SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [Fee Required] For the fiscal year ended December 31, 1998
                                                 -----------------

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

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

Commission File Number: 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                        91201-2397
----------------------------------------                  ----------------------
(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
-----------------------------------------------------------------------------------      -----------------------
<S>                                                                                      <C>                     
10% Cumulative Preferred Stock, Series A, $.01 par value...........................      New York Stock Exchange
9.20% Cumulative Preferred Stock, Series B, $.01 par value.........................      New York Stock Exchange
Adjustable Rate Cumulative Preferred Stock, Series C, $.01 par value...............      New York Stock Exchange
9.50% Cumulative Preferred Stock, Series D, $.01 par value.........................      New York Stock Exchange
10% Cumulative Preferred Stock, Series E, $.01 par value...........................      New York Stock Exchange
9.75% Cumulative Preferred Stock, Series F, $.01 par value.........................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-7/8% Cumulative
     Preferred Stock, Series G, $.01 par value.....................................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.45% Cumulative
     Preferred Stock, Series H, $.01 par value.....................................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-5/8% Cumulative
     Preferred Stock, Series I, $.01 par value.....................................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative Preferred..
     Stock, Series J, $.01 par value...............................................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative
     Preferred Stock, Series K, $.01 par value.....................................      New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative
     Preferred Stock, Series L, $.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. [X]

The  aggregate  market value of the voting stock held by non - affiliates of the
registrant as of March 15, 1999:

Common Stock, $0.10 Par Value - $2,306,154,248 (computed on the basis of $26-5/8
per share which was the  reported  closing  sale price of the  Company's  Common
Stock on the New York Stock Exchange on March 15, 1999).

The number of shares outstanding of the registrant's  classes of common stock as
of March 15, 1999:

Common Stock, $.10 Par Value - 128,780,769  shares
-------------------------------------------------------

Class B Common Stock, $.10 Par Value - 7,000,000 shares
-------------------------------------------------------

Equity Stock, Series A, $.01 Par Value - 225,000 shares
-------------------------------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions  of the proxy  statement  to be filed in  connection  with the
annual  shareholders'  meeting to be held in 1999 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 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks,  uncertainties,  and other  factors,  which may
cause the  actual  results  and  performance  of the  Company  to be  materially
different  from those  expressed or implied in the forward  looking  statements.
Such  factors   include  the  impact  of  competition   from  new  and  existing
self-storage  and commercial  facilities  which could impact rents and occupancy
levels at the Company's facilities; the Company's ability to evaluate,  finance,
and integrate  acquired and  developed  properties  into the Company's  existing
operations;  the Company's ability to effectively compete in the markets that it
does business in; the impact of the regulatory  environment as well as national,
state,  and local laws and  regulations  including,  without  limitation,  those
governing  Real Estate  Investment  Trusts;  the  acceptance by consumers of the
Pickup and Delivery  concept;  the impact of general  economic  conditions  upon
rental  rates  and  occupancy  levels  at  the  Company's  facilities;  and  the
availability of permanent capital at attractive rates.

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.   The   Company   is  a  fully   integrated,
self-administered  and self-managed  real estate  investment trust ("REIT") that
acquires,  develops, owns and operates self-storage  facilities.  The Company is
the largest owner and operator of  self-storage  space in the United States with
direct  and  indirect  equity  investments  in  1,094  self-storage   facilities
containing  approximately  65.3  million  square feet of net  rentable  space at
December 31, 1998.  The Company also has a significant  ownership in PS Business
Parks, Inc. and its operating  partnership which, as of December 31, 1998, owned
106 commercial properties containing  approximately 10.9 million rentable square
feet of space. The Company also owns  substantially all of the economic interest
in a corporation engaged in the portable self-storage business.

         The  Company  has  elected  to be taxed as a REIT  under  the  Internal
Revenue Code of 1986,  as amended.  To the extent that the Company  continues to
qualify  as a  REIT,  it  will  not be  subject  to tax,  with  certain  limited
exceptions, on the taxable income that is distributed to its shareholders.

MANAGEMENT
----------

         The Company's senior management team is headed by B. Wayne Hughes (65),
Chairman and Chief Executive Officer.  Mr. Hughes established the Public Storage
Organization  in 1972 and has  successfully  managed the Company through several
market cycles. The Company's executive management includes:  Harvey Lenkin (62),
President;  John Reyes (38), Senior Vice President and Chief Financial  Officer;
Carl B. Phelps (60),  Senior Vice  President - Real  Estate;  and Marvin M. Lotz
(56), Senior Vice President - Operations.

         The Company's senior management has a significant ownership position in
the  Company  with  executive  officers,  directors  and their  families  owning
approximately  42.2 million  shares or 32.7% of the common stock as of March 15,
1999.

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

         The  Company's  primary  objective  is to  maximize  shareholder  value
through  internal growth (by increasing funds from operations and cash available
for  distribution) and acquisitions of additional real estate  investments.  The
Company  believes  that its access to capital,  geographic  diversification  and
operating  efficiencies  resulting  from its size will  enhance  its  ability to
achieve this objective.

                                       3

<PAGE>

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

         Competition  in the  market  areas in which  the  Company  operates  is
significant  and  affects  the  occupancy  levels,  rental  rates and  operating
expenses of certain of the Company's facilities. Recent increases in development
of self-storage  facilities is intensifying the competition  among  self-storage
operators in many market areas in which the Company operates.

         In seeking  investments,  the Company  competes  with a wide variety of
institutions and other  investors.  An increase in the amount of funds available
for real estate investments may increase  competition for ownership of interests
in facilities and may reduce yields.

         The Company  believes  that the  significant  operating  and  financial
experience of its 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 the Company to continue to
compete effectively with other entities.

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

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

         The  Company's  facilities  are  part of a  comprehensive  distribution
system   encompassing   standardized   procedures,   integrated   reporting  and
information  networks and centralized  marketing.  This  distribution  system is
designed to maximize  revenue  through pricing and occupancy.  In addition,  the
Company's  subsidiaries are able to generate  incremental  revenue from sales of
ancillary  products  such as truck  rentals,  locks,  boxes  and  most  recently
portable self-storage. The distribution system was significantly enhanced during
1996  with  the  introduction  and  implementation  of  the  national  telephone
reservation center and new facility management software.

         NATIONAL TELEPHONE  RESERVATION  SYSTEM:  Commencing in early 1996, the
Company began to implement a national  telephone  reservation system designed to
provide  added   customer   service  and  maximize   utilization   of  available
self-storage  space.  Customers calling either the Company's toll-free telephone
referral system, (800) 44-STORE,  or a self-storage facility are directed to the
national  reservation system where 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.

         The Company believes that the national telephone reservation system has
enhanced the  Company's  ability to  effectively  market both  self-storage  and
portable self-storage  facilities and is primarily responsible for the Company's
increasing  occupancy  levels  and  realized  rental  rates  experienced  at the
self-storage facilities during the past three years.

         SELF-STORAGE  OPTIONS:  Historically,  the Company offered self-storage
spaces  for  rent  through  its  traditional   self-storage  facilities  whereby
customers  would transport their goods to the facility and rent a space to store
their goods.  In late 1996,  the Company  organized  Public  Storage  Pickup and
Delivery,  Inc.  as a  separate  corporation  and  a  related  partnership  (the
corporation and partnership are collectively  referred to as "PSPUD") to operate
a portable  self-storage business that rents storage containers to customers for
storage in central warehouses.

         The  concept  of PSPUD is to provide an  alternative  to a  traditional
self-storage  facility.  PSPUD delivers a storage container(s) to the customer's
location  where the  customer,  at his  convenience,  packs  his goods  into the
storage container.  PSPUD will subsequently return to the customer's location to
retrieve the storage container(s) for storage in a central warehouse.

                                       4

<PAGE>

         RETAIL  CENTERS:  In an effort to attract a wider variety of customers,
to further  differentiate  the Company from its  competition and to generate new
sources of  revenue,  additional  products  are being  offered by the  Company's
subsidiaries.  These products and services include the sale of locks,  boxes and
packing supplies and the rental of trucks and other moving equipment through the
implementation of a retail expansion program.

         The strategic  objective of the retail expansion program is to create a
"Retail Store" that will (i) rent spaces for the attached self-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,  all in an  environment  that  is  retail
oriented.  Retail stores have been  retrofitted  to some  existing  self-storage
facility  rental  offices  or  "built-in"  as  part  of the  development  of new
self-storage facilities, both in high traffic, high visibility locations.

         ECONOMIES OF SCALE: The Company is the largest provider of self-storage
space in the  industry.  As of December 31,  1998,  the Company  operated  1,129
self-storage  facilities  (including 35 managed for third  parties) in 37 states
and had  over  571,000  spaces  rented.  The size  and  scope  of the  Company's
operations  have  enabled  it to  achieve a  consistently  high  level of profit
margins and low level of administrative costs relative to revenues.

         BRAND NAME  RECOGNITION:  The Company's  operations are conducted under
the  "Public  Storage"  brand  name,  which  the  Company  believes  is the most
recognized and  established  name in the  self-storage  industry.  The Company's
self-storage   operations  are  conducted  in  37  states,  giving  it  national
recognition  and  prominence.  The Company  focuses its operations  within those
states in the major metropolitan  markets.  This  concentration  establishes the
Company as one of the dominant providers of storage space in each market that it
operates in and enables it to use a variety of promotional  activities,  such as
television and radio advertising as well as targeted  discounting and referrals,
which are generally not economically viable to its competitors.

GROWTH STRATEGIES
-----------------

         The Company's  growth  strategies  focus on (i) improving the operating
performance  of its  existing  properties,  (ii)  increasing  its  ownership  of
self-storage  facilities  through  additional  investments,  (iii) improving the
operating   performance  of  its  portable  self-storage   business,   and  (iv)
participating  in the growth of PS Business Parks,  Inc. Major elements of these
strategies are as follows:

         INCREASE  NET CASH FLOW OF EXISTING  PROPERTIES:  The Company  seeks to
increase the net cash flow  generated by its  existing  properties  by improving
average  occupancy  levels and achieving higher levels of realized monthly rents
per occupied square foot.  Over the past three years,  the Company has been able
to achieve both  increasing  occupancy  levels and  realized  rents per occupied
square foot.  The Company  believes that its property  management  personnel and
systems combined with the national telephone reservation system will continue to
enhance the Company's ability to meet these goals.

         ACQUIRE  PROPERTIES  OPERATED AND  PARTIALLY  OWNED BY THE COMPANY:  In
addition to 628 wholly owned self-storage facilities, the Company also operates,
on behalf of  approximately  47  ownership  entities  in which the Company has a
partial equity interest, 466 self-storage  facilities under the "Public Storage"
name. From time to time, some of these  self-storage  facilities or interests in
them are  available  for  purchase,  providing  the  Company  with a  source  of
additional  acquisition  opportunities.  The Company  believes these  properties
include some of the better located,  better constructed  self-storage facilities
in the industry.  Because  these  properties  are managed by the Company,  it is
provided with reliable  operating  information  prior to  acquisition  and these
properties are easily integrated into the Company's portfolio.

         DEVELOP  PROPERTIES  IN  SELECTED  MARKETS:  During  1995,  the Company
commenced construction of self-storage  facilities.  Since 1995, the Company and
its  joint  venture  partnership  (described  below)  have  opened a total of 33
facilities,  including 19 facilities in 1998.  The Company and its joint venture
partnership (described below) are developing additional self-storage facilities.

         In April 1997,  the Company  formed a joint  venture  partnership  (the
"Development  Joint Venture") with an  institutional  investor to participate in
the development of  approximately  $220 million of self-storage  facilities.  At

                                       5

<PAGE>

December 31, 1998, the Development  Joint Venture had completed  construction on
24 self-storage  facilities with a total cost of  approximately  $112.2 million,
and had six  facilities  under  construction  with an aggregate cost incurred of
approximately  $28.6 million and total additional  estimated cost to complete of
$3.9 million.  The Development  Joint Venture is reviewing the final 20 projects
(approximately 1,295,000 net rentable sq. ft), and upon approval the Development
Joint Venture will be fully  committed.  The  partnership  is funded solely with
equity capital consisting of 30% from the Company and 70% from the institutional
investor.

         ACQUIRE  PROPERTIES  OWNED OR OPERATED BY OTHERS:  The Company believes
its presence in and knowledge of  substantially  all of the major markets in the
United  States   enhances  its  ability  to  identify   attractive   acquisition
opportunities  and capitalize on the overall  fragmentation  in the self-storage
industry. The Company maintains local market information on rates, occupancy and
competition in each of the markets in which it operates. Of the more than 20,000
self-storage  facilities in the United States, the Company believes that the ten
largest operators manage less than 20% of the total space.

         On November 12, 1998,  the Company and Storage  Trust Realty  agreed to
merge  pursuant to an Agreement  and Plan of Merger.  As a result of the merger,
which was  completed on March 12, 1999,  the Company  acquired 215  self-storage
facilities located in 16 states totaling approximately 12.0 million net rentable
square feet. See - "Management's  Discussion and Analysis of Financial Condition
and Results of Operations-Liquidity and Capital Resources."

         PORTABLE  SELF-STORAGE:   At  December  31,  1998,  PSPUD  operated  43
facilities:  five are owned (and were  developed)  by PSPUD and the remainder of
the facilities are leased from third parties. The Company has not determined the
number of new facilities to be opened in 1999. PSPUD is currently developing six
additional  facilities and has identified  one additional  site for  development
which collectively have an aggregate estimated cost of $39.5 million.

         Due to the  start-up  nature  of  this  business,  PSPUD  has  incurred
operating losses during 1998, 1997, and 1996. The quarterly losses have steadily
decreased  from  the  highest  quarterly  loss  incurred  in the  quarter  ended
September 30, 1997.  The Company  believes  this trend of  decreasing  operating
losses will continue with increases in PSPUD's revenues.

         The rate of fill-up  varies  from  facility  to  facility.  As with the
traditional   self-storage   facilities,   PSPUD   believes  that  the  portable
self-storage business experiences seasonal fluctuations in occupancy levels with
occupancies  generally higher in the summer months than the winter months. There
can be no  assurances  as to the  level  of  PSPUD's  expansion,  level of gross
rentals, level of move-outs or profitability.

         COMMERCIAL PROPERTIES:  On January 2, 1997, the Company reorganized its
commercial  property  operations into a separate  private REIT. The private REIT
contributed its assets to a newly created operating  partnership (the "Operating
Partnership")  in  exchange  for a  general  partnership  interest  and  limited
partnership  interests.  During 1997,  the Company and certain  partnerships  in
which the Company has a controlling  interest  contributed  substantially all of
their commercial properties to the Operating Partnership in exchange for limited
partnership  interests or to the private REIT in exchange for common  stock.  On
March 17, 1998, the private REIT merged into Public Storage Properties XI, Inc.,
a publicly  traded  REIT and an  affiliate  of the  Company  and the name of the
surviving  corporation was changed to PS Business Parks,  Inc. (the REIT and the
related  Operating  Partnership  are  hereinafter  referred to  collectively  as
"PSB").

         Throughout  1998,  PSB  significantly  increased  its asset and capital
base,  issuing  approximately  11.8  million  shares of  common  stock for cash,
raising  approximately $272 million.  PSB acquired commercial  properties with a
total of  approximately  4.9 million net rentable  square feet in the year ended
December 31, 1998.

         At December 31, 1998,  PSB owned 106  properties  located in 11 states.
The Operating Partnership also manages the commercial space owned by the Company
and  affiliated  entities.  As of  December  31,  1998,  the Company and certain
partnerships in which the Company has a controlling interest owned approximately
40% of the equity interest of PSB.

                                       6

<PAGE>

FINANCING OF THE COMPANY'S GROWTH STRATEGIES
--------------------------------------------

          The Company has and expects to continue to fund its growth  strategies
  primarily  through the use of  permanent  capital.  Permanent  capital for the
  Company has  generally  consisted of retained  operating  cash flows,  and the
  issuance of both common and preferred stock. In addition,  as discussed above,
  during  1997  and  1998,   substantially  all  of  the  Company's  development
  activities  were  conducted  through the  Development  Joint  Venture  with an
  institutional  investor.  The venture is funded  solely  with  equity  capital
  consisting of 30% from the Company and 70% from the institutional investor.

          The Company  currently has a $150 million  unsecured  credit  facility
  with a bank  group  led by Wells  Fargo  Bank,  which  the  Company  uses as a
  temporary  source of  acquisition  financing.  The Company seeks to ultimately
  finance all acquisitions with permanent  capital to eliminate  refinancing and
  interest  rate risk.  As of March 15, 1999,  there were no  borrowings on this
  credit facility.

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

INVESTMENTS IN REAL ESTATE FACILITIES
-------------------------------------

The Company has invested directly and indirectly in self-storage facilities, and
to a lesser extent in existing commercial  properties  containing commercial and
industrial rental space, principally through (i) the acquisition of wholly-owned
properties, (ii) the acquisition of limited and general partnership interests in
real  estate  partnerships  owning  self-storage  facilities  and/or  commercial
properties  and (iii) the  acquisition  of common  stock of other  REITs  owning
self-storage  facilities  and/or  commercial  properties.  The  following  table
outlines  the  Company's  ownership  interest  in  self-storage  facilities  and
commercial properties:

<TABLE>
<CAPTION>
                                                            At December 31, 1998
                                        --------------------------------------------------------------
                                           Number of Real Estate          Net Rentable Square Feet
                                                 Facilities                   (in thousands)
                                        -----------------------------    -----------------------------    
                                         Self-storage     Commercial     Self-storage      Commercial
                                        -------------   -------------    -------------   -------------     
<S>                                             <C>               <C>          <C>              <C>
Consolidated facilities:
     Wholly-owned by the Company                  628               1          38,419                9
     Owned by controlled entities                 323               -          18,690                -
                                        -------------   -------------    -------------   -------------     
                                                  951               1          57,109                9
                                        -------------   -------------    -------------   -------------     

Facilities owned by unconsolidated entities:
     Institutional partnerships                    26               -           1,623                -
     Foreign partnerships                          36               -           2,044                -
     Development Joint Venture                     24               -           1,448                -
     PSB                                            -             106               -           10,930
     Other                                         57               -           3,054                -
                                        -------------   -------------    -------------   -------------     
                                                  143             106           8,169           10,930
                                        -------------   -------------    -------------   -------------     
        Totals                                  1,094             107          65,278           10,939
                                        =============   =============    =============   =============     
</TABLE>

         FACILITIES  OWNED BY CONTROLLED  ENTITIES:  From 1983 through 1987, the
Company  and a series of eight  limited  partnerships  (the "PSP  Partnerships")
jointly invested in an aggregate of 211 real estate  facilities  through general
partnerships  (the "Joint  Ventures").  At December 31, 1998, the Joint Ventures
and the PSP  Partnerships  had a total  of 200 and 26  self-storage  facilities,
respectively.  Six of the PSP partnerships are public limited  partnerships;  in
1998 the Company acquired the remaining minority limited  partnership  interests
in two of these partnerships which were previously public limited  partnerships.
The Company has an indirect  interest in these facilities  through its ownership
of both limited and general partnership interests.

         The  Company,  through  its  direct  ownership  interests  in the Joint
Ventures  combined  with its limited and general  partnership  interests  owns a
controlling interest in each of the PSP Partnerships.  Accordingly,  the Company

                                       7

<PAGE>

consolidates the assets,  liabilities,  and results of operations of these eight
partnerships in the Company's financial statements.

         The Company  also has  significant  ownership  interests in and control
both as limited  partner and general  partner of 13 other  limited  partnerships
which own in  aggregate  97  self-storage  facilities.  The accounts of these 13
limited partnerships are also included in the Company's  consolidated  financial
statements.

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

         At December 31, 1998, the Company had ownership interests in PSB and 26
limited partnerships,  consisting of 2 institutional  partnerships that owned 26
properties, 14 partnerships with foreign investors that owned 36 properties, and
10 other partnerships that owned 81 properties (collectively the "Unconsolidated
Entities"). The Company's ownership interest in these entities is less than 50%.
Due to the Company's limited  ownership  interest and control of these entities,
the Company does not  consolidate  the accounts of these  entities for financial
reporting purposes and accounts for such investments using the equity method.

         INSTITUTIONAL  PARTNERSHIPS:  Under the partnership  agreements for the
institutional partnerships, the general partners are generally entitled to 8% of
"cash flow from  operations"  (as defined in the partnership  agreements)  until
distributions  to the  limited  partners  from all  sources  equal 100% of their
investment  ("cross-over");  after cross-over, the general partners are entitled
to 25% of cash flow from  operations  and of sale and  financing  proceeds.  The
partnership  agreements  define cash flow from operations as cash funds provided
from operations of the partnerships,  without  deduction for  depreciation,  but
after  deducting  cash funds used to pay or  establish  a reserve  for all other
expenses,  debt payments,  capital  improvements and  replacements.  The general
partners are also entitled to 1% of the limited partnership  interest in respect
of their capital investment.

         PARTNERSHIPS WITH FOREIGN INVESTORS:  Under the partnership  agreements
for the partnerships with foreign investors,  the general partners are generally
entitled to 8% of "cash flow from operations" until distributions to the limited
partners  equal  105%  to  115%  of  their  investment   ("cross-over");   after
cross-over,  the  general  partners  are  entitled  to 28%  of  cash  flow  from
operations  (including 3% to a general partner  unaffiliated  with the Company).
Limited partners  generally receive all of the sale and financing proceeds until
such  proceeds  from a  property  equal  105% to 115% of the  investment  in the
property;  the  general  partners  are  entitled  to  receive  the next  sale or
financing  proceeds  from that property up to an amount equal to 40% of the sale
or financing  proceeds  previously  distributed  to limited  partners  from that
property;  and any additional sale or financing  proceeds  generated by the same
property  are  distributed  72% to the limited  partners  and 28% to the general
partners  (including 3% to the third general partner).  The general partners are
also  entitled  to 1% of the  limited  partnership  interest in respect of their
capital investment.

         DEVELOPMENT  JOINT  VENTURE:  In April 1997, the Company formed a joint
venture  partnership  with  an  institutional  investor  to  participate  in the
development  of  approximately  $220  million of  self-storage  facilities.  The
venture is funded solely with equity capital  consisting of 30% from the Company
and 70% from the institutional investor.

         PSB: The Company and certain of the PSP  Partnerships  that it controls
owns  approximately 40% of the shares and operating  partnership units of PSB at
December  31, 1998.  The  Company's  interest is  reflected in its  ownership of
5,201,072 common shares, as well as 7,305,355  operating  partnership units that
are convertible at a one-to-one  ratio at the option of the Company,  subject to
certain  limitations,  into common  shares of PSB and  participate  equally at a
one-to-one ratio in dividends with PSB's common shares. PSB owned 106 commercial
facilities  with an  aggregate  of 10.9  million  net  rentable  square  feet at
December 31, 1998.

         OTHER PARTNERSHIPS:  The sharing  arrangements  between the general and
limited  partners the other  partnerships  are the same as in the  institutional
partnerships.

                                       8

<PAGE>

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

         The Company's Bylaws prohibit the Company 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 only upon a vote of the holders
of a majority  of the shares of (i) Common  Stock and (ii) each of the series of
Senior Preferred Stock. See "Limitations on Debt" for other  restrictions in the
Bylaws.

BORROWINGS
----------

         The Company has an unsecured $150 million credit  facility with a group
of commercial  banks which expires on July 31, 2001. The expiration  date may be
extended by one year on each  anniversary of the credit  agreement.  Interest on
outstanding  borrowings on the credit facility is payable monthly. At the option
of the Company,  the rate of interest  charged on borrowings is equal to (i) the
prime  rate,  or (ii) a rate  ranging  from the London  Interbank  Offered  Rate
("LIBOR")  plus 0.40% to LIBOR plus 1.10%  depending on the  Company's  coverage
ratios,  as  defined.  In  addition,  the Company is required to pay a quarterly
commitment  fee of 0.250%  (per  annum) of the unused  portion of the  revolving
credit facility.  The credit facility also includes a bid feature, for up to $50
million,  which allows the Company, at its option, to request the group of banks
to propose the interest rate they would charge on specific borrowings.  However,
in no case may the interest rate bid be greater than the amount  provided by the
credit agreement.

         Under covenants of the credit facility,  the Company is required to (i)
maintain a balance sheet  leverage ratio (as defined) of less than 0.40 to 1.00,
(ii) maintain net income of not less than $1.00 for each fiscal  quarter,  (iii)
maintain certain cash flow and interest coverage ratios (as defined) of not less
than 1.0 to 1.0 and 5.0 to 1.0,  respectively  and (iv) maintain a minimum total
shareholders'  equity (as defined).  In addition,  the Company is limited in its
ability to incur  additional  borrowings  (the  Company is  required to maintain
unencumbered  assets with an aggregate book value equal to or greater than three
times the  Company's  unsecured  recourse  debt) or sell  assets.  There were no
borrowings outstanding under the credit facility at March 15, 1999.

         As of December  31,  1998,  the Company had  outstanding  note  payable
balances of approximately $81.4 million and no outstanding balance on the credit
facility.  See the notes to the consolidated  financial statements for a summary
of the Company's borrowings at December 31, 1998.

         Subject to a limitation on unsecured borrowings in the Company's Bylaws
(described  below), the Company has broad powers to borrow in furtherance of the
Company's objectives. The Company has incurred in the past, and may incur in the
future,  both  short-term  and  long-term  indebtedness  to  increase  its funds
available for investment in real estate, capital expenditures and distributions.

                                       9

<PAGE>

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 the
Company's  "Asset  Coverage" of its 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 vote of the holders of
a  majority  of the  shares of (i)  Common  Stock and (ii) each of the series of
Senior Preferred Stock.

         The Company's  Bylaws prohibit the Company from issuing debt securities
in a public  offering  unless the Company's  "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 vote of the  holders  of a
majority of the shares of (i) Common Stock and (ii) each of the series of Senior
Preferred Stock.

         Without  the consent of the holders of a majority of each of the series
of Senior  Preferred  Stock,  the  Company  will 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, 1998, the Debt Ratio was  approximately  2.4%.  "Debt" means the
liabilities (other than "accrued and other liabilities" and "minority interest")
that should, in accordance with generally  accepted  accounting  principles,  be
reflected  on  the  Company's   consolidated   balance  sheet  at  the  time  of
determination.  "Assets"  means the  Company's  total  assets  that  should,  in
accordance with generally accepted  accounting  principles,  be reflected on the
Company's consolidated balance sheet at the time of determination.

         The Company's 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.

OTHER BUSINESS ACTIVITIES
-------------------------

         A  corporation  owned by Hughes and members of his family (the  "Hughes
Family")  reinsures  policies  against  losses to goods stored by tenants in the
Company's self-storage facilities. The Company believes that the availability of
insurance  reduces the potential  liability of the Company to tenants for losses
to their goods from theft or destruction.  The corporation receives the premiums
and bears the risks associated with the re-insurance.

         A subsidiary  of the Company  sells locks and boxes and rents trucks to
the general  public and tenants to be used in securing  their  spaces and moving
their goods.  The Company  believes that the availability of locks and boxes for
sale and the rental of trucks promotes the rental of spaces.  The balance of the
equity of this subsidiary, representing all of the voting stock, is owned by the
Hughes Family.

EMPLOYEES
---------

         There are approximately  3,800 persons 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
------------------

         The Company  believes that it has operated,  and intends 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 it will at all  times  so
qualify.  To the extent that the Company continues to qualify as a REIT, it will
not be taxed,  with certain  limited  exceptions,  on the taxable income that is
distributed to its shareholders.

                                       10

<PAGE>

INSURANCE
---------

         The  Company  believes  that its  properties  are  adequately  insured.
Facilities  operated  by the Company  have  historically  carried  comprehensive
insurance,  including  fire,  earthquake,  liability and extended  coverage from
nationally recognized carriers.

MERGER WITH STORAGE TRUST REALTY
--------------------------------

         On March 12,  1999,  the  Company and Storage  Trust  Realty  ("Storage
Trust"), a New York Stock Exchange listed REIT,  completed a merger. As a result
of the merger the Company  acquired 215  self-storage  facilities  located in 16
states  totaling  approximately  12.0  million  net  rentable  square  feet  and
approximately 104,000 units. In the merger, each share of beneficial interest of
Storage  Trust was  exchanged  for 0.86  shares of the  Company's  common  stock
(approximately  13.0 million  shares of the  Company's  stock were issued in the
merger with an additional approximately 1.0 million shares reserved for issuance
upon  conversion  of  units  in  Storage  Trust's  operating  partnership).   In
connection  with the merger,  the Company's board of directors has been expanded
by one seat and Daniel C. Staton,  previously  Storage  Trust's  Chairman of the
Board, has been elected as a new member of the Company's board of directors. The
merger was structured as a tax free transaction.

                                       11

<PAGE>

ITEM 2.  PROPERTIES

         At December  31, 1998,  the Company had direct and  indirect  ownership
interests  in 1,201  properties  located in 38 states  (the  1,094  self-storage
facilities are located in 37 states):

<TABLE>
<CAPTION>
                                                            At December 31, 1998
                                        --------------------------------------------------------------
                                                                            Net Rentable Square Feet
                                             Number of Facilities               (in thousands)
                                        -----------------------------    -----------------------------    
                                         Self-storage     Commercial     Self-storage      Commercial
                                        -------------   -------------    -------------   -------------     
<S>                                         <C>               <C>            <C>             <C>
California:                                                                                  
     Northern                                 131               9             7,304           1,105
     Southern                                 150              23             9,495           3,094
Texas                                         123              30             8,110           2,490
Florida                                       101               -             5,905               -
Illinois                                       67               -             4,224               -
Colorado                                       38               -             2,374               -
Washington                                     38               -             2,360               -
Georgia                                        36               -             1,898               -
New Jersey                                     35               -             2,018               -
Maryland                                       35               6             1,989           1,107
Virginia                                       33              12             2,040           1,208
New York                                       29               -             1,692               -
Ohio                                           27               -             1,650               -
Oregon                                         25              16             1,171           1,102
Nevada                                         22               -             1,409               -
Missouri                                       19               -             1,018               -
Pennsylvania                                   18               -             1,224               -
Other states (22 states)                      167              11             9,397             833
                                        -------------   -------------    -------------   -------------     
     Totals                                 1,094             107            65,278          10,939
                                        =============   =============    =============   =============     
</TABLE>

         Five  industrial  facilities  for use by PSPUD are not  included in the
table above.


         The Company's  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, 1998, the weighted average
occupancy  level and the  weighted  average  annual  realized  rent per rentable
square foot for the Company's  self-storage  facilities were approximately 91.6%
and $9.84,  respectively,  and for the commercial properties approximately 95.5%
and $9.72, respectively.  None of the Company's facilities involve 1% or more of
the Company's total assets, gross revenues or net income.

         On March 12, 1999,  in connection  with the Storage  Trust merger,  the
Company  acquired  215  self-storage  facilities  located in 16 states  totaling
approximately 12.0 million net rentable square feet.

         SELF-STORAGE FACILITIES:  Self-storage  facilities,  which comprise the
majority  of the  Company's  investments  (approximately  91%  based  on  rental
income),  are  designed  to offer  accessible  storage  space for  personal  and
business use at a relatively low cost. A user rents a fully enclosed space which
is for the  user's  exclusive  use and to which  only the user has  access on an
unrestricted   basis   during   business   hours.   On-site   operation  is  the
responsibility  of resident  managers who are supervised by area managers.  Some
self-storage  facilities  also  include  rentable  uncovered  parking  areas for
vehicle storage.  Leases for self-storage facilities space may be on a long-term
or short-term  basis,  although  typically spaces are rented on a month-to-month
basis.  Rental rates vary according to the location of the property and the size
of the storage space. The Company's  self-storage  facilities are operated under
the "Public Storage" name.

         Users of space in self-storage  facilities include both individuals and
large and small businesses. Individuals usually employ 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.

                                       12

<PAGE>

         Self-storage  facilities  in which the Company has  invested  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.

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

         The Company's  self-storage  facilities are geographically  diversified
and are located  primarily in or near major  metropolitan  markets in 37 states.
Generally the Company's 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.

         Since the Company's investments are primarily self-storage  facilities,
the  ability  of the  Company  to  preserve  its  investments  and  achieve  its
objectives is dependent in large part upon success in this field.  Historically,
the Company's self-storage facility interests have generally shown a high degree
of consistency in generating cash flows,  despite changing economic  conditions.
The  Company   believes  that  its   self-storage   facilities  have  attractive
characteristics  consisting  of high  profit  margins,  high  average  occupancy
levels,  a broad tenant base and low levels of capital  expenditures to maintain
their condition and appearance.

         COMMERCIAL  PROPERTIES:  The  Company  may  invest in all types of real
estate.  Most  of the  Company's  non-self-storage  facilities  investments  are
interests in business parks and low-rise office buildings, primarily through its
investment in PSB. A commercial  property may include both industrial and office
space. Industrial space may be used for, among other things, light manufacturing
and assembly, storage and warehousing, distribution and research and development
activities.  The Company  believes  that most of the office space is occupied by
tenants who are also renting  industrial  space.  The remaining  office space is
used for  general  office  purposes.  A  commercial  property  may also  include
facilities  for commercial  uses such as banks,  travel  agencies,  restaurants,
office supply shops,  professionals or other tenants  providing  services to the
public.  The amount of retail space in a commercial  property is not expected to
be significant.

         PORTABLE SELF-STORAGE FACILITIES:  At December 31, 1998, PSPUD operated
43  facilities;  16 in  California,  seven in Texas,  five in Florida,  three in
Georgia,  three in Illinois and the remaining nine facilities are located in six
other  states.  As  with  mini-warehouses,  PSPUD  believes  that  the  portable
self-storage business experiences seasonal fluctuations in occupancy levels with
occupancies generally higher in the summer months than the winter months. Of the
43 facilities  operated by PSPUD at December 31, 1998,  five are owned (and were
developed)  by PSPUD and the remainder of the  facilities  are leased from third
parties.

         ENVIRONMENTAL  MATTERS:  The Company's  current  practice is to conduct
environmental  investigations  in connection  with property  acquisitions.  As a
result of  environmental  investigations  of its properties,  which commenced in
1995, the Company 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, the Company is not
aware  of  any  environmental  contamination  of any  of  its  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

ANDERSON V. PUBLIC STORAGE,  INC., San Francisco Superior Court (filed September
19, 1997)

GRANT V. PUBLIC STORAGE, INC., San Diego Superior Court (filed October 6, 1997)

WREN V. PUBLIC  STORAGE,  INc., San Francisco  Superior Court (filed October 16,
1997)

                                       13

<PAGE>

         Each of the plaintiffs in these cases is suing the Company on behalf of
a  purported  class of  California  tenants who rented  storage  spaces from the
Company and contends that the Company's  fees for late payments under its rental
agreements for storage space constitutes  unlawful  "penalties" under California
law. None of the plaintiffs has assigned any dollar amount to the claims.

         The lower court has  dismissed  one of the cases and the  plaintiff  in
that case has appealed that  dismissal.  The Company is continuing to vigorously
contest the claims in all three cases.

         There are no other material  proceedings pending against the Company or
any of its subsidiaries,  other than ordinary routine  litigation  incidental to
their business.

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

         The Company held an annual meeting of shareholders on November 4, 1998.
Proxies for the annual  meeting were  solicited  pursuant to Regulation 14 under
the Securities  Exchange Act of 1934. The annual meeting  involved the following
matter:

ELECTION OF DIRECTORS


                                            Number of Shares of Common Stock
                                            --------------------------------
                 Name                          Voted For         Withheld
--------------------------------            --------------    --------------   
B. Wayne Hughes                               98,046,500         337,374
Harvey Lenkin                                 98,054,756         329,118
B. Wayne Hughes, Jr.                          98,021,646         362,228
Robert J. Abernethy                           98,072,866         311,008
Dann V. Angeloff                              98,045,315         338,559
William C. Baker                              98,071,632         312,242
Thomas J, Barrack, Jr.                        98,073,324         310,550
Uri P. Harkham                                98,064,110         319,764

ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY

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

         B. Wayne  Hughes,  age 65, has been a director of the Company since its
organization in 1980 and was President and Co-Chief  Executive Officer from 1980
until  November 1991 when he became  Chairman of Board and sole Chief  Executive
Officer.  Mr. Hughes was Chairman of the Board and Chief Executive  Officer from
1990 until March 16,  1998 of Public  Storage  Properties  XI,  Inc.,  which was
renamed PS Business Parks, Inc. ("PSB"),  an affiliated REIT. From 1989-90 until
the respective dates of merger, he was Chairman of the Board and Chief Executive
Officer  of 18  affiliated  REITs  that were  merged  into the  Company  between
September 1994 and May 1998  (collectively,  the "Merged Public Storage REITs").
Mr.  Hughes  has been  active in the real  estate  investment  field for over 30
years. He is the father of B. Wayne Hughes, Jr., a director of the Company.

         Harvey Lenkin,  age 62, became  President and a director of the Company
in November 1991.  Mr. Lenkin has been employed by the Company for 21 years.  He
has been a director of PSB since March 16,  1998 and was  President  of PSB from
1990 until March 16, 1998. Mr. Lenkin was President of the Merged Public Storage
REITs from 1989-90 until the respective  dates of merger and was also a director
of one of those REITs,  Storage Properties,  Inc. ("SPI"),  from 1989 until June
1996.  He is a member of the Board of Governors of the National  Association  of
Real Estate Investment Trusts, Inc. (NAREIT).

         John Reyes, age 38, 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

                                       14

<PAGE>

November 1995 and a Senior Vice President of the Company in December 1996.  From
1983 to 1990, Mr. Reyes was employed by Ernst & Young.

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

         Obren B. Gerich, age 60, a certified public accountant, has been a Vice
President  of the Company  since 1980 and became  Senior Vice  President  of the
Company in November 1995. Mr. Gerich was Chief Financial  Officer of the Company
until  November  1991. Mr. Gerich was Vice President and Secretary of the Merged
Public Storage REITs from 1989-90 until the respective dates of merger.

         Marvin M. Lotz,  age 56, became a Senior Vice  President of the Company
in November  1995.  Mr. Lotz has had overall  responsibility  for the  Company's
mini-warehouse  operations  since 1988 and had  overall  responsibility  for the
Company's property acquisitions from 1983 until 1988.

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

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

         David P.  Singelyn,  age 37, a certified  public  accountant,  has been
employed by the Company  since 1989 and became Vice  President  and Treasurer of
the Company in November 1995. Mr.  Singelyn was Vice President and Controller of
SPI from  1991  until  June  1996.  From  1987 to  1989,  he was  Controller  of
Winchell's Donut Houses, L.P.

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

                                       15

<PAGE>

                                     PART II

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

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

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

                  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.


                                                Range
                                     ---------------------------
         Year          Quarter           High            Low
     ------------    ------------    ------------    ------------  
         1997             1st           $30-7/8        $26-1/2
                          2nd            29-1/4         25-7/8
                          3rd            30-7/8         27
                          4th            30-5/8         26-1/8

         1998             1st            33-5/8         28-11/16
                          2nd            32-3/4         26-5/16
                          3rd            29-1/4         22-5/8
                          4th            28-1/16        24-1/4

                  As of March 15, 1999, there were approximately  22,942 holders
         of record of the Common Stock.

b.       Class B Common Stock

                  The Class B Common  Stock issued in  connection  with the PSMI
         Merger   (as   defined   under   Item  7  below)   has  the   following
         characteristics:

         *        The  Class  B  Common  Stock  will  (i)  not   participate  in
                  distributions   until  the  LATER  to  occur  of  funds   from
                  operations   ("FFO")  per  Common  Share  as  defined   below,
                  aggregating  $1.80  during  any  period  of  four  consecutive
                  calendar quarters,  or January 1, 2000, thereafter the Class B
                  Common Stock will  participate  in  distributions  (other than
                  liquidating  distributions),  at the  rate  of 97% of the  per
                  share  distributions  on  the  Common  Stock,   provided  that
                  cumulative  distributions  of at least  $.22 per  quarter  per
                  share have been paid on the Common Stock, (ii) not participate
                  in  liquidating  distributions,  (iii) not be entitled to vote
                  (except as  expressly  required  by  California  law) and (iv)
                  automatically  convert into Common Stock, on a share for share
                  basis,  upon  the  later  to  occur  of FFO per  Common  Share
                  aggregating  $3.00  during  any  period  of  four  consecutive
                  calendar quarters or January 1, 2003.

                  For these purposes:

         1.       FFO,  means net income  (loss)  (computed in  accordance  with
                  GAAP) before (I) gain (loss) on early  extinguishment of debt,
                  (ii)  minority  interest  in income and (iii)  gain  (loss) on
                  disposition  of real  estate,  adjusted as  follows:  (i) plus
                  depreciation   and   amortization   (including  the  Company's
                  pro-rata   share   of   depreciation   and   amortization   of
                  unconsolidated  equity  interests and  amortization  of assets
                  acquired in a merger, including property management agreements
                  and  goodwill),  and (ii) less FFO  attributable  to  minority
                  interest. FFO is a supplemental performance measure for equity
                  REITs as defined by the  National  Association  of Real Estate
                  Investment Trusts, Inc. ("NAREIT"). The NAREIT definition does
                  not specifically address the treatment of minority interest in
                  the  determination of FFO or the treatment of the amortization

                                       16

<PAGE>

                  of property management agreements and goodwill. In the case of
                  the  Company,  FFO  represents  amounts  attributable  to  its
                  shareholders  after  deducting  amounts  attributable  to  the
                  minority  interests and before deductions for the amortization
                  of  property  management  agreements  and  goodwill.   FFO  is
                  presented  because  management,   as  well  as  many  industry
                  analysts, consider FFO to be one measure of the performance of
                  the  Company and it is used in  establishing  the terms of the
                  Class B Common  Stock.  FFO does not take  into  consideration
                  scheduled  principal payments on debt,  capital  improvements,
                  distributions   and   other   obligations   of  the   Company.
                  Accordingly,  FFO is not a substitute  for the Company's  cash
                  flow or net income as a measure of the Company's  liquidity or
                  operating performance or ability to pay distributions.  FFO is
                  not  comparable to similarly  entitled items reported by other
                  REITs that do not define it exactly as the Company defines it.

         2.       FFO per Common Share means FFO less preferred  stock dividends
                  (other than dividends on convertible  preferred stock) divided
                  by the  outstanding  weighted  average  shares of Common Stock
                  assuming conversion of all outstanding  convertible securities
                  and the Class B Common Stock.

                  For these purposes, FFO per share of Common Stock (as defined)
         was $2.11 for the year ended December 31, 1998.

c.       Dividends

                  The  Company   has  paid   quarterly   distributions   to  its
         shareholders   since   1981,   its  first  full  year  of   operations.
         Distributions  paid per share of  Common  Stock  for 1998  amounted  to
         $0.88.

                  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.  The Company is required to
         distribute at least 95% of its net taxable ordinary income prior to the
         filing  of the  Company's  tax  return  and  85%,  subject  to  certain
         adjustments,  during the calendar year, to maintain its REIT status for
         federal  income  tax  purposes.  It is  management's  intention  to pay
         distributions of not less than this required amount.

                  For Federal tax purposes,  distributions  to shareholders  are
         treated  as  ordinary  income,  capital  gains,  return of capital or a
         combination  thereof.  Distributions to common shareholders were $0.88,
         $0.88 and $0.88 for 1998, 1997 and 1996,  respectively  and in the case
         of 1997 and 1996,  represent  ordinary  income in their  entirety.  For
         1998,  the Company's  dividends to common  shareholders  and on all the
         Company's  various  classes of preferred stock were all ordinary income
         for the first, third, and fourth quarter distributions.  For the second
         quarter  of  1998,  86.110%  of the  dividends  were  characterized  as
         ordinary income and the remainder was characterized as capital gain.

d.       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 June 1997,  the Company  contributed  $22,500,000  (225,000
         shares) of its Equity Stock, Series A ("Equity Stock") to a partnership
         in which  the  Company  is the  general  partner.  As a result  of this
         contribution,  the  Company  obtained  a  controlling  interest  in the
         Partnership and began to consolidate  the accounts of the  Partnership.
         The Equity  Stock ranks on a parity with Common Stock and junior to the
         Company's  Cumulative  Senior  Preferred  Stock with respect to general

                                       17

<PAGE>

         preference rights and has a liquidation  amount of ten times the amount
         paid to each Common Share up to a maximum of $100 per share.  Quarterly
         distributions  per share on the Equity Stock are equal to the lesser of
         (i) 10 times the amount paid per Common Stock or (ii) $2.20.

e.       Registrant's Preferred Equity

                  On October 26, 1992, the Company  completed a public  offering
         of  1,825,000  shares  ($25 stated  value per share) of 10%  Cumulative
         Preferred Stock,  Series A ("Series A Preferred  Stock").  The Series A
         Preferred  Stock has general  preference  rights over the Common  Stock
         with respect to distributions  and liquidation  proceeds.  During 1998,
         the Company paid  dividends  totaling  $4,563,000  ($2.50 per preferred
         share).

                  On March 25, 1993, the Company  completed a public offering of
         2,300,000  shares  ($25  stated  value per  share) of 9.20%  Cumulative
         Preferred Stock,  Series B ("Series B Preferred  Stock").  The Series B
         Preferred  Stock has general  preference  rights over the Common  Stock
         with respect to distributions  and liquidation  proceeds.  During 1998,
         the Company paid  dividends  totaling  $5,488,000  ($2.30 per preferred
         share).

                  On June 30, 1994, the Company  completed a public  offering of
         1,200,000  shares  ($25  stated  value per  share) of  Adjustable  Rate
         Cumulative  Preferred Stock, Series C ("Series C Preferred Stock"). The
         Series C Preferred Stock has general  preference rights over the Common
         Stock with respect to distributions  and liquidation  proceeds.  During
         1998,  the  Company  paid  dividends  totaling  $2,024,000  ($1.688 per
         preferred share).

                  On September 1, 1994, the Company  completed a public offering
         of 1,200,000  shares ($25 stated  value per share) of 9.50%  Cumulative
         Preferred Stock,  Series D ("Series D Preferred  Stock").  The Series D
         Preferred  Stock has general  preference  rights over the Common  Stock
         with respect to distributions  and liquidation  proceeds.  During 1998,
         the Company paid dividends  totaling  $2,850,000  ($2.375 per preferred
         share).

                  On February 1, 1995, the Company  completed a public  offering
         of  2,195,000  shares  ($25 stated  value per share) of 10%  Cumulative
         Preferred Stock,  Series E ("Series E Preferred  Stock").  The Series E
         Preferred  Stock has general  preference  rights over the Common  Stock
         with respect to distributions  and liquidation  proceeds.  During 1998,
         the Company paid  dividends  totaling  $5,488,000  ($2.50 per preferred
         share).

                  On May 3, 1995,  the Company  completed  a public  offering of
         2,300,000  shares  ($25  stated  value per  share) of 9.75%  Cumulative
         Preferred Stock,  Series F ("Series F Preferred  Stock").  The Series F
         Preferred  Stock has general  preference  rights over the Common  Stock
         with respect to distributions  and liquidation  proceeds.  During 1998,
         the Company paid dividends  totaling  $5,606,000  ($2.437 per preferred
         share).

                  On December 13, 1995, the Company  completed a public offering
         of 6,900,000  depositary shares each representing 1/1,000 of a share of
         8-7/8%  Cumulative  Preferred  Stock,  Series G  ("Series  G  Preferred
         Stock")($25  stated value per depositary share). The Series G Preferred
         Stock has general  preference rights over the Common Stock with respect
         to  distributions  and liquidation  proceeds.  During 1998, the Company
         paid dividends totaling  $15,309,000  ($2.219 per preferred  depositary
         share).

                  On January 25, 1996, the Company  completed a public  offering
         of 6,750,000  depositary shares each representing 1/1,000 of a share of
         8.45%  Cumulative  Preferred  Stock,  Series  H  ("Series  H  Preferred
         Stock")($25  stated value per depositary share). The Series H Preferred
         Stock has general  preference rights over the Common Stock with respect
         to  distributions  and liquidation  proceeds.  During 1998, the Company
         paid dividends totaling $14,259,000 ($2.112 per preferred share).

                                       18

<PAGE>

                  On November 1, 1996, the Company  completed a public  offering
         of 4,000,000  depositary shares each representing 1/1,000 of a share of
         8-5/8%  Cumulative  Preferred  Stock,  Series I  ("Series  I  Preferred
         Stock")($25  stated value per depositary share). The Series I Preferred
         Stock has general  preference rights over the Common Stock with respect
         to  distributions  and liquidation  proceeds.  During 1998, the Company
         paid dividends totaling $8,625,000 ($2.156 per preferred share).

                  On August 25, 1997, the Company completed a public offering of
         6,000,000  depositary shares each representing 1/1,000 of a share of 8%
         Cumulative  Preferred Stock, Series J ("Series J Preferred  Stock")($25
         stated value per depositary  share).  The Series J Preferred  Stock has
         general  preference  rights  over the  Common  Stock  with  respect  to
         distributions and liquidation  proceeds.  During 1998, the Company paid
         dividends totaling $12,000,000 ($2.00 per preferred share).

                  On January 19, 1999, the Company  completed a public  offering
         of 4,600,000  depositary shares each representing 1/1,000 of a share of
         8-1/4%  Cumulative  Preferred  Stock,  Series K  ("Series  K  Preferred
         Stock")($25  stated value per depositary share). The Series K Preferred
         Stock has general  preference rights over the Common Stock with respect
         to distributions and liquidation proceeds.

                  On March 10, 1999, the Company  completed a public offering of
         4,600,000  depositary  shares each  representing  1/1,000 of a share of
         8-1/4%  Cumulative  Preferred  Stock,  Series L  ("Series  L  Preferred
         Stock")($25  stated value per depositary share). The Series L Preferred
         Stock has general  preference rights over the Common Stock with respect
         to distributions and liquidation proceeds.

                  The Series A through Series L Preferred Stock are collectively
         referred to as the "Senior Preferred Stock."

                  On July 15, 1993, the Company  completed a public  offering of
         2,300,000  shares  ($25  stated  value per share) of 8.25%  Convertible
         Preferred  Stock  ("Convertible   Preferred  Stock").  The  Convertible
         Preferred  Stock had general  preference  rights over the Common  Stock
         (and  ranked  junior to the Senior  Preferred  Stock)  with  respect to
         distributions  and liquidation  proceeds.  During 1998 the Company paid
         dividends totaling  $2,163,000 ($1.032 per preferred share). On July 1,
         1998,  the  Convertible  Preferred  Stock was  exchanged  for 3,503,303
         shares of common stock.

                                       19

<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                                       For the year ended December 31,
                                                 -----------------------------------------------------------------------------
                                                    1998 (1)       1997 (1)       1996 (1)       1995 (1)         1994
                                                 -------------- -------------- ---------------- -------------- ---------------
                                                                    (In thousands, except per share data
<S>                                               <C>            <C>            <C>              <C>              <C>     
Revenues:
  Rental income                                     $535,869       $434,008       $294,426         $202,134       $141,845
  Equity in earnings of real estate entities          26,602         17,569         22,121            3,763            764
  Facility management fees                             6,221         10,141         14,428            2,144              -
  Interest and other income                           13,459          9,126          7,976            4,509          4,587
                                                 -------------- -------------- ---------------- -------------- ---------------
                                                     582,151        470,844        338,951          212,550        147,196
                                                 -------------- -------------- ---------------- -------------- ---------------
Expenses:
  Cost of operations                                 212,815        174,186         94,491           72,247         52,816
  Cost of facility management                          1,066          1,793          2,575              352              -
  Depreciation and amortization                      107,482         91,356         64,967           40,760         28,274
  General and administrative                           8,972          6,384          5,524            3,982          2,631
  Interest expense                                     4,507          6,792          8,482            8,508          6,893
  Environmental cost                                       -              -              -            2,741              -
  Advisory fee                                             -              -              -            6,437          4,983
                                                 -------------- -------------- ---------------- -------------- ---------------
                                                     334,842        280,511        176,039          135,027         95,597
                                                 -------------- -------------- ---------------- -------------- ---------------
Income before minority interest                      247,309        190,333        162,912           77,523         51,599
Minority interest in income                          (20,290)       (11,684)        (9,363)          (7,137)        (9,481)
                                                 -------------- -------------- ---------------- -------------- ---------------
Net income                                          $227,019       $178,649       $153,549          $70,386        $42,118
                                                 ============== ============== ================ ============== ===============
------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE :
Distributions                                          $0.88          $0.88          $0.88            $0.88          $0.85

Net income - Basic                                     $1.30          $0.92          $1.10            $0.96          $1.05
Net income - Diluted                                   $1.30          $0.91          $1.10            $0.95          $1.05

Weighted average common shares - Basic               113,929         98,446         77,117           41,039         23,978
Weighted average common shares - Diluted             114,357         98,961         77,358           41,171         24,077
------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
Total assets                                      $3,403,904     $3,311,645     $2,572,152       $1,937,461       $820,309
Total debt                                           $81,426       $103,558       $108,443         $158,052        $77,235
Minority interest                                   $139,325       $288,479       $116,805         $112,373       $141,227
Shareholders' equity                              $3,119,340     $2,848,960     $2,305,437       $1,634,503       $587,786
-----------------------------------------------------------------------------------------------------------------------------
OTHER DATA:
Net cash provided by operating activities           $368,675       $293,163       $245,329         $123,579        $79,180
Net cash used in investing activities              $(345,774)     $(409,151)     $(484,730)       $(248,672)     $(169,590)
Net cash provided by (used in) financing
  activities                                        $(13,131)      $130,587       $185,821         $185,378       $100,029
Funds from operations (2)                           $336,363       $272,234       $224,476         $105,199        $56,143
</TABLE>

(1)  During 1998, 1997, 1996 and 1995 the Company completed several  significant
     business  combinations and equity  transactions.  See Notes 3 and 10 to the
     Company's consolidated financial statementS.

(2)  Funds  from  operations  ("FFO"),  means net  income  (loss)  (computed  in
     accordance  with GAAP)  before (i) gain (loss) on early  extinguishment  of
     debt, (ii) minority interest in income and (iii) gain (loss) on disposition
     of real estate, adjusted as follows: (i) plus depreciation and amortization
     (including the Company's pro-rata share of depreciation and amortization of
     unconsolidated  equity  interests and  amortization of assets acquired in a
     merger,  including property management  agreements and excess purchase cost
     over net  assets  acquired),  and (ii) less FFO  attributable  to  minority
     interest.  FFO is a  supplemental  performance  measure for equity REITs as
     defined by the National  Association of Real Estate Investment Trusts, Inc.
     ("NAREIT").  The  NAREIT  definition  does  not  specifically  address  the
     treatment of minority interest in the determination of FFO or the treatment
     of the amortization of property  management  agreements and excess purchase
     cost over net assets acquired.  In the case of the Company,  FFO represents
     amounts   attributable  to  its   shareholders   after  deducting   amounts
     attributable  to the  minority  interests  and  before  deductions  for the
     amortization  of property  management  agreements and excess  purchase cost
     over net assets acquired.  FFO is presented because management,  as well as
     many  analysts,  consider FFO to be one measure of the  performance  of the
     Company  and it is used in  certain  aspects  of the  terms of the  Class B
     Common  Stock.  FFO does not take into  consideration  scheduled  principal
     payments on debt, capital improvements  distributions and other obligations
     of the Company. Accordingly, FFO is not a substitute for the Company's cash
     flow or net income as a measure of the  Company's  liquidity  or  operating
     performance  or  ability to pay  distributions.  FFO is not  comparable  to
     similarly  entitled  items  reported  by other  REITs that do not define it
     exactly as the Company defines it.

                                       20

<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 the Company's 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 21F of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve known and unknown risks,  uncertainties,
and other  factors,  which may cause the actual  results and  performance of the
Company  to be  materially  different  from  those  expressed  or implied in the
forward looking statements.  Such factors include the impact of competition from
new and existing self-storage and commercial facilities which could impact rents
and occupancy  levels at the  Company's  facilities;  the  Company's  ability to
evaluate,  finance,  and integrate  acquired and developed  properties  into the
Company's existing  operations;  the Company's ability to effectively compete in
the markets that it does business in; the impact of the  regulatory  environment
as well as national,  state, and local laws and regulations  including,  without
limitation,  those governing Real Estate  Investment  Trusts;  the acceptance by
consumers of the Pickup and  Delivery  concept;  the impact of general  economic
conditions upon rental rates and occupancy  levels at the Company's  facilities;
and the availability of permanent capital at attractive rates.

         OVERVIEW:  The  self-storage  industry  is  highly  fragmented  and  is
composed predominantly of numerous local and regional operators.  Competition in
the markets in which the Company  operates is significant and is increasing from
additional  development  of  self-storage  facilities  in many markets which may
negatively   impact   occupancy   levels  and  rental  rates  at  the  Company's
self-storage  facilities.  However,  the Company  believes it possesses  several
distinguishing characteristics which enable it to compete effectively with other
owners and operators.

         The  Company  is  the  largest  owner  and  operator  of   self-storage
facilities in the United States with ownership interests as of December 31, 1998
in 1,094  self-storage  facilities  containing  approximately  65.3  million net
rentable  square feet.  All of the Company's  facilities  are operated under the
"Public  Storage" brand name,  which the Company believes is the most recognized
and  established  name  in the  self-storage  industry.  Located  in  the  major
metropolitan  markets of 37 states,  the Company's  self-storage  facilities are
geographically  diverse,  giving it national  recognition and  prominence.  This
concentration  establishes the Company as one of the most significant  providers
of storage  space in each  market in which it  operates  and enables it to use a
variety of promotional  activities,  such as television and radio advertising as
well as targeted discounting and referrals, which are generally not economically
viable for its  competitors.  In addition,  the Company believes that geographic
diversity of the portfolio reduces the impact from regional  economic  downturns
and provides a greater degree of revenue stability.

         Commencing in early 1996, the Company  implemented a national telephone
reservation system designed to provide added customer service. Customers calling
either the Company's toll-free telephone referral system,  (800) 44-STORE,  or a
self-storage  facility are directed to the national  reservation  system where 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.  The national  telephone
reservation  system  was  not  fully  operational  for  most  of  the  Company's
facilities until the latter part of the fourth quarter of 1996.  Currently,  the
national telephone  reservation system receives  approximately 175,000 calls per
month and has approximately 225  representatives.  The Company believes that the
national  telephone  reservation  system  permits  effective  marketing for both
self-storage and portable  self-storage  facilities and is primarily responsible
for increasing  occupancy  levels and realized  rental rates  experienced at the
self-storage facilities during the past three years.

         The  Company  will  continue  to focus its  growth  strategies  on: (i)
improving the operating  performance  of its existing  portfolio of  properties,
(ii) increasing its ownership of self-storage facilities through acquisitions of
facilities  owned by  affiliates  or third party owners,  (iii)  developing  new
self-storage   facilities,   (iv)  improving  the  operations  of  its  portable
self-storage  operations,  and (v) to a  limited  extent  through  its  existing

                                       21

<PAGE>

ownership  interest,  participating  in the growth of PS  Business  Parks,  Inc.
("PSB"),  a  publicly  traded  real  estate  investment  trust  focusing  on the
ownership and operation of commercial properties.

         On March 12,  1999,  the Company  completed a merger  transaction  with
Storage Trust Realty ("Storage Trust"), a publicly traded real estate investment
trust.  In connection  with the merger,  the Company  acquired 215  self-storage
properties  located in 16 states.  The  Company  believes  that the merger  will
benefit the  shareholders of both companies by eliminating  duplicative  general
and   administrative   expenses  and  creating   economies  of  scale  and  cost
efficiencies  through greater  critical mass. In addition,  the Company believes
that its national  telephone  reservation system will present an opportunity for
increased revenues through higher occupancies of the properties acquired.

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

         NET INCOME AND EARNINGS PER COMMON SHARE: Net income for 1998, 1997 and
1996 was $227,019,000,  $178,649,000 and $153,549,000,  respectively. Net income
allocable to common shareholders (net income less preferred stock dividends) for
1998, 1997 and 1996 was $148,644,000, $90,256,000 and $84,950,000, respectively.
On a diluted  basis,  net  income per  common  share was $1.30 per common  share
(based on weighted  average shares  outstanding of 114,357,000)  for 1998, $0.91
(based on weighted average shares  outstanding of 98,961,000) for 1997 and $1.10
per common share (based on weighted  average  shares  outstanding of 77,358,000)
for 1996.

         The  increase  in net  income per share for 1998  compared  to 1997 was
principally the result of improved real estate  operations,  combined with lower
operating losses generated by PSPUD's portable  self-storage  business  totaling
$31,022,000  or $0.27 per diluted  common share.  The decrease in net income per
share for 1997 compared to 1996 was principally  the result of losses  generated
from PSPUD's  portable  self-storage  business which generated  operating losses
totaling  $31,665,000  or $0.32 per diluted  common  share and the effect of the
special dividend, discussed below.

         Net income  allocable to common  shareholders and net income per common
share for the year ended December 31, 1997 was negatively  impacted by a special
dividend  totaling  $13,412,000,  paid on the  Company's  Series CC  Convertible
Preferred  Stock  ("Series CC") during the first quarter of 1997. As a result of
this special dividend, the Company would not be required to pay another dividend
with respect to this stock until the quarter  ended March 31,  1999.  During the
second quarter of 1997,  the Series CC stock  converted into common stock of the
Company.  Accordingly  during  1997,  all of the  $13,412,000  ($0.14 per common
share,  on a diluted  basis) of dividends  were treated as an  allocation of net
income to the preferred shareholders in determining the allocation of net income
to the common  shareholders.  The  special  dividend  eliminated  the  quarterly
dividend of $1.9 million (annual fixed charges of $7.6 million).

         Net income includes  depreciation and amortization  expense  (including
depreciation  included  in  equity  in  earnings  of real  estate  entities  and
excluding   depreciation  allocated  to  minority  interests)  of  approximately
$109,344,000  ($0.96 per common share on a diluted basis) for 1998,  $93,585,000
($0.95 per common share on a diluted basis) for 1997 and $70,927,000  ($0.92 per
common share on a diluted basis) for 1996.

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

         SELF-STORAGE  OPERATIONS:  The Company's self-storage operations are by
far  the  largest   component   of  the   Company's   operations,   representing
approximately 91% of total rental revenues  generated during 1998. At the end of
1995,  the Company had a total of 520  self-storage  facilities  included in its
consolidated  financial  statements.   Since  that  time,  the  Company  through
acquisition and development  activities has increased the number of self-storage
facilities by 431 (1996 - 201  facilities,  1997 - 173  facilities and 1998 - 57
facilities).  As a result of significant acquisitions of self-storage facilities
in each of the past three years,  year over year comparisons as presented on the
Company's consolidated statements of income are not meaningful.

                                       22

<PAGE>

         In order to enhance the year over year comparisons, the following table
summarizes  the  operating   results  (before   depreciation)  of  (i)  the  546
self-storage  facilities  (which includes the 520 facilities owned at the end of
1995 as well as  facilities  which were  acquired  on January 1, 1996) that were
reflected in the Company's financial statements for the entire three years ended
December 31, 1998 (the  "Consistent  Group") and (ii) all other  facilities  for
which operations were not reflected in the Company's financial statement for the
entire three years ended December 31, 1998 (the "Other Facilities"):

SELF-STORAGE OPERATIONS:
------------------------

<TABLE>
<CAPTION>
                                                Year Ended December 31,                   Year Ended December 31,
                                                -----------------------    Percentage     -----------------------    Percentage
                                                  1998          1997         Change         1997          1996         Change
                                                ---------     ---------     ---------     ---------     ---------     ---------     
                                                        (Dollar amounts in thousands, except rents per square foot)
Rental income:
--------------
  <S>                                            <C>           <C>            <C>          <C>          <C>               <C> 
  Consistent Group.......................        $271,922      $254,489       6.9%         $254,489     $239,717          6.2%
  Other Facilities.......................         216,369       131,051      65.1%          131,051       30,712        326.7%
                                                ---------     ---------     ---------     ---------     ---------     ---------     
                                                  488,291       385,540      26.7%          385,540      270,429         42.6%
                                                ---------     ---------     ---------     ---------     ---------     ---------     
Cost of operations:
-------------------
  Consistent Group.......................          81,235        76,591       6.1%           76,591       72,983          4.9%
  Other Facilities.......................          68,141        41,372      64.7%           41,372        9,511        335.0%
                                                ---------     ---------     ---------     ---------     ---------     ---------     
                                                  149,376       117,963      26.6%          117,963       82,494         43.0%
                                                ---------     ---------     ---------     ---------     ---------     ---------     
Net operating income:
---------------------
  Consistent Group.......................         190,687       177,898       7.2%          177,898      166,734          6.7%
  Other Facilities.......................         148,228        89,679      65.3%           89,679       21,201        323.0%
                                                ---------     ---------     ---------     ---------     ---------     ---------     
                                                 $338,915      $267,577      26.7%         $267,577     $187,935         42.4%
                                                =========     =========     =========     =========     =========     =========
Consistent Group data:
----------------------
  Gross margin...........................           70.1%         69.9%       0.2%            69.9%        69.6%          0.3%
  Weighted average :                                                                                                 
     Occupancy...........................           91.9%         91.4%       0.5%            91.4%        90.6%          0.8%
     Realized annual rent per square foot.          $9.25         $8.69       6.4%            $8.69        $8.26          5.2%
     Scheduled annual rent per square foot          $9.57         $9.21       3.9%            $9.21        $8.47          8.7%

Number of facilities:
---------------------
    Consistent group.....................             546           546        -                546          546           -
    Other Facilities.....................             405           348      16.4%              348          175         98.9%

Net rentable sq. ft.:
---------------------
    Consistent group.....................          31,979        31,979        -             31,979       31,979           -
    Other Facilities.....................          25,130        21,592      16.4%           21,592       11,438         88.8%

</TABLE>

         For the Consistent Group of facilities,  year-over-year improvements in
rental  income of 6.9% in 1998 and 6.2% in 1997 are the result of  increases  in
realized  rent per  square  foot  and  weighted  average  occupancy  levels,  as
reflected in the table above.  The Company believes that the improvement in each
of these areas is due to (i) the national telephone reservation system which was
implemented  during 1996 and the first part of 1997,  (ii)  increased  scheduled
rental rates, and (iii) media advertising and promotional activities.

         As  indicated  above,  the  Company  implemented  a national  telephone
reservation  system to provide added customer service.  Customers calling either
the Company's  toll-free telephone referral system,  (800) 44-STORE,  or a local
Public Storage facility, are directed to the national reservation system where a
trained representative discusses with the customer space requirements, price and
location  preferences  and also  informs  the  customer  of other  products  and
services provided by the Company and its subsidiaries.  Total cost of operations
includes  expenses  with respect to the national  telephone  reservation  center
totaling $7,021,000 in 1998, $3,875,000 in 1997, and $1,257,000 in 1996.

         In the second half of 1996, the Company began to increase its scheduled
rents charged to new customers (prior to promotional  discounts) and to existing
tenants  where  warranted.  As a result,  for fiscal 1997,  scheduled  rents per

                                       23

<PAGE>

square  foot  increased  compared  to 1996.  In  connection  with  the  national
telephone   reservation  system,  the  Company  experimented  with  pricing  and
promotional  discounts  designed to increase rental  activity.  Consistent Group
promotional  discounts  (which are  included  as a  reduction  to gross rents to
arrive  at  rental  income)  were  $3,401,000  in 1996,  $9,587,000  in 1997 and
$8,724,000 in 1998.  Despite the impact of discounts,  the  Consistent  Group of
facilities  experienced increased realized rents per square foot of 6.4% in 1998
compared to 1997 and 5.2% in 1997 compared to 1996.

         In 1996,  1997,  and 1998,  the  Company  acquired  a total of 431 self
storage  facilities.  Eight of these acquired  facilities  were newly  developed
facilities and 390 of these facilities were existing mature  facilities that the
Company  previously  managed.  The  Company  has  knowledge  of  the  historical
operations of the  facilities it acquired  that it previously  managed,  and has
information  as to  the  historical  operating  results  of  the  33  facilities
(substantially all of which were existing mature facilities) it acquired that it
did not  previously  manage.  The  following  table  summarizes  the  pro  forma
operating  results of all of the Company's  self-storage  facilities at December
31, 1998 assuming that the Company owned all of the  facilities as of January 1,
1996:

PRO FORMA SUMMARY OF SELF-STORAGE OPERATIONS:
---------------------------------------------

<TABLE>
<CAPTION>
                             Year Ended December 31,                       Year Ended December 31,
                             -----------------------                       ----------------------- 
                                1998          1997        Change             1997          1996        Change
                             ---------     ---------     ---------         ---------     ---------     ---------     
                                    Pro forma                                    Pro forma
                                                           (Amounts in thousands)
<S>                            <C>           <C>             <C>            <C>           <C>             <C> 
Rental income.........        $497,699      $464,244        7.2%           $464,244      $436,589        6.3%
Cost of operations....         151,866       143,623        5.7%            143,623       135,537        6.0%
                             ---------     ---------     ---------         ---------     ---------     ---------     
Net operating income..        $345,833      $320,621        7.9%           $320,621      $301,052        6.5%
                             =========     =========     =========         =========     =========     =========     
</TABLE>

         The above table  excludes the property  operations  of the  Company's 8
newly  developed  properties  (two  opened in 1998,  two opened in 1997 and four
opened  in 1996)  which  are in  various  stages  of  "fill-up."  The  aggregate
development cost of these eight properties totaled  approximately $38.5 million.

         COMMERCIAL  PROPERTY  OPERATIONS:  The  Company's  commercial  property
operations principally consist of the Company's investment in PSB, an affiliated
real estate investment trust, and to a much lesser extent commercial space owned
by the Company and  Consolidated  Entities.  The following  table sets forth the
historical  commercial  property  amounts  included in the  Company's  financial
statements:

COMMERCIAL PROPERTY OPERATIONS - HISTORICAL
-------------------------------------------

<TABLE>
<CAPTION>
                                  Year Ended December 31,                       Year Ended December 31,
                                  -----------------------                       ----------------------- 
                                    1998          1997         Change             1997           1996        Change
                                  ---------     ---------     ---------         ---------     ---------     ---------     
                                                               (Amounts in thousands)
<S>                                <C>            <C>           <C>              <C>            <C>            <C>  
Rental income  ...............     $23,112        $40,575       (43.0)%          $40,575        $23,576        72.1%
Cost of operations............       7,951         16,665       (52.3)%           16,665         10,750        55.0%
                                  ---------     ---------     ---------         ---------     ---------     ---------     
Net operating income..........     $15,161        $23,910       (36.6)%          $23,910        $12,826        86.4%
                                  =========     =========     =========         =========     =========     =========     

</TABLE>

         During  the  second  quarter  of 1998,  the  Company  ceased  to have a
controlling  interest in PSB. As a result,  effective April 1, 1998, the Company
no longer includes the accounts of PSB in its consolidated  financial statements
and has accounted for its  investment  during the nine months ended December 31,
1998 using the equity method (see "Equity in earnings of real estate entities").
The  income  statement  for the  year  ended  December  31,  1998  includes  the
consolidated operating results of PSB for the three months ended March 31, 1998.
The  significant  decrease in rental income and cost of operations  for the year
ended  December 31, 1998  reflects  the  Company's  deconsolidation  of PSB. The
significant  increase in rental income and cost of operations  for 1997 reflects
the impact of the Company's  business  combinations in 1996 and 1997, as well as
property acquisitions completed by PSB in 1997.

                                       24

<PAGE>

         The following table summarizes the pro forma  commercial  operations of
the Company assuming that the operations of PSB were not  consolidated  with the
Company's  accounts  (i.e., as if the Company had  consistently  used the equity
method of accounting for its investment in PSB):

PRO FORMA SUMMARY OF COMMERCIAL OPERATIONS:
-------------------------------------------

<TABLE>
<CAPTION>
                                  Year Ended December 31,                       Year Ended December 31,
                                  -----------------------                       ----------------------- 
                                    1998          1997         Change             1997          1996         Change
                                  ---------     ---------     ---------         ---------     ---------     ---------     
                                        Pro forma                                     Pro forma
                                                               (Amounts in thousands)
<S>                                <C>           <C>             <C>             <C>            <C>           <C>  
Rental income.................     $ 7,252       $ 6,810         6.5%            $ 6,810        $6,169        10.4%
Cost of operations............       2,840         2,966        (4.2)%             2,966         2,788         6.4%
                                  ---------     ---------     ---------         ---------     ---------     ---------     
Net operating income..........     $ 4,412       $ 3,844        14.8%            $ 3,844        $3,381        13.7%
                                  =========     =========     =========         =========     =========     =========     
</TABLE>

         EQUITY  IN  EARNINGS  OF  REAL  ESTATE  ENTITIES:  In  addition  to its
ownership  of equity  interests  in PSB,  the  Company  had  general and limited
partnership  interests in 26 limited  partnerships at December 31, 1998 (PSB and
the limited  partnerships  are collectively  referred to as the  "Unconsolidated
Entities"). Due to the Company's limited ownership interest and control of these
entities,  the Company does not  consolidate  the accounts of these entities for
financial reporting purposes, and accounts for such investments using the equity
method.

         Equity in earnings of real estate  entities for the year ended December
31, 1998 consists of the Company's pro rata share of the Unconsolidated Entities
based upon the  Company's  ownership  interest  for the  period.  Similar to the
Company, the Unconsolidated  Entities generate substantially all of their income
from  their  ownership  of  self-storage  facilities  which are  managed  by the
Company. In the aggregate,  the Unconsolidated  Entities own a total of 249 real
estate facilities, 143 of which are self-storage facilities. The following table
sets forth the  significant  components of the  Company's  equity in earnings of
real estate entities:

HISTORICAL SUMMARY:
-------------------

<TABLE>
<CAPTION>
                                               Year Ended December 31,                   Year Ended December 31,    
                                               ----------------------     Dollar        ------------------------    Dollar 
                                                  1998         1997       Change           1997          1996       Change
                                               ---------    ---------     ---------     ---------     ----------   ---------     
                                                                          (Amounts in thousands)
Property operations:
  <S>                                           <C>         <C>           <C>           <C>          <C>           <C>
  PSB....................................       $23,301     $       -     $ 23,301      $       -    $       -     $      -
  Development Joint Venture..............           729            86          643             86            -           86
  Other investments - self storage.......        19,975        30,940      (10,965)        30,940       41,722      (10,782)
  Other investments - commercial properties         354         1,428       (1,074)         1,428        2,667       (1,239)
                                               ---------    ---------     ---------     ---------     ----------   ---------     
                                                 44,359        32,454       11,905         32,454       44,389      (11,935)
                                               ---------    ---------     ---------     ---------     ----------   ---------     
Depreciation:
  PSB....................................        (7,303)            -       (7,303)             -            -            -
  Development Joint Venture..............          (564)         (137)        (427)          (137)           -         (137)
  Other investments - self storage ......        (5,958)      (10,798)       4,840        (10,798)     (15,709)       4,911
  Other investments - commercial properties         (59)         (539)         480           (539)      (1,741)       1,202
                                               ---------    ---------     ---------     ---------     ----------   ---------     
                                                (13,884)      (11,474)      (2,410)       (11,474)     (17,450)       5,976
                                               ---------    ---------     ---------     ---------     ----------   ---------     
Other: (1)
  PSB....................................        (1,220)            -       (1,220)             -            -            -
  Development Joint Venture..............            97            44           53             44            -           44
  Other investments......................        (2,750)       (3,455)         705         (3,455)      (4,818)       1,363
                                               ---------    ---------     ---------     ---------     ----------   ---------     
                                                 (3,873)       (3,411)        (462)        (3,411)      (4,818)       1,407
                                               ---------    ---------     ---------     ---------     ----------   ---------     

Total equity in earnings of real estate  
entities.................................       $26,602       $17,569      $ 9,033        $17,569     $ 22,121     $ (4,552)
                                               =========    =========     =========     =========     ==========   =========     
</TABLE>

(1)  "Other" reflects the Company's share of general and administrative expense,
     interest expense, interest income, and other non-property, non-depreciation
     related operating results of these entities.

                                       25

<PAGE>

         The  increase  in 1998  earnings  compared to 1997 is  principally  the
result of the  deconsolidation  of PSB  whereby the  accounts of PSB,  effective
April 1, 1998,  were no longer  consolidated  with the Company's and the Company
began to  account  for its  investment  in PSB using  the  equity  method.  This
increase  is  partially  offset by the impact of certain  business  combinations
occurring in 1997 and 1998 whereby the Company  acquired a controlling  interest
in  certain  affiliated  entities  and began to  include  the  accounts  of such
entities  in the  Company's  consolidated  financial  statements.  Prior  to the
inclusion of these entities in the Company's  consolidated financial statements,
the  Company  used the  equity  method  to  report  its  share of the  entities'
earnings.

         Likewise, the decrease in 1997 earnings compared to 1996 is principally
the result of the  Company  acquiring  during  1997 a  controlling  interest  in
certain  entities and  beginning to include the accounts of such entities in the
Company's  consolidated  financial  statements.  Prior to the inclusion of these
entities in the Company's  consolidated  financial statements,  the Company used
the equity method to report its share of these entities' earnings.

         PSB is a publicly traded real estate  investment trust organized by the
Company on January 2, 1997. During 1997, the Company and certain partnerships in
which the Company has a controlling  interest  contributed  substantially all of
their commercial properties to PSB in exchange for equity interests. At December
31, 1998,  PSB owned 106 properties  located in 11 states.  PSB also manages the
commercial  properties  owned by the  Company  and  affiliated  entities.  As of
December 31, 1998, the Company and certain partnerships in which the Company has
a controlling interest owned approximately 40% of the equity interest of PSB.

         During  1998,  a  significant  portion  of the  Company's  self-storage
development activities have been conducted within the Development Joint Venture,
a  partnership  created in April 1997  between the Company and an  institutional
investor to fund the development of  approximately  $220 million of self-storage
facilities.  The Development  Joint Venture is funded solely with equity capital
consisting of 30% from the Company and 70% from the institutional  investor. The
Company's  investment  in the  Development  Joint  Venture was $42.5  million at
December 31, 1998.

         Since  inception  through  December 31,  1998,  the  Development  Joint
Venture  has  developed  and opened 24  self-storage  facilities  (approximately
1,470,000  square  feet)  and at  December  31,  1998 had six  facilities  under
development  (approximately  384,000  square feet).  Generally the  construction
period  takes nine to 12 months  followed  by a 18 to 24 month  fill-up  process
until the newly  constructed  facility  reaches a stabilized  occupancy level of
approximately 90%. For fiscal 1998 and 1997,  substantially all of the completed
facilities  were  in the  fill-up  process  and  had not  reached  a  stabilized
occupancy  level.  The Company  expects  that its  earnings  with respect to its
investment in the Development Joint Venture will continue to increase in 1999 as
compared  to 1998 as the  existing  properties  continue  to  fill-up  and newly
completed properties are opened for business.

PORTABLE SELF-STORAGE OPERATIONS
--------------------------------------------------------------------------------

         In August 1996,  PSPUD,  a subsidiary of the Company,  made its initial
entry into the  portable  self-storage  business  through its  acquisition  of a
single facility  operator located in Irvine,  California.  At December 31, 1998,
PSPUD  operated 43 facilities in 11 states.  The facilities are located in major
markets in which the Company has significant market presence with respect to its
traditional self-storage facilities.

         Due to the start-up  nature of the business,  PSPUD incurred  operating
losses totaling  approximately $31.0 million, $31.7 million and $826,000 for the
years ended  December  31,  1998,  1997 and 1996,  respectively,  summarized  as
follows.

                                       26

<PAGE>

PORTABLE SELF-STORAGE:
----------------------

<TABLE>
<CAPTION>
                                            Year Ended December 31,                  Year Ended December 31,    
                                            ----------------------    Dollar         ----------------------     Dollar
                                              1998         1997       Change           1997         1996        Change
                                            ---------    ---------   ---------       ---------    ----------   ---------     
                                                                   (Dollar amounts in thousand)

<S>                                         <C>          <C>         <C>              <C>             <C>      <C>   
Rental and other income ............         $24,466       $7,893    $16,573            $7,893         $421      $7,472
                                            ---------    ---------   ---------       ---------    ----------   ---------     
Cost of operations:
    Direct operating costs..........          39,302       20,645     18,657            20,645        1,022      19,623
    Marketing and advertising.......           9,206       10,441    (1,235)            10,441           19      10,422
    Depreciation....................           4,317        1,394      2,923             1,394           32       1,362
    General and administrative......           2,663        7,078    (4,415)             7,078          174       6,904
                                            ---------    ---------   ---------       ---------    ----------   ---------     
                                              55,488       39,558     15,930            39,558        1,247      38,311
                                            ---------    ---------   ---------       ---------    ----------   ---------     

Operating losses....................        $(31,022)    $(31,665)      $643          $(31,665)       $(826)   $(30,839)
                                            =========    =========   =========       =========    ==========   =========     
</TABLE>

         The  Company   believes  that  the  quarterly  losses  from  the  PSPUD
operations  peaked during the third quarter of 1997.  PSPUD's  operating  losses
were  approximately  $12.1 million for the third quarter of 1997,  $10.5 million
for the fourth quarter of 1997, $9.9 million for the first quarter of 1998, $8.3
million for the second  quarter of 1998,  $6.9 million for the third  quarter of
1998, and $5.9 million in the fourth quarter of 1998. The Company  believes this
trend of decreasing  operating  losses will  continue with  increases in PSPUD's
revenues.

         Five of the 13  facilities  opened  in 1998 were  developed  by and are
owned by PSPUD,  while the remaining  facilities are operated in buildings which
are leased from third  parties.  Included in direct  operating  cost is building
lease expense of $14.4 million,  $6.2 million and $167,000 during 1998, 1997 and
1996, respectively. A typical facility generally has six employees (a manager, a
warehouseman,  and truck drivers),  two trucks,  and a  corresponding  number of
forklifts.  Substantially  all the equipment is leased.  Direct  operating costs
principally includes payroll,  facility and equipment (truck and forklift) lease
expense.

         PSPUD believes that  marketing and  advertising  activities  positively
impact move-in activity. Commencing in the third quarter of 1997, PSPUD began to
advertise the portable  self-storage  product on television in selected markets.
Television  advertising was curtailed in the second half of 1998.  Customers are
directed to call the national reservation system where  representatives  discuss
the customers'  storage needs and are able to schedule delivery of containers to
customers  locations.  During 1998,  approximately $6.6 million and $2.6 million
was incurred in television and yellow page advertising,  respectively,  compared
to  approximately  $9.2 million and $1.2 million in  television  and yellow page
advertising,  respectively,  incurred  during 1997.  Marketing  and  advertising
activities have not been consistently implemented in all markets.

         During  1998  and  1997,   PSPUD  incurred   significant   general  and
administrative  costs related to recruiting and training  personnel,  equipment,
computer software and professional fees in organizing this business.  PSPUD will
continue  to expend  funds  during  1999 in  connection  with these  activities.
However, the amounts are expected to be less than in 1998.

         The  Company  has not  determined  the number of new store  openings in
1999; however, the Company expects that future openings will predominantly be in
existing  markets in which  PSPUD  currently  operates.  By opening in  existing
markets,  PSPUD  will seek to gain  benefits  from  economies  of  scale.  As of
December 31, 1998,  PSPUD is developing  six  facilities  and has identified one
additional site for development.  All of these development  projects are located
in existing markets with expected opening dates commencing  during 1999 and will
predominantly replace existing PSPUD facilities which are currently being leased
from third parties.

         Until the PSPUD facilities are operating profitably, PSPUD's operations
are expected to continue to  adversely  impact the  Company's  earnings and cash
flow.  PSPUD  believes  that its  business  is likely to be more  successful  in
certain  markets than in others.  There can be no  assurances as to the level of
PSPUD's expansion, level of gross rentals, level of move-outs or profitability.

                                       27

<PAGE>

PROPERTY MANAGEMENT OPERATIONS
--------------------------------------------------------------------------------

         At December 31, 1998, the Company managed 178  self-storage  facilities
(143 owned by Unconsolidated Entities and 35 owned by third parties) pursuant to
property  management  contracts.  The property  management  contracts  generally
provide  for  compensation  equal  to 6% of  gross  revenues  of the  facilities
managed.  Under the supervision of the property owners, the Company  coordinates
rental  policies,  rent  collections,  marketing  activities,  the  purchase  of
equipment and supplies,  maintenance activity,  and the selection and engagement
of vendors,  suppliers and  independent  contractors.  In addition,  the Company
assists and advises the property owners in  establishing  policies for the hire,
discharge and  supervision  of employees for the operation of these  facilities,
including resident managers, assistant managers, relief managers and billing and
maintenance personnel.

PROPERTY MANAGEMENT  OPERATIONS:
--------------------------------

<TABLE>
<CAPTION>
                                          Year Ended December 31,                   Year Ended December 31,           
                                          ----------------------    Dollar          ----------------------      Dollar
                                            1998          1997      Change            1997         1996         Change
                                          ---------    ---------  ---------         ---------    ----------    ---------     
                                                                    (Amounts in thousands)
    <S>                                    <C>          <C>       <C>                <C>          <C>          <C>      

Facility management fees:
    Self-storage.................          $ 6,123      $ 9,706   $ (3,583)          $ 9,706      $ 13,474     $ (3,768)
    Commercial properties........               98          435       (337)              435           954         (519)
                                          ---------    ---------  ---------         ---------    ----------    ---------     
                                             6,221       10,141     (3,920)           10,141        14,428       (4,287)
                                          ---------    ---------  ---------         ---------    ----------    ---------     
Cost of operations:
    Self-storage.................            1,054        1,449       (395)            1,449         1,820         (371)
    Commercial properties........               12          344       (332)              344           755         (411)
                                          ---------    ---------  ---------         ---------    ----------    ---------     
                                             1,066        1,793       (727)            1,793         2,575         (782)
                                          ---------    ---------  ---------         ---------    ----------    ---------     
Net operating income:
    Self-storage.................            5,069        8,257     (3,188)            8,257        11,654       (3,397)
    Commercial properties........               86           91         (5)               91           199         (108)
                                          ---------    ---------  ---------         ---------    ----------    ---------     
                                           $ 5,155      $ 8,348   $ (3,193)          $ 8,348      $ 11,853     $ (3,505)
                                          =========    =========  =========         =========    ==========    =========     
</TABLE>

         Throughout  the three year period ended  December 31, 1998, the Company
completed  several  acquisitions  of  self-storage  facilities  from  affiliated
entities  and, as a result,  self-storage  properties  which were managed by the
Company  became  owned  facilities  and the related  management  fee income with
respect to these facilities ceased. Accordingly,  property management operations
with respect to self-storage  facilities has  continuously  decreased during the
three year period ended December 31, 1998. Since the Company has acquired in the
past, and may continue to seek to acquire in the future,  real estate facilities
owned by the Unconsolidated  Entities,  the Company's facility management income
and related cost of operations should decrease in 1999 compared to 1998.

         The  decrease  in  property  management   operations  with  respect  to
commercial properties for 1998 as compared to 1997 is due to the deconsolidation
of PSB, which eliminated commercial properties management fee income and cost of
operations after April 1, 1998.

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

         INTEREST AND OTHER  INCOME:  In an effort to attract a wider variety of
customers,  to further  differentiate  the Company from its  competition  and to
generate  new sources of revenues,  additional  businesses  are being  developed
through the Company's  subsidiaries  that complement the Company's  self-storage
business.  These products include the sale of locks,  boxes and packing supplies
and the rental of trucks and other moving equipment  through the  implementation
of a retail expansion program and truck rental program. The net results of these
businesses are presented along with interest and other income,  as "interest and
other  income."  The  components  of interest  and other  income are detailed as
follows:

                                       28

<PAGE>

<TABLE>
<CAPTION>
                                            Year ended December 31,                      Year ended December 31,
                                            ----------------------                       ----------------------            
                                              1998          1997          Change           1997          1996         Change
                                            ---------    ---------      ---------        ---------    ----------    ---------     
                                                                        (Amounts in thousands)
Sales of packaging material and truck rental income:
  <S>                                        <C>           <C>           <C>              <C>          <C>            <C>   
  Revenues                                   $8,345        $5,272        $3,073           $5,272       $ 3,083        $2,189
  Cost of operations                          6,625         4,134         2,491            4,134         2,171         1,963
                                            ---------    ---------      ---------        ---------    ----------    ---------     
     Net operating income                     1,720         1,138           582            1,138           912           226

Interest and other income                    11,739         7,988         3,751            7,988         7,064           924
                                            ---------    ---------      ---------        ---------    ----------    ---------     

  Total interest and other income           $13,459        $9,126        $4,333           $9,126        $7,976        $1,150
                                            =========    =========      =========        =========    ==========    =========     
</TABLE>

         The strategic  objective of the retail expansion program is to create a
"Retail Store" that will (i) rent spaces for the attached self-storage facility,
(ii)  rent  spaces  for  the  other  Public   Storage   facilities  in  adjacent
neighborhoods,  (iii) sell  locks,  boxes and packing  materials  to the general
public,  including tenants and (iv) rent trucks and other moving equipment,  all
in  an  environment  that  is  more  retail  oriented.  Retail  stores  will  be
retrofitted to existing  self-storage  facility  rental offices or "built-in" as
part of the development of new  self-storage  facilities,  both in high traffic,
high  visibility  locations.  The  increases in revenues and cost of  operations
reflect the opening of additional  stores, as well as increases at the Company's
existing stores.

         Interest and other income is primarily  attributable to interest income
on cash balances and interest  income from mortgage notes  receivable.  Interest
income from mortgage notes receivable was $1,878,000,  $2,938,000, $2,710,000 in
1998,  1997  and  1996,  respectively.   The  Company  canceled  mortgage  notes
receivable  of  approximately  $2,495,000  in  1998  and  $700,000  in  1996  in
connection  with the  acquisition  of the real estate  facilities  securing such
notes.  The Company also  acquired  notes  receivable of $3,709,000 in 1996 from
affiliated  parties.  The other  increases  in  interest  income  are  primarily
attributable to  fluctuations in the level of invested cash balances,  which are
caused by the  timing of  investing  equity  offering  proceeds  in real  estate
assets.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
was  $107,482,000 in 1998,  $91,356,000 in 1997 and  $64,967,000 in 1996.  These
increases are  principally  due to the  acquisition  of  additional  real estate
facilities in each period.  Depreciation expense with respect to the real estate
facilities  was  $98,173,000 in 1998,  $82,047,000  in 1997, and  $55,689,000 in
1996;  the  increases  are due to the  acquisition  of  additional  real  estate
facilities in 1996 through 1998. Amortization expense with respect to intangible
assets totaled $9,309,000 for each of the three years ended December 31, 1998.

         GENERAL AND ADMINISTRATIVE EXPENSE:  General and administrative expense
was  $8,972,000 in 1998,  $6,384,000 in 1997 and $5,524,000 in 1996. The Company
has  experienced  and expects to continue to  experience  increased  general and
administrative  costs due to the  following:  (i) the  growth in the size of the
Company, and (ii) the Company's property acquisition and development  activities
have  continued to expand,  resulting in certain  additional  costs  incurred in
connection with the acquisition of additional  real estate  facilities.  General
and administrative costs for each year principally consist of state income taxes
(for states in which the Company is a non-resident), investor relation expenses,
and certain  overhead  associated  with the  acquisition and development of real
estate facilities.

         INTEREST EXPENSE:  Interest expense was $4,507,000 in 1998,  $6,792,000
in 1997 and $8,482,000 in 1996.  Reflecting the Company's  reluctance to finance
its growth with debt, debt and related interest  expense remains  relatively low
compared to the Company's overall asset base. The Company  capitalized  interest
expense of  $3,481,000  in 1998,  $2,428,000  in 1997 and  $1,861,000 in 1996 in
connection with the Company's  development  activities.  Interest expense before
the  capitalization  of interest was $7,988,000 in 1998,  $9,220,000 in 1997 and
$10,343,000  in 1996.  The  decrease in interest  expense in 1997 as compared to
1996 principally is due to the retirement of debt in 1997 of approximately $11.9
million.  The  decrease  in  interest  expense in 1998 as  compared to 1997 also
includes the impact of the  retirement  of debt in 1998 of  approximately  $15.1
million.

                                       29

<PAGE>

         MINORITY INTEREST IN INCOME: Minority interest in income represents the
income  allocable to equity  interests in  Consolidated  Entities  which are not
owned by the Company.  Since 1990,  the Company has  acquired  portions of these
equity  interests  through its  acquisition  of limited and general  partnership
interests in the  Consolidated  Entities.  These  acquisitions  have resulted in
reductions  to the  "Minority  interest in income" from what it would  otherwise
have been in the absence of such acquisitions,  and accordingly,  have increased
the Company's share of the Consolidated  Entities' income.  However,  offsetting
the reduction in minority interest in 1998 and 1997 caused by the acquisition of
additional equity interests are the inclusion of additional  partnerships in the
Company's  consolidated  financial  statements  as  well  as  improved  property
operations.  During 1998 and 1997,  the Company  acquired  sufficient  ownership
interest  and  control  in three  and  twelve  partnerships,  respectively,  and
commenced  including  the  accounts  of  these  partnerships  in  the  Company's
consolidated  financial  statements  which  resulted  in an increase in minority
interest in income of  approximately  $5,413,000 in 1998 and $1,961,000 in 1997.
Minority interest for the year ended December 31, 1998 also reflects  additional
minority interests with respect to PSB prior to April 1, 1998.

         In determining income allocable to the minority interest for 1998, 1997
and 1996  consolidated  depreciation and  amortization  expense of approximately
$12,022,000,  $9,245,000  and  $11,490,000,  respectively,  was allocated to the
minority  interest.  The  changes  in  depreciation  allocated  to the  minority
interest were  principally  the result of the factors denoted above with respect
to minority interest in income.

SUPPLEMENTAL PROPERTY DATA AND TRENDS
--------------------------------------------------------------------------------

         At December 31, 1998, there were  approximately  47 ownership  entities
owning in aggregate  1,094  self-storage  facilities,  including the  facilities
which the Company  owns and/or  operates.  At December  31,  1998,  143 of these
facilities were owned by Unconsolidated Entities,  entities in which the Company
has an ownership  interest and uses the equity  method for  financial  statement
presentation.  The  remaining  951  facilities  are  owned  by the  Company  and
Consolidated Entities, many of which were acquired through business combinations
with affiliates during 1998, 1997 and 1996.

         The following table summarizes the Company's  investment in real estate
facilities as of December 31, 1998,  excluding  the five real estate  facilities
used in PSPUD's operations:

<TABLE>
<CAPTION>
                                              Number of Facilities in which the        Net Rentable Square Footage
                                              Company has an ownership interest              (in thousands)
                                             ----------------------------------    ----------------------------------    
                                               Self-Storage  Commercial             Self-Storage Commercial
                                                Facilities   Properties  Total       Facilities  Properties    Total
                                             -----------   ------------  ------    -----------   ------------  ------
<S>                                            <C>              <C>      <C>         <C>           <C>         <C>   
Wholly-owned facilities                          628              1        629       38,419             9      38,428
Facilities owned by Consolidated Entities        323              -        323       18,690             -      18,690
                                             -----------   ------------  ------    -----------   ------------  ------
    Total consolidated facilities                951              1        952       57,109             9      57,118

Facilities owned by Unconsolidated Entities      143            106        249        8,169        10,930      19,099
                                             -----------  -------------  ------    -----------  -------------  ------
 Total facilities in which the Company has
an ownership interest                          1,094            107      1,201       65,278        10,939      76,217
                                             ===========   ============  ======    ===========   ============  ======
</TABLE>

         In order to evaluate how the Company's overall portfolio has performed,
management  analyzes  the  operating   performance  of  a  consistent  group  of
self-storage facilities representing 984 (57.5 million net rentable square feet)
of the  1,094  self-storage  facilities  (herein  referred  to as  "Same  Store"
self-storage  facilities).  The 984  facilities  represent a consistent  pool of
properties  which have been  operated  under the  "Public  Storage"  name,  at a
stabilized  level,  by the Company since January 1, 1994. From time to time, the
Company removes  facilities from the "Same Store" pool as a result of expansions
or other  activities  which make such  facilities'  results  not  comparable  to
previous periods.  The Same Store group of properties  includes 861 consolidated
facilities  (many  of which  were not  included  in the  Company's  consolidated
financial  statements  throughout  each of the three  years  presented)  and 123
facilities owned by Unconsolidated  Entities. The following table summarizes the
pre-depreciation  historical  operating  results of the Same Store  self-storage
facilities:

                                       30

<PAGE>

SAME STORE SELF-STORAGE FACILITIES:
-----------------------------------
(historical property operations)

<TABLE>
<CAPTION>
                                          Year Ended December 31,                    Year Ended December 31,   
                                          -------------------------  Percentage     -------------------------  Percentage
                                             1998         1997         Change          1997         1996         Change
                                          -----------  ------------  ----------     -----------  ------------  ----------
                                                    (Dollar amounts in thousands except rent per square foot)

<S>                                         <C>          <C>            <C>           <C>          <C>            <C> 
Rental income..........................     $523,394     $486,510       7.6%          $486,510     $456,414       6.6%
Cost of operations (includes an
  imputed 6% property management fee)        
  (1)..................................      183,629      172,455       6.5%           172,455      162,721       6.0%
                                          -----------  ------------  ----------     -----------  ------------  ----------

Net operating income...................     $339,765     $314,055       8.2%          $314,055    $ 293,693       6.9%
                                          ===========  ============  ==========     ===========  ============  ==========

Gross profit margin(2).................        64.9%        64.6%       0.3%             64.6%        64.3%       0.3%

WEIGHTED AVERAGE:
  Occupancy............................        92.5%        91.7%       0.8%             91.7%        91.1%       0.6%
  Realized annual rent per sq. ft (3)..        $9.84        $9.21       6.8%             $9.21        $8.71       5.7%
  Scheduled annual rent per sq. ft (3)        $10.24        $9.83       4.2%             $9.83        $9.00       9.2%

</TABLE>
-----------------------------
1.   Assumes payment of property  management  fees on all facilities,  including
     those  facilities  owned by the Company  for which no fee is paid.  Cost of
     operations consists of the following:

                                         1998            1997          1996
                                      ----------      ----------    ----------
Payroll expense                         $46,501         $45,581       $44,816
Property taxes                           48,760          45,817        42,043
Imputed 6% property management fees      31,424          29,211        27,385
Advertising                               5,372           4,209         3,975
Telephone  reservation center costs       7,353           4,625         1,996
Other                                    44,219          43,012        42,506
                                      ----------      ----------    ----------
                                       $183,629        $172,455      $162,721
                                      ==========      ==========    ==========

2.   Gross profit margin is computed by dividing  property net operating  income
     (before  depreciation  expense)  by  rental  revenues.  Cost of  operations
     includes  a 6%  management  fee.  The gross  profit  margin  excluding  the
     facility  management fee was 70.9%, 70.6% and 70.3% in 1998, 1997 and 1996,
     respectively.

3.   Realized  rent  per  square  foot  as  presented   throughout  this  report
     represents the actual revenue earned per occupied  square foot.  Management
     believes this is a more relevant  measure than the scheduled  rental rates,
     since scheduled rates can be discounted through the use of promotions.

         As indicated  above, in early 1996, the Company  implemented a national
telephone  reservation system designed to provide added customer service for all
the  self-storage  facilities  under  management  by the  Company.  The  Company
believes that the improved operating  results,  as indicated in the above table,
in large  part are due to the  success  of the  national  telephone  reservation
system.  However,  the  national  telephone  reservation  system  was not  fully
operational for most of the self-storage facilities until the latter part of the
fourth quarter of 1996.

         Rental  income  for the  Same  Store  facilities  included  promotional
discounts  totaling  $15,615,000  in 1998  compared to  $17,390,000  in 1997 and
$6,227,000 in 1996.  The  significant  increase in 1997 was  principally  due to
experimentation  with  pricing and  promotional  discounts  designed to increase
rental activity; such promotional activities continued in 1998.

         The self-storage  facilities  experience minor seasonal fluctuations in
occupancy levels with occupancies  generally higher in the summer months than in
the winter months. The Company believes that these  fluctuations  result in part
from increased moving activities during the summer.

                                       31

<PAGE>
<TABLE>
<CAPTION>
                               Same-Store Operating Trends by Region
-----------------------------------------------------------------------------------------------------------
               Northern California     Southern California            Texas                  Florida         
               --------------------    --------------------    --------------------    --------------------  
                       % change from           % change from           % change from           % change from
                Amount   prior year    Amount    prior year    Amount    prior year    Amount    prior year  
               -------   ----------    -------   ----------    -------   ----------    -------   ----------  
Rental Revenues:
----------------
        <S>    <C>          <C>        <C>         <C>         <C>          <C>        <C>          <C>      
        1998   $80,083      10.4%      $95,051     10.1%       $48,543      5.8%       $33,077      6.0%     
        1997   $72,555       9.4%      $86,368      8.1%       $45,868      4.0%       $31,219      5.5%     
        1996   $66,343       8.5%      $79,883      5.0%       $44,101      1.2%       $29,595      2.6%     

Cost of operations:
-------------------
        1998   $22,546       9.2%      $27,902      7.4%       $21,088     10.3%       $13,123      5.2%     
        1997   $20,650       9.8%      $25,988      5.4%       $19,114      4.5%       $12,474      7.9%     
        1996   $18,809       3.5%      $24,665      6.0%       $18,299      5.6%       $11,561      3.6%     

Net operating income:
---------------------
        1998   $57,537      10.9%      $67,149     11.2%       $27,455      2.6%       $19,954      6.4%     
        1997   $51,905       9.2%      $60,380      9.3%       $26,754      3.7%       $18,745      3.9%     
        1996   $47,534      10.6%      $55,218      4.6%       $25,802     (1.6%)      $18,034      2.1%     

Weighted avg. occupancy:
------------------------
        1998     94.6%      (1.5%)       94.2%      2.7%         92.4%      0.5%         90.9%      0.7%     
        1997     96.1%       1.6%        91.5%      4.1%         91.9%      2.4%         90.2%      2.4%     
        1996     94.5%       3.3%        87.4%      2.3%         89.5%      1.0%         87.8%      0.6%     

Weighted avg. annual realized rents per occupied sq. ft.:
---------------------------------------------------------
        1998    $12.37      11.9%       $11.37      7.3%         $7.22      5.4%         $8.77      5.2%     
        1997    $11.05       7.6%       $10.60      3.2%         $6.85      1.0%         $8.34      2.8%     
        1996    $10.27       4.6%       $10.27      2.2%         $6.78      0.3%         $8.11      2.3%     

Number of
Facilities         127                     143                     116                      74               
----------
</TABLE>

<TABLE>
<CAPTION>
                       Same-Store Operating Trends by Region
------------------------------------------------------------------------------------
                      Illinois              Other states               Total
                --------------------    --------------------   ---------------------  
                       % change from           % change from           % change from         
                Amount    prior year    Amount    prior year    Amount    prior year
               -------    ----------    --------  ----------   --------   ----------  
Rental Revenues:
----------------
        <S>    <C>           <C>        <C>          <C>       <C>           <C> 
        1998   $37,698       9.6%       $228,942     5.9%      $523,394      7.6%
        1997   $34,405      10.5%       $216,095     5.2%      $486,510      6.6%
        1996   $31,123       9.0%       $205,369     5.0%      $456,414      5.2%

Cost of operations:
-------------------
        1998   $17,236       7.0%        $81,734     4.6%      $183,629      6.5%
        1997   $16,106       8.2%        $78,123     4.9%      $172,455      6.0%
        1996   $14,887       5.5%        $74,500     6.7%      $162,721      5.7%

Net operating income:
---------------------
        1998   $20,462      11.8%       $147,208     6.7%      $339,765      8.2%
        1997   $18,299      12.7%       $137,972     5.4%      $314,055      6.9%
        1996   $16,236      12.5%       $130,869     4.1%      $293,693      5.0%

Weighted avg. occupancy:
------------------------
        1998     92.6%       1.1%         91.6%      0.7%         92.5%      0.8%
        1997     91.5%      (1.3%)        90.9%     (1.3%)        91.7%      0.6%
        1996     92.8%       0.0%         92.2%      0.5%         91.1%      1.1%

Weighted avg. annual realized rents per occupied sq. ft.:
---------------------------------------------------------
        1998    $10.69       8.1%         $9.41      5.3%         $9.84      6.8%
        1997     $9.89      11.9%         $8.94      6.7%         $9.21      5.7%
        1996     $8.84       8.5%         $8.38      4.6%         $8.71      3.9%

Number of
Facilities          60                      464                     984
----------
</TABLE>

                                       32

<PAGE>

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

         The Company believes that its internally generated net cash provided by
operating  activities  will  continue to be  sufficient to enable it to meet its
operating  expenses,   capital  improvements,   debt  service  requirements  and
distributions to shareholders for the foreseeable future.

         Operating as a real estate  investment  trust  ("REIT"),  the Company's
ability to retain cash flow for  reinvestment  is  restricted.  In order for the
Company to maintain its REIT status, a substantial portion of its operating cash
flow must be used to make  distributions to its shareholders  (see "REIT STATUS"
below). However, despite the significant distribution requirements,  the Company
has been able to retain a  significant  amount of its operating  cash flow.  The
following table summarizes the Company's ability to pay the minority  interests'
distributions,   its  dividends  to  the  preferred   shareholders  and  capital
improvements  to maintain  the  facilities  through the use of cash  provided by
operating  activities.  The  remaining  cash flow  generated is available to the
Company to make both scheduled and optional  principal  payments on debt and for
reinvestment.

<TABLE>
<CAPTION>
                                                                                  For the Year Ended December 31,
                                                                               ----------------------------------------
                                                                                 1998            1997           1996
                                                                               ---------       ---------      ---------       
                                                                                       (Amounts in thousands)
<S>                                                                            <C>             <C>            <C>     
Net income.........................................................            $227,019        $178,649       $153,549
Depreciation and amortization......................................             107,482          91,356         64,967
Depreciation from Unconsolidated Entities..........................              13,884          11,474         17,450
Minority interest in income........................................              20,290          11,684          9,363
                                                                               ---------       ---------      ---------       
   Net cash provided by operating activities.......................             368,675         293,163        245,329

Distributions from operations to minority interests................             (32,312)        (20,929)       (20,853)
                                                                               ---------       ---------      ---------       

Cash from operations allocable to the Company's shareholders.......             336,363         272,234        224,476
Less: preferred stock dividends....................................             (78,375)        (88,393)       (68,599)
Add: Non-recurring payment of dividends with respect to the Series 
   CC convertible stock............................................                   -          13,412              -
                                                                               ---------       ---------      ---------       
Cash from operations available to common shareholders..............             257,988         197,253        155,877

Capital improvements to maintain facilities:
  Self storage facilities..........................................             (29,677)        (30,834)       (15,957)
  Commercial properties............................................              (2,037)         (4,283)        (4,409)
  Add back: minority interest share of capital improvements to 
   maintainfacilities..............................................               2,476           2,513          3,159
                                                                               ---------       ---------      ---------       
Funds available for principal payments on debt, common dividends and
   reinvestment....................................................             228,750         164,649        138,670

Cash distributions to common shareholders..........................            (100,726)        (86,181)       (67,709)
                                                                               ---------       ---------      ---------       

Funds available for principal payments on debt and reinvestment....            $128,024         $78,468        $70,961
                                                                               =========       =========      =========       
</TABLE>

         The Company expects to fund its growth  strategies with cash on hand at
December 31, 1998,  internally  generated  retained  cash flows,  proceeds  from
issuing equity securities and borrowings under its $150 million credit facility.
The Company  intends to repay amounts  borrowed  under the credit  facility from
undistributed  operating  cash  flow or,  as market  conditions  permit  and are
determined to be  advantageous,  from the public or private  placement of equity
securities.

         The Company believes that its size and financial flexibility enables it
to access capital for growth when appropriate.  The Company's  financial profile
is characterized by a low level of debt to total capitalization,  increasing net

                                       33

<PAGE>

income, increasing cash flow from operations, and a conservative dividend payout
ratio with respect to the common  stock.  The  Company's  credit  ratings on its
Senior  Preferred  Stock by each of the three major credit  agencies are Baa2 by
Moody's and BBB+ by Standard and Poor's and Duff & Phelps.

         The Company's portfolio of real estate facilities remains substantially
unencumbered. At December 31, 1998, the Company had mortgage debt outstanding of
$35.4 million and had consolidated  real estate  facilities with a book value of
$2.6 billion.  The Company has been reluctant to finance its  acquisitions  with
debt and  generally  will only  increase  its  mortgage  borrowing  through  the
assumption of pre-existing debt on acquired real estate facilities.

         Over the past three years the Company has funded  substantially  all of
its acquisitions with permanent  capital (both common and preferred stock).  The
Company has elected to use  preferred  stock  despite the fact that the dividend
rates of its preferred  stock exceeds  current  interest  rates on  conventional
debt. The Company has chosen this method of financing for the following reasons:
(i) the Company's perpetual preferred stock has no sinking fund requirement,  or
maturity date and does not require redemption, all of which eliminate any future
refinancing  risks,  (ii)  preferred  stock  allows the Company to leverage  the
common stock without the attendant  interest rate or refinancing  risks of debt,
and (iii)  like  interest  payments,  dividends  on the  preferred  stock can be
applied to the Company's REIT distributions requirements,  which have helped the
Company to maintain a low common  stock  dividend  payout  ratio and retain cash
flow.

         On January 19, 1999, the Company issued 4.6 million  depositary  shares
(each representing 1/1,000 of a share) of its Preferred Stock, Series K, raising
net proceeds of  approximately  $111.4  million.  On March 10, 1999, the Company
issued 4.6 million depositary shares (each  representing  1/1,000 of a share) of
its  Preferred  Stock,  Series L, raising net proceeds of  approximately  $111.4
million.  Proceeds of the offerings were utilized to repay bank  borrowings ($98
million)  of Storage  Trust in  connection  with the  merger  (see  below).  The
remaining   proceeds  will  be  utilized  to  fund  the  Company's   development
activities, PSPUD activities and acquisition activities.

         At March 15, 1999, the Company had cash on hand of  approximately  $165
million.

         DISTRIBUTION  REQUIREMENTS:  The  Company's  conservative  distribution
policy  has been the  principal  reason  for the  Company's  ability  to  retain
significant  operating  cash  flows  which  have  been  used to make  additional
investments and reduce debt. During 1996, 1997 and 1998, the Company distributed
to common shareholders approximately 43%, 44% and 39% of its cash available from
operations allocable to common shareholders, respectively.

         During 1998,  the Company paid  dividends  totaling  $76,212,000 to the
holders of the Company's Senior  Preferred  Stock,  $2,163,000 to the holders of
the  Convertible  Preferred  Stock  (which  converted to common stock during the
third  quarter of 1998) and  $100,726,000  to the holders of Common  Stock.  The
Company  estimates the regular  distribution  requirements  for fiscal 1999 with
respect  to Senior  Preferred  Stock  outstanding  at  December  31,  1998 to be
approximately  $76.2  million.  With  respect to the  preferred  stock issued in
January and March 1999, the annual  distribution  requirement  is  approximately
$19.0 million. Distributions with respect to the common stock will be determined
based upon the  Company's  REIT  distribution  requirements  after  taking  into
consideration distributions to the Company's preferred shareholders.

         The  Company  expects  to make a special  cash  distribution  to common
shareholders in 1999 assuming a continuation of its increasing  level of taxable
income.

         CAPITAL IMPROVEMENT REQUIREMENTS: During 1999, the Company has budgeted
approximately  $20.1  million for capital  improvements  ($19.5  million for its
self-storage facilities and $0.6 million for its commercial space). The minority
interests'  share of the budgeted  capital  improvements is  approximately  $1.5
million.

         The  significant  increase  in  capital  improvements  in 1997  for the
self-storage  facilities  (as  reflected in the table above) is due primarily to
the acquisition of new facilities in 1996 and 1997.

         DEBT  SERVICE  REQUIREMENTS:  The  Company  does not believe it has any
significant refinancing risks with respect to its mortgage debt, all of which is
fixed rate.  At December  31,  1998,  the  Company had total  outstanding  notes

                                       34

<PAGE>

payable of approximately  $81,426,000.  See Note 7 to the consolidated financial
statements  for  approximate   principal  maturities  of  such  borrowings.   In
connection  with the March 1999 merger with Storage Trust,  the Company  assumed
$100 million of notes payable. Approximately $14.7 million in principal payments
with respect to these notes are due in 2003, with the remainder due after 2003.

         GROWTH  STRATEGIES:  During  1999,  the Company  intends to continue to
expand its asset and capital base  principally  through the (i)  acquisition  of
real estate assets and  interests in real estate  assets from both  unaffiliated
and affiliated parties through direct purchases, mergers, tender offers or other
transactions,  (ii) development of additional  self-storage facilities and (iii)
the  continued  funding  of the  operations  of  PSPUD's  portable  self-storage
business. In addition to 628 wholly owned self-storage  facilities,  the Company
operates,  on behalf of  approximately 47 ownership  entities,  466 self-storage
facilities  under the "Public  Storage"  name in which the Company has a partial
equity  interest.  From time to time, some of these  self-storage  facilities or
interests  in them are  available  for  purchase,  providing  the Company with a
source of additional acquisition opportunities.

         MERGER WITH STORAGE  TRUST:  On March 12, 1999, the Company and Storage
Trust, a public REIT, completed a merger. As a result of the merger, the Company
acquired 215 self-storage facilities located in 16 states totaling approximately
12.0 million net rentable  square feet and 104,000 units. In connection with the
merger,  the Company  issued 0.86 shares of the Company's  common stock for each
share of Storage Trust common stock.  This exchange  ratio implied an enterprise
value for Storage Trust of approximately $600 million,  including the assumption
of  approximately  $198  million  of  indebtedness  (including  $98  million  of
borrowings on Storage Trust's line of credit).  The Company  immediately  repaid
the $98 million of  borrowings on the line of credit with funds that the Company
raised through the issuance of preferred stock in 1999.

         DEVELOPMENT OF SELF-STORAGE FACILITIES: Commencing in 1995, the Company
began to  construct  self-storage  facilities.  Since 1995,  the Company and its
Development  Joint  Venture have opened a total of 33  facilities,  one in 1995,
four in 1996, nine in 1997 and 19 in 1998.

         In April 1997, the Company formed the Development Joint Venture with an
institutional  investor to participate in the development of approximately  $220
million of self-storage  facilities.  Since inception through December 31, 1998,
the  Development   Joint  Venture  has  developed  and  opened  24  self-storage
facilities   (approximately   1,470,000  square  feet)  with  a  total  cost  of
approximately  $112.2 million, and at December 31, 1998 had six facilities under
development  (approximately 384,000 square feet) with an aggregate cost incurred
to date of approximately $28.6 million and estimated remaining costs to complete
of $3.9 million. The partnership is funded solely with equity capital consisting
of 30% from the Company and 70% from the institutional investor.

         The  Development  Joint  Venture  is  reviewing  the final 20  projects
(approximately 1,295,000 net rentable sq. ft), and upon approval the Development
Joint  Venture  will be fully  committed.  These  projects are  currently  being
developed  by the  Company  until they are  approved  by the  Development  Joint
Venture.  As of December 31, 1998,  the Company has incurred  total  development
costs of $44.8 million (estimated  remaining costs to complete of $49.7 million)
with respect to these 20 projects.

         The Company has  identified  34  additional  self  storage  development
projects  (2,052,000 net rentable square feet) with total estimated  development
costs of approximately $143.2 million.  Most of these projects have already been
approved  by the  Board of  Directors,  but  their  development  is  subject  to
significant   contingencies.   The  Company  is  considering  entering  into  an
additional  development joint venture  partnership to finance future development
activities,  though no such  agreement  has been  entered  into and the decision
whether to enter into such a partnership  will depend upon the  availability  of
appropriate partners at terms acceptable to the Company.

         PORTABLE SELF-STORAGE BUSINESS: As indicated above, in 1996 the Company
organized  PSPUD as a separate  corporation  to operate a portable  self-storage
business  that rents  storage  containers  to  customers  for storage in central
warehouses.  At December 31, 1998, PSPUD operated a total of 43 facilities in 20
greater   metropolitan   areas  in  11  states  and  had  six  facilities  under
construction  with an aggregate  cost  incurred to date of  approximately  $13.4
million and estimated  remaining  cost to complete of $21.8  million.  PSPUD has
identified one additional  site in an existing  market for  development of PSPUD
facilities at an aggregate estimated cost of $4.3 million.

                                       35

<PAGE>

         REIT STATUS: The Company believes that it has operated,  and intends 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 it will at all times so
qualify.  To the extent that the Company continues to qualify as a REIT, it will
not be taxed,  with certain  limited  exceptions,  on the taxable income that is
distributed  to its  shareholders,  provided  that at least  95% of its  taxable
income is so  distributed  prior to  filing of the  Company's  tax  return.  The
Company has satisfied the REIT distribution requirement since 1980.

         The Company expects to continue its present  conservative  distribution
policy  after the merger.  The current  regular  quarterly  distribution  on the
Company's common stock is $0.22 per share. The Company intends to make a special
cash distribution in 1999 assuming a continuation of its increasing level of its
taxable income.

         FUNDS FROM  OPERATIONS:  Total funds from operations or "FFO" increased
to  $336,363,000  for the year ended 1998 compared to  $272,234,000  in 1997 and
$224,476,000  in 1996.  FFO available to common  shareholders  (after  deducting
preferred stock dividends) increased to $257,988,000 for the year ended December
31, 1998 compared to  $197,253,000  in 1997 and  $155,877,000 in 1996. FFO means
net income (loss)  (computed in accordance  with generally  accepted  accounting
principles)  before  (i) gain  (loss)  on  early  extinguishment  of debt,  (ii)
minority interest in income and (iii) gain (loss) on disposition of real estate,
adjusted as follows:  (i) plus  depreciation  and  amortization  (including  the
Company's  pro-rata share of depreciation  and  amortization  of  unconsolidated
equity  interests and  amortization  of assets  acquired in a merger,  including
property management agreements and goodwill),  and (ii) less FFO attributable to
minority interest.

         FFO is a supplemental  performance  measure for equity REITs as defined
by the National  Association of Real Estate Investment Trusts, Inc.  ("NAREIT").
The NAREIT  definition does not  specifically  address the treatment of minority
interest in the  determination  of FFO or the treatment of the  amortization  of
property  management  agreements and goodwill.  In the case of the Company,  FFO
represents  amounts  attributable to its  shareholders  after deducting  amounts
attributable   to  the  minority   interests  and  before   deductions  for  the
amortization of property  management  agreements and goodwill.  FFO is presented
because  management,  as well as many industry analysts,  consider FFO to be one
measure of the  performance  of the Company and it is used in  establishing  the
terms of the Class B Common Stock. FFO does not take into consideration  capital
improvements,  scheduled  principal  payments on debt,  distributions  and other
obligations  of  the  Company.  Accordingly,  FFO is not a  substitute  for  the
Company's  cash flow or net  income  (as  discussed  above) as a measure  of the
Company's liquidity or operating performance. FFO is not comparable to similarly
entitled  items  reported  by other  REITs  that do not define it exactly as the
Company defines it.

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

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

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

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

                                       36

<PAGE>

were to fail, be insufficient,  or not be implemented on a timely basis, Company
operations could be materially impacted.

         Certain of the Company's other non-computer related systems that may be
impacted  by the Y2K  Issue,  such as  security  systems,  are  currently  being
evaluated,  and the Company  expects the evaluation to be complete by June 1999.
The Company expects the  implementation of any required solutions to be complete
in advance of December 31, 1999. The Company has not fully  evaluated the impact
of lack of Year 2000  compliance on these systems,  but has no reason to believe
that lack of compliance would materially impact the Company's operations.

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

         The cost of the the Company's year 2000  compliance  activities  (which
primarily  consists of the costs of new systems) is  estimated at  approximately
$4.3  million,  of which  approximately  $3.1 million has been incurred to date.
These costs are capitalized. The Company's year 2000 compliance efforts have not
resulted in any significant deferrals in other information system projects.

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         To limit the Company's exposure to market risk, the Company principally
finances its  operations and growth with  permanent  equity  capital  consisting
either of common or preferred stock. At December 31, 1998, the Company's debt as
a percentage of total shareholders' equity (based on book values) was 2.6%.

         The Company's preferred stock is not redeemable by the holders.  Except
under certain conditions relating to the Company's  qualification as a REIT, the
Senior  Preferred Stock are not redeemable by the Company prior to the following
dates: Series A - September 30, 2002, Series B - March 31, 2003, Series C - June
30, 1999, Series D - September 30, 2004, Series E - January 31, 2005, Series F -
April 30,  2005,  Series G - December  31,  2000,  Series H - January 31,  2001,
Series I - October 31, 2001,  Series J - August 31, 2002, Series K - January 19,
2004 and Series L - March 10, 2004. On or after the  respective  dates,  each of
the series of Senior  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 G,  Series H,  Series I,  Series J,  Series K, and Series L), plus
accrued and unpaid dividends.

         The Company's market risk sensitive  instruments  include notes payable
which  totaled  $81,426,000  at  December  31,  1998.  Substantially  all of the
Company's  notes  payable  bear  interest  at  fixed  rates.  See  Note 7 to the
Company's financial statements for terms,  valuations and approximate  principal
maturities of the notes payable as of December 31, 1998.

                                       37

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  financial  statements  of the  Company at  December  31,  1998 and
December 31, 1997 and for each of the three years in the period  ended  December
31, 1998 and the report of Ernst & Young LLP, Independent Auditors,  thereon and
the  related  financial  statement  schedule,  are  included  elsewhere  herein.
Reference is made to the Index to Financial Statements and Schedules in Item 14.

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         Not applicable.

                                       38

<PAGE>

                                    PART III

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  to  be  filed  in  connection  with  the  annual
shareholders'  meeting  to be held in 1999  (the  "Proxy  Statement")  under the
caption "Proposal No. 2 - Election of Directors."  Information  required by this
item with respect to  executive  officers is provided in Item 4A of this report.
See "Executive Officers of the Company."

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

         The  information  required  by this  item  is  hereby  incorporated  by
reference to the material  appearing in the Proxy  Statement  under the captions
"Proposal  No. 2 -  Election  of  Directors  -  Security  Ownership  of  Certain
Beneficial Owners" and "- Security Ownership of Management."

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
"Compensation   Committee   Interlocks  and  Insider   Participation  -  Certain
Relationships and Related Transactions."

                                       39

<PAGE>

                                     PART IV

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

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.       Reports on Form 8-K

         The Company filed a Current  Report on Form 8-K dated  December 7, 1998
         (filed  December 8, 1998),  pursuant to Item 5, which filed certain pro
         forma financial  statements relating to the proposed merger between the
         Company and Storage Trust Realty.

c.       Exhibits:

         See Index to Exhibits contained herein.

d.       Financial Statement Schedules

         Not applicable.

                                       40

<PAGE>

                              PUBLIC STORAGE, INC.

                                INDEX TO EXHIBITS

                            (Items 14(a)(3) and 14(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      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.

3.4      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.

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

3.6      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.

3.7      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.

3.8      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.

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

3.10     Certificate  of   Determination   for  the  Convertible   Participating
         Preferred Stock.  Filed with  Registrant's  Registration  Statement No.
         33-63947 and incorporated herein by reference.

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

3.12     Certificate of Determination for the 8-7/8% Cumulative Preferred Stock,
         Series G. Filed with Registration's  Form 8-A/A Registration  Statement
         relating to the  Depositary  Shares Each  Representing  1/1,000th  of a
         Share of 8-7/8% Cumulative  Preferred Stock,  Series G and incorporated
         herein by reference.

3.13     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  1/1,000th  of a
         Share of 8.45% Cumulative  Preferred  Stock,  Series H and incorporated
         herein by reference.

                                       41

<PAGE>

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

3.15     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.

3.16     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.

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

3.18     Certification 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.

3.19     Certification  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.

3.20     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.

3.21     Certification 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.

3.22     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.

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

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

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

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

3.27     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.

3.28     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.

                                       42

<PAGE>

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,
         1997 and incorporated herein by reference.

10.10    Agreement and Plan of Reorganization  among Registrant,  Public Storage
         Properties IX, Inc., and PS Business  Parks,  Inc. dated as of December
         13, 1995. Filed with Registrant's  Registration Statement No. 333-00591
         and incorporated herein by reference.

10.11    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  1/1000th  of a Share  of  8-7/8
         Cumulative  Preferred  Stock,  Series  G  and  incorporated  herein  by
         reference.

10.12    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  1/1000th  of a Share  of  8.45%
         Cumulative  Preferred  Stock,  Series  H  and  incorporated  herein  by
         reference.

10.13**  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.

                                       43

<PAGE>

10.14    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  1/1000th  of a Share of  8-5/8%
         Cumulative  Preferred  Stock,  Series  I  and  incorporated  herein  by
         reference.


10.15    Agreement and Plan of Reorganization  among Registrant,  Public Storage
         Properties XIV, Inc. and,  Public Storage  Properties XV, Inc. dated as
         of December 5, 1996. Filed with Registrant's Registration Statement No.
         333-22665 and incorporated herein by reference.

10.16    Agreement and Plan of Reorganization  among Registrant,  Public Storage
         Properties  XVI, Inc. , Public Storage  Properties  XVII, Inc. , Public
         Storage  Properties XVIII, Inc. and Public Storage Properties XIX, Inc.
         dated  as of  April  9,  1997.  Filed  with  Registrant's  Registration
         Statement No. 333-26959 and incorporated herein by reference.

10.17    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 March 31, 1997 and incorporated herein by reference.

10.18    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.

10.19    Agreement  and Plan of  Reorganization  between  Registrant  and Public
         Storage  Properties XX, Inc. dated as of December 13, 1997.  Filed with
         Registrant's  Registration  Statement No.  333-49247  and  incorporated
         herein by reference.

10.20    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.

10.21    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.

10.22    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.

10.23    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.

10.24    Amended and Restated Agreement of Limited  Partnership of Storage Trust
         Properties,  L. P., as amended by the First  Amendment  thereto.  Filed
         with Storage  Trust  Realty's  Annual  Report on Form 10-K for the year
         ended  December  31, 1994 and with  Storage  Trust  Realty's  Quarterly
         Report on Form 10-Q for the quarterly  period ended  September 30, 1996
         and incorporated herein by reference.

                                       44

<PAGE>

10.25    Second   Amendment  to  Amended  and  Restated   Agreement  of  Limited
         Partnership of Storage Trust Properties, L. P. Filed herewith.

10.26*   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.

10.27*   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.

10.28    Deposit  Agreement  dated as of March 10, 1999 among  Registrant,  Bank
         Boston,  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.

10.29    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.

11       Statement Re Computation of Earnings Per Share. Filed herewith.

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

23       Consent of Independent Auditors. Filed herewith.

27       Financial data schedule. Filed herewith.

--------------------
*        Compensatory benefit plan.
**       Management contract.

                                       45

<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  30, 1999                   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.

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

  /s/ B. Wayne Hughes          Chairman of the Board, Chief       March 30, 1999
---------------------------    Executive Officer and Director
B. Wayne Hughes                (principal executive officer) 


  /s/ Harvey Lenkin            President and Director             March 30, 1999
---------------------------
Harvey Lenkin


  /s/ B. Wayne Hughes, Jr.     Vice President and Director        March 30, 1999
---------------------------
B. Wayne Hughes, Jr.


  /s/ John Reyes               Senior Vice President and          March 30, 1999
---------------------------    Chief Financial Officer
John Reyes                     (principal financial officer and
                               principal accounting officer)            


  /s/ Robert J. Abernethy      Director                           March 30, 1999
---------------------------
Robert J. Abernethy


  /s/ Dann V. Angeloff         Director                           March 30, 1999
---------------------------
Dann V. Angeloff


  /s/ William C. Baker         Director                           March 30, 1999
---------------------------
William C. Baker


                               Director  
---------------------------     
Thomas J. Barrack, Jr.                                               


  /s/ Uri P. Harkham           Director                           March 30, 1999
---------------------------
Uri P. Harkham


                               Director
---------------------------    
Daniel C. Staton                                                     

                                       46

<PAGE>

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

                                  (Item 14 (a))

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

Report of Independent Auditors.......................................    F-1

Consolidated balance sheets as of December 31, 1998 and 1997.........    F-2

For each of the three years in the period ended December 31, 1998:

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-27

SCHEDULE:

III - Real estate and accumulated depreciation.......................F-28 - F-51

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.

                                       47

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS





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, 1998 and 1997, and the related  consolidated  statements
of income,  shareholders'  equity, and cash flows for each of the three years in
the period  ended  December  31, 1998.  Our audits also  included the  financial
statement  schedule  listed  in the  Index  at  Item  14  (a).  These  financial
statements  and  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  generally   accepted  auditing
standards.  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, 1998 and 1997, and the consolidated results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1998, in conformity with generally accepted accounting  principles.
Also, in our opinion, the related financial statement schedule,  when considered
in relation to the basic financial statements taken as a whole,  presents fairly
in all material respects the information set forth therein.





                                                            ERNST & YOUNG  L L P

Los Angeles, California

February 10, 1999, except for Note 10, as to which the date is March 10, 1999.

                                       F-1

<PAGE>

                              PUBLIC STORAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997
                    (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,          DECEMBER 31,
                                                                                         1998                  1997
                                                                                  -------------------   -------------------   
                                     ASSETS

<S>                                                                                  <C>                  <C>         
Cash and cash equivalents....................................................        $     51,225         $     41,455
Real estate facilities, at cost:
   Land......................................................................             803,226              845,299
   Buildings.................................................................           2,159,065            2,232,230
                                                                                  -------------------   -------------------   
                                                                                        2,962,291            3,077,529
   Accumulated depreciation..................................................            (411,176)            (378,248)
                                                                                  -------------------   -------------------   
                                                                                        2,551,115            2,699,281
   Construction in process...................................................              83,138               42,635
                                                                                  -------------------   -------------------   
                                                                                        2,634,253            2,741,916

Investment in real estate entities...........................................             450,513              225,873
Intangible assets, net.......................................................             203,635              212,944
Mortgage notes receivable from affiliates....................................               5,415               21,807
Other assets.................................................................              58,863               67,650
                                                                                  -------------------   -------------------   
              Total assets...................................................        $  3,403,904         $  3,311,645
                                                                                  ===================   ===================   

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Revolving line of credit.....................................................        $          -         $      7,000
Notes payable................................................................              81,426               96,558
Accrued and other liabilities................................................              63,813               70,648
                                                                                  -------------------   -------------------   
         Total liabilities...................................................             145,239              174,206
Minority interest............................................................             139,325              288,479
Commitments and contingencies
Shareholders' equity:
   Preferred Stock, $0.01 par value, 50,000,000 shares authorized, 11,129,650
     shares  issued  and  outstanding  (13,261,984  issued  and  outstanding  
     at December 31, 1997), at liquidation preference:
         Cumulative Preferred Stock, issued in series........................             868,900              868,900
         Convertible Preferred Stock.........................................                   -               53,308
   Common stock, $0.10 par value, 200,000,000 shares authorized, 115,965,945
     shares issued and outstanding (105,102,145 at December 31, 1997)........
                                                                                           11,598               10,511
   Class B Common Stock, $0.10 par value, 7,000,000 shares authorized 
     and issued..............................................................                 700                  700
   Paid-in capital...........................................................           2,178,465            1,903,782
   Cumulative net income.....................................................             802,088              575,069
   Cumulative distributions paid.............................................            (742,411)            (563,310)
                                                                                  -------------------   -------------------   
         Total shareholders' equity..........................................           3,119,340            2,848,960
                                                                                  -------------------   -------------------   
              Total liabilities and shareholders' equity.....................        $  3,403,904         $  3,311,645
                                                                                  ===================   ===================   
</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, 1998
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                            1998                1997                1996
                                                                       ---------------     ---------------     ---------------     
REVENUES:
   Rental income:
   <S>                                                                  <C>                 <C>                 <C>         
      Self-storage facilities...................................        $    488,291        $    385,540        $    270,429
      Commercial properties.....................................              23,112              40,575              23,576
      Portable self-storage.....................................              24,466               7,893                 421
   Equity in earnings of real estate entities...................              26,602              17,569              22,121
   Facility management fee......................................               6,221              10,141              14,428
   Interest and other income....................................              13,459               9,126               7,976
                                                                       ---------------     ---------------     ---------------     
                                                                             582,151             470,844             338,951
                                                                       ---------------     ---------------     ---------------     

EXPENSES:
  Cost of operations:
      Self-storage facilities...................................             149,376             117,963              82,494
      Commercial properties.....................................               7,951              16,665              10,750
      Portable self-storage.....................................              55,488              39,558               1,247
  Cost of facility management...................................               1,066               1,793               2,575
  Depreciation and amortization ................................             107,482              91,356              64,967
  General and administrative....................................               8,972               6,384               5,524
  Interest expense..............................................               4,507               6,792               8,482
                                                                       ---------------     ---------------     ---------------     
                                                                             334,842             280,511             176,039
                                                                       ---------------     ---------------     ---------------     

Income before minority interest.................................             247,309             190,333             162,912

Minority interest in income.....................................             (20,290)            (11,684)             (9,363)
                                                                       ---------------     ---------------     ---------------     

Net income......................................................        $    227,019        $    178,649        $    153,549
                                                                       ===============     ===============     ===============     
Net income allocation:
   Allocable to preferred shareholders..........................        $     78,375        $     88,393        $     68,599
   Allocable to common shareholders.............................             148,644              90,256              84,950
                                                                       ---------------     ---------------     ---------------     
                                                                        $    227,019        $    178,649        $    153,549
                                                                       ===============     ===============     ===============     

PER COMMON SHARE:

Basic net income per share......................................               $1.30               $0.92               $1.10
                                                                       ===============     ===============     ===============     
Diluted net income per share....................................               $1.30               $0.91               $1.10
                                                                       ===============     ===============     ===============     

Basic weighted average common shares outstanding................             113,929              98,446              77,117
                                                                       ===============     ===============     ===============     
Diluted weighted average common shares outstanding..............             114,357              98,961              77,358
                                                                       ===============     ===============     ===============     
</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, 1998
           (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>

                                                                Preferred Stock                         Class B   
                                                           -------------------------      Common        Common    
                                                           Cumulative    Convertible      Stock          Stock    
                                                           -----------   -----------    -----------   ----------- 
<S>                                                         <C>            <C>             <C>             <C>    
BALANCES AT DECEMBER 31, 1995.........................      $450,150       $85,970         $7,152          $700   
   Issuance of Preferred Stock, net of issuance costs:
     Series H and I (10,750 shares)...................       268,750             -              -             -   
     Convertible, Series CC (58,955 shares)...........             -        58,955              -             -   
   Issuance of Common Stock (15,134,241 shares).......             -             -          1,514             -   
   Conversion of Convertible Participating
     Preferred Stock into Common Stock (1,611,265                  -       (28,470)           161             -   
     shares)..........................................
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (102,721 shares)...............             -        (1,526)            10             -   
   Net income.........................................             -             -              -             -   
   Cash distributions:
     Preferred Stock..................................             -             -              -             -   
     Common Stock, $0.88 per share....................             -             -              -             -   
                                                           -----------   -----------    -----------   ----------- 
BALANCES AT DECEMBER 31, 1996.........................       718,900       114,929          8,837           700   
   Issuance of Preferred Stock, net of issuance
     costs:
     Series J (6,000 shares)..........................       150,000             -              -             -   
   Issuance of Common Stock (14,376,218 shares)                    -             -          1,438             -   
   Conversion of Series CC Convertible Preferred
     Stock into Common Stock (2,184,250 shares).......             -       (58,955)           218             -   
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (179,651 shares)...............             -        (2,666)            18             -   
   Net income.........................................             -             -              -             -   
   Cash distributions:
     Preferred Stock..................................             -             -              -             -   
     Common Stock, $0.88 per share....................             -             -              -             -   
                                                           -----------   -----------    -----------   ----------- 
BALANCES AT DECEMBER 31, 1997.........................       868,900        53,308         10,511           700   

   Issuance of Common Stock (10,093,648 shares)                    -             -          1,010             -   
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (3,589,552 shares).............             -       (53,308)           359             -   
   Repurchase of Common  Stock (2,819,400 shares).....             -             -           (282)            -   
   Net income.........................................             -             -              -             -   
   Cash distributions:
     Preferred Stock..................................             -             -              -             -   
     Common Stock, $0.88 per share....................             -             -              -             -   
                                                           -----------   -----------    -----------   ----------- 
BALANCES AT DECEMBER 31, 1998.........................      $868,900      $       -       $11,598          $700   
                                                           ===========   ===========    ===========   =========== 
</TABLE>

<TABLE>
<CAPTION>
                                                                                                               Total
                                                               Paid-in      Cumulative      Cumulative     Shareholders'
                                                               Capital      Net Income     Distributions       Equity
                                                             -----------    -----------    -------------   -------------
<S>                                                          <C>             <C>             <C>            <C>       
BALANCES AT DECEMBER 31, 1995.........................       $1,100,088      $242,871        $(252,428)     $1,634,503
   Issuance of Preferred Stock, net of issuance costs:
     Series H and I (10,750 shares)...................           (8,972)            -                -         259,778
     Convertible, Series CC (58,955 shares)...........                -             -                -          58,955
   Issuance of Common Stock (15,134,241 shares).......          333,956             -                -         335,470
   Conversion of Convertible Participating
     Preferred Stock into Common Stock (1,611,265                27,799             -                -            (510)
     shares)..........................................
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (102,721 shares)...............            1,516             -                -               -
   Net income.........................................                -       153,549                -         153,549
   Cash distributions:
     Preferred Stock..................................                -             -          (68,599)        (68,599)
     Common Stock, $0.88 per share....................                -             -          (67,709)        (67,709)
                                                             -----------    -----------    -------------   -------------
BALANCES AT DECEMBER 31, 1996.........................        1,454,387       396,420         (388,736)      2,305,437
   Issuance of Preferred Stock, net of issuance
     costs:
     Series J (6,000 shares)..........................           (5,075)            -                -         144,925
   Issuance of Common Stock (14,376,218 shares)                 393,085             -                -         394,523
   Conversion of Series CC Convertible Preferred
     Stock into Common Stock (2,184,250 shares).......           58,737             -                -               -
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (179,651 shares)...............            2,648             -                -               -
   Net income.........................................                -       178,649                -         178,649
   Cash distributions:
     Preferred Stock..................................                -             -          (88,393)        (88,393)
     Common Stock, $0.88 per share....................                -             -          (86,181)        (86,181)
                                                             -----------    -----------    -------------   -------------
BALANCES AT DECEMBER 31, 1997.........................        1,903,782       575,069         (563,310)      2,848,960

   Issuance of Common Stock (10,093,648 shares)                 293,708             -                -         294,718
   Conversion of 8.25% Convertible Preferred Stock
     into Common Stock (3,589,552 shares).............           52,949             -                -               -
   Repurchase of Common  Stock (2,819,400 shares).....          (71,974)            -                -         (72,256)
   Net income.........................................                -       227,019                -         227,019
   Cash distributions:
     Preferred Stock..................................                -             -          (78,375)        (78,375)
     Common Stock, $0.88 per share....................                -             -         (100,726)       (100,726)
                                                             -----------    -----------    -------------   -------------
BALANCES AT DECEMBER 31, 1998.........................       $2,178,465      $802,088        $(742,411)     $3,119,340
                                                             ===========    ===========    =============   =============
</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, 1998
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                       1998           1997           1996
                                                                                   -----------    -----------    -----------   
Cash flows from operating activities:
   <S>                                                                              <C>            <C>             <C>     
   Net income............................................................           $227,019       $178,649        $153,549
   Adjustments  to  reconcile  net  income  to net cash  provided  by  
     operating activities:
     Depreciation and amortization.......................................            107,482         91,356          64,967
     Depreciation included in equity in earnings of real estate entities.             13,884         11,474          17,450
     Minority interest in income.........................................             20,290         11,684           9,363
                                                                                   -----------    -----------    -----------   
       Total adjustments.................................................            141,656        114,514          91,780
                                                                                   -----------    -----------    -----------   
       Net cash provided by operating activities.........................            368,675        293,163         245,329
                                                                                   -----------    -----------    -----------   
Cash flows from investing activities:
     Principal payments received on mortgage notes receivable............             46,897            409           1,784
     Acquisition of minority interests in consolidated real estate
       partnerships......................................................            (22,845)       (21,559)        (15,419)
     Acquisition of mortgage notes receivable............................            (33,000)             -          (3,709)
     Acquisition of real estate facilities...............................            (46,064)       (65,225)       (198,404)
     Acquisition cost of business combinations...........................            (85,883)      (164,808)       (113,522)
     Reduction in cash due to the deconsolidation of PS Business Parks
       (See Note 2)......................................................            (11,260)             -               -
     Acquisition of interests in real estate entities....................            (99,934)       (46,151)        (83,893)
     Construction in process.............................................            (79,132)       (45,865)        (46,097)
     Investment in portable self- storage business ......................             (2,571)       (29,997)              -
     Capital improvements to real estate facilities .....................            (31,714)       (35,117)        (20,366)
     Other...............................................................             19,732           (838)         (5,104)
                                                                                   -----------    -----------    -----------   
       Net cash used in investing activities.............................           (345,774)      (409,151)       (484,730)
                                                                                   -----------    -----------    -----------   
Cash flows from financing activities:
     Net (paydowns) borrowings on revolving line of credit...............             (7,000)         7,000               -
     Net proceeds from the issuances of preferred stock..................                  -        144,925         259,778
     Net proceeds from the issuances of common stock.....................            237,860        182,523         130,538
     Repurchase of the Company's common stock............................            (72,256)             -               -
     Principal payments on mortgage notes payable........................            (15,131)       (11,885)        (51,310)
     Distributions paid to shareholders..................................           (179,101)      (174,574)       (136,308)
     Distributions from operations to minority interests in consolidated
       real estate entities..............................................            (32,312)       (20,929)        (20,853)
     Net reinvestment by minority interests in consolidated real estate
       entities..........................................................             54,809          3,527           3,976
                                                                                   -----------    -----------    -----------   
       Net cash (used in) provided by financing activities...............            (13,131)       130,587         185,821
                                                                                   -----------    -----------    -----------   
Net increase (decrease) in cash and cash equivalents.....................              9,770         14,599         (53,580)
Cash and cash equivalents at the beginning of the year...................             41,455         26,856          80,436
                                                                                   -----------    -----------    -----------   
Cash and cash equivalents at the end of the year.........................            $51,225        $41,455         $26,856
                                                                                   ===========    ===========    ===========   
</TABLE>
                            See accompanying notes.
                                      F-5

<PAGE>

                              PUBLIC STORAGE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1998
                             (AMOUNTS IN THOUSANDS)

                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                     1998           1997            1996
                                                                                   -----------    -----------    -----------   
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
   INVESTING ACTIVITIES:
   <S>                                                                              <C>           <C>              <C>     
   Acquisition of real estate  facilities  in exchange  for minority  
     interests, common stock, the assumption of mortgage notes payable, 
     the cancellation of mortgage notes receivable and the reduction of 
     investment in real estate entities....................................         $(42,047)     $(119,279)       $(4,292)
   Business combinations (Note 3):
       Real estate facilities..............................................         (224,999)      (657,347)      (531,794)
       Investment in real estate entities..................................           86,966        189,400        124,696
       Other assets........................................................             (670)        (4,119)        (5,849)
       Accrued and other liabilities.......................................            3,793         21,190         15,399
       Minority interest...................................................           35,210         74,068         20,139
   Effect of the deconsolidation of PS Business Parks (Note 2)
       Investments in real estate entities.................................         (219,225)             -              -
       Real estate facilities, net of accumulated depreciation.............          433,446              -              -
       Other assets........................................................            2,048              -              -
       Accrued and other liabilities.......................................          (10,106)             -              -
       Notes payable.......................................................          (14,526)             -              -
       Minority interest...................................................         (202,897)             -              -
   Acquisition of minority interest in exchange for common stock...........          (25,460)             -              -
   Investment in real estate entities......................................          (17,133)        30,406              -

   FINANCING ACTIVITIES:
   Cancellation of mortgage notes receivable to acquire real estate facilities         2,495              -            700
   Assumption of mortgage notes payable upon the acquisition of real estate
     facilities............................................................           14,526              -          1,701
   Reduction of investment in real estate entities in exchange for real estate
     facilities...........................................................               527              -          1,891
   Reduction in construction in process - contribution to joint venture....                -        (30,406)             -
   Minority interest issued in exchange for real estate facilities ........            1,206        119,279              -
  Issuance of Mandatory Convertible Preferred Stock, Series CC to acquire
       interest in consolidated real estate partnerships...................                -              -         58,955
   Issuance of Common Stock:
       In connection with mergers..........................................           13,817        212,000        204,932
       To acquire minority interests.......................................           25,908              -              -
       Acquire partnership interests in real estate entities...............           17,133              -              -
       In connection with conversion of Convertible Preferred Stock........           53,308         61,621         29,486
   Conversion of 8.25% Convertible Preferred Stock.........................          (53,308)        (2,666)        (1,526)
   Conversion of Mandatory Convertible Preferred Stock.....................                -        (58,955)       (28,470)

</TABLE>
                            See accompanying notes.
                                      F-6

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

1.   DESCRIPTION OF THE BUSINESS

              Public Storage,  Inc. (the "Company") is a California  corporation
     which  was  organized  in  1980.   The  Company  is  a  fully   integrated,
     self-administered  and self-managed  real estate  investment trust ("REIT")
     that acquires,  develops,  owns and operates self-storage  facilities which
     offer self-storage spaces for lease, usually on a month-to-month basis, for
     personal and business use.

              The Company invests in real estate  facilities  primarily  through
     the acquisition of wholly-owned facilities combined with the acquisition of
     equity interests in real estate entities owning real estate facilities.  At
     December 31, 1998, the Company had direct and indirect equity  interests in
     1,206  properties  located  in  38  states,  including  1,094  self-storage
     facilities and 107 commercial properties and five facilities for use in its
     portable self-storage  operations.  All of the self-storage  facilities are
     operated by the Company under the "Public Storage" name.

              In 1996 and 1997, the Company  organized Public Storage Pickup and
     Delivery,  Inc. as a separate  corporation and a related  partnership  (the
     corporation  and partnership  are  collectively  referred to as "PSPUD") to
     operate a portable  self-storage  business that rents storage containers to
     customers for storage in central  warehouses.  At December 31, 1998,  PSPUD
     operated 43 facilities in 11 states.

              On  January  2,  1997,  the  Company  reorganized  its  commercial
     property  operations into a separate private REIT (the "Private REIT"). The
     Private  REIT   contributed  its  assets  to  a  newly  created   operating
     partnership  (the  "Operating  Partnership")  in  exchange  for  a  general
     partnership  interest and limited  partnership  interests.  The Company and
     certain  partnerships  in which  the  Company  has a  controlling  interest
     contributed  substantially  all  of  their  commercial  properties  to  the
     Operating  Partnership in exchange for limited partnership  interests or to
     the Private  REIT in exchange  for common  stock.  On March 17,  1998,  the
     Private REIT merged into Public Storage  Properties XI, Inc., an affiliated
     publicly traded REIT and the name of the surviving  corporation was changed
     to PS Business Parks, Inc. (the REIT and Operating Partnership are referred
     to  hereafter  as "PSB").  As of  December  31,  1998,  the  Company  owned
     approximately  40% of PSB. At December 31, 1998,  PSB owned 106  properties
     located in 11 states.  PSB also manages the commercial  properties owned by
     the Company and certain of its unconsolidated affiliates.

2.   Summary of significant accounting policies

              Basis of presentation
              ---------------------
              The consolidated  financial statements include the accounts of the
     Company,  PSPUD, and 21 controlled limited  partnerships (the "Consolidated
     Entities").  Collectively,  these  entities  own a total of 957 real estate
     facilities,  consisting  of 951  self-storage  facilities,  one  commercial
     property, and five facilities for use by PSPUD.

              At December 31, 1998,  the Company also has equity  investments in
     26 other affiliated  limited  partnerships  whose principal business is the
     ownership of 143 self-storage  facilities in aggregate which are managed by
     the Company. The Company does not control these entities,  accordingly, the
     Company's  investments in these entities are accounted for using the equity
     method.

              From the time of PSB's  formation  through  March  31,  1998,  the
     Company  consolidated  the  accounts  of PSB in its  financial  statements.
     During the second quarter of 1998, the Company's  ownership interest in PSB
     was  reduced  below 50%,  and  accordingly,  the  Company  ceased to have a
     controlling  interest in PSB. As a result, the Company,  effective April 1,
     1998, no longer includes the accounts of PSB in its consolidated  financial
     statements  and has  accounted  for its  investment  during the nine months

                                      F-7

<PAGE>

     ended December 31, 1998 using the equity method. The consolidated statement
     of income for the year ended  December 31, 1998  includes the  consolidated
     operating  results  of PSB for the  three  months  ended  March  31,  1998,
     however,  for the  nine  months  ended  December  31,  1998  the  Company's
     investment is accounted for using the equity method.

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

              Income taxes
              ------------
              For all taxable years  subsequent to 1980,  the Company  qualified
     and intends to continue to qualify as a REIT,  as defined in Section 856 of
     the  Internal  Revenue  Code.  As a REIT,  the Company is not taxed on that
     portion of its taxable  income  which is  distributed  to its  shareholders
     provided that the Company meets certain tests.  The Company believes it has
     met these tests during 1998, 1997 and 1996;  accordingly,  no provision for
     income taxes has been made in the accompanying financial statements.

              Financial instruments
              ---------------------
              For  purposes of  financial  statement  presentation,  the Company
     considers all highly liquid debt  instruments  purchased with a maturity of
     three months or less to be cash equivalents.

              The  carrying  amount of cash and cash  equivalents  and  mortgage
     notes receivable  approximates  fair value because with respect to cash and
     cash equivalents  maturities are less than three months and with respect to
     the mortgage notes receivable  applicable interest rates approximate market
     rates for these loans.  The  carrying  amount of the  Company's  fixed rate
     long-term debt is estimated  using  discounted  cash flow analyses based on
     incremental  borrowing  rates the  Company  believes  it could  obtain with
     similar terms and maturities.

              Real estate facilities
              ----------------------
              Real  estate  facilities  are  recorded at cost.  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.

              Allowance for possible losses
              -----------------------------
              The Company has no allowance for possible  losses  relating to any
     of its real  estate  investments,  long-lived  assets  and  mortgage  notes
     receivable.  The need for such an allowance is evaluated by  management  by
     means of periodic reviews of its investment portfolio.

              Intangible assets
              -----------------
              Intangible  assets  consist  of  property   management   contracts
     ($165,000,000)  and the  cost  over  the fair  value  of net  tangible  and
     identifiable  intangible assets ($67,726,000)  acquired.  Intangible assets
     are amortized  straight-line  over 25 years. At December 31, 1998 and 1997,
     intangible  assets are net of accumulated  amortization  of $29,091,000 and
     $19,782,000,   respectively.  Included  in  depreciation  and  amortization
     expense is $9,309,000 in each of the three fiscal years ended  December 31,
     1998 with respect to the amortization of intangible assets.

              Revenue and expense recognition
              -------------------------------
              Property  rents are  recognized  as earned.  Equity in earnings of
     real  estate  entities  are  recognized  based on the  Company's  ownership
     interest  in the  earnings  of  each  of  the  unconsolidated  real  estate
     entities. Advertising costs are expensed as incurred.

                                      F-8

<PAGE>

              Environmental costs
              -------------------
              The Company's 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.  The  Company's  current
     practice is to conduct  environmental  investigations  in  connection  with
     property acquisitions.  As a result of environmental  investigations of its
     properties,  which commenced in 1995, the Company 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,  the  Company  is  not  aware  of  any  environmental
     contamination  of  any  of  its  facilities  which  individually  or in the
     aggregate would be material to the Company's  overall  business,  financial
     condition, or results of operations.

              Net income per common share
              ---------------------------
              In 1997, the Financial Accounting Standards Board issued Statement
     No. 128,  EARNINGS PER SHARE.  Statement  128 replaced the  calculation  of
     primary  and fully  diluted net income per share with basic and diluted net
     income per share. Unlike primary net income per share, basic net income per
     share excludes any dilutive  effects of options,  warrants and  convertible
     securities.  Diluted net income per share is very similar to the previously
     reported  fully  diluted  net income  per  share.  All net income per share
     amounts for all periods have been presented and where appropriate, restated
     to conform to Statement 128 requirements.

              Diluted net income per common share is computed using the weighted
     average common shares outstanding (adjusted for stock options). The Class B
     Common Stock is not included in the  determination of net income per common
     share because all contingencies required for the conversion to common stock
     have not been satisfied as of December 31, 1998. In addition, the inclusion
     of the Company's  convertible  preferred stock in the  determination of net
     income per common share has been determined to be anti-dilutive.

              In computing earnings per common share,  preferred stock dividends
     totaling  $78,375,000,  $88,393,000  and  $68,599,000  for the years  ended
     December 31, 1998, 1997 and 1996, respectively, reduced income available to
     common stockholders.

              Stock-based compensation
              ------------------------
              In October  1995,  the FASB  issued SFAS No. 123  "Accounting  for
     Stock-Based  Compensation"  ("Statement  123") which provides  companies an
     alternative to accounting for stock-based  compensation as prescribed under
     APB Opinion No. 25 (APB 25). Statement 123 encourages, but does not require
     companies to recognize  expense for stock-based  awards based on their fair
     value at date of grant.  Statement  123 allows  companies  to  continue  to
     follow  existing  accounting  rules  (intrinsic  value method under APB 25)
     provided  that  pro-forma  disclosures  are  made of what  net  income  and
     earnings per share would have been had the new fair value method been used.
     The Company has elected to adopt the disclosure  requirements  of Statement
     123 but will continue to account for stock-based compensation under APB 25.

3.   BUSINESS COMBINATIONS

              Mergers with affiliated REITs
              -----------------------------
              During 1998, the Company  completed merger  transactions  with two
     affiliated  public REITs whereby the Company  acquired all the  outstanding
     stock of the REITs which it did not previously own in exchange for cash and
     common stock of the Company.  The merger  transaction  with Public  Storage
     Properties  XI, Inc. was  accomplished  through a merger of Public  Storage
     Properties XI, Inc. with the Private Reit. The aggregate  acquisition  cost
     of these mergers is summarized as follows:

                                      F-9

<PAGE>

<TABLE>
<CAPTION>
                                                                     Merger consideration (In Thousands)
                                                             ---------------------------------------------------
                                                               PSI            Pre-
                                                              Common        Existing
Entity                                   Date of Merger       Stock        Investment         Cash       Total
----------------------------------       --------------      --------     -----------       -------    ---------
                                                                                     (Amounts in thousands)
<S>                                      <C>                 <C>            <C>             <C>        <C>     
Public Storage Properties XI, Inc.       March 17, 1998      $      -       $ 14,774        $     -    $ 14,774
Public Storage Properties XX, Inc.        May 8, 1998          13,817          3,797          4,744      22,358
                                                             --------     -----------       -------    ---------
                                                             $ 13,817       $ 18,571        $ 4,744    $ 37,132
                                                             ========     ===========       =======    =========
</TABLE>

              During 1997, the Company  completed merger  transactions  with six
     affiliated  public REITs whereby the Company  acquired all the  outstanding
     stock of the REITs for an aggregate cost of $404,907,000, consisting of the
     issuance of 7,681,432 shares of the Company's common stock  ($212,000,000),
     a  $124,045,000  reduction of the  Company's  pre-existing  investment  and
     $68,862,000 in cash.

              Affiliated Partnership acquisitions:
              ------------------------------------
              During 1998, the Company increased its ownership interest in three
     affiliated  limited  partnerships  in  which  the  Company  is the  general
     partner.  Prior  to  the  acquisitions,   the  Company  accounted  for  its
     investment in each of the three  partnerships using the equity method. As a
     result of increasing  its ownership  interest and obtaining  control of the
     partnerships,  the  Company  began  to  consolidate  the  accounts  of  the
     partnerships  in the Company's  consolidated  financial  statements.  These
     transactions are summarized as follows:

<TABLE>
<CAPTION>
                                           Economic
                                         Interest after       Month                     Pre-existing    
Entity                                    Acquisition        Purchased        Cash       investment      Total
----------------------------------       --------------   --------------   -----------  ------------   ---------
                                                                     (Amounts in thousands)
<S>                                          <C>          <C>               <C>           <C>          <C>      
Mid-Atlantic I and II                        95%           January 1998     $   5,710     $  1,551     $   7,261
Public Storage Institutional Fund III        98%          September 1998       75,429       66,844       142,273
                                                                           -----------  ------------   ---------
                                                                            $  81,139     $ 68,395     $ 149,534
                                                                           ===========  ============   =========  
</TABLE>

              During  1997,  the Company  increased  its  ownership  interest in
     twelve affiliated limited  partnerships in which the Company is the general
     partner.  Prior  to  the  acquisitions,   the  Company  accounted  for  its
     investment in each of the twelve partnerships using the equity method. As a
     result,  commencing in 1997, the Company began to consolidate  the accounts
     of these  partnerships  for  financial  statement  purposes.  The aggregate
     amount of the  interests  acquired  totaled  $161,301,000  consisting  of a
     $65,355,000 reduction of the Company's pre-existing  investment and cash of
     $95,946,000.

              Each of the above mergers with affiliated  REIT's and acquisitions
     of  partnership  interests  discussed  above  has been  accounted  for as a
     purchase; accordingly, allocations of the total acquisition cost to the net
     assets  acquired  were  made  based on the fair  value of such  assets  and
     liabilities as of the dates of each respective transaction. The fair market
     values of the assets acquired and  liabilities  assumed with respect to the
     transactions occurring in 1998 and 1997 are summarized as follows:

                                      F-10

<PAGE>

                                         REIT         Partnership
                                        mergers      Acquisitions       Total
                                       ---------     ------------     ----------
                                                (Amounts in thousands)
1998 BUSINESS COMBINATIONS:
    Real estate facilities..........   $ 73,971        $ 151,028      $ 224,999
    Other assets....................        271              399            670
    Accrued and other liabilities...     (2,280)          (1,513)        (3,793)
    Minority interest...............    (34,830)            (380)       (35,210)
                                       ---------     ------------     ----------
                                       $ 37,132        $ 149,534      $ 186,666
                                       =========     ============     ==========

1997 BUSINESS COMBINATIONS:
    Real estate facilities..........   $413,597        $ 243,750      $ 657,347
    Other assets....................      2,424            1,695          4,119
    Accrued and other liabilities...    (11,114)         (10,076)       (21,190)
    Minority interest...............          -          (74,068)       (74,068)
                                       ---------     ------------     ----------
                                       $404,907        $ 161,301      $ 566,208
                                       =========     ============     ==========

              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 years
     ended December 31, 1998 and 1997 as though the business  combinations above
     had been effective at the beginning of fiscal 1997 are as follows:

                                                        For the Year
                                                     Ended December 31,
                                            ------------------------------------
                                                  1998               1997
                                            ----------------    ----------------
                                            (in thousands except per share data)

Revenues..................................        $593,180          $496,977
Net income................................        $226,353          $176,716
Net income per common share (Basic).......          $1.30             $0.89
Net income per common share (Diluted).....          $1.29             $0.89

              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 1997 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 and amortization expense.

                                      F-11

<PAGE>

4.   REAL ESTATE FACILITIES

              Activity in real estate  facilities  during 1998, 1997 and 1996 is
     as follows:

<TABLE>
<CAPTION>
                                                         1998              1997               1996
                                                     ------------      ------------       ------------       
                                                                 (Amounts in thousands)
Operating facilities, at cost:
  <S>                                                <C>                <C>                <C>       
  Beginning balance.............................     $ 3,077,529        $2,185,498         $1,405,155
  Property acquisitions
     Business combinations (Note 3) .............        224,999           657,347            531,794
     Other  acquisitions.........................         64,818           184,504            202,696
  Developed facilities...........................         38,629             8,639             18,261
  Acquisition of minority interest (Note 8)......         23,293             8,904              7,226
  Capital improvements...........................         31,714            35,117             20,366
  PSB deconsolidation (see below)................       (498,691)           (2,480)                 -
                                                     ------------      ------------       ------------       
  Ending balance.................................      2,962,291         3,077,529          2,185,498
                                                     ------------      ------------       ------------       

Accumulated depreciation:
  Beginning balance..............................       (378,248)         (297,655)          (241,966)
  Additions during the year......................        (98,173)          (82,047)           (55,689)
  PSB deconsolidation (see below) ...............         65,245             1,454                  -
                                                     ------------      ------------       ------------       
  Ending balance.................................       (411,176)         (378,248)          (297,655)
                                                     ------------      ------------       ------------       

Construction in progress:
  Beginning balance..............................         42,635            35,815              7,979
  Current development cost.......................         79,132            45,865             46,097
  Property contribution to real estate entities..              -           (30,406)                 -
  Newly opened development facilities............        (38,629)           (8,639)           (18,261)
                                                     ------------      ------------       ------------       
  Ending balance.................................         83,138            42,635             35,815
                                                     ------------      ------------       ------------       

Total real estate facilities.....................    $ 2,634,253        $2,741,916         $1,923,658
                                                     ============      ============       ============       
</TABLE>

              During  1998,  the  Company  acquired  a total  of 53 real  estate
     facilities for an aggregate cost of $224,999,000 in connection with certain
     business combinations (Note 3). In addition,  the Company also acquired two
     self storage facilities for an aggregate cost of $9,384,000,  consisting of
     the cancellation of mortgage notes receivable  ($2,495,000),  the Company's
     existing investment ($527,000),  and cash ($6,362,000) and three commercial
     facilities  for  an  aggregate  cost  of  $55,434,000   consisting  of  the
     assumption  of  mortgage  notes  payable  ($14,526,000),  the  issuance  of
     minority interests ($1,206,000) and cash ($39,702,000).

              Effective  April 1,  1998,  the  Company  no longer  included  the
     accounts of PSB in its  consolidated  financial  statements  (Note 2). As a
     result of this change, real estate facilities and accumulated  depreciation
     were reduced by $498,691,000 and $65,245,000,  respectively, reflecting the
     cost basis of the PSB real estate  facilities  which are no longer included
     in the Company's consolidated financial statements.

              During  1997,  the  Company  acquired  a total of 176 real  estate
     facilities for an aggregate cost of $657,347,000 in connection with certain
     business  combinations (Note 3). The Company also acquired an additional 14
     real estate  facilities  from third  parties with an aggregate  acquisition
     cost of  $184,504,000  consisting  of the  issuance of  minority  interests
     ($119,279,000) and cash ($65,225,000).

                                      F-12

<PAGE>

              During  1996,  the  Company  acquired  a total of 154 real  estate
     facilities for an aggregate cost of $531,794,000 in connection with certain
     business  combinations.  The Company also  acquired an  additional  58 real
     estate facilities from third parties with an aggregate  acquisition cost of
     $202,696,000  consisting of the  cancellation of mortgage notes  receivable
     ($700,000),   cancellation   of  pre-existing   investments   ($1,891,000),
     assumption of mortgage notes payable ($1,701,000), and cash ($198,404,000).

              A substantial number of the real estate facilities acquired during
     1998,  1997,  and 1996 were  acquired from  affiliates  in connection  with
     business  combinations with an aggregate  acquisition cost of approximately
     $224,999,000, $657,347,000, and $531,794,000 respectively.

              Construction in progress  consists of land and  development  costs
     relating  principally to the  development of  self-storage  facilities.  In
     April  1997,  the  Company and an  institutional  investor  created a joint
     venture  partnership (the  "Development  Joint Venture") for the purpose of
     developing up to $220 million of self-storage facilities.  The Company owns
     30% of the  partnership  interest and the  institutional  investor owns the
     remaining 70% interest. In connection with the formation of the Development
     Joint  Venture,  the  Company  contributed  eight  self-storage  facilities
     ($30,406,000),  which  were  under  construction,  to  the  partnership  in
     exchange  for its  partnership  interest.  The  Company  will  periodically
     transfer  newly  developed  properties,  the cost of which were included in
     real  estate,   to  the  partnership  as  part  of  the  Company's  capital
     contribution  to  the   partnership.   The  Company's   investment  in  the
     partnership is accounted for using the equity method (See Note 5).

              At December 31, 1998, the unaudited  adjusted basis of real estate
     facilities for Federal income tax purposes was approximately $2.2 billion.

5.   INVESTMENTS IN REAL ESTATE ENTITIES

              At December 31, 1998,  the  Company's  investments  in real estate
     entities consist generally of ownership interests in 26 partnerships.  Such
     interests  consists of  noncontrolling  interests  of less than 50% and are
     accounted for using the equity method of accounting.  Accordingly, earnings
     are recognized by the Company based upon the Company's  ownership  interest
     in each of the  partnerships.  During  1998,  1997,  and 1996,  the Company
     recognized  earnings from its investments of  $26,602,000,  $17,569,000 and
     $22,121,000,   respectively,   and  received  cash  distributions  totaling
     $17,968,000, $15,673,000 and $27,326,000, respectively.

              During 1998 and 1997,  respectively,  the Company's  investment in
     real  estate  entities  decreased  principally  as  a  result  of  business
     combinations whereby the Company eliminated approximately $87.0 million and
     $189.4 million,  respectively,  of pre-existing  investments in real estate
     entity investments.  Offsetting these decreases are additional  investments
     made by the  Company  in  other  unconsolidated  entities  totaling  $319.1
     million  (including $219.2 million due to the  deconsolidation  of PSB) and
     $46.2 million in 1998 and 1997, respectively.

              Summarized  combined  financial  data with  respect  to those real
     estate entities in which the Company had an ownership  interest at December
     31, 1998 (amounts for the Development  Joint Venture are from its formation
     on April 10, 1997) are as follows:

                                      F-13

<PAGE>

<TABLE>
<CAPTION>
                                                  Other            Development
                                            Equity Investments    Joint Venture          PSB               Total
                                            ------------------    -------------     --------------    --------------
                                                                      (Amounts in thousands)
For the year ended December 31, 1998:

 <S>                                             <C>                 <C>              <C>                <C>       
 Rental income........................           $   65,813          $ 6,003          $  88,320          $  160,136
 Other income.........................                1,755              555              1,940               4,250
                                            ------------------    -------------     --------------    --------------
     Total revenues...................               67,568            6,558             90,260             164,386
                                            ------------------    -------------     --------------    --------------
 Cost of operations...................               21,882            3,703             26,150              51,735
 Depreciation and amortization........                7,990            1,879             18,908              28,777
 Other expenses.......................                8,119              100              4,594              12,813
                                            ------------------    -------------     --------------    --------------
     Total expenses...................               37,991            5,682             49,652              93,325
                                            ------------------    -------------     --------------    --------------
 Net income before minority interest..               29,577              876             40,608              71,061
 Minority interest ...................                    -                -            (11,208)            (11,208)
                                            ------------------    -------------     --------------    --------------
     Net income.......................           $   29,577          $   876          $  29,400          $   59,853
                                            ==================    =============     ==============    ==============
 At December 31, 1998:
 ---------------------
 Real estate, net ....................           $  169,775        $ 138,948          $ 698,137          $1,006,860
 Total assets.........................           $  213,762        $ 146,666          $ 709,414          $1,069,842
 Total liabilities....................           $   76,657        $   4,927          $  66,494          $  148,078
 Minority interest....................           $        -        $       -          $ 153,015          $  153,015
 Total equity.........................           $  137,105        $ 141,739          $ 489,905          $  768,749

 The Company's investment (book                                                                      
     value) at December 31, 1998......           $  175,383        $  42,522          $ 232,608          $  450,513

 The Company's effective average
     ownership interest at December
     31, 1998.........................                  37%              30%                40%                 33%

</TABLE>


              As   indicated   above,   in  April  1997,   the  Company  and  an
     institutional  investor formed a joint venture  partnership for the purpose
     of developing up to $220 million of self-storage facilities. As of December
     31, 1998, the joint venture  partnership  had completed  construction on 24
     self-storage  facilities with a total cost of approximately $112.2 million,
     and had 6 facilities under  construction with an aggregate cost incurred to
     date of approximately $28.6 million and total additional  estimated cost to
     complete of $3.9  million.  The  partnership  is funded  solely with equity
     capital  consisting of 30% from the Company and 70% from the  institutional
     investor.

6.   REVOLVING LINE OF CREDIT

              The credit agreement (the "Credit Facility") has a borrowing limit
     of $150 million and an  expiration  date of July 31, 2001.  The  expiration
     date  may be  extended  by one  year  on  each  anniversary  of the  credit
     agreement.  Interest on outstanding  borrowings is payable monthly.  At the
     option of the  Company,  the rate of  interest  charged is equal to (i) the
     prime rate or (ii) a rate  ranging from the London  Interbank  Offered Rate
     ("LIBOR") plus 0.40% to LIBOR plus 1.10% depending on the Company's  credit
     ratings and  coverage  ratios,  as  defined.  In  addition,  the Company is
     required  to pay a  quarterly  commitment  fee of 0.250% (per annum) of the
     unused  portion of the Credit  Facility.  The  Credit  Facility  allows the
     Company,  at its  option,  to  request  the group of banks to  propose  the
     interest  rate they would charge on specific  borrowings  not to exceed $50
     million; however, in no case may the interest rate proposal be greater than
     the amount provided by the Credit Facility.

                                      F-14

<PAGE>

              Under covenants of the Credit Facility, the Company is required to
     (i) maintain a balance sheet leverage ratio of less than 0.40 to 1.00, (ii)
     maintain net income of not less than $1.00 for each fiscal  quarter,  (iii)
     maintain certain cash flow and interest coverage ratios (as defined) of not
     less  than  1.0 to 1.0 and 5.0 to 1.0,  respectively  and (iv)  maintain  a
     minimum total shareholders' equity (as defined).  In addition,  the Company
     is limited in its ability to incur  additional  borrowings  (the Company is
     required to maintain unencumbered assets with an aggregate book value equal
     to or greater than three times the Company's  unsecured  recourse  debt) or
     sell assets. The Company was in compliance with the covenants of the Credit
     Facility at December 31, 1998.

7.   NOTES PAYABLE

              Notes  payable  at  December  31,  1998  and 1997  consist  of the
     following:

<TABLE>
<CAPTION>
                                                                             1998                          1997
                                                                  ---------------------------   ---------------------------   
                                                                    Carrying                      Carrying
                                                                     amount       Fair value       amount       Fair value
                                                                  -------------  ------------   -------------  ------------   
                                                                              (Amounts in thousands)
<S>                                                                  <C>          <C>              <C>           <C>     
7.08% unsecured senior notes, due November 2003..................    $ 46,000     $ 46,000         $ 53,250      $ 53,250
Mortgage notes payable:                                                                                        
  10.55% mortgage notes secured by real estate facilities,                                                     
      principal and interest payable monthly, due August 2004....      28,401       30,942           30,355        34,571
  7.134% to 11.00% mortgage notes secured by real estate                                                       
      facilities, principal and interest payable monthly, due                                                  
      at varying dates between May 1999 and September 2028.......       7,025        7,025           12,953        12,953
                                                                  -------------  ------------   -------------  ------------   
                                                                     $ 81,426     $ 83,967         $ 96,558      $100,774
                                                                  =============  ============   =============  ============
</TABLE>

              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, 1998.

              The  10.55%  mortgage  notes  consist  of  five  notes  which  are
     cross-collateralized  by 19  properties  and  are  due to a life  insurance
     company. Although there is a negative spread between the carrying value and
     the estimated fair value of the notes, the notes provide for the prepayment
     of principal subject to the payment of penalties which exceed this negative
     spread.  Accordingly,  prepayment  of the notes at this  time  would not be
     economically practicable.

              Mortgage  notes  payable are secured by 25 of the  Company's  real
     estate  facilities  having an aggregate  net book value of $53.8 million at
     December 31, 1998.

              At December 31, 1998,  approximate  principal  maturities of notes
     payable are as follows:

                                      F-15

<PAGE>

                                              Fixed Rate
                                            Mortgage debt
                      7.08% Unsecured     (weighted average        
                       Senior Notes         rate of 10.44%)           Total
                     -----------------    -----------------    -----------------
                                          (in thousands)
1999 ..........           $   8,000         $   6,398              $  14,398
2000...........               8,750             2,622                 11,372
2001...........               9,500             2,910                 12,410
2002...........               9,750             3,229                 12,979
2003...........              10,000             3,584                 13,584
Thereafter.....                   -            16,683                 16,683
                     -----------------    -----------------    -----------------
                           $ 46,000         $  35,426              $  81,426
                     =================    =================    =================

              Interest paid (including interest related to the borrowings on the
     Credit Facility) during 1998, 1997 and 1996 was $7,690,000,  $8,884,000 and
     $10,312,000, respectively. In addition, in 1998, 1997 and 1996, the Company
     capitalized  interest  totaling  $3,481,000,   $2,428,000  and  $1,861,000,
     respectively, related to construction of real estate facilities.

              The maturities  above do not include the notes payable  assumed on
     March 12, 1999 by the Company in  connection  with the merger with  Storage
     Trust in the unaudited  principal amount of $100 million (unaudited - $14.7
     million of which is due in 2003,  with the remainder due  thereafter).  See
     note 13 for further discussion of the merger.

8.   MINORITY INTEREST

              In consolidation, the Company classifies ownership interests other
     than its own in the net  assets  of each of the  Consolidated  Entities  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.

              During 1998, the Company acquired limited partnership interests in
     the Consolidated  Entities in several transactions for an aggregate cost of
     $48,753,000.  These  transactions  had  the  effect  of  reducing  minority
     interest by  approximately  $25,460,000  (the historical book value of such
     interests in the underlying net assets of the partnerships).  The excess of
     the cost over the underlying book value ($23,293,000) has been allocated to
     real estate  facilities  in  consolidation.  In 1997 and 1996,  the Company
     acquired  interests in the  Consolidated  Entities at an aggregate  cost of
     $21,559,000 and $15,419,000,  respectively,  reducing  minority interest by
     approximately $12,655,000 and $8,193,000,  respectively. The excess of cost
     over  underlying  book values was  allocated to real estate  facilities  in
     consolidation.

              During 1998,  1997 and 1996, in connection  with certain  business
     combinations  (Note 3) minority  interest  was  increased  by  $35,210,000,
     $74,068,000  and  $20,139,000,  respectively,  representing  the  remaining
     partners'  equity interests in the aggregate net assets of the Consolidated
     Entities.

9.   PROPERTY MANAGEMENT

              Throughout  the three year period ended  December  31,  1998,  the
     Company,  pursuant to property  management  contracts,  managed real estate
     facilities  owned by  affiliated  entities and to a lesser  extent by third
     parties.   The  property   management   contracts   generally  provide  for
     compensation equal to 6% of gross revenues of the facilities managed.

                                      F-16

<PAGE>

10.  SHAREHOLDERS' EQUITY

              Preferred Stock
              ---------------
              At  December  31, 1998 and 1997,  the  Company  had the  following
series of Preferred Stock outstanding:

<TABLE>
<CAPTION>
                                                       At December 31, 1998                At December 31, 1997
                                                   ----------------------------       ---------------------------
                                      Dividend        Shares          Carrying          Shares          Carrying
              Series                    Rate       Outstanding         Amount         Outstanding        Amount
---------------------------------    ----------    -----------        ---------       -----------       ---------
                                                                    (Dollar amounts in thousands)
<S>                                  <C>            <C>              <C>               <C>               <C>     
Series A                                10.000%      1,825,000        $  45,625         1,825,000        $ 45,625
Series B                                 9.200%      2,386,000           59,650         2,386,000          59,650
Series C                             Adjustable      1,200,000           30,000         1,200,000          30,000
Series D                                 9.500%      1,200,000           30,000         1,200,000          30,000
Series E                                10.000%      2,195,000           54,875         2,195,000          54,875
Series F                                 9.750%      2,300,000           57,500         2,300,000          57,500
Series G                                 8.875%          6,900          172,500             6,900         172,500
Series H                                 8.450%          6,750          168,750             6,750         168,750
Series I                                 8.625%          4,000          100,000             4,000         100,000
Series J                                 8.000%          6,000          150,000             6,000         150,000
                                                   -----------        ---------       -----------       ---------
  Total Senior Preferred Stock                      11,129,650          868,900        11,129,650         868,900

Convertible Preferred Stock              8.250%              -                -         2,132,334          53,308
                                                   -----------        ---------       -----------       ---------
                                                    11,129,650        $ 868,900        13,261,984        $922,208
                                                   ===========        =========       ===========       =========
</TABLE>

              On June 1, 1998,  the Company  exercised  its option to redeem the
     Convertible  Preferred  Stock for common  stock at the  conversion  rate of
     1.6835  shares of  common  stock for each  share of  Convertible  Preferred
     Stock.  Pursuant to the  redemption,  which was effective July 1, 1998, the
     Company issued 3,503,303 shares of common stock.

              On January 19,  1999,  the Company  issued 4.6 million  depository
     shares  (each  representing  1/1,000  of a share) of its  Preferred  Stock,
     Series K, raising net proceeds of  approximately  $111.4 million.  On March
     10,  1999,  the  Company  issued  4.6  million   depositary   shares  (each
     representing  1/1,000 of a share) of its Preferred Stock, Series L, raising
     net proceeds of approximately $111.4 million.

              The Series A through Series L (collectively the "Cumulative Senior
     Preferred   Stock")  have  general   preference   rights  with  respect  to
     liquidation  and  quarterly  distributions.  With respect to the payment of
     dividends and amounts upon  liquidation,  all of the Company's  Convertible
     Preferred Stock ranks junior to the Cumulative  Senior  Preferred Stock and
     any other shares of preferred stock of the Company ranking on a parity with
     or senior to the Cumulative Senior Preferred Stock.

              Holders of the  Company's  preferred  stock,  except under certain
     conditions  and as  noted  above,  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, 1998,  there were no dividends in
     arrears and the Debt Ratio was 2.4%.

                                      F-17

<PAGE>

              Except  under  certain   conditions   relating  to  the  Company's
     qualification  as a REIT,  the Senior  Preferred  Stock are not  redeemable
     prior to the following  dates:  Series A - September  30, 2002,  Series B -
     March 31, 2003,  Series C - June 30, 1999,  Series D - September  30, 2004,
     Series E - January 31, 2005, Series F - April 30, 2005, Series G - December
     31, 2000,  Series H - January 31, 2001, Series I - October 31, 2001, Series
     J - August 31, 2002, Series K - January 19, 2004, Series L - March 10, 2004
     On or after the respective  dates,  each of the series of Senior  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 H, Series
     I, Series J, Series K, and Series L), plus accrued and unpaid dividends.

              Common stock
              ------------
              During 1998,  1997 and 1996,  the Company  issued and  repurchased
     shares of its common stock as follows:

<TABLE>
<CAPTION>
                                                1998                        1997                        1996
                                      -------------------------   -------------------------   -------------------------   
                                        Shares        Amount         Shares        Amount       Shares       Amount
                                      -----------   -----------   -----------   -----------   -----------   -----------   
                                                                (Dollar amounts in thousands)
<S>                                    <C>           <C>           <C>            <C>          <C>          <C>      
Public offerings....................   7,951,821     $ 234,521     6,600,000      $181,448     6,151,200    $ 128,501
In connection with mergers (Note 3)      433,526        13,817     7,681,432       212,000     8,839,181      204,932
Exercise of stock options...........     219,596         3,339        94,786         1,075       100,663        1,037
Issuance to affiliates..............     853,700        26,362             -             -        43,197        1,000
Conversion of Mandatory Convertible
  Preferred Stock...................           -             -             -             -     1,611,265       27,960
Conversion of Series CC Convertible
  Preferred Stock...................           -             -     2,184,250        58,955             -            -
Acquisition of interests in real
  estate entities...................     635,005        16,679             -             -             -            -
Repurchases of stock................  (2,819,400)      (72,256)            -             -             -            -
Conversion of 8.25% Convertible
  Preferred Stock...................   3,589,552        53,308       179,651         2,666       102,721        1,526
                                      -----------   -----------   -----------   -----------   -----------   -----------   
                                      10,863,800     $ 275,770    16,740,119      $456,144    16,848,227     $364,956
                                      ===========   ===========   ===========   ===========   ===========   ===========   
</TABLE>

              Shares  of  common  stock  issued  to  affiliates  in 1998 were in
     exchange  for  interests  in real estate  entities.  Shares of common stock
     issued to  affiliates  in 1996,  were  issued  for cash.  All the shares of
     common stock,  with the  exception of the shares issued in connection  with
     the exercise of stock options,  were issued at the prevailing  market price
     at the time of issuance.

              On June  12,  1998,  the  Company  announced  that  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.   Through  December  31,  1998  the  Company  has
     repurchased  a total of  2,819,400  shares of common  stock at an aggregate
     cost of approximately $72,256,000.

              At December 31, 1998,  the Company had 4,935,642  shares of common
     stock  reserved in connection  with the Company's  stock option plans (Note
     11) and 7,000,000 shares of common stock reserved for the conversion of the
     Class B Common Stock.

              On March 12, 1999, the Company issued  approximately  13.0 million
     unaudited  shares of common stock pursuant to the merger with Storage Trust
     Realty and reserved  approximately 1.0 million additional  unaudited shares
     for issuance upon  conversion of units in Storage Trust Realty's  operating
     partnership (Note 13).

                                      F-18

<PAGE>

              Class B Common Stock
              --------------------
              The Class B Common Stock will (i) not participate in distributions
     until the later to occur of funds from operations ("FFO") per Common Share,
     as defined below,  aggregating  $1.80 during any period of four consecutive
     calendar quarters, or January 1, 2000; thereafter, the Class B Common Stock
     will participate in distributions  (other than liquidating  distributions),
     at the rate of 97% of the per  share  distributions  on the  Common  Stock,
     provided that  cumulative  distributions  of at least $0.22 per quarter per
     share  have  been  paid  on the  Common  Stock,  (ii)  not  participate  in
     liquidating  distributions,  (iii)  not be  entitled  to  vote  (except  as
     expressly required by California law) and (iv)  automatically  convert into
     Common  Stock,  on a share for share basis,  upon the later to occur of FFO
     per Common Share  aggregating  $3.00 during any period of four  consecutive
     calendar quarters or January 1, 2003.

              For these  purposes,  FFO means net  income  (loss)  (computed  in
     accordance with generally accepted  accounting  principles) before (i) gain
     (loss) on early  extinguishment  of debt, (ii) minority  interest in income
     and (iii) gain (loss) on disposition  of real estate,  adjusted as follows:
     (i) plus  depreciation and amortization  (including the Company's  pro-rata
     share of depreciation and amortization of  unconsolidated  equity interests
     and  amortization  of  assets  acquired  in a  merger,  including  property
     management  agreements and  goodwill),  and (ii) less FFO  attributable  to
     minority interest.  For these purposes, FFO per Common Share means FFO less
     preferred  stock dividends  (other than dividends on convertible  preferred
     stock) divided by the outstanding  weighted  average shares of Common Stock
     assuming conversion of all outstanding convertible securities and the Class
     B Common Stock.

              For these purposes, FFO per share of Common Stock (as defined) was
     $2.11 for the year ended December 31, 1998.

              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 June 1997, the Company contributed $22,500,000 (225,000 shares)
     of its Equity Stock,  Series A ("Equity  Stock") to a partnership  in which
     the Company is the general partner.  As a result of this contribution,  the
     Company  obtained a controlling  interest in the  Partnership  and began to
     consolidate  the accounts of the Partnership and therefore the equity stock
     is  eliminated  in  consolidation.  The Equity Stock ranks on a parity with
     Common Stock and junior to the Company's  Cumulative Senior Preferred Stock
     and Convertible  Preferred Stock with respect to general  preference rights
     and has a  liquidation  amount of ten times the amount  paid to each Common
     Share up to a maximum of $100 per share. Quarterly  distributions per share
     on the Equity Stock are equal to the lesser of (i) 10 times the amount paid
     per Common Stock or (ii) $2.20.

              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.  Distributions  declared  by the  Board of
     Directors  (including  distributions  to the holders of preferred stock) in
     1997 and 1996 were characterized entirely as ordinary income. For 1998, the
     Company's   dividends  for  the  first,  third,  and  fourth  quarter  were
     characterized as ordinary income in their entirety.  For the second quarter
     of 1998, 86.11% of the Company's  dividends were  characterized as ordinary
     income, and the remainder was characterized as a capital gain.

                                      F-19

<PAGE>

              The  following  summarizes  dividends  paid during 1998,  1997 and
     1996:

<TABLE>
<CAPTION>
                                                1998                     1997                    1996
                                       ---------------------     --------------------    ---------------------
                                       Per share      Total      Per share     Total     Per share     Total
                                       ---------    --------     ---------   --------    ---------   ---------
                                                         (in thousands, except per share data)
<S>                                      <C>        <C>          <C>         <C>           <C>       <C>   
Series A                                 $2.500       $4,563       $2.500      $4,563      $2.500      $4,563
Series B                                 $2.300        5,488       $2.300       5,488      $2.300       5,488
Series C                                 $1.688        2,024       $1.844       2,213      $1.840       2,212
Series D                                 $2.375        2,850       $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 G                                 $2.219       15,309       $2.219      15,309      $2.219      15,479
Series H                                 $2.112       14,259       $2.112      14,259      $1.978      13,348
Series I                                 $2.156        8,625       $2.156       8,625      $0.359       1,438
Series J                                 $2.000       12,000       $0.689       4,133           -           -
Convertible                              $1.032        2,163       $2.062       4,531      $2.063       4,679
Series CC                                     -            -     $260.000      15,328     $97.500       5,748
Mandatory Convertible Participating           -            -            -           -     $54.487       1,700
                                                    --------                 --------                ---------
                                                      78,375                   88,393                  68,599

Common                                   $0.880      100,726       $0.880      86,181      $0.880      67,709
                                                    --------                 --------                ---------
                                                    $179,101                 $174,574                $136,308
                                                    ========                 ========                =========
</TABLE>

              The  dividend  rate on the Series C  Preferred  Stock is  adjusted
     quarterly and is equal to the highest of one of three U.S. Treasury indices
     (Treasury  Bill Rate,  Ten Year  Constant  Maturity  Rate,  and Thirty Year
     Constant Maturity Rate) multiplied by 110%. However,  the dividend rate for
     any dividend  period will not be less than 6.75% per annum nor greater than
     10.75% per annum.  The dividend  rate with respect to the first  quarter of
     1999 will be equal to 6.75% per annum.

11.  STOCK OPTIONS

              The Company has a 1990 Stock Option Plan (which was adopted by the
     Board of Directors in 1990 and approved by the  shareholders  in 1991) (the
     "1990 Plan") which provides for the grant of  non-qualified  stock options.
     The Company has a 1994 Stock Option Plan (which was adopted by the Board of
     Directors and approved by the shareholders in 1994) (the "1994 Plan") and a
     1996 Stock  Option and  Incentive  Plan  (which was adopted by the Board of
     Directors and approved by the shareholders in 1996 (the "1996 Plan"),  each
     of which  provides  for the grant of  non-qualified  options and  incentive
     stock  options.  (The  1990  Plan,  the 1994  Plan  and the  1996  Plan are
     collectively referred to as the "Plans").  Under the Plans, the Company has
     granted  non-qualified  options  to  certain  directors,  officers  and key
     employees and service  providers 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 Plans vest over a three-year
     period from the date of grant at the rate of one-third  per year and expire
     (i) under the 1990 Plan, five years after the date they became  exercisable
     and (ii)  under the 1994 Plan and 1996  Plan,  ten years  after the date of
     grant.  The 1996 Plan also  provides for the grant of  restricted  stock to
     officers,  key employees and service  providers on terms  determined by the
     Audit  Committee of the Board of Directors;  no shares of restricted  stock
     have been granted.

                                      F-20

<PAGE>

              Information  with  respect to the Plans during 1998 and 1997 is as
     follows:

<TABLE>
<CAPTION>
                                                           1998                           1997
                                                --------------------------       ------------------------
                                                   Number         Average          Number        Average
                                                     of          Price per           of         Price per
                                                  Options          Share          Options         Share
                                                ----------      ----------       ----------     ---------
<S>                                             <C>                 <C>          <C>               <C>   
Options outstanding January 1                   1,696,215           $20.03       1,752,169         $19.02
  Granted                                         590,000            28.23         111,000          28.59
  Exercised                                      (219,596)           15.20         (94,786)         11.34
  Canceled                                        (12,334)           28.66         (72,168)         20.73
                                                ----------      ----------       ----------     ---------
Options outstanding December 31                 2,054,285           $22.85       1,696,215         $20.03
                                                                ==========                      =========

                                                                    $9.375                         $8.125
Option price range at December 31                               to $33.563                      to $30.00
                                                                              
Options exercisable at December 31              1,044,249           $19.94         778,012         $17.74
                                                ==========      ==========       ==========     =========

Options available for grant at December 31      2,881,337                        3,459,003
                                                ==========                       ==========

</TABLE>

              In 1996, the Company adopted the disclosure  requirement provision
     of SFAS 123 in accounting for stock-based compensation issued to employees.
     As of December 31, 1998 and 1997 there were 1,900,837 and 1,412,734 options
     outstanding,  respectively,  that  were  subject  to  SFAS  123  disclosure
     requirements.  The fair  value of these  options  was  estimated  utilizing
     prescribed  valuation  models and assumptions as of each  respective  grant
     date.  Based on the results of such estimates,  management  determined that
     there was no material  effect on net income or  earnings  per share for the
     years ended  December 31, 1998 and 1997.  The remaining  contractual  lives
     were 7.8 years and 7.9 years, respectively, at December 31, 1998 and 1997.

12.  DISCLOSURES REGARDING SEGMENT REPORTING

              In July 1997,  the FASB issued  Statement of Financial  Accounting
     Standards No. 131, "Disclosures about Segments of an Enterprise and Related
     Information"  ("FAS 131"),  which  establishes  standards  for the way that
     public business  enterprises report  information about operating  segments.
     This statement is effective for financial  statements for periods beginning
     after  December 15, 1997.  The Company has adopted this standard  effective
     for the year ended December 31, 1998.

              Description of each reportable segment
              --------------------------------------
              The   Company's   reportable   segments   reflect  the   Company's
     significant   operating   activities  that  are  evaluated   separately  by
     management.  The  company  has  three  reportable  segments:   self-storage
     operations,  commercial  property  operations,  and  portable  self-storage
     operations.

              The   self-storage   segment   comprises  the  direct   ownership,
     development,   and  operation  of  traditional   self-storage   facilities,
     management of these  properties for third parties and affiliated  entities,
     and the  ownership of equity  interests  in entities  that own self storage
     properties. The commercial property segment reflects the Company's interest
     in the ownership,  operation, and management of commercial properties.  The
     vast majority of the Company's 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  self-storage  and commercial  space for rent. The
     portable self storage segment  reflects the activities  conducted  entirely
     through PSPUD, the Company's subsidiary.

                                      F-21

<PAGE>

              Measurement of segment profit or loss
              -------------------------------------
              The Company  evaluates  performance and allocates  resources based
     upon the net segment income of each segment.  Net segment income represents
     net income in conformity with Generally Accepted Accounting  Principles and
     the Company's significant  accounting policies as denoted in Note 2, before
     interest and other income,  depreciation expense, interest expense, general
     and  administrative  expense,  and  minority  interest in income.  This net
     segment income is reflected on the Company's financial  statements not only
     as rental income and cost of operations,  but also as a component of equity
     in  earnings  of real  estate  entities.  The  accounting  policies  of the
     reportable  segments  are the same as those  described  in the  Summary  of
     Significant Accounting Policies.

              Corporate general and  administrative  expense,  interest expense,
     interest and other income,  depreciation  expense, and minority interest in
     income are not allocated to segments  because  management  does not utilize
     them to evaluate of the results of operations of each segment.

              Measurement of segment assets
              -----------------------------
              No segment data relative to assets or  liabilities is presented by
     the Company,  because  management does not evaluate  performance based upon
     the assets or  liabilities  of the segments.  Management  believes that the
     historical   cost  of  the  Company's  real  property  does  not  have  any
     significant  bearing upon the  performance of the  commercial  property and
     self storage  segments.  In the same manner,  management  believes that the
     book value of investment in real estate  entities as having no bearing upon
     the results of those investments. The only other types of assets that might
     be allocated to individual  segments are trade receivables,  payables,  and
     other assets which arise in the ordinary  course of business,  but they are
     also not a significant  factor in the  measurement of segment  performance.
     The company  performs  post-acquisition  analysis  of various  investments;
     however, such evaluations are beyond the scope of FAS 131.

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

                                      F-22

<PAGE>

<TABLE>
<CAPTION>
                                                 Year Ended December 31,                 Year Ended December 31,
                                                ------------------------               ------------------------ 
                                                   1998         1997        Change         1997         1996        Change
                                                -----------  -----------  -----------  -----------  -----------  -----------  
                                                                              (Dollar amounts in thousands)
RECONCILIATION OF REVENUES BY SEGMENT:

Self storage
------------
  <S>                                            <C>         <C>           <C>          <C>         <C>           <C>     
  Self-storage property rentals.............     $ 488,291   $ 385,540     $102,751     $  385,540  $  270,429    $115,111
  Facility management fees..................         6,123       9,706       (3,583)         9,706      13,474      (3,768)
  Equity in earnings - self storage property
     operations.............................        20,704      31,026      (10,322)        31,026      41,722     (10,696)
                                                -----------  -----------  -----------  -----------  -----------  -----------
      Self storage segment revenues.........       515,118     426,272       88,846        426,272     325,625     100,647
                                                -----------  -----------  -----------  -----------  -----------  -----------  

Portable self storage                               24,466       7,893       16,573          7,893         421       7,472
---------------------                           -----------  -----------  -----------  -----------  -----------  -----------  

Commercial  properties
  Commercial property rentals...............        23,112      40,575      (17,463)        40,575      23,576      16,999
  Facility management.......................            98         435         (337)           435         954        (519)
  Equity in earnings - commercial property
     operations.............................        23,655       1,428       22,227          1,428       2,667      (1,239)
                                                -----------  -----------  -----------  -----------  -----------  -----------  
      Commercial properties segment revenues        46,865      42,438        4,427         42,438      27,197      15,241
                                                -----------  -----------  -----------  -----------  -----------  -----------  

Other items not allocated to segments:
--------------------------------------
  Equity in earnings - Depreciation (self
     storage)...............................        (6,522)     10,935)       4,413        (10,935)    (15,709)      4,774
  Equity in earnings - Depreciation
     (commercial properties)................        (7,362)       (539)      (6,823)          (539)     (1,741)      1,202
  Equity in earnings - general and
     administrative and other...............        (3,873)     (3,411)        (462)        (3,411)     (4,818)      1,407
  Interest and other income.................        13,459       9,126        4,333          9,126       7,976       1,150
                                                -----------  -----------  -----------  -----------  -----------  -----------  
    Total other items not allocated to      
        segments............................        (4,298)     (5,759)       1,461         (5,759)    (14,292)      8,533
                                                -----------  -----------  -----------  -----------  -----------  -----------  
      Total consolidated Company revenues...     $ 582,151   $ 470,844     $111,307      $ 470,844   $ 338,951    $131,893
                                                ===========  ===========  ===========  ===========  ===========  ===========  
                                      F-23

<PAGE>

                                                Year Ended December 31,                 Year Ended December 31,
                                                ------------------------               ------------------------ 
                                                    1998         1997       Change          1997        1996        Change
                                                -----------  -----------  -----------  -----------  -----------  -----------
                                                                        (Dollar amounts in thousands)
  RECONCILIATION OF NET INCOME BY SEGMENT:
  <S>                                            <C>         <C>           <C>          <C>          <C>          <C>    
  Self storage
  ------------
  Self-storage properties...................     $ 338,915   $ 267,577     $71,338      $  267,577   $  187,935   $79,642
  Facility management.......................         5,069       8,257      (3,188)          8,257       11,654    (3,397)
  Equity in earnings - self storage property
     operations.............................        20,704      31,026     (10,322)         31,026       41,722   (10,696)
                                                -----------  -----------  -----------  -----------  -----------  -----------
      Total self storage segment income.....       364,688     306,860      57,828         306,860      241,311    65,549
                                                -----------  -----------  -----------  -----------  -----------  -----------

  Portable self storage segment income             (31,022)    (31,665)        643         (31,665)        (826)  (30,839)
  ------------------------------------          -----------  -----------  -----------  -----------  -----------  -----------

  Commercial properties.....................        15,161      23,910      (8,749)         23,910       12,826    11,084
  Facility management.......................            86          91          (5)             91          199      (108)
  Equity in earnings - commercial property
     operations.............................        23,655       1,428      22,227           1,428        2,667    (1,239)
                                                -----------  -----------  -----------  -----------  -----------  -----------
      Total commercial property segment income      38,902      25,429      13,473          25,429       15,692     9,737
                                                -----------  -----------  -----------  -----------  -----------  -----------

  Other items not allocated to segments:
  --------------------------------------
  Equity in earnings - depreciation
     (self-storage) ........................        (6,522)    (10,935)      4,413         (10,935)     (15,709)    4,774
  Equity in earnings - depreciation
     (commercial properties) ...............        (7,362)       (539)     (6,823)           (539)      (1,741)    1,202
  Equity in earnings - general and
     administrative  and other..............        (3,873)     (3,411)       (462)         (3,411)      (4,818)    1,407
  Depreciation - self storage...............      (102,537)    (82,165)    (20,372)        (82,165)     (59,757)  (22,408)
  Depreciation - commercial properties......        (4,945)     (9,191)      4,246          (9,191)      (5,210)   (3,981)
  Interest and other income.................        13,459       9,126       4,333           9,126        7,976     1,150
  General and administrative ...............        (8,972)     (6,384)     (2,588)         (6,384)      (5,524)     (860)
  Interest expense..........................        (4,507)     (6,792)      2,285          (6,792)      (8,482)    1,690
  Minority interest in income ..............       (20,290)    (11,684)     (8,606)        (11,684)      (9,363)   (2,321)
                                                -----------  -----------  -----------  -----------  -----------  -----------
      Total other items not allocated to segments (145,549)   (121,975)    (23,574)       (121,975)    (102,628)  (19,347)
                                                -----------  -----------  -----------  -----------  -----------  -----------

       Total consolidated company net income    $  227,019   $ 178,649     $48,370      $  178,649   $  153,549   $25,100
                                                ===========  ===========  ===========  ===========  ===========  ===========

</TABLE>

13. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT AUDITORS (UNAUDITED)

              On March 12, 1999, the Company and Storage Trust Realty  ("Storage
     Trust"),  a New York Stock Exchange listed REIT,  completed a merger.  As a
     result of the merger  the  Company  acquired  215  self-storage  facilities
     located in 16 states  totaling  approximately  12.0  million  net  rentable
     square feet and 104,000  units.  In the  merger,  each share of  beneficial
     interest of Storage  Trust was  exchanged  for 0.86 shares of the Company's
     common stock (approximately 13.0 million shares of the Company's stock were
     issued and an additional approximately 1.0 million shares were reserved for
     issuance   upon   conversion   of  units  in  Storage   Trust's   operating
     partnership).  This exchange ratio implied an enterprise  value for Storage
     Trust  of   approximately   $600  million,   including  the  assumption  of
     approximately $198 million of indebtedness.  The merger was structured as a
     tax free  transaction,  and will be accounted for using the purchase method
     of accounting.

                                      F-24

<PAGE>

              The  historical  operating  results of Storage  Trust has not been
     included in the  Company's  historical  operating  results.  Pro forma data
     (unaudited)  for the years ended  December  31, 1998 and 1997 as though the
     merger with Storage  Trust had been  effective  at the  beginning of fiscal
     1997 is set  forth  below  These  amounts  are  based  upon  the  Company's
     historical  amounts as adjusted  for the impact of the merger with  Storage
     Trust:

                                                       For the Years
                                                     Ended December 31,
                                            ------------------------------------
                                                  1998               1997
                                            -----------------  -----------------
                                            (in thousands except per share data)

Revenues..................................        $661,932          $546,510
Net income................................        $240,364          $196,202
Net income per common share (Basic).......          $1.28             $0.97
Net income per common share (Diluted).....          $1.27             $0.96

                  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  1997  or  future  results  of
         operations of the Company.  Certain pro forma  adjustments were made to
         the  historical  amounts to reflect (i) expected  reductions in general
         and administrative expenses, (ii) certain significant acquisitions made
         by Storage Trust  throughout 1997 and 1998,  (iii) estimated  increased
         interest costs to finance the cash portion of the acquisition  cost and
         (iv) estimated increase in depreciation and amortization expense.

14.  RECENT ACCOUNTING PRONOUNCEMENTS AND GUIDANCE

              Reporting Comprehensive Income
              ------------------------------
              In June 1997, the Financial  Accounting  Standards  Board ("FASB")
     issued  Statement of Financial  Accounting  Standards  No. 130,  "Reporting
     Comprehensive   Income"  ("FAS  130"),  which  establishes   standards  for
     reporting  and display of  comprehensive  income and its  components.  This
     statement  requires  a  separate  statement  to report  the  components  of
     comprehensive  income for each  period  reported.  The  provisions  of this
     statement are effective for fiscal years beginning after December 15, 1997.
     The Company has  implemented FAS 130 for the fiscal year ended December 31,
     1998, but the implementation has no impact because the Company has no items
     of comprehensive income (as defined by FAS 130).

              Accounting for Derivative Instruments and Hedging Activities
              ------------------------------------------------------------
              In June 1998,  the FASB issued  Statement of Financial  Accounting
     Standards  No. 133,  "Accounting  for  Derivative  Instruments  and Hedging
     Activities"  ("FAS  133").  This  statement  provides a  comprehensive  and
     consistent  standard for the recognition and measurement of derivatives and
     hedging  activities.  The  provisions  of this  statement are effective for
     years  beginning  after June 15, 1999,  but companies can early adopt as of
     the  beginning  of any fiscal  quarter  that  begins  after June 1998.  The
     Company  expects  that  FAS 133 will  have no  impact  upon  the  Company's
     financial  statements  because the Company has no financial  instruments or
     hedging activities that are addressed by FAS 133.

              Emerging  Issues  Task  Force  Discussion  of   Capitalization  of
              ------------------------------------------------------------------
              Acquisition Costs
              -----------------
              In March 1998, The Emerging Issues Task Force ("EITF") of the FASB
     issued  guidance  (the "97-11  Guidance")  with respect to Issue No. 97-11,
     "Accounting   for  Internal   Costs   Relating  to  Real  Estate   Property
     Acquisitions."  The 97-11  Guidance  provides  that a Company shall expense
     internal  preacquisition  costs (such as costs of an internal  acquisitions
     department) related to the purchase of an operating  property.  The Company
     does not capitalize such internal  preacquisition costs with respect to the
     acquisition of operating  real estate  facilities.  Accordingly,  the 97-11
     Guidance had no impact upon the Company's  financial  statements  and would
     have had no impact  upon the  Company's  financial  statements  for periods
     prior to the issuance of the 97-11 Guidance.

                                      F-25

<PAGE>

15.  COMMITMENTS AND CONTINGENCIES

              Lease obligations
              -----------------
              Thirty-eight of the forty-three facilities operated by PSPUD as of
     December 31, 1998 are located in buildings  leased from third parties.  The
     lease terms range from four to nine years with  renewal  options at varying
     terms.   Future   minimum  lease   payments  at  December  31,  1998  under
     non-cancelable operating leases are as follows:

            1999 ....................        $  10,480
            2000.....................           10,069
            2001.....................            9,221
            2002.....................            6,263
            2003.....................            1,531
            Thereafter...............            1,867
                                             ----------
                                             $  39,431
                                             ==========

              Legal proceedings
              -----------------
              During 1997,  three cases were filed against the Company.  Each of
     the plaintiffs in these cases is suing the Company on behalf of a purported
     class of California  tenants who rented storage spaces from the Company and
     contends  that the  Company's  fees  for late  payments  under  its  rental
     agreements  for  storage  space  constitutes   unlawful  "penalties"  under
     California  law. None of the  plaintiffs  has assigned any dollar amount to
     the claims.

              The lower court has  dismissed  one of the cases and the plaintiff
     in that case has appealed  that  dismissal.  The Company is  continuing  to
     vigorously contest the claims in all three cases.

              There  are no  other  material  proceedings  pending  against  the
     Company or any of its subsidiaries,  other than ordinary routine litigation
     incidental to their business.

                                      F-26

<PAGE>

16.  SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                              Three months ended
                                         ------------------------------------------------------------     
                                          March 31,        June 30,      September 30,    December 31,
                                            1998             1998            1998             1998
                                         -----------      -----------     -----------     -----------     
                                                     (in thousands, except per share data)
<S>                                       <C>              <C>             <C>              <C>     
Revenues                                   $142,566         $141,041        $149,969         $148,575
                                         ===========      ===========     ===========     ===========     
Net income                                 $ 48,364         $ 57,199        $ 62,286         $ 59,170
                                         ===========      ===========     ===========     ===========     

Per Common Share (Note 2):
   Net income -  Basic                     $   0.26         $   0.33        $   0.37         $   0.35
                                         ===========      ===========     ===========     ===========     
   Net income -  Diluted                   $   0.26         $   0.32        $   0.37         $   0.35
                                         ===========      ===========     ===========     ===========


                                                              Three months ended
                                         ------------------------------------------------------------     
                                          March 31,        June 30,      September 30,    December 31,
                                            1997             1997            1997             1997
                                         -----------      -----------     -----------     -----------     
                                                     (in thousands, except per share data)
Revenues                                  $ 100,740        $ 109,345       $ 126,007        $ 134,752
                                         ===========      ===========     ===========     ===========     
Net income                                $  42,318        $  44,251       $  46,548        $  45,532
                                         ===========      ===========     ===========     ===========     

Per Common Share (Note 2):
   Net income - Basic                     $    0.26        $    0.14(A)    $    0.27        $    0.24
                                         ===========      ===========     ===========     ===========     
   Net income - Diluted                   $    0.26        $    0.14(A)    $    0.27        $    0.24
                                         ===========      ===========     ===========     ===========     
</TABLE>

(A)  Includes  the effect of a  $13,412,000  special  dividend on the  Company's
     Series CC Convertible Preferred Stock.

                                      F-27

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
SELF -STORAGE FACILITIES
  <S>         <C>                                    <C>           <C>           <C>              <C>                       
   1/1/81     Newport News / Jefferson Avenue I       $849,000      $108,000     $1,071,000       $471,000                  
   1/1/81     Virginia Beach / Diamond Springs         936,000       186,000      1,094,000        507,000                  
   8/1/81     San Jose / Snell                                       312,000      1,815,000        314,000                  
   10/1/81    Tampa / Lazy Lane                                      282,000      1,899,000        536,000                  
   6/1/82     San Jose / Tully I                     1,199,000       645,000      1,579,000        381,000                  
   6/1/82     San Carlos / Storage                   1,460,000       780,000      1,387,000        425,000                  
   6/1/82     Mountain View                          2,064,000     1,180,000      1,182,000        486,000                  
   6/1/82     Cupertino / Storage                    1,620,000       572,000      1,270,000        332,000                  
   10/1/82    Sorrento Valley                        1,487,000     1,002,000      1,343,000        208,000                  
   10/1/82    Northwood                              2,242,000     1,034,000      1,522,000        140,000                  
   3/1/85     Houston / Westheimer                     716,000       850,000      1,179,000        670,000                  
   3/3/86     Tampa / 56Th                             634,000       450,000      1,360,000        361,000                  
  12/31/86    Monrovia / Myrtle Avenue               1,667,000     1,149,000      2,446,000        138,000                  
  12/31/86    Chatsworth / Topanga                   1,100,000     1,447,000      1,243,000        222,000                  
  12/31/86    Houston / Larkwood                       381,000       247,000        602,000        323,000                  
  12/31/86    Northridge                             2,501,000     3,624,000      1,922,000      2,128,000                  
  12/31/86    Santa Clara / Duane                    1,029,000     1,950,000      1,004,000        280,000                  
  12/31/86    Oyster Point                                         1,569,000      1,490,000        278,000                  
  12/31/86    Walnut A                                               767,000        613,000        185,000                  
   6/7/88     Mesquite / Sorrento Drive                              928,000      1,011,000        678,000                  
   1/1/92     Costa Mesa II                                          533,000        980,000        593,000                  
   3/1/92     Dallas / Walnut St.                                    537,000      1,008,000        173,000                  
   5/1/92     Camp Creek                                             576,000      1,075,000        141,000                  
   8/1/92     Tampa/N.Dale Mabry                                     809,000      1,537,000        281,000                  
   9/1/92     Orlando/W. Colonial                                    368,000        713,000         92,000                  
   9/1/92     Jacksonville/Arlington                                 554,000      1,065,000        131,000                  
   10/1/92    Stockton/Mariners                                      381,000        730,000         82,000                  
  11/18/92    Virginia Beach/General Booth Blvd                      599,000      1,119,000        197,000                  
   1/1/93     Redwood City/Storage                                   907,000      1,684,000        169,000                  
   1/1/93     City Of Industry                                     1,611,000      2,991,000        190,000                  
   1/1/93     San Jose/Felipe Ii                                   1,124,000      2,088,000        206,000                  
   1/1/93     Baldwin Park/Garvey Ave                                840,000      1,561,000        183,000                  
   3/19/93    Westminister / W. 80Th                                 840,000      1,586,000        120,000                  
   4/26/93    Costa Mesa / Newport                     952,000     2,141,000      3,989,000         83,000                  
   5/13/93    Austin /N. Lamar                                       919,000      1,695,000        144,000                  
   5/28/93    Jacksonville/Phillips Hwy.                             406,000        771,000        127,000                  
   5/28/93    Tampa/Nebraska Avenue                                  550,000      1,043,000         72,000                  
   6/9/93     Calabasas / Ventura Blvd.                            1,762,000      3,269,000        138,000                  
   6/9/93     Carmichael / Fair Oaks                                 573,000      1,052,000        118,000                  
   6/9/93     Santa Clara / Duane II                                 454,000        834,000         57,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
SELF -STORAGE FACILITIES
  <S>         <C>                                 <C>           <C>            <C>           <C>         
   1/1/81     Newport News / Jefferson Avenue I    $108,000     $1,542,000     $1,650,000    $1,082,000
   1/1/81     Virginia Beach / Diamond Springs      186,000      1,601,000      1,787,000     1,075,000
   8/1/81     San Jose / Snell                      312,000      2,129,000      2,441,000     1,459,000
   10/1/81    Tampa / Lazy Lane                     282,000      2,435,000      2,717,000     1,652,000
   6/1/82     San Jose / Tully I                    645,000      1,960,000      2,605,000     1,289,000
   6/1/82     San Carlos / Storage                  780,000      1,812,000      2,592,000     1,228,000
   6/1/82     Mountain View                       1,180,000      1,668,000      2,848,000     1,133,000
   6/1/82     Cupertino / Storage                   572,000      1,602,000      2,174,000     1,050,000
   10/1/82    Sorrento Valley                     1,002,000      1,551,000      2,553,000       981,000
   10/1/82    Northwood                           1,034,000      1,662,000      2,696,000     1,082,000
   3/1/85     Houston / Westheimer                  850,000      1,849,000      2,699,000       989,000
   3/3/86     Tampa / 56Th                          450,000      1,721,000      2,171,000       880,000
  12/31/86    Monrovia / Myrtle Avenue            1,149,000      2,584,000      3,733,000     1,262,000
  12/31/86    Chatsworth / Topanga                1,447,000      1,465,000      2,912,000       785,000
  12/31/86    Houston / Larkwood                    247,000        925,000      1,172,000       396,000
  12/31/86    Northridge                          3,624,000      4,050,000      7,674,000       972,000
  12/31/86    Santa Clara / Duane                 1,950,000      1,284,000      3,234,000       660,000
  12/31/86    Oyster Point                        1,569,000      1,768,000      3,337,000       835,000
  12/31/86    Walnut A                              767,000        798,000      1,565,000       373,000
   6/7/88     Mesquite / Sorrento Drive             928,000      1,689,000      2,617,000       893,000
   1/1/92     Costa Mesa II                         535,000      1,571,000      2,106,000       834,000
   3/1/92     Dallas / Walnut St.                   537,000      1,181,000      1,718,000     1,122,000
   5/1/92     Camp Creek                            576,000      1,216,000      1,792,000       346,000
   8/1/92     Tampa/N.Dale Mabry                    809,000      1,818,000      2,627,000       511,000
   9/1/92     Orlando/W. Colonial                   368,000        805,000      1,173,000       228,000
   9/1/92     Jacksonville/Arlington                554,000      1,196,000      1,750,000       334,000
   10/1/92    Stockton/Mariners                     381,000        812,000      1,193,000       214,000
  11/18/92    Virginia Beach/General Booth Blvd     599,000      1,316,000      1,915,000       341,000
   1/1/93     Redwood City/Storage                  907,000      1,853,000      2,760,000       468,000
   1/1/93     City Of Industry                    1,611,000      3,181,000      4,792,000       741,000
   1/1/93     San Jose/Felipe Ii                  1,124,000      2,294,000      3,418,000       576,000
   1/1/93     Baldwin Park/Garvey Ave               840,000      1,744,000      2,584,000       426,000
   3/19/93    Westminister / W. 80Th                840,000      1,706,000      2,546,000       420,000
   4/26/93    Costa Mesa / Newport                2,141,000      4,072,000      6,213,000       929,000
   5/13/93    Austin /N. Lamar                      919,000      1,839,000      2,758,000       434,000
   5/28/93    Jacksonville/Phillips Hwy.            406,000        898,000      1,304,000       228,000
   5/28/93    Tampa/Nebraska Avenue                 550,000      1,115,000      1,665,000       267,000
   6/9/93     Calabasas / Ventura Blvd.           1,762,000      3,407,000      5,169,000       811,000
   6/9/93     Carmichael / Fair Oaks                573,000      1,170,000      1,743,000       279,000
   6/9/93     Santa Clara / Duane II                454,000        891,000      1,345,000       205,000

</TABLE>
                                      F-28

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>              <C>                      
   6/10/93    Citrus Heights / Sylvan Road                           438,000        822,000        117,000                  
   6/25/93    Trenton / Allen Road                                   623,000      1,166,000        102,000                  
   6/30/93    Los Angeles/W.Jefferson Blvd                         1,085,000      2,017,000         91,000                  
   7/16/93    Austin / So. Congress Ave                              777,000      1,445,000        241,000                  
   8/1/93     Gaithersburg / E. Diamond                              602,000      1,139,000         99,000                  
   8/11/93    Atlanta / Northside                                  1,150,000      2,149,000        134,000                  
   8/11/93    Smyrna/ Rosswill Rd                                    446,000        842,000        111,000                  
   8/13/93    So. Brunswick/Highway 1                              1,076,000      2,033,000        157,000                  
   8/31/93    Austin / N. Lamar Iv                                   502,000        941,000        100,000                  
   10/1/93    Denver / Federal Blvd                                  875,000      1,633,000         87,000                  
   10/1/93    Citrus Heights                                         527,000        987,000         70,000                  
   10/1/93    Lakewood / 6Th Ave                                     798,000      1,489,000         59,000                  
  10/27/93    Houston / S Shaver St                                  481,000        896,000        103,000                  
   11/3/93    Upland/S. Euclid Ave.                                  431,000        807,000        344,000                  
  11/16/93    Norcross / Jimmy Carter                                627,000      1,167,000        103,000                  
  11/16/93    Seattle / 13Th                                       1,085,000      2,015,000        259,000                  
   12/9/93    Salt Lake City                                         765,000      1,422,000        218,000                  
  12/16/93    West Valley City                                       683,000      1,276,000        107,000                  
  12/21/93    Pinellas Park / 34Th St. W                             607,000      1,134,000        123,000                  
  12/28/93    New Orleans / S. Carrollton Ave                      1,575,000      2,941,000        145,000                  
  12/29/93    Orange / Main Ii                                     1,238,000      2,317,000      1,321,000                  
  12/29/93    Sunnyvale / Wedell                                     554,000      1,037,000        673,000                  
  12/29/93    El Cajon / Magnolia                                    421,000        791,000        499,000                  
  12/29/93    Orlando / S. Semoran Blvd.                             462,000        872,000        585,000                  
  12/29/93    Tampa / W. Hillsborough Ave                            352,000        665,000        358,000                  
  12/29/93    Irving / West Loop 12                                  341,000        643,000        110,000                  
  12/29/93    Fullerton / W. Commonwealth                            904,000      1,687,000        973,000                  
  12/29/93    N. Lauderdale / Mcnab Rd                               628,000      1,182,000        654,000                  
  12/29/93    Los Alimitos / Cerritos                                695,000      1,299,000        654,000                  
  12/29/93    Frederick / Prospect Blvd.                             573,000      1,082,000        455,000                  
  12/29/93    Indianapolis / E. Washington                           403,000        775,000        402,000                  
  12/29/93    Gardena / Western Ave.                                 552,000      1,035,000        533,000                  
  12/29/93    Palm Bay / Bobcock Street                              409,000        775,000        435,000                  
   1/10/94    Hialeah / W. 20Th Ave.                               1,855,000      3,497,000        155,000                  
   1/12/94    Sunnyvale / N. Fair Oaks Ave                           689,000      1,285,000        269,000                  
   1/12/94    Honolulu / Iwaena                                            0      3,382,000        617,000                  
   1/12/94    Miami / Golden Glades                                  579,000      1,081,000        308,000                  
   1/21/94    Herndon / Centreville Road                           1,584,000      2,981,000         70,000                  
   2/8/94     Las Vegas/S. MLK Blvd.                               1,383,000      2,592,000        963,000                  
   2/28/94    Arlingtn/Old Jeffersn Davishwy                         735,000      1,399,000        136,000                  
   3/8/94     Beaverton / Sw Barnes Road                             942,000      1,810,000        101,000                  
   3/21/94    Austin / Arboretum                                     473,000        897,000      2,717,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
   6/10/93    Citrus Heights / Sylvan Road          438,000        939,000      1,377,000       262,000
   6/25/93    Trenton / Allen Road                  623,000      1,268,000      1,891,000       288,000
   6/30/93    Los Angeles/W.Jefferson Blvd        1,085,000      2,108,000      3,193,000       466,000
   7/16/93    Austin / So. Congress Ave             777,000      1,686,000      2,463,000       458,000
   8/1/93     Gaithersburg / E. Diamond             602,000      1,238,000      1,840,000       276,000
   8/11/93    Atlanta / Northside                 1,150,000      2,283,000      3,433,000       520,000
   8/11/93    Smyrna/ Rosswill Rd                   446,000        953,000      1,399,000       229,000
   8/13/93    So. Brunswick/Highway 1             1,076,000      2,190,000      3,266,000       508,000
   8/31/93    Austin / N. Lamar Iv                  502,000      1,041,000      1,543,000       238,000
   10/1/93    Denver / Federal Blvd                 875,000      1,720,000      2,595,000       369,000
   10/1/93    Citrus Heights                        527,000      1,057,000      1,584,000       231,000
   10/1/93    Lakewood / 6Th Ave                    798,000      1,548,000      2,346,000       333,000
  10/27/93    Houston / S Shaver St                 481,000        999,000      1,480,000       227,000
   11/3/93    Upland/S. Euclid Ave.                 508,000      1,074,000      1,582,000       232,000
  11/16/93    Norcross / Jimmy Carter               627,000      1,270,000      1,897,000       272,000
  11/16/93    Seattle / 13Th                      1,085,000      2,274,000      3,359,000       523,000
   12/9/93    Salt Lake City                        765,000      1,640,000      2,405,000       423,000
  12/16/93    West Valley City                      683,000      1,383,000      2,066,000       303,000
  12/21/93    Pinellas Park / 34Th St. W            607,000      1,257,000      1,864,000       287,000
  12/28/93    New Orleans / S. Carrollton Ave     1,575,000      3,086,000      4,661,000       631,000
  12/29/93    Orange / Main Ii                    1,593,000      3,283,000      4,876,000       636,000
  12/29/93    Sunnyvale / Wedell                    725,000      1,539,000      2,264,000       302,000
  12/29/93    El Cajon / Magnolia                   542,000      1,169,000      1,711,000       224,000
  12/29/93    Orlando / S. Semoran Blvd.            601,000      1,318,000      1,919,000       258,000
  12/29/93    Tampa / W. Hillsborough Ave           436,000        939,000      1,375,000       185,000
  12/29/93    Irving / West Loop 12                 355,000        739,000      1,094,000       152,000
  12/29/93    Fullerton / W. Commonwealth         1,160,000      2,404,000      3,564,000       463,000
  12/29/93    N. Lauderdale / Mcnab Rd              798,000      1,666,000      2,464,000       323,000
  12/29/93    Los Alimitos / Cerritos               874,000      1,774,000      2,648,000       341,000
  12/29/93    Frederick / Prospect Blvd.            692,000      1,418,000      2,110,000       285,000
  12/29/93    Indianapolis / E. Washington          505,000      1,075,000      1,580,000       207,000
  12/29/93    Gardena / Western Ave.                695,000      1,425,000      2,120,000       263,000
  12/29/93    Palm Bay / Bobcock Street             525,000      1,094,000      1,619,000       213,000
   1/10/94    Hialeah / W. 20Th Ave.              1,590,000      3,917,000      5,507,000       785,000
   1/12/94    Sunnyvale / N. Fair Oaks Ave          657,000      1,586,000      2,243,000       305,000
   1/12/94    Honolulu / Iwaena                           0      3,999,000      3,999,000       734,000
   1/12/94    Miami / Golden Glades                 557,000      1,411,000      1,968,000       287,000
   1/21/94    Herndon / Centreville Road          1,358,000      3,277,000      4,635,000       499,000
   2/8/94     Las Vegas/S. MLK Blvd.              1,436,000      3,502,000      4,938,000       680,000
   2/28/94    Arlingtn/Old Jeffersn Davishwy        630,000      1,640,000      2,270,000       350,000
   3/8/94     Beaverton / Sw Barnes Road            807,000      2,046,000      2,853,000       434,000
   3/21/94    Austin / Arboretum                  1,554,000      2,533,000      4,087,000       227,000

</TABLE>
                                      F-29

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                                  <C>            <C>            <C>                        
   3/25/94    Tinton Falls / Shrewsbury Ave                        1,074,000      2,033,000        123,000                  
   3/25/94    East Brunswick / Milltown Road                       1,282,000      2,411,000        135,000                  
   3/25/94    Mercerville / Quakerbridge Road                      1,109,000      2,111,000         95,000                  
   3/31/94    Hypoluxo                                               735,000      1,404,000      1,728,000                  
   4/26/94    No. Highlands / Roseville Road                         980,000      1,835,000        122,000                  
   5/12/94    Fort Pierce/Okeechobee Road                            438,000        842,000        110,000                  
   5/24/94    Hempstead/Peninsula Blvd.                            2,053,000      3,832,000        103,000                  
   5/24/94    La/Huntington                                          483,000        905,000         89,000                  
   6/9/94     Chattanooga / Brainerd Road                            613,000      1,170,000         88,000                  
   6/9/94     Chattanooga / Ringgold Road                            761,000      1,433,000        147,000                  
   6/18/94    Las Vegas / S. Valley View Blvd                        837,000      1,571,000         80,000                  
   6/23/94    Las Vegas / Tropicana Ii                               750,000      1,408,000        116,000                  
   6/23/94    Henderson / Green Valley Pkwy                        1,047,000      1,960,000         98,000                  
   6/24/94    Las Vegas / N. Lamb Blvd.                              869,000      1,629,000        193,000                  
   6/30/94    Birmingham / W. Oxmoor Road                            532,000      1,004,000        285,000                  
   7/20/94    Milpitas / Dempsey Road                              1,260,000      2,358,000        104,000                  
   8/17/94    New Orleans/I-10                                       784,000      1,470,000         94,000                  
   8/17/94    Beaverton / S.W. Denny Road                            663,000      1,245,000         52,000                  
   8/17/94    Irwindale / Central Ave.                               674,000      1,263,000         52,000                  
   8/17/94    Suitland / St. Barnabas Rd                           1,530,000      2,913,000        116,000                  
   8/17/94    North Brunswick / How Lane                           1,238,000      2,323,000         23,000                  
   8/17/94    Lombard / 64Th                                         847,000      1,583,000         64,000                  
   8/17/94    Alsip / 27Th                                           406,000        765,000         56,000                  
   9/15/94    Huntsville / Old Monrovia Road                         613,000      1,157,000        106,000                  
   9/27/94    West Haven / Bull Hill Lane                            455,000        873,000         68,000                  
   9/30/94    San Francisco / Marin St.                            1,227,000      2,339,000      1,138,000                  
   9/30/94    Baltimore / Hillen Street                              580,000      1,095,000         79,000                  
   9/30/94    San Francisco /10Th & Howard                         1,423,000      2,668,000         91,000                  
   9/30/94    Montebello / E. Whittier                               383,000        732,000         74,000                  
   9/30/94    Arlington / Collins                                    228,000        435,000        163,000                  
   9/30/94    Miami / S.W. 119Th Ave                                 656,000      1,221,000         31,000                  
   9/30/94    Blackwood / Erial Road                                 774,000      1,437,000         39,000                  
   9/30/94    Concord / Monument                                   1,092,000      2,027,000        185,000                  
   9/30/94    Rochester / Lee Road                                   469,000        871,000         79,000                  
   9/30/94    Houston / Bellaire                                     623,000      1,157,000         71,000                  
   9/30/94    Austin / Lamar Blvd I                                  781,000      1,452,000         77,000                  
   9/30/94    Milwaukee / Lovers Lane Rd                             469,000        871,000         82,000                  
   9/30/94    Monterey / Del Rey Oaks                              1,093,000      1,897,000         61,000                  
   9/30/94    St. Petersburg / 66Th St.                              427,000        793,000         82,000                  
   9/30/94    Dayton Bch / N. Nova Road                              396,000        735,000         72,000                  
   9/30/94    Maple Shade / Route 38                                 994,000      1,846,000         61,000                  
   9/30/94    Marlton / Route 73 N.                                  938,000      1,742,000         49,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                 <C>            <C>            <C>           <C>         
   3/25/94    Tinton Falls / Shrewsbury Ave         921,000      2,309,000      3,230,000       495,000
   3/25/94    East Brunswick / Milltown Road      1,099,000      2,729,000      3,828,000       569,000
   3/25/94    Mercerville / Quakerbridge Road       950,000      2,365,000      3,315,000       479,000
   3/31/94    Hypoluxo                              630,000      3,237,000      3,867,000     1,114,000
   4/26/94    No. Highlands / Roseville Road        840,000      2,097,000      2,937,000       434,000
   5/12/94    Fort Pierce/Okeechobee Road           375,000      1,015,000      1,390,000       222,000
   5/24/94    Hempstead/Peninsula Blvd.           1,763,000      4,225,000      5,988,000       799,000
   5/24/94    La/Huntington                         414,000      1,063,000      1,477,000       203,000
   6/9/94     Chattanooga / Brainerd Road           525,000      1,346,000      1,871,000       269,000
   6/9/94     Chattanooga / Ringgold Road           653,000      1,688,000      2,341,000       344,000
   6/18/94    Las Vegas / S. Valley View Blvd       718,000      1,770,000      2,488,000       352,000
   6/23/94    Las Vegas / Tropicana Ii              643,000      1,631,000      2,274,000       326,000
   6/23/94    Henderson / Green Valley Pkwy         898,000      2,207,000      3,105,000       438,000
   6/24/94    Las Vegas / N. Lamb Blvd.             745,000      1,946,000      2,691,000       389,000
   6/30/94    Birmingham / W. Oxmoor Road           461,000      1,360,000      1,821,000       364,000
   7/20/94    Milpitas / Dempsey Road             1,080,000      2,642,000      3,722,000       523,000
   8/17/94    New Orleans/I-10                      672,000      1,676,000      2,348,000       307,000
   8/17/94    Beaverton / S.W. Denny Road           568,000      1,392,000      1,960,000       249,000
   8/17/94    Irwindale / Central Ave.              578,000      1,411,000      1,989,000       254,000
   8/17/94    Suitland / St. Barnabas Rd          1,312,000      3,247,000      4,559,000       614,000
   8/17/94    North Brunswick / How Lane          1,062,000      2,522,000      3,584,000       455,000
   8/17/94    Lombard / 64Th                        726,000      1,768,000      2,494,000       322,000
   8/17/94    Alsip / 27Th                          348,000        879,000      1,227,000       169,000
   9/15/94    Huntsville / Old Monrovia Road        525,000      1,351,000      1,876,000       260,000
   9/27/94    West Haven / Bull Hill Lane           390,000      1,006,000      1,396,000       210,000
   9/30/94    San Francisco / Marin St.           1,371,000      3,333,000      4,704,000       595,000
   9/30/94    Baltimore / Hillen Street             497,000      1,257,000      1,754,000       222,000
   9/30/94    San Francisco /10Th & Howard        1,221,000      2,961,000      4,182,000       515,000
   9/30/94    Montebello / E. Whittier              329,000        860,000      1,189,000       157,000
   9/30/94    Arlington / Collins                   195,000        631,000        826,000       140,000
   9/30/94    Miami / S.W. 119Th Ave                563,000      1,345,000      1,908,000       232,000
   9/30/94    Blackwood / Erial Road                663,000      1,587,000      2,250,000       277,000
   9/30/94    Concord / Monument                    936,000      2,368,000      3,304,000       421,000
   9/30/94    Rochester / Lee Road                  402,000      1,017,000      1,419,000       180,000
   9/30/94    Houston / Bellaire                    534,000      1,317,000      1,851,000       231,000
   9/30/94    Austin / Lamar Blvd I                 669,000      1,641,000      2,310,000       288,000
   9/30/94    Milwaukee / Lovers Lane Rd            402,000      1,020,000      1,422,000       182,000
   9/30/94    Monterey / Del Rey Oaks               903,000      2,148,000      3,051,000       418,000
   9/30/94    St. Petersburg / 66Th St.             366,000        936,000      1,302,000       173,000
   9/30/94    Dayton Bch / N. Nova Road             339,000        864,000      1,203,000       156,000
   9/30/94    Maple Shade / Route 38                852,000      2,049,000      2,901,000       362,000
   9/30/94    Marlton / Route 73 N.                 804,000      1,925,000      2,729,000       338,000

</TABLE>
                                      F-30

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>            <C>                        
   9/30/94    Naperville / E. Ogden Ave                              683,000      1,268,000         50,000                  
   9/30/94    Long Beach / South Street                            1,778,000      3,307,000        146,000                  
   9/30/94    Aloha / S.W. Shaw                                      805,000      1,495,000         77,000                  
   9/30/94    Alexandria / S. Pickett                              1,550,000      2,879,000         53,000                  
   9/30/94    Houston / Highway 6 North                            1,120,000      2,083,000        135,000                  
   9/30/94    San Antonio/Nacogdoches Rd                             571,000      1,060,000         68,000                  
   9/30/94    San Ramon/San Ramon Valley                           1,530,000      2,840,000        227,000                  
   9/30/94    San Rafael / Merrydale Rd                            1,705,000      3,165,000         84,000                  
   9/30/94    San Antonio / Austin Hwy                               592,000      1,098,000        102,000                  
   9/30/94    Sharonville / E. Kemper                                574,000      1,070,000         65,000                  
   10/7/94    Alcoa / Airport Plaza Drive                            543,000      1,017,000         81,000                  
  10/13/94    Davie / State Road 84                                  744,000      1,467,000        806,000                  
  10/13/94    Carrollton / Marsh Lane                                770,000      1,437,000      1,351,000                  
  10/31/94    Sherman Oaks / Van Nuys Blvd                         1,278,000      2,461,000        864,000                  
  12/19/94    Salt Lake City/West North Temple                       490,000        917,000         87,000                  
  12/27/94    Knoxville / Chapman Highway                            753,000      1,411,000        198,000                  
  12/28/94    Milpitas / Watson Ii                                 1,575,000      2,925,000        110,000                  
  12/28/94    Las Vegas / Jones Blvd                               1,208,000      2,243,000         94,000                  
  12/28/94    Venice / Guthrie                                       578,000      1,073,000         57,000                  
  12/30/94    Apple Valley / Foliage Ave                             910,000      1,695,000         99,000                  
   1/4/95     Chula Vista / Main Street                              735,000      1,802,000        108,000                  
   1/5/95     Pantego / West Park                                    315,000        735,000        105,000                  
   1/12/95    Roswell / Alpharetta                                   423,000        993,000         86,000                  
   1/23/95    North Bergen / Tonne                                 1,564,000      3,772,000        111,000                  
   1/23/95    San Leandro / Hesperian                                734,000      1,726,000         67,000                  
   1/24/95    Nashville / Elm Hill                                   338,000        791,000        207,000                  
   2/3/95     Reno / S. Mccarron Blvd                              1,080,000      2,537,000         80,000                  
   2/15/95    Schiller Park                                        1,688,000      3,939,000        120,000                  
   2/15/95    Lansing                                              1,514,000      3,534,000         49,000                  
   2/15/95    Pleasanton                                           1,257,000      2,932,000         25,000                  
   2/15/95    LA/Sepulveda                                         1,453,000      3,390,000         58,000                  
   2/28/95    Decatur / Flat Shoal                                   970,000      2,288,000        177,000                  
   2/28/95    Smyrna / S. Cobb                                       663,000      1,559,000        118,000                  
   2/28/95    Downey / Bellflower                                    916,000      2,158,000         44,000                  
   2/28/95    Vallejo / Lincoln                                      445,000      1,052,000         77,000                  
   2/28/95    Lynnwood / 180Th St                                    516,000      1,205,000        112,000                  
   2/28/95    Kent / Pacific Hwy                                     728,000      1,711,000         84,000                  
   2/28/95    Kirkland                                             1,254,000      2,932,000         78,000                  
   2/28/95    Federal Way/Pacific                                    785,000      1,832,000        187,000                  
   2/28/95    Tampa / S. Dale                                        791,000      1,852,000        141,000                  
   2/28/95    Burlingame/Adrian Rd                                 2,280,000      5,349,000         72,000                  
   2/28/95    Miami / Cloverleaf                                     606,000      1,426,000         80,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
   9/30/94    Naperville / E. Ogden Ave             585,000      1,416,000      2,001,000       255,000
   9/30/94    Long Beach / South Street           1,524,000      3,707,000      5,231,000       664,000
   9/30/94    Aloha / S.W. Shaw                     690,000      1,687,000      2,377,000       296,000
   9/30/94    Alexandria / S. Pickett             1,329,000      3,153,000      4,482,000       549,000
   9/30/94    Houston / Highway 6 North             960,000      2,378,000      3,338,000       432,000
   9/30/94    San Antonio/Nacogdoches Rd            489,000      1,210,000      1,699,000       214,000
   9/30/94    San Ramon/San Ramon Valley          1,311,000      3,286,000      4,597,000       613,000
   9/30/94    San Rafael / Merrydale Rd           1,461,000      3,493,000      4,954,000       608,000
   9/30/94    San Antonio / Austin Hwy              507,000      1,285,000      1,792,000       234,000
   9/30/94    Sharonville / E. Kemper               492,000      1,217,000      1,709,000       219,000
   10/7/94    Alcoa / Airport Plaza Drive           465,000      1,176,000      1,641,000       253,000
  10/13/94    Davie / State Road 84                 638,000      2,379,000      3,017,000       403,000
  10/13/94    Carrollton / Marsh Lane             1,022,000      2,536,000      3,558,000       409,000
  10/31/94    Sherman Oaks / Van Nuys Blvd        1,423,000      3,180,000      4,603,000       574,000
  12/19/94    Salt Lake City/West North Temple      420,000      1,074,000      1,494,000       197,000
  12/27/94    Knoxville / Chapman Highway           645,000      1,717,000      2,362,000       310,000
  12/28/94    Milpitas / Watson Ii                1,350,000      3,260,000      4,610,000       545,000
  12/28/94    Las Vegas / Jones Blvd              1,035,000      2,510,000      3,545,000       409,000
  12/28/94    Venice / Guthrie                      495,000      1,213,000      1,708,000       196,000
  12/30/94    Apple Valley / Foliage Ave            780,000      1,924,000      2,704,000       342,000
   1/4/95     Chula Vista / Main Street             735,000      1,910,000      2,645,000       370,000
   1/5/95     Pantego / West Park                   315,000        840,000      1,155,000       155,000
   1/12/95    Roswell / Alpharetta                  423,000      1,079,000      1,502,000       194,000
   1/23/95    North Bergen / Tonne                1,564,000      3,883,000      5,447,000       567,000
   1/23/95    San Leandro / Hesperian               734,000      1,793,000      2,527,000       274,000
   1/24/95    Nashville / Elm Hill                  338,000        998,000      1,336,000       230,000
   2/3/95     Reno / S. Mccarron Blvd             1,080,000      2,617,000      3,697,000       424,000
   2/15/95    Schiller Park                       1,688,000      4,059,000      5,747,000       459,000
   2/15/95    Lansing                             1,514,000      3,583,000      5,097,000       390,000
   2/15/95    Pleasanton                          1,257,000      2,957,000      4,214,000       326,000
   2/15/95    LA/Sepulveda                        1,453,000      3,448,000      4,901,000       370,000
   2/28/95    Decatur / Flat Shoal                  970,000      2,465,000      3,435,000       424,000
   2/28/95    Smyrna / S. Cobb                      663,000      1,677,000      2,340,000       273,000
   2/28/95    Downey / Bellflower                   916,000      2,202,000      3,118,000       347,000
   2/28/95    Vallejo / Lincoln                     445,000      1,129,000      1,574,000       188,000
   2/28/95    Lynnwood / 180Th St                   516,000      1,317,000      1,833,000       234,000
   2/28/95    Kent / Pacific Hwy                    728,000      1,795,000      2,523,000       283,000
   2/28/95    Kirkland                            1,254,000      3,010,000      4,264,000       466,000
   2/28/95    Federal Way/Pacific                   785,000      2,019,000      2,804,000       352,000
   2/28/95    Tampa / S. Dale                       791,000      1,993,000      2,784,000       323,000
   2/28/95    Burlingame/Adrian Rd                2,280,000      5,421,000      7,701,000       845,000
   2/28/95    Miami / Cloverleaf                    606,000      1,506,000      2,112,000       244,000

</TABLE>
                                      F-31

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                    <C>          <C>             <C>              <C>                      
   2/28/95    Pinole / San Pablo                                     639,000      1,502,000        118,000                  
   2/28/95    South Gate / Firesto                                 1,442,000      3,449,000        186,000                  
   2/28/95    San Jose / Mabury                                      892,000      2,088,000         30,000                  
   2/28/95    La Puente / Valley Blvd                                591,000      1,390,000        150,000                  
   2/28/95    San Jose / Capitol E                                 1,215,000      2,852,000         63,000                  
   2/28/95    Milwaukie / 40Th Street                                576,000      1,388,000         36,000                  
   2/28/95    Portland / N. Lombard                                  812,000      1,900,000         63,000                  
   2/28/95    Miami / Biscayne                                     1,313,000      3,076,000         69,000                  
   2/28/95    Chicago / Clark Street                                 442,000      1,031,000        115,000                  
   2/28/95    Palatine / Dundee                                      698,000      1,643,000         79,000                  
   2/28/95    Williamsville/Transit                                  284,000        670,000         57,000                  
   2/28/95    Amherst / Sheridan                                     484,000      1,151,000         64,000                  
   3/2/95     Everett / Highway 99                                   859,000      2,022,000        145,000                  
   3/2/95     Burien / 1St Ave South                                 763,000      1,783,000        200,000                  
   3/2/95     Kent / South 238Th Street                              763,000      1,783,000        162,000                  
   3/31/95    Cheverly / Central Ave                                 911,000      2,164,000         51,000                  
   5/1/95     Sandy / S. State Street                              1,043,000      2,442,000        168,000                  
   5/3/95     Largo / Ulmerton Roa                                   263,000        654,000         93,000                  
   5/8/95     Fairfield/Western Street                               439,000      1,030,000         40,000                  
   5/8/95     Dallas / W. Mockingbird                              1,440,000      3,371,000         62,000                  
   5/8/95     East Point / Lakewood                                  884,000      2,071,000        161,000                  
   5/25/95    Falls Church / Gallo                                   350,000        835,000        150,000                  
   6/12/95    Baltimore / Old Waterloo                               769,000      1,850,000         49,000                  
   6/12/95    Pleasant Hill / Hookston                               766,000      1,848,000         43,000                  
   6/12/95    Mountain View/Old Middlefield                        2,095,000      4,913,000         43,000                  
   6/30/95    San Jose / Blossom Hill                              1,467,000      3,444,000         66,000                  
   6/30/95    Fairfield / Kings Highway                            1,811,000      4,273,000        136,000                  
   6/30/95    Pacoima / Paxton Street                1,377,000       840,000      1,976,000         55,000                  
   6/30/95    Portland / Prescott                                    647,000      1,509,000         96,000                  
   6/30/95    St. Petersburg                                         352,000        827,000         85,000                  
   6/30/95    Dallas / Audelia Road                                1,166,000      2,725,000        424,000                  
   6/30/95    Miami Gardens                                          823,000      1,929,000         84,000                  
   6/30/95    Grand Prairie / 19Th                                   566,000      1,329,000         76,000                  
   6/30/95    Joliet / Jefferson Street                              501,000      1,181,000         78,000                  
   6/30/95    Bridgeton / Pennridge                                  283,000        661,000         81,000                  
   6/30/95    Portland / S.E.92Nd                                    638,000      1,497,000         88,000                  
   6/30/95    Houston / S.W. Freeway                                 537,000      1,254,000         86,000                  
   6/30/95    Milwaukee / Brown                                      358,000        849,000         65,000                  
   6/30/95    Orlando / W. Oak Ridge                                 698,000      1,642,000        113,000                  
   6/30/95    Lauderhill / State Road                                644,000      1,508,000         77,000                  
   6/30/95    Orange Park /Blanding Blvd                             394,000        918,000         96,000                  
   6/30/95    St. Petersburg /Joe's Creek                            704,000      1,642,000         80,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
--------------------------------------------------------------------------------------------------------
   <S>        <C>                                 <C>            <C>            <C>             <C>         
   2/28/95    Pinole / San Pablo                    639,000      1,620,000      2,259,000       272,000
   2/28/95    South Gate / Firesto                1,442,000      3,635,000      5,077,000       618,000
   2/28/95    San Jose / Mabury                     892,000      2,118,000      3,010,000       325,000
   2/28/95    La Puente / Valley Blvd               591,000      1,540,000      2,131,000       261,000
   2/28/95    San Jose / Capitol E                1,215,000      2,915,000      4,130,000       461,000
   2/28/95    Milwaukie / 40Th Street               579,000      1,421,000      2,000,000       222,000
   2/28/95    Portland / N. Lombard                 812,000      1,963,000      2,775,000       296,000
   2/28/95    Miami / Biscayne                    1,313,000      3,145,000      4,458,000       492,000
   2/28/95    Chicago / Clark Street                442,000      1,146,000      1,588,000       186,000
   2/28/95    Palatine / Dundee                     698,000      1,722,000      2,420,000       278,000
   2/28/95    Williamsville/Transit                 284,000        727,000      1,011,000       119,000
   2/28/95    Amherst / Sheridan                    484,000      1,215,000      1,699,000       203,000
   3/2/95     Everett / Highway 99                  859,000      2,167,000      3,026,000       379,000
   3/2/95     Burien / 1St Ave South                763,000      1,983,000      2,746,000       371,000
   3/2/95     Kent / South 238Th Street             763,000      1,945,000      2,708,000       353,000
   3/31/95    Cheverly / Central Ave                911,000      2,215,000      3,126,000       333,000
   5/1/95     Sandy / S. State Street             1,043,000      2,610,000      3,653,000       431,000
   5/3/95     Largo / Ulmerton Roa                  263,000        747,000      1,010,000       149,000
   5/8/95     Fairfield/Western Street              439,000      1,070,000      1,509,000       164,000
   5/8/95     Dallas / W. Mockingbird             1,440,000      3,433,000      4,873,000       507,000
   5/8/95     East Point / Lakewood                 884,000      2,232,000      3,116,000       346,000
   5/25/95    Falls Church / Gallo                  350,000        985,000      1,335,000       177,000
   6/12/95    Baltimore / Old Waterloo              769,000      1,899,000      2,668,000       273,000
   6/12/95    Pleasant Hill / Hookston              766,000      1,891,000      2,657,000       287,000
   6/12/95    Mountain View/Old Middlefield       2,095,000      4,956,000      7,051,000       712,000
   6/30/95    San Jose / Blossom Hill             1,467,000      3,510,000      4,977,000       500,000
   6/30/95    Fairfield / Kings Highway           1,811,000      4,409,000      6,220,000       644,000
   6/30/95    Pacoima / Paxton Street               840,000      2,031,000      2,871,000       292,000
   6/30/95    Portland / Prescott                   647,000      1,605,000      2,252,000       228,000
   6/30/95    St. Petersburg                        352,000        912,000      1,264,000       139,000
   6/30/95    Dallas / Audelia Road               1,166,000      3,149,000      4,315,000       468,000
   6/30/95    Miami Gardens                         823,000      2,013,000      2,836,000       287,000
   6/30/95    Grand Prairie / 19Th                  566,000      1,405,000      1,971,000       208,000
   6/30/95    Joliet / Jefferson Street             501,000      1,259,000      1,760,000       193,000
   6/30/95    Bridgeton / Pennridge                 283,000        742,000      1,025,000       110,000
   6/30/95    Portland / S.E.92Nd                   638,000      1,585,000      2,223,000       228,000
   6/30/95    Houston / S.W. Freeway                537,000      1,340,000      1,877,000       189,000
   6/30/95    Milwaukee / Brown                     358,000        914,000      1,272,000       146,000
   6/30/95    Orlando / W. Oak Ridge                698,000      1,755,000      2,453,000       259,000
   6/30/95    Lauderhill / State Road               644,000      1,585,000      2,229,000       226,000
   6/30/95    Orange Park /Blanding Blvd            394,000      1,014,000      1,408,000       143,000
   6/30/95    St. Petersburg /Joe's Creek           704,000      1,722,000      2,426,000       247,000

</TABLE>
                                      F-32

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                    <C>           <C>            <C>              <C>                      
   6/30/95    St. Louis / Page Service Drive                         531,000      1,241,000         84,000                  
   6/30/95    Independence /E. 42Nd                                  438,000      1,023,000        101,000                  
   6/30/95    Cherry Hill / Dobbs Lane                               716,000      1,676,000         30,000                  
   6/30/95    Edgewater Park / Route 130                             683,000      1,593,000         36,000                  
   6/30/95    Beaverton / S.W. 110                                   572,000      1,342,000         59,000                  
   6/30/95    Markham / W. 159Th Place                               230,000        539,000         61,000                  
   6/30/95    Houston / N.W. Freeway                                 447,000      1,066,000         75,000                  
   6/30/95    Portland / Gantenbein                                  537,000      1,262,000         53,000                  
   6/30/95    Upper Chichester/Market St.                            569,000      1,329,000         58,000                  
   6/30/95    Fort Worth / Hwy 80                                    379,000        891,000         68,000                  
   6/30/95    Greenfield/ S. 108Th                                   728,000      1,707,000         94,000                  
   6/30/95    Altamonte Springs                                      566,000      1,326,000         51,000                  
   6/30/95    East Hazel Crest / Halsted I                           483,000      1,127,000        104,000                  
   6/30/95    Seattle / Delridge Way                                 760,000      1,779,000         94,000                  
   6/30/95    Elmhurst / Lake Frontage Rd                            748,000      1,758,000         55,000                  
   6/30/95    Los Angeles / Beverly Blvd                             787,000      1,886,000        149,000                  
   6/30/95    Lawrenceville / Brunswick                              841,000      1,961,000         55,000                  
   6/30/95    Richmond / Carlson                                     865,000      2,025,000         80,000                  
   6/30/95    Liverpool / Oswego Road                                545,000      1,279,000         61,000                  
   6/30/95    Rochester / East Ave                                   578,000      1,375,000         55,000                  
   6/30/95    Pasadena / E. Beltway                                  757,000      1,767,000         71,000                  
   7/13/95    Tarzana / Burbank Blvd                               2,895,000      6,823,000        284,000                  
   7/31/95    Orlando / Lakehurst                    1,049,000       450,000      1,063,000         61,000                  
   7/31/95    Livermore / Portola                    1,408,000       921,000      2,157,000        100,000                  
   7/31/95    San Jose / Tully Ii                    1,740,000       912,000      2,137,000        108,000                  
   7/31/95    Mission Bay                            4,320,000     1,617,000      3,785,000        307,000                  
   7/31/95    Las Vegas / Decatur                                  1,147,000      2,697,000         91,000                  
   7/31/95    Pleasanton / Stanley                                 1,624,000      3,811,000         57,000                  
   7/31/95    Castro Valley / Grove                                  757,000      1,772,000         40,000                  
   7/31/95    Honolulu / Kaneohe                                   1,215,000      2,846,000        120,000                  
   7/31/95    Chicago / Wabash Ave                                   645,000      1,535,000        443,000                  
   7/31/95    Springfield / Parker                                   765,000      1,834,000         76,000                  
   7/31/95    Huntington Bch/Gotham                                  765,000      1,808,000         95,000                  
   7/31/95    Tucker / Lawrenceville                                 630,000      1,480,000        104,000                  
   7/31/95    Marietta / Canton Road                                 600,000      1,423,000         80,000                  
   7/31/95    Wheeling / Hintz                                       450,000      1,054,000         65,000                  
   8/1/95     Gresham / Division                                     607,000      1,428,000         42,000                  
   8/1/95     Tucker / Lawrenceville                                 600,000      1,405,000        112,000                  
   8/1/95     Decatur / Covington                                    720,000      1,694,000         96,000                  
   8/11/95    Studio City/Ventura                                  1,285,000      3,015,000         47,000                  
   8/12/95    Smyrna / Hargrove Road                               1,020,000      3,038,000        213,000                  
   9/1/95     Hayward / Mission Blvd                               1,020,000      2,383,000         49,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                 <C>            <C>           <C>            <C>         
   6/30/95    St. Louis / Page Service Drive        531,000      1,325,000      1,856,000       192,000
   6/30/95    Independence /E. 42Nd                 438,000      1,124,000      1,562,000       169,000
   6/30/95    Cherry Hill / Dobbs Lane              716,000      1,706,000      2,422,000       237,000
   6/30/95    Edgewater Park / Route 130            683,000      1,629,000      2,312,000       227,000
   6/30/95    Beaverton / S.W. 110                  572,000      1,401,000      1,973,000       194,000
   6/30/95    Markham / W. 159Th Place              230,000        600,000        830,000        92,000
   6/30/95    Houston / N.W. Freeway                447,000      1,141,000      1,588,000       186,000
   6/30/95    Portland / Gantenbein                 537,000      1,315,000      1,852,000       183,000
   6/30/95    Upper Chichester/Market St.           569,000      1,387,000      1,956,000       194,000
   6/30/95    Fort Worth / Hwy 80                   379,000        959,000      1,338,000       143,000
   6/30/95    Greenfield/ S. 108Th                  728,000      1,801,000      2,529,000       262,000
   6/30/95    Altamonte Springs                     566,000      1,377,000      1,943,000       194,000
   6/30/95    East Hazel Crest / Halsted I          483,000      1,231,000      1,714,000       169,000
   6/30/95    Seattle / Delridge Way                760,000      1,873,000      2,633,000       268,000
   6/30/95    Elmhurst / Lake Frontage Rd           748,000      1,813,000      2,561,000       264,000
   6/30/95    Los Angeles / Beverly Blvd            787,000      2,035,000      2,822,000       335,000
   6/30/95    Lawrenceville / Brunswick             841,000      2,016,000      2,857,000       285,000
   6/30/95    Richmond / Carlson                    865,000      2,105,000      2,970,000       307,000
   6/30/95    Liverpool / Oswego Road               545,000      1,340,000      1,885,000       191,000
   6/30/95    Rochester / East Ave                  578,000      1,430,000      2,008,000       213,000
   6/30/95    Pasadena / E. Beltway                 757,000      1,838,000      2,595,000       255,000
   7/13/95    Tarzana / Burbank Blvd              2,895,000      7,107,000     10,002,000     1,066,000
   7/31/95    Orlando / Lakehurst                   450,000      1,124,000      1,574,000       156,000
   7/31/95    Livermore / Portola                   921,000      2,257,000      3,178,000       322,000
   7/31/95    San Jose / Tully Ii                   912,000      2,245,000      3,157,000       317,000
   7/31/95    Mission Bay                         1,617,000      4,092,000      5,709,000       626,000
   7/31/95    Las Vegas / Decatur                 1,147,000      2,788,000      3,935,000       397,000
   7/31/95    Pleasanton / Stanley                1,624,000      3,868,000      5,492,000       543,000
   7/31/95    Castro Valley / Grove                 757,000      1,812,000      2,569,000       251,000
   7/31/95    Honolulu / Kaneohe                  1,215,000      2,966,000      4,181,000       430,000
   7/31/95    Chicago / Wabash Ave                  645,000      1,978,000      2,623,000       249,000
   7/31/95    Springfield / Parker                  765,000      1,910,000      2,675,000       275,000
   7/31/95    Huntington Bch/Gotham                 765,000      1,903,000      2,668,000       283,000
   7/31/95    Tucker / Lawrenceville                630,000      1,584,000      2,214,000       237,000
   7/31/95    Marietta / Canton Road                600,000      1,503,000      2,103,000       222,000
   7/31/95    Wheeling / Hintz                      450,000      1,119,000      1,569,000       162,000
   8/1/95     Gresham / Division                    607,000      1,470,000      2,077,000       209,000
   8/1/95     Tucker / Lawrenceville                600,000      1,517,000      2,117,000       222,000
   8/1/95     Decatur / Covington                   720,000      1,790,000      2,510,000       265,000
   8/11/95    Studio City/Ventura                 1,285,000      3,062,000      4,347,000       433,000
   8/12/95    Smyrna / Hargrove Road              1,020,000      3,251,000      4,271,000       431,000
   9/1/95     Hayward / Mission Blvd              1,020,000      2,432,000      3,452,000       329,000

</TABLE>
                                      F-33

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                    <C>           <C>            <C>              <C>                      
   9/1/95     Park City / Belvider                                   600,000      1,405,000         35,000                  
   9/1/95     New Castle/Dupont Parkway                              990,000      2,369,000         51,000                  
   9/1/95     Las Vegas / Rainbow                                  1,050,000      2,459,000         59,000                  
   9/1/95     Mountain View / Reng                                   945,000      2,216,000         51,000                  
   9/1/95     Venice / Cadillac                                      930,000      2,182,000        107,000                  
   9/1/95     Simi Valley /Los Angeles                             1,590,000      3,724,000        109,000                  
   9/1/95     Spring Valley/Foreman                                1,095,000      2,572,000         60,000                  
   9/6/95     Darien / Frontage Road                                 975,000      2,321,000         49,000                  
   9/30/95    Van Nuys/Balboa Blvd                                 1,920,000      4,504,000        260,000                  
  10/31/95    San Lorenzo /Hesperian                               1,590,000      3,716,000         91,000                  
  10/31/95    Chicago / W. 47Th Street                               300,000        708,000         81,000                  
  10/31/95    Los Angeles / Eastern                                  455,000      1,070,000         91,000                  
  11/15/95    Costa Mesa - B                                         522,000      1,218,000         42,000                  
  11/15/95    Plano / E. 14Th                                        705,000      1,646,000         40,000                  
  11/15/95    Citrus Heights/Sunrise                                 520,000      1,213,000         86,000                  
  11/15/95    Modesto/Briggsmore Ave                                 470,000      1,097,000         59,000                  
  11/15/95    So San Francisco/Spruce                              1,905,000      4,444,000        150,000                  
  11/15/95    Pacheco/Buchanan Circle                4,036,000     1,681,000      3,951,000         57,000                  
  11/16/95    Palm Beach Gardens                                     657,000      1,540,000         77,000                  
  11/16/95    Delray Beach                                           600,000      1,407,000        113,000                  
   1/3/96     San Gabriel                                          1,005,000      2,345,000        168,000                  
   1/5/96     San Francisco, Second St.                            2,880,000      6,814,000         47,000                  
   1/12/96    San Antonio, TX                                        912,000      2,170,000         50,000                  
   2/29/96    Naples, FL/Old US 41                                   849,000      2,016,000         46,000                  
   2/29/96    Lake Worth, FL/S. Military Tr.                       1,782,000      4,723,000         91,000                  
   2/29/96    Brandon, FL/W Brandon Blvd.                          1,928,000      4,523,000        773,000                  
   2/29/96    Coral Springs FL/W Sample Rd.                        3,480,000      8,148,000         99,000                  
   2/29/96    Delray Beach FL/S Military Tr                          941,000      2,222,000        137,000                  
   2/29/96    Jupiter FL/Military Trail                            2,280,000      5,347,000         46,000                  
   2/29/96    Lakeworth FL/Lake Worth Rd                             737,000      1,742,000         96,000                  
   2/29/96    New Port Richey FL/State rd 54                         857,000      2,025,000         84,000                  
   2/29/96    Pompano Beach FL/ W Copans                           1,601,000      3,756,000        119,000                  
   2/29/96    Sanford FL/S Orlando Dr                                734,000      1,749,000      1,799,000                  
   3/8/96     Atlanta/Roswell                                        898,000      3,649,000         32,000                  
   3/31/96    Oakland, CA                                          1,065,000      2,764,000        119,000                  
   3/31/96    Saratoga, CA                                         2,339,000      6,081,000         62,000                  
   3/31/96    Randallstown, MD                                     1,359,000      3,527,000         68,000                  
   3/31/96    Plano, TX                                              650,000      1,682,000         62,000                  
   3/31/96    Houston, TX                                            543,000      1,402,000         58,000                  
   3/31/96    Irvine, CA                                           1,920,000      4,975,000        241,000                  
   3/31/96    Milwaukee, WI                                          542,000      1,402,000         53,000                  
   3/31/96    Carrollton, TX                                         578,000      1,495,000         45,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>           <C>              <C>         
   9/1/95     Park City / Belvider                  600,000      1,440,000      2,040,000       198,000
   9/1/95     New Castle/Dupont Parkway             990,000      2,420,000      3,410,000       326,000
   9/1/95     Las Vegas / Rainbow                 1,050,000      2,518,000      3,568,000       347,000
   9/1/95     Mountain View / Reng                  945,000      2,267,000      3,212,000       309,000
   9/1/95     Venice / Cadillac                     930,000      2,289,000      3,219,000       327,000
   9/1/95     Simi Valley /Los Angeles            1,590,000      3,833,000      5,423,000       528,000
   9/1/95     Spring Valley/Foreman               1,095,000      2,632,000      3,727,000       353,000
   9/6/95     Darien / Frontage Road                975,000      2,370,000      3,345,000       346,000
   9/30/95    Van Nuys/Balboa Blvd                1,920,000      4,764,000      6,684,000       397,000
  10/31/95    San Lorenzo /Hesperian              1,590,000      3,807,000      5,397,000       273,000
  10/31/95    Chicago / W. 47Th Street              300,000        789,000      1,089,000        67,000
  10/31/95    Los Angeles / Eastern                 455,000      1,161,000      1,616,000        94,000
  11/15/95    Costa Mesa - B                        522,000      1,260,000      1,782,000       144,000
  11/15/95    Plano / E. 14Th                       705,000      1,686,000      2,391,000       189,000
  11/15/95    Citrus Heights/Sunrise                520,000      1,299,000      1,819,000       157,000
  11/15/95    Modesto/Briggsmore Ave                470,000      1,156,000      1,626,000       138,000
  11/15/95    So San Francisco/Spruce             1,905,000      4,594,000      6,499,000       513,000
  11/15/95    Pacheco/Buchanan Circle             1,681,000      4,008,000      5,689,000       462,000
  11/16/95    Palm Beach Gardens                    657,000      1,617,000      2,274,000       226,000
  11/16/95    Delray Beach                          600,000      1,520,000      2,120,000       211,000
   1/3/96     San Gabriel                         1,005,000      2,513,000      3,518,000       323,000
   1/5/96     San Francisco, Second St.           2,880,000      6,861,000      9,741,000       814,000
   1/12/96    San Antonio, TX                       912,000      2,220,000      3,132,000       271,000
   2/29/96    Naples, FL/Old US 41                  849,000      2,062,000      2,911,000       235,000
   2/29/96    Lake Worth, FL/S. Military Tr.      1,782,000      4,814,000      6,596,000       543,000
   2/29/96    Brandon, FL/W Brandon Blvd.         1,928,000      5,296,000      7,224,000       681,000
   2/29/96    Coral Springs FL/W Sample Rd.       3,480,000      8,247,000     11,727,000       925,000
   2/29/96    Delray Beach FL/S Military Tr         941,000      2,359,000      3,300,000       288,000
   2/29/96    Jupiter FL/Military Trail           2,280,000      5,393,000      7,673,000       599,000
   2/29/96    Lakeworth FL/Lake Worth Rd            737,000      1,838,000      2,575,000       223,000
   2/29/96    New Port Richey FL/State rd 54        857,000      2,109,000      2,966,000       250,000
   2/29/96    Pompano Beach FL/ W Copans          1,601,000      3,875,000      5,476,000       447,000
   2/29/96    Sanford FL/S Orlando Dr               975,000      3,307,000      4,282,000       323,000
   3/8/96     Atlanta/Roswell                       898,000      3,681,000      4,579,000       413,000
   3/31/96    Oakland, CA                         1,065,000      2,883,000      3,948,000       319,000
   3/31/96    Saratoga, CA                        2,339,000      6,143,000      8,482,000       659,000
   3/31/96    Randallstown, MD                    1,359,000      3,595,000      4,954,000       401,000
   3/31/96    Plano, TX                             650,000      1,744,000      2,394,000       199,000
   3/31/96    Houston, TX                           543,000      1,460,000      2,003,000       159,000
   3/31/96    Irvine, CA                          1,920,000      5,216,000      7,136,000       582,000
   3/31/96    Milwaukee, WI                         542,000      1,455,000      1,997,000       160,000
   3/31/96    Carrollton, TX                        578,000      1,540,000      2,118,000       170,000

</TABLE>
                                      F-34

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                                  <C>            <C>              <C>                      
   3/31/96    Torrance, CA                                         1,415,000      3,675,000         66,000                  
   3/31/96    Jacksonville, FL                                       713,000      1,845,000         73,000                  
   3/31/96    Dallas, TX                                             315,000        810,000         55,000                  
   3/31/96    Houston, TX                                            669,000      1,724,000        180,000                  
   3/31/96    Baltimore, MD                                          842,000      2,180,000         45,000                  
   3/31/96    New Haven, CT                                          740,000      1,907,000         66,000                  
   4/1/96     Chicago/Pulaski                                        764,000      1,869,000         83,000                  
   4/1/96     Las Vegas/Desert Inn                                 1,115,000      2,729,000         73,000                  
   4/1/96     Torrance/Crenshaw                                      916,000      2,243,000         35,000                  
   4/1/96     Weymouth, WA state                                     485,000      1,187,000         59,000                  
   4/1/96     St. Louis/Barrett Station Road                         630,000      1,542,000         46,000                  
   4/1/96     Rockville/Randolph                                   1,153,000      2,823,000         61,000                  
   4/1/96     Simi Valley/East Street                                970,000      2,374,000         19,000                  
   4/1/96     Houston/Westheimer III                               1,390,000      3,402,000        808,000                  
   4/3/96     Naples, FL                                           1,187,000      2,809,000        102,000                  
   6/26/96    Boca Raton FL                                        3,180,000      7,468,000        409,000                  
   6/28/96    Venice FL                                              669,000      1,575,000         94,000                  
   6/30/96    Las Vegas, NV                                          921,000      2,155,000         90,000                  
   6/30/96    Bedford Park, IL                                       606,000      1,419,000         89,000                  
   6/30/96    Los Angeles, CA                                        692,000      1,616,000         30,000                  
   6/30/96    Silver Spring, MD                                    1,513,000      3,535,000         97,000                  
   6/30/96    Newark, CA                                           1,051,000      2,458,000         31,000                  
   6/30/96    Brooklyn, NY                                           783,000      1,830,000        171,000                  
   7/2/96     Glen Burnie/Furnace Br Rd MD                         1,755,000      4,150,000         60,000                  
   7/22/96    Lakewood/W Hampton CO                                  717,000      2,092,000         45,000                  
   8/13/96    Norcross/Holcomb Bridge Rd                             955,000      3,117,000         24,000                  
   9/5/96     Spring Valley/S Pascack rd NY                        1,260,000      2,966,000        120,000                  
   9/16/96    Dallas/Royal Lane                                    1,008,000      2,426,000         77,000                  
   9/16/96    Colorado Springs/Tomah Drive                           731,000      1,759,000         53,000                  
   9/16/96    Lewisville/S. Stemmons                                 603,000      1,451,000         69,000                  
   9/16/96    Las Vegas/Boulder Hwy.                                 947,000      2,279,000         68,000                  
   9/16/96    Sarasota/S. Tamiami Trail                              584,000      1,407,000         60,000                  
   9/16/96    Willow Grove/Maryland Road                             673,000      1,620,000         38,000                  
   9/16/96    Houston/W. Montgomery Rd.                              524,000      1,261,000         75,000                  
   9/16/96    Denver/W. Hampden                                    1,084,000      2,609,000         49,000                  
   9/16/96    Littleton/Southpark Way                                922,000      2,221,000         42,000                  
   9/16/96    Petaluma/Baywood Drive                                 861,000      2,074,000         51,000                  
   9/16/96    Canoga Park/Sherman Way                              1,543,000      3,716,000         59,000                  
   9/16/96    Jacksonville/South Lane Ave.                           554,000      1,334,000         97,000                  
   9/16/96    Newport News/Warwick Blvd.                             575,000      1,385,000         55,000                  
   9/16/96    Greenbrook/Route 22                                  1,227,000      2,954,000         82,000                  
   9/16/96    Monsey/Route 59                                      1,068,000      2,572,000         45,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                   <C>          <C>            <C>             <C>         
   3/31/96    Torrance, CA                        1,415,000      3,741,000      5,156,000       418,000
   3/31/96    Jacksonville, FL                      713,000      1,918,000      2,631,000       213,000
   3/31/96    Dallas, TX                            315,000        865,000      1,180,000        99,000
   3/31/96    Houston, TX                           669,000      1,904,000      2,573,000       236,000
   3/31/96    Baltimore, MD                         842,000      2,225,000      3,067,000       244,000
   3/31/96    New Haven, CT                         740,000      1,973,000      2,713,000       213,000
   4/1/96     Chicago/Pulaski                       764,000      1,952,000      2,716,000       139,000
   4/1/96     Las Vegas/Desert Inn                1,115,000      2,802,000      3,917,000       241,000
   4/1/96     Torrance/Crenshaw                     916,000      2,278,000      3,194,000       170,000
   4/1/96     Weymouth, WA state                    485,000      1,246,000      1,731,000        29,000
   4/1/96     St. Louis/Barrett Station Road        630,000      1,588,000      2,218,000        99,000
   4/1/96     Rockville/Randolph                  1,153,000      2,884,000      4,037,000       201,000
   4/1/96     Simi Valley/East Street               970,000      2,393,000      3,363,000       184,000
   4/1/96     Houston/Westheimer III              1,390,000      4,210,000      5,600,000       391,000
   4/3/96     Naples, FL                          1,187,000      2,911,000      4,098,000       340,000
   6/26/96    Boca Raton FL                       3,180,000      7,877,000     11,057,000       785,000
   6/28/96    Venice FL                             669,000      1,669,000      2,338,000       185,000
   6/30/96    Las Vegas, NV                         921,000      2,245,000      3,166,000       239,000
   6/30/96    Bedford Park, IL                      606,000      1,508,000      2,114,000       167,000
   6/30/96    Los Angeles, CA                       692,000      1,646,000      2,338,000       171,000
   6/30/96    Silver Spring, MD                   1,513,000      3,632,000      5,145,000       366,000
   6/30/96    Newark, CA                          1,051,000      2,489,000      3,540,000       252,000
   6/30/96    Brooklyn, NY                          783,000      2,001,000      2,784,000       204,000
   7/2/96     Glen Burnie/Furnace Br Rd MD        1,755,000      4,210,000      5,965,000       419,000
   7/22/96    Lakewood/W Hampton CO                 716,000      2,138,000      2,854,000       210,000
   8/13/96    Norcross/Holcomb Bridge Rd            955,000      3,141,000      4,096,000       297,000
   9/5/96     Spring Valley/S Pascack rd NY       1,260,000      3,086,000      4,346,000       310,000
   9/16/96    Dallas/Royal Lane                   1,008,000      2,503,000      3,511,000       215,000
   9/16/96    Colorado Springs/Tomah Drive          731,000      1,812,000      2,543,000       161,000
   9/16/96    Lewisville/S. Stemmons                603,000      1,520,000      2,123,000       131,000
   9/16/96    Las Vegas/Boulder Hwy.                947,000      2,347,000      3,294,000       204,000
   9/16/96    Sarasota/S. Tamiami Trail             584,000      1,467,000      2,051,000       125,000
   9/16/96    Willow Grove/Maryland Road            673,000      1,658,000      2,331,000       143,000
   9/16/96    Houston/W. Montgomery Rd.             524,000      1,336,000      1,860,000       114,000
   9/16/96    Denver/W. Hampden                   1,084,000      2,658,000      3,742,000       229,000
   9/16/96    Littleton/Southpark Way               922,000      2,263,000      3,185,000       191,000
   9/16/96    Petaluma/Baywood Drive                861,000      2,125,000      2,986,000       179,000
   9/16/96    Canoga Park/Sherman Way             1,543,000      3,775,000      5,318,000       320,000
   9/16/96    Jacksonville/South Lane Ave.          554,000      1,431,000      1,985,000       131,000
   9/16/96    Newport News/Warwick Blvd.            575,000      1,440,000      2,015,000       123,000
   9/16/96    Greenbrook/Route 22                 1,227,000      3,036,000      4,263,000       258,000
   9/16/96    Monsey/Route 59                     1,068,000      2,617,000      3,685,000       220,000

</TABLE>
                                      F-35

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>              <C>                      
   9/16/96    Santa Rosa/Santa Rosa Ave.                             575,000      1,385,000         30,000                  
   9/16/96    Fort Worth/Brentwood Stair                             823,000      2,016,000         78,000                  
   9/16/96    Glendale/San Fernando Road                           2,500,000      6,124,000         35,000                  
   9/16/96    Houston/Harwin                                         549,000      1,344,000         72,000                  
   9/16/96    Irvine/Cowan Street                                  1,890,000      4,631,000         89,000                  
   9/16/96    Fairfield/Dixie Highway                                427,000      1,046,000         23,000                  
   9/16/96    Mesa/Country Club Drive                                701,000      1,718,000         42,000                  
   9/16/96    San Francisco/Geary Blvd.                            2,957,000      7,244,000         80,000                  
   9/16/96    Houston/Gulf Freeway                                   701,000      1,718,000         78,000                  
   9/16/96    Las Vegas/S. Decatur Blvd.                           1,037,000      2,539,000         61,000                  
   9/16/96    Tempe/McKellips Road                                   823,000      1,972,000         94,000                  
   9/16/96    Richland Hills/Airport Fwy.                            473,000      1,158,000         92,000                  
  10/11/96    Virginia Beach/Southern Blvd                           282,000        610,000        139,000                  
  10/11/96    Chesapeake/Military Hwy                                912,000      1,974,000        224,000                  
  10/11/96    Hampton/Pembroke Road                                1,080,000      2,346,000        247,000                  
  10/11/96    Norfolk/Widgeon Road                                 1,110,000      2,405,000        208,000                  
  10/11/96    Richmond/Bloom Lane                                  1,188,000      2,512,000        186,000                  
  10/11/96    Richmond/Midlothian Park                               762,000      1,588,000        296,000                  
  10/11/96    Roanoke/Peters Creek Road                              819,000      1,776,000        136,000                  
  10/11/96    Orlando/E Oakridge Rd                                  927,000      2,020,000        115,000                  
  10/11/96    Orlando/South Hwy 17-92                              1,170,000      2,549,000        107,000                  
  10/25/96    Austin/Renelli                                       1,710,000      3,990,000        116,000                  
  10/25/96    Austin/Santiago                                        900,000      2,100,000        107,000                  
  10/25/96    Dallas/East N.W. Highway                               698,000      1,628,000         65,000                  
  10/25/96    Dallas/Denton Drive                                    900,000      2,100,000         83,000                  
  10/25/96    Houston/Hempstead                                      518,000      1,207,000        148,000                  
  10/25/96    Pasadena/So. Shaver                                    420,000        980,000         65,000                  
  10/31/96    Houston/Joel Wheaton Rd                                465,000      1,085,000         94,000                  
  10/31/96    Mt Holly/541 Bypass                                    360,000        840,000         46,000                  
  11/13/96    Big A/Forest Park                                      270,000        630,000      1,035,000                  
  11/13/96    Town East/Mesquite                                     330,000        770,000         64,000                  
  11/14/96    Bossier City LA                                        633,000      1,488,000         61,000                  
   12/5/96    Lake Forest/Bake Parkway                               971,000      2,173,000        544,000                  
  12/16/96    Cherry Hill/Old Cuthbert                               645,000      1,505,000         99,000                  
  12/16/96    Oklahoma City/SW 74th Exprw.                           375,000        875,000         66,000                  
  12/16/96    Oklahoma City/S Santa Fe                               360,000        840,000         74,000                  
  12/16/96    Oklahoma City/S. May                                   360,000        840,000         72,000                  
  12/16/96    Arlington/S. Watson Rd.                                930,000      2,170,000        285,000                  
  12/16/96    Richardson/E. Arapaho                                1,290,000      3,010,000        104,000                  
  12/23/96    Upper Darby/Lansdowne                                  899,000      2,272,000         43,000                  
  12/23/96    Plymouth Meeting /Chemical                           1,109,000      2,802,000         36,000                  
  12/23/96    Philadelphia/Byberry                                 1,019,000      2,575,000         68,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
   9/16/96    Santa Rosa/Santa Rosa Ave.            575,000      1,415,000      1,990,000       117,000
   9/16/96    Fort Worth/Brentwood Stair            823,000      2,094,000      2,917,000       185,000
   9/16/96    Glendale/San Fernando Road          2,500,000      6,159,000      8,659,000       523,000
   9/16/96    Houston/Harwin                        549,000      1,416,000      1,965,000       125,000
   9/16/96    Irvine/Cowan Street                 1,890,000      4,720,000      6,610,000       403,000
   9/16/96    Fairfield/Dixie Highway               427,000      1,069,000      1,496,000        90,000
   9/16/96    Mesa/Country Club Drive               701,000      1,760,000      2,461,000       148,000
   9/16/96    San Francisco/Geary Blvd.           2,957,000      7,324,000     10,281,000       621,000
   9/16/96    Houston/Gulf Freeway                  701,000      1,796,000      2,497,000       157,000
   9/16/96    Las Vegas/S. Decatur Blvd.          1,037,000      2,600,000      3,637,000       227,000
   9/16/96    Tempe/McKellips Road                  823,000      2,066,000      2,889,000       179,000
   9/16/96    Richland Hills/Airport Fwy.           473,000      1,250,000      1,723,000       110,000
  10/11/96    Virginia Beach/Southern Blvd          282,000        749,000      1,031,000        89,000
  10/11/96    Chesapeake/Military Hwy               912,000      2,198,000      3,110,000       220,000
  10/11/96    Hampton/Pembroke Road               1,080,000      2,593,000      3,673,000       276,000
  10/11/96    Norfolk/Widgeon Road                1,110,000      2,613,000      3,723,000       266,000
  10/11/96    Richmond/Bloom Lane                 1,188,000      2,698,000      3,886,000       260,000
  10/11/96    Richmond/Midlothian Park              762,000      1,884,000      2,646,000       225,000
  10/11/96    Roanoke/Peters Creek Road             819,000      1,912,000      2,731,000       187,000
  10/11/96    Orlando/E Oakridge Rd                 927,000      2,135,000      3,062,000       197,000
  10/11/96    Orlando/South Hwy 17-92             1,170,000      2,656,000      3,826,000       240,000
  10/25/96    Austin/Renelli                      1,710,000      4,106,000      5,816,000       369,000
  10/25/96    Austin/Santiago                       900,000      2,207,000      3,107,000       204,000
  10/25/96    Dallas/East N.W. Highway              698,000      1,693,000      2,391,000       148,000
  10/25/96    Dallas/Denton Drive                   900,000      2,183,000      3,083,000       196,000
  10/25/96    Houston/Hempstead                     518,000      1,355,000      1,873,000       130,000
  10/25/96    Pasadena/So. Shaver                   420,000      1,045,000      1,465,000        94,000
  10/31/96    Houston/Joel Wheaton Rd               465,000      1,179,000      1,644,000        99,000
  10/31/96    Mt Holly/541 Bypass                   360,000        886,000      1,246,000        74,000
  11/13/96    Big A/Forest Park                     270,000      1,665,000      1,935,000       342,000
  11/13/96    Town East/Mesquite                    330,000        834,000      1,164,000        70,000
  11/14/96    Bossier City LA                       633,000      1,549,000      2,182,000       136,000
   12/5/96    Lake Forest/Bake Parkway              973,000      2,715,000      3,688,000       134,000
  12/16/96    Cherry Hill/Old Cuthbert              645,000      1,604,000      2,249,000       134,000
  12/16/96    Oklahoma City/SW 74th Exprw.          375,000        941,000      1,316,000        80,000
  12/16/96    Oklahoma City/S Santa Fe              360,000        914,000      1,274,000        78,000
  12/16/96    Oklahoma City/S. May                  360,000        912,000      1,272,000        80,000
  12/16/96    Arlington/S. Watson Rd.               930,000      2,455,000      3,385,000       188,000
  12/16/96    Richardson/E. Arapaho               1,290,000      3,114,000      4,404,000       261,000
  12/23/96    Upper Darby/Lansdowne                 899,000      2,315,000      3,214,000       188,000
  12/23/96    Plymouth Meeting /Chemical          1,109,000      2,838,000      3,947,000        85,000
  12/23/96    Philadelphia/Byberry                1,019,000      2,643,000      3,662,000       218,000

</TABLE>
                                      F-36

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>              <C>                      
  12/23/96    Ft. Lauderdale/State Road                            1,199,000      3,030,000         60,000                  
  12/23/96    Englewood/Costilla                                   1,739,000      4,393,000         47,000                  
  12/23/96    Lilburn/Beaver Ruin Road                               600,000      1,515,000         26,000                  
  12/23/96    Carmichael/Fair Oaks IL                                809,000      2,045,000         45,000                  
  12/23/96    Portland/Division Street                               989,000      2,499,000         56,000                  
  12/23/96    Napa/Industrial                                        660,000      1,666,000         62,000                  
  12/23/96    Wheatridge/W. 44th Avenue IL                         1,439,000      3,636,000         31,000                  
  12/23/96    Las Vegas/Charleston IL                              1,049,000      2,651,000         40,000                  
  12/23/96    Las Vegas/South Arvill                                 929,000      2,348,000         47,000                  
  12/23/96    Los Angeles/Santa Monica II                          3,328,000      8,407,000         82,000                  
  12/23/96    Warren/Schoenherr Rd.                                  749,000      1,894,000         50,000                  
  12/23/96    Portland/N.E. 71st Avenue                              869,000      2,196,000         74,000                  
  12/23/96    Seattle/Pacific Hwy. South                             689,000      1,742,000         74,000                  
  12/23/96    Broadview/S. 25th Avenue                             1,289,000      3,257,000         59,000                  
  12/23/96    Winter Springs/W. St. Rte 434                          689,000      1,742,000         45,000                  
  12/23/96    Tampa/15th Street                                      420,000      1,060,000         70,000                  
  12/23/96    Pompano Beach/S. Dixie Hwy.                            930,000      2,292,000        100,000                  
  12/23/96    Overland Park/Mastin                                   990,000      2,440,000         36,000                  
  12/23/96    Nashville/Dickerson Pike                               990,000      2,440,000         74,000                  
  12/23/96    Madison/Gallatin Road                                  780,000      1,922,000         92,000                  
  12/23/96    Auburn/R Street                                        690,000      1,700,000         65,000                  
  12/23/96    Federal Heights/W. 48th Ave.                           720,000      1,774,000         22,000                  
  12/23/96    Decatur/Covington IL                                   930,000      2,292,000         38,000                  
  12/23/96    Forest Park/Jonesboro Rd.                              540,000      1,331,000         62,000                  
  12/23/96    Mangonia Park/Australian Ave.                          840,000      2,070,000         49,000                  
  12/23/96    Whittier/Colima                                        540,000      1,331,000         42,000                  
  12/23/96    Kent/Pacific Hwy South                                 930,000      2,292,000         63,000                  
  12/23/96    Topeka/8th Street                                      150,000        370,000         50,000                  
  12/23/96    Denver East Evans                                    1,740,000      4,288,000         83,000                  
  12/23/96    Pittsburgh/California Ave.                             630,000      1,552,000         53,000                  
  12/23/96    Ft. Lauderdale/Powerline                               660,000      1,626,000         97,000                  
  12/23/96    Philadelphia/Oxford                                    900,000      2,218,000         45,000                  
  12/23/96    Dallas/Lemmon Ave. (arlington)                       1,710,000      4,214,000         69,000                  
  12/23/96    Eagle Rock/Colorado                                    330,000        813,000         22,000                  
  12/23/96    Alsip/115th Street                                     750,000      1,848,000         99,000                  
  12/23/96    Green Acres/Jog Road                                   600,000      1,479,000         41,000                  
  12/23/96    Pompano Beach/Sample Road                            1,320,000      3,253,000         65,000                  
  12/23/96    Wyndmoor/Ivy Hill                                    2,160,000      5,323,000         48,000                  
  12/23/96    W. Palm Beach/Belvedere                                960,000      2,366,000         71,000                  
  12/23/96    Renton  174th St.                                      960,000      2,366,000         50,000                  
  12/23/96    Sacramento/Northgate                                 1,021,000      2,647,000         59,000                  
  12/23/96    Phoenix/19th Avenue                                    991,000      2,569,000         22,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
  12/23/96    Ft. Lauderdale/State Road           1,199,000      3,090,000      4,289,000       253,000
  12/23/96    Englewood/Costilla                  1,739,000      4,440,000      6,179,000       356,000
  12/23/96    Lilburn/Beaver Ruin Road              600,000      1,541,000      2,141,000       124,000
  12/23/96    Carmichael/Fair Oaks IL               809,000      2,090,000      2,899,000       173,000
  12/23/96    Portland/Division Street              989,000      2,555,000      3,544,000       203,000
  12/23/96    Napa/Industrial                       660,000      1,728,000      2,388,000       147,000
  12/23/96    Wheatridge/W. 44th Avenue IL        1,439,000      3,667,000      5,106,000       297,000
  12/23/96    Las Vegas/Charleston IL             1,049,000      2,691,000      3,740,000       220,000
  12/23/96    Las Vegas/South Arvill                929,000      2,395,000      3,324,000       197,000
  12/23/96    Los Angeles/Santa Monica II         3,328,000      8,489,000     11,817,000       690,000
  12/23/96    Warren/Schoenherr Rd.                 749,000      1,944,000      2,693,000       160,000
  12/23/96    Portland/N.E. 71st Avenue             869,000      2,270,000      3,139,000       187,000
  12/23/96    Seattle/Pacific Hwy. South            689,000      1,816,000      2,505,000       146,000
  12/23/96    Broadview/S. 25th Avenue            1,289,000      3,316,000      4,605,000       271,000
  12/23/96    Winter Springs/W. St. Rte 434         689,000      1,787,000      2,476,000       149,000
  12/23/96    Tampa/15th Street                     420,000      1,130,000      1,550,000        94,000
  12/23/96    Pompano Beach/S. Dixie Hwy.           930,000      2,392,000      3,322,000       208,000
  12/23/96    Overland Park/Mastin                  990,000      2,476,000      3,466,000       205,000
  12/23/96    Nashville/Dickerson Pike              990,000      2,514,000      3,504,000       207,000
  12/23/96    Madison/Gallatin Road                 780,000      2,014,000      2,794,000       169,000
  12/23/96    Auburn/R Street                       690,000      1,765,000      2,455,000       146,000
  12/23/96    Federal Heights/W. 48th Ave.          720,000      1,796,000      2,516,000       145,000
  12/23/96    Decatur/Covington IL                  930,000      2,330,000      3,260,000       190,000
  12/23/96    Forest Park/Jonesboro Rd.             540,000      1,393,000      1,933,000       125,000
  12/23/96    Mangonia Park/Australian Ave.         840,000      2,119,000      2,959,000       172,000
  12/23/96    Whittier/Colima                       540,000      1,373,000      1,913,000       114,000
  12/23/96    Kent/Pacific Hwy South                930,000      2,355,000      3,285,000       194,000
  12/23/96    Topeka/8th Street                     150,000        420,000        570,000        40,000
  12/23/96    Denver East Evans                   1,740,000      4,371,000      6,111,000       356,000
  12/23/96    Pittsburgh/California Ave.            630,000      1,605,000      2,235,000       137,000
  12/23/96    Ft. Lauderdale/Powerline              660,000      1,723,000      2,383,000       148,000
  12/23/96    Philadelphia/Oxford                   900,000      2,263,000      3,163,000       186,000
  12/23/96    Dallas/Lemmon Ave. (arlington)      1,710,000      4,283,000      5,993,000       348,000
  12/23/96    Eagle Rock/Colorado                   330,000        835,000      1,165,000        67,000
  12/23/96    Alsip/115th Street                    750,000      1,947,000      2,697,000       170,000
  12/23/96    Green Acres/Jog Road                  600,000      1,520,000      2,120,000       127,000
  12/23/96    Pompano Beach/Sample Road           1,320,000      3,318,000      4,638,000       273,000
  12/23/96    Wyndmoor/Ivy Hill                   2,160,000      5,371,000      7,531,000       435,000
  12/23/96    W. Palm Beach/Belvedere               960,000      2,437,000      3,397,000       198,000
  12/23/96    Renton  174th St.                     960,000      2,416,000      3,376,000       201,000
  12/23/96    Sacramento/Northgate                1,021,000      2,706,000      3,727,000       226,000
  12/23/96    Phoenix/19th Avenue                   991,000      2,591,000      3,582,000       209,000

</TABLE>
                                      F-37

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>              <C>                      
  12/23/96    Bedford Park/Cicero                                  1,321,000      3,426,000         80,000                  
  12/23/96    Lake Worth/Lk Worth                                  1,111,000      2,880,000         52,000                  
  12/23/96    Arlington/Algonquin                                    991,000      2,569,000         88,000                  
  12/23/96    Seattle/15th Avenue NE                                 781,000      2,024,000         43,000                  
  12/23/96    Southington/Spring                                     811,000      2,102,000         64,000                  
  12/23/96    Clifton/Broad Street                                 1,411,000      3,659,000         43,000                  
  12/23/96    Hillside/Glenwood B (37.5%)                            563,000      4,051,000         90,000                  
  12/30/96    Concorde/Treat                                       1,396,000      3,258,000         54,000                  
  12/30/96    Virginia Beach                                         535,000      1,248,000         50,000                  
  12/30/96    San Mateo                                            2,408,000      5,619,000         79,000                  
   1/22/97    Austin, 1033 E. 41 Street                              257,000      3,633,000         17,000                  
   4/12/97    Annandale / Backlick                                   955,000      2,229,000        234,000                  
   4/12/97    Ft. Worth / West Freeway                               667,000      1,556,000        190,000                  
   4/12/97    Campbell / S. Curtner                                2,550,000      5,950,000        589,000                  
   4/12/97    Aurora / S. Idalia                                   1,002,000      2,338,000        250,000                  
   4/12/97    Santa Cruz / Capitola                                1,037,000      2,420,000        254,000                  
   4/12/97    Indianapolis / Lafayette Road                          682,000      1,590,000        195,000                  
   4/12/97    Indianapolis / Route 31                                619,000      1,444,000        179,000                  
   4/12/97    Farmingdale / Broad Hollow Rd.                       1,568,000      3,658,000        426,000                  
   4/12/97    Tyson's Corner / Springhill Rd.                      3,861,000      9,010,000        895,000                  
   4/12/97    Fountain Valley / Newhope                            1,137,000      2,653,000        271,000                  
   4/12/97    Dallas / Winsted                                     1,375,000      3,209,000        355,000                  
   4/12/97    Columbia / Broad River Rd.-B                           121,000        282,000         81,000                  
   4/12/97    Livermore / S. Front Road                              876,000      2,044,000        132,000                  
   4/12/97    Garland / Plano                                        889,000      2,073,000        159,000                  
   4/12/97    San Jose / Story Road                                1,352,000      3,156,000        217,000                  
   4/12/97    Aurora / Abilene                                     1,406,000      3,280,000        208,000                  
   4/12/97    Antioch / Sunset Drive                               1,035,000      2,416,000        164,000                  
   4/12/97    Rancho Cordova / Sunrise                             1,048,000      2,445,000        170,000                  
   4/12/97    Berlin / Wilbur Cross                                  756,000      1,764,000        157,000                  
   4/12/97    Whittier / Whittier Blvd.                              648,000      1,513,000        100,000                  
   4/12/97    Peabody / Newbury Street                             1,159,000      2,704,000        189,000                  
   4/12/97    Denver / Blake                                         602,000      1,405,000        117,000                  
   4/12/97    Evansville / Green River Road                          470,000      1,096,000         92,000                  
   4/12/97    Burien / First Ave. So.                                792,000      1,847,000        151,000                  
   4/12/97    Rancho Cordova / Mather Field                          494,000      1,153,000        115,000                  
   4/12/97    Sugar Land / Eldridge                                  705,000      1,644,000        139,000                  
   4/12/97    Columbus / Eastland Drive                              602,000      1,405,000        126,000                  
   4/12/97    Slickerville / Black Horse Pike                        539,000      1,258,000         93,000                  
   4/12/97    Seattle / Aurora                                     1,145,000      2,671,000        186,000                  
   4/12/97    Gaithersburg / Christopher Ave.                        972,000      2,268,000        162,000                  
   4/12/97    Manchester / Tolland Turnpike                          807,000      1,883,000        147,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
  12/23/96    Bedford Park/Cicero                 1,321,000      3,506,000      4,827,000       283,000
  12/23/96    Lake Worth/Lk Worth                 1,111,000      2,932,000      4,043,000       238,000
  12/23/96    Arlington/Algonquin                   991,000      2,657,000      3,648,000       226,000
  12/23/96    Seattle/15th Avenue NE                781,000      2,067,000      2,848,000       168,000
  12/23/96    Southington/Spring                    811,000      2,166,000      2,977,000       181,000
  12/23/96    Clifton/Broad Street                1,411,000      3,702,000      5,113,000       296,000
  12/23/96    Hillside/Glenwood B (37.5%)           563,000      4,141,000      4,704,000       351,000
  12/30/96    Concorde/Treat                      1,396,000      3,312,000      4,708,000       269,000
  12/30/96    Virginia Beach                        535,000      1,298,000      1,833,000       109,000
  12/30/96    San Mateo                           2,408,000      5,698,000      8,106,000       461,000
   1/22/97    Austin, 1033 E. 41 Street             257,000      3,650,000      3,907,000       256,000
   4/12/97    Annandale / Backlick                  955,000      2,463,000      3,418,000       162,000
   4/12/97    Ft. Worth / West Freeway              667,000      1,746,000      2,413,000       118,000
   4/12/97    Campbell / S. Curtner               2,550,000      6,539,000      9,089,000       426,000
   4/12/97    Aurora / S. Idalia                  1,002,000      2,588,000      3,590,000       172,000
   4/12/97    Santa Cruz / Capitola               1,037,000      2,674,000      3,711,000       176,000
   4/12/97    Indianapolis / Lafayette Road         682,000      1,785,000      2,467,000       122,000
   4/12/97    Indianapolis / Route 31               619,000      1,623,000      2,242,000       112,000
   4/12/97    Farmingdale / Broad Hollow Rd.      1,568,000      4,084,000      5,652,000       276,000
   4/12/97    Tyson's Corner / Springhill Rd.     3,861,000      9,905,000     13,766,000       648,000
   4/12/97    Fountain Valley / Newhope           1,137,000      2,924,000      4,061,000       190,000
   4/12/97    Dallas / Winsted                    1,375,000      3,564,000      4,939,000       238,000
   4/12/97    Columbia / Broad River Rd.-B          121,000        363,000        484,000        32,000
   4/12/97    Livermore / S. Front Road             876,000      2,176,000      3,052,000       144,000
   4/12/97    Garland / Plano                       889,000      2,232,000      3,121,000       150,000
   4/12/97    San Jose / Story Road               1,352,000      3,373,000      4,725,000       222,000
   4/12/97    Aurora / Abilene                    1,406,000      3,488,000      4,894,000       227,000
   4/12/97    Antioch / Sunset Drive              1,035,000      2,580,000      3,615,000       171,000
   4/12/97    Rancho Cordova / Sunrise            1,048,000      2,615,000      3,663,000       173,000
   4/12/97    Berlin / Wilbur Cross                 756,000      1,921,000      2,677,000       131,000
   4/12/97    Whittier / Whittier Blvd.             648,000      1,613,000      2,261,000       107,000
   4/12/97    Peabody / Newbury Street            1,159,000      2,893,000      4,052,000       191,000
   4/12/97    Denver / Blake                        602,000      1,522,000      2,124,000        98,000
   4/12/97    Evansville / Green River Road         470,000      1,188,000      1,658,000        83,000
   4/12/97    Burien / First Ave. So.               792,000      1,998,000      2,790,000       131,000
   4/12/97    Rancho Cordova / Mather Field         494,000      1,268,000      1,762,000        89,000
   4/12/97    Sugar Land / Eldridge                 705,000      1,783,000      2,488,000       123,000
   4/12/97    Columbus / Eastland Drive             602,000      1,531,000      2,133,000       106,000
   4/12/97    Slickerville / Black Horse Pike       539,000      1,351,000      1,890,000        90,000
   4/12/97    Seattle / Aurora                    1,145,000      2,857,000      4,002,000       187,000
   4/12/97    Gaithersburg / Christopher Ave.       972,000      2,430,000      3,402,000       160,000
   4/12/97    Manchester / Tolland Turnpike         807,000      2,030,000      2,837,000       136,000

</TABLE>
                                      F-38

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                                  <C>            <C>            <C>                        
   5/12/97    New Orleans, St. Charles                             1,407,000      2,632,000        307,000                  
   6/25/97    Kirkland-Totem                                       2,131,000      4,972,000        (39,000)                 
   6/25/97    Idianapolis                                            471,000      1,098,000          7,000                  
   6/25/97    Dallas                                                 699,000      1,631,000         18,000                  
   6/25/97    Atlanta                                              1,183,000      2,761,000        (23,000)                 
   6/25/97    Bensalem                                             1,159,000      2,705,000        (29,000)                 
   6/25/97    Evansville                                             429,000      1,000,000         (3,000)                 
   6/25/97    Austin                                                 813,000      1,897,000         (6,000)                 
   6/25/97    Harbor City                                          1,244,000      2,904,000         52,000                  
   6/25/97    Birmingham                                             539,000      1,258,000         (3,000)                 
   6/25/97    Sacramento                                             489,000      1,396,000       (264,000)                 
   6/25/97    Carrollton                                             441,000      1,029,000         (7,000)                 
   6/25/97    La Habra                                               822,000      1,918,000         (7,000)                 
   6/25/97    Lombard                                              1,527,000      3,564,000      1,656,000                  
   6/25/97    Fairfield                                              740,000      1,727,000        (14,000)                 
   6/25/97    Seattle                                              1,498,000      3,494,000        155,000                  
   6/25/97    Bellevue                                             1,653,000      3,858,000          5,000                  
   6/25/97    Citrus Heights                                         642,000      1,244,000        269,000                  
   6/25/97    San Jose                                             1,273,000      2,971,000        (50,000)                 
   6/25/97    Stanton                                                948,000      2,212,000        (37,000)                 
   6/25/97    Garland                                                486,000      1,135,000          1,000                  
   6/25/97    Westford                                               857,000      1,999,000         (1,000)                 
   6/25/97    Dallas                                               1,627,000      3,797,000        439,000                  
   6/25/97    Wheat Ridge                                          1,054,000      2,459,000        273,000                  
   6/25/97    Berlin                                                 825,000      1,925,000        202,000                  
   6/25/97    Gretna                                               1,069,000      2,494,000        307,000                  
   6/25/97    Spring                                                 461,000      1,077,000        131,000                  
   6/25/97    Sacramento                                             592,000      1,380,000        782,000                  
   6/25/97    Houston/South Dairyashford                             856,000      1,997,000        240,000                  
   6/25/97    Naperville                                           1,108,000      2,585,000        282,000                  
   6/25/97    Carrollton                                           1,158,000      2,702,000        330,000                  
   6/25/97    Waipahu                                              1,620,000      3,780,000        430,000                  
   6/25/97    Davis                                                  628,000      1,465,000        173,000                  
   6/25/97    Decatur                                                951,000      2,220,000        245,000                  
   6/25/97    Jacksonville                                           653,000      1,525,000        203,000                  
   6/25/97    Chicoppe                                               663,000      1,546,000        221,000                  
   6/25/97    Alexandria                                           1,533,000      3,576,000        376,000                  
   6/25/97    Houston/Veterans Memorial Dr.                          458,000      1,070,000        120,000                  
   6/25/97    Los Angeles/Olympic                                  4,392,000     10,247,000      1,165,000                  
   6/25/97    Littleton                                            1,340,000      3,126,000        361,000                  
   6/25/97    Metairie                                             1,229,000      2,868,000        366,000                  
   6/25/97    Louisville                                             717,000      1,672,000        210,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                 <C>            <C>            <C>             <C>         
   5/12/97    New Orleans, St. Charles            1,463,000      2,883,000      4,346,000       241,000
   6/25/97    Kirkland-Totem                      2,131,000      4,933,000      7,064,000       295,000
   6/25/97    Idianapolis                           471,000      1,105,000      1,576,000        68,000
   6/25/97    Dallas                                699,000      1,649,000      2,348,000        99,000
   6/25/97    Atlanta                             1,183,000      2,738,000      3,921,000       163,000
   6/25/97    Bensalem                            1,159,000      2,676,000      3,835,000       162,000
   6/25/97    Evansville                            429,000        997,000      1,426,000        60,000
   6/25/97    Austin                                813,000      1,891,000      2,704,000       112,000
   6/25/97    Harbor City                         1,244,000      2,956,000      4,200,000       181,000
   6/25/97    Birmingham                            539,000      1,255,000      1,794,000        77,000
   6/25/97    Sacramento                            489,000      1,132,000      1,621,000        68,000
   6/25/97    Carrollton                            441,000      1,022,000      1,463,000        62,000
   6/25/97    La Habra                              822,000      1,911,000      2,733,000       113,000
   6/25/97    Lombard                             2,047,000      4,700,000      6,747,000       232,000
   6/25/97    Fairfield                             740,000      1,713,000      2,453,000       104,000
   6/25/97    Seattle                             1,498,000      3,649,000      5,147,000       229,000
   6/25/97    Bellevue                            1,653,000      3,863,000      5,516,000       234,000
   6/25/97    Citrus Heights                        642,000      1,513,000      2,155,000        92,000
   6/25/97    San Jose                            1,273,000      2,921,000      4,194,000       175,000
   6/25/97    Stanton                               948,000      2,175,000      3,123,000       130,000
   6/25/97    Garland                               486,000      1,136,000      1,622,000        69,000
   6/25/97    Westford                              857,000      1,998,000      2,855,000       124,000
   6/25/97    Dallas                              1,627,000      4,236,000      5,863,000       263,000
   6/25/97    Wheat Ridge                         1,054,000      2,732,000      3,786,000       163,000
   6/25/97    Berlin                                825,000      2,127,000      2,952,000       127,000
   6/25/97    Gretna                              1,069,000      2,801,000      3,870,000       174,000
   6/25/97    Spring                                461,000      1,208,000      1,669,000        73,000
   6/25/97    Sacramento                            720,000      2,034,000      2,754,000        93,000
   6/25/97    Houston/South Dairyashford            856,000      2,237,000      3,093,000       137,000
   6/25/97    Naperville                          1,108,000      2,867,000      3,975,000       174,000
   6/25/97    Carrollton                          1,158,000      3,032,000      4,190,000       190,000
   6/25/97    Waipahu                             1,620,000      4,210,000      5,830,000       259,000
   6/25/97    Davis                                 628,000      1,638,000      2,266,000       100,000
   6/25/97    Decatur                               951,000      2,465,000      3,416,000       147,000
   6/25/97    Jacksonville                          653,000      1,728,000      2,381,000       109,000
   6/25/97    Chicoppe                              663,000      1,767,000      2,430,000       110,000
   6/25/97    Alexandria                          1,533,000      3,952,000      5,485,000       236,000
   6/25/97    Houston/Veterans Memorial Dr.         458,000      1,190,000      1,648,000        72,000
   6/25/97    Los Angeles/Olympic                 4,392,000     11,412,000     15,804,000       689,000
   6/25/97    Littleton                           1,340,000      3,487,000      4,827,000       212,000
   6/25/97    Metairie                            1,229,000      3,234,000      4,463,000       200,000
   6/25/97    Louisville                            717,000      1,882,000      2,599,000       114,000

</TABLE>
                                      F-39

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>              <C>                      
   6/25/97    East Hazel Crest                                       753,000      1,757,000        208,000                  
   6/25/97    Edmonds                                              1,187,000      2,770,000        318,000                  
   6/25/97    Foster City                                          1,064,000      2,483,000        274,000                  
   6/25/97    Chicago                                              1,160,000      2,708,000        319,000                  
   6/25/97    Philadelphia                                           924,000      2,155,000        246,000                  
   6/25/97    Dallas/Vilbig Rd.                                      508,000      1,184,000        163,000                  
   6/25/97    Staten Island                                        1,676,000      3,910,000        454,000                  
   6/25/97    Pelham Manor                                         1,209,000      2,820,000        328,000                  
   6/25/97    Irving                                                 469,000      1,093,000        151,000                  
   6/25/97    Elk Grove                                              642,000      1,497,000        181,000                  
   6/25/97    LAX                                                  1,312,000      3,062,000        394,000                  
   6/25/97    Denver                                               1,316,000      3,071,000        362,000                  
   6/25/97    Plano                                                1,369,000      3,193,000        358,000                  
   6/25/97    Lynnwood                                               839,000      1,959,000        238,000                  
   6/25/97    Lilburn                                                507,000      1,182,000        229,000                  
   6/25/97    Parma                                                  881,000      2,055,000        376,000                  
   6/25/97    Davie                                                1,086,000      2,533,000        502,000                  
   6/25/97    Allen Park                                             953,000      2,223,000        412,000                  
   6/25/97    Aurora                                                 808,000      1,886,000        336,000                  
   6/25/97    San Diego/16th Street                                  932,000      2,175,000        436,000                  
   6/25/97    Sterling Heights                                       766,000      1,787,000        330,000                  
   6/25/97    East L.A./Boyle Heights                                957,000      2,232,000        405,000                  
   6/25/97    Springfield/Alban Station                            1,317,000      3,074,000        551,000                  
  06/25/97    Littleton                                              868,000      2,026,000        362,000                  
  06/25/97    Sacramento/57th Street                                 869,000      2,029,000        372,000                  
  06/25/97    L.A./Venice Blvd.                                      523,000      1,221,000        226,000                  
  06/25/97    Miami                                                1,762,000      4,111,000        768,000                  
  08/13/97    Santa Monica / Wilshire Blvd.                        2,040,000      4,760,000        150,000                  
  11/02/97    Lansing, IL                                            758,000      1,768,000         81,000                  
  11/07/97    Phoenix, AZ                                          1,197,000      2,793,000         50,000                  
  11/13/97    Tinley Park, IL                                      1,422,000      3,319,000         19,000                  
  03/17/98    Houston/De Soto Dr.                                    659,000      1,537,000         20,000                  
  03/17/98    Houston / East Freew                                   593,000      1,384,000         45,000                  
  03/17/98    Austin/Ben White Bl                                    692,000      1,614,000         20,000                  
  03/17/98    Arlington/E.Pioneer                                    922,000      2,152,000         30,000                  
  03/17/98    Las Vegas/Tropicana                                  1,285,000      2,998,000         18,000                  
  03/17/98    Branford / Summit Place                                728,000      1,698,000         30,000                  
  03/17/98    Las Vegas / Charleston                                 791,000      1,845,000         23,000                  
  03/17/98    So. San Francisco                                    1,550,000      3,617,000         26,000                  
  03/17/98    Pasadena / Arroyo Prkwy                              3,005,000      7,012,000         11,000                  
  03/17/98    Tempe / E. Broadway                                    633,000      1,476,000          6,000                  
  03/17/98    Phoenix / N. 43rd Ave                                  443,000      1,033,000         21,000                  
  03/17/98    Phoenix/No. 43rd                                       380,000        886,000         16,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
   6/25/97    East Hazel Crest                      753,000      1,965,000      2,718,000       118,000
   6/25/97    Edmonds                             1,187,000      3,088,000      4,275,000       185,000
   6/25/97    Foster City                         1,064,000      2,757,000      3,821,000       164,000
   6/25/97    Chicago                             1,160,000      3,027,000      4,187,000       183,000
   6/25/97    Philadelphia                          924,000      2,401,000      3,325,000       144,000
   6/25/97    Dallas/Vilbig Rd.                     508,000      1,347,000      1,855,000        80,000
   6/25/97    Staten Island                       1,676,000      4,364,000      6,040,000       260,000
   6/25/97    Pelham Manor                        1,209,000      3,148,000      4,357,000       187,000
   6/25/97    Irving                                469,000      1,244,000      1,713,000        77,000
   6/25/97    Elk Grove                             642,000      1,678,000      2,320,000       102,000
   6/25/97    LAX                                 1,312,000      3,456,000      4,768,000       210,000
   6/25/97    Denver                              1,316,000      3,433,000      4,749,000       206,000
   6/25/97    Plano                               1,369,000      3,551,000      4,920,000       212,000
   6/25/97    Lynnwood                              839,000      2,197,000      3,036,000       130,000
   6/25/97    Lilburn                               507,000      1,411,000      1,918,000        84,000
   6/25/97    Parma                                 881,000      2,431,000      3,312,000       144,000
   6/25/97    Davie                               1,086,000      3,035,000      4,121,000       190,000
   6/25/97    Allen Park                            953,000      2,635,000      3,588,000       158,000
   6/25/97    Aurora                                808,000      2,222,000      3,030,000       132,000
   6/25/97    San Diego/16th Street                 932,000      2,611,000      3,543,000       162,000
   6/25/97    Sterling Heights                      766,000      2,117,000      2,883,000       127,000
   6/25/97    East L.A./Boyle Heights               957,000      2,637,000      3,594,000       156,000
   6/25/97    Springfield/Alban Station           1,317,000      3,625,000      4,942,000       216,000
  06/25/97    Littleton                             868,000      2,388,000      3,256,000       142,000
  06/25/97    Sacramento/57th Street                869,000      2,401,000      3,270,000       143,000
  06/25/97    L.A./Venice Blvd.                     523,000      1,447,000      1,970,000        87,000
  06/25/97    Miami                               1,762,000      4,879,000      6,641,000       293,000
  08/13/97    Santa Monica / Wilshire Blvd.       2,040,000      4,910,000      6,950,000       273,000
  11/02/97    Lansing, IL                           758,000      1,849,000      2,607,000        93,000
  11/07/97    Phoenix, AZ                         1,197,000      2,843,000      4,040,000       144,000
  11/13/97    Tinley Park, IL                     1,422,000      3,338,000      4,760,000       146,000
  03/17/98    Houston/De Soto Dr.                   659,000      1,557,000      2,216,000        46,000
  03/17/98    Houston / East Freew                  593,000      1,429,000      2,022,000        43,000
  03/17/98    Austin/Ben White Bl                   692,000      1,634,000      2,326,000        47,000
  03/17/98    Arlington/E.Pioneer                   922,000      2,182,000      3,104,000        63,000
  03/17/98    Las Vegas/Tropicana                 1,285,000      3,016,000      4,301,000        85,000
  03/17/98    Branford / Summit Place               728,000      1,728,000      2,456,000        50,000
  03/17/98    Las Vegas / Charleston                791,000      1,868,000      2,659,000        55,000
  03/17/98    So. San Francisco                   1,550,000      3,643,000      5,193,000       104,000
  03/17/98    Pasadena / Arroyo Prkwy             3,005,000      7,023,000     10,028,000       201,000
  03/17/98    Tempe / E. Broadway                   633,000      1,482,000      2,115,000        43,000
  03/17/98    Phoenix / N. 43rd Ave                 443,000      1,054,000      1,497,000        33,000
  03/17/98    Phoenix/No. 43rd                      380,000        902,000      1,282,000        30,000

</TABLE>
                                      F-40

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>               <C>                     
  03/17/98    Phoenix / Black Canyon                                 380,000        886,000         18,000                  
  03/17/98    Phoenix/Black Canyon                                   136,000        317,000          5,000                  
  03/17/98    Nesconset / Southern                                 1,423,000      3,321,000         16,000                  
  05/01/98    Berkeley / 2nd St.                                   1,914,000      4,466,000         11,000                  
  05/20/98    Boynton Beach / S. C.                                1,299,000      3,034,000         56,000                  
  05/08/98    Cleveland / W. 117th                                   930,000      2,277,000         27,000                  
  05/08/98    La /Venice Blvd                                      1,470,000      3,599,000         12,000                  
  05/08/98    Aurora / Farnsworth                                    960,000      2,350,000          6,000                  
  05/08/98    Santa Rosa / Hopper                                  1,020,000      2,497,000         17,000                  
  05/08/98    Golden Valley / Winn                                   630,000      1,542,000         35,000                  
  05/08/98    St. Louis / Benham                                     810,000      1,983,000         37,000                  
  05/08/98    Chicago / S. Chicago                                   840,000      2,057,000          6,000                  
  04/01/98    Patchogue/W.Sunrise                                    936,000      2,184,000         16,000                  
  04/01/98    Havertown/West Chester                               1,254,000      2,926,000         18,000                  
  04/01/98    Schiller Park/River                                    568,000      1,390,000          6,000                  
  04/01/98    Chicago / Cuyler                                     1,400,000      2,695,000         22,000                  
  04/01/98    Chicago Heights/West                                   468,000      1,804,000          9,000                  
  04/01/98    Arlington Hts/University                               670,000      3,004,000          6,000                  
  04/01/98    Cicero / Ogden                                       1,678,000      2,266,000         19,000                  
  04/01/98    Chicago/W. Howard St.                                  974,000      2,875,000         25,000                  
  04/01/98    Chicago/N. Western Ave                               1,453,000      3,205,000         15,000                  
  04/01/98    Chicago/Northwest Hwy                                  925,000      2,412,000         17,000                  
  04/01/98    Chicago/N. Wells St.                                 1,446,000      2,828,000         34,000                  
  04/01/98    Chicago / Pulaski Rd.                                1,276,000      2,858,000          6,000                  
  04/01/98    Artesia / Artesia                                      625,000      1,419,000         35,000                  
  04/01/98    Arcadia / Lower Azusa                                  821,000      1,369,000         14,000                  
  04/01/98    Manassas / Centreville                                 405,000      2,137,000         60,000                  
  04/01/98    La Downtwn/10 Fwy                                    1,608,000      3,358,000         30,000                  
  04/01/98    Bellevue / Northup                                   1,232,000      3,306,000        125,000                  
  04/01/98    Hollywood/Cole & Wilshire                            1,590,000      1,785,000         27,000                  
  04/01/98    Atlanta/John Wesley                                  1,233,000      1,665,000         59,000                  
  04/01/98    Montebello/S. Maple                                  1,274,000      2,299,000         14,000                  
  04/01/98    Lake City/Forest Park                                  248,000      1,445,000         20,000                  
  04/01/98    Baltimore / W. Patap                                   403,000      2,650,000         22,000                  
  04/01/98    Fraser/Groesbeck Hwy                                   368,000      1,796,000         18,000                  
  04/01/98    Vallejo / Mini Drive                                   560,000      1,803,000         17,000                  
  04/01/98    San Diego/54th & Euclid                                952,000      2,550,000         19,000                  
  04/01/98    Miami / 5th Street                                   2,327,000      3,234,000         31,000                  
  04/01/98    Silver Spring/Hill                                     922,000      2,080,000         30,000                  
  04/01/98    Chicago/E. 95th St.                                    397,000      2,357,000          6,000                  
  04/01/98    Chicago / S. Harlem                                    791,000      1,424,000         15,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
  03/17/98    Phoenix / Black Canyon                380,000        904,000      1,284,000        28,000
  03/17/98    Phoenix/Black Canyon                  136,000        322,000        458,000        12,000
  03/17/98    Nesconset / Southern                1,423,000      3,337,000      4,760,000        96,000
  05/01/98    Berkeley / 2nd St.                  1,914,000      4,477,000      6,391,000       104,000
  05/20/98    Boynton Beach / S. C.               1,299,000      3,090,000      4,389,000        62,000
  05/08/98    Cleveland / W. 117th                  930,000      2,304,000      3,234,000        48,000
  05/08/98    La /Venice Blvd                     1,470,000      3,611,000      5,081,000        73,000
  05/08/98    Aurora / Farnsworth                   960,000      2,356,000      3,316,000        48,000
  05/08/98    Santa Rosa / Hopper                 1,020,000      2,514,000      3,534,000        51,000
  05/08/98    Golden Valley / Winn                  630,000      1,577,000      2,207,000        33,000
  05/08/98    St. Louis / Benham                    810,000      2,020,000      2,830,000        41,000
  05/08/98    Chicago / S. Chicago                  840,000      2,063,000      2,903,000        42,000
  04/01/98    Patchogue/W.Sunrise                   936,000      2,200,000      3,136,000        80,000
  04/01/98    Havertown/West Chester              1,254,000      2,944,000      4,198,000       106,000
  04/01/98    Schiller Park/River                   568,000      1,396,000      1,964,000        60,000
  04/01/98    Chicago / Cuyler                    1,400,000      2,717,000      4,117,000       143,000
  04/01/98    Chicago Heights/West                  468,000      1,813,000      2,281,000        96,000
  04/01/98    Arlington Hts/University              670,000      3,010,000      3,680,000       146,000
  04/01/98    Cicero / Ogden                      1,678,000      2,285,000      3,963,000       118,000
  04/01/98    Chicago/W. Howard St.                 974,000      2,900,000      3,874,000       155,000
  04/01/98    Chicago/N. Western Ave              1,453,000      3,220,000      4,673,000       160,000
  04/01/98    Chicago/Northwest Hwy                 925,000      2,429,000      3,354,000       116,000
  04/01/98    Chicago/N. Wells St.                1,446,000      2,862,000      4,308,000       133,000
  04/01/98    Chicago / Pulaski Rd.               1,276,000      2,864,000      4,140,000       130,000
  04/01/98    Artesia / Artesia                     625,000      1,454,000      2,079,000       143,000
  04/01/98    Arcadia / Lower Azusa                 821,000      1,383,000      2,204,000       154,000
  04/01/98    Manassas / Centreville                405,000      2,197,000      2,602,000       215,000
  04/01/98    La Downtwn/10 Fwy                   1,608,000      3,388,000      4,996,000       344,000
  04/01/98    Bellevue / Northup                  1,232,000      3,431,000      4,663,000       318,000
  04/01/98    Hollywood/Cole & Wilshire           1,590,000      1,812,000      3,402,000       184,000
  04/01/98    Atlanta/John Wesley                 1,233,000      1,724,000      2,957,000       209,000
  04/01/98    Montebello/S. Maple                 1,274,000      2,313,000      3,587,000       244,000
  04/01/98    Lake City/Forest Park                 248,000      1,465,000      1,713,000       147,000
  04/01/98    Baltimore / W. Patap                  403,000      2,672,000      3,075,000       250,000
  04/01/98    Fraser/Groesbeck Hwy                  368,000      1,814,000      2,182,000       178,000
  04/01/98    Vallejo / Mini Drive                  560,000      1,820,000      2,380,000       189,000
  04/01/98    San Diego/54th & Euclid               952,000      2,569,000      3,521,000       381,000
  04/01/98    Miami / 5th Street                  2,327,000      3,265,000      5,592,000       430,000
  04/01/98    Silver Spring/Hill                    922,000      2,110,000      3,032,000       304,000
  04/01/98    Chicago/E. 95th St.                   397,000      2,363,000      2,760,000       359,000
  04/01/98    Chicago / S. Harlem                   791,000      1,439,000      2,230,000       213,000

</TABLE>
                                      F-41

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                 <C>             <C>               <C>                     
  04/01/98    St. Charles /Highway                                   623,000      1,501,000         47,000                  
  04/01/98    Chicago/Burr Ridge Rd.                                 421,000      2,165,000         10,000                  
  04/01/98    St. Louis / Hwy. 141                                   659,000      1,628,000         29,000                  
  04/01/98    Island Park / Austin                                 2,313,000      3,015,000          8,000                  
  04/01/98    Yonkers / Route 9a                                   1,722,000      3,823,000         25,000                  
  04/01/98    Silverlake/Glendale                                  2,314,000      5,481,000         53,000                  
  04/01/98    Akron / Brittain Rd.                                   275,000      2,248,000         53,000                  
  04/01/98    Chicago/Harlem Ave                                   1,430,000      3,038,000         29,000                  
  04/01/98    Bethesda / Butler Rd                                 1,146,000      2,509,000          9,000                  
  04/01/98    Dundalk / Wise Ave                                     447,000      2,005,000          9,000                  
  08/17/98    Honolulu(Kahala)/Waikiki                             3,019,000      8,175,000         10,000                  
  10/01/98    El Segundo / Sepulveda                               6,586,000      5,795,000          8,000                  
  10/01/98    Atlanta / Memorial Dr.                                 414,000      2,239,000         23,000                  
  10/01/98    Chicago / W. 79th St                                   861,000      2,789,000          8,000                  
  10/01/98    Chicago / N. Broadway                                1,918,000      3,824,000          5,000                  
  10/01/98    Tacoma / Orchard                                       358,000      1,987,000         30,000                  
  10/01/98    St. Louis / Gravois                                    312,000      2,327,000         25,000                  
  10/01/98    White Bear Lake                                        578,000      2,079,000         10,000                  
  10/01/98    Santa Cruz / Soquel                                    832,000      2,385,000         16,000                  
  10/01/98    Coon Rapids / Hwy 10                                   330,000      1,646,000         18,000                  
  10/01/98    Oxnard / Hueneme Rd                                    923,000      3,925,000          9,000                  
  10/01/98    Vancouver/ Millplain                                   343,000      2,000,000         35,000                  
  10/01/98    Tigard / Mc Ewan                                       597,000      1,652,000         27,000                  
  10/01/98    Griffith / Cline                                       299,000      2,118,000          8,000                  
  10/01/98    Miami / Sunset Drive                                 1,656,000      2,321,000         12,000                  
  10/01/98    Farmington / 9 Mile                                    580,000      2,526,000          4,000                  
  10/01/98    Los Gatos / University                               2,234,000      3,890,000         10,000                  
  10/01/98    N. Hollywood                                         1,484,000      3,143,000          4,000                  
  10/01/98    Petaluma / Transport                                   460,000      1,840,000         10,000                  
  10/01/98    Chicago / 111th                                        341,000      2,898,000          5,000                  
  10/01/98    Upper Darby / Market                                   808,000      5,011,000          8,000                  
  10/01/98    San Jose / Santa                                       966,000      3,870,000         18,000                  
  10/01/98    San Diego / Morena                                   3,173,000      5,469,000         14,000                  
  10/01/98    Brooklyn /Rockaway Ave                               6,272,000      9,691,000          5,000                  
  10/01/98    Revere / Charger St                                  1,997,000      3,727,000         24,000                  
  10/01/98    Las Vegas / E. Charles                                 602,000      2,545,000         14,000                  
  10/01/98    Laurel / Baltimore Ave                               1,899,000      4,498,000         13,000                  
  10/01/98    East La/Figueroa & 4th                               1,213,000      2,689,000          4,000                  
  10/01/98    Oldsmar / Tampa Road                                   760,000      2,154,000          5,000                  
  10/01/98    Ft. Lauderdale /S.W.                                 1,046,000      2,928,000          5,000                  
  10/01/98    Miami / Nw 73rd St                                   1,050,000      3,064,000          6,000                  
  12/28/98    Kent / S. 180th St                                     621,000      3,600,000          5,000                  

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>            <C>         
  04/01/98    St. Charles /Highway                  623,000      1,548,000      2,171,000       228,000
  04/01/98    Chicago/Burr Ridge Rd.                421,000      2,175,000      2,596,000       333,000
  04/01/98    St. Louis / Hwy. 141                  659,000      1,657,000      2,316,000       233,000
  04/01/98    Island Park / Austin                2,313,000      3,023,000      5,336,000       440,000
  04/01/98    Yonkers / Route 9a                  1,722,000      3,848,000      5,570,000       531,000
  04/01/98    Silverlake/Glendale                 2,314,000      5,534,000      7,848,000       745,000
  04/01/98    Akron / Brittain Rd.                  275,000      2,301,000      2,576,000       302,000
  04/01/98    Chicago/Harlem Ave                  1,430,000      3,067,000      4,497,000       417,000
  04/01/98    Bethesda / Butler Rd                1,146,000      2,518,000      3,664,000       316,000
  04/01/98    Dundalk / Wise Ave                    447,000      2,014,000      2,461,000       238,000
  08/17/98    Honolulu(Kahala)/Waikiki            3,019,000      8,185,000     11,204,000        24,000
  10/01/98    El Segundo / Sepulveda              6,586,000      5,803,000     12,389,000       113,000
  10/01/98    Atlanta / Memorial Dr.                414,000      2,262,000      2,676,000        44,000
  10/01/98    Chicago / W. 79th St                  861,000      2,797,000      3,658,000        55,000
  10/01/98    Chicago / N. Broadway               1,918,000      3,829,000      5,747,000        76,000
  10/01/98    Tacoma / Orchard                      358,000      2,017,000      2,375,000        40,000
  10/01/98    St. Louis / Gravois                   312,000      2,352,000      2,664,000        46,000
  10/01/98    White Bear Lake                       578,000      2,089,000      2,667,000        41,000
  10/01/98    Santa Cruz / Soquel                   832,000      2,401,000      3,233,000        47,000
  10/01/98    Coon Rapids / Hwy 10                  330,000      1,664,000      1,994,000        33,000
  10/01/98    Oxnard / Hueneme Rd                   923,000      3,934,000      4,857,000        76,000
  10/01/98    Vancouver/ Millplain                  343,000      2,035,000      2,378,000        39,000
  10/01/98    Tigard / Mc Ewan                      597,000      1,679,000      2,276,000        32,000
  10/01/98    Griffith / Cline                      299,000      2,126,000      2,425,000        41,000
  10/01/98    Miami / Sunset Drive                1,656,000      2,333,000      3,989,000        46,000
  10/01/98    Farmington / 9 Mile                   580,000      2,530,000      3,110,000        49,000
  10/01/98    Los Gatos / University              2,234,000      3,900,000      6,134,000        74,000
  10/01/98    N. Hollywood                        1,484,000      3,147,000      4,631,000        60,000
  10/01/98    Petaluma / Transport                  460,000      1,850,000      2,310,000        36,000
  10/01/98    Chicago / 111th                       341,000      2,903,000      3,244,000        56,000
  10/01/98    Upper Darby / Market                  808,000      5,019,000      5,827,000        94,000
  10/01/98    San Jose / Santa                      966,000      3,888,000      4,854,000        75,000
  10/01/98    San Diego / Morena                  3,173,000      5,483,000      8,656,000       105,000
  10/01/98    Brooklyn /Rockaway Ave              6,258,000      9,710,000     15,968,000       188,000
  10/01/98    Revere / Charger St                 1,997,000      3,751,000      5,748,000        72,000
  10/01/98    Las Vegas / E. Charles                602,000      2,559,000      3,161,000        51,000
  10/01/98    Laurel / Baltimore Ave              1,899,000      4,511,000      6,410,000        86,000
  10/01/98    East La/Figueroa & 4th              1,213,000      2,693,000      3,906,000        52,000
  10/01/98    Oldsmar / Tampa Road                  760,000      2,159,000      2,919,000        43,000
  10/01/98    Ft. Lauderdale /S.W.                1,046,000      2,933,000      3,979,000        58,000
  10/01/98    Miami / Nw 73rd St                  1,050,000      3,070,000      4,120,000        61,000
  12/28/98    Kent / S. 180th St                    621,000      3,605,000      4,226,000             0

</TABLE>
                                      F-42

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
  <S>         <C>                                                  <C>            <C>             <C>          <C>          
  04/01/98    Dallas / Kingsly                                     1,095,000      1,712,000         13,000                  
  10/01/98    Dallas / Greenville                                  1,933,000      2,892,000          4,000                  
   1/1/96     Bensenville/York R                                     667,000      1,602,000         51,000       527,000    
   1/1/96     Louisville/Preston                                     211,000      1,060,000         36,000       349,000    
   1/1/96     San Jose/Aborn Road                                    615,000      1,342,000         40,000       441,000    
   1/1/96     Englewood/Federal                                      481,000      1,395,000         46,000       460,000    
   1/1/96     W. Hollywood/Santa Monica                            3,415,000      4,577,000        144,000     1,506,000    
   1/1/96     Orland Hills/W. 159th                                  917,000      2,392,000         62,000       782,000    
   1/1/96     Merrionette Park/S                                     818,000      2,020,000         55,000       661,000    
   1/1/96     Denver/S Quebec                                      1,849,000      1,941,000         56,000       637,000    
   1/1/96     Tigard/S.W. Pacific                                    633,000      1,206,000         37,000       397,000    
   1/1/96     Coram/Middle Count                                     507,000      1,421,000         33,000       463,000    
   1/1/96     Houston/FM 1960                                        635,000      1,294,000        137,000       456,000    
   1/1/96     Kent/Military Trail                                    409,000      1,670,000         70,000       555,000    
   1/1/96     Turnersville/Black H                                   165,000      1,360,000         21,000       441,000    
   1/1/96     Sewell/Rts. 553                                        323,000      1,138,000         42,000       376,000    
   1/1/96     Maple Shade/Fellowship                                 331,000      1,421,000         33,000       464,000    
   1/1/96     Hyattsville/Kenilworth                                 509,000      1,757,000         48,000       576,000    
   1/1/96     Waterbury/Captain Ne                                   434,000      2,089,000         55,000       684,000    
   1/1/96     Bedford Hts/Miles                                      835,000      1,577,000         58,000       521,000    
   1/1/96     Livonia/Newburgh                                       635,000      1,407,000         43,000       462,000    
   1/1/96     Sunland/Sunland Blvd.                                  631,000      1,965,000         43,000       640,000    
   1/1/96     Des Moines                                             448,000      1,350,000         37,000       443,000    
   1/1/96     Oxonhill/Indianhead                                    772,000      2,017,000         62,000       663,000    
   1/1/96     Sacramento/N. 16th                                     582,000      2,610,000         55,000       850,000    
   1/1/96     Houston/Westheimer                                   1,508,000      2,274,000        133,000       768,000    
   1/1/96     San Pablo/San Pablo                                    565,000      1,232,000         64,000       414,000    
   1/1/96     Bowie/Woodcliff                                        718,000      2,336,000         43,000       758,000    
   1/1/96     Milwaukee/S. 84th                                      444,000      1,868,000         51,000       612,000    
   1/1/96     Clinton/Malcolm Road                                   593,000      2,123,000         55,000       695,000    
   10/1/97    Marietta /Austell Rd                                   398,000      1,326,000        182,000       384,000    
   10/1/97    Denver / Leetsdale                                   1,407,000      1,682,000        111,000       490,000    
   10/1/97    Baltimore / York Road                                1,538,000      1,952,000        140,000       561,000    
   10/1/97    Bolingbrook                                            737,000      1,776,000        128,000       509,000    
   10/1/97    Kent / Central                                         483,000      1,321,000        109,000       379,000    
   10/1/97    Geneva / Roosevelt                                     355,000      1,302,000         99,000       376,000    
   10/1/97    Denver / Sheridan                                      429,000      1,105,000         73,000       323,000    
   10/1/97    Mountlake Terrace                                    1,017,000      1,783,000        152,000       508,000    
   10/1/97    Carol Stream/ St.Charles                               185,000      1,187,000         91,000       342,000    
   10/1/97    Marietta / Cobb Park                                   420,000      1,131,000        132,000       326,000    
   10/1/97    Venice / Rose                                        5,468,000      5,478,000        535,000     1,567,000    
   10/1/97    Ventura / Ventura Blvd                                 911,000      2,227,000        159,000       646,000    

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
  <S>         <C>                                 <C>            <C>            <C>             <C>         
  04/01/98    Dallas / Kingsly                    1,095,000      1,725,000      2,820,000       181,000
  10/01/98    Dallas / Greenville                 1,933,000      2,896,000      4,829,000        53,000
   1/1/96     Bensenville/York R                    667,000      2,180,000      2,847,000       260,000
   1/1/96     Louisville/Preston                    211,000      1,445,000      1,656,000       167,000
   1/1/96     San Jose/Aborn Road                   615,000      1,823,000      2,438,000       216,000
   1/1/96     Englewood/Federal                     481,000      1,901,000      2,382,000       234,000
   1/1/96     W. Hollywood/Santa Monica           3,415,000      6,227,000      9,642,000       693,000
   1/1/96     Orland Hills/W. 159th                 917,000      3,236,000      4,153,000       393,000
   1/1/96     Merrionette Park/S                    818,000      2,736,000      3,554,000       314,000
   1/1/96     Denver/S Quebec                     1,849,000      2,634,000      4,483,000       302,000
   1/1/96     Tigard/S.W. Pacific                   633,000      1,640,000      2,273,000       187,000
   1/1/96     Coram/Middle Count                    507,000      1,917,000      2,424,000       211,000
   1/1/96     Houston/FM 1960                       635,000      1,887,000      2,522,000       214,000
   1/1/96     Kent/Military Trail                   409,000      2,295,000      2,704,000       246,000
   1/1/96     Turnersville/Black H                  165,000      1,822,000      1,987,000       209,000
   1/1/96     Sewell/Rts. 553                       323,000      1,556,000      1,879,000       178,000
   1/1/96     Maple Shade/Fellowship                331,000      1,918,000      2,249,000       206,000
   1/1/96     Hyattsville/Kenilworth                509,000      2,381,000      2,890,000       250,000
   1/1/96     Waterbury/Captain Ne                  434,000      2,828,000      3,262,000       263,000
   1/1/96     Bedford Hts/Miles                     835,000      2,156,000      2,991,000       236,000
   1/1/96     Livonia/Newburgh                      635,000      1,912,000      2,547,000       207,000
   1/1/96     Sunland/Sunland Blvd.                 631,000      2,648,000      3,279,000       263,000
   1/1/96     Des Moines                            448,000      1,830,000      2,278,000       205,000
   1/1/96     Oxonhill/Indianhead                   772,000      2,742,000      3,514,000       279,000
   1/1/96     Sacramento/N. 16th                    582,000      3,515,000      4,097,000       319,000
   1/1/96     Houston/Westheimer                  1,508,000      3,175,000      4,683,000       334,000
   1/1/96     San Pablo/San Pablo                   565,000      1,710,000      2,275,000       176,000
   1/1/96     Bowie/Woodcliff                       718,000      3,137,000      3,855,000       293,000
   1/1/96     Milwaukee/S. 84th                     444,000      2,531,000      2,975,000       249,000
   1/1/96     Clinton/Malcolm Road                  593,000      2,873,000      3,466,000       261,000
   10/1/97    Marietta /Austell Rd                  398,000      1,892,000      2,290,000       110,000
   10/1/97    Denver / Leetsdale                  1,407,000      2,283,000      3,690,000       139,000
   10/1/97    Baltimore / York Road               1,538,000      2,653,000      4,191,000       158,000
   10/1/97    Bolingbrook                           737,000      2,413,000      3,150,000       143,000
   10/1/97    Kent / Central                        483,000      1,809,000      2,292,000       108,000
   10/1/97    Geneva / Roosevelt                    355,000      1,777,000      2,132,000       107,000
   10/1/97    Denver / Sheridan                     429,000      1,501,000      1,930,000        92,000
   10/1/97    Mountlake Terrace                   1,017,000      2,443,000      3,460,000       140,000
   10/1/97    Carol Stream/ St.Charles              185,000      1,620,000      1,805,000        94,000
   10/1/97    Marietta / Cobb Park                  420,000      1,589,000      2,009,000        93,000
   10/1/97    Venice / Rose                       5,468,000      7,580,000     13,048,000       386,000
   10/1/97    Ventura / Ventura Blvd                911,000      3,032,000      3,943,000       170,000

</TABLE>
                                      F-43

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                                  <C>            <C>            <C>           <C>          
   10/1/97    Studio City/ Ventura                                 2,421,000      1,610,000        112,000       459,000    
   10/1/97    Madison Heights                                        428,000      1,686,000      1,996,000       481,000    
   10/1/97    Lax / Imperial                                       1,662,000      2,079,000        115,000       602,000    
   10/1/97    Justice / Industrial                                   233,000      1,181,000         95,000       341,000    
   10/1/97    Burbank / San Fernando                               1,825,000      2,210,000        127,000       632,000    
   10/1/97    Pinole / Appian Way                                    728,000      1,827,000        117,000       523,000    
   10/1/97    Denver / Tamarac Park                                2,545,000      1,692,000        111,000       497,000    
   10/1/97    Gresham / Powell                                       322,000      1,298,000        154,000       372,000    
   10/1/97    Warren / Mound Road                                    268,000      1,025,000        113,000       293,000    
   10/1/97    Woodside/Brooklyn                                    5,016,000      3,950,000        118,000     1,134,000    
   10/1/97    Enfield / Elm Street                                   399,000      1,900,000        208,000       547,000    
   10/1/97    Roselle / Lake Street                                  312,000      1,411,000        116,000       406,000    
   10/1/97    Milwaukee / Appleton                                   324,000      1,385,000        130,000       399,000    
   10/1/97    Emeryville / Bay St                                  1,602,000      1,830,000         95,000       525,000    
   10/1/97    Monterey / Del Rey                                     257,000      1,048,000        164,000       301,000    
   10/1/97    San Leandro / Washington                               660,000      1,142,000         99,000       326,000    
   10/1/97    Boca Raton / N.W. 20                                 1,140,000      2,256,000        299,000       654,000    
   10/1/97    Washington Dc/So Capital                             1,437,000      4,489,000        272,000     1,280,000    
   10/1/97    Lynn / Lynnway                                         463,000      3,059,000        206,000       888,000    
   10/1/97    Pompano Beach                                        1,077,000      1,527,000        445,000       442,000    
   10/1/97    Lake Oswego/ N.State                                   465,000      1,956,000        209,000       566,000    
   10/1/97    Daly City / Mission                                    389,000      2,921,000        137,000       808,000    
   10/1/97    Odenton / Route 175                                    456,000      2,104,000        146,000       606,000    
   10/1/97    Novato / Landing                                     2,416,000      3,496,000        142,000        50,000    
   10/1/97    St. Louis / Lindberg                                   584,000      1,508,000        135,000        23,000    
   10/1/97    Oakland/International                                  358,000      1,568,000        125,000        23,000    
   10/1/97    Stockton / March Lane                                  663,000      1,398,000         72,000        21,000    
   10/1/97    Des Plaines / Golf Rd                                1,363,000      3,093,000        159,000        46,000    
   10/1/97    Morton Grove / Wauke                                 2,658,000      3,232,000         87,000        48,000    
   10/1/97    Los Angeles / Jefferson                              1,090,000      1,580,000        176,000        24,000    
   10/1/97    Los Angeles / Martin                                   869,000      1,152,000         57,000        17,000    
   10/1/97    San Leandro / E. 14t                                   627,000      1,289,000         59,000        19,000    
   10/1/97    Tucson / Tanque Verde                                  345,000      1,709,000         83,000        25,000    
   10/1/97    Randolph / Warren St                                 2,330,000      1,914,000        363,000        29,000    
   10/1/97    Forrestville / Penn.                                 1,056,000      2,347,000        137,000        35,000    
   10/1/97    Bridgeport / Wordin                                  4,877,000      2,739,000        420,000        42,000    
   10/1/97    North Hollywood/Vine                                   906,000      2,379,000        114,000        35,000    
   10/1/97    Santa Cruz / Portola                                   535,000      1,526,000         76,000        23,000    
   10/1/97    Hyde Park / River St                                   626,000      1,748,000        152,000        26,000    
   10/1/97    Dublin / San Ramon Rd                                  942,000      1,999,000         94,000        26,000    
   10/1/97    Vallejo / Humboldt                                     473,000      1,651,000         92,000        25,000    
   10/1/97    Fremont/Warm Springs                                   848,000      2,885,000        137,000        43,000    

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                 <C>            <C>            <C>             <C>         
   10/1/97    Studio City/ Ventura                2,421,000      2,181,000      4,602,000       129,000
   10/1/97    Madison Heights                       428,000      4,163,000      4,591,000       124,000
   10/1/97    Lax / Imperial                      1,662,000      2,796,000      4,458,000       161,000
   10/1/97    Justice / Industrial                  233,000      1,617,000      1,850,000        97,000
   10/1/97    Burbank / San Fernando              1,825,000      2,969,000      4,794,000       166,000
   10/1/97    Pinole / Appian Way                   728,000      2,467,000      3,195,000       140,000
   10/1/97    Denver / Tamarac Park               2,545,000      2,300,000      4,845,000       148,000
   10/1/97    Gresham / Powell                      322,000      1,824,000      2,146,000       101,000
   10/1/97    Warren / Mound Road                   268,000      1,431,000      1,699,000        78,000
   10/1/97    Woodside/Brooklyn                   5,016,000      5,202,000     10,218,000       253,000
   10/1/97    Enfield / Elm Street                  399,000      2,655,000      3,054,000       140,000
   10/1/97    Roselle / Lake Street                 312,000      1,933,000      2,245,000       108,000
   10/1/97    Milwaukee / Appleton                  324,000      1,914,000      2,238,000       102,000
   10/1/97    Emeryville / Bay St                 1,602,000      2,450,000      4,052,000       135,000
   10/1/97    Monterey / Del Rey                    257,000      1,513,000      1,770,000        80,000
   10/1/97    San Leandro / Washington              660,000      1,567,000      2,227,000        87,000
   10/1/97    Boca Raton / N.W. 20                1,140,000      3,209,000      4,349,000       165,000
   10/1/97    Washington Dc/So Capital            1,437,000      6,041,000      7,478,000       256,000
   10/1/97    Lynn / Lynnway                        463,000      4,153,000      4,616,000       203,000
   10/1/97    Pompano Beach                       1,077,000      2,414,000      3,491,000       112,000
   10/1/97    Lake Oswego/ N.State                  465,000      2,731,000      3,196,000       136,000
   10/1/97    Daly City / Mission                   389,000      3,866,000      4,255,000       195,000
   10/1/97    Odenton / Route 175                   456,000      2,856,000      3,312,000       120,000
   10/1/97    Novato / Landing                    2,416,000      3,688,000      6,104,000       279,000
   10/1/97    St. Louis / Lindberg                  584,000      1,666,000      2,250,000       114,000
   10/1/97    Oakland/International                 358,000      1,716,000      2,074,000       119,000
   10/1/97    Stockton / March Lane                 663,000      1,491,000      2,154,000       106,000
   10/1/97    Des Plaines / Golf Rd               1,363,000      3,298,000      4,661,000       233,000
   10/1/97    Morton Grove / Wauke                2,658,000      3,367,000      6,025,000       274,000
   10/1/97    Los Angeles / Jefferson             1,090,000      1,780,000      2,870,000       122,000
   10/1/97    Los Angeles / Martin                  869,000      1,226,000      2,095,000        88,000
   10/1/97    San Leandro / E. 14t                  627,000      1,367,000      1,994,000        92,000
   10/1/97    Tucson / Tanque Verde                 345,000      1,817,000      2,162,000       115,000
   10/1/97    Randolph / Warren St                2,330,000      2,306,000      4,636,000       133,000
   10/1/97    Forrestville / Penn.                1,056,000      2,519,000      3,575,000       176,000
   10/1/97    Bridgeport / Wordin                 4,877,000      3,201,000      8,078,000       198,000
   10/1/97    North Hollywood/Vine                  906,000      2,528,000      3,434,000       161,000
   10/1/97    Santa Cruz / Portola                  535,000      1,625,000      2,160,000       106,000
   10/1/97    Hyde Park / River St                  626,000      1,926,000      2,552,000       114,000
   10/1/97    Dublin / San Ramon Rd                 942,000      2,119,000      3,061,000       173,000
   10/1/97    Vallejo / Humboldt                    473,000      1,768,000      2,241,000       111,000
   10/1/97    Fremont/Warm Springs                  848,000      3,065,000      3,913,000       181,000

</TABLE>
                                      F-44

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
   <S>        <C>                                      <C>         <C>            <C>             <C>          <C>          
   10/1/97    Seattle / Stone Way                                    829,000      2,180,000        192,000        32,000    
   10/1/97    W. Olympia                                             149,000      1,096,000        187,000        16,000    
   10/1/97    Mercer/Parkside Ave                                    359,000      1,763,000        132,000        26,000    
   10/1/97    Bridge Water / Main                                    445,000      2,054,000        208,000        31,000    
   10/1/97    Norwalk / Hoyt Street                                2,369,000      3,049,000        223,000        45,000    
   9/30/95    Whittier                                               215,000        384,000         17,000       696,000    
   9/30/95    Van Nuys                                               295,000        657,000         31,000     1,242,000    
   9/30/95    Huntington Beach                                       176,000        321,000         62,000       751,000    
   9/30/95    Monterey Park                            257,000       124,000        346,000         39,000       800,000    
   9/30/95    Downey                                                 191,000        317,000         53,000       821,000    
   9/30/95    Balboa                                                  85,000        346,000         19,000       830,000    
   9/30/95    Stockton                                 312,000       151,000        402,000         79,000       673,000    
   9/30/95    Del Amo                                                474,000        742,000         38,000     1,107,000    
   9/30/95    Fresno                                    90,000        44,000        206,000         44,000       668,000    
   9/30/95    Carson                                                 375,000        735,000         56,000       523,000    
    1/83      Platte                                                 409,000        953,000        208,000       408,000    
    5/83      Delta Drive                                             67,000        481,000        130,000       239,000    
    12/82     Port/Halsey                                            357,000      1,150,000       (461,000)      279,000    
    12/82     Sacto/Folsom                                           396,000        329,000        563,000       311,000    
    1/83      Semoran                                                442,000      1,882,000        124,000       702,000    
    3/83      Blackwood                                              213,000      1,559,000        136,000       567,000    
    10/83     Orlando J. Y. Parkway                                  383,000      1,512,000        227,000       593,000    
    9/83      Southington                                            124,000      1,233,000        234,000       519,000    
    4/83      Vailsgate                                              103,000        990,000        321,000       452,000    
    6/83      Ventura                                                658,000      1,734,000         54,000       581,000    
    9/83      Southhampton                                           331,000      1,738,000        472,000       772,000    
    9/83      Webster/Keystone                                       449,000      1,688,000        614,000       806,000    
    9/83      Dover                                                  107,000      1,462,000        310,000       616,000    
    9/83      Newcastle                                              227,000      2,163,000        279,000       808,000    
    9/83      Newark                                                 208,000      2,031,000        150,000       716,000    
    9/83      Langhorne                                              263,000      3,549,000        219,000     1,414,000    
    8/83      Hobart                                                 215,000      1,491,000        412,000       672,000    
    9/83      Ft. Wayne/W. Coliseum                                  160,000      1,395,000         53,000       495,000    
    9/83      Ft. Wayne/Bluffton                                      88,000        675,000        116,000       262,000    
    11/83     Aurora                                                 505,000        758,000        193,000       319,000    
    11/83     Campbell                                             1,379,000      1,849,000       (664,000)      439,000    
    11/83     Col Springs/Ed  (Coulter)                              471,000      1,640,000         19,000       552,000    
    11/83     Col Springs/Mv  (Coulter)                              320,000      1,036,000        115,000       414,000    
    11/83     Thorton (Coulter)                                      418,000      1,400,000         16,000       503,000    
    11/83     Oklahoma City   (Coulter)                              454,000      1,030,000        605,000       596,000    
    11/83     Tucson (Coulter)                                       343,000        778,000        454,000       419,000    
    11/83     Webster/Nasa                                         1,570,000      2,457,000        972,000     1,296,000    

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
   <S>        <C>                                <C>             <C>            <C>           <C>         
   10/1/97    Seattle / Stone Way                   829,000      2,404,000      3,233,000       134,000
   10/1/97    W. Olympia                            149,000      1,299,000      1,448,000        74,000
   10/1/97    Mercer/Parkside Ave                   359,000      1,921,000      2,280,000       117,000
   10/1/97    Bridge Water / Main                   445,000      2,293,000      2,738,000       137,000
   10/1/97    Norwalk / Hoyt Street               2,369,000      3,317,000      5,686,000       189,000
   9/30/95    Whittier                              215,000      1,097,000      1,312,000       382,000
   9/30/95    Van Nuys                              295,000      1,930,000      2,225,000       613,000
   9/30/95    Huntington Beach                      176,000      1,134,000      1,310,000       356,000
   9/30/95    Monterey Park                         124,000      1,185,000      1,309,000       386,000
   9/30/95    Downey                                191,000      1,191,000      1,382,000       358,000
   9/30/95    Balboa                                 85,000      1,195,000      1,280,000       326,000
   9/30/95    Stockton                              151,000      1,154,000      1,305,000       318,000
   9/30/95    Del Amo                               474,000      1,887,000      2,361,000       663,000
   9/30/95    Fresno                                 44,000        918,000        962,000       200,000
   9/30/95    Carson                                375,000      1,314,000      1,689,000       288,000
    1/83      Platte                                409,000      1,569,000      1,978,000       738,000
    5/83      Delta Drive                            68,000        849,000        917,000       390,000
    12/82     Port/Halsey                           357,000        968,000      1,325,000       442,000
    12/82     Sacto/Folsom                          396,000      1,203,000      1,599,000       557,000
    1/83      Semoran                               442,000      2,708,000      3,150,000     1,306,000
    3/83      Blackwood                             213,000      2,262,000      2,475,000     1,074,000
    10/83     Orlando J. Y. Parkway                 383,000      2,332,000      2,715,000     1,088,000
    9/83      Southington                           123,000      1,987,000      2,110,000       885,000
    4/83      Vailsgate                             103,000      1,763,000      1,866,000       796,000
    6/83      Ventura                               658,000      2,369,000      3,027,000     1,129,000
    9/83      Southhampton                          331,000      2,982,000      3,313,000     1,405,000
    9/83      Webster/Keystone                      449,000      3,108,000      3,557,000     1,426,000
    9/83      Dover                                 107,000      2,388,000      2,495,000     1,079,000
    9/83      Newcastle                             227,000      3,250,000      3,477,000     1,522,000
    9/83      Newark                                208,000      2,897,000      3,105,000     1,350,000
    9/83      Langhorne                             263,000      5,182,000      5,445,000     2,348,000
    8/83      Hobart                                215,000      2,575,000      2,790,000     1,116,000
    9/83      Ft. Wayne/W. Coliseum                 160,000      1,943,000      2,103,000       903,000
    9/83      Ft. Wayne/Bluffton                     88,000      1,053,000      1,141,000       481,000
    11/83     Aurora                                505,000      1,270,000      1,775,000       589,000
    11/83     Campbell                            1,379,000      1,624,000      3,003,000       711,000
    11/83     Col Springs/Ed  (Coulter)             471,000      2,211,000      2,682,000     1,066,000
    11/83     Col Springs/Mv  (Coulter)             320,000      1,565,000      1,885,000       742,000
    11/83     Thorton (Coulter)                     418,000      1,919,000      2,337,000       920,000
    11/83     Oklahoma City   (Coulter)             454,000      2,231,000      2,685,000     1,054,000
    11/83     Tucson (Coulter)                      343,000      1,651,000      1,994,000       745,000
    11/83     Webster/Nasa                        1,571,000      4,724,000      6,295,000     2,270,000

</TABLE>
                                      F-45

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
    <S>       <C>                                                    <C>          <C>              <C>           <C>        
    12/83     Charlotte                                              165,000      1,274,000        320,000        94,000    
    12/83     Greensboro/Market                                      214,000      1,653,000        473,000       159,000    
    12/83     Greensboro/Electra                                     112,000        869,000        248,000       114,000    
    1/83      Raleigh/Yonkers                                        203,000        914,000        361,000        97,000    
    12/83     Columbia                                               171,000      1,318,000        442,000        99,000    
    12/83     Richmond                                               176,000      1,360,000        318,000        81,000    
    12/83     Augusta                                                 97,000        747,000        240,000        81,000    
    4/84      Providence                                              92,000      1,087,000        313,000        84,000    
    1/85      Cranston                                               175,000        722,000        272,000        50,000    
    3/84      Marrietta/Cobb                                          73,000        542,000        223,000        48,000    
    1/84      Fremont/Albrae                                         636,000      1,659,000        417,000        97,000    
    12/83     Tacoma                                                 553,000      1,173,000        341,000        86,000    
    1/84      Belton                                                 175,000        858,000        458,000        83,000    
    1/84      Gladstone                                              275,000      1,799,000        374,000       118,000    
    1/84      Hickman/112                                            257,000      1,848,000        382,000       119,000    
    1/84      Holmes                                                 289,000      1,333,000        240,000       106,000    
    1/84      Independence                                           221,000      1,848,000        267,000       125,000    
    1/84      Merriam                                                255,000      1,469,000        323,000        85,000    
    1/84      Olathe                                                 107,000        992,000        270,000        68,000    
    1/84      Shawnee                                                205,000      1,420,000        337,000       101,000    
    1/84      Topeka                                                  75,000      1,049,000        195,000        64,000    
    2/84      Unicorn/Nkoxville                                      662,000      1,887,000        421,000       136,000    
    2/84      Central/Knoxville                                      449,000      1,281,000        242,000        99,000    
    3/84      Manassas                                               320,000      1,556,000        325,000        94,000    
    3/84      Pico Rivera                                            743,000        807,000        302,000        62,000    
    5/84      Raleigh/Departure                                      302,000      2,484,000        412,000       153,000    
    4/84      Milwaukie/Oregon                                       289,000        584,000        225,000       102,000    
    7/84      Trevose/Old Lincoln                                    421,000      1,749,000        347,000       111,000    
    5/84      Virginia Beach                                         509,000      2,121,000        598,000       153,000    
    5/84      Philadelphia/Grant                                   1,041,000      3,262,000        400,000       180,000    
    6/84      Lorton                                                 435,000      2,040,000        461,000       135,000    
    6/84      Baltimore                                              382,000      1,793,000        531,000       128,000    
    6/84      Laurel                                                 501,000      2,349,000        611,000       176,000    
    6/84      Delran                                                 279,000      1,472,000        237,000       109,000    
    5/84      Garland                                                356,000        844,000        185,000        70,000    
    6/84      Orange Blossom                                         226,000        924,000        179,000        95,000    
    6/84      Safe Place (Cincinnati)                                402,000      1,573,000        444,000       116,000    
    6/84      Safe Place (Florence)                                  185,000        740,000        319,000        89,000    
    8/84      Medley                                                 584,000      1,016,000        298,000        90,000    
    8/84      Oklahoma City                                          340,000      1,310,000        357,000       190,000    
    8/84      Newport News                                           356,000      2,395,000        528,000       216,000    
    8/84      Kaplan (Irving)                                        677,000      1,592,000        320,000       152,000    

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
    <S>       <C>                                   <C>          <C>            <C>           <C>         
    12/83     Charlotte                             165,000      1,688,000      1,853,000       965,000
    12/83     Greensboro/Market                     214,000      2,285,000      2,499,000     1,315,000
    12/83     Greensboro/Electra                    112,000      1,231,000      1,343,000       679,000
    1/83      Raleigh/Yonkers                       203,000      1,372,000      1,575,000       784,000
    12/83     Columbia                              171,000      1,859,000      2,030,000     1,078,000
    12/83     Richmond                              176,000      1,759,000      1,935,000     1,005,000
    12/83     Augusta                                97,000      1,068,000      1,165,000       595,000
    4/84      Providence                             92,000      1,484,000      1,576,000       838,000
    1/85      Cranston                              175,000      1,044,000      1,219,000       579,000
    3/84      Marrietta/Cobb                         73,000        813,000        886,000       453,000
    1/84      Fremont/Albrae                        636,000      2,173,000      2,809,000     1,279,000
    12/83     Tacoma                                553,000      1,600,000      2,153,000       922,000
    1/84      Belton                                175,000      1,399,000      1,574,000       791,000
    1/84      Gladstone                             275,000      2,291,000      2,566,000     1,284,000
    1/84      Hickman/112                           257,000      2,349,000      2,606,000     1,332,000
    1/84      Holmes                                289,000      1,679,000      1,968,000       936,000
    1/84      Independence                          221,000      2,240,000      2,461,000     1,276,000
    1/84      Merriam                               255,000      1,877,000      2,132,000     1,047,000
    1/84      Olathe                                107,000      1,330,000      1,437,000       742,000
    1/84      Shawnee                               205,000      1,858,000      2,063,000     1,042,000
    1/84      Topeka                                 75,000      1,308,000      1,383,000       738,000
    2/84      Unicorn/Nkoxville                     662,000      2,444,000      3,106,000     1,381,000
    2/84      Central/Knoxville                     449,000      1,622,000      2,071,000       914,000
    3/84      Manassas                              320,000      1,975,000      2,295,000     1,130,000
    3/84      Pico Rivera                           743,000      1,171,000      1,914,000       700,000
    5/84      Raleigh/Departure                     302,000      3,049,000      3,351,000     1,713,000
    4/84      Milwaukie/Oregon                      289,000        911,000      1,200,000       486,000
    7/84      Trevose/Old Lincoln                   421,000      2,207,000      2,628,000     1,219,000
    5/84      Virginia Beach                        499,000      2,882,000      3,381,000     1,576,000
    5/84      Philadelphia/Grant                  1,040,000      3,843,000      4,883,000     2,214,000
    6/84      Lorton                                435,000      2,636,000      3,071,000     1,492,000
    6/84      Baltimore                             382,000      2,452,000      2,834,000     1,380,000
    6/84      Laurel                                501,000      3,136,000      3,637,000     1,748,000
    6/84      Delran                                279,000      1,818,000      2,097,000     1,004,000
    5/84      Garland                               356,000      1,099,000      1,455,000       591,000
    6/84      Orange Blossom                        226,000      1,198,000      1,424,000       652,000
    6/84      Safe Place (Cincinnati)               402,000      2,133,000      2,535,000     1,169,000
    6/84      Safe Place (Florence)                 185,000      1,148,000      1,333,000       623,000
    8/84      Medley                                584,000      1,404,000      1,988,000       778,000
    8/84      Oklahoma City                         340,000      1,857,000      2,197,000       988,000
    8/84      Newport News                          356,000      3,139,000      3,495,000     1,691,000
    8/84      Kaplan (Irving)                       677,000      2,064,000      2,741,000     1,117,000

</TABLE>
                                      F-46

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
    <S>       <C>                                                  <C>            <C>              <C>           <C>        
    8/84      Kaplan (Walnut Hill)                                   971,000      2,359,000        602,000       194,000    
    9/84      Cockrell Hill                                          380,000        913,000        994,000       138,000    
    11/84     Omaha                                                  109,000        806,000        402,000        91,000    
    11/84     Manchester                                             164,000      1,643,000        211,000       114,000    
    12/84     Austin (Ben White)                                     325,000        474,000        184,000        42,000    
    12/84     Austin (Lamar)                                         643,000        947,000        334,000        96,000    
    12/84     Pompano                                                399,000      1,386,000        454,000       164,000    
    12/84     Fort Worth                                             122,000        928,000         (3,000)       57,000    
    11/84     Hialeah                                                886,000      1,784,000        234,000       134,000    
    12/84     Montgomeryville                                        215,000      2,085,000        252,000       163,000    
    1/85      Bossier City                                           184,000      1,542,000        267,000       157,000    
    2/85      Simi Valley                                            737,000      1,389,000        248,000        98,000    
    3/85      Chattanooga                                            202,000      1,573,000        303,000       149,000    
    2/85      Hurst                                                  231,000      1,220,000        183,000        98,000    
    3/85      Portland                                               285,000        941,000        184,000        99,000    
    5/85      Longwood                                               355,000      1,645,000        217,000       149,000    
    3/85      Fern Park                                              144,000      1,107,000        179,000       101,000    
    3/85      Fairfield                                              338,000      1,187,000        336,000       111,000    
    4/85      Laguna Hills                                         1,224,000      3,303,000        345,000       250,000    
    7/85      Columbus (Morse Rd.)                                   195,000      1,510,000        211,000       128,000    
    7/85      Columbus (Kenney Rd.)                                  199,000      1,531,000        257,000       107,000    
    5/85      Columbus (Busch Blvd.)                                 202,000      1,559,000        238,000       125,000    
    5/85      Columbus (Kinnear Rd.)                                 241,000      1,865,000        220,000       155,000    
    6/85      Grove City/ Marlane Drive                              150,000      1,157,000        231,000       110,000    
    6/85      Reynoldsburg                                           204,000      1,568,000        222,000       131,000    
    5/85      Worthington                                            221,000      1,824,000        217,000       136,000    
    7/85      Westerville                                            199,000      1,517,000        281,000       116,000    
    5/85      Arlington                                              201,000      1,497,000        262,000       142,000    
    7/85      Springfield                                             90,000        699,000        169,000        88,000    
    7/85      Dayton (Needmore Road)                                 144,000      1,108,000        275,000       101,000    
    7/85      Dayton (Executive Blvd.)                               160,000      1,207,000        295,000       144,000    
    7/85      Lilburn                                                331,000        969,000        150,000        92,000    
    4/85      Austin/ S. First                                       778,000      1,282,000        221,000       161,000    
    4/85      Cincinnati/ E. Kemper                                  232,000      1,573,000        232,000       162,000    
    4/85      Cincinnati/ Colerain                                   253,000      1,717,000        260,000       196,000    
    4/85      Florence/ Tanner Lane                                  218,000      1,477,000        281,000       162,000    
    5/85      Tacoma/ Phillips Rd.                                   396,000      1,204,000        182,000       150,000    
    5/85      Milwaukie/ Mcloughlin II                               458,000        742,000        275,000       139,000    
    7/85      San Diego/ Kearny Mesa Rd                              783,000      1,750,000        308,000       192,000    
    5/85      Manchester/ S. Willow II                               371,000      2,129,000       (229,000)      191,000    
    6/85      N. Hollywood/ Raymer                                   967,000        848,000        243,000       119,000    
    7/85      Scottsdale/ 70th St                                    632,000      1,368,000        194,000       157,000    

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
    <S>       <C>                                 <C>            <C>            <C>           <C>         
    8/84      Kaplan (Walnut Hill)                  971,000      3,155,000      4,126,000     1,699,000
    9/84      Cockrell Hill                         380,000      2,045,000      2,425,000     1,134,000
    11/84     Omaha                                 109,000      1,299,000      1,408,000       728,000
    11/84     Manchester                            164,000      1,968,000      2,132,000     1,057,000
    12/84     Austin (Ben White)                    325,000        700,000      1,025,000       383,000
    12/84     Austin (Lamar)                        643,000      1,377,000      2,020,000       725,000
    12/84     Pompano                               399,000      2,004,000      2,403,000     1,055,000
    12/84     Fort Worth                            122,000        982,000      1,104,000       533,000
    11/84     Hialeah                               886,000      2,152,000      3,038,000     1,172,000
    12/84     Montgomeryville                       215,000      2,500,000      2,715,000     1,329,000
    1/85      Bossier City                          184,000      1,966,000      2,150,000     1,039,000
    2/85      Simi Valley                           737,000      1,735,000      2,472,000       929,000
    3/85      Chattanooga                           202,000      2,025,000      2,227,000     1,048,000
    2/85      Hurst                                 231,000      1,501,000      1,732,000       788,000
    3/85      Portland                              285,000      1,224,000      1,509,000       650,000
    5/85      Longwood                              355,000      2,011,000      2,366,000     1,045,000
    3/85      Fern Park                             144,000      1,387,000      1,531,000       723,000
    3/85      Fairfield                             338,000      1,634,000      1,972,000       842,000
    4/85      Laguna Hills                        1,224,000      3,898,000      5,122,000     2,057,000
    7/85      Columbus (Morse Rd.)                  195,000      1,849,000      2,044,000       935,000
    7/85      Columbus (Kenney Rd.)                 199,000      1,895,000      2,094,000       961,000
    5/85      Columbus (Busch Blvd.)                202,000      1,922,000      2,124,000       980,000
    5/85      Columbus (Kinnear Rd.)                241,000      2,240,000      2,481,000     1,140,000
    6/85      Grove City/ Marlane Drive             150,000      1,498,000      1,648,000       751,000
    6/85      Reynoldsburg                          204,000      1,921,000      2,125,000       985,000
    5/85      Worthington                           221,000      2,177,000      2,398,000     1,117,000
    7/85      Westerville                           199,000      1,914,000      2,113,000       979,000
    5/85      Arlington                             201,000      1,901,000      2,102,000       955,000
    7/85      Springfield                            90,000        956,000      1,046,000       481,000
    7/85      Dayton (Needmore Road)                144,000      1,484,000      1,628,000       765,000
    7/85      Dayton (Executive Blvd.)              159,000      1,647,000      1,806,000       833,000
    7/85      Lilburn                               330,000      1,212,000      1,542,000       611,000
    4/85      Austin/ S. First                      778,000      1,664,000      2,442,000       833,000
    4/85      Cincinnati/ E. Kemper                 232,000      1,967,000      2,199,000       994,000
    4/85      Cincinnati/ Colerain                  253,000      2,173,000      2,426,000     1,095,000
    4/85      Florence/ Tanner Lane                 218,000      1,920,000      2,138,000       958,000
    5/85      Tacoma/ Phillips Rd.                  396,000      1,536,000      1,932,000       759,000
    5/85      Milwaukie/ Mcloughlin II              458,000      1,156,000      1,614,000       566,000
    7/85      San Diego/ Kearny Mesa Rd             783,000      2,250,000      3,033,000     1,163,000
    5/85      Manchester/ S. Willow II              371,000      2,091,000      2,462,000     1,056,000
    6/85      N. Hollywood/ Raymer                  967,000      1,210,000      2,177,000       618,000
    7/85      Scottsdale/ 70th St                   632,000      1,719,000      2,351,000       853,000

</TABLE>
                                      F-47

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
    <S>       <C>                                                  <C>            <C>             <C>            <C>        
    7/85      Concord/ Hwy 29                                        150,000        750,000        226,000       169,000    
    10/85     N. Hollywood/ Whitsett                               1,524,000      2,576,000        275,000       307,000    
    10/85     Portland/ SE 82nd St                                   354,000        496,000        244,000        90,000    
    9/85      Madison/ Copps Ave.                                    450,000      1,150,000        331,000       130,000    
    9/85      Columbus/ Sinclair                                     307,000        893,000        168,000       104,000    
    9/85      Philadelphia/ Tacony St                                118,000      1,782,000        158,000       192,000    
    10/85     Perrysburg/ Helen Dr.                                  110,000      1,590,000       (137,000)      138,000    
    10/85     Columbus/ Ambleside                                    124,000      1,526,000       (179,000)      139,000    
    10/85     Indianapolis/ Pike Place                               229,000      1,531,000        204,000       157,000    
    10/85     Indianapolis/ Beach Grove                              198,000      1,342,000        191,000       144,000    
    10/85     Hartford/ Roberts                                      219,000      1,481,000        356,000       213,000    
    10/85     Wichita/ S. Rock Rd.                                   501,000      1,478,000        (19,000)      147,000    
    10/85     Wichita/ E. Harry                                      313,000      1,050,000        (42,000)      102,000    
    10/85     Wichita/ S. Woodlawn                                   263,000        905,000        (56,000)      106,000    
    10/85     Wichita/ E. Kellogg                                    185,000        658,000        (98,000)       68,000    
    10/85     Wichita/ S. Tyler                                      294,000      1,004,000         47,000       106,000    
    10/85     Wichita/ W. Maple                                      234,000        805,000       (141,000)       70,000    
    10/85     Wichita/ Carey Lane                                    192,000        674,000        (90,000)       69,000    
    10/85     Wichita/ E. Macarthur                                  220,000        775,000       (155,000)       71,000    
    10/85     Joplin/ S. Range Line                                  264,000        904,000        (66,000)      118,000    
    12/85     Milpitas                                             1,623,000      1,577,000        287,000       183,000    
    12/85     Pleasanton/ Santa Rita                               1,226,000      2,078,000        313,000       214,000    
    7/88      Fort Wayne                                             101,000      1,524,000         (4,000)      141,000    
    10/85     San Antonio/ Wetmore Rd.                               306,000      1,079,000        391,000        27,000    
    10/85     San Antonio/ Callaghan                                 288,000      1,016,000        329,000        16,000    
    10/85     San Antonio/ Zarzamora                                 364,000      1,281,000        404,000         7,000    
    10/85     San Antonio/ Hackberry                                 388,000      1,367,000        358,000        23,000    
    10/85     San Antonio/ Fredericksburg                            287,000      1,009,000        352,000        23,000    
    10/85     Dallas/ S. Westmoreland                                474,000      1,670,000        154,000        39,000    
    10/85     Dallas/ Alvin St.                                      359,000      1,266,000        152,000        15,000    
    10/85     Fort Worth/ W. Beach St.                               356,000      1,252,000        151,000        21,000    
    10/85     Fort Worth/ E. Seminary                                382,000      1,346,000        173,000         5,000    
    10/85     Fort Worth/ Cockrell St.                               323,000      1,136,000        157,000        11,000    
    11/85     Everett/ Evergreen                                     706,000      2,294,000        440,000        15,000    
    11/85     Seattle/ Empire Way                                  1,652,000      5,348,000        572,000        49,000    
    12/85     Amherst/ Niagra Falls                                  132,000        701,000        208,000        38,000    
    12/85     West Sams Blvd.                                        164,000      1,159,000       (294,000)       30,000    
    3/86      Jacksonville/ Wiley                                    140,000        510,000        225,000        15,000    
    12/85     MacArthur Rd.                                          204,000      1,628,000        143,000        11,000    
    2/86      Costa Mesa/ Pomona                                   1,405,000      1,520,000        327,000        15,000    
    12/85     Brockton/ Main                                         153,000      2,020,000       (257,000)       21,000    
    1/86      Mapleshade/ Rudderow                                   362,000      1,811,000        226,000        26,000    

</TABLE>

<TABLE>
<CAPTION>
                                                             Gross Carrying Amount               
                                                              At December 31, 1998
    Date                                           ---------------------------------------    Accumulated
  Acquired               Description                   Land       Buildings        Total      Depreciation
----------------------------------------------------------------------------------------------------------
    <S>       <C>                                  <C>            <C>            <C>           <C>         
    7/85      Concord/ Hwy 29                        150,000      1,145,000      1,295,000       547,000
    10/85     N. Hollywood/ Whitsett               1,524,000      3,158,000      4,682,000     1,530,000
    10/85     Portland/ SE 82nd St                   354,000        830,000      1,184,000       429,000
    9/85      Madison/ Copps Ave.                    450,000      1,611,000      2,061,000       802,000
    9/85      Columbus/ Sinclair                     307,000      1,165,000      1,472,000       564,000
    9/85      Philadelphia/ Tacony St                118,000      2,132,000      2,250,000     1,048,000
    10/85     Perrysburg/ Helen Dr.                  110,000      1,591,000      1,701,000       775,000
    10/85     Columbus/ Ambleside                    124,000      1,486,000      1,610,000       722,000
    10/85     Indianapolis/ Pike Place               229,000      1,892,000      2,121,000       924,000
    10/85     Indianapolis/ Beach Grove              198,000      1,677,000      1,875,000       803,000
    10/85     Hartford/ Roberts                      219,000      2,050,000      2,269,000       947,000
    10/85     Wichita/ S. Rock Rd.                   642,000      1,465,000      2,107,000       709,000
    10/85     Wichita/ E. Harry                      313,000      1,110,000      1,423,000       572,000
    10/85     Wichita/ S. Woodlawn                   263,000        955,000      1,218,000       463,000
    10/85     Wichita/ E. Kellogg                    185,000        628,000        813,000       302,000
    10/85     Wichita/ S. Tyler                      294,000      1,157,000      1,451,000       617,000
    10/85     Wichita/ W. Maple                      234,000        734,000        968,000       342,000
    10/85     Wichita/ Carey Lane                    192,000        653,000        845,000       309,000
    10/85     Wichita/ E. Macarthur                  220,000        691,000        911,000       332,000
    10/85     Joplin/ S. Range Line                  264,000        956,000      1,220,000       506,000
    12/85     Milpitas                             1,623,000      2,047,000      3,670,000       983,000
    12/85     Pleasanton/ Santa Rita               1,226,000      2,605,000      3,831,000     1,243,000
    7/88      Fort Wayne                             101,000      1,661,000      1,762,000       652,000
    10/85     San Antonio/ Wetmore Rd.               306,000      1,497,000      1,803,000       763,000
    10/85     San Antonio/ Callaghan                 288,000      1,361,000      1,649,000       708,000
    10/85     San Antonio/ Zarzamora                 364,000      1,692,000      2,056,000       863,000
    10/85     San Antonio/ Hackberry                 388,000      1,748,000      2,136,000       896,000
    10/85     San Antonio/ Fredericksburg            287,000      1,384,000      1,671,000       722,000
    10/85     Dallas/ S. Westmoreland                474,000      1,863,000      2,337,000       980,000
    10/85     Dallas/ Alvin St.                      359,000      1,433,000      1,792,000       755,000
    10/85     Fort Worth/ W. Beach St.               356,000      1,424,000      1,780,000       746,000
    10/85     Fort Worth/ E. Seminary                382,000      1,524,000      1,906,000       806,000
    10/85     Fort Worth/ Cockrell St.               323,000      1,304,000      1,627,000       692,000
    11/85     Everett/ Evergreen                     706,000      2,749,000      3,455,000     1,526,000
    11/85     Seattle/ Empire Way                  1,652,000      5,969,000      7,621,000     3,201,000
    12/85     Amherst/ Niagra Falls                  132,000        947,000      1,079,000       516,000
    12/85     West Sams Blvd.                        164,000        895,000      1,059,000       473,000
    3/86      Jacksonville/ Wiley                    140,000        750,000        890,000       386,000
    12/85     MacArthur Rd.                          204,000      1,782,000      1,986,000       944,000
    2/86      Costa Mesa/ Pomona                   1,405,000      1,862,000      3,267,000       980,000
    12/85     Brockton/ Main                         153,000      1,784,000      1,937,000       958,000
    1/86      Mapleshade/ Rudderow                   362,000      2,063,000      2,425,000     1,076,000

</TABLE>
                                      F-48

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
    <S>       <C>                                                  <C>            <C>              <C>          <C>         
    1/86      Bordentown/ Groveville                                 196,000        981,000        130,000        25,000    
    12/85     Eatontown/ Hwy 35                                      308,000      4,067,000        413,000        49,000    
    2/86      Brea/ Imperial Hwy                                   1,069,000      2,165,000        331,000        24,000    
    12/85     Denver/ Leetsdale                                      603,000        847,000        187,000         9,000    
    2/86      Skokie/ McCormick                                      638,000      1,912,000        224,000        15,000    
    1/86      Sun Valley/ Sheldon                                    544,000      1,836,000        326,000        24,000    
    3/86      St. Louis/ Forder                                      517,000      1,133,000        251,000         5,000    
    1/86      Las Vegas/ Highland                                    432,000        848,000        217,000        24,000    
    5/86      Westlake Village                                     1,205,000        995,000        210,000         5,000    
    2/86      Colorado Springs/ Sinton                               535,000      1,115,000        175,000        33,000    
    2/86      Oklahoma City/ Penn                                    146,000        829,000        140,000        22,000    
    2/86      Oklahoma City/ 39th Expressway                         238,000        812,000        279,000        34,000    
    4/86      Reno/ Telegraph                                        649,000      1,051,000        434,000        84,000    
    7/86      Colorado Springs/ Hollow Tree                          574,000        726,000        230,000        17,000    
    4/86      St. Louis/Kirkham                                      199,000      1,001,000        193,000       (22,000)   
    4/86      St. Louis/Reavis                                       192,000        958,000        196,000       (28,000)   
    4/86      Fort Worth/East Loop                                   196,000        804,000        212,000       (41,000)   
    6/86      Richland Hills                                         543,000        857,000        420,000       (47,000)   
    5/86      Sacramento/Franklin Blvd.                              872,000        978,000        461,000       (97,000)   
    6/86      West Valley/So. 3600                                   208,000      1,552,000        365,000      (192,000)   
    7/86      West LA/Purdue Ave.                                  2,415,000      3,585,000        241,000       (55,000)   
    7/86      Capital Heights/Central Ave.                           649,000      3,851,000        280,000      (105,000)   
    10/86     Peralta/Fremont                                        851,000      1,074,000        272,000       (19,000)   
    7/86      Pontiac/Dixie Hwy.                                     259,000      2,091,000         39,000       (55,000)   
    8/86      Laurel/Ft. Meade Rd.                                   475,000      1,475,000        204,000       (15,000)   
    9/86      Kansas City/S. 44th.                                   509,000      1,906,000        456,000       (91,000)   
    10/86     Birmingham/Highland                                     89,000        786,000        207,000        50,000    
    10/86     Birmingham/Riverchase                                  262,000      1,338,000        357,000         1,000    
    10/86     Birmingham/Eastwood                                    166,000      1,184,000        211,000        38,000    
    10/86     Birmingham/Forestdale                                  152,000        948,000        152,000        41,000    
    10/86     Birmingham/Centerpoint                                 265,000      1,305,000        234,000       (30,000)   
    10/86     Birmingham/Roebuck Plaza                               101,000        399,000        243,000       204,000    
    10/86     Birmingham/Greensprings                                347,000      1,173,000        289,000      (317,000)   
    10/86     Birmingham/Hoover-Lorna                                372,000      1,128,000        324,000      (111,000)   
    10/86     Midfield/Bessemer                                      170,000        355,000        272,000      (133,000)   
    10/86     Huntsville/Leeman Ferry Rd.                            158,000        992,000        233,000        50,000    
    10/86     Huntsville/Drake                                       253,000      1,172,000        224,000       (32,000)   
    10/86     Anniston/Whiteside                                      59,000        566,000        171,000        31,000    
    10/86     Houston/Glenvista                                      595,000      1,043,000        492,000      (123,000)   
    10/86     Houston/I-45                                           704,000      1,146,000        729,000       (71,000)   
    10/86     Houston/Rogerdale                                    1,631,000      2,792,000        454,000         7,000    
    10/86     Houston/Gessner                                      1,032,000      1,693,000        836,000      (171,000)   

</TABLE>

<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
    <S>       <C>                                 <C>            <C>            <C>           <C>         
    1/86      Bordentown/ Groveville                196,000      1,136,000      1,332,000       582,000
    12/85     Eatontown/ Hwy 35                     308,000      4,529,000      4,837,000     2,376,000
    2/86      Brea/ Imperial Hwy                  1,069,000      2,520,000      3,589,000     1,345,000
    12/85     Denver/ Leetsdale                     603,000      1,043,000      1,646,000       559,000
    2/86      Skokie/ McCormick                     638,000      2,151,000      2,789,000     1,105,000
    1/86      Sun Valley/ Sheldon                   544,000      2,186,000      2,730,000     1,132,000
    3/86      St. Louis/ Forder                     517,000      1,389,000      1,906,000       713,000
    1/86      Las Vegas/ Highland                   432,000      1,089,000      1,521,000       563,000
    5/86      Westlake Village                    1,205,000      1,210,000      2,415,000       625,000
    2/86      Colorado Springs/ Sinton              535,000      1,323,000      1,858,000       670,000
    2/86      Oklahoma City/ Penn                   146,000        991,000      1,137,000       505,000
    2/86      Oklahoma City/ 39th Expressway        238,000      1,125,000      1,363,000       551,000
    4/86      Reno/ Telegraph                       649,000      1,569,000      2,218,000       792,000
    7/86      Colorado Springs/ Hollow Tree         574,000        973,000      1,547,000       485,000
    4/86      St. Louis/Kirkham                     199,000      1,172,000      1,371,000       610,000
    4/86      St. Louis/Reavis                      192,000      1,126,000      1,318,000       592,000
    4/86      Fort Worth/East Loop                  196,000        975,000      1,171,000       508,000
    6/86      Richland Hills                        543,000      1,230,000      1,773,000       694,000
    5/86      Sacramento/Franklin Blvd.             872,000      1,342,000      2,214,000       734,000
    6/86      West Valley/So. 3600                  208,000      1,725,000      1,933,000       981,000
    7/86      West LA/Purdue Ave.                 2,416,000      3,770,000      6,186,000     1,978,000
    7/86      Capital Heights/Central Ave.          649,000      4,026,000      4,675,000     2,076,000
    10/86     Peralta/Fremont                       851,000      1,327,000      2,178,000       703,000
    7/86      Pontiac/Dixie Hwy.                    259,000      2,075,000      2,334,000     1,072,000
    8/86      Laurel/Ft. Meade Rd.                  475,000      1,664,000      2,139,000       872,000
    9/86      Kansas City/S. 44th.                  509,000      2,271,000      2,780,000     1,216,000
    10/86     Birmingham/Highland                   150,000        982,000      1,132,000       496,000
    10/86     Birmingham/Riverchase                 278,000      1,680,000      1,958,000       907,000
    10/86     Birmingham/Eastwood                   232,000      1,367,000      1,599,000       704,000
    10/86     Birmingham/Forestdale                 190,000      1,103,000      1,293,000       579,000
    10/86     Birmingham/Centerpoint                273,000      1,501,000      1,774,000       746,000
    10/86     Birmingham/Roebuck Plaza              340,000        607,000        947,000       328,000
    10/86     Birmingham/Greensprings                16,000      1,476,000      1,492,000       753,000
    10/86     Birmingham/Hoover-Lorna               266,000      1,447,000      1,713,000       704,000
    10/86     Midfield/Bessemer                      95,000        569,000        664,000       306,000
    10/86     Huntsville/Leeman Ferry Rd.           198,000      1,235,000      1,433,000       664,000
    10/86     Huntsville/Drake                      248,000      1,369,000      1,617,000       686,000
    10/86     Anniston/Whiteside                    107,000        720,000        827,000       397,000
    10/86     Houston/Glenvista                     595,000      1,412,000      2,007,000       740,000
    10/86     Houston/I-45                          704,000      1,804,000      2,508,000     1,062,000
    10/86     Houston/Rogerdale                   1,631,000      3,253,000      4,884,000     1,604,000
    10/86     Houston/Gessner                     1,032,000      2,358,000      3,390,000     1,239,000

</TABLE>
                                      F-49

<PAGE>


<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the   
                                                                  --------------------------      Costs         Acquisition 
    Date                                                                       Buildings &      Subsequent      of Minority 
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests  
----------------------------------------------------------------------------------------------------------------------------
    <S>       <C>                                                  <C>            <C>              <C>           <C>        
    10/86     Houston/Richmond-Fairdale                            1,502,000      2,506,000        863,000       (57,000)   
    10/86     Houston/Gulfton                                      1,732,000      3,036,000        858,000         1,000    
    10/86     Houston/Westpark                                       503,000        854,000        145,000        28,000    
    10/86     Jonesboro                                              157,000        718,000        188,000        16,000    
    9/86      Lakewood/W. 6th Ave.                                 1,070,000      3,155,000        479,000         9,000    
    10/86     Pilgrim/Houston/Loop 610                             1,299,000      3,491,000        927,000        85,000    
    10/86     Pilgrim/Houston/S.W. Freeway                           904,000      2,319,000        539,000        32,000    
    10/86     Pilgrim/Houston/FM 1960                                719,000      1,987,000          2,000        22,000    
    10/86     Pilgrim/Houston/Old Katy Rd.                         1,365,000      3,431,000        918,000        26,000    
    10/86     Pilgrim/Houston/Long Point                             451,000      1,187,000        469,000        59,000    
    10/86     Austin/Red Rooster                                   1,390,000      1,710,000        393,000        42,000    
    12/86     Lynnwood/196th SW                                    1,063,000      1,602,000        314,000        30,000    
    12/86     Auburn/Auburn Way North                                606,000      1,144,000        325,000        62,000    
    12/86     Gresham/Burnside                                       351,000      1,056,000        335,000        47,000    
    12/86     Denver/Sheridan Rd.                                  1,033,000      2,792,000        589,000        30,000    
    12/86     Marietta/Cobb Pkwy.                                    536,000      2,764,000        548,000        28,000    
    12/86     Hillsboro/Tualatin Hwy.                                461,000        574,000        207,000        76,000    
    11/86     Arleta/Osborne St.                                     987,000        663,000        230,000        14,000    
    4/87      City of Industry/Amar Rd.                              748,000      2,052,000        363,000        25,000    
    3/87      Annandale/Ravensworth                                  679,000      1,621,000        185,000        45,000    
    5/87      OK City/Hefner                                         459,000        941,000        206,000        55,000    
    12/86     San Antonio/Sunst Rd.                                1,206,000      1,594,000        474,000        17,000    
    8/86      Hammond/Calumet                                         97,000        751,000        470,000        19,000    
    7/86      Portland/Moody                                         663,000      1,637,000        (68,000)       66,000    
    7/87      Oakbrook Terrace                                       912,000      2,688,000        628,000       384,000    
    10/87     Plantation/S. State Rd.                                924,000      1,801,000        252,000       263,000    
    2/88      Anaheim/Lakeview                                       995,000      1,505,000        467,000       236,000    
    8/87      San Antonio/Austin Hwy.                                400,000        850,000        182,000       151,000    
    10/87     Rockville/Fredrick Rd.                               1,695,000      3,305,000        643,000       475,000    

PORTABLE SELF -STORAGE FACILITIES                                                                                           

    6/98      Renton / Sw 39th St.                                   795,000      2,196,000              0                  
    6/98      Pompano Bch/Center Port Circle                         726,000      2,312,000              0                  
    6/98      St Petersburg / 18th St North                          877,000      2,754,000              0                  
    12/98     Miami / Nw 115th Ave                                 1,095,000      2,349,000              0                  
    12/98     W. Palm Beach                                          880,000      2,402,000              0                  

</TABLE>


<TABLE>
<CAPTION>
                                                            Gross Carrying Amount               
                                                             At December 31, 1998
    Date                                          ---------------------------------------    Accumulated
  Acquired               Description                  Land       Buildings        Total      Depreciation
---------------------------------------------------------------------------------------------------------
    <S>       <C>                                 <C>            <C>            <C>           <C>         
    10/86     Houston/Richmond-Fairdale           1,502,000      3,312,000      4,814,000     1,784,000
    10/86     Houston/Gulfton                     1,732,000      3,895,000      5,627,000     2,123,000
    10/86     Houston/Westpark                      503,000      1,027,000      1,530,000       500,000
    10/86     Jonesboro                             157,000        922,000      1,079,000       456,000
    9/86      Lakewood/W. 6th Ave.                1,070,000      3,643,000      4,713,000     1,893,000
    10/86     Pilgrim/Houston/Loop 610            1,299,000      4,503,000      5,802,000     2,261,000
    10/86     Pilgrim/Houston/S.W. Freeway          904,000      2,890,000      3,794,000     1,436,000
    10/86     Pilgrim/Houston/FM 1960               661,000      2,069,000      2,730,000     1,020,000
    10/86     Pilgrim/Houston/Old Katy Rd.        1,365,000      4,375,000      5,740,000     2,179,000
    10/86     Pilgrim/Houston/Long Point            451,000      1,715,000      2,166,000       901,000
    10/86     Austin/Red Rooster                  1,390,000      2,145,000      3,535,000     1,050,000
    12/86     Lynnwood/196th SW                   1,063,000      1,946,000      3,009,000       946,000
    12/86     Auburn/Auburn Way North               606,000      1,531,000      2,137,000       780,000
    12/86     Gresham/Burnside                      351,000      1,438,000      1,789,000       688,000
    12/86     Denver/Sheridan Rd.                 1,033,000      3,411,000      4,444,000     1,682,000
    12/86     Marietta/Cobb Pkwy.                   536,000      3,340,000      3,876,000     1,651,000
    12/86     Hillsboro/Tualatin Hwy.               461,000        857,000      1,318,000       442,000
    11/86     Arleta/Osborne St.                    987,000        907,000      1,894,000       447,000
    4/87      City of Industry/Amar Rd.             748,000      2,440,000      3,188,000       701,000
    3/87      Annandale/Ravensworth                 679,000      1,851,000      2,530,000       902,000
    5/87      OK City/Hefner                        459,000      1,202,000      1,661,000       559,000
    12/86     San Antonio/Sunst Rd.               1,207,000      2,084,000      3,291,000       991,000
    8/86      Hammond/Calumet                        97,000      1,240,000      1,337,000       569,000
    7/86      Portland/Moody                        663,000      1,635,000      2,298,000       745,000
    7/87      Oakbrook Terrace                      912,000      3,700,000      4,612,000     1,619,000
    10/87     Plantation/S. State Rd.               924,000      2,316,000      3,240,000       954,000
    2/88      Anaheim/Lakeview                      995,000      2,208,000      3,203,000       877,000
    8/87      San Antonio/Austin Hwy.               400,000      1,183,000      1,583,000       492,000
    10/87     Rockville/Fredrick Rd.              1,695,000      4,423,000      6,118,000     1,827,000

PORTABLE SELF -STORAGE FACILITIES                             

    6/98      Renton / Sw 39th St.                  795,000      2,196,000      2,991,000        50,000
    6/98      Pompano Bch/Center Port Circle        726,000      2,312,000      3,038,000        49,000
    6/98      St Petersburg / 18th St North         877,000      2,754,000      3,631,000        25,000
    12/98     Miami / Nw 115th Ave                1,095,000      2,349,000      3,444,000        13,000
    12/98     W. Palm Beach                         880,000      2,402,000      3,282,000         8,000

</TABLE>
                                      F-50

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Adjustments
                                                                                                                Resulting 
                                                                       Initial Cost                              from the  
                                                                  --------------------------      Costs         Acquisition
    Date                                                                       Buildings &      Subsequent      of Minority
  Acquired               Description             Encumbrances       Land       Improvements   to Acquisition     interests 
---------------------------------------------------------------------------------------------------------------------------
OTHER PROPERTIES                                                                                                           
   <S>        <C>                                  <C>          <C>          <C>              <C>            <C>           
    11/95     Camarillo/Ventura Blvd                                 180,000        420,000         22,000                 
              Glendale/Western Avenue                              1,622,000      3,771,000      7,453,000                 
              Construction in Progress                                     0              0     83,138,000                 
              Vacant Land                                            701,000              0              0                 

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

                                                   $35,426,000  $806,607,000 $1,901,619,000   $261,386,000   $75,817,000   
                                                 ==========================================================================
</TABLE>

<TABLE>
<CAPTION>


                                                               Gross Carrying Amount               
                                                                At December 31, 1998
    Date                                             ---------------------------------------    Accumulated
  Acquired               Description                     Land       Buildings        Total      Depreciation
-----------------------------------------------------------------------------------------------------------
OTHER PROPERTIES                                                 
   <S>        <C>                                 <C>          <C>            <C>             <C>         
    11/95     Camarillo/Ventura Blvd                   180,000        442,000        622,000        53,000
              Glendale/Western Avenue                1,617,000     11,229,000     12,846,000     2,772,000
              Construction in Progress                       0     83,138,000     83,138,000             0
              Vacant Land                              701,000              0        701,000             0

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

                                                  $803,226,000 $2,242,203,000 $3,045,429,000  $411,176,000
                                                  =========================================================
</TABLE>                                     
                                      F-51