositary
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       Share  of  6.75%  Cumulative   Preferred  Stock,  Series  E.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing   1/1,000  of  a  Share  of  6.75%
       Cumulative   Preferred  Stock,   Series  E  and  incorporated  herein  by
       reference.

10.30  Deposit   Agreement  dated  as  of  August  23,  2005  among  Registrant,
       Computershare  Shareholder Services,  Inc., Equiserve Trust Company, N.A.
       and the holders of depositary receipts evidencing  Depositary Shares Each
       Representing  1/1,000  of a Share of 6.45%  Cumulative  Preferred  Stock,
       Series F.  Filed with  Registrant's  Registration  Statement  on Form 8-A
       relating to  Depositary  Shares Each  Representing  1/1,000 of a Share of
       6.45%  Cumulative  Preferred Stock,  Series F and incorporated  herein by
       reference.

                                       88
<PAGE>

10.31  Deposit   Agreement  dated  as  of  October  3,  2005  among  Registrant,
       Computershare  Shareholder Services,  Inc., Equiserve Trust Company, N.A.
       and the holders of depositary receipts evidencing  additional  Depositary
       Shares Each Representing 1/1,000 of a Share of 6.45% Cumulative Preferred
       Stock, Series F. Filed with Registrant's  Registration  Statement on Form
       8-A  relating to the  Depositary  Shares Each  Representing  1/1,000 of a
       Share of 6.45%  Cumulative  Preferred  Stock,  Series F and  incorporated
       herein by reference.

10.32  Deposit   Agreement   dated  December  12,  2005  among   Registrant  and
       Computershare  Shareholder Services,  Inc., Equiserve Trust Company, N.A.
       and the holders of the  depositary  receipts  evidencing  the  Depositary
       Shares Each Representing 1/1,000 of a share of 7.00% Cumulative Preferred
       Stock, Series G. Filed with Registrant's  Registration  Statement on Form
       8-A  relating to the  Depositary  Shares Each  Representing  1/1,000 of a
       Share of 7.00%  Cumulative  Preferred  Stock,  Series G and  incorporated
       herein by reference.

10.33  Deposit   Agreement   dated  January  19,  2006  among   Registrant   and
       Computershare  Trust  Company  N.A.  and the  holders  of the  depository
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       share  of  6.95%  Cumulative   Preferred  Stock,  Series  H.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing   1/1,000  of  a  share  of  6.95%
       Cumulative   Preferred  Stock,   Series  H  and  incorporated  herein  by
       reference.  Amendment to Certificate of Determination of Determination of
       Preferences of Cumulative  Preferred Stock, Series G (8.875%), H (8.45%),
       I (8.625%), J (8%), K (8.25%), L (8.25%), M (8.75%), N (9.5%), O (9.125%)
       and P (8.75%) of Public  Storage,  Inc. Filed with  Registrant's  Current
       Report on Form 8-K dated  November  22, 2005 and  incorporated  herein by
       reference.

10.34  Deposit  Agreement dated May 3, 2006 among  Registrant and  Computershare
       Trust Company N.A. and the holders of the depository  receipts evidencing
       the  Depositary  Shares  Each  Representing  1/1,000  of a share of 7.25%
       Cumulative   Preferred   Stock,   Series  I.  Filed   with   Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a share of 7.25%  Cumulative  Preferred  Stock,
       Series I and incorporated herein by reference.

10.35  Deposit Agreement dated August 8, 2006 among Registrant and Computershare
       Trust Company N.A. and the holders of the depository  receipts evidencing
       the  Depositary  Shares  Each  Representing  1/1,000  of a share of 7.25%
       Cumulative   Preferred   Stock,   Series  K.  Filed   with   Registrant's
       Registration Statement on Form 8-A relating to the Depositary Shares Each
       Representing  1/1,000  of a share of 7.25%  Cumulative  Preferred  Stock,
       Series K and incorporated herein by reference.

10.36  Deposit   Agreement   dated  October  20,  2006  among   Registrant   and
       Computershare  Trust  Company  N.A.  and the  holders  of the  depository
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       share  of  6.75%  Cumulative   Preferred  Stock,  Series  L.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing   1/1,000  of  a  share  of  6.75%
       Cumulative   Preferred  Stock,   Series  L  and  incorporated  herein  by
       reference.

10.37  Deposit   Agreement   dated   January  9,  2007  among   Registrant   and
       Computershare  Trust  Company  N.A.  and the  holders  of the  depository
       receipts evidencing the Depositary Shares Each Representing  1/1,000 of a
       share  of  6.625%  Cumulative  Preferred  Stock,  Series  M.  Filed  with
       Registrant's   Registration   Statement  on  Form  8-A  relating  to  the
       Depositary  Shares  Each  Representing  1/1,000  of  a  share  of  6.625%
       Cumulative   Preferred  Stock,   Series  M  and  incorporated  herein  by
       reference.

10.38  Senior  Credit  Agreement  dated May 26,  2003,  as amended by  Amendment
       Agreements  dated July 11, 2003 and December 2, 2003,  by and among First
       Shurgard Sprl, First Shurgard  Finance Sarl,  First Shurgard  Deutschland
       GmbH,  Societe Generale and others.  Incorporated by reference to Exhibit
       10.1 filed with the Current  Report on Form 8-K dated  February  21, 2005
       filed by Shurgard Storage Centers, Inc. ("Shurgard").

                                       89
<PAGE>

10.39  Amendment  and Waiver  Agreement  dated  February  21, 2005 to the Senior
       Credit  Agreement  dated May 26, 2003, as amended as of December 2, 2003,
       by and among First Shurgard  Sprl,  First  Shurgard  Finance Sarl,  First
       Shurgard  Deutschland GmbH, Societe Generale and others.  Incorporated by
       reference to Exhibit 10.2 filed with the Current Report on Form 8-K dated
       February 21, 2005 filed by Shurgard.

10.40  Credit Facility  Agreement  dated July 12, 2004,  between Second Shurgard
       SPRL,  Second  Shurgard  Finance  SARL,  the Royal  Bank of  Scotland  as
       Mandated Lead Arranger, the Royal Bank of Scotland PLC as Facility Agent.
       Incorporated  by reference to Exhibit 10.43 filed with the Report on Form
       10-Q for the quarter ended June 30, 2004 filed by Shurgard.

10.41* Employment  Agreement between  Registrant and B. Wayne Hughes dated as of
       November 16, 1995. Filed with Registrant's Annual Report on Form 10-K for
       the year ended December 31, 1995 and incorporated herein by reference.

10.42* Registrant's   1996  Stock  Option  and   Incentive   Plan.   Filed  with
       Registrant's  Annual Report on Form 10-K for the year ended  December 31,
       2000 and incorporated herein by reference.

10.43* Storage Trust Realty 1994 Share Incentive Plan.  Filed with Storage Trust
       Realty's  Annual Report on Form 10-K for the year ended December 31, 1997
       (SEC File No. 001-13462) and incorporated herein by reference.

10.44* Storage Trust Realty  Retention  Bonus Plan  effective as of November 12,
       1998.  Filed with  Registrant's  Registration  Statement on Form S-4 (SEC
       File No. 333-68543) and incorporated herein by reference.

10.45* Registrant's 2000  Non-Executive/Non-Director  Stock Option and Incentive
       Plan.  Filed with  Registrant's  Registration  Statement on Form S-8 (SEC
       File No. 333-52400) and incorporated herein by reference.

10.46* Registrant's 2001  Non-Executive/Non-Director  Stock Option and Incentive
       Plan.  Filed with  Registrant's  Registration  Statement on Form S-8 (SEC
       File No. 333-59218) and incorporated herein by reference.

10.47* Registrant's   2001  Stock  Option  and   Incentive   Plan.   Filed  with
       Registrant's  Registration Statement on Form S-8 (SEC File No. 333-59218)
       and incorporated herein by reference.

10.48* Form of 2001 Stock Option and Incentive Plan  Non-qualified  Stock Option
       Agreement.  Filed with Registrant's Quarterly Report on Form 10-Q for the
       quarterly  period ended  September  30, 2004 and  incorporated  herein by
       reference.

10.49* Form of  Restricted  Stock Unit  Agreement.  Filed with the  Registrant's
       Quarterly  Report on Form 10-Q for the quarterly  period ended  September
       30, 2004 and incorporated herein by reference.

10.50* Form of 2001 Stock  Option and  Incentive  Plan Stock  Option  Agreement.
       Filed with  Registrant's  Quarterly Report on Form 10-Q for the quarterly
       period ended September 30, 2004 and incorporated herein by reference.

10.51* Public Storage,  Inc.  Performance  Based  Compensation  Plan for Covered
       Employees.  Filed with Registrant's  Current Report on Form 8-K dated May
       11, 2005 and incorporated herein by reference.

10.52* Form of Indemnity Agreement. Filed with the Registrant's Annual Report on
       Form 10-K for the year ended December 31, 2004 and incorporated herein by
       reference.

                                       90

<PAGE>

11     Statement Re: Computation of Earnings per Share. Filed herewith.

12     Statement  Re:  Computation  of Ratio of  Earnings  to Fixed  Charges and
       Preferred Stock Dividends. Filed herewith.

14     Code of Ethics for Senior Financial Officers. Filed with the Registrant's
       Annual  Report  on Form 10-K for the year  ended  December  31,  2003 and
       incorporated herein by reference.

21     Subsidiaries of the Registrant. Filed herewith.

23     Consent of Independent Auditors. Filed herewith.

31.1   Certification  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       Filed herewith.

31.2   Certification  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       Filed herewith.

32     Certification  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       Filed herewith.



* Compensatory benefit plan or arrangement or management contract.

(1) SEC File No. 001-08389 unless otherwise indicated.

                                       91

<PAGE>

                                   SIGNATURES

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

                                    PUBLIC STORAGE, INC.

Date:  March 1, 2007                By:   /s/ Ronald L. Havner, Jr.
                                         -------------------------
                                         Ronald L. Havner, Jr., Vice-Chairman of
                                         the Board, Chief Executive Officer and
                                         President

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

                Signature                                              Title                                      Date
---------------------------------          -------------------------------------------------------         -------------------

<S>                                        <C>                                                              <C>
/s/ Ronald L. Havner, Jr.                  Vice-Chairman of the Board, Chief                                March 1, 2007
-------------------------------
Ronald L. Havner, Jr.                      Executive Officer, President and Director
                                           (principal executive officer)
/s/ John Reyes                             Senior Vice President and                                        March 1, 2007
-------------------------------
John Reyes                                 Chief Financial Officer
                                           (principal financial officer and principal accounting
                                           officer)
/s/ B. Wayne Hughes                        Chairman of the Board                                            March 1, 2007
-------------------------------
B. Wayne Hughes
/s/ Dann V. Angeloff                       Director                                                         March 1, 2007
-------------------------------
Dann V. Angeloff
/s/ William C. Baker                       Director                                                         March 1, 2007
-------------------------------
William C. Baker
/s/ John T. Evans                          Director                                                         March 1, 2007
-------------------------------
John T. Evans
/s/ Uri P. Harkham                         Director                                                         March 1, 2007
-------------------------------
Uri P. Harkham
/s/ B. Wayne Hughes, Jr.                   Director                                                         March 1, 2007
-------------------------------
B. Wayne Hughes, Jr.
/s/ Harvey Lenkin                          Director                                                         March 1, 2007
-------------------------------
Harvey Lenkin
/s/ Gary E. Pruitt                         Director                                                         March 1, 2007
-------------------------------
Gary E. Pruitt
/s/ Daniel C. Staton                       Director                                                         March 1, 2007
-------------------------------
Daniel C. Staton

</TABLE>

                                       92
<PAGE>


                              PUBLIC STORAGE, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                  AND SCHEDULES

                                  (Item 15 (a))


                                                                 Page References

Report of Independent Registered Public Accounting Firm...............F-1

Consolidated balance sheets as of December 31, 2006 and 2005..........F-2

For each of the three years in the period ended December 31, 2006:

Consolidated statements of income.....................................F-3

Consolidated statements of shareholders' equity ......................F-4

Consolidated statements of cash flows..............................F-5 - F-7

Notes to consolidated financial statements.........................F-8 - F-47

SCHEDULE:

III - Real estate and accumulated depreciation....................F-48 - F-117


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  consolidated
financial statements or notes thereto.



<PAGE>





             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


The Board of Directors and Shareholders
Public Storage, Inc.


We have audited the accompanying  consolidated balance sheets of Public Storage,
Inc. as of December 31, 2006 and 2005, and the related  consolidated  statements
of income,  shareholders'  equity, and cash flows for each of the three years in
the period  ended  December  31, 2006.  Our audits also  included the  financial
statement schedule listed in the Index at Item 15(a). These financial statements
and  financial  statement  schedule  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  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 consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Public
Storage,  Inc. at December 31, 2006 and 2005,  and the  consolidated  results of
their  operations and their cash flows for each of the three years in the period
ended December 31, 2006, in conformity with U.S. 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.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States), the effectiveness of Public Storage,
Inc.'s internal control over financial  reporting as of December 31, 2006, based
on criteria established in Internal  Control-Integrated  Framework issued by the
Committee of Sponsoring  Organizations of the Treadway Commission and our report
dated February 28, 2007 expressed an unqualified opinion thereon.





                                                           ERNST & YOUNG LLP /s/

Los Angeles, California

February 28, 2007


                                      F-1
<PAGE>


                              PUBLIC STORAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2006 AND 2005
                    (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>

                                                                                        DECEMBER 31,         DECEMBER 31,
                                                                                           2006                  2005
                                                                                  -------------------- --------------------

                                       ASSETS

<S>                                                                                <C>                  <C>
Cash and cash equivalents....................................................      $     555,584        $     493,501
Real estate facilities, at cost:
   Land......................................................................          2,959,875            1,540,357
   Buildings.................................................................          8,301,990            4,390,127
                                                                                  -------------------- --------------------
                                                                                      11,261,865            5,930,484
   Accumulated depreciation..................................................         (1,754,362)          (1,500,128)
                                                                                  -------------------- --------------------
                                                                                       9,507,503            4,430,356
   Construction in process...................................................             90,038               54,472
                                                                                  -------------------- --------------------
                                                                                       9,597,541            4,484,828

Investment in real estate entities...........................................            301,905              328,555
Goodwill.....................................................................            174,634              176,285
Intangible assets, net.......................................................            414,602                    -
Other assets.................................................................            154,207              69,317
                                                                                  -------------------- --------------------
              Total assets...................................................      $  11,198,473        $   5,552,486
                                                                                  ==================== ====================

                       LIABILITIES AND SHAREHOLDERS' EQUITY

Borrowings on bank credit facilities.........................................      $     345,000        $           -
Notes payable................................................................          1,466,284              113,950
Debt to joint venture partner................................................             37,258               35,697
Preferred stock called for redemption........................................            302,150              172,500
Accrued and other liabilities................................................            333,706              159,360
                                                                                  -------------------- --------------------
         Total liabilities...................................................          2,484,398              481,507
Minority interest:
   Preferred partnership interests...........................................            325,000              225,000
   Other partnership interests...............................................            181,030               28,970
Commitments and contingencies (Note 17)
Shareholders' equity:
   Cumulative Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
     1,712,600 shares issued (in series) and outstanding, (1,698,336 at
     December 31, 2005) at liquidation preference............................          2,855,000            2,498,400
   Common Stock, $0.10 par value, 200,000,000 shares authorized, 169,144,467
     shares issued and outstanding (128,089,563 at December 31, 2005)........             16,915               12,809
   Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized,
     8,744.193 shares issued and outstanding.................................                  -                    -
   Paid-in capital...........................................................          5,661,507            2,430,671
   Cumulative net income.....................................................          3,503,292            3,189,266
   Cumulative distributions paid.............................................         (3,847,998)          (3,314,137)
   Accumulated other comprehensive income....................................             19,329                    -
                                                                                  -------------------- --------------------
         Total shareholders' equity..........................................          8,208,045            4,817,009
                                                                                  -------------------- --------------------
              Total liabilities and shareholders' equity.....................      $  11,198,473        $   5,552,486
                                                                                  ==================== ====================

</TABLE>

                            See accompanying notes.
                                      F-2

<PAGE>


                              PUBLIC STORAGE, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2006
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                                                            2006                2005                2004
                                                                       ---------------     ---------------   -----------------

REVENUES:
<S>                                                                     <C>                 <C>                 <C>
   Self-storage rental income...................................        $  1,239,949        $    951,370        $    861,665
   Ancillary operating revenue..................................             109,907              92,230              91,101
   Interest and other income....................................              31,799              16,447               5,391
                                                                       ---------------     ---------------   -----------------
                                                                           1,381,655           1,060,047             958,157
                                                                       ---------------     ---------------   -----------------

EXPENSES:
  Cost of operations (excluding depreciation and amortization):
      Self-storage facilities...................................             429,196             320,589             300,355
      Ancillary operations......................................              71,364              57,712              61,589
  Depreciation and amortization.................................             437,984             196,232             182,890
  General and administrative....................................              84,661              21,115              18,813
  Interest expense, including interest paid to related party
  (Note 13).....................................................              33,062               8,216                 760
                                                                       ---------------     ---------------   -----------------
                                                                           1,056,267             603,864             564,407
                                                                       ---------------     ---------------   -----------------

Income from continuing operations before equity in earnings of
   real estate entities, casualty loss, gain on disposition of
   real estate and real estate investments, foreign currency
   exchange gain, income (expense) from derivatives and minority
   interest in income...........................................             325,388             456,183             393,750

Equity in earnings of real estate entities......................              11,895              24,883              22,564
Casualty loss ..................................................                   -              (1,917)             (1,250)
Gain on disposition of real estate and real estate investments..               2,177               3,099               1,317
Foreign currency exchange gain..................................                 336                   -                   -
Income (expense) from derivatives, net..........................               3,926                   -                   -
Minority interest in income.....................................             (31,883)            (32,651)            (49,913)
                                                                       ---------------     ---------------   -----------------
Income from continuing operations...............................             311,839             449,597             366,468
Cumulative effect of a change in accounting principle...........                 578                   -                   -
Discontinued operations.........................................               1,609               6,796                (255)
                                                                       ---------------     ---------------   -----------------
Net income......................................................        $    314,026        $    456,393        $    366,213
                                                                       ===============     ===============   =================
Net income allocation:
----------------------
   Allocable to preferred shareholders:
     Based on distributions paid ...............................        $    214,218        $    173,017        $    157,925
     Based on redemptions of preferred stock (Note 2)...........              31,493               7,538               8,724
   Allocable to Equity Stock, Series A..........................              21,424              21,443              21,501
   Allocable to common shareholders.............................              46,891             254,395             178,063
                                                                       ---------------     ---------------   -----------------
                                                                        $    314,026        $    456,393        $    366,213
                                                                       ===============     ===============   =================

Net income per common share - basic
-----------------------------------
   Continuing operations........................................        $       0.32        $       1.93        $      1.39
   Discontinued operations......................................                0.01                0.05                 -
                                                                       ---------------     ---------------   -----------------
                                                                        $       0.33        $       1.98        $      1.39
                                                                       ===============     ===============   =================
Net income per common share - diluted
-------------------------------------
   Continuing operations........................................        $       0.32        $       1.92        $      1.38
   Discontinued operations......................................                0.01                0.05               -
                                                                       ---------------     ---------------   -----------------
                                                                        $       0.33        $       1.97        $      1.38
                                                                       ===============     ===============   =================
Net income per depositary share of Equity Stock, Series A (basic
   and diluted) ................................................        $       2.45        $       2.45        $      2.45
                                                                       ===============     ===============   =================
Basic weighted average common shares outstanding................             142,760             128,159             127,836
                                                                       ===============     ===============   =================
Diluted weighted average common shares outstanding..............             143,715             128,819             128,681
                                                                       ===============     ===============   =================
Weighted average shares of Equity Stock, Series A (basic and
   diluted) ....................................................               8,744               8,752               8,776
                                                                       ===============     ===============   =================

</TABLE>

                            See accompanying notes.
                                      F-3
<PAGE>


                              PUBLIC STORAGE, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2006
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>


                                                                             Cumulative
                                                                             Preferred     Common       Paid-in      Cumulative
                                                                               Stock        Stock       Capital      Net Income
                                                                          -------------- ----------- ------------- --------------
<S>                                                                         <C>           <C>        <C>            <C>
     BALANCES AT DECEMBER 31, 2003......................................    $1,867,025    $  12,699  $  2,438,632   $ 2,366,660
        Issuance of Cumulative Preferred Stock; (1,618,050 shares)......       491,250            -       (15,016)            -
        Redemption of Cumulative Preferred Stock (3,401,850) shares.....      (256,125)           -           (81)            -
        Restructuring of preferred partnership units (Note 11)..........             -            -         2,063             -
        Issuance of common stock (1,985,416 shares) (Note 12)                                   199        49,730
        Repurchase of common stock (445,700 shares) (Note 12)...........             -          (45)      (20,250)            -
        Stock option and restricted stock expense (Note 14).............             -            -         2,490             -
        Net income......................................................             -            -             -       366,213
        Distributions to shareholders:
          Cumulative Preferred Stock....................................             -            -             -             -
          Equity Stock, Series A........................................             -            -             -             -
          Common Stock ($1.80 per share)................................             -            -             -             -
                                                                          -------------- ----------- ------------- --------------
     BALANCES AT DECEMBER 31, 2004......................................     2,102,150       12,853     2,457,568     2,732,873
      Issuance of Cumulative Preferred Stock (25,050 shares) ...........       626,250            -       (19,665)            -
        Redemption of Cumulative Preferred Stock (2,306,900 shares).....      (230,000)           -           (34)            -
        Repurchase of preferred partnership units (Note 11) ............             -            -           874             -
        Issuance of common stock (282,998 shares) (Note 12) ............                         28         7,483             -
        Repurchase of common stock (84,000 shares) (Note 12)............             -           (8)       (4,982)            -
        Stock distribution from unconsolidated real estate entities
         (635,885 common                                                             -          (64)      (14,456)            -
           shares and 31,909 Equity Stock, Series A, depositary shares)
             (Note 6)...................................................
        Stock option and restricted stock expense (Note 14).............             -            -         3,883             -
        Net income......................................................             -            -             -       456,393
        Distributions to shareholders:
          Cumulative Preferred Stock....................................             -            -             -             -
          Equity Stock, Series A........................................             -            -             -             -
          Common Stock ($1.90 per share)................................             -            -             -             -
                                                                          -------------- ----------- ------------- --------------
     BALANCES AT DECEMBER 31, 2005......................................     2,498,400       12,809     2,430,671     3,189,266
        Issuance of Cumulative Preferred Stock (52,500 shares) .........     1,312,500            -       (39,932)            -
        Redemption of Cumulative Preferred Stock (38,236 shares)........      (955,900)           -             -             -
        Issuance of common stock (41,054,904 shares) (Note 12) .........                      4,106     3,267,564             -
        Stock option and restricted stock expense (Note 14).............             -            -         3,204             -
        Net income......................................................             -            -             -       314,026
        Distributions to shareholders:
          Cumulative Preferred Stock....................................             -            -             -             -
          Equity Stock, Series A........................................             -            -             -             -
          Common Stock ($2.00 per share)................................             -            -             -             -
         Accumulated other comprehensive income:
           Foreign currency translation adjustments.....................             -            -             -             -
                                                                          -------------- ----------- ------------- --------------
     BALANCES AT DECEMBER 31, 2006......................................   $ 2,855,000    $  16,915  $  5,661,507   $ 3,503,292
                                                                          ============== =========== ============= ==============

</TABLE>

<TABLE>
<CAPTION>

                                                                                             Accumulated
                                                                                               Other             Total
                                                                             Cumulative     Comprehensive    Shareholders'
                                                                            Distributions       Income          Equity
                                                                           --------------- --------------- ----------------
<S>                                                                        <C>              <C>             <C>
     BALANCES AT DECEMBER 31, 2003......................................   $  (2,465,217)   $           -   $   4,219,799
        Issuance of Cumulative Preferred Stock; (1,618,050 shares)......               -                -         476,234
        Redemption of Cumulative Preferred Stock (3,401,850) shares.....               -                -        (256,206)
        Restructuring of preferred partnership units (Note 11)..........               -                -           2,063
        Issuance of common stock (1,985,416 shares) (Note 12)                                                      49,929
        Repurchase of common stock (445,700 shares) (Note 12)...........               -                -         (20,295)
        Stock option and restricted stock expense (Note 14).............               -                -           2,490
        Net income......................................................               -                -         366,213
        Distributions to shareholders:
          Cumulative Preferred Stock....................................        (157,925)               -        (157,925)
          Equity Stock, Series A........................................         (21,501)               -         (21,501)
          Common Stock ($1.80 per share)................................        (230,834)               -        (230,834)
                                                                           --------------- --------------- ----------------
     BALANCES AT DECEMBER 31, 2004......................................      (2,875,477)               -       4,429,967
      Issuance of Cumulative Preferred Stock (25,050 shares) ...........               -                -         606,585
        Redemption of Cumulative Preferred Stock (2,306,900 shares).....               -                -        (230,034)
        Repurchase of preferred partnership units (Note 11) ............               -                -             874
        Issuance of common stock (282,998 shares) (Note 12) ............               -                -           7,511
        Repurchase of common stock (84,000 shares) (Note 12)............               -                -          (4,990)
        Stock distribution from unconsolidated real estate entities
         (635,885 common                                                               -                -         (14,520)
           shares and 31,909 Equity Stock, Series A, depositary shares)
             (Note 6)...................................................
        Stock option and restricted stock expense (Note 14).............               -                -           3,883
        Net income......................................................               -                -         456,393
        Distributions to shareholders:
          Cumulative Preferred Stock....................................        (173,017)               -        (173,017)
          Equity Stock, Series A........................................         (21,443)               -         (21,443)
          Common Stock ($1.90 per share)................................        (244,200)               -        (244,200)
                                                                           --------------- --------------- ----------------
     BALANCES AT DECEMBER 31, 2005......................................      (3,314,137)               -       4,817,009
        Issuance of Cumulative Preferred Stock (52,500 shares) .........               -                -       1,272,568
        Redemption of Cumulative Preferred Stock (38,236 shares)........               -                -        (955,900)
        Issuance of common stock (41,054,904 shares) (Note 12) .........               -                -       3,271,670
        Stock option and restricted stock expense (Note 14).............               -                -           3,204
        Net income......................................................               -                -         314,026
        Distributions to shareholders:
          Cumulative Preferred Stock....................................        (214,218)               -        (214,218)
          Equity Stock, Series A........................................         (21,424)               -         (21,424)
          Common Stock ($2.00 per share)................................        (298,219)               -        (298,219)
         Accumulated other comprehensive income:
           Foreign currency translation adjustments.....................               -           19,329          19,329
                                                                           --------------- --------------- ----------------
     BALANCES AT DECEMBER 31, 2006......................................   $  (3,847,998)   $      19,329   $   8,208,045
                                                                           =============== =============== ================

</TABLE>

                            See accompanying notes.
                                      F-4
<PAGE>


                              PUBLIC STORAGE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2006
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                                         2006            2005           2004
                                                                                   --------------- -------------- ---------------
Cash flows from operating activities:
<S>                                                                                 <C>             <C>             <C>
   Net income..................................................................     $   314,026     $   456,393     $   366,213
   Adjustments to reconcile net income to net cash provided by operating
     activities:
    Amortization of note premium (Note 8)......................................          (3,109)         (1,026)              -
    Gain on sales of real estate assets, net, including discontinued operations          (4,547)         (8,279)         (2,288)
    Real estate impairment associated with casualty losses (Note 5).........                996           2,592           1,250
    Depreciation and amortization...........................................            437,984         196,232         182,890
    Write off of capitalized development project costs......................             10,354               -               -
    Equity in earnings of real estate entities..............................            (11,895)        (24,883)        (22,564)
    Foreign currency exchange gain..........................................               (336)              -               -
    Income from derivatives, net............................................             (3,926)              -               -
    Distributions received from the real estate entities (Note 6)...........             17,699          23,112          20,961
    Non-cash portion of stock-based compensation expense....................              3,204           3,883           2,490
    Minority interest in income.............................................             31,883          32,651          49,913
   Other operating activities...............................................               (633)         11,373          17,799
                                                                                   --------------- -------------- ---------------
       Total adjustments....................................................            477,674         235,655         250,451
                                                                                   --------------- -------------- ---------------
       Net cash provided by operating activities............................            791,700         692,048         616,664
                                                                                   --------------- -------------- ---------------
Cash flows from investing activities:
    Repayment of notes receivable due from affiliate........................                  -               -         100,000
    Capital improvements to real estate facilities .........................            (79,326)        (25,890)        (35,868)
    Construction in process.................................................           (119,648)        (86,248)        (71,602)
    Acquisition of minority interests (Note 11).............................            (62,300)        (92,815)        (24,851)
    Acquisitions of real estate facilities..................................            (98,954)       (254,549)       (139,794)
    Merger with Shurgard (Note 3)...........................................           (137,261)              -               -
    Consolidation of partnerships (Note 2)..................................              3,024               -               -
    Investments in real estate entities.....................................                  -               -          (3,005)
    Proceeds from sales of real estate and real estate investments..........             14,545          14,755          12,648
    Proceeds from sales of held-to-maturity investments  (Note 2) ..........             13,074           7,452          20,729
    Acquisition of held-to-maturity investments (Note 2)....................                  -          (6,361)        (13,663)
    Other investing activities..............................................            (20,650)              -          (2,232)
                                                                                   --------------- -------------- ---------------
       Net cash used in investing activities................................           (487,496)       (443,656)       (157,638)
                                                                                   --------------- -------------- ---------------
Cash flows from financing activities:
    Principal payments on notes payable and bank credit facilities..........           (711,557)        (14,543)        (41,204)
    Repayment of debt to related party (Note 11) ...........................                  -         (64,513)              -
    Proceeds from borrowings on bank credit facilities......................            360,000               -               -
    Proceeds from borrowing on European notes payable ......................             28,891               -               -
    Contributions received from European minority interests ................             15,800               -               -
    Net proceeds from issuances of common stock.............................             85,369           7,511          49,929
    Net proceeds from issuances of cumulative preferred stock...............          1,272,568         606,585         476,234
    Repurchases of common stock.............................................                  -          (4,990)        (20,295)
    Redemption of cumulative preferred stock................................           (826,250)       (112,409)       (316,331)
    Redemption of preferred partnership interests...........................                  -         (85,000)              -
    Issuance of preferred partnership interests.............................            100,000               -               -
    Distributions paid to shareholders......................................           (533,861)       (438,660)       (410,260)
    Distributions paid to holders of preferred partnership interests (Note
       11)..................................................................            (19,055)        (16,147)        (30,423)
    Distributions paid to other minority interests,.........................            (16,300)        (18,177)        (21,349)
    Net proceeds from financing through acquisition joint venture (Note 9)..                  -          19,197          16,095
                                                                                   --------------- -------------- ---------------
       Net cash used in financing activities................................           (244,395)       (121,146)       (297,604)
                                                                                   --------------- -------------- ---------------
Net increase in cash and cash equivalents...................................             59,809         127,246         161,422
Net effect of foreign exchange translation on cash..........................              2,274               -               -
Cash and cash equivalents at the beginning of the year......................            493,501         366,255         204,833
                                                                                   --------------- -------------- ---------------
Cash and cash equivalents at the end of the year............................        $   555,584     $   493,501     $   366,255
                                                                                   =============== ============== ===============

</TABLE>

                                      F-5
                            See accompanying notes.
<PAGE>

                              PUBLIC STORAGE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2006
                             (AMOUNTS IN THOUSANDS)

                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                      2006            2005           2004
                                                                                 --------------- -------------- -------------
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES:

<S>                                                                              <C>                        <C>            <C>
   Real estate acquired in exchange for assumption of notes payable.......       $     (4,590)              -              -

   Notes payable assumed in connection with the acquisition of real estate              4,590               -              -

   Merger with Shurgard Storage Centers, Inc. (Note 3):
       Real estate facilities.............................................         (4,887,507)              -              -
       Construction in process............................................            (91,000)              -              -
       Intangible assets..................................................           (584,165)              -              -
       Other assets.......................................................            (95,899)              -              -
       Accrued and other liabilities......................................            190,419               -              -
       Minority interest..................................................            144,196               -              -
       Notes payable......................................................          2,000,549               -              -
       Common stock.......................................................              3,891               -              -
       Paid in  capital...................................................          3,182,255               -              -

   Consolidation of affiliated entities:
       Minority interest..................................................              3,963               -              -
       Real estate facilities.............................................            (22,459)              -              -
       Investments........................................................             20,846               -              -
       Other assets.......................................................               (167)              -              -
       Accrued and other liabilities......................................                841               -              -

   Revaluation of debt to joint venture partner (Note 9):
       Debt due to joint venture partner..................................              1,386               -              -
       Other assets.......................................................             (1,386)              -              -

   Foreign currency adjustment:
       Real estate facilities.............................................            (34,696)              -              -
       Construction in process............................................             (1,373)              -              -
       Intangible assets, net.............................................             (6,381)              -              -
       Other assets.......................................................               (717)              -              -
       Notes payable......................................................             17,970               -              -
       Accrued and other liabilities......................................              4,237               -              -
       Minority interests.................................................              3,905               -              -
       Equity.............................................................             19,329               -              -

   Partnership units converted into shares of common stock (Note 11):
       Minority interest                                                                 (155)              -              -
       Common stock                                                                         1               -              -
       Paid-in capital                                                                    154               -              -

   Retirement of Common Stock and Equity Stock, Series A, received as a
     distribution from affiliated entities (Note 6):
       Common Stock.......................................................                  -              (64)            -
       Paid-in capital....................................................                  -          (14,456)            -
       Investment in real estate entities.................................                  -           14,520             -

</TABLE>
                            See accompanying notes.
                                      F-6
<PAGE>
                              PUBLIC STORAGE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2006
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                      2006            2005           2004
                                                                                 --------------- -------------- -------------
   Acquisition of minority interest in Consolidated Joint Venture in exchange
     for debt (Note 9):...................................................
<S>                                                                                         <C>        <C>                 <C>
       Minority interest - Other partnership interests....................                  -          (62,013)            -
       Real estate facilities.............................................                  -           (2,500)            -
       Debt to related party..............................................                  -           64,513             -

   Acquisition of real estate facilities in exchange for minority interests and
     assumption of mortgage notes payable:
       Real estate facilities..............................................                 -                -      (119,693)
       Mortgage notes payable..............................................                 -                -        94,693
       Preferred partnership interests.....................................                 -                -        25,000

</TABLE>

                            See accompanying notes.
                                      F-7
<PAGE>


                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006



1.       Description of the business
         ---------------------------

         Public Storage,  Inc. (referred to herein as "the Company",  "we", "us"
or "our") is a California  corporation,  which was  organized in 1980.  We are a
fully  integrated,  self-administered  and self-managed  real estate  investment
trust ("REIT") whose  principal  business  activities  include the  acquisition,
development,  ownership and  operation of  self-storage  facilities  which offer
storage spaces for lease,  generally on a month-to-month basis, for personal and
business use. Our  self-storage  facilities are located  primarily in the United
States.  As  a  result  of  the  merger  with  Shurgard  Storage  Centers,  Inc.
("Shurgard") on August 22, 2006, we have  facilities  located in several Western
European countries (Note 3).

         In addition to our  self-storage  facilities,  we own (i)  interests in
commercial  properties,  containing commercial and industrial rental space, (ii)
interests in facilities that lease storage containers, and (iii) other ancillary
operations  comprised  principally of reinsurance of policies  against losses to
goods  stored by our  self-storage  tenants,  retail  sales of  storage  related
products and truck rentals at our self-storage locations.

         At December 31, 2006,  we had direct and indirect  equity  interests in
2,003  self-storage  facilities located in 38 states operating under the "Public
Storage" name, and 166 self-storage facilities located in seven Western European
nations which operate under the "Shurgard  Storage  Centers"  name. We also have
direct and indirect equity  interests in  approximately  20 million net rentable
square  feet of  commercial  space  located in 11 states in the  United  States.
References  throughout  to the  number of  facilities  and  square  footage  are
unaudited.

2. Summary of significant accounting policies
   ------------------------------------------

         Basis of presentation
         ---------------------

         The consolidated financial statements are presented on an accrual basis
in accordance with accounting principles generally accepted in the United States
and include the accounts of the Company and our consolidated  subsidiaries.  All
intercompany balances and transactions have been eliminated in consolidation.

         Certain amounts  previously  reported have been reclassified to conform
to the December 31, 2006  presentation.  In previous  presentations,  intangible
assets were reported  separately  from  goodwill on the  Company's  consolidated
balance sheet. We have now reclassified  the intangible  assets to goodwill (see
"Goodwill and Intangible  Assets" below).  Certain  reclassifications  have also
been made from previous  presentations  as a result of  discontinued  operations
(See Note 4).

         Consolidation policy
         --------------------

         Entities in which we have an interest are first  evaluated to determine
whether, in accordance with the provisions of the Financial Accounting Standards
Board's  Interpretation No. 46R,  "Consolidation of Variable Interest Entities,"
they represent  Variable  Interest  Entities.  We have  determined  that we have
several Variable Interest Entities that we are the primary beneficiaries of and,
accordingly such entities are consolidated.

         Entities that are not Variable  Interest Entities are consolidated when
we control the entity.  For  purposes of  determining  control,  when we are the
general partner, we are considered to control the partnership unless the limited
partners possess substantial  "kick-out" or "participative" rights as defined in
Emerging  Issues  Task Force  Statement  04-5 -  "Determining  whether a general
partner or the general  partners as a group,  controls a limited  partnership or
similar entity when the limited partners have certain rights" ("EITF 04-5").

                                      F-8
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


         The accounts of the entities we control  along with the accounts of the
Variable Interest Entities that we are the primary beneficiary of (collectively,
the  "Consolidated   Entities")  are  included  in  our  consolidated  financial
statements  along  with  those  of the  Company.  All  significant  intercompany
balances and transactions have been eliminated.

         In accordance with the guidance of EITF 04-5, effective January 1, 2006
we commenced consolidating the accounts of three partnerships that we previously
accounted for on the equity method.  Our investment in these entities,  totaling
$20,846,000,  was allocated to the real estate  facilities,  cash, other assets,
liabilities,  and minority interests of these entities as described in the table
below (amounts in thousands).

                                        Total
                                     -------------

Real estate facilities.........      $   22,459
Cash...........................           3,024
Other assets...................             167
Accrued and other liabilities..            (841)
Minority interest .............          (3,963)
                                     -------------
                                     $   20,846
                                     =============

         We account  for  affiliated  entities  over  which we have  significant
influence (the "Unconsolidated Entities") using the equity method of accounting.

         Use of estimates
         ----------------

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

         Income taxes
         ------------

         For all taxable  years  subsequent to 1980,  the Company  qualified and
intends  to  continue  to qualify  as a REIT,  as defined in Section  856 of the
Internal  Revenue  Code.  As a REIT,  we are not  taxed on that  portion  of our
taxable income which is distributed to our  shareholders,  provided that we meet
certain  tests.  We believe we have met these tests during 2006,  2005, and 2004
and,  accordingly,   no  provision  for  income  taxes  has  been  made  in  the
accompanying consolidated financial statements.

         Financial instruments
         ---------------------

         We have  estimated  the fair value of our financial  instruments  using
available   market   information   and  appropriate   valuation   methodologies.
Considerable  judgment  is  required  in  interpreting  market  data to  develop
estimates of fair value. Accordingly,  estimated fair values are not necessarily
indicative of the amounts that could be realized in current market exchanges.

         For  purposes of  financial  statement  presentation,  we consider  all
highly liquid financial  instruments such as short-term  treasury  securities or
investment grade short-term commercial paper to be cash equivalents.

         Due to the short  period to maturity of our cash and cash  equivalents,
accounts receivable,  other financial instruments included in other assets, line
of credit and  short-term  bank  financing,  variable rate debt, and accrued and
other liabilities,  the carrying values as presented on the consolidated balance
sheets are reasonable estimates of fair value.

                                      F-9
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


         Financial  assets that are exposed to credit risk consist  primarily of
cash and cash equivalents and accounts  receivable.  Cash and cash  equivalents,
which consist of short-term  investments,  including  commercial paper, are only
invested in entities with an investment  grade rating.  Accounts  receivable are
not a significant portion of total assets and are comprised of a large number of
individual customer balances.

         Due to the  acquisition  of  European  subsidiaries  in the merger with
Shurgard,  the results of our operations and our financial position are affected
by the  fluctuations  in the value of the euro,  and to a lesser  extent,  other
European  currencies,  against the U.S. dollar.  Also, we are exposed to foreign
currency exchange risk related to intercompany debt with or between our European
subsidiaries  that  are  not  denominated  in  the  functional  currency  of the
subsidiary or the investee.

         Included  in  cash  and  cash  equivalents  at  December  31,  2006  is
$32,496,000  ($18,962,000  at December 31,  2005) held by our captive  insurance
entities.  Insurance and other regulations place significant restrictions on our
ability to withdraw these funds for purposes  other than  insurance  activities.
Other  assets at  December  31, 2006  include  investments  totaling  $6,764,000
($19,838,000 at December 31, 2005) primarily held-to-maturity Federal government
agency securities stated at amortized cost, which approximates fair value. Other
assets at  December  31,  2006 also  include  derivative  financial  instruments
totaling  $11,810,000  (none at December 31, 2005)  reported at fair value.  See
Note 10 for further  discussion  of the fair value of our  derivative  financial
instruments,  and Note 8 for further  discussion  of the fair value of our notes
payable.

         Real Estate Facilities
         ----------------------

         Real estate  facilities are recorded at cost. Costs associated with the
acquisition,   development,   construction,   renovation,   and  improvement  of
properties are capitalized. Interest, property taxes, and other costs associated
with  development  incurred  during the  construction  period are capitalized as
building cost.  Expenditures for repairs and maintenance  expense are charged to
expense when incurred.  Depreciation is computed using the straight-line  method
over the estimated  useful lives of the buildings  and  improvements,  which are
generally between 5 and 25 years.

         Evaluation of asset impairment
         ------------------------------

         We evaluate impairment of goodwill annually through a two-step process.
In the first step, if the fair value of the reporting unit to which the goodwill
applies is equal to or  greater  than the  carrying  amount of the assets of the
reporting unit,  including the goodwill,  the goodwill is considered  unimpaired
and the second step is unnecessary. If, however, the fair value of the reporting
unit  including  goodwill is less than the carrying  amount,  the second step is
performed. In this test, we compute the implied fair value of the goodwill based
upon the  allocations  that  would be made to the  goodwill,  other  assets  and
liabilities of the reporting  unit if a business  combination  transaction  were
consummated  at the fair value of the  reporting  unit.  An  impairment  loss is
recorded to the extent that the implied  fair value of the goodwill is less than
the goodwill's  carrying amount.  No impairments of our goodwill were identified
in our annual evaluations at December 31, 2006, 2005, or 2004.

         We evaluate  impairment of long-lived  assets on a quarterly  basis. We
first  evaluate  these  assets  for  indicators  of  impairment  such  as  a)  a
significant decrease in the market price of a long-lived asset, b) a significant
adverse change in the extent or manner in which a long-lived asset is being used
or in its physical  condition,  c) a significant adverse change in legal factors
or the business climate that could affect the value of the long-lived  asset, d)
an  accumulation  of costs  significantly  in  excess of the  amount  originally
projected for the acquisition or  construction of the long-lived  asset, or e) a
current-period  operating or cash flow loss combined with a history of operating
or cash flow losses or a projection  or forecast  that  demonstrates  continuing
losses associated with the use of the long-lived asset. When any such indicators
of impairment  are noted,  we compare the carrying  value of these assets to the
future estimated  undiscounted  cash flows  attributable to these assets. If the
asset's recoverable amount is less than the carrying value of the asset, then an
impairment  charge is booked for the excess of  carrying  value over the asset's
fair value.

                                      F-10
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Any long-lived  assets which we expect to sell or otherwise  dispose of
prior to their  previously  estimated useful life are stated at what we estimate
to be the lower of their  estimated net realizable  value (less cost to sell) or
their carrying  value.  During 2004 we recorded  impairment  charges  related to
containers,  trucks,  and other equipment in our  containerized  storage segment
identified  for closure (see Note 4). These  impairment  charges were based upon
the  differential  between book value and the  estimated net  realizable  value,
which was based  upon  prices  for  similar  assets,  and were  equal to the net
proceeds ultimately received. No additional impairments were identified from our
evaluations, except as noted under "Accounting for casualty losses" below.

         Accounting for casualty losses
         ------------------------------

         Our  policy is to record  casualty  losses or gains in the  period  the
casualty occurs equal to the  differential  between (a) the book value of assets
destroyed  and (b)  insurance  proceeds,  if any,  that we expect to  receive in
accordance with our insurance  contracts.  Potential insurance proceeds that are
subject to uncertainties, such as interpretation of deductible provisions of the
governing  agreements,  are treated as a contingent  proceeds in accordance with
Statement of Financial  Accounting  Standards No. 5 ("SFAS 5"), and not recorded
until the uncertainties are satisfied. During 2005 and 2004 we incurred casualty
losses totaling $1,917,000 and $1,250,000, respectively, due to damage caused by
hurricanes.

         Accounting for stock-based compensation
         ---------------------------------------

         We utilize the Fair Value Method (as defined in Note 14) of  accounting
for our employee  stock options  issued after December 31, 2001, and utilize the
APB 25 Method (as defined in Note 14) for employee stock options issued prior to
January 1, 2002.  Restricted  stock unit  expense is recorded  over the relevant
vesting period.  See Note 14 for more information with respect to our accounting
for employee stock options and restricted stock units.

         Other assets
         ------------

         Other assets  primarily  consists of prepaid  expenses,  investments in
held to maturity debt securities,  accounts  receivable,  assets associated with
our containerized storage business, merchandise inventory and rental trucks.

         Accrued and other liabilities
         -----------------------------

         Accrued and other  liabilities  consist  primarily of real property tax
accruals,  value-added tax with respect to our European operations,  prepayments
of  rents,  trade  payables,  losses  and loss  adjustment  liabilities  for our
self-insured risks (described below), and accrued interest. Prepaid rent totaled
$64,291,000  at December  31, 2006  ($26,145,000  at December 31,  2005),  while
property and value-added tax accruals  approximated  $80,336,000 at December 31,
2006 ($45,360,000 at December 31, 2005).

         We are  self-insured  for a portion  of the risks  associated  with our
property and casualty losses. We also utilize third-party  insurance carriers to
provide  property and liability  insurance  coverage to limit our self insurance
exposure.  We  accrue  liabilities  for  uninsured  losses  and loss  adjustment
expense, which at December 31, 2006 totaled $31,532,000 ($32,797,000 at December
31, 2005). Liabilities for losses and loss adjustment expenses include an amount
we determine  from loss  reports and  individual  cases and an amount,  based on
recommendations  from an  independent  actuary  that is a member of the American
Academy of Actuaries using a frequency and severity method,  for losses incurred
but  not  reported.  Determining  the  liability  for  unpaid  losses  and  loss
adjustment expense is based upon estimates.

                                      F-11
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Through a wholly-owned subsidiary,  we reinsure policies against claims
for losses to goods stored by tenants in our  self-storage  facilities.  For our
United States operations, we have third-party insurance coverage for losses from
any  individual  event  that  exceeds  a loss of  $1,500,000,  to a  maximum  of
$9,000,000.  Estimated  uninsured  losses  are  accrued  as  ancillary  costs of
operations.

         While we believe that the amount of estimated accrued  liabilities with
respect to tenant  claims and  property and casualty  losses are  adequate,  the
ultimate  losses  may be in  excess  of or less  than the  amounts  that we have
accrued.  The  methods  for  making  such  estimates  and for  establishing  the
resulting liabilities are regularly reviewed.

         Intangible assets and goodwill
         ------------------------------

         Goodwill  represents the excess of acquisition cost over the fair value
of  net  tangible  and  identifiable  intangible  assets  acquired  in  business
combinations.  Each business  combination  from which our goodwill arose was for
the  acquisition  of single  businesses and  accordingly,  the allocation of our
goodwill to our business segments (principally  Domestic  Self-Storage) is based
directly  on  such  acquisitions.  Our  goodwill  has an  indeterminate  life in
accordance  with the provisions of Statement of Financial  Accounting  Standards
No. 142 ("SFAS 142").

         In prior  periods,  intangible  assets  (original  acquisition  cost of
$165,000,000  and net book  value of  $98,081,000  at  December  31,  2005) were
presented on our consolidated  balance sheets. For all periods presented herein,
we have  reclassified  this intangible asset to goodwill and, in accordance with
the provisions of SFAS 142 as applied to the reclassification effective April 1,
2006, we ceased amortization.  Included in depreciation and amortization expense
for the year ended  December 31, 2006 is  $1,651,000  ($6,604,000  for the years
ended  December  31, 2005 and 2004) with respect to these  assets.  Our goodwill
balances of  $174,634,000  and  $176,285,000  are  reported  net of  accumulated
amortization  of  $85,085,000  and  $83,434,000  at December  31, 2006 and 2005,
respectively, on our accompanying consolidated balance sheets.

         As a  result  of  the  merger  with  Shurgard  (Note  3),  we  acquired
finite-lived  intangible  assets comprised of storage tenants in place valued at
$530,528,000,  certain  land leases  with rent  payments  that are below  market
valued at $34,813,000, and the "Shurgard" tradename, which we continue to use in
Europe,  valued  at  $18,824,000.   Our  intangible  assets  were  increased  by
$6,381,000  in the year ended  December 31, 2006 due to the impact of changes in
exchange rates.

         The tenant  intangible  assets are  amortized  relative to the expected
future  benefit  of the  tenants  in place to each  period,  and the land  lease
intangibles are amortized relative to the benefit of the below-market lease. The
Shurgard tradename has an indefinite life and,  accordingly,  we do not amortize
this asset but instead analyze it on an annual basis for recoverability.

         Amortization  expense of $175,944,000 was recorded for our finite-lived
intangible  assets for the year ended  December 31, 2006.  The estimated  annual
amortization expense for our finite-lived intangible assets for each of the next
five years ending December 31 is as follows:


   2007                                                        $   243,282,000
   2008                                                             70,518,000
   2009                                                             22,395,000
   2010                                                             13,830,000
   2011 and beyond                                                  39,372,000

                                      F-12
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Revenue and expense recognition
         -------------------------------

         Rental income,  which is generally  earned  pursuant to  month-to-month
leases for storage  space,  is recognized as earned.  Promotional  discounts are
recognized as a reduction to rental income over the promotional period, which is
generally during the first month of occupancy.  Late charges and  administrative
fees are recognized as income when collected.  Tenant  reinsurance  premiums are
recognized as premium revenue when earned.  Revenues from merchandise  sales and
truck  rentals are  recognized  when earned.  Interest  income is  recognized as
earned.  Equity in earnings of real estate  entities is recognized  based on our
ownership interest in the earnings of each of the Unconsolidated Entities.

         We accrue for property tax expense based upon  estimates and historical
trends.  If these  estimates are  incorrect,  the timing of expense  recognition
could be affected.

         Cost  of  operations,  general  and  administrative  expense,  interest
expense, as well as television,  yellow page, and other advertising expenditures
are expensed as incurred.


         Foreign Exchange Translation Policy
         -----------------------------------

         The  local  currency  is  the  functional  currency  for  our  European
subsidiaries.  Assets and liabilities are translated at  end-of-period  exchange
rates while revenues and expenses are  translated at the average  exchange rates
in effect during the period.  Equity is  translated at historical  rates and the
resulting  cumulative  translation  adjustments  are  included as a component of
accumulated other comprehensive income (loss) until the translation  adjustments
are realized.

         For the year ended  December 31,  2006,  we recorded  foreign  currency
exchange gains of $336,000 on our consolidated statement of income.  Included in
other  accumulated  comprehensive  income  was  a  cumulative  foreign  currency
translation adjustment gain of $19,329,000 at December 31, 2006.

         Derivative Financial Instruments
         --------------------------------

         In  connection  with our merger  with  Shurgard,  we  acquired  certain
preexisting  derivative  financial  instruments  held by Shurgard (the "Shurgard
Derivatives"), including interest rate caps, interest rate swaps, cross-currency
swaps and foreign currency  forward  contracts.  These  derivatives were entered
into by Shurgard in order to mitigate  currency  and exchange  rate  fluctuation
risk in connection with European borrowings.  We do not intend to use derivative
financial instruments for speculative or trading purposes.

         In accordance with the provisions of Statement of Financial  Accounting
Standards No. 133, Accounting for Derivative  Financial  Instruments and Hedging
Activities ("SFAS 133"),  derivative financial  instruments are measured at fair
value and recognized on the balance sheet as assets or liabilities.

         As of  December  31,  2006,  and for the year then  ended,  none of the
Shurgard  Derivatives were considered  effective hedges because we believe it is
not highly  likely that the debt and the  related  derivative  instruments  will
remain outstanding for their entire contractual period. Accordingly, all changes
in the fair values of the derivatives are reflected in earnings,  along with the
related  cash  flows  from  these  instruments,  under  "Income  (expense)  from
derivatives, net" on our consolidated statement of income.

                                      F-13
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Other Comprehensive Income
         --------------------------

         Our comprehensive income is as follows:

<TABLE>
<CAPTION>

                                                         For the Year Ended December 31,
                                                       2006           2005             2004
                                                   ------------   ------------     -----------
                                                             (Amounts in thousands)
<S>                                                <C>              <C>            <C>
     Net income................................    $   314,026      $  456,393     $  366,213
     Accumulated other comprehensive income:
       Foreign currency translation adjustments         19,329               -              -
                                                   ------------   ------------     -----------
     Total comprehensive income................    $   333,355      $  456,393     $  366,213
                                                   ============   ============     ============
</TABLE>

         The foreign currency translation adjustment represents the net currency
translation  adjustment  gains and losses  related to our European  subsidiaries
acquired  in the  merger  with  Shurgard  measured  from the date of the  merger
through December 31, 2006. Amounts are presented net of minority interests.

         Environmental costs
         -------------------

         Our  policy  is  to  accrue  environmental  assessments  and  estimated
remediation  cost when it is probable that such efforts will be required and the
related costs can be reasonably  estimated.  Our current  practice is to conduct
environmental investigations in connection with property acquisitions.  Although
there can be no assurance,  we are not aware of any environmental  contamination
of any of our  facilities,  which  individually  or in the  aggregate  would  be
material to our overall business, financial condition, or results of operations.

         Net income per common share
         ---------------------------

         In computing net income allocated to our common shareholders,  we first
allocate net income to our preferred  shareholders.  Net income allocated to our
preferred  shareholders  consists  of (i)  distributions  paid  to  the  holders
totaling  $214,218,000,  $173,017,000,  and  $157,925,000  for the  years  ended
December 31, 2006, 2005, and 2004,  respectively,  combined with (ii) the effect
of applying  Emerging Issues Task Force Topic D-42 ("EITF D42"),  "The Effect on
the  Calculation  of  Earnings  per  Share  for the  Redemption  or the  Induced
Conversion of Preferred Stock." EITF D-42 provides, among other things, that any
excess of the fair  value of the  consideration  transferred  to the  holders of
preferred  stock redeemed over the carrying amount of the preferred stock should
be subtracted  from net earnings to determine  net earnings  available to common
stockholders in the  calculation of earnings per share.  The application of EITF
D42 resulted in an additional  $31,493,000,  $7,538,000,  and $8,724,000 for the
years ended  December  31, 2006,  2005,  and 2004,  respectively,  of net income
allocated to our preferred shareholders.

         Income allocated to our common  shareholders has been further allocated
among our two classes of common stock;  our regular  common stock and our Equity
Stock,  Series A. The  allocation  among each class was based upon the two-class
method. Under the two-class method,  earnings per share for each class of common
stock are  determined  according to  dividends  declared  (or  accumulated)  and
participation rights in undistributed  earnings, or to the extent of contractual
participation in losses.  The Equity Stock,  Series A is deemed to contractually
participate in losses if its liquidation  proceeds,  assuming liquidation of the
Company at book value,  is reduced as a result of the loss.  Under the two-class
method,  the Equity Stock,  Series A was  allocated  net income of  $21,424,000,
$21,443,000,  and $21,501,000  for the years ended December 31, 2006,  2005, and
2004,  respectively.   Remaining  income  of  $46,891,000,   $254,395,000,   and
$178,063,000 for the years ended December 31, 2006, 2005 and 2004, respectively,
was allocated to the regular common stockholders.

         Basic net  income  per share is  computed  using the  weighted  average
common  shares  outstanding  (prior to the dilutive  impact of stock options and
restricted  stock units  outstanding).  Diluted  net income per common  share is
computed using the weighted average common shares outstanding  (adjusted for the
dilutive impact of stock options and restricted stock units outstanding computed
using the treasury stock method,  that totaled 955,000 in 2006, 660,000 in 2005,
and 845,000 in 2004).

                                      F-14
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

3.       Merger with Shurgard
         --------------------

         On August 22, 2006, the Company merged with Shurgard  Storage  Centers,
Inc. ("Shurgard"),  a REIT which had interests in 487 self-storage facilities in
the United States and 160  self-storage  facilities  in Europe.  We believe this
merger will  provide a number of  strategic  and  financial  benefits and growth
opportunities  for us by  solidifying  our  position  as the  largest  owner and
operator of self-storage  facilities in the United States,  enhancing  access to
capital,  eliminating duplicative general and administrative expenses, improving
cost  efficiencies,   increasing  growth  opportunities  and  providing  greater
geographic and financial diversification.

         Shurgard shareholders received 0.82 shares of our common stock for each
share of Shurgard common stock they owned.  Total  consideration  for the merger
approximated $5,323,956,000,  comprised of (i) the issuance of 38,913,187 shares
of Public Storage  common stock (valued at  approximately  $3,116,850,000  based
upon the average of Public  Storage's  share closing price for five days before,
the day of and five days  after the  acquisition  announcement  date of March 7,
2006), (ii) the assumption of Shurgard's domestic and European notes payable and
capital  leases  with a fair  value  of  approximately  $1,396,777,000  of which
$67,275,000 was repaid following the merger,  (iii) the assumption of Shurgard's
line of credit  totaling  $603,772,000,  which was repaid  following the merger,
(iv) the issuance of vested common stock options in exchange for Shurgard  stock
options, with an estimated intrinsic value of approximately $69,296,000, and (v)
$137,261,000 in cash, comprised of $137,916,000 to redeem Shurgard's outstanding
preferred stock at liquidation value,  approximately $47,524,000 in direct costs
of the  merger,  less  $48,179,000  in cash held by  Shurgard at the date of the
merger.

         We have  allocated  this  aggregate  purchase price to the tangible and
intangible net assets, as follows (amounts in thousands):

      Operating real estate facilities                            $   4,887,507
      Construction in process                                            91,000
      Intangible assets (Note 2)                                        584,165
      Other assets                                                       95,899
      Accrued and other liabilities                                    (190,419)
      Minority interest                                                 144,196)

                                                                  --------------
         Total allocated Purchase Price to net assets acquired    $   5,323,956
                                                                  ==============

                                      F-15
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         As described  more fully in Note 2,  intangible  assets  consist of the
estimated value of Shurgard's  existing tenants in place, the estimated value of
Shurgard's   existing  land  leases,  and  the  estimated  value  of  Shurgard's
tradename, which we expect to continue to use in Europe.

         The results of operations of the facilities acquired from Shurgard have
been included in our consolidated  financial statements since the merger date of
August 22, 2006. The unaudited pro forma data  presented  below assumes that the
merger occurred as of the beginning of the respective periods,  and includes pro
forma adjustments to (i) increase depreciation expense to reflect our book basis
for the buildings acquired,  (ii) increase  amortization  expense to reflect the
intangible  assets  acquired in the merger,  (iii) decrease  interest income and
increase income allocated to preferred  shareholders to reflect the financing of
the merger with cash on hand and the proceeds  from  preferred  stock,  and (iv)
decrease the historical general and  administrative  expense of Shurgard that is
expected to be  eliminated  as a result of the merger.  The  unaudited pro forma
results have been prepared for  comparative  purposes only and do not purport to
be  indicative  of the results of  operations  that would have  occurred had the
merger been consummated at the beginning of the periods presented.

                                       For the Year ended
                                           December 31,
                                        2006         2005
                                     ------------  ----------
                                     (Amounts in thousands,
                                     except per share data)
                                           (Unaudited)
Revenues..........................    $1,704,757   $1,539,087
Net income........................    $  200,321   $  103,958
Loss per common share:
  Basic...........................    $   (0.40)   $    (0.80)
  Diluted.........................    $   (0.40)   $    (0.80)


4.       Discontinued operations
         -----------------------

         We segregate all of our disposed  components  that have operations that
can be  distinguished  from the rest of the Company and will be eliminated  from
the ongoing  operations of the Company in a disposal  transaction.  Discontinued
operations   principally  consists  of  the  historical  operations  related  to
facilities  that were closed and are no longer in operation and facilities  that
have been disposed of either through condemnation by a local governmental agency
or sale. The following table  summarizes the historical  operations with respect
to these facilities:

DISCONTINUED OPERATIONS:
------------------------
                                          For the Year Ended December 31,
                                         -----------------------------------
                                          2006         2005          2004
                                         ---------- ------------ -----------
                                               (Amounts in thousands)
Rental income.....................      $     688     $  1,470     $  9,599
Cost of operations................           (219)        (744)      (7,379)
Depreciation expense..............           (234)        (253)      (1,455)
Asset impairment charges..........           (996)           -       (1,575)
Lease termination costs...........              -            -         (416)
Net gain on dispositions..........          2,370        6,323          971
                                         ---------- ------------ -----------

Total discontinued operations.....      $   1,609     $  6,796     $   (255)
                                         ========== ============ ===========

                                      F-16
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

5.       Real estate facilities
         ----------------------

         Activity in real estate  facilities  during  2006,  2005 and 2004 is as
follows:

<TABLE>
<CAPTION>

                                                                      2006               2005              2004
                                                                 ----------------  ----------------  ----------------
                                                                               (Amounts in thousands)
Operating facilities, at cost:
<S>                                                               <C>                <C>               <C>
  Beginning balance.......................................        $  5,930,484       $  5,510,750      $  5,125,498
  Facilities consolidated pursuant to EITF 04-5 (Note 2)..              22,459                  -                 -
  Acquired in the merger with Shurgard (Note 3)...........           4,887,507                  -                 -
  Acquisition of real estate facilities...................             103,544            254,549           259,487
  Dispositions............................................              (5,860)            (8,582)           (6,785)
  Newly developed facilities opened for operations........             161,131             86,888            93,017
  Casualty loss (Note 2)..................................                   -             (8,953)           (2,874)
  Abandoned facility......................................              (1,545)                 -                 -
  Acquisition of minority interests (Note 11).............              50,123             69,942             6,539
  Capital improvements....................................              79,326             25,890            35,868
  Impact of foreign exchange rate changes.................              34,696                  -                 -
                                                                 ----------------  ----------------  ----------------
  Ending balance..........................................          11,261,865          5,930,484         5,510,750
                                                                 ----------------  ----------------  ----------------
Accumulated depreciation:
  Beginning balance.......................................          (1,500,128)        (1,320,200)       (1,153,059)
  Additions during the year...............................            (255,615)          (186,048)         (169,471)
  Casualty loss (Note 2)..................................                   -              2,966             1,624
  Abandoned facility......................................                 549                  -                 -
  Dispositions............................................                 832              3,154               706
  Impact of foreign exchange rate changes.................                   -                  -                 -
                                                                 ----------------  ----------------  ----------------
  Ending balance..........................................          (1,754,362)        (1,500,128)       (1,320,200)
                                                                 ----------------  ----------------  ----------------
Construction in process:
  Beginning balance.......................................              54,472             56,160            81,856
  Current development.....................................             119,648             86,248            71,602
  Acquired in the merger with Shurgard (Note 3)...........              91,000                  -                 -
  Write off of development costs..........................             (10,354)                 -                 -
  Dispositions............................................              (4,970)            (1,048)           (4,281)
  Newly developed facilities opened for operations........            (161,131)           (86,888)          (93,017)
  Impact of foreign exchange rate changes.................               1,373                  -                 -
                                                                 ----------------  ----------------  ----------------
  Ending balance..........................................              90,038             54,472            56,160
                                                                 ----------------  ----------------  ----------------
 Total real estate facilities.............................        $  9,597,541       $  4,484,828      $  4,246,710
                                                                 ================  ================  ================
</TABLE>


         During 2006, we completed several development and expansion projections
which in aggregate  added  approximately  1,266,000 net rentable  square feet of
self-storage  space at a total  cost of  $161,131,000  (1,472,000  net  rentable
square feet at a total cost of  $86,888,000  in 2005 and  1,217,000 net rentable
square  feet at a total cost of  $93,017,000  in 2004) . During  2006,  2005 and
2004, we also sold several parcels of vacant land and disposed of real estate as
a result of  condemnation  by local  governmental  agencies.  As a result of the
dispositions in 2006, we received proceeds totaling  $14,545,000 and recorded an
aggregate gain on disposition of $4,547,000  (proceeds  totaled  $14,755,000 and
$12,648,000  in 2005 and 2004,  respectively,  and related  gain on  disposition
totaled $8,279,000 and $2,288,000 in 2005 and 2004, respectively).

         Excluding self-storage  facilities acquired in the merger with Shurgard
(see Note 3), during 2006, we acquired 12 self-storage  facilities  (877,000 net
rentable  square feet) from third parties at an aggregate cost of  $103,544,000,
consisting of $98,954,000 in cash and assumed mortgage debt totaling $4,590,000.

         In 2005,  we acquired  from third  parties 32  self-storage  facilities
(2,390,000  net rentable  square feet) at an aggregate cost of  $254,549,000  in
cash.  In 2004 we  acquired  interests  from third  parties  in 45  self-storage
facilities  (3,109,000  net  rentable  square  feet)  at an  aggregate  cost  of
$259,487,000,  comprised of $139,794,000 cash,  $94,693,000 in assumed debt, and
the issuance of $25 million of our Series Z Perpetual Preferred Units.

                                      F-17
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         In 2005 and  2004,  we  recorded  casualty  losses  of  $1,917,000  and
$1,250,000,   respectively  as  a  result  of  damage  to  our  facilities  from
hurricanes.  These  casualty  losses were  comprised of the book value of assets
damaged  ($5,987,000  in 2005 and $1,250,000 in 2004) less, in the case of 2005,
insurance  proceeds of  approximately  $4,070,000.  No insurance  proceeds  were
received for losses occurring in 2004.

         One of these facilities  damaged by the  aforementioned  hurricanes was
abandoned in 2006,  because it was deemed  economically  impractical to rebuild.
Because  the book value is no longer  recoverable,  we  recorded  an  impairment
charge of  $996,000  in the year  ended  December  31,  2006,  representing  the
remaining book value of the facility.  This  impairment  charge,  along with the
historical operations of this facility, is included in discontinued operations.

         Construction  in process at  December  31,  2006  includes  48 projects
(2,256,000  net  rentable  square feet,  unaudited)  which expand or enhance the
visual and structural appeal of our existing self-storage  facilities with costs
incurred of  $39,502,000  at  December  31,  2006 and total  estimated  costs to
complete of $148,114,000 (unaudited). In addition, we have 8 projects to develop
new  self-storage  facilities in Europe  (389,000  aggregate net rentable square
feet,  unaudited),  with costs incurred at December 31, 2006 of $41,916,000  and
total estimated costs to complete of $36,549,000 (unaudited).  We also have five
parcels held for development with an aggregate of $8,620,000 in costs.

         We  capitalize   interest   incurred  on  debt  during  the  course  of
construction of our self-storage facilities.  Interest capitalized for the years
ended  December  31,  2006,  2005  and  2004  was  $2,716,000,   $2,820,000  and
$3,617,000, respectively.

         At December 31, 2006, the adjusted basis of real estate  facilities for
federal tax purposes was approximately $9.0 billion (unaudited).

6.       Investments in real estate entities
         -----------------------------------

         At December 31, 2006,  investments in real estate  entities  consist of
our ownership  interests in the  Unconsolidated  Entities.  These  interests are
non-controlling  interests  of less  than 50% and are  accounted  for  using the
equity method of accounting. Accordingly, earnings are recognized based upon our
ownership interest in each of these entities.  The accounting  policies of these
entities are similar to those of the Company.

         Approximately  $50  million of our  consolidated  retained  earnings is
represented by undistributed earnings of these Unconsolidated Entities.

         During  2006,   2005,  and  2004,  we  recognized   earnings  from  our
investments  in  real  estate   entities  of   $11,895,000,   $24,883,000,   and
$22,564,000, respectively, and received cash distributions totaling $17,699,000,
$23,112,000,  and  $20,961,000,  respectively.  In  addition,  during  2005,  we
received a distribution from affiliated entities of 635,885 shares of our common
stock and  31,909  depositary  shares  of our  Equity  Stock,  Series A, with an
aggregate book value of $14,520,000.

         Equity in earnings of real estate entities  includes our pro rata share
of the net  impact of  gains/losses  on sales of assets and  impairment  charges
relating to the  impending  sale of real  estate  assets as well as our pro rata
share of the impact of the  application  of EITF Topic  D-42 on  redemptions  of
preferred  securities recorded by PSB. See the condensed  financial  information
with respect to PSB below for further information regarding these items recorded
by PSB.

                                      F-18
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


         The  following  table sets  forth our  investments  in the real  estate
entities at December 31, 2006 and 2005 and our equity in earnings of real estate
entities  for each of the three  years  ended  December  31,  2006  (amounts  in
thousands):

<TABLE>
<CAPTION>

                                        Investments in Real Estate            Equity in Earnings of Real Estate Entities
                                         Entities at December 31,                  for the Year Ended December 31,
                                       -----------------------------         -------------------------------------------
                                           2006             2005                 2006            2005            2004
                                       -------------  --------------         -------------  -------------   ------------
<S>                                    <C>              <C>                  <C>            <C>             <C>
     Investment in PSB (a)..........   $   283,700      $   288,694          $   9,764      $  18,757       $  16,895
     Other investments (b)..........        18,205           39,861              2,131          6,126           5,669
                                       -------------  --------------         -------------  -------------   ------------
         Total......................   $   301,905      $   328,555          $  11,895      $  24,883       $  22,564
                                       =============  ==============         =============  =============   ============

</TABLE>

(a)  Included  in equity in earnings is the net impact of PSB's gains on sale of
     real estate,  impairment  charges,  and the impact from applying EITF Topic
     D-42  aggregating  a loss of  $1,042,000,  and  income of  $7,727,000,  and
     $4,544,000 in 2006, 2005, and 2004, respectively.

(b)  As   described  in  Note  2,   effective   January  1,  2006  we  commenced
     consolidating  the  accounts  of  three  limited  partnerships   previously
     accounted  for  under the  equity  method of  accounting.  As a result,  we
     decreased our investment in these partnerships by approximately $20,846,000
     on January 1, 2006.

         Investment in PS Business Parks, Inc. ("PSB")
         ---------------------------------------------

         PS  Business  Parks,  Inc.  is a  REIT  traded  on the  American  Stock
Exchange,  which controls an operating partnership  (collectively,  the REIT and
the operating partnership are referred to as "PSB"). We have a 44% common equity
interest  in PSB as of  December  31,  2006.  This  common  equity  interest  is
comprised  of our  ownership  of  5,418,273  shares  of PSB's  common  stock and
7,305,355 limited partnership units in the operating partnership at December 31,
2006 and 2005.  The limited  partnership  units are  convertible  at our option,
subject to certain  conditions,  on a  one-for-one  basis into PSB common stock.
Based upon the  closing  price at  December  31,  2006  ($70.71 per share of PSB
common stock),  the shares and units had a market value of approximately  $899.7
million as compared to a book value of $283.7 million.

         At December 31, 2006, PSB owned and operated approximately 18.7 million
net  rentable  square  feet  of  commercial  space.  In  addition,  PSB  manages
commercial space owned by the Company and the Consolidated  Entities pursuant to
property management agreements.

         The following table sets forth selected  financial  information of PSB;
the amounts represent 100% of PSB's balances and not our pro-rata share.

<TABLE>
<CAPTION>

                                                                   2006              2005
                                                              ---------------  ----------------
                                                                    (Amounts in thousands)
 For the year ended December 31,
 -------------------------------
<S>                                                           <C>                <C>
   Total operating revenue..............................      $      242,839     $     220,183
   Costs of operations and other operating expenses.....             (81,717)          (71,627)
   Other income and expense, net........................               4,299             3,558
   Depreciation and amortization........................             (86,216)          (76,178)
   Discontinued operations (a)..........................               1,643            15,620
   Minority interest....................................             (16,268)          (16,262)
                                                              ---------------  ----------------
     Net income.........................................      $       64,580     $      75,294
                                                              ===============  ================

 At December 31,
 ---------------
   Total assets (primarily real estate).................      $    1,462,864     $    1,463,678
   Total debt...........................................              67,048             25,893
   Other liabilities....................................              42,394             39,126
   Preferred equity and preferred minority interests....             705,250            729,100
   Common equity and common minority interests..........             648,172            669,559

</TABLE>

(a)  Included in  discontinued  operations  are net gains on sale of real estate
     facilities totaling $2,328,000 and $18,109,000 for the years ended December
     31, 2006 and 2005, respectively.

                                      F-19
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


         Other Investments
         -----------------

         Other  investments  consist  primarily of an average  approximately 22%
common equity ownership in five limited partnerships that own an aggregate of 22
self-storage facilities.

         The following table sets forth certain condensed financial  information
(representing  100% of these entities' balances and not our pro-rata share) with
respect to these other investments:

                                                  2006             2005
                                             ---------------  ---------------
                                                  (Amounts in thousands)
 For the year ended December 31,
 -------------------------------
 Total revenue........................       $     17,459    $      16,563
 Cost of operations and other expenses             (6,674)          (6,390)
 Depreciation and amortization........             (2,031)          (2,039)
                                             ---------------  ---------------
     Net income.......................       $      8,754    $       8,134
                                             ===============  ===============

 At December 31,
----------------
 Total assets (primarily storage             $     48,002    $      48,255
     facilities)......................
 Total liabilities....................              1,104            1,240
 Total Partners' equity...............             46,898           47,015


7.       Bank Credit Facilities
         ----------------------

         On  December  27,  2006,  we  entered  into  a $300  million  unsecured
short-term  credit  agreement  (the "Bridge  Loan") with a commercial  bank that
matures  April 1, 2007.  Pursuant  to the credit  agreement,  we  borrowed  $300
million at an initial  interest  rate of LIBOR plus 0.30% (5.63% at December 31,
2006).  We used the proceeds from this facility in funding the prepayment of the
(euro)325 million  collateralized notes payable that were otherwise due in 2011.
See Note 8 for further discussion of this prepayment.  At December 31, 2006, our
outstanding  borrowings under this facility totaled $300 million. On January 10,
2007,  borrowings  under this  facility  were repaid in full and the Bridge Loan
terminated.

         We also have a revolving line of credit (the "Credit  Agreement")  with
an  aggregate  limit with  respect to  borrowings  and letters of credit of $200
million,  that has a maturity date of April 1, 2007 and bears an annual interest
rate ranging from the London  Interbank  Offered  Rate  ("LIBOR")  plus 0.50% to
LIBOR plus 1.20%  depending on our credit  ratings (LIBOR plus 0.50% at December
31,  2006).  In  addition,  we are  required to pay a quarterly  commitment  fee
ranging from 0.15% per annum to 0.30% per annum  depending on our credit ratings
(0.15% per annum at December 31, 2006).  Outstanding borrowings on our revolving
line of credit  totaled $45  million  and $80  million at December  31, 2006 and
February 28, 2007 (unaudited), respectively.

         The Credit Agreement includes various  covenants,  the more significant
of which require us to (i) maintain a balance sheet  leverage ratio of less than
0.55 to 1.00, (ii) maintain certain quarterly interest and fixed-charge coverage
ratios  (as  defined  therein)  of not  less  than  2.25  to 1.0 and 1.5 to 1.0,
respectively,  and (iii)  maintain  a minimum  total  shareholders'  equity  (as
defined therein). In addition, we are limited in our ability to incur additional
borrowings  (we are required to maintain  unencumbered  assets with an aggregate
book value equal to or greater than 1.5 times our unsecured  recourse  debt). We
were in compliance  with all  covenants of the Credit  Agreement at December 31,
2006.

         At December 31, 2006 and February 28, 2007 (unaudited),  we had undrawn
standby letters of credit,  which reduces our borrowing  capability with respect
to our  line  of  credit  by  the  amount  of the  letter  of  credit,  totaling
$21,068,000  ($17,985,000  at December 31,  2005).  The  beneficiaries  of these
standby letters of credit were certain insurance  companies  associated with our
captive  insurance and tenant  re-insurance  activities,  collateral for certain
construction projects, and a mortgage note.

                                      F-20
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

8.       Notes payable
         -------------

         Notes  payable at December 31, 2006 and 2005  consist of the  following
(dollar amounts in thousands):

<TABLE>
<CAPTION>

                                                                        December 31, 2006                   December 31, 2005
                                                                 --------------------------------  --------------------------------
                                                                       Carrying        Fair               Carrying         Fair
                                                                        amount         value               amount          value
                                                                 ---------------- ---------------  ----------------- --------------
DOMESTIC UNSECURED NOTES PAYABLE:

  5.875% effective and stated note rate, interest only and
<S>                                                               <C>            <C>                 <C>              <C>
     payable semi-annually, matures in March 2013.........        $    200,000   $    205,999        $       -        $       -
  5.73% effective rate, 7.75% stated note rate, interest only
     and payable semi-annually, matures in February 2011
     (carrying amount includes $14,033 of unamortized premium
     at December 31, 2006) ...............................             214,033        221,244                -                -
  6.53% effective rate, 7.625% stated note rate, interest only
     and payable semi-annually, matures in April 2007
     (carrying amount includes $119 of unamortized premium at
     December 31, 2006) ..................................              50,119         50,119                -                -
  7.66% senior unsecured note due January 2007............              11,200         11,200           22,400           23,060

DOMESTIC MORTGAGE NOTES:

  Fixed rate mortgage notes payable, secured by 63 real estate
     facilities with a net book value of $459,764 at
     December 31, 2006, average effective interest rates of 5.59%
     and stated note rates between 4.95% and 8.78%, due between
     December 2006 and August 2015 (carrying amount includes
     $4,145 of unamortized premium at December 31, 2006) .             166,737          164,953                -                -
  Variable rate mortgage notes payable, secured by six real
     estate facilities with a net book value of $20,895 at
     December 31, 2006,(average interest rate of 7.32% at
     December 31, 2006) which approximate market rates, due
     between December 2007 and August 2010 ...............               8,428            8,428                -                -
  Fixed rate mortgage notes payable,  secured by 33 real estate
     facilities with a net book value of $194,285 at
     December 31, 2006, stated note rates between 5.05% and 8.75%,
     principal and interest payable monthly, due at varying dates
     between October 2009 and September 2028 (carrying
     amount includes $4,471 of unamortized  premium at December
     31, 2006)............................................             91,489            89,049           91,550           89,822

  EUROPEAN SECURED NOTES PAYABLE:

  (euro)325 million notes payable due in 2011, collateralized
     by 101 real estate facilities with a net book value of
     $951,548 at December 31, 2006 (interest rate of
     EURIBOR + 0.51%, 3.826% average for year ended
     December 31, 2006, 3.928% rate at December 31, 2006).            428,760           428,670                -                -
  First and Second Shurgard credit  agreement,  due in 2008 and
     2009, secured by 60 real estate facilities with a net book
     value of $426,555 at December 31, 2006 (interest rate of
     EURIBOR + 2.25%, 5.534% average for year ended
     December 31, 2006, 5.915% rate at December 31, 2006 which
     approximate market rates)............................            288,918           288,918                -                -
  Liability under Capital Leases..........................              6,600             6,600                -                -
                                                                 ---------------- ---------------  ----------------- --------------
         Total notes payable..............................        $ 1,466,284       $ 1,475,180       $  113,950       $  112,882
                                                                 ================ ===============  ================= ==============

</TABLE>

                                      F-21
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         The 5.875%,  5.73%,  and 6.53% effective rate domestic  unsecured notes
payable were assumed in connection with the merger with Shurgard. The notes were
recorded at their  estimated  fair value based upon  estimated  market rates for
debt with  similar  terms and  ratings  upon  assumption.  As of the date of the
merger with Shurgard,  the aggregate fair value of these notes was approximately
$465,692,000 as compared to the actual assumed  balances of  $450,000,000.  This
initial premium of $15,692,000 is being amortized over the remaining term of the
notes using the effective interest method.

         The  domestic   unsecured   notes  payable  have  various   restrictive
covenants,  the more  significant of which require us to (i) maintain a ratio of
debt to total  assets  (as  defined  therein)  of less than  0.60 to 1.00,  (ii)
maintain a ratio secured debt to total assets (as defined  therein) of less than
0.40 to 1.00,  (iii) maintain a debt service coverage ratio (as defined therein)
of greater than 1.50 to 1.00, and (iv) maintain a ratio of  unencumbered  assets
to unsecured  debt (as defined  therein) of greater than 150%, all of which have
been met at December 31, 2006.

         The 5.59%  fixed rate  domestic  mortgage  notes  were also  assumed in
connection  with  the  merger.  These  mortgage  notes  were  recorded  at their
estimated  fair value based upon the  estimated  market rate upon  assumption of
approximately  5.59%, an aggregate of approximately  $184,592,000 as compared to
the actual  assumed  balances of an  aggregate  of  $179,827,000.  This  initial
premium of $4,765,000 is being amortized over the remaining term of the mortgage
notes using the effective interest method. These mortgage notes require interest
and  principal  payments  to  be  paid  monthly  and  have  various  restrictive
covenants, all of which have been met at December 31, 2006.

         We also assumed an additional  $671,047,000  in debt in the merger with
Shurgard,  comprised of Shurgard's  line of credit  totaling  $603,772,000,  and
certain  variable  rate  notes  totaling  $67,275,000.   This  debt  was  repaid
immediately following the merger.

         We  assumed  a  5.58%  mortgage  note  in  connection  with a  property
acquisition  during the first  quarter  of 2006.  The note was  recorded  at the
stated rate, which we believe  approximates the market rate for similar mortgage
notes.

         On January 2, 2007,  we repaid  the  (euro)325  million  collateralized
European  notes that were  otherwise  payable in 2011.  We also  terminated  the
related European currency and interest rate hedges.


         First  Shurgard and Second  Shurgard  (see Note 11) have senior  credit
agreements denominated in euros to borrow, in aggregate, up to (euro)271 million
($357.5 million as of December 31, 2006). As of December 31, 2006, the available
amount under those credit facilities was, in aggregate,  (euro)52 million ($68.6
million).  Our  draws  under the  First  Shurgard  and  Second  Shurgard  credit
facilities are determined on a development  project basis,  or on an acquisition
project basis when  applicable  for Second  Shurgard,  and can be limited if the
completion of projects is not timely and if we have certain cost  overruns.  The
credit  facilities  also  require us to maintain a maximum  loan to value of the
collateral  ratio and a minimum debt service ratio.  As of December 31, 2006, we
were in compliance with these financial covenants.

                                      F-22
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         At December 31, 2006,  approximate  principal  maturities  of our notes
payable are as follows (amounts in thousands):


<TABLE>
<CAPTION>
                                                           Domestic
                                       Domestic         Mortgage Notes         European     Capital Leases
                                    Notes Payable           Payable         Notes Payable      - Europe           Total
                                   ----------------   -----------------   ----------------  ---------------  --------------
<C>                                  <C>                  <C>                  <C>               <C>           <C>
2007.........................        $     63,483         $    9,892           $    2,375        $   95        $   75,845
2008.........................               3,320             27,848              170,449           104           201,721
2009.........................               3,515              9,367              116,095           114           129,091
2010.........................               3,722             17,775                    -            79            21,576
2011.........................             201,312             27,703              428,759           723           658,497
Thereafter...................             200,000            174,069                    -         5,485           379,554
                                   ----------------   -----------------   ----------------  ---------------  --------------
                                     $    475,352         $  266,654           $  717,678        $6,600        $1,466,284
                                   ================   =================   ================  ===============  ==============
Weighted average rate........                5.3%               5.4%                 5.0%          8.8%              5.2%
                                   ================   =================   ================  ===============  ==============
</TABLE>


         We  incurred  interest  expense  with  respect  to our  notes  payable,
excluding capital leases, aggregating $31,949,000, $6,639,000 and $4,377,000 for
the years ended December 31, 2006,  2005 and 2004,  respectively.  These amounts
were comprised of  $35,058,000,  $7,665,000 and $4,377,000 in cash for the years
ended  December  31,  2006 and 2005 and  2004,  respectively,  less  $3,109,000,
$1,026,000 and nil in amortization of premium, respectively.

         The present value of net minimum capital lease payments at December 31,
2006, was as follows (amounts in thousands):

     PRESENT VALUE OF NET MINIMUM CAPITAL LEASE PAYMENTS
     ---------------------------------------------------

     Capital lease future payments..........                          $40,774
     Amount representing interest...........                          (34,174)
     Present value of net minimum capital lease payments               $6,600


         The net book  value of the  properties  under  capital  leases was $6.6
million as of December 31, 2006,  which is net of  accumulated  depreciation  of
$1.6 million.  We recognized  depreciation  expense on these properties totaling
$0.1 million for the year ended December 31, 2006.

9.       Debt to Joint Venture Partner
         -----------------------------

         On December  31,  2004,  we sold seven  self-storage  facilities  to an
unconsolidated affiliated joint venture for $22,993,000. On January 14, 2005, we
sold an 86.7% interest in three additional  self-storage facilities to the joint
venture for an aggregate  amount of $27,424,000.  Our partner's  combined equity
contribution  with respect to these  transactions  was  $35,292,000.  Due to our
continuing interest in these facilities and the likelihood that we will exercise
our  option  to  acquire  our  partner's  interest,  we have  accounted  for our
partner's  investment  in these  facilities  as, in substance,  debt  financing.
Accordingly,  our  partner's  investment  with  respect to these  facilities  is
accounted for as a liability on our  accompanying  consolidated  balance sheets.
Our partner's  share of  operations  with respect to these  facilities  has been
accounted for as interest expense on our accompanying consolidated statements of
income.


         The  outstanding  balances of $37,258,000 and $35,697,000 due the joint
venture partner as of December 31, 2006 and 2005, respectively,  approximate the
fair value of our partners'  interest in these  facilities as of each respective
date. On a quarterly  basis, we review the fair value of this liability,  and to
the extent fair value exceeds the carrying value of the liability, an adjustment
is made to increase the liability to fair value,  and to increase  other assets,
with the other  assets  amortized  over the  remaining  period term of the joint
venture.  We increased the note balance by $1,386,000 during 2006 as a result of
our periodic review of fair value.

                                      F-23
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         A total of $3,036,000 and  $2,939,000 was recorded as interest  expense
on our  consolidated  statements  of income  with  respect  to the Debt to Joint
Venture Partner during the years ended December 31, 2006 and 2005, respectively,
representing  our  partner's  pro rata share of the net earnings with respect to
the properties (an 8.5% return on their  investment).  This interest expense was
comprised of a total of  $2,862,000  and  $2,534,000  paid to our joint  venture
partner (an 8.0% return  payable  currently in accordance  with the  partnership
agreement) during the years ended December 31, 2006 and 2005, respectively,  and
increases  in Debt to Joint  Venture  Partner of $175,000  and  $405,000 for the
years ended December 31, 2006 and 2005, respectively.

         We expect that this debt will be repaid  during 2008,  assuming that we
exercise our option to acquire our partner's interest in the joint venture.

10.      Derivative Financial Instruments
         --------------------------------

         As  described in Note 2, under  Derivative  Financial  Instruments,  we
report these derivative financial  instruments at fair value on our consolidated
balance  sheet at December  31, 2006 and changes in fair values from the date of
the Shurgard merger through December 31, 2006, have been recognized in earnings.
The respective  balances of these  financial  instruments  are included in other
assets and accrued and other liabilities as follows:

                                                            December 31, 2006
                                                          ---------------------
                                                               (Amounts in
                                                                thousands)
Assets:
   Interest rate contracts.............................    $       11,810
   Foreign currency exchange contracts.................                 -
                                                          ---------------------
                                                           $       11,810
                                                          =====================

Liabilities:
   Interest rate contracts.............................    $       (4,162)
   Foreign currency exchange contracts.................            (7,837)
                                                          ---------------------
                                                           $      (11,999)
                                                          =====================


         For the year ended December 31, 2006, net income from  derivatives  was
comprised of a change in value of the related instruments representing a gain of
$5,826,000, less $1,900,000 in net payments incurred during the period under the
underlying instruments.

         On January 2, 2007, in connection  with our prepayment of the (euro)325
million  collateralized  notes at our European  operations,  we  terminated  the
related  European  currency and interest rate hedges.  These  terminated  hedges
comprised approximately  $8,605,000 of the $11,810,000 in assets and $10,175,000
of the $11,999,000 in liabilities included in the table above.

11.      Minority Interest
         -----------------

         In consolidation,  we classify ownership interests in the net assets of
each of the Consolidated  Entities,  other than our own, as minority interest on
our consolidated  financial statements.  Minority interest in income consists of
the  minority  interests'  share of the  operating  results of the  Consolidated
Entities, or in the case of preferred partnership interests, distributions paid,
plus amounts associated with the application of EITF topic D-42 as it relates to
the redemption of preferred partnership interests.

                                      F-24
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Preferred partnership interests:
         --------------------------------

         At December 31, 2006 and 2005, we had the following series of preferred
partnership units outstanding:

<TABLE>
<CAPTION>

                                                           At December 31, 2006        At December 31, 2005
                    Earliest Redemption   Distribution     Units       Carrying        Units        Carrying
      Series                Date              Rate      Outstanding     Amount      Outstanding      Amount
----------------   --------------------- -------------- ------------  ------------ --------------- ------------
                                                                         (amounts in thousands)
<S>                      <C>                   <C>           <C>      <C>                <C>       <C>
Series NN......          March 17, 2010        6.400%        8,000    $   200,000        8,000     $   200,000
Series Z.......        October 12, 2009        6.250%        1,000         25,000        1,000          25,000
Series J ......             May 9, 2011        7.250%        4,000        100,000            -               -
                                                         -----------  ------------ --------------- ------------
Total..........                                             13,000    $   325,000        9,000     $   225,000
                                                         ===========  ============ =============== ============

</TABLE>

         On May 9, 2006, one of the Consolidated Entities issued 4,000,000 units
of 7.25%  Series J  Preferred  Partnership  Units  for cash  proceeds  of $100.0
million.

         Subject to certain  conditions,  the  Series NN  preferred  partnership
units are  convertible  into shares of our 6.40% Series NN Cumulative  Preferred
Stock, the Series Z preferred  partnership  units are convertible into shares of
our  6.25%  Series Z  Cumulative  Preferred  Stock  and the  Series J  preferred
partnership  units are convertible  into shares of our 7.25% Series J Cumulative
Preferred Stock. The preferred  partnership  units are not redeemable during the
first  five  years,  thereafter,  at our  option,  we can  call  the  units  for
redemption at the issuance amount plus any unpaid  distributions.  The Series NN
and Series J preferred  partnership units are not redeemable by the holder.  The
holders  of the Series Z  preferred  partnership  units have a one-time  option,
exercisable  five years from  issuance,  to require us to redeem their units for
$25.0 million in cash plus any unpaid distributions.

         For each of the years ended  December 31,  2006,  2005,  and 2004,  the
holders of the preferred partnership units were paid in aggregate  approximately
$19,055,000,  $16,147,000,  and  $30,423,000,   respectively,  in  distributions
(excluding the special  distribution  paid on March 22, 2004,  described below),
and received an  equivalent  allocation  of minority  interest in  earnings.  In
addition, in 2005 and 2004, income allocated to minority interests was increased
by $874,000 and $2,063,000,  respectively,  due to the application of EITF Topic
D-42.

         Other partnership interests
         ---------------------------

         Minority  interest at December 31, 2006 and 2005, and minority interest
in income for each of the three years in the period ended December 31, 2006 with
respect to the other partnership interests are comprised of the following:

<TABLE>
<CAPTION>

                                          Minority interest at            Minority interest in income for the year ended
                                   --------------------------------    ----------------------------------------------------
                                     December 31,     December 31,        December 31,     December 31,     December 31,
 Description of Minority Interest        2006             2005                2006             2005             2004
---------------------------------- --------------- ----------------    ----------------- --------------- ------------------
                                                                    (Amounts in thousands)
<S>                                    <C>             <C>                 <C>               <C>             <C>
European joint ventures..........      $ 140,034       $       -           $     (3,631)     $        -      $        -
Newly Consolidated Partnerships..          4,085               -                  5,259               -               -
Shurgard domestic joint ventures.          8,023               -                    417               -               -
 Consolidated Development
     Joint Venture.............                -               -                      -           4,229           5,652
Convertible Partnership Units....          5,710           6,177                    151             469             328
Other Consolidated Partnerships..         23,178          22,793                 10,632          10,932          11,447
                                   --------------- ----------------    ----------------- --------------- ------------------
Total other partnership interests      $ 181,030       $  28,970           $     12,828      $   15,630     $    17,427
                                   =============== ================    ================= =============== ==================

</TABLE>

                                      F-25
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         European Joint Ventures
         -----------------------

         Through  the  merger  with  Shurgard,  we  acquired  two joint  venture
entities:  First  Shurgard  SPRI ("First  Shurgard")  formed in January 2003 and
Second  Shurgard  SPRL  ("Second  Shurgard")  formed  in May 2004.  Those  joint
ventures  were  expected  to develop or acquire up to  approximately  75 storage
facilities in Europe. Through a wholly-owned subsidiary,  we have a 20% interest
in each of these  ventures.  We have  determined  that First Shurgard and Second
Shurgard are each VIEs,  and that we are the primary  beneficiary.  Accordingly,
First Shurgard and Second Shurgard have been  consolidated  in our  consolidated
financial  statements.  At December 31, 2006, First Shurgard and Second Shurgard
had  aggregate  total  assets of $497.2  million,  total  liabilities  of $322.1
million, and credit facilities collateralized by assets with a net book value of
$288.9 million.  At December 31, 2006,  First  Shurgard's and Second  Shurgard's
creditors  had no recourse to the general  credit of Public  Storage or Shurgard
Europe other than a commitment,  previously made by Shurgard, to subscribe to up
to $20 million and an additional  (euro)7.5 million ($9.9 million as of December
31,  2006) in  preferred  bonds in order  for  First  Shurgard  to  fulfill  its
obligations under its senior credit  agreement.  We have an option to put 80% of
the bonds issued by First  Shurgard to Crescent  Euro Self Storage  Investments,
Shurgard Europe's partner in the joint venture.

         On September 5, 2006, we informed the joint  venture  partners of First
Shurgard and Second  Shurgard of our  intention to purchase  their  interests in
First  Shurgard and Second  Shurgard,  pursuant to an "exit  procedure"  that we
believe is provided for in the respective agreements. Our joint venture partners
currently  contest  whether we have the right to purchase their  interests under
this  procedure.  Further,  the exit  procedure  can, in certain  circumstances,
result in a third  party  acquiring  the  facilities  owned by First and  Second
Shurgard,  including  our  interest  in  these  facilities.  Accordingly,  it is
uncertain  as to whether  we will  acquire  their  interests  pursuant  to these
provisions.  On January  17,  2007,  we filed an  arbitration  request to compel
arbitration of the matter.

         Newly Consolidated Partnerships
         -------------------------------

         As further  described in Note 2, effective January 1, 2006 we commenced
consolidating  the  accounts  of  three  partnerships  that  we  had  previously
accounted for under the equity method of accounting. This consolidation resulted
in a  $3,963,000  increase  in minority  interest on January 1, 2006.  Effective
January 1, 2006,  the income  allocated to the  interests we do not own in these
three  partnerships  is  shown  in the  table  above  under  Newly  Consolidated
Partnerships.

         Shurgard Domestic Joint Ventures
         --------------------------------

         Following the merger with Shurgard,  we acquired the minority interests
in certain of  Shurgard's  joint  ventures,  for an aggregate  of  approximately
$62,300,000  in  cash.  As a result  of  these  transactions,  we  obtained  the
remaining  interest in a total of 68 self-storage  facilities.  This acquisition
was recorded as a reduction in minority interest totaling $12,177,000,  with the
remainder allocated to real estate ($50,123,000).

         The partnership agreements of the joint ventures have termination dates
that cannot be  unilaterally  extended by the Company and, upon  termination  of
each partnership,  the net assets of these entities would be liquidated and paid
to the minority  interests and the Company based upon their  relative  ownership
interests.

         Consolidated Development Joint Venture
         --------------------------------------

         In  November   1999,  we  formed  a  development   joint  venture  (the
"Consolidated  Development  Joint  Venture") with a joint venture  partner (PSAC
Storage  Investors,  LLC, referred to as "PSAC") whose partners included a third
party institutional investor and B. Wayne Hughes ("Mr. Hughes"), the Chairman of
the Board of the Company, to develop  approximately $100 million of self-storage
facilities and to purchase $100 million of the our Equity Stock,  Series AAA. We
owned a controlling  interest in the Consolidated  Development Joint Venture and
included  the  accounts  of  this  partnership  in  our  consolidated  financial
statements since its inception.  PSAC's interest in the Consolidated Development
Joint Venture was accounted  for as minority  interest,  as denoted in the above
table.

                                      F-26
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         On August 5, 2005, we acquired the institutional investor's interest in
PSAC  for  approximately  $41,420,000  in  cash.  This  acquisition  gave  us  a
controlling  position in PSAC and the right to acquire the remaining interest in
PSAC,  held by Mr.  Hughes,  for a stipulated  amount on November  17, 2005.  We
immediately  notified  Mr.  Hughes of our  intent to  acquire  his  interest  on
November 17, 2005.

         On August 5, 2005, we commenced consolidating the accounts of PSAC. The
total  acquisition  cost of the transaction was  $105,933,000,  comprised of the
$41,420,000 in cash paid to the  institutional  investor and $64,513,000 in debt
due to Mr. Hughes. Mr. Hughes' interest in PSAC was accounted for as debt due to
the exercise of our right to acquire his interest.  The total  acquisition  cost
eliminated  the  book  value of  minority  interest  on the date of  acquisition
($62,013,000) with the remainder allocated to real estate ($43,920,000).

         The  preferred  return  that Mr.  Hughes  accrued  from  August 5, 2005
through   November  17,  2005  amounting  to  $1,458,000  is  reflected  on  our
consolidated  statements of income as interest expense. On November 17, 2005, we
acquired Mr.  Hughes'  interest for an aggregate of  $64,513,000  in cash,  plus
accrued and unpaid interest, extinguishing the debt.

         Convertible Partnership Units
         -----------------------------

         At  December  31,   2006,   one  of  the   Consolidated   Entities  had
approximately  231,978  convertible   partnership  units  ("Convertible  Units")
outstanding  (237,934 at December 31, 2005)  representing a limited  partnership
interest  in  the  partnership.  The  Convertible  Units  are  convertible  on a
one-for-one  basis  (subject to certain  limitations)  into common  stock of the
Company at the  option of the  unit-holder.  Minority  interest  in income  with
respect to Convertible  Units reflects the  Convertible  Units' share of our net
income, with net income allocated to minority interests with respect to weighted
average  outstanding  Convertible  Units on a per unit  basis  equal to  diluted
earnings per common share.  During the year ended  December 31, 2006, a total of
5,956 units were converted into common shares (none during 2005 and 2004).  As a
result of this conversion, minority interest was reduced by $155,000.

         Other Consolidated Partnerships
         -------------------------------

         The  partnership  agreements  of the  Other  Consolidated  Partnerships
included in the table above have  termination  dates that cannot be unilaterally
extended by the Company  and,  upon  termination  of each  partnership,  the net
assets of these entities would be liquidated and paid to the minority  interests
and the Company based upon their relative ownership interests.

         At December  31,  2006 and 2005,  the Other  Consolidated  Partnerships
reflect  common  equity  interests  that we do not own in 22 entities  owning an
aggregate of 73 self-storage facilities.

         In January 2005, we acquired a portion of the minority  interest we did
not own in one of the  Consolidated  Entities for an aggregate of  $4,366,000 in
cash.  The  acquisition  resulted  in the  reduction  of  minority  interest  by
$2,828,000  with the  excess of cost over  underlying  book  value  ($1,538,000)
allocated to real estate.

                                      F-27
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         In April 2005,  we acquired  minority  interests  we did not own in two
Consolidated  Entities for an aggregate of $32,432,000 in cash. The  acquisition
resulted in a reduction of minority  interest of $15,394,000  with the excess of
cost over underlying book value ($17,038,000) allocated to real estate.

         In August 2005, we acquired the remaining minority interests we did not
own in the  Consolidated  Entities for an aggregate of  $14,597,000 in cash. The
acquisition  resulted in a reduction of minority interest of $7,151,000 with the
excess of cost over underlying book value ($7,446,000) allocated to real estate.

         Impact of SFAS No. 150
         ----------------------

         In  May  2003,  the  FASB  issued  Statement  of  Financial  Accounting
Standards  No.  150  -  "Accounting  for  Certain  Financial   Instruments  with
Characteristics  of both Liabilities and Equity" (SFAS No. 150"). This statement
prescribes   reporting   standards   for   financial   instruments   that   have
characteristics  of  both  liabilities  and  equity.   This  standard  generally
indicates that certain  financial  instruments  that give the issuer a choice of
setting an  obligation  with a variable  number of  securities  or  settling  an
obligation with a transfer of assets, any mandatorily  redeemable security,  and
certain put options and forward  purchase  contracts,  should be classified as a
liability  on the balance  sheet.  With the  exception  of  minority  interests,
described  below, we implemented  SFAS No. 150 on July 1, 2003, and the adoption
had no impact on our financial statements.

         The  provisions  of SFAS  No.  150  indicate  that the  Other  Minority
Interests  would have to be treated as a liability,  because these  partnerships
have  termination  dates that cannot be  unilaterally  extended by us and,  upon
termination,  the net assets of these  entities  would be liquidated and paid to
the minority interest and us based upon relative ownership  interests.  However,
on October 29,  2003,  the FASB decided to defer  indefinitely  a portion of the
implementation  of SFAS No. 150,  which  thereby  deferred  our  requirement  to
recognize these minority interest  liabilities.  We estimate that the fair value
of the Other  Partnership  Interests is  approximately  $450 million at December
31, 2006.

                                      F-28
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


12.      Shareholders' equity
         --------------------

         Cumulative Preferred Stock
         --------------------------

         At  December  31,  2006  and  2005,  we had  the  following  series  of
Cumulative  Preferred  Stock  outstanding:


<TABLE>
<CAPTION>
                                                            At December 31, 2006            At December 31, 2005
                                                         ----------------------------    --------------------------
                           Earliest
                          Redemption        Dividend        Shares        Carrying         Shares         Carrying
       Series                Date             Rate        Outstanding      Amount        Outstanding       Amount
---------------------   --------------    ------------   -------------- -------------    ------------- ------------
                                                                      (Dollar amounts in thousands)
<S>                        <C>                <C>                  <C>  <C>                  <C>       <C>
Series R                   9/28/06            8.000%               -    $         -          20,400    $   510,000
Series S                  10/31/06            7.875%               -              -           5,750        143,750
Series T                   1/18/07            7.625%               -              -           6,086        152,150
Series U                   2/19/07            7.625%               -              -           6,000        150,000
Series V                   9/30/07            7.500%           6,900        172,500           6,900        172,500
Series W                   10/6/08            6.500%           5,300        132,500           5,300        132,500
Series X                  11/13/08            6.450%           4,800        120,000           4,800        120,000
Series Y                    1/2/09            6.850%       1,600,000         40,000       1,600,000         40,000
Series Z                    3/5/09            6.250%           4,500        112,500           4,500        112,500
Series A                   3/31/09            6.125%           4,600        115,000           4,600        115,000
Series B                   6/30/09            7.125%           4,350        108,750           4,350        108,750
Series C                   9/13/09            6.600%           4,600        115,000           4,600        115,000
Series D                   2/28/10            6.180%           5,400        135,000           5,400        135,000
Series E                   4/27/10            6.750%           5,650        141,250           5,650        141,250
Series F                   8/23/10            6.450%          10,000        250,000          10,000        250,000
Series G                  12/12/10            7.000%           4,000        100,000           4,000        100,000
Series H                   1/19/11            6.950%           4,200        105,000               -              -
Series I                    5/3/11            7.250%          20,700        517,500               -              -
Series K                    8/8/11            7.250%          18,400        460,000               -              -
Series L                  10/20/11            6.750%           9,200        230,000               -              -
                                                          ------------- --------------   ------------- -------------
      Total Cumulative Preferred Stock                     1,712,600    $ 2,855,000       1,698,336    $ 2,498,400
                                                          ============= ==============   ============= =============

</TABLE>

         During  2006,  we issued four  series of  Cumulative  Preferred  Stock:
Series H - issued January 19, 2006, net proceeds totaling $101,492,000, Series I
- issued May 3, 2006,  net  proceeds  totaling  $501,601,000,  Series K - issued
August 8, 2006, net proceeds totaling $445,852,000 and Series L - issued October
20, 2006, aggregate net proceeds totaling  $223,623,000.  During 2005, we issued
four series of Cumulative  Preferred Stock: Series D - issued February 28, 2005,
net  proceeds  totaling  $130,548,000,  Series E - issued  April 27,  2005,  net
proceeds totaling $136,601,000,  Series F - issued August 23, 2005, net proceeds
totaling  $242,550,000  and Series G - issued  December 12, 2005,  aggregate net
proceeds totaling $96,886,000.  During 2004, we issued five series of Cumulative
Preferred  Stock:  Series Y - issued January 2, 2004, net proceeds  $40,000,000,
Series Z - issued March 5, 2004,  net proceeds  $108,756,000,  Series A - issued
March 31, 2004, net proceeds $111,177,000,  Series B - issued June 30, 2004, net
proceeds  $105,124,000,  Series C - issued  September  13,  2004,  net  proceeds
$111,177,000.


         Upon  issuance of our  Cumulative  Preferred  Stock,  we  classify  the
liquidation  value as preferred  stock,  with any issuance  costs  recorded as a
reduction in Paid-in Capital.


         During 2006, we redeemed our Series R and Series S Cumulative Preferred
Stock at par value plus  accrued  dividends.  In  December  2006,  we called for
redemption  our Series T and Series U Cumulative  Preferred  Stock,  at par. The
aggregated  redemption  value of  $302,150,000  of  these  two  series  has been
classified  as a liability at December 31,  2006.  During 2005,  we redeemed our
Series F Cumulative  Preferred  Stock, at par value plus accrued  dividends.  In
November 2005, we called for redemption our Series Q Cumulative Preferred Stock,
at par. The total redemption value for this series was classified as a liability
at December 31, 2005. During 2004, we redeemed our Series K, Series L, Series M,
and Series D Cumulative Preferred Stocks (including  redemption expenses) at par
plus accrued dividends.

                                      F-29
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Except under certain conditions relating to the Company's qualification
as a REIT, the various series of Cumulative  Preferred  Stock are not redeemable
prior to the dates indicated.  On or after the dates  indicated,  each series of
Cumulative  Preferred  Stock will be redeemable,  at our option,  in whole or in
part, at $25.00 per depositary share (or per share in the case of the Series Y),
plus accrued and unpaid dividends. The holders of our Cumulative Preferred Stock
have  general  preference  rights  with  respect to  liquidation  and  quarterly
distributions  and, except under certain conditions and as noted below, will not
be  entitled to vote on most  matters.  In the event of a  cumulative  arrearage
equal to six  quarterly  dividends  or  failure  to  maintain  a Debt  Ratio (as
defined) of 50% or less,  holders of all  outstanding  series of preferred stock
(voting as a single class without regard to series) will have the right to elect
two additional members to serve on the Company's Board of Directors until events
of default have been cured.  At December  31,  2006,  there were no dividends in
arrears and the Debt Ratio was 16.6%.

         Common Stock
         ------------

         During 2006,  2005 and 2004,  activity with respect to our Common Stock
was as follows:

<TABLE>
<CAPTION>

                                                 2006                         2005                        2004
                                       -------------------------   --------------------------   --------------------------
                                        Shares          Amount         Shares        Amount        Shares        Amount
                                       ------------ ------------   ------------- ------------   ------------ -------------
                                                                (Dollar amounts in thousands)
Merger with Shurgard:
<S>                                    <C>           <C>                     <C>  <C>                   <C>   <C>
     Issuance of common stock....      38,913,187    $ 3,116,850             -    $        -            -     $        -
     Conversion of stock options.               -         69,296             -             -            -              -
Employee stock-based
     compensation................       2,135,761         85,369       282,998         7,511    1,985,416         49,929
Shares received as a distribution
    from unconsolidated entities.               -              -      (635,885)      (14,520)           -              -
Conversion of partnership units..           5,956            155             -             -            -              -
Repurchases of common stock......               -              -       (84,000)       (4,990)    (445,700)       (20,295)
                                       ------------ ------------   ------------- ------------   ------------ -------------
                                       41,054,904    $ 3,271,670      (436,887)   $  (11,999)   1,539,716     $   29,634
                                       ============ ============   ============= ============   ============ =============

</TABLE>

         In  connection  with the merger  with  Shurgard,  we issued  38,913,187
common shares to the former Shurgard shareholders. In addition, we issued vested
common stock options in exchange for Shurgard stock  options,  with an intrinsic
value of $69,296,000 at the merger date.


         During 2005, we received a distribution of 503,110  shares,  and one of
the  Consolidated   Entities  received  132,775  shares,  of  our  Common  Stock
previously  held by the  Unconsolidated  Entities.  The  503,110  shares that we
received were retired.


         At December  31, 2006 and 2005,  certain  Consolidated  Entities  owned
1,146,207 shares of our Common Stock. In the consolidation process, these shares
and the related balance sheet amounts have been eliminated.  In addition,  these
shares  are  not  included  in  the  computation  of  weighted   average  shares
outstanding. These shares continue to be legally issued and outstanding.


         Our Board of Directors has authorized the repurchase  from time to time
of up to  25,000,000  shares  of our  Common  Stock  on the  open  market  or in
privately   negotiated   transactions.   Through  December  31,  2006,  we  have
repurchased  a total of 22,201,720  shares of our Common Stock  pursuant to this
authorization.

                                      F-30
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         At December 31, 2006 and 2005, we had 3,025,747 and 4,735,647 shares of
Common  Stock  reserved in  connection  with our  stock-based  incentive  plans,
respectively,  (see Note 14) and  231,978 and 237,934  shares  reserved  for the
conversion of Convertible Partnership Units, respectively.

         Equity Stock
         ------------

         The Company is authorized to issue up to  200,000,000  shares of Equity
Stock. The Articles of Incorporation provide that the Equity Stock may be issued
from time to time in one or more series and gives the Board of  Directors  broad
authority to fix the dividend and  distribution  rights,  conversion  and voting
rights,  redemption  provisions and liquidation  rights of each series of Equity
Stock.

         Equity Stock, Series A
         ----------------------

         At  December  31, 2006 and 2005,  we had  8,744,193  depositary  shares
outstanding  each  representing  1/1,000  of a share of Equity  Stock,  Series A
("Equity  Stock A"). We received  31,909  depositary  shares from a distribution
from affiliated  entities  during 2005 (see Note 6). The Equity Stock,  Series A
ranks on parity with common stock and junior to the Cumulative  Preferred  Stock
with respect to general  preference  rights and has a  liquidation  amount which
cannot exceed $24.50 per share.  Distributions  with respect to each  depositary
share shall be the lesser of: i) five times the per share dividend on the common
stock or ii) $2.45 per annum. We have no obligation to pay  distributions on the
depositary if no distributions are paid to common shareholders.


         Except in order to preserve the Company's  federal income tax status as
a REIT,  we may not redeem the  depositary  shares  before March 31, 2010. On or
after March 31, 2010,  we may, at our option,  redeem the  depositary  shares at
$24.50 per depositary share. If the Company fails to preserve its federal income
tax status as a REIT, each depositary share will be convertible at the option of
the shareholder into .956 shares of our common stock. The depositary  shares are
otherwise not convertible into common stock.  Holders of depositary  shares vote
as a single class with our holders of our common stock on  shareholder  matters,
but the  depositary  shares  have  the  equivalent  of  one-tenth  of a vote per
depositary share.

         Dividends
         ---------

         The  unaudited  characterization  of dividends  for Federal  income tax
purposes is made based upon  earnings and profits of the Company,  as defined by
the  Internal   Revenue  Code.  For  the  tax  year  ended  December  31,  2006,
distributions for the common stock,  Equity Stock, Series A, and all the various
series of preferred stocks were classified as follows:

<TABLE>
<CAPTION>

                                                               2006 (unaudited)
                                 ----------------------------------------------------------------------------
                                    1st Quarter        2nd Quarter         3rd Quarter        4th Quarter
                                 ----------------  -------------------  -----------------  ------------------
<S>                                   <C>                <C>                 <C>                <C>
Ordinary Income                       100.00%            100.00%             100.00%            100.00%
Long-Term Capital Gain                  0.00%              0.00%               0.00%              0.00%
                                 ----------------  -------------------  -----------------  ------------------
Total                                 100.00%            100.00%             100.00%            100.00%
                                 ================  ===================  =================  ==================

</TABLE>

                                      F-31
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006



         The following table  summarizes  dividends for the years ended December
31, 2006, 2005 and 2004:

<TABLE>
<CAPTION>

                                                 2006                   2005                       2004
                                      ----------------------  ----------------------  -------------------------
                                       Per share     Total      Per share     Total       Per share      Total
                                      ----------- ----------  ------------ ---------  --------------- ---------
                                                      (Amounts in thousands, except per share data)
Cumulative Preferred Stock
--------------------------
<S>                                          <C>         <C>          <C>        <C>      <C>          <C>
Series D                                     -           -            -          -        $1.776       2,131
Series E                                     -           -       $0.208        457        $2.500       5,488
Series F                                     -           -       $0.819      1,884        $2.437       5,606
Series K                                     -           -            -          -        $0.109         501
Series L                                     -           -            -          -        $0.395       1,818
Series M                                     -           -            -          -        $1.373       3,089
Series Q                                $0.108         742       $2.150     14,835        $2.150      14,835
Series R                                $1.483      30,255       $2.000     40,800        $2.000      40,800
Series S                                $1.641       9,437       $1.969     11,320        $1.969      11,320
Series T                                $1.906      11,601       $1.906     11,601        $1.906      11,601
Series U                                $1.906      11,438       $1.906     11,438        $1.906      11,438
Series V                                $1.875      12,938       $1.875     12,938        $1.875      12,938
Series W                                $1.625       8,612       $1.625      8,612        $1.625       8,612
Series X                                $1.613       7,740       $1.613      7,740        $1.613       7,740
Series Y                                $1.713       2,740       $1.713      2,740        $1.708       2,732
Series Z                                $1.563       7,031       $1.563      7,031        $1.289       5,801
Series A                                $1.531       7,044       $1.531      7,044        $1.153       5,302
Series B                                $1.781       7,748       $1.781      7,748        $0.896       3,896
Series C                                $1.650       7,590       $1.650      7,590        $0.495       2,277
Series D                                $1.545       8,344       $1.292      6,976             -           -
Series E                                $1.688       9,536       $1.144      6,463             -           -
Series F                                $1.613      16,124       $0.543      5,430             -           -
Series G                                $1.750       7,000       $0.093        370             -           -
Series H                                $1.654       6,945            -          -             -           -
Series I                                $1.203      24,908            -          -             -           -
Series K                                $0.725      13,340            -          -             -           -
Series L                                $0.338       3,105            -          -             -           -
                                                 -----------              ---------                  --------
                                                   214,218                 173,017                   157,925
Common Equivalent Stock
-----------------------
Common Stock                            $2.000     298,219      $1.900     244,200        $1.800     230,834
Equity Stock, Series A                  $2.450      21,424    $2.450        21,443        $2.450      21,501
                                                 -----------              ---------                  --------
Total Distributions                               $533,861                $438,660                  $410,260
                                                 ===========              =========                  ========

</TABLE>

13.      Related party transactions
         --------------------------

         Relationships and transactions with the Hughes Family
         -----------------------------------------------------

         Mr.  Hughes and his family  (collectively  the  "Hughes  Family")  have
ownership interests in, and operate approximately 44 self-storage  facilities in
Canada  under the name  "Public  Storage"  ("PS  Canada")  pursuant to a license
agreement  with the  Company.  We  currently  do not own any  interests in these
facilities  nor do we own any  facilities  in  Canada.  The Hughes  Family  owns
approximately  27% of our Common Stock outstanding at December 31, 2006. We have
a right of first refusal to acquire the stock or assets of the corporation  that
manages the 44  self-storage  facilities in Canada,  if the Hughes Family or the
corporation agrees to sell them.  However, we have no interest in the operations
of this corporation, we have no right to acquire this stock or assets unless the
Hughes Family  decides to sell, the right of first refusal does not apply to the
self-storage  facilities,  and we  receive  no  benefit  from  the  profits  and
increases in value of the Canadian self-storage facilities.

                                      F-32
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         In October 2005, the Company's  Board of Directors (with Mr. Hughes and
B. Wayne Hughes Jr. abstaining) approved the reimbursement of CAD $653,424, plus
CAD  $52,274  in  interest  accrued  at 4% per  annum,  representing  the amount
previously  charged to the Canadian  entities for system  development costs that
Company no longer permits them to use. These amounts were reimbursed in November
2005.

         Through consolidated  entities,  we continue to reinsure risks relating
to loss of goods  stored by tenants in the  self-storage  facilities  in Canada.
During 2006, 2005, and 2004, respectively, we received $989,000, $1,052,000, and
$1,069,000,  respectively,  in reinsurance premiums attributable to the Canadian
facilities.  Since our  right to  provide  tenant  reinsurance  to the  Canadian
facilities  may be  qualified,  there is no assurance  that these  premiums will
continue.

         In November 1999, we formed the Consolidated  Development Joint Venture
with a joint venture partner whose partners  include an  institutional  investor
and Mr.  Hughes  (Note 11).  On August 5, 2005,  we acquired  the  institutional
investor's interest in PSAC. This acquisition gave us a controlling  position in
PSAC and the right to acquire the  remaining  interest in PSAC which was held by
Mr.  Hughes.  We exercised  this right and on November 17, 2005, we acquired Mr.
Hughes' interest in PSAC for $64,513,000 plus an accrued preferred return.

         The  Company  and  Mr.  Hughes  are  co-general   partners  in  certain
consolidated  entities  and  affiliated  entities  of the  Company  that are not
unconsolidated.  The Hughes  Family also owns limited  partnership  interests in
certain  of  these   entities.   The  Company  and  the  Hughes  Family  receive
distributions  from  these  partnerships  in  accordance  with the  terms of the
partnership agreements.

         Other Related Party Transactions
         --------------------------------

         Ronald L. Havner, Jr. is our Vice-Chairman and Chief Executive Officer,
and he is Chairman of the Board of PSB.

         Dann V. Angeloff,  a director of the Company, is the general partner of
a limited  partnership formed in June of 1973 that owns a self-storage  facility
that is managed by us. We recorded management fees with respect to this facility
amounting  to $68,000,  $45,000,  and $41,000 for the years ended  December  31,
2006, 2005, and 2004, respectively.

         PSB manages  certain of the commercial  facilities that we own pursuant
to management agreements for a management fee equal to 5% of revenues. We paid a
total of $625,000, $579,000, and $562,000 for the years ended December 31, 2006,
2005 and 2004,  respectively,  in management fees with respect to PSB's property
management services.  At December 31, 2006, we have recorded amounts owed to PSB
of $871,000  ($551,000 at December 31, 2005),  for  management  fees and certain
other operating expenses related to the managed  facilities,  paid by PSB on our
behalf.  These  amounts  are the result of a time lag  between  PSB paying  such
expenditures and being reimbursed by us.

         We  manage  our  wholly-owned  self-storage  facilities  as well as the
facilities owned by the Consolidated  Entities and affiliated  entities that are
not consolidated on a joint basis, in order to take advantage of scale and other
efficiencies.  As a result,  significant  components of  self-storage  operating
costs, such as payroll costs,  advertising and promotion,  data processing,  and
insurance  expenses are shared and allocated  among the various  entities  using
methodologies  meant to  fairly  allocate  such  costs  based  upon the  related
activities. The amount of such expenses allocated to Unconsolidated Entities was
approximately $2.3 million,  $4.1 million,  and $4.2 million for the years ended
December 31, 2006, 2005, and 2004, respectively.

                                      F-33
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Pursuant to a cost-sharing and administrative  services agreement,  PSB
reimburses us for certain administrative services that we provide to them. PSB's
share of these costs totaled approximately  $320,000 for the year ended December
31, 2006 and  $340,000  for each of the years ended  December 31, 2005 and 2004,
respectively.

         Stor-RE,  a consolidated  entity,  and third party  insurance  carriers
provided PS Canada,  the Company,  PSB, and other affiliates of the Company with
liability and casualty insurance coverage until March 31, 2004. PS Canada owns a
2.2%  interest  and PSB owns a 4.0%  interest  in  Stor-RE.  PS  Canada  and PSB
obtained their own liability and casualty insurance  covering  occurrences after
April 1, 2004.  For  occurrences  before  April 1, 2004,  STOR-Re  continues  to
provide liability and casualty insurance  coverage  consistent with the relevant
agreements.

14.      Stock-based Compensation
         ------------------------

         Description of Stock-Based Incentive Plan
         -----------------------------------------

         We have a 1990 Stock Option Plan (the "1990 Plan"),  which provides for
the grant of non-qualified  stock options. We have a 1994 Stock Option Plan (the
"1994 Plan"),  a 1996 Stock Option and Incentive Plan (the "1996 Plan"),  a 2000
Non-Executive/Non-Director  Stock Option and Incentive Plan (the "2000 Plan"), a
2001  Non-Executive/Non-Director  Stock  Option  and  Incentive  Plan (the "2001
Non-Executive  Plan") and a 2001  Stock  Option  and  Incentive  Plan (the "2001
Plan"),  each of which  provides  for the  grant of  non-qualified  options  and
incentive  stock  options.  (The 1990 Plan, the 1994 Plan, the 1996 Plan and the
2000 Plan are collectively referred to as the "PSI Plans"). Under the PSI Plans,
the Company has granted non-qualified options to certain directors, officers and
key employees to purchase shares of the Company's  common stock at a price equal
to the fair market  value of the common  stock at the date of grant.  Generally,
options under the PSI Plans vest over a three-year period from the date of grant
at the rate of one-third per year (options granted after, December 31, 2002 vest
generally  over a  five-year  period)  and expire (i) under the 1990 Plan,  five
years after the date they became  exercisable  and (ii) under the 1994 Plan, the
1996 Plan and the 2000 Plan,  ten years after the date of grant.  The 1996 Plan,
the 2000 Plan,  the 2001  Non-Executive  Plan and the 2001 Plan also provide for
the grant of restricted stock (see below) to officers, key employees and service
providers  on  terms  determined  by an  authorized  committee  of the  Board of
Directors.  A total of  approximately  2,331,371 and 3,012,671  securities  were
available for grant at December 31, 2006 and 2005, respectively.

                                      F-34
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Stock Options
         -------------

         Information with respect to stock options during 2006, 2005 and 2004 is
as follows:

<TABLE>
<CAPTION>

                                                        2006                           2005                         2004
                                             -----------------------------   ----------------------------  ------------------------
                                                               Weighted                      Weighted                      Weighted
                                                Number          Average         Number        Average         Number        Average
                                                 of            Price per          of         Price per          of         Price per
                                               Options           Share          Options        Share         Options         Share
                                             ------------- ---------------   ------------- --------------  ------------- -----------
<S>                                           <C>                <C>           <C>              <C>         <C>               <C>
 Options outstanding January 1                1,423,146          $41.46        1,441,901        $35.07      3,088,618         $27.14
   Granted (a)                                2,208,328           49.67          288,000         62.56        353,500          51.46
   Exercised (b) (c)                         (2,026,540)          41.99         (249,520)        30.10     (1,957,907)         25.51
   Cancelled                                     (2,000)          52.98          (57,235)        36.84        (42,310)         32.75
                                             ------------- ---------------   ------------- --------------  ------------- -----------
 Options outstanding December 31 (d) (e)      1,602,934          $52.08        1,423,146        $41.46      1,441,901         $35.08
                                             ============= ===============   ============= ==============  ============= ===========

 Price  range of options  outstanding  at
 December 31: (e)                                    $22.94 to $96.61               $18.00 to $69.87            $14.88 to $39.23

Options exercisable at December 31 (f):         856,993          $38.96          780,350        $31.38        651,013         $27.13
                                             ============= ===============   ============= ==============  ============= ===========

</TABLE>

(a)  On August 22,  2006,  in  connection  with our  merger  with  Shurgard,  we
     converted  each  outstanding   Shurgard  stock  option  into  0.82  options
     exercisable  for shares of the  Company's  Common  Stock.  This  conversion
     resulted in the issuance of 1,912,828 stock options.

(b)  The  aggregate  intrinsic  value of  shares  exercised  during  each  year,
     representing  the  differential  between the market  price and the exercise
     price  on the  respective  dates of  exercise,  amounted  to  approximately
     $10,791,000,  $7,508,000,  and $45,673,000 for the years ended December 31,
     2006, 2005, and 2004, respectively.

(c)  As of December 31, 2006, 1,814,467 of the 1,912,828 stock options issued in
     the exchange in connection with our merger with Shurgard were exercised.

(d)  The options  outstanding  at December  31,  2006,  have  remaining  average
     contractual  lives of 7.2 years, and an aggregate  intrinsic  value,  based
     upon  the  December  31,  2006  closing  price  of  our  common  stock,  of
     approximately $72,800,000.

(e)  Approximately  263,205,  372,570 and 472,788  options have exercise  prices
     less  than  $30  at  December  31,  2006,  2005,  and  2004,  respectively.
     Approximately  894,000,  624,000 and 336,000  options have exercise  prices
     greater than $45 at December 31, 2006, 2005 and 2004, respectively.

(f)  The aggregate  intrinsic value of exercisable options at December 31, 2006,
     based upon the  closing  price of our common  stock at December  31,  2006,
     amounted to approximately $50,200,000.  Options exercisable at December 31,
     2006 have a weighted average remaining  contractual life of approximately 7
     years.


         We recognize  compensation  expense for stock option  awards based upon
their  fair value on the date of grant  amortized  over the  applicable  vesting
period  (the "Fair  Value  Method"),  less an  allowance  for  estimated  future
forfeited  awards with respect to stock  options  granted after January 1, 2002.
The fair value of the stock  options is determined  utilizing the  Black-Scholes
option pricing model.  The  Black-Scholes  option pricing model utilizes several
assumptions,  including the  estimated  life of the stock  options,  the average
risk-free  rate,  the  expected  dividend  yield,  and expected  volatility.  We
establish these assumptions based generally upon historical trends.

         We do not recognize  compensation expense for stock option awards prior
to January 1, 2002, instead, we disclose the amount of stock option expense that
would have been  recognized  in each year with  respect to these  options had we
utilized the Fair Value Method with respect to these awards, in the table below.
Because  stock-based  awards had a vesting period of three years, our accounting
method with respect to these  pre-2002  awards has no effect after  December 31,
2004.

         Outstanding  stock options are included on a  one-for-one  basis in our
diluted weighted average shares,  less a reduction for the treasury stock method
applied to a) the average  cumulative  measured  but  unrecognized  compensation
expense  during the period and b) the strike price  proceeds  expected  from the
employee upon exercise.

                                      F-35
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


         The following  table sets forth financial  disclosures  with respect to
the accounting for stock options:

<TABLE>
<CAPTION>

                                                                                For the years ended December 31,
                                                                           ----------------------------------------------
SELECTED INFORMATION WITH RESPECT TO EMPLOYEE STOCK OPTIONS:                    2006             2005            2004
                                                                           ----------------  --------------  ------------
                                                                           (Dollar amounts in thousands, except per-share
                                                                                            amounts)
Average estimated value per option granted, utilizing the
<S>                                                                              <C>             <C>              <C>
Black-Scholes method..............................................               $9.72           $6.77            $4.40

ASSUMPTIONS USED IN VALUING OPTIONS WITH THE BLACK-SCHOLES METHOD:
    Expected life of options in years (a).........................                   5               5                5
    Risk-free interest rate.......................................                4.6%            4.0%             3.5%
    Expected volatility (b).......................................               0.227           0.234            0.210
    Expected dividend yield.......................................                7.0%            7.0%             7.0%

NET INCOME INFORMATION WITH RESPECT TO EACH YEAR:

Net income, as reported...........................................            $314,026        $456,393         $366,213
Add back:  stock-based employee compensation expense included in net
   income (c).....................................................               1,173           1,010              709
Less: stock-based employee compensation cost that would have been
   included if the fair value method were applied for all awards..              (1,173)         (1,010)            (874)
                                                                           ----------------  --------------  ------------

   Net income, assuming consistent application of the fair value method       $314,026        $456,393         $366,048
                                                                           ================  ==============  ============

EARNINGS PER SHARE, AS REPORTED:
   Basic .........................................................              $0.33           $1.98            $1.39
   Diluted........................................................              $0.33           $1.97            $1.38

EARNINGS PER SHARE, ASSUMING CONSISTENT APPLICATION OF THE FAIR VALUE
METHOD
   Basic .........................................................              $0.33           $1.98            $1.39
   Diluted........................................................              $0.33           $1.97            $1.38

</TABLE>

(a)  Expected life is based upon our  expectations  of stock option  recipients'
     expected exercise and termination patterns.

(b)  Expected  volatility  is based  upon the level of  volatility  historically
     experienced.

(c)  At December  31,  2006,  the total  compensation  cost related to nonvested
     stock option  awards  amounts to  approximately  $6,161,000,  which will be
     recognized over the remaining vesting period.

         Restricted Stock Units
         ----------------------

         Outstanding  restricted  stock  units  vest  over a five or  eight-year
period from the date of grant at the rate of one-fifth or  one-eighth  per year,
respectively.  The  employee  receives  additional  compensation  equal  to  the
per-share  dividends received by common  shareholders with respect to restricted
stock units  outstanding.  Such compensation is accounted for as dividends paid.
Any dividends paid on units which are subsequently forfeited are expensed.  Upon
vesting,  the  employee  receives  common  shares  equal to the number of vested
restricted stock units in exchange for the units.

         The total value of each  restricted  stock unit  grant,  based upon the
market  price of our common stock at the date of grant,  is  amortized  over the
vesting period as compensation  expense. The related employer portion of payroll
taxes is expensed as incurred. Until December 31, 2005 (see below),  forfeitures
were recognized as experienced, reducing compensation expense.

                                      F-36
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Effective  January 1, 2006, in accordance  with  Statement of Financial
Accounting  Standards  No.  123 -  revised  ("SFAS  123R"),  we began  recording
compensation  expense net of estimates for future  forfeitures  (the  "Estimated
Forfeiture  Method").  In addition,  we estimated  the  cumulative  compensation
expense that would have been recorded through December 31, 2005, had we used the
Estimated  Forfeiture Method, would have been $578,000 ($0.01 per diluted common
share)  lower.  Accordingly,  as  prescribed  by SFAS  123R,  we  recorded  this
adjustment  as a  cumulative  effect of change in  accounting  principal  on our
accompanying consolidated statement of income for the year December 31, 2006.

         During the year ended December 31, 2006, 419,170 restricted stock units
were granted with an aggregate fair value on the date of grant of  approximately
$33,861,000,  31,370 restricted stock units were forfeited (aggregate grant-date
fair value of $1,924,000),  and 71,160  restricted stock units vested (aggregate
grant-date fair value of $3,438,000) with an aggregate fair value on the date of
vesting of $5,918,000. This vesting resulted in the issuance of 47,159 shares of
common stock. In addition,  cash  compensation  was paid to employees in lieu of
24,001  shares of common  stock based upon the market  value of the stock at the
date of vesting,  and used to settle the employees'  tax liability  generated by
the vesting.

         During the year ended December 31, 2005, 169,750 restricted stock units
were granted with an aggregate fair value on the date of grant of  approximately
$9,633,000,  74,200 restricted stock units were forfeited (aggregate  grant-date
fair value of $3,388,000),  and 47,760  restricted stock units vested (aggregate
grant-date fair value of $2,053,000) with an aggregate fair value on the date of
vesting of $3,156,000. This vesting resulted in the issuance of 33,478 shares of
common stock. In addition,  cash  compensation  was paid to employees in lieu of
14,282  shares of common  stock based upon the market  value of the stock at the
date of vesting,  and used to settle the employees'  tax liability  generated by
the vesting.

         During the year ended December 31, 2004,  94,500 restricted stock units
were granted with an  aggregate  fair value on the date of grant of  $4,649,000,
48,650 restricted stock units were forfeited,  and 42,810 restricted stock units
vested  with an  aggregate  fair value on the date of  vesting of  approximately
$2,419,000.  This vesting  resulted in the  issuance of 27,509  shares of common
stock. In addition,  cash  compensation  was paid to employees in lieu of 15,301
shares of common  stock based upon the market  value of the stock at the date of
vesting,  and used to settle  the  employees'  tax  liability  generated  by the
vesting.  During the year ended December 31, 2003, we granted 249,000 restricted
stock units to employees of the Company with an aggregate fair value on the date
of grant of approximately $10,180,000.

         At December 31, 2006, approximately 616,470 restricted stock units were
outstanding  (299,830 and 252,040 at December  31, 2005 and 2004,  respectively)
with an aggregate fair value at December 31, 2006,  based upon the closing price
of our common stock, of approximately $60,106,000. The aggregate grant-date fair
value of the 616,470 restricted stock units outstanding at December 31, 2006 was
approximately $43,421,000 ($14,922,000 for the 299,830 restricted stock units at
December 31, 2005),  which will be recognized over the remaining  vesting period
of approximately 4 years. A total of $5,136,000,  $3,748,000,  and $2,254,000 in
restricted  stock  expense was recorded  for the years ended  December 31, 2006,
2005 and 2004,  respectively,  which includes  amortization of the fair value of
the grant reflected as an increase to paid-in capital,  as well as payroll taxes
we incurred upon each respective vesting.

         Outstanding  restricted stock units are included on a one-for-one basis
in our diluted weighted average shares,  less a reduction for the treasury stock
method applied to the average cumulative measured but unrecognized  compensation
expense during the period.

                                      F-37
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

15.      Disclosures Regarding Segment Reporting
         ---------------------------------------

         Description of Each Reportable Segment
         --------------------------------------

         Our reportable segments reflect significant  operating  activities that
are evaluated  separately  by  management,  comprised of the following  segments
which are organized based upon their operating characteristics.

         Our  domestic  self-storage  segment  comprises  the direct  ownership,
development,  and operation of traditional  storage  facilities in the U.S., and
the ownership of equity interests in entities that own storage properties in the
U.S. Our European self-storage segment comprises our self-storage and associated
activities owned by affiliated entities based in Europe.

         Our domestic  ancillary  operating segment  represents all of our other
segments,  which are reported as a group,  including (i) containerized  storage,
(ii)  commercial  property  operations,  which  reflects  our  interest  in  the
ownership,  operation, and management of commercial properties both directly and
through our interest in PSB (iii) the reinsurance of policies  against losses to
goods stored by tenants in our self-storage facilities, (ii) sale of merchandise
at  our  self-storage  facilities,   (iv)  truck  rentals  at  our  self-storage
facilities  and (v)  management of facilities  owned by  third-party  owners and
facilities owned by the Unconsolidated Entities.

         Measurement  of Segment  Income  (Loss) and  Segment  Assets - Domestic
         -----------------------------------------------------------------------
Self-Storage and Domestic Ancillary
-----------------------------------

         The domestic self-storage and domestic ancillary segments are evaluated
by management  based upon the net segment  income of each  segment.  Net segment
income  represents  net  income  in  conformity  with  GAAP and our  significant
accounting  policies as denoted in Note 2,  before  interest  and other  income,
interest expense, and corporate general and administrative expense. Interest and
other income,  interest expense,  corporate general and administrative  expense,
minority  interest in income and gains and losses on sales of real estate assets
are not allocated to these segments because  management does not utilize them to
evaluate the results of  operations of each  segment.  In addition,  there is no
presentation of segment assets for these other segments because total assets are
not considered in the evaluation of these segments.

         Measurement  of Segment  Income  (Loss) and  Segment  Assets - European
         -----------------------------------------------------------------------
Operations
----------

         The European segment operations are primarily  independent of the other
segments,  with separate  management,  debt, financing  activities,  and capital
allocation decisions.  Accordingly, this segment is evaluated by management as a
stand-alone business unit and the European segment presentation  includes all of
the revenues, expenses, and operations of this business unit, including interest
expense  and  general  and  administrative   expense.  Assets  of  our  European
operations at December 31, 2006 include  approximately  $480 million in cash (of
which  approximately  $429 million was utilized on January 2, 2007 to prepay the
325M euro collateralized  notes), real estate with a book value of approximately
$1.4 billion,  intangibles with a book value of approximately $161 million,  and
other assets with a book value of approximately $65 million.

                                      F-38
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Presentation of Segment Information
         -----------------------------------

         The following  table  reconciles the  performance  of each segment,  in
terms of segment income, to our consolidated net income (amounts in thousands):

For the year ended December 31, 2006


<TABLE>
<CAPTION>
                                                                                           DOMESTIC     OTHER ITEMS NOT
                                                         DOMESTIC          EUROPEAN        ANCILLARY      ALLOCATED TO      TOTAL
                                                       SELF-STORAGE       OPERATIONS       OPERATIONS       SEGMENTS    CONSOLIDATED
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                                                   (Amounts in thousands)
REVENUES:
<S>                                                  <C>              <C>              <C>             <C>             <C>
   Self-storage rental income....................    $  1,180,234     $     59,715     $          -    $          -    $  1,239,949
   Ancillary operating revenue...................               -            5,121          104,786               -         109,907
   Interest and other income.....................               -                -                -          31,799          31,799
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                        1,180,234           64,836          104,786          31,799       1,381,655
                                                     ---------------- --------------- ---------------- --------------- -------------

EXPENSES:
  Cost of operations (excluding depreciation and
      amortization below):
      Self-storage facilities....................         398,760           30,436                -               -         429,196
      Ancillary operations.......................               -            2,210           69,154               -          71,364
  Depreciation and amortization..................         374,843           59,803            3,338               -         437,984
  General and administrative.....................               -           10,245                -          74,416          84,661
  Interest expense...............................               -           13,109                -          19,953          33,062
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                          773,603          115,803           72,492          94,369       1,056,267
                                                     ---------------- --------------- ---------------- --------------- -------------

Income (loss) from continuing operations before
   equity in earnings of real estate entities,
   gain on disposition of real estate and real
   estate investments, foreign currency exchange
   gain, income from derivatives and minority
   interest in income............................         406,631          (50,967)          32,294         (62,570)        325,388

Equity in earnings of real estate entities.......           2,131                -            9,764               -          11,895
Gain on disposition of real estate and real
   estate investments............................               -                -                -           2,177           2,177
Foreign currency exchange gain...................               -              336                -               -             336
Income from derivatives, net.....................               -            3,926                -               -           3,926
 Minority interest in income.....................         (16,459)           3,631                -         (19,055)        (31,883)
                                                     ---------------- --------------- ---------------- --------------- -------------
Income (loss) from continuing operations.........         392,303          (43,074)          42,058         (79,448)        311,839
Cumulative effect of a change in accounting                     -                -                -             578             578
   principle.....................................
Discontinued operations..........................               -                -                -           1,609           1,609
                                                     ---------------- --------------- ---------------- --------------- -------------
Net income (loss)................................    $    392,303     $    (43,074)    $     42,058    $    (77,261)   $    314,026
                                                     ================ =============== ================ =============== =============

</TABLE>

                                      F-39
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

For the year ended December 31, 2005

<TABLE>
<CAPTION>

                                                                                           DOMESTIC     OTHER ITEMS NOT
                                                         DOMESTIC          EUROPEAN        ANCILLARY      ALLOCATED TO      TOTAL
                                                       SELF-STORAGE       OPERATIONS       OPERATIONS       SEGMENTS    CONSOLIDATED
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                                                   (Amounts in thousands)
REVENUES:
<S>                                                   <C>              <C>             <C>             <C>             <C>
   Self-storage rental income....................     $    951,370     $          -    $          -    $          -    $    951,370
   Ancillary operating revenue...................                -                -          92,230               -          92,230
   Interest and other income.....................                -                -               -          16,447          16,447
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                           951,370                -          92,230          16,447       1,060,047
                                                     ---------------- --------------- ---------------- --------------- -------------

EXPENSES:
  Cost of operations (excluding depreciation and
      amortization below):
      Self-storage facilities....................          320,589                -               -               -         320,589
      Ancillary operations.......................                -                -          57,712               -          57,712
  Depreciation and amortization..................          191,102                -           5,130               -         196,232
  General and administrative.....................                -                -               -          21,115          21,115
  Interest expense...............................                -                -               -           8,216           8,216
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                           511,691                -          62,842          29,331         603,864
                                                     ---------------- --------------- ---------------- --------------- -------------

Income (loss) from continuing operations before
   equity in earnings of real estate entities,
   casualty loss, gain on disposition of real
   estate and real estate investments and
   minority interest in income...................          439,679                -          29,388         (12,884)        456,183

Equity in earnings of real estate entities.......            6,126                -          18,757               -          24,883
Casualty loss ...................................                -                -               -          (1,917)         (1,917)
Gain on disposition of real estate and real
   estate investments............................                -                -               -           3,099           3,099
 Minority interest in income.....................          (15,630)               -               -         (17,021)        (32,651)
                                                     ---------------- --------------- ---------------- --------------- -------------
Income from continuing operations................          430,175                -          48,145         (28,723)        449,597
Discontinued operations..........................                -                -               -           6,796           6,796
                                                     ---------------- --------------- ---------------- --------------- -------------
Net income (loss)................................     $    430,175     $          -    $     48,145    $    (21,927)   $    456,393
                                                     ================ =============== ================ =============== =============

</TABLE>

For the year ended December 31, 2004

<TABLE>
<CAPTION>

                                                                                           DOMESTIC     OTHER ITEMS NOT
                                                         DOMESTIC          EUROPEAN        ANCILLARY      ALLOCATED TO      TOTAL
                                                       SELF-STORAGE       OPERATIONS       OPERATIONS       SEGMENTS    CONSOLIDATED
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                                                   (Amounts in thousands)
REVENUES:
<S>                                                   <C>             <C>              <C>             <C>             <C>
   Self-storage rental income....................     $    861,665    $          -     $          -    $          -    $    861,665
   Ancillary operating revenue...................                -               -           91,101               -          91,101
   Interest and other income.....................                -               -                -           5,391           5,391
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                           861,665               -           91,101           5,391         958,157
                                                     ---------------- --------------- ---------------- --------------- -------------

EXPENSES:
  Cost of operations (excluding depreciation and
      amortization below):
      Self-storage facilities....................          300,355               -                -               -         300,355
      Ancillary operations.......................                -               -           61,589               -          61,589
  Depreciation and amortization..................          176,230               -            6,660               -         182,890
  General and administrative.....................                -               -                -          18,813          18,813
  Interest expense...............................                -               -                -             760             760
                                                     ---------------- --------------- ---------------- --------------- -------------
                                                           476,585               -           68,249          19,573         564,407
                                                     ---------------- --------------- ---------------- --------------- -------------

Income (loss) from continuing operations before
   equity in earnings of real estate entities,
   casualty loss, gain on disposition of real
   estate and realestate investments and
   minority interest in income...................          385,080               -           22,852         (14,182)        393,750

Equity in earnings of real estate entities.......            5,669               -           16,895               -          22,564
Casualty loss ...................................                -               -                -          (1,250)         (1,250)
Gain on disposition of real estate and real
   estate investments............................                -               -                -           1,317           1,317
 Minority interest in income.....................          (17,427)              -                -         (32,486)        (49,913)
                                                     ---------------- --------------- ---------------- --------------- -------------
Income (loss) from continuing operations.........          373,322               -           39,747         (46,601)        366,468
Discontinued operations..........................                -               -                -            (255)           (255)
                                                     ---------------- --------------- ---------------- --------------- -------------
Net income (loss)................................     $    373,322    $          -     $     39,747    $    (46,856)   $    366,213
                                                     ================ =============== ================ =============== =============

</TABLE>

                                      F-40
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2006

16.      Recent Accounting Pronouncements and Guidance
         ---------------------------------------------

         Accounting for Uncertainty in Income Taxes
         ------------------------------------------

         In July 2006,  the Financial  Accounting  Standards  Board (the "FASB")
issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN
48"). This interpretation,  among other things,  creates a two-step approach for
evaluating  uncertain  tax  positions.  Recognition  (step one)  occurs  when an
enterprise concludes that a tax position,  based solely on its technical merits,
is more-likely-than-not to be sustained upon examination. Measurement (step two)
determines the amount of benefit that more-likely-than-not will be realized upon
settlement. Derecognition of a tax position that was previously recognized would
occur when a company subsequently determines that a tax position no longer meets
the  more-likely-than-not  threshold  of being  sustained.  FIN 48  specifically
prohibits the use of a valuation  allowance as a substitute for derecognition of
tax positions, and it has expanded disclosure requirements.  FIN 48 is effective
for fiscal years  beginning  after  December  15,  2006,  in which the impact of
adoption  should  be  accounted  for as a  cumulative-effect  adjustment  to the
beginning balance of retained earnings. The Company is evaluating FIN 48 and has
not yet  determined  the  impact  the  adoption  will  have on the  consolidated
financial statements.


         Fair Value Measurement
         ----------------------

         In 2006, the FASB issued SFAS No. 157, "Fair Value  Measurement"  (SFAS
No. 157). SFAS No. 157 provides  guidance for using fair value to measure assets
and liabilities.  The standard expands required  disclosures about the extent to
which companies  measure assets and  liabilities at fair value,  the information
used to  measure  fair  value,  and the  effect of fair  value  measurements  on
earnings.  SFAS No. 157 applies  whenever  other  standards  require (or permit)
assets or liabilities to be measured at fair value. SFAS No. 157 does not expand
the use of fair value in any new  circumstances.  SFAS No. 157 is effective  for
financial  statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. We do not expect the impact to be
material to our financial condition or results of operations.

         Effects of Prior Year Misstatements
         -----------------------------------

         In 2006, the SEC issued Staff Accounting Bulletin No. 108 (SAB No. 108)
which addresses  quantifying the financial  statement  effects of misstatements,
specifically,  how  the  effects  of  prior  year  uncorrected  errors  must  be
considered  in   quantifying   misstatements   in  the  current  year  financial
statements.  SAB No. 108 is effective for fiscal years ending after November 15,
2006.  We adopted the  provisions  of SAB No. 108 as of December 31,  2006.  The
adoption  of SAB No.  108 had no  material  impact  on our  financial  position,
operating results or cash flows.

         Accounting Changes and Error Corrections
         ----------------------------------------

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
Errors  Corrections - a replacement of APB Opinion No. 20 and FASB Statement No.
3." This statement replaces APB Opinion No. 20,  "Accounting  Changes," and SFAS
No. 3,  "Reporting  Accounting  Changes in Interim  Financial  Statements,"  and
changes the  requirements  for the  accounting  for and reporting of a voluntary
change in  accounting  principle.  It also  applies  to changes  required  by an
accounting pronouncement in the instance that the pronouncement does not include
specific transition provisions. APB Opinion No. 20 previously required that most
voluntary  changes in  accounting  principle be  recognized  by including in net
income of the period the  cumulative  effect of changing  to the new  accounting
principle.  SFAS No.  154  requires  retrospective  application  of  changes  in
accounting  principle  to prior  periods'  financial  statements,  unless  it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the change. We adopted the provisions of SFAS No. 154 as of January 1,
2006.  The  adoption  of SAB No.  154 had no  material  impact on our  financial
position, operating results or cash flows.

                                      F-41
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

17.      Commitments and Contingencies
         -----------------------------

         Serrao v. Public  Storage,  Inc.  (filed April 2003)
         ----------------------------------------------------
         (Superior Court of California - Orange County)
         ----------------------------------------------

         The  plaintiff  in this case filed a suit against the Company on behalf
of a putative class of renters who rented  self-storage  units from the Company.
Plaintiff alleges that the Company misrepresented the size of its storage units,
has  brought  claims  under  California  statutory  and common law  relating  to
consumer protection, fraud, unfair competition, and negligent misrepresentation,
and is seeking  monetary  damages,  restitution,  and declaratory and injunctive
relief.

         The claim in this case is  substantially  similar to those in Henriquez
v. Public Storage,  Inc., which was disclosed in prior reports. In January 2003,
the plaintiff caused the Henriquez action to be dismissed.

         Based upon the  uncertainty  inherent in any putative class action,  we
cannot  presently  determine  the  potential  damages,  if any, or the  ultimate
outcome of this litigation. On November 3, 2003, the court granted our motion to
strike the plaintiff's  nationwide  class  allegations and to limit any putative
class to California  residents only. In August 2005, we filed a motion to remove
the case to federal court, but the case has been remanded to the Superior Court.
We are  vigorously  contesting  the claims  upon  which  this  lawsuit is based,
including class certification efforts.

         Drake  v.  Shurgard  Storage  Centers,   Inc.  (filed  September  2002)
         -----------------------------------------------------------------------
         (Superior Court of California - Orange County)
         ----------------------------------------------

         This is a companion  case to the Serrao  matter  discussed  above.  The
plaintiff  alleges the same set of operative  facts and seeks the same relief as
in Serrao against Shurgard Storage Centers, Inc.  ("Shurgard"),  whose liability
Public  Storage  assumed  following the merger of Public Storage and Shurgard on
August 22, 2006.  There is currently  pending a motion for class  certification,
which has yet to be ruled on. We cannot presently  determine the potential total
damages,  if any,  or the  ultimate  outcome of the  litigation.  We  vigorously
contested the motion for class  certification  and will  vigorously  defend this
action.

         Potter,  et al v. Hughes,  et al (filed  December  2004)
         --------------------------------------------------------
         (United States District Court - Central District of California)
         ---------------------------------------------------------------

         In November  2002,  a  shareholder  of the Company made a demand on the
Board of Directors  challenging the fairness of the Company's  acquisition of PS
Insurance Company,  Ltd. ("PSIC") and related matters. PSIC was previously owned
by the Hughes Family. In June 2003, following the filing by the Hughes Family of
a complaint for declaratory relief asking the court to find that the acquisition
of PSIC and related matters were fair to the Company, it was ruled that the PSIC
transaction  was just and  reasonable  as to the Company  and  holding  that the
Hughes Family was not required to make any payment to the Company.

         At the end of December 2004, the same shareholder referred to above and
a second  shareholder filed this  shareholder's  derivative  complaint naming as
defendants  the  Company's  directors  (and two former  directors)  and  certain
officers of the Company.  The matters alleged in this complaint  relate to PSIC,
the Hughes  Family's  Canadian  self-storage  operations  and the Company's 1995
reorganization.  In July  2006,  the Court  granted  the  defendants'  motion to
dismiss the amended Complaint without leave to amend. In August 2006, Plaintiffs
filed a notice  of appeal  of the  Court's  decision.  The  appeal is  currently
pending.  We believe the litigation will not have any financially adverse effect
on the  Company  (other  than the  costs  and  other  expenses  relating  to the
lawsuit).

                                      F-42
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         Brinkley v. Public Storage,  Inc. (filed April 2005)
         ----------------------------------------------------
         (Superior Court of California - Los Angeles County)
         ---------------------------------------------------

         The  plaintiff  sued the  Company  on  behalf of a  purported  class of
California  non-exempt  employees based on various California wage and hour laws
and seeking  monetary damages and injunctive  relief.  In May 2006, a motion for
class  certification  was filed  seeking to certify five  subclasses.  Plaintiff
sought certification for alleged meal period violations, rest period violations,
failure to pay for travel time,  failure to pay for mileage  reimbursement,  and
for wage  statement  violations.  In October 2006, the Court declined to certify
three out of the five subclasses.  The Court did,  however,  certify  subclasses
based  on  alleged  meal  period  and wage  statement  violations.  The  maximum
potential  liability  cannot  presently be  estimated.  We intend to  vigorously
contest  the  substantive  merits  of the two  remaining  subclasses  that  were
certified.

         Simas v. Public  Storage,  Inc. (filed January 2006)
         ----------------------------------------------------
         (Superior Court of California - Orange County)
         ----------------------------------------------

         The  plaintiff  brings this  action  against the Company on behalf of a
purported class who bought insurance coverage at Company's  facilities  alleging
that the Company does not have a license to offer,  sell and/or transact storage
insurance.  The action was  originally  brought  under  California  Business and
Professions  Code  Section  17200  and seeks  retention,  monetary  damages  and
injunctive  relief.  The Company  filed a demurrer to the  complaint.  While the
demurrer was pending, Plaintiff amended the complaint to allege a national class
and claims for  unfair  business  practices,  unjust  enrichment,  money had and
received, and negligent and intentional misrepresentation. Ultimately all claims
except for unjust  enrichment  were  dismissed.  There is  currently  a demurrer
pending on  Plaintiff's  amended  allegations  as to unjust  enrichment.  We are
vigorously contesting the claims upon which this lawsuit is based, including any
efforts for class certification.

         Other Items
         -----------

         We are a party to various claims,  complaints,  and other legal actions
that have arisen in the normal course of business from time to time that are not
described  above. We believe that it is unlikely that the outcome of these other
pending  legal  proceedings  including  employment  and  tenant  claims,  in the
aggregate,  will have a material adverse impact upon our operations or financial
position.

         INSURANCE AND LOSS EXPOSURE

         We  have  historically  carried  comprehensive   insurance,   including
property,  earthquake,  general  liability  and  workers  compensation,  through
nationally  recognized  insurance  carriers  and through  our captive  insurance
programs.  Our  insurance  programs also insure  affiliates of the Company.  Our
maximum  aggregate annual exposure for losses that are below the deductibles set
forth in the third-party  insurance  contracts,  assuming  multiple  significant
events occur, is approximately $35 million.  In addition,  if losses exhaust the
third-party insurers' limit of coverage of $125 million for property coverage (a
maximum of $80,000,000 with respect to earthquake coverage) and $102 million for
general liability,  our exposure could be greater.  These limits are higher than
estimates  of  maximum   probable   losses  that  could  occur  from  individual
catastrophic  events  (i.e.  earthquake  and wind damage)  determined  in recent
engineering and actuarial studies.


         Our tenant  insurance  program  reinsures  policies  against claims for
losses to goods  stored  by  tenants  at our  self-storage  facilities.  We have
third-party  insurance coverage for claims paid exceeding  $1,500,000  resulting
from any individual  event,  to a limit of $9,000,000.  At December 31, 2006, we
had approximately 403,000 reinsured policies outstanding  representing aggregate
coverage of approximately $1 billion.

                                      F-43
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         DEVELOPMENT AND ACQUISITION OF REAL ESTATE FACILITIES

         We currently have 56 projects in our  development  pipeline,  including
expansions  and  enhancements  to existing  self-storage  facilities.  The total
estimated cost of these facilities (unaudited) is approximately  $266,081,000 of
which  $81,418,000  has been spent at December  31,  2006.  These  projects  are
subject to contingencies. We expect to incur these expenditures over the next 12
- 24 months.  As of February  28,  2007,  we are under  contract to purchase one
self-storage  facility in Hawaii  (total  approximate  net rental square feet of
79,000) at an aggregate cost of $22,500,000. We anticipate that this acquisition
will  be  funded  entirely  by us.  This  contract  is  subject  to  significant
contingencies, and there is no assurance that this facility will be acquired.

         OPERATING LEASE OBLIGATIONS

         We lease trucks,  land,  equipment and office space. As a result of the
merger  with  Shurgard,  we  obtained  additional  operating  leases  for  land,
buildings  and  equipment.  .At  December 31, 2006,  the future  minimum  rental
payments  required under our operating  leases for the years ending  December 31
are as follows (amounts in thousands):

  2007......................................       $21,747
  2008......................................        18,980
  2009......................................        15,143
  2010......................................        11,450
  2011......................................        10,458
  Thereafter................................       200,097
                                                  --------
                                                  $277,875
                                                  --------

         We lease  trucks,  land,  equipment  and  office  space  under  various
operating  leases.  Certain leases are cancelable  with  substantial  penalties.
Amounts  include  leases for land,  equipment  and office  space  under  various
operating leases that we assumed in the merger with Shurgard. Certain leases are
cancelable with  substantial  penalties.  Certain of our European land operating
leases have indefinite terms or extension options  exercisable at the discretion
of  the  lessee.  For  such  land  leases  we  have  disclosed  operating  lease
obligations over the estimated useful life of the related property.

         Expenses under operating leases were approximately  $9.8 million,  $6.3
million and $6.0 million for the years ended  December 31, 2006,  2005 and 2004,
respectively.  Certain of our land leases  include  escalation  clauses,  and we
recognize related lease expenses on a straight-line basis.

18.      Income Taxes
         ------------

         For all taxable years subsequent to 1980, the Company  qualified and we
intend to continue  to qualify the Company as a REIT,  as defined in Section 856
of the Internal  Revenue Code. As a REIT,  the Company is generally not taxed on
the portion of its REIT taxable income that is distributed to its  shareholders,
provided that it meets certain organizational and operational  requirements.  We
believe that the Company has met these REIT requirements during 2006.

         Domestic  operations  other  than  rental  real  estate  are  primarily
conducted  through  taxable  REIT  subsidiaries.  Income  of  our  taxable  REIT
subsidiaries is subject to federal, state and local income taxes.

         As of August 22,  2006,  the date of the Shurgard  merger,  the Company
started to consolidate the income tax provision of the former Shurgard  domestic
and European activities,  the latter of which are subject to income taxes in the
jurisdictions of the countries where they operate.

                                      F-44
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         The  provision  for income tax for the years  ended  December  31 is as
follows:

                                            2006             2005
                                        --------------- --------------
                                           (Amounts in thousands)
Current:
   Federal.......................        $    5,100       $        -
   State.........................                 -                -
   Foreign.......................                 -                -
                                        --------------- --------------
Total Current....................        $    5,100       $        -

Deferred
   Federal.......................        $        -       $        -
   State.........................                 -                -
   Foreign.......................                 -                -
                                        --------------- --------------
Total Deferred...................        $        -       $        -
                                        --------------- --------------
                                         $    5,100       $        -
                                        =============== ==============

         Under SFAS No. 109, "Accounting for Income Taxes",  deferred tax assets
and liabilities are determined based on differences  between financial reporting
and tax bases of assets and liabilities,  and are measured using the enacted tax
rates and laws  that will be in effect  when the  differences  are  expected  to
reverse.  SFAS No. 109  provides for the  recognition  of deferred tax assets if
realization  of such  assets is more  likely  than not.  Based on the  weight of
available  evidence,  a  valuation  allowance  may be provided  against  certain
deferred tax assets.

         The foreign and domestic  components  of the Company's net deferred tax
asset are as follows:


<TABLE>
<CAPTION>

                                                                     December 31,         December 31,
                                                                         2006                 2005
                                                                    ---------------    ----------------
                                                                           (Amounts in thousands)

<S>                                                                    <C>                  <C>
          Federal                                                      $     9,953          $    4,342
          State                                                              3,611               2,298
          Foreign                                                          104,369                   -
                                                                    ---------------    ----------------
          Net deferred tax asset before valuation allowance                117,933               6,640

          Valuation Allowance                                             (117,933)             (6,640)
                                                                    ---------------    ----------------
          Net deferred tax asset                                       $         -          $       -
                                                                    ===============    ================

</TABLE>

         Significant  components of our deferred tax assets and liabilities were
as follows:

<TABLE>
<CAPTION>

                                                                     December 31,         December 31,
                                                                         2006                 2005
                                                                    ----------------    ----------------
Deferred Tax Assets:                                                       (Amounts in thousands)
       Current:
<S>                                                                    <C>                 <C>
          UNICAP                                                       $        66         $       126
          Discounted Unearned Premium Reserves                                 210                 180
          Discounted Unpaid Losses                                             928                 603
          Other Current Deferred Assets                                      1,094                 368
       Noncurrent:
          Partnership and Other Investments                                  2,610               2,337
          Asset Impairment                                                     730                   -
          Accrued Closing Costs                                                161                   -
          Net Operating Loss Carryforward                                  133,944               3,935
                                                                    ----------------    ----------------
Total Deferred Tax Assets                                                  139,743               7,549

</TABLE>

                                      F-45
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

<TABLE>
<CAPTION>

                                                                     December 31,         December 31,
                                                                         2006                 2005
                                                                    ----------------    ----------------
Deferred Tax Liabilities:                                                   (Amounts in thousands)
       Current:
<S>                                                                            <C>                 <C>
          Deferred Revenue                                                     350                 353
          State Deferred Taxes                                                 211                 134
          Exchange Losses                                                    6,419                   -

       Noncurrent:
          Depreciation & Amortization                                       14,830                 422
                                                                    ----------------    ----------------
Total Deferred Tax Liabilities                                              21,810                 909

          Net Deferred Tax Asset Before Valuation Allowance                117,933               6,640
          Valuation Allowance                                             (117,933)             (6,640)
                                                                    ----------------    ----------------
          Net Deferred Tax Asset                                       $         -         $         -
                                                                    ================    ================

</TABLE>

         At December 31, 2006, the Company had net operating loss  carryforwards
of $456.7 million related to U.S. federal, state and foreign  jurisdictions.  Of
this total,  $423.0 million  originated  from the merger with Shurgard on August
22,  2006  ($14.4  million of U.S.  federal,  $11.1  million of state and $397.5
million of foreign loss  carryforwards).  Utilization of net operating losses to
offset  future  taxable  income  may be subject  to  certain  limitations  under
Sections 382 and 1502 of the Internal Revenue Code, and other  limitations under
state and foreign tax laws. If these net operating losses are not utilized, they
expire at various times  beginning in 2007. As of December 31, 2006 and 2005, we
had provided a full  valuation  allowance  against the value of the net deferred
tax asset,  because  sufficient  uncertainty  exists at this time  regarding the
future  realization of these tax benefits within  individual tax  jurisdictions.
The net increase in the valuation allowance for 2006 was $111.0 million.


19. Supplementary quarterly financial data (unaudited)

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                         --------------------------------------------------------------
                                          March 31,        June 30,      September 30,    December 31,
                                            2006             2006            2006             2006
                                         -------------- -------------- ---------------- ---------------
                                                 (Amounts in thousands, except per share data)
<S>                                      <C>              <C>             <C>              <C>
Revenues (a).....................        $  278,518       $  297,861      $  371,359       $  433,917
                                         ============== ============== ================ ===============
Cost of operations (a)...........        $  102,978       $  106,544      $  128,038       $  163,000
                                         ============== ============== ================ ===============
Income    (loss)   from    continuing
operations.......................        $  113,482       $  128,752      $   78,926       $   (9,321)
                                         ============== ============== ================ ===============
Net income (loss)................        $  114,216       $  128,862      $   81,181       $  (10,233)
                                         ============== ============== ================ ===============
Per Common Share (Note 2):
   Net income (loss) -  Basic....        $    0.48        $    0.55       $   (0.04)       $   (0.48)
                                         ============== ============== ================ ===============
   Net income (loss) -  Diluted..        $    0.49        $    0.55       $   (0.04)       $   (0.48)
                                         ============== ============== ================ ===============

</TABLE>

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                         --------------------------------------------------------------
                                          March 31,        June 30,      September 30,    December 31,
                                            2005             2005            2005             2005
                                         -------------- -------------- ---------------- ---------------
                                                 (Amounts in thousands, except per share data)
<S>                                      <C>              <C>             <C>              <C>
Revenues (a).....................        $  250,779       $  262,609      $  273,246       $  273,413
                                         ============== ============== ================ ===============
Cost of operations (a)...........        $   95,899       $   94,835      $   96,592       $   90,975
                                         ============== ============== ================ ===============
Income from continuing operations        $   95,189       $  108,071      $  122,960       $  123,377
                                         ============== ============== ================ ===============
Net income.......................        $   96,411       $  108,266      $  128,344       $  123,372
                                         ============== ============== ================ ===============
Per Common Share (Note 2):
   Net income - Basic............        $    0.38        $    0.47       $    0.62        $    0.51
                                         ============== ============== ================ ===============
   Net income - Diluted..........        $    0.38        $    0.47       $    0.62        $    0.51
                                         ============== ============== ================ ===============

</TABLE>

                                      F-46
<PAGE>
                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

         (a) Revenues and cost of  operations  as presented in this table differ
from the revenue and cost of operations  as presented in our  quarterly  reports
due primarily to  reclassification  of our truck rental,  merchandise sales, and
property  management  operations  which are now included,  along with our tenant
reinsurance operations, under "Ancillary Operations" on our income statement. In
previous presentations, the net income from our truck rental, merchandise sales,
and property  management  operations  were reflected as a component of "interest
and  other  income."  This  reclassification  increased  revenues  and  cost  of
operations a total of  $7,416,000,  $8,597,000,  and  $8,557,000  in each of the
first three quarters of 2005, respectively. Revenues and cost of operations also
differ due to the impact of discontinued  operations  accounting as described in
Note 4.

20.      Subsequent Events
         -----------------

         As noted above,  in December  2006, we called for redemption all of the
outstanding shares of our (i) 7.625% Cumulative Preferred Stock, Series T (total
liquidation value of $152,150,000), at $25 per share, plus accrued dividends and
(ii) 7.625%  Cumulative  Preferred Stock,  Series U (total  liquidation value of
$150,000,000),  at $25 per share,  plus accrued  dividends.  The Series T shares
were  subsequently  redeemed  on January  18,  2007 and the Series U shares were
subsequently redeemed on February 20, 2007.

         On January 9, 2007, we issued 20,000,000  depositary shares,  with each
depositary  share  representing  1/1,000  of a share  of our  6.625%  Cumulative
Preferred Stock, Series M (carrying amount totaling $500,000,000).

         On January 2, 2007,  we repaid  the  (euro)325  million  collateralized
notes ($429 million at December 31, 2006) at our European  operations  that were
otherwise  payable in 2011. We also terminated the related European currency and
interest rate hedges.

         On January 9, 2007, we repaid the remaining  amounts  outstanding under
our bank credit facilities. Subsequently,  concurrent with our redemption of our
Series U shares noted above, we borrowed  approximately  $80,000,000 on our bank
credit facilities.


                                      F-47
<PAGE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------
Self-storage Facilities - United States

<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
   1/1/81    Newport News / Jefferson Avenue                 -          108          1,071           687              -
   1/1/81    Virginia Beach / Diamond Springs                -          186          1,094           792              -
   8/1/81    San Jose / Snell                                -          312          1,815           407              -
  10/1/81    Tampa / Lazy Lane                               -          282          1,899           713              -
   6/1/82    San Jose / Tully                                -          645          1,579        10,845              -
   6/1/82    San Carlos / Storage                            -          780          1,387           591              -
   6/1/82    Mountain View                                   -        1,180          1,182           320              -
   6/1/82    Cupertino / Storage                             -          572          1,270           538              -
  10/1/82    Sorrento Valley                                 -        1,002          1,343          (814)             -
  10/1/82    Northwood                                       -        1,034          1,522           364              -
  12/1/82    Port/Halsey                                     -          357          1,150          (399)           326
  12/1/82    Sacto/Folsom                                    -          396            329           719            323
   1/1/83    Platte                                          -          409            953           489            428
   1/1/83    Semoran                                         -          442          1,882         8,227            720
   1/1/83    Raleigh/Yonkers                                 -          203            914           625            425
   3/1/83    Blackwood                                       -          213          1,559           396            595
   4/1/83    Vailsgate                                       -          103            990           855            505
   5/1/83    Delta Drive                                     -           67            481           312            241
   6/1/83    Ventura                                         -          658          1,734           352            583
   9/1/83    Southington                                     -          124          1,233           292            546
   9/1/83    Southhampton                                    -          331          1,738           697            806
   9/1/83    Webster/Keystone                                -          449          1,688           755            813
   9/1/83    Dover                                           -          107          1,462           677            627
   9/1/83    Newcastle                                       -          227          2,163           558            817
   9/1/83    Newark                                          -          208          2,031           443            746
   9/1/83    Langhorne                                       -          263          3,549           604          1,445
   9/1/83    Hobart                                          -          215          1,491           737            838
   9/1/83    Ft. Wayne/W. Coliseum                           -          160          1,395           527            535
   9/1/83    Ft. Wayne/Bluffton                              -           88            675           299            285
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                                Gross Carrying Amount
                                                                At December 31, 2006
    Date                                                    --------------------------------------- Accumulated
  Acquired                Description                           Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------------
Self-storage Facilities - United States

<S>          <C>                                                  <C>        <C>          <C>           <C>
   1/1/81    Newport News / Jefferson Avenue                      108        1,758        1,866         1,629
   1/1/81    Virginia Beach / Diamond Springs                     186        1,886        2,072         1,759
   8/1/81    San Jose / Snell                                     312        2,222        2,534         2,231
  10/1/81    Tampa / Lazy Lane                                    282        2,612        2,894         2,404
   6/1/82    San Jose / Tully                                   2,989       10,080       13,069         3,734
   6/1/82    San Carlos / Storage                                 780        1,978        2,758         1,912
   6/1/82    Mountain View                                      1,046        1,636        2,682         1,445
   6/1/82    Cupertino / Storage                                  572        1,808        2,380         1,642
  10/1/82    Sorrento Valley                                      651          880        1,531           801
  10/1/82    Northwood                                          1,034        1,886        2,920         1,706
  12/1/82    Port/Halsey                                          357        1,077        1,434           821
  12/1/82    Sacto/Folsom                                         396        1,371        1,767         1,031
   1/1/83    Platte                                               409        1,870        2,279         1,461
   1/1/83    Semoran                                              442       10,829       11,271         3,564
   1/1/83    Raleigh/Yonkers                                      203        1,964        2,167         1,446
   3/1/83    Blackwood                                            213        2,550        2,763         1,893
   4/1/83    Vailsgate                                            103        2,350        2,453         1,682
   5/1/83    Delta Drive                                           68        1,033        1,101           767
   6/1/83    Ventura                                              658        2,669        3,327         1,980
   9/1/83    Southington                                          123        2,072        2,195         1,474
   9/1/83    Southhampton                                         331        3,241        3,572         2,444
   9/1/83    Webster/Keystone                                     449        3,256        3,705         2,457
   9/1/83    Dover                                                107        2,766        2,873         1,950
   9/1/83    Newcastle                                            227        3,538        3,765         2,592
   9/1/83    Newark                                               208        3,220        3,428         2,375
   9/1/83    Langhorne                                            263        5,598        5,861         4,184
   9/1/83    Hobart                                               215        3,066        3,281         2,290
   9/1/83    Ft. Wayne/W. Coliseum                                160        2,457        2,617         1,793
   9/1/83    Ft. Wayne/Bluffton                                    88        1,259        1,347           914
</TABLE>

                                      F-48
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
  10/1/83    Orlando J. Y. Parkway                           -          383          1,512           468            622
  11/1/83    Aurora                                          -          505            758           527            341
  11/1/83    Campbell                                        -        1,379          1,849          (377)           474
  11/1/83    Col Springs/Ed                                  -          471          1,640           218            554
  11/1/83    Col Springs/Mv                                  -          320          1,036           297            441
  11/1/83    Thorton                                         -          418          1,400           258            536
  11/1/83    Oklahoma City                                   -          454          1,030         1,036            620
  11/1/83    Tucson                                          -          343            778           671            420
  11/1/83    Webster/Nasa                                    -        1,570          2,457         1,652          1,372
  12/1/83    Charlotte                                       -          165          1,274           525            442
  12/1/83    Greensboro/Market                               -          214          1,653           855            794
  12/1/83    Greensboro/Electra                              -          112            869           389            382
  12/1/83    Columbia                                        -          171          1,318           534            492
  12/1/83    Richmond                                        -          176          1,360           650            468
  12/1/83    Augusta                                         -           97            747           449            324
  12/1/83    Tacoma                                          -          553          1,173           499            487
   1/1/84    Fremont/Albrae                                  -          636          1,659           533            532
   1/1/84    Belton                                          -          175            858           819            378
   1/1/84    Gladstone                                       -          275          1,799           731            640
   1/1/84    Hickman/112                                     -          257          1,848          (353)           618
   1/1/84    Holmes                                          -          289          1,333           475            455
   1/1/84    Independence                                    -          221          1,848           737            609
   1/1/84    Merriam                                         -          255          1,469           612            480
   1/1/84    Olathe                                          -          107            992           387            361
   1/1/84    Shawnee                                         -          205          1,420           605            502
   1/1/84    Topeka                                          -           75          1,049           297            356
   3/1/84    Marrietta/Cobb                                  -           73            542           439            259
   3/1/84    Manassas                                        -          320          1,556           475            553
   3/1/84    Pico Rivera                                     -          743            807           368            321
   4/1/84    Providence                                      -           92          1,087           479            423
   4/1/84    Milwaukie/Oregon                                -          289            584           343            311
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                                Gross Carrying Amount
                                                                At December 31, 2006
    Date                                                    --------------------------------------- Accumulated
  Acquired                Description                           Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------------

<S>          <C>                                                  <C>        <C>          <C>           <C>
  10/1/83    Orlando J. Y. Parkway                                383        2,602        2,985         1,944
  11/1/83    Aurora                                               505        1,626        2,131         1,086
  11/1/83    Campbell                                           1,379        1,946        3,325         1,436
  11/1/83    Col Springs/Ed                                       470        2,413        2,883         1,816
  11/1/83    Col Springs/Mv                                       320        1,774        2,094         1,329
  11/1/83    Thorton                                              418        2,194        2,612         1,586
  11/1/83    Oklahoma City                                        454        2,686        3,140         1,933
  11/1/83    Tucson                                               343        1,869        2,212         1,358
  11/1/83    Webster/Nasa                                       1,570        5,481        7,051         3,932
  12/1/83    Charlotte                                            165        2,241        2,406         1,730
  12/1/83    Greensboro/Market                                    214        3,302        3,516         2,563
  12/1/83    Greensboro/Electra                                   112        1,640        1,752         1,288
  12/1/83    Columbia                                             171        2,344        2,515         1,822
  12/1/83    Richmond                                             176        2,478        2,654         1,886
  12/1/83    Augusta                                               97        1,520        1,617         1,128
  12/1/83    Tacoma                                               553        2,159        2,712         1,680
   1/1/84    Fremont/Albrae                                       636        2,724        3,360         2,123
   1/1/84    Belton                                               175        2,055        2,230         1,576
   1/1/84    Gladstone                                            274        3,171        3,445         2,365
   1/1/84    Hickman/112                                          158        2,212        2,370         1,347
   1/1/84    Holmes                                               289        2,263        2,552         1,744
   1/1/84    Independence                                         221        3,194        3,415         2,258
   1/1/84    Merriam                                              255        2,561        2,816         1,882
   1/1/84    Olathe                                               107        1,740        1,847         1,351
   1/1/84    Shawnee                                              205        2,527        2,732         1,893
   1/1/84    Topeka                                                75        1,702        1,777         1,317
   3/1/84    Marrietta/Cobb                                        73        1,240        1,313           900
   3/1/84    Manassas                                             320        2,584        2,904         1,981
   3/1/84    Pico Rivera                                          743        1,496        2,239         1,170
   4/1/84    Providence                                            92        1,989        2,081         1,542
   4/1/84    Milwaukie/Oregon                                     289        1,238        1,527           927
</TABLE>

                                      F-49
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>           <C>              <C>
   5/1/84    Raleigh/Departure                               -          302          2,484         1,087            788
   5/1/84    Virginia Beach                                  -          509          2,121         1,140            776
   5/1/84    Philadelphia/Grant                              -        1,041          3,262           818            971
   5/1/84    Garland                                         -          356            844           426            360
   6/1/84    Lorton                                          -          435          2,040           826            682
   6/1/84    Baltimore                                       -          382          1,793         1,020            634
   6/1/84    Laurel                                          -          501          2,349           941            824
   6/1/84    Delran                                          -          279          1,472           446            573
   6/1/84    Orange Blossom                                  -          226            924           263            398
   6/1/84    Cincinnati                                      -          402          1,573           900            672
   6/1/84    Florence                                        -          185            740           505            376
   7/1/84    Trevose/Old Lincoln                             -          421          1,749           511            582
   8/1/84    Medley                                          -          584          1,016           666            464
   8/1/84    Oklahoma City                                   -          340          1,310           612            652
   8/1/84    Newport News                                    -          356          2,395           846          1,013
   8/1/84    Kaplan/Walnut Hill                              -          971          2,359         1,095          1,041
   8/1/84    Kaplan/Irving                                   -          677          1,592         4,730            639
   9/1/84    Cockrell Hill                                   -          380            913         1,256            675
  11/1/84    Omaha                                           -          109            806           525            399
  11/1/84    Hialeah                                         -          886          1,784           415            672
  12/1/84    Austin/Lamar                                    -          643            947           704            443
  12/1/84    Pompano                                         -          399          1,386           718            698
  12/1/84    Fort Worth                                      -          122            928            75            303
  12/1/84    Montgomeryville                                 -          215          2,085           510            776
   1/1/85    Cranston                                        -          175            722           385            267
   1/1/85    Bossier City                                    -          184          1,542           701            656
   2/1/85    Simi Valley                                     -          737          1,389           370            520
   2/1/85    Hurst                                           -          231          1,220           252            480
   3/1/85    Chattanooga                                     -          202          1,573           873            683
   3/1/85    Portland                                        -          285            941           431            438
   3/1/85    Fern Park                                       -          144          1,107           255            432
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                              Gross Carrying Amount
                                                              At December 31, 2006
    Date                                                 ---------------------------------------- Accumulated
  Acquired                Description                        Land       Buildings      Total     Depreciation
-------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
-------------------------------------------------------------------------------------------------------------


<S>          <C>                                                <C>        <C>          <C>           <C>
   5/1/84    Raleigh/Departure                                  302        4,359        4,661         3,025
   5/1/84    Virginia Beach                                     499        4,047        4,546         2,866
   5/1/84    Philadelphia/Grant                               1,040        5,052        6,092         3,795
   5/1/84    Garland                                            356        1,630        1,986         1,107
   6/1/84    Lorton                                             435        3,548        3,983         2,645
   6/1/84    Baltimore                                          382        3,447        3,829         2,591
   6/1/84    Laurel                                             500        4,115        4,615         3,074
   6/1/84    Delran                                             279        2,491        2,770         1,788
   6/1/84    Orange Blossom                                     226        1,585        1,811         1,176
   6/1/84    Cincinnati                                         402        3,145        3,547         2,223
   6/1/84    Florence                                           185        1,621        1,806         1,199
   7/1/84    Trevose/Old Lincoln                                421        2,842        3,263         2,156
   8/1/84    Medley                                             583        2,147        2,730         1,418
   8/1/84    Oklahoma City                                      340        2,574        2,914         1,915
   8/1/84    Newport News                                       356        4,254        4,610         3,099
   8/1/84    Kaplan/Walnut Hill                                 971        4,495        5,466         3,225
   8/1/84    Kaplan/Irving                                      677        6,961        7,638         2,947
   9/1/84    Cockrell Hill                                      380        2,844        3,224         2,027
  11/1/84    Omaha                                              109        1,730        1,839         1,278
  11/1/84    Hialeah                                            886        2,871        3,757         2,097
  12/1/84    Austin/Lamar                                       642        2,095        2,737         1,442
  12/1/84    Pompano                                            399        2,802        3,201         2,024
  12/1/84    Fort Worth                                         122        1,306        1,428           936
  12/1/84    Montgomeryville                                    215        3,371        3,586         2,415
   1/1/85    Cranston                                           175        1,374        1,549         1,017
   1/1/85    Bossier City                                       184        2,899        3,083         2,076
   2/1/85    Simi Valley                                        736        2,280        3,016         1,643
   2/1/85    Hurst                                              231        1,952        2,183         1,410
   3/1/85    Chattanooga                                        202        3,129        3,331         2,082
   3/1/85    Portland                                           285        1,810        2,095         1,258
   3/1/85    Fern Park                                          144        1,794        1,938         1,294
</TABLE>

                                      F-50
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
   3/1/85    Fairfield                                       -          338          1,187           531            527
   3/1/85    Houston / Westheimer                            -          850          1,179           823              -
   4/1/85    Austin/ S. First                                -          778          1,282           394            711
   4/1/85    Cincinnati/ E. Kemper                           -          232          1,573           332            853
   4/1/85    Cincinnati/ Colerain                            -          253          1,717           584            932
   4/1/85    Florence/ Tanner Lane                           -          218          1,477           441            835
   4/1/85    Laguna Hills                                    -        1,224          3,303           494          1,213
   5/1/85    Tacoma/ Phillips Rd.                            -          396          1,204           332            669
   5/1/85    Milwaukie/ Mcloughlin                           -          458            742           422            620
   5/1/85    Manchester/ S. Willow                           -          371          2,129             8            854
   5/1/85    Longwood                                        -          355          1,645           366            669
   5/1/85    Columbus/Busch Blvd.                            -          202          1,559           634            592
   5/1/85    Columbus/Kinnear Rd.                            -          241          1,865           732            771
   5/1/85    Worthington                                     -          221          1,824           660            709
   5/1/85    Arlington                                       -          201          1,497           657            618
   6/1/85    N. Hollywood/ Raymer                            -          967            848           269            515
   6/1/85    Grove City/ Marlane Drive                       -          150          1,157           554            471
   6/1/85    Reynoldsburg                                    -          204          1,568           791            598
   7/1/85    San Diego/ Kearny Mesa Rd                       -          783          1,750           376            962
   7/1/85    Scottsdale/ 70th St                             -          632          1,368           410            742
   7/1/85    Concord/ Hwy 29                                 -          150            750           490            587
   7/1/85    Columbus/Morse Rd.                              -          195          1,510           469            670
   7/1/85    Columbus/Kenney Rd.                             -          199          1,531           716            598
   7/1/85    Westerville                                     -          199          1,517           910            620
   7/1/85    Springfield                                     -           90            699           481            332
   7/1/85    Dayton/Needmore Road                            -          144          1,108           543            460
   7/1/85    Dayton/Executive Blvd.                          -          160          1,207           489            569
   7/1/85    Lilburn                                         -          331            969           269            424
   9/1/85    Madison/ Copps Ave.                             -          450          1,150           468            665
   9/1/85    Columbus/ Sinclair                              -          307            893           403            519
   9/1/85    Philadelphia/ Tacony St                         -          118          1,782           345            856
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                                Gross Carrying Amount
                                                                At December 31, 2006
    Date                                                  ---------------------------------------- Accumulated
  Acquired                Description                         Land       Buildings      Total     Depreciation
--------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------

<S>          <C>                                                <C>        <C>          <C>           <C>
   3/1/85    Fairfield                                          338        2,245        2,583         1,604
   3/1/85    Houston / Westheimer                               850        2,002        2,852         1,774
   4/1/85    Austin/ S. First                                   778        2,387        3,165         1,615
   4/1/85    Cincinnati/ E. Kemper                              232        2,758        2,990         1,855
   4/1/85    Cincinnati/ Colerain                               253        3,233        3,486         2,078
   4/1/85    Florence/ Tanner Lane                              218        2,753        2,971         1,838
   4/1/85    Laguna Hills                                     1,223        5,011        6,234         3,594
   5/1/85    Tacoma/ Phillips Rd.                               396        2,205        2,601         1,472
   5/1/85    Milwaukie/ Mcloughlin                              458        1,784        2,242         1,203
   5/1/85    Manchester/ S. Willow                              371        2,991        3,362         1,949
   5/1/85    Longwood                                           355        2,680        3,035         1,922
   5/1/85    Columbus/Busch Blvd.                               202        2,785        2,987         1,913
   5/1/85    Columbus/Kinnear Rd.                               241        3,368        3,609         2,269
   5/1/85    Worthington                                        221        3,193        3,414         2,196
   5/1/85    Arlington                                          201        2,772        2,973         1,915
   6/1/85    N. Hollywood/ Raymer                               967        1,632        2,599         1,092
   6/1/85    Grove City/ Marlane Drive                          150        2,182        2,332         1,512
   6/1/85    Reynoldsburg                                       204        2,957        3,161         2,009
   7/1/85    San Diego/ Kearny Mesa Rd                          783        3,088        3,871         2,072
   7/1/85    Scottsdale/ 70th St                                632        2,520        3,152         1,650
   7/1/85    Concord/ Hwy 29                                    150        1,827        1,977         1,224
   7/1/85    Columbus/Morse Rd.                                 195        2,649        2,844         1,896
   7/1/85    Columbus/Kenney Rd.                                199        2,845        3,044         1,915
   7/1/85    Westerville                                        305        2,941        3,246         1,944
   7/1/85    Springfield                                         90        1,512        1,602         1,036
   7/1/85    Dayton/Needmore Road                               144        2,111        2,255         1,466
   7/1/85    Dayton/Executive Blvd.                             159        2,266        2,425         1,625
   7/1/85    Lilburn                                            330        1,663        1,993         1,176
   9/1/85    Madison/ Copps Ave.                                450        2,283        2,733         1,484
   9/1/85    Columbus/ Sinclair                                 307        1,815        2,122         1,194
   9/1/85    Philadelphia/ Tacony St                            118        2,983        3,101         1,959
</TABLE>

                                      F-51
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>      <C>            <C>             <C>          <C>
  10/1/85    N. Hollywood/ Whitsett                          -        1,524          2,576           420          1,302
  10/1/85    Portland/ SE 82nd St                            -          354            496           377            380
  10/1/85    Columbus/ Ambleside                             -          124          1,526           251            644
  10/1/85    Indianapolis/ Pike Place                        -          229          1,531           572            856
  10/1/85    Indianapolis/ Beach Grove                       -          198          1,342           439            709
  10/1/85    Hartford/ Roberts                               -          219          1,481         5,928            966
  10/1/85    Wichita/ S. Rock Rd.                            -          501          1,478           339            657
  10/1/85    Wichita/ E. Harry                               -          313          1,050           175            468
  10/1/85    Wichita/ S. Woodlawn                            -          263            905           204            437
  10/1/85    Wichita/ E. Kellogg                             -          185            658             4            261
  10/1/85    Wichita/ S. Tyler                               -          294          1,004           142            530
  10/1/85    Wichita/ W. Maple                               -          234            805           (26)           313
  10/1/85    Wichita/ Carey Lane                             -          192            674            71            296
  10/1/85    Wichita/ E. Macarthur                           -          220            775           (38)           323
  10/1/85    Joplin/ S. Range Line                           -          264            904           215            465
  10/1/85    San Antonio/ Wetmore Rd.                        -          306          1,079           560            638
  10/1/85    San Antonio/ Callaghan                          -          288          1,016           453            543
  10/1/85    San Antonio/ Zarzamora                          -          364          1,281           653            674
  10/1/85    San Antonio/ Hackberry                          -          388          1,367         2,685          1,001
  10/1/85    San Antonio/ Fredericksburg                     -          287          1,009           773            597
  10/1/85    Dallas/ S. Westmoreland                         -          474          1,670           222            734
  10/1/85    Dallas/ Alvin St.                               -          359          1,266           315            559
  10/1/85    Fort Worth/ W. Beach St.                        -          356          1,252           303            531
  10/1/85    Fort Worth/ E. Seminary                         -          382          1,346           272            552
  10/1/85    Fort Worth/ Cockrell St.                        -          323          1,136           211            515
  11/1/85    Everett/ Evergreen                              -          706          2,294           608          1,076
  11/1/85    Seattle/ Empire Way                             -        1,652          5,348           871          2,198
  12/1/85    Milpitas                                        -        1,623          1,577           333            913
  12/1/85    Pleasanton/ Santa Rita                          -        1,226          2,078           503          1,160
  12/1/85    Amherst/ Niagra Falls                           -          132            701           303            400
  12/1/85    West Sams Blvd.                                 -          164          1,159          (240)           383
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                              Gross Carrying Amount
                                                              At December 31, 2006
    Date                                                  ---------------------------------------- Accumulated
  Acquired                Description                         Land       Buildings      Total     Depreciation
--------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------

<S>          <C>                                              <C>          <C>          <C>           <C>
  10/1/85    N. Hollywood/ Whitsett                           1,524        4,298        5,822         2,849
  10/1/85    Portland/ SE 82nd St                               354        1,253        1,607           834
  10/1/85    Columbus/ Ambleside                                124        2,421        2,545         1,529
  10/1/85    Indianapolis/ Pike Place                           229        2,959        3,188         1,945
  10/1/85    Indianapolis/ Beach Grove                          198        2,490        2,688         1,559
  10/1/85    Hartford/ Roberts                                  409        8,185        8,594         1,981
  10/1/85    Wichita/ S. Rock Rd.                               642        2,333        2,975         1,537
  10/1/85    Wichita/ E. Harry                                  285        1,721        2,006         1,155
  10/1/85    Wichita/ S. Woodlawn                               263        1,546        1,809         1,027
  10/1/85    Wichita/ E. Kellogg                                185          923        1,108           611
  10/1/85    Wichita/ S. Tyler                                  294        1,676        1,970         1,134
  10/1/85    Wichita/ W. Maple                                  234        1,092        1,326           724
  10/1/85    Wichita/ Carey Lane                                192        1,041        1,233           690
  10/1/85    Wichita/ E. Macarthur                              220        1,060        1,280           687
  10/1/85    Joplin/ S. Range Line                              264        1,584        1,848         1,088
  10/1/85    San Antonio/ Wetmore Rd.                           306        2,277        2,583         1,575
  10/1/85    San Antonio/ Callaghan                             288        2,012        2,300         1,392
  10/1/85    San Antonio/ Zarzamora                             364        2,608        2,972         1,798
  10/1/85    San Antonio/ Hackberry                             388        5,053        5,441         2,235
  10/1/85    San Antonio/ Fredericksburg                        287        2,379        2,666         1,538
  10/1/85    Dallas/ S. Westmoreland                            474        2,626        3,100         1,829
  10/1/85    Dallas/ Alvin St.                                  359        2,140        2,499         1,415
  10/1/85    Fort Worth/ W. Beach St.                           356        2,086        2,442         1,398
  10/1/85    Fort Worth/ E. Seminary                            382        2,170        2,552         1,489
  10/1/85    Fort Worth/ Cockrell St.                           323        1,862        2,185         1,300
  11/1/85    Everett/ Evergreen                                 705        3,979        4,684         2,824
  11/1/85    Seattle/ Empire Way                              1,702        8,367       10,069         5,937
  12/1/85    Milpitas                                         1,623        2,823        4,446         1,845
  12/1/85    Pleasanton/ Santa Rita                           1,225        3,742        4,967         2,412
  12/1/85    Amherst/ Niagra Falls                              132        1,404        1,536           974
  12/1/85    West Sams Blvd.                                    164        1,302        1,466           916
</TABLE>

                                      F-52
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
  12/1/85    MacArthur Rd.                                   -          204          1,628           238            638
  12/1/85    Brockton/ Main                                  -          153          2,020          (137)           678
  12/1/85    Eatontown/ Hwy 35                               -          308          4,067           690          1,648
  12/1/85    Denver/ Leetsdale                               -          603            847           284            408
   1/1/86    Mapleshade/ Rudderow                            -          362          1,811           430            825
   1/1/86    Bordentown/ Groveville                          -          196            981           183            471
   1/1/86    Sun Valley/ Sheldon                             -          544          1,836           401            793
   1/1/86    Las Vegas/ Highland                             -          432            848           311            420
   2/1/86    Costa Mesa/ Pomona                              -        1,405          1,520           559            693
   2/1/86    Brea/ Imperial Hwy                              -        1,069          2,165           422            954
   2/1/86    Skokie/ McCormick                               -          638          1,912           503            779
   2/1/86    Colorado Springs/ Sinton                        -          535          1,115           660            631
   2/1/86    Oklahoma City/ Penn                             -          146            829           163            406
   2/1/86    Oklahoma City/ 39th                             -          238            812           354            477
   3/1/86    Jacksonville/ Wiley                             -          140            510           305            331
   3/1/86    St. Louis/ Forder                               -          517          1,133           343            534
   3/3/86    Tampa / 56th                                    -          450          1,360           659              -
   4/1/86    Reno/ Telegraph                                 -          649          1,051           755            682
   4/1/86    St. Louis/Kirkham                               -          199          1,001           411            401
   4/1/86    St. Louis/Reavis                                -          192            958           268            384
   4/1/86    Fort Worth/East Loop                            -          196            804           260            369
   5/1/86    Westlake Village                                -        1,205            995         5,373            429
   5/1/86    Sacramento/Franklin Blvd.                       -          872            978         3,325            389
   6/1/86    Richland Hills                                  -          543            857           475            404
   6/1/86    West Valley/So. 3600                            -          208          1,552           482            413
   7/1/86    Colorado Springs/ Hollow Tree                   -          574            726           342            426
   7/1/86    West LA/Purdue Ave.                             -        2,415          3,585           269          1,212
   7/1/86    Capital Heights/Central Ave.                    -          649          3,851           494          1,277
   7/1/86    Pontiac/Dixie Hwy.                              -          259          2,091           270            756
   8/1/86    Laurel/Ft. Meade Rd.                            -          475          1,475           514            630
   8/1/86    Hammond / Calumet                               -           97            751           838            366
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                              Gross Carrying Amount
                                                              At December 31, 2006
    Date                                                ---------------------------------------- Accumulated
  Acquired                Description                       Land       Buildings      Total     Depreciation
------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
------------------------------------------------------------------------------------------------------------

<S>          <C>                                                <C>        <C>          <C>           <C>
  12/1/85    MacArthur Rd.                                      204        2,504        2,708         1,733
  12/1/85    Brockton/ Main                                     153        2,561        2,714         1,771
  12/1/85    Eatontown/ Hwy 35                                  308        6,405        6,713         4,409
  12/1/85    Denver/ Leetsdale                                  603        1,539        2,142         1,060
   1/1/86    Mapleshade/ Rudderow                               362        3,066        3,428         2,103
   1/1/86    Bordentown/ Groveville                             196        1,635        1,831         1,129
   1/1/86    Sun Valley/ Sheldon                                544        3,030        3,574         2,100
   1/1/86    Las Vegas/ Highland                                432        1,579        2,011         1,092
   2/1/86    Costa Mesa/ Pomona                               1,404        2,773        4,177         1,834
   2/1/86    Brea/ Imperial Hwy                               1,069        3,541        4,610         2,454
   2/1/86    Skokie/ McCormick                                  638        3,194        3,832         2,074
   2/1/86    Colorado Springs/ Sinton                           535        2,406        2,941         1,515
   2/1/86    Oklahoma City/ Penn                                146        1,398        1,544           966
   2/1/86    Oklahoma City/ 39th                                238        1,643        1,881         1,140
   3/1/86    Jacksonville/ Wiley                                140        1,146        1,286           790
   3/1/86    St. Louis/ Forder                                  516        2,011        2,527         1,388
   3/3/86    Tampa / 56th                                       450        2,019        2,469         1,604
   4/1/86    Reno/ Telegraph                                    649        2,488        3,137         1,599
   4/1/86    St. Louis/Kirkham                                  199        1,813        2,012         1,155
   4/1/86    St. Louis/Reavis                                   192        1,610        1,802         1,110
   4/1/86    Fort Worth/East Loop                               196        1,433        1,629         1,008
   5/1/86    Westlake Village                                 1,256        6,746        8,002         1,330
   5/1/86    Sacramento/Franklin Blvd.                        1,139        4,425        5,564         2,178
   6/1/86    Richland Hills                                     543        1,736        2,279         1,213
   6/1/86    West Valley/So. 3600                               208        2,447        2,655         1,677
   7/1/86    Colorado Springs/ Hollow Tree                      574        1,494        2,068         1,008
   7/1/86    West LA/Purdue Ave.                              2,415        5,066        7,481         3,498
   7/1/86    Capital Heights/Central Ave.                       649        5,622        6,271         3,873
   7/1/86    Pontiac/Dixie Hwy.                                 259        3,117        3,376         2,115
   8/1/86    Laurel/Ft. Meade Rd.                               475        2,619        3,094         1,703
   8/1/86    Hammond / Calumet                                   97        1,955        2,052         1,190
</TABLE>

                                      F-53
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
   9/1/86    Kansas City/S. 44th.                            -          509          1,906           660            737
   9/1/86    Lakewood / Wadsworth - 6th                      -        1,070          3,155           751          1,027
  10/1/86    Peralta/Fremont                                 -          851          1,074           326            456
  10/1/86    Birmingham/Highland                             -           89            786           288            398
  10/1/86    Birmingham/Riverchase                           -          262          1,338           544            645
  10/1/86    Birmingham/Eastwood                             -          166          1,184           448            612
  10/1/86    Birmingham/Forestdale                           -          152            948           307            519
  10/1/86    Birmingham/Centerpoint                          -          265          1,305           440            525
  10/1/86    Birmingham/Roebuck Plaza                        -          101            399           367            425
  10/1/86    Birmingham/Greensprings                         -          347          1,173           385            281
  10/1/86    Birmingham/Hoover-Lorna                         -          372          1,128           446            431
  10/1/86    Midfield/Bessemer                               -          170            355           457            112
  10/1/86    Huntsville/Leeman Ferry Rd.                     -          158            992           367            558
  10/1/86    Huntsville/Drake                                -          253          1,172           301            538
  10/1/86    Anniston/Whiteside                              -           59            566           234            329
  10/1/86    Houston/Glenvista                               -          595          1,043           700            494
  10/1/86    Houston/I-45                                    -          704          1,146         1,134            604
  10/1/86    Houston/Rogerdale                               -        1,631          2,792           720          1,232
  10/1/86    Houston/Gessner                                 -        1,032          1,693         1,167            746
  10/1/86    Houston/Richmond-Fairdale                       -        1,502          2,506         1,457          1,160
  10/1/86    Houston/Gulfton                                 -        1,732          3,036         1,188          1,398
  10/1/86    Houston/Westpark                                -          503            854           388            435
  10/1/86    Jonesboro                                       -          157            718           334            370
  10/1/86    Houston / South Loop West                       -        1,299          3,491         1,481          1,366
  10/1/86    Houston / Plainfield Road                       -          904          2,319         1,023            920
  10/1/86    Houston / North Freeway                         -          719          1,987           364            609
  10/1/86    Houston / Old Katy Road                         -        1,365          3,431            24          1,274
  10/1/86    Houston / Long Point                            -          451          1,187           698            563
  10/1/86    Austin / Research Blvd.                         -        1,390          1,710           594            672
  11/1/86    Arleta / Osborne Street                         -          987            663           312            290
  12/1/86    Lynnwood / 196th Street                         -        1,063          1,602         7,402            571
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                              Gross Carrying Amount
                                                              At December 31, 2006
    Date                                                ---------------------------------------- Accumulated
  Acquired                Description                       Land       Buildings      Total     Depreciation
------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
------------------------------------------------------------------------------------------------------------

<S>          <C>                                                <C>        <C>          <C>           <C>
   9/1/86    Kansas City/S. 44th.                               508        3,304        3,812         2,250
   9/1/86    Lakewood / Wadsworth - 6th                       1,070        4,933        6,003         3,592
  10/1/86    Peralta/Fremont                                    851        1,856        2,707         1,272
  10/1/86    Birmingham/Highland                                149        1,412        1,561           960
  10/1/86    Birmingham/Riverchase                              278        2,511        2,789         1,710
  10/1/86    Birmingham/Eastwood                                232        2,178        2,410         1,466
  10/1/86    Birmingham/Forestdale                              190        1,736        1,926         1,197
  10/1/86    Birmingham/Centerpoint                             273        2,262        2,535         1,523
  10/1/86    Birmingham/Roebuck Plaza                           340          952        1,292           615
  10/1/86    Birmingham/Greensprings                             16        2,170        2,186         1,486
  10/1/86    Birmingham/Hoover-Lorna                            266        2,111        2,377         1,420
  10/1/86    Midfield/Bessemer                                   95          999        1,094           621
  10/1/86    Huntsville/Leeman Ferry Rd.                        198        1,877        2,075         1,274
  10/1/86    Huntsville/Drake                                   248        2,016        2,264         1,384
  10/1/86    Anniston/Whiteside                                 107        1,081        1,188           748
  10/1/86    Houston/Glenvista                                  594        2,238        2,832         1,557
  10/1/86    Houston/I-45                                       703        2,885        3,588         1,920
  10/1/86    Houston/Rogerdale                                1,631        4,744        6,375         3,263
  10/1/86    Houston/Gessner                                  1,032        3,606        4,638         2,500
  10/1/86    Houston/Richmond-Fairdale                        1,501        5,124        6,625         3,432
  10/1/86    Houston/Gulfton                                  1,732        5,622        7,354         3,908
  10/1/86    Houston/Westpark                                   502        1,678        2,180         1,047
  10/1/86    Jonesboro                                          156        1,423        1,579           935
  10/1/86    Houston / South Loop West                        1,298        6,339        7,637         4,514
  10/1/86    Houston / Plainfield Road                          903        4,263        5,166         3,000
  10/1/86    Houston / North Freeway                            661        3,018        3,679         2,087
  10/1/86    Houston / Old Katy Road                          1,163        4,931        6,094         3,422
  10/1/86    Houston / Long Point                               451        2,448        2,899         1,793
  10/1/86    Austin / Research Blvd.                          1,390        2,976        4,366         2,171
  11/1/86    Arleta / Osborne Street                            986        1,266        2,252           891
  12/1/86    Lynnwood / 196th Street                          1,405        9,233       10,638         3,134
</TABLE>

                                      F-54
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
  12/1/86    N. Auburn / Auburn Way N.                       -          606          1,144           449            533
  12/1/86    Gresham / Burnside & 202nd                      -          351          1,056           498            482
  12/1/86    Denver / Sheridan Boulevard                     -        1,033          2,792         1,117          1,007
  12/1/86    Marietta / Cobb Parkway                         -          536          2,764         1,112          1,016
  12/1/86    Hillsboro / T.V. Highway                        -          461            574           308            414
  12/1/86    San Antonio / West Sunset Road                  -        1,206          1,594           775            649
  12/31/86   Monrovia / Myrtle Avenue                        -        1,149          2,446           225              -
  12/31/86   Chatsworth / Topanga                            -        1,447          1,243         3,786              -
  12/31/86   Houston / Larkwood                              -          247            602           400              -
  12/31/86   Northridge                                      -        3,624          1,922         2,489              -
  12/31/86   Santa Clara / Duane                             -        1,950          1,004           426              -
  12/31/86   Oyster Point                                    -        1,569          1,490           499              -
  12/31/86   Walnut                                          -          767            613         5,500              -
   3/1/87    Annandale / Ravensworth                         -          679          1,621           349            596
   4/1/87    City Of Industry / Amar                         -          748          2,052           523            702
   5/1/87    Oklahoma City / W. Hefner                       -          459            941           414            417
   7/1/87    Oakbrook Terrace                                -          912          2,688         1,741            399
   8/1/87    San Antonio/Austin Hwy.                         -          400            850           (12)           164
  10/1/87    Plantation/S. State Rd.                         -          924          1,801          (129)           298
  10/1/87    Rockville/Fredrick Rd.                          -        1,695          3,305           (90)           519
   2/1/88    Anaheim/Lakeview                                -          995          1,505            65            256
   6/7/88    Mesquite / Sorrento Drive                       -          928          1,011         3,554              -
   7/1/88    Fort Wayne                                      -          101          1,524           235            663
   1/1/92    Costa Mesa                                      -          533            980           792              -
   3/1/92    Dallas / Walnut St.                             -          537          1,008           408              -
   5/1/92    Camp Creek                                      -          576          1,075           492              -
   9/1/92    Orlando/W. Colonial                             -          368            713           227              -
   9/1/92    Jacksonville/Arlington                          -          554          1,065           282              -
  10/1/92    Stockton/Mariners                               -          381            730           229              -
  11/18/92   Virginia Beach/General Booth Blvd               -          599          1,119           477              -
   1/1/93    Redwood City/Storage                            -          907          1,684           262              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                              Gross Carrying Amount
                                                              At December 31, 2006
    Date                                                ---------------------------------------- Accumulated
  Acquired                Description                       Land       Buildings      Total     Depreciation
------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
------------------------------------------------------------------------------------------------------------

<S>          <C>                                                <C>        <C>          <C>           <C>
  12/1/86    N. Auburn / Auburn Way N.                          606        2,126        2,732         1,565
  12/1/86    Gresham / Burnside & 202nd                         351        2,036        2,387         1,412
  12/1/86    Denver / Sheridan Boulevard                      1,033        4,916        5,949         3,484
  12/1/86    Marietta / Cobb Parkway                            535        4,893        5,428         3,383
  12/1/86    Hillsboro / T.V. Highway                           461        1,296        1,757           987
  12/1/86    San Antonio / West Sunset Road                   1,207        3,017        4,224         2,015
  12/31/86   Monrovia / Myrtle Avenue                         1,149        2,671        3,820         2,069
  12/31/86   Chatsworth / Topanga                             1,448        5,028        6,476         1,622
  12/31/86   Houston / Larkwood                                 246        1,003        1,249           748
  12/31/86   Northridge                                       3,623        4,412        8,035         2,408
  12/31/86   Santa Clara / Duane                              1,949        1,431        3,380         1,092
  12/31/86   Oyster Point                                     1,569        1,989        3,558         1,493
  12/31/86   Walnut                                             768        6,112        6,880         1,688
   3/1/87    Annandale / Ravensworth                            679        2,566        3,245         1,805
   4/1/87    City Of Industry / Amar                            748        3,277        4,025         1,635
   5/1/87    Oklahoma City / W. Hefner                          459        1,772        2,231         1,210
   7/1/87    Oakbrook Terrace                                 1,580        4,160        5,740         3,081
   8/1/87    San Antonio/Austin Hwy.                            400        1,002        1,402           920
  10/1/87    Plantation/S. State Rd.                            924        1,970        2,894         1,697
  10/1/87    Rockville/Fredrick Rd.                           1,694        3,735        5,429         3,335
   2/1/88    Anaheim/Lakeview                                   995        1,826        2,821         1,587
   6/7/88    Mesquite / Sorrento Drive                        1,045        4,448        5,493         2,090
   7/1/88    Fort Wayne                                         101        2,422        2,523         1,375
   1/1/92    Costa Mesa                                         535        1,770        2,305         1,462
   3/1/92    Dallas / Walnut St.                                537        1,416        1,953         1,312
   5/1/92    Camp Creek                                         575        1,568        2,143           946
   9/1/92    Orlando/W. Colonial                                367          941        1,308           614
   9/1/92    Jacksonville/Arlington                             554        1,347        1,901           858
  10/1/92    Stockton/Mariners                                  380          960        1,340           616
  11/18/92   Virginia Beach/General Booth Blvd                  599        1,596        2,195           997
   1/1/93    Redwood City/Storage                               907        1,946        2,853         1,163
</TABLE>

                                      F-55
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
   1/1/93    City Of Industry                                -        1,611          2,991           896              -
   1/1/93    San Jose/Felipe                                 -        1,124          2,088           574              -
   1/1/93    Baldwin Park/Garvey Ave                         -          840          1,561           438              -
  3/19/93    Westminister / W. 80th                          -          840          1,586           337              -
  4/26/93    Costa Mesa / Newport                          851        2,141          3,989         5,421              -
  5/13/93    Austin /N. Lamar                                -          919          1,695         8,580              -
  5/28/93    Jacksonville/Phillips Hwy.                      -          406            771           227              -
  5/28/93    Tampa/Nebraska Avenue                           -          550          1,043           239              -
   6/9/93    Calabasas / Ventura Blvd.                       -        1,762          3,269           312              -
   6/9/93    Carmichael / Fair Oaks                          -          573          1,052           272              -
   6/9/93    Santa Clara / Duane                             -          454            834           146              -
  6/10/93    Citrus Heights / Sylvan Road                    -          438            822           230              -
  6/25/93    Trenton / Allen Road                            -          623          1,166           292              -
  6/30/93    Los Angeles/W.Jefferson Blvd                    -        1,085          2,017           236              -
  7/16/93    Austin / So. Congress Ave                       -          777          1,445           380              -
   8/1/93    Gaithersburg / E. Diamond                       -          602          1,139           234              -
  8/11/93    Atlanta / Northside                             -        1,150          2,149           374              -
  8/11/93    Smyrna/ Rosswill Rd                             -          446            842           255              -
  8/13/93    So. Brunswick/Highway                           -        1,076          2,033           426              -
  10/1/93    Denver / Federal Blvd                           -          875          1,633           301              -
  10/1/93    Citrus Heights                                  -          527            987           216              -
  10/1/93    Lakewood / 6th Ave                              -          798          1,489            58              -
  10/27/93   Houston / S Shaver St                           -          481            896           248              -
  11/3/93    Upland/S. Euclid Ave.                           -          431            807           550              -
  11/16/93   Norcross / Jimmy Carter                         -          627          1,167           233              -
  11/16/93   Seattle / 13th                                  -        1,085          2,015           687              -
  12/9/93    Salt Lake City                                  -          765          1,422            37              -
  12/16/93   West Valley City                                -          683          1,276           255              -
  12/21/93   Pinellas Park / 34th St. W                      -          607          1,134           277              -
  12/28/93   New Orleans / S. Carrollton Ave                 -        1,575          2,941           213              -
  12/29/93   Orange / Main                                   -        1,238          2,317         1,735              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                             Gross Carrying Amount
                                                             At December 31, 2006
    Date                                               ---------------------------------------- Accumulated
  Acquired                Description                      Land       Buildings      Total     Depreciation
-----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
-----------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>          <C>          <C>           <C>
   1/1/93    City Of Industry                                1,610        3,888        5,498         2,436
   1/1/93    San Jose/Felipe                                 1,124        2,662        3,786         1,553
   1/1/93    Baldwin Park/Garvey Ave                           840        1,999        2,839         1,256
  3/19/93    Westminister / W. 80th                            840        1,923        2,763         1,161
  4/26/93    Costa Mesa / Newport                            3,732        7,819       11,551         3,063
  5/13/93    Austin /N. Lamar                                1,421        9,773       11,194         2,946
  5/28/93    Jacksonville/Phillips Hwy.                        406          998        1,404           630
  5/28/93    Tampa/Nebraska Avenue                             550        1,282        1,832           746
   6/9/93    Calabasas / Ventura Blvd.                       1,761        3,582        5,343         2,009
   6/9/93    Carmichael / Fair Oaks                            572        1,325        1,897           824
   6/9/93    Santa Clara / Duane                               453          981        1,434           567
  6/10/93    Citrus Heights / Sylvan Road                      437        1,053        1,490           644
  6/25/93    Trenton / Allen Road                              623        1,458        2,081           847
  6/30/93    Los Angeles/W.Jefferson Blvd                    1,085        2,253        3,338         1,299
  7/16/93    Austin / So. Congress Ave                         777        1,825        2,602         1,134
   8/1/93    Gaithersburg / E. Diamond                         602        1,373        1,975           761
  8/11/93    Atlanta / Northside                             1,150        2,523        3,673         1,509
  8/11/93    Smyrna/ Rosswill Rd                               446        1,097        1,543           684
  8/13/93    So. Brunswick/Highway                           1,076        2,459        3,535         1,431
  10/1/93    Denver / Federal Blvd                             875        1,934        2,809         1,092
  10/1/93    Citrus Heights                                    527        1,203        1,730           652
  10/1/93    Lakewood / 6th Ave                                685        1,660        2,345           929
  10/27/93   Houston / S Shaver St                             481        1,144        1,625           674
  11/3/93    Upland/S. Euclid Ave.                             508        1,280        1,788           688
  11/16/93   Norcross / Jimmy Carter                           626        1,401        2,027           807
  11/16/93   Seattle / 13th                                  1,085        2,702        3,787         1,659
  12/9/93    Salt Lake City                                    633        1,591        2,224           535
  12/16/93   West Valley City                                  682        1,532        2,214           885
  12/21/93   Pinellas Park / 34th St. W                        607        1,411        2,018           830
  12/28/93   New Orleans / S. Carrollton Ave                 1,575        3,154        4,729         2,000
  12/29/93   Orange / Main                                   1,593        3,697        5,290         1,867
</TABLE>

                                      F-56
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------

<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  12/29/93   Sunnyvale / Wedell                              -          554          1,037           783              -
  12/29/93   El Cajon / Magnolia                             -          421            791           614              -
  12/29/93   Orlando / S. Semoran Blvd.                      -          462            872           648              -
  12/29/93   Tampa / W. Hillsborough Ave                     -          352            665           473              -
  12/29/93   Irving / West Loop 12                           -          341            643           233              -
  12/29/93   Fullerton / W. Commonwealth                     -          904          1,687         1,282              -
  12/29/93   N. Lauderdale / Mcnab Rd                        -          628          1,182           751              -
  12/29/93   Los Alimitos / Cerritos                         -          695          1,299           718              -
  12/29/93   Frederick / Prospect Blvd.                      -          573          1,082           640              -
  12/29/93   Indianapolis / E. Washington                    -          403            775           669              -
  12/29/93   Gardena / Western Ave.                          -          552          1,035           613              -
  12/29/93   Palm Bay / Bobcock Street                       -          409            775           591              -
  1/10/94    Hialeah / W. 20Th Ave.                          -        1,855          3,497           326              -
  1/12/94    Sunnyvale / N. Fair Oaks Ave                    -          689          1,285           334              -
  1/12/94    Honolulu / Iwaena                               -            -          3,382         1,003              -
  1/12/94    Miami / Golden Glades                           -          579          1,081           590              -
  1/21/94    Herndon / Centreville Road                      -        1,584          2,981           540              -
   2/8/94    Las Vegas/S. MLK Blvd.                          -        1,383          2,592         1,144              -
  2/28/94    Arlingtn/Old Jeffersn Davishwy                  -          735          1,399           630              -
   3/8/94    Beaverton / Sw Barnes Road                      -          942          1,810           212              -
  3/21/94    Austin / Arboretum                              -          473            897         2,777              -
  3/25/94    Tinton Falls / Shrewsbury Ave                   -        1,074          2,033           313              -
  3/25/94    East Brunswick / Milltown Road                  -        1,282          2,411           460              -
  3/25/94    Mercerville / Quakerbridge Road                 -        1,109          2,111           348              -
  3/31/94    Hypoluxo                                        -          735          1,404         2,008              -
  4/26/94    No. Highlands / Roseville Road                  -          980          1,835           510              -
  5/12/94    Fort Pierce/Okeechobee Road                     -          438            842           164              -
  5/24/94    Hempstead/Peninsula Blvd.                       -        2,053          3,832           352              -
  5/24/94    La/Huntington                                   -          483            905           205              -
   6/9/94    Chattanooga / Brainerd Road                     -          613          1,170           275              -
   6/9/94    Chattanooga / Ringgold Road                     -          761          1,433           501              -
</TABLE>


                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------

<S>          <C>                                              <C>        <C>          <C>             <C>
  12/29/93   Sunnyvale / Wedell                               725        1,649        2,374           928
  12/29/93   El Cajon / Magnolia                              541        1,285        1,826           701
  12/29/93   Orlando / S. Semoran Blvd.                       601        1,381        1,982           806
  12/29/93   Tampa / W. Hillsborough Ave                      436        1,054        1,490           587
  12/29/93   Irving / West Loop 12                            354          863        1,217           505
  12/29/93   Fullerton / W. Commonwealth                    1,159        2,714        3,873         1,408
  12/29/93   N. Lauderdale / Mcnab Rd                         798        1,763        2,561           951
  12/29/93   Los Alimitos / Cerritos                          874        1,838        2,712           977
  12/29/93   Frederick / Prospect Blvd.                       692        1,603        2,295           899
  12/29/93   Indianapolis / E. Washington                     505        1,342        1,847           696
  12/29/93   Gardena / Western Ave.                           694        1,506        2,200           807
  12/29/93   Palm Bay / Bobcock Street                        525        1,250        1,775           705
  1/10/94    Hialeah / W. 20Th Ave.                         1,590        4,088        5,678         2,113
  1/12/94    Sunnyvale / N. Fair Oaks Ave                     657        1,651        2,308           891
  1/12/94    Honolulu / Iwaena                                  -        4,385        4,385         2,221
  1/12/94    Miami / Golden Glades                            557        1,693        2,250           909
  1/21/94    Herndon / Centreville Road                     1,358        3,747        5,105         1,951
   2/8/94    Las Vegas/S. MLK Blvd.                         1,435        3,684        5,119         1,976
  2/28/94    Arlingtn/Old Jeffersn Davishwy                   630        2,134        2,764         1,218
   3/8/94    Beaverton / Sw Barnes Road                       807        2,157        2,964         1,286
  3/21/94    Austin / Arboretum                             1,553        2,594        4,147         1,116
  3/25/94    Tinton Falls / Shrewsbury Ave                    920        2,500        3,420         1,391
  3/25/94    East Brunswick / Milltown Road                 1,099        3,054        4,153         1,732
  3/25/94    Mercerville / Quakerbridge Road                  950        2,618        3,568         1,475
  3/31/94    Hypoluxo                                         630        3,517        4,147         2,710
  4/26/94    No. Highlands / Roseville Road                   840        2,485        3,325         1,392
  5/12/94    Fort Pierce/Okeechobee Road                      375        1,069        1,444           762
  5/24/94    Hempstead/Peninsula Blvd.                      1,762        4,475        6,237         2,417
  5/24/94    La/Huntington                                    414        1,179        1,593           668
   6/9/94    Chattanooga / Brainerd Road                      525        1,533        2,058           892
   6/9/94    Chattanooga / Ringgold Road                      652        2,043        2,695         1,221
</TABLE>

                                      F-57
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  6/18/94    Las Vegas / S. Valley View Blvd                 -          837          1,571           337              -
  6/23/94    Las Vegas / Tropicana                           -          750          1,408           305              -
  6/23/94    Henderson / Green Valley Pkwy                   -        1,047          1,960           314              -
  6/24/94    Las Vegas / N. Lamb Blvd.                       -          869          1,629           104              -
  6/30/94    Birmingham / W. Oxmoor Road                     -          532          1,004           504              -
  7/20/94    Milpitas / Dempsey Road                         -        1,260          2,358           243              -
  8/17/94    Beaverton / S.W. Denny Road                     -          663          1,245           153              -
  8/17/94    Irwindale / Central Ave.                        -          674          1,263           132              -
  8/17/94    Suitland / St. Barnabas Rd                      -        1,530          2,913           433              -
  8/17/94    North Brunswick / How Lane                      -        1,238          2,323           156              -
  8/17/94    Lombard / 64th                                  -          847          1,583           376              -
  8/17/94    Alsip / 27th                                    -          406            765           161              -
  9/15/94    Huntsville / Old Monrovia Road                  -          613          1,157           259              -
  9/27/94    West Haven / Bull Hill Lane                     -          455            873         5,369              -
  9/30/94    San Francisco / Marin St.                       -        1,227          2,339         1,341              -
  9/30/94    Baltimore / Hillen Street                       -          580          1,095           438              -
  9/30/94    San Francisco /10th & Howard                    -        1,423          2,668           316              -
  9/30/94    Montebello / E. Whittier                        -          383            732           213              -
  9/30/94    Arlington / Collins                             -          228            435           285              -
  9/30/94    Miami / S.W. 119th Ave                          -          656          1,221           123              -
  9/30/94    Blackwood / Erial Road                          -          774          1,437           147              -
  9/30/94    Concord / Monument                              -        1,092          2,027           430              -
  9/30/94    Rochester / Lee Road                            -          469            871           335              -
  9/30/94    Houston / Bellaire                              -          623          1,157           333              -
  9/30/94    Austin / Lamar Blvd                             -          781          1,452           169              -
  9/30/94    Milwaukee / Lovers Lane Rd                      -          469            871           269              -
  9/30/94    Monterey / Del Rey Oaks                         -        1,093          1,897           127              -
  9/30/94    St. Petersburg / 66Th St.                       -          427            793           216              -
  9/30/94    Dayton Bch / N. Nova Road                       -          396            735           226              -
  9/30/94    Maple Shade / Route 38                          -          994          1,846           260              -
  9/30/94    Marlton / Route 73 N.                           -          938          1,742           159              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  6/18/94    Las Vegas / S. Valley View Blvd                  718        2,027        2,745         1,058
  6/23/94    Las Vegas / Tropicana                            643        1,820        2,463         1,016
  6/23/94    Henderson / Green Valley Pkwy                    897        2,424        3,321         1,288
  6/24/94    Las Vegas / N. Lamb Blvd.                        669        1,933        2,602           834
  6/30/94    Birmingham / W. Oxmoor Road                      456        1,584        2,040           994
  7/20/94    Milpitas / Dempsey Road                        1,080        2,781        3,861         1,502
  8/17/94    Beaverton / S.W. Denny Road                      568        1,493        2,061           795
  8/17/94    Irwindale / Central Ave.                         578        1,491        2,069           786
  8/17/94    Suitland / St. Barnabas Rd                     1,311        3,565        4,876         1,925
  8/17/94    North Brunswick / How Lane                     1,061        2,656        3,717         1,385
  8/17/94    Lombard / 64th                                   726        2,080        2,806         1,024
  8/17/94    Alsip / 27th                                     348          984        1,332           536
  9/15/94    Huntsville / Old Monrovia Road                   525        1,504        2,029           866
  9/27/94    West Haven / Bull Hill Lane                    1,963        4,734        6,697         1,656
  9/30/94    San Francisco / Marin St.                      1,371        3,536        4,907         1,794
  9/30/94    Baltimore / Hillen Street                        497        1,616        2,113           864
  9/30/94    San Francisco /10th & Howard                   1,221        3,186        4,407         1,702
  9/30/94    Montebello / E. Whittier                         329          999        1,328           559
  9/30/94    Arlington / Collins                              195          753          948           495
  9/30/94    Miami / S.W. 119th Ave                           562        1,438        2,000           718
  9/30/94    Blackwood / Erial Road                           663        1,695        2,358           891
  9/30/94    Concord / Monument                               935        2,614        3,549         1,464
  9/30/94    Rochester / Lee Road                             402        1,273        1,675           745
  9/30/94    Houston / Bellaire                               534        1,579        2,113           868
  9/30/94    Austin / Lamar Blvd                              668        1,734        2,402           928
  9/30/94    Milwaukee / Lovers Lane Rd                       402        1,207        1,609           652
  9/30/94    Monterey / Del Rey Oaks                          903        2,214        3,117         1,199
  9/30/94    St. Petersburg / 66Th St.                        366        1,070        1,436           608
  9/30/94    Dayton Bch / N. Nova Road                        339        1,018        1,357           541
  9/30/94    Maple Shade / Route 38                           852        2,248        3,100         1,206
  9/30/94    Marlton / Route 73 N.                            805        2,034        2,839         1,045
</TABLE>

                                      F-58
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  9/30/94    Naperville / E. Ogden Ave                       -          683          1,268           241              -
  9/30/94    Long Beach / South Street                       -        1,778          3,307           470              -
  9/30/94    Aloha / S.W. Shaw                               -          805          1,495           139              -
  9/30/94    Alexandria / S. Pickett                         -        1,550          2,879           337              -
  9/30/94    Houston / Highway 6 North                       -        1,120          2,083           264              -
  9/30/94    San Antonio/Nacogdoches Rd                      -          571          1,060           253              -
  9/30/94    San Ramon/San Ramon Valley                      -        1,530          2,840           596              -
  9/30/94    San Rafael / Merrydale Rd                       -        1,705          3,165           223              -
  9/30/94    San Antonio / Austin Hwy                        -          592          1,098           242              -
  9/30/94    Sharonville / E. Kemper                         -          574          1,070           426              -
  10/13/94   Davie / State Road 84                           -          744          1,467         1,127              -
  10/13/94   Carrollton / Marsh Lane                         -          770          1,437         1,423              -
  10/31/94   Sherman Oaks / Van Nuys Blvd                    -        1,278          2,461           980              -
  12/19/94   Salt Lake City/West North Temple                -          490            917           (53)             -
  12/28/94   Milpitas / Watson                               -        1,575          2,925           312              -
  12/28/94   Las Vegas / Jones Blvd                          -        1,208          2,243           200              -
  12/28/94   Venice / Guthrie                                -          578          1,073           148              -
  12/30/94   Apple Valley / Foliage Ave                      -          910          1,695           274              -
   1/4/95    Chula Vista / Main Street                       -          735          1,802           203              -
   1/5/95    Pantego / West Park                             -          315            735           167              -
  1/12/95    Roswell / Alpharetta                            -          423            993           433              -
  1/23/95    North Bergen / Tonne                            -        1,564          3,772           409              -
  1/23/95    San Leandro / Hesperian                         -          734          1,726           145              -
  1/24/95    Nashville / Elm Hill                            -          338            791           471              -
   2/3/95    Reno / S. Mccarron Blvd                         -        1,080          2,537           208              -
  2/15/95    Schiller Park                                   -        1,688          3,939           448              -
  2/15/95    Lansing                                         -        1,514          3,534           551              -
  2/15/95    Pleasanton                                      -        1,257          2,932           129              -
  2/15/95    LA/Sepulveda                                    -        1,453          3,390           141              -
  2/28/95    Decatur / Flat Shoal                            -          970          2,288           765              -
  2/28/95    Smyrna / S. Cobb                                -          663          1,559           448              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  9/30/94    Naperville / E. Ogden Ave                        585        1,607        2,192           817
  9/30/94    Long Beach / South Street                      1,524        4,031        5,555         2,112
  9/30/94    Aloha / S.W. Shaw                                690        1,749        2,439           931
  9/30/94    Alexandria / S. Pickett                        1,329        3,437        4,766         1,800
  9/30/94    Houston / Highway 6 North                        960        2,507        3,467         1,356
  9/30/94    San Antonio/Nacogdoches Rd                       489        1,395        1,884           791
  9/30/94    San Ramon/San Ramon Valley                     1,311        3,655        4,966         1,917
  9/30/94    San Rafael / Merrydale Rd                      1,461        3,632        5,093         1,903
  9/30/94    San Antonio / Austin Hwy                         507        1,425        1,932           776
  9/30/94    Sharonville / E. Kemper                          492        1,578        2,070           830
  10/13/94   Davie / State Road 84                            637        2,701        3,338         1,324
  10/13/94   Carrollton / Marsh Lane                        1,021        2,609        3,630         1,316
  10/31/94   Sherman Oaks / Van Nuys Blvd                   1,423        3,296        4,719         1,722
  12/19/94   Salt Lake City/West North Temple                 385          969        1,354           335
  12/28/94   Milpitas / Watson                              1,350        3,462        4,812         1,801
  12/28/94   Las Vegas / Jones Blvd                         1,035        2,616        3,651         1,341
  12/28/94   Venice / Guthrie                                 495        1,304        1,799           686
  12/30/94   Apple Valley / Foliage Ave                       780        2,099        2,879         1,121
   1/4/95    Chula Vista / Main Street                        735        2,005        2,740         1,106
   1/5/95    Pantego / West Park                              315          902        1,217           505
  1/12/95    Roswell / Alpharetta                             423        1,426        1,849           848
  1/23/95    North Bergen / Tonne                           1,551        4,194        5,745         2,156
  1/23/95    San Leandro / Hesperian                          733        1,872        2,605           951
  1/24/95    Nashville / Elm Hill                             337        1,263        1,600           780
   2/3/95    Reno / S. Mccarron Blvd                        1,080        2,745        3,825         1,401
  2/15/95    Schiller Park                                  1,688        4,387        6,075         2,013
  2/15/95    Lansing                                        1,514        4,085        5,599         1,705
  2/15/95    Pleasanton                                     1,256        3,062        4,318         1,349
  2/15/95    LA/Sepulveda                                   1,453        3,531        4,984         1,552
  2/28/95    Decatur / Flat Shoal                             970        3,053        4,023         1,624
  2/28/95    Smyrna / S. Cobb                                 662        2,008        2,670         1,030
</TABLE>

                                      F-59
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  2/28/95    Downey / Bellflower                             -          916          2,158           201              -
  2/28/95    Vallejo / Lincoln                               -          445          1,052           316              -
  2/28/95    Lynnwood / 180th St                             -          516          1,205           252              -
  2/28/95    Kent / Pacific Hwy                              -          728          1,711           159              -
  2/28/95    Kirkland                                        -        1,254          2,932           507              -
  2/28/95    Federal Way/Pacific                             -          785          1,832           311              -
  2/28/95    Tampa / S. Dale                                 -          791          1,852           300              -
  2/28/95    Burlingame/Adrian Rd                            -        2,280          5,349           460              -
  2/28/95    Miami / Cloverleaf                              -          606          1,426           358              -
  2/28/95    Pinole / San Pablo                              -          639          1,502           335              -
  2/28/95    South Gate / Firesto                            -        1,442          3,449           447              -
  2/28/95    San Jose / Mabury                               -          892          2,088           180              -
  2/28/95    La Puente / Valley Blvd                         -          591          1,390           258              -
  2/28/95    San Jose / Capitol E                            -        1,215          2,852           155              -
  2/28/95    Milwaukie / 40th Street                         -          576          1,388           122              -
  2/28/95    Portland / N. Lombard                           -          812          1,900           228              -
  2/28/95    Miami / Biscayne                                -        1,313          3,076           387              -
  2/28/95    Chicago / Clark Street                          -          442          1,031           379              -
  2/28/95    Palatine / Dundee                               -          698          1,643           572              -
  2/28/95    Williamsville/Transit                           -          284            670           313              -
  2/28/95    Amherst / Sheridan                              -          484          1,151           218              -
   3/2/95    Everett / Highway 99                            -          859          2,022           286              -
   3/2/95    Burien / 1St Ave South                          -          763          1,783           528              -
   3/2/95    Kent / South 238th Street                       -          763          1,783           275              -
  3/31/95    Cheverly / Central Ave                          -          911          2,164           443              -
   5/1/95    Sandy / S. State Street                         -        1,043          2,442          (204)             -
   5/3/95    Largo / Ulmerton Roa                            -          263            654           146              -
   5/8/95    Fairfield/Western Street                        -          439          1,030           103              -
   5/8/95    Dallas / W. Mockingbird                         -        1,440          3,371           202              -
   5/8/95    East Point / Lakewood                           -          884          2,071           376              -
  5/25/95    Falls Church / Gallows Rd                       -          350            835         9,348              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>           <C>
  2/28/95    Downey / Bellflower                              916        2,359        3,275         1,197
  2/28/95    Vallejo / Lincoln                                445        1,368        1,813           723
  2/28/95    Lynnwood / 180th St                              516        1,457        1,973           810
  2/28/95    Kent / Pacific Hwy                               728        1,870        2,598           969
  2/28/95    Kirkland                                       1,253        3,440        4,693         1,692
  2/28/95    Federal Way/Pacific                              785        2,143        2,928         1,152
  2/28/95    Tampa / S. Dale                                  791        2,152        2,943         1,156
  2/28/95    Burlingame/Adrian Rd                           2,280        5,809        8,089         2,920
  2/28/95    Miami / Cloverleaf                               606        1,784        2,390           965
  2/28/95    Pinole / San Pablo                               639        1,837        2,476           977
  2/28/95    South Gate / Firesto                           1,442        3,896        5,338         2,093
  2/28/95    San Jose / Mabury                                892        2,268        3,160         1,148
  2/28/95    La Puente / Valley Blvd                          591        1,648        2,239           909
  2/28/95    San Jose / Capitol E                           1,215        3,007        4,222         1,516
  2/28/95    Milwaukie / 40th Street                          579        1,507        2,086           795
  2/28/95    Portland / N. Lombard                            812        2,128        2,940         1,121
  2/28/95    Miami / Biscayne                               1,313        3,463        4,776         1,629
  2/28/95    Chicago / Clark Street                           442        1,410        1,852           834
  2/28/95    Palatine / Dundee                                698        2,215        2,913         1,167
  2/28/95    Williamsville/Transit                            283          984        1,267           549
  2/28/95    Amherst / Sheridan                               483        1,370        1,853           739
   3/2/95    Everett / Highway 99                             858        2,309        3,167         1,214
   3/2/95    Burien / 1St Ave South                           763        2,311        3,074         1,180
   3/2/95    Kent / South 238th Street                        763        2,058        2,821         1,117
  3/31/95    Cheverly / Central Ave                           910        2,608        3,518         1,248
   5/1/95    Sandy / S. State Street                          923        2,358        3,281           796
   5/3/95    Largo / Ulmerton Roa                             262          801        1,063           463
   5/8/95    Fairfield/Western Street                         439        1,133        1,572           568
   5/8/95    Dallas / W. Mockingbird                        1,440        3,573        5,013         1,757
   5/8/95    East Point / Lakewood                            884        2,447        3,331         1,323
  5/25/95    Falls Church / Gallows Rd                      3,607        6,926       10,533           903
</TABLE>

                                      F-60
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  6/12/95    Baltimore / Old Waterloo                        -          769          1,850           222              -
  6/12/95    Pleasant Hill / Hookston                        -          766          1,848           151              -
  6/12/95    Mountain View/Old Middlefield                   -        2,095          4,913           187              -
  6/30/95    San Jose / Blossom Hill                         -        1,467          3,444           229              -
  6/30/95    Fairfield / Kings Highway                       -        1,811          4,273           310              -
  6/30/95    Pacoima / Paxton Street                       464          840          1,976           210              -
  6/30/95    Portland / Prescott                             -          647          1,509           223              -
  6/30/95    St. Petersburg                                  -          352            827           298              -
  6/30/95    Dallas / Audelia Road                           -        1,166          2,725           975              -
  6/30/95    Miami Gardens                                   -          823          1,929           281              -
  6/30/95    Grand Prairie / 19th                            -          566          1,329           161              -
  6/30/95    Joliet / Jefferson Street                       -          501          1,181           213              -
  6/30/95    Bridgeton / Pennridge                           -          283            661           201              -
  6/30/95    Portland / S.E.92nd                             -          638          1,497           224              -
  6/30/95    Houston / S.W. Freeway                          -          537          1,254         6,873              -
  6/30/95    Milwaukee / Brown                               -          358            849           279              -
  6/30/95    Orlando / W. Oak Ridge                          -          698          1,642           325              -
  6/30/95    Lauderhill / State Road                         -          644          1,508           328              -
  6/30/95    Orange Park /Blanding Blvd                      -          394            918           231              -
  6/30/95    St. Petersburg /Joe'S Creek                     -          704          1,642           235              -
  6/30/95    St. Louis / Page Service Drive                  -          531          1,241           198              -
  6/30/95    Independence /E. 42nd                           -          438          1,023           229              -
  6/30/95    Cherry Hill / Dobbs Lane                        -          716          1,676           227              -
  6/30/95    Edgewater Park / Route 130                      -          683          1,593           170              -
  6/30/95    Beaverton / S.W. 110                            -          572          1,342           220              -
  6/30/95    Markham / W. 159Th Place                        -          230            539           222              -
  6/30/95    Houston / N.W. Freeway                          -          447          1,066           158              -
  6/30/95    Portland / Gantenbein                           -          537          1,262           239              -
  6/30/95    Upper Chichester/Market St.                     -          569          1,329           165              -
  6/30/95    Fort Worth / Hwy 80                             -          379            891           168              -
  6/30/95    Greenfield/ S. 108th                            -          728          1,707           493              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>           <C>
  6/12/95    Baltimore / Old Waterloo                         769        2,072        2,841         1,034
  6/12/95    Pleasant Hill / Hookston                         742        2,023        2,765         1,017
  6/12/95    Mountain View/Old Middlefield                  2,094        5,101        7,195         2,441
  6/30/95    San Jose / Blossom Hill                        1,467        3,673        5,140         1,810
  6/30/95    Fairfield / Kings Highway                      1,810        4,584        6,394         2,250
  6/30/95    Pacoima / Paxton Street                          840        2,186        3,026         1,093
  6/30/95    Portland / Prescott                              647        1,732        2,379           892
  6/30/95    St. Petersburg                                   352        1,125        1,477           609
  6/30/95    Dallas / Audelia Road                          1,166        3,700        4,866         2,061
  6/30/95    Miami Gardens                                    823        2,210        3,033         1,098
  6/30/95    Grand Prairie / 19th                             566        1,490        2,056           765
  6/30/95    Joliet / Jefferson Street                        501        1,394        1,895           739
  6/30/95    Bridgeton / Pennridge                            283          862        1,145           492
  6/30/95    Portland / S.E.92nd                              638        1,721        2,359           891
  6/30/95    Houston / S.W. Freeway                         1,140        7,524        8,664         1,843
  6/30/95    Milwaukee / Brown                                358        1,128        1,486           610
  6/30/95    Orlando / W. Oak Ridge                           697        1,968        2,665         1,004
  6/30/95    Lauderhill / State Road                          644        1,836        2,480           882
  6/30/95    Orange Park /Blanding Blvd                       394        1,149        1,543           639
  6/30/95    St. Petersburg /Joe'S Creek                      703        1,878        2,581           953
  6/30/95    St. Louis / Page Service Drive                   531        1,439        1,970           754
  6/30/95    Independence /E. 42nd                            438        1,252        1,690           649
  6/30/95    Cherry Hill / Dobbs Lane                         715        1,904        2,619           949
  6/30/95    Edgewater Park / Route 130                       683        1,763        2,446           859
  6/30/95    Beaverton / S.W. 110                             572        1,562        2,134           798
  6/30/95    Markham / W. 159Th Place                         229          762          991           406
  6/30/95    Houston / N.W. Freeway                           447        1,224        1,671           641
  6/30/95    Portland / Gantenbein                            537        1,501        2,038           787
  6/30/95    Upper Chichester/Market St.                      569        1,494        2,063           747
  6/30/95    Fort Worth / Hwy 80                              379        1,059        1,438           545
  6/30/95    Greenfield/ S. 108th                             727        2,201        2,928         1,068
</TABLE>

                                      F-61
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  6/30/95    Altamonte Springs                               -          566          1,326           266              -
  6/30/95    Seattle / Delridge Way                          -          760          1,779           269              -
  6/30/95    Elmhurst / Lake Frontage Rd                     -          748          1,758           257              -
  6/30/95    Los Angeles / Beverly Blvd                      -          787          1,886           631              -
  6/30/95    Lawrenceville / Brunswick                       -          841          1,961           189              -
  6/30/95    Richmond / Carlson                              -          865          2,025           325              -
  6/30/95    Liverpool / Oswego Road                         -          545          1,279           343              -
  6/30/95    Rochester / East Ave                            -          578          1,375           516              -
  6/30/95    Pasadena / E. Beltway                           -          757          1,767           178              -
  7/13/95    Tarzana / Burbank Blvd                          -        2,895          6,823           567              -
  7/31/95    Orlando / Lakehurst                             -          450          1,063           171              -
  7/31/95    Livermore / Portola                             -          921          2,157           217              -
  7/31/95    San Jose / Tully                                -          912          2,137           508              -
  7/31/95    Mission Bay                                     -        1,617          3,785           569              -
  7/31/95    Las Vegas / Decatur                             -        1,147          2,697           395              -
  7/31/95    Pleasanton / Stanley                            -        1,624          3,811           316              -
  7/31/95    Castro Valley / Grove                           -          757          1,772           105              -
  7/31/95    Honolulu / Kaneohe                              -        1,215          2,846         2,231              -
  7/31/95    Chicago / Wabash Ave                            -          645          1,535           729              -
  7/31/95    Springfield / Parker                            -          765          1,834           267              -
  7/31/95    Huntington Bch/Gotham                           -          765          1,808           226              -
  7/31/95    Tucker / Lawrenceville                          -          630          1,480           224              -
  7/31/95    Marietta / Canton Road                          -          600          1,423           306              -
  7/31/95    Wheeling / Hintz                                -          450          1,054           173              -
   8/1/95    Gresham / Division                              -          607          1,428           106              -
   8/1/95    Tucker / Lawrenceville                          -          600          1,405           359              -
   8/1/95    Decatur / Covington                             -          720          1,694           277              -
  8/11/95    Studio City/Ventura                             -        1,285          3,015           363              -
  8/12/95    Smyrna / Hargrove Road                          -        1,020          3,038           503              -
   9/1/95    Hayward / Mission Blvd                          -        1,020          2,383           295              -
   9/1/95    Park City / Belvider                            -          600          1,405           137              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  6/30/95    Altamonte Springs                                566        1,592        2,158           771
  6/30/95    Seattle / Delridge Way                           760        2,048        2,808         1,044
  6/30/95    Elmhurst / Lake Frontage Rd                      748        2,015        2,763         1,000
  6/30/95    Los Angeles / Beverly Blvd                       787        2,517        3,304         1,290
  6/30/95    Lawrenceville / Brunswick                        840        2,151        2,991         1,048
  6/30/95    Richmond / Carlson                               864        2,351        3,215         1,242
  6/30/95    Liverpool / Oswego Road                          545        1,622        2,167           869
  6/30/95    Rochester / East Ave                             578        1,891        2,469           937
  6/30/95    Pasadena / E. Beltway                            757        1,945        2,702           966
  7/13/95    Tarzana / Burbank Blvd                         2,894        7,391       10,285         3,610
  7/31/95    Orlando / Lakehurst                              450        1,234        1,684           638
  7/31/95    Livermore / Portola                              921        2,374        3,295         1,187
  7/31/95    San Jose / Tully                                 912        2,645        3,557         1,327
  7/31/95    Mission Bay                                    1,617        4,354        5,971         2,244
  7/31/95    Las Vegas / Decatur                            1,147        3,092        4,239         1,577
  7/31/95    Pleasanton / Stanley                           1,624        4,127        5,751         1,997
  7/31/95    Castro Valley / Grove                            756        1,878        2,634           911
  7/31/95    Honolulu / Kaneohe                             2,133        4,159        6,292         1,836
  7/31/95    Chicago / Wabash Ave                             645        2,264        2,909         1,389
  7/31/95    Springfield / Parker                             765        2,101        2,866         1,025
  7/31/95    Huntington Bch/Gotham                            765        2,034        2,799         1,014
  7/31/95    Tucker / Lawrenceville                           630        1,704        2,334           882
  7/31/95    Marietta / Canton Road                           600        1,729        2,329           921
  7/31/95    Wheeling / Hintz                                 450        1,227        1,677           629
   8/1/95    Gresham / Division                               607        1,534        2,141           763
   8/1/95    Tucker / Lawrenceville                           600        1,764        2,364           944
   8/1/95    Decatur / Covington                              720        1,971        2,691         1,011
  8/11/95    Studio City/Ventura                            1,285        3,378        4,663         1,609
  8/12/95    Smyrna / Hargrove Road                         1,020        3,541        4,561         1,689
   9/1/95    Hayward / Mission Blvd                         1,020        2,678        3,698         1,283
   9/1/95    Park City / Belvider                             600        1,542        2,142           756
</TABLE>

                                      F-62
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
   9/1/95    New Castle/Dupont Parkway                       -          990          2,369           233              -
   9/1/95    Las Vegas / Rainbow                             -        1,050          2,459           121              -
   9/1/95    Mountain View / Reng                            -          945          2,216           161              -
   9/1/95    Venice / Cadillac                               -          930          2,182           384              -
   9/1/95    Simi Valley /Los Angeles                        -        1,590          3,724           314              -
   9/1/95    Spring Valley/Foreman                           -        1,095          2,572           408              -
   9/6/95    Darien / Frontage Road                          -          975          2,321           233              -
  9/30/95    Whittier                                        -          215            384           202            781
  9/30/95    Van Nuys/Balboa                                 -          295            657            62          1,148
  9/30/95    Huntington Beach                                -          176            321           132            738
  9/30/95    Monterey Park                                   -          124            346           (25)           782
  9/30/95    Downey                                          -          191            317           120            825
  9/30/95    Del Amo                                         -          474            742           419            922
  9/30/95    Carson                                          -          375            735           400            428
  9/30/95    Van Nuys/Balboa Blvd                            -        1,920          4,504           635              -
  10/31/95   San Lorenzo /Hesperian                          -        1,590          3,716           401              -
  10/31/95   Chicago / W. 47th Street                        -          300            708           277              -
  10/31/95   Los Angeles / Eastern                           -          455          1,070           181              -
  11/15/95   Costa Mesa                                      -          522          1,218           162              -
  11/15/95   Plano / E. 14th                                 -          705          1,646           105              -
  11/15/95   Citrus Heights/Sunrise                          -          520          1,213           147              -
  11/15/95   Modesto/Briggsmore Ave                          -          470          1,097           151              -
  11/15/95   So San Francisco/Spruce                         -        1,905          4,444           509              -
  11/15/95   Pacheco/Buchanan Circle                         -        1,681          3,951           511              -
  11/16/95   Palm Beach Gardens                              -          657          1,540           184              -
  11/16/95   Delray Beach                                    -          600          1,407           220              -
   1/1/96    Bensenville/York Rd                             -          667          1,602           286            895
   1/1/96    Louisville/Preston                              -          211          1,060           129            594
   1/1/96    San Jose/Aborn Road                             -          615          1,342           103            759
   1/1/96    Englewood/Federal                               -          481          1,395           153            777
   1/1/96    W. Hollywood/Santa Monica                       -        3,415          4,577           425          2,552
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>           <C>
   9/1/95    New Castle/Dupont Parkway                        990        2,602        3,592         1,262
   9/1/95    Las Vegas / Rainbow                            1,050        2,580        3,630         1,240
   9/1/95    Mountain View / Reng                             945        2,377        3,322         1,158
   9/1/95    Venice / Cadillac                                930        2,566        3,496         1,245
   9/1/95    Simi Valley /Los Angeles                       1,590        4,038        5,628         1,949
   9/1/95    Spring Valley/Foreman                          1,095        2,980        4,075         1,388
   9/6/95    Darien / Frontage Road                           975        2,554        3,529         1,197
  9/30/95    Whittier                                         215        1,367        1,582           742
  9/30/95    Van Nuys/Balboa                                  295        1,867        2,162         1,027
  9/30/95    Huntington Beach                                 176        1,191        1,367           646
  9/30/95    Monterey Park                                    124        1,103        1,227           655
  9/30/95    Downey                                           191        1,262        1,453           690
  9/30/95    Del Amo                                          474        2,083        2,557         1,156
  9/30/95    Carson                                           375        1,563        1,938           714
  9/30/95    Van Nuys/Balboa Blvd                           1,920        5,139        7,059         2,200
  10/31/95   San Lorenzo /Hesperian                         1,590        4,117        5,707         1,829
  10/31/95   Chicago / W. 47th Street                         300          985        1,285           502
  10/31/95   Los Angeles / Eastern                            454        1,252        1,706           572
  11/15/95   Costa Mesa                                       522        1,380        1,902           610
  11/15/95   Plano / E. 14th                                  705        1,751        2,456           805
  11/15/95   Citrus Heights/Sunrise                           520        1,360        1,880           662
  11/15/95   Modesto/Briggsmore Ave                           470        1,248        1,718           589
  11/15/95   So San Francisco/Spruce                        1,904        4,954        6,858         2,280
  11/15/95   Pacheco/Buchanan Circle                        1,680        4,463        6,143         2,026
  11/16/95   Palm Beach Gardens                               657        1,724        2,381           823
  11/16/95   Delray Beach                                     600        1,627        2,227           785
   1/1/96    Bensenville/York Rd                              667        2,783        3,450         1,149
   1/1/96    Louisville/Preston                               211        1,783        1,994           690
   1/1/96    San Jose/Aborn Road                              615        2,204        2,819           895
   1/1/96    Englewood/Federal                                481        2,325        2,806           974
   1/1/96    W. Hollywood/Santa Monica                      3,414        7,555       10,969         2,947
</TABLE>

                                      F-63
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>          <C>
   1/1/96    Orland Hills/W. 159th                           -          917          2,392           352          1,342
   1/1/96    Merrionette Park                                -          818          2,020           183          1,122
   1/1/96    Denver/S Quebec                                 -        1,849          1,941           461          1,086
   1/1/96    Tigard/S.W. Pacific                             -          633          1,206           211            705
   1/1/96    Coram/Middle Count                              -          507          1,421           174            792
   1/1/96    Houston/FM 1960                                 -          635          1,294           244            783
   1/1/96    Kent/Military Trail                             -          409          1,670           303            956
   1/1/96    Turnersville/Black                              -          165          1,360           167            758
   1/1/96    Sewell/Rts. 553                                 -          323          1,138           141            658
   1/1/96    Maple Shade/Fellowship                          -          331          1,421           166            803
   1/1/96    Hyattsville/Kenilworth                          -          509          1,757           207          1,000
   1/1/96    Waterbury/Captain                               -          434          2,089           210          1,162
   1/1/96    Bedford Hts/Miles                               -          835          1,577           312            929
   1/1/96    Livonia/Newburgh                                -          635          1,407           173            783
   1/1/96    Sunland/Sunland Blvd.                           -          631          1,965           132          1,090
   1/1/96    Des Moines                                      -          448          1,350           129            768
   1/1/96    Oxonhill/Indianhead                             -          772          2,017           383          1,141
   1/1/96    Sacramento/N. 16th                              -          582          2,610           191          1,466
   1/1/96    Houston/Westheimer                              -        1,508          2,274           301          1,304
   1/1/96    San Pablo/San Pablo                             -          565          1,232           168            713
   1/1/96    Bowie/Woodcliff                                 -          718          2,336           259          1,292
   1/1/96    Milwaukee/S. 84th                               -          444          1,868           343          1,091
   1/1/96    Clinton/Malcolm Road                            -          593          2,123           261          1,187
   1/3/96    San Gabriel                                     -        1,005          2,345           417              -
   1/5/96    San Francisco, Second St.                       -        2,880          6,814           210              -
  1/12/96    San Antonio, TX                                 -          912          2,170            93              -
  2/29/96    Naples, FL/Old US 41                            -          849          2,016           255              -
  2/29/96    Lake Worth, FL/S. Military Tr.                  -        1,782          4,723           124              -
  2/29/96    Brandon, FL/W Brandon Blvd.                     -        1,928          4,523         1,010              -
  2/29/96    Coral Springs FL/W Sample Rd.                   -        3,480          8,148            26              -
  2/29/96    Delray Beach FL/S Military Tr.                  -          941          2,222           193              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>           <C>
   1/1/96    Orland Hills/W. 159th                            917        4,086        5,003         1,697
   1/1/96    Merrionette Park                                 818        3,325        4,143         1,317
   1/1/96    Denver/S Quebec                                1,849        3,488        5,337         1,320
   1/1/96    Tigard/S.W. Pacific                              633        2,122        2,755           835
   1/1/96    Coram/Middle Count                               507        2,387        2,894           925
   1/1/96    Houston/FM 1960                                  635        2,321        2,956           968
   1/1/96    Kent/Military Trail                              409        2,929        3,338         1,130
   1/1/96    Turnersville/Black                               165        2,285        2,450           908
   1/1/96    Sewell/Rts. 553                                  323        1,937        2,260           776
   1/1/96    Maple Shade/Fellowship                           331        2,390        2,721           924
   1/1/96    Hyattsville/Kenilworth                           508        2,965        3,473         1,142
   1/1/96    Waterbury/Captain                                434        3,461        3,895         1,216
   1/1/96    Bedford Hts/Miles                                835        2,818        3,653         1,174
   1/1/96    Livonia/Newburgh                                 635        2,363        2,998           901
   1/1/96    Sunland/Sunland Blvd.                            631        3,187        3,818         1,197
   1/1/96    Des Moines                                       447        2,248        2,695           891
   1/1/96    Oxonhill/Indianhead                              772        3,541        4,313         1,387
   1/1/96    Sacramento/N. 16th                               581        4,268        4,849         1,387
   1/1/96    Houston/Westheimer                             1,508        3,879        5,387         1,564
   1/1/96    San Pablo/San Pablo                              565        2,113        2,678           818
   1/1/96    Bowie/Woodcliff                                  718        3,887        4,605         1,413
   1/1/96    Milwaukee/S. 84th                                444        3,302        3,746         1,274
   1/1/96    Clinton/Malcolm Road                             592        3,572        4,164         1,332
   1/3/96    San Gabriel                                    1,005        2,762        3,767         1,281
   1/5/96    San Francisco, Second St.                      2,879        7,025        9,904         3,216
  1/12/96    San Antonio, TX                                  912        2,263        3,175         1,037
  2/29/96    Naples, FL/Old US 41                             849        2,271        3,120         1,067
  2/29/96    Lake Worth, FL/S. Military Tr.                 1,781        4,848        6,629         2,173
  2/29/96    Brandon, FL/W Brandon Blvd.                    1,928        5,533        7,461         2,922
  2/29/96    Coral Springs FL/W Sample Rd.                  3,479        8,175       11,654         3,662
  2/29/96    Delray Beach FL/S Military Tr.                   940        2,416        3,356         1,142
</TABLE>

                                      F-64
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  2/29/96    Jupiter FL/Military Trail                       -        2,280          5,347           347              -
  2/29/96    Lakeworth FL/Lake Worth Rd                      -          737          1,742           185              -
  2/29/96    New Port Richey/State Rd 54                     -          857          2,025           270              -
  2/29/96    Sanford FL/S Orlando Dr                         -          734          1,749         2,050              -
   3/8/96    Atlanta/Roswell                                 -          898          3,649           129              -
  3/31/96    Oakland                                         -        1,065          2,764           455              -
  3/31/96    Saratoga                                        -        2,339          6,081           229              -
  3/31/96    Randallstown                                    -        1,359          3,527           434              -
  3/31/96    Plano                                           -          650          1,682           129              -
  3/31/96    Houston                                         -          543          1,402           141              -
  3/31/96    Irvine                                          -        1,920          4,975         1,086              -
  3/31/96    Milwaukee                                       -          542          1,402           159              -
  3/31/96    Carrollton                                      -          578          1,495           108              -
  3/31/96    Torrance                                        -        1,415          3,675           183              -
  3/31/96    Jacksonville                                    -          713          1,845           222              -
  3/31/96    Dallas                                          -          315            810         1,757              -
  3/31/96    Houston                                         -          669          1,724           583              -
  3/31/96    Baltimore                                       -          842          2,180           286              -
  3/31/96    New Haven                                       -          740          1,907          (155)             -
   4/1/96    Chicago/Pulaski                                 -          764          1,869           300              -
   4/1/96    Las Vegas/Desert Inn                            -        1,115          2,729           176              -
   4/1/96    Torrance/Crenshaw                               -          916          2,243           142              -
   4/1/96    Weymouth                                        -          485          1,187           336              -
   4/1/96    St. Louis/Barrett Station Road                  -          630          1,542           143              -
   4/1/96    Rockville/Randolph                              -        1,153          2,823           280              -
   4/1/96    Simi Valley/East Street                         -          970          2,374            76              -
   4/1/96    Houston/Westheimer                              -        1,390          3,402         6,250              -
   4/3/96    Naples                                          -        1,187          2,809           295              -
  6/26/96    Boca Raton                                      -        3,180          7,468           519              -
  6/28/96    Venice                                          -          669          1,575           188              -
  6/30/96    Las Vegas                                       -          921          2,155           352              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>           <C>
  2/29/96    Jupiter FL/Military Trail                      2,279        5,695        7,974         2,594
  2/29/96    Lakeworth FL/Lake Worth Rd                       736        1,928        2,664           905
  2/29/96    New Port Richey/State Rd 54                      856        2,296        3,152         1,078
  2/29/96    Sanford FL/S Orlando Dr                          974        3,559        4,533         1,637
   3/8/96    Atlanta/Roswell                                  898        3,778        4,676         1,688
  3/31/96    Oakland                                        1,065        3,219        4,284         1,485
  3/31/96    Saratoga                                       2,339        6,310        8,649         2,789
  3/31/96    Randallstown                                   1,359        3,961        5,320         1,798
  3/31/96    Plano                                            649        1,812        2,461           846
  3/31/96    Houston                                          543        1,543        2,086           723
  3/31/96    Irvine                                         1,920        6,061        7,981         2,619
  3/31/96    Milwaukee                                        542        1,561        2,103           732
  3/31/96    Carrollton                                       578        1,603        2,181           746
  3/31/96    Torrance                                       1,415        3,858        5,273         1,750
  3/31/96    Jacksonville                                     712        2,068        2,780         1,001
  3/31/96    Dallas                                           315        2,567        2,882           823
  3/31/96    Houston                                          669        2,307        2,976         1,174
  3/31/96    Baltimore                                        842        2,466        3,308         1,153
  3/31/96    New Haven                                        667        1,825        2,492           881
   4/1/96    Chicago/Pulaski                                  763        2,170        2,933           893
   4/1/96    Las Vegas/Desert Inn                           1,115        2,905        4,020         1,251
   4/1/96    Torrance/Crenshaw                                916        2,385        3,301         1,003
   4/1/96    Weymouth                                         485        1,523        2,008           583
   4/1/96    St. Louis/Barrett Station Road                   630        1,685        2,315           696
   4/1/96    Rockville/Randolph                             1,153        3,103        4,256         1,291
   4/1/96    Simi Valley/East Street                          970        2,450        3,420         1,014
   4/1/96    Houston/Westheimer                             1,389        9,653       11,042         3,440
   4/3/96    Naples                                         1,186        3,105        4,291         1,452
  6/26/96    Boca Raton                                     3,179        7,988       11,167         3,689
  6/28/96    Venice                                           669        1,763        2,432           828
  6/30/96    Las Vegas                                        921        2,507        3,428         1,175
</TABLE>

                                      F-65
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  6/30/96    Bedford Park                                    -          606          1,419           261              -
  6/30/96    Los Angeles                                     -          692          1,616           142              -
  6/30/96    Silver Spring                                   -        1,513          3,535           308              -
  6/30/96    Newark                                          -        1,051          2,458           135              -
  6/30/96    Brooklyn                                        -          783          1,830           975              -
   7/2/96    Glen Burnie/Furnace Br Rd                       -        1,755          4,150           758              -
  7/22/96    Lakewood/W Hampton                              -          717          2,092            93              -
  8/13/96    Norcross/Holcomb Bridge Rd                      -          955          3,117           176              -
   9/5/96    Spring Valley/S Pascack rd                      -        1,260          2,966           620              -
  9/16/96    Dallas/Royal Lane                               -        1,008          2,426           234              -
  9/16/96    Colorado Springs/Tomah Drive                    -          731          1,759           141              -
  9/16/96    Lewisville/S. Stemmons                          -          603          1,451           165              -
  9/16/96    Las Vegas/Boulder Hwy.                          -          947          2,279           403              -
  9/16/96    Sarasota/S. Tamiami Trail                       -          584          1,407         1,455              -
  9/16/96    Willow Grove/Maryland Road                      -          673          1,620           161              -
  9/16/96    Houston/W. Montgomery Rd.                       -          524          1,261           210              -
  9/16/96    Denver/W. Hampden                               -        1,084          2,609           227              -
  9/16/96    Littleton/Southpark Way                         -          922          2,221           375              -
  9/16/96    Petaluma/Baywood Drive                          -          861          2,074           174              -
  9/16/96    Canoga Park/Sherman Way                         -        1,543          3,716           605              -
  9/16/96    Jacksonville/South Lane Ave.                    -          554          1,334           288              -
  9/16/96    Newport News/Warwick Blvd.                      -          575          1,385           191              -
  9/16/96    Greenbrook/Route 22                             -        1,227          2,954           626              -
  9/16/96    Monsey/Route 59                                 -        1,068          2,572           203              -
  9/16/96    Santa Rosa/Santa Rosa Ave.                      -          575          1,385           129              -
  9/16/96    Fort Worth/Brentwood                            -          823          2,016           168              -
  9/16/96    Glendale/San Fernando Road                      -        2,500          6,124           239              -
  9/16/96    Houston/Harwin                                  -          549          1,344           186              -
  9/16/96    Irvine/Cowan Street                             -        1,890          4,631           361              -
  9/16/96    Fairfield/Dixie Highway                         -          427          1,046           149              -
  9/16/96    Mesa/Country Club Drive                         -          701          1,718           499              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  6/30/96    Bedford Park                                     606        1,680        2,286           815
  6/30/96    Los Angeles                                      691        1,759        2,450           794
  6/30/96    Silver Spring                                  1,513        3,843        5,356         1,759
  6/30/96    Newark                                         1,051        2,593        3,644         1,153
  6/30/96    Brooklyn                                         783        2,805        3,588         1,271
   7/2/96    Glen Burnie/Furnace Br Rd                      1,755        4,908        6,663         1,995
  7/22/96    Lakewood/W Hampton                               716        2,186        2,902           937
  8/13/96    Norcross/Holcomb Bridge Rd                       954        3,294        4,248         1,435
   9/5/96    Spring Valley/S Pascack rd                     1,260        3,586        4,846         1,659
  9/16/96    Dallas/Royal Lane                              1,007        2,661        3,668         1,192
  9/16/96    Colorado Springs/Tomah Drive                     730        1,901        2,631           826
  9/16/96    Lewisville/S. Stemmons                           603        1,616        2,219           724
  9/16/96    Las Vegas/Boulder Hwy.                           946        2,683        3,629         1,259
  9/16/96    Sarasota/S. Tamiami Trail                        584        2,862        3,446           850
  9/16/96    Willow Grove/Maryland Road                       673        1,781        2,454           764
  9/16/96    Houston/W. Montgomery Rd.                        523        1,472        1,995           696
  9/16/96    Denver/W. Hampden                              1,083        2,837        3,920         1,240
  9/16/96    Littleton/Southpark Way                          922        2,596        3,518         1,199
  9/16/96    Petaluma/Baywood Drive                           861        2,248        3,109           999
  9/16/96    Canoga Park/Sherman Way                        1,543        4,321        5,864         2,037
  9/16/96    Jacksonville/South Lane Ave.                     554        1,622        2,176           752
  9/16/96    Newport News/Warwick Blvd.                       575        1,576        2,151           727
  9/16/96    Greenbrook/Route 22                            1,226        3,581        4,807         1,526
  9/16/96    Monsey/Route 59                                1,068        2,775        3,843         1,192
  9/16/96    Santa Rosa/Santa Rosa Ave.                       575        1,514        2,089           670
  9/16/96    Fort Worth/Brentwood                             823        2,184        3,007           959
  9/16/96    Glendale/San Fernando Road                     2,499        6,364        8,863         2,676
  9/16/96    Houston/Harwin                                   549        1,530        2,079           697
  9/16/96    Irvine/Cowan Street                            1,890        4,992        6,882         2,141
  9/16/96    Fairfield/Dixie Highway                          427        1,195        1,622           533
  9/16/96    Mesa/Country Club Drive                          701        2,217        2,918           951
</TABLE>

                                      F-66
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  9/16/96    San Francisco/Geary Blvd.                       -        2,957          7,244           463              -
  9/16/96    Houston/Gulf Freeway                            -          701          1,718         4,984              -
  9/16/96    Las Vegas/S. Decatur Blvd.                      -        1,037          2,539           259              -
  9/16/96    Tempe/McKellips Road                            -          823          1,972           412              -
  9/16/96    Richland Hills/Airport Fwy.                     -          473          1,158           209              -
  10/11/96   Hampton/Pembroke Road                           -        1,080          2,346          (169)             -
  10/11/96   Norfolk/Widgeon Road                            -        1,110          2,405          (293)             -
  10/11/96   Richmond/Bloom Lane                             -        1,188          2,512          (116)             -
  10/11/96   Virginia Beach/Southern Blvd                    -          282            610           272              -
  10/11/96   Chesapeake/Military Hwy                         -          912          1,974           457              -
  10/11/96   Richmond/Midlothian Park                        -          762          1,588           540              -
  10/11/96   Roanoke/Peters Creek Road                       -          819          1,776           312              -
  10/11/96   Orlando/E Oakridge Rd                           -          927          2,020           312              -
  10/11/96   Orlando/South Hwy 17-92                         -        1,170          2,549           211              -
  10/25/96   Austin/Renelli                                  -        1,710          3,990           315              -
  10/25/96   Austin/Santiago                                 -          900          2,100           218              -
  10/25/96   Dallas/East N.W. Highway                        -          698          1,628           236              -
  10/25/96   Dallas/Denton Drive                             -          900          2,100           226              -
  10/25/96   Houston/Hempstead                               -          518          1,207           445              -
  10/25/96   Pasadena/So. Shaver                             -          420            980           457              -
  10/31/96   Houston/Joel Wheaton Rd                         -          465          1,085           231              -
  10/31/96   Mt Holly/541 Bypass                             -          360            840           312              -
  11/13/96   Town East/Mesquite                              -          330            770           209              -
  11/14/96   Bossier City LA                                 -          633          1,488           (91)             -
  12/5/96    Lake Forest/Bake Parkway                        -          971          2,173           576              -
  12/16/96   Cherry Hill/Old Cuthbert                        -          645          1,505           656              -
  12/16/96   Oklahoma City/SW 74th                           -          375            875           120              -
  12/16/96   Oklahoma City/S Santa Fe                        -          360            840           167              -
  12/16/96   Oklahoma City/S. May                            -          360            840           143              -
  12/16/96   Arlington/S. Watson Rd.                         -          930          2,170           710              -
  12/16/96   Richardson/E. Arapaho                           -        1,290          3,010           478              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>         <C>            <C>
  9/16/96    San Francisco/Geary Blvd.                      2,957        7,707       10,664         3,287
  9/16/96    Houston/Gulf Freeway                             701        6,702        7,403         1,698
  9/16/96    Las Vegas/S. Decatur Blvd.                     1,036        2,799        3,835         1,208
  9/16/96    Tempe/McKellips Road                             823        2,384        3,207         1,023
  9/16/96    Richland Hills/Airport Fwy.                      472        1,368        1,840           648
  10/11/96   Hampton/Pembroke Road                            914        2,343        3,257           822
  10/11/96   Norfolk/Widgeon Road                             908        2,314        3,222           809
  10/11/96   Richmond/Bloom Lane                              994        2,590        3,584           932
  10/11/96   Virginia Beach/Southern Blvd                     282          882        1,164           480
  10/11/96   Chesapeake/Military Hwy                          912        2,431        3,343         1,193
  10/11/96   Richmond/Midlothian Park                         762        2,128        2,890         1,136
  10/11/96   Roanoke/Peters Creek Road                        819        2,088        2,907           972
  10/11/96   Orlando/E Oakridge Rd                            927        2,332        3,259         1,051
  10/11/96   Orlando/South Hwy 17-92                        1,170        2,760        3,930         1,227
  10/25/96   Austin/Renelli                                 1,710        4,305        6,015         1,884
  10/25/96   Austin/Santiago                                  900        2,318        3,218         1,061
  10/25/96   Dallas/East N.W. Highway                         697        1,865        2,562           841
  10/25/96   Dallas/Denton Drive                              900        2,326        3,226           998
  10/25/96   Houston/Hempstead                                517        1,653        2,170           804
  10/25/96   Pasadena/So. Shaver                              420        1,437        1,857           687
  10/31/96   Houston/Joel Wheaton Rd                          465        1,316        1,781           612
  10/31/96   Mt Holly/541 Bypass                              360        1,152        1,512           570
  11/13/96   Town East/Mesquite                               330          979        1,309           445
  11/14/96   Bossier City LA                                  557        1,473        2,030           529
  12/5/96    Lake Forest/Bake Parkway                         972        2,748        3,720         1,049
  12/16/96   Cherry Hill/Old Cuthbert                         645        2,161        2,806         1,089
  12/16/96   Oklahoma City/SW 74th                            375          995        1,370           452
  12/16/96   Oklahoma City/S Santa Fe                         360        1,007        1,367           486
  12/16/96   Oklahoma City/S. May                             360          983        1,343           470
  12/16/96   Arlington/S. Watson Rd.                          930        2,880        3,810         1,305
  12/16/96   Richardson/E. Arapaho                          1,290        3,488        4,778         1,518
</TABLE>

                                      F-67
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>            <C>           <C>              <C>
  12/23/96   Eagle Rock/Colorado                             -          330            813           425              -
  12/23/96   Upper Darby/Lansdowne                           -          899          2,272           266              -
  12/23/96   Plymouth Meeting /Chemical                      -        1,109          2,802           227              -
  12/23/96   Philadelphia/Byberry                            -        1,019          2,575           306              -
  12/23/96   Ft. Lauderdale/State Road                       -        1,199          3,030           300              -
  12/23/96   Englewood/Costilla                              -        1,739          4,393           179              -
  12/23/96   Lilburn/Beaver Ruin Road                        -          600          1,515           182              -
  12/23/96   Carmichael/Fair Oaks                            -          809          2,045           231              -
  12/23/96   Portland/Division Street                        -          989          2,499           177              -
  12/23/96   Napa/Industrial                                 -          660          1,666           161              -
  12/23/96   Wheatridge/W. 44th Avenue                       -        1,439          3,636           207              -
  12/23/96   Las Vegas/Charleston                            -        1,049          2,651           189              -
  12/23/96   Las Vegas/South Arvill                          -          929          2,348           229              -
  12/23/96   Los Angeles/Santa Monica                        -        3,328          8,407           438              -
  12/23/96   Warren/Schoenherr Rd.                           -          749          1,894           208              -
  12/23/96   Portland/N.E. 71st Avenue                       -          869          2,196           288              -
  12/23/96   Broadview/S. 25th Avenue                        -        1,289          3,257           369              -
  12/23/96   Winter Springs/W. St. Rte 434                   -          689          1,742           154              -
  12/23/96   Tampa/15th Street                               -          420          1,060           352              -
  12/23/96   Pompano Beach/S. Dixie Hwy.                     -          930          2,292           395              -
  12/23/96   Overland Park/Mastin                            -          990          2,440         3,272              -
  12/23/96   Auburn/R Street                                 -          690          1,700           215              -
  12/23/96   Federal Heights/W. 48th Ave.                    -          720          1,774           196              -
  12/23/96   Decatur/Covington                               -          930          2,292           275              -
  12/23/96   Forest Park/Jonesboro Rd.                       -          540          1,331           281              -
  12/23/96   Mangonia Park/Australian Ave.                   -          840          2,070           182              -
  12/23/96   Whittier/Colima                                 -          540          1,331           121              -
  12/23/96   Kent/Pacific Hwy South                          -          930          2,292           201              -
  12/23/96   Topeka/8th Street                               -          150            370           456              -
  12/23/96   Denver East Evans                               -        1,740          4,288           276              -
  12/23/96   Pittsburgh/California Ave.                      -          630          1,552           122              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  12/23/96   Eagle Rock/Colorado                              444        1,124        1,568           370
  12/23/96   Upper Darby/Lansdowne                            899        2,538        3,437         1,137
  12/23/96   Plymouth Meeting /Chemical                     1,109        3,029        4,138           935
  12/23/96   Philadelphia/Byberry                           1,019        2,881        3,900         1,220
  12/23/96   Ft. Lauderdale/State Road                      1,199        3,330        4,529         1,448
  12/23/96   Englewood/Costilla                             1,738        4,573        6,311         1,923
  12/23/96   Lilburn/Beaver Ruin Road                         599        1,698        2,297           772
  12/23/96   Carmichael/Fair Oaks                             809        2,276        3,085         1,019
  12/23/96   Portland/Division Street                         989        2,676        3,665         1,153
  12/23/96   Napa/Industrial                                  659        1,828        2,487           814
  12/23/96   Wheatridge/W. 44th Avenue                      1,439        3,843        5,282         1,635
  12/23/96   Las Vegas/Charleston                           1,049        2,840        3,889         1,217
  12/23/96   Las Vegas/South Arvill                           929        2,577        3,506         1,094
  12/23/96   Los Angeles/Santa Monica                       3,327        8,846       12,173         3,673
  12/23/96   Warren/Schoenherr Rd.                            749        2,102        2,851           933
  12/23/96   Portland/N.E. 71st Avenue                        869        2,484        3,353         1,120
  12/23/96   Broadview/S. 25th Avenue                       1,289        3,626        4,915         1,597
  12/23/96   Winter Springs/W. St. Rte 434                    689        1,896        2,585           824
  12/23/96   Tampa/15th Street                                420        1,412        1,832           690
  12/23/96   Pompano Beach/S. Dixie Hwy.                      930        2,687        3,617         1,251
  12/23/96   Overland Park/Mastin                           1,306        5,396        6,702         1,710
  12/23/96   Auburn/R Street                                  690        1,915        2,605           879
  12/23/96   Federal Heights/W. 48th Ave.                     720        1,970        2,690           843
  12/23/96   Decatur/Covington                                930        2,567        3,497         1,137
  12/23/96   Forest Park/Jonesboro Rd.                        540        1,612        2,152           700
  12/23/96   Mangonia Park/Australian Ave.                    840        2,252        3,092           972
  12/23/96   Whittier/Colima                                  540        1,452        1,992           628
  12/23/96   Kent/Pacific Hwy South                           930        2,493        3,423         1,091
  12/23/96   Topeka/8th Street                                150          826          976           297
  12/23/96   Denver East Evans                              1,740        4,564        6,304         1,929
  12/23/96   Pittsburgh/California Ave.                       630        1,674        2,304           737
</TABLE>

                                      F-68
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  12/23/96   Ft. Lauderdale/Powerline                        -          660          1,626           363              -
  12/23/96   Philadelphia/Oxford                             -          900          2,218           216              -
  12/23/96   Dallas/Lemmon Ave.                              -        1,710          4,214           184              -
  12/23/96   Alsip/115th Street                              -          750          1,848         4,611              -
  12/23/96   Green Acres/Jog Road                            -          600          1,479           120              -
  12/23/96   Pompano Beach/Sample Road                       -        1,320          3,253           150              -
  12/23/96   Wyndmoor/Ivy Hill                               -        2,160          5,323           286              -
  12/23/96   W. Palm Beach/Belvedere                         -          960          2,366           230              -
  12/23/96   Renton  174th St.                               -          960          2,366           313              -
  12/23/96   Sacramento/Northgate                            -        1,021          2,647           184              -
  12/23/96   Phoenix/19th Avenue                             -          991          2,569           244              -
  12/23/96   Bedford Park/Cicero                             -        1,321          3,426           419              -
  12/23/96   Lake Worth/Lk Worth                             -        1,111          2,880           278              -
  12/23/96   Arlington/Algonquin                             -          991          2,569           875              -
  12/23/96   Seattle/15th Avenue                             -          781          2,024           278              -
  12/23/96   Southington/Spring                              -          811          2,102           320              -
  12/23/96   Clifton/Broad Street                            -        1,411          3,659           237              -
  12/23/96   Hillside/Glenwood                               -          563          4,051           419              -
  12/23/96   Nashville/Dickerson Pike                        -          990          2,440           235              -
  12/23/96   Madison/Gallatin Road                           -          780          1,922           307              -
  12/30/96   Concorde/Treat                                  -        1,396          3,258           319              -
  12/30/96   Virginia Beach                                  -          535          1,248           166              -
  12/30/96   San Mateo                                       -        2,408          5,619           225              -
  1/22/97    Austin, 1033 E. 41 Street                       -          257          3,633           100              -
  4/12/97    Annandale / Backlick                            -          955          2,229           379              -
  4/12/97    Ft. Worth / West Freeway                        -          667          1,556           275              -
  4/12/97    Campbell / S. Curtner                           -        2,550          5,950           724              -
  4/12/97    Aurora / S. Idalia                              -        1,002          2,338           611              -
  4/12/97    Santa Cruz / Capitola                           -        1,037          2,420           337              -
  4/12/97    Indianapolis / Lafayette Road                   -          682          1,590           480              -
  4/12/97    Indianapolis / Route 31                         -          619          1,444           408              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  12/23/96   Ft. Lauderdale/Powerline                         660        1,989        2,649           960
  12/23/96   Philadelphia/Oxford                              900        2,434        3,334         1,063
  12/23/96   Dallas/Lemmon Ave.                             1,710        4,398        6,108         1,859
  12/23/96   Alsip/115th Street                               750        6,459        7,209         1,505
  12/23/96   Green Acres/Jog Road                             600        1,599        2,199           704
  12/23/96   Pompano Beach/Sample Road                      1,320        3,403        4,723         1,441
  12/23/96   Wyndmoor/Ivy Hill                              2,159        5,610        7,769         2,390
  12/23/96   W. Palm Beach/Belvedere                          960        2,596        3,556         1,146
  12/23/96   Renton  174th St.                                960        2,679        3,639         1,189
  12/23/96   Sacramento/Northgate                           1,021        2,831        3,852         1,214
  12/23/96   Phoenix/19th Avenue                              991        2,813        3,804         1,244
  12/23/96   Bedford Park/Cicero                            1,321        3,845        5,166         1,670
  12/23/96   Lake Worth/Lk Worth                            1,111        3,158        4,269         1,373
  12/23/96   Arlington/Algonquin                              991        3,444        4,435         1,514
  12/23/96   Seattle/15th Avenue                              780        2,303        3,083           998
  12/23/96   Southington/Spring                               810        2,423        3,233         1,053
  12/23/96   Clifton/Broad Street                           1,411        3,896        5,307         1,648
  12/23/96   Hillside/Glenwood                                563        4,470        5,033         1,978
  12/23/96   Nashville/Dickerson Pike                         990        2,675        3,665         1,170
  12/23/96   Madison/Gallatin Road                            780        2,229        3,009         1,011
  12/30/96   Concorde/Treat                                 1,396        3,577        4,973         1,481
  12/30/96   Virginia Beach                                   535        1,414        1,949           633
  12/30/96   San Mateo                                      2,408        5,844        8,252         2,433
  1/22/97    Austin, 1033 E. 41 Street                        257        3,733        3,990         1,508
  4/12/97    Annandale / Backlick                             955        2,608        3,563         1,094
  4/12/97    Ft. Worth / West Freeway                         667        1,831        2,498           760
  4/12/97    Campbell / S. Curtner                          2,549        6,675        9,224         2,680
  4/12/97    Aurora / S. Idalia                             1,002        2,949        3,951         1,253
  4/12/97    Santa Cruz / Capitola                          1,037        2,757        3,794         1,124
  4/12/97    Indianapolis / Lafayette Road                    681        2,071        2,752           826
  4/12/97    Indianapolis / Route 31                          619        1,852        2,471           789
</TABLE>

                                      F-69
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  4/12/97    Farmingdale / Broad Hollow Rd.                  -        1,568          3,658           866              -
  4/12/97    Tyson's Corner / Springhill Rd.                 -        3,861          9,010         1,479              -
  4/12/97    Fountain Valley / Newhope                       -        1,137          2,653           347              -
  4/12/97    Dallas / Winsted                                -        1,375          3,209           513              -
  4/12/97    Columbia / Broad River Rd.                      -          121            282           162              -
  4/12/97    Livermore / S. Front Road                       -          876          2,044           196              -
  4/12/97    Garland / Plano                                 -          889          2,073           244              -
  4/12/97    San Jose / Story Road                           -        1,352          3,156           451              -
  4/12/97    Aurora / Abilene                                -        1,406          3,280           467              -
  4/12/97    Antioch / Sunset Drive                          -        1,035          2,416           266              -
  4/12/97    Rancho Cordova / Sunrise                        -        1,048          2,445           415              -
  4/12/97    Berlin / Wilbur Cross                           -          756          1,764           303              -
  4/12/97    Whittier / Whittier Blvd.                       -          648          1,513           190              -
  4/12/97    Peabody / Newbury Street                        -        1,159          2,704           592              -
  4/12/97    Denver / Blake                                  -          602          1,405           214              -
  4/12/97    Evansville / Green River Road                   -          470          1,096           198              -
  4/12/97    Burien / First Ave. So.                         -          792          1,847           253              -
  4/12/97    Rancho Cordova / Mather Field                   -          494          1,153           386              -
  4/12/97    Sugar Land / Eldridge                           -          705          1,644           234              -
  4/12/97    Columbus / Eastland Drive                       -          602          1,405           334              -
  4/12/97    Slickerville / Black Horse Pike                 -          539          1,258           235              -
  4/12/97    Seattle / Aurora                                -        1,145          2,671           316              -
  4/12/97    Gaithersburg / Christopher Ave.                 -          972          2,268           436              -
  4/12/97    Manchester / Tolland Turnpike                   -          807          1,883           271              -
  6/25/97    L.A./Venice Blvd.                               -          523          1,221         1,797              -
  6/25/97    Kirkland-Totem                                  -        2,131          4,972           255              -
  6/25/97    Idianapolis                                     -          471          1,098           239              -
  6/25/97    Dallas                                          -          699          1,631            87              -
  6/25/97    Atlanta                                         -        1,183          2,761           159              -
  6/25/97    Bensalem                                        -        1,159          2,705           121              -
  6/25/97    Evansville                                      -          429          1,000            60              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>           <C>
  4/12/97    Farmingdale / Broad Hollow Rd.                 1,567        4,525        6,092         1,823
  4/12/97    Tyson's Corner / Springhill Rd.                3,860       10,490       14,350         4,284
  4/12/97    Fountain Valley / Newhope                      1,137        3,000        4,137         1,209
  4/12/97    Dallas / Winsted                               1,375        3,722        5,097         1,528
  4/12/97    Columbia / Broad River Rd.                       121          444          565           242
  4/12/97    Livermore / S. Front Road                        876        2,240        3,116           915
  4/12/97    Garland / Plano                                  888        2,318        3,206           967
  4/12/97    San Jose / Story Road                          1,352        3,607        4,959         1,480
  4/12/97    Aurora / Abilene                               1,405        3,748        5,153         1,562
  4/12/97    Antioch / Sunset Drive                         1,035        2,682        3,717         1,080
  4/12/97    Rancho Cordova / Sunrise                       1,048        2,860        3,908         1,241
  4/12/97    Berlin / Wilbur Cross                            756        2,067        2,823           888
  4/12/97    Whittier / Whittier Blvd.                        648        1,703        2,351           694
  4/12/97    Peabody / Newbury Street                       1,159        3,296        4,455         1,434
  4/12/97    Denver / Blake                                   602        1,619        2,221           686
  4/12/97    Evansville / Green River Road                    470        1,294        1,764           553
  4/12/97    Burien / First Ave. So.                          791        2,101        2,892           899
  4/12/97    Rancho Cordova / Mather Field                    494        1,539        2,033           593
  4/12/97    Sugar Land / Eldridge                            705        1,878        2,583           801
  4/12/97    Columbus / Eastland Drive                        602        1,739        2,341           761
  4/12/97    Slickerville / Black Horse Pike                  539        1,493        2,032           667
  4/12/97    Seattle / Aurora                               1,144        2,988        4,132         1,234
  4/12/97    Gaithersburg / Christopher Ave.                  972        2,704        3,676         1,085
  4/12/97    Manchester / Tolland Turnpike                    807        2,154        2,961           887
  6/25/97    L.A./Venice Blvd.                              1,044        2,497        3,541           806
  6/25/97    Kirkland-Totem                                 2,130        5,228        7,358         2,173
  6/25/97    Idianapolis                                      471        1,337        1,808           543
  6/25/97    Dallas                                           699        1,718        2,417           709
  6/25/97    Atlanta                                        1,183        2,920        4,103         1,203
  6/25/97    Bensalem                                       1,159        2,826        3,985         1,154
  6/25/97    Evansville                                       401        1,088        1,489           466
</TABLE>

                                      F-70
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  6/25/97    Austin                                          -          813          1,897            88              -
  6/25/97    Harbor City                                     -        1,244          2,904           274              -
  6/25/97    Birmingham                                      -          539          1,258           133              -
  6/25/97    Sacramento                                      -          489          1,396          (137)             -
  6/25/97    Carrollton                                      -          441          1,029            45              -
  6/25/97    La Habra                                        -          822          1,918           167              -
  6/25/97    Lombard                                         -        1,527          3,564         1,766              -
  6/25/97    Fairfield                                       -          740          1,727            88              -
  6/25/97    Seattle                                         -        1,498          3,494         9,847              -
  6/25/97    Bellevue                                        -        1,653          3,858           222              -
  6/25/97    Citrus Heights                                  -          642          1,244           566              -
  6/25/97    San Jose                                        -        1,273          2,971            23              -
  6/25/97    Stanton                                         -          948          2,212            70              -
  6/25/97    Garland                                         -          486          1,135           102              -
  6/25/97    Westford                                        -          857          1,999           377              -
  6/25/97    Dallas                                          -        1,627          3,797           702              -
  6/25/97    Wheat Ridge                                     -        1,054          2,459           416              -
  6/25/97    Berlin                                          -          825          1,925           316              -
  6/25/97    Gretna                                          -        1,069          2,494           495              -
  6/25/97    Spring                                          -          461          1,077           217              -
  6/25/97    Sacramento                                      -          592          1,380         1,024              -
  6/25/97    Houston/South Dairyashford                      -          856          1,997           392              -
  6/25/97    Naperville                                      -        1,108          2,585           494              -
  6/25/97    Carrollton                                      -        1,158          2,702           566              -
  6/25/97    Waipahu                                         -        1,620          3,780           786              -
  6/25/97    Davis                                           -          628          1,465           232              -
  6/25/97    Decatur                                         -          951          2,220           419              -
  6/25/97    Jacksonville                                    -          653          1,525           297              -
  6/25/97    Chicoppe                                        -          663          1,546           422              -
  6/25/97    Alexandria                                      -        1,533          3,576           546              -
  6/25/97    Houston/Veterans Memorial Dr.                   -          458          1,070           228              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  6/25/97    Austin                                           813        1,985        2,798           816
  6/25/97    Harbor City                                    1,244        3,178        4,422         1,387
  6/25/97    Birmingham                                       539        1,391        1,930           595
  6/25/97    Sacramento                                       489        1,259        1,748           506
  6/25/97    Carrollton                                       441        1,074        1,515           440
  6/25/97    La Habra                                         822        2,085        2,907           830
  6/25/97    Lombard                                        2,046        4,811        6,857         1,848
  6/25/97    Fairfield                                        740        1,815        2,555           740
  6/25/97    Seattle                                        1,447       13,392       14,839         1,876
  6/25/97    Bellevue                                       1,653        4,080        5,733         1,632
  6/25/97    Citrus Heights                                   642        1,810        2,452           845
  6/25/97    San Jose                                       1,273        2,994        4,267         1,198
  6/25/97    Stanton                                          948        2,282        3,230           931
  6/25/97    Garland                                          486        1,237        1,723           502
  6/25/97    Westford                                         857        2,376        3,233           922
  6/25/97    Dallas                                         1,627        4,499        6,126         1,878
  6/25/97    Wheat Ridge                                    1,054        2,875        3,929         1,151
  6/25/97    Berlin                                           825        2,241        3,066           905
  6/25/97    Gretna                                         1,069        2,989        4,058         1,343
  6/25/97    Spring                                           461        1,294        1,755           543
  6/25/97    Sacramento                                       720        2,276        2,996           858
  6/25/97    Houston/South Dairyashford                       856        2,389        3,245           959
  6/25/97    Naperville                                     1,108        3,079        4,187         1,217
  6/25/97    Carrollton                                     1,158        3,268        4,426         1,343
  6/25/97    Waipahu                                        1,620        4,566        6,186         1,797
  6/25/97    Davis                                            628        1,697        2,325           692
  6/25/97    Decatur                                          951        2,639        3,590         1,108
  6/25/97    Jacksonville                                     653        1,822        2,475           776
  6/25/97    Chicoppe                                         662        1,969        2,631           826
  6/25/97    Alexandria                                     1,532        4,123        5,655         1,650
  6/25/97    Houston/Veterans Memorial Dr.                    458        1,298        1,756           522
</TABLE>

                                      F-71
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>           <C>            <C>                <C>
  6/25/97    Los Angeles/Olympic                             -        4,392         10,247         1,272              -
  6/25/97    Littleton                                       -        1,340          3,126           627              -
  6/25/97    Metairie                                        -        1,229          2,868           240              -
  6/25/97    Louisville                                      -          717          1,672           334              -
  6/25/97    East Hazel Crest                                -          753          1,757         2,202              -
  6/25/97    Edmonds                                         -        1,187          2,770           433              -
  6/25/97    Foster City                                     -        1,064          2,483           370              -
  6/25/97    Chicago                                         -        1,160          2,708           542              -
  6/25/97    Philadelphia                                    -          924          2,155           409              -
  6/25/97    Dallas/Vilbig Rd.                               -          508          1,184           271              -
  6/25/97    Staten Island                                   -        1,676          3,910           602              -
  6/25/97    Pelham Manor                                    -        1,209          2,820           790              -
  6/25/97    Irving                                          -          469          1,093           209              -
  6/25/97    Elk Grove                                       -          642          1,497           307              -
  6/25/97    LAX                                             -        1,312          3,062           558              -
  6/25/97    Denver                                          -        1,316          3,071           738              -
  6/25/97    Plano                                           -        1,369          3,193           553              -
  6/25/97    Lynnwood                                        -          839          1,959           372              -
  6/25/97    Lilburn                                         -          507          1,182           394              -
  6/25/97    Parma                                           -          881          2,055           699              -
  6/25/97    Davie                                           -        1,086          2,533           640              -
  6/25/97    Allen Park                                      -          953          2,223           572              -
  6/25/97    Aurora                                          -          808          1,886           462              -
  6/25/97    San Diego/16th Street                           -          932          2,175           632              -
  6/25/97    Sterling Heights                                -          766          1,787           605              -
  6/25/97    East L.A./Boyle Heights                         -          957          2,232           517              -
  6/25/97    Springfield/Alban Station                       -        1,317          3,074           854              -
  6/25/97    Littleton                                       -          868          2,026           507              -
  6/25/97    Sacramento/57th Street                          -          869          2,029           499              -
  6/25/97    Miami                                           -        1,762          4,111         1,030              -
  8/13/97    Santa Monica / Wilshire Blvd.                   -        2,040          4,760           329              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>         <C>          <C>            <C>
  6/25/97    Los Angeles/Olympic                            4,391       11,520       15,911         4,525
  6/25/97    Littleton                                      1,339        3,754        5,093         1,530
  6/25/97    Metairie                                       1,229        3,108        4,337         1,337
  6/25/97    Louisville                                       716        2,007        2,723           825
  6/25/97    East Hazel Crest                               1,213        3,499        4,712         1,629
  6/25/97    Edmonds                                        1,187        3,203        4,390         1,294
  6/25/97    Foster City                                    1,064        2,853        3,917         1,118
  6/25/97    Chicago                                        1,160        3,250        4,410         1,343
  6/25/97    Philadelphia                                     923        2,565        3,488         1,046
  6/25/97    Dallas/Vilbig Rd.                                507        1,456        1,963           592
  6/25/97    Staten Island                                  1,675        4,513        6,188         1,815
  6/25/97    Pelham Manor                                   1,208        3,611        4,819         1,543
  6/25/97    Irving                                           468        1,303        1,771           547
  6/25/97    Elk Grove                                        642        1,804        2,446           740
  6/25/97    LAX                                            1,312        3,620        4,932         1,497
  6/25/97    Denver                                         1,316        3,809        5,125         1,515
  6/25/97    Plano                                          1,368        3,747        5,115         1,467
  6/25/97    Lynnwood                                         839        2,331        3,170           969
  6/25/97    Lilburn                                          506        1,577        2,083           667
  6/25/97    Parma                                            880        2,755        3,635         1,088
  6/25/97    Davie                                          1,085        3,174        4,259         1,307
  6/25/97    Allen Park                                       953        2,795        3,748         1,138
  6/25/97    Aurora                                           808        2,348        3,156           948
  6/25/97    San Diego/16th Street                            932        2,807        3,739         1,204
  6/25/97    Sterling Heights                                 766        2,392        3,158           948
  6/25/97    East L.A./Boyle Heights                          956        2,750        3,706         1,106
  6/25/97    Springfield/Alban Station                      1,317        3,928        5,245         1,515
  6/25/97    Littleton                                        868        2,533        3,401         1,030
  6/25/97    Sacramento/57th Street                           869        2,528        3,397         1,037
  6/25/97    Miami                                          1,762        5,141        6,903         2,039
  8/13/97    Santa Monica / Wilshire Blvd.                  2,040        5,089        7,129         2,085
</TABLE>

                                      F-72
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>            <C>
  10/1/97    Marietta /Austell Rd                            -          398          1,326           330            681
  10/1/97    Denver / Leetsdale                              -        1,407          1,682           311            952
  10/1/97    Baltimore / York Road                           -        1,538          1,952           759          1,125
  10/1/97    Bolingbrook                                     -          737          1,776           267            927
  10/1/97    Kent / Central                                  -          483          1,321           195            687
  10/1/97    Geneva / Roosevelt                              -          355          1,302           218            665
  10/1/97    Denver / Sheridan                               -          429          1,105           314            587
  10/1/97    Mountlake Terrace                               -        1,017          1,783           242            950
  10/1/97    Carol Stream/ St.Charles                        -          185          1,187           227            591
  10/1/97    Marietta / Cobb Park                            -          420          1,131           317            619
  10/1/97    Venice / Rose                                   -        5,468          5,478           852          3,117
  10/1/97    Ventura / Ventura Blvd                          -          911          2,227           415          1,146
  10/1/97    Studio City/ Ventura                            -        2,421          1,610           192            995
  10/1/97    Madison Heights                                 -          428          1,686         2,596          1,014
  10/1/97    Lax / Imperial                                  -        1,662          2,079           206          1,159
  10/1/97    Justice / Industrial                            -          233          1,181           176            589
  10/1/97    Burbank / San Fernando                          -        1,825          2,210           292          1,223
  10/1/97    Pinole / Appian Way                             -          728          1,827           230            935
  10/1/97    Denver / Tamarac Park                           -        2,545          1,692           452          1,127
  10/1/97    Gresham / Powell                                -          322          1,298           216            646
  10/1/97    Warren / Mound Road                             -          268          1,025           210            528
  10/1/97    Woodside/Brooklyn                               -        5,016          3,950           920          3,195
  10/1/97    Enfield / Elm Street                            -          399          1,900           318            945
  10/1/97    Roselle / Lake Street                           -          312          1,411           216            710
  10/1/97    Milwaukee / Appleton                            -          324          1,385           274            706
  10/1/97    Emeryville / Bay St                             -        1,602          1,830           252          1,091
  10/1/97    Monterey / Del Rey                              -          257          1,048           229            563
  10/1/97    San Leandro / Washington                        -          660          1,142           173            653
  10/1/97    Boca Raton / N.W. 20                            -        1,140          2,256           455          1,198
  10/1/97    Washington Dc/So Capital                        -        1,437          4,489           473          2,274
  10/1/97    Lynn / Lynnway                                  -          463          3,059           471          1,513
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  10/1/97    Marietta /Austell Rd                             440        2,295        2,735           891
  10/1/97    Denver / Leetsdale                             1,554        2,798        4,352         1,118
  10/1/97    Baltimore / York Road                          1,700        3,674        5,374         1,429
  10/1/97    Bolingbrook                                      814        2,893        3,707         1,138
  10/1/97    Kent / Central                                   533        2,153        2,686           850
  10/1/97    Geneva / Roosevelt                               392        2,148        2,540           862
  10/1/97    Denver / Sheridan                                474        1,961        2,435           755
  10/1/97    Mountlake Terrace                              1,123        2,869        3,992         1,086
  10/1/97    Carol Stream/ St.Charles                         205        1,985        2,190           768
  10/1/97    Marietta / Cobb Park                             464        2,023        2,487           804
  10/1/97    Venice / Rose                                  6,041        8,874       14,915         3,141
  10/1/97    Ventura / Ventura Blvd                         1,006        3,693        4,699         1,385
  10/1/97    Studio City/ Ventura                           2,675        2,543        5,218           972
  10/1/97    Madison Heights                                  473        5,251        5,724           995
  10/1/97    Lax / Imperial                                 1,836        3,270        5,106         1,291
  10/1/97    Justice / Industrial                             258        1,921        2,179           752
  10/1/97    Burbank / San Fernando                         2,016        3,534        5,550         1,338
  10/1/97    Pinole / Appian Way                              804        2,916        3,720         1,126
  10/1/97    Denver / Tamarac Park                          2,812        3,004        5,816         1,266
  10/1/97    Gresham / Powell                                 356        2,126        2,482           790
  10/1/97    Warren / Mound Road                              296        1,735        2,031           649
  10/1/97    Woodside/Brooklyn                              5,541        7,540       13,081         2,369
  10/1/97    Enfield / Elm Street                             441        3,121        3,562         1,125
  10/1/97    Roselle / Lake Street                            344        2,305        2,649           884
  10/1/97    Milwaukee / Appleton                             357        2,332        2,689           874
  10/1/97    Emeryville / Bay St                            1,770        3,005        4,775         1,130
  10/1/97    Monterey / Del Rey                               284        1,813        2,097           634
  10/1/97    San Leandro / Washington                         729        1,899        2,628           708
  10/1/97    Boca Raton / N.W. 20                           1,259        3,790        5,049         1,325
  10/1/97    Washington Dc/So Capital                       1,588        7,085        8,673         2,326
  10/1/97    Lynn / Lynnway                                   511        4,995        5,506         1,810
</TABLE>

                                      F-73
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>            <C>
  10/1/97    Pompano Beach                                   -        1,077          1,527           737            869
  10/1/97    Lake Oswego/ N.State                            -          465          1,956           283            972
  10/1/97    Daly City / Mission                             -          389          2,921           251          1,389
  10/1/97    Odenton / Route 175                             -          456          2,104           416          1,053
  10/1/97    Novato / Landing                                -        2,416          3,496           282          1,706
  10/1/97    St. Louis / Lindberg                            -          584          1,508           347            711
  10/1/97    Oakland/International                           -          358          1,568           258            700
  10/1/97    Stockton / March Lane                           -          663          1,398           217            657
  10/1/97    Des Plaines / Golf Rd                           -        1,363          3,093           261          1,118
  10/1/97    Morton Grove / Wauke                            -        2,658          3,232         6,285            822
  10/1/97    Los Angeles / Jefferson                         -        1,090          1,580           261            820
  10/1/97    Los Angeles / Martin                            -          869          1,152           119            717
  10/1/97    San Leandro / E. 14th                           -          627          1,289           114            608
  10/1/97    Tucson / Tanque Verde                           -          345          1,709           322            709
  10/1/97    Randolph / Warren St                            -        2,330          1,914           531          1,332
  10/1/97    Forrestville / Penn.                            -        1,056          2,347           355          1,114
  10/1/97    Bridgeport                                      -        4,877          2,739           715          1,651
  10/1/97    North Hollywood/Vine                            -          906          2,379           234          1,211
  10/1/97    Santa Cruz / Portola                            -          535          1,526           186            761
  10/1/97    Hyde Park / River St                            -          626          1,748           419            665
  10/1/97    Dublin / San Ramon Rd                           -          942          1,999           189            803
  10/1/97    Vallejo / Humboldt                              -          473          1,651           196            757
  10/1/97    Fremont/Warm Springs                            -          848          2,885           277          1,105
  10/1/97    Seattle / Stone Way                             -          829          2,180           357          1,080
  10/1/97    W. Olympia                                      -          149          1,096           295            452
  10/1/97    Mercer/Parkside Ave                             -          359          1,763           286            962
  10/1/97    Bridge Water / Main                             -          445          2,054           319            811
  10/1/97    Norwalk / Hoyt Street                           -        2,369          3,049           593          1,391
  11/2/97    Lansing                                         -          758          1,768           (79)             -
  11/7/97    Phoenix                                         -        1,197          2,793           254              -
  11/13/97   Tinley Park                                     -        1,422          3,319           106              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>             <C>
  10/1/97    Pompano Beach                                  1,190        3,020        4,210           945
  10/1/97    Lake Oswego/ N.State                             514        3,162        3,676         1,101
  10/1/97    Daly City / Mission                              430        4,520        4,950         1,614
  10/1/97    Odenton / Route 175                              504        3,525        4,029         1,141
  10/1/97    Novato / Landing                               2,904        4,996        7,900         1,937
  10/1/97    St. Louis / Lindberg                             728        2,422        3,150           960
  10/1/97    Oakland/International                            475        2,409        2,884           909
  10/1/97    Stockton / March Lane                            811        2,124        2,935           793
  10/1/97    Des Plaines / Golf Rd                          1,630        4,205        5,835         1,646
  10/1/97    Morton Grove / Wauke                           3,110        9,887       12,997         2,493
  10/1/97    Los Angeles / Jefferson                        1,322        2,429        3,751           883
  10/1/97    Los Angeles / Martin                           1,066        1,791        2,857           638
  10/1/97    San Leandro / E. 14th                            774        1,864        2,638           694
  10/1/97    Tucson / Tanque Verde                            469        2,616        3,085           959
  10/1/97    Randolph / Warren St                           2,718        3,389        6,107         1,099
  10/1/97    Forrestville / Penn.                           1,312        3,560        4,872         1,354
  10/1/97    Bridgeport                                     5,612        4,370        9,982         1,664
  10/1/97    North Hollywood/Vine                           1,166        3,564        4,730         1,251
  10/1/97    Santa Cruz / Portola                             689        2,319        3,008           835
  10/1/97    Hyde Park / River St                             759        2,699        3,458           964
  10/1/97    Dublin / San Ramon Rd                          1,119        2,814        3,933         1,059
  10/1/97    Vallejo / Humboldt                               620        2,457        3,077           891
  10/1/97    Fremont/Warm Springs                           1,072        4,043        5,115         1,474
  10/1/97    Seattle / Stone Way                            1,078        3,368        4,446         1,150
  10/1/97    W. Olympia                                       209        1,783        1,992           618
  10/1/97    Mercer/Parkside Ave                              503        2,867        3,370           971
  10/1/97    Bridge Water / Main                              576        3,053        3,629         1,061
  10/1/97    Norwalk / Hoyt Street                          2,793        4,609        7,402         1,740
  11/2/97    Lansing                                          730        1,717        2,447           709
  11/7/97    Phoenix                                        1,197        3,047        4,244         1,188
  11/13/97   Tinley Park                                    1,422        3,425        4,847         1,272
</TABLE>

                                      F-74
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/17/98    Houston/De Soto Dr.                             -          659          1,537           163              -
  3/17/98    Houston / East Freeway                          -          593          1,384           278              -
  3/17/98    Austin/Ben White                                -          692          1,614            90              -
  3/17/98    Arlington/E.Pioneer                             -          922          2,152           271              -
  3/17/98    Las Vegas/Tropicana                             -        1,285          2,998           170              -
  3/17/98    Branford / Summit Place                         -          728          1,698           209              -
  3/17/98    Las Vegas / Charleston                          -          791          1,845           127              -
  3/17/98    So. San Francisco                               -        1,550          3,617           233              -
  3/17/98    Pasadena / Arroyo Prkwy                         -        3,005          7,012           253              -
  3/17/98    Tempe / E. Broadway                             -          633          1,476           337              -
  3/17/98    Phoenix / N. 43rd Ave                           -          443          1,033           228              -
  3/17/98    Phoenix/No. 43rd                                -          380            886           485              -
  3/17/98    Phoenix / Black Canyon                          -          380            886           157              -
  3/17/98    Phoenix/Black Canyon                            -          136            317           197              -
  3/17/98    Nesconset / Southern                            -        1,423          3,321           240              -
   4/1/98    St. Louis / Hwy. 141                            -          659          1,628         4,530              -
   4/1/98    Island Park / Austin                            -        2,313          3,015          (633)             -
   4/1/98    Akron / Brittain Rd.                            -          275          2,248          (186)             -
   4/1/98    Patchogue/W.Sunrise                             -          936          2,184           207              -
   4/1/98    Havertown/West Chester                          -        1,254          2,926           137              -
   4/1/98    Schiller Park/River                             -          568          1,390           115              -
   4/1/98    Chicago / Cuyler                                -        1,400          2,695           221              -
   4/1/98    Chicago Heights/West                            -          468          1,804           172              -
   4/1/98    Arlington Hts/University                        -          670          3,004           143              -
   4/1/98    Cicero / Ogden                                  -        1,678          2,266           340              -
   4/1/98    Chicago/W. Howard St.                           -          974          2,875           344              -
   4/1/98    Chicago/N. Western Ave                          -        1,453          3,205           279              -
   4/1/98    Chicago/Northwest Hwy                           -          925          2,412            89              -
   4/1/98    Chicago/N. Wells St.                            -        1,446          2,828           152              -
   4/1/98    Chicago / Pulaski Rd.                           -        1,276          2,858           180              -
   4/1/98    Artesia / Artesia                               -          625          1,419            97              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/17/98    Houston/De Soto Dr.                              659        1,700        2,359           665
  3/17/98    Houston / East Freeway                           593        1,662        2,255           657
  3/17/98    Austin/Ben White                                 682        1,714        2,396           645
  3/17/98    Arlington/E.Pioneer                              922        2,423        3,345           961
  3/17/98    Las Vegas/Tropicana                            1,285        3,168        4,453         1,206
  3/17/98    Branford / Summit Place                          727        1,908        2,635           737
  3/17/98    Las Vegas / Charleston                           791        1,972        2,763           754
  3/17/98    So. San Francisco                              1,550        3,850        5,400         1,378
  3/17/98    Pasadena / Arroyo Prkwy                        3,004        7,266       10,270         2,671
  3/17/98    Tempe / E. Broadway                              632        1,814        2,446           694
  3/17/98    Phoenix / N. 43rd Ave                            443        1,261        1,704           517
  3/17/98    Phoenix/No. 43rd                                 379        1,372        1,751           578
  3/17/98    Phoenix / Black Canyon                           379        1,044        1,423           449
  3/17/98    Phoenix/Black Canyon                             136          514          650           294
  3/17/98    Nesconset / Southern                           1,423        3,561        4,984         1,294
   4/1/98    St. Louis / Hwy. 141                           1,344        5,473        6,817         1,598
   4/1/98    Island Park / Austin                           1,373        3,322        4,695         1,219
   4/1/98    Akron / Brittain Rd.                             669        1,668        2,337           564
   4/1/98    Patchogue/W.Sunrise                              936        2,391        3,327           922
   4/1/98    Havertown/West Chester                         1,249        3,068        4,317         1,164
   4/1/98    Schiller Park/River                              568        1,505        2,073           595
   4/1/98    Chicago / Cuyler                               1,400        2,916        4,316         1,150
   4/1/98    Chicago Heights/West                             468        1,976        2,444           793
   4/1/98    Arlington Hts/University                         670        3,147        3,817         1,203
   4/1/98    Cicero / Ogden                                 1,677        2,607        4,284         1,141
   4/1/98    Chicago/W. Howard St.                            974        3,219        4,193         1,245
   4/1/98    Chicago/N. Western Ave                         1,453        3,484        4,937         1,339
   4/1/98    Chicago/Northwest Hwy                            925        2,501        3,426           962
   4/1/98    Chicago/N. Wells St.                           1,446        2,980        4,426         1,141
   4/1/98    Chicago / Pulaski Rd.                          1,276        3,038        4,314         1,130
   4/1/98    Artesia / Artesia                                625        1,516        2,141           690
</TABLE>

                                      F-75
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
   4/1/98    Arcadia / Lower Azusa                           -          821          1,369           274              -
   4/1/98    Manassas / Centreville                          -          405          2,137           319              -
   4/1/98    La Downtwn/10 Fwy                               -        1,608          3,358           261              -
   4/1/98    Bellevue / Northup                              -        1,232          3,306           567              -
   4/1/98    Hollywood/Cole & Wilshire                       -        1,590          1,785           127              -
   4/1/98    Atlanta/John Wesley                             -        1,233          1,665           230              -
   4/1/98    Montebello/S. Maple                             -        1,274          2,299           134              -
   4/1/98    Lake City/Forest Park                           -          248          1,445           127              -
   4/1/98    Baltimore / W. Patap                            -          403          2,650           183              -
   4/1/98    Fraser/Groesbeck Hwy                            -          368          1,796            95              -
   4/1/98    Vallejo / Mini Drive                            -          560          1,803            93              -
   4/1/98    San Diego/54th & Euclid                         -          952          2,550           305              -
   4/1/98    Miami / 5th Street                              -        2,327          3,234           260              -
   4/1/98    Silver Spring/Hill                              -          922          2,080           200              -
   4/1/98    Chicago/E. 95th St.                             -          397          2,357           177              -
   4/1/98    Chicago / S. Harlem                             -          791          1,424           115              -
   4/1/98    St. Charles /Highway                            -          623          1,501           204              -
   4/1/98    Chicago/Burr Ridge Rd.                          -          421          2,165           245              -
   4/1/98    Yonkers / Route 9a                              -        1,722          3,823           309              -
   4/1/98    Silverlake/Glendale                             -        2,314          5,481           296              -
   4/1/98    Chicago/Harlem Ave                              -        1,430          3,038           163              -
   4/1/98    Bethesda / Butler Rd                            -        1,146          2,509            91              -
   4/1/98    Dundalk / Wise Ave                              -          447          2,005           181              -
   4/1/98    St. Louis / Hwy. 141                            -          659          1,628            71              -
   4/1/98    Island Park / Austin                            -        2,313          3,015           205              -
   4/1/98    Dallas / Kingsly                                -        1,095          1,712           133              -
   5/1/98    Berkeley / 2nd St.                              -        1,914          4,466            23              -
   5/8/98    Cleveland / W. 117th                            -          930          2,277           309              -
   5/8/98    La /Venice Blvd                                 -        1,470          3,599           135              -
   5/8/98    Aurora / Farnsworth                             -          960          2,350           106              -
   5/8/98    Santa Rosa / Hopper                             -        1,020          2,497           131              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                           Gross Carrying Amount
                                                           At December 31, 2006
    Date                                            -------------------------------------- Accumulated
  Acquired                Description                 Land       Buildings      Total     Depreciation
---------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
---------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>
   4/1/98    Arcadia / Lower Azusa                           821        1,643        2,464           745
   4/1/98    Manassas / Centreville                          405        2,456        2,861         1,142
   4/1/98    La Downtwn/10 Fwy                             1,607        3,620        5,227         1,631
   4/1/98    Bellevue / Northup                            1,231        3,874        5,105         1,696
   4/1/98    Hollywood/Cole & Wilshire                     1,590        1,912        3,502           855
   4/1/98    Atlanta/John Wesley                           1,233        1,895        3,128           930
   4/1/98    Montebello/S. Maple                           1,273        2,434        3,707         1,090
   4/1/98    Lake City/Forest Park                           248        1,572        1,820           715
   4/1/98    Baltimore / W. Patap                            402        2,834        3,236         1,262
   4/1/98    Fraser/Groesbeck Hwy                            368        1,891        2,259           837
   4/1/98    Vallejo / Mini Drive                            560        1,896        2,456           848
   4/1/98    San Diego/54th & Euclid                         952        2,855        3,807         1,310
   4/1/98    Miami / 5th Street                            2,327        3,494        5,821         1,601
   4/1/98    Silver Spring/Hill                              921        2,281        3,202         1,097
   4/1/98    Chicago/E. 95th St.                             397        2,534        2,931         1,230
   4/1/98    Chicago / S. Harlem                             791        1,539        2,330           746
   4/1/98    St. Charles /Highway                            623        1,705        2,328           825
   4/1/98    Chicago/Burr Ridge Rd.                          421        2,410        2,831         1,098
   4/1/98    Yonkers / Route 9a                            1,722        4,132        5,854         1,940
   4/1/98    Silverlake/Glendale                           2,313        5,778        8,091         2,673
   4/1/98    Chicago/Harlem Ave                            1,430        3,201        4,631         1,502
   4/1/98    Bethesda / Butler Rd                          1,146        2,600        3,746         1,186
   4/1/98    Dundalk / Wise Ave                              447        2,186        2,633           985
   4/1/98    St. Louis / Hwy. 141                            659        1,699        2,358           863
   4/1/98    Island Park / Austin                          2,313        3,220        5,533         1,607
   4/1/98    Dallas / Kingsly                              1,095        1,845        2,940           835
   5/1/98    Berkeley / 2nd St.                            1,837        4,566        6,403         1,685
   5/8/98    Cleveland / W. 117th                            930        2,586        3,516           979
   5/8/98    La /Venice Blvd                               1,470        3,734        5,204         1,339
   5/8/98    Aurora / Farnsworth                             960        2,456        3,416           888
   5/8/98    Santa Rosa / Hopper                           1,020        2,628        3,648           955
</TABLE>

                                      F-76
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
   5/8/98    Golden Valley / Winn                            -          630          1,542           163              -
   5/8/98    St. Louis / Benham                              -          810          1,983           201              -
   5/8/98    Chicago / S. Chicago                            -          840          2,057           191              -
  10/1/98    El Segundo / Sepulveda                          -        6,586          5,795           225              -
  10/1/98    Atlanta / Memorial Dr.                          -          414          2,239           297              -
  10/1/98    Chicago / W. 79th St                            -          861          2,789           328              -
  10/1/98    Chicago / N. Broadway                           -        1,918          3,824           298              -
  10/1/98    Dallas / Greenville                             -        1,933          2,892           139              -
  10/1/98    Tacoma / Orchard                                -          358          1,987           146              -
  10/1/98    St. Louis / Gravois                             -          312          2,327           321              -
  10/1/98    White Bear Lake                                 -          578          2,079           207              -
  10/1/98    Santa Cruz / Soquel                             -          832          2,385           122              -
  10/1/98    Coon Rapids / Hwy 10                            -          330          1,646           124              -
  10/1/98    Oxnard / Hueneme Rd                             -          923          3,925           231              -
  10/1/98    Vancouver/ Millplain                            -          343          2,000            92              -
  10/1/98    Tigard / Mc Ewan                                -          597          1,652            83              -
  10/1/98    Griffith / Cline                                -          299          2,118            89              -
  10/1/98    Miami / Sunset Drive                            -        1,656          2,321         1,878              -
  10/1/98    Farmington / 9 Mile                             -          580          2,526           239              -
  10/1/98    Los Gatos / University                          -        2,234          3,890           206              -
  10/1/98    N. Hollywood                                    -        1,484          3,143            93              -
  10/1/98    Petaluma / Transport                            -          460          1,840         4,932              -
  10/1/98    Chicago / 111th                                 -          341          2,898         2,294              -
  10/1/98    Upper Darby / Market                            -          808          5,011           244              -
  10/1/98    San Jose / Santa                                -          966          3,870           103              -
  10/1/98    San Diego / Morena                              -        3,173          5,469           196              -
  10/1/98    Brooklyn /Rockaway Ave                          -        6,272          9,691           556              -
  10/1/98    Revere / Charger St                             -        1,997          3,727           477              -
  10/1/98    Las Vegas / E. Charles                          -          602          2,545           275              -
  10/1/98    Laurel / Baltimore Ave                          -        1,899          4,498           204              -
  10/1/98    East La/Figueroa & 4th                          -        1,213          2,689            70              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
   5/8/98    Golden Valley / Winn                             630        1,705        2,335           640
   5/8/98    St. Louis / Benham                               810        2,184        2,994           820
   5/8/98    Chicago / S. Chicago                             840        2,248        3,088           781
  10/1/98    El Segundo / Sepulveda                         6,584        6,022       12,606         2,151
  10/1/98    Atlanta / Memorial Dr.                           414        2,536        2,950           954
  10/1/98    Chicago / W. 79th St                             861        3,117        3,978         1,211
  10/1/98    Chicago / N. Broadway                          1,917        4,123        6,040         1,493
  10/1/98    Dallas / Greenville                            1,933        3,031        4,964         1,088
  10/1/98    Tacoma / Orchard                                 358        2,133        2,491           780
  10/1/98    St. Louis / Gravois                              312        2,648        2,960           936
  10/1/98    White Bear Lake                                  578        2,286        2,864           843
  10/1/98    Santa Cruz / Soquel                              832        2,507        3,339           915
  10/1/98    Coon Rapids / Hwy 10                             330        1,770        2,100           652
  10/1/98    Oxnard / Hueneme Rd                              923        4,156        5,079         1,488
  10/1/98    Vancouver/ Millplain                             342        2,093        2,435           762
  10/1/98    Tigard / Mc Ewan                                 597        1,735        2,332           640
  10/1/98    Griffith / Cline                                 299        2,207        2,506           782
  10/1/98    Miami / Sunset Drive                           2,266        3,589        5,855         1,117
  10/1/98    Farmington / 9 Mile                              580        2,765        3,345           971
  10/1/98    Los Gatos / University                         2,234        4,096        6,330         1,447
  10/1/98    N. Hollywood                                   1,484        3,236        4,720         1,139
  10/1/98    Petaluma / Transport                             857        6,375        7,232         1,598
  10/1/98    Chicago / 111th                                  431        5,102        5,533         1,437
  10/1/98    Upper Darby / Market                             807        5,256        6,063         1,871
  10/1/98    San Jose / Santa                                 966        3,973        4,939         1,415
  10/1/98    San Diego / Morena                             3,173        5,665        8,838         1,994
  10/1/98    Brooklyn /Rockaway Ave                         6,271       10,248       16,519         3,722
  10/1/98    Revere / Charger St                            1,996        4,205        6,201         1,522
  10/1/98    Las Vegas / E. Charles                           602        2,820        3,422         1,065
  10/1/98    Laurel / Baltimore Ave                         1,899        4,702        6,601         1,699
  10/1/98    East La/Figueroa & 4th                         1,213        2,759        3,972           975
</TABLE>

                                      F-77
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>           <C>                <C>
  10/1/98    Oldsmar / Tampa Road                            -          760          2,154         2,770              -
  10/1/98    Ft. Lauderdale /S.W.                            -        1,046          2,928           203              -
  10/1/98    Miami / Nw 73rd St                              -        1,050          3,064           156              -
  12/9/98    Miami / Nw 115th Ave                            -        1,095          2,349         4,920              -
   1/1/99    New Orleans/St.Charles                          -        1,463          2,634          (428)             -
   1/6/99    Brandon / E. Brandon Blvd                       -        1,560          3,695            71              -
  3/12/99    St. Louis / N. Lindbergh Blvd.                  -        1,688          3,939           357              -
  3/12/99    St. Louis /Vandeventer Midtown                  -          699          1,631           267              -
  3/12/99    St. Ann / Maryland Heights                      -        1,035          2,414           304              -
  3/12/99    Florissant / N. Hwy 67                          -          971          2,265           276              -
  3/12/99    Ferguson Area-W.Florissant                      -        1,194          2,732           492              -
  3/12/99    Florissant / New Halls Ferry Rd                 -        1,144          2,670           511              -
  3/12/99    St. Louis / Airport                             -          785          1,833           255              -
  3/12/99    St. Louis/ S.Third St                           -        1,096          2,557           120              -
  3/12/99    Kansas City / E. 47th St.                       -          610          1,424           179              -
  3/12/99    Kansas City /E. 67th Terrace                    -        1,136          2,643           238              -
  3/12/99    Kansas City / James A. Reed Rd                  -          749          1,748           128              -
  3/12/99    Independence / 291                              -          871          2,032           157              -
  3/12/99    Raytown / Woodson Rd                            -          915          2,134           130              -
  3/12/99    Kansas City / 34th Main Street                  -          114          2,599           679              -
  3/12/99    Columbia / River Dr                             -          671          1,566           285              -
  3/12/99    Columbia / Buckner Rd                           -          714          1,665           354              -
  3/12/99    Columbia / Decker Park Rd                       -          605          1,412           119              -
  3/12/99    Columbia / Rosewood Dr                          -          777          1,814           102              -
  3/12/99    W. Columbia / Orchard Dr.                       -          272            634           225              -
  3/12/99    W. Columbia / Airport Blvd                      -          493          1,151           228              -
  3/12/99    Greenville / Whitehorse Rd                      -          882          2,058           141              -
  3/12/99    Greenville / Woods Lake Rd                      -          364            849           136              -
  3/12/99    Mauldin / N. Main Street                        -          571          1,333           142              -
  3/12/99    Simpsonville / Grand View Dr                    -          582          1,358           129              -
  3/12/99    Taylors / Wade Hampton Blvd                     -          650          1,517           134              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                             Gross Carrying Amount
                                                             At December 31, 2006
    Date                                             --------------------------------------- Accumulated
  Acquired                Description                   Land       Buildings      Total     Depreciation
-----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
-----------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>          <C>          <C>           <C>
  10/1/98    Oldsmar / Tampa Road                            1,049        4,635        5,684         1,385
  10/1/98    Ft. Lauderdale /S.W.                            1,046        3,131        4,177         1,108
  10/1/98    Miami / Nw 73rd St                              1,049        3,221        4,270         1,137
  12/9/98    Miami / Nw 115th Ave                            1,185        7,179        8,364         1,068
   1/1/99    New Orleans/St.Charles                          1,039        2,630        3,669           937
   1/6/99    Brandon / E. Brandon Blvd                       1,560        3,766        5,326         1,126
  3/12/99    St. Louis / N. Lindbergh Blvd.                  1,688        4,296        5,984         1,506
  3/12/99    St. Louis /Vandeventer Midtown                    699        1,898        2,597           634
  3/12/99    St. Ann / Maryland Heights                      1,034        2,719        3,753           941
  3/12/99    Florissant / N. Hwy 67                            971        2,541        3,512           904
  3/12/99    Ferguson Area-W.Florissant                      1,178        3,240        4,418         1,188
  3/12/99    Florissant / New Halls Ferry Rd                 1,144        3,181        4,325         1,131
  3/12/99    St. Louis / Airport                               785        2,088        2,873           734
  3/12/99    St. Louis/ S.Third St                           1,096        2,677        3,773           887
  3/12/99    Kansas City / E. 47th St.                         610        1,603        2,213           577
  3/12/99    Kansas City /E. 67th Terrace                    1,134        2,883        4,017           931
  3/12/99    Kansas City / James A. Reed Rd                    749        1,876        2,625           628
  3/12/99    Independence / 291                                871        2,189        3,060           748
  3/12/99    Raytown / Woodson Rd                              914        2,265        3,179           760
  3/12/99    Kansas City / 34th Main Street                    114        3,278        3,392         1,255
  3/12/99    Columbia / River Dr                               671        1,851        2,522           664
  3/12/99    Columbia / Buckner Rd                             713        2,020        2,733           806
  3/12/99    Columbia / Decker Park Rd                         605        1,531        2,136           551
  3/12/99    Columbia / Rosewood Dr                            777        1,916        2,693           661
  3/12/99    W. Columbia / Orchard Dr.                         272          859        1,131           329
  3/12/99    W. Columbia / Airport Blvd                        493        1,379        1,872           465
  3/12/99    Greenville / Whitehorse Rd                        882        2,199        3,081           745
  3/12/99    Greenville / Woods Lake Rd                        364          985        1,349           367
  3/12/99    Mauldin / N. Main Street                          571        1,475        2,046           542
  3/12/99    Simpsonville / Grand View Dr                      574        1,495        2,069           538
  3/12/99    Taylors / Wade Hampton Blvd                       650        1,651        2,301           582
</TABLE>

                                      F-78
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/12/99    Charleston/Ashley Phosphate                     -          839          1,950           229              -
  3/12/99    N. Charleston / Dorchester Rd                   -          380            886           148              -
  3/12/99    N. Charleston / Dorchester                      -          487          1,137           174              -
  3/12/99    Charleston / Sam Rittenberg Blvd                -          555          1,296           138              -
  3/12/99    Hilton Head / Office Park Rd                    -        1,279          2,985           188              -
  3/12/99    Columbia / Plumbers Rd                          -          368            858           179              -
  3/12/99    Greenville / Pineknoll Rd                       -          927          2,163           230              -
  3/12/99    Hilton Head / Yacht Cove Dr                     -        1,182          2,753           254              -
  3/12/99    Spartanburg / Chesnee Hwy                       -          533          1,244           506              -
  3/12/99    Charleston / Ashley River Rd                    -        1,114          2,581           211              -
  3/12/99    Columbia / Broad River                          -        1,463          3,413           336              -
  3/12/99    Charlotte / East Wt Harris Blvd                 -          736          1,718           149              -
  3/12/99    Charlotte / North Tryon St.                     -          708          1,653           604              -
  3/12/99    Charlotte / South Blvd                          -          641          1,496           196              -
  3/12/99    Kannapolis / Oregon St                          -          463          1,081           170              -
  3/12/99    Durham / E. Club Blvd                           -          947          2,209           176              -
  3/12/99    Durham / N. Duke St.                            -          769          1,794           172              -
  3/12/99    Raleigh / Maitland Dr                           -          679          1,585           233              -
  3/12/99    Greensboro / O'henry Blvd                       -          577          1,345           390              -
  3/12/99    Gastonia / S. York Rd                           -          467          1,089           220              -
  3/12/99    Durham / Kangaroo Dr.                           -        1,102          2,572           469              -
  3/12/99    Pensacola / Brent Lane                          -          402            938           (86)             -
  3/12/99    Pensacola / Creighton Road                      -          454          1,060           122              -
  3/12/99    Jacksonville / Park Avenue                      -          905          2,113           185              -
  3/12/99    Jacksonville / Phillips Hwy                     -          665          1,545           258              -
  3/12/99    Clearwater / Highland Ave                       -          724          1,690           263              -
  3/12/99    Tarpon Springs / Us Highway 19                  -          892          2,081           205              -
  3/12/99    Orlando/S. Orange Blossom Trail                 -        1,229          2,867           240              -
  3/12/99    Casselberry Ii                                  -        1,160          2,708           174              -
  3/12/99    Miami/NW 14th Street                            -        1,739          4,058           221              -
  3/12/99    Tarpon Springs/Highway 19                       -        1,179          2,751           408              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/12/99    Charleston/Ashley Phosphate                      823        2,195        3,018           791
  3/12/99    N. Charleston / Dorchester Rd                    379        1,035        1,414           377
  3/12/99    N. Charleston / Dorchester                       487        1,311        1,798           489
  3/12/99    Charleston / Sam Rittenberg Blvd                 555        1,434        1,989           503
  3/12/99    Hilton Head / Office Park Rd                   1,279        3,173        4,452         1,051
  3/12/99    Columbia / Plumbers Rd                           368        1,037        1,405           381
  3/12/99    Greenville / Pineknoll Rd                        927        2,393        3,320           848
  3/12/99    Hilton Head / Yacht Cove Dr                    1,180        3,009        4,189         1,031
  3/12/99    Spartanburg / Chesnee Hwy                        533        1,750        2,283           655
  3/12/99    Charleston / Ashley River Rd                   1,108        2,798        3,906           953
  3/12/99    Columbia / Broad River                         1,463        3,749        5,212         1,302
  3/12/99    Charlotte / East Wt Harris Blvd                  736        1,867        2,603           640
  3/12/99    Charlotte / North Tryon St.                      708        2,257        2,965           770
  3/12/99    Charlotte / South Blvd                           641        1,692        2,333           592
  3/12/99    Kannapolis / Oregon St                           463        1,251        1,714           432
  3/12/99    Durham / E. Club Blvd                            946        2,386        3,332           810
  3/12/99    Durham / N. Duke St.                             769        1,966        2,735           674
  3/12/99    Raleigh / Maitland Dr                            679        1,818        2,497           622
  3/12/99    Greensboro / O'henry Blvd                        576        1,736        2,312           621
  3/12/99    Gastonia / S. York Rd                            466        1,310        1,776           463
  3/12/99    Durham / Kangaroo Dr.                          1,102        3,041        4,143         1,082
  3/12/99    Pensacola / Brent Lane                           228        1,026        1,254           357
  3/12/99    Pensacola / Creighton Road                       454        1,182        1,636           462
  3/12/99    Jacksonville / Park Avenue                       905        2,298        3,203           790
  3/12/99    Jacksonville / Phillips Hwy                      663        1,805        2,468           662
  3/12/99    Clearwater / Highland Ave                        724        1,953        2,677           686
  3/12/99    Tarpon Springs / Us Highway 19                   892        2,286        3,178           812
  3/12/99    Orlando/S. Orange Blossom Trail                1,228        3,108        4,336         1,056
  3/12/99    Casselberry Ii                                 1,160        2,882        4,042           981
  3/12/99    Miami/NW 14th Street                           1,739        4,279        6,018         1,409
  3/12/99    Tarpon Springs/Highway 19                      1,179        3,159        4,338         1,065
</TABLE>

                                      F-79
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/12/99    Ft. Myers / Tamiami Trail South                 -          834          1,945          (244)             -
  3/12/99    Jacksonville / Ft. Caroline Rd.                 -        1,037          2,420           238              -
  3/12/99    Orlando / South Semoran                         -          565          1,319            46              -
  3/12/99    Jacksonville / Southside Blvd.                  -        1,278          2,982           323              -
  3/12/99    Miami / Nw 7th Ave                              -          783          1,827           162              -
  3/12/99    Vero Beach / Us Hwy 1                           -          678          1,583           149              -
  3/12/99    Ponte Vedra / Palm Valley Rd.                   -          745          2,749           713              -
  3/12/99    Miami Lakes / Nw 153rd St.                      -          425            992            72              -
  3/12/99    Deerfield Beach / Sw 10th St.                   -        1,844          4,302            90              -
  3/12/99    Apopka / S. Orange Blossom                      -          307            717           225              -
  3/12/99    Davie / University                              -          313          4,379           311              -
  3/12/99    Arlington / Division                            -          998          2,328            90              -
  3/12/99    Duncanville/S.Cedar Ridge                       -        1,477          3,447           272              -
  3/12/99    Carrollton / Trinity Mills West                 -          530          1,237            99              -
  3/12/99    Houston / Wallisville Rd.                       -          744          1,736           104              -
  3/12/99    Houston / Fondren South                         -          647          1,510           127              -
  3/12/99    Houston / Addicks Satsuma                       -          409            954           144              -
  3/12/99    Addison / Inwood Road                           -        1,204          2,808            62              -
  3/12/99    Garland / Jackson Drive                         -          755          1,761           103              -
  3/12/99    Garland / Buckingham Road                       -          492          1,149           117              -
  3/12/99    Houston / South Main                            -        1,461          3,409           214              -
  3/12/99    Plano / Parker Road-Avenue K                    -        1,517          3,539           164              -
  3/12/99    Houston / Bingle Road                           -          576          1,345           135              -
  3/12/99    Houston / Mangum Road                           -          737          1,719           263              -
  3/12/99    Houston / Hayes Road                            -          916          2,138           120              -
  3/12/99    Katy / Dominion Drive                           -          995          2,321            62              -
  3/12/99    Houston / Fm 1960 West                          -          513          1,198           157              -
  3/12/99    Webster / Fm 528 Road                           -          756          1,764            85              -
  3/12/99    Houston / Loch Katrine Lane                     -          580          1,352           146              -
  3/12/99    Houston / Milwee St.                            -          779          1,815           177              -
  3/12/99    Lewisville / Highway 121                        -          688          1,605           181              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/12/99    Ft. Myers / Tamiami Trail South                  834        1,701        2,535           542
  3/12/99    Jacksonville / Ft. Caroline Rd.                1,037        2,658        3,695           926
  3/12/99    Orlando / South Semoran                          565        1,365        1,930           457
  3/12/99    Jacksonville / Southside Blvd.                 1,278        3,305        4,583         1,151
  3/12/99    Miami / Nw 7th Ave                               783        1,989        2,772           715
  3/12/99    Vero Beach / Us Hwy 1                            678        1,732        2,410           575
  3/12/99    Ponte Vedra / Palm Valley Rd.                    745        3,462        4,207         1,163
  3/12/99    Miami Lakes / Nw 153rd St.                       425        1,064        1,489           369
  3/12/99    Deerfield Beach / Sw 10th St.                  1,843        4,393        6,236         1,427
  3/12/99    Apopka / S. Orange Blossom                       307          942        1,249           336
  3/12/99    Davie / University                               313        4,690        5,003         1,477
  3/12/99    Arlington / Division                             997        2,419        3,416           793
  3/12/99    Duncanville/S.Cedar Ridge                      1,477        3,719        5,196         1,274
  3/12/99    Carrollton / Trinity Mills West                  530        1,336        1,866           468
  3/12/99    Houston / Wallisville Rd.                        744        1,840        2,584           612
  3/12/99    Houston / Fondren South                          647        1,637        2,284           560
  3/12/99    Houston / Addicks Satsuma                        409        1,098        1,507           396
  3/12/99    Addison / Inwood Road                          1,203        2,871        4,074           934
  3/12/99    Garland / Jackson Drive                          755        1,864        2,619           614
  3/12/99    Garland / Buckingham Road                        492        1,266        1,758           464
  3/12/99    Houston / South Main                           1,461        3,623        5,084         1,185
  3/12/99    Plano / Parker Road-Avenue K                   1,516        3,704        5,220         1,244
  3/12/99    Houston / Bingle Road                            576        1,480        2,056           531
  3/12/99    Houston / Mangum Road                            737        1,982        2,719           706
  3/12/99    Houston / Hayes Road                             916        2,258        3,174           765
  3/12/99    Katy / Dominion Drive                            994        2,384        3,378           774
  3/12/99    Houston / Fm 1960 West                           513        1,355        1,868           482
  3/12/99    Webster / Fm 528 Road                            756        1,849        2,605           625
  3/12/99    Houston / Loch Katrine Lane                      579        1,499        2,078           506
  3/12/99    Houston / Milwee St.                             778        1,993        2,771           710
  3/12/99    Lewisville / Highway 121                         688        1,786        2,474           590
</TABLE>

                                      F-80
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/12/99    Richardson / Central Expressway                 -          465          1,085           100              -
  3/12/99    Houston / Hwy 6 South                           -          569          1,328            83              -
  3/12/99    Houston / Westheimer West                       -        1,075          2,508            53              -
  3/12/99    Ft. Worth / Granbury Road                       -          763          1,781           103              -
  3/12/99    Houston / New Castle                            -        2,346          5,473         1,291              -
  3/12/99    Dallas / Inwood Road                            -        1,478          3,448           123              -
  3/12/99    Fort Worth / Loop 820 North                     -          729          1,702           195              -
  3/12/99    Arlington / Cooper St                           -          779          1,818           116              -
  3/12/99    Webster / Highway 3                             -          677          1,580            73              -
  3/12/99    Augusta / Peach Orchard Rd                      -          860          2,007           301              -
  3/12/99    Martinez / Old Petersburg Rd                    -          407            950           228              -
  3/12/99    Jonesboro / Tara Blvd                           -          785          1,827           285              -
  3/12/99    Atlanta / Briarcliff Rd                         -        2,171          5,066           270              -
  3/12/99    Decatur / N Decatur Rd                          -          933          2,177           295              -
  3/12/99    Douglasville / Westmoreland                     -          453          1,056           225              -
  3/12/99    Doraville / Mcelroy Rd                          -          827          1,931           253              -
  3/12/99    Roswell / Alpharetta                            -        1,772          4,135           200              -
  3/12/99    Douglasville / Duralee Lane                     -          533          1,244           164              -
  3/12/99    Douglasville / Highway 5                        -          804          1,875           521              -
  3/12/99    Forest Park / Jonesboro                         -          659          1,537           200              -
  3/12/99    Marietta / Whitlock                             -        1,016          2,370           203              -
  3/12/99    Marietta / Cobb                                 -          727          1,696           489              -
  3/12/99    Norcross / Jones Mill Rd                        -        1,142          2,670           194              -
  3/12/99    Norcross / Dawson Blvd                          -        1,232          2,874           402              -
  3/12/99    Forest Park / Old Dixie Hwy                     -          895          2,070           465              -
  3/12/99    Decatur / Covington                             -        1,764          4,116           232              -
  3/12/99    Alpharetta / Maxwell Rd                         -        1,075          2,509           139              -
  3/12/99    Alpharetta / N. Main St                         -        1,240          2,893           111              -
  3/12/99    Atlanta / Bolton Rd                             -          866          2,019           181              -
  3/12/99    Riverdale / Georgia Hwy 85                      -        1,075          2,508           177              -
  3/12/99    Kennesaw / Rutledge Road                        -          803          1,874           416              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/12/99    Richardson / Central Expressway                  465        1,185        1,650           427
  3/12/99    Houston / Hwy 6 South                            569        1,411        1,980           467
  3/12/99    Houston / Westheimer West                      1,074        2,562        3,636           829
  3/12/99    Ft. Worth / Granbury Road                        763        1,884        2,647           611
  3/12/99    Houston / New Castle                           2,345        6,765        9,110         2,062
  3/12/99    Dallas / Inwood Road                           1,477        3,572        5,049         1,159
  3/12/99    Fort Worth / Loop 820 North                      729        1,897        2,626           630
  3/12/99    Arlington / Cooper St                            779        1,934        2,713           631
  3/12/99    Webster / Highway 3                              677        1,653        2,330           560
  3/12/99    Augusta / Peach Orchard Rd                       860        2,308        3,168           907
  3/12/99    Martinez / Old Petersburg Rd                     407        1,178        1,585           425
  3/12/99    Jonesboro / Tara Blvd                            784        2,113        2,897           798
  3/12/99    Atlanta / Briarcliff Rd                        2,171        5,336        7,507         1,805
  3/12/99    Decatur / N Decatur Rd                           933        2,472        3,405           851
  3/12/99    Douglasville / Westmoreland                      452        1,282        1,734           516
  3/12/99    Doraville / Mcelroy Rd                           827        2,184        3,011           823
  3/12/99    Roswell / Alpharetta                           1,772        4,335        6,107         1,445
  3/12/99    Douglasville / Duralee Lane                      533        1,408        1,941           509
  3/12/99    Douglasville / Highway 5                         803        2,397        3,200         1,006
  3/12/99    Forest Park / Jonesboro                          658        1,738        2,396           650
  3/12/99    Marietta / Whitlock                            1,016        2,573        3,589           893
  3/12/99    Marietta / Cobb                                  727        2,185        2,912           797
  3/12/99    Norcross / Jones Mill Rd                       1,142        2,864        4,006           995
  3/12/99    Norcross / Dawson Blvd                         1,231        3,277        4,508         1,157
  3/12/99    Forest Park / Old Dixie Hwy                      889        2,541        3,430           915
  3/12/99    Decatur / Covington                            1,763        4,349        6,112         1,419
  3/12/99    Alpharetta / Maxwell Rd                        1,075        2,648        3,723           881
  3/12/99    Alpharetta / N. Main St                        1,240        3,004        4,244           988
  3/12/99    Atlanta / Bolton Rd                              865        2,201        3,066           776
  3/12/99    Riverdale / Georgia Hwy 85                     1,074        2,686        3,760           902
  3/12/99    Kennesaw / Rutledge Road                         803        2,290        3,093           806
</TABLE>

                                      F-81
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>            <C>            <C>             <C>
  3/12/99    Lawrenceville / Buford Dr.                      -          256            597            91              -
  3/12/99    Hanover Park / W. Lake Street                   -        1,320          3,081           183              -
  3/12/99    Chicago / W. Jarvis Ave                         -          313            731            82              -
  3/12/99    Chicago / N. Broadway St                        -          535          1,249           287              -
  3/12/99    Carol Stream / Phillips Court                   -          829          1,780           103              -
  3/12/99    Winfield / Roosevelt Road                       -        1,109          2,587           311              -
  3/12/99    Schaumburg / S. Roselle Road                    -          659          1,537           102              -
  3/12/99    Tinley Park / Brennan Hwy                       -          771          1,799           185              -
  3/12/99    Schaumburg / Palmer Drive                       -        1,333          3,111           396              -
  3/12/99    Mobile / Hillcrest Road                         -          554          1,293           171              -
  3/12/99    Mobile / Azalea Road                            -          517          1,206           231              -
  3/12/99    Mobile / Moffat Road                            -          537          1,254           197              -
  3/12/99    Mobile / Grelot Road                            -          804          1,877           200              -
  3/12/99    Mobile / Government Blvd                        -          407            950           165              -
  3/12/99    New Orleans / Tchoupitoulas                     -        1,092          2,548           352              -
  3/12/99    Louisville / Breckenridge Lane                  -          581          1,356           103              -
  3/12/99    Louisville                                      -          554          1,292           154              -
  3/12/99    Louisville / Poplar Level                       -          463          1,080           150              -
  3/12/99    Chesapeake / Western Branch                     -        1,274          2,973           219              -
  3/12/99    Centreville / Lee Hwy                           -        1,650          3,851           196              -
  3/12/99    Sterling / S. Sterling Blvd                     -        1,282          2,992           203              -
  3/12/99    Manassas / Sudley Road                          -          776          1,810           217              -
  3/12/99    Longmont / Wedgewood Ave                        -          717          1,673            95              -
  3/12/99    Fort Collins / So.College Ave                   -          745          1,739           153              -
  3/12/99    Colo Sprngs / Parkmoor Village                  -          620          1,446           255              -
  3/12/99    Colo Sprngs / Van Teylingen                     -        1,216          2,837           189              -
  3/12/99    Denver / So. Clinton St.                        -          462          1,609            93              -
  3/12/99    Denver / Washington St.                         -          795          1,846           438              -
  3/12/99    Colo Sprngs / Centennial Blvd                   -        1,352          3,155            96              -
  3/12/99    Colo Sprngs / Astrozon Court                    -          810          1,889           276              -
  3/12/99    Arvada / 64th Ave                               -          671          1,566           106              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>          <C>          <C>           <C>
  3/12/99    Lawrenceville / Buford Dr.                       256          688          944           258
  3/12/99    Hanover Park / W. Lake Street                  1,320        3,264        4,584         1,094
  3/12/99    Chicago / W. Jarvis Ave                          313          813        1,126           302
  3/12/99    Chicago / N. Broadway St                         535        1,536        2,071           605
  3/12/99    Carol Stream / Phillips Court                    782        1,930        2,712           624
  3/12/99    Winfield / Roosevelt Road                      1,108        2,899        4,007           919
  3/12/99    Schaumburg / S. Roselle Road                     659        1,639        2,298           566
  3/12/99    Tinley Park / Brennan Hwy                        771        1,984        2,755           704
  3/12/99    Schaumburg / Palmer Drive                      1,333        3,507        4,840         1,104
  3/12/99    Mobile / Hillcrest Road                          554        1,464        2,018           535
  3/12/99    Mobile / Azalea Road                             517        1,437        1,954           522
  3/12/99    Mobile / Moffat Road                             537        1,451        1,988           510
  3/12/99    Mobile / Grelot Road                             804        2,077        2,881           718
  3/12/99    Mobile / Government Blvd                         407        1,115        1,522           396
  3/12/99    New Orleans / Tchoupitoulas                    1,092        2,900        3,992         1,022
  3/12/99    Louisville / Breckenridge Lane                   581        1,459        2,040           503
  3/12/99    Louisville                                       554        1,446        2,000           521
  3/12/99    Louisville / Poplar Level                        463        1,230        1,693           471
  3/12/99    Chesapeake / Western Branch                    1,274        3,192        4,466         1,083
  3/12/99    Centreville / Lee Hwy                          1,635        4,062        5,697         1,365
  3/12/99    Sterling / S. Sterling Blvd                    1,282        3,195        4,477         1,084
  3/12/99    Manassas / Sudley Road                           776        2,027        2,803           729
  3/12/99    Longmont / Wedgewood Ave                         717        1,768        2,485           590
  3/12/99    Fort Collins / So.College Ave                    745        1,892        2,637           658
  3/12/99    Colo Sprngs / Parkmoor Village                   620        1,701        2,321           574
  3/12/99    Colo Sprngs / Van Teylingen                    1,215        3,027        4,242         1,034
  3/12/99    Denver / So. Clinton St.                         462        1,702        2,164           566
  3/12/99    Denver / Washington St.                          792        2,287        3,079           780
  3/12/99    Colo Sprngs / Centennial Blvd                  1,352        3,251        4,603         1,059
  3/12/99    Colo Sprngs / Astrozon Court                     809        2,166        2,975           728
  3/12/99    Arvada / 64th Ave                                671        1,672        2,343           572
</TABLE>

                                      F-82
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/12/99    Golden / Simms Street                           -          918          2,143           366              -
  3/12/99    Lawrence / Haskell Ave                          -          636          1,484           171              -
  3/12/99    Overland Park / Hemlock St                      -        1,168          2,725           153              -
  3/12/99    Lenexa / Long St.                               -          720          1,644            63              -
  3/12/99    Shawnee / Hedge Lane Terrace                    -          570          1,331           148              -
  3/12/99    Mission / Foxridge Dr                           -        1,657          3,864           181              -
  3/12/99    Milwaukee / W. Dean Road                        -        1,362          3,163           546              -
  3/12/99    Columbus / Morse Road                           -        1,415          3,302           995              -
  3/12/99    Milford / Branch Hill                           -          527          1,229         2,414              -
  3/12/99    Fairfield / Dixie                               -          519          1,211           112              -
  3/12/99    Cincinnati / Western Hills                      -          758          1,769           226              -
  3/12/99    Austin / N. Mopac Expressway                    -          865          2,791            82              -
  3/12/99    Atlanta / Dunwoody Place                        -        1,410          3,296           309              -
  3/12/99    Kennedale/Bowman Sprgs                          -          425            991            95              -
  3/12/99    Colo Sprngs/N.Powers                            -        1,124          2,622           292              -
  3/12/99    St. Louis/S. Third St                           -          206            480            22              -
  3/12/99    Orlando / L.B. Mcleod Road                      -          521          1,217           159              -
  3/12/99    Jacksonville / Roosevelt Blvd.                  -          851          1,986           308              -
  3/12/99    Miami-Kendall / Sw 84th Street                  -          935          2,180           201              -
  3/12/99    North Miami Beach / 69th St                     -        1,594          3,720           222              -
  3/12/99    Miami Beach / Dade Blvd                         -          962          2,245           307              -
  3/12/99    Chicago / N. Natchez Ave                        -        1,684          3,930           270              -
  3/12/99    Chicago / W. Cermak Road                        -        1,294          3,019           662              -
  3/12/99    Kansas City / State Ave                         -          645          1,505           240              -
  3/12/99    Lenexa / Santa Fe Trail Road                    -          713          1,663           189              -
  3/12/99    Waukesha / Foster Court                         -          765          1,785           166              -
  3/12/99    River Grove / N. 5th Ave.                       -        1,094          2,552            35              -
  3/12/99    St. Charles / E. Main St.                       -          951          2,220          (280)             -
  3/12/99    Chicago / West 47th St.                         -          705          1,645            99              -
  3/12/99    Carol Stream / S. Main Place                    -        1,320          3,079           316              -
  3/12/99    Carpentersville /N. Western Ave                 -          911          2,120           145              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/12/99    Golden / Simms Street                            918        2,509        3,427           924
  3/12/99    Lawrence / Haskell Ave                           636        1,655        2,291           578
  3/12/99    Overland Park / Hemlock St                     1,168        2,878        4,046           954
  3/12/99    Lenexa / Long St.                                709        1,718        2,427           554
  3/12/99    Shawnee / Hedge Lane Terrace                     570        1,479        2,049           524
  3/12/99    Mission / Foxridge Dr                          1,656        4,046        5,702         1,356
  3/12/99    Milwaukee / W. Dean Road                       1,357        3,714        5,071         1,391
  3/12/99    Columbus / Morse Road                          1,415        4,297        5,712         1,447
  3/12/99    Milford / Branch Hill                            527        3,643        4,170           967
  3/12/99    Fairfield / Dixie                                519        1,323        1,842           459
  3/12/99    Cincinnati / Western Hills                       758        1,995        2,753           731
  3/12/99    Austin / N. Mopac Expressway                     865        2,873        3,738           876
  3/12/99    Atlanta / Dunwoody Place                       1,390        3,625        5,015         1,211
  3/12/99    Kennedale/Bowman Sprgs                           425        1,086        1,511           371
  3/12/99    Colo Sprngs/N.Powers                           1,123        2,915        4,038         1,003
  3/12/99    St. Louis/S. Third St                            206          502          708           161
  3/12/99    Orlando / L.B. Mcleod Road                       521        1,376        1,897           441
  3/12/99    Jacksonville / Roosevelt Blvd.                   851        2,294        3,145           904
  3/12/99    Miami-Kendall / Sw 84th Street                   934        2,382        3,316           830
  3/12/99    North Miami Beach / 69th St                    1,594        3,942        5,536         1,338
  3/12/99    Miami Beach / Dade Blvd                          962        2,552        3,514           936
  3/12/99    Chicago / N. Natchez Ave                       1,684        4,200        5,884         1,408
  3/12/99    Chicago / W. Cermak Road                       1,294        3,681        4,975         1,447
  3/12/99    Kansas City / State Ave                          645        1,745        2,390           644
  3/12/99    Lenexa / Santa Fe Trail Road                     712        1,853        2,565           650
  3/12/99    Waukesha / Foster Court                          765        1,951        2,716           676
  3/12/99    River Grove / N. 5th Ave.                      1,034        2,647        3,681         1,112
  3/12/99    St. Charles / E. Main St.                        802        2,089        2,891           933
  3/12/99    Chicago / West 47th St.                          705        1,744        2,449           572
  3/12/99    Carol Stream / S. Main Place                   1,319        3,396        4,715         1,157
  3/12/99    Carpentersville /N. Western Ave                  909        2,267        3,176           783
</TABLE>

                                      F-83
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  3/12/99    Elgin / E. Chicago St.                          -          570          2,163           107              -
  3/12/99    Elgin / Big Timber Road                         -        1,347          3,253           289              -
  3/12/99    Chicago / S. Pulaski Road                       -          458          2,118           317              -
  3/12/99    Aurora / Business 30                            -          900          2,097           198              -
  3/12/99    Streamwood / Old Church Road                    -          855          1,991            81              -
  3/12/99    Mt. Prospect / Central Road                     -          802          1,847           516              -
  3/12/99    Geneva / Gary Ave                               -        1,072          2,501           126              -
  3/12/99    Naperville / Lasalle Ave                        -        1,501          3,502           123              -
  3/31/99    Forest Park                                     -          270          3,378         4,279              -
   4/1/99    Fresno                                          -           44            206          (236)           804
   5/1/99    Stockton                                        -          151            402          (217)         2,017
  6/30/99    Winter Park/N. Semor                            -          342            638           380            728
  6/30/99    N. Richland Hills                               -          455            769           314            832
  6/30/99    Rolling Meadows/Lois                            -          441            849           392            898
  6/30/99    Gresham/Burnside                                -          354            544           210            627
  6/30/99    Jacksonville/University                         -          211            741           253            700
  6/30/99    Irving/W. Airport                               -          419            960           248            857
  6/30/99    Houston/Highway 6 So.                           -          751          1,006         1,004          1,057
  6/30/99    Concord/Arnold                                  -          827          1,553           496          1,874
  6/30/99    Rockville/Gude Drive                            -          602            768           398            880
  6/30/99    Bradenton/Cortez Road                           -          476            885           434            906
  6/30/99    San Antonio/Nw Loop                             -          511            786           212            855
  6/30/99    Anaheim / La Palma                              -        1,378            851           221          1,221
  6/30/99    Spring Valley/Sweetwater                        -          271            380         5,055            416
  6/30/99    Ft. Myers/Tamiami                               -          948            962           363          1,208
  6/30/99    Littleton/Centennial                            -          421            804           320            812
  6/30/99    Newark/Cedar Blvd                               -          729            971           441          1,067
  6/30/99    Falls Church/Columbia                           -          901            975           331          1,141
  6/30/99    Fairfax / Lee Highway                           -          586          1,078           345          1,106
  6/30/99    Wheat Ridge / W. 44th                           -          480            789           293            831
  6/30/99    Huntington Bch/Gotham                           -          952            890           345          1,130
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  3/12/99    Elgin / E. Chicago St.                           570        2,270        2,840           735
  3/12/99    Elgin / Big Timber Road                        1,347        3,542        4,889         1,253
  3/12/99    Chicago / S. Pulaski Road                        458        2,435        2,893           771
  3/12/99    Aurora / Business 30                             899        2,296        3,195           788
  3/12/99    Streamwood / Old Church Road                     853        2,074        2,927           680
  3/12/99    Mt. Prospect / Central Road                      795        2,370        3,165           777
  3/12/99    Geneva / Gary Ave                              1,072        2,627        3,699           858
  3/12/99    Naperville / Lasalle Ave                       1,501        3,625        5,126         1,201
  3/31/99    Forest Park                                      270        7,657        7,927         2,630
   4/1/99    Fresno                                           193          625          818           216
   5/1/99    Stockton                                         590        1,763        2,353           574
  6/30/99    Winter Park/N. Semor                             427        1,661        2,088           469
  6/30/99    N. Richland Hills                                569        1,801        2,370           594
  6/30/99    Rolling Meadows/Lois                             551        2,029        2,580           682
  6/30/99    Gresham/Burnside                                 441        1,294        1,735           415
  6/30/99    Jacksonville/University                          263        1,642        1,905           548
  6/30/99    Irving/W. Airport                                524        1,960        2,484           603
  6/30/99    Houston/Highway 6 So.                            936        2,882        3,818           984
  6/30/99    Concord/Arnold                                 1,031        3,719        4,750         1,314
  6/30/99    Rockville/Gude Drive                             751        1,897        2,648           635
  6/30/99    Bradenton/Cortez Road                            588        2,113        2,701           712
  6/30/99    San Antonio/Nw Loop                              638        1,726        2,364           535
  6/30/99    Anaheim / La Palma                             1,720        1,951        3,671           573
  6/30/99    Spring Valley/Sweetwater                         356        5,766        6,122           744
  6/30/99    Ft. Myers/Tamiami                              1,184        2,297        3,481           703
  6/30/99    Littleton/Centennial                             526        1,831        2,357           609
  6/30/99    Newark/Cedar Blvd                                910        2,298        3,208           701
  6/30/99    Falls Church/Columbia                          1,126        2,222        3,348           719
  6/30/99    Fairfax / Lee Highway                            732        2,383        3,115           790
  6/30/99    Wheat Ridge / W. 44th                            599        1,794        2,393           604
  6/30/99    Huntington Bch/Gotham                          1,189        2,128        3,317           694
</TABLE>

                                      F-84
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>            <C>           <C>            <C>
  6/30/99    Fort Worth/McCart                               -          372            942           219            703
  6/30/99    San Diego/Clairemont                            -        1,601          2,035           435          2,034
  6/30/99    Houston/Millridge N.                            -        1,160          1,983           309          2,433
  6/30/99    Woodbridge/Jefferson                            -          840          1,689           321          1,446
  6/30/99    Mountainside                                    -        1,260          1,237         2,618          1,523
  6/30/99    Woodbridge / Davis                              -        1,796          1,623           659          1,996
  6/30/99    Huntington Beach                                -        1,026          1,437           148          1,450
  6/30/99    Edison / Old Post Rd                            -          498          1,267           336          1,175
  6/30/99    Northridge/Parthenia                            -        1,848          1,486           195          1,839
  6/30/99    Brick Township/Brick                            -          590          1,431           312          1,364
  6/30/99    Stone Mountain/Rock                             -        1,233            288           345            852
  6/30/99    Hyattsville                                     -          768          2,186           301          1,919
  6/30/99    Union City / Alvarado                           -          992          1,776           230          1,690
  6/30/99    Oak Park / Greenfield                           -          621          1,735           267          1,490
  6/30/99    Tujunga/Foothill Blvd                           -        1,746          2,383           247          2,370
   7/1/99    Pantego/W. Pioneer Pkwy                         -          432          1,228            66              -
   7/1/99    Nashville/Lafayette St                          -          486          1,135           233              -
   7/1/99    Nashville/Metroplex Dr                          -          380            886           203              -
   7/1/99    Madison / Myatt Dr                              -          441          1,028           115              -
   7/1/99    Hixson / Highway 153                            -          488          1,138           267              -
   7/1/99    Hixson / Gadd Rd                                -          207            484           347              -
   7/1/99    Red Bank / Harding Rd                           -          452          1,056           305              -
   7/1/99    Nashville/Welshwood Dr                          -          934          2,179           232              -
   7/1/99    Madison/Williams Ave                            -        1,318          3,076           838              -
   7/1/99    Nashville/Mcnally Dr                            -          884          2,062           514              -
   7/1/99    Hermitage/Central Ct                            -          646          1,508           173              -
   7/1/99    Antioch/Cane Ridge Rd                           -          353            823           191              -
   9/1/99    Charlotte / Ashley Road                         -          664          1,551           150              -
   9/1/99    Raleigh / Capital Blvd                          -          927          2,166           294              -
   9/1/99    Charlotte / South Blvd.                         -          734          1,715            38              -
   9/1/99    Greensboro/W.Market St.                         -          603          1,409            51              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  6/30/99    Fort Worth/McCart                                464        1,772        2,236           415
  6/30/99    San Diego/Clairemont                           1,999        4,106        6,105         1,271
  6/30/99    Houston/Millridge N.                           1,449        4,436        5,885         1,358
  6/30/99    Woodbridge/Jefferson                           1,048        3,248        4,296           814
  6/30/99    Mountainside                                   1,594        5,044        6,638           865
  6/30/99    Woodbridge / Davis                             2,243        3,831        6,074         1,233
  6/30/99    Huntington Beach                               1,282        2,779        4,061           834
  6/30/99    Edison / Old Post Rd                             621        2,655        3,276           847
  6/30/99    Northridge/Parthenia                           2,307        3,061        5,368           874
  6/30/99    Brick Township/Brick                             736        2,961        3,697           867
  6/30/99    Stone Mountain/Rock                            1,540        1,178        2,718           340
  6/30/99    Hyattsville                                      959        4,215        5,174         1,246
  6/30/99    Union City / Alvarado                          1,239        3,449        4,688         1,003
  6/30/99    Oak Park / Greenfield                            774        3,339        4,113           995
  6/30/99    Tujunga/Foothill Blvd                          2,180        4,566        6,746         1,252
   7/1/99    Pantego/W. Pioneer Pkwy                          432        1,294        1,726           279
   7/1/99    Nashville/Lafayette St                           486        1,368        1,854           518
   7/1/99    Nashville/Metroplex Dr                           379        1,090        1,469           409
   7/1/99    Madison / Myatt Dr                               441        1,143        1,584           410
   7/1/99    Hixson / Highway 153                             487        1,406        1,893           545
   7/1/99    Hixson / Gadd Rd                                 207          831        1,038           411
   7/1/99    Red Bank / Harding Rd                            452        1,361        1,813           504
   7/1/99    Nashville/Welshwood Dr                           934        2,411        3,345           857
   7/1/99    Madison/Williams Ave                           1,318        3,914        5,232         1,310
   7/1/99    Nashville/Mcnally Dr                             884        2,576        3,460         1,030
   7/1/99    Hermitage/Central Ct                             646        1,681        2,327           616
   7/1/99    Antioch/Cane Ridge Rd                            352        1,015        1,367           399
   9/1/99    Charlotte / Ashley Road                          651        1,714        2,365           545
   9/1/99    Raleigh / Capital Blvd                           908        2,479        3,387           789
   9/1/99    Charlotte / South Blvd.                          719        1,768        2,487           600
   9/1/99    Greensboro/W.Market St.                          590        1,473        2,063           501
</TABLE>

                                      F-85
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  10/8/99    Belmont / O'neill Ave                           -          869          4,659           168              -
  10/11/99   Matthews                                        -          937          3,165           278          1,665
  11/15/99   Poplar, Memphis                                 -        1,631          3,093           316          2,201
  12/17/99   Dallas / Swiss Ave                              -        1,862          4,344           160              -
  12/30/99   Oak Park/Greenfield Rd                          -        1,184          3,685           (73)             -
  12/30/99   Santa Anna                                      -        2,657          3,293           463          3,083
  1/21/00    Hanover Park                                    -          262          3,104            68              -
  1/25/00    Memphis / N.Germantwn Pkwy                      -          884          3,024           193          1,237
  1/31/00    Rowland Heights/Walnut                          -          681          1,589           115              -
   2/8/00    Lewisville / Justin Rd                          -          529          2,919         2,680          1,585
  2/28/00    Plano / Avenue K                                -        2,064         10,407         1,786              -
   4/1/00    Hyattsville/Edmonson                            -        1,036          2,657            91              -
  4/29/00    St.Louis/Ellisville Twn Centre                  -          765          4,377           293          1,621
   5/2/00    Mill Valley                                     -        1,412          3,294          (344)             -
   5/2/00    Culver City                                     -        2,439          5,689          (654)             -
  5/26/00    Phoenix/N. 35th Ave                             -          868          2,967            55              -
   6/5/00    Mount Sinai / Route 25a                         -          950          3,338           287          1,923
  6/15/00    Pinellas Park                                   -          526          2,247           275          1,100
  6/30/00    San Antonio/Broadway St                         -        1,131          4,558         1,265              -
  7/13/00    Lincolnwood                                     -        1,598          3,727           343              -
  7/17/00    La Palco/New Orleans                            -        1,023          3,204           167          1,709
  7/29/00    Tracy/1615& 1650 W.11th S                       -        1,745          4,530           316              -
   8/1/00    Pineville                                       -        2,197          3,417           357          2,262
  8/23/00    Morris Plains                                   -        1,501          4,300           645          3,596
  8/31/00    Florissant/New Halls Fry                        -          800          4,225            93              -
  8/31/00    Orange, CA                                      -          661          1,542            53              -
   9/1/00    Bayshore, NY                                    -        1,277          2,980         1,681              -
   9/1/00    Los Angeles, CA                                 -          590          1,376           520              -
  9/13/00    Merrillville                                    -          343          2,474           211          1,449
  9/15/00    Gardena / W. El Segundo                         -        1,532          3,424           123              -
  9/15/00    Chicago / Ashland Avenue                        -          850          4,880           808              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>           <C>
  10/8/99    Belmont / O'neill Ave                            878        4,818        5,696         1,542
  10/11/99   Matthews                                       1,499        4,546        6,045         1,000
  11/15/99   Poplar, Memphis                                2,377        4,864        7,241         1,019
  12/17/99   Dallas / Swiss Ave                             1,877        4,489        6,366         1,451
  12/30/99   Oak Park/Greenfield Rd                         1,196        3,600        4,796         1,079
  12/30/99   Santa Anna                                     3,704        5,792        9,496         1,121
  1/21/00    Hanover Park                                     256        3,178        3,434           848
  1/25/00    Memphis / N.Germantwn Pkwy                     1,301        4,037        5,338           937
  1/31/00    Rowland Heights/Walnut                           687        1,698        2,385           538
   2/8/00    Lewisville / Justin Rd                         1,679        6,034        7,713         1,047
  2/28/00    Plano / Avenue K                               1,220       13,037       14,257         6,010
   4/1/00    Hyattsville/Edmonson                           1,036        2,748        3,784           786
  4/29/00    St.Louis/Ellisville Twn Centre                 1,311        5,745        7,056         1,295
   5/2/00    Mill Valley                                    1,283        3,079        4,362           912
   5/2/00    Culver City                                    2,216        5,258        7,474         1,547
  5/26/00    Phoenix/N. 35th Ave                              867        3,023        3,890           622
   6/5/00    Mount Sinai / Route 25a                        1,599        4,899        6,498         1,013
  6/15/00    Pinellas Park                                    887        3,261        4,148           606
  6/30/00    San Antonio/Broadway St                        1,130        5,824        6,954         1,461
  7/13/00    Lincolnwood                                    1,612        4,056        5,668         1,280
  7/17/00    La Palco/New Orleans                           1,609        4,494        6,103           792
  7/29/00    Tracy/1615& 1650 W.11th S                      1,761        4,830        6,591         1,393
   8/1/00    Pineville                                      2,965        5,268        8,233         1,073
  8/23/00    Morris Plains                                  2,719        7,323       10,042         1,285
  8/31/00    Florissant/New Halls Fry                         807        4,311        5,118         1,238
  8/31/00    Orange, CA                                       667        1,589        2,256           459
   9/1/00    Bayshore, NY                                   1,533        4,405        5,938         1,220
   9/1/00    Los Angeles, CA                                  708        1,778        2,486           576
  9/13/00    Merrillville                                     832        3,645        4,477           713
  9/15/00    Gardena / W. El Segundo                        1,532        3,547        5,079           875
  9/15/00    Chicago / Ashland Avenue                         849        5,689        6,538         1,393
</TABLE>

                                      F-86
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------



<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  9/15/00    Oakland / Macarthur                             -          678          2,751           165              -
  9/15/00    Alexandria / Pickett Ii                         -        2,743          6,198           394              -
  9/15/00    Royal Oak / Coolidge Highway                    -        1,062          2,576           170              -
  9/15/00    Hawthorne / Crenshaw Blvd.                      -        1,079          2,913           150              -
  9/15/00    Rockaway / U.S. Route 46                        -        2,424          4,945           279              -
  9/15/00    Evanston / Greenbay                             -          846          4,436           188              -
  9/15/00    Los Angeles / Coliseum                          -        3,109          4,013           171              -
  9/15/00    Bethpage / Hempstead Turnpike                   -        2,899          5,457           946              -
  9/15/00    Northport / Fort Salonga Road                   -        2,999          5,698           530              -
  9/15/00    Brooklyn / St. Johns Place                      -        3,492          6,026           423              -
  9/15/00    Lake Ronkonkoma / Portion Rd.                   -          937          4,199           183              -
  9/15/00    Tampa/Gunn Hwy                                  -        1,843          4,300            94              -
  9/18/00    Tampa/N. Del Mabry                              -        2,204          2,447         9,974              -
  9/30/00    Marietta/Kennestone& Hwy5                       -          622          3,388         1,418              -
  9/30/00    Lilburn/Indian Trail                            -        1,695          5,170         1,653              -
  11/15/00   Largo/Missouri                                  -        1,092          4,270           290          2,215
  11/21/00   St. Louis/Wilson                                -        1,608          3,913         1,931              -
  12/21/00   Houston/7715 Katy Frwy                          -        2,274          5,307        (1,709)             -
  12/21/00   Houston/10801 Katy Frwy                         -        1,664          3,884           (36)             -
  12/21/00   Houston/Main St                                 -        1,681          3,924           103              -
  12/21/00   Houston/W. Loop/S. Frwy                         -        2,036          4,749           121              -
  12/29/00   Chicago                                         -        1,946          6,002            34              -
  12/30/00   Raleigh/Glenwood                                -        1,545          3,628           121              -
  12/30/00   Frazier                                         -          800          3,324            42              -
   1/5/01    Troy/E. Big Beaver Rd                           -        2,195          4,221           277          1,846
  1/11/01    Ft Lauderdale                                   -          954          3,972           397          2,183
  1/16/01    No Hollywood/Sherman Way                        -        2,173          5,442         3,571              -
  1/18/01    Tuscon/E. Speedway                              -          735          2,895           174          1,066
  1/25/01    Lombard/Finley                                  -          851          3,806           425          2,112
  3/15/01    Los Angeles/West Pico                           -        8,579          8,630         2,568              -
   4/1/01    Lakewood/Cedar Dr.                              -        1,329          9,356         4,052              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  9/15/00    Oakland / Macarthur                              678        2,916        3,594           732
  9/15/00    Alexandria / Pickett Ii                        2,743        6,592        9,335         1,593
  9/15/00    Royal Oak / Coolidge Highway                   1,062        2,746        3,808           688
  9/15/00    Hawthorne / Crenshaw Blvd.                     1,079        3,063        4,142           761
  9/15/00    Rockaway / U.S. Route 46                       2,423        5,225        7,648         1,291
  9/15/00    Evanston / Greenbay                              846        4,624        5,470         1,123
  9/15/00    Los Angeles / Coliseum                         3,108        4,185        7,293           989
  9/15/00    Bethpage / Hempstead Turnpike                  2,898        6,404        9,302         1,502
  9/15/00    Northport / Fort Salonga Road                  2,998        6,229        9,227         1,469
  9/15/00    Brooklyn / St. Johns Place                     3,491        6,450        9,941         1,469
  9/15/00    Lake Ronkonkoma / Portion Rd.                    937        4,382        5,319         1,036
  9/15/00    Tampa/Gunn Hwy                                 1,842        4,395        6,237         1,152
  9/18/00    Tampa/N. Del Mabry                             2,238       12,387       14,625         4,054
  9/30/00    Marietta/Kennestone& Hwy5                        628        4,800        5,428         1,203
  9/30/00    Lilburn/Indian Trail                           1,711        6,807        8,518         1,624
  11/15/00   Largo/Missouri                                 1,838        6,029        7,867         1,188
  11/21/00   St. Louis/Wilson                               1,627        5,825        7,452         1,394
  12/21/00   Houston/7715 Katy Frwy                         1,500        4,372        5,872           709
  12/21/00   Houston/10801 Katy Frwy                        1,618        3,894        5,512           862
  12/21/00   Houston/Main St                                1,683        4,025        5,708           899
  12/21/00   Houston/W. Loop/S. Frwy                        2,037        4,869        6,906         1,085
  12/29/00   Chicago                                        1,949        6,033        7,982         1,456
  12/30/00   Raleigh/Glenwood                               1,560        3,734        5,294           996
  12/30/00   Frazier                                          800        3,366        4,166           707
   1/5/01    Troy/E. Big Beaver Rd                          2,820        5,719        8,539         1,096
  1/11/01    Ft Lauderdale                                  1,745        5,761        7,506         1,083
  1/16/01    No Hollywood/Sherman Way                       2,200        8,986       11,186         1,439
  1/18/01    Tuscon/E. Speedway                             1,095        3,775        4,870           770
  1/25/01    Lombard/Finley                                 1,564        5,630        7,194         1,067
  3/15/01    Los Angeles/West Pico                          8,608       11,169       19,777         2,566
   4/1/01    Lakewood/Cedar Dr.                             1,331       13,406       14,737         2,836
</TABLE>

                                      F-87
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>           <C>                <C>
   4/7/01    Farmingdale/Rte 110                             -        2,364          5,807         1,955              -
  4/17/01    Philadelphia/Aramingo                           -          968          4,539            35              -
  4/18/01    Largo/Walsingham Road                           -        1,000          3,545          (240)             -
  6/17/01    Port Washington/Seaview &W.Sh                   -        2,381          4,608         1,811              -
  6/18/01    Silver Springs/Prosperity                       -        1,065          5,391         2,013              -
  6/19/01    Tampa/W. Waters Ave & Wilsky                    -          953          3,785            27              -
  6/26/01    Middletown                                      -        1,535          4,258           461          2,258
  7/29/01    Miami/Sw 85th Ave                               -        2,755          4,951             4              -
  8/28/01    Hoover/John Hawkins Pkwy                        -        1,050          2,453            43              -
  9/30/01    Syosset                                         -        2,461          5,312           225          1,855
  12/27/01   Los Angeles/W.Jefferson                         -        8,285          9,429           906              -
  12/27/01   Howell/Hgwy 9                                   -          941          4,070           269          1,260
  12/29/01   Catonsville/Kent                                -        1,378          5,289         2,628              -
  12/29/01   Old Bridge/Rte 9                                -        1,244          4,960            (3)             -
  12/29/01   Sacremento/Roseville                            -          876          5,344         1,939              -
  12/31/01   Santa Ana/E.Mcfadden                            -        7,587          8,612         1,022              -
   1/1/02    Concord                                         -          650          1,332            68              -
   1/1/02    Tustin                                          -          962          1,465            (1)             -
   1/1/02    Pasadena/Sierra Madre                           -          706            872            51              -
   1/1/02    Azusa                                           -          933          1,659         7,542              -
   1/1/02    Redlands                                        -          423          1,202           171              -
   1/1/02    Airport I                                       -          346            861            83              -
   1/1/02    Miami / Marlin Road                             -          562          1,345           228              -
   1/1/02    Riverside                                       -           95          1,106             3              -
   1/1/02    Oakland / San Leandro                           -          330          1,116            65              -
   1/1/02    Richmond / Jacuzzi                              -          419          1,224             1              -
   1/1/02    Santa Clara / Laurel                            -        1,178          1,789            71              -
   1/1/02    Pembroke Park                                   -          475          1,259            25              -
   1/1/02    Ft. Lauderdale / Sun                            -          452          1,254            40              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>         <C>            <C>
   4/7/01    Farmingdale/Rte 110                            1,779        8,347       10,126         1,439
  4/17/01    Philadelphia/Aramingo                            968        4,574        5,542         1,045
  4/18/01    Largo/Walsingham Road                            799        3,506        4,305           810
  6/17/01    Port Washington/Seaview &W.Sh                  2,359        6,441        8,800         1,162
  6/18/01    Silver Springs/Prosperity                      1,065        7,404        8,469         1,346
  6/19/01    Tampa/W. Waters Ave & Wilsky                     954        3,811        4,765           850
  6/26/01    Middletown                                     2,295        6,217        8,512         1,072
  7/29/01    Miami/Sw 85th Ave                              2,730        4,980        7,710         1,096
  8/28/01    Hoover/John Hawkins Pkwy                       1,050        2,496        3,546           559
  9/30/01    Syosset                                        3,089        6,764        9,853         1,186
  12/27/01   Los Angeles/W.Jefferson                        8,299       10,321       18,620         2,117
  12/27/01   Howell/Hgwy 9                                  1,365        5,175        6,540           927
  12/29/01   Catonsville/Kent                               1,377        7,918        9,295         1,410
  12/29/01   Old Bridge/Rte 9                               1,249        4,952        6,201         1,002
  12/29/01   Sacremento/Roseville                             526        7,633        8,159         1,441
  12/31/01   Santa Ana/E.Mcfadden                           7,600        9,621       17,221         2,002
   1/1/02    Concord                                          649        1,401        2,050           377
   1/1/02    Tustin                                           962        1,464        2,426           412
   1/1/02    Pasadena/Sierra Madre                            706          923        1,629           254
   1/1/02    Azusa                                            932        9,202       10,134         1,112
   1/1/02    Redlands                                         422        1,374        1,796           386
   1/1/02    Airport I                                        346          944        1,290           252
   1/1/02    Miami / Marlin Road                              562        1,573        2,135           382
   1/1/02    Riverside                                         94        1,110        1,204           316
   1/1/02    Oakland / San Leandro                            330        1,181        1,511           335
   1/1/02    Richmond / Jacuzzi                               419        1,225        1,644           339
   1/1/02    Santa Clara / Laurel                           1,179        1,859        3,038           565
   1/1/02    Pembroke Park                                    475        1,284        1,759           349
   1/1/02    Ft. Lauderdale / Sun                             452        1,294        1,746           350
</TABLE>

                                      F-88
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
   1/1/02    San Carlos / Shorewa                            -          737          1,360           (32)             -
   1/1/02    Ft. Lauderdale / Sun                            -          532          1,444            70              -
   1/1/02    Sacramento / Howe                               -          361          1,181             4              -
   1/1/02    Sacramento / Capitol                            -          186          1,284           169              -
   1/1/02    Miami / Airport                                 -          517            915            65              -
   1/1/02    Marietta / Cobb Park                            -          419          1,571           270              -
   1/1/02    Sacramento / Florin                             -          624          1,710           238              -
   1/1/02    Belmont / Dairy Lane                            -          915          1,252           105              -
   1/1/02    So. San Francisco                               -        1,018          2,464           182              -
   1/1/02    Palmdale / P Street                             -          218          1,287            39              -
   1/1/02    Tucker / Montreal Rd                            -          760          1,485            86              -
   1/1/02    Pasadena / S Fair Oaks                          -        1,313          1,905            86              -
   1/1/02    Carmichael/Fair Oaks                            -          584          1,431            25              -
   1/1/02    Carson / Carson St                              -          507            877            93              -
   1/1/02    San Jose / Felipe Ave                           -          517          1,482            48              -
   1/1/02    Miami / 27th Ave                                -          272          1,572            97              -
   1/1/02    San Jose / Capitol                              -          400          1,183            16              -
   1/1/02    Tucker / Mountain                               -          519          1,385            62              -
   1/3/02    St Charles/Veterans Memorial                    -          687          1,602           161              -
   1/7/02    Bothell/ N. Bothell Way                         -        1,063          4,995           146              -
  1/15/02    Houston / N.Loop                                -        2,045          6,178         2,020              -
  1/16/02    Orlando / S. Kirkman                            -          889          3,180            45              -
  1/16/02    Austin / Us Hwy 183                             -          608          3,856            29              -
  1/16/02    Rochelle Park / 168                             -          744          4,430            38              -
  1/16/02    Honolulu / Waialae                              -       10,631         10,783           173              -
  1/16/02    Sunny Isles Bch                                 -          931          2,845            92              -
  1/16/02    San Ramon / San Ramo                            -        1,522          3,510            45              -
  1/16/02    Austin / W. 6th St                              -        2,399          4,493           284              -
  1/16/02    Schaumburg / W. Wise                            -        1,158          2,598            55              -
  1/16/02    Laguna Hills / Moulton                          -        2,319          5,200           162              -
  1/16/02    Annapolis / West St                             -          955          3,669            43              -
  1/16/02    Birmingham / Commons                            -        1,125          3,938           116              -
  1/16/02    Crestwood / Watson Rd                           -        1,232          3,093           (51)             -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
   1/1/02    San Carlos / Shorewa                             737        1,328        2,065           373
   1/1/02    Ft. Lauderdale / Sun                             533        1,513        2,046           421
   1/1/02    Sacramento / Howe                                361        1,185        1,546           319
   1/1/02    Sacramento / Capitol                             186        1,453        1,639           347
   1/1/02    Miami / Airport                                  517          980        1,497           292
   1/1/02    Marietta / Cobb Park                             420        1,840        2,260           515
   1/1/02    Sacramento / Florin                              623        1,949        2,572           573
   1/1/02    Belmont / Dairy Lane                             914        1,358        2,272           403
   1/1/02    So. San Francisco                              1,018        2,646        3,664           809
   1/1/02    Palmdale / P Street                              218        1,326        1,544           398
   1/1/02    Tucker / Montreal Rd                             758        1,573        2,331           478
   1/1/02    Pasadena / S Fair Oaks                         1,312        1,992        3,304           600
   1/1/02    Carmichael/Fair Oaks                             584        1,456        2,040           426
   1/1/02    Carson / Carson St                               506          971        1,477           300
   1/1/02    San Jose / Felipe Ave                            516        1,531        2,047           505
   1/1/02    Miami / 27th Ave                                 271        1,670        1,941           523
   1/1/02    San Jose / Capitol                               401        1,198        1,599           365
   1/1/02    Tucker / Mountain                                520        1,446        1,966           464
   1/3/02    St Charles/Veterans Memorial                     687        1,763        2,450           427
   1/7/02    Bothell/ N. Bothell Way                        1,062        5,142        6,204         1,026
  1/15/02    Houston / N.Loop                               2,045        8,198       10,243         1,323
  1/16/02    Orlando / S. Kirkman                             889        3,225        4,114           708
  1/16/02    Austin / Us Hwy 183                              608        3,885        4,493           848
  1/16/02    Rochelle Park / 168                              744        4,468        5,212           948
  1/16/02    Honolulu / Waialae                            10,629       10,958       21,587         2,349
  1/16/02    Sunny Isles Bch                                  931        2,937        3,868           625
  1/16/02    San Ramon / San Ramo                           1,521        3,556        5,077           754
  1/16/02    Austin / W. 6th St                             2,399        4,777        7,176         1,121
  1/16/02    Schaumburg / W. Wise                           1,157        2,654        3,811           567
  1/16/02    Laguna Hills / Moulton                         2,318        5,363        7,681         1,215
  1/16/02    Annapolis / West St                              955        3,712        4,667           801
  1/16/02    Birmingham / Commons                           1,125        4,054        5,179           877
  1/16/02    Crestwood / Watson Rd                          1,176        3,098        4,274           657
</TABLE>

                                      F-89
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  1/16/02    Northglenn /Huron St                            -          688          2,075            28              -
  1/16/02    Skokie / Skokie Blvd                            -          716          5,285            37              -
  1/16/02    Garden City / Stewart                           -        1,489          4,039           199              -
  1/16/02    Millersville / Veterans                         -        1,036          4,229            35              -
  1/16/02    W. Babylon / Sunrise                            -        1,609          3,959            35              -
  1/16/02    Memphis / Summer Ave                            -        1,103          2,772            27              -
  1/16/02    Santa Clara/Lafayette                           -        1,393          4,626            12              -
  1/16/02    Naperville / Washington                         -        2,712          2,225           495              -
  1/16/02    Phoenix/W Union Hills                           -        1,071          2,934            26              -
  1/16/02    Woodlawn / Whitehead                            -        2,682          3,355            63              -
  1/16/02    Issaquah / Pickering                            -        1,138          3,704            25              -
  1/16/02    West La /W Olympic                              -        6,532          5,975            49              -
  1/16/02    New Orleans/I-10                                -        1,286          3,380        (1,934)             -
  1/16/02    Pasadena / E. Colorado                          -        1,125          5,160            49              -
  1/16/02    Memphis / Covington                             -          620          3,076            14              -
  1/16/02    Hiawassee / N.Hiawassee                         -        1,622          1,892            70              -
  1/16/02    Longwood / State Rd                             -        2,123          3,083           122              -
  1/16/02    Casselberry / State                             -        1,628          3,308            20              -
  1/16/02    Honolulu/Kahala                                 -        3,722          8,525            63              -
  1/16/02    Waukegan / Greenbay                             -          933          3,826            50              -
  1/16/02    Southfield / Telegraph                          -        2,869          5,507           135              -
  1/16/02    San Mateo / S. Delaware                         -        1,921          4,602            40              -
  1/16/02    Scottsdale/N.Hayden                             -        2,111          3,564            20              -
  1/16/02    Gilbert/W Park Ave                              -          497          3,534             2              -
  1/16/02    W.Palm Beach/Okeechobee                         -        2,149          4,650          (368)             -
  1/16/02    Indianapolis / W.86th                           -          812          2,421            26              -
  1/16/02    Indianapolis / Madison                          -          716          2,655            21              -
  1/16/02    Indianapolis / Rockville                        -          704          2,704            26              -
  1/16/02    Santa Cruz / River                              -        2,148          6,584            70              -
  1/16/02    Novato / Rush Landing                           -        1,858          2,574             8              -
  1/16/02    Martinez / Arnold Dr                            -          847          5,422            15              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  1/16/02    Northglenn /Huron St                             688        2,103        2,791           460
  1/16/02    Skokie / Skokie Blvd                             716        5,322        6,038         1,149
  1/16/02    Garden City / Stewart                          1,489        4,238        5,727           881
  1/16/02    Millersville / Veterans                        1,035        4,265        5,300           947
  1/16/02    W. Babylon / Sunrise                           1,608        3,995        5,603           854
  1/16/02    Memphis / Summer Ave                           1,103        2,799        3,902           590
  1/16/02    Santa Clara/Lafayette                          1,393        4,638        6,031           959
  1/16/02    Naperville / Washington                        2,712        2,720        5,432           543
  1/16/02    Phoenix/W Union Hills                          1,065        2,966        4,031           643
  1/16/02    Woodlawn / Whitehead                           2,681        3,419        6,100           757
  1/16/02    Issaquah / Pickering                           1,137        3,730        4,867           793
  1/16/02    West La /W Olympic                             6,531        6,025       12,556         1,277
  1/16/02    New Orleans/I-10                               1,292        1,440        2,732           508
  1/16/02    Pasadena / E. Colorado                         1,124        5,210        6,334         1,085
  1/16/02    Memphis / Covington                              620        3,090        3,710           650
  1/16/02    Hiawassee / N.Hiawassee                        1,621        1,963        3,584           435
  1/16/02    Longwood / State Rd                            2,123        3,205        5,328           751
  1/16/02    Casselberry / State                            1,628        3,328        4,956           702
  1/16/02    Honolulu/Kahala                                3,721        8,589       12,310         1,788
  1/16/02    Waukegan / Greenbay                              933        3,876        4,809           807
  1/16/02    Southfield / Telegraph                         2,869        5,642        8,511         1,174
  1/16/02    San Mateo / S. Delaware                        1,921        4,642        6,563           959
  1/16/02    Scottsdale/N.Hayden                            2,112        3,583        5,695           759
  1/16/02    Gilbert/W Park Ave                               497        3,536        4,033           741
  1/16/02    W.Palm Beach/Okeechobee                        2,148        4,283        6,431           823
  1/16/02    Indianapolis / W.86th                            812        2,447        3,259           508
  1/16/02    Indianapolis / Madison                           716        2,676        3,392           560
  1/16/02    Indianapolis / Rockville                         704        2,730        3,434           567
  1/16/02    Santa Cruz / River                             2,147        6,655        8,802         1,355
  1/16/02    Novato / Rush Landing                          1,858        2,582        4,440           541
  1/16/02    Martinez / Arnold Dr                             847        5,437        6,284         1,095
</TABLE>

                                      F-90
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>             <C>              <C>
  1/16/02    Charlotte/Cambridge                             -          836          3,908            27              -
  1/16/02    Rancho Cucamonga                                -          579          3,222         3,606              -
  1/16/02    Renton / Kent                                   -          768          4,078            37              -
  1/16/02    Hawthorne / Goffle Rd                           -        2,414          4,918            39              -
   2/2/02    Nashua / Southwood Dr                           -        2,493          4,326           166              -
  2/15/02    Houston/Fm 1960 East                            -          859          2,004            60              -
   3/7/02    Baltimore / Russell Street                      -        1,763          5,821           187              -
  3/11/02    Weymouth / Main St                              -        1,440          4,433           154              -
  3/28/02    Clinton / Branch Ave & Schultz                  -        1,257          4,108           451          3,253
  4/17/02    La Mirada/Alondra                               -        1,749          5,044           341          2,443
   5/1/02    N.Richlnd Hls/Rufe Snow Dr                      -          632          6,337         2,287              -
   5/2/02    Parkville/E.Joppa                               -          898          4,306           129              -
  6/17/02    Waltham / Lexington St                          -        3,183          5,733           291              -
  6/30/02    Nashville / Charlotte                           -          876          2,004            85              -
   7/2/02    Mt Juliet / Lebonan Rd                          -          516          1,203            70              -
  7/14/02    Yorktown / George Washington                    -          707          1,684            45              -
  7/22/02    Brea/E. Lambert & Clifwood Pk                   -        2,114          3,555           154              -
   8/1/02    Bricktown/Route 70                              -        1,292          3,690           174              -
   8/1/02    Danvers / Newbury St.                           -        1,311          4,140           604              -
  8/15/02    Montclair / Holt Blvd.                          -          889          2,074           222              -
  8/21/02    Rockville Centre/Merrick Rd                     -        3,693          6,990           365              -
  9/13/02    Lacey / Martin Way                              -        1,379          3,217            62              -
  9/13/02    Lakewood / Bridgeport                           -        1,286          3,000            86              -
  9/13/02    Kent / Pacific Highway                          -        1,839          4,291           127              -
  11/4/02    Scotch Plains /Route 22                         -        2,124          5,072            51              -
  12/23/02   Snta Clarita/Viaprincssa                        -        2,508          3,008         3,560              -
  2/13/03    Pasadena / Ritchie Hwy                          -        2,253          4,218             7              -
  2/13/03    Malden / Eastern Ave                            -        3,212          2,739            64              -
  2/24/03    Miami / SW 137th Ave                            -        1,600          4,684          (285)             -
   3/3/03    Chantilly / Dulles South Court                  -        2,190          4,314           130              -
   3/6/03    Medford / Mystic Ave                            -        3,886          4,982            16              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  1/16/02    Charlotte/Cambridge                              836        3,935        4,771           825
  1/16/02    Rancho Cucamonga                               1,130        6,277        7,407           831
  1/16/02    Renton / Kent                                    768        4,115        4,883           868
  1/16/02    Hawthorne / Goffle Rd                          2,413        4,958        7,371         1,012
   2/2/02    Nashua / Southwood Dr                          2,493        4,492        6,985           885
  2/15/02    Houston/Fm 1960 East                             859        2,064        2,923           425
   3/7/02    Baltimore / Russell Street                     1,763        6,008        7,771         1,169
  3/11/02    Weymouth / Main St                             1,439        4,588        6,027           893
  3/28/02    Clinton / Branch Ave & Schultz                 2,357        6,712        9,069           988
  4/17/02    La Mirada/Alondra                              2,574        7,003        9,577         1,090
   5/1/02    N.Richlnd Hls/Rufe Snow Dr                       631        8,625        9,256         1,465
   5/2/02    Parkville/E.Joppa                                898        4,435        5,333           832
  6/17/02    Waltham / Lexington St                         3,203        6,004        9,207         1,085
  6/30/02    Nashville / Charlotte                            875        2,090        2,965           417
   7/2/02    Mt Juliet / Lebonan Rd                           516        1,273        1,789           262
  7/14/02    Yorktown / George Washington                     707        1,729        2,436           343
  7/22/02    Brea/E. Lambert & Clifwood Pk                  2,113        3,710        5,823           670
   8/1/02    Bricktown/Route 70                             1,292        3,864        5,156           693
   8/1/02    Danvers / Newbury St.                          1,326        4,729        6,055           801
  8/15/02    Montclair / Holt Blvd.                           889        2,296        3,185           509
  8/21/02    Rockville Centre/Merrick Rd                    3,692        7,356       11,048         1,293
  9/13/02    Lacey / Martin Way                             1,379        3,279        4,658           422
  9/13/02    Lakewood / Bridgeport                          1,285        3,087        4,372           412
  9/13/02    Kent / Pacific Highway                         1,839        4,418        6,257           593
  11/4/02    Scotch Plains /Route 22                        2,126        5,121        7,247           908
  12/23/02   Snta Clarita/Viaprincssa                       2,508        6,568        9,076           912
  2/13/03    Pasadena / Ritchie Hwy                         2,252        4,226        6,478           664
  2/13/03    Malden / Eastern Ave                           3,212        2,803        6,015           427
  2/24/03    Miami / SW 137th Ave                           1,600        4,399        5,999           686
   3/3/03    Chantilly / Dulles South Court                 2,190        4,444        6,634           650
   3/6/03    Medford / Mystic Ave                           3,885        4,999        8,884           739
</TABLE>

                                      F-91
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  5/27/03    Castro Valley / Grove Way                       -        2,247          5,881           924              -
   8/2/03    Sacramento / E.Stockton Blvd                    -          554          4,175            36              -
  8/13/03    Timonium / W. Padonia Road                      -        1,932          3,681            41              -
  8/21/03    Van Nuys / Sepulveda                            -        1,698          3,886         2,401              -
   9/9/03    Westwood / East St                              -        3,267          5,013           290              -
  10/21/03   San Diego / Miramar Road                        -        2,244          6,653           651              -
  11/3/03    El Sobrante/San Pablo                           -        1,255          4,990           676              -
  11/6/03    Pearl City / Kamehameha Hwy                     -        4,428          4,839           479              -
  12/23/03   Boston / Southampton Street                     -        5,334          7,511           794              -
   1/9/04    Farmingville / Horseblock Road                  -        1,919          4,420          (116)             -
  2/27/04    Salem / Goodhue St.                             -        1,544          6,160            53              -
  3/18/04    Seven Corners / Arlington Blvd.                 -        6,087          7,553          (280)             -
  6/30/04    Marlton / Route 73                              -        1,103          5,195            12              -
   7/1/04    Long Island City/Northern Blvd.                 -        4,876          7,610          (238)             -
   7/9/04    West Valley Cty/Redwood                     2,377          876          2,067           288              -
  7/12/04    Hicksville/E. Old Country Rd.                   -        1,693          3,910           142              -
  7/15/04    Harwood/Ronald                                  -        1,619          3,778           185              -
  9/24/04    E. Hanover/State Rt                             -        3,895          4,943           230              -
  10/14/04   Apple Valley/148th St                         838          591          1,375            79              -
  10/14/04   Blaine / Hwy 65 NE                          1,156          789          1,833           198              -
  10/14/04   Brooklyn Park / Lakeland Ave                    -        1,411          3,278           166              -
  10/14/04   Brooklyn Park / Xylon Ave                   1,654        1,120          2,601           316              -
  10/14/04   St Paul(Eagan)/Sibley Mem'l Hwy               846          615          1,431            18              -
  10/14/04   Maple Grove / Zachary Lane                  1,847        1,337          3,105            64              -
  10/14/04   Minneapolis / Hiawatha Ave                  2,079        1,480          3,437           156              -
  10/14/04   New Hope / 36th Ave                         1,850        1,332          3,094            87              -
  10/14/04   Rosemount / Chippendale Ave                 1,198          864          2,008            52              -
  10/14/04   St Cloud/Franklin                             796          575          1,338            30              -
  10/14/04   Savage / W 128th St                         2,122        1,522          3,535           120              -
  10/14/04   Spring Lake Park/Hwy 65 NE                  2,166        1,534          3,562           188              -
  10/14/04   St Paul / Terrace Court                     1,579        1,122          2,606           126              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>             <C>
  5/27/03    Castro Valley / Grove Way                      2,307        6,745        9,052           967
   8/2/03    Sacramento / E.Stockton Blvd                     554        4,211        4,765           630
  8/13/03    Timonium / W. Padonia Road                     1,931        3,723        5,654           524
  8/21/03    Van Nuys / Sepulveda                           1,698        6,287        7,985           522
   9/9/03    Westwood / East St                             3,287        5,283        8,570           742
  10/21/03   San Diego / Miramar Road                       2,243        7,305        9,548           975
  11/3/03    El Sobrante/San Pablo                          1,257        5,664        6,921           742
  11/6/03    Pearl City / Kamehameha Hwy                    4,430        5,316        9,746           694
  12/23/03   Boston / Southampton Street                    5,344        8,295       13,639         1,008
   1/9/04    Farmingville / Horseblock Road                 1,918        4,305        6,223           524
  2/27/04    Salem / Goodhue St.                            1,544        6,213        7,757           708
  3/18/04    Seven Corners / Arlington Blvd.                6,085        7,275       13,360           798
  6/30/04    Marlton / Route 73                             1,103        5,207        6,310           532
   7/1/04    Long Island City/Northern Blvd.                4,876        7,372       12,248           765
   7/9/04    West Valley Cty/Redwood                          883        2,348        3,231           234
  7/12/04    Hicksville/E. Old Country Rd.                  1,692        4,053        5,745           393
  7/15/04    Harwood/Ronald                                 1,619        3,963        5,582           393
  9/24/04    E. Hanover/State Rt                            3,894        5,174        9,068           468
  10/14/04   Apple Valley/148th St                            592        1,453        2,045           132
  10/14/04   Blaine / Hwy 65 NE                               790        2,030        2,820           176
  10/14/04   Brooklyn Park / Lakeland Ave                   1,413        3,442        4,855           307
  10/14/04   Brooklyn Park / Xylon Ave                      1,121        2,916        4,037           268
  10/14/04   St Paul(Eagan)/Sibley Mem'l Hwy                  616        1,448        2,064           127
  10/14/04   Maple Grove / Zachary Lane                     1,338        3,168        4,506           278
  10/14/04   Minneapolis / Hiawatha Ave                     1,481        3,592        5,073           317
  10/14/04   New Hope / 36th Ave                            1,333        3,180        4,513           281
  10/14/04   Rosemount / Chippendale Ave                      865        2,059        2,924           185
  10/14/04   St Cloud/Franklin                                576        1,367        1,943           123
  10/14/04   Savage / W 128th St                            1,523        3,654        5,177           325
  10/14/04   Spring Lake Park/Hwy 65 NE                     1,535        3,749        5,284           329
  10/14/04   St Paul / Terrace Court                        1,123        2,731        3,854           245
</TABLE>

                                      F-92
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  10/14/04   St Paul / Eaton St                              -        1,161          2,698           119              -
  10/14/04   St Paul-Hartzell / Wabash Ave                   -        1,207          2,816           133              -
  10/14/04   West St Paul / Marie Ave                    1,572        1,447          3,361           322              -
  10/14/04   Stillwater / Memorial Ave                   2,303        1,669          3,876            74              -
  10/14/04   St Paul / VadnaisHts                        1,312          928          2,157           116              -
  10/14/04   Woodbury / Hudson Road                        690        1,863          4,327            64              -
  10/14/04   Brown Deer / N Green Bay Rd                 1,493        1,059          2,461           122              -
  10/14/04   Germantown / Spaten Court                     845          607          1,411            44              -
  10/14/04   Milwaukee/ N 77th St                        1,744        1,241          2,882           132              -
  10/14/04   Milwaukee/ S 13th St                        2,065        1,484          3,446           108              -
  10/14/04   Oak Creek / S 27th St                       1,059          751          1,746            87              -
  10/14/04   Waukesha / Arcadian Ave                     2,368        1,665          3,868           246              -
  10/14/04   West Allis / W Lincoln Ave                  1,935        1,390          3,227           105              -
  10/14/04   Garland / O'Banion Rd                       1,518          606          1,414            41              -
  10/14/04   Grand Prairie/ Hwy360                       2,334          942          2,198            32              -
  10/14/04   Duncanville/N Duncnvill                     3,886        1,524          3,556           199              -
  10/14/04   Lancaster/ W Pleasant                       2,465          993          2,317            39              -
  10/14/04   Mesquite / Oates Dr                         2,328          937          2,186            40              -
  10/14/04   Dallas / E NW Hwy                           2,342          942          2,198            43              -
  11/24/04   Pompano Beach/E. Sample                     4,631        1,608          3,754           145              -
  11/24/04   Davie / SW 41st St.                         5,977        2,467          5,758           167              -
  11/24/04   North Bay Village/Kennedy                   6,493        3,275          7,644           126              -
  11/24/04   Miami / Biscayne Blvd                       6,436        3,538          8,258            12              -
  11/24/04   Miami Gardens/NW 57th St                    6,482        2,706          6,316            71              -
  11/24/04   Tamarac/ N University Dr                    6,326        2,580          6,022            68              -
  11/24/04   Miami / SW 31st Ave                        13,814       11,574         27,009           199              -
  11/24/04   Hialeah / W 20th Ave                        5,502        2,224          5,192            63              -
  11/24/04   Miami / SW 42nd St                          7,288        2,955          6,897            62              -
  11/24/04   Miami / SW 40th St                          7,218        2,933          6,844            53              -
  11/25/04   Carlsbad/CorteDelAbeto                          -        2,861          6,676         1,459              -
  1/19/05    Cheektowaga / William St                        -          965          2,262            38              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>             <C>
  10/14/04   St Paul / Eaton St                             1,162        2,816        3,978           254
  10/14/04   St Paul-Hartzell / Wabash Ave                  1,206        2,950        4,156           271
  10/14/04   West St Paul / Marie Ave                       1,449        3,681        5,130           317
  10/14/04   Stillwater / Memorial Ave                      1,671        3,948        5,619           349
  10/14/04   St Paul / VadnaisHts                             929        2,272        3,201           200
  10/14/04   Woodbury / Hudson Road                         1,865        4,389        6,254           389
  10/14/04   Brown Deer / N Green Bay Rd                    1,060        2,582        3,642           229
  10/14/04   Germantown / Spaten Court                        608        1,454        2,062           130
  10/14/04   Milwaukee/ N 77th St                           1,242        3,013        4,255           267
  10/14/04   Milwaukee/ S 13th St                           1,485        3,553        5,038           313
  10/14/04   Oak Creek / S 27th St                            752        1,832        2,584           160
  10/14/04   Waukesha / Arcadian Ave                        1,667        4,112        5,779           361
  10/14/04   West Allis / W Lincoln Ave                     1,391        3,331        4,722           293
  10/14/04   Garland / O'Banion Rd                            608        1,453        2,061           122
  10/14/04   Grand Prairie/ Hwy360                            944        2,228        3,172           183
  10/14/04   Duncanville/N Duncnvill                        1,525        3,754        5,279           310
  10/14/04   Lancaster/ W Pleasant                            995        2,354        3,349           195
  10/14/04   Mesquite / Oates Dr                              939        2,224        3,163           184
  10/14/04   Dallas / E NW Hwy                                944        2,239        3,183           186
  11/24/04   Pompano Beach/E. Sample                        1,621        3,886        5,507           335
  11/24/04   Davie / SW 41st St.                            2,466        5,926        8,392           516
  11/24/04   North Bay Village/Kennedy                      3,274        7,771       11,045           667
  11/24/04   Miami / Biscayne Blvd                          3,537        8,271       11,808           710
  11/24/04   Miami Gardens/NW 57th St                       2,706        6,387        9,093           548
  11/24/04   Tamarac/ N University Dr                       2,580        6,090        8,670           523
  11/24/04   Miami / SW 31st Ave                           11,571       27,211       38,782         2,297
  11/24/04   Hialeah / W 20th Ave                           2,224        5,255        7,479           449
  11/24/04   Miami / SW 42nd St                             2,954        6,960        9,914           597
  11/24/04   Miami / SW 40th St                             2,932        6,898        9,830           592
  11/25/04   Carlsbad/CorteDelAbeto                         2,861        8,135       10,996           670
  1/19/05    Cheektowaga / William St                         964        2,301        3,265           186
</TABLE>

                                      F-93
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  1/19/05    Amherst / Millersport Hwy                       -        1,431          3,350            20              -
  1/19/05    Lancaster / Walden Ave                          -          528          1,244            24              -
  1/19/05    Tonawanda/Hospitality Centre                    -        1,205          2,823            26              -
  1/19/05    Wheatfield / Niagara Falls Blv                  -        1,130          2,649            29              -
  1/20/05    Oak Lawn / Southwest Hwy                        -        1,850          4,330           107              -
  2/25/05    Owings Mills / Reisterstown Rd                  -          887          3,865            10              -
  4/26/05    Hoboken / 8th St                                -        3,963          9,290            65              -
   5/3/05    Bayville / 939 Route 9                          -        1,928          4,519            52              -
   5/3/05    Bricktown / Burnt Tavern Rd                     -        3,522          8,239            37              -
   5/3/05    JacksonTwnshp/N.County Line                     -        1,555          3,647            44              -
  5/16/05    Methuen / Pleasant Valley St                    -        2,263          4,540           131              -
  5/19/05    Libertyville / Kelley Crt                       -        2,042          4,783            52              -
  5/19/05    Joliet / Essington                              -        1,434          3,367            61              -
  6/15/05    Atlanta/Howell Mill Rd NW                       -        1,864          4,363            49              -
  6/15/05    Smyrna / Herodian Way SE                        -        1,294          3,032            40              -
   7/7/05    Lithonia / Minola Dr                            -        1,273          2,985            62              -
  7/14/05    Kennesaw / Bells Ferry Rd NW                    -        1,264          2,976           773              -
  7/28/05    Atlanta / Monroe Dr NE                          -        2,914          6,829           845              -
  8/11/05    Suwanee / Old Peachtree Rd NE                   -        1,914          4,497           131              -
   9/8/05    Brandon / Providence Rd                         -        2,592          6,067            83              -
  9/15/05    Woodstock / Hwy 92                              -        1,251          2,935            57              -
  9/22/05    Charlotte / W. Arrowood Rd                      -        1,426          3,335          (234)             -
  10/5/05    Jacksonville Beach / Beach Blvd                 -        2,552          5,981            81              -
  10/5/05    Bronx / Brush Ave                               -        4,517         10,581            45              -
  10/11/05   Austin / E. Ben White Blvd                      -          213          3,461            12              -
  10/13/05   Deerfield Beach/S. Powerline                    -        3,365          7,874           122              -
  10/14/05   Cooper City / Sheridan St                       -        3,035          7,092            84              -
  10/20/05   Staten Island / Veterans Rd                     -        3,599          8,430            58              -
  10/20/05   Pittsburg / Loveridge Center                    -        3,602          8,448            42              -
  10/21/05   Norristown / W. Main St                         -        1,465          4,818           271              -
  11/2/05    Miller Place / Route 25A                        -        2,757          6,459            33              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>             <C>
  1/19/05    Amherst / Millersport Hwy                      1,431        3,370        4,801           268
  1/19/05    Lancaster / Walden Ave                           528        1,268        1,796           103
  1/19/05    Tonawanda/Hospitality Centre                   1,205        2,849        4,054           228
  1/19/05    Wheatfield / Niagara Falls Blv                 1,130        2,678        3,808           215
  1/20/05    Oak Lawn / Southwest Hwy                       1,850        4,437        6,287           359
  2/25/05    Owings Mills / Reisterstown Rd                   887        3,875        4,762           290
  4/26/05    Hoboken / 8th St                               3,962        9,356       13,318           639
   5/3/05    Bayville / 939 Route 9                         1,927        4,572        6,499           311
   5/3/05    Bricktown / Burnt Tavern Rd                    3,521        8,277       11,798           559
   5/3/05    JacksonTwnshp/N.County Line                    1,554        3,692        5,246           252
  5/16/05    Methuen / Pleasant Valley St                   2,263        4,671        6,934           303
  5/19/05    Libertyville / Kelley Crt                      2,042        4,835        6,877           324
  5/19/05    Joliet / Essington                             1,434        3,428        4,862           234
  6/15/05    Atlanta/Howell Mill Rd NW                      1,863        4,413        6,276           280
  6/15/05    Smyrna / Herodian Way SE                       1,293        3,073        4,366           197
   7/7/05    Lithonia / Minola Dr                           1,272        3,048        4,320           190
  7/14/05    Kennesaw / Bells Ferry Rd NW                   1,264        3,749        5,013           189
  7/28/05    Atlanta / Monroe Dr NE                         2,913        7,675       10,588           405
  8/11/05    Suwanee / Old Peachtree Rd NE                  1,914        4,628        6,542           258
   9/8/05    Brandon / Providence Rd                        2,591        6,151        8,742           328
  9/15/05    Woodstock / Hwy 92                             1,250        2,993        4,243           155
  9/22/05    Charlotte / W. Arrowood Rd                     1,153        3,374        4,527           173
  10/5/05    Jacksonville Beach / Beach Blvd                2,552        6,062        8,614           304
  10/5/05    Bronx / Brush Ave                              4,516       10,627       15,143           531
  10/11/05   Austin / E. Ben White Blvd                       213        3,473        3,686           396
  10/13/05   Deerfield Beach/S. Powerline                   3,364        7,997       11,361           396
  10/14/05   Cooper City / Sheridan St                      3,034        7,177       10,211           351
  10/20/05   Staten Island / Veterans Rd                    3,598        8,489       12,087           413
  10/20/05   Pittsburg / Loveridge Center                   3,601        8,491       12,092           412
  10/21/05   Norristown / W. Main St                        1,465        5,089        6,554           244
  11/2/05    Miller Place / Route 25A                       2,757        6,492        9,249           570
</TABLE>

                                      F-94
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>           <C>              <C>              <C>
  11/18/05   Miami / Biscayne Blvd                           -        7,434         17,268            98              -
  12/1/05    Manchester / Taylor St                          -        1,305          3,029            27              -
  12/7/05    Buffalo Grove/E. Aptakisic Rd                   -        1,986          4,635            66              -
  12/13/05   Lorton / Pohick Rd & I95                        -        1,167          4,582           368              -
  12/16/05   Pico Rivera / Washington Blvd                   -        4,719         11,012            50              -
  12/27/05   Queens Village / Jamaica Ave                    -        3,409          5,494           183              -
   1/1/06    Costa Mesa / Placentia-A                        -          275            754             -              -
   1/1/06    Van Nuys / Sepulveda-A                          -          497            886             3              -
   1/1/06    Pico Rivera / Beverly                           -          303            865             -              -
   1/1/06    San Dimas                                       -          222          1,505            66              -
   1/1/06    Long Beach / Cherry Ave                         -          801          1,723         2,700              -
   1/1/06    E.LA / Valley Blvd                              -          670          1,845             1              -
   1/1/06    Glendale / Eagle Rock Blvd                      -        1,240          1,831           172              -
   1/1/06    N. Pasadena / Lincoln Ave                       -          357            535             7              -
   1/1/06    Crossroads Parkway                              -          146            773             6              -
   1/1/06    Fremont / Enterprise                            -          122            727             3              -
   1/1/06    Milpitas/Montague                               -          212            607            70              -
   1/1/06    Wilmington                                      -          890          1,345            16              -
   1/1/06    Sun Valley / Glenoaks                           -          359            616            12              -
   1/1/06    Corona                                          -          169            722             4              -
   1/1/06    Norco                                           -          106            410             -              -
   1/1/06    N. Hollywood / Vanowen                          -          343            567             1              -
   1/5/06    Norfolk/Widgeon Rd.                             -        1,328          3,125             2              -
  1/11/06    Goleta/Hollister&Stork                      4,498        2,873          6,788            19              -
  2/15/06    Rockville Ctr/Sunrise                           -        1,813          4,264         1,713              -
  3/16/06    Deerfield/S. Pfingsten Rd.                      -        1,953          4,569            56              -
  3/28/06    Pembroke Pines/S. Douglas Rd.                   -        3,008          7,018            37              -
  3/30/06    Miami/SW 24th Ave.                              -        4,272          9,969            97              -
  3/31/06    San Diego/Mira Mesa                             -        2,492          7,127             -              -
   5/1/06    Wilmington/Kirkwood Hwy                         -        1,572          3,672            10              -
   5/1/06    Jupiter/5100 Military Trail                     -        4,397         10,266            20              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>         <C>          <C>              <C>
  11/18/05   Miami / Biscayne Blvd                          7,432       17,368       24,800           782
  12/1/05    Manchester / Taylor St                         1,305        3,056        4,361           134
  12/7/05    Buffalo Grove/E. Aptakisic Rd                  1,986        4,701        6,687           204
  12/13/05   Lorton / Pohick Rd & I95                       1,184        4,933        6,117           212
  12/16/05   Pico Rivera / Washington Blvd                  4,718       11,063       15,781           467
  12/27/05   Queens Village / Jamaica Ave                   3,409        5,677        9,086           229
   1/1/06    Costa Mesa / Placentia-A                         275          754        1,029            52
   1/1/06    Van Nuys / Sepulveda-A                           497          889        1,386            65
   1/1/06    Pico Rivera / Beverly                            303          865        1,168            33
   1/1/06    San Dimas                                        222        1,571        1,793           114
   1/1/06    Long Beach / Cherry Ave                          801        4,423        5,224           (21)
   1/1/06    E.LA / Valley Blvd                               670        1,846        2,516           216
   1/1/06    Glendale / Eagle Rock Blvd                     1,240        2,003        3,243            32
   1/1/06    N. Pasadena / Lincoln Ave                        357          542          899            59
   1/1/06    Crossroads Parkway                               146          779          925            69
   1/1/06    Fremont / Enterprise                             122          730          852            58
   1/1/06    Milpitas/Montague                                212          677          889             1
   1/1/06    Wilmington                                       890        1,361        2,251           100
   1/1/06    Sun Valley / Glenoaks                            359          628          987            54
   1/1/06    Corona                                           169          726          895            12
   1/1/06    Norco                                            106          410          516           (22)
   1/1/06    N. Hollywood / Vanowen                           343          568          911            23
   1/5/06    Norfolk/Widgeon Rd.                            1,328        3,127        4,455           114
  1/11/06    Goleta/Hollister&Stork                         2,873        6,807        9,680           249
  2/15/06    Rockville Ctr/Sunrise                          1,813        5,977        7,790           143
  3/16/06    Deerfield/S. Pfingsten Rd.                     1,953        4,625        6,578           139
  3/28/06    Pembroke Pines/S. Douglas Rd.                  3,008        7,055       10,063           213
  3/30/06    Miami/SW 24th Ave.                             4,272       10,066       14,338           302
  3/31/06    San Diego/Mira Mesa                            2,492        7,127        9,619           207
   5/1/06    Wilmington/Kirkwood Hwy                        1,572        3,682        5,254            86
   5/1/06    Jupiter/5100 Military Trail                    4,397       10,286       14,683           241
</TABLE>

                                      F-95
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
   5/1/06    Neptune/Neptune Blvd.                           -        3,240          7,564             9              -
  5/15/06    Suwanee/Peachtree Pkwy                          -        2,483          5,799            26              -
   6/6/06    Tampa/30th St                                   -        2,283          5,337            16              -
  6/22/06    Centennial/S. Parker Rd.                        -        1,786          4,173             3              -
  5/26/06    Honolulu/Kapiolani                              -        9,329         20,400             -              -
   7/1/06    Brooklyn/Knapp St                               -        6,701          5,088             2              -
  8/22/06    Scottsdale North                                -        5,037         14,000            28              -
  8/22/06    Dobson Ranch                                    -        1,896          5,065            28              -
  8/22/06    Scottsdale Air Park                             -        1,560          7,060            28              -
  8/22/06    Shea                                            -        2,271          6,402            28              -
  8/22/06    Collonade Mall                                  -            -          3,569            33              -
  8/22/06    Union Hills                                     -        2,618          5,357            28              -
  8/22/06    Speedway                                        -        1,921          6,105            28              -
  8/22/06    Mill Avenue                                     -          621          2,447            28              -
  8/22/06    Cooper Road                                     -        2,378          3,970            28              -
  8/22/06    Desert Sky                                      -        1,603          4,667            34              -
  8/22/06    Tanque Verde Road                               -        1,636          3,714            28              -
  8/22/06    Oro Valley                                      -        1,729          6,158            28              -
  8/22/06    Sunnyvale                                       -        5,647         16,555            28              -
  8/22/06    El Cerito                                       -        2,002          8,710            28              -
  8/22/06    Westwood                                        -        7,826         13,848            28              -
  8/22/06    El Cajon                                        -        7,490         13,341            34              -
  8/22/06    Santa Ana                                       -       12,432         10,961            32              -
  8/22/06    Culver City / Jefferson                         -        3,689         14,555            28              -
  8/22/06    Solana Beach                                    -            -         11,163            28              -
  8/22/06    Huntington Beach                                -        3,914         11,064            31              -
  8/22/06    Ontario                                         -        2,904          5,762            28              -
  8/22/06    Orange                                          -        2,421          9,184            28              -
  8/22/06    Daly City                                       -        4,034         13,280            28              -
  8/22/06    Castro Valley                                   -        3,682          5,986            28              -
  8/22/06    Newark                                          -        3,550          6,512            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>         <C>              <C>
   5/1/06    Neptune/Neptune Blvd.                          3,240        7,573       10,813           177
  5/15/06    Suwanee/Peachtree Pkwy                         2,483        5,825        8,308           136
   6/6/06    Tampa/30th St                                  2,283        5,353        7,636           108
  6/22/06    Centennial/S. Parker Rd.                       1,786        4,176        5,962            84
  5/26/06    Honolulu/Kapiolani                             9,329       20,400       29,729           442
   7/1/06    Brooklyn/Knapp St                              6,701        5,090       11,791            92
  8/22/06    Scottsdale North                               5,037       14,028       19,065           270
  8/22/06    Dobson Ranch                                   1,896        5,093        6,989            93
  8/22/06    Scottsdale Air Park                            1,560        7,088        8,648           130
  8/22/06    Shea                                           2,271        6,430        8,701           118
  8/22/06    Collonade Mall                                     -        3,602        3,602            66
  8/22/06    Union Hills                                    2,618        5,385        8,003            98
  8/22/06    Speedway                                       1,921        6,133        8,054           112
  8/22/06    Mill Avenue                                      621        2,475        3,096            46
  8/22/06    Cooper Road                                    2,378        3,998        6,376            73
  8/22/06    Desert Sky                                     1,603        4,701        6,304            86
  8/22/06    Tanque Verde Road                              1,636        3,742        5,378            69
  8/22/06    Oro Valley                                     1,729        6,186        7,915           114
  8/22/06    Sunnyvale                                      5,647       16,583       22,230           304
  8/22/06    El Cerito                                      2,002        8,738       10,740           160
  8/22/06    Westwood                                       7,826       13,876       21,702           254
  8/22/06    El Cajon                                       7,490       13,375       20,865           245
  8/22/06    Santa Ana                                     12,432       10,993       23,425           202
  8/22/06    Culver City / Jefferson                        3,689       14,583       18,272           267
  8/22/06    Solana Beach                                       -       11,191       11,191           206
  8/22/06    Huntington Beach                               3,914       11,095       15,009           203
  8/22/06    Ontario                                        2,904        5,790        8,694           106
  8/22/06    Orange                                         2,421        9,212       11,633           169
  8/22/06    Daly City                                      4,034       13,308       17,342           244
  8/22/06    Castro Valley                                  3,682        6,014        9,696           110
  8/22/06    Newark                                         3,550        6,540       10,090           120
</TABLE>

                                      F-96
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Sacramento                                      -        1,864          4,399            28              -
  8/22/06    San Leandro                                     -        2,979          4,776            28              -
  8/22/06    San Lorenzo                                     -        1,842          4,387            32              -
  8/22/06    Tracy                                           -          959          3,791            28              -
  8/22/06    Aliso Viejo                                     -        6,640         11,486            30              -
  8/22/06    Alicia Parkway                                  -        5,669         12,680            33              -
  8/22/06    Capitol Expressway                              -            -          3,970            28              -
  8/22/06    Vista Park-Land Lease                           -            -              -            28              -
  8/22/06    Oakley                                          -        2,419          5,452            28              -
  8/22/06    Livermore                                       -        2,972          6,816            28              -
  8/22/06    Sand City/Monterey                              -        2,563          8,291            28              -
  8/22/06    Tracy II                                        -        1,762          4,487            28              -
  8/22/06    SF-Evans                                        -        3,966          7,487            30              -
  8/22/06    Natomas                                         -        1,302          5,063            28              -
  8/22/06    Presidio                                        -            -              -           424              -
  8/22/06    Golden / 6th & Simms                            -          853          2,817            28              -
  8/22/06    Littleton / Hampden                             -        1,040          2,261            28              -
  8/22/06    Margate                                         -        3,482          5,742            28              -
  8/22/06    Delray Beach                                    -        3,546          7,076            28              -
  8/22/06    Lauderhill                                      -        2,807          6,668            28              -
  8/22/06    Roswell                                         -          908          3,308            28              -
  8/22/06    Morgan Falls                                    -        3,229          7,844            31              -
  8/22/06    Norcross                                        -          724          2,197            28              -
  8/22/06    Stone Mountain                                  -          500          2,055            28              -
  8/22/06    Tucker                                          -          731          2,664            29              -
  8/22/06    Forest Park                                     -          502          1,731            28              -
  8/22/06    Clairmont Road                                  -          804          2,345            31              -
  8/22/06    Gwinnett Place                                  -        1,728          3,982            28              -
  8/22/06    Perimeter Center                                -        3,414          8,283            28              -
  8/22/06    Peachtree Industrial Blvd.                      -        2,443          6,682            28              -
  8/22/06    Satellite Blvd                                  -        1,940          3,907            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Sacramento                                     1,864        4,427        6,291            82
  8/22/06    San Leandro                                    2,979        4,804        7,783            88
  8/22/06    San Lorenzo                                    1,842        4,419        6,261            80
  8/22/06    Tracy                                            959        3,819        4,778            70
  8/22/06    Aliso Viejo                                    6,640       11,516       18,156           211
  8/22/06    Alicia Parkway                                 5,669       12,713       18,382           234
  8/22/06    Capitol Expressway                                 -        3,998        3,998            73
  8/22/06    Vista Park-Land Lease                              -           28           28             -
  8/22/06    Oakley                                         2,419        5,480        7,899           101
  8/22/06    Livermore                                      2,972        6,844        9,816           125
  8/22/06    Sand City/Monterey                             2,563        8,319       10,882           152
  8/22/06    Tracy II                                       1,762        4,515        6,277            83
  8/22/06    SF-Evans                                       3,966        7,517       11,483           138
  8/22/06    Natomas                                        1,302        5,091        6,393            93
  8/22/06    Presidio                                           -          424          424             8
  8/22/06    Golden / 6th & Simms                             853        2,845        3,698            52
  8/22/06    Littleton / Hampden                            1,040        2,289        3,329            42
  8/22/06    Margate                                        3,482        5,770        9,252           106
  8/22/06    Delray Beach                                   3,546        7,104       10,650           130
  8/22/06    Lauderhill                                     2,807        6,696        9,503           123
  8/22/06    Roswell                                          908        3,336        4,244            61
  8/22/06    Morgan Falls                                   3,229        7,875       11,104           144
  8/22/06    Norcross                                         724        2,225        2,949            41
  8/22/06    Stone Mountain                                   500        2,083        2,583            38
  8/22/06    Tucker                                           731        2,693        3,424            50
  8/22/06    Forest Park                                      502        1,759        2,261            32
  8/22/06    Clairmont Road                                   804        2,376        3,180            43
  8/22/06    Gwinnett Place                                 1,728        4,010        5,738            74
  8/22/06    Perimeter Center                               3,414        8,311       11,725           152
  8/22/06    Peachtree Industrial Blvd.                     2,443        6,710        9,153           123
  8/22/06    Satellite Blvd                                 1,940        3,935        5,875            72
</TABLE>

                                      F-97
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Hillside                                        -        1,949          3,611            29              -
  8/22/06    Orland Park                                     -        2,977          5,443            88              -
  8/22/06    Bolingbrook / Brook Ct                          -        1,342          2,133            28              -
  8/22/06    Wheaton                                         -        1,531          5,584            32              -
  8/22/06    Lincolnwood  / Touhy                            -          700          3,307            28              -
  8/22/06    Niles                                           -          826          1,473            28              -
  8/22/06    Berwyn                                          -          728          5,310            36              -
  8/22/06    Chicago Hts / N Western                         -        1,367          3,359            28              -
  8/22/06    River West                                      -          296          2,443            30              -
  8/22/06    Fullerton                                       -        1,369          6,500            29              -
  8/22/06    Glenview West                                   -        1,283          2,621            28              -
  8/22/06    Glendale  / Keystone Ave.                       -        1,733          3,958            28              -
  8/22/06    College Park / W. 86th St.                      -        1,381          2,669            32              -
  8/22/06    Carmel / N. Range Line Rd.                      -        2,580          5,025            29              -
  8/22/06    Geogetown / Georgetown Rd.                      -        1,263          4,224            28              -
  8/22/06    Fishers / Allisonville Rd.                      -        2,106          3,629            31              -
  8/22/06    Castleton / Corporate Dr.                       -          914          2,465            28              -
  8/22/06    Geist / Fitness Lane                            -        2,133          3,718            28              -
  8/22/06    Indianapolis / E. 6nd St.                       -          444          2,141            28              -
  8/22/06    Suitland                                        -        2,337          5,799            30              -
  8/22/06    Gaithersburg                                    -        4,239          8,516            47              -
  8/22/06    Germantown                                      -        2,057          4,510            37              -
  8/22/06    Briggs Chaney                                   -        2,073          2,802            28              -
  8/22/06    Oxon Hill                                       -        1,557          3,971            44              -
  8/22/06    Frederick/Thomas Johnson Dr                     -        1,811          2,695            28              -
  8/22/06    Clinton                                         -        2,728          5,363            28              -
  8/22/06    Reisterstown                                    -          833          2,035            28              -
  8/22/06    Plymouth                                        -        2,018          4,415            28              -
  8/22/06    Madison Heights                                 -        2,354          4,391            28              -
  8/22/06    Ann Arbor                                       -        1,921          4,068            28              -
  8/22/06    Canton                                          -          710          4,287            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Hillside                                       1,949        3,640        5,589            66
  8/22/06    Orland Park                                    2,977        5,531        8,508           101
  8/22/06    Bolingbrook / Brook Ct                         1,342        2,161        3,503            40
  8/22/06    Wheaton                                        1,531        5,616        7,147           103
  8/22/06    Lincolnwood  / Touhy                             700        3,335        4,035            61
  8/22/06    Niles                                            826        1,501        2,327            28
  8/22/06    Berwyn                                           728        5,346        6,074            98
  8/22/06    Chicago Hts / N Western                        1,367        3,387        4,754            63
  8/22/06    River West                                       296        2,473        2,769            46
  8/22/06    Fullerton                                      1,369        6,529        7,898           120
  8/22/06    Glenview West                                  1,283        2,649        3,932            49
  8/22/06    Glendale  / Keystone Ave.                      1,733        3,986        5,719            73
  8/22/06    College Park / W. 86th St.                     1,381        2,701        4,082            50
  8/22/06    Carmel / N. Range Line Rd.                     2,580        5,054        7,634            93
  8/22/06    Geogetown / Georgetown Rd.                     1,263        4,252        5,515            78
  8/22/06    Fishers / Allisonville Rd.                     2,106        3,660        5,766            68
  8/22/06    Castleton / Corporate Dr.                        914        2,493        3,407            46
  8/22/06    Geist / Fitness Lane                           2,133        3,746        5,879            69
  8/22/06    Indianapolis / E. 6nd St.                        444        2,169        2,613            40
  8/22/06    Suitland                                       2,337        5,829        8,166           107
  8/22/06    Gaithersburg                                   4,239        8,563       12,802           157
  8/22/06    Germantown                                     2,057        4,547        6,604            83
  8/22/06    Briggs Chaney                                  2,073        2,830        4,903            52
  8/22/06    Oxon Hill                                      1,557        4,015        5,572            74
  8/22/06    Frederick/Thomas Johnson Dr                    1,811        2,723        4,534            50
  8/22/06    Clinton                                        2,728        5,391        8,119            98
  8/22/06    Reisterstown                                     833        2,063        2,896            38
  8/22/06    Plymouth                                       2,018        4,443        6,461            82
  8/22/06    Madison Heights                                2,354        4,419        6,773            80
  8/22/06    Ann Arbor                                      1,921        4,096        6,017            75
  8/22/06    Canton                                           710        4,315        5,025            79
</TABLE>

                                      F-98
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Fraser                                          -        2,026          5,393            28              -
  8/22/06    Livonia                                         -        1,849          3,860            28              -
  8/22/06    Sterling Heights                                -        2,996          5,358            28              -
  8/22/06    Warren                                          -        3,345          7,004            28              -
  8/22/06    Rochester                                       -        1,876          3,032            33              -
  8/22/06    Taylor                                          -        1,635          4,808            28              -
  8/22/06    Jackson                                         -          442          1,756            28              -
  8/22/06    Troy                                            -        1,237          2,093            28              -
  8/22/06    Rochester Hills                                 -        1,780          4,559            28              -
  8/22/06    Auburn Hills                                    -        1,888          3,017            28              -
  8/22/06    Flint South                                     -          543          3,068            28              -
  8/22/06    Troy - Maple                                    -        2,570          5,775            28              -
  8/22/06    Matawan                                         -        4,282          7,813            28              -
  8/22/06    Marlboro                                        -        2,214          5,868            28              -
  8/22/06    Voorhees                                        -        2,705          5,486            28              -
  8/22/06    Dover/Rockaway                                  -        3,395          5,327            28              -
  8/22/06    Marlton                                         -        1,635          2,273            39              -
  8/22/06    West Paterson                                   -          701          5,689            28              -
  8/22/06    Yonkers                                         -        4,473          9,925            32              -
  8/22/06    Van Dam Street                                  -        3,527          6,935            37              -
  8/22/06    Northern Blvd                                   -        5,373          9,970            35              -
  8/22/06    Gold Street                                     -        6,747         16,544           332              -
  8/22/06    Utica Avenue                                    -        7,746         13,063            28              -
  8/22/06    Melville                                        -        4,659          6,572            29              -
  8/22/06    Westgate                                        -          697          1,211            28              -
  8/22/06    Capital Boulevard                               -          757          1,681            28              -
  8/22/06    Cary                                            -        1,145          5,104            28              -
  8/22/06    Garner                                          -          529          1,211            30              -
  8/22/06    Morrisville                                     -          703          1,880            28              -
  8/22/06    Atlantic Avenue                                 -        1,693          6,293            28              -
  8/22/06    Friendly Avenue                                 -        1,169          3,043            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Fraser                                         2,026        5,421        7,447           100
  8/22/06    Livonia                                        1,849        3,888        5,737            72
  8/22/06    Sterling Heights                               2,996        5,386        8,382            98
  8/22/06    Warren                                         3,345        7,032       10,377           129
  8/22/06    Rochester                                      1,876        3,065        4,941            56
  8/22/06    Taylor                                         1,635        4,836        6,471            88
  8/22/06    Jackson                                          442        1,784        2,226            33
  8/22/06    Troy                                           1,237        2,121        3,358            38
  8/22/06    Rochester Hills                                1,780        4,587        6,367            84
  8/22/06    Auburn Hills                                   1,888        3,045        4,933            56
  8/22/06    Flint South                                      543        3,096        3,639            56
  8/22/06    Troy - Maple                                   2,570        5,803        8,373           106
  8/22/06    Matawan                                        4,282        7,841       12,123           144
  8/22/06    Marlboro                                       2,214        5,896        8,110           109
  8/22/06    Voorhees                                       2,705        5,514        8,219           101
  8/22/06    Dover/Rockaway                                 3,395        5,355        8,750            98
  8/22/06    Marlton                                        1,635        2,312        3,947            42
  8/22/06    West Paterson                                    701        5,717        6,418           105
  8/22/06    Yonkers                                        4,473        9,957       14,430           183
  8/22/06    Van Dam Street                                 3,527        6,972       10,499           128
  8/22/06    Northern Blvd                                  5,373       10,005       15,378           184
  8/22/06    Gold Street                                    6,747       16,876       23,623           309
  8/22/06    Utica Avenue                                   7,746       13,091       20,837           240
  8/22/06    Melville                                       4,659        6,601       11,260           121
  8/22/06    Westgate                                         697        1,239        1,936            23
  8/22/06    Capital Boulevard                                757        1,709        2,466            32
  8/22/06    Cary                                           1,145        5,132        6,277            95
  8/22/06    Garner                                           529        1,241        1,770            23
  8/22/06    Morrisville                                      703        1,908        2,611            34
  8/22/06    Atlantic Avenue                                1,693        6,321        8,014           116
  8/22/06    Friendly Avenue                                1,169        3,071        4,240            56
</TABLE>

                                      F-99
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Glenwood Avenue                                 -        1,689          4,948            28              -
  8/22/06    Poole Road                                      -        1,271          2,919            28              -
  8/22/06    South Raleigh                                   -          800          2,219            28              -
  8/22/06    Wendover                                        -        2,891          7,656            41              -
  8/22/06    Beaverton/Allen Blvd                            -        2,130          3,908            28              -
  8/22/06    Gresham / Hogan Rd                              -        1,957          4,438            30              -
  8/22/06    Hillsboro/30th St                               -        3,095          8,504            28              -
  8/22/06    Westchester                                     -            -          5,735            28              -
  8/22/06    Airport                                         -        4,597          8,728            33              -
  8/22/06    Oxford Valley                                   -        2,430          5,365            32              -
  8/22/06    Valley Forge                                    -            -              -            28              -
  8/22/06    Jenkintown                                      -            -              -            30              -
  8/22/06    Burke                                           -        2,522          4,019            28              -
  8/22/06    Midlothian Turnpike                             -        1,978          3,244            28              -
  8/22/06    South Military Highway                          -        1,611          2,903            33              -
  8/22/06    Newport News North                              -        2,073          4,067            30              -
  8/22/06    Virginia Beach Blvd.                            -        2,743          4,786            32              -
  8/22/06    Bayside                                         -        1,570          2,708            28              -
  8/22/06    Chesapeake                                      -        1,507          4,296            31              -
  8/22/06    Leesburg                                        -        1,935          2,485            30              -
  8/22/06    Dale City                                       -        1,885          3,335            28              -
  8/22/06    Gainesville                                     -        1,377          2,046            31              -
  8/22/06    Charlottesville                                 -        1,481          2,397            28              -
  8/22/06    Laskin Road                                     -        1,448          2,634            28              -
  8/22/06    Holland Road                                    -        1,565          2,227            28              -
  8/22/06    Princess Anne Road                              -        1,479          2,766            28              -
  8/22/06    Cedar Road                                      -        1,138          2,083            28              -
  8/22/06    Crater Road                                     -        1,497          2,266            31              -
  8/22/06    Temple                                          -          993          2,231            32              -
  8/22/06    Jefferson Davis Hwy                             -          954          2,156            33              -
  8/22/06    McLean                                          -            -          8,815            30              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Glenwood Avenue                                1,689        4,976        6,665            91
  8/22/06    Poole Road                                     1,271        2,947        4,218            54
  8/22/06    South Raleigh                                    800        2,247        3,047            41
  8/22/06    Wendover                                       2,891        7,697       10,588           141
  8/22/06    Beaverton/Allen Blvd                           2,130        3,936        6,066            73
  8/22/06    Gresham / Hogan Rd                             1,957        4,468        6,425            82
  8/22/06    Hillsboro/30th St                              3,095        8,532       11,627           156
  8/22/06    Westchester                                        -        5,763        5,763           106
  8/22/06    Airport                                        4,597        8,761       13,358           161
  8/22/06    Oxford Valley                                  2,430        5,397        7,827            98
  8/22/06    Valley Forge                                       -           28           28             -
  8/22/06    Jenkintown                                         -           30           30             -
  8/22/06    Burke                                          2,522        4,047        6,569            74
  8/22/06    Midlothian Turnpike                            1,978        3,272        5,250            60
  8/22/06    South Military Highway                         1,611        2,936        4,547            54
  8/22/06    Newport News North                             2,073        4,097        6,170            75
  8/22/06    Virginia Beach Blvd.                           2,743        4,818        7,561            88
  8/22/06    Bayside                                        1,570        2,736        4,306            50
  8/22/06    Chesapeake                                     1,507        4,327        5,834            79
  8/22/06    Leesburg                                       1,935        2,515        4,450            46
  8/22/06    Dale City                                      1,885        3,363        5,248            61
  8/22/06    Gainesville                                    1,377        2,077        3,454            38
  8/22/06    Charlottesville                                1,481        2,425        3,906            45
  8/22/06    Laskin Road                                    1,448        2,662        4,110            49
  8/22/06    Holland Road                                   1,565        2,255        3,820            41
  8/22/06    Princess Anne Road                             1,479        2,794        4,273            51
  8/22/06    Cedar Road                                     1,138        2,111        3,249            38
  8/22/06    Crater Road                                    1,497        2,297        3,794            42
  8/22/06    Temple                                           993        2,263        3,256            41
  8/22/06    Jefferson Davis Hwy                              954        2,189        3,143            40
  8/22/06    McLean                                             -        8,845        8,845           162
</TABLE>

                                     F-100
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Burke Centre                                    -        4,756          8,705            28              -
  8/22/06    Fordson                                         -        3,063          5,235            28              -
  8/22/06    Fullerton                                       -        4,199          8,867            28              -
  8/22/06    Telegraph                                       -        2,183          4,467            28              -
  8/22/06    Mt Vernon                                       -        4,876         11,544            28              -
  8/22/06    Bellingham                                      -        2,160          4,340            36              -
  8/22/06    Everett Central                                 -        2,137          4,342            28              -
  8/22/06    Tacoma / Highland Hills                         -        2,647          5,533            28              -
  8/22/06    Edmonds                                         -        5,883         10,514            38              -
  8/22/06    Kirkland 124th                                  -        2,827          5,031            28              -
  8/22/06    Woodinville                                     -        2,603          5,723            32              -
  8/22/06    Burien / Des Moines                             -        3,063          5,952            28              -
  8/22/06    SeaTac                                          -        2,439          4,623            30              -
  8/22/06    Southcenter                                     -        2,054          3,665            28              -
  8/22/06    Puyallup / Canyon Rd                            -        1,123          1,940            28              -
  8/22/06    Puyallup / South Hill                           -        1,567          2,610            28              -
  8/22/06    Queen Anne/Magnolia                             -        3,191         11,723            28              -
  8/22/06    Kennydale                                       -        3,424          7,799            31              -
  8/22/06    Bellefield                                      -        3,019          5,541            28              -
  8/22/06    Factoria Square                                 -        3,431          8,891            33              -
  8/22/06    Auburn / 16th Ave                               -        2,491          4,716            28              -
  8/22/06    East Bremerton                                  -        1,945          5,203            28              -
  8/22/06    Port Orchard                                    -        1,144          2,885            28              -
  8/22/06    West Seattle                                    -        3,573          8,711            28              -
  8/22/06    Vancouver / Salmon Creek                        -        2,667          5,597            28              -
  8/22/06    West Bremerton                                  -        1,778          3,067            30              -
  8/22/06    Kent / 132nd                                    -        1,806          3,880            28              -
  8/22/06    Lacey/Martin Way                                -        1,211          2,162            28              -
  8/22/06    Lynwood/189th St SW                             -        2,172          3,518            34              -
  8/22/06    W Olympia/Black Lake Blvd II                    -        1,295          2,300            28              -
  8/22/06    Parkland / A St                                 -        1,855          3,819            30              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>         <C>              <C>
  8/22/06    Burke Centre                                   4,756        8,733       13,489           160
  8/22/06    Fordson                                        3,063        5,263        8,326            97
  8/22/06    Fullerton                                      4,199        8,895       13,094           164
  8/22/06    Telegraph                                      2,183        4,495        6,678            83
  8/22/06    Mt Vernon                                      4,876       11,572       16,448           212
  8/22/06    Bellingham                                     2,160        4,376        6,536            80
  8/22/06    Everett Central                                2,137        4,370        6,507            80
  8/22/06    Tacoma / Highland Hills                        2,647        5,561        8,208           102
  8/22/06    Edmonds                                        5,883       10,552       16,435           193
  8/22/06    Kirkland 124th                                 2,827        5,059        7,886            93
  8/22/06    Woodinville                                    2,603        5,755        8,358           106
  8/22/06    Burien / Des Moines                            3,063        5,980        9,043           110
  8/22/06    SeaTac                                         2,439        4,653        7,092            86
  8/22/06    Southcenter                                    2,054        3,693        5,747            68
  8/22/06    Puyallup / Canyon Rd                           1,123        1,968        3,091            36
  8/22/06    Puyallup / South Hill                          1,567        2,638        4,205            49
  8/22/06    Queen Anne/Magnolia                            3,191       11,751       14,942           216
  8/22/06    Kennydale                                      3,424        7,830       11,254           143
  8/22/06    Bellefield                                     3,019        5,569        8,588           102
  8/22/06    Factoria Square                                3,431        8,924       12,355           164
  8/22/06    Auburn / 16th Ave                              2,491        4,744        7,235            87
  8/22/06    East Bremerton                                 1,945        5,231        7,176            96
  8/22/06    Port Orchard                                   1,144        2,913        4,057            54
  8/22/06    West Seattle                                   3,573        8,739       12,312           160
  8/22/06    Vancouver / Salmon Creek                       2,667        5,625        8,292           103
  8/22/06    West Bremerton                                 1,778        3,097        4,875            56
  8/22/06    Kent / 132nd                                   1,806        3,908        5,714            72
  8/22/06    Lacey/Martin Way                               1,211        2,190        3,401            40
  8/22/06    Lynwood/189th St SW                            2,172        3,552        5,724            65
  8/22/06    W Olympia/Black Lake Blvd II                   1,295        2,328        3,623            42
  8/22/06    Parkland / A St                                1,855        3,849        5,704            70
</TABLE>

                                     F-101
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>           <C>               <C>             <C>
  8/22/06    Lake Union                                      -        7,586         11,024            28              -
  8/22/06    Bellevue / 122nd                                -        9,552         21,891            32              -
  8/22/06    Gig Harbor/Olympic                              -        1,762          3,196            28              -
  8/22/06    Seattle/Ballinger Way                           -            -          7,098            28              -
  8/22/06    Scottsdale South                                -        2,377          3,524            28              -
  8/22/06    Phoenix                                         -        2,516          5,638            28              -
  8/22/06    Chandler                                        -        2,910          5,460            28              -
  8/22/06    Phoenix East                                    -        1,524          5,151            28              -
  8/22/06    Mesa                                            -        1,604          4,434            28              -
  8/22/06    Union City                                      -        1,905          3,091            28              -
  8/22/06    La Habra                                        -        5,439         10,239            28              -
  8/22/06    Palo Alto                                       -        4,259          6,362            28              -
  8/22/06    Kearney - Balboa                                -        4,565         11,584            28              -
  8/22/06    South San Francisco                             -        1,593          4,995            28              -
  8/22/06    Mountain View                                   -        1,505          3,839            28              -
  8/22/06    Denver / Tamarac II                             -          666          1,109            33              -
  8/22/06    Littleton / Windermere I                        -        2,214          4,186            33              -
  8/22/06    Thornton / Quivas                               -          547          1,439            28              -
  8/22/06    Northglenn / Irma Dr.                           -        1,579          3,716            28              -
  8/22/06    Oakland Park                                    -        8,821         20,512            41              -
  8/22/06    Seminole                                        -        1,821          3,817            28              -
  8/22/06    Military Trail                                  -        6,514         10,965            28              -
  8/22/06    Blue Heron                                      -        8,121         11,641            28              -
  8/22/06    Alsip / 127th St                                -        1,891          3,414            28              -
  8/22/06    Dolton                                          -        1,784          4,508            28              -
  8/22/06    Lombard / 330 W North Ave                       -        1,506          2,596            28              -
  8/22/06    Rolling Meadows / Rohlwing                      -        1,839          3,620            28              -
  8/22/06    Schaumburg / Hillcrest Blvd                     -        1,732          4,026            30              -
  8/22/06    Bridgeview                                      -        1,396          3,651            28              -
  8/22/06    Willowbrook                                     -        1,730          3,355            32              -
  8/22/06    Lisle                                           -        1,967          3,525            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>         <C>          <C>              <C>
  8/22/06    Lake Union                                     7,586       11,052       18,638           203
  8/22/06    Bellevue / 122nd                               9,552       21,923       31,475           402
  8/22/06    Gig Harbor/Olympic                             1,762        3,224        4,986            59
  8/22/06    Seattle/Ballinger Way                              -        7,126        7,126           130
  8/22/06    Scottsdale South                               2,377        3,552        5,929            65
  8/22/06    Phoenix                                        2,516        5,666        8,182           103
  8/22/06    Chandler                                       2,910        5,488        8,398           101
  8/22/06    Phoenix East                                   1,524        5,179        6,703            95
  8/22/06    Mesa                                           1,604        4,462        6,066            82
  8/22/06    Union City                                     1,905        3,119        5,024            57
  8/22/06    La Habra                                       5,439       10,267       15,706           188
  8/22/06    Palo Alto                                      4,259        6,390       10,649           118
  8/22/06    Kearney - Balboa                               4,565       11,612       16,177           213
  8/22/06    South San Francisco                            1,593        5,023        6,616            92
  8/22/06    Mountain View                                  1,505        3,867        5,372            72
  8/22/06    Denver / Tamarac II                              666        1,142        1,808            20
  8/22/06    Littleton / Windermere I                       2,214        4,219        6,433            78
  8/22/06    Thornton / Quivas                                547        1,467        2,014            27
  8/22/06    Northglenn / Irma Dr.                          1,579        3,744        5,323            69
  8/22/06    Oakland Park                                   8,821       20,553       29,374           377
  8/22/06    Seminole                                       1,821        3,845        5,666            70
  8/22/06    Military Trail                                 6,514       10,993       17,507           202
  8/22/06    Blue Heron                                     8,121       11,669       19,790           215
  8/22/06    Alsip / 127th St                               1,891        3,442        5,333            63
  8/22/06    Dolton                                         1,784        4,536        6,320            83
  8/22/06    Lombard / 330 W North Ave                      1,506        2,624        4,130            49
  8/22/06    Rolling Meadows / Rohlwing                     1,839        3,648        5,487            66
  8/22/06    Schaumburg / Hillcrest Blvd                    1,732        4,056        5,788            74
  8/22/06    Bridgeview                                     1,396        3,679        5,075            68
  8/22/06    Willowbrook                                    1,730        3,387        5,117            63
  8/22/06    Lisle                                          1,967        3,553        5,520            65
</TABLE>

                                     F-102
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Laurel                                          -        1,323          2,577            28              -
  8/22/06    Crofton                                         -        1,373          3,377            28              -
  8/22/06    Lansing                                         -          114          1,126            28              -
  8/22/06    Southfield                                      -        4,181          6,338            30              -
  8/22/06    23006 Troy - Oakland Mall                       -        2,281          4,953            28              -
  8/22/06    Walled Lake                                     -        2,788          4,784            28              -
  8/22/06    Salem / Lancaster                               -        2,036          4,827            28              -
  8/22/06    Tigard / King City                              -        1,959          7,189            28              -
  8/22/06    Portland / SE 82nd Ave                          -        1,519          4,390            32              -
  8/22/06    Beaverton/HWY 217                               -        3,294          7,186            28              -
  8/22/06    Beaverton / Cornell Rd                          -        1,869          3,814            29              -
  8/22/06    Fairfax                                         -        6,895         10,006            30              -
  8/22/06    Falls Church                                    -        2,488         15,341            31              -
  8/22/06    Manassas West                                   -          912          2,826            28              -
  8/22/06    Herndon                                         -        2,625          3,105            31              -
  8/22/06    Newport News South                              -        2,190          5,264            28              -
  8/22/06    North Richmond                                  -        1,606          2,411            32              -
  8/22/06    Kempsville                                      -        1,165          1,951            28              -
  8/22/06    Manassas East                                   -        1,297          2,843            34              -
  8/22/06    Vancouver / Vancouver Mall                      -        1,751          3,251            29              -
  8/22/06    White Center/West Seattle                       -        2,091          4,530            28              -
  8/22/06    Factoria                                        -        2,770          5,429            29              -
  8/22/06    Federal Way/Pac Hwy                             -        4,027          8,554            28              -
  8/22/06    Renton                                          -        2,752          6,378            28              -
  8/22/06    Issaquah                                        -        3,739          5,624            28              -
  8/22/06    East Lynnwood                                   -        2,250          4,790            31              -
  8/22/06    Tacoma / 96th St & 32nd Ave                     -        1,604          2,394            28              -
  8/22/06    Smokey Point                                    -          607          1,723            32              -
  8/22/06    Shoreline / 145th                               -        2,926          4,910         3,463              -
  8/22/06    23038 Mt. Clemens                           1,947        1,247          3,590            30              -
  8/22/06    Ramsey                                          -          552          2,155            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------

<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Laurel                                         1,323        2,605        3,928            47
  8/22/06    Crofton                                        1,373        3,405        4,778            63
  8/22/06    Lansing                                          114        1,154        1,268            22
  8/22/06    Southfield                                     4,181        6,368       10,549           116
  8/22/06    23006 Troy - Oakland Mall                      2,281        4,981        7,262            92
  8/22/06    Walled Lake                                    2,788        4,812        7,600            88
  8/22/06    Salem / Lancaster                              2,036        4,855        6,891            89
  8/22/06    Tigard / King City                             1,959        7,217        9,176           133
  8/22/06    Portland / SE 82nd Ave                         1,519        4,422        5,941            80
  8/22/06    Beaverton/HWY 217                              3,294        7,214       10,508           133
  8/22/06    Beaverton / Cornell Rd                         1,869        3,843        5,712            70
  8/22/06    Fairfax                                        6,895       10,036       16,931           184
  8/22/06    Falls Church                                   2,488       15,372       17,860           282
  8/22/06    Manassas West                                    912        2,854        3,766            52
  8/22/06    Herndon                                        2,625        3,136        5,761            57
  8/22/06    Newport News South                             2,190        5,292        7,482            97
  8/22/06    North Richmond                                 1,606        2,443        4,049            45
  8/22/06    Kempsville                                     1,165        1,979        3,144            36
  8/22/06    Manassas East                                  1,297        2,877        4,174            52
  8/22/06    Vancouver / Vancouver Mall                     1,751        3,280        5,031            60
  8/22/06    White Center/West Seattle                      2,091        4,558        6,649            83
  8/22/06    Factoria                                       2,770        5,458        8,228           100
  8/22/06    Federal Way/Pac Hwy                            4,027        8,582       12,609           157
  8/22/06    Renton                                         2,752        6,406        9,158           118
  8/22/06    Issaquah                                       3,739        5,652        9,391           103
  8/22/06    East Lynnwood                                  2,250        4,821        7,071            88
  8/22/06    Tacoma / 96th St & 32nd Ave                    1,604        2,422        4,026            45
  8/22/06    Smokey Point                                     607        1,755        2,362            32
  8/22/06    Shoreline / 145th                              2,926        8,373       11,299           153
  8/22/06    23038 Mt. Clemens                              1,247        3,620        4,867            66
  8/22/06    Ramsey                                           552        2,183        2,735            40
</TABLE>

                                     F-103
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Apple Valley / 155th St                         -        1,203          3,136            28              -
  8/22/06    Brooklyn Park / 73rd Ave                        -        1,953          3,902            28              -
  8/22/06    Burnsville Parkway                              -        1,561          4,359            30              -
  8/22/06    Chanhassen                                      -        3,292          6,220            28              -
  8/22/06    Coon Rapids / Robinson Dr                       -        1,991          4,975            28              -
  8/22/06    Eden Prairie East                               -        3,516          5,682            28              -
  8/22/06    Eden Prairie West                               -        3,713          7,177            29              -
  8/22/06    Edina                                           -        4,422          8,190            28              -
  8/22/06    Hopkins                                         -        1,460          2,510            28              -
  8/22/06    Little Canada                                   -        3,490          7,062            28              -
  8/22/06    Maple Grove / Lakeland Dr                       -        1,513          3,272           816              -
  8/22/06    Minnetonka                                      -        1,318          2,087            28              -
  8/22/06    Plymouth 169                                    -          684          1,323            28              -
  8/22/06    Plymouth 494                                    -        2,000          4,260            28              -
  8/22/06    Plymouth West                                   -        1,973          6,638            28              -
  8/22/06    Richfield                                       -        1,641          5,688            28              -
  8/22/06    Shorewood                                       -        2,805          7,244            30              -
  8/22/06    Woodbury / Wooddale Dr                          -        2,220          5,307            29              -
  8/22/06    Central Parkway                                 -        2,545          4,637            28              -
  8/22/06    Kirkman East                                    -        2,479          3,717            28              -
  8/22/06    Pinole                                          -        1,703          3,047            28              -
  8/22/06    Martinez                                        -        3,277          7,126            28              -
  8/22/06    Portland / 16th & Sandy Blvd                    -        1,053          3,802            28              -
  8/22/06    Houghton                                        -        2,694          4,132            28              -
  8/22/06    Antioch                                         -        1,853          6,475            28              -
  8/22/06    Walnut Creek                                    -            -              -            28              -
  8/22/06    Holcomb Bridge                                  -        1,906          4,303            28              -
  8/22/06    Palatine / Rand Rd                              -        1,215          1,895            28              -
  8/22/06    Washington Square                               -          523          1,073            28              -
  8/22/06    Indianapolis/N.Illinois                         -          182          2,795            28              -
  8/22/06    Canton South                                    -          769          3,316            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Apple Valley / 155th St                        1,203        3,164        4,367            57
  8/22/06    Brooklyn Park / 73rd Ave                       1,953        3,930        5,883            72
  8/22/06    Burnsville Parkway                             1,561        4,389        5,950            80
  8/22/06    Chanhassen                                     3,292        6,248        9,540           115
  8/22/06    Coon Rapids / Robinson Dr                      1,991        5,003        6,994            92
  8/22/06    Eden Prairie East                              3,516        5,710        9,226           105
  8/22/06    Eden Prairie West                              3,713        7,206       10,919           132
  8/22/06    Edina                                          4,422        8,218       12,640           151
  8/22/06    Hopkins                                        1,460        2,538        3,998            46
  8/22/06    Little Canada                                  3,490        7,090       10,580           130
  8/22/06    Maple Grove / Lakeland Dr                      1,513        4,088        5,601            75
  8/22/06    Minnetonka                                     1,318        2,115        3,433            38
  8/22/06    Plymouth 169                                     684        1,351        2,035            24
  8/22/06    Plymouth 494                                   2,000        4,288        6,288            79
  8/22/06    Plymouth West                                  1,973        6,666        8,639           123
  8/22/06    Richfield                                      1,641        5,716        7,357           105
  8/22/06    Shorewood                                      2,805        7,274       10,079           133
  8/22/06    Woodbury / Wooddale Dr                         2,220        5,336        7,556            98
  8/22/06    Central Parkway                                2,545        4,665        7,210            86
  8/22/06    Kirkman East                                   2,479        3,745        6,224            69
  8/22/06    Pinole                                         1,703        3,075        4,778            56
  8/22/06    Martinez                                       3,277        7,154       10,431           132
  8/22/06    Portland / 16th & Sandy Blvd                   1,053        3,830        4,883            70
  8/22/06    Houghton                                       2,694        4,160        6,854            77
  8/22/06    Antioch                                        1,853        6,503        8,356           119
  8/22/06    Walnut Creek                                       -           28           28             -
  8/22/06    Holcomb Bridge                                 1,906        4,331        6,237            79
  8/22/06    Palatine / Rand Rd                             1,215        1,923        3,138            36
  8/22/06    Washington Square                                523        1,101        1,624            20
  8/22/06    Indianapolis/N.Illinois                          182        2,823        3,005            52
  8/22/06    Canton South                                     769        3,344        4,113            61
</TABLE>

                                     F-104
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Bricktown                                       -        2,881          5,834            28              -
  8/22/06    Commack                                         -        2,688          6,376            28              -
  8/22/06    Nesconset / Nesconset Hwy                       -        1,374          3,151            28              -
  8/22/06    Great Neck                                      -        1,229          3,299            28              -
  8/22/06    Hempstead / S. Franklin St.                     -          509          3,042            28              -
  8/22/06    Bethpage / Stuart Ave                           -        2,387          7,104            29              -
  8/22/06    Helotes                                         -        1,833          3,557            28              -
  8/22/06    Medical Center San Antonio                      -        1,571          4,217            28              -
  8/22/06    Oak Hills                                       -            -          7,449            28              -
  8/22/06    Olympia                                         -        2,382          4,182            28              -
  8/22/06    Las Colinas                                     -          676          3,338            28              -
  8/22/06    Old Towne                                       -        2,756         13,080            28              -
  8/22/06    Juanita                                         -        2,318          7,554            28              -
  8/22/06    Ansley Park                                     -        3,132         11,926            30              -
  8/22/06    Brookhaven                                      -        2,740          8,333            30              -
  8/22/06    Decatur                                         -        2,556         10,146            30              -
  8/22/06    Oregon City                                     -        1,582          3,539            28              -
  8/22/06    Portland/Barbur Bl                              -        2,328          9,134            30              -
  8/22/06    Salem  / Liberty Road                           -        1,994          5,304            32              -
  8/22/06    Edgemont                                        -        3,585          7,704            28              -
  8/22/06    Bedford                                         -        2,042          4,176            28              -
  8/22/06    Kingwood                                        -        1,625          2,926            28              -
  8/22/06    Hillcroft                                       -            -          3,994            28              -
  8/22/06    T.C. Jester                                     -        2,047          4,819            30              -
  8/22/06    Windcrest                                       -          764          2,601            28              -
  8/22/06    Mission Bend                                    -        1,381          3,141            28              -
  8/22/06    Parker Road/Independence                        -        2,593          5,464            28              -
  8/22/06    Park Cities East                                -        4,205          6,259            28              -
  8/22/06    MaCarthur Crossing                              -        2,635          5,698            28              -
  8/22/06    Arlington/S.Cooper                              -        2,305          4,308            28              -
  8/22/06    Woodforest                                      -        1,534          3,545           955              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Bricktown                                      2,881        5,862        8,743           107
  8/22/06    Commack                                        2,688        6,404        9,092           118
  8/22/06    Nesconset / Nesconset Hwy                      1,374        3,179        4,553            59
  8/22/06    Great Neck                                     1,229        3,327        4,556            61
  8/22/06    Hempstead / S. Franklin St.                      509        3,070        3,579            56
  8/22/06    Bethpage / Stuart Ave                          2,387        7,133        9,520           130
  8/22/06    Helotes                                        1,833        3,585        5,418            65
  8/22/06    Medical Center San Antonio                     1,571        4,245        5,816            78
  8/22/06    Oak Hills                                          -        7,477        7,477           137
  8/22/06    Olympia                                        2,382        4,210        6,592            77
  8/22/06    Las Colinas                                      676        3,366        4,042            61
  8/22/06    Old Towne                                      2,756       13,108       15,864           240
  8/22/06    Juanita                                        2,318        7,582        9,900           139
  8/22/06    Ansley Park                                    3,132       11,956       15,088           220
  8/22/06    Brookhaven                                     2,740        8,363       11,103           153
  8/22/06    Decatur                                        2,556       10,176       12,732           187
  8/22/06    Oregon City                                    1,582        3,567        5,149            65
  8/22/06    Portland/Barbur Bl                             2,328        9,164       11,492           169
  8/22/06    Salem  / Liberty Road                          1,994        5,336        7,330            98
  8/22/06    Edgemont                                       3,585        7,732       11,317           142
  8/22/06    Bedford                                        2,042        4,204        6,246            77
  8/22/06    Kingwood                                       1,625        2,954        4,579            54
  8/22/06    Hillcroft                                          -        4,022        4,022            74
  8/22/06    T.C. Jester                                    2,047        4,849        6,896            89
  8/22/06    Windcrest                                        764        2,629        3,393            49
  8/22/06    Mission Bend                                   1,381        3,169        4,550            57
  8/22/06    Parker Road/Independence                       2,593        5,492        8,085           101
  8/22/06    Park Cities East                               4,205        6,287       10,492           115
  8/22/06    MaCarthur Crossing                             2,635        5,726        8,361           105
  8/22/06    Arlington/S.Cooper                             2,305        4,336        6,641            79
  8/22/06    Woodforest                                     1,534        4,500        6,034            83
</TABLE>

                                     F-105
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Preston Road                                    -        1,931          3,246            28              -
  8/22/06    East Lamar                                      -        1,581          2,878            30              -
  8/22/06    Lewisville/Interstate 35                        -        2,696          4,311            28              -
  8/22/06    Round Rock                                      -        1,256          2,153            28              -
  8/22/06    Slaughter Lane                                  -        1,881          3,326            28              -
  8/22/06    Valley Ranch                                    -        1,927          5,390            28              -
  8/22/06    Nacogdoches                                     -        1,422          2,655            28              -
  8/22/06    Thousand Oaks                                   -        1,815          3,814            28              -
  8/22/06    Highway 78                                      -        1,344          2,288            28              -
  8/22/06    The Quarry                                      -        1,841          8,765            28              -
  8/22/06    Cinco Ranch                                     -          939          2,085            28              -
  8/22/06    North Carrollton                                -        2,408          4,204            28              -
  8/22/06    First Colony                                    -        1,181          2,930            28              -
  8/22/06    North Park                                      -        1,444          3,253            28              -
  8/22/06    South Main - TX                                 -          521            723            28              -
  8/22/06    Westchase                                       -          903          3,748            28              -
  8/22/06    Lakeline                                        -        1,289          3,762            28              -
  8/22/06    Highway 26                                      -        1,353          3,147            28              -
  8/22/06    Shavano Park                                    -          972          4,973            28              -
  8/22/06    Oltorf                                          -          880          3,693            30              -
  8/22/06    Irving                                          -          686          1,367            28              -
  8/22/06    Hill Country Village                            -          988          3,524            28              -
  8/22/06    San Antonio NE                                  -          253            664            31              -
  8/22/06    East Pioneer II                                 -          786          1,784            28              -
  8/22/06    Westheimer                                      -          594          2,316            32              -
  8/22/06    San Antonio/Jones-Maltsberger                   -        1,102          2,637            28              -
  8/22/06    Beltline                                        -        1,291          2,336            31              -
  8/22/06    MacArthur                                       -        1,590          2,265            28              -
  8/22/06    Hurst / S. Pipeline Rd                          -          661          1,317            28              -
  8/22/06    Balcones Hts/Fredericksburg Rd                  -        2,372          4,718            28              -
  8/22/06    Blanco Road                                     -        1,742          4,813            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Preston Road                                   1,931        3,274        5,205            60
  8/22/06    East Lamar                                     1,581        2,908        4,489            54
  8/22/06    Lewisville/Interstate 35                       2,696        4,339        7,035            79
  8/22/06    Round Rock                                     1,256        2,181        3,437            40
  8/22/06    Slaughter Lane                                 1,881        3,354        5,235            61
  8/22/06    Valley Ranch                                   1,927        5,418        7,345           100
  8/22/06    Nacogdoches                                    1,422        2,683        4,105            50
  8/22/06    Thousand Oaks                                  1,815        3,842        5,657            70
  8/22/06    Highway 78                                     1,344        2,316        3,660            42
  8/22/06    The Quarry                                     1,841        8,793       10,634           161
  8/22/06    Cinco Ranch                                      939        2,113        3,052            38
  8/22/06    North Carrollton                               2,408        4,232        6,640            78
  8/22/06    First Colony                                   1,181        2,958        4,139            54
  8/22/06    North Park                                     1,444        3,281        4,725            60
  8/22/06    South Main - TX                                  521          751        1,272            14
  8/22/06    Westchase                                        903        3,776        4,679            69
  8/22/06    Lakeline                                       1,289        3,790        5,079            69
  8/22/06    Highway 26                                     1,353        3,175        4,528            59
  8/22/06    Shavano Park                                     972        5,001        5,973            92
  8/22/06    Oltorf                                           880        3,723        4,603            68
  8/22/06    Irving                                           686        1,395        2,081            26
  8/22/06    Hill Country Village                             988        3,552        4,540            65
  8/22/06    San Antonio NE                                   253          695          948            13
  8/22/06    East Pioneer II                                  786        1,812        2,598            33
  8/22/06    Westheimer                                       594        2,348        2,942            43
  8/22/06    San Antonio/Jones-Maltsberger                  1,102        2,665        3,767            49
  8/22/06    Beltline                                       1,291        2,367        3,658            43
  8/22/06    MacArthur                                      1,590        2,293        3,883            42
  8/22/06    Hurst / S. Pipeline Rd                           661        1,345        2,006            24
  8/22/06    Balcones Hts/Fredericksburg Rd                 2,372        4,746        7,118            87
  8/22/06    Blanco Road                                    1,742        4,841        6,583            88
</TABLE>

                                     F-106
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>        <C>          <C>           <C>                <C>
  8/22/06    Leon Valley/Bandera Road                        -          501          1,044         2,466              -
  8/22/06    Imperial Valley                                 -        1,166          2,756            28              -
  8/22/06    Sugarland                                       -        1,714          3,407            28              -
  8/22/06    Woodlands                                       -        1,353          3,131            28              -
  8/22/06    Federal Road                                    -        1,021          3,086            28              -
  8/22/06    West University                                 -        1,940          8,121            30              -
  8/22/06    Medical Center/Braeswood II                     -        1,121          4,678            28              -
  8/22/06    Richardson/Audelia                              -        1,034          2,703            28              -
  8/22/06    North Austin                                    -        2,143          3,674            28              -
  8/22/06    Warner                                          -        1,603          3,998            31              -
  8/22/06    Universal City                                  -          777          3,194            28              -
  8/22/06    Seattle / Lake City Way                         -        3,406          7,789            33              -
  8/22/06    Arrowhead                                       -        2,372          5,818            28              -
  8/22/06    Ahwatukee                                       -        3,017          5,975            28              -
  8/22/06    Blossom Valley                                  -        2,721          8,418            28              -
  8/22/06    Jones Bridge                                    -        3,065          6,015            30              -
  8/22/06    Lawrenceville                                   -        2,076          5,188            30              -
  8/22/06    Fox Valley                                      -        1,880          3,622            28              -
  8/22/06    Eagle Creek / Shore Terrace                     -          880          2,878            31              -
  8/22/06    N. Greenwood/E. County Line                     -            -          3,954            28              -
  8/22/06    Annapolis                                       -            -          7,439            28              -
  8/22/06    Creedmoor                                       -        3,579          7,366            28              -
  8/22/06    Painters Crossing                               -        1,582          4,527            28              -
  8/22/06    Greenville Ave & Meadow                         -        2,066          6,969            28              -
  8/22/06    Potomac Mills                                   -        2,806          7,347            51              -
  8/22/06    Sterling / Cascades                             -        3,435          7,713            28              -
  8/22/06    Redmond / Plateau                               -        2,872          7,603            28              -
  8/22/06    Val Vista                                       -        3,686          6,223            28              -
  8/22/06    Van Ness                                        -       11,120         13,555            28              -
  8/22/06    Sandy Plains                                    -        2,452          4,669            28              -
  8/22/06    Country Club Hills                              -        2,783          5,438            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                              <C>        <C>          <C>             <C>
  8/22/06    Leon Valley/Bandera Road                         501        3,510        4,011            64
  8/22/06    Imperial Valley                                1,166        2,784        3,950            51
  8/22/06    Sugarland                                      1,714        3,435        5,149            63
  8/22/06    Woodlands                                      1,353        3,159        4,512            57
  8/22/06    Federal Road                                   1,021        3,114        4,135            57
  8/22/06    West University                                1,940        8,151       10,091           149
  8/22/06    Medical Center/Braeswood II                    1,121        4,706        5,827            87
  8/22/06    Richardson/Audelia                             1,034        2,731        3,765            50
  8/22/06    North Austin                                   2,143        3,702        5,845            68
  8/22/06    Warner                                         1,603        4,029        5,632            74
  8/22/06    Universal City                                   777        3,222        3,999            59
  8/22/06    Seattle / Lake City Way                        3,406        7,822       11,228           143
  8/22/06    Arrowhead                                      2,372        5,846        8,218           107
  8/22/06    Ahwatukee                                      3,017        6,003        9,020           110
  8/22/06    Blossom Valley                                 2,721        8,446       11,167           155
  8/22/06    Jones Bridge                                   3,065        6,045        9,110           111
  8/22/06    Lawrenceville                                  2,076        5,218        7,294            96
  8/22/06    Fox Valley                                     1,880        3,650        5,530            66
  8/22/06    Eagle Creek / Shore Terrace                      880        2,909        3,789            54
  8/22/06    N. Greenwood/E. County Line                        -        3,982        3,982            73
  8/22/06    Annapolis                                          -        7,467        7,467           137
  8/22/06    Creedmoor                                      3,579        7,394       10,973           135
  8/22/06    Painters Crossing                              1,582        4,555        6,137            83
  8/22/06    Greenville Ave & Meadow                        2,066        6,997        9,063           128
  8/22/06    Potomac Mills                                  2,806        7,398       10,204           135
  8/22/06    Sterling / Cascades                            3,435        7,741       11,176           142
  8/22/06    Redmond / Plateau                              2,872        7,631       10,503           141
  8/22/06    Val Vista                                      3,686        6,251        9,937           115
  8/22/06    Van Ness                                      11,120       13,583       24,703           249
  8/22/06    Sandy Plains                                   2,452        4,697        7,149            86
  8/22/06    Country Club Hills                             2,783        5,466        8,249           100
</TABLE>

                                     F-107
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  8/22/06    Schaumburg / Irving Park Rd                     -        2,695          4,781            32              -
  8/22/06    Clinton Township                                -        1,917          4,143            28              -
  8/22/06    Champions                                       -        1,061          3,207            28              -
  8/22/06    Southlake                                       -        2,794          4,760            28              -
  8/22/06    City Place                                      -        2,045          5,776            28              -
  8/22/06    Bee Cave Road                                   -        3,546         10,341            28              -
  8/22/06    Oak Farms                                       -        2,307          8,481            28              -
  8/22/06    Henderson Street                                -          542          5,001            28              -
  8/22/06    Merrifield                                      -        5,061         10,949            30              -
  8/22/06    Mill Creek                                      -        2,917          7,252            28              -
  8/22/06    Pier 57                                         -        2,042          8,719            28              -
  8/22/06    Redmond / 90th                                  -        3,717          7,011            29              -
  8/22/06    Seattle / Capital Hill - 12th                   -        3,811         11,104           283              -
  8/22/06    Costa Mesa                                  2,921        3,622          6,030            86              -
  8/22/06    West Park                                   7,469       11,715         12,915           274              -
  8/22/06    Cabot Road                                  4,355        5,168          9,253            98              -
  8/22/06    San Juan Creek                              4,701        4,755         10,749           100              -
  8/22/06    Rancho San Diego                            3,766        4,226          7,652            72              -
  8/22/06    Palms                                       4,697        2,491         11,404            97              -
  8/22/06    West Covina                                 3,759        3,595          7,360            92              -
  8/22/06    Woodland Hills                              4,767        4,376         11,898           119              -
  8/22/06    Long Beach                                      -        3,130         11,211           114              -
  8/22/06    Northridge                                      -        4,674         11,164            95              -
  8/22/06    Rancho Mirage                                   -        2,614          4,744            88              -
  8/22/06    Palm Desert                                     -        1,910          5,462            97              -
  8/22/06    Davie                                           -        4,842          9,388            28              -
  8/22/06    Portland / I-205 & Division                     -        2,026          4,299            31              -
  8/22/06    Milwaukie/Hwy224                                -        2,867          5,926            28              -
  8/22/06    River Oaks                                      -        2,625          8,930            28              -
  8/22/06    Tacoma / South Sprague Ave                      -        2,189          4,776            28              -
  8/22/06    Vancouver / Hazel Dell                          -        2,299          4,313            31              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>             <C>
  8/22/06    Schaumburg / Irving Park Rd                    2,695        4,813        7,508            88
  8/22/06    Clinton Township                               1,917        4,171        6,088            77
  8/22/06    Champions                                      1,061        3,235        4,296            59
  8/22/06    Southlake                                      2,794        4,788        7,582            88
  8/22/06    City Place                                     2,045        5,804        7,849           106
  8/22/06    Bee Cave Road                                  3,546       10,369       13,915           190
  8/22/06    Oak Farms                                      2,307        8,509       10,816           156
  8/22/06    Henderson Street                                 542        5,029        5,571            92
  8/22/06    Merrifield                                     5,061       10,979       16,040           202
  8/22/06    Mill Creek                                     2,917        7,280       10,197           134
  8/22/06    Pier 57                                        2,042        8,747       10,789           161
  8/22/06    Redmond / 90th                                 3,717        7,040       10,757           129
  8/22/06    Seattle / Capital Hill - 12th                  3,811       11,387       15,198           208
  8/22/06    Costa Mesa                                     3,622        6,116        9,738           112
  8/22/06    West Park                                     11,715       13,189       24,904           241
  8/22/06    Cabot Road                                     5,168        9,351       14,519           171
  8/22/06    San Juan Creek                                 4,755       10,849       15,604           199
  8/22/06    Rancho San Diego                               4,226        7,724       11,950           142
  8/22/06    Palms                                          2,491       11,501       13,992           211
  8/22/06    West Covina                                    3,595        7,452       11,047           137
  8/22/06    Woodland Hills                                 4,376       12,017       16,393           221
  8/22/06    Long Beach                                     3,130       11,325       14,455           208
  8/22/06    Northridge                                     4,674       11,259       15,933           207
  8/22/06    Rancho Mirage                                  2,614        4,832        7,446            88
  8/22/06    Palm Desert                                    1,910        5,559        7,469           102
  8/22/06    Davie                                          4,842        9,416       14,258           172
  8/22/06    Portland / I-205 & Division                    2,026        4,330        6,356            79
  8/22/06    Milwaukie/Hwy224                               2,867        5,954        8,821           109
  8/22/06    River Oaks                                     2,625        8,958       11,583           165
  8/22/06    Tacoma / South Sprague Ave                     2,189        4,804        6,993            88
  8/22/06    Vancouver / Hazel Dell                         2,299        4,344        6,643            79
</TABLE>

                                     F-108
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>             <C>              <C>
  8/22/06    Canyon Park                                     -        3,628          7,327           176              -
  8/22/06    South Boulevard                             4,269        3,090          6,041            30          1,463
  8/22/06    Weddington                                  3,012        2,172          4,263            31          1,030
  8/22/06    Gastonia                                    2,094          644          2,808            28            507
  8/22/06    Amity Ct                                    1,961          610          1,378            28            313
  8/22/06    Pavilion                                    1,601        1,490          3,114            28            732
  8/22/06    Randleman                                   2,098        1,639          2,707            30            712
  8/22/06    Matthews                                        -        1,733          6,457            28          1,220
  8/22/06    Eastland                                    1,736          949          2,159            28            488
  8/22/06    Albermarle                                  3,281        1,557          4,636            28            945
  8/22/06    COTT                                        1,202          429          1,732            28            320
  8/22/06    Ashley River                                    -        1,907          4,065            28            947
  8/22/06    Clayton                                         -        1,071          2,869            28            608
  8/22/06    Dave Lyle                                       -          604          2,111            28            407
  8/22/06    English Rd                                      -          437          1,215            28            254
  8/22/06    Sunset                                          -          659          1,461            30            334
  8/22/06    Cone Blvd                                   1,057        1,253          2,462            28            595
  8/22/06    Wake Forest                                   704        1,098          2,553            28            573
  8/22/06    Silas Creek                                     -        1,304          2,738            28            642
  8/22/06    Winston                                     2,249        1,625          3,368            28            794
  8/22/06    Hickory                                     2,392        1,091          4,271            28            795
  8/22/06    Wilkinson                                   2,069        1,366          3,235            28            720
  8/22/06    Lexington                                   1,212          874          1,806            28            426
  8/22/06    Florence                                    2,889          952          5,557            28            932
  8/22/06    Sumter                                      1,150          560          2,002            28            384
  8/22/06    Garners Ferry                               2,515        1,418          2,516            28            638
  8/22/06    Greenville                                  1,930        1,816          4,732            28          1,014
  8/22/06    Spartanburg                                   509          799          1,550            28            377
  8/22/06    Rockingham                                    834          376          1,352            32            258
  8/22/06    Monroe                                      2,287        1,578          2,996            28            735
  8/22/06    Salisbury                                   3,434           40          5,488            28            724
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>         <C>              <C>
  8/22/06    Canyon Park                                    3,628        7,503       11,131           138
  8/22/06    South Boulevard                                3,766        6,858       10,624           125
  8/22/06    Weddington                                     2,647        4,849        7,496            89
  8/22/06    Gastonia                                         785        3,202        3,987            59
  8/22/06    Amity Ct                                         743        1,586        2,329            29
  8/22/06    Pavilion                                       1,816        3,548        5,364            65
  8/22/06    Randleman                                      1,998        3,090        5,088            56
  8/22/06    Matthews                                       2,112        7,326        9,438           134
  8/22/06    Eastland                                       1,156        2,468        3,624            45
  8/22/06    Albermarle                                     1,898        5,268        7,166            97
  8/22/06    COTT                                             523        1,986        2,509            37
  8/22/06    Ashley River                                   2,324        4,623        6,947            84
  8/22/06    Clayton                                        1,305        3,271        4,576            60
  8/22/06    Dave Lyle                                        736        2,414        3,150            45
  8/22/06    English Rd                                       533        1,401        1,934            26
  8/22/06    Sunset                                           803        1,681        2,484            31
  8/22/06    Cone Blvd                                      1,527        2,811        4,338            51
  8/22/06    Wake Forest                                    1,338        2,914        4,252            54
  8/22/06    Silas Creek                                    1,589        3,123        4,712            57
  8/22/06    Winston                                        1,980        3,835        5,815            70
  8/22/06    Hickory                                        1,330        4,855        6,185            89
  8/22/06    Wilkinson                                      1,665        3,684        5,349            68
  8/22/06    Lexington                                      1,065        2,069        3,134            38
  8/22/06    Florence                                       1,160        6,309        7,469           116
  8/22/06    Sumter                                           683        2,291        2,974            42
  8/22/06    Garners Ferry                                  1,728        2,872        4,600            52
  8/22/06    Greenville                                     2,213        5,377        7,590            98
  8/22/06    Spartanburg                                      974        1,780        2,754            33
  8/22/06    Rockingham                                       458        1,560        2,018            28
  8/22/06    Monroe                                         1,923        3,414        5,337            63
  8/22/06    Salisbury                                         49        6,231        6,280           114
</TABLE>

                                     F-109
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                         <C>          <C>            <C>              <C>           <C>
  8/22/06    N. Tryon                                    2,123        1,271          2,330            31            582
  8/22/06    Pineville                                   4,362        2,609          6,829            33          1,461
  8/22/06    Park Rd                                     4,575        2,667          7,243            29          1,527
  8/22/06    Ballantyne                                      -        1,758          3,720            30            869
  8/22/06    Stallings                                   2,454        1,348          2,882            28            671
  8/22/06    Concord                                     2,009        1,147          2,308            28            552
  8/22/06    Woodruff                                    1,623        1,154          1,616            28            463
  8/22/06    Shriners                                    1,796          758          2,347            30            472
  8/22/06    Charleston                                  1,853          604          3,313            36            564
  8/22/06    Rock Hill                                   2,135          993          2,222            33            506
  8/22/06    Arrowood                                    2,798        2,014          4,214            37            989
  8/22/06    Country Club                                    -          935          3,439            32            652
  8/22/06    Rosewood                                        -          352          2,141            28            356
  8/22/06    James Island/Folly Road                         -        2,061          3,708            28            934
  8/22/06    Battleground                                    -        1,995          3,757            28            925
  8/22/06    Greenwood Village / DTC Blvd                    -          684          2,925            99              -
  8/22/06    Highlands Ranch/ Colorado Blvd                  -          793          2,000           110              -
  8/22/06    Medical Center                              1,727        1,051          3,509           144              -
  8/22/06    Seneca Commons                                  -        2,672          5,354            28          1,283
  8/22/06    Hermitage                                   2,245        1,183          3,226           248              -
  8/22/06    Capital Blvd South                              -        3,002          6,273            28          1,474
  8/22/06    Franklin                                    2,876        1,837          4,294            94              -
  8/22/06    Rivergate                                   2,123        1,055          3,384           157              -
  8/22/06    Hickory Hollow                              1,614          637          2,635           129              -
  8/22/06    Southhaven                                  1,852        1,286          3,578           124              -
  8/22/06    Wolfchase                                   1,465          987          2,816           142              -
  8/22/06    Winchester                                  1,889          676          1,500           158              -
  8/22/06    Sycamore View                               1,161          705          1,936           166              -
  8/22/06    Stones River                                2,168        1,090          3,378           110              -
  8/22/06    South Main                                    585           70            186            76              -
  8/22/06    Southfield at Telegraph                         -        1,757          8,341            28              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    N. Tryon                                       1,549        2,665        4,214            49
  8/22/06    Pineville                                      3,180        7,752       10,932           142
  8/22/06    Park Rd                                        3,250        8,216       11,466           151
  8/22/06    Ballantyne                                     2,142        4,235        6,377            78
  8/22/06    Stallings                                      1,643        3,286        4,929            60
  8/22/06    Concord                                        1,398        2,637        4,035            49
  8/22/06    Woodruff                                       1,406        1,855        3,261            34
  8/22/06    Shriners                                         924        2,683        3,607            50
  8/22/06    Charleston                                       736        3,781        4,517            69
  8/22/06    Rock Hill                                      1,210        2,544        3,754            47
  8/22/06    Arrowood                                       2,454        4,800        7,254            88
  8/22/06    Country Club                                   1,139        3,919        5,058            72
  8/22/06    Rosewood                                         429        2,448        2,877            45
  8/22/06    James Island/Folly Road                        2,512        4,219        6,731            78
  8/22/06    Battleground                                   2,431        4,274        6,705            78
  8/22/06    Greenwood Village / DTC Blvd                     684        3,024        3,708            55
  8/22/06    Highlands Ranch/ Colorado Blvd                   793        2,110        2,903            38
  8/22/06    Medical Center                                 1,051        3,653        4,704            66
  8/22/06    Seneca Commons                                 3,257        6,080        9,337           111
  8/22/06    Hermitage                                      1,183        3,474        4,657            64
  8/22/06    Capital Blvd South                             3,659        7,118       10,777           130
  8/22/06    Franklin                                       1,837        4,388        6,225            80
  8/22/06    Rivergate                                      1,055        3,541        4,596            65
  8/22/06    Hickory Hollow                                   637        2,764        3,401            51
  8/22/06    Southhaven                                     1,286        3,702        4,988            68
  8/22/06    Wolfchase                                        987        2,958        3,945            54
  8/22/06    Winchester                                       676        1,658        2,334            31
  8/22/06    Sycamore View                                    705        2,102        2,807            38
  8/22/06    Stones River                                   1,090        3,488        4,578            64
  8/22/06    South Main                                        70          262          332             5
  8/22/06    Southfield at Telegraph                        1,757        8,369       10,126           153
</TABLE>

                                     F-110
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>          <C>                                             <C>      <C>            <C>              <C>             <C>
  8/22/06    Westland                                        -        1,572          3,687            28              -
  8/22/06    Dearborn                                        -        1,030          4,847            28              -
  8/22/06    Roseville                                       -        1,319          5,210            28              -
  8/22/06    Farmington Hills                                -          982          2,878            28              -
  8/22/06    Hunt Club                                       -        2,527          5,483            29            729
  8/22/06    Speedway/N. High School Rd                      -        2,091          3,566            28              -
  8/22/06    Alafaya/University Blvd.                        -        2,817          4,549            28            689
  8/22/06    McCoy/528                                       -        2,656          5,206            35              -
  8/22/06    S. Orange Blossom Trail/417                 2,990        2,810          6,849            28            870
  8/22/06    Alafaya/Mitchell Hammock Road               2,706        2,363          5,092            28            679
  8/22/06    Maitland / Lake Ave                         4,364        5,146         10,670            29          1,445
  8/22/06    S. Semoran / Hoffner Road                   2,663        2,633          6,601            30            829
  8/22/06    Red Bug / Dodd Road                         2,703        2,552          5,959            28            769
  8/22/06    Altmonte Springs                            2,303        1,703          5,125            29            604
  8/22/06    Brandon                                     2,964        2,810          4,584            28            691
  8/22/06    Granada / U.S. 1                            2,878        2,682          4,751            40            689
  8/22/06    Daytona/Beville                             2,867        2,616          6,085            28            786
  8/22/06    Eau Gallie                                  2,576        1,962          4,677            28            599
  8/22/06    Hyde Park                                   2,872        2,719          7,145            28            883
  8/22/06    Carrollwood                                 1,465        2,050          6,221            28            731
  8/22/06    Conroy / I-4                                1,874        2,091          3,517            28            523
  8/22/06    West Waters                                     -        2,190          5,186            28            666
  8/22/06    Oldsmar                                     2,246        2,276          5,253            35            682
  8/22/06    Mills North of Colonial                     4,566        1,995          5,914            31            701
  8/22/06    Alafaya / Colonial                          2,828        2,836          4,680            28            701
  8/22/06    Fairbanks / I-4                                 -        2,846          6,612            28            855
  8/22/06    Maguire / Colonial                              -          479          7,521           151            839
  10/20/06   Burbank-Rich R.                                 -        3,793          9,103             -              -
  10/24/06   Stonegate                                       -          651          4,278             -              -
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>          <C>                                            <C>          <C>          <C>              <C>
  8/22/06    Westland                                       1,572        3,715        5,287            68
  8/22/06    Dearborn                                       1,030        4,875        5,905            89
  8/22/06    Roseville                                      1,319        5,238        6,557            96
  8/22/06    Farmington Hills                                 982        2,906        3,888            54
  8/22/06    Hunt Club                                      2,823        5,945        8,768           109
  8/22/06    Speedway/N. High School Rd                     2,091        3,594        5,685            66
  8/22/06    Alafaya/University Blvd.                       3,147        4,936        8,083            91
  8/22/06    McCoy/528                                      2,656        5,241        7,897            96
  8/22/06    S. Orange Blossom Trail/417                    3,139        7,418       10,557           135
  8/22/06    Alafaya/Mitchell Hammock Road                  2,640        5,522        8,162           101
  8/22/06    Maitland / Lake Ave                            5,749       11,541       17,290           212
  8/22/06    S. Semoran / Hoffner Road                      2,941        7,152       10,093           132
  8/22/06    Red Bug / Dodd Road                            2,851        6,457        9,308           119
  8/22/06    Altmonte Springs                               1,903        5,558        7,461           102
  8/22/06    Brandon                                        3,139        4,974        8,113            91
  8/22/06    Granada / U.S. 1                               2,996        5,166        8,162            95
  8/22/06    Daytona/Beville                                2,922        6,593        9,515           121
  8/22/06    Eau Gallie                                     2,192        5,074        7,266            93
  8/22/06    Hyde Park                                      3,038        7,737       10,775           142
  8/22/06    Carrollwood                                    2,290        6,740        9,030           124
  8/22/06    Conroy / I-4                                   2,336        3,823        6,159            70
  8/22/06    West Waters                                    2,447        5,623        8,070           103
  8/22/06    Oldsmar                                        2,543        5,703        8,246           105
  8/22/06    Mills North of Colonial                        2,229        6,412        8,641           118
  8/22/06    Alafaya / Colonial                             3,168        5,077        8,245            93
  8/22/06    Fairbanks / I-4                                3,179        7,162       10,341           132
  8/22/06    Maguire / Colonial                               815        8,175        8,990           149
  10/20/06   Burbank-Rich R.                                3,793        9,103       12,896            61
  10/24/06   Stonegate                                        651        4,278        4,929            29
</TABLE>

                                     F-111
<PAGE>
                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


Self-storage Facilities - Europe

<S>             <C>                                        <C>        <C>            <C>              <C>              <C>
    8/22/06     Wokingham                                  6,843      3,243          9,492            53               -
    8/22/06     Diemen                                     4,756      1,755          6,901            39               -
    8/22/06     Surbiton                                       -        805          2,774            16               -
    8/22/06     Veldhoven                                  4,165      1,347          5,636            32               -
    8/22/06     Wuppertal Friedrich-Engels-Alle            4,273        221          2,470            15               -
    8/22/06     Mulheim Dusseldorfer Strasse               3,387        567          3,989            23               -
    8/22/06     Koln Melatengurtel                         5,191        624          5,534            31               -
    8/22/06     Dordrecht Ampere                           3,648        409          4,786            27               -
    8/22/06     Dusseldorf Erkrather Strasse               4,700      1,143          4,052            22               -
    8/22/06     Delft                                      4,369      1,149          6,926            39               -
    8/22/06     Marseille Bonneveine                       3,918      1,156          6,891            39               -
    8/22/06     Utrecht Cartesius                          4,344        774          6,092            36               -
    8/22/06     Forest                                     6,314         11          4,815            28               -
    8/22/06     Molenbeek                                  2,211        197          1,974            12               -
    8/22/06     Waterloo                                   6,307         49          8,941            52               -
    8/22/06     Aartselaar                                 3,738      1,847          6,950            38               -
    8/22/06     Overijse                                   2,569        870          4,121            23               -
    8/22/06     Leuven                                     3,629        843          4,804            27               -
    8/22/06     Kortrijk                                   3,000        520          3,319            19               -
    8/22/06     Brugge                                     2,536        659          3,024            16               -
    8/22/06     Antwerpen Bredabaan                        3,402      1,759          3,822            20               -
    8/22/06     Luik                                       2,330        571          4,101            23               -
    8/22/06     Linkeroever                                2,319        551          2,884            17               -
    8/22/06     Borgerhout                                 3,215         17          2,001            12               -
    8/22/06     Zaventem                                   4,451      3,361          6,931            38               -
    8/22/06     Machelen                                   2,813      1,696          4,871            28               -
    8/22/06     Ghent                                      4,292        897          7,778        (2,091)              -
    8/22/06     Sint Pieters Leeuw                         2,619        729          3,924            23               -
    8/22/06     Jette                                      4,749      1,643          6,733           (89)              -
    8/22/06     Wavre                                      2,458        610          4,031            22               -
    8/22/06     Den Haag                                   5,485        166         11,472            66               -
    8/22/06     Rotterdam                                  3,341         29          9,644            56               -
    8/22/06     Utrecht Nieuwegein                         4,310      2,563          9,799            55               -
    8/22/06     Amsterdam                                  3,059          7          9,047            53               -
    8/22/06     Zaandam                                    4,031        398          5,887            35               -
</TABLE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                               --------------------------------------- Accumulated
  Acquired                Description                     Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>             <C>                                        <C>        <C>       <C>              <C>
    8/22/06     Wokingham                                  3,241      9,547     12,788           137
    8/22/06     Diemen                                     1,754      6,941      8,695           100
    8/22/06     Surbiton                                     804      2,791      3,595            40
    8/22/06     Veldhoven                                  1,346      5,669      7,015            81
    8/22/06     Wuppertal Friedrich-Engels-Alle              221      2,485      2,706            35
    8/22/06     Mulheim Dusseldorfer Strasse                 567      4,012      4,579            57
    8/22/06     Koln Melatengurtel                           623      5,566      6,189            80
    8/22/06     Dordrecht Ampere                             409      4,813      5,222            69
    8/22/06     Dusseldorf Erkrather Strasse               1,142      4,075      5,217            58
    8/22/06     Delft                                      1,148      6,966      8,114           101
    8/22/06     Marseille Bonneveine                       1,155      6,931      8,086           101
    8/22/06     Utrecht Cartesius                            774      6,128      6,902            88
    8/22/06     Forest                                        11      4,843      4,854            70
    8/22/06     Molenbeek                                    197      1,986      2,183            28
    8/22/06     Waterloo                                      49      8,993      9,042           130
    8/22/06     Aartselaar                                 1,845      6,990      8,835           101
    8/22/06     Overijse                                     869      4,145      5,014            60
    8/22/06     Leuven                                       842      4,832      5,674            70
    8/22/06     Kortrijk                                     520      3,338      3,858            48
    8/22/06     Brugge                                       658      3,041      3,699            44
    8/22/06     Antwerpen Bredabaan                        1,757      3,844      5,601            55
    8/22/06     Luik                                         570      4,125      4,695            59
    8/22/06     Linkeroever                                  551      2,901      3,452            41
    8/22/06     Borgerhout                                    17      2,013      2,030            28
    8/22/06     Zaventem                                   3,359      6,971     10,330           101
    8/22/06     Machelen                                   1,695      4,900      6,595            71
    8/22/06     Ghent                                        896      5,688      6,584           113
    8/22/06     Sint Pieters Leeuw                           729      3,947      4,676            57
    8/22/06     Jette                                      1,642      6,645      8,287            97
    8/22/06     Wavre                                        609      4,054      4,663            58
    8/22/06     Den Haag                                     166     11,538     11,704           166
    8/22/06     Rotterdam                                     29      9,700      9,729           141
    8/22/06     Utrecht Nieuwegein                         2,561      9,856     12,417           143
    8/22/06     Amsterdam                                      7      9,100      9,107           132
    8/22/06     Zaandam                                      398      5,922      6,320            85
</TABLE>

                                     F-112
<PAGE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>             <C>                                        <C>           <C>         <C>              <C>              <C>
    8/22/06     Amersfoort                                 8,568         17          7,473            44               -
    8/22/06     Apeldoorn                                  3,638        999          6,091            34               -
    8/22/06     Breda                                      4,442        824          6,985            40               -
    8/22/06     Spaanse Polder                             2,459          -          5,690            33               -
    8/22/06     Kerkrade - Heerlen                         3,486        381          5,097            28               -
    8/22/06     Heemstede                                  9,292         18          8,564            50               -
    8/22/06     Rotterdam Stadionweg                       3,304        419          5,842            33               -
    8/22/06     Dordrecht II                               4,524        815          5,524            32               -
    8/22/06     Nijmegen                                   2,665          -          5,328            31               -
    8/22/06     Ede                                        3,652        867          5,406            30               -
    8/22/06     Rijswijk                                   3,643        949          5,956            35               -
    8/22/06     Spijkenisse                                3,765        633          6,573            38               -
    8/22/06     Maastricht                                 3,405        923          4,874            28               -
    8/22/06     Essen Martin Luther Strasse                5,078      1,875          5,771            32               -
    8/22/06     KUNGENS KURVA                              4,001      5,473          7,911            41               -
    8/22/06     TABY                                       3,709      2,249         11,309            64               -
    8/22/06     JAKOBSBERG                                 3,095      1,971          8,920            50               -
    8/22/06     RISSNE                                     4,460        111         11,258            65               -
    8/22/06     SOLNA                                      7,391      2,666         17,961           103               -
    8/22/06     UPPSALA                                    3,766      1,413          9,818            56               -
    8/22/06     HOGDALEN                                   4,197      1,192          9,475            55               -
    8/22/06     HANDEN                                     4,081      1,548         11,019            63               -
    8/22/06     MOLNDAL  (GBG)                             3,903      2,828          9,605            54               -
    8/22/06     SODERMALM                                  1,487         15          2,729            16               -
    8/22/06     UPPLANDS VASBY                             4,328      1,196          8,090            46               -
    8/22/06     SKONDAL                                    4,072         62         11,110            64               -
    8/22/06     LUNDAVAGEN  (MMO)                          4,593      1,866          8,390            47               -
    8/22/06     MORABERG  (STHLM)                          3,760      1,552          7,071            40               -
    8/22/06     LUND (MMO)                                 3,236      1,485          5,766            33               -
    8/22/06     YSTADSVAGEN (MMO)                          3,495        908          7,632            44               -
    8/22/06     MINELUND (GBG)                             4,054      1,763          8,292            46               -
    8/22/06     VASTRA FROLUNDA  (GBG)                     4,080      2,184          8,140            46               -
    8/22/06     DANDERYD                                   4,699      2,571          9,366            52               -
    8/22/06     ARSTABERG                                  4,281         69          9,846            57               -
    8/22/06     Hvidovre                                   5,341      1,576         10,166            57               -
    8/22/06     Ishoj                                      4,017        816          8,048            46               -
    8/22/06     Roskilde                                   5,143        794          8,723            50               -
    8/22/06     Horsholm                                   5,076      2,364         10,860            61               -
</TABLE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                             Gross Carrying Amount
                                                             At December 31, 2006
    Date                                                --------------------------------------- Accumulated
  Acquired                Description                      Land       Buildings      Total     Depreciation
-----------------------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
-----------------------------------------------------------------------------------------------------------


<S>             <C>                                            <C>     <C>        <C>             <C>
    8/22/06     Amersfoort                                     17      7,517      7,534           108
    8/22/06     Apeldoorn                                     998      6,126      7,124            88
    8/22/06     Breda                                         823      7,026      7,849           101
    8/22/06     Spaanse Polder                                  -      5,723      5,723            82
    8/22/06     Kerkrade - Heerlen                            380      5,126      5,506            74
    8/22/06     Heemstede                                      18      8,614      8,632           124
    8/22/06     Rotterdam Stadionweg                          418      5,876      6,294            85
    8/22/06     Dordrecht II                                  815      5,556      6,371            80
    8/22/06     Nijmegen                                        -      5,359      5,359            77
    8/22/06     Ede                                           866      5,437      6,303            78
    8/22/06     Rijswijk                                      949      5,991      6,940            86
    8/22/06     Spijkenisse                                   633      6,611      7,244            95
    8/22/06     Maastricht                                    922      4,903      5,825            70
    8/22/06     Essen Martin Luther Strasse                 1,874      5,804      7,678            83
    8/22/06     KUNGENS KURVA                               5,468      7,957     13,425           114
    8/22/06     TABY                                        2,247     11,375     13,622           164
    8/22/06     JAKOBSBERG                                  1,969      8,972     10,941           129
    8/22/06     RISSNE                                        111     11,323     11,434           163
    8/22/06     SOLNA                                       2,664     18,066     20,730           260
    8/22/06     UPPSALA                                     1,412      9,875     11,287           142
    8/22/06     HOGDALEN                                    1,191      9,531     10,722           136
    8/22/06     HANDEN                                      1,547     11,083     12,630           159
    8/22/06     MOLNDAL  (GBG)                              2,826      9,661     12,487           139
    8/22/06     SODERMALM                                      15      2,745      2,760            39
    8/22/06     UPPLANDS VASBY                              1,195      8,137      9,332           116
    8/22/06     SKONDAL                                        61     11,175     11,236           161
    8/22/06     LUNDAVAGEN  (MMO)                           1,864      8,439     10,303           121
    8/22/06     MORABERG  (STHLM)                           1,551      7,112      8,663           102
    8/22/06     LUND (MMO)                                  1,484      5,800      7,284            83
    8/22/06     YSTADSVAGEN (MMO)                             908      7,676      8,584           110
    8/22/06     MINELUND (GBG)                              1,761      8,340     10,101           119
    8/22/06     VASTRA FROLUNDA  (GBG)                      2,182      8,188     10,370           117
    8/22/06     DANDERYD                                    2,569      9,420     11,989           134
    8/22/06     ARSTABERG                                      69      9,903      9,972           142
    8/22/06     Hvidovre                                    1,574     10,225     11,799           147
    8/22/06     Ishoj                                         815      8,095      8,910           117
    8/22/06     Roskilde                                      793      8,774      9,567           126
    8/22/06     Horsholm                                    2,362     10,923     13,285           158
</TABLE>

                                     F-113
<PAGE>
                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>             <C>                                        <C>       <C>             <C>              <C>              <C>
    8/22/06     Croydon                                    6,228     12,151          8,992            44               -
    8/22/06     Streatham                                  5,100      6,351          6,134            30               -
    8/22/06     Reading                                    7,416      6,955          8,859            47               -
    8/22/06     Hayes                                      6,146      5,121         10,468            57               -
    8/22/06     Hanworth                                   6,098      7,586          9,661            51               -
    8/22/06     Ewell                                      6,251      5,351         14,127            79               -
    8/22/06     Neasden                                    8,174      5,514          9,178            49               -
    8/22/06     Putney                                     8,331      6,032         14,902            83               -
    8/22/06     Greenford                                  9,600      8,747         11,122            59               -
    8/22/06     Ruislip                                    5,036          -         14,975            87               -
    8/22/06     Gypsy Corner                               7,470      9,299         11,086            58               -
    8/22/06     Montrouge                                  3,127         25         10,697            62               -
    8/22/06     Varlin                                       310          -          1,348             8               -
    8/22/06     Nice                                       4,134      2,379          7,015            39               -
    8/22/06     Osny                                       3,240        820          6,050            34               -
    8/22/06     Nanterre                                   5,687      3,668         15,878            90               -
    8/22/06     Port-Marly                                 3,629      1,702          9,647            54               -
    8/22/06     Fresnes                                    4,456      2,680          9,012            50               -
    8/22/06     Ballainvilliers                            4,036      1,643          7,711            42               -
    8/22/06     Pontault Combault                          3,339        908          7,096            41               -
    8/22/06     Villejust                                  3,962        981          9,134            53               -
    8/22/06     Asnieres                                   5,906      3,057         14,566            83               -
    8/22/06     Rosny                                      4,144      1,619          9,876            56               -
    8/22/06     Buchelay                                   3,986        950          5,152            30               -
    8/22/06     Coignieres                                 3,720      1,142          7,511            42               -
    8/22/06     Grigny                                     4,006        548          7,518            43               -
    8/22/06     Marseille                                  4,685        365          6,148            35               -
    8/22/06     Epinay                                     4,045        417          6,395            37               -
    8/22/06     Thiais                                     5,739      2,602          7,221            40               -
    8/22/06     Vitrolles                                  4,224        581          6,380            37               -
    8/22/06     La Seyne                                   3,720      1,047          6,978            41               -
    8/22/06     Sevran                                     4,224        933          8,155            47               -
    8/22/06     Noisy                                      5,131      1,347          7,537            43               -
    8/22/06     Lyon Gerland                               4,455        991          4,578            25               -
    8/22/06     Chambourcy                                 5,142      1,867          8,415            47               -
    8/22/06     West London                                    -      5,730         14,278            79               -
    8/22/06     Monchengladbach Krefelder Strasse          4,448      1,510          4,425            24               -
    8/22/06     Monchengladbach Waldnieler Strasse         4,601      1,846          4,416            24               -
</TABLE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                           Gross Carrying Amount
                                                           At December 31, 2006
    Date                                               -------------------------------------- Accumulated
  Acquired                Description                    Land       Buildings      Total     Depreciation
---------------------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
---------------------------------------------------------------------------------------------------------


<S>             <C>                                      <C>         <C>       <C>              <C>
    8/22/06     Croydon                                  12,142      9,045     21,187           129
    8/22/06     Streatham                                 6,346      6,169     12,515            88
    8/22/06     Reading                                   6,950      8,911     15,861           127
    8/22/06     Hayes                                     5,117     10,529     15,646           151
    8/22/06     Hanworth                                  7,580      9,718     17,298           139
    8/22/06     Ewell                                     5,347     14,210     19,557           204
    8/22/06     Neasden                                   5,510      9,231     14,741           130
    8/22/06     Putney                                    6,028     14,989     21,017           215
    8/22/06     Greenford                                 8,741     11,187     19,928           158
    8/22/06     Ruislip                                       -     15,062     15,062           216
    8/22/06     Gypsy Corner                              9,292     11,151     20,443           159
    8/22/06     Montrouge                                    25     10,759     10,784           156
    8/22/06     Varlin                                        -      1,356      1,356            20
    8/22/06     Nice                                      2,377      7,056      9,433           102
    8/22/06     Osny                                        819      6,085      6,904            88
    8/22/06     Nanterre                                  3,665     15,971     19,636           232
    8/22/06     Port-Marly                                1,700      9,703     11,403           141
    8/22/06     Fresnes                                   2,678      9,064     11,742           131
    8/22/06     Ballainvilliers                           1,641      7,755      9,396           112
    8/22/06     Pontault Combault                           907      7,138      8,045           103
    8/22/06     Villejust                                   981      9,187     10,168           133
    8/22/06     Asnieres                                  3,055     14,651     17,706           213
    8/22/06     Rosny                                     1,617      9,934     11,551           144
    8/22/06     Buchelay                                    950      5,182      6,132            74
    8/22/06     Coignieres                                1,141      7,554      8,695           109
    8/22/06     Grigny                                      547      7,562      8,109           109
    8/22/06     Marseille                                   364      6,184      6,548            89
    8/22/06     Epinay                                      417      6,432      6,849            93
    8/22/06     Thiais                                    2,600      7,263      9,863           105
    8/22/06     Vitrolles                                   581      6,417      6,998            92
    8/22/06     La Seyne                                  1,047      7,019      8,066           101
    8/22/06     Sevran                                      933      8,202      9,135           118
    8/22/06     Noisy                                     1,346      7,581      8,927           109
    8/22/06     Lyon Gerland                                990      4,604      5,594            66
    8/22/06     Chambourcy                                1,865      8,464     10,329           122
    8/22/06     West London                               5,726     14,361     20,087           206
    8/22/06     Monchengladbach Krefelder Strasse         1,509      4,450      5,959            64
    8/22/06     Monchengladbach Waldnieler Strasse        1,844      4,442      6,286            64
</TABLE>

                                     F-114
<PAGE>
                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>             <C>                                        <C>        <C>            <C>              <C>              <C>
    8/22/06     Dusseldorf Heerdter Landstrasse            4,161      1,125          4,708            27               -
    8/22/06     Osterbro                                   5,237      2,345          8,334            46               -
    8/22/06     Tarnby                                     5,202      1,731          6,210            34               -
    8/22/06     Krefeld Diessemer Bruch                    3,905        932          4,819            27               -
    8/22/06     Herlev                                     4,823      2,149          5,500            30               -
    8/22/06     Bonn Bornheimer Strasse                    4,705      2,072          5,044            28               -
    8/22/06     Amager                                     4,940        534          7,598            44               -
    8/22/06     Koln Clevischer Ring                       3,958      1,247          4,812            27               -
    8/22/06     Edgeware                                   8,121      3,569          8,811            48               -
    8/22/06     Forest Hill                                7,659      3,443          9,126            51               -
    8/22/06     Wallington                                 6,756      2,047          8,402            47               -
    8/22/06     Helsingborg                                3,633        652          4,920            27               -
    8/22/06     Vallingby                                  4,710      2,288          6,933            38               -
    8/22/06     Eragny                                     4,179        892          5,672            32               -
    8/22/06     Utrecht Franciscus                         4,951      2,882          4,757            26               -
    8/22/06     Amsterdam Sneevliet                        4,722          -          5,615            32               -
    8/22/06     Sucy                                       4,914      3,743          4,227            21               -
    8/22/06     Tilburg                                    3,883      1,265          4,629            26               -
    8/22/06     Almere                                     4,440      1,294          5,654            32               -
    8/22/06     Wattignies                                 3,605        712          4,930            28               -
    8/22/06     Eindhoven Praxis                           3,156          -          4,835            29               -
    8/22/06     Pessac                                     4,354      1,443          5,531            31               -
    8/22/06     Amstelveen                                 2,726          -          3,792            22               -
    8/22/06     Lyon Vaise                                 4,432      2,084          4,486            25               -
    8/22/06     Amsterdam Badhoeve                         3,931      1,542          4,573            25               -
    8/22/06     Wambrechies                                3,246      1,615          3,136            17               -
    8/22/06     Merignac                                   4,098      1,282          5,193            30               -
    8/22/06     Pierrefitte                                4,662      1,917          5,338            30               -
    8/22/06     Avignon                                    3,773      1,456          4,738            25               -
    8/22/06     Wasquehal                                  3,917        961          5,205            29               -
    8/22/06     Lormont                                    4,076        956          5,792            32               -
    8/22/06     Lyon Sarrazin                              4,631        660          6,568            37               -
    8/22/06     Hatch End                                  8,185      3,010          7,910            44               -
    8/22/06     Nacka                                      5,148      1,072          6,507            37               -
    8/22/06     Kgl Tennishallen                           1,086          -          1,373             8               -
    8/22/06     Den Haag 2, Lozerlaan                      3,073          -          4,615            27               -
    8/22/06     Zoetermeer                                 3,091          -          4,368            25               -
    8/22/06     Aix La Pioline                             5,121      1,661          5,945            35               -
</TABLE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                             Gross Carrying Amount
                                                             At December 31, 2006
    Date                                                --------------------------------------- Accumulated
  Acquired                Description                      Land       Buildings      Total     Depreciation
-----------------------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
-----------------------------------------------------------------------------------------------------------


<S>             <C>                                         <C>        <C>        <C>              <C>
    8/22/06     Dusseldorf Heerdter Landstrasse             1,124      4,736      5,860            68
    8/22/06     Osterbro                                    2,343      8,382     10,725           121
    8/22/06     Tarnby                                      1,729      6,246      7,975            90
    8/22/06     Krefeld Diessemer Bruch                       931      4,847      5,778            70
    8/22/06     Herlev                                      2,147      5,532      7,679            80
    8/22/06     Bonn Bornheimer Strasse                     2,071      5,073      7,144            73
    8/22/06     Amager                                        534      7,642      8,176           110
    8/22/06     Koln Clevischer Ring                        1,246      4,840      6,086            69
    8/22/06     Edgeware                                    3,566      8,862     12,428           126
    8/22/06     Forest Hill                                 3,441      9,179     12,620           131
    8/22/06     Wallington                                  2,045      8,451     10,496           120
    8/22/06     Helsingborg                                   651      4,948      5,599            70
    8/22/06     Vallingby                                   2,286      6,973      9,259            99
    8/22/06     Eragny                                        891      5,705      6,596            82
    8/22/06     Utrecht Franciscus                          2,880      4,785      7,665            69
    8/22/06     Amsterdam Sneevliet                             -      5,647      5,647            81
    8/22/06     Sucy                                        3,740      4,251      7,991            61
    8/22/06     Tilburg                                     1,264      4,656      5,920            67
    8/22/06     Almere                                      1,293      5,687      6,980            82
    8/22/06     Wattignies                                    712      4,958      5,670            71
    8/22/06     Eindhoven Praxis                                -      4,864      4,864            70
    8/22/06     Pessac                                      1,442      5,563      7,005            80
    8/22/06     Amstelveen                                      -      3,814      3,814            55
    8/22/06     Lyon Vaise                                  2,082      4,513      6,595            65
    8/22/06     Amsterdam Badhoeve                          1,541      4,599      6,140            66
    8/22/06     Wambrechies                                 1,614      3,154      4,768            45
    8/22/06     Merignac                                    1,281      5,224      6,505            75
    8/22/06     Pierrefitte                                 1,916      5,369      7,285            77
    8/22/06     Avignon                                     1,454      4,765      6,219            69
    8/22/06     Wasquehal                                     960      5,235      6,195            75
    8/22/06     Lormont                                       955      5,825      6,780            84
    8/22/06     Lyon Sarrazin                                 659      6,606      7,265            95
    8/22/06     Hatch End                                   3,008      7,956     10,964           113
    8/22/06     Nacka                                       1,071      6,545      7,616            93
    8/22/06     Kgl Tennishallen                                -      1,381      1,381            20
    8/22/06     Den Haag 2, Lozerlaan                           -      4,642      4,642            67
    8/22/06     Zoetermeer                                      -      4,393      4,393            63
    8/22/06     Aix La Pioline                              1,661      5,980      7,641            86
</TABLE>

                                     F-115
<PAGE>
                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


<S>             <C>                                       <C>         <C>           <C>               <C>              <C>
    8/22/06     Poissonniers                              10,779      2,160         14,646            85               -
    8/22/06     Marseille le cannet                        2,920        925          2,844            16               -
    8/22/06     Groot-Bijgaarden                           4,690      2,321          4,749            28               -
    8/22/06     Aubervilliers la Villette                      -          -            544             4               -
    8/22/06     Charenton                                      -          -          1,946            11               -
    8/22/06     Lille Lezennes                                 -          -             13             -               -
    8/22/06     Nanterre - la Defense                      8,805      3,908          8,718            48               -
    8/22/06     Bezons - Pont                              5,733      2,194          5,785            33               -
    8/22/06     Clichy Republique                          5,881      4,641          6,112            32               -
    8/22/06     Creteil - RN6                              7,401      1,754          7,311            40               -
    8/22/06     Lyon - Jean Mace                           3,183        419          3,012            18               -
   11/16/06     Camberley                                  8,054      3,266          9,786             -               -
    12/1/06     Jean Jaures                                6,188      3,016          8,034             -               -
    12/1/06     bezon                                      2,880      1,611          5,778             -               -
   12/19/06     Munkeback                                  2,203      1,193          3,920             -               -
   12/27/06     Evere                                      2,144      1,645          3,288             -               -
   12/27/06     Gent 2, Antwerpsestw                       3,303        875          3,673             -               -
</TABLE>

                             PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                                -------------------------------------- Accumulated
  Acquired                Description                     Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


<S>             <C>                                        <C>       <C>        <C>              <C>
    8/22/06     Poissonniers                               2,160     14,731     16,891           212
    8/22/06     Marseille le cannet                          925      2,860      3,785            41
    8/22/06     Groot-Bijgaarden                           2,321      4,777      7,098            69
    8/22/06     Aubervilliers la Villette                      -        548        548             8
    8/22/06     Charenton                                      -      1,957      1,957            28
    8/22/06     Lille Lezennes                                 -         13         13             -
    8/22/06     Nanterre - la Defense                      3,905      8,769     12,674           126
    8/22/06     Bezons - Pont                              2,193      5,819      8,012            84
    8/22/06     Clichy Republique                          4,638      6,147     10,785            88
    8/22/06     Creteil - RN6                              1,752      7,353      9,105           106
    8/22/06     Lyon - Jean Mace                             419      3,030      3,449            43
   11/16/06     Camberley                                  3,266      9,786     13,052            30
    12/1/06     Jean Jaures                                3,016      8,034     11,050             1
    12/1/06     bezon                                      1,611      5,778      7,389            15
   12/19/06     Munkeback                                  1,193      3,920      5,113             -
   12/27/06     Evere                                      1,645      3,288      4,933             -
   12/27/06     Gent 2, Antwerpsestw                         875      3,673      4,548             -
</TABLE>

                                     F-116
<PAGE>
                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                             Adjustments
                                                                        Initial Cost                          Resulting
                                                                  ----------------------------                 from the
                                                         2006                                   Costs        Acquisition
    Date                                                Encum-                  Buildings &    Subsequent    of Minority
  Acquired                Description                   brances       Land     Improvements  to Acquisition   Interest
--------------------------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
--------------------------------------------------------------------------------------------------------------------------


Other properties

<S>          <C>                                             <C>      <C>            <C>          <C>                 <C>
  2/16/96    Glendale/Western Avenue                         -        1,622          3,771        15,867              -
  8/22/06    Corporate - Belgium                             -            2          6,460            44              -
  8/22/06    Seattle/Valley St.                              -        4,016         20,995             -              -
  12/13/99   Burlingame                                      -        4,043          9,434           327              -
  4/28/00    San Diego/Sorrento                              -        1,282          3,016           322              -
   6/1/98    Renton / Sw 39th St.                            -          725          2,196            51              -
  6/29/98    Pompano Bch/Center Port Circle                  -          795          2,312            23              -
  12/30/99   Tamarac Parkway                                 -        1,902          4,467         1,347              -
  12/29/00   Gardena                                         -        1,737          5,456            27              -
   4/2/02    Long Beach                                      -          887          6,251            15              -
  8/22/06    Lakewood / 512                                  -        4,437          6,685             7              -
  8/22/06    Olive Innerbelt                                 -          787          3,023             -              -
  8/22/06    St. Peters (land)                               -        1,138              -             -              -
  8/22/06    Monocacy (land)                                 -        1,386              -             -              -
  8/22/06    Dolfield (land)                                 -          643              -             -              -
  8/22/06    Village of Bee Caves (land)                     -          544              -             -              -
  8/22/06    Fontana (land)                                  -           99              -             -              -

             Construction in Progress                        -            -              -        90,038              -



                                                   ----------------------------------------------------------------------
                                                     $ 1,028,190  $ 2,900,564    $ 7,276,819     $ 805,495      $ 369,025
                                                   ======================================================================
</TABLE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>



                                                            Gross Carrying Amount
                                                            At December 31, 2006
    Date                                             -------------------------------------- Accumulated
  Acquired                Description                  Land       Buildings      Total     Depreciation
----------------------------------------------------------------------------------------------------------
                                            (Dollar amounts in thousands)
----------------------------------------------------------------------------------------------------------


Other properties

<S>          <C>                                            <C>         <C>          <C>           <C>
  2/16/96    Glendale/Western Avenue                        1,615       19,645       21,260        16,654
  8/22/06    Corporate - Belgium                                2        6,504        6,506            52
  8/22/06    Seattle/Valley St.                             4,016       20,995       25,011           301
  12/13/99   Burlingame                                     4,042        9,762       13,804         2,811
  4/28/00    San Diego/Sorrento                             1,023        3,597        4,620         1,104
   6/1/98    Renton / Sw 39th St.                             725        2,247        2,972           851
  6/29/98    Pompano Bch/Center Port Circle                   795        2,335        3,130           823
  12/30/99   Tamarac Parkway                                1,890        5,826        7,716         1,001
  12/29/00   Gardena                                        1,737        5,483        7,220         1,055
   4/2/02    Long Beach                                       886        6,267        7,153           717
  8/22/06    Lakewood / 512                                 4,437        6,692       11,129            96
  8/22/06    Olive Innerbelt                                  787        3,023        3,810            43
  8/22/06    St. Peters (land)                              1,138            -        1,138             -
  8/22/06    Monocacy (land)                                1,386            -        1,386             -
  8/22/06    Dolfield (land)                                  643            -          643             -
  8/22/06    Village of Bee Caves (land)                      544            -          544             -
  8/22/06    Fontana (land)                                    99            -           99             -

             Construction in Progress                           -       90,038       90,038             -


                                                   -------------------------------------------------------
                                                      $ 2,959,875  $ 8,392,028  $ 11,351,903   $ 1,754,362
                                                   =======================================================
</TABLE>

                                     F-117