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, 2004 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
        incorporation or organization)                 Identification Number)
   701 Western Avenue, Glendale, California                  91201-2349
--------------------------------------------           ----------------------
   (Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code: (818) 244-8080.
                                                    ---------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
                                                                                          Name of each exchange
                                Title of each class                                        on which registered
--------------------------------------------------------------------------------       ----------------------------
<C>                                                                                      <C>
9.750% Cumulative Preferred Stock, Series F, $.01 par value.....................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.600% Cumulative
     Preferred Stock, Series Q, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.000% Cumulative
     Preferred Stock, Series R, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.875% Cumulative
     Preferred Stock, Series S, $.01 par value..................................         New York Stock Exchange
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 Equity Stock, Series A,
     $.01 par value.............................................................         New York Stock Exchange
Common Stock, $.10 par value....................................................         New York Stock Exchange,
                                                                                             Pacific Exchange

</TABLE>

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

                                      None
                          --------------------------
                                (Title of class)
                          --------------------------

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

                                [ X ] Yes [ ] No

<PAGE>

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 the
Form 10-K. [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act) Yes [ X ] No [ ]

The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant as of June 30, 2004:

Common Stock, $0.10 Par Value - $3,687,482,000 (computed on the basis of $46.01
per share which was the reported closing sale price of the Company's Common
Stock on the New York Stock Exchange on June 30, 2004).

Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
A, $.01 Par Value - $194,799,000 (computed on the basis of $26.11 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, 2004).

The number of shares outstanding of the registrant's classes of common stock as
of March 14, 2005:

Common Stock, $.10 Par Value - 129,560,552 shares
-------------------------------------------------

Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
------------------------------------------------------------------------------
A, $.01 Par Value - 8,776,102 depositary shares (representing 8,776.102 shares
------------------------------------------------------------------------------
of Equity Stock, Series A)
--------------------------

Equity Stock, Series AAA, $.01 Par Value - 4,289,544 shares
-----------------------------------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the proxy statement to be filed in connection with the
annual shareholders' meeting to be held in 2005 are incorporated by reference
into Part III.

                                       2
<PAGE>

                                     PART I

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

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

     When  used  within  this  document,   the  words  "expects,"   "believes,"
"anticipates,"  "should,"  "estimates," and similar expressions are intended to
identify  "forward-looking  statements"  within  the  meaning  of that  term in
Section 27A of the Securities Exchange Act of 1933, as amended,  and in Section
21E of the Securities  Exchange Act of 1934, as amended.  Such  forward-looking
statements involve known and unknown risks,  uncertainties,  and other factors,
which may cause the actual results and performance of Public Storage, Inc. (the
"Company") to be materially  different  from those  expressed or implied in the
forward  looking  statements.  Such  factors are  described  in Item 1A,  "Risk
Factors" and include changes in general economic  conditions and in the markets
in which  the  Company  operates  and the  impact of  competition  from new and
existing  storage and  commercial  facilities  and other storage  alternatives,
which could  impact rents and  occupancy  levels at the  Company's  facilities;
difficulties  in the  Company's  ability to  evaluate,  finance  and  integrate
acquired and developed properties into the Company's existing operations and to
fill  up  those   properties,   which  could  adversely  affect  the  Company's
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 the Company's
expense and reduce the Company's  cash available for  distribution;  consumers'
failure to accept the  containerized  storage  concept  which would  reduce the
Company's  profitability;  difficulties in raising capital at reasonable rates,
which would impede the  Company's  ability to grow;  delays in the  development
process, which could adversely affect the Company's profitability; and economic
uncertainty due to the impact of war or terrorism  could  adversely  affect our
business  plan. We disclaim any  obligation to publicly  release the results of
any revisions to these  forward-looking  statements  reflecting  new estimates,
events or circumstances after the date of this report.

   GENERAL
   -------
   Public  Storage,  Inc. (the  "Company") 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
real estate  investment  trust ("REIT") that acquires,  develops, owns  and
operates  self-storage  facilities.  We are the  largest  owner  and operator
of storage space in the United States with direct and indirect  equity
investments in 1,464 storage facilities  containing  approximately 89.2 million
square feet of net rentable  space at December  31,  2004.  Our common stock is
traded on the New York Stock  Exchange  under the symbol "PSA".  We also have a
44% ownership  interest in PS Business Parks,  Inc.,  which, as of December 31,
2004, owned and operated commercial  properties  containing  approximately 18.0
million net rentable square feet of space. PS Business Parks,  Inc. is a public
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
Securities  and Exchange  Commission  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.

                                       3
<PAGE>

MANAGEMENT
----------

     Ronald L. Havner, Jr. (47) was appointed as a director, vice chairman, and
chief executive officer of the Company on November 7, 2002. Mr. Havner has been
employed  by  Public  Storage  or  its  affiliates  in  various  financial  and
operational capacities since 1986 and served as Senior Vice President and Chief
Financial Officer of the Company from November 1991 until December 1996 when he
became Chairman,  President,  and Chief Executive Officer of PS Business Parks,
Inc., ("PSB") an affiliate of the Company.  Mr. Havner continues as Chairman of
PSB.

     B. Wayne Hughes (71) is Chairman of the Board of Directors,  a position he
has held  since  1991.  Mr.  Hughes  plans to remain  active  in the  Company's
business, focusing primarily on strategic and marketing initiatives. 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:  Harvey  Lenkin  (68),  President  and Chief  Operating
Officer,  27 years;  John Reyes (44),  Senior Vice  President - Chief  Financial
Officer,  14 years;  John S. Baumann (44),  Senior Vice  President - Chief Legal
Officer,  who joined the Company in June 2003;  John E. Graul (53),  Senior Vice
President  and  President,  Self-Storage  Operations,  who joined the Company in
February 2004 and David F. Doll (46), 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 46.5
million shares or 36% of the common stock as of March 14, 2005.

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

     Our  primary  objective  is to  increase  the value of each share  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 certain of
our  facilities.  Development  of new 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  capital
structure, national investment scope, geographic diversity,  economies of scale
and the "Public  Storage" name,  should enable us to compete  effectively  with
other entities.

     In recent  years  consolidation  has  occurred in the  fragmented  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.

                                       4
<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 2003 and 2004, we  implemented an
upgraded  information  system  platform,  which has enabled us to more  quickly
adapt our pricing and marketing efforts to 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 storage  space in the
industry.  As of December 31, 2004,  we operated  1,464  storage  facilities in
which we had an interest and managed 28 storage  facilities  for third parties.
These facilities are in markets within 37 states.  At December 31, 2004, we had
over 748,000 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.  Our storage operations are conducted in 37
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 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.

     RETAIL  OPERATIONS:   The  Company  has  historically  sold  retail  items
associated  with  the  storage  business  and  rented  trucks  at  its  storage
facilities.  In order to supplement and  strengthen  the existing  self-storage
business  by  further  meeting  the needs of  storage  customers,  the  Company
continues to expand its 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:  On December 31, 2001, we purchased all of the
capital stock of PS Insurance Company, Ltd., from Mr. Hughes and members of his
family. This insurance company reinsures policies issued to our tenants 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 will continue to further
supplement  and strengthen  the existing  self-storage  business and provide an
additional source of earnings for the Company.

                                       5
<PAGE>

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

     Our growth strategies consist of: (i) improving the operating  performance
of our stabilized existing traditional self-storage properties,  (ii) acquiring
additional  interests in entities that own properties  operated by the Company,
(iii)  acquiring  interests in properties that are owned or operated by others,
(iv) developing  properties in selected markets,  (v) expanding and repackaging
existing  real  estate  facilities,  and (vi)  participating  in the  growth of
commercial  facilities  owned  primarily  by  PS  Business  Parks,  Inc.  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  stabilized  traditional
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.

     ACQUIRE  PROPERTIES  OPERATED  AND  PARTIALLY  OWNED  BY THE  COMPANY:  In
addition to our wholly owned storage facilities,  we operate storage facilities
on behalf of other  entities in which we have partial  equity  interests.  From
time to time, interests in these storage facilities are available for purchase,
providing us with a source of additional acquisition opportunities.  Because we
manage  these  properties,  we have  reliable  operating  information  prior to
acquisition, and these properties are easily integrated into our portfolio. The
amount of such potential acquisition  opportunities has decreased over the last
several years as we have  continued to acquire such  interests.  Such potential
remaining acquisition opportunities include the remaining equity interests that
we do not own in the entities described as "Other Investments" in Note 6 to our
consolidated financial statements for the year ended December 31, 2004, as well
as the  "Other  Partnership  Interests"  and  "Consolidated  Development  Joint
Venture" in Note 10 to the consolidated financial statements for the year ended
December 31, 2004.

     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 storage  industry.  We maintain
local market  information  on rates,  occupancy and  competition in each of the
markets in which we operate.

     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 140  facilities,  including  23
facilities in 2000, 22 facilities in 2001, 16 facilities in 2002, 14 facilities
in 2003 and  seven in 2004.  During  2004,  these  140  facilities  contributed
significantly  to the growth in our earning as they continue to gain  occupancy
and grow their  revenues.  We expect  that these  facilities  will  continue to
provide  growth to our earnings  into 2005.  As of December 31, 2004, we have a
development  "pipeline" of 10 newly-developed  self-storage  facilities with an
aggregate  estimated cost of approximately  $98.4 million,  and an aggregate of
754,000 net rentable square feet. Development of these facilities is subject to
significant  contingencies such as obtaining  appropriate  governmental  agency
approvals.  The Company  continues to seek attractive  sites for development of
additional  storage  facilities  and evaluates  existing sites for expansion or
enhancement opportunities.

     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  since  then,  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. During
2002,  2003,  and  2004,  we have  invested  a total of $71.5  million  in such
expansion,  conversion,  and repackaging  activities.  At December 31, 2004, we
have   identified  37  such  projects  to  expand  or  repackage  our  existing
facilities, and to convert the vacant space previously used by the discontinued
containerized  storage  facilities,  for an aggregate of $112.3 million,  which
will add an  aggregate of  approximately  2,246,000  net rentable  square feet.

                                       6
<PAGE>

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.

     PARTICIPATE IN THE GROWTH OF COMMERCIAL  FACILITIES  PRIMARILY THROUGH OUR
OWNERSHIP IN PS BUSINESS PARKS, INC.: We own a 44% common equity interest in PS
Business Parks, Inc. and its operating  partnership (PS Business Parks Inc. and
the related operating  partnership are hereinafter  referred to collectively as
"PSB") as of December 31, 2004,  comprised 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, 2004,
PSB owned and operated  approximately  18.0 million net rentable square feet of
commercial space located in eight states.

     In addition to our  investment  in PSB, we have direct  interests  in four
commercial facilities with an aggregate of 302,000 net rentable square feet. In
addition,  certain of our self-storage facilities rent a total of 1,040,000 net
rentable square feet of commercial  space at the same location,  1.2 million of
which, is managed by PSB pursuant to management agreements.

     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, Inc. 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 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 March 14, 2005,
       we  repurchased  a total of  22,117,720  shares  of  common  stock at an
       aggregate cost of approximately $562,158,000. Cumulatively through March
       14, 2005, we have called for redemption or repurchased $1,095,500,000 of
       our senior preferred stock and $165,000,000 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.
                                       7
<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  with permanent  capital
(predominantly retained cash flow 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,  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  line of  credit
described below under "Borrowings" as temporary "bridge" financing,  and repaid
those amounts with permanent capital. 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 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 the Company's 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, 2004, we had  approximately
$2.1  billion of preferred  stock  outstanding,  excluding  one series that was
called for redemption on December 22, 2004 and subsequently redeemed on January
31,  2005.  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 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.

     DEVELOPMENT  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.  At December 31,
2004, PSAC Development Partners,  L.P. had completed construction on 22 storage
facilities with a total cost of  approximately  $108.6 million.  We expect that
this joint venture  partnership  will receive no additional  capital funding to
develop any additional facilities.

     PSAC  Development  Partners,  L.P. is funded  solely  with equity  capital
consisting of 51% from us and 49% from PSAC Storage Investors, LLC. The term of
the Consolidated  Development  Joint Venture is 15 years;  however,  during the
sixth  year  PSAC  Storage  Investors,  LLC has the  right  to  cause  an early
termination of PSAC Development Partners,  L.P. If PSAC Storage Investors,  LLC
exercises  this right,  we then have the  option,  but not the  obligation,  to
acquire their  interest for an amount that will allow them to receive an annual
return of 10.75%.  If we do not  exercise  our option to acquire  PSAC  Storage
Investors,  LLC's interest,  PSAC Development  Partners,  L.P.'s assets will be
sold to third  parties  and the  proceeds  distributed  to us and PSAC  Storage
Investors,  LLC in accordance with the partnership  agreement.  If PSAC Storage
Investors,  LLC does not  exercise  its right to early  termination  during the
sixth year,  the  partnership  will be  liquidated 15 years after its formation
with the assets sold to third  parties and the proceeds  distributed  to us and
PSAC Storage Investors, LLC in accordance with the partnership agreement.

                                       8
<PAGE>

     PSAC Storage  Investors,  LLC  provides  Mr.  Hughes with a fixed yield of
approximately 8.0% per annum on his preferred non-voting interest (representing
an  investment  of  approximately  $64.1  million at  December  31,  2004).  In
addition,  Mr.  Hughes  can  receive  up to 1% of cash flow of the  Partnership
(estimated  to be less than  $50,000 per year) if PSAC Storage  Investors,  LLC
elects an early termination.  If PSAC Storage Investors,  LLC does not elect to
cause an early termination, Mr. Hughes' 1% interest can increase to up to 10%.

     FINANCING  ACQUISITION  JOINT  VENTURE:  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, 2004, the
Acquisition Joint Venture owned a total of nine self-storage  facilities with an
aggregate cost of $32,079,000.  In January 2005, the  Acquisition  Joint Venture
acquired a significant interest in an additional three facilities from us for an
aggregate of $27.4  million in cash.  See Note 2 to our  consolidated  financial
statements at December 31, 2004 for further discussion of the accounting for the
Acquisition  Joint Venture.  We do not expect the  Acquisition  Joint Venture to
acquire any additional facilities.

     DISPOSITION OF PROPERTIES:  During 2004, we sold a commercial property for
proceeds of approximately $3.8 million.  During 2003, we sold five self-storage
facilities,  which were located in non-strategic markets and locations,  and an
industrial  facilitiy for an aggregate of approximately  $21.0 million. We used
the  proceeds  from these  sales as a source of funding  for  developments  and
third-party  acquisitions.  We continually  review our portfolio for facilities
that  are  not  strategically  located  and  determine  the  proper  method  of
disposition of these facilities.

     See  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations-Liquidity and Capital Resources."

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 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 operated by the Company under the "Public Storage" 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 47 development  projects,  including 35 expansions
       of real  estate  facilities,  for a total  cost of $210.7  million.  See
       "Management's Discussion and Analysis of Financial Condition and Results
       of Operations - Liquidity and Capital Resources."

                                       9
<PAGE>


     The  following  table  outlines  our  ownership  interest in  self-storage
facilities at December 31, 2004:

<TABLE>
<CAPTION>

                                                                   Net Rentable Square
                                                  Number of        Footage of Storage
                                                  Storage                Space (a)
                                                  Facilities         (in thousands)
                                                  ------------       ----------------
Consolidated self-storage facilities:
<S>                                                      <C>                <C>
   Wholly-owned by the Company.............              908                56,683
   Owned by Consolidated Entities..........              518                30,198
                                                  ------------       ----------------
                                                       1,426                86,881

 Facilities owned by Unconsolidated Entities              38                 2,336
                                                  ------------       ----------------
 Total  self-storage  facilities in which the
   Company has an ownership interest.......            1,464                89,217
                                                  ============       ================

</TABLE>

     (a) Square footage for the consolidated  facilities includes 1,040,000 net
rentable  square  feet of  industrial  space for use in  containerized  storage
activities.

     In addition to our interest in self-storage  facilities  noted above,  the
Company  owns four  stand-alone  commercial  facilities  with an  aggregate  of
302,000 net rentable  square feet,  owns three  industrial  facilities  with an
aggregate  of  242,000  net  rentable   square  feet  used  by  the  continuing
containerized storage operations, and has 1,040,000 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, 2004 owned and operated approximately 18.0 million net rentable square feet
of commercial space.

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

     In addition to our direct ownership of 908 storage  facilities at December
31, 2004,  we had  controlling  ownership  interests  in 37 entities  owning in
aggregate of 518 storage  facilities.  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.

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

     At December 31, 2004, we had ownership  interests in PSB and eight 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 eight 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, 2004 for
further  disclosure  regarding the assets and liabilities of the Unconsolidated
Entities.

                                      10
<PAGE>

     The following  chart sets forth,  as of December 31, 2004, the entities in
which  we have a  controlling  interest  and the  entities  in  which we have a
minority interest:

<TABLE>
<CAPTION>

          Subsidiaries (Controlled Entities)                Entities in which we have
                    of the Company                          a Minority Interest (Unconsolidated Entities)
------------------------------------------------        --------------------------------------------------

<S>                                                     <C>
Carson Storage Partners, Ltd.                           Public Storage Alameda, Ltd.  (2)
Carson Storage Ventures                                 Public Storage Glendale Freeway, Ltd. (11)
Connecticut Storage Fund                                Metropublic Storage Fund (10)
Del Amo Storage Partners, Ltd.                          PS Business Parks, Inc.  (3)
Downey Storage Partners, Ltd.                           Public Storage Crescent Fund, Ltd. (4)
Huntington Beach Storage Partners, Ltd.                 Public Storage Partners, Ltd. (5)
Monterey Park Properties, Ltd.                          Public Storage Partners II, Ltd. (6)
PS Co-Investment Partners                               Public Storage Properties, Ltd. (7)
PS Orangeco Partnerships, Inc.                          PSAF Acquisition Partners, Ltd.
PS Partners, Ltd.
PS Partners VIII, Ltd.
PS Texas Holdings, II, Ltd.
Public Storage Properties IV, Ltd. (8)
Public Storage Properties V, Ltd. (9)
PSA Institutional Partners, L.P.
PSAC Development Partners, L.P. (1)
Public Storage Euro Fund III, Ltd. (2)
Public Storage Euro Fund IV, Ltd. (2)
Public Storage Euro Fund V, Ltd. (2)
Public Storage Euro Fund VI, Ltd. (2)
Public Storage Euro Fund VII, Ltd. (2)
Public Storage Euro Fund VIII, Ltd. (2)
Public Storage Euro Fund IX, Ltd. (2)
Public Storage Euro Fund X, Ltd. (2)
Public Storage Euro Fund XI, Ltd. (2)
Public Storage Euro Fund XII, Ltd. (2)
Public Storage Euro Fund XIII, Ltd. (2)
Public Storage German Fund II, Ltd. (2)
Public Storage Institutional Fund
Public Storage Institutional Fund II (10)
Public Storage Institutional Fund III
Public Storage Institutional Fund IV (10)
Secure Mini-Storage
STOR-Re Mutual Insurance Company, Inc.
Storage Trust Properties, L.P.
Van Nuys Storage Partners, Ltd.
Whittier Storage Partners, Ltd.

</TABLE>

(1) PSAC Storage  Investors,  LLC owns a direct 49%  ownership  interest in this
    entity. The partners of PSAC Storage Investors,  LLC are Mr. Hughes,  having
    an approximately  65% ownership  interest,  and a third party  institutional
    investor having an approximately 35% ownership interest.
(2) B. Wayne Hughes owns  approximately  20% of the general partner  interest of
    these entities.
(3) B. Wayne Hughes owns  approximately 0.5% of the common shares of PS Business
    Parks, Inc.
(4) B. Wayne Hughes owns approximately 17.9% of the general partnership interest
    of this entity.
(5) The  Hughes  Family  owns  approximately  24.3% of the  limited  partnership
    interests of this entity.
(6) The  Hughes  Family  owns  approximately  11.9% of the  limited  partnership
    interests of this entity.
(7) The Hughes Family owns 20% of the general partner interests and 30.5% of the
    limited partnership interests of this entity.
(8) The Hughes Family owns 20% of the general partner interests and 15.5% of the
    limited partnership interests of this entity.
(9) The Hughes Family owns 20% of the general partner interests and 11.4% of the
    limited partnership interests of this entity.
(10)B. Wayne  Hughes is a general  partner of this  entity,  and has no economic
    interest.
(11)B. Wayne Hughes is a general  partner in this entity and owns a 0.02% equity
    interest.

                                      11
<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 0.45% to LIBOR
plus 1.20%  depending on our credit ratings  (currently  LIBOR plus 0.45%).  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 (currently the fee
is 0.15% per  annum).  At  December  31,  2004 and March  15,  2005,  we had no
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, 2004.

     As of December  31, 2004,  we had notes  payable of  approximately  $129.5
million and debt to a joint venture partner of approximately $16.1 million. See
Notes 8 and 9 to the  consolidated  financial  statements  for a summary of our
borrowings at December 31, 2004.

     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
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, 2004, the Debt
Ratio was approximately 2.2%. "Debt" means the liabilities (other than "accrued

                                      12
<PAGE>

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 the
Company's  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  4,149  employees  at December  31, 2004 who render
services  on behalf of the  Company,  primarily  personnel  engaged in property
operation,  substantially  all of whom are employed by a clearing  company that
provides certain  administrative  and cost-sharing  services to the Company and
other owners of properties operated by the Company.

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. Distributions in excess of taxable income (as
defined) may be treated as nontaxable  returns of capital or as capital gain to
the extent  the  distributions  exceed a  shareholder's  adjusted  basis in the
shares.

INSURANCE
---------

     We believe that our properties are adequately insured. Our facilities have
historically  carried  comprehensive  insurance,  including  fire,  earthquake,
liability  and  extended  coverage  through  our  captive  insurance   programs
(described  below),  and insure  portions  of these  risks  through  nationally
recognized  insurance  carriers.  Our captive  insurance  programs  also insure
affiliates of the Company.

     For  losses  incurred  prior to  April  1,  2004,  the  Company's  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").

     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  $125,000,000  for  property   coverage  and
$101,000,000 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.

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:

                                      13
<PAGE>

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

     At March 14,  2005,  the  Hughes  family  owned  approximately  36% of our
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.  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 FAIL TO QUALIFY AS A REIT.

     You will be 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  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 PSB 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 the  relief
provisions do not apply,  we would be taxed 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.  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 January 1, 2001. A taxable REIT subsidiary is a fully taxable corporation
and is  limited  in its  ability  to deduct  interest  payments  made to us. In
addition,  we will be subject to a 100%  penalty tax on some  payments  that we
receive if the  economic  arrangements  among our  tenants,  our  taxable  REIT
subsidiaries and us are not comparable to similar  arrangements among unrelated
parties.  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 WOULD INCUR A CORPORATE LEVEL TAX IF WE SELL CERTAIN ASSETS.

     We will generally be subject to a corporate  level tax on any net built-in
gain if  before  November  2005 we sell any of the  assets we  acquired  in the
November 1995 reorganization.

                                      14
<PAGE>

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.

WE AND OUR SHAREHOLDERS ARE SUBJECT TO FINANCING RISKS.

     Debt increases the risk of loss. In making real estate investments, we may
borrow money,  which increases the risk of loss. At December 31, 2004, our debt
of $145.6 million was 2.8% of our total assets.

     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 that other real estate companies may use third-party
insurers  for.  This results in a higher risk of losses that are not covered by
third-party  insurance  contracts,  as described in Note 17 to our consolidated
financial statements at December 31, 2004 under "Insurance and Loss Exposure."

         There is significant competition among self-storage facilities and from
other storage alternatives. Most of our properties are self-storage facilities,
which generated 93% of our revenue for the year ended December 31, 2004. Local

                                      15
<PAGE>

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
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,  2000,  we have  opened  65 newly  developed
self-storage  facilities  and  17  facilities  that  combine  self-storage  and
containerized  storage space at the same location,  with aggregate  development
costs of $584.6 million.  In addition,  at December 31, 2004 we had 47 projects
in development that are expected to be completed in approximately  the next two
years.  These  47  projects  have  total  estimated  costs of  $210.7  million.
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

                                      16
<PAGE>

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 the award of
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 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.

     B. Wayne  Hughes,  Chairman  of the Board,  and his  family  (the  "Hughes
Family")  have   ownership   interests  in,  and  operate,   approximately   40
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.   The  Hughes  Family  owns  approximately  36%  of  our  common  stock
outstanding  at December 31, 2004.  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.

     Company  personnel have been engaged in the  supervision and the operation
of these properties and have 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 have 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 have been 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.

     The corporation  engaged in the operations of the Canadian  facilities has
advised us that it intends to reorganize the entities  owning and operating the
Canadian  facilities  and  has  proposed  that  the  Company  consent  to  this
reorganization, which would impact the license agreement and the right of first
refusal agreement with the Company.  The  reorganization is designed to enhance
the entities' financial flexibility and growth potential. In November 2004, the
Board appointed a special  committee,  comprised of independent  directors,  to
consider  the  Company's  alternatives  in this  matter,  including  a possible
investment in the reorganized Canadian entities.

OUR CONTAINERIZED STORAGE BUSINESS HAS INCURRED OPERATING LOSSES.

     Public  Storage  Pickup &  Delivery  ("PSPUD")  was  organized  in 1996 to
operate a containerized  storage business.  We own all of the economic interest
of PSPUD.  Since PSPUD will  operate  profitably  only if it can succeed in the
relatively new field of containerized  storage, we cannot provide any assurance
as to its  profitability.  PSPUD  incurred an operating  loss of $10,058,000 in
2002,  and generated  operating  profits of $2,543,000 in 2003 and $684,000 for
the year ended December 31, 2004.  Since 2002,  PSPUD closed or consolidated 43
of 55 facilities that were deemed not strategic to our business plan.

                                      17
<PAGE>

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.

2003 TAX LEGISLATION COULD ADVERSELY AFFECT THE PRICE OF OUR STOCK.

     Tax legislation enacted in 2003 generally reduces the maximum tax rate for
dividends payable to individuals to 15% through 2008.  Dividends paid by REITs,
however,  generally  continue to be taxed at the normal rate  applicable to the
individual  recipient,  rather than the preferential  rates applicable to other
dividends.  Although this legislation does not adversely affect the taxation of
REITs or  dividends  paid by REITs,  the more  favorable  rates  applicable  to
regular  corporate  dividends  could cause  investors  who are  individuals  to
perceive investments in REITs to be relatively less attractive than investments
in the  stocks  of  non-REIT  corporations  that  pay  dividends,  which  could
adversely affect the value of the stock of REITs, including our common stock.

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

     We are headquartered  in, and approximately  one-quarter of our properties
are located in,  California.  California is facing serious 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.

                                      18

<PAGE>

ITEM 2.  PROPERTIES
         ----------

     At December 31, 2004,  we had direct and indirect  ownership  interests in
1,464 storage facilities located in 37 states:

<TABLE>
<CAPTION>
                                               At December 31, 2004
                                   ------------------------------------------
                                   Number of Storage      Net Rentable Square
                                     Facilities (a)       Feet (in thousands)
                                   ------------------     -------------------
California:
<S>                                        <C>                    <C>
     Southern...............               168                    10,932
     Northern...............               143                     8,346
Texas.......................               169                    11,438
Florida.....................               149                     9,052
Illinois....................                96                     5,888
Georgia.....................                64                     3,776
Colorado....................                50                     3,189
Washington..................                43                     2,747
New Jersey..................                44                     2,583
Maryland....................                43                     2,458
Virginia....................                39                     2,388
New York....................                39                     2,335
Missouri....................                38                     2,172
Ohio........................                30                     1,863
Minnesota...................                26                     1,635
Nevada......................                22                     1,409
Pennsylvania................                20                     1,360
Kansas......................                22                     1,316
Tennessee...................                23                     1,311
North Carolina..............                24                     1,266
Oregon......................                25                     1,171
South Carolina..............                24                     1,082
Wisconsin...................                15                     1,071
Indiana.....................                18                     1,050
Other states (14 states)....               130                     7,379
                                   ------------------     -------------------
     Totals.................             1,464                    89,217
                                   ==================     ===================
</TABLE>

(a)  Includes 1,426 self-storage facilities owned by the Company and entities
     controlled by the Company. The remaining 38 facilities are self-storage
     facilities owned by entities in which the Company has an interest; however,
     the Company does not have a controlling interest in such entities. See
     Schedule III: Real Estate and Accumulated Depreciation in the Company's
     2004 financials, for a complete list of properties consolidated by the
     Company.

     Our  facilities  are generally  operated to maximize cash flow through the
regular  review  and,  when  warranted  by  market  conditions,  adjustment  of
scheduled  rents.  For the year ended December 31, 2004,  the weighted  average
occupancy  level and the average total rental  income per rentable  square foot
for  our  self-storage   facilities  were   approximately   90.0%  and  $10.35,
respectively.  Included in the 1,426 storage  facilities are 82 newly developed
facilities opened since January 1, 2000.

     At December 31, 2004, 34 of our facilities were encumbered by an aggregate
of $95.9 million in mortgage debt.

     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  (approximately  97% based on rental
revenue),  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

                                      19
<PAGE>

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  are  operated  under the
"Public Storage" name.

     Users of space in self-storage  facilities  include  individuals and large
and small  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.

     Our self-storage facilities are geographically diversified and are located
primarily  in or near  major  metropolitan  markets  in 37 states in the United
States.  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  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  some  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.

     COMMERCIAL  PROPERTIES:  In addition to our interest in 1,464 self-storage
facilities,  we have an interest in PSB,  which,  as of December 31, 2004, owns
and  operates  approximately  18.0  million net  rentable  square feet in eight
states.  At December 31, 2004, our investment in PSB represents less than 6% of
our total  assets  based upon cost of $284.6  million.  The market value of our
investment  in PSB  at  December  31,  2004  of  approximately  $573.8  million
represents  11.0% of the book value of our total assets at December 31, 2004 of
approximately  $5.2 billion.  We also directly own four  commercial  properties
with 302,000 net rentable  square feet, have 1,040,000 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 242,000 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

                                      20
<PAGE>

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   practice  is  to  conduct   environmental
investigations  in  connection  with  property  acquisitions.  As a  result  of
environmental  investigations  of our  properties,  which commenced in 1995, we
recorded an amount, which in management's best estimate,  will be sufficient to
satisfy anticipated costs of known investigation and remediation  requirements.
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 the Company's overall business,  financial  condition,  or
results of operations.

ITEM 3.  LEGAL PROCEEDINGS
         -----------------

Serrao v. Public  Storage,  Inc.  (filed April 2003)  (Superior  Court - 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,  the
Company  cannot  presently  determine  the  potential  damages,  if any, or the
ultimate outcome of this litigation. On November 3, 2003, the court granted the
Company's motion to strike the plaintiff's  nationwide class allegations and to
limit  any  putative  class  to  California  residents  only.  The  Company  is
vigorously  contesting  the claims upon which this  lawsuit is based  including
class certification efforts.

Salaam et al v. Public Storage,  Inc. (filed February 2000)
------------------------------------------------------------
(Superior Court - Sacramento  County);  Holzman et al v. Public Storage,
------------------------------------------------------------------------
Inc. (filed October 2004) (Superior Court - Sacramento County)
--------------------------------------------------------------

     This action,  which was  described in the  Company's  prior  reports,  was
disposed of in February 2005.

Gustavson et al v. Public  Storage,  Inc.  (filed June 2003) (Superior Court
----------------------------------------------------------------------------
- Los Angeles  County);  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 that  challenged  the fairness of the Company's  acquisition of PS
Insurance  Company,  Ltd.  ("PSIC")  and  demanded  that the Board  recover the
profits  earned by PSIC from November  1995 through  December 2001 and that the
entire  purchase  price  paid by the  Company  for PSIC in excess of PSIC's net
assets be returned to the Company.

     The contract to acquire PSIC was approved by the independent  directors of
the Company in March 2001,  and the  transaction  was closed in December  2001.
PSIC was formerly owned by B. Wayne Hughes, currently the Chairman of the Board
(and in 2001 also the Chief Executive Officer) of the Company, B. Wayne Hughes,
Jr.,  currently  a director  (and in 2001 also an  officer)  of the Company and
Tamara H. Gustavson, who in 2001 was an officer of the Company. In exchange for
the Hughes family's shares in PSIC, the Company issued to them 1,439,765 shares
of common  stock (or a net of  1,138,733  shares,  after  taking  into  account
301,032 shares held by PSIC).

     The  shareholder has threatened  litigation  against the Hughes family and
the  directors  of the Company  arising out of this  transaction  and alleged a
pattern of deceptive  disclosures  with respect to PSIC since 1995. In December
2002,  the  Board  held a  special  meeting  to  authorize  an  inquiry  by its
independent  directors to review the fairness to the Company's  shareholders of

                                      21
<PAGE>

its  acquisition of PSIC and the ability of the Company to have started its own
tenant  reinsurance  business in 1995. The Company  believes that, prior to the
effectiveness in 2001 of the Federal REIT  Modernization  Act and corresponding
California  legislation  that authorized the creation and ownership of "taxable
REIT  subsidiaries,"  the  ownership by the Company of a  reinsurance  business
relating to its tenants would have  jeopardized the Company's  status as a REIT
and that other REITs faced similar concerns about tenant insurance programs.

     In June 2003, the Hughes family filed a complaint for  declaratory  relief
(Gustavson,   et  al.v.  Public  Storage,   Inc.)  relating  to  the  Company's
acquisition  of PSIC  naming the  Company as  defendant.  The Hughes  family is
seeking that the court make (i) a binding  declaration  that the Company either
is not entitled to recover profits or other moneys earned by PSIC from November
1995 through December 2001; or alternatively the amounts that the Hughes family
should be ordered to surrender to the Company if the court  determines that the
Company is entitled to recover any such  profits or moneys;  and (ii) a binding
declaration  either  that the Company  cannot  establish  that the  acquisition
agreement  was not just and  reasonable  as to the  Company  at the time it was
authorized,  approved or ratified; or alternatively the amounts that the Hughes
family  should  surrender  to the  Company,  if the court  determines  that the
agreement was not just and  reasonable to the Company at that time.  The Hughes
family  is not  seeking  any  payments  from  the  Company.  In the  event of a
determination that the Hughes family is obligated to pay certain amounts to the
Company,  the  complaint  states  that  they  have  agreed  to be bound by that
determination to pay such amounts to the Company.

     In July 2003 the Company filed an answer to the Hughes family's  complaint
requesting a final judicial  determination  of the Company's rights of recovery
against the Hughes  family in respect of PSIC.  In September  2003, by order of
the Superior  Court,  Justice  Malcolm  Lucas,  a former  chief  justice of the
California  Supreme Court, was appointed to try the case. Justice Lucas has set
this matter for trial at the end of March 2005.  We believe that the lawsuit by
the Hughes family will ultimately resolve matters relating to PSIC and will not
have any  financially  adverse  effect on the Company (other than the costs and
other expenses relating to the lawsuit).

     At the end of December 2004, the same shareholder  referred to above and a
second shareholder filed a shareholder's  derivative  complaint (Potter, et al.
v. Hughes, et al.) naming as defendants the Company's directors (and two former
directors)  and certain  officers of the Company.  The matters  alleged in this
Potter  complaint  relate to PSIC, the Hughes  family's  Canadian  self-storage
operations and the Company's 1995  reorganization.  The Company is currently in
the process of evaluating the Potter complaint and believes the litigation will
not have any  financially  adverse  effect on the Company (other than the costs
and other expenses relating to the lawsuit).

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

     The  Company is 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  effect  upon  the
operations or financial position of the Company.

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, 2004.

                                     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:

     The Common Stock (NYSE:PSA) has been listed on the New York Stock Exchange
   since October 19, 1984 and on the Pacific  Exchange since December 26, 1996.
   The 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.

                                      22
<PAGE>

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

<TABLE>
<CAPTION>
                                                              Range
                                             ----------------------------------
         Year                 Quarter               High                  Low
   ----------------       -------------      ---------------    ---------------
<S>                             <C>              <C>                  <C>
         2003                   1st              $  33.600            $  28.250
                                2nd                 36.200               28.250
                                3rd                 39.250               33.710
                                4th                 45.810               39.150

         2004                   1st                 50.000               43.470
                                2nd                 49.800               39.500
                                3rd                 52.670               45.240
                                4th                 57.640               49.600

</TABLE>

     The  following  table  sets  forth  the high and low  sales  prices of the
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.
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                              Range
                                             ----------------------------------
         Year                 Quarter               High                  Low
   ----------------       -------------      ---------------    ---------------
<S>                              <C>             <C>                  <C>
         2003                    1st             $  28.100            $  26.480
                                 2nd                28.900               26.870
                                 3rd                29.120               27.300
                                 4th                29.950               28.000

         2004                    1st                31.500               29.220
                                 2nd                30.500               26.010
                                 3rd                28.480               26.130
                                 4th                29.500               27.860

</TABLE>

     As of March 14, 2005, there were approximately 18,700 holders of record of
the Common Stock and approximately 11,900 holders of the 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 2004 amounted to $230.8 million or $1.80 per share.

               Holders of Common  Stock are  entitled to receive  distributions
         when and if declared by the  Company's  Board of Directors  out of any
         funds  legally  available  for  that  purpose.   We  are  required  to
         distribute at least 90% of our net taxable ordinary income prior to

                                      23

<PAGE>
         the filing of the  Company's  tax  return and 85%,  subject to certain
         adjustments, during the calendar year, to maintain our REIT status for
         Federal income tax purposes.  It is our intention to pay distributions
         of not less than this required amount.


               For Federal income tax purposes,  distributions  to shareholders
         are treated as ordinary income,  capital gains, return of capital or a
         combination  thereof.  For  2004,  the  dividends  paid to the  common
         shareholders  ($1.80  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..........        99.8683%          99.8694%          99.8712%           98.0855%
Long-term Capital Gain...        0.1317%           0.1306%           0.1288%            1.9145%
                                 ------------     ------------       ------------      -------------
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 of 2004 as follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                 ------------     ------------       ------------      -------------
<S>                                <C>               <C>               <C>                <C>
Unrecaptured ss.1250 Gain..        34.8559%          34.8559%          34.8559%           43.7003%
                                 ============     ============       ============      =============
</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 2004 the percentage is as follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                 ------------     ------------       ------------      -------------
<S>                                <C>               <C>               <C>                <C>
IRC ss.291 Recapture.......        6.9709%           6.9709%           6.9709%            8.7400%
                                 ============     ============       ============      =============
</TABLE>


               For Federal income tax purposes,  distributions  to shareholders
         are treated as ordinary income,  capital gains, return of capital or a
         combination  thereof.  For  2003,  the  dividends  paid to the  common
         shareholders  ($1.80  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..........        99.72%            99.26%            99.98%             100.00%
Pre-May 6th Long-term
Capital Gain.............          0.28%             0.74%             0.02%              0.00%
                                 ------------     ------------       ------------      -------------
Total....................        100.00%           100.00%           100.00%            100.00%
                                 ============     ============       ============      =============
</TABLE>


               A  percentage  of the  long-term  capital  gain is  unrecaptured
         Section 1250 gain for the first,  second and third quarters of 2003 as
         follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                 ------------     ------------       ------------      -------------
<S>                                <C>               <C>               <C>                <C>
Unrecaptured ss.1250 Gain..        57.33%            96.36%            100.00%            0.00%
                                 ============     ============       ============      =============
</TABLE>


               For  the  corporate  shareholders  a  portion  of the  long-term
         capital gain is required to be recaptured as ordinary income.  For the
         first,  second  and third  quarters  for 2003 the  percentages  are as
         follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter        3rd Quarter       4th Quarter
                                 ------------     ------------       ------------      -------------
<S>                                <C>               <C>               <C>                <C>
IRC ss.291 Recapture.......        11.47%            19.27%            20.00%             0.00%
                                 ============     ============       ============      =============
</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,

                                      24
<PAGE>

               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 real estate investment trust
         ("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.

               During  2002,  the  dividends  paid to the  common  shareholders
         ($1.80 per share),  on all the various classes of preferred stock, and
         on our Equity  Stock,  Series A were  characterized  as 100%  ordinary
         income.

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,  the  Company  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, the Company completed a direct
         placement  of 830,000  depositary  shares,  raising  net  proceeds  of
         approximately  $20,294,000.  In November 2001, the Company completed a
         direct placement of 100,000 depositary shares, raising net proceeds of
         approximately   $2,690,000.   In  January  2000,  the  Company  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,
         the Company  issued  52,547  depositary  shares to a related  party in
         connection with the acquisition of real estate facilities. In December
         2000,  the  Company  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,  2004,  we  had  8,776,102  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 June 1997, we  contributed  $22,500,000  (225,000  shares) of
         equity stock, now designated as Equity Stock,  Series AA (Equity Stock
         AA")  to a  consolidated  partnership  in  which  we are  the  general
         partner.  On June 30, 2004, the Equity Stock, Series AA was retired in
         connection  with  our  aforementioned  acquisition  of  the  remaining
         interests we did not own in the consolidated partnership.

               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.  We control the joint venture and consolidate the accounts of
         the joint venture,  and accordingly the Equity Stock AAA is eliminated
         in  consolidation.  The Equity  Stock AAA ranks on a parity with
         common  stock and junior to the  Senior  Preferred  Stock (as  defined
         below)  with  respect  to  general   preference   rights,  and  has  a
         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.

                                      25
<PAGE>

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

                                                                          For the year ended December 31,
                                                      -------------------------------------------------------------------------
                                                       2004 (1)       2003 (1)        2002 (1)        2001 (1)       2000 (1)
                                                      ----------    -----------   ------------       ----------     -----------
                                                                   (Amounts in thousands, except per share data)
Revenues:
<S>                                                    <C>             <C>            <C>             <C>             <C>
  Rental income and tenant reinsurance premiums.       $917,811        $856,040       $815,052        $755,020        $687,394
  Interest and other income.....................         10,165           8,628          8,661          14,225          18,836
                                                      ----------    -----------   ------------       ----------     -----------
                                                        927,976         864,668        823,713         769,245         706,230
                                                      ----------    -----------   ------------       ----------     -----------
Expenses:
  Cost of operations............................        330,531         311,414        281,497         252,068         237,955
  Depreciation and amortization.................        183,148         184,145        175,834         164,025         146,996
  General and administrative....................         18,813          17,127         15,619          21,038          21,306
  Interest expense..............................            760           1,121          3,809           3,227           3,293
                                                      ----------    -----------   ------------       ----------     -----------
                                                        533,252         513,807        476,759         440,358         409,550
                                                      ----------    -----------   ------------       ----------     -----------
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............................        394,724         350,861        346,954         328,887         296,680
Equity in earnings of real estate entities......         22,564          24,966         29,888          38,542          39,319
Gain/(loss) on disposition of real estate
  investments and casualty loss.................             67           1,007         (2,541)          4,091             576
Minority interest in income (3).................        (49,913)        (43,703)       (44,087)        (46,015)        (38,356)
                                                      ----------    -----------   ------------       ----------     -----------
Income from continuing operations...............        367,442         333,131        330,214         325,505         298,219
Discontinued operations (2).....................         (1,229)          3,522        (11,476)         (1,297)        (1,131)
                                                      ----------    -----------   ------------       ----------     -----------
Net income......................................       $366,213        $336,653       $318,738        $324,208        $297,088
                                                      ==========    ===========   ============       ==========     ===========
-----------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE:
-----------------
Distributions...................................          $1.80           $1.80          $1.80           $1.69           $1.48

Net income - Basic..............................          $1.39           $1.29          $1.15           $1.41           $1.41
Net income - Diluted............................          $1.38           $1.28          $1.14           $1.39           $1.41

Weighted average common shares - Basic..........        127,836         125,181        123,005         122,310         131,566
Weighted average common shares - Diluted........        128,681         126,517        124,571         123,577         131,657
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA:
-------------------
Total assets....................................     $5,204,790      $4,968,069     $4,843,662      $4,625,879      $4,513,941
Total debt......................................       $145,614         $76,030       $115,867        $168,552        $156,003
Minority interest (other partnership interests).       $118,903        $141,137       $154,499        $169,601        $167,918
Minority interest (preferred partnership
interests)......................................       $310,000        $285,000       $285,000        $285,000        $365,000
Shareholders' equity............................     $4,429,967      $4,219,799     $4,158,969      $3,909,583      $3,724,117
-----------------------------------------------------------------------------------------------------------------------------------
OTHER DATA:
-----------
Net cash provided by operating activities.......       $647,443        $608,624       $591,283        $538,534        $525,775
Net cash used in investing activities...........      $(188,417)      $(242,370)     $(325,786)      $(306,058)      $(465,464)
Net cash provided used in financing activities..      $(297,604)      $(264,545)     $(211,720)      $(272,596)       $(25,969)

</TABLE>

(1) During 2004, 2003, 2002, 2001, and 2000, we completed  several  significant
    asset  acquisitions,  business  combinations and equity  transactions.  See
    Notes 3, 6, 9, and 10 to our consolidated financial statements.

(2) During the years ended  December  31, 2002,  2003 and 2004,  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.

(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.

                                      26
<PAGE>

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:  When used within this  document,  the words
"expects,"  "believes,"   "anticipates,"  "should,"  "estimates,"  and  similar
expressions are intended to identify  "forward-looking  statements"  within the
meaning of that term in Section 27A of the Securities  Exchange Act of 1933, as
amended, and in Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve known and unknown risks, uncertainties,
and other  factors,  which may cause our actual  results and  performance to be
materially  different  from those  expressed or implied in the forward  looking
statements.  Such factors are described in Item 2A, "Risk  Factors" and include
changes in general economic conditions in the markets in which we operate,  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 our  ability  to  evaluate,  finance  and
integrate acquired and developed  properties into our 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  expense  and  reduce our cash
available  for  distribution;  consumers'  failure to accept the  containerized
storage concept which would reduce our  profitability;  difficulties in raising
capital at reasonable rates,  which would impede our ability to grow; delays in
the development  process,  which could adversely affect our profitability;  and
economic  uncertainty  due to the impact of war or  terrorism  could  adversely
affect our business  plan. We disclaim any  obligation to publicly  release the
results of any revisions to these  forward-looking  statements  reflecting  new
estimates, events or circumstances after the date of this report.

     OVERVIEW

     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.  We
believe  that the  increase  in  competition  has had a negative  impact to 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,
2004 in 1,464 self-storage facilities containing approximately 89.2 million net
rentable  square feet.  All of our  facilities  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
37 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.

     We will  continue to focus our growth  strategies  on: (i)  improving  the
operating performance of our existing self-storage  properties,  (ii) acquiring
properties  operated  and  partially  owned  by the  Company,  (iii)  acquiring
properties owned or operated by others, (iv) developing  properties in selected
markets,  (v) expanding and repackaging  existing real estate  facilities,  and
(vi)  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.  See "Self-Storage  Operations - Consistent Group of
        Facilities"  for further  discussion.  We expect  future  increases  in
        rental  income to come  primarily  from  increases  in  realized  rent,
        although there can be no assurance.

                                      27
<PAGE>

     o  We will  attempt to continue to acquire  self-storage  facilities  from
        affiliates  or interests in affiliated  entities that own  self-storage
        facilities which we manage, as they become available from time to time.
        The pool of such available acquisitions has continued to decrease as we
        have acquired such  remaining  interests  over the last several  years.
        Such  potential  remaining   acquisition   opportunities   include  the
        remaining equity interests that we do not own in the entities described
        as  "Other  Investments"  in  Note  6  to  the  consolidated  financial
        statements  for the year ended December 31, 2004, as well as the "Other
        Partnership Interests" and "Consolidated  Development Joint Venture" in
        Note 10 to the  consolidated  financial  statements  for the year ended
        December 31, 2004.

     o  We will acquire  facilities  from third  parties.  Prior to 2004,  this
        activity had not contributed  significantly to our growth over the past
        three  years.  However,  during  2004,  we  acquired  interests  in  47
        self-storage  facilities  from third  parties at an  aggregate  cost of
        approximately $268.6 million. In addition, in January 2005, we acquired
        six additional  self-storage  facilities  from third parties (total net
        rentable square feet of 304,000) at an aggregate cost of  approximately
        $23.6 million in cash, and we currently have under contract to purchase
        six self-storage facilities (total net rentable square feet of 448,000)
        at an aggregate cost of  approximately  $48.1 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.

     o  We will continue to develop new self-storage locations. During the five
        years  ending  December  31,  2004,  the Company  and the  Consolidated
        Development  Joint  Venture  developed and opened a total of 82 storage
        facilities with total costs of approximately  $584.6 million.  In 2004,
        we opened seven  facilities with an aggregate cost of  $61,558,000.  At
        December 31, 2004, we have a  development  pipeline  which  includes 10
        self-storage facilities that are expected to cost an aggregate of $98.4
        million, which we expect will open over the next 24 months.

     o  We  will  look  to  expand  and  further   invest  into  our   existing
        self-storage locations, either by improving their visual and structural
        appeal,  expanding  these  facilities at a per square foot cost that is
        typically less than the cost incurred in developing a new location,  or
        converting  existing vacant space previously used by our  containerized
        storage operations into traditional  self-storage  space.  During 2002,
        2003,  and 2004,  we have  invested  a total of $71.5  million  in such
        expansion,  conversion,  and  repackaging  activities.  At December 31,
        2004, we have a pipeline of 37 such projects to expand or repackage our
        existing  facilities,  and to convert  substantially  all of the vacant
        space previously used by our containerized  storage operations,  for an
        aggregate of $112.3 million, which will add approximately 2,246,000 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.

     o  Through our  investment in PSB, we will continue to  participate in the
        potential growth of this company's  investment in approximately  18.0
        million net rentable square feet of commercial space at
        December 31, 2004.

     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 of America.  The preparation of financial  statements and related
disclosures in conformity with generally accepted accounting principles and our

                                      28
<PAGE>

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 the 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. 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 shareholders.

     We therefore don't 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.

     IMPAIRMENT OF LONG-LIVED  ASSETS:  Substantially all of our assets consist
of  long-lived  assets,  including  real  estate,  assets  associated  with the
containerized  storage  business,  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 the  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 the  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.

     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 the 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 our
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 provided.

                                      29
<PAGE>

     ACCRUALS FOR CONTINGENCIES: We are exposed to business and legal liability
risks  with  respect  to events  that have  occurred,  but in  accordance  with
accounting  principles  generally  accepted in the United  States,  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 the  consolidated  financial
statements.

     ACCRUALS FOR  OPERATING  EXPENSES:  We accrue for property tax expense and
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.

                                       30
<PAGE>
Results of Operations
------------------------------------------------------------------------------

NET INCOME:

     Net income for the year ended December 31, 2004 was $366,213,000  compared
to  $336,653,000  for the same  period in 2003,  representing  an  increase  of
$29,560,000 or 8.8%. This increase is primarily due to improved operations from
our Consistent Group of self-storage  facilities,  acquired and newly developed
self-storage  facilities,  combined  with a  decrease  in income  allocable  to
minority  interests  based  upon  ongoing  distributions  as a  result  of  our
restructuring  of $200  million of our Series N  preferred  partnership  units.
These factors are partially  offset by an increase in the  allocation of income
to minority  interest of $10,063,000  attributable to the  restructuring of our
preferred partnership  interests,  increased general and administrative expense
attributable  primarily  to  increased  stock-based  compensation  expense  and
reduced gains from the sale of discontinued real estate facilities.


     Net income for 2003 was  $336,653,000  compared to $318,738,000  for 2002,
representing an increase of $17,915,000 or 5.6%. This increase in net income is
primarily a result of an increase in the operations of our newly  developed and
expansion  self-storage  facilities,  improved  contributions  with  respect to
discontinued  containerized  storage  operations,  improved  operations  of our
continuing  containerized  storage  business,  a net gain from the sale of real
estate  assets versus a net loss  recorded in 2002 and lower  interest  expense
resulting  primarily  from lower  average  debt  balances.  The effect of these
increases  were  partially  offset  by a  reduction  in  our  Consistent  Group
operating  results  (as  discussed  below),   increased   depreciation  expense
resulting  primarily from new property  additions,  and a decrease in equity in
earnings of real estate  entities.  The  decrease in equity in earnings of real
estate  entities is primarily  due to a reduction in our pro-rata  share of the
earnings  of PSB caused by the impact of gains from the sale of real estate and
asset impairment charges during 2003 and 2002.

     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 $21,501,000 in each of 2004, 2003, and 2002, ii) distributions paid to
our preferred shareholders totaling $157,925,000 in 2004, $146,196,000 in 2003,
and $148,926,000 in 2002, and iii) amounts allocated to preferred  shareholders
in connection with preferred stock  redemption  activities as described  below,
totaling $8,724,000 in 2004, $7,120,000 in 2003 and $6,888,000 in 2002.

     The Securities and Exchange Commission's  clarification of Emerging Issues
Task Force  Topic  D-42  ("EITF  Topic  D-42") in July 2003  requires  that the
original issuance costs of redeemed preferred stock be treated as an additional
allocation of income to the holders of the preferred  stock in determining  the
allocation of income to the common shareholders and earnings per share.

     In the first quarter of 2005, we expect to call for  redemption our 9.750%
Series F Preferred Stock, which will be redeemable in April 2005.  Accordingly,
we expect an allocation of additional income to our preferred shareholders with
respect to EITF Topic D-42 totaling  $1,905,000 in 2005. Future  allocations of
income pursuant to EITF Topic D-42 will depend upon how much preferred stock we
redeem and the related original issuance costs.

     NET INCOME PER SHARE:  Net income was $1.38 per common share, on a diluted
basis,  for 2004 compared to $1.28 per common share for 2003. 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 126,517,000
in 2003 to  128,681,000  in 2004.  The increase in shares  outstanding  was due
primarily to the issuance of shares in connection with the exercise of employee
stock options.

     Net  income  was $1.28 per  common  share,  on a diluted  basis,  for 2003
compared to $1.14 per common share for 2002. This increase was  attributable to
the factors  denoted above with respect to net income and a reduction in income
allocated to preferred  shareholders  described  above,  partially offset by an
increase in diluted shares  outstanding from 124,571,000 in 2002 to 126,517,000
in 2003. The increase in shares  outstanding  was due to the issuance of shares
in connection  with the exercise of employee  stock options and the issuance of
common shares in connection with the acquisition of partnership interests.

                                      31
<PAGE>

Real Estate Operations
-------------------------------------------------------------------------------

     Self-Storage  Operations:  Our  self-storage  operations  are by  far  the
largest component of our operating activities,  representing  approximately 93%
of our  revenues  generated  during  2004.  Rental  income with  respect to our
self-storage  operations has grown from $761,446,000 in 2002 to $798,584,000 in
2003,  representing  an  increase  of 4.9%.  In  2004,  rental  income  grew to
$863,463,000,  representing  an increase of 8.1% over 2003. The  year-over-year
improvements  in rental income are due to  improvements  in the  performance of
those  facilities  that we owned  throughout  each of the  three  years and the
addition of new facilities to our portfolio,  either through our acquisition or
development activities.

     At the  end of  2001,  we had a total  of  1,262  self-storage  facilities
included  in our  consolidated  financial  statements.  Since that time we have
increased the net number of self-storage  facilities by 164 facilities  (2002 -
103  facilities,  2003 - 9 facilities and 2004 - 52  facilities).  We sold five
facilities  in 2003,  and  their  revenues,  cost of  operations,  depreciation
expense and the net gain on these sales for all periods  presented are reported
as "Discontinued  Operations" on the consolidated income statement.  To enhance
year-over-year  comparisons,  the following table  summarizes,  and the ensuing
discussion describes, the self-storage operating results.

<TABLE>
<CAPTION>

SELF - STORAGE OPERATIONS SUMMARY:                         Year Ended December 31,                Year Ended December 31,
----------------------------------                    -------------------------------------  ------------------------------------
                                                                               Percentage                             Percentage
                                                       2004          2003        Change       2003          2002        Change
                                                      ----------  ------------  -----------  -----------  -----------  -----------
                                                                            (Dollar amounts in thousands)
Rental income (a):
-----------------
<S>                                                    <C>          <C>            <C>        <C>          <C>            <C>
   Consistent Group (b)........................        $725,351     $691,737       4.9%       $691,737     $676,191       2.3%
   Acquired Facilities (c).....................          54,652       45,929      19.0%         45,929       38,979      17.8%
   Expansion Facilities (d)....................          28,348       24,622      15.1%         24,622       24,272       1.4%
   Developed Facilities (e)....................          55,112       36,296      51.8%         36,296       22,004      65.0%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
     Total rental income.......................         863,463      798,584       8.1%        798,584      761,446       4.9%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
Cost of operations:
   Consistent Group............................         249,547      237,870       4.9%        237,870      215,357      10.5%
   Acquired Facilities.........................          18,245       15,709      16.1%         15,709       12,869      22.1%
   Expansion Facilities........................          10,295        9,605       7.2%          9,605        9,105       5.5%
   Developed Facilities........................          22,834       17,721      28.9%         17,721       12,884      37.5%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
   Total cost of operations....................         300,921      280,905       7.1%        280,905      250,215      12.3%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
Net operating income before depreciation:
   Consistent Group............................         475,804      453,867       4.8%        453,867      460,834      (1.5)%
   Acquired Facilities.........................          36,407       30,220      20.5%         30,220       26,110      15.7%
   Expansion Facilities........................          18,053       15,017      20.2%         15,017       15,167      (1.0)%
   Developed Facilities........................          32,278       18,575      73.8%         18,575        9,120     103.7%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
   Total net operating income before depreciation       562,542      517,679       8.7%        517,679      511,231       1.3%
 Depreciation..................................        (176,488)    (176,929)     (0.2)%      (176,929)    (170,887)      3.5%
                                                      ----------  ------------  -----------  -----------  -----------  -----------
   Net operating income........................        $386,054     $340,750      13.3%       $340,750     $340,344       0.1%
                                                      ==========  ============  ===========  ===========  ===========  ===========

Number of self-storage facilities (at end of
period)........................................           1,426        1,374       3.8%          1,374        1,362       0.9%
Net rentable square feet (in thousands, at end of
period):.......................................          86,881       83,013       4.7%         83,013       82,019       1.2%

</TABLE>

(a)  Rental income includes late charges, administrative fees and lien fees and
     is net of promotional discounts given. Rental income does not include
     retail sales or truck rental income generated at the facilities.

(b)  The Consistent Group includes 1,194 facilities containing 69,402,000 net
     rentable square feet that were owned throughout the three years ended
     December 31, 2004, and operated at a mature, stabilized occupancy level
     throughout the periods presented.

(c)  The Acquired Facilities includes 109 facilities containing 7,084,000 net
     rentable square feet. These facilities were acquired in the three-year
     period ending December 31, 2004. Substantially all of these facilities were
     mature, stabilized facilities at the time of their acquisition.

(d)  The Expansion Facilities include 41 facilities containing 3,426,000 net
     rentable square feet of self-storage space and 690,000 square feet of
     industrial space developed for containerized storage activities. These

                                      32
<PAGE>

     facilities were owned since January 1, 2002, however, operating results are
     not comparable throughout the periods presented due primarily to expansions
     in their net rentable square feet or their conversion into Combination
     Facilities (described below).

(e)  The Developed Facilities includes 82 facilities containing 5,886,000 net
     rentable square feet of self-storage space and 393,000 square feet of
     industrial space initially developed for use in containerized storage
     activities.

         Self-Storage Operations - Consistent Group of Facilities

     At December 31, 2004, we owned 1,194 self-storage  facilities that we have
operated at a stabilized level of operations  throughout the three-year period.
The  Consistent  Group of facilities  contains  approximately  69.4 million net
rentable  square feet,  representing  approximately  80% of the  aggregate  net
rentable  square feet of our  self-storage  portfolio.  Revenues and  operating
expenses  with respect to this group of  properties  are set forth in the above
Self-Storage  Operations  table  under the  caption,  "Consistent  Group."  The
following  table  sets  forth  additional  operating  data with  respect to the
Consistent Group of facilities:

<TABLE>
<CAPTION>
                                CONSISTENT GROUP

                                                           Year Ended December 31,                Year Ended December 31,
                                                      -----------------------------------  ----------------------------------------
                                                                              Percentage                              Percentage
                                                       2004         2003        Change        2003          2002        Change
                                                      ----------  ----------  -----------  ------------  -----------  -------------
                                                            (Dollar amounts in thousands, except rents per square foot)

<S>                                                    <C>          <C>            <C>        <C>          <C>             <C>
Rental income, net of discounts................        $694,136     $663,860       4.6%       $663,860     $653,693        1.6%
Late charges and administrative fees collected.          31,215       27,877      12.0%         27,877       22,498       23.9%
                                                      ----------  ----------  -----------  ------------  -----------  -------------
   Total rental income.........................         725,351      691,737       4.9%        691,737      676,191        2.3%
                                                      ----------  ----------  -----------  ------------  -----------  -------------
Cost of operations:
     Property taxes............................          65,845       64,440       2.2%         64,440       61,527        4.7%
     Direct property payroll...................          54,366       52,374       3.8%         52,374       46,985       11.5%
     Advertising and promotion.................          20,873       20,066       4.0%         20,066       18,672        7.5%
     Repairs and maintenance...................          21,154       19,716       7.3%         19,716       15,826       24.6%
     Utilities.................................          17,770       16,541       7.4%         16,541       15,944        3.7%
     Telephone reservation center..............          10,016       10,230      (2.1)%        10,230        9,398        8.9%
     Property insurance........................           8,320        8,189       1.6%          8,189        5,780       41.7%
     Other cost of management..................          51,203       46,314      10.6%         46,314       41,225       12.3%
                                                      ----------  ----------  -----------  ------------  -----------  -------------
   Total cost of operations....................         249,547      237,870       4.9%        237,870      215,357       10.5%
                                                      ----------  ----------  -----------  ------------  -----------  -------------
Net operating income before depreciation.......         475,804      453,867       4.8%        453,867      460,834       (1.5)%
Depreciation...................................        (141,300)    (148,232)     (4.7)%      (148,232)    (144,980)       2.2%
                                                      ----------  ----------  -----------  ------------  -----------  -------------
 Net operating income..........................        $334,504     $305,635       9.4%       $305,635     $315,854       (3.2)%
                                                      ==========  ==========  ===========  ============  ===========  =============
Gross margin (before depreciation).............          65.6%        65.6%       (0.0)%        65.6%        68.2%        (3.8)%

Weighted average for the fiscal year:
   Square foot occupancy (a)...................           90.9%       89.2%        2.0%         89.2%        85.1%          4.7%
   Realized annual rent per occupied square foot (b)    $11.00       $10.72        2.6%        $10.72       $11.07        (3.2)%
   REVPAF (c)..................................         $10.00        $9.57        4.5%         $9.57        $9.42          1.6%

 Weighted average at December 31:
   Square foot occupancy.......................          89.9%        89.6%        0.4%         89.6%        84.3%         6.2%
   In place annual rent per occupied square foot (d)    $12.10       $11.73        3.2%        $11.73       $11.67         0.5%

Total net rentable square feet (in thousands)..          69,402       69,402          -        69,402       69,402           -

</TABLE>

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

(b)   Realized  annual  rent per  occupied  square foot is computed by dividing
      adjusted  base rental  income by the  weighted  average  occupied  square
      footage  for  the  year.   Realized  rents  per  square  foot  take  into
      consideration promotional discounts, bad debt costs, credit card fees and
      other costs that reduce rental income from the contractual amounts due.

(c)   Annualized  revenue  per  available  square  foot  ("REVPAF")  represents
      adjusted  base rental  income  divided by total  available  net  rentable
      square feet.

(d)   In place  annual rent per  occupied  square foot  represents  contractual
      rents  per  occupied  square  foot  without  reductions  for  promotional
      discounts.

                                      33
<PAGE>

ANALYSIS OF OPERATING RESULTS IN 2002 THROUGH 2004

     During 2004, the net operating  income  generated by our Consistent  Group
increased  9.6% as compared to 2003.  This increase was due to improved  rental
income combined with a reduction in depreciation  expense,  partially offset by
increased cost of operations.

     Rental income, net of discounts,  increased by 4.6% in 2004 as compared to
2003.  This increase was primarily  attributable to a 2.0% increase in weighted
average  square foot occupancy in 2004 as compared to 2003 combined with a 2.6%
increase in realized annual rent per occupied square foot.

     Cost of  operations  increased  by 4.9% in 2004 as compared  to 2003.  This
increase was  attributable  primarily to an increase in direct property  payroll
due to higher  incentives  and other  compensation  to  property  operating  and
management  personnel,  as well as an increase in other cost of  management  due
primarily  to  increased   recruiting  and  training  expenses  and  information
technology costs.

     Depreciation  expense  declined  5.3%,  due  primarily  to a reduction  in
depreciation  expense with respect to capital  expenditures due to increases in
capital  expenditures  becoming  fully  depreciated  relative  to  new  capital
expenditures coming on-line.

     During  2003,  the  net  operating  income  of  the  Consistent  Group  of
facilities  declined 1.5% from the same period in 2003. This decline was due to
higher cost of operations offset partially by higher rental income.

     Cost of operations increased 10.5%, primarily due to increases in payroll,
advertising and promotion,  property tax,  repairs and maintenance  costs,  and
property  insurance.  Direct property payroll  increased 11.5% due primarily to
increased  incentives paid to and hours worked by property operating personnel.
Advertising  and  promotion  increased  7.5% due  primarily  to an  increase in
television  advertising from $8,048,000 in 2002 to $8,662,000 in 2003.  Repairs
and maintenance increased 24.6% during 2003 as compared to 2002 due to costs to
remedy mold issues in several  facilities in Southern  states,  increased  snow
removal  expenses,  as well as a general  increase in costs to address deferred
maintenance at our facilities.  Property insurance increased due to an increase
in our self-insured portion of its risks.

     Rental income,  net of discounts  increased by 1.6% in 2004 as compared to
2003.  This  increase  was  primarily  attributable  to a 4.7%  increase in the
weighted average occupancy, partially offset by a decrease in realized rent per
occupied square foot of 3.2%.

     As  previously  reported,  in 2001,  we changed our  historical  marketing
strategy and began to aggressively  increase rental rates and reduce the amount
of promotional  discounts offered to new tenants.  During the first nine months
of 2001, this strategy  significantly  enhanced the growth in our rental income
from our  historically  experienced  levels,  and  while our  occupancy  levels
dropped  during  the  first  nine  months  of 2001,  it was at a level  that we
believed manageable.  During the fourth quarter of 2001, we experienced a rapid
decline in our occupancy levels.  This reduction  coincided with a reduction in
call volume into our national telephone  reservation center that we believe was
attributable to our pricing strategy as well as to general economic conditions.
We also experienced unusually high levels of move-out activity.

     Beginning in early 2002, we reversed our  aggressive  pricing  strategy by
reducing  rates charged to incoming  tenants and increasing  move-in  discounts
offered to these  tenants and expanding our  television  advertising  campaign.
However,  there was a pause in these activities  during the peak move-in period
in 2002 from May through July,  due to an  expectation  that proved  incorrect,
that the demand  during the peak season would be  sufficient  to stabilize  our
occupancy  levels in the  absence of  significant  promotional  activities.  We
reduced our rates, continued our television advertising campaign, and continued
to offer move-in  promotional  discounts  throughout  the remainder of 2002 and
2003.

                                      34
<PAGE>

     By the end of 2003, we had largely attained our goal of reestablishing our
occupancy  levels  to  historical  levels.  In  addition,  the  improvement  in
occupancy  levels  enabled us to begin to increase rates that we charged to new
tenants,  which at the end of 2003  were 6.2%  higher  than at the same time in
2002.

     Throughout  2004 we  continued  our  television  advertising  campaign  in
selected markets, and continued to offer various move-in promotional  discounts
where  warranted to sustain our occupancy  levels and rental rates.  During the
first  half of 2004,  we were able to  generate  year-over-year  rental  income
growth of approximately 5.7%. This growth was largely due to a 4.0% improvement
in occupancy  levels combined with improved  realized rental rates per occupied
square foot. During the second half of 2004,  year-over-year rental income grew
approximately 4.1% as compared to the same period in 2003. However,  unlike the
first half of 2004 where rental growth was primarily driven by occupancy gains,
in the second half of the year  rental  growth was  primarily  driven by a 3.9%
increase in realized rents per occupied square foot.

     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.  We also believe that our
occupancy levels with respect to the Consistent Group of facilities have become
more stabilized and therefore further  year-over-year gains in occupancy levels
will be difficult to generate.  We are  currently  working on new  processes to
improve  our  inventory  management  which may help us drive  occupancy  levels
modestly  higher;  however,  there can be no assurance that we will achieve our
goal.

REVENUE OUTLOOK

     Our goals are a sustainable  occupancy level and moderate growth in rental
income.  Few expect that future growth in rental  income will come  principally
from  increases  in  rates,   rather  than  increases  in  occupancy.   We  are
continuously   evaluating   our  call   volume,   reservation   activity,   and
move-in/move-out  ratios  for each of our  markets  relative  to our  marketing
activities and rental rates. In addition,  we are evaluating  market supply and
demand  factors and based upon these  analyses we are  continuing to refine our
marketing, promotional, and pricing activities to maximize rental income. There
can be no assurance that we will achieve our goals.

EXPENSE TRENDS AND OUTLOOK

     Throughout  2003  and  2004,  we  have  increased  regular  and  incentive
compensation  of our field  operating and  management  personnel,  as our field
organization  has focused upon  improving  customer  service and  productivity.
Accordingly,  direct  property  payroll  increased 11.5% in 2003 as compared to
2002, and 3.8% in 2004 as compared to 2003.

     In addition,  during 2003 and 2004,  we increased the level of repairs and
maintenance significantly, in order to improve the curb appeal and "rent ready"
condition of our facilities. Repairs and maintenance increased 24.6% in 2003 as
compared to 2002,  and 7.3% in 2004 as compared to 2003.  The  increase in 2003
also included  increased snow removal  expenses and costs to remedy mold issues
at several  facilities  in  Southern  states.  Snow  removal  and  mold-related
expenses declined in 2004 as compared to 2003.

     Advertising and promotion  expenses  increased 7.5% in 2003 as compared to
2002,  and 4.0% in 2004 as  compared  to  2003.  This  was  principally  due to
increases  in  television  advertising   expenditures,   which  increased  from
$8,048,000  in  2002 to  $8,662,000  in 2003 to  $10,193,000  in  2004.  Future
television advertising expense will be dependent upon market conditions and the
results of our pricing and promotional strategies.

     For 2005, we expect that operating  expenses for our  Consistent  Group of
facilities will continue to rise,  probably matching the 2004 increase of 4% to
5%.

                                      35
<PAGE>

     The following table  summarizes  selected  financial data, with respect to
the Consistent  Group  Facilitates,  for each of the quarters in 2004, 2003 and
2002:

<TABLE>
<CAPTION>
                                               For the Quarter Ended
                     ------------------------------------------------------------------------
                         March 31            June 30       September 30         December 31        Entire Year
                     ---------------  -----------------  ---------------- -------------------  ---------------
                                              (amounts in thousands)
Total rental income:
<S>                   <C>                <C>                 <C>                 <C>               <C>
     2004             $   175,923        $   180,594         $  184,897          $  183,937        $   725,351
     2003             $   165,821        $   171,431         $  178,301          $  176,184        $   691,737
     2002             $   169,812        $   167,616         $  172,810          $  165,953        $   676,191

Total cost of operations:
     2004             $    63,022        $    61,936         $   61,143          $   63,446        $   249,547
     2003             $    55,379        $    59,270         $   60,221          $   63,000        $   237,870
     2002             $    51,082        $    51,556         $   53,643          $   59,076        $   215,357

Media advertising expense:
     2004             $     3,098        $     1,842         $    1,892          $    3,361        $    10,193
     2003             $     1,580        $     2,818         $    3,166          $    1,098        $     8,662
     2002             $       560        $     1,441         $    2,013          $    4,034        $     8,048

REVPAF:
     2004             $     9.69         $     9.96          $   10.21           $    10.14        $    10.00
     2003             $     9.18         $     9.48          $    9.85           $     9.75        $     9.57
     2002             $     9.48         $     9.35          $    9.63           $     9.22        $     9.42

Weighted average realized annual rent per occupied square foot:
     2004             $    10.83         $    10.90          $   11.12           $    11.20        $    11.00
     2003             $    10.81         $    10.63          $   10.72           $    10.75        $    10.72
     2002             $    11.36         $    10.85          $   11.23           $    10.84        $    11.07

Weighted average occupancy levels for the period:
     2004                 89.5%              91.4%               91.8%               90.6%              90.9%
     2003                 84.9%              89.2%               91.9%               90.7%              89.2%
     2002                 83.5%              86.2%               85.7%               85.0%              85.1%

</TABLE>

     The following table sets forth regional trends in our consistent  group of
facilities  with respect to rental income,  cost of  operations,  net operating
income,  weighted average occupancy levels,  and realized rent per net rentable
square foot.

                                      36
<PAGE>

<TABLE>
<CAPTION>

                                     Consistent Group Operating Trends by Region
--------------------------------------------------------------------------------------------------------------------
                                                Year Ended December 31,                 Year Ended December 31,
                                           ------------------------------------  -----------------------------------
                                            2004         2003         Change        2003         2002        Change
                                           ----------  ----------  ------------  -----------  -----------  ---------
Rental income:                                    (Dollar amounts in thousands, except rents per square foot)
<S>                                       <C>         <C>              <C>       <C>          <C>              <C>
   Southern California  (124
   facilities)......................      $  122,665  $   116,644      5.2%      $   116,644  $   109,118      6.9%
   Northern California  (124
   facilities)......................          92,048       89,274      3.1%           89,274       87,824      1.7%
   Texas  (143 facilities)..........          66,574       64,068      3.9%           64,068       63,049      1.6%
   Florida  (116 facilities)........          65,976       61,693      6.9%           61,693       59,028      4.5%
   Illinois  (79 facilities)........          51,089       49,316      3.6%           49,316       51,367     (4.0)%
   Georgia  (60 facilities).........          26,593       25,341      4.9%           25,341       24,790      2.2%
   All other states  (548 facilities)        300,406      285,401      5.3%          285,401      281,015      1.6%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total rental income.................         725,351      691,737      4.9%          691,737      676,191      2.3%

Cost of operations:
   Southern California..............          28,930       27,367      5.7%           27,367       26,119      4.8%
   Northern California..............          23,906       23,624      1.2%           23,624       21,617      9.3%
   Texas............................          29,766       29,599      0.6%           29,599       26,677     11.0%
   Florida..........................          25,857       24,052      7.5%           24,052       21,070     14.2%
   Illinois.........................          22,583       21,531      4.9%           21,531       20,148      6.9%
   Georgia..........................           9,802        9,348      4.9%            9,348        8,155     14.6%
   All other states.................         108,703      102,349      6.2%          102,349       91,571     11.8%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total cost of operations............         249,547      237,870      4.9%          237,870      215,357     10.5%

Net operating income before depreciation:
   Southern California..............          93,735       89,277      5.0%           89,277       82,999      7.6%
   Northern California..............          68,142       65,650      3.8%           65,650       66,207     (0.8)%
   Texas............................          36,808       34,469      6.8%           34,469       36,372     (5.2)%
   Florida..........................          40,119       37,641      6.6%           37,641       37,958     (0.8)%
   Illinois.........................          28,506       27,785      2.6%           27,785       31,219    (11.0)%
   Georgia..........................          16,791       15,993      5.0%           15,993       16,635     (3.9)%
   All other states.................         191,703      183,052      4.7%          183,052      189,444     (3.4)%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total net operating income..........      $  475,804  $   453,867      4.8%      $   453,867  $   460,834     (1.5)%

Weighted average occupancy:
   Southern California..............         92.1%        90.7%        1.5%          90.7%        86.9%        4.4%
   Northern California..............         89.4%        88.7%        0.8%          88.7%        84.9%        4.5%
   Texas............................         89.9%        89.1%        0.9%          89.1%        84.0%        6.1%
   Florida..........................         92.3%        90.6%        1.9%          90.6%        85.2%        6.3%
   Illinois.........................         89.8%        88.0%        2.0%          88.0%        84.3%        4.4%
   Georgia..........................         91.5%        90.1%        1.6%          90.1%        84.3%        6.9%
   All other states.................         90.9%        88.6%        2.6%          88.6%        85.2%        4.0%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total weighted average occupancy....         90.9%        89.2%        2.0%          89.2%        85.1%        4.7%

REVPAR:
   Southern California..............       $  15.12     $  14.42       4.8%        $  14.42     $  13.53       6.6%
   Northern California..............          13.25        12.91       2.7%           12.91        12.75       1.3%
   Texas............................           7.13         6.87       3.7%            6.87         6.82       0.8%
   Florida..........................           9.55         8.91       7.3%            8.91         8.59       3.7%
   Illinois.........................          10.17         9.86       3.2%            9.86        10.35      (4.7)%
   Georgia..........................           7.25         6.93       4.7%            6.93         6.93       0.0%
   All other states.................           9.21         8.78       4.9%            8.78         8.72       0.7%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total REVPAR:.......................       $  10.00     $   9.57       4.5%        $   9.57     $   9.42       1.6%

Realized annual rent per occupied square foot:
   Southern California..............       $  16.42     $  15.90       3.2%        $  15.90     $  15.57       2.1%
   Northern California..............          14.82        14.55       1.9%           14.55        15.01      (3.1)%
   Texas............................           7.93         7.71       2.8%            7.71         8.12      (5.0)%
   Florida..........................          10.35         9.83       5.3%            9.83        10.08      (2.5)%
   Illinois.........................          11.33        11.20       1.1%           11.20        12.28      (8.7)%
   Georgia..........................           7.93         7.69       3.1%            7.69         8.21      (6.4)%
   All other states.................          10.13         9.91       2.2%            9.91        10.23      (3.2)%
                                           ----------  ----------  ------------  -----------  -----------  ---------
Total realized rent per square foot:...    $  11.00     $  10.72       2.6%        $  10.72     $  11.07      (3.2)%

</TABLE>
                                                                37
<PAGE>

         Self-Storage Operations - Acquired Facilities

     Over the  past  three  years,  we  acquired  109  self-storage  facilities
containing  7,084,000 net rentable square feet. The following table  summarizes
operating data with respect to these facilities.


<TABLE>
<CAPTION>
                                                       ACQUIRED FACILITIES
-----------------------------------------------------------------------------------------------------------------------------------
                                                          Year Ended December 31,                 Year Ended December 31,
                                                     ------------------------------------  ----------------------------------------
                                                       2004         2003        Change        2003         2002         Change
                                                     -----------  -----------  ----------  -----------  -----------  --------------
                                                                           (Dollar amounts in thousands)
Rental income:
--------------
<S>                                                  <C>          <C>           <C>         <C>          <C>           <C>
   Self-storage facilities acquired in 2004....      $    4,705   $        -    $  4,705    $        -   $        -    $      -
   Self-storage facilities acquired in 2002....          44,102       40,684       3,418        40,684       34,772       5,912
   Self-storage facilities acquired in 2001....             592          560          32           560          445         115
   Self-storage facilities acquired in 2000....           5,253        4,685         568         4,685        3,762         923
                                                     -----------  -----------  ----------  -----------  -----------  --------------
   Total rental income.........................          54,652       45,929       8,723        45,929       38,979       6,950
                                                     -----------  -----------  ----------  -----------  -----------  --------------
Cost of operations:
-------------------
   Self-storage facilities acquired in 2004....      $    1,606   $        -    $  1,606    $       -    $             $     -
   Self-storage facilities acquired in 2002....          14,393       13,489         904        13,489       11,301       2,188
   Self-storage facilities acquired in 2001....             222          200          22           200          191           9
   Self-storage facilities acquired in 2000....           2,024        2,020           4         2,020        1,377         643
                                                     -----------  -----------  ----------  -----------  -----------  --------------
   Total cost of operations....................          18,245       15,709       2,536        15,709       12,869       2,840
                                                     -----------  -----------  ----------  -----------  -----------  --------------
Net operating income before depreciation:
-----------------------------------------
   Self-storage facilities acquired in 2004....      $    3,099   $        -    $  3,099    $        -   $        -    $      -
   Self-storage facilities acquired in 2002....          29,709       27,195       2,514        27,195       23,471       3,724
   Self-storage facilities acquired in 2001....             370          360          10           360          254         106
   Self-storage facilities acquired in 2000....           3,229        2,665         564         2,665        2,385         280
   Total net operating income before depreciation        36,407       30,220       6,187        30,220       26,110       4,110
Depreciation...................................         (11,400)      (9,666)     (1,734)       (9,666)      (9,306)       (360)
                                                     -----------  -----------  ----------  -----------  -----------  --------------
   Net operating income........................      $   25,007   $   20,554    $  4,453    $   20,554   $   16,804    $  3,750
                                                     ===========  ===========  ==========  ===========  ===========  ==============
Weighted average square foot occupancy during the
-------------------------------------------------
period:
------
   Self-storage facilities acquired in 2004....         80.4%           -            -            -            -            -
   Self-storage facilities acquired in 2002....         92.1%          89.9%         2.5%        89.9%        84.2%         6.8%
   Self-storage facilities acquired in 2001....         94.3%          92.2%         2.3%        92.2%        67.4%        36.8%
   Self-storage facilities acquired in 2000....         91.4%          84.5%         8.2%        84.5%        68.8%        22.8%
                                                     -----------  -----------  ----------  -----------  -----------  --------------
                                                        90.4%          89.2%         1.2%        89.2%        81.9%         8.9%
                                                     ===========  ===========  ==========  ===========  ===========  ==============

Number of self-storage facilities (at end of
period)........................................             109           64          45            64           64           -
Net rentable square feet (in thousands, at end of
period)........................................           7,084        3,975       3,109         3,975        3,975           -
Cumulative acquisition cost (at end of period).      $  604,643   $  345,156    $259,487    $  345,156   $  345,156    $      -

</TABLE>

     Rental  income and cost of  operations  for the Acquired  Facilities  have
increased  significantly in 2004 as compared to 2003. This increase,  in part,
is due to the  acquisition of 45 additional  properties from third parties for
an aggregate cost of $259.5 million.  These  acquisitions  are described below:

o        During July 2004, we acquired two facilities from a third party for an
         aggregate cost of approximately $8.3 million. One of these facilities
         was located in Salt Lake City, and had been managed by us for many
         years.

o        On October 12, 2004, we acquired 26 facilities from a third party for
         an aggregate cost of approximately $102.4 million. This acquisition
         increased our presence in the Minneapolis and Milwaukee markets, and
         will allow us to cost-effectively introduce media advertising in these
         markets, improve our yellow page ad placement, and drive operational
         efficiency. In addition, the average rental rates and average
         occupancies of these properties are lower than comparable properties
         that we currently own in these markets..

                                      38
<PAGE>

o        On October 13, 2004, we acquired six facilities in Dallas from a third
         party for an aggregate of approximately $19.8 million. We believe that
         this acquisition improved our presence in submarkets of Dallas where we
         were underrepresented.

o        On November 23, 2004, we acquired 10 facilities in the Miami market for
         an aggregate of $119.5 million. We believe that these properties are
         well-built and located in highly desirable submarkets in Miami. All of
         these facilities were built between 1997 and 2003.

o        On November 24, 2004, we acquired a facility in a submarket of
         San Diego for approximately $9.5 million.

         Operating  results  for the 2004  acquisitions,  in the  table  above,
represents the results of these  acquisitions  from the respective  acquisition
dates  through  December  31,  2004.  On  December  31,  2004,  seven  of these
facilities  (the  facility in Salt Lake City and the six  facilities in Dallas)
were sold to our Acquisition Joint Venture. This transaction,  however, will be
accounted for as a financing arrangement,  accordingly, the operations of these
properties will continue to be consolidated  in our financial  statements,  see
Note 9 to the consolidated financial statements.  In addition, in January 2005,
a  significant  interest in three of the 10  facilities  acquired in Miami were
sold to our Acquisition  Joint Venture.  Similarly these  transactions  will be
accounted for as a financing arrangement.

         The 2002  acquisitions  include 47 properties  acquired on January 16,
2002  from  an  affiliated  development  joint  venture  (see  Note  3  to  the
consolidated  financial  statements).  The 2002 acquisitions also included nine
self-storage  facilities  acquired  from  third  parties  for an  aggregate  of
$30,117,000 in cash. The 2001 acquisition includes one facility acquired from a
third party for an aggregate cost of $3,503,000.

         Operating   results   for  the  2000,   2001  and  2002   acquisitions
collectively  showed strong  improvement  in 2003 and 2004.  These results were
primarily driven by improved  occupancy levels combined with improved  realized
rental rates per occupied  square foot which combined  improved  rental income.
Notwithstanding  the damage to the facility  discussed  below, we believe these
acquisitions  will continue to provide  growth to our earnings into 2005 due to
improved year-over-year occupancy levels and rental rates.

         During September 2004, a facility located in Florida,  and included in
our 2002 acquisitions,  was significantly  damaged by hurricanes.  As a result,
occupancy  levels and  operating  results  for this  facility  were  negatively
affected  during the fourth  quarter of 2004 and are expected to continue to be
negatively  impacted into 2005. For 2004,  rental income and cost of operations
for this  facility were  $766,000 and  $352,000,  respectively,  as compared to
$884,000 and $321,000,  respectively, for 2003. Occupancy for this facility was
19.3% and 92.1% at  December  31,  2004 and 2003,  respectively.  We are in the
process of  repairing  the damage and should  bring the  facility  back on line
fully during 2005.

         In January 2005, we acquired 6 additional self-storage facilities from
third parties (total net rentable  square feet of 304,000) at an aggregate cost
of  approximately  $23.6  million of cash.  As of March 14, 2005,  we are under
contract  to  purchase  six  self-storage  facilities  (total  approximate  net
rentable  square feet of 448,000) at an aggregate cost of  approximately  $48.1
million.

         Self-Storage Operations - Expansion Facilities

         As  a  result   primarily  of  expansions  to  existing   self-storage
facilities,  the net rentable space at certain of our self-storage  facilities'
operations has changed.  Accordingly,  the operating results are not comparable
in each of the three years ended December 31, 2004.  The operating  results for
these facilities are presented in the Self-Storage Operations table above under
the caption, "Expansion Facilities."

                                       39
<PAGE>

         These 41  facilities  contain  approximately  3,426,000  net  rentable
square feet of self-storage space at December 31, 2004, and 690,000 square feet
of  industrial  space  developed  for  containerized  storage  activities - see
"Containerized   Storage"  and   "Discontinued   Operations".   The   aggregate
construction  costs to complete these expansions  totaled  approximately  $80.5
million during the four years ended December 31, 2004.

         We have 37 projects to repackage  and expand our  facilities,  with an
aggregate  cost of $112.3 million in our  development  pipeline at December 31,
2004, which will increase our traditional self-storage space by an aggregate of
2,246,000 net rentable square feet,  including the conversion of certain of the
industrial   space  developed  for   containerized   storage   activities  into
traditional  self-storage  space.  These  activities  will result in short-term
dilution to earnings from these activities.  However, we believe that expansion
of our existing  self-storage  facilities  in markets  that have unmet  storage
demand,  and improving our existing  facilities'  competitive  position through
enhancing  their visual and structural  appeal,  provide an important  means to
improve the  Company's  earnings.  There can be no  assurance  about the future
level of such expansion and enhancement opportunities.

         We expect that these 41 facilities  will continue to provide growth to
our earnings into 2005 as we continue to fill the newly added vacant space.  At
December 31, 2004, the weighted average occupancy level of these facilities was
approximately 83.1% as compared to 77.3% one year earlier.

         Depreciation  expense with  respect to the  expansion  facilities  was
$7,101,000 in 2004,  $6,254,000 in 2003,  and $6,688,000 in 2002. The increases
in depreciation  expense are due to the opening of the expanded  portion of the
facilities.

         Self-Storage Operations -Developed Facilities

         Since January 1, 2000, we have opened 65 newly developed  self-storage
facilities and 17 facilities that contain both  self-storage and  containerized
storage at the same location ("Combination Facilities").  These newly developed
facilities  have an aggregate of 6,279,000  net rentable  square feet (of which
393,000  net  rentable   square  feet  is   industrial   space   developed  for
containerized   storage   activities   -  see   "Containerized   Storage"   and
"Discontinued Operations").  Aggregate development cost for these 82 facilities
was  approximately  $584.6 million.  The operating  results of the self-storage
facilities  and  Combination  facilities  are  reflected  in  the  Self-Storage
Operations table under the caption, "Developed Facilities."

                                      40
<PAGE>

         The  following  chart  sets  forth  the  operations  of the  Developed
Facilities:

<TABLE>
<CAPTION>

                                                       Year ended December 31,                Year ended December 31,
                                                 -----------------------------------   ---------------------------------------
                                                   2004         2003        Change        2003          2002        Change
                                                 ----------  ----------- ------------  ----------  -------------  ------------
                                                              (Amounts in thousands, except No. of facilities)
Rental income:
--------------
<S>                                              <C>         <C>           <C>          <C>          <C>          <C>
   Self-storage facilities..................     $  40,877   $   25,651    $  15,226    $   25,651   $   15,241   $   10,410
   Combination facilities...................        14,235       10,645        3,590        10,645        6,763        3,882
                                                 ----------  ----------- ------------  ----------  -------------  ------------
     Total rental income....................        55,112       36,296       18,816        36,296       22,004       14,292
                                                 ----------  ----------- ------------  ----------  -------------  ------------
Cost of operations:
------------------
   Self-storage facilities..................        17,135       12,845        4,290        12,845        7,848        4,997
   Combination facilities...................         5,699        4,876          823         4,876        5,036         (160)
                                                 ----------  ----------- ------------  ----------  -------------  ------------
     Total cost of operations...............        22,834       17,721        5,113        17,721       12,884        4,837
                                                 ----------  ----------- ------------  ----------  -------------  ------------
Net operating income before depreciation:
----------------------------------------
   Self-storage facilities.................         23,742       12,806       10,936        12,806        7,393        5,413
   Combination facilities..................          8,536        5,769        2,767         5,769        1,727        4,042
                                                 ----------  ----------- ------------  ----------  -------------  ------------
     Net operating income before depreciation       32,278       18,575       13,703        18,575        9,120        9,455
 Depreciation..............................         (16,687)     (12,777)    (3,910)        (12,777)      (9,913)    (2,864)
                                                 ----------  ----------- ------------  ----------  -------------  ------------
   Net operating income (loss).............       $  15,591    $   5,798   $  9,793       $   5,798    $    (793)  $  6,591
                                                 ==========  =========== ============  ==========  =============  ============
SELF-STORAGE FACILITIES, AT END OF PERIOD:
   Number of facilities....................             65           58           7             58           44          14
   Net rentable square feet................          4,320        3,780         540          3,780        2,787         993
   Total development cost..................      $  415,755   $  350,737   $ 65,018      $  350,737   $  241,833   $108,904
COMBINATION FACILITIES, AT END OF PERIOD:
   Number of facilities....................             17           17           -             17           17           -
   Net rentable square feet (a)  (b).......          1,959        1,844         115          1,844        1,844           -
   Total development cost (a)  (b).........      $  168,844   $  158,677   $ 10,167      $  158,677   $  154,177   $  4,500
</TABLE>

(a)  During 2003, we completed the conversion of 166,000 net rentable square
     feet of containerized storage space into 166,000 net rentable square feet
     of self-storage space at an aggregate cost of $4,500,000. During 2004, we
     completed the conversion of 248,000 net rentable square feet of
     containerized storage space into 363,000 net rentable square feet of
     self-storage space at an aggregate cost of $10,167,000.

(b)  Approximately 393,000 net rentable square feet of this storage space
     represents industrial space that was developed for use in our containerized
     storage activities.

                                      41
<PAGE>

         The  following  table  summarizes  operating  data  for  the 65  newly
developed self-storage facilities included in the table above:

<TABLE>
<CAPTION>

                                                DEVELOPED SELF-STORAGE FACILITIES
----------------------------------------------------------------------------------------------------------------------------------
                                                           Year Ended December 31,                Year Ended December 31,
                                                    -----------------------------------  ----------------------------------------
                                                       2004          2003        Change       2003         2002         Change
                                                    -----------  ----------  ----------  ------------  ------------  ------------
                                                                            (Dollar amounts in thousands)
Rental income (a):
-----------------
<S>                                                  <C>          <C>           <C>         <C>          <C>          <C>
  Self-storage facilities opened in 2004.......      $    1,234   $        -    $  1,234    $        -   $        -   $       -
  Self-storage facilities opened in 2003.......           8,705        1,566       7,139         1,566            -       1,566
  Self-storage facilities opened in 2002.......          10,344        6,737       3,607         6,737        1,435       5,302
  Self-storage facilities opened in 2001.......           8,706        6,579       2,127         6,579        4,474       2,105
  Self-storage facilities opened in 2000.......          11,888       10,769       1,119        10,769        9,332       1,437
                                                    -----------  ----------  ----------  ------------  ------------  ------------
     Total rental income.......................          40,877       25,651      15,226        25,651       15,241      10,410
                                                    -----------  ----------  ----------  ------------  ------------  ------------
Cost of operations:
-------------------
  Self-storage facilities opened in 2004.......      $    1,149   $        -    $  1,149    $        -   $        -   $       -
  Self-storage facilities opened in 2003.......           3,788        1,347       2,441         1,347            -       1,347
  Self-storage facilities opened in 2002.......           4,009        3,660         349         3,660        1,399       2,261
  Self-storage facilities opened in 2001.......           3,576        3,389         187         3,389        2,667         722
  Self-storage facilities opened in 2000.......           4,613        4,449         164         4,449        3,782         667
                                                    -----------  ----------  ----------  ------------  ------------  ------------
     Total cost of operations..................          17,135       12,845       4,290        12,845        7,848       4,997
                                                    -----------  ----------  ----------  ------------  ------------  ------------
Net operating income before depreciation:
-----------------------------------------
  Self-storage facilities opened in 2004.......      $       85   $        -    $     85    $        -   $        -   $       -
  Self-storage facilities opened in 2003.......           4,917          219       4,698           219            -         219
  Self-storage facilities opened in 2002.......           6,335        3,077       3,258         3,077           36       3,041
  Self-storage facilities opened in 2001.......           5,130        3,190       1,940         3,190        1,807       1,383
  Self-storage facilities opened in 2000.......           7,275        6,320         955         6,320        5,550         770
   Net operating income before depreciation....          23,742       12,806      10,936        12,806        7,393       5,413
 Depreciation..................................         (11,824)      (8,343)     (3,481)       (8,343)      (6,322)     (2,021)
                                                    -----------  ----------  ----------  ------------  ------------  ------------
   Net operating income........................      $   11,918   $    4,463    $  7,455    $    4,463   $    1,071   $   3,392
                                                    ===========  ==========  ==========  ============  ============  ============

Weighted average square foot occupancy during the
-------------------------------------------------
period:
-------
  Self-storage facilities opened in 2004.......           35.2%         -          -              -            -          -
  Self-storage facilities opened in 2003.......           64.8%        24.4%     165.6%          24.4%         -          -
  Self-storage facilities opened in 2002.......           88.8%        61.3%      44.9%          61.3%        20.6%     197.6%
  Self-storage facilities opened in 2001.......           93.5%        74.3%      25.8%          74.3%        44.0%      68.9%
  Self-storage facilities opened in 2000.......           92.8%        88.8%       4.5%          88.8%        76.1%      16.7%
                                                    -----------  ----------  ----------  ------------  ------------  ------------
                                                          81.0%        62.2%      30.2%          62.2%        52.9%      17.6%
                                                    ===========  ==========  ==========  ============  ============  ============
Number of facilities:
---------------------
  Self-storage facilities opened in 2004.......               7            -           7             -            -            -
  Self-storage facilities opened in 2003.......              14           14           -            14            -           14
  Self-storage facilities opened in 2002.......              14           14           -            14           14            -
  Self-storage facilities opened in 2001.......              12           12           -            12           12            -
  Self-storage facilities opened in 2000.......              18           18           -            18           18            -
                                                    -----------  ----------  ----------  ------------  ------------  ------------
                                                             65           58           7            58           44           14
                                                    ===========  ==========  ==========  ============  ============  ============
Cumulative development cost:
----------------------------
  Self-storage facilities opened in 2004.......      $   61,558   $        -    $ 61,558    $        -   $        -   $        -
  Self-storage facilities opened in 2003.......         107,452      107,126         326       107,126            -      107,126
  Self-storage facilities opened in 2002  (a)..          97,021       93,887       3,134        93,887       92,109        1,778
  Self-storage facilities opened in 2001.......          66,905       66,905           -        66,905       66,905            -
  Self-storage facilities opened in 2000.......          82,819       82,819           -        82,819       82,819            -
                                                    -----------  ----------  ----------  ------------  ------------  ------------
                                                     $  415,755   $  350,737    $ 65,018    $  350,737   $  241,833   $  108,904
                                                    ===========  ==========  ==========  ============  ============  ============
</TABLE>

(a) In the quarter ended September 30, 2004, we expanded an existing
    self-storage facility that was originally developed in 2002, adding 33,000
    net rentable square feet at a cost of $3,134,000.

                                      42
<PAGE>

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

     We believe  that the newly  developed  self-storage  facilities  have been
affected by the operating  trends in occupancy  and realized  rents noted above
with  respect to the  Consistent  Group of  facilities.  In  addition,  move-in
discounts  have a more  pronounced  effect  upon  realized  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 reach an occupancy
level of approximately 30% to 34%. 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 yield on cost for these  facilities  for the year ended  December  31,
2004,  based on net operating  income before  depreciation,  was  approximately
5.7%,  which is lower than our  ultimate  yield  expectations.  We expect these
yields to increase as these facilities fill up.  Properties that were developed
before 2004 have contributed  greatly to our earnings growth with net operating
income before depreciation increasing by approximately $10.9 million in 2004 as
compared to 2003. This growth was primarily due to higher  occupancy  levels in
2004 as compared  to 2003.  We expect that these  facilities  will  continue to
provide growth,  however,  at a growth rate that is much lower than experienced
in 2004 as occupancy levels become more stabilized.

     With  respect  to  our  Combination  Facilities,  we  have  been  steadily
converting these facilities into entirely self-storage facilities by converting
the industrial  space once used by our  containerized  storage  operations into
self-storage  space.  As of  December  31,  2004,  nine  of the 17  Combination
Facilities have been converted into entirely self-storage.  The remaining eight
facilities  are  expected  to be  converted  over the next two years.  Weighted
average  occupancy  levels for the Combination  Facilities at December 31, 2004
was 74.0% as compared to 84.1% at December 31, 2003,  the drop in occupancy due
to the addition of more space during 2004.

     We  continue  to  develop  facilities,  despite  the  short-term  earnings
dilution  experienced  during the fill-up  period,  because we believe that the
ultimate returns on developed facilities are favorable. In addition, we believe
that 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.

     We  expect  that  over  at  least  the  next  12  months,   the  Developed
Self-Storage  Facilities  will  continue  to  have  a  negative  impact  to our
earnings.  Furthermore,  the 47 expansion and newly developed facilities in our
development   pipeline   described  in  "Liquidity  and  Capital   Resources  -
Acquisition  and  Development of Facilities"  that will be opened for operation
over the next 24 months will also  negatively  impact our  earnings  until they
reach a stabilized occupancy level.

     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

                                      43
<PAGE>

interest in commercial  properties  through our ownership  interest in PSB. Our
investment  in PSB is accounted  for on 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  1,040,000  net  rentable
commercial  space operated at certain of the  self-storage  facilities and four
stand-alone commercial facilities having a total of 302,000 net rentable square
feet.

     The results of our commercial operations are provided in the table below:

<TABLE>
<CAPTION>

                         COMMERCIAL PROPERTY OPERATIONS
                      (EXCLUDING DISCONTINUED OPERATIONS):
                      ------------------------------------
                                  Year Ended December 31,                 Year Ended December 31,
                                 -----------------------                 -----------------------
                                     2004         2003        Change        2003         2002       Change
                                 ------------  -----------  ---------    -----------  ----------  ----------
                                                            (Amounts in thousands)
<S>                                   <C>          <C>         <C>           <C>          <C>         <C>
Rental income  ...............        $10,750      $11,001     $(251)        $11,001      $11,304     $(303)
Cost of operations............          4,328        4,583      (255)          4,583        4,259       324
                                 ------------  -----------  ---------    -----------  ----------  ----------
   Net operating income before
      depreciation............          6,422        6,418         4           6,418        7,045      (627)

Depreciation expense..........         (2,114)      (2,436)      322          (2,436)      (2,436)        -
                                 ------------  -----------  ---------    -----------  ----------  ----------
   Net operating income.......         $4,308       $3,982      $326          $3,982       $4,609     $(627)
                                 ============  ===========  =========    ===========  ==========  ==========
</TABLE>

     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 2005.

     CONTAINERIZED  STORAGE  OPERATIONS:  During 2002,  2003, and 2004, we have
significantly curtailed the scope and number of facilities of our containerized
storage operations, and continue to evaluate additional facilities for closure.
At December 31, 2004, we operated 12 containerized  storage  facilities located
in major markets in which we have significant  traditional  self-storage market
presence.  The operations  with respect to the  facilities  that were closed or
consolidated  in 2002,  2003,  and 2004 (the  "Closed  Facilities"),  including
historical  operating  results for  previous  periods,  are not included in the
table  below  and  instead  are   included  in   "Discontinued   Operations   -
Containerized storage" on our income statement.  The following table sets forth
continuing operations:

<TABLE>
<CAPTION>

CONTAINERIZED STORAGE
(EXCLUDING DISCONTINUED OPERATIONS):
------------------------------------
                                           Year Ended December 31,                  Year Ended December 31,
                                           ------------------------                 --------------------------
                                             2004          2003       Change           2003         2002       Change
                                           -----------  ----------  ----------      ------------  ----------  ----------
                                                                  (Dollar amounts in thousands)
<S>                                          <C>          <C>         <C>             <C>           <C>         <C>
Rental and other income ............         $19,355      $23,991     $(4,636)        $23,991       $22,355     $1,636
Cost of operations:
    Direct operating costs..........          10,448       12,796      (2,348)         12,796        16,505     (3,709)
    Facility lease expense..........           1,326        1,143         183           1,143         1,107         36
                                           -----------  ----------  ----------      ------------  ----------  ----------
       Total cost of operations.....          11,774       13,939      (2,165)         13,939        17,612     (3,673)
                                           -----------  ----------  ----------      ------------  ----------  ----------
    Operating income prior to
      depreciation..................           7,581       10,052      (2,471)         10,052         4,743      5,309
 Depreciation expense (a)............         (4,546)      (4,780)        234          (4,780)       (2,511)    (2,269)
                                           -----------  ----------  ----------      ------------  ----------  ----------
Net operating income ...............          $3,035       $5,272     $(2,237)         $5,272        $2,232     $3,040
                                           ===========  ==========  ==========      ============  ==========  ==========
</TABLE>

 (a) Depreciation  expense principally relates to the depreciation  related
     to the  containers,  however,  depreciation  expense  for  2004,  2003
     and 2002 includes $1,020,000,  $1,218,000, and $592,000,  respectively,
     related to real estate facilities.

     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, prior to the termination of
this moving service,  moving service fees to move customers' goods from city to
city.  Rental and other  income  decreased  to  $19,355,000  for the year ended
December 31, 2004 from $23,991,000 for the same period in 2003,  primarily as a
result of the termination of our long-distance  moving service. At December 31,
2004, there were approximately 20,800 occupied containers at the 12 facilities.

                                      44
<PAGE>

     Direct  operating  costs  principally  includes  payroll,  equipment lease
expense,  utilities and vehicle expenses (fuel and insurance). The reduction in
direct  operating costs is due primarily to the  aforementioned  termination of
our long-distance moving service.

     We  expect  that the net  operating  income of our  containerized  storage
facilities in 2005 will be  substantially  equivalent to 2004's  results,  with
increases in net operating income (prior to advertising)  substantially  offset
by increased yellow page and other media advertising. There can be no assurance
as to the ultimate level of the  containerized  storage  business's  expansion,
level of gross  rentals,  level of occupancy or  profitability.  We continue to
evaluate the business operations, and additional facilities may be closed.

     See "Discontinued  Operations" below for a discussion of operating results
of the Closed Facilities.

     TENANT  REINSURANCE  OPERATIONS:  On  December  31,  2001,  we acquired PS
Insurance  Company,  Ltd. ("PS  Insurance")  from a related party. PS Insurance
reinsures   policies   against  losses  to  goods  stored  by  tenants  in  our
self-storage  facilities.  Effective  January 1,  2002,  the  operations  of PS
Insurance  are  included  in the  income  statement  under  "Revenues  - tenant
reinsurance premiums" and "Cost of operations - tenant reinsurance." The tenant
reinsurance  business  earned  $24,243,000,  $22,464,000,  and  $19,947,000  in
revenues for the years ended December 31, 2004,  2003, and 2002,  respectively,
and incurred  $13,508,000,  $11,987,000,  and $9,411,000 in operating expenses,
for  the  same  periods.  PS  Insurance  generated  net  operating  profits  of
$10,735,000, $10,477,000 and $10,536,000 for the years ended December 31, 2004,
2003 and 2002, respectively.

     The future level of tenant reinsurance  revenues is largely dependent upon
our occupancy level and move-in activity,  as well as the level of such tenants
that opt for such insurance.  For the years ended December 31, 2004,  2003, and
2002, approximately 35%, 37%, and 37%, respectively, of our self-storage tenant
base had such policies.  New insurance  business comes from tenants who sign up
for insurance as they move into our self-storage facilities.

     We have  outside  third-party  insurance  coverage  for  losses  from  any
individual  event that exceeds a loss of $500,000,  to a limit of  $10,000,000.
Losses below these  amounts are recorded as cost of  operations  for the tenant
reinsurance operations.

     The increase in operating expenses for the year ended December 31, 2004 as
compared to the same period in 2003 is due primarily to $1,500,000 in estimated
tenant claim  payments  resulting  from a series of  hurricanes in Florida that
occurred in the quarter ended September 30, 2004.

     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
eight  limited   partnerships  at  December  31,  2004  (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.

                                      45
<PAGE>

     Equity in earnings of real estate entities for the year ended December 31,
2004 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,     Dollar          Year Ended December 31,   Dollar
-------------------                           ------------------------                    -------------------------
                                                  2004         2003        Change           2003         2002        Change
                                              -----------  -----------  ----------        ----------  ----------  ------------
                                                                           (Amounts in thousands)
Property operations:
<S>                                             <C>           <C>          <C>             <C>          <C>            <C>
  PSB                                           $68,545       $64,242      $4,303          $64,242      $65,212        $(970)
  Acquisition Joint Venture..............            23             -          23                -            -            -
  Disposed Investments (1)...............             -            10         (10)              10          325         (315)
  Other Investments (2)..................         6,587         6,278         309            6,278        5,667          611
                                              -----------  -----------  ----------        ----------  ----------  ------------
                                                 75,155        70,530       4,625           70,530       71,204         (674)
                                              -----------  -----------  ----------        ----------  ----------  ------------
Depreciation:
  PSB....................................       (32,063)      (26,048)     (6,015)         (26,048)     (25,459)        (589)
  Acquisition Joint Venture..............           (96)            -         (96)               -            -            -
  Disposed Investments (1)...............             -             -           -                -          (65)          65
  Other Investments (2)..................        (1,561)       (1,705)        144           (1,705)      (1,554)        (151)
                                              -----------  -----------  ----------        ----------  ----------  ------------
                                                (33,720)      (27,753)     (5,967)         (27,753)     (27,078)        (675)
                                              -----------  -----------  ----------        ----------  ----------  ------------
Other: (3)
  PSB (4)................................       (19,587)      (18,507)     (1,080)         (18,507)     (15,292)      (3,215)
  Other Investments (2)..................           716           696          20              696        1,054         (358)
                                              -----------  -----------  ----------        ----------  ----------  ------------
                                                (18,871)      (17,811)     (1,060)         (17,811)     (14,238)      (3,573)
                                              -----------  -----------  ----------        ----------  ----------  ------------
Total equity in earnings of real estate
 entities..................................     $22,564       $24,966     $(2,402)         $24,966       29,888       (4,922)
                                              ===========  ===========  ==========        ==========  ==========  ============
</TABLE>

(1)     Amounts  include our pro-rata share of the earnings for the Development
        Joint Venture, which we began to consolidate effective January 16, 2002
        and two partnerships that we began to consolidate  effective January 1,
        2002.  On the  respective  dates of  consolidation,  we had  obtained a
        controlling interest in these partnerships and began to consolidate the
        operations  of  these  partnerships,  and no  longer  account  for  our
        interest in these  partnerships  using the equity method (see Note 3 to
        the  consolidated  financial  statements).  Amounts also include income
        with  respect  to an  investment  that was  disposed  of in the  second
        quarter of 2003.

(2)     Amounts include equity in earnings  recorded for investments  that have
        been held  consistently  throughout  the three years ended December 31,
        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)     Our  equity  in  earnings  includes  our  pro-rata  share  of  gain  on
        disposition  of real  estate  investments,  impairment  charges on real
        estate  assets,  and  EITF  Topic  D-42  charges  totaling  $4,544,000,
        $187,000 and $3,737,000, respectively, during 2004, 2003 and 2002.

        The  decrease  in equity  in  earnings  of real  estate  entities  when
comparing  2003 to 2002, and 2004 to 2003, is caused by the net impact of PSB's
gains,  losses,  impairment  charges  and EITF D-42  charges  recorded in these
periods.  The  decrease in  comparing  2004 to 2003 also  includes our pro-rata
share of  increased  depreciation  expense  recorded by PSB due to its property
acquisition activities in late 2003.

        Equity in earnings of PSB represents our pro-rata share  (approximately
44% at December 31, 2004 and 2003) of the earnings of PS Business Parks,  Inc.,
a publicly traded real estate  investment trust (American Stock Exchange symbol
"PSB") organized by the Company on January 2, 1997. As of December 31, 2004, 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, 2004, PSB owned and operated 18.0 million net rentable square feet
of commercial space located in eight states.

        Accordingly,  our  future  equity  income  from PSB  will be  dependent
entirely upon PSB's  operating  results.  PSB's filings and selected  financial
information can be accessed through the Securities and Exchange Commission, and
on its website, www.psbusinessparks.com.
                ------------------------

                                      46
<PAGE>

        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 2 to the  Consolidated  Financial  Statements  for the year
ended  December 31, 2004, our pro-rata share of earnings with respect to two of
the facilities acquired directly by the Acquisition Joint Venture are reflected
in Equity in Earnings in the table above. These two facilities were acquired by
the Acquisition  Joint Venture directly from third parties at an aggregate cost
of  $9,086,000.  Our  investment,  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 owned by the Acquisition Joint Venture.

         The "Other Investments" includes our equity in earnings with respect to
our pro-rata share of earnings with respect to seven limited partnerships, for
which we held an approximately consistent level of equity interest during the
three years ended December 31, 2004. These limited partnerships were formed by
the Company during the 1980's. The Company is the general partner in each
limited partnership, and manages each of these facilities for a management fee
that is included in "interest and other income." 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 36  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 Consistent Group of self-storage  facilities
as discussed above with respect to Self-Storage  Operations.  See Note 6 to the
consolidated  financial  statements for the operating results of these entities
for the years ended December 31, 2004 and 2003.

Other Income and Expense Items
-------------------------------------------------------------------------------

        INTEREST AND OTHER  INCOME:  Interest in other income  includes (i) the
net operating results from our third party property management operations, (ii)
the net operating results from our merchandise sales and consumer truck rentals
and (iii) interest income.

        Interest  and other income  increased in 2004 as compared to 2003,  due
primarily  to  higher  interest  income  attributable  to higher  average  cash
balances and higher  average  interest  rates on short-term  cash  investments,
offset partially by principal payments received on notes receivable.

        Interest and other income remained constant in 2003 as compared to 2002
reflecting the impact of improved  operating results from our merchandise sales
and consumer truck rentals,  offset by lower interest  income  attributable  to
lower average  interest  rates on  short-term  cash  investments  and principal
payments received on notes receivable.

        As discussed more fully in "Liquidity and Capital  Resources" below, at
December 31, 2004, we had cash balances totaling  approximately $366.3 million.
In addition,  during the first  quarter 2005,  we issued  approximately  $135.0
million of our 6.18% Series D Cumulative Preferred Stock. The net proceeds from
this issuance and our December 31, 2004 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 is expected to earn nominal  interest  income
relative to the corresponding divided requirement.  This difference will result
in an estimated  reduction to earnings per common  share.  In addition,  we may
issue  additional  preferred stock during 2005,  raising the necessary funds to
redeem  additional  high rate  preferred  stock  during 2006.  These  issuances
similarly will have a negative  impact on earnings per share until the proceeds
are utilized.

                                      47

<PAGE>

        DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
was  $183,148,000  in 2004,  $184,145,000  in 2003, and  $175,834,000  in 2002.
Included in depreciation expense with respect to our real estate facilities was
$169,000,000  in 2004,  $171,114,000  in 2003,  and  $166,343,000  in 2002. The
decrease  in  depreciation  and  amortization   with  respect  to  real  estate
facilities  for  2004 as  compared  2003 is due  primarily  to a  reduction  in
depreciation with respect to maintenance capital expenditures, offset partially
by an increase in  depreciation  with respect to newly  developed  and acquired
facilities.  The  increase  from  2002 to 2003  is due to the  acquisition  and
development  of  additional  real  estate  facilities  in  1999  through  2003.
Depreciation  expense with respect to other assets,  primarily  depreciation of
equipment and containers  associated with the containerized storage operations,
was   $7,544,000  in  2004,   $6,427,000  in  2003,  and  $2,887,000  in  2002.
Amortization  expense with respect to intangible assets totaled  $6,604,000 for
each of the three years ended December 31, 2004.

        Depreciation and  amortization  during 2004 with respect to real estate
facilities acquired or developed during 2004 amounted to $866,000 which was for
a partial  period for the time they were acquired  until December 31, 2004, and
we expect the annual depreciation  expense with respect to these facilities for
2005 and forward will approximate $7,266,000.

        GENERAL AND ADMINISTRATIVE EXPENSE:  General and administrative expense
was $18,813,000 in 2004,  $17,127,000 in 2003, and $15,619,000 in 2002. General
and  administrative  costs for each year  principally  consist of state  income
taxes,  investor relation expenses,  and corporate and executive  salaries.  In
addition,  general  and  administrative  expense  includes  expenses  that vary
depending upon the Company's activity levels in certain areas, such as overhead
associated  with the  acquisition  and  development of real estate  facilities,
employee severance, and product research and development expenditures.

        The increase in general and administrative expense from 2003 to 2004 is
primarily due to higher stock-based  compensation expense.  Included in general
and  administrative  expense for 2004 is $3,932,000 with respect to stock-based
compensation expense, including $709,000 in stock option expense, $2,254,000 in
restricted  stock  expense,  and  $969,000  in  payroll  taxes and other  costs
associated  with  employees'  exercise  of  1,958,000  stock  options  in 2004.
Stock-based   compensation  expense  totaled  $2,685,000  for  2003,  which  is
comprised of $530,000 in stock option  expense,  $970,000 in  restricted  stock
expense  and  $1,185,000  in  payroll  taxes and other  costs  associated  with
employees' exercise of 2,743,000 stock options during 2003.

        Total restricted  stock and stock option expense,  exclusive of payroll
taxes on the exercise of options,  should  approximate  $3.0 million based upon
options and restricted stock outstanding at December 31, 2004. Future grants of
restricted  stock units and stock  options  could  further  increase our future
stock-based  compensation  expense. The future level of payroll taxes and other
costs associated with employees' exercise of stock options will depend upon the
timing of  employees'  exercise  of  approximately  1,441,901  remaining  stock
options outstanding at December 31, 2004, the Company's stock price at the time
of exercise, and the level of future grants of stock options.

        General and  administrative  expense  increased  in 2003 as compared to
2002, is primarily due to an increase in stock-based  compensation expense from
$543,000 in 2002 to $2,685,000 for 2003.

        INTEREST EXPENSE:  Interest expense was $760,000 in 2004, $1,121,000 in
2003,  and  $3,809,000  in  2002.  Debt and  related  interest  expense  remain
relatively  low  compared to our overall  asset base.  The decrease in interest
expense in 2004  compared to 2003 and 2002 is  principally  the result of lower
average debt balances,  offset partially by decreased  capitalized interest due
to lower average in-process development balances.  Capitalized interest expense
totaled  $3,617,000  in 2004,  $6,010,000  in 2003,  and  $6,513,000 in 2002 in
connection with our development activities.

        During 2004,  we assumed notes with an aggregate  principal  balance of
$94.7 million and an average interest rate of approximately  5.2% in connection
with property acquisitions, and incurred interest expense with respect to these
notes  of  $879,000  for  the  partial  period  these  notes  were  became  our
liabilities.

                                      48
<PAGE>

        As  described  more  fully  in  Note  2 to the  Consolidated  Financial
Statements,  on  December  31,  2004,  seven  facilities  were  acquired by the
Acquisition  Joint  Venture from us for an aggregate of $23.0  million in cash.
Our Joint Venture Partner's interest in these properties will be accounted from
as a financing  arrangement  and their pro-rata share of income with respect to
their investment in these facilities will be included in interest  expense.  In
January  2005,  the  Acquisition  Joint  Venture  acquired  interests  in three
additional  facilities  from us for an aggregate of $27.4 million in cash,  and
our joint venture partner's pro rata share of income will similarly be included
in interest expense.  We do not expect any further facilities to be acquired by
the Acquisition  Joint Venture,  and future interest  expense will be dependent
upon  the  level  of  operations  at the  facilities  acquired  from  us by the
Acquisition Joint Venture.

        We expect  interest  expense to  increase in fiscal 2005 as compared to
2004, due to the assumption of additional  notes combined with interest expense
with respect to our Acquisition  Joint Venture,  offset partially by the effect
of scheduled principal payments of approximately $15,506,000 in 2005.

        Interest paid, including capitalized interest,  was $5,240,000 in 2004,
$7,131,000 in 2003, and $10,322,000 in 2002.

        MINORITY INTEREST IN INCOME: Minority interest in income represents the
income 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, 2004:


<TABLE>
<CAPTION>
                                                  Minority interest in income for the year ended
                                                 -------------------------------------------------
                                                   December 31,     December 31,     December 31,
                  Description                          2004             2003             2002
-----------------------------------------------  --------------  ----------------  ---------------
                                                                   (in thousands)
Preferred partnership interests:
<S>                                                  <C>              <C>              <C>
     Ongoing distributions....................       $   22,423       $   26,906       $   26,906
     Special distribution and EITF Topic D-42
       allocation.............................           10,063                -                -
Consolidated Development Joint Venture (a)....            5,652            4,211            2,399
Convertible Partnership Units (b).............              328              305              283
Acquired minority interests (c)...............              842            2,170            4,821
Other minority interests (d)..................           10,605           10,111            9,678
                                                --------------  ----------------  ---------------
Total minority interests in income............       $   49,913       $   43,703       $   44,087
                                                ==============  ================  ===============
</TABLE>

(a)     These amounts reflect income allocated to the minority interests in the
        Consolidated  Development Joint Venture.  Included in minority interest
        in income is $3,619,000,  $3,362,000,  and  $3,227,000 in  depreciation
        expense  for the  years  ended  December  31,  2004,  2003,  and  2002,
        respectively.

(b)     These  amounts  reflect  the  minority  interests  represented  by  the
        Convertible Partnership Units (see Note 9 to the consolidated financial
        statements).  Included in minority interest is $333,000,  $342,000, and
        $354,000 in depreciation expense for the years ended December 31, 2004,
        2003, and 2002, respectively.

(c)     These amounts reflect income  allocated to minority  interests that the
        Company  acquired as of December 31, 2004,  and are therefore no longer
        outstanding  at December  31,  2004.  Included in minority  interest in
        income is $309,000,  $812,000,  and $2,915,000 in depreciation  expense
        for the years ended December 31, 2004, 2003, and 2002, respectively.

(d)     These amounts reflect income allocated to minority  interests that were
        outstanding  consistently throughout the three years ended December 31,
        2004.   Included  in  minority   interest  in  income  is   $1,785,000,
        $1,812,000,  and $1,591,000 in depreciation expense for the years ended
        December 31, 2004, 2003, and 2002, respectively.

        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.

                                      49
<PAGE>

        Principally as a result of the rate  reduction,  ongoing  distributions
paid to the preferred  partnership  interests was reduced by $4,483,000 in 2004
as  compared  to 2003.  This  decrease  was  offset  by an  increase  in income
allocable to minority  interests of  approximately  $10,063,000  due to (i) the
$8,000,000 special  distribution to the holders of the preferred units and (ii)
the  application of EITF Topic D-42, "The Effect on the Calculation of Earnings
per Share for the Redemption or Induced Conversion of Preferred Stock" totaling
$2,063,000,  which  represents  the excess of the $200 million stated amount of
the preferred units over their carrying amount.

        We have called for redemption our 9.5% Series N Preferred  Units ($40.0
million) and our 9.125% Series O Preferred Units ($45.0 million). Each of these
securities  will be  redeemed  for cash in March  2005.  We  expect  additional
allocations with respect to these units in accordance with EITF Topic D-42 will
approximate  $873,000  in the  first  quarter  of 2005,  as a  result  of these
redemptions.  We expect that our aggregate annual  distributions  for 2005 with
respect to our Cumulative Redeemable Perpetual Preferred Units will approximate
$16.2  million  after  taking  into   consideration   the  March  2005  planned
redemptions.

        In  November   1999,  we  formed  a  development   joint  venture  (the
"Consolidated  Development  Joint  Venture") with a joint venture partner whose
partners  include an  institutional  investor  and the  Company's  Chairman and
former CEO, B. Wayne Hughes ("Mr. Hughes"). The Consolidated  Development Joint
Venture is funded solely with equity capital consisting of 51% from the Company
and 49% from the joint venture partner. Included in minority interest in income
for  the  years  ended  December  31,  2002,  2003,  and  2004  is  $2,399,000,
$4,211,000,  and  $5,652,000,  respectively,  representing  our  joint  venture
partner's  pro-rata interest in the operations of the Consolidated  Development
Joint Venture. The facilities in the entity are newly developed facilities that
have been in the fill-up phase. The increase in minority  interest in income in
2004  and  2003  as  compared  to  the  preceding  years  with  respect  to the
Consolidated Development Joint Venture is due to the opening and fill-up of the
facilities  owned by this  entity.  We expect  that such  minority  interest in
income  will  continue to increase  during 2005 as the  facilities  continue to
fill-up and increase the earnings of this entity.

        The acquired  minority  interests reflect interests in the consolidated
entities  that we acquired as of December 31, 2004 and are  therefore no longer
outstanding.  There will be no further income  allocated to these  interests in
2005 and beyond.

        Other minority interests reflect income allocated to minority interests
that have maintained a consistent level of interest  throughout the three years
ended December 31, 2004, comprised of investments in the Consolidated  Entities
and the  Operating  Partnership  Units  described  in Note 10 to the  Company's
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  acquisitions  of minority
interests that we may acquire in the future.

        DISCONTINUED  OPERATIONS:  As  described  more  fully  in Note 4 to the
consolidated financial statements, during 2002, 2003 and 2004, we implemented a
business  plan which  included  the closure of 43 of 55  containerized  storage
facilities  that  were  open  at  December  31,  2001.  The 43  facilities  are
hereinafter referred to as the "Closed Facilities."

        During 2004, we sold one of our commercial  facilities  located in West
Palm Beach, Florida. The facility was sold to a third party on October 28, 2004
for an  aggregate  of $3.8  million  in  cash.  In  2002,  we  sold  one of our
commercial  facilities to a third party for an aggregate  $3.9 million in cash.
These facilities are referred to as the "Sold Commercial Facilities"

        During the first  quarter of 2003,  we entered into a business  plan to
exit  the  Knoxville,  Tennessee  market,  and  listed  our  four  self-storage
facilities  in this market for sale.  In addition,  in October  2003, we sold a
self-storage  facility located in Perrysburg,  Ohio  (collectively,  these five
facilities  are  referred  to as the  "Sold  Self-Storage  Facilities").  These
facilities were sold in 2003 for a gain of approximately $5,476,000 included in
the table below.

        During  2002,  in  connection  primarily  with the  closure  or planned
closure of 22 of the Closed  Facilities,  we recorded asset  impairment  losses
with  respect to the  containers  and  equipment  utilized by these  facilities

                                      50
<PAGE>

totaling $6,504,000. In 2003, we recorded impairment charges on assets for nine
Closed  Facilities of $2,479,000  and a $750,000 asset  impairment  charge on a
real estate facility previously used by the containerized  storage business, as
well as an  additional  $355,000  loss upon sale of this real estate  facility.
During 2004,  impairment charges of 1,575,000 were recorded with respect to the
Closed Facilitates.

        During  2002,  lease  termination  costs,   representing  the  expected
remaining lease liability following closure of the facilities,  were accrued in
the amount of  $2,447,000.  In accordance  with the  provisions of Statement of
Financial  Accounting  Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal  Activities" which we adopted on January 1, 2003, we no longer
accrue for such lease  termination or other  liabilities and instead  recognize
such expenses as they are incurred.

        The historical  operations of the aforementioned  facilities (including
the asset  impairment  losses and lease  termination  costs) are  classified as
discontinued  operations,  with the  rental  income,  cost of  operations,  and
depreciation  expense  with respect to these  facilities  for current and prior
periods included in the line-item "Discontinued Operations" on the consolidated
income statement. These amounts are set forth below:

<TABLE>
<CAPTION>
Discontinued Operations:
-----------------------
                                           Year Ended December 31,                  Year Ended December 31,
                                          ------------------------                 ------------------------
                                             2004          2003       Change           2003         2002       Change
                                          -----------  -----------  -----------    -------------  ---------  -----------
                                                                   (Dollar amounts in thousand)
Rental income (a):
<S>                                           <C>          <C>        <C>              <C>           <C>         <C>
    Sold self-storage facilities.....         $     -      $1,579     $(1,579)         $1,579        $1,841      $(262)
    Closed facilities................          7,488       19,347     (11,859)         19,347        29,764    (10,417)
    Sold commercial properties.......            314          441        (127)            441           745       (304)
                                          -----------  -----------  -----------    -------------  ---------  -----------
        Total rental income..........          7,802       21,367     (13,565)         21,367        32,350    (10,983)

Cost of operations (a):
    Sold self-storage facilities.....              -          617        (617)            617           742       (125)
    Closed facilities................          6,733       15,157      (8,424)         15,157        28,032    (12,875)
    Sold commercial properties.......             81          105         (24)            105           287       (182)
                                          -----------  -----------  -----------    -------------  ---------  -----------
        Total cost of operations.....          6,814       15,879      (9,065)         15,879        29,061    (13,182)

Depreciation and amortization (a):
    Sold self-storage facilities.....              -          424        (424)            424           528       (104)
    Closed facilities................          1,115        3,335      (2,220)          3,335         5,071     (1,736)
    Sold commercial properties.......             82           99         (17)             99           215       (116)
                                          -----------  -----------  -----------    -------------  ---------  -----------
      Total depreciation and
             amortization ..........           1,197        3,858      (2,661)          3,858         5,814     (1,956)
                                          -----------  -----------  -----------    -------------  ---------  -----------

Income (loss) before other items....            (209)       1,630      (1,839)          1,630        (2,525)     4,155

Other items:
Asset impairment charges.............         (1,575)      (3,229)      1,654          (3,229)       (6,504)     3,275
Lease termination costs..............           (416)           -        (416)              -        (2,447)     2,447
 Net gain on disposition of assets...            971        5,121      (4,150)          5,121             -      5,121
                                          -----------  -----------  -----------    -------------  ---------  -----------
       Total other items.............         (1,020)       1,892      (2,912)          1,892        (8,951)    10,843
                                          -----------  -----------  -----------    -------------  ---------  -----------
Net discontinued operations.........         $(1,229)      $3,522     $(4,751)         $3,522      ($11,476)   $14,998
                                          ===========  ===========  ===========    =============  =========  ===========
</TABLE>

(a)     These  amounts  represent  the  historical  operations  of  the  Closed
        Facilities  and the Sold  Facilities.  Amounts  with  respect  to these
        facilities,  prior to their discontinuance,  were previously classified
        as rental income,  cost of  operations,  and  depreciation  expense and
        gain/(loss)  on  sales  in  the  consolidated   financial   statements.

         Two of the Closed Facilities are in the process of closing which we
expect will be completed in the first half of 2005. We expect that these
facilities will continue to generate operating losses until final closure.

                                      51
<PAGE>
         GAIN (LOSS) IN DISPOSITION OF REAL ESTATE:  In the year ended December
31,  2004,  we  recorded a net gain on  disposition  of real  estate  assets of
$67,000,  as  compared  to a net  gain  of  $1,007,000  in  2003  and a loss of
$2,541,000  in  2002.  The gain in 2004 is  composed  of a gain on sale of four
vacant  parcels of land and partial  condemnation  with respect to two existing
self-storage  facilities  totaling  $1,317,000,  as well as $1,250,000 casualty
loss with respect to  real-estate  assets  damaged as a result of hurricanes in
the  State  of  Florida.  The  gain in 2003  is  composed  of a gain on sale of
investments  of $316,000,  and a gain on sale of seven  parcels of land and two
self-storage  facilities aggregating $691,000. The net loss in 2002 is composed
of a loss on disposition of land and a commercial facility totaling $702,000 as
described  in  Note  5,  combined  with a loss on  disposition  of  partnership
interests in the amount of $1,839,000.

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.  Cash  and  cash
equivalents  totaled  $366.3 million at December 31, 2004. We expect that these
funds will be utilized to fund our acquisition and development activities,  and
fund the redemptions of preferred securities that become callable at our option
during 2005.

         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.

<TABLE>
<CAPTION>
                                                                                  For the Year Ended December 31,
                                                                               -----------------------------------------
                                                                                       (Amount in thousands)
                                                                                 2004           2003           2002
                                                                               -----------  -------------  -------------
<S>                                                                            <C>             <C>            <C>
Net cash provided by operating activities.............................         $647,443        $608,624       $591,283

Allocable to minority interests (Preferred Units) - ongoing distributions       (22,423)        (26,906)       (26,906)
Allocable to minority interests (Preferred Units) - special
   distribution(a)....................................................           (8,000)              -              -
Allocable to minority interests (common equity).......................          (23,473)        (23,125)       (25,268)
                                                                               -----------  -------------  -------------
Cash from operations allocable to our shareholders....................          593,547         558,593        539,109

Capital improvements to maintain our facilities.......................          (35,868)        (30,175)       (26,993)
Add back: minority interest share of capital improvements.............              494             505            926
                                                                               -----------  -------------  -------------
Remaining operating cash flow available for distributions to our
   shareholders.......................................................          558,173         528,923        513,042

Distributions paid to:
   Preferred shareholders.............................................         (157,925)       (146,196)      (148,926)
   Equity Stock, Series A shareholders................................          (21,501)        (21,501)       (21,501)
   Common and Class B shareholders....................................         (230,834)       (225,864)      (221,299)
                                                                               -----------  -------------  -------------
Cash available for principal payments on debt and reinvestment........         $147,913        $135,362       $121,316
                                                                               ===========  =============  =============
</TABLE>

(a)  The $8 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%.

         Our financial profile is characterized by a low level of debt to total
capitalization,  increasing net income,  increasing cash flow from  operations,
and a conservative  dividend  payout ratio with respect to the common stock. We
expect to fund our growth  strategies  with cash on hand at December  31, 2004,

                                      52
<PAGE>

internally  generated  retained cash flows,  and 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. We have in
the past used our $200 million line of credit as temporary "bridge"  financing,
and repaid those amounts with internally generated cash flows and proceeds from
the placement of permanent capital. In addition,  we have assumed existing debt
in connection with the  acquisition of facilities.  As of December 31, 2004, we
had no outstanding borrowings under our $200 million bank line of credit.

         Our  portfolio  of  real  estate  facilities   remains   substantially
unencumbered.  At December 31, 2004, we had mortgage debt  outstanding of $95.9
million (which encumbers 34 facilities with a book value of $195.3 million) and
unsecured  debt in the  amount  of $33.6  million.  We also  have Debt to Joint
Venture  Partner  amounting to $16.1  million with respect to seven real estate
facilities with an aggregate book value of $24.7 million.

         Over the past  three  years we have  funded  substantially  all of our
growth 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 during 2001  through  2004 enabled us to  effectively
refinance  higher  coupon  preferred  stock with new  preferred  stock at lower
rates, (iv) preferred stock does not contain onerous  covenants,  thus allowing
us to maintain  significant  financial  flexibility,  and (v)  dividends on the
preferred stock can be applied to our REIT distribution requirements.

         Our credit ratings on each of our series of Cumulative Preferred Stock
are "Baa2" by Moody's and "BBB+" by Standard & Poor's.

         We  believe  that our size and  financial  flexibility  enables  us to
access capital when appropriate.  Since the beginning of 2002, we completed the
following  capital  raising  activities  (amounts are presented net of issuance
costs):

<TABLE>
<CAPTION>
                                                                           Cumulative
               Securities issued                      Date issued          Preferred Stock
---------------------------------------------  ---------------------  --------------------
                                                                           (in thousands)
<C>                                                     <C> <C>              <C>
7.625% Cumulative Preferred Stock, Series T     January 18, 2002             $  145,075
7.625% Cumulative Preferred Stock, Series U     February 19, 2002               145,075
7.500% Cumulative Preferred Stock, Series V     September 30, 2002              166,866
6.500% Cumulative Preferred Stock, Series W     October 6, 2003                 128,126
6.500% Cumulative Preferred Stock, Series X     November 13, 2003               116,020
6.850% Cumulative Preferred Stock, Series Y     January 2, 2004                  40,000
6.250% Cumulative Preferred Stock, Series Z     March 5, 2004                   108,756
6.125% Cumulative Preferred Stock, Series A     March 31, 2004                  111,178
7.125% Cumulative Preferred Stock, Series B     June 30, 2004                   105,124
6.600% Cumulative Preferred Stock, Series C     September 13, 2004              111,178
6.180% Cumulative Preferred Stock, Series D     February 28, 2005               130,548
                                                                      --------------------
                                                                             $1,307,946
                                                                      ====================
</TABLE>

                                      53
<PAGE>

         We used approximately $654.4 million of these net proceeds in order to
redeem higher-coupon preferred securities, as follows:

<TABLE>
<CAPTION>

                                                Date Redeemed or           Cumulative
       Security Redeemed or Repurchased         Repurchased             Preferred Stock
--------------------------------------------  ----------------------  -----------------
                                                                         (in thousands)
<C>                                                       <C>               <C>
10.00% Cumulative Preferred Units, Series A     September 30, 2002          $    45,643
8.000% Cumulative Preferred Stock, Series J     October 7, 2002                 150,018
Cumulative Preferred Stock, Series C            October 7, 2002                  30,018
9.200% Cumulative Preferred Stock, Series B     March 31, 2003                   57,517
8.250% Cumulative Preferred Stock, Series K     January 19, 2004                115,000
8.250% Cumulative Preferred Stock, Series L     March 10, 2004                  115,021
8.750% Cumulative Preferred Stock, Series M     August 14, 2004                  56,270
9.500% Cumulative Preferred Stock, Series D     September 30, 2004               30,020
10.00% Cumulative Preferred Stock, Series E     January 31, 2005                 54,895
                                                                      -----------------
                                                                             $  654,402
                                                                      =================
</TABLE>

         The Cumulative Preferred Stock amounts listed above include redemption
costs.

         We currently have approximately $142.5 million of additional preferred
securities that become redeemable at our option in 2005, as follows.

<TABLE>
<CAPTION>
                                               Earliest
                                               Redemption      Dividend      Liquidation
                 Security                         Date           Rate      Value (000's)
-----------------------------------------  ---------------  -----------  ---------------


<S>                                              <C>            <C>         <C>
 Series N Preferred Units (a)                    3/17/05        9.500%   $  40,000
 Series O Preferred Units (a)                    3/29/05        9.125%      45,000
 Series F Preferred Stock                        4/30/05        9.750%      57,500
                                                            -----------  ---------------
    Total securities available for
      redemption through 12/31/05                               9.482%   $ 142,500
                                                            ===========  ===============
</TABLE>

(a)      During February 2005, these securities were called for redemption. The
         redemptions will take effect on their earliest redemption dates noted
         in the table above.

         We  expect  that  we will  redeem  each of  these  securities  at each
respective earliest redemption date. Cash on-hand at December 31, 2004, will be
utilized 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 2004 totaled  $157.9  million to the
holders of our Cumulative Preferred Stock, $230.8 million to the holders of our
Common Stock and $21.5  million to the holders of our Equity  Stock,  Series A.
Although we have not finalized the calculation of our 2004 taxable  income,  we
believe that the aggregate  dividends paid in 2004 to our shareholders  enabled
us to continue to qualify as a REIT.

                                      54
<PAGE>

         We estimate that the  distribution  requirements  for fiscal 2005 with
respect  to our  Cumulative  Preferred  Stock  outstanding,  and  assuming  the
redemption of the preferred  securities  mentioned above, will be approximately
$160.3 million.

         During 2004, we paid distributions totaling $30.4 million, including a
special  onetime  distribution  of $8 million,  with  respect to our  Preferred
Partnership Units. We estimate the 2005 distribution  requirements with respect
to the preferred  partnership units outstanding at December 31, 2004,  assuming
redemption of the Series N and O Preferred Units at the dates indicated,  to be
approximately $16.2 million.

         For 2005,  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 $0.45 per common  share.  For the first  quarter of
2005, a quarterly  distribution  of $0.45 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  2005,  we  have  budgeted
approximately  $50  million  for  capital  improvements.  Capital  improvements
include  major  repairs  or  replacements  to the  facilities  which  keep  the
facilities  in good  operation  condition  and maintain  their  visual  appeal.
Capital  improvements  do not  include  costs  relating to the  development  or
expansion of facilities.

         DEBT SERVICE  REQUIREMENTS:  We do not believe we have any significant
refinancing  risks with respect to our Notes  Payable and Debt to Joint Venture
Partners.  Except for the debt to joint venture partners all such debt is fixed
rate.  At  December  31,  2004,  we had  total  outstanding  notes  payable  of
approximately  $145.6  million.  See Note 8 & 9 to the  consolidated  financial
statements  for  approximate  principal  maturities  of  such  borrowings.   We
anticipate that our retained operating cash flow will continue to be sufficient
to enable us to make scheduled principal payments.  It is our current intent to
fully amortize our debt as opposed to refinance debt maturities with additional
debt.

         ACQUISITION  AND  DEVELOPMENT  OF  FACILITIES:  During  2005,  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.  For 2005, we do not anticipate that our joint
venture  partnerships  will fund additional  acquisitions from third parties or
developments, all of which we expect to be funded entirely by the Company.

         In January 2005, we acquired six  additional  self-storage  facilities
from third parties (total net rentable  square feet of 304,000) at an aggregate
cost of  approximately  $23.6 million of cash. These  acquisitions  were funded
entirely by us.

         As  of  March  14,  2005,  we  are  under  contract  to  purchase  six
self-storage facilities (total approximate net rentable square feet of 448,000)
at an aggregate cost of approximately  $48.1 million.  We anticipate that these
acquisitions  will be funded entirely by us. Each of these contracts is subject
to  significant  contingencies,  and  there is no  assurance  that any of these
facilities will be acquired.

         We  currently  have  a  development   "pipeline"  of  47  self-storage
facilities and expansions to existing self-storage facilities with an aggregate
estimated cost of approximately $210.7 million (unaudited). Approximately $47.3
million of  development  cost has been  incurred as of December 31,  2004.  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 of  approximately  $163.4 million will be
incurred  over the next 24 months.  The  following  table  sets  forth  certain
information with respect to our development pipeline.

                                      55
<PAGE>

<TABLE>
<CAPTION>

DEVELOPMENT PIPELINE SUMMARY
                                                    Number      Net           Total       Costs incurred
                                                      of     rentable      estimated         through         Costs to
                                                   projects   sq. ft.     development       12/31/04         complete
                                                  --------- -----------  -------------  ---------------  ---------------
                                                                             costs
                                                                               (Amounts in thousands)
  FACILITIES CURRENTLY UNDER CONSTRUCTION:
<S>                                                    <C>        <C>      <C>              <C>              <C>
    Self-storage facilities                            5          333      $   33,776       $   21,718       $   12,058
    Expansions to existing self-storage
     facilities                                        6          192           9,227            3,147            6,080
                                                  --------- -----------  -------------  ---------------  ---------------
                                                      11          525          43,003           24,865           18,138

  FACILITIES AWAITING  CONSTRUCTION,  WHERE LAND
     IS ACQUIRED:
    Self-storage facilities                            4          361          53,589           19,307           34,282
    Expansions to existing self-storage
     facilities                                       29        1,931          95,054            2,736           92,318
                                                  --------- -----------  -------------  ---------------  ---------------
                                                      33        2,292         148,643           22,043          126,600

  SELF-STORAGE FACILITIES AWAITING
    CONSTRUCTION, WHERE LAND HAS NOT YET BEEN
    ACQUIRED:
  Self Storage Facility                                1           60          11,038              263           10,775
  Expansions to Self-storage Facility                  2          123           7,973              106            7,867
                                                  --------- -----------  -------------  ---------------  ---------------
                                                       3          183          19,011              369           18,642
                                                  --------- -----------  -------------  ---------------  ---------------
  TOTAL DEVELOPMENT PIPELINE                          47        3,000      $  210,657       $   47,277       $  163,380
                                                  ========= ===========  =============  ===============  ===============
</TABLE>

         In addition to the above  projects,  we have five parcels of land held
for development  with total costs of  approximately  $8,883,000 at December 31,
2004. These parcels will either be developed or sold.

         STOCK  REPURCHASE  PROGRAM:  The  Company's  Board  of  Directors  has
authorized the repurchase  from time to time of up to 25,000,000  shares of the
Company's  common  stock  on  the  open  market  or  in  privately   negotiated
transactions. During 2003, we repurchased 175,000 shares for approximately $6.0
million.  During 2004, we repurchased  445,700 shares for  approximately  $20.3
million.  From the inception of the  repurchase  program  through  December 31,
2004, we have  repurchased  a total of 22,117,720  shares of common stock at an
aggregate cost of approximately $562.2 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
or preferred stock. At December 31, 2004, the Company's debt as a percentage of
total shareholders' equity (based on book values) was 3.3%.

         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 Senior  Preferred Stock is not redeemable by the Company prior to the
following dates: Series F - April 30, 2005, Series Q - January 19, 2006, Series
R - September  28, 2006,  Series S - October 31,  2006,  Series T - January 18,
2007,  Series U - February 19, 2007,  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 and Series D - February 28, 2010. 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 share (or depositary
share in the case of the  Series Q  through  Series X,  Series Z, and  Series A
through Series D, plus accrued and unpaid dividends.

         Our market risk sensitive instruments include notes payable, which
totaled $129,519,000 at December 31, 2004. All of our notes payable bear
interest at fixed rates. See Note 7 to the consolidated financial statements for
terms, valuations and approximate principal maturities of the notes payable as
of December 31, 2004.

                                      56
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

         The  financial  statements  of the  Company at  December  31, 2004 and
December 31, 2003 and for each of the three years in the period ended  December
31,  2004 and the report of Ernst & Young LLP,  Independent  Registered  Public
Accountants, 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, 2004, 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). Based
on that evaluation,  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, 2004.

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  Office 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.  Based on our evaluation  under the
framework in Internal  Control-Integrated  Framework,  our management concluded
that our internal control over financial reporting was effective as of December
31, 2004.

         Our  management's  assessment  of the  effectiveness  of our  internal
control  over  financial  reporting as of December 31, 2004 has been audited by
Ernst & Young LLP, an independent  registered public accounting firm, as stated
in their report which is included herein.

                                      57
<PAGE>

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.

                                      58
<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,   2004,   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.

In our opinion,  management's  assessment that Public Storage,  Inc. maintained
effective internal control over financial reporting as of December 31, 2004, 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, 2004,
based on the COSO criteria.

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,  2004 and  2003,  and the  related
consolidated  statements of income,  shareholders'  equity,  and cash flows for
each of the  three  years in the  period  ended  December  31,  2004 of  Public
Storage,  Inc. and our report dated March 14,  2005  expressed an unqualified
opinion thereon.

                                                     Ernst & Young LLP

Los Angeles, CA
March 14, 2005

                                      59

<PAGE>

                                    PART III
                                    --------

ITEM 9B. OTHER INFORMATION
         -----------------

         Not Applicable.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
         --------------------------------------------------

     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 to be
held on May 5, 2005 (the  "Proxy  Statement")  under the caption  "Election  of
Directors."

     The information  required by this item with respect to 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  "Election of
Directors - Directors and Committee Meetings."

     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  "Election of Directors - Directors  and Committee
Meetings."  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 47, has been Vice  Chairman,  Chief  Executive
Officer and a director of the Company since  November 2002. Mr. Havner has been
employed by the Company in various accounting and operational  capacities since
1986 and served as Senior Vice  President  and Chief  Financial  Officer of the
Company  from  November  1991  until  December  1996 when be  became  Chairman,
President and Chief Executive Officer of PS Business Parks, Inc. (AMEX:  symbol
PSB),  an  affiliate  of the  Company,  a  capacity  in which he  served  until
September  2002.  He is a member  of the  Board of  Governors  of the  National
Association  of Real  Estate  Investment  Trusts  (NAREIT)  and the Urban  Land
Institute (ULI) and a director of Business Machine  Security,  Inc., The Mobile
Storage  Group,  and Union  BanCal and its  primary  subsidiary,  Union Bank of
California,  N.A. Mr. Havner earned a Bachelor of Arts degree in Economics from
the University of California, Los Angeles.

     Harvey Lenkin,  age 68, became  President and a director of the Company in
November 1991. Mr. Lenkin has been employed by the Company for 27 years. He has
been a  director  of PSB since  March 1998 and was  President  of PSB from 1990
until March 1998. He is a director of Paladin Realty Income Properties I, Inc.,
a director of  Huntington  Memorial  Hospital in  Pasadena,  California,  and a
former  member of the  Executive  Committee  of the Board of  Governors  of the
National Association of Real Estate Investment Trusts, Inc. (NAREIT).

     John Reyes, age 44, 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.

                                      60
<PAGE>

     John S.  Baumann,  age 44,  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 53,  became  Senior  Vice  President  and  President,
Self-Storage Operations,  in February 2004, with overall responsibility for the
Company's national  operations.  From 1992 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 46, 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.

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
"Compensation"   and   "Compensation    Committee    Interlocks   and   Insider
Participation."

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  "Election
of Directors - Security  Ownership of Certain  Beneficial Owners" and "Security
Ownership of Management."

     The following table sets forth  information as of December 31, 2004 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)..........          1,683,722     (b)        $36.42            2,608,882

 Equity    compensation   plans   not
 approved by security holders (c).             10,219                $25.74            2,121,671

</TABLE>

(a)           The Company's stock option and stock incentive plans are described
              more fully in Note 13 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.

(b)           Includes 252,040 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.

(c)           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.

                                      61
<PAGE>

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

     The information  required by this item is hereby incorporated by reference
to the material  appearing in the Proxy  Statement  under the caption  "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
2003 and 2004".

                                      62
<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.

                                      63

<PAGE>

                              PUBLIC STORAGE, INC.

                             INDEX TO EXHIBITS (1)

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


3.1      Restated   Articles   of   Incorporation.   Filed  with   Registrant's
         Registration   Statement  No.  33-54557  and  incorporated  herein  by
         reference.

3.2      Certificate of Determination  for the 10% Cumulative  Preferred Stock,
         Series A. Filed with Registrant's  Registration Statement No. 33-54557
         and incorporated herein by reference.

3.3      Amendment  to  Certificate  of  Determination  for the 10%  Cumulative
         Preferred Stock,  Series A. Filed with the Registrant's  Form 10-Q for
         the quarterly period ended March 31, 2004 and  incorporated  herein by
         reference.

3.4      Certificate of Determination for the 9.20% Cumulative Preferred Stock,
         Series B. Filed with Registrant's  Registration Statement No. 33-54557
         and incorporated herein by reference.

3.5      Amendment to Certificate  of  Determination  for the 9.20%  Cumulative
         Preferred  Stock,  Series  B.  Filed  with  Registrant's  Registration
         Statement No. 33-56925 and incorporated herein by reference.

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

3.7      Certificate  of  Determination  for the  8.25%  Convertible  Preferred
         Stock. Filed with Registrant's Registration Statement No. 33-54557 and
         incorporated herein by reference.

3.8      Certificate  of  Determination  for  the  Adjustable  Rate  Cumulative
         Preferred  Stock,  Series  C.  Filed  with  Registrant's  Registration
         Statement No. 33-54557 and incorporated herein by reference.

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

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

3.11     Amendment to  Certificate  of  Determination  of  Preferences of 9.50%
         Cumulative Preferred Stock, Series D. Filed herewith.

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

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

3.14     Registration   Statement  No.  33-63947  and  incorporated  herein  by
         reference.

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3.15     Certificate  of  Amendment  of Articles of  Incorporation.  Filed with
         Registrant's  Registration  Statement  No.  33-63947 and  incorporated
         herein by reference.

3.16     Certificate  of  Determination  for the  8-7/8%  Cumulative  Preferred
         Stock,  Series G. Filed  with  Registrant's  Form  8-A/A  Registration
         Statement 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.

3.17     Certificate of Determination for the 8.45% Cumulative Preferred Stock,
         Series H. Filed with  Registrant's Form 8-A/A  Registration  Statement
         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.

3.18     Certificate of  Determination  for the  Convertible  Preferred  Stock,
         Series  CC.  Filed  with  Registrant's   Registration   Statement  No.
         333-03749 and incorporated herein by reference.

3.19     Certificate  of Correction of  Certificate  of  Determination  for the
         Convertible  Participating  Preferred Stock.  Filed with  Registrant's
         Registration  Statement  No.  333-08791  and  incorporated  herein  by
         reference.

3.20     Certificate of Determination  for 8-5/8%  Cumulative  Preferred Stock,
         Series I. Filed with  Registrant's Form 8-A/A  Registration  Statement
         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.

3.21     Certificate  of  Amendment  of Articles of  Incorporation.  Filed with
         Registrant's  Registration  Statement No.  333-18395 and  incorporated
         herein by reference.

3.22     Certificate of  Determination  for Equity Stock,  Series A. Filed with
         Registrant's  Form 10-Q for the  quarterly  period ended June 30, 1997
         and incorporated herein by reference.

3.23     Certificate of Determination  for Equity Stock,  Series AA. Filed with
         Registrant's  Form 10-Q for the quarterly  period ended  September 30,
         1999 and incorporated herein by reference.

3.24     Certificate  Decreasing Shares  Constituting  Equity Stock,  Series A.
         Filed  with  Registrant's  Form 10-Q for the  quarterly  period  ended
         September 30, 1999 and incorporated herein by reference.

3.25     Certificate of  Determination  for Equity Stock,  Series A. Filed with
         Registrant's  Form 10-Q for the quarterly  period ended  September 30,
         1999 and incorporated herein by reference.

3.26     Certificate of Determination for 8% Cumulative Preferred Stock, Series
         J. Filed with Registrant's Form 8-A/A Registration  Statement 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.

3.27     Certificate  of Correction of  Certificate  of  Determination  for the
         8.25%   Convertible   Preferred   Stock.   Filed   with   Registrant's
         Registration  Statement  No.  333-61045  and  incorporated  herein  by
         reference.

3.28     Certificate of Determination  for 8-1/4%  Cumulative  Preferred Stock,
         Series K. Filed with  Registrant's Form 8-A/A  Registration  Statement
         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.

3.29     Certificate of Determination  for 8-1/4%  Cumulative  Preferred Stock,
         Series L. Filed with  Registrant's Form 8-A/A  Registration  Statement
         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.

3.30     Certificate of  Determination  for 8.75%  Cumulative  Preferred Stock,
         Series M. Filed with  Registrant's Form 8-A/A  Registration  Statement
         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.

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

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

3.33     Certificate of Determination  for 9.125%  Cumulative  Preferred Stock,
         Series O. Filed with  Registrant's  Quarterly  Report on Form 10-Q for
         the quarterly  period ended June 30, 2000 and  incorporated  herein by
         reference.

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

3.35     Certificate of Determination  for 8.600%  Cumulative  Preferred Stock,
         Series, Q. Filed with Registrant's Form 8-A/A  Registration  Statement
         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.

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

3.37     Certificate of Determination  for 8.000%  Cumulative  Preferred Stock,
         Series R.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.38     Certificate of Determination  for 7.875%  Cumulative  Preferred Stock,
         Series S.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.39     Certificate of Determination  for 7.625%  Cumulative  Preferred Stock,
         Series T.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.40     Certificate of Determination  for 7.625%  Cumulative  Preferred Stock,
         Series U.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

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

3.42     Certificate of Determination  for 7.500%  Cumulative  Preferred Stock,
         Series V.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.43     Certificate of Determination  for 6.500%  Cumulative  Preferred Stock,
         Series W.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.44     Certificate of Determination  for 6.450%  Cumulative  Preferred Stock,
         Series X.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

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3.45     Certificate of Determination for the 6.85% Cumulative Preferred Stock,
         Series Y.  Filed  with the  Registrant's  Form 10-Q for the  quarterly
         period ended March 31, 2004 and incorporated herein by reference.

3.46     Certificate of Determination  for 6.250%  Cumulative  Preferred Stock,
         Series Z.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.47     Certificate of Determination  for 6.125%  Cumulative  Preferred Stock,
         Series A.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

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

3.49     Certificate of Determination  for 7.125%  Cumulative  Preferred Stock,
         Series B.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.50     Certificate of  Determination  for 6.60%  Cumulative  Preferred Stock,
         Series C.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.51     Certificate of  Determination  for 6.18%  Cumulative  Preferred Stock,
         Series D.  Filed with  Registrant's  Form 8-A  Registration  Statement
         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.

3.52     Bylaws, as amended. Filed with Registrant's Registration Statement No.
         33-64971 and incorporated herein by reference.

3.53     Amendment to Bylaws  adopted on May 9, 1996.  Filed with  Registrant's
         Registration  Statement  No.  333-03749  and  incorporated  herein  by
         reference.

3.54     Amendment to Bylaws adopted on June 26, 1997. Filed with  Registrant's
         Registration  Statement  No.  333-41123  and  incorporated  herein  by
         reference.

3.55     Amendment   to  Bylaws   adopted  on  January  6,  1998.   Filed  with
         Registrant's  Registration  Statement No.  333-41123 and  incorporated
         herein by reference.

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

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

3.58     Amendment to Bylaws  adopted on May 6, 1999.  Filed with  Registrants'
         Form  10-Q  for  the   quarterly   period  ended  June  30,  1999  and
         incorporated herein by reference.

3.59     Amendment  to  Bylaws   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.

3.60     Amendment to Bylaws  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.

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<PAGE>

3.61     Amendment to Bylaws 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.

3.62     Amendment to Bylaws 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.

10.1     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 and incorporated herein by reference.

10.2     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.

10.3     Loan Agreement  between  Registrant  and Aetna Life Insurance  Company
         dated as of July 11, 1988. Filed with  Registrant's  Current Report on
         Form 8-K dated July 14, 1988 and incorporated herein by reference.

10.4     Amendment  to  Loan  Agreement  between   Registrant  and  Aetna  Life
         Insurance   Company  dated  as  of  September  1,  1993.   Filed  with
         Registrant's  Annual  Report on Form 10-K for the year ended  December
         31, 1993 and incorporated herein by reference.

10.5     Second Amended and Restated Credit Agreement by and among  Registrant,
         Wells Fargo Bank,  National  Association,  as agent, and the financial
         institutions  party thereto dated as of February 25, 1997.  Filed with
         Registrant's  Registration  Statement No.  333-22665 and  incorporated
         herein by reference.

10.6     Note  Assumption  and Exchange  Agreement by and among Public  Storage
         Management,  Inc., Public Storage, Inc., Registrant and the holders of
         the notes  dated as of  November  13,  1995.  Filed with  Registrant's
         Registration   Statement  No.  33-64971  and  incorporated  herein  by
         reference.

10.7*    Registrant's  1990 Stock Option Plan. Filed with  Registrant's  Annual
         Report  on  Form  10-K  for the  year  ended  December  31,  1994  and
         incorporated herein by reference.

10.8*    Registrant's  1994 Stock Option Plan. Filed with  Registrant's  Annual
         Report  on  Form  10-K  for the  year  ended  December  31,  1997  and
         incorporated herein by reference.

10.9*    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.

10.10    Deposit Agreement dated as of December 13, 1995, among Registrant, The
         First  National  Bank of Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing 1/1,000 of
         a Share of 8-7/8%  Cumulative  Preferred  Stock,  Series G. Filed with
         Registrant's  Form  8-A/A  Registration   Statement  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.

10.11    Deposit Agreement dated as of January 25, 1996, among Registrant,  The
         First  national  Bank of Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing 1/1,000 of
         a Share of 8.45%  Cumulative  Preferred  Stock,  Series H.  Filed with
         Registrant's  Form  8-A/A  Registration   Statement  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.

10.12*   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.

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<PAGE>

10.13    Deposit Agreement dated as of November 1, 1996, among Registrant,  The
         First  National  Bank of Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing 1/1,000 of
         a Share of 8-5/8%  Cumulative  Preferred  Stock,  Series I. Filed with
         Registrant's  Form  8-A/A  Registration   Statement  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.

10.14    Limited  Partnership  Agreement  of PSAF  Development  Partners,  L.P.
         between PSAF  Development,  Inc. and the Limited  Partner  dated as of
         April 10, 1997.  Filed with  Registrant's  Form 10-Q for the quarterly
         period ended June 30, 1997 and incorporated herein by reference.

10.15    Deposit  Agreement dated as of August 28, 1997 among  Registrant,  The
         First  National  Bank of Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing 1/1,000 of
         a Share  of 8%  Cumulative  Preferred  Stock,  Series  J.  Filed  with
         Registrant's  Form  8-A/A  Registration   Statement  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.

10.16    Agreement of Limited  Partnership of PS Business Parks,  L.P. dated as
         of March 17,  1998.  Filed with PS Business  Parks,  Inc.'s  Quarterly
         Report on Form 10-Q for the  quarterly  period ended June 30, 1998 and
         incorporated herein by reference.

10.17    Deposit  Agreement  dated as of January  19,  1999  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 8-1/4%
         Cumulative  Preferred Stock,  Series K. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  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.

10.18    Agreement and Plan of Merger among  Storage  Trust Realty,  Registrant
         and Newco Merger Subsidiary, Inc. dated as of November 12, 1998. Filed
         with   Registrant's   Registration   Statement   No.   333-68543   and
         incorporated herein by reference.

10.19    Amendment  No. 1 to Agreement  and Plan of Merger 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  No.  333-68543  and  incorporated  herein  by
         reference.

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

10.21*   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 and incorporated herein by reference.

10.22*   Amended  and  Restated  Storage  Trust  Realty  Retention  Bonus  Plan
         effective   as  of  November  12,   1998.   Filed  with   Registrant's
         Registration  Statement  No.  333-68543  and  incorporated  herein  by
         reference.

10.23    Deposit  Agreement  dated  as of  March  10,  1999  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 8-1/4%
         Cumulative  Preferred Stock,  Series L. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  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.

10.24    Note  Purchase  Agreement  and  Guaranty  Agreement  with  respect  to
         $100,000,000 of Senior Notes of Storage Trust  Properties,  L.P. Filed
         with Storage  Trust  Realty's  Annual Report on Form 10-K for the year
         ended December 31, 1996 and incorporated herein by reference.

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<PAGE>

10.25    Deposit  Agreement  dated as of  August  17,  1999  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 8.75%
         Cumulative  Preferred Stock,  Series M. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  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.

10.26    Limited Partnership Agreement of PSAC Development Partners, L.P. among
         PS Texas  Holdings,  Ltd.,  PS  Pennsylvania  Trust  and PSAC  Storage
         Investors,  L.L.C. dated as November 15, 1999. Filed with Registrant's
         Current  Report on Form 8-K dated  November 15, 1999 and  incorporated
         herein by reference.

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

10.28    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  Form  8-A/A  Registration
         Statement relating to the Depositary Shares Each Representing  1/1,000
         of a Share of  Equity  Stock,  Series  A and  incorporated  herein  by
         reference.

10.29    Amended  and  Restated   Agreement  of  Limited   Partnership  of  PSA
         Institutional  Partners,  L.P. among PS Texas  Holdings,  Ltd. and the
         Limited Partners dated as of March 29, 2000.  Filed with  Registrant's
         Annual  Report on Form 10-K for the year ended  December  31, 1999 and
         incorporated herein by reference.

10.30    Amended  and  Restated   Agreement  of  Limited   Partnership  of  PSA
         Institutional  Partners,  L.P. among PS Texas  Holdings,  Ltd. and the
         Limited Partners dated as of August 11, 2000. Filed with  Registrant's
         Quarterly  Report on Form 10-Q for the quarterly period ended June 30,
         2000 and incorporated herein by reference.

10.31*   Registrant's   2000   Non-Executive/Non-Director   Stock   Option  and
         Incentive Plan.  Filed with  Registrant's  Registration  Statement No,
         333-52400 and incorporated herein by reference.

10.32    Deposit Agreement dated as of January 19, 2001 among Registrant, Fleet
         National Bank and the holders of the  depositary  receipts  evidencing
         the Depositary Shares Each  Representing  1/1,000 of a Share of 8.600%
         Cumulative  Preferred Stock,  Series Q. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  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.

10.33*   Registrant's   2001   Non-Executive/Non-Director   Stock   Option  and
         Incentive Plan.  Filed with  Registrant's  Registration  Statement No.
         333-59218 and incorporated herein by reference.

10.34*   Registrant's   2001  Stock  Option  and  Incentive  Plan.  Filed  with
         Registrant's  Registration  Statement No.  333-59218 and  incorporated
         herein by reference.

10.35    Deposit  Agreement  dated as of September  28, 2001 among  Registrant,
         Fleet  National  Bank  and  the  holders  of the  depositary  receipts
         evidencing the Depositary Shares Each Representing  1/1,000 of a Share
         of  8.000%   Cumulative   Preferred   Stock,   Series  R.  Filed  with
         Registrant's   Form  8-A  Registration   Statement   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.

10.36    Deposit Agreement dated as of October 31, 2001 among Registrant, Fleet
         National Bank and the holder of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a Share of  7.875%
         Cumulative Preferred Stock, Series S. Filed with Registrant's Form 8-A
         Registration   Statement   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.

                                      70
<PAGE>

10.37    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.

10.38    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   Form  8-A  Registration   Statement   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.

10.39    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   Form  8-A  Registration   Statement   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.

10.40    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   Form  8-A  Registration   Statement   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.

10.41*   Employment  Agreement between Registrant and Harvey Lenkin dated as of
         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.

10.42    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 Form 8-A Registration  Statement  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.

10.43    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 Form 8-A Registration  Statement  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.

10.44    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 Form 8-A Registration  Statement  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.

10.45    Limited  Partnership  Agreement  of PSAF  Acquisition  Partners,  L.P.
         between PS Texas  Holdings,  Ltd. and the Limited  Partner dated as of
         December 18, 2003. Filed with Registrant's  Annual Report on Form 10-K
         for the year  ended  December  31,  2003 and  incorporated  herein  by
         reference.

10.46    Second  Amendment  to  Amended  and  Restated   Agreement  of  Limited
         Partnership  of  PSA  Institutional  Partners,  L.P.  among  PS  Texas
         Holdings,  Ltd. and the Limited  Partners  dated as of March 22, 2004.
         Filed  with  Registrant's  Quarterly  Report  on  Form  10-Q  for  the
         quarterly  period  ended  March 31,  2004 and  incorporated  herein by
         reference.

                                      71
<PAGE>

10.47    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.

10.48    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 Form 8-A Registration  Statement  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.

10.49    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 Form 8-A Registration  Statement  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.

10.50    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 Form 8-A Registration  Statement  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.

10.51    Amended  and  Restated   Agreement  of  Limited   Partnership  of  PSA
         Institutional  Partners,  L.P. among PS Texas  Holdings,  Ltd. and the
         Limited Partners dated as of October 12, 2004. Filed with Registrant's
         Quarterly Report on Form 10-Q for the quarterly period ended September
         30, 2004 and incorporated herein by reference.

10.52    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 Form 8-A Registration  Statement  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.

10.53*   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.

1054*    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.

10.55*   Form of 2001 Stock Option and Incentive  Plan Outside  Director  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.

10.56*   Form of  Indemnification  Agreement  with  Executive  Officers.  Filed
         herewith.

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

12       Statement Re: Computation of Ratio of Earnings to Fixed Charges. Filed
         herewith.

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

                                      72
<PAGE>

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.

31.3     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.


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

         * Compensatory benefit plan or arrangement or management contract.


                                      73

<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 14, 2005                                   By:   /s/ Harvey Lenkin
                                                              -----------------
                                                       Harvey Lenkin, 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 14, 2005
------------------------
Ronald L. Havner, Jr.                      Executive Officer and Director
                                           (principal executive officer)
/s/ Harvey Lenkin                          President and Director                                          March 14, 2005
------------------------
Harvey Lenkin
/s/ John Reyes                             Senior Vice President and                                       March 14, 2005
------------------------
John Reyes                                 Chief Financial Officer
                                           (principal financial officer and principal accounting
                                           officer)
/s/ B. Wayne Hughes                        Chairman of the Board                                           March 14, 2005
------------------------
B. Wayne Hughes
/s/ B. Wayne Hughes, Jr.                   Director                                                        March 14, 2005
------------------------
B. Wayne Hughes, Jr.
/s/ Robert J. Abernethy                    Director                                                        March 14, 2005
------------------------
Robert J. Abernethy
/s/ Dann V. Angeloff                       Director                                                        March 14, 2005
------------------------
Dann V. Angeloff
                                           Director                                                        March 14, 2005
------------------------
William C. Baker
/s/ John T. Evans                          Director                                                        March 14, 2005
------------------------
John T. Evans
/s/ Uri P. Harkham                         Director                                                        March 14, 2005
------------------------
Uri P. Harkham
/s/ Daniel C. Staton                       Director                                                        March 14, 2005
------------------------
Daniel C. Staton

</TABLE>

                                      74
<PAGE>

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

                                 (Item 15 (a))

<TABLE>
<CAPTION>

                                                                            Page References
                                                                           -----------------

<S>                                                                                  <C>
Report of Independent Registered Public Accounting Firm...................         F-1

Consolidated balance sheets as of December 31, 2004 and 2003..............         F-2

For each of the three years in the period ended December 31, 2004:

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

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

Consolidated statements of cash flows.....................................      F-5 - F-6

Notes to consolidated financial statements................................     F-7 - F- 43

Schedule:

III - Real estate and accumulated depreciation............................     F-44 - F-82
</TABLE>


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, 2004 and 2003, and the related consolidated statements
of income, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 2004. 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, 2004 and 2003, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2004, in conformity with US 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, 2004, based
on criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report
dated March 14, 2005 expressed an unqualified opinion thereon.


                                                              ERNST & YOUNG LLP

Los Angeles, California

March 14, 2005

                                      F-1

<PAGE>


                              PUBLIC STORAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2004 and 2003
                    (amounts in thousands, except share data)
<TABLE>
<CAPTION>

                                                                                        December 31,         December 31,
                                                                                            2004                2003
                                                                                     -----------------    -----------------

                                       ASSETS

<S>                                                                                   <C>                  <C>
Cash and cash equivalents....................................................         $     366,255        $     204,833
Real estate facilities, at cost:
   Land......................................................................             1,431,148            1,332,882
   Buildings.................................................................             4,079,602            3,792,616
                                                                                     -----------------    -----------------
                                                                                          5,510,750            5,125,498
   Accumulated depreciation..................................................            (1,320,200)          (1,153,059)
                                                                                     -----------------    -----------------
                                                                                          4,190,550            3,972,439
   Construction in process...................................................                47,277               69,620
   Land held for development.................................................                 8,883               12,236
                                                                                     -----------------    -----------------
                                                                                          4,246,710            4,054,295

Investment in real estate entities...........................................               341,304              336,696
Goodwill.....................................................................                78,204               78,204
Intangible assets, net.......................................................               104,685              111,289
Notes receivable, primarily due from related parties.........................                   492              100,510
Other assets.................................................................                67,140               82,242
                                                                                     -----------------    -----------------
              Total assets...................................................         $   5,204,790        $   4,968,069
                                                                                     =================    =================
                       LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable................................................................         $     129,519        $      76,030
Preferred stock called for redemption........................................                54,875              115,000
Debt to joint venture partner................................................                16,095                    -
Accrued and other liabilities................................................               145,431              131,103
                                                                                     -----------------    -----------------
         Total liabilities...................................................               345,920              322,133
Minority interest:
   Preferred partnership interests...........................................               310,000              285,000
   Other partnership interests...............................................               118,903              141,137
Commitments and contingencies (Note 17)......................................                     -                    -
Shareholders' equity:
   Cumulative Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
     3,980,186 shares issued (in series) and outstanding, (5,763,986 at
     December 31, 2003) at liquidation preference............................             2,102,150            1,867,025
   Common Stock, $0.10 par value, 200,000,000 shares authorized, 128,526,450
     shares issued and outstanding (126,986,734 at December 31, 2003)........                12,853               12,699
   Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized,
     8,776.102 shares issued and outstanding.................................                     -                    -
   Paid-in capital...........................................................             2,457,568            2,438,632
   Cumulative net income.....................................................             2,732,873            2,366,660
   Cumulative distributions paid.............................................            (2,875,477)          (2,465,217)
                                                                                     -----------------    -----------------
         Total shareholders' equity..........................................             4,429,967            4,219,799
                                                                                     -----------------    -----------------
              Total liabilities and shareholders' equity.....................         $   5,204,790        $   4,968,069
                                                                                     =================    =================
</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, 2004
                  (amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                            2004                2003                2002
                                                                       ---------------    ----------------     ---------------
Revenues:
   Rental income:
<S>                                                                     <C>                 <C>                 <C>
      Self-storage facilities...................................        $    863,463        $    798,584        $    761,446
      Commercial properties.....................................              10,750              11,001              11,304
      Containerized storage facilities..........................              19,355              23,991              22,355
   Tenant reinsurance premiums..................................              24,243              22,464              19,947
   Interest and other income....................................              10,165               8,628               8,661
                                                                       ---------------    ----------------     ---------------
                                                                             927,976             864,668             823,713
                                                                       ---------------    ----------------     ---------------
Expenses:
  Cost of operations:
      Storage facilities........................................             300,921             280,905             250,215
      Commercial properties.....................................               4,328               4,583               4,259
      Containerized storage facilities..........................              11,774              13,939              17,612
      Tenant reinsurance........................................              13,508              11,987               9,411
  Depreciation and amortization.................................             183,148             184,145             175,834
  General and administrative....................................              18,813              17,127              15,619
  Interest expense..............................................                 760               1,121               3,809
                                                                       ---------------    ----------------     ---------------
                                                                             533,252             513,807             476,759
                                                                       ---------------    ----------------     ---------------
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             394,724             350,861             346,954

Equity in earnings of real estate entities (Note 6).............              22,564              24,966              29,888
Gain (loss) on disposition of real estate and real estate
   investments and casualty loss ...............................                  67               1,007              (2,541)
Minority interest in income:
  Preferred partnership interests:
     Based on ongoing distributions paid........................             (22,423)            (26,906)            (26,906)
     Special distribution and restructuring allocation (Note 10)             (10,063)                  -                   -
  Other partnership interests...................................             (17,427)            (16,797)            (17,181)
                                                                       ---------------    ----------------     ---------------
Income from continuing operations...............................             367,442             333,131             330,214
Discontinued operations (Note 4)................................              (1,229)              3,522             (11,476)
                                                                       ---------------    ----------------     ---------------
Net income......................................................        $    366,213        $    336,653        $    318,738
                                                                       ===============    ================     ===============
Net income allocation:
----------------------
   Allocable to preferred shareholders:
     Based on distributions paid................................        $    157,925        $    146,196        $    148,926
     Based on redemptions of preferred stock (Note 2)...........               8,724               7,120               6,888
   Allocable to Equity Stock, Series A..........................              21,501              21,501              21,501
   Allocable to common shareholders.............................             178,063             161,836             141,423
                                                                       ---------------    ----------------     ---------------
                                                                        $    366,213        $    336,653        $    318,738
                                                                       ===============    ================     ===============
Net income per common share - basic
   Continuing operations........................................       $        1.40        $      1.26         $       1.24
   Discontinued operations......................................               (0.01)              0.03               (0.09)
                                                                       ---------------    ----------------     ---------------
                                                                       $        1.39        $      1.29         $       1.15
                                                                       ===============    ================     ===============
Net income per common share - diluted
   Continuing operations........................................       $        1.39        $      1.25         $       1.23
   Discontinued operations......................................               (0.01)              0.03                (0.09)
                                                                       ---------------    ----------------     ---------------
                                                                       $        1.38        $      1.28         $       1.14
                                                                       ===============    ================     ===============
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................             127,836             125,181             123,005
                                                                       ===============    ================     ===============
Diluted weighted average common shares outstanding..............             128,681             126,517             124,571
                                                                       ===============    ================     ===============
Weighted average shares of Equity Stock, Series A (basic and
   diluted) ....................................................               8,776               8,776               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, 2004
           (Amounts in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                       Cumulative                Class B
                                                                        Preferred     Common      Common      Paid-in
                                                                          Stock        Stock      Stock       Capital
                                                                    --------------- ------------ ---------   ----------- -
<S>                                                                     <C>             <C>           <C>      <C>
Balances at December 31, 2001......................................     1,540,150       11,496        700      2,325,898
   Issuance of Cumulative Preferred Stock; Series T (6,000 shares),
     Series U (6,000 shares) and Series V (6,900 shares)...........       472,500            -          -        (15,484)
   Redemption of Cumulative Preferred Stock; Series A (1,825,000
     shares) and Series J (6,000 shares)...........................      (195,625)           -          -            (36)
   Issuance of Common Stock (2,040,540 shares).....................             -          204          -         61,033
   Repurchase of Common Stock (11,000 shares)......................             -           (1)         -           (380)
   Stock option expense (Note 13)..................................             -            -          -            163
   Net income......................................................             -            -          -              -
   Distributions to shareholders:
     Cumulative Preferred Stock....................................             -            -          -              -
     Equity Stock, Series A........................................             -            -          -              -
     Common Stock ($1.80 per common share and common share
     equivalent)...................................................             -            -          -              -
                                                                    --------------- ------------ ---------   -----------
Balances at December 31, 2002......................................     1,817,025       11,699        700      2,371,194
   Issuance of Cumulative Preferred Stock; Series W (5,300 shares)
     and Series X (4,800 shares)...................................       252,500            -          -         (8,354)
   Redemption of Cumulative Preferred Stock; Series B (2,300,000
     shares), Series C (1,200,000 shares) and Series K (4,600
     shares).......................................................      (202,500)           -          -            (35)
   Conversion of Class B Common Stock (7,000,000 shares) (Note 11)              -          700       (700)             -
   Issuance of Common Stock (3,170,279 shares) (Note 11)...........             -          317          -         81,281
   Repurchase of Common Stock (175,000 shares) (Note 11)...........             -          (17)         -         (5,984)
   Stock option and restricted stock expense (Note 13).............             -            -          -            530
   Net income......................................................             -            -          -              -
   Distributions to shareholders:
     Cumulative Preferred Stock....................................             -            -          -              -
     Equity Stock, Series A........................................             -            -          -              -
     Common Stock ($1.80 per share)................................             -            -          -              -
                                                                    --------------- ------------ ---------   -----------
Balances at December 31, 2003......................................     1,867,025       12,699          -      2,438,632
   Issuance of Cumulative Preferred Stock; Series Y (1,600,000
   shares), Series Z (4,500 shares), Series A (4,600 shares),
   Series B (4,350 shares), and Series C (4,600 shares) ...........       491,250            -          -        (15,016)
   Redemption of Cumulative Preferred Stock; Series L (4,600
   shares), Series M (2,250 shares), Series D (1,200,000 shares),
   and Series E (2,195,000 shares).................................      (256,125)           -          -             81
   Restructuring of Series N preferred partnership units (Note 10).             -            -          -          2,063
   Issuance of common stock in connection with:
    Exercise of employee stock options (1,957,907 shares)..........             -          196                    49,733
    Vesting of restricted stock (27,509 shares)....................             -            3          -             (3)
   Repurchase of common stock (445,700 shares) (Note 11)...........             -          (45)         -        (20,250)
   Stock option and restricted stock expense (Note 13).............             -            -          -          2,490
   Net income......................................................             -            -          -              -
   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
                                                                    =============== ============ =========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                                                         Total
                                                                      Cumulative      Cumulative     Shareholders'
                                                                      Net Income    Distributions        Equity
                                                                     ------------- ---------------  ----------------
<S>                                                                    <C>            <C>                <C>
Balances at December 31, 2001......................................    1,711,269      (1,679,930)        3,909,583
   Issuance of Cumulative Preferred Stock; Series T (6,000 shares),
     Series U (6,000 shares) and Series V (6,900 shares)...........            -               -           457,016
   Redemption of Cumulative Preferred Stock; Series A (1,825,000
     shares) and Series J (6,000 shares)...........................            -               -          (195,661)
   Issuance of Common Stock (2,040,540 shares).....................            -               -            61,237
   Repurchase of Common Stock (11,000 shares)......................            -               -              (381)
   Stock option expense (Note 13)..................................            -               -               163
   Net income......................................................      318,738               -           318,738
   Distributions to shareholders:
     Cumulative Preferred Stock....................................            -        (148,926)         (148,926)
     Equity Stock, Series A........................................            -         (21,501)          (21,501)
     Common Stock ($1.80 per common share and common share
     equivalent)...................................................            -        (221,299)         (221,299)
                                                                     ------------- ---------------  ----------------
Balances at December 31, 2002......................................    2,030,007      (2,071,656)        4,158,969
   Issuance of Cumulative Preferred Stock; Series W (5,300 shares)
     and Series X (4,800 shares)...................................            -               -           244,146
   Redemption of Cumulative Preferred Stock; Series B (2,300,000
     shares), Series C (1,200,000 shares) and Series K (4,600
     shares).......................................................            -               -          (202,535)
   Conversion of Class B Common Stock (7,000,000 shares) (Note 11)             -               -                 -
   Issuance of Common Stock (3,170,279 shares) (Note 11)...........            -               -            81,598
   Repurchase of Common Stock (175,000 shares) (Note 11)...........            -               -            (6,001)
   Stock option and restricted stock expense (Note 13).............            -               -               530
   Net income......................................................      336,653               -           336,653
   Distributions to shareholders:
     Cumulative Preferred Stock....................................            -        (146,196)         (146,196)
     Equity Stock, Series A........................................            -         (21,501)          (21,501)
     Common Stock ($1.80 per share)................................            -        (225,864)         (225,864)
                                                                     ------------- ---------------  ----------------
Balances at December 31, 2003......................................    2,366,660      (2,465,217)        4,219,799
   Issuance of Cumulative Preferred Stock; Series Y (1,600,000
   shares), Series Z (4,500 shares), Series A (4,600 shares),
   Series B (4,350 shares), and Series C (4,600 shares) ...........            -               -           476,234
   Redemption of Cumulative Preferred Stock; Series L (4,600
   shares), Series M (2,250 shares), Series D (1,200,000 shares),
   and Series E (2,195,000 shares).................................            -               -          (256,206)
   Restructuring of Series N preferred partnership units (Note 10).            -               -             2,063
   Issuance of common stock in connection with:
    Exercise of employee stock options (1,957,907 shares)..........            -               -            49,929
    Vesting of restricted stock (27,509 shares)....................            -               -                 -
   Repurchase of common stock (445,700 shares) (Note 11)...........            -               -           (20,295)
   Stock option and restricted stock expense (Note 13).............            -               -             2,490
   Net income......................................................      366,213               -           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......................................  $ 2,732,873   $  (2,875,477)    $   4,429,967
                                                                     ============= ===============  ================
</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, 2004
                             (amounts in thousands)

<TABLE>
<CAPTION>

                                                                                        2004           2003            2002
                                                                                   --------------  -------------   --------------
Cash flows from operating activities:
<S>                                                                                 <C>             <C>             <C>
   Net income..................................................................     $   366,213     $   336,653     $   318,738
   Adjustments to reconcile net income to net cash provided by operating
     activities:
    Gain on sale of assets, net of impairment charge, and impact of EITF Topic
       D-42 included in equity in earnings of real estate investments (Note 6).          (4,544)           (187)         (3,737)
    (Gain)/loss on disposition of real estate and real estate investments
       and casualty loss....................................................                (67)         (1,007)          2,541
    Depreciation and amortization...........................................            183,148         184,145         175,834
    Depreciation included in equity in earnings of real estate entities.....             33,720          27,753          27,078
    Minority interest in income.............................................             49,913          43,703          44,087
    Depreciation, impairment losses, and other items associated with
       discontinued operations (Note 4).....................................              1,801           1,966          12,318
    Other operating activities..............................................             17,259          15,598          14,424
                                                                                   --------------  -------------   --------------
       Total adjustments....................................................            281,230         271,971         272,545
                                                                                   --------------  -------------   --------------
       Net cash provided by operating activities............................            647,443         608,624         591,283
                                                                                   --------------  -------------   --------------
Cash flows from investing activities:
    Principal payments received on mortgage notes receivable................                 18          23,814          35,513
    Paydown/(issuance) of notes receivable to affiliates....................            100,000        (100,000)              -
    Business combinations...................................................                  -               -        (139,680)
    Capital improvements to real estate facilities .........................            (35,868)        (30,175)        (26,993)
    Construction in process and acquisition of land held for development....            (71,602)       (102,428)       (101,110)
    Acquisition of minority interests (Note 10).............................            (24,851)         (9,867)        (27,544)
    Acquisition of real estate facilities...................................           (139,794)              -         (30,117)
    Investments in real estate entities.....................................            (33,784)        (35,118)        (33,956)
    Proceeds from the sale of real estate facilities, land, and real estate              12,648          34,883          15,209
       investments..........................................................
    Net liquidation (acquisition) of held to maturity debt securities held
       by captives (Note 2) ................................................              7,066         (14,194)         (2,322)
     Other investing activities..............................................            (2,250)         (9,285)        (14,786)
                                                                                   --------------  -------------   --------------
       Net cash used in investing activities................................           (188,417)       (242,370)       (325,786)
                                                                                   --------------  -------------   --------------
Cash flows from financing activities:
    Principal payments on notes payable and paydowns on line of credit......            (41,204)        (39,837)        (52,685)
    Net proceeds from the issuance of common stock..........................             49,929          68,618          23,333
    Net proceeds from the issuance of cumulative preferred stock............            476,234         244,146         457,016
    Repurchase of common stock..............................................            (20,295)         (6,001)           (381)
    Redemption of cumulative preferred stock................................           (316,331)        (87,535)       (195,661)
    Distributions paid to shareholders......................................           (410,260)       (393,561)       (391,726)
    Distributions paid to holders of preferred partnership interests........            (22,423)        (26,906)        (26,906)
    Special distribution paid to holders of preferred partnership interests              (8,000)              -               -
       (Note 10)............................................................
    Distributions paid to minority interests, net of reinvestments..........            (21,349)        (23,469)        (24,710)
    Net proceeds from financing through acquisition joint venture...........             16,095               -               -
                                                                                   --------------  -------------   --------------
       Net cash used in financing activities................................           (297,604)       (264,545)       (211,720)
                                                                                   --------------  -------------   --------------
Net increase in cash and cash equivalents...................................            161,422         101,709          53,777
Cash and cash equivalents at the beginning of the year......................            204,833         103,124          49,347
                                                                                   --------------  -------------   --------------
Cash and cash equivalents at the end of the year............................        $   366,255     $   204,833     $   103,124
                                                                                   ==============  =============   ==============

</TABLE>

                            See accompanying notes.
                                      F-5

<PAGE>


                                   (Continued)

<TABLE>
<CAPTION>

                                                                                      2004            2003           2002
                                                                                   --------------  -------------   --------------
Supplemental schedule of non cash investing and financing activities:
   Acquisition of real estate facilities in exchange for minority interests
     and assumption of mortgage notes payable:
<S>                                                                                <C>              <C>            <C>
       Real estate facilities..............................................        $ (119,693)      $       -      $       -
       Mortgage notes payable..............................................            94,693               -              -
       Preferred partnership interests.....................................            25,000               -              -
   Business combinations (Note 3):
       Real estate facilities..............................................                 -               -       (330,426)
       Investment in real estate entities..................................                 -               -        160,236
       Other assets........................................................                 -               -         (8,187)
       Accrued and other liabilities.......................................                 -               -         23,891
       Minority interest...................................................                 -               -         14,806
   Disposition of real estate facilities in exchange for notes receivable,
     other assets, and investment in real estate entities..................                 -               -            493
   Notes receivable issued in connection with real estate dispositions.....                 -               -           (493)
   Disposition of minority interest in exchange for other assets:
       Other assets........................................................                 -               -         (1,450)
       Minority interest...................................................                 -               -          3,289
   Acquisition of minority interest in exchange for common stock (Note 10):
       Real estate facilities..............................................                 -         (16,687)       (39,780)
       Minority interest...................................................                 -          (6,690)       (25,668)
   Exchange of Cumulative Preferred Stock, Series B for Cumulative Preferred
     Stock, Series T:
        Reduction in Cumulative Preferred Stock, Series B..................                 -               -         (2,150)
        Increase in Cumulative Preferred Stock, Series T...................                 -               -          2,150
       Issuance of Common Stock to acquire minority interests..............                 -          13,510         37,904
   Exchange of Common Stock for Common Stock, Series B:
       Reduction in Common Stock, Series B (7,000,000 shares)..............                 -            (700)             -
       Increase in Common Stock (7,000,000 shares).........................                 -             700              -

</TABLE>

                            See accompanying notes.
                                      F-6

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

1.   Description of the business
     ---------------------------

              Public Storage, Inc. (the "Company") 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,
     usually on a month-to-month basis, for personal and business use. In
     addition, to a much lesser extent, we have interests in commercial
     properties, containing commercial and industrial rental space, and
     interests in facilities that lease storage containers.

              At December 31, 2004, we had direct and indirect equity interests
     in 1,464 self-storage facilities located in 37 states and operating under
     the "Public Storage" name. We also have direct and indirect equity
     interests in approximately 19.6 million net rentable square feet of
     commercial space located in 10 states.

2.   Summary of significant accounting policies
     ------------------------------------------

              Basis of presentation
              ---------------------

              The consolidated financial statements include the accounts of the
     Company and 37 controlled entities (the "Consolidated Entities").
     Collectively, the Company and the Consolidated Entities own a total of
     1,433 real estate facilities, consisting of 1,426 self-storage facilities,
     three industrial facilities used by the containerized storage operations
     and four commercial properties.

              At December 31, 2004, we had equity investments in eight limited
     partnerships in which we do not have a controlling interest. These limited
     partnerships collectively own 38 self-storage facilities, which are managed
     by the Company. In addition, we own approximately 44% of the common equity
     of PS Business Parks, Inc. ("PSB"), which owns and operates 18.0 million
     net rentable square feet of commercial space as of December 31, 2004. We do
     not control these entities; accordingly, our investments in these limited
     partnerships and PSB (collectively the "Unconsolidated Entities") are
     accounted for using the equity method.

              Certain amounts previously reported have been reclassified to
     conform to the December 31, 2004 presentation, including discontinued
     operations (see Note 4).

              Use of estimates
              ----------------

              The preparation of the consolidated financial statements in
     conformity with accounting principles generally accepted in the United
     States 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 2004, 2003
     and 2002; accordingly, no provision for income taxes has been made in the
     accompanying financial statements.

                                      F-7
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

             Financial instruments
              ---------------------

              The methods and assumptions used to estimate the fair value of
     financial instruments are described below. 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 market 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 debt instruments purchased with a maturity of three months or
     less to be cash equivalents.

              Due to the short period to maturity of our cash and cash
     equivalents, accounts receivable, and other financial assets included in
     other assets, and accrued and other liabilities, the carrying values as
     presented on the consolidated balance sheets are reasonable estimates of
     fair value. A comparison of the carrying amount of notes payable to their
     estimated fair value is included in Note 8, "Notes Payable." Debt assumed
     in connection with property acquisitions is recorded at fair value, based
     upon the present value of future interest and principal payments discounted
     at the estimated market interest rate for similar loans. Any premium or
     discount is amortized over the remaining life of the loans using the
     effective interest method.

              Financial assets that are exposed to credit risk consist primarily
     of cash and cash equivalents, accounts receivable, and notes 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 from customers are a component
     of other assets, and are not a significant component of total assets.

              Included in cash and cash equivalents at December 31, 2004 is
     $1,984,000 ($1,835,000 at December 31, 2003) held by our captive insurance
     programs. Insurance and other regulations place significant restrictions on
     our ability to withdraw these funds for purposes other than insurance
     activities (see Note 3). Our captive insurance programs are conducted by
     STOR-Re Mutual Insurance Company, Inc. ("STOR-Re"), an association captive
     insurance company owned by the Company and its affiliates, which is
     approximately 90.1% owned by the Company and the Consolidated Entities, and
     PS Insurance Company Hawaii, Ltd. ("PSIC-H"), a captive insurer formed on
     December 31, 2003 which is wholly owned by a subsidiary of the Company.
     Other assets at December 31, 2004 include aggregate investments totaling
     $20,929,000 ($27,995,000 at December 31, 2003) in held to maturity debt
     securities owned by our captive insurance programs stated at amortized
     cost, which approximates fair value.

              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.

              Accounting for Acquisition Joint Venture
              ----------------------------------------

              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.

                                      F-8
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              We have determined that the Acquisition Joint Venture is not a
     variable interest entity, and we do not control this entity. Therefore, we
     do not consolidate the accounts of the Acquisition Joint Venture on our
     financial statements.

              During the year ended December 31, 2004, the Acquisition Joint
     Venture acquired two facilities directly from third parties at an aggregate
     cost of $9,086,000. We account for our investment with respect to these
     facilities using the equity method, with our pro-rata share of the income
     from these facilities recorded as "Equity in earnings of real estate
     entities" on our income statement. See Note 6 for further discussion of
     these amounts.

              In addition, at the end of December 2004, we sold seven facilities
     that we recently acquired to the Acquisition Joint Venture for an aggregate
     cost of $22,993,000 representing our original cost. Due to our continuing
     interest in these facilities and our option to acquire our Partner's
     investment as described above in Year 5 we are precluded from treating
     these transactions as completed sales of facilities pursuant to Statement
     of Financial Accounting Standards No. 66 ("SFAS 66"). Therefore, we
     continue to reflect these properties and associated operations on our
     financial statements.

              We believe that it is likely that we will exercise our option to
     acquire our joint venture partner's interest and, accordingly, we consider
     the transactions to be, in substance, debt financing. Our joint venture
     partner's 70% investment in the Acquisition Joint Venture with respect to
     the seven properties is therefore reflected as a liability on our balance
     sheet, "Debt to Joint Venture Partner," with our joint venture partner's
     share of operations reflected on our income statement as interest expense.
     The balance of the liability is adjusted each period to equal the current
     value to the extent fair value exceeds the original liability. See Note 9
     for a further discussion of these debt amounts.

              Evaluation of asset impairment
              ------------------------------

              In August 2001, the Financial  Accounting Standards Board ("FASB")
     issued Statement of Financial Accounting Standards No. 144, "Accounting for
     the Impairment or Disposal of Long-Lived  Assets" ("SFAS No. 144"). In June
     2001, the FASB issued Statement of Financial  Accounting Standards No. 142,
     "Goodwill and Other Intangible Assets" ("SFAS No. 142"). We adopted both of
     these statements effective January 1, 2002.

              With respect to goodwill, we evaluate impairment 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.

                                      F-9
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              With respect to other long-lived assets, we evaluate such 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.

              Any long-lived assets which we expect to sell or otherwise dispose
     of prior to its previously estimated useful life is stated at what we
     estimate to be the lower of its estimated net realizable value (less cost
     to sell) or its carrying value. During 2004, 2003 and 2002 we recorded
     impairment charges related to containers, trucks, and other equipment at
     containerized storage facilities 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 other
     impairments were identified from our evaluations.

              Accounting for stock-based compensation
              ---------------------------------------

              We utilize the Fair Value Method (as defined in Note 13) of
     accounting for our employee stock options issued after December 31, 2001,
     and utilize the APB 25 Method (as defined in Note 13) for employee stock
     options issued prior to January 1, 2002. Restricted stock unit expense is
     recorded over the relevant vesting period. See Note 13 for a full
     discussion of our accounting with respect to employee stock options and
     restricted stock units.

              Other assets
              ------------

              Other assets primarily consist of containers and equipment
     associated with the containerized storage operations, assets associated
     with the truck rental business, accounts receivable, and prepaid expenses.
     Accounts receivable due from tenants are net of allowances for estimated
     doubtful accounts.

              Containers and equipment utilized in our containerized storage
     business totaled $4,395,000 and $10,895,000 at December 31, 2004 and 2003,
     respectively. The carrying amounts are net of accumulated depreciation and
     asset impairment charges. As discussed in Note 4, during 2004, 2003 and
     2002 impairment charges amounting to $1,575,000, $2,479,000 and $6,504,000,
     respectively, were recorded with respect to containers and equipment
     utilized in the discontinued containerized storage operations. In addition,
     during 2002, an impairment charge of $420,000 was recorded with respect to
     assets used in the continuing containerized storage operations.

              Included in depreciation and amortization expense for 2004, 2003
     and 2002 is $7,544,000, $6,427,000, and $2,887,000 respectively, related to
     depreciation of other assets. Included in discontinued operations for 2004,
     2003, and 2002, respectively, is depreciation expense of $726,000,
     $2,644,000, and $4,134,000 respectively, related to depreciation of
     containers and equipment of the discontinued operations of the
     containerized storage business.

              Other assets at December 31, 2004 also includes investments
     totaling $20,929,000 ($27,995,000 at December 31, 2003) in held to maturity
     debt securities owned by our captive insurance programs stated at amortized
     cost, which approximates fair value. Approximately $5,224,000 of these
     securities held at December 31, 2004 have maturity dates of within 1 year,
     and the remainder have maturity dates of between 1 to 5 years.

                                      F-10
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Accrued and other liabilities
              -----------------------------

              Accrued and other liabilities consist primarily of trade payables,
     real and personal property tax accruals, prepayments of rents, accrued
     interest, and losses and loss adjustment liabilities from our insurance
     programs, as discussed below. Prepaid rent totals $26,289,000 and
     $23,029,000 at December 31, 2004 and 2003, respectively.

              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. While we
     believe that the amount is adequate, the ultimate loss may be in excess of
     or less than the amounts provided. The methods for making such estimates
     and for establishing the resulting liability are continually reviewed.

              STOR-Re, which is consolidated with the Company, was formed in
     1994 as an association captive insurance company owned by the Company and
     affiliates of the Company. STOR-Re provides limited property and liability
     insurance to the Company and its affiliates for losses incurred during
     policy periods prior to April 1, 2004, and was succeeded by PSIC-H with
     respect to these insurance activities for policy periods following March
     31, 2004. The Company also utilizes other insurance carriers to provide
     property and liability insurance coverage in excess of STOR-Re's and
     PSIC-H's limitations which are described in Note 17. STOR-Re and PSIC-H
     accrue liabilities for covered losses and loss adjustment expense, which at
     December 31, 2004 totaled $34,192,000 ($28,741,000 at December 31, 2003)
     with respect to insurance provided to the Company and its affiliates.

              PS Insurance Company, Ltd ("PSIC"), a wholly-owned subsidiary of
     the Company, reinsured policies against claims for losses to goods stored
     by tenants in our self-storage facilities for policy periods prior to March
     31, 2004. PSIC-H succeeded PSIC with respect to these tenant insurance
     activities effective April 1, 2004. Both of these entities utilize
     third-party insurance coverage for losses from any individual event that
     exceeds a loss of $500,000, to a maximum of $10,000,000. Losses below the
     third-party insurers' deductible amounts are accrued as cost of operations
     for the tenant insurance operations. Included in cost of operations for the
     year ended December 31, 2004 is approximately $1.5 million in estimated
     losses from tenant claims as a result of damage sustained from the recent
     hurricanes in Florida. The accrued liability for losses and loss adjustment
     expense with respect to tenant insurance activities totaled $4,898,000 at
     December 31, 2004 including the aforementioned $1.5 million in estimated
     losses from tenant claims ($2,486,000 at December 31, 2003).

              Liabilities for losses and loss adjustment expenses include an
     amount determined 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. While we
     believe that the amount is adequate, the ultimate loss may be in excess of
     or less than the amounts provided. The methods for making such estimates
     and for establishing the resulting liability are continually reviewed.

              Intangible assets and goodwill
              ------------------------------

              Intangible assets consist of property management contracts
     ($165,000,000) and the excess of acquisition cost over the fair value of
     net tangible and identifiable intangible assets or "goodwill" ($94,719,000)
     acquired in business combinations. Our goodwill has an indeterminate life
     and, accordingly, is not amortized. Our other intangibles have a defined
     life and are amortized on a straight-line basis over a 25 year period.

                                      F-11
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Goodwill is net of accumulated amortization of $16,515,000 at
     December 31, 2004 and December 31, 2003. At December 31, 2004, property
     management contracts are net of accumulated amortization of $60,315,000
     ($53,711,000 at December 31, 2003). Included in depreciation and
     amortization expense for each of the years ended December 31, 2004, 2003
     and 2002 is $6,604,000 with respect to the amortization of property
     management contracts. We expect amortization expense with respect to
     property management contracts will be $6,604,000 per year in each of the
     five years following the year ended December 31, 2004.

              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 rental
     income when collected. Tenant reinsurance premiums are recognized as
     premium revenue when collected. 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 real
     estate 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. Television, yellow page, and other
     advertising expense totaled $27,336,000, $25,231,000, and $25,610,000 for
     the years ended December 31, 2004, 2003, and 2002, respectively.

              Environmental costs
              -------------------

              Our policy is to accrue environmental assessments and/or
     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
              ---------------------------

              Distributions paid to the holders of our Cumulative Preferred
     Stock totaling $157,925,000, $146,196,000, and $148,926,000 for the years
     ended December 31, 2004, 2003 and 2002, respectively, have been deducted
     from net income to arrive at net income allocable to our common
     shareholders.

              Emerging Issues Task Force ("EITF") Topic D-42, "The Effect on the
     Calculation of Earnings per Share for the Redemption or the Induced
     Conversion of Preferred Stock" 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. At the
     July 31, 2003 meeting of the EITF, the Securities and Exchange Commission
     Observer clarified that for purposes of applying EITF Topic D-42, the
     carrying amount of the preferred stock should be reduced by the issuance
     costs of the preferred stock, regardless of where in the stockholders'
     equity section those costs were initially classified on issuance.

              In conformity with the SEC Observer's clarification, an additional
     $8,724,000 ($0.07 per diluted share), $7,120,000 ($0.06 per diluted share)
     and $6,888,000 ($0.06 per diluted share) was allocated to our preferred
     stockholders in connection with the redemption of such securities for the
     years ended December 31, 2004, 2003, and 2002, respectively.

                                      F-12
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Net income allocated to our common shareholders has been further
     allocated between 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 is determined according to dividends
     declared (or accumulated) and participation rights in undistributed
     earnings. Under the two-class method, the Equity Stock, Series A was
     allocated net income of $21,501,000 for each of the three years ended
     December 31, 2004, 2003 and 2002. The remaining $178,063,000, $161,836,000,
     and $141,423,000, for the years ended December 31, 2004, 2003, and 2002,
     respectively, was allocated to our 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
     845,000 in 2004, 1,336,000 in 2003, and 1,566,000 in 2002).

              Distributions per share of Class B common stock are equal to 97%
     of the per share distribution paid to the regular common shares. As a
     result of this participation in the distribution of our earnings, we have
     included 6,790,000 (7,000,000 x 97%) Class B common shares in the weighted
     average common equivalent shares for the year ended December 31, 2001.

              As of March 31, 2002, the remaining contingency for the conversion
     of the Class B common stock into regular common stock was satisfied. As a
     result, beginning April 1, 2002, we began to include all 7,000,000 Class B
     common shares in the computation of the weighted average common equivalent
     shares. The Class B common stock converted into 7,000,000 shares of common
     stock on January 1, 2003.

3.   Business combinations
     ---------------------

              Development Joint Venture
              -------------------------

              On January 16, 2002, we acquired the remaining 70% interest we did
     not own in a partnership (the "Development Joint Venture"). The Development
     Joint Venture was formed in April 1997 to develop self-storage facilities
     and was funded with equity capital consisting of 30% from the Company and
     70% from an institutional investor. The Development Joint Venture developed
     and owned a total of 47 self-storage facilities. Prior to January 16, 2002,
     we accounted for our investment in the Development Joint Venture using the
     equity method of accounting. The aggregate cost of this business
     combination was $268,209,000, consisting of our pre-existing investment in
     the Development Joint Venture of $115,131,000 and cash of $153,078,000 paid
     to the institutional investor to acquire its interest.

              STOR-Re Mutual Insurance Company, Inc.
              --------------------------------------

              As a result of obtaining a controlling ownership interest,
     effective July 1, 2002 we began consolidating STOR-Re. Accordingly, the
     assets and liabilities and operating results subsequent to July 1, 2002 of
     STOR-Re are included on our consolidated financial statements. Our
     investment in STOR-Re, which at June 30, 2002 was classified as an other
     asset in the amount of $8,541,000, was allocated to the cash, other assets,
     and liabilities of STOR-Re as described in the table below.

              STOR-Re was formed in 1994 as an association captive insurance
     company owned by the Company and its affiliates. STOR-Re provides limited
     property and liability insurance to the Company and its affiliates. The
     Company also utilizes other insurance carriers to provide property and
     liability coverage in excess of STOR-Re's limitations.

                                      F-13

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Prior to July 1, 2002, the insurance premiums paid to STOR-Re were
     included in property operating expenses. After June 30, 2002, the insured
     liabilities costs incurred by STOR-Re with respect to the Company and the
     Consolidated Entities facilities are presented as property operating
     expenses. The insured liability costs incurred by STOR-Re are substantially
     equivalent to the premiums paid by the Company and its affiliates;
     accordingly, the consolidation of STOR-Re had no material impact upon the
     Company's income statement. The net operating results of STOR-Re with
     respect to its insurance services provided to the Unconsolidated Entities
     are included in "Interest and other income."

              Other Partnerships
              ------------------

              As a result of obtaining a controlling ownership interest, we
     began to consolidate the accounts of two publicly-held limited partnerships
     owning 31 self-storage facilities in which we are the general partner,
     effective January 1, 2002. Our $45,105,000 investment at December 31, 2001
     was allocated to the cash, other assets, liabilities, and minority
     interests of these entities as described in the table below. Prior to 2002,
     we accounted for our investment in these entities using the equity method
     of accounting.

              Each of the business combinations, indicated above, has been
     accounted for using the purchase method. Accordingly, allocations of the
     total acquisition cost to the net assets acquired were made based upon the
     fair value of such assets and liabilities assumed with respect to the
     transactions, with the remainder, if any, allocated to goodwill.
     Accordingly, allocations of the total acquisition cost to the net assets
     acquired were made based upon the fair value of such assets and liabilities
     assumed with respect to the transactions occurring in 2002 (none in 2003 or
     2004) are summarized as follows:

<TABLE>
<CAPTION>

                                       Development                 Partnership
                                      Joint Venture    STOR-Re     Acquisitions         Total
                                      -------------- ------------  -------------   ------------
                                                       (Amounts in thousands)
2002 business combinations:
<S>                                    <C>            <C>            <C>            <C>
    Real estate facilities....         $  269,898     $       -      $  60,528      $  330,426
    Cash......................                  -        12,647            751          13,398
    Other assets..............              1,122        14,553          1,053          16,728
    Accrued and other liabilities          (2,811)      (18,659)        (2,421)        (23,891)
    Minority interest ........                  -             -        (14,806)        (14,806)
                                      -------------- ------------  -------------   ------------
                                       $  268,209     $   8,541      $  45,105      $  321,855
                                      ============== ============  =============   ============
</TABLE>

              The historical operating results of the above acquisitions prior
     to each respective acquisition date have not been included in the Company's
     historical operating results. Pro-forma data (unaudited) for the year ended
     December 31, 2002 (there were no pro-forma adjustments required for the
     years ended December 31, 2003 or 2004 as all the transactions denoted above
     had occurred by December 31, 2002) as though the business combinations
     above had been effective at the beginning of fiscal 2002 are as follows:

                                                            For the Year
                                                      Ended December 31, 2002
                                                      -----------------------
                                                       (in thousands except
                                                          per share data)
     Revenues....................................           $825,060
     Net income..................................           $318,503

     Net income per common share (Basic).........             $1.15
     Net income per common share (Diluted).......             $1.13

              The pro-forma data does not purport to be indicative either of
     results of operations that would have occurred had the transactions
     occurred at the beginning of fiscal 2002 or future results of operations of
     the Company. Certain pro-forma adjustments were made to the combined
     historical amounts to reflect (i) expected reductions in general and
     administrative expenses, (ii) estimated increased interest expense from
     bank borrowings to finance the cash portion of the acquisition cost, and
     (iii) estimated increase in depreciation expense.

                                      F-14
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

4.   Discontinued Operations
     -----------------------

              We segregate all of our disposed components that have operations
     that (i) can be distinguished from the rest of the entity and (ii) will be
     eliminated from the ongoing operations of the entity in a disposal
     transaction.

              During 2002, 2003, and 2004, we have closed a total of 43
     containerized storage facilities that were determined to be non-strategic
     (the "Closed Facilities."). As the decision was made to close each
     facility, the related assets were deemed not recoverable from operations
     and therefore asset impairment charges for the excess of these assets' net
     book value over their fair value (less costs to sell), determined based
     upon the values of similar assets, were recorded. These asset impairment
     charges totaled $1,575,000, $3,229,000 (including $750,000 with respect to
     a real estate facility previously utilized by the Closed Facilities), and
     $6,504,000 for the years ended December 31, 2004, 2003 and 2002,
     respectively. A loss on sale in the amount of $355,000 was also recorded in
     2003 in connection with the sale of the real estate facility previously
     utilized by the Closed Facilities. Amounts for 2004 and 2002 also include
     $416,000 and $2,447,000 in lease termination costs, respectively.

              During 2003, we sold five self-storage facilities and recorded an
     aggregate gain on sale of $5,476,000. The historical operations of these
     facilities are reported as discontinued operations in the table below as
     the "Sold Self-Storage Facilities."

              During 2002, we sold one of our commercial properties to a third
     party, and no gain or loss was recorded from this sale. During 2004, we
     sold another commercial property to a third party and recorded a gain on
     sale of $971,000. The historical operating results of these facilities are
     reported as discontinued operations in the table below as the "Sold
     Commercial Facilities."

                                      F-15
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The following table summarizes the historical operations of the
     Closed Facilities, the Sold Self-Storage Facilities, and the Sold
     Commercial Facilities:

Discontinued Operations:
                                             Year Ended December 31,
                                        -------------------------------------
                                           2004         2003          2002
                                        ----------    ----------    ----------
                                                (Amounts in thousands)
Rental income:
  Closed Facilities...............      $   7,488    $  19,347     $  29,764
  Sold Self-Storage Facilities....              -        1,579         1,841
  Sold Commercial Facilities......            314          441           745
                                        -----------   ----------    ----------
Total rental income...............          7,802       21,367        32,350
                                        -----------   ----------    ----------
Cost of operations:
  Closed Facilities...............         (6,733)     (15,157)      (28,032)
  Sold Self-Storage Facilities....              -         (617)         (742)
  Sold Commercial Facilities......            (81)        (105)         (287)
                                        -----------   ----------    ----------
Total cost of operations..........         (6,814)     (15,879)      (29,061)
                                        -----------   ----------    ----------
Depreciation expense:
  Closed Facilities ..............         (1,115)      (3,335)       (5,071)
  Sold Self-Storage Facilities....              -         (424)         (528)
  Sold Commercial Facilities......            (82)         (99)         (215)
                                        -----------   ----------    ----------
Total depreciation ...............         (1,197)      (3,858)       (5,814)
                                        -----------   ----------    ----------
Other
  Asset impairment charges........         (1,575)      (3,229)       (6,504)
  Lease termination costs.........           (416)           -        (2,447)
  Net gain (loss) on dispositions.            971        5,121             -
                                        -----------   ----------    ----------
Total other ......................         (1,020)       1,892        (8,951)
                                        -----------   ----------    ----------
Total discontinued operations           $   (1,229)   $  3,522      $ (11,476)
                                        ===========   ==========    ==========

                                      F-16
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

5.   Real estate facilities
     ----------------------

              Activity in real estate facilities during 2004, 2003 and 2002 is
as follows:

<TABLE>
<CAPTION>

                                                                      2004               2003              2002
                                                                 ----------------  ----------------   ---------------
                                                                                  (Amounts in thousands)
Operating facilities, at cost:
<S>                                                               <C>                <C>               <C>
  Beginning balance.......................................        $  5,125,498       $  4,988,526      $  4,431,054
  Property acquisitions:
     Business combinations (Note 3) ......................                   -                  -           330,426
     Other acquisitions...................................             259,487                  -            30,117
  Disposition of facilities...............................              (6,785)           (31,327)           (4,619)
  Completed projects opened for operations................              93,017            121,437           134,775
  Casualty losses.........................................              (2,874)                 -                 -
  Acquisition of minority interest (Note 10)..............               6,539             16,687            39,780
  Capital improvements....................................              35,868             30,175            26,993
                                                                 ----------------  ----------------   ---------------
  Ending balance..........................................           5,510,750          5,125,498         4,988,526
                                                                 ----------------  ----------------   ---------------
Accumulated depreciation:
  Beginning balance.......................................          (1,153,059)          (987,546)         (819,932)
  Additions during the year (a)...........................            (169,471)          (172,328)         (168,023)
  Casualty losses.........................................               1,624                  -                 -
  Disposition of facilities...............................                 706              6,815               409
                                                                 ----------------  ----------------   ---------------
  Ending balance..........................................          (1,320,200)        (1,153,059)         (987,546)
                                                                 ----------------  ----------------   ---------------
Construction in process:
   Beginning balance......................................              69,620             87,516           121,181
   Current development....................................              71,602            102,428           101,110
   Transfers (to) from land held for development..........                (928)             1,113                 -
   Completed projects opened for operations...............             (93,017)          (121,437)         (134,775)
                                                                 ----------------  ----------------   ---------------
   Ending balance.........................................              47,277             69,620            87,516
                                                                 ----------------  ----------------   ---------------
Land held for development:
  Beginning balance.......................................              12,236             17,807            30,001
  Transfers from (to) construction in process.............                 928             (1,113)                -
  Dispositions............................................              (4,281)            (4,458)          (12,194)
  Ending balance..........................................               8,883             12,236            17,807
                                                                 ----------------  ----------------   ---------------
 Total real estate facilities.............................        $  4,246,710       $  4,054,295      $  4,106,303
                                                                 ================  ================   ===============

</TABLE>

              Operating Facilities
              --------------------

              During the year ended December 31, 2004, we opened seven newly
     developed self-storage facilities (505,000 net rentable square feet) with
     an aggregate cost of $61,558,000. We also completed nine projects to
     convert 460,000 net rentable square feet previously used by our
     containerized storage business into 606,000 net rentable square feet of
     self-storage space for an aggregate cost of $17,022,000, as well as various
     projects that structurally and visually enhanced certain projects, and
     expanded the square footage of our existing self-storage facilities
     (108,000 net rentable square feet) for an aggregate cost of $12,918,000. In
     addition, we incurred $1,519,000 in additional costs with respect to
     projects completed in 2003.

              In  2004 we also  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 (Note 8) and the  issuance  of $25 million of our Series Z
     Perpetual Preferred Units (Note 10).

                                      F-17

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              During year ended December 31, 2004, we sold one discontinued
     commercial facility, four vacant parcels of land and received partial
     condemnation proceeds with respect to two existing self-storage facilities.
     Total aggregate net proceeds totaled $12,648,000. We recorded a gain from
     these transactions of $2,288,000, of which, $1,317,000 is recorded to the
     line item "Gain (loss) on disposition of real estate and real estate
     investments and casualty loss" on our income statement and $971,000 is
     recorded in discontinued operations (Note 4) with respect to the
     aforementioned commercial facility.

              In addition, in 2004, we recorded a $1,250,000 casualty loss with
     respect to real estate assets damaged as a result of hurricanes occurring
     in the state of Florida. This casualty loss is comprised of $2,874,000 in
     buildings and $1,624,000 in accumulated depreciation and is reflected on
     the condensed consolidated statement of income as "Casualty Loss."

              During 2003, we opened 14 newly developed self-storage facilities
     with an aggregate cost of $107,126,000. We also completed expansions to
     eight existing self-storage facilities with a total cost of $12,533,000 and
     incurred additional costs with respect to facilities opened in prior years
     of $1,778,000.

              During 2003 we sold five self-storage facilities and an industrial
     facility previously used by the containerized storage operations for
     aggregate net proceeds of $20,950,000 of cash. An aggregate net gain on
     sale of $5,121,000 was recorded for these sales, combined with an
     impairment charge in the amount of $750,000 which was recorded when it was
     determined that the industrial facility would be sold for less than its
     book value. The gain and impairment charge are included in Discontinued
     Operations. See Note 4.

              In addition, during 2003 we sold excess land and completed the
     sale of two additional self-storage facilities for aggregate net proceeds
     of $13,082,000, recognizing a net gain on sale of $691,000. The two
     self-storage facilities had been operated by the buyer pursuant to a lease
     arrangement, with the lease income with respect to these two facilities
     included in "Interest and Other Income."

              During 2002, we opened 14 newly developed traditional self-storage
     facilities with an aggregate cost of $92,109,000 and two newly developed
     facilities that combine traditional self-storage facilities and
     containerized storage facilities in the same location ("Combination
     Facilities") with an aggregate cost of $14,852,000. We also completed
     expansions to existing self-storage facilities with a total cost of
     $27,814,000 and acquired nine self-storage facilities, in separate
     transactions from third parties, for $30,117,000 cash.

              During 2002, we sold four plots of land and one commercial
     facility for an aggregate of $15,702,000, consisting of $15,209,000 of cash
     and notes receivable in the amount of $493,000. An aggregate loss in the
     amount of $702,000 was recorded on the sale of these properties.

              At December 31, 2004, the unaudited adjusted basis of real estate
     facilities for federal tax purposes was approximately $3.4 billion.

              Construction in process and land held for development
              -----------------------------------------------------

              Construction in process at December 31, 2004 consists primarily of
     10 self-storage facilities (754,000 net rentable square feet) and 37
     expansion projects and various remodeling projects to enhance the visual
     and structural appeal of existing self-storage facilities (2,246,000 net
     rentable square feet). In addition, we have five parcels of land held for
     development with total costs of approximately $8,883,000.

6.   Investments in real estate entities
     -----------------------------------

              At December 31, 2004, our investments in real estate entities
     consist of ownership interests in eight partnerships, which principally own
     self-storage facilities, and our ownership interest in PSB. 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 the partnerships. The accounting
     policies of these entities are similar to ours.

              A total of approximately $44 million of the Company's consolidated
     retained earnings is represented by undistributed earnings of the
     Unconsolidated Entities.

                                      F-18
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              During 2004, 2003 and 2002, we recognized earnings from our
     investments of $22,564,000, $24,966,000, and $29,888,000, respectively, and
     received cash distributions totaling $20,961,000, $17,754,000, and
     $19,496,000, respectively. During 2004, 2003 and 2002, earnings from our
     investments includes the net impact of PSB's gains on sale of real estate
     impairment charges, and EITF Topic D-42 charges aggregating $4,544,000,
     $187,000, and $3,737,000 in 2004, 2003 and 2002 respectively.

              During 2004, 2003, and 2002, we invested a total of $3,005,000,
     $340,000 and $223,000 in investments in real estate entities.

              The following table sets forth our investments in the
     Unconsolidated Entities at December 31, 2004 and 2003 and our equity in
     earnings of real estate investments for each of the three years ended
     December 31, 2004:

<TABLE>
<CAPTION>

                                        Investments in Real Estate            Equity in Earnings of Real Estate Entities
                                         Entities at December 31,                  for the year ended December 31,
                                      -------------------------------        ------------------------------------------
                                           2004             2003                2004            2003            2002
                                      --------------     ------------        ------------   -----------     -----------
<S>                                     <C>               <C>                 <C>            <C>             <C>
     PSB (a)........................    $   284,564       $   282,428         $  16,895      $  19,687       $  24,461
     Other investments..............         53,883            54,268             5,742          5,279           5,427
     Acquisition Joint Venture......          2,857                 -               (73)             -               -
                                      --------------     ------------        ------------   -----------     -----------
         Total......................     $  341,304        $  336,696         $  22,564      $  24,966       $  29,888
                                      ==============     ============        ============   ===========     ===========

</TABLE>

         (a) Included in equity in earnings  for 2004,  2003 and 2002 is the net
             impact of PSB's  gains on sale of real estate  impairment  charges,
             and EITF Topic D-42 charges aggregating  $4,544,000,  $187,000, and
             $3,737,000 in 2004, 2003 and 2002 respectively.


              Investment in PS Business Parks, Inc. ("PSB")
              ---------------------------------------------

              On January 2, 1997, we reorganized our commercial property
     operations into an entity now known as PS Business Parks, Inc., a REIT
     traded on the American Stock Exchange, and an operating partnership
     controlled by PS Business Parks, Inc. (collectively, the REIT and the
     operating partnership are referred to as "PSB"). The Company, and certain
     partnerships in which the Company has a controlling interest, have a 44%
     common equity interest in PSB as of December 31, 2004. This 44% common
     equity interest is comprised of the ownership of 5,418,273 shares of common
     stock and 7,305,355 limited partnership units in the operating partnership;
     these limited partnership units are convertible at our option, subject to
     certain conditions, on a one-for-one basis into PSB common stock. Based
     upon PSB's trading price at December 31, 2004 ($45.10), the shares and
     units had a market value of approximately $573,836,000 as compared to a
     book value of $284,564,000, which is substantially equivalent to our
     underlying equity in this entity.

              At December 31, 2004, PSB owned and operated approximately 18.0
     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 the condensed statements of
     operations for each of the two years ended December 31, 2004 and 2003, and
     the condensed balance sheets of PSB at December 31, 2004 and 2003. The
     amounts below represent 100% of PSB's balances and not our pro-rata share.

                                      F-19

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

<TABLE>
<CAPTION>

                                                            -------------------------------------
                                                                   2004              2003
                                                            ------------------  -----------------
                                                                  (Amount in thousands)
 For the year ended December 31,
   Total revenue and interest and other income, and gain
<S>                                                         <C>                  <C>
      on sale of Marketable securities..................    $        219,477     $      197,903
    Cost of operations and other expenses................            (72,651)           (62,108)
   Depreciation and amortization........................             (72,336)           (57,436)
   Discontinued operations (b)..........................              17,658              1,322
   Minority interest....................................             (30,005)           (30,585)
                                                            ------------------  -----------------
     Net income.........................................    $         62,143     $       49,096
                                                            ==================  =================
 At December 31,
   Total assets (primarily real estate).................    $      1,363,829     $    1,358,861
   Total debt (c).......................................              11,367            264,694
   Other liabilities....................................              38,453             35,701
   Preferred equity and preferred minority interests....             638,600            386,423
   Common equity........................................             675,409            672,043

</TABLE>

         (a) Included  in  discontinued   operations  is  an  impairment  charge
             recorded on impending real estate sales totaling $5,907,000 for the
             year ended  December  31,  2003;  net gains on sale of real  estate
             facilities totaling  $15,462,000 and $2,897,000 for the years ended
             December  31,  2004  and  2003,  respectively.   Also  included  in
             discontinued  operations  is  equity  in  income  from  a  disposed
             investment of $2,296,000 for the year ended December 31, 2003.

         (b) Total debt at December 31, 2003  includes  $100,000,000  due to the
             Company  pursuant to a loan  agreement.  See Note 12, Related Party
             Transactions, below.

              Acquisition Joint Venture
              -------------------------

              As described more fully under "Accounting for Acquisition Joint
     Venture" in Note 2, we formed a partnership (the "Acquisition Joint
     Venture") in January 2004 for the purpose of acquiring up to $125 million
     in existing self-storage facilities from third parties. Through December
     31, 2004, the Acquisition Joint Venture had acquired two self-storage
     facilities directly from third parties at an aggregate cost of $9,086,000,
     of which our joint venture share was $2,930,000. Our investment in these
     two facilities is accounted for using the equity method of accounting.

              The following table sets forth certain condensed financial
     information (representing 100% of this entity's balances and not our
     pro-rata share) with respect to the two self-storage facilities acquired by
     the Acquisition Joint Venture.

                                                    Year Ended December 31, 2004
                                                    ----------------------------
                                                      (Amounts in thousands)
   Total revenue.................................... $          447
   Cost of operations and other expenses............           (192)
   Depreciation and amortization....................            (97)
     Net income..................................... $          158


                                                        At December 31, 2004
                                                    ----------------------------
                                                      (Amounts in thousands)
   Total assets (primarily storage facilitites)..... $        9,168
   Liabilities......................................             11
   Partners' equity.................................          9,157

                                      F-20
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Other Investments
              -----------------

              The Other Investments consist primarily of an average 41% common
     equity ownership, which we owned throughout the three-year period ending
     December 31, 2004, in seven limited partnerships (collectively, the "Other
     Investments") owning an aggregate of 36 storage facilities. The book value
     of these investments ($53,883,000) is approximately $30,812,000 higher than
     our aggregate underlying equity in these entities; 70% of this difference
     (representing the portion allocated to building) is amortized as a
     reduction to equity in earnings over 25-year period. During 2004 and 2003,
     we acquired additional equity interests in these entities for a total of
     $75,000 and $340,000, respectively.

              The following table sets forth certain condensed financial
     information (representing 100% of these entities' balances and not our
     pro-rata share) with respect to Other Investments:

                                                  2004              2003
                                             ---------------   ---------------
                                                   (Amount in thousands)
 For the year ended December 31,
 Total revenue........................       $       28,376    $       26,763
 Cost of operations and other expenses               (9,870)           (9,109)
 Depreciation and amortization........               (2,247)           (2,573)
                                             ---------------   ---------------
     Net income.......................       $       16,259    $       15,081
                                             ===============   ===============
 At December 31,
 Total assets (primarily storage             $       58,124    $       56,592
     facilities)......................
 Total debt...........................                    -             1,930
 Other liabilities....................                1,853             1,618
 Partners' equity.....................               56,271            53,044

7.   Revolving line of credit
     ------------------------

              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
     0.45% to LIBOR plus 1.20% depending on our credit ratings (currently LIBOR
     plus 0.45%). 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 (currently the fee is 0.15% per annum). At December 31, 2004 and at
     March 15, 2005, we had no 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 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, 2004.

                                      F-21

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

8.   Notes payable
     -------------

              Notes payable at December 31, 2004 and 2003 consist of the
following:

<TABLE>
<CAPTION>

                                                                          2004                      2003
                                                               -------------------------  -------------------------
                                                                 Carrying                  Carrying
                                                                  amount     Fair value     amount      Fair value
                                                               ------------ ------------  -----------  ------------
                                                                              (Amounts in thousands)
Unsecured senior notes:
<S>                                                               <C>          <C>          <C>          <C>
  7.47% note repaid in January 2004.......................        $      -     $      -     $ 14,600     $ 15,001
  7.66% note due January 2007.............................          33,600       35,355       44,800       49,346

Mortgage notes payable:
  10.55% mortgage notes repaid in June 2004...............               -            -       14,863       15,266
  7.134% and 8.75% mortgage notes secured by two real estate
      facilities with a net book value of $11.2 million,
      principal and interest payable monthly, due at varying
      dates between October 2009 and September 2028.......           1,629        1,782        1,767        1,956
  5.05% mortgage notes (including note premium of $2.4 million)
      secured by 25 real estate facilities with a net book
      value of $95.9 million, principal and interest due
      monthly, due at varying dates  between October 2010 and
      May 2023............................................          41,470       41,470            -            -
  5.25% mortgage notes (including note premium of $4.0 million)
      secured by 7 real estate facilities with a net book
      value of $88.3 million, principal and interest due
      monthly, due at varying dates between June 2011 and July
      2013................................................          52,820       52,820            -            -
                                                               ------------ ------------  -----------  ------------
         Total notes payable..............................        $129,519     $131,427     $ 76,030     $ 81,569
                                                               ============ ============  ===========  ============

</TABLE>

              All of our notes payable are fixed rate. The senior notes require
     interest and principal payments to be paid semi-annually and have various
     restrictive covenants, all of which have been met at December 31, 2004.

              Substantially all of our mortgage notes have prepayment penalties
     or restrictions on prepayment that make prepayment of these notes
     economically impractical.

              We assumed the 5.05% and 5.25% mortgage notes in connection with
     property acquisitions in 2004. The stated interest rates on the notes range
     from 5.4% to 8.1% with a weighted average of approximately 6.65%. The notes
     were recorded at their estimated fair value based upon the estimated market
     rate of 5.05% and 5.25%, an aggregate of approximately $94,693,000 as
     compared to actual outstanding balances aggregating approximately
     $88,247,000. This premium of approximately $6,446,000 over the principal
     balance of the notes payable, will be amortized over the remaining term of
     the loans based upon the effective interest method.

                                      F-22

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              At December 31, 2004, approximate principal maturities of notes
payable are as follows:

                                Unsecured
                               Senior Notes       Mortgage debt         Total
                               -------------     ---------------    ------------
                                         (dollar amounts in thousands)
2005.........................  $     11,200        $    4,306          $  15,506
2006.........................        11,200             4,539             15,739
2007.........................        11,200             4,783             15,983
2008.........................             -             5,034              5,034
2009.........................             -             5,213              5,213
Thereafter...................             -            72,044             72,044
                               -------------     ---------------    ------------
                               $     33,600        $   95,919          $ 129,519
                               =============     ===============    ============
Weighted average rate........         7.7%              5.2%                5.8%
                               =============     ===============    ============

              Interest paid (including interest related to the borrowings under
     the Credit Agreement) during 2004, 2003 and 2002 was $4,377,000,
     $7,131,000, and $10,322,000, respectively. In addition, in 2004, 2003 and
     2002, capitalized interest totaled $3,617,000, $6,010,000, and $6,513,000,
     respectively, related to construction of real estate facilities.

9.   Debt to Joint Venture Partner
     -----------------------------

              On December 31, 2004, we sold seven self-storage facilities that
     we had recently acquired from third parties to our Acquisition Joint
     Venture for $22,993,000, an amount that was equal to fair value and our
     cost. As described more fully in Note 2, we accounted for the sale of these
     seven facilities as a financing transaction pursuant to guidance under SFAS
     66. As a result, our joint venture partner's interest in these facilities
     ($16,095,000 at December 31, 2004) is accounted for as debt on our
     consolidated balance sheet. Our partner's pro-rata share of net earnings
     with respect to these properties and will be recorded as interest expense
     on our consolidated income statement.

              We expect that this debt will be repaid during 2008, assuming that
     we exercise our option to acquire our partner's interest in the Acquisition
     Joint Venture.

              Subsequent to December 31, 2004, we sold a significant interest in
     three additional self-storage facilities that we had recently acquired from
     a third party to our Acquisition Joint Venture for approximately $27.4
     million. This transaction will also be accounted for as a financing
     arrangement whereby our joint venture partner's interest approximately (a
     $19.2 million with respect to these three properties) will be presented as
     debt on our consolidated balance sheet.

10.  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 the consolidated financial statements. Minority
     interest in income consists of the minority interests' share of the
     operating results of the Company relating to the consolidated operations of
     the Consolidated Entities.

                                      F-23

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Preferred partnership interests:
              --------------------------------

              At December 31, 2003 and 2004, we had the following series of
Preferred Units outstanding:

<TABLE>
<CAPTION>

                                                           At December 31, 2004        At December 31, 2003
                          Earliest        Distribution     Units       Carrying        Units         Carrying
      Series        Redemption Date (a)       Rate      Outstanding     Amount      Outstanding       Amount
------------------ ---------------------- ------------- ------------  -----------   -----------    -----------
                                                                (Units and dollar amounts in thousands)
<S>                       <C>                  <C>           <C>      <C>                <C>       <C>
Series N (b).....        March 17, 2005        9.500%        1,600    $    40,000        9,600     $   240,000
Series NN........        March 17, 2010        6.400%        8,000        200,000            -               -
Series O (b).....        March 29, 2005        9.125%        1,800         45,000        1,800          45,000
Series Z(a)......        October 12, 2009      6.250%        1,000         25,000            -               -
                                                        ------------  -----------    -----------   -----------
Total............                                           12,400    $   310,000       11,400     $   285,000
                                                        ============  ===========    ===========   ===========

</TABLE>

(a)      After  these  dates,  at our  option,  we can  redeem  the units at the
         issuance  amount  plus any  unpaid  distributions.  The  units  are not
         redeemable by the holder with the exception of the Series Z units.  The
         holders of the Series Z units have a one-time option,  exercisable five
         years  from  issuance,   to  require  us  to  redeem  their  units  for
         $25,000,000 cash plus unpaid and accrued distributions.

(b)      The Series N and Series O units outstanding at December 31, 2004 were
         called for redemption during February 2005 and will be redeemed on
         March 17, 2005 and March 29, 2005, respectively. See Note 15 - Events
         subsequent to December 31, 2004.

              Subject to certain conditions, the Series N preferred units are
     convertible into shares of our 9.5% Series N Cumulative Preferred Stock,
     the Series O preferred units are convertible into shares of our 9.125%
     Series O Cumulative Preferred Stock, the Series NN preferred units are
     convertible into shares of our 6.4% Series NN Cumulative Preferred Stock,
     and the Series Z preferred units are convertible into shares of our 6.25%
     Series Z Cumulative Preferred Stock.

              These preferred 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 N, NN and O
     units are not redeemable by the holder.

              The holders of the Series Z 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, 2004, 2003, and 2002, the
     holders of these preferred units were paid in aggregate approximately
     $22,423,000, $26,906,000, and $26,906,000, respectively, in distributions
     and received an equivalent allocation of minority interest in earnings.

              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 exchange their 9.5%
     Series N Cumulative Redeemable Perpetual Preferred Units for $200 million
     of our 6.4% Series NN Cumulative Redeemable Perpetual Preferred Units. The
     investors also received a distribution for dividends that accrued from
     January 1, 2004 through the effective date of the exchange.

                                      F-24

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The restructure of these Preferred Units resulted in an increase
     in income allocated to minority interests and a reduction to our net income
     for the year ended December 31, 2004 of $10,063,000 from (1) the special
     distribution to the holders of the preferred units ($8,000,000) and (2) the
     application of the SEC's clarification of EITF Topic D-42 ($2,063,000). The
     $2,063,000 additional reduction in our net income represents the excess of
     the stated amount of the preferred units over their carrying amount.

              During October 2004, in connection with property acquisitions, one
     of our consolidated operating partnerships issued $25.0 million of 6.250%
     Series Z Cumulative Redeemable Perpetual Preferred Units.

              Other partnership interests:
              ----------------------------

              Minority interest at December 31, 2004 and 2003, and minority
     interest in income for the three years ended December 31, 2004 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        2004             2003                2004             2003             2002
---------------------------------   -------------    -------------       --------------   --------------   --------------
                                                        (Amounts in thousands)
Consolidated Development Joint
<S>                                    <C>             <C>                <C>               <C>             <C>
  Venture........................      $  64,297       $  68,490          $      5,652      $     4,211     $     2,399
Convertible Partnership Units...           6,160           6,259                   328              305             283
Other consolidated partnerships..         48,446          66,388                11,447           12,281          14,499
                                    -------------    -------------       --------------   --------------   --------------
Total other partnership interests      $ 118,903       $ 141,137          $     17,427      $    16,797     $    17,181
                                    =============    =============       ==============   ==============   ==============

</TABLE>

              The partnership agreements of the Other Consolidated Partnerships,
     the Consolidated Development Joint Venture, and the Newly 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.

              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) whose partners include a third party
     institutional investor and Mr. Hughes, to develop approximately $100
     million of self-storage facilities and to purchase $100 million of the
     Company's Equity Stock, Series AAA (see Note 10). At December 31, 2004, the
     Consolidated Development Joint Venture was fully committed, having
     completed construction on 22 storage facilities with a total cost of $108.6
     million.

              The Consolidated Development Joint Venture is funded solely with
     equity capital consisting of 51% from the Company and 49% from PSAC Storage
     Investors. The accounts of the Consolidated Development Joint Venture are
     included in the Company's consolidated financial statements. The accounts
     of PSAC Storage Investors are not included in the Company's consolidated
     financial statements, as the Company has no ownership interest in this
     entity. Minority interests primarily represent the total contributions
     received from PSAC Storage Investors combined with the accumulated net
     income allocated to PSAC Storage Investors, net of cumulative
     distributions. The amounts included in our financial statements with
     respect to the minority interest in the Consolidated Development Joint
     Venture are denoted in the tables above.

                                      F-25

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The term of the Consolidated Development Joint Venture is 15
     years; however, during the sixth year PSAC Storage Investors has the right
     to cause an early termination of the partnership. If PSAC Storage Investors
     exercises this right, we then have the option, but not the obligation, to
     acquire their interest for an amount that will allow them to receive an
     annual return of 10.75%. If the Company does not exercise its option to
     acquire PSAC Storage Investors' interest, the partnership's assets will be
     sold to third parties and the proceeds distributed to the Company and PSAC
     Storage Investors in accordance with the partnership agreement. If PSAC
     Storage Investors does not exercise its right to early termination during
     the sixth year, the partnership will be liquidated 15 years after its
     formation with the assets sold to third parties and the proceeds
     distributed to the Company and PSAC Storage Investors in accordance with
     the partnership agreement.

              PSAC Storage Investors, LLC provides Mr. Hughes with a fixed yield
     of approximately 8.0% per annum on his preferred non-voting interest
     (representing an investment of approximately $64.1 million at December 31,
     2004 and 2003). In addition, Mr. Hughes receives 1% of the remaining cash
     flow of PSAC Storage Investors, LLC (estimated to be less than $50,000 per
     year). If PSAC Storage Investors, LLC does not elect to cause an early
     termination, Mr. Hughes' 1% interest in residual cash flow can increase to
     10%.

              In consolidation, the Equity Stock, Series AAA owned by the joint
     venture and the related dividend income have been eliminated. Minority
     interests primarily represent the total contributions received from PSAC
     Storage Investors combined with the accumulated net income allocated to
     PSAC Storage Investors, net of cumulative distributions.

              Convertible Partnership Units
              -----------------------------

              As of December 31, 2004, one of our Consolidated Entities had
     approximately 237,935 operating partnership units ("Convertible Units")
     outstanding, 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 shares of the Company at the
     option of the unitholder. Minority interest in income with respect to
     Convertible Units reflects the Convertible Units' share of the net income
     of the Company, 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 years ended
     December 31, 2004, 2003, and 2002, no units were converted.

              Other Consolidated Partnerships
              -------------------------------

              At December 31, 2004, the Other Consolidated Partnerships reflect
     common equity interests that we do not own in 24 entities owning an
     aggregate of 123 self-storage facilities.

              On June 30, 2004, we acquired the remaining interest we did not
     own in one of the Consolidated Entities, for an aggregate of $24,851,000 in
     cash. This acquisition had the effect of reducing minority interest by
     $18,312,000, with the excess of cost over underlying book value
     ($6,539,000) allocated to real estate. Subsequent to December 31, 2004, we
     acquired an additional interest for $4,368,000 in cash (see Note 15).

                                      F-26

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              During 2003, we acquired through a merger all of the remaining
     limited partnership interest not currently owned by the Company in PS
     Partners IV, Ltd., a partnership that is consolidated with the Company. The
     acquisition cost was approximately $23,377,000, consisting of the issuance
     of 426,859 shares of our common stock ($13,510,000) valued at the closing
     trading price of the shares at the date of the acquisition, and cash of
     approximately $9,867,000; this acquisition had the effect of reducing
     minority interest by $6,690,000, with the excess of cost over underlying
     book value ($16,687,000) allocated to real estate.

              During 2002, we acquired minority interests in the Consolidated
     Entities for an aggregate cash cost of $27,544,000 and issued an aggregate
     of 1,091,608 shares ($37,904,000) of our common stock valued at the closing
     trading price of the shares at the date of the acquisition; these
     acquisitions had the effect of reducing minority interest by $25,668,000,
     with the excess of cost over underlying book value ($39,780,000) allocated
     to real estate.

              In addition, during 2002, we recorded the pending sale of a
     partnership interest in the Consolidated Entities for an aggregate of
     $1,450,000. We recorded a loss on sale of the interest in the amount of
     $1,839,000. As a result of this sale, minority interest increased by
     $3,289,000. This sale was completed in 2003, with no additional gain or
     loss on sale recorded.

11.  Shareholders' equity
     --------------------

              Cumulative Preferred Stock
              --------------------------

              At December 31, 2004 and 2003, we had the following series of
     Cumulative Preferred Stock outstanding:

<TABLE>
<CAPTION>

                                                              At December 31, 2004           At December 31, 2003
                                                             --------------------------   --------------------------
                                  Earliest
                                 Redemption     Dividend       Shares       Carrying        Shares         Carrying
              Series                Date          Rate       Outstanding     Amount       Outstanding       Amount
-----------------------------    ------------   --------     ------------  ------------   -----------     ----------
                                                                          (Dollar amount in thousands)
<S>                               <C>             <C>                  <C>            <C>   <C>               <C>
     Series D                     9/30/04 (a)     9.500%               -    $         -     1,200,000     $   30,000
     Series E                     1/31/05 (a)    10.000%               -              -     2,195,000         54,875
     Series F                     4/30/05         9.750%       2,300,000         57,500     2,300,000         57,500
     Series L                     3/10/04 (a)     8.250%               -              -         4,600        115,000
     Series M                     8/17/04 (a)     8.750%               -              -         2,250         56,250
     Series Q                     1/19/06         8.600%           6,900        172,500         6,900        172,500
     Series R                     9/28/06         8.000%          20,400        510,000        20,400        510,000
     Series S                    10/31/06         7.875%           5,750        143,750         5,750        143,750
     Series T                     1/18/07         7.625%           6,086        152,150         6,086        152,150
     Series U                     2/19/07         7.625%           6,000        150,000         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             -              -
     Series Z                      3/5/09         6.250%           4,500        112,500             -              -
     Series A                     3/31/09         6.125%           4,600        115,000             -              -
     Series B                     6/30/09         7.125%           4,350        108,750             -              -
     Series C                     9/13/09         6.600%           4,600        115,000             -              -
                                                             ------------   ------------  -----------     ----------
            Total Cumulative Preferred Stock                   3,980,186    $2,102,150      5,763,986     $1,867,025
                                                             ============   ============  ===========     ==========

</TABLE>

(a)      Series was  redeemed  on the date  indicated.  The Series E  Cumulative
         Preferred  Stock was called for  redemption in December  2004,  and was
         redeemed  in January  2005 along  with the  unpaid  distributions  from
         December  31,  2004  through  the  redemption  date.  Accordingly,  the
         redemption  value of  $54,875,000  was  classified  as a  liability  at
         December 31, 2004.

                                      F-27

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              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.

              During 2004, we redeemed our Series K (which was called for
     redemption in December 2003), Series L, Series M, and Series D with
     redemption costs (including redemption expenses) of $115,021,000,
     $56,270,000, and $30,020,000, plus accrued dividends. In December 2004, we
     called for redemption our Series E Cumulative Preferred Stock, at par. The
     total cost of redemption of the Series E was approximately $54,895,000,
     plus accrued dividends, on the redemption date, January 31, 2005.
     Accordingly, the redemption value of $54,875,000 Series E Preferred Stock
     was classified as a liability at December 31, 2004.

              During 2003, we issued our Series W and Series X Cumulative
     Preferred Stock: Series W - issued on October 6, 2003, net proceeds of
     $128,126,000 and Series X - issued November 13, 2003, net proceeds of
     $116,020,000.

              During 2003, we redeemed our Series B and Series C Cumulative
     Preferred Stock, at par, at a total cost of $57,517,000 and $30,018,000
     (including related redemption expenses), respectively. In December 2003, we
     called for redemption our Series K Cumulative Preferred Stock, at par. The
     total cost of redemption of the Series K was approximately $115,000,000,
     plus accrued dividends, on the redemption date, January 20, 2004.
     Accordingly, the $115,000,000 Series K Preferred Stock was classified as a
     liability at December 31, 2003.

              During 2002, we issued our Series T, Series U and Series V
     Cumulative Preferred Stock: Series T - issued on January 18, 2002, net
     proceeds of $145,075,000, Series U - issued on February 19, 2002, net
     proceeds of $145,075,000 and Series V - issued September 30, 2002, net
     proceeds of $166,866,000.

              During 2002, we redeemed our Series A and Series J Cumulative
     Preferred Stock, at par, at a total cost of $45,643,000 and $150,018,000
     (including related redemption expenses), respectively.

              On August 30, 2002, in a privately negotiated transaction, we
     exchanged an aggregate of 86,000 shares (par value of $2,150,000) of our
     Preferred Stock, Series B for 86 shares (representing 86,000 depositary
     shares with a par value of $2,150,000) of our Preferred Stock, Series T.

              On February 28, 2005 (unaudited), we issued 5,400,000 depositary
     shares, with each depositary share representing 1/1,000 of a share of
     6.180% Cumulative Preferred Stock, Series D (par value $135,000,000). See
     Note 15 for more information.

              The holders of our Senior Preferred Stock have general preference
     rights with respect to liquidation and quarterly distributions. Holders of
     the preferred stock, 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,
     2004, there were no dividends in arrears and the Debt Ratio was 2.2%.

              Upon issuance of our Preferred Stock, we classify the liquidation
     value as preferred stock, with any issuance costs recorded as a reduction
     in Paid-in capital.

              Except under certain conditions relating to the Company's
     qualification as a REIT, the Senior Preferred Stock is not redeemable prior
     to the following dates: Series F - April 30, 2005, Series Q - January 19,
     2006, Series R - September 28, 2006 , Series S - October 31, 2006, Series T
     - January 18, 2007, Series U - February 19, 2007, 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, and Series D -
     February 28, 2010. On or after the respective dates, each of the series of
     Cumulative Senior 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 Series F and Series Y), plus accrued and unpaid dividends.

                                      F-28

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Common Stock
              ------------

              During 2004, 2003 and 2002, we issued and repurchased shares of
our common stock as follows:

<TABLE>
<CAPTION>

                                                2004                        2003                        2002
                                       ------------------------  ---------------------------   ------------------------
                                                                (Dollar amount in thousands)
                                        Shares        Amount        Shares        Amount        Shares        Amount
                                       -----------  -----------  --------------  ------------   -----------  -----------
Exercise of stock options and
<S>                                     <C>          <C>            <C>          <C>              <C>        <C>
  vesting of restricted stock units.    1,985,416    $   49,929     2,743,420    $   68,088       948,932    $   23,333
Acquisition of minority interests               -             -       426,859        13,510     1,091,608        37,904
Conversion of Class B Common Stock
                                                -             -     7,000,000           700             -             -
Repurchases of common stock......        (445,700)      (20,295)     (175,000)       (6,001)      (11,000)         (381)
                                       -----------  ------------  -------------  ------------   -----------  -----------
                                        1,539,716    $   29,634     9,995,279    $   76,297     2,029,540    $   60,856
                                       ===========  ============ ==============  ============   ===========  ===========

</TABLE>

              At December 31, 2004, certain Consolidated Entities owned 929,432
     common shares of the Company. These shares continue to be legally issued
     and outstanding. 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.

              The following chart reconciles the Company's legally issued and
     outstanding shares of common stock and the reported outstanding shares of
     common stock at December 31, 2004 and December 31, 2003:

                                               At December 31,  December 31,
Reconciliation of Common Shares Outstanding         2004          2003
-------------------------------------------    --------------  -------------

Legally issued and outstanding shares.......     129,455,882    127,710,466
Less - Shares owned by the Consolidated
    Entities that are eliminated in
    consolidation (a).......................        (929,432)      (723,732)
                                               --------------   ------------
Reported issued and outstanding shares......     128,526,450    126,986,734
                                               ==============   ============

     (a) The increase in shares owned by the Consolidated Entities is due to the
         Consolidated  Entities' purchases of 205,700 shares of our common stock
         during the year ended December 31, 2004.

              As previously reported, the Board of Directors authorized the
     repurchase from time to time of up to 10,000,000 shares of the Company's
     common stock on the open market or in privately negotiated transactions. On
     March 4, 2000, the Board of Directors increased the authorized number of
     shares that the Company could repurchase to 15,000,000. During 2001, the
     Board of Directors increased the authorized number of shares the Company
     could repurchase to 25,000,000. Cumulatively through December 31, 2004, we
     repurchased a total of 22,117,720 shares of common stock at an aggregate
     cost of approximately $562,158,000.

              At December 31, 2004 and 2003, we had 5,548,277 and 7,548,494
     shares of common stock reserved in connection with the Company's stock
     option plans, respectively, (see Note 13) and 237,935 shares reserved for
     the conversion of Convertible Partnership Units.

                                      F-29

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Class B Common Stock
              --------------------

              The 7,000,000 shares of Class B Common Stock were converted into
     7,000,000 shares of Common Stock on January 1, 2003. During 2002 the Class
     B Common Stock participated in distributions at 97% of the per share
     distributions on the Common Stock, which were subject to the condition
     (which was met) that cumulative distributions of at least $0.22 per quarter
     per share had been paid on the Common Stock. The Class B Common Stock could
     not participate in liquidating distributions, and Class B shareholders were
     not entitled to vote (except as expressly required by California law).

              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
              ----------------------

              As of December 31, 2004 and 2003, there were 8,776,102 depositary
     shares, each representing 1/1,000 of a share, of Equity Stock, Series A
     outstanding. We have not issued any shares of our Equity Stock, Series A
     since May 2001. The issuance amounts were recorded as part of paid-in
     capital on the consolidated balance sheet.

              The Equity Stock, Series A ranks on parity with our 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: 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 if no distributions are paid to common shareholders.

              Equity Stock, Series AA
              -----------------------

              In June 1997, we contributed $22,500,000 (225,000 shares) of
     equity stock, to a consolidated partnership in which we are the general
     partner.

              On June 30, 2004, the Equity Stock, Series AA was retired in
     connection with our aforementioned acquisition of the remaining interests
     we did not own in the consolidated partnership. For periods prior to June
     30, 2004, the Equity Stock, Series AA and related dividends were eliminated
     in consolidation.

              Equity Stock, Series AAA
              ------------------------

              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. We control the joint venture and consolidate the accounts of the
     joint venture, and accordingly the Equity Stock AAA is eliminated in
     consolidation. The Equity Stock AAA ranks on a parity with our common stock
     and junior to the Cumulative Preferred Stock (as defined below) with
     respect to general preference rights, and has a 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 on
     these shares if no distributions are paid to common stockholders.

                                      F-30

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Upon liquidation of the Consolidated Development Joint Venture, at
     the Company's option either a) each share of Equity Stock, Series AAA shall
     convert into 1.2 shares of our common stock or b) the Company can redeem
     the Equity Stock, Series AAA at a per share amount equal to 120% of the
     market price of our common stock. In addition, if the Company determines
     that it is necessary to maintain its status as a Real Estate Investment
     Trust, subject to certain limitations it may cause the redemption of shares
     of Equity Stock, Series AAA at a per share amount equal to 120% of the
     market price of our common stock. The shares are not otherwise redeemable
     or convertible into shares of any other class or series of the Company's
     capital stock. Other than as required by law, the Equity Stock, Series AAA
     has no voting rights.

              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, 2004,
     distributions for the common stock, Equity Stock, Series A, and all the
     various series of preferred stocks were classified as follows:

<TABLE>
<CAPTION>

                                                                 2004 (unaudited)
                                   ------------------ ------------------- ------------------- ------------------
                                      1st Quarter        2nd Quarter         3rd Quarter         4th Quarter
                                   ------------------ ------------------- ------------------- ------------------
<S>                                    <C>                 <C>                 <C>                <C>
Ordinary Income                        99.8683%            99.8694%            99.8712%           98.0855%
Long-Term Capital Gain                  0.1317%             0.1306%             0.1288%            1.9145%
                                   ------------------ ------------------- ------------------- ------------------
Total                                   100.00%             100.00%             100.00%            100.00%
                                   ================== =================== ==================  ==================
</TABLE>

     A percentage of the long-term capital gain is unrecaptured section 1250
     gain for each quarter of 2004 as follows:

<TABLE>
<CAPTION>

                                            2004 Percentage of Total Long-Term Capital Gain Distribution
                                       ------------------------------------------------------------------------
                                          1st Quarter       2nd Quarter      3rd Quarter        4th Quarter
                                       ----------------- ---------------- ----------------- -------------------
<S>                                        <C>              <C>               <C>                <C>
Unrecaptured Section 1250 Gain             34.8559%         34.8559%          34.8559%           43.7003%
                                       ================= ================ ================= ===================
</TABLE>

     For corporate shareholders a portion of the total long-term capital gain is
     required to be recaptured as ordinary income. For each quarter of 2004 the
     percentages are as follows:

<TABLE>
<CAPTION>

                                            2004 Percentage of Total Long-Term Capital Gain Distribution
                                       ------------------------------------------------------------------------
                                          1st Quarter       2nd Quarter      3rd Quarter        4th Quarter
                                       ----------------- ---------------- ----------------- -------------------
<S>                                          <C>               <C>              <C>                <C>
IRC ss.291 Recapture                         6.9709%           6.9709%          6.9709%            8.7400%
                                       ================= ================ ================= ===================
</TABLE>

                                      F-31

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The following table summarizes dividends for the years ended
December 31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>

                                                 2004                    2003                    2002
                                        --------------------    ---------------------    ---------------------
                                        Per share     Total     Per share     Total      Per share     Total
                                        ---------  ---------    ---------   ---------    ---------    --------
                                                        (in thousands, except per share data)
Cumulative Preferred Stock
<S>                                     <C>        <C>            <C>        <C>                      <C>
Series A                                $ -        $     -        $ -        $             $1.875     $  3,422
Series B                                -                -        $0.575       1,322       $2.343        5,389
Series C                                -                -        $0.844       1,013       $1.688        2,024
Series D                                $1.776       2,131        $2.375       2,850       $2.375        2,850
Series E                                $2.500       5,488        $2.500       5,488       $2.500        5,488
Series F                                $2.437       5,606        $2.437       5,606       $2.437        5,606
Series J                                -                -        -                -       $1.533        9,200
Series K                                $0.109         501        $2.063       9,488       $2.063        9,488
Series L                                $0.395       1,818        $2.063       9,488       $2.063        9,488
Series M                                $1.373       3,089        $2.188       4,922       $2.188        4,922
Series Q                                $2.150      14,835        $2.150      14,835       $2.150       14,835
Series R                                $2.000      40,800        $2.000      40,800       $2.000       40,800
Series S                                $1.969      11,320        $1.969      11,320       $1.969       11,320
Series T                                $1.906      11,601        $1.906      11,601       $1.809       11,011
Series U                                $1.906      11,438        $1.906      11,438       $1.641        9,849
Series V                                $1.875      12,938        $1.875      12,938       $0.469        3,234
Series W                                $1.625       8,612        $0.388       2,057       -                 -
Series X                                $1.613       7,740        $0.215       1,030       -                 -
Series Y                                $1.708       2,732        -                -       -                 -
Series Z                                $1.289       5,801        -                -       -                 -
Series A                                $1.153       5,302        -                -       -                 -
Series B                                $0.896       3,896        -                -       -                 -
Series C                                $0.495       2,277        -                -       -                 -
                                                  ----------                ---------                 --------
                                                   157,925                   146,196                   148,926
Common Equivalent Stock
Common Stock                            $1.800     230,834        $1.800     225,864     $1.800        209,077
Equity Stock, Series A                  $2.450      21,501        $2.450      21,501     $2.450         21,501
Class B Common Stock                    -                -        -                -     $1.746         12,222
                                                  ----------                ---------                 --------
Total Distributions                               $410,260                  $393,561                  $391,726
                                                  ==========                =========                 ========

</TABLE>

12.  Related party transactions
     --------------------------

              Relationships and transactions with the Hughes Family
              -----------------------------------------------------

              B. Wayne Hughes, Chairman of the Board, and his family (the
     "Hughes Family") have ownership interests in, and operate, approximately 40
     self-storage facilities in Canada under the name "Public Storage" 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 37% of our common stock outstanding at
     December 31, 2004. We have a right of first refusal to acquire the stock or
     assets of the corporation engaged in the operation of approximately 40
     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, have no right to acquire this 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.

                                      F-32

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Prior to December 31, 2003, our personnel were engaged in the
     supervision and the operation of these Canadian self-storage facilities 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 (U.S. $542,499 and $638,000 in
     respect of the Canadian operations for 2003 and 2002, respectively, and
     U.S. $151,063 and $167,930 for other services during 2003 and 2002,
     respectively). There have been conflicts of interest in allocating the time
     of our personnel between our properties, the Canadian properties, and
     certain other Hughes Family interests. The sharing of personnel and systems
     with the Canadian entities was substantially discontinued by December 31,
     2003. The Canadian entities claim that the Company owes them CAD $653,424
     representing the amount charged to them for the development of certain
     systems that they no longer utilize. This amount has been accrued on the
     Company's financial statements for the year ended December 31, 2004.

              The Company, through subsidiaries, continues to reinsure risks
     relating to loss of goods stored by tenants in the self-storage facilities
     in Canada. The Company had acquired the tenant insurance business on
     December 31, 2001 through its acquisition of PSIC. During 2004, 2003, and
     2002, respectively, PSIC received $1,069,000, $1,017,000, and $834,000,
     respectively, in reinsurance premiums attributable to the Canadian
     Facilities. PSIC has no contractual right to provide tenant reinsurance to
     the Canadian Facilities and there is no assurance that these premiums will
     continue.

              The corporation engaged in the operation of the Canadian
     facilities has advised us that it intends to reorganize the entities owning
     and operating the Canadian facilities and has proposed that the Company
     consent to this reorganization, which would impact the license agreement
     and the right of first refusal agreement with the Company, and might also
     impact our ability to sell tenant insurance The reorganization is designed
     to enhance the entities' financial flexibility and growth potential. In
     November 2004, the Board appointed a special committee, comprised of
     independent directors, to consider the Company's alternatives in this
     matter, including a possible investment in the reorganized Canadian
     entities.

              In November 1999, we formed the Consolidated Development Joint
     Venture with a joint venture partner whose partners include an
     institutional investor and Mr. Hughes. This transaction is discussed more
     fully in Note 10.

              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.  Until August  2003,  Mr.
     Havner  was also the  Chief  Executive  Officer  of PSB.  For 2003 and 2004
     services, Mr. Havner was compensated by PSB, as well as by the Company.

              In December 2003, we loaned $100,000,000 to PSB. This loan bore
     interest at the rate of 1.45% per year. This loan, which was fully repaid
     on March 8, 2004, was included in Notes Receivable at December 31, 2003.
     Also, in December 2001, we loaned $35,000,000 to PSB. This loan bore
     interest at the rate of 3.25% per year. This loan was repaid in full on
     January 28, 2002.

              In June 2002, we sold an undeveloped parcel of land at cost to PSB
     for an aggregate of $1,100,000 cash.

              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 $562,000, $581,000, and $578,000,
     respectively, in 2004, 2003 and 2002 in management fees with respect to
     PSB's property management services.

              Stor-Re provided limited property and liability insurance to the
     Company, PSB and our affiliates for losses incurred during policy periods
     prior to April 1, 2004.

                                      F-33

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

13.  Stock-based Compensation
     ------------------------

              Stock Options
              -------------

              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 at the rate of one-fifth  per year) 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 4,730,553, 5,087,593, and 5,229,407 securities were available
     for grant at December 31, 2004, 2003, and 2002,  respectively,  under these
     plans.

              Information with respect to the Plans during 2004, 2003 and 2002
is as follows:

<TABLE>
<CAPTION>

                                                        2004                           2003                         2002
                                            ----------------------------    ---------------------------   --------------------------
                                              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                3,088,618          $27.14        5,939,224         $25.79     6,677,334         $24.81
   Granted                                      353,500           51.46          272,500          34.50       792,000          33.20
   Exercised                                 (1,957,907)          25.51       (2,743,420)         24.85      (948,932)         24.59
   Cancelled                                    (42,310)          32.75         (379,686)         28.33      (581,178)         26.61
                                            -------------   ------------    -------------   -----------   ------------   -----------
 Options outstanding December 31 (a)          1,441,901          $35.08        3,088,618         $27.14     5,939,224         $25.79
                                                            ============                    ===========                  ===========
                                                                 $18.00                          $14.88                       $14.88
 Option price range at December 31 (b)                        to $56.12                       to $39.23                    to $37.40
 Options exercisable at December 31             651,013          $27.13        2,305,868         $25.24     3,666,641         $24.46
                                            =============   ============    ============    ===========   ============   ===========

</TABLE>

a)  The options  outstanding  at December  31,  2004,  have  remaining  average
     contractual lives of 7.5 years.


(b)  Approximately 472,788, 2,159,944, and 5,059,000 of options outstanding at
     December 31, 2004, 2003 and 2002, had exercise prices less than $30. In
     addition, 336,000 options outstanding at December 31, 2004 had weighted
     average exercise prices greater than $45 (none at December 31, 2003 and
     2002).

              Accounting principles generally accepted in the United States
     permit, but do not require, companies to recognize compensation expense for
     stock-based awards based on their fair value at date of grant, which is
     then amortized as compensation expense over the vesting period (the "Fair
     Value Method"). Companies can also elect to disclose, but not recognize as
     an expense, stock option expense when stock options are granted to
     employees at an exercise price equal to the market price at the date of
     grant (the "APB 25 Method").

                                      F-34

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              For periods prior to December 31, 2001, we utilized the APB 25
     Method of accounting for employee stock options. As of January 1, 2002, we
     adopted the Fair Value Method, and have elected to use the prospective
     method of transition, whereby we applied the recognition provisions of the
     Fair Value Method to all stock options granted after the beginning of the
     year in which we adopted such method. Accordingly, we recognize
     compensation expense in our income statement using the Fair Value Method
     only with respect to stock options issued after January 1, 2002.

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:                  2004            2003             2002
                                                                           -------------   -------------     ------------
Average estimated value per option granted, utilizing the
<S>                                                                              <C>             <C>              <C>
Black-Scholes method..............................................               $4.40           $1.95            $1.86

Assumptions used in valuing options with the Black-Scholes method:
    Expected life of options in years                                             5               5                5
    Risk-free interest rate.......................................                3.5%            3.0%             3.2%
    Expected volatility...........................................                0.210           0.180            0.170
    Expected dividend yield.......................................                7.0%            7.0%             7.0%

Net income information with respect to each year:

Net income, as reported...........................................            $366,213        $336,653         $318,738
Add back:  stock-based employee compensation expense included in net
   income.........................................................                 709             530              163
Less: stock-based employee compensation cost that would have been
   included if the fair value method were applied for all awards..                (874)         (3,311)          (3,595)
                                                                           -------------   -------------     ------------
   Net income, assuming consistent application of the fair value method       $366,048        $333,872         $315,306
                                                                           =============   =============     ============
Earnings per share, as reported:
   Basic .........................................................              $1.39           $1.29            $1.15
   Diluted........................................................              $1.38           $1.28            $1.14

Earnings per share, assuming consistent application of the fair value
method
   Basic .........................................................              $1.39           $1.27            $1.12
   Diluted........................................................              $1.38           $1.26            $1.11

</TABLE>

              Restricted Stock Units
              ----------------------

              Outstanding  restricted  stock units vest over a five-year  period
     from the date of grant at the rate of  one-fifth  per  year.  The  employee
     receives additional  compensation equal to the per-share dividends received
     by common  shareholders with respect to restricted stock units outstanding.
     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,  combined with the estimated  payroll taxes and
     other payroll  burden costs to be incurred upon vesting,  is amortized over
     the vesting period as compensation  expense.  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-35

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              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.  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. 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.

              At December  31, 2004,  approximately  252,040  restricted  stock
     units  were  outstanding  (249,000  at  December  31,  2003).  A  total  of
     $2,254,000  and $970,000 in  restricted  stock expense was recorded for the
     years  ended  December  31,  2004 and 2003,  respectively,  which  includes
     amortization  of the fair value of the grant  reflected  as an  increase to
     paid-in  capital,  as well as accrued  estimated burden to be incurred upon
     vesting.


14.  Disclosures Regarding Segment Reporting
     ---------------------------------------

              Description of Each Reportable Segment
              --------------------------------------

              Our reportable segments reflect significant operating activities
     that are evaluated separately by management. We have four reportable
     segments: self-storage operations, containerized storage operations,
     commercial property operations, and tenant reinsurance operations.

              The self-storage segment comprises the direct ownership,
     development, and operation of traditional storage facilities, and the
     ownership of equity interests in entities that own storage properties. The
     containerized storage operations represent another segment. The commercial
     property segment reflects our interest in the ownership, operation, and
     management of commercial properties. The vast majority of the commercial
     property operations are conducted through 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. The tenant reinsurance operations reflect a
     business segment that reinsures policies against losses to goods stored by
     tenants in our self-storage facilities.

              Measurement of Segment Profit or Loss
              -------------------------------------

              We evaluate performance and allocate resources based upon the net
     segment income of each segment. Net segment income represents net income in
     conformity with accounting principles generally accepted in the United
     States and our significant accounting policies as denoted in Note 2, before
     interest and other income, interest expense, corporate general and
     administrative expense, and minority interest in income. The accounting
     policies of the reportable segments are the same as those described in the
     Summary of Significant Accounting Policies.

              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 segments because
     management does not utilize them to evaluate the results of operations of
     each segment.

              Measurement of Segment Assets
              -----------------------------

              No segment data relative to assets or liabilities is presented,
     because we do not consider the historical cost of our real estate
     facilities and investments in real estate entities in evaluating the
     performance of operating management or in evaluating alternative courses of
     action. The only other types of assets that might be allocated to
     individual segments are trade receivables, payables, and other assets that
     arise in the ordinary course of business, but they are also not a
     significant factor in the measurement of segment performance.

                                      F-36
<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              Presentation of Segment Information
              -----------------------------------

              Our income statement provides most of the information required in
     order to determine the performance of each of our four segments. The
     following tables reconcile the performance of each segment, in terms of
     segment revenues and segment income, to our consolidated revenues and net
     income. It further provides detail of the segment components of the income
     statement item, "Equity in earnings of real estate entities."

              The following table reconciles revenue by segment to the Company's
consolidated revenues:

<TABLE>
<CAPTION>

Reconciliation of Revenues by Segment                Years Ended December 31,                        Years Ended December 31,
-------------------------------------       ----------------------------------------------------------------------------------------
                                               2004            2003           Change          2003            2002           Change
                                            ------------   -------------   -------------  -------------   ------------   -----------
                                                                             (amounts in thousands)
<S>                                         <C>             <C>             <C>             <C>            <C>            <C>
Self-storage facility rentals.......        $   863,463     $   798,584     $    64,879     $   798,584    $   761,446    $  37,138
Commercial property rentals.........             10,750          11,001            (251)         11,001         11,304         (303)
Containerized storage rentals.......             19,355          23,991          (4,636)         23,991         22,355        1,636
Tenant re-insurance premiums........             24,243          22,464           1,779          22,464         19,947        2,517
Interest and other income (not
  allocated to segments)............             10,165           8,628           1,537           8,628          8,661          (33)
                                            ------------   -------------   -------------  -------------   ------------   -----------
    Total revenues..................        $   927,976     $   864,668     $    63,308     $   864,668    $   823,713    $  40,955
                                            ============   =============   =============  =============   =============  ===========

</TABLE>

                                      F-37

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The following table sets forth a reconciliation of each segment's
     net income to the Company's consolidated net income:

<TABLE>
<CAPTION>

                                                Year Ended December 31,                 Year Ended December 31,
                                               ------------------------                -------------------------
                                                    2004        2003        Change          2003        2002        Change
                                               ------------- ----------  -----------   ------------  ----------   ---------
                                                                        (Dollar amounts in thousands)
  Reconciliation of Net Income by Segment:
  ---------------------------------------
  Self-storage
<S>                                               <C>         <C>         <C>             <C>         <C>          <C>
  Self-storage net operating income.........      $562,542    $517,679    $44,863         $517,679    $511,231     $6,448
  Self-storage depreciation.................      (176,488)   (176,929)       441         (176,929)   (170,887)    (6,042)
  Equity in earnings - storage property
     operations.............................         6,610       6,288        322            6,288       5,992        296
  Equity in earnings - depreciation
     (self-storage) ........................        (1,657)     (1,705)        48           (1,705)     (1,619)       (86)
  Discontinued self-storage operations......             -       6,014     (6,014)           6,014         571      5,443
                                               ------------- ----------  -----------   ------------  ----------   ---------
      Total self-storage segment net income.       391,007     351,347     39,660          351,347     345,288      6,059
                                               ------------- ----------  -----------   ------------  ----------   ---------

  Commercial properties
  Commercial properties.....................         6,422       6,418          4            6,418       7,045       (627)
  Depreciation and amortization - commercial
     properties.............................        (2,114)     (2,436)       322           (2,436)     (2,436)         -
  Equity in earnings - commercial property
     operations.............................        68,545      64,242      4,303           64,242      65,212       (970)
  Equity in earnings - depreciation
     (commercial properties) ...............       (32,063)    (26,048)    (6,015)         (26,048)    (25,459)      (589)
  Discontinued operations (Note 4) .........         1,122         237        885              237         243         (6)
                                               ------------- ----------  -----------   ------------  ----------   ---------
      Total commercial property segment net
       income...............................        41,912      42,413       (501)          42,413      44,605     (2,192)
                                               ------------- ----------  -----------   ------------  ----------   ---------
  Containerized storage
  Containerized storage net operating income         7,581      10,052     (2,471)          10,052       4,743      5,309
  Containerized storage depreciation........        (4,546)     (4,780)       234           (4,780)     (2,511)    (2,269)
  Discontinued operations (Note 4) .........        (2,351)     (2,729)       378           (2,729)    (12,290)     9,561
                                               ------------- ----------  -----------   ------------  ----------   ---------
       Total containerized storage segment
       net income/(loss)..................             684       2,543     (1,859)           2,543     (10,058)    12,601
                                               ------------- ----------  -----------   ------------  ----------   ---------
  Tenant Reinsurance
   Tenant reinsurance operating income....          10,735      10,477        258           10,477      10,536        (59)
                                               ------------- ----------  -----------   ------------  ----------   ---------
  Other items not allocated to segments
  -------------------------------------
  Equity in earnings - general and
     administrative and other...............       (18,871)    (17,811)    (1,060)         (17,811)    (14,238)    (3,573)
  Interest and other income.................        10,165       8,628      1,537            8,628       8,661        (33)
  General and administrative ...............       (18,813)    (17,127)    (1,686)         (17,127)    (15,619)    (1,508)
  Interest expense..........................          (760)     (1,121)       361           (1,121)     (3,809)     2,688
  Minority interest in income ..............       (49,913)    (43,703)    (6,210)         (43,703)    (44,087)       384
  Gain/(loss) on disposition of real estate
     and casualty loss......................            67       1,007       (940)           1,007      (2,541)     3,548
                                               ------------- ----------  -----------   ------------  ----------   ---------
      Total other items not allocated to segments  (78,125)    (70,127)    (7,998)         (70,127)    (71,633)     1,506
                                               ------------- ----------  -----------   ------------  ----------   ---------
       Total consolidated company net income      $366,213    $336,653    $29,560         $336,653    $318,738    $17,915
                                               ============= ==========  ===========   ============  ==========   =========

</TABLE>

                                      F-38

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

15.  Events Subsequent to December 31, 2004 (unaudited)
     --------------------------------------------------

              On December 22, 2004, we called for redemption all of the
     outstanding shares (total liquidation value of $54,875,000) of our 10.00%
     Cumulative Preferred Stock, Series E, at $25 per share, plus accrued
     dividends. These shares were subsequently redeemed on January 31, 2005.

              On January 18, 2005, we acquired an additional interest in one of
     the Consolidated Entities for cash totaling $4,368,000.

              In January 2005, we acquired six self-storage facilities from
     third parties with total net rentable square feet of 304,000, at an
     aggregate cost of approximately $23.6 million in cash. These property
     acquisitions were funded entirely by the Company.

              During February 2005, we called for redemption our 9.50% Series N
     Preferred Units (liquidation value of $40,000,000) and our 9.125% Series O
     Preferred Units (liquidation value of $45,000,000). Each of these
     securities will be redeemed for cash in March 2005.

              On February 15, 2005, we priced a public offering of 5,400,000
     depositary shares representing 1/1000 of a share of 6.18% Cumulative
     Preferred Stock, Series D. The offering resulted in approximately
     $130,548,000 of net proceeds and closed on February 28, 2005.

              In  January  2005,  the  Acquisition   Joint  Venture  acquired  a
     significant interest in three additional  self-storage facilities that were
     originally  acquired  by us in 2004 for an  aggregate  of $27.4  million in
     cash. As described in Note 9, our joint venture partner's interest in these
     acquisitions of approximately  $19.2 million will be accounted for as "Debt
     to Joint Venture Partner" on our balance sheet.

16.  Recent Accounting Pronouncements and Guidance
     ---------------------------------------------

     Accounting for Certain Financial  Instruments with  Characteristics of Both
     ---------------------------------------------------------------------------
     Liabilities and Equity
     ----------------------

              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 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 settling 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
     150 on July 1, 2003, and the adoption had no impact on our financial
     statements.

              The provisions of SFAS 150 indicate certain minority interests in
     consolidated entities are to be classified as liabilities at fair value.
     However, on October 29, 2003, the FASB decided to defer indefinitely the
     implementation of SFAS 150 as it relates to these minority interests.

     FASB Interpretation No. 46 - Consolidation of Variable Interest Entities
     ------------------------------------------------------------------------

              In January 2003, the FASB issued FASB Interpretation No. 46 -
     "Consolidation of Variable Interest Entities, an interpretation of
     Accounting Research Bulletin No. 51." This interpretation explains how to
     identify variable interest entities and how an enterprise assesses its
     interests in a variable interest entity to decide whether to consolidate
     that entity. In general, a variable interest entity is a corporation,
     partnership, trust, or any other legal structure used for business purposes
     that either (a) does not have equity investors with voting rights, or (b)
     has equity investors that do not provide sufficient financial resources for
     the entity to support its activities. We adopted this statement on January
     1, 2004 and the adoption had no impact on our financial statements.

                                      F-39

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

     FASB Statement 123R-Share Based Payment
     ---------------------------------------

         On December  2004,  the FASB issued  Statement of Financial  Accounting
     Standards No.  123R-"Share Based Payments" ("SFAS 123R").  The most notable
     change  in  accounting  standards  as a result  of this  statement  is that
     Companies are required to expense stock option grants to employees over the
     vesting  period.  Because  we  have  already  elected  to do so  under  the
     predecessor statement, the adoption of SFAS 123R will have no impact on our
     results of operations.

17.  Commitments and Contingencies
     -----------------------------

     LEGAL PROCEEDINGS

     Serrao v. Public Storage,  Inc. (filed April 2003)
     ---------------------------------------------------
     (Superior Court - 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,
     the Company cannot presently determine the potential damages, if any, or
     the ultimate outcome of this litigation. On November 3, 2003, the court
     granted the Company's motion to strike the plaintiff's nationwide class
     allegations and to limit any putative class to California residents only.
     The Company is vigorously contesting the claims upon which this lawsuit is
     based including class certification efforts.

     Salaam, et al v. Public Storage, Inc. (filed February 2000)
     -----------------------------------------------------------
     (Superior Court - Los Angeles County)
     -------------------------------------

              In February 2005, the plaintiffs caused these actions, which were
      described in the Company's prior reports, to be dismissed.

     Gustavson,  et al v. Public Storage, Inc. (filed June 2003) (Superior Court
     ---------------------------------------------------------------------------
     - Los Angeles  County);  Potter,  at 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 that challenged the fairness of the Company's
     acquisition of PS Insurance Company, Ltd. ("PSIC") and demanded that the
     Board recover the profits earned by PSIC from November 1995 through
     December 2001 and that the entire purchase price paid by the Company for
     PSIC in excess of PSIC's net assets be returned to the Company.

              The contract to acquire PSIC was approved by the independent
     directors of the Company in March 2001, and the transaction was closed in
     December 2001. PSIC was formerly owned by B. Wayne Hughes, currently the
     Chairman of the Board (and in 2001 also the Chief Executive Officer) of the
     Company, B. Wayne Hughes, Jr., currently a director (and in 2001 also an
     officer) of the Company and Tamara H. Gustavson, who in 2001 was an officer
     of the Company. In exchange for the Hughes family's shares in PSIC, the
     Company issued to them 1,439,765 shares of common stock (or a net of
     1,138,733 shares, after taking into account 301,032 shares held by PSIC).

                                      F-40

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

              The shareholder has threatened litigation against the Hughes
     family and the directors of the Company arising out of this transaction and
     alleged a pattern of deceptive disclosures with respect to PSIC since 1995.
     In December 2002, the Board held a special meeting to authorize an inquiry
     by its independent directors to review the fairness to the Company's
     shareholders of its acquisition of PSIC and the ability of the Company to
     have started its own tenant reinsurance business in 1995. The Company
     believes that, prior to the effectiveness in 2001 of the federal REIT
     Modernization Act and corresponding California legislation that authorized
     the creation and ownership of "taxable REIT subsidiaries," the ownership by
     the Company of a reinsurance business relating to its tenants would have
     jeopardized the Company's status as a REIT and that other REITs faced
     similar concerns about tenant insurance programs.

              In June 2003, the Hughes family filed a complaint  (Gustavson,  et
     al.  v  Public  Storage,  Inc.)  for  declaratory  relief  relating  to the
     Company's  acquisition of PSIC naming the Company as defendant.  The Hughes
     family is seeking  that the court make (i) a binding  declaration  that the
     Company either is not entitled to recover profits or other moneys earned by
     PSIC from November 1995 through December 2001; or alternatively the amounts
     that the Hughes family should be ordered to surrender to the Company if the
     court  determines  that the Company is entitled to recover any such profits
     or moneys;  and (ii) a binding  declaration  either that the Company cannot
     establish that the acquisition  agreement was not just and reasonable as to
     the  Company  at the  time it was  authorized,  approved  or  ratified;  or
     alternatively  the amounts that the Hughes family  should  surrender to the
     Company,  if the  court  determines  that  the  agreement  was not just and
     reasonable  to the Company at that time.  The Hughes  family is not seeking
     any payments  from the Company.  In the event of a  determination  that the
     Hughes  family is  obligated  to pay certain  amounts to the  Company,  the
     complaint states that they have agreed to be bound by that determination to
     pay such amounts to the Company.

              In July 2003 the Company filed an answer to the Hughes family's
     complaint requesting a final judicial determination of the Company's rights
     of recovery against the Hughes family in respect of PSIC. In September
     2003, by order of the Superior Court, Justice Malcolm Lucas, a former chief
     justice of the California Supreme Court, was appointed to try the case.
     Justice Lucas has set this matter for trial at the end of March, 2005. We
     believe that the lawsuit by the Hughes family will ultimately resolve
     matters relating to PSIC and will not have any financially adverse effect
     on the Company (other than the costs and other expenses relating to the
     lawsuit).

              At the end of  December  2004,  the same  shareholder  referred to
     above and a second shareholder filed a shareholder's  derivative  complaint
     (Potter,  et al. v Hughes,  et al.)  naming  as  defendants  the  Company's
     directors (and two former  directors) and certain  officers of the Company.
     The  matters  alleged in the Potter  complaint  relate to PSIC,  the Hughes
     family's  Canadian   mini-warehouse   operations  and  the  Company's  1995
     reorganization.  The Company is currently in the process of evaluating  the
     Potter  complaint and believes the litigation will not have any financially
     adverse  effect on the  Company  (other  than the costs and other  expenses
     relating to the lawsuit).

     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.

                                      F-41

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

     INSURANCE AND LOSS EXPOSURE

              Our facilities have historically carried comprehensive insurance,
     including fire, earthquake, liability and extended coverage through STOR-Re
     and PSIC-H, our captive insurance programs, and insure portions of these
     risks through nationally recognized insurance carriers. Our captive
     insurance programs also insure affiliates of the Company.

              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 $125,000,000 for property
     coverage and $101,000,000 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, operating through PSIC through March
     31, 2004, and through PSIC-H beginning April 1, 2004, reinsures policies
     against claims for losses to goods stored by tenants at our self-storage
     facilities. We reinsure our risks with third-party insurers from any
     individual event that exceeds a loss of $500,000, up to the policy limit of
     $10,000,000.

     DEVELOPMENT AND ACQUISITION OF REAL ESTATE FACILITIES

              We currently have 47 projects in our development pipeline,
     including newly developed facilities and expansions and enhancements to
     existing self-storage facilities. The total estimated cost of these
     facilities (unaudited) is $210,657,000, of which $47,277,000 has been spent
     at December 31, 2004. Development of these projects is subject to
     contingencies.

              In January 2005, we acquired six additional self-storage
     facilities from third parties at an aggregate cost of approximately $23.6
     million in cash, which we had contracted to purchase at December 31, 2004.

              As of  March  14,  2005 we are  under  contract  to  purchase  six
     self-storage  facilities  (total  approximate  net rentable  square feet of
     448,000) at an aggregate cost of approximately $48.1 million. We anticipate
     that  these  acquisitions  will be  funded  entirely  by us.  Each of these
     contracts  is  subject  to  significant  contingencies,  and  there  is  no
     assurance that any of these facilities will be aqcuired.

                                      F-42

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2004

18.  Supplementary quarterly financial data (unaudited)
     --------------------------------------------------

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                         -------------------------------------------------------------
                                          March 31,        June 30,      September 30,    December 31,
                                            2004             2004            2004             2004
                                         ------------    ------------   --------------   -------------
                                                     (in thousands, except per share data)
<S>                                      <C>              <C>             <C>              <C>
Revenues (a).....................        $  220,799       $  229,722      $  237,173       $  240,282
                                         ============    ============   ==============   =============
Cost of operations (a)...........        $   82,599       $   82,167      $   82,383       $   83,382
                                         ============    ============   ==============   =============
Net income.......................        $   69,067       $   92,360      $   97,515       $  107,271
                                         ============    ============   ==============   =============
Per Common Share (Note 2):
   Net income -  Basic...........        $    0.17        $    0.38       $    0.38        $    0.46
                                         ============    ============   ==============   =============
   Net income -  Diluted.........        $    0.17        $    0.37       $    0.38        $    0.46
                                         ============    ============   ==============   =============

</TABLE>


<TABLE>
<CAPTION>
                                                              Three Months Ended
                                         -------------------------------------------------------------
                                          March 31,        June 30,      September 30,    December 31,
                                            2003             2003            2003             2003
                                         ------------    ------------   --------------   -------------
                                                     (in thousands, except per share data)
<S>                                      <C>             <C>              <C>              <C>
Revenues (a).....................        $  204,913      $   214,360      $  224,842       $  220,553
                                         ============    ============   ==============   =============
Cost of operations (a)...........        $   72,499      $    77,964      $   78,951       $   82,000
                                         ============    ============   ==============   =============
Net income.......................        $   76,639      $    84,297      $   89,747       $   85,970
                                         ============    ============   ==============   =============
Per Common Share (Note 2):
   Net income - Basic............        $    0.26       $     0.34       $    0.39        $    0.31
                                         ============    ============   ==============   =============
   Net income - Diluted..........        $    0.26       $     0.33       $    0.39        $    0.30
                                         ============    ============   ==============   =============

</TABLE>

       (a) Revenues  and cost of  operations  as  presented in this table differ
           from the revenue and cost of operations as presented in the Company's
           quarterly  reports  due  primarily  to  the  impact  of  discontinued
           operations  accounting with respect to certain  containerized storage
           facilities  that  were  closed  in  2004,  as  described  in  Note 4.

                                      F-43

<PAGE>

                              PUBLIC STORAGE, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

Self-storage properties

<S>       <C>                                       <C>      <C>          <C>             <C>              <C>
  1/1/81  Newport News / Jefferson Avenue           $-       $108         $1,071          $629             $-
  1/1/81  Virginia Beach / Diamond Springs           -        186          1,094           737              -
  8/1/81  San Jose / Snell                           -        312          1,815           412              -
 10/1/81  Tampa / Lazy Lane                          -        282          1,899           650              -
  6/1/82  San Jose / Tully                           -        645          1,579        10,656              -
  6/1/82  San Carlos / Storage                       -        780          1,387           592              -
  6/1/82  Mountain View                              -      1,180          1,182           255              -
  6/1/82  Cupertino / Storage                        -        572          1,270           540              -
 10/1/82  Sorrento Valley                            -      1,002          1,343         (804)              -
 10/1/82  Northwood                                  -      1,034          1,522           365              -
 12/1/82  Port/Halsey                                -        357          1,150         (393)            326
 12/1/82  Sacto/Folsom                               -        396            329           675            323
  1/1/83  Platte                                     -        409            953           547            428
  1/1/83  Semoran                                    -        442          1,882         6,088            720
  1/1/83  Raleigh/Yonkers                            -        203            914           485            425
  3/1/83  Blackwood                                  -        213          1,559           331            595
  4/1/83  Vailsgate                                  -        103            990           839            505
  5/1/83  Delta Drive                                -         67            481           324            241
  6/1/83  Ventura                                    -        658          1,734           339            583
  9/1/83  Southington                                -        124          1,233           382            546
  9/1/83  Southhampton                               -        331          1,738           686            806
  9/1/83  Webster/Keystone                           -        449          1,688           737            813
  9/1/83  Dover                                      -        107          1,462           507            627
  9/1/83  Newcastle                                  -        227          2,163           484            817
  9/1/83  Newark                                     -        208          2,031           380            746
  9/1/83  Langhorne                                  -        263          3,549           534          1,445
  9/1/83  Hobart                                     -        215          1,491           727            838
  9/1/83  Ft. Wayne/W. Coliseum                      -        160          1,395           475            535
  9/1/83  Ft. Wayne/Bluffton                         -         88            675           303            285
 10/1/83  Orlando J. Y. Parkway                      -        383          1,512           437            622
 11/1/83  Aurora                                     -        505            758           365            341
 11/1/83  Campbell                                   -      1,379          1,849         (466)            474
 11/1/83  Col Springs/Ed                             -        471          1,640           224            554
 11/1/83  Col Springs/Mv                             -        320          1,036           303            441
 11/1/83  Thorton                                    -        418          1,400           184            536
 11/1/83  Oklahoma City                              -        454          1,030           921            620
 11/1/83  Tucson                                     -        343            778           672            420

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

Miniwarehouses

<S>       <C>                                        <C>      <C>        <C>           <C>
  1/1/81  Newport News / Jefferson Avenue            $108     $1,700     $1,808        $1,515
  1/1/81  Virginia Beach / Diamond Springs            186      1,831      2,017         1,598
  8/1/81  San Jose / Snell                            312      2,227      2,539         1,986
 10/1/81  Tampa / Lazy Lane                           282      2,549      2,831         2,257
  6/1/82  San Jose / Tully                          2,990      9,890     12,880         2,836
  6/1/82  San Carlos / Storage                        780      1,979      2,759         1,710
  6/1/82  Mountain View                             1,046      1,571      2,617         1,364
  6/1/82  Cupertino / Storage                         572      1,810      2,382         1,510
 10/1/82  Sorrento Valley                             651        890      1,541           752
 10/1/82  Northwood                                 1,034      1,887      2,921         1,568
 12/1/82  Port/Halsey                                 357      1,083      1,440           765
 12/1/82  Sacto/Folsom                                396      1,327      1,723           950
  1/1/83  Platte                                      409      1,928      2,337         1,263
  1/1/83  Semoran                                     442      8,690      9,132         2,730
  1/1/83  Raleigh/Yonkers                             203      1,824      2,027         1,313
  3/1/83  Blackwood                                   213      2,485      2,698         1,693
  4/1/83  Vailsgate                                   103      2,334      2,437         1,400
  5/1/83  Delta Drive                                  68      1,045      1,113           670
  6/1/83  Ventura                                     658      2,656      3,314         1,737
  9/1/83  Southington                                 123      2,162      2,285         1,428
  9/1/83  Southhampton                                331      3,230      3,561         2,217
  9/1/83  Webster/Keystone                            449      3,238      3,687         2,251
  9/1/83  Dover                                       107      2,596      2,703         1,752
  9/1/83  Newcastle                                   227      3,464      3,691         2,321
  9/1/83  Newark                                      208      3,157      3,365         2,109
  9/1/83  Langhorne                                   263      5,528      5,791         3,752
  9/1/83  Hobart                                      215      3,056      3,271         2,045
  9/1/83  Ft. Wayne/W. Coliseum                       160      2,405      2,565         1,524
  9/1/83  Ft. Wayne/Bluffton                           88      1,263      1,351           788
 10/1/83  Orlando J. Y. Parkway                       383      2,571      2,954         1,717
 11/1/83  Aurora                                      505      1,464      1,969           967
 11/1/83  Campbell                                  1,379      1,857      3,236         1,259
 11/1/83  Col Springs/Ed                              471      2,418      2,889         1,632
 11/1/83  Col Springs/Mv                              320      1,780      2,100         1,191
 11/1/83  Thorton                                     418      2,120      2,538         1,424
 11/1/83  Oklahoma City                               454      2,571      3,025         1,717
 11/1/83  Tucson                                      343      1,870      2,213         1,222

                                       F-44
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>           <C>            <C>
 11/1/83  Webster/Nasa                               -      1,570          2,457         1,089          1,372
 12/1/83  Charlotte                                  -        165          1,274           480            442
 12/1/83  Greensboro/Market                          -        214          1,653           740            794
 12/1/83  Greensboro/Electra                         -        112            869           390            382
 12/1/83  Columbia                                   -        171          1,318           519            492
 12/1/83  Richmond                                   -        176          1,360           573            468
 12/1/83  Augusta                                    -         97            747           361            324
 12/1/83  Tacoma                                     -        553          1,173           462            487
  1/1/84  Fremont/Albrae                             -        636          1,659           507            532
  1/1/84  Belton                                     -        175            858           768            378
  1/1/84  Gladstone                                  -        275          1,799           570            640
  1/1/84  Hickman/112                                -        257          1,848           537            618
  1/1/84  Holmes                                     -        289          1,333           447            455
  1/1/84  Independence                               -        221          1,848           394            609
  1/1/84  Merriam                                    -        255          1,469           447            480
  1/1/84  Olathe                                     -        107            992           379            361
  1/1/84  Shawnee                                    -        205          1,420           498            502
  1/1/84  Topeka                                     -         75          1,049           291            356
  3/1/84  Marrietta/Cobb                             -         73            542           358            259
  3/1/84  Manassas                                   -        320          1,556           460            553
  3/1/84  Pico Rivera                                -        743            807           364            321
  4/1/84  Providence                                 -         92          1,087           476            423
  4/1/84  Milwaukie/Oregon                           -        289            584           299            311
  5/1/84  Raleigh/Departure                          -        302          2,484           577            788
  5/1/84  Virginia Beach                             -        509          2,121           807            776
  5/1/84  Philadelphia/Grant                         -      1,041          3,262           683            971
  5/1/84  Garland                                    -        356            844           262            360
  6/1/84  Lorton                                     -        435          2,040           764            682
  6/1/84  Baltimore                                  -        382          1,793           927            634
  6/1/84  Laurel                                     -        501          2,349           811            824
  6/1/84  Delran                                     -        279          1,472           394            573
  6/1/84  Orange Blossom                             -        226            924           260            398
  6/1/84  Cincinnati                                 -        402          1,573           659            672
  6/1/84  Florence                                   -        185            740           514            376
  7/1/84  Trevose/Old Lincoln                        -        421          1,749           466            582
  8/1/84  Medley                                     -        584          1,016           441            464
  8/1/84  Oklahoma City                              -        340          1,310           622            652

</TABLE>


<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             --------------------------------------------------

<S>       <C>                                        <C>        <C>        <C>           <C>
 11/1/83  Webster/Nasa                               1,571      4,917      6,488         3,412
 12/1/83  Charlotte                                    165      2,196      2,361         1,569
 12/1/83  Greensboro/Market                            214      3,187      3,401         2,279
 12/1/83  Greensboro/Electra                           112      1,641      1,753         1,169
 12/1/83  Columbia                                     171      2,329      2,500         1,683
 12/1/83  Richmond                                     176      2,401      2,577         1,619
 12/1/83  Augusta                                       97      1,432      1,529         1,024
 12/1/83  Tacoma                                       553      2,122      2,675         1,527
  1/1/84  Fremont/Albrae                               636      2,698      3,334         1,946
  1/1/84  Belton                                       175      2,004      2,179         1,376
  1/1/84  Gladstone                                    275      3,009      3,284         2,112
  1/1/84  Hickman/112                                  257      3,003      3,260         2,116
  1/1/84  Holmes                                       289      2,235      2,524         1,558
  1/1/84  Independence                                 221      2,851      3,072         2,027
  1/1/84  Merriam                                      255      2,396      2,651         1,699
  1/1/84  Olathe                                       107      1,732      1,839         1,222
  1/1/84  Shawnee                                      205      2,420      2,625         1,702
  1/1/84  Topeka                                        75      1,696      1,771         1,193
  3/1/84  Marrietta/Cobb                                73      1,159      1,232           826
  3/1/84  Manassas                                     320      2,569      2,889         1,792
  3/1/84  Pico Rivera                                  743      1,492      2,235         1,093
  4/1/84  Providence                                    92      1,986      2,078         1,386
  4/1/84  Milwaukie/Oregon                             289      1,194      1,483           844
  5/1/84  Raleigh/Departure                            302      3,849      4,151         2,684
  5/1/84  Virginia Beach                               499      3,714      4,213         2,545
  5/1/84  Philadelphia/Grant                         1,040      4,917      5,957         3,371
  5/1/84  Garland                                      356      1,466      1,822           986
  6/1/84  Lorton                                       435      3,486      3,921         2,322
  6/1/84  Baltimore                                    382      3,354      3,736         2,279
  6/1/84  Laurel                                       501      3,984      4,485         2,733
  6/1/84  Delran                                       279      2,439      2,718         1,592
  6/1/84  Orange Blossom                               226      1,582      1,808         1,060
  6/1/84  Cincinnati                                   402      2,904      3,306         1,935
  6/1/84  Florence                                     185      1,630      1,815         1,066
  7/1/84  Trevose/Old Lincoln                          421      2,797      3,218         1,949
  8/1/84  Medley                                       584      1,921      2,505         1,260
  8/1/84  Oklahoma City                                340      2,584      2,924         1,708

</TABLE>

                                       F-45
<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>          <C>
  8/1/84  Newport News                               -        356          2,395           792          1,013
  8/1/84  Kaplan/Walnut Hill                         -        971          2,359           959          1,041
  8/1/84  Kaplan/Irving                              -        677          1,592         4,659            639
  9/1/84  Cockrell Hill                              -        380            913         1,160            675
 11/1/84  Omaha                                      -        109            806           535            399
 11/1/84  Hialeah                                    -        886          1,784           421            672
 12/1/84  Austin/Lamar                               -        643            947           564            443
 12/1/84  Pompano                                    -        399          1,386           686            698
 12/1/84  Fort Worth                                 -        122            928            65            303
 12/1/84  Montgomeryville                            -        215          2,085           462            776
  1/1/85  Cranston                                   -        175            722           375            267
  1/1/85  Bossier City                               -        184          1,542           569            656
  2/1/85  Simi Valley                                -        737          1,389           384            520
  2/1/85  Hurst                                      -        231          1,220           260            480
  3/1/85  Chattanooga                                -        202          1,573           565            683
  3/1/85  Portland                                   -        285            941           362            438
  3/1/85  Fern Park                                  -        144          1,107           248            432
  3/1/85  Fairfield                                  -        338          1,187           530            527
  3/1/85  Houston / Westheimer                       -        850          1,179           804              -
  4/1/85  Austin/ S. First                           -        778          1,282           382            711
  4/1/85  Cincinnati/ E. Kemper                      -        232          1,573           329            853
  4/1/85  Cincinnati/ Colerain                       -        253          1,717           422            932
  4/1/85  Florence/ Tanner Lane                      -        218          1,477           413            835
  4/1/85  Laguna Hills                               -      1,224          3,303           499          1,213
  5/1/85  Tacoma/ Phillips Rd.                       -        396          1,204           324            669
  5/1/85  Milwaukie/ Mcloughlin                      -        458            742           428            620
  5/1/85  Manchester/ S. Willow                      -        371          2,129          (73)            854
  5/1/85  Longwood                                   -        355          1,645           359            669
  5/1/85  Columbus/Busch Blvd.                       -        202          1,559           457            592
  5/1/85  Columbus/Kinnear Rd.                       -        241          1,865           430            771
  5/1/85  Worthington                                -        221          1,824           578            709
  5/1/85  Arlington                                  -        201          1,497           581            618
  6/1/85  N. Hollywood/ Raymer                       -        967            848           271            515
  6/1/85  Grove City/ Marlane Drive                  -        150          1,157           518            471
  6/1/85  Reynoldsburg                               -        204          1,568           576            598
  7/1/85  San Diego/ Kearny Mesa Rd                  -        783          1,750           364            962
  7/1/85  Scottsdale/ 70th St                        -        632          1,368           378            742

</TABLE>
<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                           (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>           <C>
  8/1/84  Newport News                                356      4,200      4,556         2,764
  8/1/84  Kaplan/Walnut Hill                          971      4,359      5,330         2,880
  8/1/84  Kaplan/Irving                               678      6,889      7,567         2,295
  9/1/84  Cockrell Hill                               380      2,748      3,128         1,836
 11/1/84  Omaha                                       109      1,740      1,849         1,158
 11/1/84  Hialeah                                     886      2,877      3,763         1,885
 12/1/84  Austin/Lamar                                643      1,954      2,597         1,253
 12/1/84  Pompano                                     399      2,770      3,169         1,836
 12/1/84  Fort Worth                                  122      1,296      1,418           850
 12/1/84  Montgomeryville                             215      3,323      3,538         2,130
  1/1/85  Cranston                                    175      1,364      1,539           922
  1/1/85  Bossier City                                184      2,767      2,951         1,811
  2/1/85  Simi Valley                                 737      2,293      3,030         1,477
  2/1/85  Hurst                                       231      1,960      2,191         1,279
  3/1/85  Chattanooga                                 202      2,821      3,023         1,799
  3/1/85  Portland                                    285      1,741      2,026         1,113
  3/1/85  Fern Park                                   144      1,787      1,931         1,164
  3/1/85  Fairfield                                   338      2,244      2,582         1,421
  3/1/85  Houston / Westheimer                        850      1,983      2,833         1,600
  4/1/85  Austin/ S. First                            778      2,375      3,153         1,429
  4/1/85  Cincinnati/ E. Kemper                       232      2,755      2,987         1,620
  4/1/85  Cincinnati/ Colerain                        253      3,071      3,324         1,803
  4/1/85  Florence/ Tanner Lane                       218      2,725      2,943         1,600
  4/1/85  Laguna Hills                              1,225      5,014      6,239         3,225
  5/1/85  Tacoma/ Phillips Rd.                        396      2,197      2,593         1,287
  5/1/85  Milwaukie/ Mcloughlin                       458      1,790      2,248         1,057
  5/1/85  Manchester/ S. Willow                       371      2,910      3,281         1,690
  5/1/85  Longwood                                    355      2,673      3,028         1,712
  5/1/85  Columbus/Busch Blvd.                        202      2,608      2,810         1,648
  5/1/85  Columbus/Kinnear Rd.                        241      3,066      3,307         1,955
  5/1/85  Worthington                                 221      3,111      3,332         1,901
  5/1/85  Arlington                                   201      2,696      2,897         1,670
  6/1/85  N. Hollywood/ Raymer                        967      1,634      2,601           984
  6/1/85  Grove City/ Marlane Drive                   150      2,146      2,296         1,306
  6/1/85  Reynoldsburg                                204      2,742      2,946         1,684
  7/1/85  San Diego/ Kearny Mesa Rd                   783      3,076      3,859         1,830
  7/1/85  Scottsdale/ 70th St                         632      2,488      3,120         1,422

</TABLE>

                                       F-46

<PAGE>

<TABLE>
<CAPTION>
                                                                                               Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>            <C>           <C>            <C>
  7/1/85  Concord/ Hwy 29                            -        150            750           453            587
  7/1/85  Columbus/Morse Rd.                         -        195          1,510           450            670
  7/1/85  Columbus/Kenney Rd.                        -        199          1,531           553            598
  7/1/85  Westerville                                -        199          1,517           657            620
  7/1/85  Springfield                                -         90            699           411            332
  7/1/85  Dayton/Needmore Road                       -        144          1,108           522            460
  7/1/85  Dayton/Executive Blvd.                     -        160          1,207           478            569
  7/1/85  Lilburn                                    -        331            969           263            424
  9/1/85  Madison/ Copps Ave.                        -        450          1,150           468            665
  9/1/85  Columbus/ Sinclair                         -        307            893           367            519
  9/1/85  Philadelphia/ Tacony St                    -        118          1,782           304            856
 10/1/85  N. Hollywood/ Whitsett                     -      1,524          2,576           399          1,302
 10/1/85  Portland/ SE 82nd St                       -        354            496           376            380
 10/1/85  Columbus/ Ambleside                        -        124          1,526           137            644
 10/1/85  Indianapolis/ Pike Place                   -        229          1,531           571            856
 10/1/85  Indianapolis/ Beach Grove                  -        198          1,342           282            709
 10/1/85  Hartford/ Roberts                          -        219          1,481           445            966
 10/1/85  Wichita/ S. Rock Rd.                       -        501          1,478           292            657
 10/1/85  Wichita/ E. Harry                          -        313          1,050           180            468
 10/1/85  Wichita/ S. Woodlawn                       -        263            905           164            437
 10/1/85  Wichita/ E. Kellogg                        -        185            658           (6)            261
 10/1/85  Wichita/ S. Tyler                          -        294          1,004           145            530
 10/1/85  Wichita/ W. Maple                          -        234            805          (23)            313
 10/1/85  Wichita/ Carey Lane                        -        192            674            52            296
 10/1/85  Wichita/ E. Macarthur                      -        220            775          (70)            323
 10/1/85  Joplin/ S. Range Line                      -        264            904           225            465
 10/1/85  San Antonio/ Wetmore Rd.                   -        306          1,079           560            638
 10/1/85  San Antonio/ Callaghan                     -        288          1,016           452            543
 10/1/85  San Antonio/ Zarzamora                     -        364          1,281           642            674
 10/1/85  San Antonio/ Hackberry                     -        388          1,367         2,531          1,001
 10/1/85  San Antonio/ Fredericksburg                -        287          1,009           548            597
 10/1/85  Dallas/ S. Westmoreland                    -        474          1,670           217            734
 10/1/85  Dallas/ Alvin St.                          -        359          1,266           191            559
 10/1/85  Fort Worth/ W. Beach St.                   -        356          1,252           212            531
 10/1/85  Fort Worth/ E. Seminary                    -        382          1,346           224            552
 10/1/85  Fort Worth/ Cockrell St.                   -        323          1,136           219            515
 11/1/85  Everett/ Evergreen                         -        706          2,294           597          1,076

</TABLE>

<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                   (Dollar amounts in thousands)
                                              -------------------------------------------------

<S>       <C>                                          <C>      <C>        <C>           <C>
  7/1/85  Concord/ Hwy 29                              150      1,790      1,940         1,069
  7/1/85  Columbus/Morse Rd.                           195      2,630      2,825         1,695
  7/1/85  Columbus/Kenney Rd.                          199      2,682      2,881         1,669
  7/1/85  Westerville                                  199      2,794      2,993         1,698
  7/1/85  Springfield                                   90      1,442      1,532           899
  7/1/85  Dayton/Needmore Road                         144      2,090      2,234         1,278
  7/1/85  Dayton/Executive Blvd.                       159      2,255      2,414         1,447
  7/1/85  Lilburn                                      330      1,657      1,987         1,063
  9/1/85  Madison/ Copps Ave.                          450      2,283      2,733         1,303
  9/1/85  Columbus/ Sinclair                           307      1,779      2,086         1,036
  9/1/85  Philadelphia/ Tacony St                      118      2,942      3,060         1,719
 10/1/85  N. Hollywood/ Whitsett                     1,524      4,277      5,801         2,505
 10/1/85  Portland/ SE 82nd St                         354      1,252      1,606           733
 10/1/85  Columbus/ Ambleside                          124      2,307      2,431         1,276
 10/1/85  Indianapolis/ Pike Place                     229      2,958      3,187         1,537
 10/1/85  Indianapolis/ Beach Grove                    198      2,333      2,531         1,347
 10/1/85  Hartford/ Roberts                            219      2,892      3,111         1,620
 10/1/85  Wichita/ S. Rock Rd.                         642      2,286      2,928         1,310
 10/1/85  Wichita/ E. Harry                            285      1,726      2,011         1,008
 10/1/85  Wichita/ S. Woodlawn                         263      1,506      1,769           871
 10/1/85  Wichita/ E. Kellogg                          185        913      1,098           541
 10/1/85  Wichita/ S. Tyler                            294      1,679      1,973         1,011
 10/1/85  Wichita/ W. Maple                            234      1,095      1,329           652
 10/1/85  Wichita/ Carey Lane                          192      1,022      1,214           609
 10/1/85  Wichita/ E. Macarthur                        220      1,028      1,248           602
 10/1/85  Joplin/ S. Range Line                        264      1,594      1,858           933
 10/1/85  San Antonio/ Wetmore Rd.                     306      2,277      2,583         1,324
 10/1/85  San Antonio/ Callaghan                       288      2,011      2,299         1,194
 10/1/85  San Antonio/ Zarzamora                       364      2,597      2,961         1,502
 10/1/85  San Antonio/ Hackberry                       389      4,898      5,287         1,782
 10/1/85  San Antonio/ Fredericksburg                  287      2,154      2,441         1,261
 10/1/85  Dallas/ S. Westmoreland                      474      2,621      3,095         1,579
 10/1/85  Dallas/ Alvin St.                            359      2,016      2,375         1,231
 10/1/85  Fort Worth/ W. Beach St.                     356      1,995      2,351         1,204
 10/1/85  Fort Worth/ E. Seminary                      382      2,122      2,504         1,289
 10/1/85  Fort Worth/ Cockrell St.                     323      1,870      2,193         1,126
 11/1/85  Everett/ Evergreen                           706      3,967      4,673         2,420

</TABLE>

                                       F-47

<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>          <C>
 11/1/85  Seattle/ Empire Way                        -      1,652          5,348           740          2,198
 12/1/85  Milpitas                                   -      1,623          1,577           336            913
 12/1/85  Pleasanton/ Santa Rita                     -      1,226          2,078           423          1,160
 12/1/85  Amherst/ Niagra Falls                      -        132            701           298            400
 12/1/85  West Sams Blvd.                            -        164          1,159         (235)            383
 12/1/85  MacArthur Rd.                              -        204          1,628           237            638
 12/1/85  Brockton/ Main                             -        153          2,020         (171)            678
 12/1/85  Eatontown/ Hwy 35                          -        308          4,067           635          1,648
 12/1/85  Denver/ Leetsdale                          -        603            847           266            408
  1/1/86  Mapleshade/ Rudderow                       -        362          1,811           380            825
  1/1/86  Bordentown/ Groveville                     -        196            981           192            471
  1/1/86  Sun Valley/ Sheldon                        -        544          1,836           389            793
  1/1/86  Las Vegas/ Highland                        -        432            848           314            420
  2/1/86  Costa Mesa/ Pomona                         -      1,405          1,520           405            693
  2/1/86  Brea/ Imperial Hwy                         -      1,069          2,165           420            954
  2/1/86  Skokie/ McCormick                          -        638          1,912           325            779
  2/1/86  Colorado Springs/ Sinton                   -        535          1,115           430            631
  2/1/86  Oklahoma City/ Penn                        -        146            829           172            406
  2/1/86  Oklahoma City/ 39th                        -        238            812           350            477
  3/1/86  Jacksonville/ Wiley                        -        140            510           303            331
  3/1/86  St. Louis/ Forder                          -        517          1,133           342            534
  3/3/86  Tampa / 56th                               -        450          1,360           583              -
  4/1/86  Reno/ Telegraph                            -        649          1,051           527            682
  4/1/86  St. Louis/Kirkham                          -        199          1,001           238            401
  4/1/86  St. Louis/Reavis                           -        192            958           256            384
  4/1/86  Fort Worth/East Loop                       -        196            804           270            369
  5/1/86  Westlake Village                           -      1,205            995           255            429
  5/1/86  Sacramento/Franklin Blvd.                  -        872            978         3,271            389
  6/1/86  Richland Hills                             -        543            857           464            404
  6/1/86  West Valley/So. 3600                       -        208          1,552           466            413
  7/1/86  Colorado Springs/ Hollow Tree              -        574            726           330            426
  7/1/86  West LA/Purdue Ave.                        -      2,415          3,585           260          1,212
  7/1/86  Capital Heights/Central Ave.               -        649          3,851           445          1,277
  7/1/86  Pontiac/Dixie Hwy.                         -        259          2,091           180            756
  7/1/86  Portland/Johns Landing Area                -        663          1,637          (19)            538
  8/1/86  Laurel/Ft. Meade Rd.                       -        475          1,475           351            630
  8/1/86  Hammond / Calumet                          -         97            751           549            366

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>           <C>
 11/1/85  Seattle/ Empire Way                       1,652      8,286      9,938         5,008
 12/1/85  Milpitas                                  1,623      2,826      4,449         1,607
 12/1/85  Pleasanton/ Santa Rita                    1,226      3,661      4,887         2,086
 12/1/85  Amherst/ Niagra Falls                       132      1,399      1,531           840
 12/1/85  West Sams Blvd.                             164      1,307      1,471           800
 12/1/85  MacArthur Rd.                               204      2,503      2,707         1,486
 12/1/85  Brockton/ Main                              153      2,527      2,680         1,526
 12/1/85  Eatontown/ Hwy 35                           308      6,350      6,658         3,760
 12/1/85  Denver/ Leetsdale                           603      1,521      2,124           904
  1/1/86  Mapleshade/ Rudderow                        362      3,016      3,378         1,778
  1/1/86  Bordentown/ Groveville                      196      1,644      1,840           976
  1/1/86  Sun Valley/ Sheldon                         544      3,018      3,562         1,820
  1/1/86  Las Vegas/ Highland                         432      1,582      2,014           937
  2/1/86  Costa Mesa/ Pomona                        1,405      2,618      4,023         1,575
  2/1/86  Brea/ Imperial Hwy                        1,069      3,539      4,608         2,126
  2/1/86  Skokie/ McCormick                           638      3,016      3,654         1,778
  2/1/86  Colorado Springs/ Sinton                    535      2,176      2,711         1,222
  2/1/86  Oklahoma City/ Penn                         146      1,407      1,553           845
  2/1/86  Oklahoma City/ 39th                         238      1,639      1,877           988
  3/1/86  Jacksonville/ Wiley                         140      1,144      1,284           690
  3/1/86  St. Louis/ Forder                           517      2,009      2,526         1,189
  3/3/86  Tampa / 56th                                450      1,943      2,393         1,429
  4/1/86  Reno/ Telegraph                             649      2,260      2,909         1,374
  4/1/86  St. Louis/Kirkham                           199      1,640      1,839         1,010
  4/1/86  St. Louis/Reavis                            192      1,598      1,790           971
  4/1/86  Fort Worth/East Loop                        196      1,443      1,639           899
  5/1/86  Westlake Village                          1,205      1,679      2,884           974
  5/1/86  Sacramento/Franklin Blvd.                 1,139      4,371      5,510         1,505
  6/1/86  Richland Hills                              543      1,725      2,268         1,080
  6/1/86  West Valley/So. 3600                        208      2,431      2,639         1,451
  7/1/86  Colorado Springs/ Hollow Tree               574      1,482      2,056           852
  7/1/86  West LA/Purdue Ave.                       2,416      5,056      7,472         3,037
  7/1/86  Capital Heights/Central Ave.                649      5,573      6,222         3,322
  7/1/86  Pontiac/Dixie Hwy.                          259      3,027      3,286         1,798
  7/1/86  Portland/Johns Landing Area                 663      2,156      2,819         1,345
  8/1/86  Laurel/Ft. Meade Rd.                        475      2,456      2,931         1,444
  8/1/86  Hammond / Calumet                            97      1,666      1,763         1,016

</TABLE>

                                       F-48

<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>            <C>
  9/1/86  Kansas City/S. 44th.                       -        509          1,906           571            737
  9/1/86  Lakewood / Wadsworth - 6th                 -      1,070          3,155           739          1,027
 10/1/86  Peralta/Fremont                            -        851          1,074           334            456
 10/1/86  Birmingham/Highland                        -         89            786           251            398
 10/1/86  Birmingham/Riverchase                      -        262          1,338           462            645
 10/1/86  Birmingham/Eastwood                        -        166          1,184           346            612
 10/1/86  Birmingham/Forestdale                      -        152            948           287            519
 10/1/86  Birmingham/Centerpoint                     -        265          1,305           383            525
 10/1/86  Birmingham/Roebuck Plaza                   -        101            399           314            425
 10/1/86  Birmingham/Greensprings                    -        347          1,173           364            281
 10/1/86  Birmingham/Hoover-Lorna                    -        372          1,128           404            431
 10/1/86  Midfield/Bessemer                          -        170            355           360            112
 10/1/86  Huntsville/Leeman Ferry Rd.                -        158            992           308            558
 10/1/86  Huntsville/Drake                           -        253          1,172           308            538
 10/1/86  Anniston/Whiteside                         -         59            566           211            329
 10/1/86  Houston/Glenvista                          -        595          1,043           698            494
 10/1/86  Houston/I-45                               -        704          1,146           846            604
 10/1/86  Houston/Rogerdale                          -      1,631          2,792           709          1,232
 10/1/86  Houston/Gessner                            -      1,032          1,693         1,049            746
 10/1/86  Houston/Richmond-Fairdale                  -      1,502          2,506         1,197          1,160
 10/1/86  Houston/Gulfton                            -      1,732          3,036         1,159          1,398
 10/1/86  Houston/Westpark                           -        503            854           229            435
 10/1/86  Jonesboro                                  -        157            718           257            370
 10/1/86  Houston / South Loop West                  -      1,299          3,491         1,269          1,366
 10/1/86  Houston / Plainfield Road                  -        904          2,319           862            920
 10/1/86  Houston / North Freeway                    -        719          1,987           128            609
 10/1/86  Houston / Old Katy Road                    -      1,365          3,431         1,065          1,274
 10/1/86  Houston / Long Point                       -        451          1,187           647            563
 10/1/86  Austin / Research Blvd                     -      1,390          1,710           588            672
 11/1/86  Arleta / Osborne Street                    -        987            663           290            290
 12/1/86  Lynnwood / 196th Street                    -      1,063          1,602         7,256            571
 12/1/86  N. Auburn / Auburn Way N                   -        606          1,144           454            533
 12/1/86  Gresham / Burnside & 202nd                 -        351          1,056           427            482
 12/1/86  Denver / Sheridan Boulevard                -      1,033          2,792           971          1,007
 12/1/86  Marietta / Cobb Parkway                    -        536          2,764           821          1,016
 12/1/86  Hillsboro / T.V. Highway                   -        461            574           270            414
 12/1/86  San Antonio / West Sunset Road             -      1,206          1,594           579            649

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   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.                        509      3,214      3,723         1,941
  9/1/86  Lakewood / Wadsworth - 6th                1,070      4,921      5,991         3,104
 10/1/86  Peralta/Fremont                             851      1,864      2,715         1,108
 10/1/86  Birmingham/Highland                         150      1,374      1,524           855
 10/1/86  Birmingham/Riverchase                       278      2,429      2,707         1,482
 10/1/86  Birmingham/Eastwood                         232      2,076      2,308         1,245
 10/1/86  Birmingham/Forestdale                       190      1,716      1,906         1,027
 10/1/86  Birmingham/Centerpoint                      273      2,205      2,478         1,287
 10/1/86  Birmingham/Roebuck Plaza                    340        899      1,239           543
 10/1/86  Birmingham/Greensprings                      16      2,149      2,165         1,284
 10/1/86  Birmingham/Hoover-Lorna                     266      2,069      2,335         1,232
 10/1/86  Midfield/Bessemer                            95        902        997           532
 10/1/86  Huntsville/Leeman Ferry Rd.                 198      1,818      2,016         1,117
 10/1/86  Huntsville/Drake                            248      2,023      2,271         1,196
 10/1/86  Anniston/Whiteside                          107      1,058      1,165           663
 10/1/86  Houston/Glenvista                           595      2,235      2,830         1,325
 10/1/86  Houston/I-45                                704      2,596      3,300         1,669
 10/1/86  Houston/Rogerdale                         1,631      4,733      6,364         2,786
 10/1/86  Houston/Gessner                           1,032      3,488      4,520         2,146
 10/1/86  Houston/Richmond-Fairdale                 1,502      4,863      6,365         2,931
 10/1/86  Houston/Gulfton                           1,732      5,593      7,325         3,363
 10/1/86  Houston/Westpark                            503      1,518      2,021           904
 10/1/86  Jonesboro                                   157      1,345      1,502           820
 10/1/86  Houston / South Loop West                 1,299      6,126      7,425         3,947
 10/1/86  Houston / Plainfield Road                   904      4,101      5,005         2,623
 10/1/86  Houston / North Freeway                     661      2,782      3,443         1,796
 10/1/86  Houston / Old Katy Road                   1,365      5,770      7,135         3,755
 10/1/86  Houston / Long Point                        451      2,397      2,848         1,598
 10/1/86  Austin / Research Blvd                    1,390      2,970      4,360         1,898
 11/1/86  Arleta / Osborne Street                     987      1,243      2,230           799
 12/1/86  Lynnwood / 196th Street                   1,405      9,087     10,492         2,374
 12/1/86  N. Auburn / Auburn Way N                    606      2,131      2,737         1,368
 12/1/86  Gresham / Burnside & 202nd                  351      1,965      2,316         1,247
 12/1/86  Denver / Sheridan Boulevard               1,033      4,770      5,803         2,964
 12/1/86  Marietta / Cobb Parkway                     536      4,601      5,137         2,894
 12/1/86  Hillsboro / T.V. Highway                    461      1,258      1,719           911
 12/1/86  San Antonio / West Sunset Road            1,207      2,821      4,028         1,789

</TABLE>

                                       F-49

<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 12/31/86 Monrovia / Myrtle Avenue                   -      1,149          2,446           218              -
 12/31/86 Chatsworth / Topanga                       -      1,447          1,243         3,319              -
 12/31/86 Houston / Larkwood                         -        247            602           399              -
 12/31/86 Northridge                                 -      3,624          1,922         2,497              -
 12/31/86 Santa Clara / Duane                        -      1,950          1,004           413              -
 12/31/86 Oyster Point                               -      1,569          1,490           461              -
 12/31/86 Walnut                                     -        767            613         3,600              -
  3/1/87  Annandale / Ravensworth                    -        679          1,621           336            596
  4/1/87  City Of Industry / Amar                    -        748          2,052           514            702
  5/1/87  Oklahoma City / W. Hefner                  -        459            941           359            417
  7/1/87  Oakbrook Terrace                           -        912          2,688           175            399
  8/1/87  San Antonio/Austin Hwy.                    -        400            850           (4)            164
 10/1/87  Plantation/S. State Rd.                    -        924          1,801         (213)            298
 10/1/87  Rockville/Fredrick Rd.                     -      1,695          3,305         (107)            519
  2/1/88  Anaheim/Lakeview                           -        995          1,505            45            256
  6/7/88  Mesquite / Sorrento Drive                  -        928          1,011         3,482              -
  7/1/88  Fort Wayne                                 -        101          1,524           138            663
  1/1/92  Costa Mesa                                 -        533            980           708              -
  3/1/92  Dallas / Walnut St.                        -        537          1,008           312              -
  5/1/92  Camp Creek                                 -        576          1,075           327              -
  9/1/92  Orlando/W. Colonial                        -        368            713           218              -
  9/1/92  Jacksonville/Arlington                     -        554          1,065           285              -
 10/1/92  Stockton/Mariners                          -        381            730           225              -
 11/18/92 Virginia Beach/General Booth Blvd          -        599          1,119           437              -
  1/1/93  Redwood City/Storage                       -        907          1,684           255              -
  1/1/93  City Of Industry                           -      1,611          2,991           348              -
  1/1/93  San Jose/Felipe                            -      1,124          2,088           455              -
  1/1/93  Baldwin Park/Garvey Ave                    -        840          1,561           420              -
 3/19/93  Westminister / W. 80th                     -        840          1,586           324              -
 4/26/93  Costa Mesa / Newport                     883      2,141          3,989         5,171              -
 5/13/93  Austin /N. Lamar                           -        919          1,695         8,284              -
 5/28/93  Jacksonville/Phillips Hwy.                 -        406            771           233              -
 5/28/93  Tampa/Nebraska Avenue                      -        550          1,043           192              -
  6/9/93  Calabasas / Ventura Blvd.                  -      1,762          3,269           220              -
  6/9/93  Carmichael / Fair Oaks                     -        573          1,052           260              -
  6/9/93  Santa Clara / Duane                        -        454            834           128              -
 6/10/93  Citrus Heights / Sylvan Road               -        438            822           213              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>           <C>
 12/31/86 Monrovia / Myrtle Avenue                  1,149      2,664      3,813         1,877
 12/31/86 Chatsworth / Topanga                      1,448      4,561      6,009         1,218
 12/31/86 Houston / Larkwood                          247      1,001      1,248           677
 12/31/86 Northridge                                3,624      4,419      8,043         2,024
 12/31/86 Santa Clara / Duane                       1,950      1,417      3,367           979
 12/31/86 Oyster Point                              1,569      1,951      3,520         1,301
 12/31/86 Walnut                                      769      4,211      4,980         1,195
  3/1/87  Annandale / Ravensworth                     679      2,553      3,232         1,580
  4/1/87  City Of Industry / Amar                     748      3,268      4,016         1,339
  5/1/87  Oklahoma City / W. Hefner                   459      1,717      2,176         1,038
  7/1/87  Oakbrook Terrace                            912      3,262      4,174         2,653
  8/1/87  San Antonio/Austin Hwy.                     400      1,010      1,410           835
 10/1/87  Plantation/S. State Rd.                     924      1,886      2,810         1,538
 10/1/87  Rockville/Fredrick Rd.                    1,695      3,717      5,412         2,954
  2/1/88  Anaheim/Lakeview                            995      1,806      2,801         1,415
  6/7/88  Mesquite / Sorrento Drive                 1,045      4,376      5,421         1,717
  7/1/88  Fort Wayne                                  101      2,325      2,426         1,149
  1/1/92  Costa Mesa                                  535      1,686      2,221         1,291
  3/1/92  Dallas / Walnut St.                         537      1,320      1,857         1,278
  5/1/92  Camp Creek                                  576      1,402      1,978           813
  9/1/92  Orlando/W. Colonial                         368        931      1,299           505
  9/1/92  Jacksonville/Arlington                      554      1,350      1,904           739
 10/1/92  Stockton/Mariners                           381        955      1,336           538
 11/18/92 Virginia Beach/General Booth Blvd           599      1,556      2,155           845
  1/1/93  Redwood City/Storage                        907      1,939      2,846         1,001
  1/1/93  City Of Industry                          1,611      3,339      4,950         1,643
  1/1/93  San Jose/Felipe                           1,124      2,543      3,667         1,271
  1/1/93  Baldwin Park/Garvey Ave                     840      1,981      2,821         1,060
 3/19/93  Westminister / W. 80th                      840      1,910      2,750           975
 4/26/93  Costa Mesa / Newport                      3,730      7,571     11,301         2,256
 5/13/93  Austin /N. Lamar                          1,421      9,477     10,898         2,081
 5/28/93  Jacksonville/Phillips Hwy.                  406      1,004      1,410           550
 5/28/93  Tampa/Nebraska Avenue                       550      1,235      1,785           635
  6/9/93  Calabasas / Ventura Blvd.                 1,762      3,489      5,251         1,697
  6/9/93  Carmichael / Fair Oaks                      573      1,312      1,885           712
  6/9/93  Santa Clara / Duane                         454        962      1,416           494
 6/10/93  Citrus Heights / Sylvan Road                438      1,035      1,473           560

</TABLE>

                                       F-50

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 6/25/93  Trenton / Allen Road                       -        623          1,166           252              -
 6/30/93  Los Angeles/W.Jefferson Blvd               -      1,085          2,017           218              -
 7/16/93  Austin / So. Congress Ave                  -        777          1,445           369              -
  8/1/93  Gaithersburg / E. Diamond                  -        602          1,139           187              -
 8/11/93  Atlanta / Northside                        -      1,150          2,149           367              -
 8/11/93  Smyrna/ Rosswill Rd                        -        446            842           257              -
 8/13/93  So. Brunswick/Highway                      -      1,076          2,033           361              -
 10/1/93  Denver / Federal Blvd                      -        875          1,633           254              -
 10/1/93  Citrus Heights                             -        527            987           134              -
 10/1/93  Lakewood / 6th Ave                         -        798          1,489            47              -
 10/27/93 Houston / S Shaver St                      -        481            896           232              -
 11/3/93  Upland/S. Euclid Ave.                      -        431            807           434              -
 11/16/93 Norcross / Jimmy Carter                    -        627          1,167           208              -
 11/16/93 Seattle / 13th                             -      1,085          2,015           651              -
 12/9/93  Salt Lake City                             -        765          1,422            34              -
 12/16/93 West Valley City                           -        683          1,276           256              -
 12/21/93 Pinellas Park / 34th St. W                 -        607          1,134           255              -
 12/28/93 New Orleans / S. Carrollton Ave            -      1,575          2,941           595              -
 12/29/93 Orange / Main                              -      1,238          2,317         1,471              -
 12/29/93 Sunnyvale / Wedell                         -        554          1,037           783              -
 12/29/93 El Cajon / Magnolia                        -        421            791           598              -
 12/29/93 Orlando / S. Semoran Blvd.                 -        462            872           640              -
 12/29/93 Tampa / W. Hillsborough Ave                -        352            665           441              -
 12/29/93 Irving / West Loop 12                      -        341            643           213              -
 12/29/93 Fullerton / W. Commonwealth                -        904          1,687         1,100              -
 12/29/93 N. Lauderdale / Mcnab Rd                   -        628          1,182           736              -
 12/29/93 Los Alimitos / Cerritos                    -        695          1,299           716              -
 12/29/93 Frederick / Prospect Blvd.                 -        573          1,082           635              -
 12/29/93 Indianapolis / E. Washington               -        403            775           536              -
 12/29/93 Gardena / Western Ave.                     -        552          1,035           613              -
 12/29/93 Palm Bay / Bobcock Street                  -        409            775           555              -
 1/10/94  Hialeah / W. 20Th Ave.                     -      1,855          3,497           265              -
 1/12/94  Sunnyvale / N. Fair Oaks Ave               -        689          1,285           344              -
 1/12/94  Honolulu / Iwaena                          -          -          3,382           739              -
 1/12/94  Miami / Golden Glades                      -        579          1,081           498              -
 1/21/94  Herndon / Centreville Road                 -      1,584          2,981           519              -
  2/8/94  Las Vegas/S. MLK Blvd.                     -      1,383          2,592         1,096              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                      (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 6/25/93  Trenton / Allen Road                        623      1,418      2,041           701
 6/30/93  Los Angeles/W.Jefferson Blvd              1,085      2,235      3,320         1,090
 7/16/93  Austin / So. Congress Ave                   777      1,814      2,591           974
  8/1/93  Gaithersburg / E. Diamond                   602      1,326      1,928           649
 8/11/93  Atlanta / Northside                       1,150      2,516      3,666         1,274
 8/11/93  Smyrna/ Rosswill Rd                         446      1,099      1,545           589
 8/13/93  So. Brunswick/Highway                     1,076      2,394      3,470         1,196
 10/1/93  Denver / Federal Blvd                       875      1,887      2,762           911
 10/1/93  Citrus Heights                              527      1,121      1,648           554
 10/1/93  Lakewood / 6th Ave                          685      1,649      2,334           775
 10/27/93 Houston / S Shaver St                       481      1,128      1,609           577
 11/3/93  Upland/S. Euclid Ave.                       508      1,164      1,672           582
 11/16/93 Norcross / Jimmy Carter                     627      1,375      2,002           696
 11/16/93 Seattle / 13th                            1,085      2,666      3,751         1,439
 12/9/93  Salt Lake City                              633      1,588      2,221           394
 12/16/93 West Valley City                            683      1,532      2,215           737
 12/21/93 Pinellas Park / 34th St. W                  607      1,389      1,996           707
 12/28/93 New Orleans / S. Carrollton Ave           1,575      3,536      5,111         1,682
 12/29/93 Orange / Main                             1,593      3,433      5,026         1,553
 12/29/93 Sunnyvale / Wedell                          725      1,649      2,374           784
 12/29/93 El Cajon / Magnolia                         542      1,268      1,810           582
 12/29/93 Orlando / S. Semoran Blvd.                  601      1,373      1,974           683
 12/29/93 Tampa / W. Hillsborough Ave                 436      1,022      1,458           497
 12/29/93 Irving / West Loop 12                       355        842      1,197           439
 12/29/93 Fullerton / W. Commonwealth               1,160      2,531      3,691         1,141
 12/29/93 N. Lauderdale / Mcnab Rd                    798      1,748      2,546           797
 12/29/93 Los Alimitos / Cerritos                     874      1,836      2,710           828
 12/29/93 Frederick / Prospect Blvd.                  692      1,598      2,290           742
 12/29/93 Indianapolis / E. Washington                505      1,209      1,714           576
 12/29/93 Gardena / Western Ave.                      695      1,505      2,200           689
 12/29/93 Palm Bay / Bobcock Street                   525      1,214      1,739           581
 1/10/94  Hialeah / W. 20Th Ave.                    1,590      4,027      5,617         1,846
 1/12/94  Sunnyvale / N. Fair Oaks Ave                657      1,661      2,318           757
 1/12/94  Honolulu / Iwaena                             -      4,121      4,121         1,836
 1/12/94  Miami / Golden Glades                       557      1,601      2,158           749
 1/21/94  Herndon / Centreville Road                1,358      3,726      5,084         1,542
  2/8/94  Las Vegas/S. MLK Blvd.                    1,436      3,635      5,071         1,650

</TABLE>

                                       F-51

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 2/28/94  Arlingtn/Old Jeffersn Davishwy             -        735          1,399           619              -
  3/8/94  Beaverton / Sw Barnes Road                 -        942          1,810           216              -
 3/21/94  Austin / Arboretum                         -        473            897         2,774              -
 3/25/94  Tinton Falls / Shrewsbury Ave              -      1,074          2,033           262              -
 3/25/94  East Brunswick / Milltown Road             -      1,282          2,411           445              -
 3/25/94  Mercerville / Quakerbridge Road            -      1,109          2,111           299              -
 3/31/94  Hypoluxo                                   -        735          1,404         1,936              -
 4/26/94  No. Highlands / Roseville Road             -        980          1,835           410              -
 5/12/94  Fort Pierce/Okeechobee Road                -        438            842           168              -
 5/24/94  Hempstead/Peninsula Blvd.                  -      2,053          3,832           336              -
 5/24/94  La/Huntington                              -        483            905           210              -
  6/9/94  Chattanooga / Brainerd Road                -        613          1,170           271              -
  6/9/94  Chattanooga / Ringgold Road                -        761          1,433           442              -
 6/18/94  Las Vegas / S. Valley View Blvd            -        837          1,571           177              -
 6/23/94  Las Vegas / Tropicana                      -        750          1,408           286              -
 6/23/94  Henderson / Green Valley Pkwy              -      1,047          1,960           200              -
 6/24/94  Las Vegas / N. Lamb Blvd.                  -        869          1,629            99              -
 6/30/94  Birmingham / W. Oxmoor Road                -        532          1,004           462              -
 7/20/94  Milpitas / Dempsey Road                    -      1,260          2,358           238              -
 8/17/94  New Orleans/I-10                           -        784          1,470           229              -
 8/17/94  Beaverton / S.W. Denny Road                -        663          1,245           133              -
 8/17/94  Irwindale / Central Ave.                   -        674          1,263           140              -
 8/17/94  Suitland / St. Barnabas Rd                 -      1,530          2,913           371              -
 8/17/94  North Brunswick / How Lane                 -      1,238          2,323           133              -
 8/17/94  Lombard / 64th                             -        847          1,583           192              -
 8/17/94  Alsip / 27th                               -        406            765           161              -
 9/15/94  Huntsville / Old Monrovia Road             -        613          1,157           252              -
 9/27/94  West Haven / Bull Hill Lane                -        455            873         5,332              -
 9/30/94  San Francisco / Marin St.                  -      1,227          2,339         1,245              -
 9/30/94  Baltimore / Hillen Street                  -        580          1,095           277              -
 9/30/94  San Francisco /10th & Howard               -      1,423          2,668           284              -
 9/30/94  Montebello / E. Whittier                   -        383            732           212              -
 9/30/94  Arlington / Collins                        -        228            435           280              -
 9/30/94  Miami / S.W. 119th Ave                     -        656          1,221            78              -
 9/30/94  Blackwood / Erial Road                     -        774          1,437           143              -
 9/30/94  Concord / Monument                         -      1,092          2,027           427              -
 9/30/94  Rochester / Lee Road                       -        469            871           321              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 2/28/94  Arlingtn/Old Jeffersn Davishwy              630      2,123      2,753           919
  3/8/94  Beaverton / Sw Barnes Road                  807      2,161      2,968         1,041
 3/21/94  Austin / Arboretum                        1,554      2,590      4,144           911
 3/25/94  Tinton Falls / Shrewsbury Ave               921      2,448      3,369         1,165
 3/25/94  East Brunswick / Milltown Road            1,099      3,039      4,138         1,422
 3/25/94  Mercerville / Quakerbridge Road             950      2,569      3,519         1,240
 3/31/94  Hypoluxo                                    630      3,445      4,075         2,522
 4/26/94  No. Highlands / Roseville Road              840      2,385      3,225         1,154
 5/12/94  Fort Pierce/Okeechobee Road                 375      1,073      1,448           638
 5/24/94  Hempstead/Peninsula Blvd.                 1,763      4,458      6,221         2,013
 5/24/94  La/Huntington                               414      1,184      1,598           559
  6/9/94  Chattanooga / Brainerd Road                 525      1,529      2,054           750
  6/9/94  Chattanooga / Ringgold Road                 653      1,983      2,636         1,016
 6/18/94  Las Vegas / S. Valley View Blvd             718      1,867      2,585           858
 6/23/94  Las Vegas / Tropicana                       643      1,801      2,444           841
 6/23/94  Henderson / Green Valley Pkwy               898      2,309      3,207         1,058
 6/24/94  Las Vegas / N. Lamb Blvd.                   669      1,928      2,597           615
 6/30/94  Birmingham / W. Oxmoor Road                 456      1,542      1,998           828
 7/20/94  Milpitas / Dempsey Road                   1,080      2,776      3,856         1,252
 8/17/94  New Orleans/I-10                            672      1,811      2,483           840
 8/17/94  Beaverton / S.W. Denny Road                 568      1,473      2,041           679
 8/17/94  Irwindale / Central Ave.                    578      1,499      2,077           653
 8/17/94  Suitland / St. Barnabas Rd                1,312      3,502      4,814         1,566
 8/17/94  North Brunswick / How Lane                1,062      2,632      3,694         1,147
 8/17/94  Lombard / 64th                              726      1,896      2,622           841
 8/17/94  Alsip / 27th                                348        984      1,332           447
 9/15/94  Huntsville / Old Monrovia Road              525      1,497      2,022           735
 9/27/94  West Haven / Bull Hill Lane               1,964      4,696      6,660         1,249
 9/30/94  San Francisco / Marin St.                 1,371      3,440      4,811         1,495
 9/30/94  Baltimore / Hillen Street                   497      1,455      1,952           716
 9/30/94  San Francisco /10th & Howard              1,221      3,154      4,375         1,402
 9/30/94  Montebello / E. Whittier                    329        998      1,327           460
 9/30/94  Arlington / Collins                         195        748        943           441
 9/30/94  Miami / S.W. 119th Ave                      563      1,392      1,955           610
 9/30/94  Blackwood / Erial Road                      663      1,691      2,354           749
 9/30/94  Concord / Monument                          936      2,610      3,546         1,213
 9/30/94  Rochester / Lee Road                        402      1,259      1,661           591

</TABLE>

                                       F-52

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 9/30/94  Houston / Bellaire                         -        623          1,157           300              -
 9/30/94  Austin / Lamar Blvd                        -        781          1,452           174              -
 9/30/94  Milwaukee / Lovers Lane Rd                 -        469            871           274              -
 9/30/94  Monterey / Del Rey Oaks                    -      1,093          1,897           130              -
 9/30/94  St. Petersburg / 66Th St.                  -        427            793           211              -
 9/30/94  Dayton Bch / N. Nova Road                  -        396            735           127              -
 9/30/94  Maple Shade / Route 38                     -        994          1,846           245              -
 9/30/94  Marlton / Route 73 N.                      -        938          1,742           281              -
 9/30/94  Naperville / E. Ogden Ave                  -        683          1,268           167              -
 9/30/94  Long Beach / South Street                  -      1,778          3,307           411              -
 9/30/94  Aloha / S.W. Shaw                          -        805          1,495           147              -
 9/30/94  Alexandria / S. Pickett                    -      1,550          2,879           305              -
 9/30/94  Houston / Highway 6 North                  -      1,120          2,083           264              -
 9/30/94  San Antonio/Nacogdoches Rd                 -        571          1,060           254              -
 9/30/94  San Ramon/San Ramon Valley                 -      1,530          2,840           486              -
 9/30/94  San Rafael / Merrydale Rd                  -      1,705          3,165           223              -
 9/30/94  San Antonio / Austin Hwy                   -        592          1,098           206              -
 9/30/94  Sharonville / E. Kemper                    -        574          1,070           270              -
 10/13/94 Davie / State Road 84                      -        744          1,467           929              -
 10/13/94 Carrollton / Marsh Lane                    -        770          1,437         1,418              -
 10/31/94 Sherman Oaks / Van Nuys Blvd               -      1,278          2,461           944              -
 12/19/94 Salt Lake City/West North Temple           -        490            917          (48)              -
 12/28/94 Milpitas / Watson                          -      1,575          2,925           308              -
 12/28/94 Las Vegas / Jones Blvd                     -      1,208          2,243           186              -
 12/28/94 Venice / Guthrie                           -        578          1,073           145              -
 12/30/94 Apple Valley / Foliage Ave                 -        910          1,695           256              -
  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           400              -
 1/23/95  North Bergen / Tonne                       -      1,564          3,772           373              -
 1/23/95  San Leandro / Hesperian                    -        734          1,726           153              -
 1/24/95  Nashville / Elm Hill                       -        338            791           393              -
  2/3/95  Reno / S. Mccarron Blvd                    -      1,080          2,537           206              -
 2/15/95  Schiller Park                              -      1,688          3,939           401              -
 2/15/95  Lansing                                    -      1,514          3,534           228              -
 2/15/95  Pleasanton                                 -      1,257          2,932           128              -
 2/15/95  LA/Sepulveda                               -      1,453          3,390           130              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 9/30/94  Houston / Bellaire                          534      1,546      2,080           707
 9/30/94  Austin / Lamar Blvd                         669      1,738      2,407           787
 9/30/94  Milwaukee / Lovers Lane Rd                  402      1,212      1,614           523
 9/30/94  Monterey / Del Rey Oaks                     903      2,217      3,120         1,008
 9/30/94  St. Petersburg / 66Th St.                   366      1,065      1,431           521
 9/30/94  Dayton Bch / N. Nova Road                   339        919      1,258           459
 9/30/94  Maple Shade / Route 38                      852      2,233      3,085           980
 9/30/94  Marlton / Route 73 N.                       804      2,157      2,961           863
 9/30/94  Naperville / E. Ogden Ave                   585      1,533      2,118           673
 9/30/94  Long Beach / South Street                 1,524      3,972      5,496         1,703
 9/30/94  Aloha / S.W. Shaw                           690      1,757      2,447           791
 9/30/94  Alexandria / S. Pickett                   1,329      3,405      4,734         1,474
 9/30/94  Houston / Highway 6 North                   960      2,507      3,467         1,142
 9/30/94  San Antonio/Nacogdoches Rd                  489      1,396      1,885           647
 9/30/94  San Ramon/San Ramon Valley                1,311      3,545      4,856         1,571
 9/30/94  San Rafael / Merrydale Rd                 1,461      3,632      5,093         1,598
 9/30/94  San Antonio / Austin Hwy                    507      1,389      1,896           663
 9/30/94  Sharonville / E. Kemper                     492      1,422      1,914           665
 10/13/94 Davie / State Road 84                       638      2,502      3,140         1,127
 10/13/94 Carrollton / Marsh Lane                   1,022      2,603      3,625         1,100
 10/31/94 Sherman Oaks / Van Nuys Blvd              1,423      3,260      4,683         1,438
 12/19/94 Salt Lake City/West North Temple            385        974      1,359           254
 12/28/94 Milpitas / Watson                         1,350      3,458      4,808         1,469
 12/28/94 Las Vegas / Jones Blvd                    1,035      2,602      3,637         1,114
 12/28/94 Venice / Guthrie                            495      1,301      1,796           579
 12/30/94 Apple Valley / Foliage Ave                  780      2,081      2,861           935
  1/4/95  Chula Vista / Main Street                   735      2,005      2,740           945
  1/5/95  Pantego / West Park                         315        902      1,217           450
 1/12/95  Roswell / Alpharetta                        423      1,393      1,816           672
 1/23/95  North Bergen / Tonne                      1,551      4,158      5,709         1,766
 1/23/95  San Leandro / Hesperian                     734      1,879      2,613           791
 1/24/95  Nashville / Elm Hill                        338      1,184      1,522           673
  2/3/95  Reno / S. Mccarron Blvd                   1,080      2,743      3,823         1,172
 2/15/95  Schiller Park                             1,688      4,340      6,028         1,591
 2/15/95  Lansing                                   1,514      3,762      5,276         1,352
 2/15/95  Pleasanton                                1,257      3,060      4,317         1,086
 2/15/95  LA/Sepulveda                              1,453      3,520      4,973         1,269

</TABLE>

                                       F-53

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 2/28/95  Decatur / Flat Shoal                       -        970          2,288           499              -
 2/28/95  Smyrna / S. Cobb                           -        663          1,559           282              -
 2/28/95  Downey / Bellflower                        -        916          2,158           179              -
 2/28/95  Vallejo / Lincoln                          -        445          1,052           227              -
 2/28/95  Lynnwood / 180th St                        -        516          1,205           258              -
 2/28/95  Kent / Pacific Hwy                         -        728          1,711           164              -
 2/28/95  Kirkland                                   -      1,254          2,932           264              -
 2/28/95  Federal Way/Pacific                        -        785          1,832           278              -
 2/28/95  Tampa / S. Dale                            -        791          1,852           308              -
 2/28/95  Burlingame/Adrian Rd                       -      2,280          5,349           343              -
 2/28/95  Miami / Cloverleaf                         -        606          1,426           311              -
 2/28/95  Pinole / San Pablo                         -        639          1,502           262              -
 2/28/95  South Gate / Firesto                       -      1,442          3,449           437              -
 2/28/95  San Jose / Mabury                          -        892          2,088           163              -
 2/28/95  La Puente / Valley Blvd                    -        591          1,390           263              -
 2/28/95  San Jose / Capitol E                       -      1,215          2,852           153              -
 2/28/95  Milwaukie / 40th Street                    -        576          1,388           131              -
 2/28/95  Portland / N. Lombard                      -        812          1,900           228              -
 2/28/95  Miami / Biscayne                           -      1,313          3,076           511              -
 2/28/95  Chicago / Clark Street                     -        442          1,031           358              -
 2/28/95  Palatine / Dundee                          -        698          1,643           399              -
 2/28/95  Williamsville/Transit                      -        284            670           286              -
 2/28/95  Amherst / Sheridan                         -        484          1,151           203              -
  3/2/95  Everett / Highway 99                       -        859          2,022           287              -
  3/2/95  Burien / 1St Ave South                     -        763          1,783           324              -
  3/2/95  Kent / South 238th Street                  -        763          1,783           277              -
 3/31/95  Cheverly / Central Ave                     -        911          2,164           232              -
  5/1/95  Sandy / S. State Street                    -      1,043          2,442         (267)              -
  5/3/95  Largo / Ulmerton Roa                       -        263            654           158              -
  5/8/95  Fairfield/Western Street                   -        439          1,030            98              -
  5/8/95  Dallas / W. Mockingbird                    -      1,440          3,371           173              -
  5/8/95  East Point / Lakewood                      -        884          2,071           361              -
 5/25/95  Falls Church / Gallows Rd                  -        350            835           216              -
 6/12/95  Baltimore / Old Waterloo                   -        769          1,850           215              -
 6/12/95  Pleasant Hill / Hookston                   -        766          1,848           136              -
 6/12/95  Mountain View/Old Middlefield              -      2,095          4,913           148              -
 6/30/95  San Jose / Blossom Hill                    -      1,467          3,444           222              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                              (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>           <C>
 2/28/95  Decatur / Flat Shoal                        970      2,787      3,757         1,307
 2/28/95  Smyrna / S. Cobb                            663      1,841      2,504           848
 2/28/95  Downey / Bellflower                         916      2,337      3,253           977
 2/28/95  Vallejo / Lincoln                           445      1,279      1,724           593
 2/28/95  Lynnwood / 180th St                         516      1,463      1,979           666
 2/28/95  Kent / Pacific Hwy                          728      1,875      2,603           811
 2/28/95  Kirkland                                  1,254      3,196      4,450         1,352
 2/28/95  Federal Way/Pacific                         785      2,110      2,895           979
 2/28/95  Tampa / S. Dale                             791      2,160      2,951           946
 2/28/95  Burlingame/Adrian Rd                      2,280      5,692      7,972         2,411
 2/28/95  Miami / Cloverleaf                          606      1,737      2,343           794
 2/28/95  Pinole / San Pablo                          639      1,764      2,403           824
 2/28/95  South Gate / Firesto                      1,442      3,886      5,328         1,721
 2/28/95  San Jose / Mabury                           892      2,251      3,143           937
 2/28/95  La Puente / Valley Blvd                     591      1,653      2,244           767
 2/28/95  San Jose / Capitol E                      1,215      3,005      4,220         1,266
 2/28/95  Milwaukie / 40th Street                     579      1,516      2,095           674
 2/28/95  Portland / N. Lombard                       812      2,128      2,940           940
 2/28/95  Miami / Biscayne                          1,313      3,587      4,900         1,352
 2/28/95  Chicago / Clark Street                      442      1,389      1,831           699
 2/28/95  Palatine / Dundee                           698      2,042      2,740           856
 2/28/95  Williamsville/Transit                       284        956      1,240           443
 2/28/95  Amherst / Sheridan                          484      1,354      1,838           622
  3/2/95  Everett / Highway 99                        859      2,309      3,168         1,014
  3/2/95  Burien / 1St Ave South                      763      2,107      2,870           957
  3/2/95  Kent / South 238th Street                   763      2,060      2,823           956
 3/31/95  Cheverly / Central Ave                      911      2,396      3,307           994
  5/1/95  Sandy / S. State Street                     923      2,295      3,218           571
  5/3/95  Largo / Ulmerton Roa                        263        812      1,075           402
  5/8/95  Fairfield/Western Street                    439      1,128      1,567           478
  5/8/95  Dallas / W. Mockingbird                   1,440      3,544      4,984         1,447
  5/8/95  East Point / Lakewood                       884      2,432      3,316         1,109
 5/25/95  Falls Church / Gallows Rd                   350      1,051      1,401           475
 6/12/95  Baltimore / Old Waterloo                    769      2,065      2,834           833
 6/12/95  Pleasant Hill / Hookston                    742      2,008      2,750           831
 6/12/95  Mountain View/Old Middlefield             2,095      5,061      7,156         1,980
 6/30/95  San Jose / Blossom Hill                   1,467      3,666      5,133         1,484

</TABLE>

                                       F-54

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 6/30/95  Fairfield / Kings Highway                  -      1,811          4,273           240              -
 6/30/95  Pacoima / Paxton Street                  746        840          1,976           203              -
 6/30/95  Portland / Prescott                        -        647          1,509           222              -
 6/30/95  St. Petersburg                             -        352            827           259              -
 6/30/95  Dallas / Audelia Road                      -      1,166          2,725           872              -
 6/30/95  Miami Gardens                              -        823          1,929           234              -
 6/30/95  Grand Prairie / 19th                       -        566          1,329           163              -
 6/30/95  Joliet / Jefferson Street                  -        501          1,181           223              -
 6/30/95  Bridgeton / Pennridge                      -        283            661           212              -
 6/30/95  Portland / S.E.92nd                        -        638          1,497           220              -
 6/30/95  Houston / S.W. Freeway                     -        537          1,254         6,844              -
 6/30/95  Milwaukee / Brown                          -        358            849           264              -
 6/30/95  Orlando / W. Oak Ridge                     -        698          1,642           277              -
 6/30/95  Lauderhill / State Road                    -        644          1,508           238              -
 6/30/95  Orange Park /Blanding Blvd                 -        394            918           239              -
 6/30/95  St. Petersburg /Joe'S Creek                -        704          1,642           207              -
 6/30/95  St. Louis / Page Service Drive             -        531          1,241           201              -
 6/30/95  Independence /E. 42nd                      -        438          1,023           183              -
 6/30/95  Cherry Hill / Dobbs Lane                   -        716          1,676           191              -
 6/30/95  Edgewater Park / Route 130                 -        683          1,593           139              -
 6/30/95  Beaverton / S.W. 110                       -        572          1,342           206              -
 6/30/95  Markham / W. 159Th Place                   -        230            539           188              -
 6/30/95  Houston / N.W. Freeway                     -        447          1,066           155              -
 6/30/95  Portland / Gantenbein                      -        537          1,262           235              -
 6/30/95  Upper Chichester/Market St.                -        569          1,329           169              -
 6/30/95  Fort Worth / Hwy 80                        -        379            891           139              -
 6/30/95  Greenfield/ S. 108th                       -        728          1,707           296              -
 6/30/95  Altamonte Springs                          -        566          1,326           161              -
 6/30/95  Seattle / Delridge Way                     -        760          1,779           275              -
 6/30/95  Elmhurst / Lake Frontage Rd                -        748          1,758           211              -
 6/30/95  Los Angeles / Beverly Blvd                 -        787          1,886           410              -
 6/30/95  Lawrenceville / Brunswick                  -        841          1,961           181              -
 6/30/95  Richmond / Carlson                         -        865          2,025           321              -
 6/30/95  Liverpool / Oswego Road                    -        545          1,279           330              -
 6/30/95  Rochester / East Ave                       -        578          1,375           310              -
 6/30/95  Pasadena / E. Beltway                      -        757          1,767           165              -
 7/13/95  Tarzana / Burbank Blvd                     -      2,895          6,823           409              -

</TABLE>

<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             --------------------------------------------------

<S>       <C>                                        <C>        <C>        <C>           <C>
 6/30/95  Fairfield / Kings Highway                  1,811      4,513      6,324         1,845
 6/30/95  Pacoima / Paxton Street                      840      2,179      3,019           889
 6/30/95  Portland / Prescott                          647      1,731      2,378           741
 6/30/95  St. Petersburg                               352      1,086      1,438           499
 6/30/95  Dallas / Audelia Road                      1,166      3,597      4,763         1,750
 6/30/95  Miami Gardens                                823      2,163      2,986           897
 6/30/95  Grand Prairie / 19th                         566      1,492      2,058           641
 6/30/95  Joliet / Jefferson Street                    501      1,404      1,905           610
 6/30/95  Bridgeton / Pennridge                        283        873      1,156           417
 6/30/95  Portland / S.E.92nd                          638      1,717      2,355           738
 6/30/95  Houston / S.W. Freeway                     1,140      7,495      8,635         1,189
 6/30/95  Milwaukee / Brown                            358      1,113      1,471           490
 6/30/95  Orlando / W. Oak Ridge                       698      1,919      2,617           825
 6/30/95  Lauderhill / State Road                      644      1,746      2,390           716
 6/30/95  Orange Park /Blanding Blvd                   394      1,157      1,551           538
 6/30/95  St. Petersburg /Joe'S Creek                  704      1,849      2,553           782
 6/30/95  St. Louis / Page Service Drive               531      1,442      1,973           627
 6/30/95  Independence /E. 42nd                        438      1,206      1,644           546
 6/30/95  Cherry Hill / Dobbs Lane                     715      1,868      2,583           751
 6/30/95  Edgewater Park / Route 130                   683      1,732      2,415           703
 6/30/95  Beaverton / S.W. 110                         572      1,548      2,120           657
 6/30/95  Markham / W. 159Th Place                     229        728        957           333
 6/30/95  Houston / N.W. Freeway                       447      1,221      1,668           545
 6/30/95  Portland / Gantenbein                        537      1,497      2,034           635
 6/30/95  Upper Chichester/Market St.                  569      1,498      2,067           620
 6/30/95  Fort Worth / Hwy 80                          379      1,030      1,409           464
 6/30/95  Greenfield/ S. 108th                         728      2,003      2,731           851
 6/30/95  Altamonte Springs                            566      1,487      2,053           617
 6/30/95  Seattle / Delridge Way                       760      2,054      2,814           845
 6/30/95  Elmhurst / Lake Frontage Rd                  748      1,969      2,717           821
 6/30/95  Los Angeles / Beverly Blvd                   787      2,296      3,083         1,055
 6/30/95  Lawrenceville / Brunswick                    841      2,142      2,983           848
 6/30/95  Richmond / Carlson                           865      2,346      3,211         1,017
 6/30/95  Liverpool / Oswego Road                      545      1,609      2,154           705
 6/30/95  Rochester / East Ave                         578      1,685      2,263           690
 6/30/95  Pasadena / E. Beltway                        757      1,932      2,689           798
 7/13/95  Tarzana / Burbank Blvd                     2,895      7,232     10,127         2,992

</TABLE>

                                       F-55

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 7/31/95  Orlando / Lakehurst                        -        450          1,063           176              -
 7/31/95  Livermore / Portola                        -        921          2,157           215              -
 7/31/95  San Jose / Tully                           -        912          2,137           353              -
 7/31/95  Mission Bay                                -      1,617          3,785           556              -
 7/31/95  Las Vegas / Decatur                        -      1,147          2,697           352              -
 7/31/95  Pleasanton / Stanley                       -      1,624          3,811           240              -
 7/31/95  Castro Valley / Grove                      -        757          1,772           107              -
 7/31/95  Honolulu / Kaneohe                         -      1,215          2,846         2,109              -
 7/31/95  Chicago / Wabash Ave                       -        645          1,535           686              -
 7/31/95  Springfield / Parker                       -        765          1,834           201              -
 7/31/95  Huntington Bch/Gotham                      -        765          1,808           190              -
 7/31/95  Tucker / Lawrenceville                     -        630          1,480           225              -
 7/31/95  Marietta / Canton Road                     -        600          1,423           284              -
 7/31/95  Wheeling / Hintz                           -        450          1,054           172              -
  8/1/95  Gresham / Division                         -        607          1,428           115              -
  8/1/95  Tucker / Lawrenceville                     -        600          1,405           335              -
  8/1/95  Decatur / Covington                        -        720          1,694           242              -
 8/11/95  Studio City/Ventura                        -      1,285          3,015           206              -
 8/12/95  Smyrna / Hargrove Road                     -      1,020          3,038           438              -
  9/1/95  Hayward / Mission Blvd                     -      1,020          2,383           189              -
  9/1/95  Park City / Belvider                       -        600          1,405           140              -
  9/1/95  New Castle/Dupont Parkway                  -        990          2,369           196              -
  9/1/95  Las Vegas / Rainbow                        -      1,050          2,459           120              -
  9/1/95  Mountain View / Reng                       -        945          2,216           160              -
  9/1/95  Venice / Cadillac                          -        930          2,182           260              -
  9/1/95  Simi Valley /Los Angeles                   -      1,590          3,724           294              -
  9/1/95  Spring Valley/Foreman                      -      1,095          2,572           178              -
  9/6/95  Darien / Frontage Road                     -        975          2,321           132              -
 9/30/95  Whittier                                   -        215            384           208            781
 9/30/95  Van Nuys/Balboa                            -        295            657            66          1,148
 9/30/95  Huntington Beach                           -        176            321           135            738
 9/30/95  Monterey Park                              -        124            346          (32)            782
 9/30/95  Downey                                     -        191            317           122            825
 9/30/95  Del Amo                                    -        474            742           418            922
 9/30/95  Carson                                     -        375            735           405            428
 9/30/95  Van Nuys/Balboa Blvd                       -      1,920          4,504           457              -
 10/31/95 San Lorenzo /Hesperian                     -      1,590          3,716           388              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 7/31/95  Orlando / Lakehurst                         450      1,239      1,689           533
 7/31/95  Livermore / Portola                         921      2,372      3,293           979
 7/31/95  San Jose / Tully                            912      2,490      3,402         1,052
 7/31/95  Mission Bay                               1,617      4,341      5,958         1,841
 7/31/95  Las Vegas / Decatur                       1,147      3,049      4,196         1,278
 7/31/95  Pleasanton / Stanley                      1,624      4,051      5,675         1,628
 7/31/95  Castro Valley / Grove                       757      1,879      2,636           760
 7/31/95  Honolulu / Kaneohe                        2,133      4,037      6,170         1,454
 7/31/95  Chicago / Wabash Ave                        645      2,221      2,866         1,188
 7/31/95  Springfield / Parker                        765      2,035      2,800           839
 7/31/95  Huntington Bch/Gotham                       765      1,998      2,763           845
 7/31/95  Tucker / Lawrenceville                      630      1,705      2,335           740
 7/31/95  Marietta / Canton Road                      600      1,707      2,307           765
 7/31/95  Wheeling / Hintz                            450      1,226      1,676           519
  8/1/95  Gresham / Division                          607      1,543      2,150           641
  8/1/95  Tucker / Lawrenceville                      600      1,740      2,340           781
  8/1/95  Decatur / Covington                         720      1,936      2,656           841
 8/11/95  Studio City/Ventura                       1,285      3,221      4,506         1,274
 8/12/95  Smyrna / Hargrove Road                    1,020      3,476      4,496         1,355
  9/1/95  Hayward / Mission Blvd                    1,020      2,572      3,592         1,031
  9/1/95  Park City / Belvider                        600      1,545      2,145           619
  9/1/95  New Castle/Dupont Parkway                   990      2,565      3,555         1,027
  9/1/95  Las Vegas / Rainbow                       1,050      2,579      3,629         1,024
  9/1/95  Mountain View / Reng                        945      2,376      3,321           949
  9/1/95  Venice / Cadillac                           930      2,442      3,372         1,026
  9/1/95  Simi Valley /Los Angeles                  1,590      4,018      5,608         1,575
  9/1/95  Spring Valley/Foreman                     1,095      2,750      3,845         1,100
  9/6/95  Darien / Frontage Road                      975      2,453      3,428           988
 9/30/95  Whittier                                    215      1,373      1,588           587
 9/30/95  Van Nuys/Balboa                             295      1,871      2,166           876
 9/30/95  Huntington Beach                            176      1,194      1,370           538
 9/30/95  Monterey Park                               124      1,096      1,220           574
 9/30/95  Downey                                      191      1,264      1,455           574
 9/30/95  Del Amo                                     474      2,082      2,556           991
 9/30/95  Carson                                      375      1,568      1,943           545
 9/30/95  Van Nuys/Balboa Blvd                      1,920      4,961      6,881         1,714
 10/31/95 San Lorenzo /Hesperian                    1,590      4,104      5,694         1,437

</TABLE>

                                       F-56

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>            <C>           <C>              <C>
 10/31/95 Chicago / W. 47th Street                   -        300            708           267              -
 10/31/95 Los Angeles / Eastern                      -        455          1,070           184              -
 11/15/95 Costa Mesa                                 -        522          1,218            77              -
 11/15/95 Plano / E. 14th                            -        705          1,646           102              -
 11/15/95 Citrus Heights/Sunrise                     -        520          1,213           158              -
 11/15/95 Modesto/Briggsmore Ave                     -        470          1,097           130              -
 11/15/95 So San Francisco/Spruce                    -      1,905          4,444           399              -
 11/15/95 Pacheco/Buchanan Circle                    -      1,681          3,951           321              -
 11/16/95 Palm Beach Gardens                         -        657          1,540           145              -
 11/16/95 Delray Beach                               -        600          1,407           177              -
  1/1/96  Bensenville/York Rd                        -        667          1,602           249            895
  1/1/96  Louisville/Preston                         -        211          1,060            88            594
  1/1/96  San Jose/Aborn Road                        -        615          1,342           102            759
  1/1/96  Englewood/Federal                          -        481          1,395           145            777
  1/1/96  W. Hollywood/Santa Monica                  -      3,415          4,577           238          2,552
  1/1/96  Orland Hills/W. 159th                      -        917          2,392           340          1,342
  1/1/96  Merrionette Park                           -        818          2,020           116          1,122
  1/1/96  Denver/S Quebec                            -      1,849          1,941           198          1,086
  1/1/96  Tigard/S.W. Pacific                        -        633          1,206           141            705
  1/1/96  Coram/Middle Count                         -        507          1,421           145            792
  1/1/96  Houston/FM 1960                            -        635          1,294           235            783
  1/1/96  Kent/Military Trail                        -        409          1,670           195            956
  1/1/96  Turnersville/Black                         -        165          1,360           143            758
  1/1/96  Sewell/Rts. 553                            -        323          1,138           141            658
  1/1/96  Maple Shade/Fellowship                     -        331          1,421           147            803
  1/1/96  Hyattsville/Kenilworth                     -        509          1,757           163          1,000
  1/1/96  Waterbury/Captain                          -        434          2,089           206          1,162
  1/1/96  Bedford Hts/Miles                          -        835          1,577           305            929
  1/1/96  Livonia/Newburgh                           -        635          1,407           124            783
  1/1/96  Sunland/Sunland Blvd.                      -        631          1,965           130          1,090
  1/1/96  Des Moines                                 -        448          1,350           120            768
  1/1/96  Oxonhill/Indianhead                        -        772          2,017           329          1,141
  1/1/96  Sacramento/N. 16th                         -        582          2,610           174          1,466
  1/1/96  Houston/Westheimer                         -      1,508          2,274           274          1,304
  1/1/96  San Pablo/San Pablo                        -        565          1,232           162            713
  1/1/96  Bowie/Woodcliff                            -        718          2,336           165          1,292
  1/1/96  Milwaukee/S. 84th                          -        444          1,868           332          1,091

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>        <C>      <C>             <C>
 10/31/95 Chicago / W. 47th Street                    300        975      1,275           393
 10/31/95 Los Angeles / Eastern                       455      1,254      1,709           468
 11/15/95 Costa Mesa                                  522      1,295      1,817           494
 11/15/95 Plano / E. 14th                             705      1,748      2,453           668
 11/15/95 Citrus Heights/Sunrise                      520      1,371      1,891           554
 11/15/95 Modesto/Briggsmore Ave                      470      1,227      1,697           486
 11/15/95 So San Francisco/Spruce                   1,905      4,843      6,748         1,829
 11/15/95 Pacheco/Buchanan Circle                   1,681      4,272      5,953         1,599
 11/16/95 Palm Beach Gardens                          657      1,685      2,342           677
 11/16/95 Delray Beach                                600      1,584      2,184           659
  1/1/96  Bensenville/York Rd                         667      2,746      3,413           936
  1/1/96  Louisville/Preston                          211      1,742      1,953           582
  1/1/96  San Jose/Aborn Road                         615      2,203      2,818           760
  1/1/96  Englewood/Federal                           481      2,317      2,798           807
  1/1/96  W. Hollywood/Santa Monica                 3,415      7,367     10,782         2,396
  1/1/96  Orland Hills/W. 159th                       917      4,074      4,991         1,356
  1/1/96  Merrionette Park                            818      3,258      4,076         1,087
  1/1/96  Denver/S Quebec                           1,849      3,225      5,074         1,082
  1/1/96  Tigard/S.W. Pacific                         633      2,052      2,685           699
  1/1/96  Coram/Middle Count                          507      2,358      2,865           757
  1/1/96  Houston/FM 1960                             635      2,312      2,947           818
  1/1/96  Kent/Military Trail                         409      2,821      3,230           924
  1/1/96  Turnersville/Black                          165      2,261      2,426           749
  1/1/96  Sewell/Rts. 553                             323      1,937      2,260           654
  1/1/96  Maple Shade/Fellowship                      331      2,371      2,702           763
  1/1/96  Hyattsville/Kenilworth                      509      2,920      3,429           944
  1/1/96  Waterbury/Captain                           434      3,457      3,891           977
  1/1/96  Bedford Hts/Miles                           835      2,811      3,646           959
  1/1/96  Livonia/Newburgh                            635      2,314      2,949           749
  1/1/96  Sunland/Sunland Blvd.                       631      3,185      3,816           975
  1/1/96  Des Moines                                  448      2,238      2,686           749
  1/1/96  Oxonhill/Indianhead                         772      3,487      4,259         1,105
  1/1/96  Sacramento/N. 16th                          582      4,250      4,832         1,145
  1/1/96  Houston/Westheimer                        1,508      3,852      5,360         1,271
  1/1/96  San Pablo/San Pablo                         565      2,107      2,672           682
  1/1/96  Bowie/Woodcliff                             718      3,793      4,511         1,112
  1/1/96  Milwaukee/S. 84th                           444      3,291      3,735         1,031

</TABLE>

                                       F-57

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>          <C>
  1/1/96  Clinton/Malcolm Road                       -        593          2,123           254          1,187
  1/3/96  San Gabriel                                -      1,005          2,345           251              -
  1/5/96  San Francisco, Second St.                  -      2,880          6,814           192              -
 1/12/96  San Antonio, TX                            -        912          2,170            96              -
 2/29/96  Naples, FL/Old US 41                       -        849          2,016           247              -
 2/29/96  Lake Worth, FL/S. Military Tr.             -      1,782          4,723           157              -
 2/29/96  Brandon, FL/W Brandon Blvd.                -      1,928          4,523           916              -
 2/29/96  Coral Springs FL/W Sample Rd.              -      3,480          8,148           277              -
 2/29/96  Delray Beach FL/S Military Tr.             -        941          2,222           193              -
 2/29/96  Jupiter FL/Military Trail                  -      2,280          5,347           259              -
 2/29/96  Lakeworth FL/Lake Worth Rd                 -        737          1,742           165              -
 2/29/96  New Port Richey/State Rd 54                -        857          2,025           241              -
 2/29/96  Sanford FL/S Orlando Dr                    -        734          1,749         1,949              -
  3/8/96  Atlanta/Roswell                            -        898          3,649           110              -
 3/31/96  Oakland                                    -      1,065          2,764           285              -
 3/31/96  Saratoga                                   -      2,339          6,081           189              -
 3/31/96  Randallstown                               -      1,359          3,527           301              -
 3/31/96  Plano                                      -        650          1,682           131              -
 3/31/96  Houston                                    -        543          1,402           140              -
 3/31/96  Irvine                                     -      1,920          4,975           616              -
 3/31/96  Milwaukee                                  -        542          1,402           153              -
 3/31/96  Carrollton                                 -        578          1,495           114              -
 3/31/96  Torrance                                   -      1,415          3,675           174              -
 3/31/96  Jacksonville                               -        713          1,845           231              -
 3/31/96  Dallas                                     -        315            810         1,747              -
 3/31/96  Houston                                    -        669          1,724           532              -
 3/31/96  Baltimore                                  -        842          2,180           248              -
 3/31/96  New Haven                                  -        740          1,907         (160)              -
  4/1/96  Chicago/Pulaski                            -        764          1,869           198              -
  4/1/96  Las Vegas/Desert Inn                       -      1,115          2,729           175              -
  4/1/96  Torrance/Crenshaw                          -        916          2,243           136              -
  4/1/96  Weymouth                                   -        485          1,187           176              -
  4/1/96  St. Louis/Barrett Station Road             -        630          1,542           118              -
  4/1/96  Rockville/Randolph                         -      1,153          2,823           208              -
  4/1/96  Simi Valley/East Street                    -        970          2,374            71              -
  4/1/96  Houston/Westheimer                         -      1,390          3,402         6,190              -
  4/3/96  Naples                                     -      1,187          2,809           265              -

</TABLE>

<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             --------------------------------------------------

<S>       <C>                                          <C>      <C>        <C>           <C>
  1/1/96  Clinton/Malcolm Road                         593      3,564      4,157         1,062
  1/3/96  San Gabriel                                1,005      2,596      3,601         1,060
  1/5/96  San Francisco, Second St.                  2,880      7,006      9,886         2,615
 1/12/96  San Antonio, TX                              912      2,266      3,178           850
 2/29/96  Naples, FL/Old US 41                         849      2,263      3,112           851
 2/29/96  Lake Worth, FL/S. Military Tr.             1,782      4,880      6,662         1,790
 2/29/96  Brandon, FL/W Brandon Blvd.                1,928      5,439      7,367         2,475
 2/29/96  Coral Springs FL/W Sample Rd.              3,480      8,425     11,905         3,048
 2/29/96  Delray Beach FL/S Military Tr.               941      2,415      3,356           946
 2/29/96  Jupiter FL/Military Trail                  2,280      5,606      7,886         2,067
 2/29/96  Lakeworth FL/Lake Worth Rd                   737      1,907      2,644           759
 2/29/96  New Port Richey/State Rd 54                  857      2,266      3,123           852
 2/29/96  Sanford FL/S Orlando Dr                      975      3,457      4,432         1,292
  3/8/96  Atlanta/Roswell                              898      3,759      4,657         1,372
 3/31/96  Oakland                                    1,065      3,049      4,114         1,191
 3/31/96  Saratoga                                   2,339      6,270      8,609         2,228
 3/31/96  Randallstown                               1,359      3,828      5,187         1,429
 3/31/96  Plano                                        650      1,813      2,463           713
 3/31/96  Houston                                      543      1,542      2,085           600
 3/31/96  Irvine                                     1,920      5,591      7,511         2,044
 3/31/96  Milwaukee                                    542      1,555      2,097           596
 3/31/96  Carrollton                                   578      1,609      2,187           617
 3/31/96  Torrance                                   1,415      3,849      5,264         1,409
 3/31/96  Jacksonville                                 713      2,076      2,789           820
 3/31/96  Dallas                                       315      2,557      2,872           616
 3/31/96  Houston                                      669      2,256      2,925           914
 3/31/96  Baltimore                                    842      2,428      3,270           921
 3/31/96  New Haven                                    668      1,819      2,487           701
  4/1/96  Chicago/Pulaski                              764      2,067      2,831           709
  4/1/96  Las Vegas/Desert Inn                       1,115      2,904      4,019           994
  4/1/96  Torrance/Crenshaw                            916      2,379      3,295           793
  4/1/96  Weymouth                                     485      1,363      1,848           442
  4/1/96  St. Louis/Barrett Station Road               630      1,660      2,290           566
  4/1/96  Rockville/Randolph                         1,153      3,031      4,184         1,015
  4/1/96  Simi Valley/East Street                      970      2,445      3,415           813
  4/1/96  Houston/Westheimer                         1,390      9,592     10,982         2,620
  4/3/96  Naples                                     1,187      3,074      4,261         1,189

</TABLE>

                                       F-58

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>           <C>                <C>
 6/26/96  Boca Raton                                 -      3,180          7,468         1,243              -
 6/28/96  Venice                                     -        669          1,575           166              -
 6/30/96  Las Vegas                                  -        921          2,155           287              -
 6/30/96  Bedford Park                               -        606          1,419           255              -
 6/30/96  Los Angeles                                -        692          1,616           128              -
 6/30/96  Silver Spring                              -      1,513          3,535           260              -
 6/30/96  Newark                                     -      1,051          2,458           120              -
 6/30/96  Brooklyn                                   -        783          1,830           500              -
  7/2/96  Glen Burnie/Furnace Br Rd                  -      1,755          4,150           277              -
 7/22/96  Lakewood/W Hampton                         -        717          2,092            89              -
 8/13/96  Norcross/Holcomb Bridge Rd                 -        955          3,117           143              -
  9/5/96  Spring Valley/S Pascack rd                 -      1,260          2,966           537              -
 9/16/96  Dallas/Royal Lane                          -      1,008          2,426           218              -
 9/16/96  Colorado Springs/Tomah Drive               -        731          1,759           128              -
 9/16/96  Lewisville/S. Stemmons                     -        603          1,451           146              -
 9/16/96  Las Vegas/Boulder Hwy.                     -        947          2,279           393              -
 9/16/96  Sarasota/S. Tamiami Trail                  -        584          1,407         3,353              -
 9/16/96  Willow Grove/Maryland Road                 -        673          1,620           134              -
 9/16/96  Houston/W. Montgomery Rd.                  -        524          1,261           211              -
 9/16/96  Denver/W. Hampden                          -      1,084          2,609           209              -
 9/16/96  Littleton/Southpark Way                    -        922          2,221           338              -
 9/16/96  Petaluma/Baywood Drive                     -        861          2,074           177              -
 9/16/96  Canoga Park/Sherman Way                    -      1,543          3,716           555              -
 9/16/96  Jacksonville/South Lane Ave.               -        554          1,334           236              -
 9/16/96  Newport News/Warwick Blvd.                 -        575          1,385           196              -
 9/16/96  Greenbrook/Route 22                        -      1,227          2,954           591              -
 9/16/96  Monsey/Route 59                            -      1,068          2,572           153              -
 9/16/96  Santa Rosa/Santa Rosa Ave.                 -        575          1,385           138              -
 9/16/96  Fort Worth/Brentwood                       -        823          2,016           140              -
 9/16/96  Glendale/San Fernando Road                 -      2,500          6,124           184              -
 9/16/96  Houston/Harwin                             -        549          1,344           180              -
 9/16/96  Irvine/Cowan Street                        -      1,890          4,631           232              -
 9/16/96  Fairfield/Dixie Highway                    -        427          1,046           122              -
 9/16/96  Mesa/Country Club Drive                    -        701          1,718           246              -
 9/16/96  San Francisco/Geary Blvd.                  -      2,957          7,244           367              -
 9/16/96  Houston/Gulf Freeway                       -        701          1,718         4,945              -
 9/16/96  Las Vegas/S. Decatur Blvd.                 -      1,037          2,539           178              -

</TABLE>

<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             --------------------------------------------------

<S>       <C>                                        <C>        <C>       <C>            <C>
 6/26/96  Boca Raton                                 3,180      8,711     11,891         3,171
 6/28/96  Venice                                       669      1,741      2,410           684
 6/30/96  Las Vegas                                    921      2,442      3,363           893
 6/30/96  Bedford Park                                 606      1,674      2,280           656
 6/30/96  Los Angeles                                  692      1,744      2,436           646
 6/30/96  Silver Spring                              1,513      3,795      5,308         1,414
 6/30/96  Newark                                     1,051      2,578      3,629           930
 6/30/96  Brooklyn                                     783      2,330      3,113           991
  7/2/96  Glen Burnie/Furnace Br Rd                  1,755      4,427      6,182         1,544
 7/22/96  Lakewood/W Hampton                           716      2,182      2,898           758
 8/13/96  Norcross/Holcomb Bridge Rd                   955      3,260      4,215         1,142
  9/5/96  Spring Valley/S Pascack rd                 1,260      3,503      4,763         1,257
 9/16/96  Dallas/Royal Lane                          1,008      2,644      3,652           964
 9/16/96  Colorado Springs/Tomah Drive                 731      1,887      2,618           673
 9/16/96  Lewisville/S. Stemmons                       603      1,597      2,200           595
 9/16/96  Las Vegas/Boulder Hwy.                       947      2,672      3,619           935
 9/16/96  Sarasota/S. Tamiami Trail                    584      4,760      5,344           639
 9/16/96  Willow Grove/Maryland Road                   673      1,754      2,427           605
 9/16/96  Houston/W. Montgomery Rd.                    524      1,472      1,996           560
 9/16/96  Denver/W. Hampden                          1,084      2,818      3,902           966
 9/16/96  Littleton/Southpark Way                      922      2,559      3,481           924
 9/16/96  Petaluma/Baywood Drive                       861      2,251      3,112           804
 9/16/96  Canoga Park/Sherman Way                    1,543      4,271      5,814         1,524
 9/16/96  Jacksonville/South Lane Ave.                 554      1,570      2,124           602
 9/16/96  Newport News/Warwick Blvd.                   575      1,581      2,156           580
 9/16/96  Greenbrook/Route 22                        1,227      3,545      4,772         1,174
 9/16/96  Monsey/Route 59                            1,068      2,725      3,793           942
 9/16/96  Santa Rosa/Santa Rosa Ave.                   575      1,523      2,098           537
 9/16/96  Fort Worth/Brentwood                         823      2,156      2,979           783
 9/16/96  Glendale/San Fernando Road                 2,500      6,308      8,808         2,108
 9/16/96  Houston/Harwin                               549      1,524      2,073           570
 9/16/96  Irvine/Cowan Street                        1,890      4,863      6,753         1,681
 9/16/96  Fairfield/Dixie Highway                      427      1,168      1,595           423
 9/16/96  Mesa/Country Club Drive                      701      1,964      2,665           703
 9/16/96  San Francisco/Geary Blvd.                  2,957      7,611     10,568         2,560
 9/16/96  Houston/Gulf Freeway                         701      6,663      7,364         1,152
 9/16/96  Las Vegas/S. Decatur Blvd.                 1,037      2,717      3,754           943

</TABLE>

                                       F-59

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 9/16/96  Tempe/McKellips Road                       -        823          1,972           272              -
 9/16/96  Richland Hills/Airport Fwy.                -        473          1,158           208              -
 10/11/96 Hampton/Pembroke Road                      -      1,080          2,346         (180)              -
 10/11/96 Norfolk/Widgeon Road                       -      1,110          2,405         (324)              -
 10/11/96 Richmond/Bloom Lane                        -      1,188          2,512         (154)              -
 10/11/96 Virginia Beach/Southern Blvd               -        282            610           250              -
 10/11/96 Chesapeake/Military Hwy                    -        912          1,974           424              -
 10/11/96 Richmond/Midlothian Park                   -        762          1,588           534              -
 10/11/96 Roanoke/Peters Creek Road                  -        819          1,776           283              -
 10/11/96 Orlando/E Oakridge Rd                      -        927          2,020           265              -
 10/11/96 Orlando/South Hwy 17-92                    -      1,170          2,549           198              -
 10/25/96 Austin/Renelli                             -      1,710          3,990           256              -
 10/25/96 Austin/Santiago                            -        900          2,100           213              -
 10/25/96 Dallas/East N.W. Highway                   -        698          1,628           198              -
 10/25/96 Dallas/Denton Drive                        -        900          2,100           146              -
 10/25/96 Houston/Hempstead                          -        518          1,207           324              -
 10/25/96 Pasadena/So. Shaver                        -        420            980           275              -
 10/31/96 Houston/Joel Wheaton Rd                    -        465          1,085           214              -
 10/31/96 Mt Holly/541 Bypass                        -        360            840           297              -
 11/13/96 Town East/Mesquite                         -        330            770           186              -
 11/14/96 Bossier City LA                            -        633          1,488         (135)              -
 12/5/96  Lake Forest/Bake Parkway                   -        971          2,173           576              -
 12/16/96 Cherry Hill/Old Cuthbert                   -        645          1,505           647              -
 12/16/96 Oklahoma City/SW 74th                      -        375            875           120              -
 12/16/96 Oklahoma City/S Santa Fe                   -        360            840           179              -
 12/16/96 Oklahoma City/S. May                       -        360            840           155              -
 12/16/96 Arlington/S. Watson Rd.                    -        930          2,170           460              -
 12/16/96 Richardson/E. Arapaho                      -      1,290          3,010           423              -
 12/23/96 Eagle Rock/Colorado                        -        330            813           410              -
 12/23/96 Upper Darby/Lansdowne                      -        899          2,272           262              -
 12/23/96 Plymouth Meeting /Chemical                 -      1,109          2,802           206              -
 12/23/96 Philadelphia/Byberry                       -      1,019          2,575           186              -
 12/23/96 Ft. Lauderdale/State Road                  -      1,199          3,030           283              -
 12/23/96 Englewood/Costilla                         -      1,739          4,393           163              -
 12/23/96 Lilburn/Beaver Ruin Road                   -        600          1,515           178              -
 12/23/96 Carmichael/Fair Oaks                       -        809          2,045           216              -
 12/23/96 Portland/Division Street                   -        989          2,499           167              -

</TABLE>

<TABLE>
<CAPTION>



                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 9/16/96  Tempe/McKellips Road                        823      2,244      3,067           815
 9/16/96  Richland Hills/Airport Fwy.                 473      1,366      1,839           534
 10/11/96 Hampton/Pembroke Road                       914      2,332      3,246           588
 10/11/96 Norfolk/Widgeon Road                        908      2,283      3,191           594
 10/11/96 Richmond/Bloom Lane                         995      2,551      3,546           676
 10/11/96 Virginia Beach/Southern Blvd                282        860      1,142           412
 10/11/96 Chesapeake/Military Hwy                     912      2,398      3,310           974
 10/11/96 Richmond/Midlothian Park                    762      2,122      2,884           932
 10/11/96 Roanoke/Peters Creek Road                   819      2,059      2,878           787
 10/11/96 Orlando/E Oakridge Rd                       927      2,285      3,212           824
 10/11/96 Orlando/South Hwy 17-92                   1,170      2,747      3,917           979
 10/25/96 Austin/Renelli                            1,710      4,246      5,956         1,497
 10/25/96 Austin/Santiago                             900      2,313      3,213           856
 10/25/96 Dallas/East N.W. Highway                    698      1,826      2,524           683
 10/25/96 Dallas/Denton Drive                         900      2,246      3,146           810
 10/25/96 Houston/Hempstead                           518      1,531      2,049           598
 10/25/96 Pasadena/So. Shaver                         420      1,255      1,675           482
 10/31/96 Houston/Joel Wheaton Rd                     465      1,299      1,764           504
 10/31/96 Mt Holly/541 Bypass                         360      1,137      1,497           430
 11/13/96 Town East/Mesquite                          330        956      1,286           352
 11/14/96 Bossier City LA                             557      1,429      1,986           395
 12/5/96  Lake Forest/Bake Parkway                    973      2,747      3,720           827
 12/16/96 Cherry Hill/Old Cuthbert                    645      2,152      2,797           781
 12/16/96 Oklahoma City/SW 74th                       375        995      1,370           380
 12/16/96 Oklahoma City/S Santa Fe                    360      1,019      1,379           402
 12/16/96 Oklahoma City/S. May                        360        995      1,355           394
 12/16/96 Arlington/S. Watson Rd.                     930      2,630      3,560         1,043
 12/16/96 Richardson/E. Arapaho                     1,290      3,433      4,723         1,168
 12/23/96 Eagle Rock/Colorado                         444      1,109      1,553           273
 12/23/96 Upper Darby/Lansdowne                       899      2,534      3,433           873
 12/23/96 Plymouth Meeting /Chemical                1,109      3,008      4,117           659
 12/23/96 Philadelphia/Byberry                      1,019      2,761      3,780           956
 12/23/96 Ft. Lauderdale/State Road                 1,199      3,313      4,512         1,129
 12/23/96 Englewood/Costilla                        1,739      4,556      6,295         1,514
 12/23/96 Lilburn/Beaver Ruin Road                    600      1,693      2,293           625
 12/23/96 Carmichael/Fair Oaks                        809      2,261      3,070           814
 12/23/96 Portland/Division Street                    989      2,666      3,655           921

</TABLE>

                                       F-60
<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 12/23/96 Napa/Industrial                            -        660          1,666           166              -
 12/23/96 Wheatridge/W. 44th Avenue                  -      1,439          3,636           171              -
 12/23/96 Las Vegas/Charleston                       -      1,049          2,651           180              -
 12/23/96 Las Vegas/South Arvill                     -        929          2,348           150              -
 12/23/96 Los Angeles/Santa Monica                   -      3,328          8,407           238              -
 12/23/96 Warren/Schoenherr Rd.                      -        749          1,894           186              -
 12/23/96 Portland/N.E. 71st Avenue                  -        869          2,196           256              -
 12/23/96 Seattle/Pacific Hwy. South                 -        689          1,742           200              -
 12/23/96 Broadview/S. 25th Avenue                   -      1,289          3,257           336              -
 12/23/96 Winter Springs/W. St. Rte 434              -        689          1,742           137              -
 12/23/96 Tampa/15th Street                          -        420          1,060           307              -
 12/23/96 Pompano Beach/S. Dixie Hwy.                -        930          2,292           376              -
 12/23/96 Overland Park/Mastin                       -        990          2,440         3,249              -
 12/23/96 Auburn/R Street                            -        690          1,700           221              -
 12/23/96 Federal Heights/W. 48th Ave.               -        720          1,774           178              -
 12/23/96 Decatur/Covington                          -        930          2,292           246              -
 12/23/96 Forest Park/Jonesboro Rd.                  -        540          1,331           172              -
 12/23/96 Mangonia Park/Australian Ave.              -        840          2,070           165              -
 12/23/96 Whittier/Colima                            -        540          1,331           111              -
 12/23/96 Kent/Pacific Hwy South                     -        930          2,292           197              -
 12/23/96 Topeka/8th Street                          -        150            370           164              -
 12/23/96 Denver East Evans                          -      1,740          4,288           206              -
 12/23/96 Pittsburgh/California Ave.                 -        630          1,552           127              -
 12/23/96 Ft. Lauderdale/Powerline                   -        660          1,626           341              -
 12/23/96 Philadelphia/Oxford                        -        900          2,218           207              -
 12/23/96 Dallas/Lemmon Ave.                         -      1,710          4,214           160              -
 12/23/96 Alsip/115th Street                         -        750          1,848         1,958              -
 12/23/96 Green Acres/Jog Road                       -        600          1,479           132              -
 12/23/96 Pompano Beach/Sample Road                  -      1,320          3,253           178              -
 12/23/96 Wyndmoor/Ivy Hill                          -      2,160          5,323           264              -
 12/23/96 W. Palm Beach/Belvedere                    -        960          2,366           228              -
 12/23/96 Renton  174th St.                          -        960          2,366           235              -
 12/23/96 Sacramento/Northgate                       -      1,021          2,647           152              -
 12/23/96 Phoenix/19th Avenue                        -        991          2,569           233              -
 12/23/96 Bedford Park/Cicero                        -      1,321          3,426           306              -
 12/23/96 Lake Worth/Lk Worth                        -      1,111          2,880           229              -
 12/23/96 Arlington/Algonquin                        -        991          2,569           637              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 12/23/96 Napa/Industrial                             660      1,832      2,492           662
 12/23/96 Wheatridge/W. 44th Avenue                 1,439      3,807      5,246         1,285
 12/23/96 Las Vegas/Charleston                      1,049      2,831      3,880           954
 12/23/96 Las Vegas/South Arvill                      929      2,498      3,427           854
 12/23/96 Los Angeles/Santa Monica                  3,328      8,645     11,973         2,868
 12/23/96 Warren/Schoenherr Rd.                       749      2,080      2,829           744
 12/23/96 Portland/N.E. 71st Avenue                   869      2,452      3,321           892
 12/23/96 Seattle/Pacific Hwy. South                  689      1,942      2,631           729
 12/23/96 Broadview/S. 25th Avenue                  1,289      3,593      4,882         1,241
 12/23/96 Winter Springs/W. St. Rte 434               689      1,879      2,568           646
 12/23/96 Tampa/15th Street                           420      1,367      1,787           542
 12/23/96 Pompano Beach/S. Dixie Hwy.                 930      2,668      3,598           984
 12/23/96 Overland Park/Mastin                      1,306      5,373      6,679         1,229
 12/23/96 Auburn/R Street                             690      1,921      2,611           704
 12/23/96 Federal Heights/W. 48th Ave.                720      1,952      2,672           647
 12/23/96 Decatur/Covington                           930      2,538      3,468           884
 12/23/96 Forest Park/Jonesboro Rd.                   540      1,503      2,043           565
 12/23/96 Mangonia Park/Australian Ave.               840      2,235      3,075           787
 12/23/96 Whittier/Colima                             540      1,442      1,982           517
 12/23/96 Kent/Pacific Hwy South                      930      2,489      3,419           872
 12/23/96 Topeka/8th Street                           150        534        684           243
 12/23/96 Denver East Evans                         1,740      4,494      6,234         1,524
 12/23/96 Pittsburgh/California Ave.                  630      1,679      2,309           602
 12/23/96 Ft. Lauderdale/Powerline                    660      1,967      2,627           762
 12/23/96 Philadelphia/Oxford                         900      2,425      3,325           842
 12/23/96 Dallas/Lemmon Ave.                        1,710      4,374      6,084         1,480
 12/23/96 Alsip/115th Street                          750      3,806      4,556         1,004
 12/23/96 Green Acres/Jog Road                        600      1,611      2,211           586
 12/23/96 Pompano Beach/Sample Road                 1,320      3,431      4,751         1,178
 12/23/96 Wyndmoor/Ivy Hill                         2,160      5,587      7,747         1,875
 12/23/96 W. Palm Beach/Belvedere                     960      2,594      3,554           917
 12/23/96 Renton  174th St.                           960      2,601      3,561           938
 12/23/96 Sacramento/Northgate                      1,021      2,799      3,820           972
 12/23/96 Phoenix/19th Avenue                         991      2,802      3,793           980
 12/23/96 Bedford Park/Cicero                       1,321      3,732      5,053         1,308
 12/23/96 Lake Worth/Lk Worth                       1,111      3,109      4,220         1,083
 12/23/96 Arlington/Algonquin                         991      3,206      4,197         1,096

</TABLE>

                                       F-61

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 12/23/96 Seattle/15th Avenue                        -        781          2,024           168              -
 12/23/96 Southington/Spring                         -        811          2,102           183              -
 12/23/96 Clifton/Broad Street                       -      1,411          3,659           173              -
 12/23/96 Hillside/Glenwood                          -        563          4,051           329              -
 12/23/96 Nashville/Dickerson Pike                   -        990          2,440           181              -
 12/23/96 Madison/Gallatin Road                      -        780          1,922           241              -
 12/30/96 Concorde/Treat                             -      1,396          3,258           145              -
 12/30/96 Virginia Beach                             -        535          1,248           165              -
 12/30/96 San Mateo                                  -      2,408          5,619           206              -
 1/22/97  Austin, 1033 E. 41 Street                  -        257          3,633            95              -
 4/12/97  Annandale / Backlick                       -        955          2,229           379              -
 4/12/97  Ft. Worth / West Freeway                   -        667          1,556           256              -
 4/12/97  Campbell / S. Curtner                      -      2,550          5,950           680              -
 4/12/97  Aurora / S. Idalia                         -      1,002          2,338           558              -
 4/12/97  Santa Cruz / Capitola                      -      1,037          2,420           333              -
 4/12/97  Indianapolis / Lafayette Road              -        682          1,590           301              -
 4/12/97  Indianapolis / Route 31                    -        619          1,444           343              -
 4/12/97  Farmingdale / Broad Hollow Rd.             -      1,568          3,658           726              -
 4/12/97  Tyson's Corner / Springhill Rd.            -      3,861          9,010         1,258              -
 4/12/97  Fountain Valley / Newhope                  -      1,137          2,653           340              -
 4/12/97  Dallas / Winsted                           -      1,375          3,209           453              -
 4/12/97  Columbia / Broad River Rd.                 -        121            282           170              -
 4/12/97  Livermore / S. Front Road                  -        876          2,044           199              -
 4/12/97  Garland / Plano                            -        889          2,073           242              -
 4/12/97  San Jose / Story Road                      -      1,352          3,156           357              -
 4/12/97  Aurora / Abilene                           -      1,406          3,280           431              -
 4/12/97  Antioch / Sunset Drive                     -      1,035          2,416           222              -
 4/12/97  Rancho Cordova / Sunrise                   -      1,048          2,445           393              -
 4/12/97  Berlin / Wilbur Cross                      -        756          1,764           264              -
 4/12/97  Whittier / Whittier Blvd.                  -        648          1,513           179              -
 4/12/97  Peabody / Newbury Street                   -      1,159          2,704           521              -
 4/12/97  Denver / Blake                             -        602          1,405           212              -
 4/12/97  Evansville / Green River Road              -        470          1,096           196              -
 4/12/97  Burien / First Ave. So.                    -        792          1,847           260              -
 4/12/97  Rancho Cordova / Mather Field              -        494          1,153           187              -
 4/12/97  Sugar Land / Eldridge                      -        705          1,644           231              -
 4/12/97  Columbus / Eastland Drive                  -        602          1,405           316              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 12/23/96 Seattle/15th Avenue                         781      2,192      2,973           790
 12/23/96 Southington/Spring                          811      2,285      3,096           793
 12/23/96 Clifton/Broad Street                      1,411      3,832      5,243         1,289
 12/23/96 Hillside/Glenwood                           563      4,380      4,943         1,548
 12/23/96 Nashville/Dickerson Pike                    990      2,621      3,611           959
 12/23/96 Madison/Gallatin Road                       780      2,163      2,943           812
 12/30/96 Concorde/Treat                            1,396      3,403      4,799         1,151
 12/30/96 Virginia Beach                              535      1,413      1,948           505
 12/30/96 San Mateo                                 2,408      5,825      8,233         1,913
 1/22/97  Austin, 1033 E. 41 Street                   257      3,728      3,985         1,183
 4/12/97  Annandale / Backlick                        955      2,608      3,563           855
 4/12/97  Ft. Worth / West Freeway                    667      1,812      2,479           622
 4/12/97  Campbell / S. Curtner                     2,550      6,630      9,180         2,109
 4/12/97  Aurora / S. Idalia                        1,002      2,896      3,898           938
 4/12/97  Santa Cruz / Capitola                     1,037      2,753      3,790           888
 4/12/97  Indianapolis / Lafayette Road               682      1,891      2,573           658
 4/12/97  Indianapolis / Route 31                     619      1,787      2,406           614
 4/12/97  Farmingdale / Broad Hollow Rd.            1,568      4,384      5,952         1,419
 4/12/97  Tyson's Corner / Springhill Rd.           3,861     10,268     14,129         3,340
 4/12/97  Fountain Valley / Newhope                 1,137      2,993      4,130           955
 4/12/97  Dallas / Winsted                          1,375      3,662      5,037         1,220
 4/12/97  Columbia / Broad River Rd.                  121        452        573           216
 4/12/97  Livermore / S. Front Road                   876      2,243      3,119           730
 4/12/97  Garland / Plano                             889      2,315      3,204           773
 4/12/97  San Jose / Story Road                     1,352      3,513      4,865         1,165
 4/12/97  Aurora / Abilene                          1,406      3,711      5,117         1,211
 4/12/97  Antioch / Sunset Drive                    1,035      2,638      3,673           857
 4/12/97  Rancho Cordova / Sunrise                  1,048      2,838      3,886           986
 4/12/97  Berlin / Wilbur Cross                       756      2,028      2,784           705
 4/12/97  Whittier / Whittier Blvd.                   648      1,692      2,340           548
 4/12/97  Peabody / Newbury Street                  1,159      3,225      4,384         1,079
 4/12/97  Denver / Blake                              602      1,617      2,219           540
 4/12/97  Evansville / Green River Road               470      1,292      1,762           441
 4/12/97  Burien / First Ave. So.                     792      2,107      2,899           713
 4/12/97  Rancho Cordova / Mather Field               494      1,340      1,834           466
 4/12/97  Sugar Land / Eldridge                       705      1,875      2,580           643
 4/12/97  Columbus / Eastland Drive                   602      1,721      2,323           582

</TABLE>

                                       F-62

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 4/12/97  Slickerville / Black Horse Pike            -        539          1,258           213              -
 4/12/97  Seattle / Aurora                           -      1,145          2,671           295              -
 4/12/97  Gaithersburg / Christopher Ave.            -        972          2,268           281              -
 4/12/97  Manchester / Tolland Turnpike              -        807          1,883           235              -
 6/25/97  L.A./Venice Blvd.                          -        523          1,221         1,791              -
 6/25/97  Kirkland-Totem                             -      2,131          4,972           229              -
 6/25/97  Idianapolis                                -        471          1,098           115              -
 6/25/97  Dallas                                     -        699          1,631            74              -
 6/25/97  Atlanta                                    -      1,183          2,761           132              -
 6/25/97  Bensalem                                   -      1,159          2,705           101              -
 6/25/97  Evansville                                 -        429          1,000            71              -
 6/25/97  Austin                                     -        813          1,897            84              -
 6/25/97  Harbor City                                -      1,244          2,904           266              -
 6/25/97  Birmingham                                 -        539          1,258           119              -
 6/25/97  Sacramento                                 -        489          1,396         (182)              -
 6/25/97  Carrollton                                 -        441          1,029            53              -
 6/25/97  La Habra                                   -        822          1,918            68              -
 6/25/97  Lombard                                    -      1,527          3,564         1,739              -
 6/25/97  Fairfield                                  -        740          1,727            86              -
 6/25/97  Seattle                                    -      1,498          3,494           289              -
 6/25/97  Bellevue                                   -      1,653          3,858            78              -
 6/25/97  Citrus Heights                             -        642          1,244           536              -
 6/25/97  San Jose                                   -      1,273          2,971            23              -
 6/25/97  Stanton                                    -        948          2,212            68              -
 6/25/97  Garland                                    -        486          1,135            69              -
 6/25/97  Westford                                   -        857          1,999           165              -
 6/25/97  Dallas                                     -      1,627          3,797           661              -
 6/25/97  Wheat Ridge                                -      1,054          2,459           403              -
 6/25/97  Berlin                                     -        825          1,925           314              -
 6/25/97  Gretna                                     -      1,069          2,494           441              -
 6/25/97  Spring                                     -        461          1,077           221              -
 6/25/97  Sacramento                                 -        592          1,380           911              -
 6/25/97  Houston/South Dairyashford                 -        856          1,997           346              -
 6/25/97  Naperville                                 -      1,108          2,585           392              -
 6/25/97  Carrollton                                 -      1,158          2,702           524              -
 6/25/97  Waipahu                                    -      1,620          3,780           544              -
 6/25/97  Davis                                      -        628          1,465           232              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 4/12/97  Slickerville / Black Horse Pike             539      1,471      2,010           543
 4/12/97  Seattle / Aurora                          1,145      2,966      4,111           974
 4/12/97  Gaithersburg / Christopher Ave.             972      2,549      3,521           861
 4/12/97  Manchester / Tolland Turnpike               807      2,118      2,925           702
 6/25/97  L.A./Venice Blvd.                         1,044      2,491      3,535           605
 6/25/97  Kirkland-Totem                            2,131      5,201      7,332         1,718
 6/25/97  Idianapolis                                 471      1,213      1,684           427
 6/25/97  Dallas                                      699      1,705      2,404           578
 6/25/97  Atlanta                                   1,183      2,893      4,076           947
 6/25/97  Bensalem                                  1,159      2,806      3,965           903
 6/25/97  Evansville                                  401      1,099      1,500           372
 6/25/97  Austin                                      813      1,981      2,794           656
 6/25/97  Harbor City                               1,244      3,170      4,414         1,084
 6/25/97  Birmingham                                  539      1,377      1,916           471
 6/25/97  Sacramento                                  489      1,214      1,703           413
 6/25/97  Carrollton                                  441      1,082      1,523           359
 6/25/97  La Habra                                    822      1,986      2,808           653
 6/25/97  Lombard                                   2,047      4,783      6,830         1,432
 6/25/97  Fairfield                                   740      1,813      2,553           577
 6/25/97  Seattle                                   1,498      3,783      5,281         1,349
 6/25/97  Bellevue                                  1,653      3,936      5,589         1,283
 6/25/97  Citrus Heights                              642      1,780      2,422           661
 6/25/97  San Jose                                  1,273      2,994      4,267           955
 6/25/97  Stanton                                     948      2,280      3,228           732
 6/25/97  Garland                                     486      1,204      1,690           407
 6/25/97  Westford                                    857      2,164      3,021           700
 6/25/97  Dallas                                    1,627      4,458      6,085         1,466
 6/25/97  Wheat Ridge                               1,054      2,862      3,916           885
 6/25/97  Berlin                                      825      2,239      3,064           699
 6/25/97  Gretna                                    1,069      2,935      4,004         1,024
 6/25/97  Spring                                      461      1,298      1,759           441
 6/25/97  Sacramento                                  720      2,163      2,883           661
 6/25/97  Houston/South Dairyashford                  856      2,343      3,199           745
 6/25/97  Naperville                                1,108      2,977      4,085           939
 6/25/97  Carrollton                                1,158      3,226      4,384         1,041
 6/25/97  Waipahu                                   1,620      4,324      5,944         1,373
 6/25/97  Davis                                       628      1,697      2,325           564

</TABLE>

                                       F-63

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 6/25/97  Decatur                                    -        951          2,220           405              -
 6/25/97  Jacksonville                               -        653          1,525           298              -
 6/25/97  Chicoppe                                   -        663          1,546           340              -
 6/25/97  Alexandria                                 -      1,533          3,576           507              -
 6/25/97  Houston/Veterans Memorial Dr.              -        458          1,070           189              -
 6/25/97  Los Angeles/Olympic                        -      4,392         10,247         1,215              -
 6/25/97  Littleton                                  -      1,340          3,126           560              -
 6/25/97  Metairie                                   -      1,229          2,868           483              -
 6/25/97  Louisville                                 -        717          1,672           310              -
 6/25/97  East Hazel Crest                           -        753          1,757         2,199              -
 6/25/97  Edmonds                                    -      1,187          2,770           412              -
 6/25/97  Foster City                                -      1,064          2,483           345              -
 6/25/97  Chicago                                    -      1,160          2,708           530              -
 6/25/97  Philadelphia                               -        924          2,155           408              -
 6/25/97  Dallas/Vilbig Rd.                          -        508          1,184           232              -
 6/25/97  Staten Island                              -      1,676          3,910           557              -
 6/25/97  Pelham Manor                               -      1,209          2,820           701              -
 6/25/97  Irving                                     -        469          1,093           217              -
 6/25/97  Elk Grove                                  -        642          1,497           287              -
 6/25/97  LAX                                        -      1,312          3,062           542              -
 6/25/97  Denver                                     -      1,316          3,071           580              -
 6/25/97  Plano                                      -      1,369          3,193           473              -
 6/25/97  Lynnwood                                   -        839          1,959           364              -
 6/25/97  Lilburn                                    -        507          1,182           348              -
 6/25/97  Parma                                      -        881          2,055           505              -
 6/25/97  Davie                                      -      1,086          2,533           652              -
 6/25/97  Allen Park                                 -        953          2,223           533              -
 6/25/97  Aurora                                     -        808          1,886           457              -
 6/25/97  San Diego/16th Street                      -        932          2,175           613              -
 6/25/97  Sterling Heights                           -        766          1,787           461              -
 6/25/97  East L.A./Boyle Heights                    -        957          2,232           501              -
 6/25/97  Springfield/Alban Station                  -      1,317          3,074           663              -
 6/25/97  Littleton                                  -        868          2,026           499              -
 6/25/97  Sacramento/57th Street                     -        869          2,029           493              -
 6/25/97  Miami                                      -      1,762          4,111           971              -
 8/13/97  Santa Monica / Wilshire Blvd.              -      2,040          4,760           275              -
 10/1/97  Marietta /Austell Rd                       -        398          1,326           302            462

</TABLE>

<TABLE>
<CAPTION>


                                                    Gross Carrying Amount
                                                     At December 31, 2004
   Date                                       ---------------------------------- Accumulated
 Acquired             Description                 Land     Buildings    Total    Depreciation
-----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             --------------------------------------------------

<S>       <C>                                          <C>      <C>        <C>             <C>
 6/25/97  Decatur                                      951      2,625      3,576           866
 6/25/97  Jacksonville                                 653      1,823      2,476           622
 6/25/97  Chicoppe                                     663      1,886      2,549           647
 6/25/97  Alexandria                                 1,533      4,083      5,616         1,280
 6/25/97  Houston/Veterans Memorial Dr.                458      1,259      1,717           420
 6/25/97  Los Angeles/Olympic                        4,392     11,462     15,854         3,541
 6/25/97  Littleton                                  1,340      3,686      5,026         1,166
 6/25/97  Metairie                                   1,229      3,351      4,580         1,082
 6/25/97  Louisville                                   717      1,982      2,699           650
 6/25/97  East Hazel Crest                           1,236      3,473      4,709         1,272
 6/25/97  Edmonds                                    1,187      3,182      4,369         1,026
 6/25/97  Foster City                                1,064      2,828      3,892           881
 6/25/97  Chicago                                    1,160      3,238      4,398         1,040
 6/25/97  Philadelphia                                 924      2,563      3,487           804
 6/25/97  Dallas/Vilbig Rd.                            508      1,416      1,924           480
 6/25/97  Staten Island                              1,676      4,467      6,143         1,420
 6/25/97  Pelham Manor                               1,209      3,521      4,730         1,135
 6/25/97  Irving                                       469      1,310      1,779           446
 6/25/97  Elk Grove                                    642      1,784      2,426           578
 6/25/97  LAX                                        1,312      3,604      4,916         1,168
 6/25/97  Denver                                     1,316      3,651      4,967         1,151
 6/25/97  Plano                                      1,369      3,666      5,035         1,133
 6/25/97  Lynnwood                                     839      2,323      3,162           775
 6/25/97  Lilburn                                      507      1,530      2,037           530
 6/25/97  Parma                                        881      2,560      3,441           833
 6/25/97  Davie                                      1,086      3,185      4,271         1,033
 6/25/97  Allen Park                                   953      2,756      3,709           888
 6/25/97  Aurora                                       808      2,343      3,151           734
 6/25/97  San Diego/16th Street                        932      2,788      3,720           957
 6/25/97  Sterling Heights                             766      2,248      3,014           732
 6/25/97  East L.A./Boyle Heights                      957      2,733      3,690           872
 6/25/97  Springfield/Alban Station                  1,317      3,737      5,054         1,185
 6/25/97  Littleton                                    868      2,525      3,393           793
 6/25/97  Sacramento/57th Street                       869      2,522      3,391           825
 6/25/97  Miami                                      1,762      5,082      6,844         1,564
 8/13/97  Santa Monica / Wilshire Blvd.              2,040      5,035      7,075         1,663
 10/1/97  Marietta /Austell Rd                         398      2,090      2,488           710

</TABLE>

                                       F-64

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>            <C>
 10/1/97  Denver / Leetsdale                         -      1,407          1,682           245            588
 10/1/97  Baltimore / York Road                      -      1,538          1,952           629            708
 10/1/97  Bolingbrook                                -        737          1,776           232            617
 10/1/97  Kent / Central                             -        483          1,321           197            463
 10/1/97  Geneva / Roosevelt                         -        355          1,302           219            461
 10/1/97  Denver / Sheridan                          -        429          1,105           163            401
 10/1/97  Mountlake Terrace                          -      1,017          1,783           223            605
 10/1/97  Carol Stream/ St.Charles                   -        185          1,187           182            418
 10/1/97  Marietta / Cobb Park                       -        420          1,131           315            426
 10/1/97  Venice / Rose                              -      5,468          5,478           664          1,814
 10/1/97  Ventura / Ventura Blvd                     -        911          2,227           256            762
 10/1/97  Studio City/ Ventura                       -      2,421          1,610           191            537
 10/1/97  Madison Heights                            -        428          1,686         2,576            565
 10/1/97  Lax / Imperial                             -      1,662          2,079           180            715
 10/1/97  Justice / Industrial                       -        233          1,181           179            412
 10/1/97  Burbank / San Fernando                     -      1,825          2,210           196            745
 10/1/97  Pinole / Appian Way                        -        728          1,827           207            624
 10/1/97  Denver / Tamarac Park                      -      2,545          1,692           417            662
 10/1/97  Gresham / Powell                           -        322          1,298           217            439
 10/1/97  Warren / Mound Road                        -        268          1,025           206            363
 10/1/97  Woodside/Brooklyn                          -      5,016          3,950           572          2,107
 10/1/97  Enfield / Elm Street                       -        399          1,900           286            645
 10/1/97  Roselle / Lake Street                      -        312          1,411           215            493
 10/1/97  Milwaukee / Appleton                       -        324          1,385           276            488
 10/1/97  Emeryville / Bay St                        -      1,602          1,830           164            627
 10/1/97  Monterey / Del Rey                         -        257          1,048           229            360
 10/1/97  San Leandro / Washington                   -        660          1,142           169            395
 10/1/97  Boca Raton / N.W. 20                       -      1,140          2,256           457            774
 10/1/97  Washington Dc/So Capital                   -      1,437          4,489           459          1,528
 10/1/97  Lynn / Lynnway                             -        463          3,059           428          1,067
 10/1/97  Pompano Beach                              -      1,077          1,527           680            534
 10/1/97  Lake Oswego/ N.State                       -        465          1,956           275            660
 10/1/97  Daly City / Mission                        -        389          2,921           211            980
 10/1/97  Odenton / Route 175                        -        456          2,104           247            724
 10/1/97  Novato / Landing                           -      2,416          3,496           235            824
 10/1/97  St. Louis / Lindberg                       -        584          1,508           339            315
 10/1/97  Oakland/International                      -        358          1,568           253            296

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 10/1/97  Denver / Leetsdale                        1,407      2,515      3,922           892
 10/1/97  Baltimore / York Road                     1,538      3,289      4,827         1,054
 10/1/97  Bolingbrook                                 737      2,625      3,362           919
 10/1/97  Kent / Central                              483      1,981      2,464           703
 10/1/97  Geneva / Roosevelt                          355      1,982      2,337           700
 10/1/97  Denver / Sheridan                           429      1,669      2,098           603
 10/1/97  Mountlake Terrace                         1,017      2,611      3,628           890
 10/1/97  Carol Stream/ St.Charles                    185      1,787      1,972           617
 10/1/97  Marietta / Cobb Park                        420      1,872      2,292           658
 10/1/97  Venice / Rose                             5,468      7,956     13,424         2,513
 10/1/97  Ventura / Ventura Blvd                      911      3,245      4,156         1,106
 10/1/97  Studio City/ Ventura                      2,421      2,338      4,759           800
 10/1/97  Madison Heights                             428      4,827      5,255           797
 10/1/97  Lax / Imperial                            1,662      2,974      4,636         1,039
 10/1/97  Justice / Industrial                        233      1,772      2,005           611
 10/1/97  Burbank / San Fernando                    1,825      3,151      4,976         1,080
 10/1/97  Pinole / Appian Way                         728      2,658      3,386           910
 10/1/97  Denver / Tamarac Park                     2,545      2,771      5,316         1,035
 10/1/97  Gresham / Powell                            322      1,954      2,276           650
 10/1/97  Warren / Mound Road                         268      1,594      1,862           523
 10/1/97  Woodside/Brooklyn                         5,016      6,629     11,645         1,766
 10/1/97  Enfield / Elm Street                        399      2,831      3,230           899
 10/1/97  Roselle / Lake Street                       312      2,119      2,431           716
 10/1/97  Milwaukee / Appleton                        324      2,149      2,473           686
 10/1/97  Emeryville / Bay St                       1,602      2,621      4,223           889
 10/1/97  Monterey / Del Rey                          257      1,637      1,894           510
 10/1/97  San Leandro / Washington                    660      1,706      2,366           574
 10/1/97  Boca Raton / N.W. 20                      1,140      3,487      4,627         1,092
 10/1/97  Washington Dc/So Capital                  1,437      6,476      7,913         1,837
 10/1/97  Lynn / Lynnway                              463      4,554      5,017         1,447
 10/1/97  Pompano Beach                             1,077      2,741      3,818           772
 10/1/97  Lake Oswego/ N.State                        465      2,891      3,356           912
 10/1/97  Daly City / Mission                         389      4,112      4,501         1,309
 10/1/97  Odenton / Route 175                         456      3,075      3,531           882
 10/1/97  Novato / Landing                          2,587      4,384      6,971         1,505
 10/1/97  St. Louis / Lindberg                        625      2,121      2,746           694
 10/1/97  Oakland/International                       383      2,092      2,475           704

</TABLE>

                                       F-65

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>            <C>
 10/1/97  Stockton / March Lane                      -        663          1,398           157            279
 10/1/97  Des Plaines / Golf Rd                      -      1,363          3,093           251            595
 10/1/97  Morton Grove / Wauke                       -      2,658          3,232         3,688            149
 10/1/97  Los Angeles / Jefferson                    -      1,090          1,580           256            351
 10/1/97  Los Angeles / Martin                       -        869          1,152           121            253
 10/1/97  San Leandro / E. 14th                      -        627          1,289           118            254
 10/1/97  Tucson / Tanque Verde                      -        345          1,709           274            321
 10/1/97  Randolph / Warren St                       -      2,330          1,914           524            529
 10/1/97  Forrestville / Penn.                       -      1,056          2,347           309            472
 10/1/97  Bridgeport                                 -      4,877          2,739           655            852
 10/1/97  North Hollywood/Vine                       -        906          2,379           229            452
 10/1/97  Santa Cruz / Portola                       -        535          1,526           184            293
 10/1/97  Hyde Park / River St                       -        626          1,748           290            347
 10/1/97  Dublin / San Ramon Rd                      -        942          1,999           172            394
 10/1/97  Vallejo / Humboldt                         -        473          1,651           162            302
 10/1/97  Fremont/Warm Springs                       -        848          2,885           242            526
 10/1/97  Seattle / Stone Way                        -        829          2,180           321            432
 10/1/97  W. Olympia                                 -        149          1,096           303            220
 10/1/97  Mercer/Parkside Ave                        -        359          1,763           260            326
 10/1/97  Bridge Water / Main                        -        445          2,054           289            381
 10/1/97  Norwalk / Hoyt Street                      -      2,369          3,049           563            704
 11/2/97  Lansing                                    -        758          1,768          (96)              -
 11/7/97  Phoenix                                    -      1,197          2,793           138              -
 11/13/97 Tinley Park                                -      1,422          3,319            76              -
 3/17/98  Houston/De Soto Dr.                        -        659          1,537           154              -
 3/17/98  Houston / East Freeway                     -        593          1,384           180              -
 3/17/98  Austin/Ben White                           -        692          1,614            74              -
 3/17/98  Arlington/E.Pioneer                        -        922          2,152           250              -
 3/17/98  Las Vegas/Tropicana                        -      1,285          2,998           161              -
 3/17/98  Branford / Summit Place                    -        728          1,698           180              -
 3/17/98  Las Vegas / Charleston                     -        791          1,845           129              -
 3/17/98  So. San Francisco                          -      1,550          3,617            97              -
 3/17/98  Pasadena / Arroyo Prkwy                    -      3,005          7,012           223              -
 3/17/98  Tempe / E. Broadway                        -        633          1,476           194              -
 3/17/98  Phoenix / N. 43rd Ave                      -        443          1,033           178              -
 3/17/98  Phoenix/No. 43rd                           -        380            886           424              -
 3/17/98  Phoenix / Black Canyon                     -        380            886           163              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 10/1/97  Stockton / March Lane                       710      1,787      2,497           601
 10/1/97  Des Plaines / Golf Rd                     1,460      3,842      5,302         1,314
 10/1/97  Morton Grove / Wauke                      2,846      6,881      9,727         1,899
 10/1/97  Los Angeles / Jefferson                   1,167      2,110      3,277           692
 10/1/97  Los Angeles / Martin                        931      1,464      2,395           498
 10/1/97  San Leandro / E. 14th                       671      1,617      2,288           547
 10/1/97  Tucson / Tanque Verde                       370      2,279      2,649           686
 10/1/97  Randolph / Warren St                      2,495      2,802      5,297           802
 10/1/97  Forrestville / Penn.                      1,131      3,053      4,184         1,017
 10/1/97  Bridgeport                                5,222      3,901      9,123         1,255
 10/1/97  North Hollywood/Vine                        970      2,996      3,966           930
 10/1/97  Santa Cruz / Portola                        573      1,965      2,538           631
 10/1/97  Hyde Park / River St                        670      2,341      3,011           712
 10/1/97  Dublin / San Ramon Rd                     1,008      2,499      3,507           863
 10/1/97  Vallejo / Humboldt                          506      2,082      2,588           665
 10/1/97  Fremont/Warm Springs                        908      3,593      4,501         1,099
 10/1/97  Seattle / Stone Way                         887      2,875      3,762           836
 10/1/97  W. Olympia                                  160      1,608      1,768           469
 10/1/97  Mercer/Parkside Ave                         384      2,324      2,708           708
 10/1/97  Bridge Water / Main                         477      2,692      3,169           791
 10/1/97  Norwalk / Hoyt Street                     2,536      4,149      6,685         1,239
 11/2/97  Lansing                                     730      1,700      2,430           573
 11/7/97  Phoenix                                   1,197      2,931      4,128           918
 11/13/97 Tinley Park                               1,422      3,395      4,817           982
 3/17/98  Houston/De Soto Dr.                         659      1,691      2,350           508
 3/17/98  Houston / East Freeway                      593      1,564      2,157           502
 3/17/98  Austin/Ben White                            682      1,698      2,380           503
 3/17/98  Arlington/E.Pioneer                         922      2,402      3,324           712
 3/17/98  Las Vegas/Tropicana                       1,285      3,159      4,444           916
 3/17/98  Branford / Summit Place                     728      1,878      2,606           558
 3/17/98  Las Vegas / Charleston                      791      1,974      2,765           582
 3/17/98  So. San Francisco                         1,550      3,714      5,264         1,046
 3/17/98  Pasadena / Arroyo Prkwy                   3,005      7,235     10,240         2,019
 3/17/98  Tempe / E. Broadway                         633      1,670      2,303           506
 3/17/98  Phoenix / N. 43rd Ave                       443      1,211      1,654           396
 3/17/98  Phoenix/No. 43rd                            380      1,310      1,690           349
 3/17/98  Phoenix / Black Canyon                      380      1,049      1,429           349

</TABLE>

                                       F-66

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>            <C>           <C>              <C>
 3/17/98  Phoenix/Black Canyon                       -        136            317           192              -
 3/17/98  Nesconset / Southern                       -      1,423          3,321           131              -
  4/1/98  St. Louis / Hwy. 141                       -        659          1,628         4,496              -
  4/1/98  Island Park / Austin                       -      2,313          3,015         (673)              -
  4/1/98  Akron / Brittain Rd.                       -        275          2,248         (194)              -
  4/1/98  Patchogue/W.Sunrise                        -        936          2,184           159              -
  4/1/98  Havertown/West Chester                     -      1,254          2,926           132              -
  4/1/98  Schiller Park/River                        -        568          1,390           114              -
  4/1/98  Chicago / Cuyler                           -      1,400          2,695           219              -
  4/1/98  Chicago Heights/West                       -        468          1,804           176              -
  4/1/98  Arlington Hts/University                   -        670          3,004            97              -
  4/1/98  Cicero / Ogden                             -      1,678          2,266           315              -
  4/1/98  Chicago/W. Howard St.                      -        974          2,875           163              -
  4/1/98  Chicago/N. Western Ave                     -      1,453          3,205           160              -
  4/1/98  Chicago/Northwest Hwy                      -        925          2,412            86              -
  4/1/98  Chicago/N. Wells St.                       -      1,446          2,828            97              -
  4/1/98  Chicago / Pulaski Rd.                      -      1,276          2,858            83              -
  4/1/98  Artesia / Artesia                          -        625          1,419            99              -
  4/1/98  Arcadia / Lower Azusa                      -        821          1,369           214              -
  4/1/98  Manassas / Centreville                     -        405          2,137           299              -
  4/1/98  La Downtwn/10 Fwy                          -      1,608          3,358           226              -
  4/1/98  Bellevue / Northup                         -      1,232          3,306           272              -
  4/1/98  Hollywood/Cole & Wilshire                  -      1,590          1,785           119              -
  4/1/98  Atlanta/John Wesley                        -      1,233          1,665           211              -
  4/1/98  Montebello/S. Maple                        -      1,274          2,299           136              -
  4/1/98  Lake City/Forest Park                      -        248          1,445           130              -
  4/1/98  Baltimore / W. Patap                       -        403          2,650           164              -
  4/1/98  Fraser/Groesbeck Hwy                       -        368          1,796            86              -
  4/1/98  Vallejo / Mini Drive                       -        560          1,803            90              -
  4/1/98  San Diego/54th & Euclid                    -        952          2,550           125              -
  4/1/98  Miami / 5th Street                         -      2,327          3,234           128              -
  4/1/98  Silver Spring/Hill                         -        922          2,080           158              -
  4/1/98  Chicago/E. 95th St.                        -        397          2,357           173              -
  4/1/98  Chicago / S. Harlem                        -        791          1,424           121              -
  4/1/98  St. Charles /Highway                       -        623          1,501           134              -
  4/1/98  Chicago/Burr Ridge Rd.                     -        421          2,165            83              -
  4/1/98  Yonkers / Route 9a                         -      1,722          3,823           280              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>        <C>        <C>           <C>
 3/17/98  Phoenix/Black Canyon                        136        509        645           214
 3/17/98  Nesconset / Southern                      1,423      3,452      4,875           983
  4/1/98  St. Louis / Hwy. 141                      1,344      5,439      6,783         1,075
  4/1/98  Island Park / Austin                      1,374      3,281      4,655           890
  4/1/98  Akron / Brittain Rd.                        669      1,660      2,329           426
  4/1/98  Patchogue/W.Sunrise                         936      2,343      3,279           699
  4/1/98  Havertown/West Chester                    1,249      3,063      4,312           891
  4/1/98  Schiller Park/River                         568      1,504      2,072           456
  4/1/98  Chicago / Cuyler                          1,400      2,914      4,314           865
  4/1/98  Chicago Heights/West                        468      1,980      2,448           599
  4/1/98  Arlington Hts/University                    670      3,101      3,771           940
  4/1/98  Cicero / Ogden                            1,678      2,581      4,259           873
  4/1/98  Chicago/W. Howard St.                       974      3,038      4,012           955
  4/1/98  Chicago/N. Western Ave                    1,453      3,365      4,818         1,032
  4/1/98  Chicago/Northwest Hwy                       925      2,498      3,423           758
  4/1/98  Chicago/N. Wells St.                      1,446      2,925      4,371           893
  4/1/98  Chicago / Pulaski Rd.                     1,276      2,941      4,217           872
  4/1/98  Artesia / Artesia                           625      1,518      2,143           572
  4/1/98  Arcadia / Lower Azusa                       821      1,583      2,404           577
  4/1/98  Manassas / Centreville                      405      2,436      2,841           902
  4/1/98  La Downtwn/10 Fwy                         1,608      3,584      5,192         1,288
  4/1/98  Bellevue / Northup                        1,232      3,578      4,810         1,333
  4/1/98  Hollywood/Cole & Wilshire                 1,590      1,904      3,494           687
  4/1/98  Atlanta/John Wesley                       1,233      1,876      3,109           769
  4/1/98  Montebello/S. Maple                       1,274      2,435      3,709           868
  4/1/98  Lake City/Forest Park                       248      1,575      1,823           588
  4/1/98  Baltimore / W. Patap                        403      2,814      3,217         1,000
  4/1/98  Fraser/Groesbeck Hwy                        368      1,882      2,250           677
  4/1/98  Vallejo / Mini Drive                        560      1,893      2,453           688
  4/1/98  San Diego/54th & Euclid                     952      2,675      3,627         1,047
  4/1/98  Miami / 5th Street                        2,327      3,362      5,689         1,291
  4/1/98  Silver Spring/Hill                          922      2,238      3,160           897
  4/1/98  Chicago/E. 95th St.                         397      2,530      2,927           983
  4/1/98  Chicago / S. Harlem                         791      1,545      2,336           617
  4/1/98  St. Charles /Highway                        623      1,635      2,258           669
  4/1/98  Chicago/Burr Ridge Rd.                      421      2,248      2,669           894
  4/1/98  Yonkers / Route 9a                        1,722      4,103      5,825         1,526

</TABLE>

                                       F-67

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
  4/1/98  Silverlake/Glendale                        -      2,314          5,481           213              -
  4/1/98  Chicago/Harlem Ave                         -      1,430          3,038           141              -
  4/1/98  Bethesda / Butler Rd                       -      1,146          2,509            73              -
  4/1/98  Dundalk / Wise Ave                         -        447          2,005           143              -
  4/1/98  St. Louis / Hwy. 141                       -        659          1,628            74              -
  4/1/98  Island Park / Austin                       -      2,313          3,015           104              -
  4/1/98  Dallas / Kingsly                           -      1,095          1,712           107              -
  5/1/98  Berkeley / 2nd St.                         -      1,914          4,466          (88)              -
  5/8/98  Cleveland / W. 117th                       -        930          2,277           208              -
  5/8/98  La /Venice Blvd                            -      1,470          3,599           131              -
  5/8/98  Aurora / Farnsworth                        -        960          2,350           106              -
  5/8/98  Santa Rosa / Hopper                        -      1,020          2,497           123              -
  5/8/98  Golden Valley / Winn                       -        630          1,542           139              -
  5/8/98  St. Louis / Benham                         -        810          1,983           154              -
  5/8/98  Chicago / S. Chicago                       -        840          2,057            97              -
 10/1/98  El Segundo / Sepulveda                     -      6,586          5,795           202              -
 10/1/98  Atlanta / Memorial Dr.                     -        414          2,239           180              -
 10/1/98  Chicago / W. 79th St                       -        861          2,789           266              -
 10/1/98  Chicago / N. Broadway                      -      1,918          3,824           190              -
 10/1/98  Dallas / Greenville                        -      1,933          2,892           115              -
 10/1/98  Tacoma / Orchard                           -        358          1,987           105              -
 10/1/98  St. Louis / Gravois                        -        312          2,327           143              -
 10/1/98  White Bear Lake                            -        578          2,079           190              -
 10/1/98  Santa Cruz / Soquel                        -        832          2,385           119              -
 10/1/98  Coon Rapids / Hwy 10                       -        330          1,646           124              -
 10/1/98  Oxnard / Hueneme Rd                        -        923          3,925           166              -
 10/1/98  Vancouver/ Millplain                       -        343          2,000            95              -
 10/1/98  Tigard / Mc Ewan                           -        597          1,652            85              -
 10/1/98  Griffith / Cline                           -        299          2,118            88              -
 10/1/98  Miami / Sunset Drive                       -      1,656          2,321         1,972              -
 10/1/98  Farmington / 9 Mile                        -        580          2,526            98              -
 10/1/98  Los Gatos / University                     -      2,234          3,890         (228)              -
 10/1/98  N. Hollywood                               -      1,484          3,143            88              -
 10/1/98  Petaluma / Transport                       -        460          1,840         4,877              -
 10/1/98  Chicago / 111th                            -        341          2,898         2,266              -
 10/1/98  Upper Darby / Market                       -        808          5,011           176              -
 10/1/98  San Jose / Santa                           -        966          3,870           102              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>           <C>
  4/1/98  Silverlake/Glendale                       2,314      5,694      8,008         2,138
  4/1/98  Chicago/Harlem Ave                        1,430      3,179      4,609         1,221
  4/1/98  Bethesda / Butler Rd                      1,146      2,582      3,728           970
  4/1/98  Dundalk / Wise Ave                          447      2,148      2,595           782
  4/1/98  St. Louis / Hwy. 141                        659      1,702      2,361           725
  4/1/98  Island Park / Austin                      2,313      3,119      5,432         1,307
  4/1/98  Dallas / Kingsly                          1,095      1,819      2,914           679
  5/1/98  Berkeley / 2nd St.                        1,837      4,455      6,292         1,281
  5/8/98  Cleveland / W. 117th                        930      2,485      3,415           750
  5/8/98  La /Venice Blvd                           1,470      3,730      5,200         1,008
  5/8/98  Aurora / Farnsworth                         960      2,456      3,416           677
  5/8/98  Santa Rosa / Hopper                       1,020      2,620      3,640           726
  5/8/98  Golden Valley / Winn                        630      1,681      2,311           488
  5/8/98  St. Louis / Benham                          810      2,137      2,947           641
  5/8/98  Chicago / S. Chicago                        840      2,154      2,994           584
 10/1/98  El Segundo / Sepulveda                    6,586      5,997     12,583         1,596
 10/1/98  Atlanta / Memorial Dr.                      414      2,419      2,833           716
 10/1/98  Chicago / W. 79th St                        861      3,055      3,916           934
 10/1/98  Chicago / N. Broadway                     1,918      4,014      5,932         1,124
 10/1/98  Dallas / Greenville                       1,933      3,007      4,940           825
 10/1/98  Tacoma / Orchard                            358      2,092      2,450           599
 10/1/98  St. Louis / Gravois                         312      2,470      2,782           718
 10/1/98  White Bear Lake                             578      2,269      2,847           620
 10/1/98  Santa Cruz / Soquel                         832      2,504      3,336           704
 10/1/98  Coon Rapids / Hwy 10                        330      1,770      2,100           497
 10/1/98  Oxnard / Hueneme Rd                         923      4,091      5,014         1,117
 10/1/98  Vancouver/ Millplain                        343      2,095      2,438           594
 10/1/98  Tigard / Mc Ewan                            597      1,737      2,334           508
 10/1/98  Griffith / Cline                            299      2,206      2,505           595
 10/1/98  Miami / Sunset Drive                      2,267      3,682      5,949           849
 10/1/98  Farmington / 9 Mile                         580      2,624      3,204           723
 10/1/98  Los Gatos / University                    2,234      3,662      5,896           999
 10/1/98  N. Hollywood                              1,484      3,231      4,715           868
 10/1/98  Petaluma / Transport                        857      6,320      7,177         1,072
 10/1/98  Chicago / 111th                             432      5,073      5,505           987
 10/1/98  Upper Darby / Market                        808      5,187      5,995         1,403
 10/1/98  San Jose / Santa                            966      3,972      4,938         1,081

</TABLE>

                                       F-68

<PAGE>

<TABLE>
<CAPTION>
                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 10/1/98  San Diego / Morena                         -      3,173          5,469           131              -
 10/1/98  Brooklyn /Rockaway Ave                     -      6,272          9,691           458              -
 10/1/98  Revere / Charger St                        -      1,997          3,727           236              -
 10/1/98  Las Vegas / E. Charles                     -        602          2,545           260              -
 10/1/98  Laurel / Baltimore Ave                     -      1,899          4,498           158              -
 10/1/98  East La/Figueroa & 4th                     -      1,213          2,689            68              -
 10/1/98  Oldsmar / Tampa Road                       -        760          2,154         2,725              -
 10/1/98  Ft. Lauderdale /S.W.                       -      1,046          2,928           153              -
 10/1/98  Miami / Nw 73rd St                         -      1,050          3,064           120              -
 12/9/98  Miami / Nw 115th Ave                       -      1,095          2,349           212              -
  1/1/99  New Orleans/St.Charles                     -      1,463          2,634         (301)              -
  1/6/99  Brandon / E. Brandon Blvd                  -      1,560          3,695            54              -
 3/12/99  St. Louis / N. Lindbergh Blvd.             -      1,688          3,939           336              -
 3/12/99  St. Louis /Vandeventer Midtown             -        699          1,631           151              -
 3/12/99  St. Ann / Maryland Heights                 -      1,035          2,414           287              -
 3/12/99  Florissant / N. Hwy 67                     -        971          2,265           277              -
 3/12/99  Ferguson Area-W.Florissant                 -      1,194          2,732           422              -
 3/12/99  Florissant / New Halls Ferry Rd            -      1,144          2,670           313              -
 3/12/99  St. Louis / Airport                        -        785          1,833           172              -
 3/12/99  St. Louis/ S.Third St                      -      1,096          2,557           113              -
 3/12/99  Kansas City / E. 47th St.                  -        610          1,424           155              -
 3/12/99  Kansas City /E. 67th Terrace               -      1,136          2,643            90              -
 3/12/99  Kansas City / James A. Reed Rd             -        749          1,748            98              -
 3/12/99  Independence / 291                         -        871          2,032           151              -
 3/12/99  Raytown / Woodson Rd                       -        915          2,134            99              -
 3/12/99  Kansas City / 34th Main Street             -        114          2,599           597              -
 3/12/99  Columbia / River Dr                        -        671          1,566           177              -
 3/12/99  Columbia / Buckner Rd                      -        714          1,665           295              -
 3/12/99  Columbia / Decker Park Rd                  -        605          1,412           125              -
 3/12/99  Columbia / Rosewood Dr                     -        777          1,814           102              -
 3/12/99  W. Columbia / Orchard Dr.                  -        272            634           145              -
 3/12/99  W. Columbia / Airport Blvd                 -        493          1,151           133              -
 3/12/99  Greenville / Whitehorse Rd                 -        882          2,058           117              -
 3/12/99  Greenville / Woods Lake Rd                 -        364            849           127              -
 3/12/99  Mauldin / N. Main Street                   -        571          1,333           147              -
 3/12/99  Simpsonville / Grand View Dr               -        582          1,358           133              -
 3/12/99  Taylors / Wade Hampton Blvd                -        650          1,517           133              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>           <C>
 10/1/98  San Diego / Morena                        3,173      5,600      8,773         1,496
 10/1/98  Brooklyn /Rockaway Ave                    6,272     10,149     16,421         2,750
 10/1/98  Revere / Charger St                       1,997      3,963      5,960         1,121
 10/1/98  Las Vegas / E. Charles                      602      2,805      3,407           786
 10/1/98  Laurel / Baltimore Ave                    1,899      4,656      6,555         1,285
 10/1/98  East La/Figueroa & 4th                    1,213      2,757      3,970           748
 10/1/98  Oldsmar / Tampa Road                      1,049      4,590      5,639           991
 10/1/98  Ft. Lauderdale /S.W.                      1,046      3,081      4,127           820
 10/1/98  Miami / Nw 73rd St                        1,050      3,184      4,234           881
 12/9/98  Miami / Nw 115th Ave                      1,102      2,554      3,656           590
  1/1/99  New Orleans/St.Charles                    1,039      2,757      3,796           672
  1/6/99  Brandon / E. Brandon Blvd                 1,560      3,749      5,309           821
 3/12/99  St. Louis / N. Lindbergh Blvd.            1,688      4,275      5,963         1,040
 3/12/99  St. Louis /Vandeventer Midtown              699      1,782      2,481           461
 3/12/99  St. Ann / Maryland Heights                1,035      2,701      3,736           652
 3/12/99  Florissant / N. Hwy 67                      971      2,542      3,513           632
 3/12/99  Ferguson Area-W.Florissant                1,178      3,170      4,348           818
 3/12/99  Florissant / New Halls Ferry Rd           1,144      2,983      4,127           772
 3/12/99  St. Louis / Airport                         785      2,005      2,790           499
 3/12/99  St. Louis/ S.Third St                     1,096      2,670      3,766           652
 3/12/99  Kansas City / E. 47th St.                   610      1,579      2,189           421
 3/12/99  Kansas City /E. 67th Terrace              1,134      2,735      3,869           679
 3/12/99  Kansas City / James A. Reed Rd              749      1,846      2,595           474
 3/12/99  Independence / 291                          871      2,183      3,054           544
 3/12/99  Raytown / Woodson Rd                        915      2,233      3,148           563
 3/12/99  Kansas City / 34th Main Street              114      3,196      3,310           930
 3/12/99  Columbia / River Dr                         671      1,743      2,414           495
 3/12/99  Columbia / Buckner Rd                       714      1,960      2,674           623
 3/12/99  Columbia / Decker Park Rd                   605      1,537      2,142           426
 3/12/99  Columbia / Rosewood Dr                      777      1,916      2,693           505
 3/12/99  W. Columbia / Orchard Dr.                   272        779      1,051           250
 3/12/99  W. Columbia / Airport Blvd                  493      1,284      1,777           343
 3/12/99  Greenville / Whitehorse Rd                  882      2,175      3,057           556
 3/12/99  Greenville / Woods Lake Rd                  364        976      1,340           284
 3/12/99  Mauldin / N. Main Street                    571      1,480      2,051           419
 3/12/99  Simpsonville / Grand View Dr                574      1,499      2,073           414
 3/12/99  Taylors / Wade Hampton Blvd                 650      1,650      2,300           450

</TABLE>

                                       F-69

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 3/12/99  Charleston/Ashley Phosphate                -        839          1,950           179              -
 3/12/99  N. Charleston / Dorchester Rd              -        380            886           135              -
 3/12/99  N. Charleston / Dorchester                 -        487          1,137           158              -
 3/12/99  Charleston / Sam Rittenberg Blvd           -        555          1,296           109              -
 3/12/99  Hilton Head / Office Park Rd               -      1,279          2,985           136              -
 3/12/99  Columbia / Plumbers Rd                     -        368            858           153              -
 3/12/99  Greenville / Pineknoll Rd                  -        927          2,163           203              -
 3/12/99  Hilton Head / Yacht Cove Dr                -      1,182          2,753           189              -
 3/12/99  Spartanburg / Chesnee Hwy                  -        533          1,244           294              -
 3/12/99  Charleston / Ashley River Rd               -      1,114          2,581           160              -
 3/12/99  Columbia / Broad River                     -      1,463          3,413           273              -
 3/12/99  Charlotte / East Wt Harris Blvd            -        736          1,718           120              -
 3/12/99  Charlotte / North Tryon St.                -        708          1,653           260              -
 3/12/99  Charlotte / South Blvd                     -        641          1,496           152              -
 3/12/99  Kannapolis / Oregon St                     -        463          1,081           115              -
 3/12/99  Durham / E. Club Blvd                      -        947          2,209           153              -
 3/12/99  Durham / N. Duke St.                       -        769          1,794           134              -
 3/12/99  Raleigh / Maitland Dr                      -        679          1,585           149              -
 3/12/99  Greensboro / O'henry Blvd                  -        577          1,345           214              -
 3/12/99  Gastonia / S. York Rd                      -        467          1,089           131              -
 3/12/99  Durham / Kangaroo Dr.                      -      1,102          2,572           292              -
 3/12/99  Pensacola / Brent Lane                     -        402            938            24              -
 3/12/99  Pensacola / Creighton Road                 -        454          1,060            62              -
 3/12/99  Jacksonville / Park Avenue                 -        905          2,113           151              -
 3/12/99  Jacksonville / Phillips Hwy                -        665          1,545           204              -
 3/12/99  Clearwater / Highland Ave                  -        724          1,690           188              -
 3/12/99  Tarpon Springs / Us Highway 19             -        892          2,081           190              -
 3/12/99  Orlando /S. Orange Blossom Trail           -      1,229          2,867           136              -
 3/12/99  Casselberry Ii                             -      1,160          2,708           171              -
 3/12/99  Miami / Nw 14th Street                     -      1,739          4,058           152              -
 3/12/99  Tarpon Springs / Highway 19                -      1,179          2,751           152              -
 3/12/99  Ft. Myers / Tamiami Trail South            -        834          1,945         (262)              -
 3/12/99  Jacksonville / Ft. Caroline Rd.            -      1,037          2,420           177              -
 3/12/99  Orlando / South Semoran                    -        565          1,319            39              -
 3/12/99  Jacksonville / Southside Blvd.             -      1,278          2,982           236              -
 3/12/99  Miami / Nw 7th Ave                         -        783          1,827           186              -
 3/12/99  Vero Beach / Us Hwy 1                      -        678          1,583            82              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   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      2,145      2,968           600
 3/12/99  N. Charleston / Dorchester Rd               380      1,021      1,401           283
 3/12/99  N. Charleston / Dorchester                  487      1,295      1,782           367
 3/12/99  Charleston / Sam Rittenberg Blvd            555      1,405      1,960           390
 3/12/99  Hilton Head / Office Park Rd              1,279      3,121      4,400           766
 3/12/99  Columbia / Plumbers Rd                      368      1,011      1,379           292
 3/12/99  Greenville / Pineknoll Rd                   927      2,366      3,293           632
 3/12/99  Hilton Head / Yacht Cove Dr               1,181      2,943      4,124           760
 3/12/99  Spartanburg / Chesnee Hwy                   533      1,538      2,071           468
 3/12/99  Charleston / Ashley River Rd              1,108      2,747      3,855           685
 3/12/99  Columbia / Broad River                    1,463      3,686      5,149           979
 3/12/99  Charlotte / East Wt Harris Blvd             736      1,838      2,574           488
 3/12/99  Charlotte / North Tryon St.                 708      1,913      2,621           526
 3/12/99  Charlotte / South Blvd                      641      1,648      2,289           446
 3/12/99  Kannapolis / Oregon St                      463      1,196      1,659           334
 3/12/99  Durham / E. Club Blvd                       947      2,362      3,309           596
 3/12/99  Durham / N. Duke St.                        769      1,928      2,697           504
 3/12/99  Raleigh / Maitland Dr                       679      1,734      2,413           468
 3/12/99  Greensboro / O'henry Blvd                   577      1,559      2,136           468
 3/12/99  Gastonia / S. York Rd                       467      1,220      1,687           360
 3/12/99  Durham / Kangaroo Dr.                     1,102      2,864      3,966           772
 3/12/99  Pensacola / Brent Lane                      402        962      1,364           253
 3/12/99  Pensacola / Creighton Road                  454      1,122      1,576           313
 3/12/99  Jacksonville / Park Avenue                  905      2,264      3,169           596
 3/12/99  Jacksonville / Phillips Hwy                 663      1,751      2,414           483
 3/12/99  Clearwater / Highland Ave                   724      1,878      2,602           489
 3/12/99  Tarpon Springs / Us Highway 19              892      2,271      3,163           604
 3/12/99  Orlando /S. Orange Blossom Trail          1,229      3,003      4,232           766
 3/12/99  Casselberry Ii                            1,160      2,879      4,039           719
 3/12/99  Miami / Nw 14th Street                    1,739      4,210      5,949         1,039
 3/12/99  Tarpon Springs / Highway 19               1,179      2,903      4,082           721
 3/12/99  Ft. Myers / Tamiami Trail South             834      1,683      2,517           330
 3/12/99  Jacksonville / Ft. Caroline Rd.           1,037      2,597      3,634           690
 3/12/99  Orlando / South Semoran                     565      1,358      1,923           337
 3/12/99  Jacksonville / Southside Blvd.            1,278      3,218      4,496           826
 3/12/99  Miami / Nw 7th Ave                          783      2,013      2,796           550
 3/12/99  Vero Beach / Us Hwy 1                       678      1,665      2,343           414

</TABLE>

                                       F-70

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 3/12/99  Ponte Vedra / Palm Valley Rd.              -        745          2,749           473              -
 3/12/99  Miami Lakes / Nw 153rd St.                 -        425            992            75              -
 3/12/99  Deerfield Beach / Sw 10th St.              -      1,844          4,302            96              -
 3/12/99  Apopka / S. Orange Blossom                 -        307            717           138              -
 3/12/99  Davie / University                         -        313          4,379           205              -
 3/12/99  Arlington / Division                       -        998          2,328            84              -
 3/12/99  Duncanville/S.Cedar Ridge                  -      1,477          3,447           211              -
 3/12/99  Carrollton / Trinity Mills West            -        530          1,237            98              -
 3/12/99  Houston / Wallisville Rd.                  -        744          1,736            82              -
 3/12/99  Houston / Fondren South                    -        647          1,510           137              -
 3/12/99  Houston / Addicks Satsuma                  -        409            954           136              -
 3/12/99  Addison / Inwood Road                      -      1,204          2,808            64              -
 3/12/99  Garland / Jackson Drive                    -        755          1,761            83              -
 3/12/99  Garland / Buckingham Road                  -        492          1,149           121              -
 3/12/99  Houston / South Main                       -      1,461          3,409           115              -
 3/12/99  Plano / Parker Road-Avenue K               -      1,517          3,539           152              -
 3/12/99  Houston / Bingle Road                      -        576          1,345           134              -
 3/12/99  Houston / Mangum Road                      -        737          1,719           250              -
 3/12/99  Houston / Hayes Road                       -        916          2,138           126              -
 3/12/99  Katy / Dominion Drive                      -        995          2,321            55              -
 3/12/99  Houston / Fm 1960 West                     -        513          1,198           138              -
 3/12/99  Webster / Fm 528 Road                      -        756          1,764            89              -
 3/12/99  Houston / Loch Katrine Lane                -        580          1,352            82              -
 3/12/99  Houston / Milwee St.                       -        779          1,815           176              -
 3/12/99  Lewisville / Highway 121                   -        688          1,605            99              -
 3/12/99  Richardson / Central Expressway            -        465          1,085           109              -
 3/12/99  Houston / Hwy 6 South                      -        569          1,328            72              -
 3/12/99  Houston / Westheimer West                  -      1,075          2,508            51              -
 3/12/99  Ft. Worth / Granbury Road                  -        763          1,781            70              -
 3/12/99  Houston / New Castle                       -      2,346          5,473         1,242              -
 3/12/99  Dallas / Inwood Road                       -      1,478          3,448           102              -
 3/12/99  Fort Worth / Loop 820 North                -        729          1,702           119              -
 3/12/99  Arlington / Cooper St                      -        779          1,818            85              -
 3/12/99  Webster / Highway 3                        -        677          1,580            79              -
 3/12/99  Augusta / Peach Orchard Rd                 -        860          2,007           294              -
 3/12/99  Martinez / Old Petersburg Rd               -        407            950           157              -
 3/12/99  Jonesboro / Tara Blvd                      -        785          1,827           263              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 3/12/99  Ponte Vedra / Palm Valley Rd.               745      3,222      3,967           882
 3/12/99  Miami Lakes / Nw 153rd St.                  425      1,067      1,492           292
 3/12/99  Deerfield Beach / Sw 10th St.             1,844      4,398      6,242         1,055
 3/12/99  Apopka / S. Orange Blossom                  307        855      1,162           254
 3/12/99  Davie / University                          313      4,584      4,897         1,105
 3/12/99  Arlington / Division                        998      2,412      3,410           593
 3/12/99  Duncanville/S.Cedar Ridge                 1,477      3,658      5,135           937
 3/12/99  Carrollton / Trinity Mills West             530      1,335      1,865           362
 3/12/99  Houston / Wallisville Rd.                   744      1,818      2,562           468
 3/12/99  Houston / Fondren South                     647      1,647      2,294           411
 3/12/99  Houston / Addicks Satsuma                   409      1,090      1,499           297
 3/12/99  Addison / Inwood Road                     1,204      2,872      4,076           696
 3/12/99  Garland / Jackson Drive                     755      1,844      2,599           468
 3/12/99  Garland / Buckingham Road                   492      1,270      1,762           367
 3/12/99  Houston / South Main                      1,461      3,524      4,985           871
 3/12/99  Plano / Parker Road-Avenue K              1,517      3,691      5,208           923
 3/12/99  Houston / Bingle Road                       576      1,479      2,055           400
 3/12/99  Houston / Mangum Road                       737      1,969      2,706           504
 3/12/99  Houston / Hayes Road                        916      2,264      3,180           555
 3/12/99  Katy / Dominion Drive                       995      2,376      3,371           584
 3/12/99  Houston / Fm 1960 West                      513      1,336      1,849           356
 3/12/99  Webster / Fm 528 Road                       756      1,853      2,609           477
 3/12/99  Houston / Loch Katrine Lane                 580      1,434      2,014           380
 3/12/99  Houston / Milwee St.                        778      1,992      2,770           529
 3/12/99  Lewisville / Highway 121                    688      1,704      2,392           446
 3/12/99  Richardson / Central Expressway             465      1,194      1,659           328
 3/12/99  Houston / Hwy 6 South                       569      1,400      1,969           355
 3/12/99  Houston / Westheimer West                 1,075      2,559      3,634           627
 3/12/99  Ft. Worth / Granbury Road                   763      1,851      2,614           465
 3/12/99  Houston / New Castle                      2,346      6,715      9,061         1,481
 3/12/99  Dallas / Inwood Road                      1,478      3,550      5,028           848
 3/12/99  Fort Worth / Loop 820 North                 729      1,821      2,550           472
 3/12/99  Arlington / Cooper St                       779      1,903      2,682           471
 3/12/99  Webster / Highway 3                         677      1,659      2,336           429
 3/12/99  Augusta / Peach Orchard Rd                  860      2,301      3,161           707
 3/12/99  Martinez / Old Petersburg Rd                407      1,107      1,514           314
 3/12/99  Jonesboro / Tara Blvd                       784      2,091      2,875           575

</TABLE>

                                       F-71

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 3/12/99  Atlanta / Briarcliff Rd                    -      2,171          5,066           241              -
 3/12/99  Decatur / N Decatur Rd                     -        933          2,177           147              -
 3/12/99  Douglasville / Westmoreland                -        453          1,056           224              -
 3/12/99  Doraville / Mcelroy Rd                     -        827          1,931           245              -
 3/12/99  Roswell / Alpharetta                       -      1,772          4,135           186              -
 3/12/99  Douglasville / Duralee Lane                -        533          1,244           158              -
 3/12/99  Douglasville / Highway 5                   -        804          1,875           456              -
 3/12/99  Forest Park / Jonesboro                    -        659          1,537           198              -
 3/12/99  Marietta / Whitlock                        -      1,016          2,370           198              -
 3/12/99  Marietta / Cobb                            -        727          1,696           255              -
 3/12/99  Norcross / Jones Mill Rd                   -      1,142          2,670           186              -
 3/12/99  Norcross / Dawson Blvd                     -      1,232          2,874           263              -
 3/12/99  Forest Park / Old Dixie Hwy                -        895          2,070           337              -
 3/12/99  Decatur / Covington                        -      1,764          4,116           108              -
 3/12/99  Alpharetta / Maxwell Rd                    -      1,075          2,509           125              -
 3/12/99  Alpharetta / N. Main St                    -      1,240          2,893           103              -
 3/12/99  Atlanta / Bolton Rd                        -        866          2,019           178              -
 3/12/99  Riverdale / Georgia Hwy 85                 -      1,075          2,508           151              -
 3/12/99  Kennesaw / Rutledge Road                   -        803          1,874           243              -
 3/12/99  Lawrenceville / Buford Dr.                 -        256            597            91              -
 3/12/99  Hanover Park / W. Lake Street              -      1,320          3,081           146              -
 3/12/99  Chicago / W. Jarvis Ave                    -        313            731            91              -
 3/12/99  Chicago / N. Broadway St                   -        535          1,249           230              -
 3/12/99  Carol Stream / Phillips Court              -        829          1,780            96              -
 3/12/99  Winfield / Roosevelt Road                  -      1,109          2,587           118              -
 3/12/99  Schaumburg / S. Roselle Road               -        659          1,537           107              -
 3/12/99  Tinley Park / Brennan Hwy                  -        771          1,799           173              -
 3/12/99  Schaumburg / Palmer Drive                  -      1,333          3,111           137              -
 3/12/99  Mobile / Hillcrest Road                    -        554          1,293           155              -
 3/12/99  Mobile / Azalea Road                       -        517          1,206           166              -
 3/12/99  Mobile / Moffat Road                       -        537          1,254           134              -
 3/12/99  Mobile / Grelot Road                       -        804          1,877           139              -
 3/12/99  Mobile / Government Blvd                   -        407            950           131              -
 3/12/99  New Orleans / Tchoupitoulas                -      1,092          2,548           239              -
 3/12/99  Louisville / Breckenridge Lane             -        581          1,356            87              -
 3/12/99  Louisville                                 -        554          1,292           140              -
 3/12/99  Louisville / Poplar Level                  -        463          1,080           157              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>           <C>
 3/12/99  Atlanta / Briarcliff Rd                   2,171      5,307      7,478         1,326
 3/12/99  Decatur / N Decatur Rd                      933      2,324      3,257           624
 3/12/99  Douglasville / Westmoreland                 453      1,280      1,733           390
 3/12/99  Doraville / Mcelroy Rd                      827      2,176      3,003           610
 3/12/99  Roswell / Alpharetta                      1,772      4,321      6,093         1,049
 3/12/99  Douglasville / Duralee Lane                 533      1,402      1,935           379
 3/12/99  Douglasville / Highway 5                    804      2,331      3,135           734
 3/12/99  Forest Park / Jonesboro                     659      1,735      2,394           493
 3/12/99  Marietta / Whitlock                       1,016      2,568      3,584           655
 3/12/99  Marietta / Cobb                             727      1,951      2,678           564
 3/12/99  Norcross / Jones Mill Rd                  1,142      2,856      3,998           739
 3/12/99  Norcross / Dawson Blvd                    1,232      3,137      4,369           808
 3/12/99  Forest Park / Old Dixie Hwy                 889      2,413      3,302           642
 3/12/99  Decatur / Covington                       1,764      4,224      5,988         1,045
 3/12/99  Alpharetta / Maxwell Rd                   1,075      2,634      3,709           647
 3/12/99  Alpharetta / N. Main St                   1,240      2,996      4,236           730
 3/12/99  Atlanta / Bolton Rd                         865      2,198      3,063           570
 3/12/99  Riverdale / Georgia Hwy 85                1,075      2,659      3,734           658
 3/12/99  Kennesaw / Rutledge Road                    803      2,117      2,920           578
 3/12/99  Lawrenceville / Buford Dr.                  256        688        944           207
 3/12/99  Hanover Park / W. Lake Street             1,320      3,227      4,547           800
 3/12/99  Chicago / W. Jarvis Ave                     313        822      1,135           250
 3/12/99  Chicago / N. Broadway St                    535      1,479      2,014           446
 3/12/99  Carol Stream / Phillips Court               783      1,922      2,705           459
 3/12/99  Winfield / Roosevelt Road                 1,109      2,705      3,814           678
 3/12/99  Schaumburg / S. Roselle Road                659      1,644      2,303           433
 3/12/99  Tinley Park / Brennan Hwy                   771      1,972      2,743           519
 3/12/99  Schaumburg / Palmer Drive                 1,333      3,248      4,581           802
 3/12/99  Mobile / Hillcrest Road                     554      1,448      2,002           402
 3/12/99  Mobile / Azalea Road                        517      1,372      1,889           376
 3/12/99  Mobile / Moffat Road                        537      1,388      1,925           388
 3/12/99  Mobile / Grelot Road                        804      2,016      2,820           526
 3/12/99  Mobile / Government Blvd                    407      1,081      1,488           297
 3/12/99  New Orleans / Tchoupitoulas               1,092      2,787      3,879           750
 3/12/99  Louisville / Breckenridge Lane              581      1,443      2,024           385
 3/12/99  Louisville                                  554      1,432      1,986           397
 3/12/99  Louisville / Poplar Level                   463      1,237      1,700           351

</TABLE>

                                       F-72

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 3/12/99  Chesapeake / Western Branch                -      1,274          2,973           192              -
 3/12/99  Centreville / Lee Hwy                      -      1,650          3,851           175              -
 3/12/99  Sterling / S. Sterling Blvd                -      1,282          2,992           185              -
 3/12/99  Manassas / Sudley Road                     -        776          1,810           209              -
 3/12/99  Longmont / Wedgewood Ave                   -        717          1,673            97              -
 3/12/99  Fort Collins / So.College Ave              -        745          1,739           149              -
 3/12/99  Colo Sprngs / Parkmoor Village             -        620          1,446           185              -
 3/12/99  Colo Sprngs / Van Teylingen                -      1,216          2,837           191              -
 3/12/99  Denver / So. Clinton St.                   -        462          1,609           100              -
 3/12/99  Denver / Washington St.                    -        795          1,846           364              -
 3/12/99  Colo Sprngs / Centennial Blvd              -      1,352          3,155            93              -
 3/12/99  Colo Sprngs / Astrozon Court               -        810          1,889           148              -
 3/12/99  Arvada / 64th Ave                          -        671          1,566           104              -
 3/12/99  Golden / Simms Street                      -        918          2,143           330              -
 3/12/99  Lawrence / Haskell Ave                     -        636          1,484           142              -
 3/12/99  Overland Park / Hemlock St                 -      1,168          2,725           120              -
 3/12/99  Lenexa / Long St.                          -        720          1,644            50              -
 3/12/99  Shawnee / Hedge Lane Terrace               -        570          1,331           158              -
 3/12/99  Mission / Foxridge Dr                      -      1,657          3,864           163              -
 3/12/99  Milwaukee / W. Dean Road                   -      1,362          3,163           525              -
 3/12/99  Columbus / Morse Road                      -      1,415          3,302           523              -
 3/12/99  Milford / Branch Hill                      -        527          1,229         2,412              -
 3/12/99  Fairfield / Dixie                          -        519          1,211            91              -
 3/12/99  Cincinnati / Western Hills                 -        758          1,769           200              -
 3/12/99  Austin / N. Mopac Expressway               -        865          2,791            71              -
 3/12/99  Atlanta / Dunwoody Place                   -      1,410          3,296           207              -
 3/12/99  Kennedale/Bowman Sprgs                     -        425            991            78              -
 3/12/99  Colo Sprngs/N.Powers                       -      1,124          2,622           206              -
 3/12/99  St. Louis/S. Third St                      -        206            480            29              -
 3/12/99  Orlando / L.B. Mcleod Road                 -        521          1,217            61              -
 3/12/99  Jacksonville / Roosevelt Blvd.             -        851          1,986           305              -
 3/12/99  Miami-Kendall / Sw 84th Street             -        935          2,180           163              -
 3/12/99  North Miami Beach / 69th St                -      1,594          3,720           187              -
 3/12/99  Miami Beach / Dade Blvd                    -        962          2,245           295              -
 3/12/99  Chicago / N. Natchez Ave                   -      1,684          3,930           211              -
 3/12/99  Chicago / W. Cermak Road                   -      1,294          3,019           516              -
 3/12/99  Kansas City / State Ave                    -        645          1,505           212              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 3/12/99  Chesapeake / Western Branch               1,274      3,165      4,439           791
 3/12/99  Centreville / Lee Hwy                     1,636      4,040      5,676           999
 3/12/99  Sterling / S. Sterling Blvd               1,282      3,177      4,459           789
 3/12/99  Manassas / Sudley Road                      776      2,019      2,795           523
 3/12/99  Longmont / Wedgewood Ave                    717      1,770      2,487           442
 3/12/99  Fort Collins / So.College Ave               745      1,888      2,633           486
 3/12/99  Colo Sprngs / Parkmoor Village              620      1,631      2,251           405
 3/12/99  Colo Sprngs / Van Teylingen               1,216      3,028      4,244           750
 3/12/99  Denver / So. Clinton St.                    462      1,709      2,171           426
 3/12/99  Denver / Washington St.                     792      2,213      3,005           554
 3/12/99  Colo Sprngs / Centennial Blvd             1,352      3,248      4,600           779
 3/12/99  Colo Sprngs / Astrozon Court                810      2,037      2,847           540
 3/12/99  Arvada / 64th Ave                           671      1,670      2,341           433
 3/12/99  Golden / Simms Street                       918      2,473      3,391           645
 3/12/99  Lawrence / Haskell Ave                      636      1,626      2,262           424
 3/12/99  Overland Park / Hemlock St                1,168      2,845      4,013           700
 3/12/99  Lenexa / Long St.                           709      1,705      2,414           419
 3/12/99  Shawnee / Hedge Lane Terrace                570      1,489      2,059           384
 3/12/99  Mission / Foxridge Dr                     1,656      4,028      5,684           987
 3/12/99  Milwaukee / W. Dean Road                  1,357      3,693      5,050           986
 3/12/99  Columbus / Morse Road                     1,415      3,825      5,240           965
 3/12/99  Milford / Branch Hill                       527      3,641      4,168           657
 3/12/99  Fairfield / Dixie                           519      1,302      1,821           348
 3/12/99  Cincinnati / Western Hills                  758      1,969      2,727           538
 3/12/99  Austin / N. Mopac Expressway                865      2,862      3,727           646
 3/12/99  Atlanta / Dunwoody Place                  1,390      3,523      4,913           893
 3/12/99  Kennedale/Bowman Sprgs                      425      1,069      1,494           285
 3/12/99  Colo Sprngs/N.Powers                      1,124      2,828      3,952           732
 3/12/99  St. Louis/S. Third St                       206        509        715           139
 3/12/99  Orlando / L.B. Mcleod Road                  521      1,278      1,799           330
 3/12/99  Jacksonville / Roosevelt Blvd.              851      2,291      3,142           665
 3/12/99  Miami-Kendall / Sw 84th Street              935      2,343      3,278           619
 3/12/99  North Miami Beach / 69th St               1,594      3,907      5,501           989
 3/12/99  Miami Beach / Dade Blvd                     962      2,540      3,502           662
 3/12/99  Chicago / N. Natchez Ave                  1,684      4,141      5,825         1,014
 3/12/99  Chicago / W. Cermak Road                  1,294      3,535      4,829         1,080
 3/12/99  Kansas City / State Ave                     645      1,717      2,362           469

</TABLE>

                                       F-73

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>             <C>              <C>
 3/12/99  Lenexa / Santa Fe Trail Road               -        713          1,663           184              -
 3/12/99  Waukesha / Foster Court                    -        765          1,785           173              -
 3/12/99  River Grove / N. 5th Ave.                  -      1,094          2,552            27              -
 3/12/99  St. Charles / E. Main St.                  -        951          2,220         (286)              -
 3/12/99  Chicago / West 47th St.                    -        705          1,645            77              -
 3/12/99  Carol Stream / S. Main Place               -      1,320          3,079           174              -
 3/12/99  Carpentersville /N. Western Ave            -        911          2,120           148              -
 3/12/99  Elgin / E. Chicago St.                     -        570          2,163           102              -
 3/12/99  Elgin / Big Timber Road                    -      1,347          3,253           250              -
 3/12/99  Chicago / S. Pulaski Road                  -        458          2,118           303              -
 3/12/99  Aurora / Business 30                       -        900          2,097           158              -
 3/12/99  Streamwood / Old Church Road               -        855          1,991            78              -
 3/12/99  Mt. Prospect / Central Road                -        802          1,847           182              -
 3/12/99  Geneva / Gary Ave                          -      1,072          2,501            76              -
 3/12/99  Naperville / Lasalle Ave                   -      1,501          3,502           113              -
 3/31/99  Forest Park                                -        270          3,378         1,031              -
  4/1/99  Fresno                                     -         44            206         (238)            804
  5/1/99  Stockton                                   -        151            402         (250)          2,017
 6/30/99  Winter Park/N. Semor                       -        342            638           334            728
 6/30/99  N. Richland Hills                          -        455            769           253            832
 6/30/99  Rolling Meadows/Lois                       -        441            849           378            898
 6/30/99  Gresham/Burnside                           -        354            544           218            627
 6/30/99  Jacksonville/University                    -        211            741           250            700
 6/30/99  Irving/W. Airport                          -        419            960           203            857
 6/30/99  Houston/Highway 6 So.                      -        751          1,006         1,002          1,057
 6/30/99  Concord/Arnold                             -        827          1,553           431          1,874
 6/30/99  Rockville/Gude Drive                       -        602            768           388            880
 6/30/99  Bradenton/Cortez Road                      -        476            885           387            906
 6/30/99  San Antonio/Nw Loop                        -        511            786           210            855
 6/30/99  Anaheim / La Palma                         -      1,378            851           218          1,221
 6/30/99  Spring Valley/Sweetwater                   -        271            380         6,125            416
 6/30/99  Ft. Myers/Tamiami                          -        948            962           311          1,208
 6/30/99  Littleton/Centennial                       -        421            804           292            812
 6/30/99  Newark/Cedar Blvd                          -        729            971           245          1,067
 6/30/99  Falls Church/Columbia                      -        901            975           330          1,141
 6/30/99  Fairfax / Lee Highway                      -        586          1,078           324          1,106
 6/30/99  Wheat Ridge / W. 44th                      -        480            789           274            831

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
 3/12/99  Lenexa / Santa Fe Trail Road                713      1,847      2,560           468
 3/12/99  Waukesha / Foster Court                     765      1,958      2,723           490
 3/12/99  River Grove / N. 5th Ave.                 1,034      2,639      3,673           884
 3/12/99  St. Charles / E. Main St.                   802      2,083      2,885           758
 3/12/99  Chicago / West 47th St.                     705      1,722      2,427           430
 3/12/99  Carol Stream / S. Main Place              1,320      3,253      4,573           849
 3/12/99  Carpentersville /N. Western Ave             909      2,270      3,179           578
 3/12/99  Elgin / E. Chicago St.                      570      2,265      2,835           547
 3/12/99  Elgin / Big Timber Road                   1,347      3,503      4,850           943
 3/12/99  Chicago / S. Pulaski Road                   458      2,421      2,879           560
 3/12/99  Aurora / Business 30                        899      2,256      3,155           581
 3/12/99  Streamwood / Old Church Road                854      2,070      2,924           508
 3/12/99  Mt. Prospect / Central Road                 795      2,036      2,831           561
 3/12/99  Geneva / Gary Ave                         1,072      2,577      3,649           640
 3/12/99  Naperville / Lasalle Ave                  1,501      3,615      5,116           903
 3/31/99  Forest Park                                 270      4,409      4,679         2,152
  4/1/99  Fresno                                      193        623        816           155
  5/1/99  Stockton                                    590      1,730      2,320           430
 6/30/99  Winter Park/N. Semor                        427      1,615      2,042           427
 6/30/99  N. Richland Hills                           569      1,740      2,309           439
 6/30/99  Rolling Meadows/Lois                        551      2,015      2,566           510
 6/30/99  Gresham/Burnside                            442      1,301      1,743           327
 6/30/99  Jacksonville/University                     263      1,639      1,902           421
 6/30/99  Irving/W. Airport                           524      1,915      2,439           474
 6/30/99  Houston/Highway 6 So.                       937      2,879      3,816           722
 6/30/99  Concord/Arnold                            1,032      3,653      4,685           971
 6/30/99  Rockville/Gude Drive                        751      1,887      2,638           478
 6/30/99  Bradenton/Cortez Road                       594      2,060      2,654           514
 6/30/99  San Antonio/Nw Loop                         638      1,724      2,362           407
 6/30/99  Anaheim / La Palma                        1,721      1,947      3,668           449
 6/30/99  Spring Valley/Sweetwater                    338      6,854      7,192           344
 6/30/99  Ft. Myers/Tamiami                         1,184      2,245      3,429           516
 6/30/99  Littleton/Centennial                        526      1,803      2,329           438
 6/30/99  Newark/Cedar Blvd                           910      2,102      3,012           492
 6/30/99  Falls Church/Columbia                     1,126      2,221      3,347           530
 6/30/99  Fairfax / Lee Highway                       732      2,362      3,094           583
 6/30/99  Wheat Ridge / W. 44th                       599      1,775      2,374           448

</TABLE>

                                       F-74

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>            <C>           <C>          <C>
 6/30/99  Huntington Bch/Gotham                      -        952            890           327          1,130
 6/30/99  Fort Worth/McCart                          -        372            942           189            703
 6/30/99  San Diego/Clairemont                       -      1,601          2,035           389          2,034
 6/30/99  Houston/Millridge N.                       -      1,160          1,983           266          2,433
 6/30/99  Woodbridge/Jefferson                       -        840          1,689           284          1,446
 6/30/99  Mountainside                               -      1,260          1,237           338          1,523
 6/30/99  Woodbridge / Davis                         -      1,796          1,623           465          1,996
 6/30/99  Huntington Beach                           -      1,026          1,437           147          1,450
 6/30/99  Edison / Old Post Rd                       -        498          1,267           323          1,175
 6/30/99  Northridge/Parthenia                       -      1,848          1,486           192          1,839
 6/30/99  Brick Township/Brick                       -        590          1,431           292          1,364
 6/30/99  Stone Mountain/Rock                        -      1,233            288           328            852
 6/30/99  Hyattsville                                -        768          2,186           276          1,919
 6/30/99  Union City / Alvarado                      -        992          1,776           217          1,690
 6/30/99  Oak Park / Greenfield                      -        621          1,735           208          1,490
 6/30/99  Tujunga/Foothill Blvd                      -      1,746          2,383           235          2,370
  7/1/99  Pantego/W. Pioneer Pkwy                    -        432          1,228            71              -
  7/1/99  Nashville/Lafayette St                     -        486          1,135           171              -
  7/1/99  Nashville/Metroplex Dr                     -        380            886           155              -
  7/1/99  Madison / Myatt Dr                         -        441          1,028           118              -
  7/1/99  Hixson / Highway 153                       -        488          1,138           198              -
  7/1/99  Hixson / Gadd Rd                           -        207            484           327              -
  7/1/99  Red Bank / Harding Rd                      -        452          1,056           189              -
  7/1/99  Nashville/Welshwood Dr                     -        934          2,179           186              -
  7/1/99  Madison/Williams Ave                       -      1,318          3,076           355              -
  7/1/99  Nashville/Mcnally Dr                       -        884          2,062           419              -
  7/1/99  Hermitage/Central Ct                       -        646          1,508           179              -
  7/1/99  Antioch/Cane Ridge Rd                      -        353            823           186              -
  9/1/99  Charlotte / Ashley Road                    -        664          1,551            33              -
  9/1/99  Raleigh / Capital Blvd                     -        927          2,166            21              -
  9/1/99  Charlotte / South Blvd.                    -        734          1,715            46              -
  9/1/99  Greensboro/W.Market St.                    -        603          1,409            53              -
 10/8/99  Belmont / O'neill Ave                      -        869          4,659           155              -
 10/11/99 Matthews                                   -        937          3,165           245              -
 11/15/99 Poplar, Memphis                            -      1,631          3,093           274              -
 12/17/99 Dallas / Swiss Ave                         -      1,862          4,344           137              -
 12/30/99 Oak Park/Greenfield Rd                     -      1,184          3,685         (101)              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 6/30/99  Huntington Bch/Gotham                     1,189      2,110      3,299           512
 6/30/99  Fort Worth/McCart                           464      1,742      2,206           382
 6/30/99  San Diego/Clairemont                      1,999      4,060      6,059           948
 6/30/99  Houston/Millridge N.                      1,449      4,393      5,842         1,010
 6/30/99  Woodbridge/Jefferson                      1,048      3,211      4,259           647
 6/30/99  Mountainside                              1,574      2,784      4,358           624
 6/30/99  Woodbridge / Davis                        2,243      3,637      5,880           849
 6/30/99  Huntington Beach                          1,282      2,778      4,060           607
 6/30/99  Edison / Old Post Rd                        622      2,641      3,263           614
 6/30/99  Northridge/Parthenia                      2,308      3,057      5,365           642
 6/30/99  Brick Township/Brick                        736      2,941      3,677           623
 6/30/99  Stone Mountain/Rock                       1,540      1,161      2,701           265
 6/30/99  Hyattsville                                 959      4,190      5,149           902
 6/30/99  Union City / Alvarado                     1,239      3,436      4,675           736
 6/30/99  Oak Park / Greenfield                       775      3,279      4,054           719
 6/30/99  Tujunga/Foothill Blvd                     2,180      4,554      6,734           876
  7/1/99  Pantego/W. Pioneer Pkwy                     432      1,299      1,731           184
  7/1/99  Nashville/Lafayette St                      486      1,306      1,792           392
  7/1/99  Nashville/Metroplex Dr                      380      1,041      1,421           314
  7/1/99  Madison / Myatt Dr                          441      1,146      1,587           319
  7/1/99  Hixson / Highway 153                        488      1,336      1,824           401
  7/1/99  Hixson / Gadd Rd                            207        811      1,018           304
  7/1/99  Red Bank / Harding Rd                       452      1,245      1,697           378
  7/1/99  Nashville/Welshwood Dr                      934      2,365      3,299           643
  7/1/99  Madison/Williams Ave                      1,318      3,431      4,749           911
  7/1/99  Nashville/Mcnally Dr                        884      2,481      3,365           760
  7/1/99  Hermitage/Central Ct                        646      1,687      2,333           465
  7/1/99  Antioch/Cane Ridge Rd                       353      1,009      1,362           302
  9/1/99  Charlotte / Ashley Road                     651      1,597      2,248           404
  9/1/99  Raleigh / Capital Blvd                      909      2,205      3,114           531
  9/1/99  Charlotte / South Blvd.                     719      1,776      2,495           448
  9/1/99  Greensboro/W.Market St.                     591      1,474      2,065           375
 10/8/99  Belmont / O'neill Ave                       878      4,805      5,683         1,126
 10/11/99 Matthews                                    994      3,353      4,347           654
 11/15/99 Poplar, Memphis                           1,731      3,267      4,998           657
 12/17/99 Dallas / Swiss Ave                        1,878      4,465      6,343         1,076
 12/30/99 Oak Park/Greenfield Rd                    1,196      3,572      4,768           791

</TABLE>

                                       F-75

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
 12/30/99 Santa Anna                                 -      2,657          3,293           375              -
 1/21/00  Hanover Park                               -        262          3,104            68              -
 1/25/00  Memphis / N.Germantwn Pkwy                 -        884          3,024           221              -
 1/31/00  Rowland Heights/Walnut                     -        681          1,589           122              -
  2/8/00  Lewisville / Justin Rd                     -        529          2,919           207              -
 2/28/00  Plano / Avenue K                           -      2,064         10,407         1,684              -
  4/1/00  Hyattsville/Edmonson                       -      1,036          2,657            52              -
 4/29/00  St.Louis/Ellisville Twn Centre             -        765          4,377           332              -
  5/2/00  Mill Valley                                -      1,412          3,294         (368)              -
  5/2/00  Culver City                                -      2,439          5,689         (676)              -
 5/26/00  Phoenix/N. 35th Ave                        -        868          2,967            54              -
  6/5/00  Mount Sinai / Route 25a                    -        950          3,338           251              -
 6/15/00  Pinellas Park                              -        526          2,247           270              -
 6/30/00  San Antonio/Broadway St                    -      1,131          4,558         1,195              -
 7/13/00  Lincolnwood                                -      1,598          3,727           336              -
 7/17/00  La Palco/New Orleans                       -      1,023          3,204           126              -
 7/29/00  Tracy/1615& 1650 W.11th S                  -      1,745          4,530           305              -
  8/1/00  Pineville                                  -      2,197          3,417           351              -
 8/23/00  Morris Plains                              -      1,501          4,300           313              -
 8/31/00  Florissant/New Halls Fry                   -        800          4,225            78              -
 8/31/00  Orange, CA                                 -        661          1,542            60              -
  9/1/00  Bayshore, NY                               -      1,277          2,980           974              -
  9/1/00  Los Angeles, CA                            -        590          1,376           522              -
 9/13/00  Merrillville                               -        343          2,474           167              -
 9/15/00  Gardena / W. El Segundo                    -      1,532          3,424           121              -
 9/15/00  Chicago / Ashland Avenue                   -        850          4,880           326              -
 9/15/00  Oakland / Macarthur                        -        678          2,751           152              -
 9/15/00  Alexandria / Pickett Ii                    -      2,743          6,198           277              -
 9/15/00  Royal Oak / Coolidge Highway               -      1,062          2,576           155              -
 9/15/00  Hawthorne / Crenshaw Blvd.                 -      1,079          2,913           147              -
 9/15/00  Rockaway / U.S. Route 46                   -      2,424          4,945           244              -
 9/15/00  Evanston / Greenbay                        -        846          4,436           177              -
 9/15/00  Los Angeles / Coliseum                     -      3,109          4,013           167              -
 9/15/00  Bethpage / Hempstead Turnpike              -      2,899          5,457           817              -
 9/15/00  Northport / Fort Salonga Road              -      2,999          5,698           238              -
 9/15/00  Brooklyn / St. Johns Place                 -      3,492          6,026           240              -
 9/15/00  Lake Ronkonkoma / Portion Rd.              -        937          4,199           156              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 12/30/99 Santa Anna                                2,820      3,505      6,325           677
 1/21/00  Hanover Park                                256      3,178      3,434           586
 1/25/00  Memphis / N.Germantwn Pkwy                  937      3,192      4,129           632
 1/31/00  Rowland Heights/Walnut                      688      1,704      2,392           412
  2/8/00  Lewisville / Justin Rd                      562      3,093      3,655           614
 2/28/00  Plano / Avenue K                          1,221     12,934     14,155         5,161
  4/1/00  Hyattsville/Edmonson                      1,036      2,709      3,745           563
 4/29/00  St.Louis/Ellisville Twn Centre              812      4,662      5,474           854
  5/2/00  Mill Valley                               1,283      3,055      4,338           650
  5/2/00  Culver City                               2,217      5,235      7,452         1,098
 5/26/00  Phoenix/N. 35th Ave                         868      3,021      3,889           591
  6/5/00  Mount Sinai / Route 25a                   1,008      3,531      4,539           639
 6/15/00  Pinellas Park                               547      2,496      3,043           362
 6/30/00  San Antonio/Broadway St                   1,131      5,753      6,884           950
 7/13/00  Lincolnwood                               1,613      4,048      5,661           874
 7/17/00  La Palco/New Orleans                      1,094      3,259      4,353           456
 7/29/00  Tracy/1615& 1650 W.11th S                 1,762      4,818      6,580         1,000
  8/1/00  Pineville                                 2,332      3,633      5,965           674
 8/23/00  Morris Plains                             1,594      4,520      6,114           762
 8/31/00  Florissant/New Halls Fry                    807      4,296      5,103           892
 8/31/00  Orange, CA                                  667      1,596      2,263           338
  9/1/00  Bayshore, NY                              1,533      3,698      5,231           862
  9/1/00  Los Angeles, CA                             708      1,780      2,488           412
 9/13/00  Merrillville                                364      2,620      2,984           446
 9/15/00  Gardena / W. El Segundo                   1,532      3,545      5,077           604
 9/15/00  Chicago / Ashland Avenue                    850      5,206      6,056           907
 9/15/00  Oakland / Macarthur                         678      2,903      3,581           510
 9/15/00  Alexandria / Pickett Ii                   2,743      6,475      9,218         1,068
 9/15/00  Royal Oak / Coolidge Highway              1,062      2,731      3,793           471
 9/15/00  Hawthorne / Crenshaw Blvd.                1,079      3,060      4,139           523
 9/15/00  Rockaway / U.S. Route 46                  2,424      5,189      7,613           874
 9/15/00  Evanston / Greenbay                         846      4,613      5,459           756
 9/15/00  Los Angeles / Coliseum                    3,109      4,180      7,289           661
 9/15/00  Bethpage / Hempstead Turnpike             2,899      6,274      9,173           988
 9/15/00  Northport / Fort Salonga Road             2,999      5,936      8,935           964
 9/15/00  Brooklyn / St. Johns Place                3,492      6,266      9,758           980
 9/15/00  Lake Ronkonkoma / Portion Rd.               937      4,355      5,292           695

</TABLE>

                                       F-76

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>              <C>             <C>
 9/15/00  Tampa/Gunn Hwy                             -      1,843          4,300            74              -
 9/18/00  Tampa/N. Del Mabry                         -      2,204          2,447         7,475              -
 9/30/00  Marietta/Kennestone& Hwy5                  -        622          3,388         1,390              -
 9/30/00  Lilburn/Indian Trail                       -      1,695          5,170         1,587              -
 11/15/00 Largo/Missouri                             -      1,092          4,270           248              -
 11/21/00 St. Louis/Wilson                           -      1,608          3,913         1,908              -
 12/21/00 Houston/7715 Katy Frwy                     -      2,274          5,307            98              -
 12/21/00 Houston/10801 Katy Frwy                    -      1,664          3,884            84              -
 12/21/00 Houston/Main St                            -      1,681          3,924            95              -
 12/21/00 Houston/W. Loop/S. Frwy                    -      2,036          4,749           104              -
 12/29/00 Chicago                                    -      1,946          6,002            20              -
 12/30/00 Raleigh/Glenwood                           -      1,545          3,628           111              -
 12/30/00 Frazier                                    -        800          3,324            40              -
  1/5/01  Troy/E. Big Beaver Rd                      -      2,195          4,221           349              -
 1/11/01  Ft Lauderdale                              -        954          3,972           342              -
 1/16/01  No Hollywood/Sherman Way                   -      2,173          5,442            32              -
 1/18/01  Tuscon/E. Speedway                         -        735          2,895           192              -
 1/25/01  Lombard/Finley                             -        851          3,806           364              -
 3/15/01  Los Angeles/West Pico                      -      8,579          8,630           984              -
  4/1/01  Lakewood/Cedar Dr.                         -      1,329          9,356         2,944              -
  4/7/01  Farmingdale/Rte 110                        -      2,364          5,807          (21)              -
 4/17/01  Philadelphia/Aramingo                      -        968          4,539            11              -
 4/18/01  Largo/Walsingham Road                      -      1,000          3,545         (246)              -
 6/17/01  Port Washington/Seaview &W.Sh              -      2,381          4,608           115              -
 6/18/01  Silver Springs/Prosperity                  -      1,065          5,391            17              -
 6/19/01  Tampa/W. Waters Ave & Wilsky               -        953          3,785            16              -
 6/26/01  Middletown                                 -      1,535          4,258           316              -
 7/29/01  Miami/Sw 85th Ave                          -      2,755          4,951            17              -
 8/28/01  Hoover/John Hawkins Pkwy                   -      1,050          2,453            42              -
 9/30/01  Syosset                                    -      2,461          5,312           373              -
 12/27/01 Los Angeles/W.Jefferson                    -      8,285          9,429           800              -
 12/27/01 Howell/Hgwy 9                              -        941          4,070           229              -
 12/29/01 Catonsville/Kent                           -      1,378          5,289           636              -
 12/29/01 Old Bridge/Rte 9                           -      1,244          4,960          (35)              -
 12/29/01 Sacremento/Roseville                       -        876          5,344         1,907              -
 12/31/01 Santa Ana/E.Mcfadden                       -      7,587          8,612           905              -
  1/1/02  Concord                                    -        650          1,332            90           (44)

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 9/15/00  Tampa/Gunn Hwy                            1,843      4,374      6,217           779
 9/18/00  Tampa/N. Del Mabry                        2,225      9,901     12,126         3,130
 9/30/00  Marietta/Kennestone& Hwy5                   628      4,772      5,400           823
 9/30/00  Lilburn/Indian Trail                      1,712      6,740      8,452         1,044
 11/15/00 Largo/Missouri                            1,157      4,453      5,610           716
 11/21/00 St. Louis/Wilson                          1,628      5,801      7,429           930
 12/21/00 Houston/7715 Katy Frwy                    2,277      5,402      7,679           715
 12/21/00 Houston/10801 Katy Frwy                   1,667      3,965      5,632           543
 12/21/00 Houston/Main St                           1,684      4,016      5,700           550
 12/21/00 Houston/W. Loop/S. Frwy                   2,038      4,851      6,889           661
 12/29/00 Chicago                                   1,949      6,019      7,968           962
 12/30/00 Raleigh/Glenwood                          1,560      3,724      5,284           691
 12/30/00 Frazier                                     800      3,364      4,164           434
  1/5/01  Troy/E. Big Beaver Rd                     2,329      4,436      6,765           682
 1/11/01  Ft Lauderdale                             1,070      4,198      5,268           660
 1/16/01  No Hollywood/Sherman Way                  2,175      5,472      7,647           995
 1/18/01  Tuscon/E. Speedway                          780      3,042      3,822           479
 1/25/01  Lombard/Finley                              903      4,118      5,021           631
 3/15/01  Los Angeles/West Pico                     8,595      9,598     18,193         1,709
  4/1/01  Lakewood/Cedar Dr.                        1,332     12,297     13,629         1,740
  4/7/01  Farmingdale/Rte 110                       2,378      5,772      8,150           928
 4/17/01  Philadelphia/Aramingo                       968      4,550      5,518           684
 4/18/01  Largo/Walsingham Road                       800      3,499      4,299           534
 6/17/01  Port Washington/Seaview &W.Sh             2,358      4,746      7,104           662
 6/18/01  Silver Springs/Prosperity                 1,065      5,408      6,473           829
 6/19/01  Tampa/W. Waters Ave & Wilsky                954      3,800      4,754           549
 6/26/01  Middletown                                1,630      4,479      6,109           620
 7/29/01  Miami/Sw 85th Ave                         2,757      4,966      7,723           693
 8/28/01  Hoover/John Hawkins Pkwy                  1,051      2,494      3,545           358
 9/30/01  Syosset                                   2,612      5,534      8,146           682
 12/27/01 Los Angeles/W.Jefferson                   8,301     10,213     18,514         1,227
 12/27/01 Howell/Hgwy 9                               999      4,241      5,240           533
 12/29/01 Catonsville/Kent                          1,378      5,925      7,303           748
 12/29/01 Old Bridge/Rte 9                          1,246      4,923      6,169           602
 12/29/01 Sacremento/Roseville                        526      7,601      8,127           813
 12/31/01 Santa Ana/E.Mcfadden                      7,602      9,502     17,104         1,147
  1/1/02  Concord                                     649      1,379      2,028           323

</TABLE>

                                       F-77

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>              <C>          <C>
  1/1/02  Tustin                                     -        962          1,465            30           (53)
  1/1/02  Pasadena/Sierra Madre                      -        706            872            70           (28)
  1/1/02  Azusa                                      -        933          1,659            25          4,926
  1/1/02  Redlands                                   -        423          1,202           197           (34)
  1/1/02  Airport I                                  -        346            861            78           (32)
  1/1/02  Miami / Marlin Road                        -        562          1,345            71           (49)
  1/1/02  Riverside                                  -         95          1,106            37           (41)
  1/1/02  Oakland / San Leandro                      -        330          1,116            90           (34)
  1/1/02  Richmond / Jacuzzi                         -        419          1,224            42           (44)
  1/1/02  Santa Clara / Laurel                       -      1,178          1,789           120           (62)
  1/1/02  Pembroke Park                              -        475          1,259            29           (47)
  1/1/02  Ft. Lauderdale / Sun                       -        452          1,254            42           (48)
  1/1/02  San Carlos / Shorewa                       -        737          1,360            14           (52)
  1/1/02  Ft. Lauderdale / Sun                       -        532          1,444            74           (56)
  1/1/02  Sacramento / Howe                          -        361          1,181            25           (45)
  1/1/02  Sacramento / Capitol                       -        186          1,284            19           (49)
  1/1/02  Miami / Airport                            -        517            915            63              2
  1/1/02  Marietta / Cobb Park                       -        419          1,571            54            (2)
  1/1/02  Sacramento / Florin                        -        624          1,710            82              3
  1/1/02  Belmont / Dairy Lane                       -        915          1,252            77              -
  1/1/02  So. San Francisco                          -      1,018          2,464            75             39
  1/1/02  Palmdale / P Street                        -        218          1,287            41              3
  1/1/02  Tucker / Montreal Rd                       -        760          1,485            70            (3)
  1/1/02  Pasadena / S Fair Oaks                     -      1,313          1,905            95            (2)
  1/1/02  Carmichael/Fair Oaks                       -        584          1,431            30            (2)
  1/1/02  Carson / Carson St                         -        507            877           109              1
  1/1/02  San Jose / Felipe Ave                      -        517          1,482            50            (3)
  1/1/02  Miami / 27th Ave                           -        272          1,572            81              1
  1/1/02  San Jose / Capitol                         -        400          1,183            25              1
  1/1/02  Tucker / Mountain                          -        519          1,385            67              -
  1/3/02  St Charles/Veterans Memorial               -        687          1,602           147              -
  1/7/02  Bothell/ N. Bothell Way                    -      1,063          4,995           137              -
 1/15/02  Houston / N.Loop                           -      2,045          6,178           (2)              -
 1/16/02  Orlando / S. Kirkman                       -        889          3,180            39              -
 1/16/02  Austin / Us Hwy 183                        -        608          3,856            17              -
 1/16/02  Rochelle Park / 168                        -        744          4,430            18              -
 1/16/02  Honolulu / Waialae                         -     10,631         10,783            58              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>             <C>
  1/1/02  Tustin                                      963      1,441      2,404           374
  1/1/02  Pasadena/Sierra Madre                       706        914      1,620           214
  1/1/02  Azusa                                       932      6,611      7,543           625
  1/1/02  Redlands                                    422      1,366      1,788           302
  1/1/02  Airport I                                   347        906      1,253           225
  1/1/02  Miami / Marlin Road                         562      1,367      1,929           341
  1/1/02  Riverside                                    94      1,103      1,197           282
  1/1/02  Oakland / San Leandro                       330      1,172      1,502           292
  1/1/02  Richmond / Jacuzzi                          420      1,221      1,641           307
  1/1/02  Santa Clara / Laurel                      1,179      1,846      3,025           443
  1/1/02  Pembroke Park                               475      1,241      1,716           322
  1/1/02  Ft. Lauderdale / Sun                        452      1,248      1,700           315
  1/1/02  San Carlos / Shorewa                        736      1,323      2,059           349
  1/1/02  Ft. Lauderdale / Sun                        533      1,461      1,994           366
  1/1/02  Sacramento / Howe                           361      1,161      1,522           301
  1/1/02  Sacramento / Capitol                        185      1,255      1,440           324
  1/1/02  Miami / Airport                             517        980      1,497           270
  1/1/02  Marietta / Cobb Park                        420      1,622      2,042           437
  1/1/02  Sacramento / Florin                         623      1,796      2,419           481
  1/1/02  Belmont / Dairy Lane                        914      1,330      2,244           366
  1/1/02  So. San Francisco                         1,019      2,577      3,596           663
  1/1/02  Palmdale / P Street                         218      1,331      1,549           378
  1/1/02  Tucker / Montreal Rd                        759      1,553      2,312           408
  1/1/02  Pasadena / S Fair Oaks                    1,313      1,998      3,311           527
  1/1/02  Carmichael/Fair Oaks                        584      1,459      2,043           386
  1/1/02  Carson / Carson St                          506        988      1,494           254
  1/1/02  San Jose / Felipe Ave                       516      1,530      2,046           403
  1/1/02  Miami / 27th Ave                            271      1,655      1,926           440
  1/1/02  San Jose / Capitol                          401      1,208      1,609           331
  1/1/02  Tucker / Mountain                           520      1,451      1,971           384
  1/3/02  St Charles/Veterans Memorial                687      1,749      2,436           252
  1/7/02  Bothell/ N. Bothell Way                   1,063      5,132      6,195           612
 1/15/02  Houston / N.Loop                          2,045      6,176      8,221           710
 1/16/02  Orlando / S. Kirkman                        889      3,219      4,108           394
 1/16/02  Austin / Us Hwy 183                         608      3,873      4,481           485
 1/16/02  Rochelle Park / 168                         744      4,448      5,192           544
 1/16/02  Honolulu / Waialae                       10,631     10,841     21,472         1,299

</TABLE>

                                       F-78

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>      <C>          <C>              <C>             <C>
 1/16/02  Sunny Isles Bch                            -        931          2,845            19              -
 1/16/02  San Ramon / San Ramo                       -      1,522          3,510             1              -
 1/16/02  Austin / W. 6th St                         -      2,399          4,493           201              -
 1/16/02  Schaumburg / W. Wise                       -      1,158          2,598            25              -
 1/16/02  Laguna Hills / Moulton                     -      2,319          5,200           132              -
 1/16/02  Annapolis / West St                        -        955          3,669            24              -
 1/16/02  Birmingham / Commons                       -      1,125          3,938            36              -
 1/16/02  Crestwood / Watson Rd                      -      1,232          3,093             -              -
 1/16/02  Northglenn /Huron St                       -        688          2,075            25              -
 1/16/02  Skokie / Skokie Blvd                       -        716          5,285            12              -
 1/16/02  Garden City / Stewart                      -      1,489          4,039             9              -
 1/16/02  Millersville / Veterans                    -      1,036          4,229             7              -
 1/16/02  W. Babylon / Sunrise                       -      1,609          3,959            21              -
 1/16/02  Memphis / Summer Ave                       -      1,103          2,772             3              -
 1/16/02  Santa Clara/Lafayette                      -      1,393          4,626           (2)              -
 1/16/02  Naperville / Washington                    -      2,712          2,225           443              -
 1/16/02  Phoenix/W Union Hills                      -      1,071          2,934            20              -
 1/16/02  Woodlawn / Whitehead                       -      2,682          3,355            23              -
 1/16/02  Issaquah / Pickering                       -      1,138          3,704            10              -
 1/16/02  West La /W Olympic                         -      6,532          5,975            28              -
 1/16/02  New Orleans/I-10                           -      1,286          3,380            13              -
 1/16/02  Pasadena / E. Colorado                     -      1,125          5,160             8              -
 1/16/02  Memphis / Covington                        -        620          3,076           (3)              -
 1/16/02  Hiawassee / N.Hiawassee                    -      1,622          1,892            47              -
 1/16/02  Longwood / State Rd                        -      2,123          3,083            86              -
 1/16/02  Casselberry / State                        -      1,628          3,308            15              -
 1/16/02  Honolulu/Kahala                            -      3,722          8,525            17              -
 1/16/02  Waukegan / Greenbay                        -        933          3,826             4              -
 1/16/02  Southfield / Telegraph                     -      2,869          5,507           (7)              -
 1/16/02  San Mateo / S. Delaware                    -      1,921          4,602            22              -
 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         (508)              -
 1/16/02  Indianapolis / W.86th                      -        812          2,421             4              -
 1/16/02  Indianapolis / Madison                     -        716          2,655            23              -
 1/16/02  Indianapolis / Rockville                   -        704          2,704             3              -
 1/16/02  Santa Cruz / River                         -      2,148          6,584            32              -

</TABLE>

<TABLE>
<CAPTION>


                                                  Gross Carrying Amount
                                                   At December 31, 2004
   Date                                      --------------------------------- Accumulated
 Acquired             Description               Land     Buildings    Total    Depreciation
---------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             ------------------------------------------------

<S>       <C>                                       <C>      <C>        <C>             <C>
 1/16/02  Sunny Isles Bch                            931      2,864      3,795           363
 1/16/02  San Ramon / San Ramo                     1,522      3,511      5,033           444
 1/16/02  Austin / W. 6th St                       2,399      4,694      7,093           587
 1/16/02  Schaumburg / W. Wise                     1,158      2,623      3,781           332
 1/16/02  Laguna Hills / Moulton                   2,319      5,332      7,651           698
 1/16/02  Annapolis / West St                        955      3,693      4,648           463
 1/16/02  Birmingham / Commons                     1,125      3,974      5,099           498
 1/16/02  Crestwood / Watson Rd                    1,232      3,093      4,325           389
 1/16/02  Northglenn /Huron St                       688      2,100      2,788           277
 1/16/02  Skokie / Skokie Blvd                       716      5,297      6,013           675
 1/16/02  Garden City / Stewart                    1,489      4,048      5,537           501
 1/16/02  Millersville / Veterans                  1,036      4,236      5,272           557
 1/16/02  W. Babylon / Sunrise                     1,609      3,980      5,589           497
 1/16/02  Memphis / Summer Ave                     1,103      2,775      3,878           353
 1/16/02  Santa Clara/Lafayette                    1,393      4,624      6,017           577
 1/16/02  Naperville / Washington                  2,712      2,668      5,380           311
 1/16/02  Phoenix/W Union Hills                    1,066      2,959      4,025           382
 1/16/02  Woodlawn / Whitehead                     2,682      3,378      6,060           451
 1/16/02  Issaquah / Pickering                     1,138      3,714      4,852           466
 1/16/02  West La /W Olympic                       6,532      6,003     12,535           748
 1/16/02  New Orleans/I-10                         1,292      3,387      4,679           427
 1/16/02  Pasadena / E. Colorado                   1,125      5,168      6,293           639
 1/16/02  Memphis / Covington                        620      3,073      3,693           394
 1/16/02  Hiawassee / N.Hiawassee                  1,622      1,939      3,561           250
 1/16/02  Longwood / State Rd                      2,123      3,169      5,292           405
 1/16/02  Casselberry / State                      1,628      3,323      4,951           416
 1/16/02  Honolulu/Kahala                          3,722      8,542     12,264         1,032
 1/16/02  Waukegan / Greenbay                        933      3,830      4,763           480
 1/16/02  Southfield / Telegraph                   2,869      5,500      8,369           680
 1/16/02  San Mateo / S. Delaware                  1,921      4,624      6,545           569
 1/16/02  Scottsdale/N.Hayden                      2,113      3,582      5,695           460
 1/16/02  Gilbert/W Park Ave                         497      3,532      4,029           448
 1/16/02  W.Palm Beach/Okeechobee                  2,149      4,142      6,291           425
 1/16/02  Indianapolis / W.86th                      812      2,425      3,237           313
 1/16/02  Indianapolis / Madison                     716      2,678      3,394           340
 1/16/02  Indianapolis / Rockville                   704      2,707      3,411           347
 1/16/02  Santa Cruz / River                       2,148      6,616      8,764           804

</TABLE>

                                       F-79

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>               <C>            <C>
 1/16/02  Novato / Rush Landing                      -      1,858          2,574             7              -
 1/16/02  Martinez / Arnold Dr                       -        847          5,422           (5)              -
 1/16/02  Charlotte/Cambridge                        -        836          3,908           (1)              -
 1/16/02  Rancho Cucamonga                           -        579          3,222            31              -
 1/16/02  Renton / Kent                              -        768          4,078            29              -
 1/16/02  Hawthorne / Goffle Rd                      -      2,414          4,918           (8)              -
  2/2/02  Nashua / Southwood Dr                      -      2,493          4,326           155              -
 2/15/02  Houston/Fm 1960 East                       -        859          2,004            55              -
  3/7/02  Baltimore / Russell Street                 -      1,763          5,821           166              -
 3/11/02  Weymouth / Main St                         -      1,440          4,433           134              -
 3/28/02  Clinton / Branch Ave & Schultz             -      1,257          4,108           288              -
 4/17/02  La Mirada/Alondra                          -      1,749          5,044           359              -
  5/1/02  N.Richlnd Hls/Rufe Snow Dr                 -        632          6,337         1,939              -
  5/2/02  Parkville/E.Joppa                          -        898          4,306           124              -
 6/17/02  Waltham / Lexington St                     -      3,183          5,733           126              -
 6/30/02  Nashville / Charlotte                      -        876          2,004            89              -
  7/2/02  Mt Juliet / Lebonan Rd                     -        516          1,203            79              -
 7/14/02  Yorktown / George Washington               -        707          1,684            43              -
 7/22/02  Brea/E. Lambert & Clifwood Pk              -      2,114          3,555           140              -
  8/1/02  Bricktown/Route 70                         -      1,292          3,690            69              -
  8/1/02  Danvers / Newbury St.                      -      1,311          4,140           243              -
 8/15/02  Montclair / Holt Blvd.                     -        889          2,074           190              -
 8/21/02  Rockville Centre/Merrick Rd                -      3,693          6,990           262              -
 9/13/02  Lacey / Martin Way                         -      1,379          3,217            49              -
 9/13/02  Lakewood / Bridgeport                      -      1,286          3,000            75              -
 9/13/02  Kent / Pacific Highway                     -      1,839          4,291           115              -
 11/4/02  Scotch Plains /Route 22                    -      2,124          5,072            26              -
12/23/02  Snta Clarita/Viaprincssa                   -      2,508          3,008         3,275              -
 2/13/03  Pasadena / Ritchie Hwy                     -      2,253          4,218           (5)              -
 2/13/03  Malden / Eastern Ave                       -      3,212          2,739            26              -
 2/24/03  Miami / SW 137th Ave                       -      1,600          4,684         (303)              -
  3/3/03  Chantilly / Dulles South Court             -      2,190          4,314           (3)              -
  3/6/03  Medford / Mystic Ave                       -      3,886          4,982           (5)              -
 5/27/03  Castro Valley / Grove Way                  -      2,247          5,881           882              -
  8/2/03  Sacramento / E.Stockton Blvd               -        554          4,175             9              -
 8/13/03  Timonium / W. Padonia Road                 -      1,932          3,681            10              -
 8/21/03  Van Nuys / Sepulveda                       -      1,698          3,886           444              -

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
 1/16/02  Novato / Rush Landing                     1,858      2,581      4,439           332
 1/16/02  Martinez / Arnold Dr                        847      5,417      6,264           663
 1/16/02  Charlotte/Cambridge                         836      3,907      4,743           494
 1/16/02  Rancho Cucamonga                            579      3,253      3,832           416
 1/16/02  Renton / Kent                               768      4,107      4,875           513
 1/16/02  Hawthorne / Goffle Rd                     2,414      4,910      7,324           594
  2/2/02  Nashua / Southwood Dr                     2,493      4,481      6,974           524
 2/15/02  Houston/Fm 1960 East                        859      2,059      2,918           252
  3/7/02  Baltimore / Russell Street                1,763      5,987      7,750           684
 3/11/02  Weymouth / Main St                        1,440      4,567      6,007           525
 3/28/02  Clinton / Branch Ave & Schultz            1,334      4,319      5,653           478
 4/17/02  La Mirada/Alondra                         1,856      5,296      7,152           547
  5/1/02  N.Richlnd Hls/Rufe Snow Dr                  632      8,276      8,908           733
  5/2/02  Parkville/E.Joppa                           898      4,430      5,328           478
 6/17/02  Waltham / Lexington St                    3,183      5,859      9,042           607
 6/30/02  Nashville / Charlotte                       876      2,093      2,969           232
  7/2/02  Mt Juliet / Lebonan Rd                      516      1,282      1,798           149
 7/14/02  Yorktown / George Washington                707      1,727      2,434           192
 7/22/02  Brea/E. Lambert & Clifwood Pk             2,114      3,695      5,809           373
  8/1/02  Bricktown/Route 70                        1,293      3,758      5,051           386
  8/1/02  Danvers / Newbury St.                     1,312      4,382      5,694           435
 8/15/02  Montclair / Holt Blvd.                      889      2,264      3,153           267
 8/21/02  Rockville Centre/Merrick Rd               3,693      7,252     10,945           694
 9/13/02  Lacey / Martin Way                        1,379      3,266      4,645            89
 9/13/02  Lakewood / Bridgeport                     1,286      3,075      4,361            91
 9/13/02  Kent / Pacific Highway                    1,839      4,406      6,245           126
 11/4/02  Scotch Plains /Route 22                   2,126      5,096      7,222           494
12/23/02  Snta Clarita/Viaprincssa                  2,508      6,283      8,791           377
 2/13/03  Pasadena / Ritchie Hwy                    2,253      4,213      6,466           324
 2/13/03  Malden / Eastern Ave                      3,212      2,765      5,977           202
 2/24/03  Miami / SW 137th Ave                      1,600      4,381      5,981           329
  3/3/03  Chantilly / Dulles South Court            2,190      4,311      6,501           293
  3/6/03  Medford / Mystic Ave                      3,886      4,977      8,863           334
 5/27/03  Castro Valley / Grove Way                 2,307      6,703      9,010           403
  8/2/03  Sacramento / E.Stockton Blvd                554      4,184      4,738           294
 8/13/03  Timonium / W. Padonia Road                1,932      3,691      5,623           225
 8/21/03  Van Nuys / Sepulveda                      1,699      4,329      6,028           153

</TABLE>

                                       F-80

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                        <C>    <C>            <C>             <C>              <C>
  9/9/03  Westwood / East St                         -      3,267          5,013           236              -
 10/21/03 San Diego / Miramar Road                   -      2,244          6,653           624              -
 11/3/03  El Sobrante/San Pablo                      -      1,255          4,990           536              -
 11/6/03  Pearl City / Kamehameha Hwy                -      4,428          4,839           558              -
 12/23/03 Boston / Southampton Street                -      5,334          7,511           740              -
  1/9/04  Farmingville / Horseblock Road             -      1,919          4,420             1              -
 2/27/04  Salem / Goodhue St.                        -      1,544          6,160             2              -
 3/18/04  Seven Corners / Arlington Blvd.            -      6,087          7,553             1              -
 6/30/04  Marlton / Route 73                         -      1,753          5,195             2              -
  7/1/04  Long Island City/Northern Blvd.            -      4,876          7,610             1              -
  7/9/04  West Valley Cty/Redwood                    -        876          2,067             3              -
 7/12/04  Hicksville/E. Old Country Rd.              -      1,693          3,910             2              -
 7/15/04  Harwood/Ronald                             -      1,619          3,778             4              -
 9/24/04  E. Hanover/State Rt                        -      3,895          4,943             1              -
 10/14/04 Apple Valley/148th St                    830        591          1,375             2              -
 10/14/04 Blaine / Hwy 65 NE                     1,107        789          1,833             2              -
 10/14/04 Brooklyn Park / Lakeland Ave           1,980      1,411          3,278             3              -
 10/14/04 Brooklyn Park / Xylon Ave              1,571      1,120          2,601             3              -
 10/14/04 St Paul(Eagan)/Sibley Mem'l Hwy          864        615          1,431             2              -
 10/14/04 Maple Grove / Zachary Lane             1,875      1,337          3,105             3              -
 10/14/04 Minneapolis / Hiawatha Ave             2,076      1,480          3,437             4              -
 10/14/04 New Hope / 36th Ave                    1,869      1,332          3,094             3              -
 10/14/04 Rosemount / Chippendale Ave            1,213        864          2,008             3              -
 10/14/04 St Cloud/Franklin                        808        575          1,338             2              -
 10/14/04 Savage / W 128th St                    2,135      1,522          3,535             3              -
 10/14/04 Spring Lake Park/Hwy 65 NE             2,151      1,534          3,562             3              -
 10/14/04 St Paul / Terrace Court                1,574      1,122          2,606             3              -
 10/14/04 St Paul / Eaton St                     1,629      1,161          2,698             3              -
 10/14/04 St Paul-Hartzell / Wabash Ave              -      1,207          2,816             3              -
 10/14/04 West St Paul / Marie Ave               2,030      1,447          3,361             4              -
 10/14/04 Stillwater / Memorial Ave              2,341      1,669          3,876             4              -
 10/14/04 St Paul(VadnaisHts/Birch Lake Rd       1,302        928          2,157             2              -
 10/14/04 Woodbury / Hudson Road                 2,613      1,863          4,327             3              -
 10/14/04 Brown Deer / N Green Bay Rd            1,486      1,059          2,461             3              -
 10/14/04 Germantown / Spaten Court                852        607          1,411             2              -
 10/14/04 Milwaukee/ N 77th St                   1,741      1,241          2,882             3              -
 10/14/04 Milwaukee/ S 13th St                   2,082      1,484          3,446             4              -

</TABLE>
<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                       <C>        <C>        <C>             <C>
  9/9/03  Westwood / East St                        3,278      5,238      8,516           316
 10/21/03 San Diego / Miramar Road                  2,244      7,277      9,521           384
 11/3/03  El Sobrante/San Pablo                     1,257      5,524      6,781           275
 11/6/03  Pearl City / Kamehameha Hwy               4,534      5,291      9,825           266
 12/23/03 Boston / Southampton Street               5,345      8,240     13,585           333
  1/9/04  Farmingville / Horseblock Road            1,919      4,421      6,340           173
 2/27/04  Salem / Goodhue St.                       1,544      6,162      7,706           202
 3/18/04  Seven Corners / Arlington Blvd.           6,087      7,554     13,641           209
 6/30/04  Marlton / Route 73                        1,753      5,197      6,950           108
  7/1/04  Long Island City/Northern Blvd.           4,876      7,611     12,487           169
  7/9/04  West Valley Cty/Redwood                     876      2,070      2,946            35
 7/12/04  Hicksville/E. Old Country Rd.             1,693      3,912      5,605            65
 7/15/04  Harwood/Ronald                            1,619      3,782      5,401            64
 9/24/04  E. Hanover/State Rt                       3,895      4,944      8,839            46
 10/14/04 Apple Valley/148th St                       591      1,377      1,968             9
 10/14/04 Blaine / Hwy 65 NE                          789      1,835      2,624            12
 10/14/04 Brooklyn Park / Lakeland Ave              1,411      3,281      4,692            22
 10/14/04 Brooklyn Park / Xylon Ave                 1,120      2,604      3,724            17
 10/14/04 St Paul(Eagan)/Sibley Mem'l Hwy             615      1,433      2,048            10
 10/14/04 Maple Grove / Zachary Lane                1,337      3,108      4,445            21
 10/14/04 Minneapolis / Hiawatha Ave                1,480      3,441      4,921            23
 10/14/04 New Hope / 36th Ave                       1,332      3,097      4,429            21
 10/14/04 Rosemount / Chippendale Ave                 864      2,011      2,875            14
 10/14/04 St Cloud/Franklin                           575      1,340      1,915             9
 10/14/04 Savage / W 128th St                       1,522      3,538      5,060            24
 10/14/04 Spring Lake Park/Hwy 65 NE                1,534      3,565      5,099            24
 10/14/04 St Paul / Terrace Court                   1,122      2,609      3,731            17
 10/14/04 St Paul / Eaton St                        1,161      2,701      3,862            18
 10/14/04 St Paul-Hartzell / Wabash Ave             1,207      2,819      4,026            19
 10/14/04 West St Paul / Marie Ave                  1,447      3,365      4,812            22
 10/14/04 Stillwater / Memorial Ave                 1,669      3,880      5,549            26
 10/14/04 St Paul(VadnaisHts/Birch Lake Rd            928      2,159      3,087            15
 10/14/04 Woodbury / Hudson Road                    1,863      4,330      6,193            29
 10/14/04 Brown Deer / N Green Bay Rd               1,059      2,464      3,523            17
 10/14/04 Germantown / Spaten Court                   607      1,413      2,020            10
 10/14/04 Milwaukee/ N 77th St                      1,241      2,885      4,126            19
 10/14/04 Milwaukee/ S 13th St                      1,484      3,450      4,934            23

</TABLE>

                                       F-81

<PAGE>

<TABLE>
<CAPTION>

                                                                                                Adjustments
                                                              Initial Cost                     Resulting from
                                                        -------------------------    Costs    the Acquisition
   Date                                         Encumb-              Buildings &   Subsequent    of Minority
 Acquired            Description                rances     Land     Improvements to Acquisition   interests
---------------------------------------------------------------------------------------------------------------
                                                                (Dollar amounts in thousands)
                                             ------------------------------------------------------------------

<S>       <C>                                    <C>          <C>          <C>               <C>            <C>
 10/14/04 Oak Creek / S 27th St                  1,054        751          1,746             2              -
 10/14/04 Waukesha / Arcadian Ave                2,336      1,665          3,868             3              -
 10/14/04 West Allis / W Lincoln Ave             1,950      1,390          3,227             4              -
 10/14/04 Garland / O'Banion Rd                      -        606          1,414             3              -
 10/14/04 Grand Prairie/ Hwy360                      -        942          2,198             2              -
 10/14/04 Duncanville/N Duncnvill                    -      1,524          3,556             2              -
 10/14/04 Lancaster/ W Pleasant                      -        993          2,317             3              -
 10/14/04 Mesquite / Oates Dr                        -        937          2,186             2              -
 10/14/04 Dallas / E NW Hwy                          -        942          2,198             3              -
 11/24/04 Pompano Beach/E. Sample                4,690      1,608          3,754             3              -
 11/24/04 Davie / SW 41st St.                    6,110      2,467          5,758             3              -
 11/24/04 North Bay Village/Kennedy              6,846      3,275          7,644             2              -
 11/24/04 Miami / Biscayne Blvd                  6,825      3,538          8,258             2              -
 11/24/04 Miami Gardens/NW 57th St               6,679      2,706          6,316             4              -
 11/24/04 Tamarac/ N University Dr               6,473      2,580          6,022             4              -
 11/24/04 Miami / SW 31st Ave                   15,197     11,574         27,009             3              -
 11/24/04 Hialeah / W 20th Ave                       -      2,224          5,192             3              -
 11/24/04 Miami / SW 42nd St                         -      2,955          6,897             3              -
 11/24/04 Miami / SW 40th St                         -      2,933          6,844             4              -
 11/25/04 Carlsbad/CorteDelAbeto                     -      2,861          6,676             3              -

Other Properties

          Glendale/Western Avenue                    -      1,622          3,771        12,799              -
 12/13/99 Burlingame (Commercial & PUD)              -      4,043          9,434           209              -
 4/28/00  San Diego/Sorrento                         -      1,282          3,016           138              -
  6/1/98  Renton / Sw 39th St.                       -        725          2,196            24              -
 6/29/98  Pompano Bch/Center Port Circle             -        795          2,312           180              -
 12/30/99 Tamarac Parkway                            -      1,902          4,467         1,336              -
 12/29/00 Gardena                                    -      1,737          5,456            17              -
  4/2/02  Long Beach                                 -        887          6,251             -              -

          Construction in Progress                   -          -              -        47,277              -
          Land held for development                  -          -              -         8,883              -

                                             ------------------------------------------------------------------
                                               $95,919 $1,415,762     $3,315,302      $582,107       $253,739
                                             ==================================================================

</TABLE>

<TABLE>
<CAPTION>


                                                   Gross Carrying Amount
                                                    At December 31, 2004
   Date                                      ---------------------------------- Accumulated
 Acquired             Description                Land     Buildings    Total    Depreciation
----------------------------------------------------------------------------------------------
                                                     (Dollar amounts in thousands)
                                             -------------------------------------------------

<S>       <C>                                         <C>      <C>        <C>              <C>
 10/14/04 Oak Creek / S 27th St                       751      1,748      2,499            12
 10/14/04 Waukesha / Arcadian Ave                   1,665      3,871      5,536            26
 10/14/04 West Allis / W Lincoln Ave                1,390      3,231      4,621            22
 10/14/04 Garland / O'Banion Rd                       606      1,417      2,023             9
 10/14/04 Grand Prairie/ Hwy360                       942      2,200      3,142            15
 10/14/04 Duncanville/N Duncnvill                   1,524      3,558      5,082            24
 10/14/04 Lancaster/ W Pleasant                       993      2,320      3,313            15
 10/14/04 Mesquite / Oates Dr                         937      2,188      3,125            15
 10/14/04 Dallas / E NW Hwy                           942      2,201      3,143            15
 11/24/04 Pompano Beach/E. Sample                   1,608      3,757      5,365            12
 11/24/04 Davie / SW 41st St.                       2,467      5,761      8,228            19
 11/24/04 North Bay Village/Kennedy                 3,275      7,646     10,921            25
 11/24/04 Miami / Biscayne Blvd                     3,538      8,260     11,798            27
 11/24/04 Miami Gardens/NW 57th St                  2,706      6,320      9,026            21
 11/24/04 Tamarac/ N University Dr                  2,580      6,026      8,606            20
 11/24/04 Miami / SW 31st Ave                      11,574     27,012     38,586            88
 11/24/04 Hialeah / W 20th Ave                      2,224      5,195      7,419            18
 11/24/04 Miami / SW 42nd St                        2,955      6,900      9,855            23
 11/24/04 Miami / SW 40th St                        2,933      6,848      9,781            23
 11/25/04 Carlsbad/CorteDelAbeto                    2,861      6,679      9,540            23

Other Properties

          Glendale/Western Avenue                   1,615     16,577     18,192        16,020
 12/13/99 Burlingame (Commercial & PUD)             4,043      9,643     13,686         2,046
 4/28/00  San Diego/Sorrento                        1,024      3,412      4,436           778
  6/1/98  Renton / Sw 39th St.                        725      2,220      2,945           643
 6/29/98  Pompano Bch/Center Port Circle              795      2,492      3,287           767
 12/30/99 Tamarac Parkway                           1,890      5,815      7,705           888
 12/29/00 Gardena                                   1,737      5,473      7,210           960
  4/2/02  Long Beach                                  887      6,251      7,138         1,389

          Construction in Progress                      -     47,277     47,277             -
          Land held for development                 8,883          -      8,883             -

                                             -------------------------------------------------
                                               $1,440,031 $4,126,879 $5,566,910    $1,320,200
                                             =================================================

</TABLE>

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