SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

For the fiscal year ended December 31, 2005 or
                          -----------------

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

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

Commission File Number:     1-8389
                            ------
                              PUBLIC STORAGE, INC.
                              --------------------
             (Exact name of Registrant as specified in its charter)

                    California                              95-3551121
--------------------------------------------------    -----------------------
     ( State or other jurisdiction of                   (I.R.S. Employer
       incorporation or organization)                  Identification Number)
     701 Western Avenue, Glendale, California               91201-2349
--------------------------------------------------    -----------------------
     (Address of principal executive offices)               (Zip Code)

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

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

                                                                                          Name of each exchange
                                Title of each class                                        on which registered
---------------------------------------------------------------------------             ------------------------
<S>                                                                                      <C>
Depositary Shares Each Representing 1/1,000 of a Share of 8.000% Cumulative
     Preferred Stock, Series R, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.875% Cumulative
     Preferred Stock, Series S, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
     Preferred Stock, Series T, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
     Preferred Stock, Series U, $.01 par value..................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.500% Cumulative
     Preferred Stock, Series V $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.500% Cumulative
     Preferred Stock, Series W $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
     Preferred Stock, Series X $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.250% Cumulative
     Preferred Stock, Series Z $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.125% Cumulative
     Preferred Stock, Series A $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.125% Cumulative
     Preferred Stock, Series B $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.600% Cumulative
     Preferred Stock, Series C $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.180% Cumulative
     Preferred Stock, Series D $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.750% Cumulative
     Preferred Stock, Series E $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
     Preferred Stock, Series F $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.000% Cumulative
     Preferred Stock, Series G $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.950% Cumulative
     Preferred Stock, Series H $.01 par value...................................         New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A,
     $.01 par value.............................................................         New York Stock Exchange
Common Stock, $.10 par value....................................................         New York Stock Exchange,
                                                                                             Pacific Exchange
</TABLE>
                                       1

<PAGE>

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

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes [X] No [ ]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

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

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

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The  aggregate  market value of the voting and  non-voting  common stock held by
non-affiliates of the Registrant as of June 30, 2005:

Common  Stock,  $0.10  Par  Value -  $5,146,400,000  (computed  on the  basis of
$63.25per  share  which was the  reported  closing  sale price of the  Company's
Common Stock on the New York Stock Exchange on June 30, 2005).

Depositary Shares Each Representing  1/1,000 of a Share of Equity Stock,  Series
A,  $.01 Par Value -  $209,493,000  (computed  on the basis of $28.35  per share
which  was the  reported  closing  sale  price  of the  Depositary  Shares  each
Representing  1/1,000 of a Share of Equity Stock, Series A on the New York Stock
Exchange on June 30, 2005).

The number of shares outstanding of the registrant's  classes of common stock as
of March 14, 2006:

Common Stock, $.10 Par Value - 129,306,139 shares

Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
A, $.01 Par Value - 8,744,193 depositary shares (representing 8,744.193 shares
of Equity Stock, Series A)

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

                                       2

<PAGE>

                                     PART I
                                     ------
ITEM 1.  Business
         --------

Forward Looking Statements

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

General
-------

         Public Storage, Inc. (the "Company" or "we" or "our") is an equity real
estate  investment trust ("REIT")  organized as a corporation  under the laws of
California on July 10, 1980. We are a fully  integrated,  self-administered  and
self-managed  REIT  that  acquires,  develops,  owns and  operates  self-storage
facilities.  We are the largest owner and operator of self-storage  space in the
United States with direct and indirect equity  investments in 1,501 self-storage
facilities containing approximately 92 million square feet of net rentable space
at December 31, 2005.  Our common stock is traded on the New York Stock Exchange
under the symbol  "PSA".  We also have a 44%  ownership  interest in PS Business
Parks,  Inc.,  which,  as of December  31, 2005,  owned and operated  commercial
properties  containing  approximately  17.6 million net rentable  square feet of
space.  PS Business  Parks,  Inc. is a publicly  traded REIT whose  common stock
trades on the American Stock Exchange under the symbol "PSB."

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

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

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

                                       3
<PAGE>

Management
----------

         Ronald L.  Havner,  Jr. (48) has been vice  chairman,  chief  executive
officer and a director of the Company since November 7, 2002 and President since
July 1, 2005.  Mr.  Havner joined  Public  Storage,  Inc. in 1986 and has held a
variety of  positions,  including  Chairman  of the Board of  Directors  for the
Company's affiliate, PS Business Parks, Inc., a position he has held since March
1998.

         B. Wayne Hughes (72) is Chairman of the Board of Directors,  a position
he has held since 1991. Mr. Hughes  established the Public Storage  organization
in 1972 and has managed the Company through several market cycles.

         Our executive  management  team and their years of experience  with the
Company are as follows: John Reyes (45), Senior Vice President - Chief Financial
Officer,  15 years;  John S. Baumann (45),  Senior Vice  President - Chief Legal
Officer,  who joined the Company in June 2003;  John E. Graul (54),  Senior Vice
President  and  President,  Self-Storage  Operations,  who joined the Company in
February 2004 and David F. Doll (47), Senior Vice President and President,  Real
Estate Group, who joined the Company in February 2005.

         Our senior  management  has a  significant  ownership  position  in the
Company  with  executive   officers,   directors  and  their   families   owning
approximately 47 million shares or 36% of the common stock as of March 1, 2006.

Investment Objective
--------------------

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

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

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

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

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

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


                                       4
<PAGE>

Business Attributes
-------------------

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

         COMPREHENSIVE  DISTRIBUTION  SYSTEM AND NATIONAL TELEPHONE  RESERVATION
SYSTEM:  Our  facilities  are  part  of  a  comprehensive   distribution  system
encompassing  standardized  procedures,  integrated  reporting  and  information
networks and  centralized  marketing.  During 2003 and 2004, we  implemented  an
upgraded information system platform, which has enabled us to more quickly adapt
our  pricing  and  marketing  efforts  to  changing  market   conditions.   This
distribution system,  among other benefits,  is designed to maximize revenue and
occupancy levels through automated pricing.

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

         ECONOMIES OF SCALE: We are the largest  provider of self-storage  space
in the industry.  As of December 31, 2005, we operated 1,501 storage  facilities
in which we had an interest  and managed 27  self-storage  facilities  for third
parties. These facilities are in markets within 37 states. At December 31, 2005,
we had over 770,000  spaces rented.  The size and scope of our  operations  have
enabled  us to  achieve  a high  level  of  profit  margins  and  low  level  of
administrative costs relative to revenues.

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

         BRAND NAME RECOGNITION:  Our operations are conducted under the "Public
Storage" brand name,  which we believe is the most  recognized  and  established
name in the self-storage  industry.  Our storage  operations are conducted in 37
states,  giving us national recognition and prominence.  We focus our operations
within  those  states  in the major  metropolitan  markets.  This  concentration
establishes  us as  one  of the  largest  providers  of  self-storage  space  in
virtually  all  markets  that we operate  in and  enables us to use a variety of
promotional  activities,  such as  television  advertising  as well as  targeted
discounting and referrals which are generally not  economically  viable for most
of our competitors.

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

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

         TENANT INSURANCE PROGRAM: On December 31, 2001, we purchased all of the
capital  stock of PS  Insurance  Company,  Ltd.  ("PSIC"),  from Mr.  Hughes and
members of his family.  PSIC reinsures  policies  issued to our tenants  against
lost or  damaged  goods  stored  by  tenants  in our  storage  facilities.  This
subsidiary  receives  the  premiums  and  bears the  risks  associated  with the
re-insurance.  We believe that this insurance  operation further supplements and
strengthens the existing self-storage business and provides an additional source
of earnings for the Company.

                                       5
<PAGE>

Growth and Investment Strategies
--------------------------------

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

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

         ACQUIRE PROPERTIES OWNED OR OPERATED BY OTHERS: We believe our presence
in and knowledge of substantially  all of the major markets in the United States
enhances  our  ability to  identify  attractive  acquisition  opportunities  and
capitalize  on the  overall  fragmentation  in  the  self-storage  industry.  We
maintain local market information on rates, occupancy and competition in each of
the markets in which we operate.  During 2004 and 2005, we acquired interests in
77  self-storage   facilities  from  third  parties  at  an  aggregate  cost  of
approximately $514.0 million. In addition, between January 1, 2006 and March 15,
2006, we acquired three  additional  self-storage  facilities from third parties
(total  net  rentable   square  feet  of  170,000)  at  an  aggregate   cost  of
approximately  $20.0  million and we  currently  are under  contract to purchase
seven self-storage  facilities (total net rentable square feet of 574,000) at an
aggregate cost of approximately $69.4 million.

         EXPAND  AND  REPACKAGE  EXISTING  REAL  ESTATE  FACILITIES:  We  have a
substantial  number of facilities that were developed and constructed 20 or more
years ago based upon local  competitive and  demographic  conditions in place at
that time.  Since such conditions may have changed,  there are  opportunities to
expand and further invest into our existing  self-storage  locations,  either by
improving their visual and structural  appeal,  or by expanding these facilities
at a per  square  foot cost that is  typically  less than the cost  incurred  in
developing a new  location.  In  addition,  there are  opportunities  to convert
existing vacant space previously used by our  containerized  storage  facilities
into  traditional  self-storage  space.  During 2003,  2004,  and 2005,  we have
invested a total of approximately $96 million in such expansion, conversion, and
repackaging  activities.  At  December  31,  2005,  we have  identified  58 such
projects to expand or  repackage  our  existing  facilities,  and to convert the
vacant  space  previously  used  by  the  discontinued   containerized   storage
facilities,  for an aggregate of approximately  $262 million,  which will add an
aggregate of  approximately  3,573,000 net rentable  square feet.  Completion of
these projects is subject to  contingencies,  including  obtaining  governmental
agency approvals.  We continue to evaluate our existing real estate portfolio to
identify additional expansion and repackaging opportunities.

         DEVELOP PROPERTIES IN SELECTED MARKET:  Since 1995, the Company and its
joint  venture  partnerships  (described  below in  "Financing  of the Company's
Growth  Strategies")  have opened a total of 146 facilities.  During 2005, these
facilities  contributed  significantly  to the  growth in our  earnings  as they
continued  to gain  occupancy  and grow  their  revenues.  We expect  that these
facilities  will  continue to provide  growth to our earnings  into 2006.  As of
December 31, 2005,  we have a  development  "pipeline"  of four  newly-developed
self-storage  facilities with an aggregate estimated cost of approximately $61.2
million,  and an aggregate of 338,000 net rentable  square feet.  Development of
these  facilities  is subject to  significant  contingencies  such as  obtaining
appropriate  governmental  agency  approvals.  In 2004  and  2005,  our  rate of
development  of new  self-storage  facilities  has  declined due to increases in
construction  cost,  increases  in  competition  with retail,  condominium,  and
apartment operators for quality self-storage sites in urban locations,  and more
difficult zoning and permitting requirements.  However, we will continue to seek
favorable sites and markets for development.

                                       6

<PAGE>

         PARTICIPATE IN THE GROWTH OF COMMERCIAL  FACILITIES  PRIMARILY  THROUGH
OUR OWNERSHIP IN PS BUSINESS PARKS, INC.: We own a 44% common equity interest in
PS Business  Parks,  Inc. and its operating  partnership (PS Business Parks Inc.
and the related operating  partnership are hereinafter  referred to collectively
as "PSB")  which,  December  31, 2005,  consisted of 5,418,273  shares of common
stock and 7,305,355 limited partnership units in the Operating Partnership.  The
limited  partnership  units are  convertible  at our option,  subject to certain
conditions,  on a one-for-one basis into PSB common stock. At December 31, 2005,
PSB owned and operated  approximately  17.6 million net rentable  square feet of
commercial space located in eight states.

         ACQUIRE ADDITIONAL  PARTNERSHIPS  INTERESTS IN AFFILIATED ENTITIES: The
acquisition of interests in facilities that we have an ownership interest in and
operate  has  historically  comprised  a  significant  component  of our growth.
However, the pool of such available acquisitions has continued to decrease as we
have acquired such remaining interests over the years, including $157 million of
such  acquisitions in 2005. The potential  remaining  acquisition  opportunities
principally  include the  remaining  59% that we do not own in the 36 properties
owned  by the  "Other  Investments"  described  in  Note  5 to the  consolidated
financial  statements  for the year ended December 31, 2005 with a book value of
approximately $37 million as well as the "Other partnership interests" described
in Note 9 to the consolidated  financial  statements for the year ended December
31, 2005 with a book value of approximately $23 million.  Accordingly, we do not
expect such acquisitions to comprise a significant component of our growth going
forward.

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

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

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

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

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

         o     Repurchasing   or   reacquiring   our  common   shares  or  other
               securities:  The Board of Directors has authorized the repurchase
               from time to time of up to 25,000,000  shares of our common stock
               on the  open  market  or in  privately  negotiated  transactions.
               Cumulatively  through March 15, 2006,  we  repurchased a total of
               22,201,720  shares  of common  stock  under  this  authorization.
               Cumulatively   through   March  15,  2006,  we  have  called  for
               redemption or  repurchased  $1.5 billion of our senior  preferred
               stock and $165  million of our  preferred  partnership  units for
               cash,   representing  a  refinancing  of  these  securities  into
               lower-coupon preferred securities.  Any future repurchases of our
               common stock will depend  primarily  upon the  attractiveness  of
               repurchases compared to our other investment alternatives. Future
               redemptions  or repurchases  of our preferred  securities,  which
               will become  available  for  redemption  or  repurchase  on their
               respective call dates,  will be dependent upon the spread between
               market rates and the coupon rates of these securities.

                                       7
<PAGE>

Financing of the Company's Growth Strategies
--------------------------------------------

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

         BORROWINGS: We have in the past used our $200 million revolving line of
credit described below under "Borrowings" as temporary "bridge"  financing,  and
repaid those amounts with permanent  capital.  During 2005, we assumed long-term
secured   mortgage   notes  of  $94.7  million  in   connection   with  property
acquisitions.  Prior to 2005, we incurred  long-term debt during the merger with
Storage Trust in 1999 wherein we assumed $100 million in senior unsecured notes.
We were unable to prepay these debt balances either because of the nature of the
loan terms or because it was not economically advantageous to do so. While it is
not our present  intention  to issue  additional  debt as a long-term  financing
strategy,  we have  broad  powers  to borrow in  furtherance  of our  objectives
without a vote of our shareholders.  These powers are subject to a limitation on
unsecured  borrowings in our Bylaws  described in  "Limitations  on  Borrowings"
below.

         ISSUANCE OF SENIOR  SECURITIES:  We have in the last three  years,  and
expect to  continue,  to issue  additional  series of  preferred  stock that are
senior to our Common  Stock and Equity  Stock.  At  December  31,  2005,  we had
approximately $2.5 billion of preferred stock outstanding,  excluding one series
that was called for  redemption  on November 2005 and  subsequently  redeemed in
January,  2006.  The preferred  stock,  which was issued in series,  has general
preference  rights with respect to liquidation and quarterly  distributions.  We
intend to continue to issue  preferred  securities  without a vote of our common
shareholders.

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

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

         In November  1999,  we formed PSAC  Development  Partners,  L.P.,  (the
"Consolidated  Development  Joint  Venture") with a joint venture partner ("PSAC
Storage  Investors,  LLC") whose  partners  include a third party  institutional
investor, owning approximately 35%, and Mr. Hughes, owning approximately 65%, to
develop  approximately  $100  million of storage  facilities.  The  Consolidated
Development Joint Venture completed construction on 22 storage facilities with a
total cost of  approximately  $108.6 million.  On August 5, 2005 we acquired the
third  party  institutional  investor's  partnership  interest  in PSAC  Storage
Investors, LLC for approximately $41.4 million in cash, and on November 17, 2005
we acquired Mr. Hughes' interest for an aggregate of $64.5 million in cash.

         In January 2004, we entered into a joint  venture  partnership  with an
institutional  investor  for the purpose of  acquiring  up to $125.0  million of
existing  self-storage  properties  in the United States from third parties (the
"Acquisition  Joint  Venture").  The  venture  is funded  entirely  with  equity
consisting of 30% from the Company and 70% from the institutional  investor. For
a six-month  period  beginning 54 months after  formation,  we have the right to
acquire our joint venture partner's  interest based upon the market value of the
properties.  If we do not exercise  our option,  our joint  venture  partner can
elect to purchase  our  interest  in the  properties  during a six-month  period
commencing upon expiration of our six-month option period.

                                       8
<PAGE>

If our joint venture partner fails to exercise its option,  the partnership will
be liquidated and the proceeds will be distributed to the partners  according to
the joint venture  agreement.  As of December 31, 2005,  the  Acquisition  Joint
Venture  owned  interests  in a  total  of 12  self-storage  facilities  with an
aggregate   investment  of  approximately  $60  million.   See  Note  2  to  our
consolidated financial statements at December 31, 2005 for further discussion of
the  accounting  for  the  Acquisition  Joint  Venture.  We do  not  expect  the
Acquisition Joint Venture to acquire any additional facilities.

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

         DISPOSITION   OF   PROPERTIES:   We   historically   have  disposed  of
self-storage facilities only because of condemnation  proceedings,  which compel
us to sell. However,  during 2003, we sold five self-storage  facilities,  which
were  located  in  non-strategic  markets  and  locations  for an  aggregate  of
approximately  $21.0 million. We do not presently expect to sell any significant
number  of  self-storage  facilities  in  the  future,  though  there  can be no
assurance that we will not.

Investments in Real Estate and Real Estate Entities
---------------------------------------------------

         INVESTMENT POLICIES AND PRACTICES WITH RESPECT TO OUR INVESTMENTS:
Following are our investment practices and policies which, though we do not
anticipate any significant alteration, can be changed by the Board of Directors
without a shareholder vote:

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

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

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

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

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

         o    We  have a  pipeline  of 62  development  projects,  including  58
              expansions  of  real  estate  facilities,  for  a  total  cost  of
              approximately  $323  million.  See  "Management's  Discussion  and
              Analysis  of  Financial  Condition  and  Results of  Operations  -
              Liquidity and Capital Resources."

         The following  table  outlines our ownership  interest in  self-storage
facilities at December 31, 2005:
<TABLE>
<CAPTION>

                                                                  Net Rentable Square
                                                                   Footage of Storage
                                                  Number of              Space
                                                   Storage           (in thousands)
                                                  Facilities
                                                 ------------     --------------------
Consolidated self-storage facilities:
<S>                                                    <C>                  <C>
   Wholly-owned by the Company...............          1,018                63,111
   Other consolidated facilities.............            445                26,210
                                                 ------------     --------------------
                                                       1,463                89,321

 Facilities owned by Unconsolidated Entities.             38                 2,306
                                                 ------------     --------------------
 Total self-storage facilities in which the
   Company has an ownership interest.........          1,501                91,627
                                                 ============     ====================
</TABLE>

                                       9
<PAGE>

         In addition to our interest in self-storage facilities noted above, we
own four commercial facilities with an aggregate of 293,000 net rentable square
feet, three industrial facilities with an aggregate of 244,000 net rentable
square feet used by the continuing containerized storage operations, and have
1,003,000 net rentable square feet of commercial space and 544,000 net rentable
square feet of industrial space developed for containerized storage activities
at certain of the self-storage facilities. The Company and the entities it
controls also have a 44% common interest in PSB, which at December 31, 2005
owned and operated approximately 17.6 million net rentable square feet of
commercial space.

Facilities Owned by Controlled Entities
---------------------------------------

         In addition to our direct ownership of 1,018 self-storage facilities at
December 31, 2005, we had controlling  ownership interests in 34 entities owning
an aggregate of 445 storage facilities.  Because of our controlling  interest in
each of these entities, we consolidate the assets,  liabilities,  and results of
operations of these entities on our financial statements.

Facilities Owned by Unconsolidated Entities
-------------------------------------------

         At December  31,  2005,  we had  ownership  interests  in PSB and eight
limited partnerships (collectively the "Unconsolidated Entities"). Our ownership
interest in these entities is less than 50%.

         Due to our limited  ownership  interest  and  limited  control of these
entities,  we do not  consolidate  the accounts of these  entities for financial
reporting  purposes and we account for such investments using the equity method.
PSB,  which  files  financial   statements  with  the  Securities  and  Exchange
Commission,  has  debt  and  other  obligations  that  are not  included  in our
consolidated  financial  statements.  The eight limited partnerships do not have
any  significant  amounts  of  debt  or  other  obligations.  See  Note 5 to our
consolidated  financial  statements  for the year ended  December  31,  2005 for
further  disclosure  regarding the assets and liabilities of the  Unconsolidated
Entities.

                                       10
<PAGE>

         The following chart sets forth, as of December 31, 2005, the entities
in which we have a controlling interest and the entities in which we have a
minority interest:

<TABLE>
<CAPTION>


          Subsidiaries (Controlled Entities)                          Entities in which we have
                    of the Company                          a Minority Interest (Unconsolidated Entities)
----------------------------------------------          --------------------------------------------------
<S>                                                     <C>
Carson Storage Partners, Ltd.                           Public Storage Alameda, Ltd.  (5)
Carson Storage Ventures                                 Public Storage Glendale Freeway, Ltd. (7)
Connecticut Storage Fund                                Metropublic Storage Fund (8)
Del Amo Storage Partners, Ltd.                          PS Business Parks, Inc.  (9)
Downey Storage Partners, Ltd.  (1)                      Public Storage Crescent Fund, Ltd. (10)
Huntington Beach Storage Partners, Ltd.                 Public Storage Partners, Ltd. (11)
Monterey Park Properties, Ltd.  (2)                     Public Storage Partners II, Ltd. (12)
PS Orangeco Partnerships, Inc.                          Public Storage Properties, Ltd. (13)
PS Partners, Ltd.                                       PSAF Acquisition Partners, Ltd.
PS Partners VIII, Ltd.
PS Texas Holdings, II, Ltd.
Public Storage Properties IV, Ltd. (3)
Public Storage Properties V, Ltd. (4)
PSA Institutional Partners, L.P.
PS HKBF, LLC
Public Storage Euro Fund III, Ltd. (5)
Public Storage Euro Fund IV, Ltd. (5)
Public Storage Euro Fund V, Ltd. (5)
Public Storage Euro Fund VI, Ltd. (5)
Public Storage Euro Fund VII, Ltd. (5)
Public Storage Euro Fund VIII, Ltd. (5)
Public Storage Euro Fund IX, Ltd. (5)
Public Storage Euro Fund X, Ltd. (5)
Public Storage Euro Fund XI, Ltd. (5)
Public Storage Euro Fund XII, Ltd. (5)
Public Storage Euro Fund XIII, Ltd. (5)
Public Storage German Fund II, Ltd. (5)
Public Storage Institutional Fund
Public Storage Institutional Fund III
Secure Mini-Storage
STOR-Re Mutual Insurance Company, Inc.
Storage Trust Properties, L.P.
Van Nuys Storage Partners, Ltd.  (6)
Whittier Storage Partners, Ltd.

</TABLE>


(1)  B. Wayne Hughes owns approximately 2.8% of the limited partnership interest
     of this entity.
(2)  B. Wayne Hughes owns approximately 4.4% of the limited partnership interest
     of this entity.
(3)  The Hughes  Family owns 20% of the general  partner  interests and 15.5% of
     the limited partnership interests of this entity.
(4)  The Hughes  Family owns 20% of the general  partner  interests and 11.4% of
     the limited partnership interests of this entity.
(5)  B. Wayne Hughes owns  approximately  20% of the general partner interest of
     these entities.
(6)  B.  Wayne  Hughes  owns  approximately  17.4%  of the  limited  partnership
     interest of this entity.
(7)  B. Wayne Hughes is a general partner in this entity and owns a 0.02% equity
     interest.
(8)  B. Wayne Hughes is a general  partner of this  entity,  and has no economic
     interest.
(9)  B. Wayne Hughes owns approximately 0.5% of the common shares of PS Business
     Parks, Inc.
(10) B.  Wayne  Hughes  owns  approximately  17.9%  of the  general  partnership
     interest of this entity.
(11) The Hughes  Family  owns  approximately  24.3% of the  limited  partnership
     interest of this entity.
(12) The Hughes  Family  owns  approximately  11.9% of the  limited  partnership
     interest of this entity.
(13) The Hughes  Family owns 20% of the general  partner  interests and 30.5% of
     the limited partnership interests of this entity.

                                       11
<PAGE>

Prohibited Investments and Activities
-------------------------------------

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

Borrowings
----------

         We  have  a  $200  million   revolving  line  of  credit  (the  "Credit
Agreement")  that  has a  maturity  date of April 1,  2007 and  bears an  annual
interest  rate ranging from the London  Interbank  Offered Rate  ("LIBOR")  plus
0.45% to LIBOR plus 1.20% depending on our credit ratings  (currently LIBOR plus
0.45%). In addition,  we are required to pay a quarterly  commitment fee ranging
from  0.15%  per  annum to 0.30%  per  annum  depending  on our  credit  ratings
(currently the fee is 0.15% per annum). At December 31, 2005 and March 15, 2006,
we had no borrowings on our line of credit.

         The Credit Agreement includes various  covenants,  the more significant
of which require us to (i) maintain a balance sheet  leverage ratio of less than
0.55 to 1.00, (ii) maintain certain quarterly interest and fixed-charge coverage
ratios (as  defined) of not less than 2.25 to 1.0 and 1.5 to 1.0,  respectively,
and (iii)  maintain  a minimum  total  shareholders'  equity  (as  defined).  In
addition,  we are limited in our ability to incur additional  borrowings (we are
required to maintain  unencumbered  assets with an aggregate book value equal to
or greater than 1.5 times our unsecured  recourse  debt).  We were in compliance
with all the covenants of the Credit Agreement at December 31, 2005.

         As of December 31, 2005, we had notes payable of  approximately  $114.0
million and debt to a joint venture partner of approximately $35.7 million.  See
Notes 7 and 8 to the  consolidated  financial  statements  for a summary  of our
borrowings at December 31, 2005.

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

Limitations on Debt
-------------------

         The Bylaws  provide that the Board of Directors  shall not authorize or
permit the  incurrence of any  obligation by the Company,  which would cause our
"Asset  Coverage" of our unsecured  indebtedness to become less than 300%. Asset
Coverage is defined in the Bylaws as the ratio  (expressed as a  percentage)  by
which the value of the total  assets (as  defined in the  Bylaws) of the Company
less the Company's  liabilities  (except  liabilities for unsecured  borrowings)
bears to the aggregate amount of all unsecured  borrowings of the Company.  This
Bylaw provision may be changed only upon a shareholder vote.

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

         Without  the  consent  of  holders  of the  various  series  of  Senior
Preferred  Stock,  we may not take any action  that  would  result in a ratio of
"Debt" to "Assets" (the "Debt Ratio") in excess of 50%. As of December 31, 2005,
the Debt Ratio was approximately  4.5%. "Debt" means the liabilities (other than
"accrued  and other  liabilities"  and  "minority  interest")  that  should,  in
accordance with accounting  principles  generally accepted in the United States,
be reflected on our  consolidated  balance  sheet at the time of  determination.
"Assets" means our total assets before a reduction for accumulated  depreciation
and amortization that should, in accordance with generally  accepted  accounting
principles,  be  reflected  on the  consolidated  balance  sheet  at the time of
determination.

                                       12
<PAGE>

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

Employees
---------

         We have  approximately  4,030 employees at December 31, 2005 who render
services  on behalf of the  Company,  primarily  personnel  engaged in  property
operation,  substantially  all of whom are  employed by a clearing  company that
provides certain  administrative  and  cost-sharing  services to the Company and
other owners of properties operated by the Company.

Federal Income Tax
------------------

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

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

Insurance
---------

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

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

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

Subsequent Event - Agreement to Acquire Shurgard Storage Centers
----------------------------------------------------------------

         We have entered into an agreement to acquire  Shurgard Storage Centers,
Inc.  ("Shurgard"),  a publicly-held REIT engaged in the operation,  development
and acquisition of  approximately  646  self-storage  facilities  located in the
United States and Europe.  Under the agreement,  and based upon our December 31,
2005 balance sheet and  Shurgard's  September 30, 2005 balance sheet included in
its related  Form 10-Q,  i) we would  issue 0.82 shares of our common  stock for
each share of  Shurgard  common  stock which would  increase  our common  shares
outstanding from 128,089,563 to approximately  166,460,200  shares, ii) we would
assume  Shurgard debt which totals  approximately  $1.8 billion at September 30,
2005, increasing our debt outstanding (assuming no prepayment) from $150 million
to approximately $2.0 billion, and iii) $136 million of Shurgard preferred stock
would be redeemed. The transaction is targeted to close by the end of the second
quarter of 2006.

                                       13
<PAGE>

         Completion of the  transaction  is not assured and is subject to risks,
including that  shareholders of either Public Storage or Shurgard do not approve
the  transaction  or that the other closing  conditions  are not  satisfied.  In
addition,  Shurgard may under limited  circumstances  terminate the agreement to
take a superior  proposal.  Public  Storage  and  Shurgard  are not aware of any
significant  governmental  approvals that are required for  consummation  of the
merger. If any approval or action is required, it is presently contemplated that
Public  Storage and Shurgard would use their  reasonable  best efforts to obtain
such approval.  There can be no assurance that any approvals,  if required, will
be obtained.

         The  foregoing  description  of the terms of our  agreement  to acquire
Shurgard  does not purport to be  complete,  and is qualified in its entirety by
reference to the full text of the Merger Agreement,  copy of which is filed with
our current report on Form 8-K dated March 7, 2006.

ITEM 1A. Risk Factors
         ------------

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

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

         At March 3, 2006, B. Wagne Hughes  Chairman of the Board and members of
his family (the "Hughes  Family")  owned  approximately  36% of our  outstanding
shares of common stock.  Consequently,  the Hughes Family could control  matters
submitted to a vote of our shareholders,  including electing directors, amending
our  organizational  documents,  dissolving  and approving  other  extraordinary
transactions,  such as a takeover  attempt,  even though such actions may not be
favorable to the other common shareholders.

PROVISIONS IN OUR ORGANIZATIONAL DOCUMENTS MAY PREVENT CHANGES IN CONTROL.

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

WE WOULD INCUR ADVERSE TAX CONSEQUENCES IF WE FAIL TO QUALIFY AS A REIT.

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

                                       14
<PAGE>

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

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

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

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

         We have become  increasingly  centralized  and dependent upon automated
information technology processes.  While we have attempted to mitigate this risk
through offsite backup  procedures and contracted data centers that include,  in
some cases,  redundant  operations,  we could  still be  severely  impacted by a
catastrophic  occurrence,  such as a natural disaster or a terrorist  attack. In
addition,  an increasing  portion of our business  operations are conducted over
the Internet,  increasing  the risk of viruses that could cause system  failures
and  disruptions of operations  despite our  deployment of anti-virus  measures.
Experienced  computer  programmers may be able to penetrate our network security
and  misappropriate our confidential  information,  create system disruptions or
cause shutdowns.

WE AND OUR SHAREHOLDERS ARE SUBJECT TO FINANCING RISKS.

         Debt increases the risk of loss. In making real estate investments,  we
may borrow money,  which  increases the risk of loss. At December 31, 2005,  our
debt of $149.6 million was 2.7% of our total assets.

         Certain securities have a liquidation  preference over our common stock
and  Equity  Stock,  Series  A.  If we  liquidated,  holders  of  our  preferred
securities  would be entitled  to receive  liquidating  distributions,  plus any
accrued  and  unpaid  distributions,  before any  distribution  of assets to the
holders of our common  stock and Equity  Stock,  Series A.  Holders of preferred
securities  are entitled to receive,  when  declared by our Board of  Directors,
cash  distributions  in  preference  to holders  of our common  stock and Equity
Stock, Series A.

                                       15
<PAGE>

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

         The value of our  investments  may be reduced by general  risks of real
estate  ownership.  Since we derive  substantially  all of our income  from real
estate  operations,  we  are  subject  to  the  general  risks  of  owning  real
estate-related assets, including:

         o    lack of demand for rental spaces or units in a locale;

         o    changes in general economic or local conditions;

         o    natural disasters, such as earthquakes or hurricanes;

         o    potential terrorist attacks;

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

         o    the impact of environmental protection laws;

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

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

         o    tenant claims.

         In addition,  we self-insure  certain of our property loss,  liability,
and workers  compensation  risks; areas that other real estate companies may use
third-party  insurers  for. This results in a higher risk of losses that are not
covered  by  third-party  insurance  contracts,  as  described  in Note 16 under
"Insurance  and Loss  Exposure"  to our  consolidated  financial  statements  at
December 31, 2005.

         There is significant competition among self-storage facilities and from
other storage alternatives.  Most of our properties are self-storage facilities,
which generated most of our revenue for the year ended December 31, 2005.  Local
market  conditions will play a significant  part in how competition  will affect
us.  Competition in the market areas in which many of our properties are located
from other self-storage facilities and other storage alternatives is significant
and has affected the occupancy  levels,  rental rates and operating  expenses of
some of our properties.  Any increase in availability of funds for investment in
real estate may accelerate  competition.  Further  development  of  self-storage
facilities may intensify competition among operators of self-storage  facilities
in the market areas in which we operate.

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

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

                                       16
<PAGE>

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

         Delays in development  and fill-up of our  properties  would reduce our
profitability.  Since  January  1,  2001,  we have  opened  53  newly  developed
self-storage   facilities  and  17  facilities  that  combine  self-storage  and
containerized  storage space at the same location,  with  aggregate  development
costs of approximately $547 million. In addition, at December 31, 2005 we had 62
projects in development that are expected to be completed in  approximately  the
next two years.  These 62 projects have total estimated  costs of  approximately
$323 million.  Construction  delays due to weather,  unforeseen site conditions,
personnel problems, and other factors, as well as cost overruns, would adversely
affect our profitability. Delays in the rent-up of newly developed facilities as
a result of  competition  or other  factors  would  also  adversely  impact  our
profitability.

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

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

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

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

         We have no interest in Canadian  self-storage  facilities  owned by the
Hughes Family.

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

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

                                       17
<PAGE>

         Through our  subsidiaries,  we continue to reinsure  risks  relating to
loss of goods stored by tenants in the  self-storage  facilities  in Canada.  We
acquired  the tenant  insurance  business  on  December  31,  2001  through  our
acquisition of PSIC.  During the years ended  December 31, 2005,  2004 and 2003,
PSIC  received  $1,052,000,   $1,069,000,  and  $1,017,000,   respectively,   in
reinsurance premiums attributable to the Canadian operations. Since PSIC's right
to provide tenant reinsurance to the Canadian facilities may be qualified, there
is no assurance that these premiums will continue.

OUR CONTAINERIZED STORAGE BUSINESS HAS INCURRED OPERATING LOSSES.

         Public  Storage  Pickup & Delivery  ("PSPUD")  was organized in 1996 to
operate a containerized storage business. We own all of the economic interest of
PSPUD.  Since  PSPUD  will  operate  profitably  only if it can  succeed  in the
relatively new field of containerized  storage,  we cannot provide any assurance
as to its  profitability.  PSPUD  incurred an operating  loss of  $10,058,000 in
2002, and generated  operating  profits of $2,543,000 in 2003,  $684,000 in 2004
and $1,818,000 for 2005.  Since 2002,  PSPUD closed or  consolidated  facilities
that were deemed not strategic to its business plan, and has 12 facilities  open
at December 31, 2005.

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

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

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

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

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

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

OUR PROPOSED ACQUISITION OF SHURGARD SUBJECTS US TO ADDITIONAL RISKS

         We have entered into an agreement to acquire  Shurgard Storage Centers,
Inc. ("Shurgard"),  a publicly held REIT that has interests in approximately 646
self-storage  facilities  located in the United  States  and  Europe.  Under the
agreement,  and based upon our December 31, 2005  balance  sheet and  Shurgard's
September 30, 2005 balance sheet  included in its related Form 10-Q, i) we would
issue 0.82 shares of our common  stock for each share of Shurgard  common  stock
which  would  increase  our  common  shares   outstanding  from  128,089,563  to
approximately 166,460,200 shares, ii) we would assume Shurgard debt which totals
approximately   $1.8  billion  at  September  30,  2005,   increasing  our  debt
outstanding  (assuming no prepayment)  from $150 million to  approximately  $2.0
billion,  and iii) $136 million of Shurgard  preferred  stock would be redeemed.
The transaction is targeted to close by the end of the second quarter of 2006.

                                       18
<PAGE>

         Completion of the  transaction  is not assured and is subject to risks,
including that  shareholders of either Public Storage or Shurgard do not approve
the  transaction  or that the other closing  conditions  are not  satisfied.  In
addition,  Shurgard may under limited  circumstances  terminate the agreement to
take a superior  proposal.  Public  Storage  and  Shurgard  are not aware of any
significant  governmental  approvals that are required for  consummation  of the
merger. If any approval or action is required, it is presently contemplated that
Public  Storage and Shurgard would use their  reasonable  best efforts to obtain
such approval.  There can be no assurance that any approvals,  if required, will
be obtained.

         In  addition to the general  risks  related to real estate  noted above
which may also adversely impact  Shurgard's  operations,  we are also subject to
the following  risks in  connection  with our  acquisition  of Shurgard into our
operations, including without limitation the following:

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

         o    inability to realize or delays in realizing expected synergies;

         o    unanticipated operating costs;

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

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

         o    potential underinsured losses on Shurgard properties; and

         o    risk of failure to mitigate any Shurgard  material  weaknesses  in
              internal  control  to the  extent  that it  affects  our  internal
              controls.

         Shurgard  also holds many of its  properties  through  joint  ventures,
which have additional risks,  including risks related to the financial strength,
common business goals and strategies and cooperation of the venture partner,  as
well as the  inability  to take some  actions  that may require  approval by the
venture  partner.  In addition,  Shurgard  holds  substantially  all of its real
estate investments in Europe indirectly  through  partnerships and joint venture
arrangements.   If  we  are  unable  to   effectively   control  these  indirect
investments,  there is a risk that our  ownership  of the joint  ventures  could
cause us to lose our REIT status.

         We have assumed based on public filings that Shurgard has qualified and
will  continue  to  qualify as a REIT and that we would be able to  continue  to
qualify as a REIT following an acquisition.  However,  if Shurgard has failed or
fails to  qualify  as a REIT,  we might  succeed  to or  incur  significant  tax
liabilities  and possibly lose our REIT status should  disqualifying  activities
continue after the acquisition.

         Shurgard has a greater  level of debt than we do, as well as derivative
instruments that we would assume. Shurgard's outstanding borrowings on its lines
of credit ($569 million at September 30, 2005) would become payable  immediately
upon completion of the merger. In addition, there would be additional cash costs
related to the merger,  cash  requirements for the redemption of $136 million of
Shurgard's  preferred  stock on the merger date,  and  additional  possible cash
requirements  following  the merger.  Our cash on hand and  available  borrowing
capacity on our line of credit  would be  insufficient  to fund these  immediate
capital  requirements and,  accordingly,  we may look to obtain a larger line of
credit, bridge financing, or issue preferred or common equity. As a result, this
transaction  may result in an  increase in our  exposure  to  interest  rate and
refinancing risks.

                                       19
<PAGE>

         We would  also be  acquiring  Shurgard's  international  operations  in
Europe,  which consist principally of facilities that have been completed in the
last few years and are in various  stages of fill-up.  Shurgard's  international
operations  have not  been  profitable,  and  there is no  assurance  they  will
ultimately  be  profitable.   We  have  limited   experience  in   international
operations,  which may  adversely  impact our ability to operate  profitably  in
Europe. In addition,  these operations have specific  inherent risks,  including
without limitation the following:

         o    currency risks, including currency fluctuations;

         o    unexpected changes in legislative and regulatory requirements;

         o    potentially adverse tax burdens;

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

         o    obstacles to the repatriation of earnings and cash;

         o    regional, national and local political uncertainty;

         o    economic slowdown and/or downturn in foreign markets;

         o    difficulties  in staffing and managing  international  operations;
              and

         o    reduced protection for intellectual property in some countries.


         In connection  with the proposed  acquisition  of  Shurgard's  European
operations, we will be evaluating various strategic alternatives, including, but
not limited to, public or private offerings of securities,  one or more possible
joint ventures, and possible asset acquisitions and/or sales.

         The foregoing  description of the terms and conditions of our agreement
to acquire  Shurgard  does not purport to be  complete,  and is qualified in its
entirety by reference to the full text of the merger agreement,  a copy of which
is filed with our current report on Form 8-K dated March 7, 2006.

ITEM 1B. Unresolved Staff Comments
         -------------------------
         Not applicable.

                                       20

<PAGE>


ITEM 2.  Properties
         ----------

         At December 31, 2005, we had direct and indirect ownership interests in
1,501 storage facilities located in 37 states:

                                               At December 31, 2005
                                  -------------------------------------------
                                   Number of Storage      Net Rentable Square
                                    Facilities (a)        Feet (in thousands)
                                  -------------------    --------------------
California:
     Southern...............               170                    11,059
     Northern...............               142                     7,911
Texas.......................               170                    11,356
Florida.....................               155                     9,622
Illinois....................                99                     6,286
Georgia.....................                71                     4,467
Colorado....................                50                     3,207
New York....................                48                     2,948
New Jersey..................                48                     2,958
Washington..................                42                     2,710
Maryland....................                44                     2,642
Virginia....................                41                     2,569
Missouri....................                38                     2,144
Ohio........................                30                     1,859
Minnesota...................                25                     1,571
Pennsylvania................                21                     1,418
Nevada......................                22                     1,404
Tennessee...................                23                     1,321
North Carolina..............                25                     1,311
Kansas......................                22                     1,310
Massachusetts...............                19                     1,180
Oregon......................                24                     1,122
South Carolina..............                25                     1,083
Wisconsin...................                16                     1,030
Indiana.....................                18                     1,029
Other states (13 states)....               113                     6,110
                                  -------------------    --------------------
     Totals.................             1,501                    91,627
                                  ===================    ====================

(a)  Includes 1,463  self-storage  facilities  owned by the Company and entities
     consolidated with the Company. The remaining 38 facilities are self-storage
     facilities owned by entities in which the Company has an interest; however,
     the Company  does not have a  controlling  interest in such  entities.  See
     Schedule III:  Real Estate and  Accumulated  Depreciation  in the Company's
     2005  financials,  for a complete  list of properties  consolidated  by the
     Company.

         Our facilities are generally operated to maximize cash flow through the
regular  review and, when  warranted by market  conditions,  adjustment of rents
charged to our  tenants.  For the year ended  December  31,  2005,  the weighted
average  occupancy level and the average total rental income per rentable square
foot  for  our  self-storage  facilities  were  approximately  90%  and  $11.01,
respectively.  Included in the 1,501 storage  facilities are 70 newly  developed
facilities opened since January 1, 2001.

         At December  31,  2005,  34 of our  facilities  were  encumbered  by an
aggregate of $91.6 million in mortgage notes payable.

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

                                       21
<PAGE>

         DESCRIPTION OF SELF-STORAGE FACILITIES:  Self-storage facilities, which
comprise  the  majority of our  investments,  are  designed to offer  accessible
storage  space for personal  and  business use at a relatively  low cost. A user
rents a fully enclosed space, which is for the user's exclusive use and to which
only the user has access on an unrestricted basis during business hours. On-site
operation  is the  responsibility  of property  managers who are  supervised  by
district managers.  Some self-storage facilities also include rentable uncovered
parking  areas  for  vehicle  storage,  as well as space  for  portable  storage
containers.  Leases  for  storage  facility  space  may  be  on a  long-term  or
short-term  basis,  although  typically  spaces are  rented on a  month-to-month
basis. Rental rates vary according to the location of the property,  the size of
the storage space and length of stay.  All of our  self-storage  facilities  are
operated under the "Public Storage" brand name.

         Users of space  in  self-storage  facilities  include  individuals  and
businesses.  Individuals  usually  obtain this space for  storage of  furniture,
household  appliances,  personal  belongings,  motor vehicles,  boats,  campers,
motorcycles and other household goods. Businesses normally employ this space for
storage of excess  inventory,  business records,  seasonal goods,  equipment and
fixtures.

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

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

         Our  self-storage  facilities are  geographically  diversified  and are
located  primarily  in or near  major  metropolitan  markets in 37 states in the
United  States.  Generally our  self-storage  facilities  are located in heavily
populated  areas and close to  concentrations  of  apartment  complexes,  single
family   residences  and  commercial   developments.   However,   there  may  be
circumstances  in  which  it may be  appropriate  to  own a  property  in a less
populated  area,  for  example,  in an area that is highly  visible from a major
thoroughfare and close to, although not in, a heavily populated area.  Moreover,
in certain population  centers,  land costs and zoning restrictions may create a
demand for space in nearby less populated areas.

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

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

         COMMERCIAL   PROPERTIES:   In  addition  to  our   interests  in  1,501
self-storage  facilities,  we have an interest in PSB, which, as of December 31,
2005, owns and operates  approximately  17.6 million net rentable square feet in
eight states. At December 31, 2005, our investment in PSB represents 5.2% of our
total  assets based upon book value of $288.7  million.  The market value of our
investment  in  PSB  at  December  31,  2005  of  approximately  $626.0  million
represents  11.3% of the book value of our total  assets at December 31, 2005 of
approximately $5.6 billion. We also directly own four commercial properties with
293,000 net rentable  square feet,  have  1,003,000 net rentable  square feet of
commercial space that is located at certain of the self-storage facilities,  and
own three industrial facilities with an aggregate of 244,000 net rentable square
feet that are being used by the continuing  containerized storage operations and
544,000 net rentable square feet of industrial space developed for containerized
storage facilities.

                                       22
<PAGE>

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

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

ITEM 3.  Legal Proceedings
         -----------------

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

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

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

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

Gustavson, et al v. Public Storage, Inc. (filed June 2003) (Superior Court - Los
--------------------------------------------------------------------------------
Angeles County);  Potter,  et al v. Hughes,  et al (filed December 2004) (United
--------------------------------------------------------------------------------
States District Court - Central District of California)
-------------------------------------------------------

         As previously reported, in November  2002, a shareholder of the Company
made a demand on the Board of  Directors  that  challenged  the  fairness of the
Company's  acquisition  of PS  Insurance  Company,  Ltd.  ("PSIC")  and  related
matters. PSIC was previously owned by the Hughes Family.

         In June 2003, the Hughes Family filed a complaint (Gustavson,  et al v.
Public Storage,  Inc.) for declaratory  relief asking the court to find that the
acquisition  of PSIC and related  matters were fair to the Company.  The Company
filed an answer to the Hughes  Family's  complaint  requesting a final  judicial
determination  of the Company's  rights of recovery against the Hughes Family in
respect of PSIC.  By order of the  Superior  Court,  the matter was tried before
Justice  Malcolm Lucas, a former chief justice of the California  Supreme Court.
In October 2005,  Judge Lucas rendered his decision,  ruling against the Company
by finding that the PSIC  transaction  was just and reasonable as to the Company
and holding  that the Hughes  Family was not required to make any payment to the
Company.  The Superior Court has formally entered judgment  accordingly and this
lawsuit has been concluded.

                                       23
<PAGE>

         At the end of December 2004, the same shareholder referred to above and
a second shareholder filed a shareholder's  derivative  complaint (Potter, et al
v. Hughes,  et al) naming as defendants the Company's  directors (and two former
directors)  and certain  officers  of the  Company.  The matters  alleged in the
Potter  complaint  relate to PSIC,  the Hughes  Family's  Canadian  self-storage
operations  and the  Company's  1995  reorganization.  In June  2005,  the court
granted the  defendants'  motion to dismiss the Potter  complaint  with leave to
amend the complaint.  In July 2005, the plaintiffs  filed an amended  complaint,
and the defendants filed a motion to dismiss the amended  complaint.  The matter
is  currently  under  submission.  We believe the  litigation  will not have any
financially  adverse  effect  on the  Company  (other  than the  costs and other
expenses relating to the lawsuit).

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

         The Brinkley  plaintiffs are suing the Company on behalf of a purported
class of California  property  managers who claim that they were not compensated
for all the hours they worked.  The Brinkley suit is based upon  California wage
and hour laws. The maximum potential liability cannot be estimated, but would be
increased if a class or classes are  certified or, if claims are permitted to be
brought on behalf of others under the California Unfair Business  Practices Act.
We are  vigorously  contesting  the claims  and  intend to resist any  expansion
beyond the named plaintiffs on the grounds of lack of commonality of claims.  We
do not believe  that this matter will have any  material  adverse  effect on the
results of operations of the Company.

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

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

ITEM 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

         We did not  submit  any  matter to a vote of  security  holders  in the
fourth quarter of the fiscal year ended December 31, 2005.

                                       24
<PAGE>

                                     PART II
                                     -------

ITEM 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
Issuer Purchases of Equity Securities

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

         Our Common  Stock  (NYSE and PCX:  PSA) has been listed on the New York
     Stock  Exchange  since October 19, 1984 and on the Pacific  Exchange  since
     December 26, 1996. Our  Depositary  Shares each  representing  1/1,000 of a
     share of Equity  Stock,  Series A  (NYSE:PSAA)  (see section c. below) have
     been listed on the New York Stock Exchange since February 14, 2000.

         The following  table sets forth the high and low sales prices of Common
     Stock on the New York Stock  Exchange  composite  tapes for the  applicable
     periods.
                                                             Range
                                                --------------------------------
         Year                 Quarter               High                  Low
       -------               ---------          -------------       ------------
         2004                   1st              $  50.000            $  43.470
                                2nd                 49.800               39.500
                                3rd                 52.670               45.240
                                4th                 57.640               49.600

         2005                   1st                 59.490               51.700
                                2nd                 64.500               55.300
                                3rd                 70.450               59.700
                                4th                 72.020               61.360

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

                                                              Range
                                                --------------------------------
         Year                 Quarter               High                  Low
       -------               ---------          -------------       ------------
         2004                    1st             $  31.500            $  29.220
                                 2nd                30.500               26.010
                                 3rd                28.480               26.130
                                 4th                29.500               27.860

         2005                    1st                29.950               27.800
                                 2nd                29.000               27.540
                                 3rd                28.900               27.610
                                 4th                28.650               27.380

         As of March 1, 2006, there were approximately  18,942 holders of record
     of Common Stock and approximately  11,311 holders of Depositary Shares Each
     Representing   1/1,000   of  a   share   of   Equity   Stock,   Series   A.

b.   Dividends

         We have paid quarterly  distributions to our  shareholders  since 1981,
     our first full year of operations.  Overall  distributions  on Common Stock
     for 2005 amounted to $244.2 million or $1.90 per share of Common Stock.

                                       25
<PAGE>

         Holders of Common Stock are entitled to receive  distributions when and
     if declared by our Board of Directors  out of any funds  legally  available
     for that purpose.  In order to maintain our REIT status for federal  income
     tax purposes,  we are generally required to pay dividends at least equal to
     90% of our real estate investment trust taxable income for the taxable year
     (for this purpose,  certain  dividends paid in the  subsequent  year may be
     taken into account). We intend to pay distributions sufficient to permit us
     to maintain our REIT status.


         For Federal  income tax purposes,  distributions  to  shareholders  are
     treated  as  ordinary  income,  capital  gains,  return  of  capital  or  a
     combination   thereof.   For  2005,   the  dividends  paid  to  the  common
     shareholders  ($1.90 per share),  on all the various  classes of  preferred
     stock, and on our Equity Stock, Series A were classified as follows:
<TABLE>
<CAPTION>

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

         A percentage of the long-term capital gain is unrecaptured Section 1250
     gain as follows:
<TABLE>
<CAPTION>

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

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

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

         For Federal  income tax purposes,  distributions  to  shareholders  are
     treated  as  ordinary  income,  capital  gains,  return  of  capital  or  a
     combination   thereof.   For  2004,   the  dividends  paid  to  the  common
     shareholders  ($1.80 per share),  on all the various  classes of  preferred
     stock, and on our Equity Stock, Series A were classified as follows:

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter      3rd Quarter       4th Quarter
                               -------------      -------------     ------------     -------------
<S>                              <C>               <C>               <C>                <C>
Ordinary Income..........        99.8683%          99.8694%          99.8712%           98.0855%
Long-term Capital Gain...        0.1317%           0.1306%           0.1288%            1.9145%
                               -------------      -------------     ------------     -------------
Total....................        100.0000%         100.0000%         100.0000%          100.0000%
                               =============      =============     ============     =============
</TABLE>

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

<TABLE>
<CAPTION>

                                  1st Quarter      2nd Quarter      3rd Quarter       4th Quarter
                               -------------      -------------     ------------     -------------
<S>                                <C>               <C>               <C>                <C>
Unrecaptured ss.1250 Gain..        34.8559%          34.8559%          34.8559%           43.7003%
                               =============      =============     ============     =============
</TABLE>

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

<TABLE>
<CAPTION>

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

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

                                       26
<PAGE>

c.       Equity Stock

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

         In April 2001, we completed a public  offering of 2,210,500  depositary
     shares  each  representing  1/1,000 of a share of Equity  Stock,  Series A,
     ("Equity Stock A") raising net proceeds of  approximately  $51,836,000.  In
     May 2001,  we completed a direct  placement of 830,000  depositary  shares,
     raising net proceeds of  approximately  $20,294,000.  In November  2001, we
     completed a direct  placement  of 100,000  depositary  shares,  raising net
     proceeds of approximately  $2,690,000. In January 2000, we issued 4,300,555
     depositary  shares  (2,200,555  shares  as part of a  special  distribution
     declared on November  15, 1999 and  2,100,000  shares in a separate  public
     offering).  In addition,  in the second  quarter of 2000,  we issued 52,547
     depositary  shares to a related party in connection with the acquisition of
     real estate  facilities.  In December 2000, we issued 1,282,500  depositary
     shares in a public offering.  All of the issuances of the depositary shares
     described in this paragraph were registered under the Securities Act at the
     time of issuance.

         At December 31, 2005, we had 8,744,193  depositary shares  outstanding,
     each representing  1/1,000 of a share of Equity Stock A. The Equity Stock A
     ranks on a parity  with  common  stock and junior to the  Senior  Preferred
     Stock with respect to  distributions  and liquidation and has a liquidation
     amount which cannot exceed $24.50 per share.  Distributions with respect to
     each  depositary  share shall be the lesser of: a) five times the per share
     dividend  on the  Common  Stock or b) $2.45 per  annum.  Except in order to
     preserve  the  Company's  Federal  income tax status as a REIT,  we may not
     redeem the  depositary  shares before March 31, 2010. On or after March 31,
     2010,  we may, at our option,  redeem the  depositary  shares at $24.50 per
     depositary  share.  If the Company fails to preserve its Federal income tax
     status as a REIT,  each  depositary  share will be  convertible  into 0.956
     shares of our  common  stock.  The  depositary  shares  are  otherwise  not
     convertible  into  common  stock.  Holders of  depositary  shares vote as a
     single class with our holders of common stock on shareholder  matters,  but
     the  depositary  shares  have the  equivalent  of  one-tenth  of a vote per
     depositary  share.  We  have  no  obligation  to pay  distributions  on the
     depositary shares if no distributions are paid to common shareholders.

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

                                       27
<PAGE>

ITEM 6.  Selected Financial Data
         -----------------------
<TABLE>
<CAPTION>

                                                                          For the year ended December 31,
                                                    ---------------------------------------------------------------------------
                                                       2005 (1)       2004 (1)        2003 (1)        2002 (1)       2001 (1)
                                                    -------------   ------------    -----------      -----------    -----------
                                                                   (Amounts in thousands, except per share data)
Revenues:
<S>                                                  <C>               <C>            <C>             <C>             <C>
  Rental income and ancillary operations........     $1,044,514        $953,910       $891,419        $846,379        $787,655
  Interest and other income.....................         16,447           5,391          2,537           5,210           8,640
                                                    -------------   ------------    -----------      -----------    -----------
                                                      1,060,961         959,301        893,956         851,589         796,295
                                                    -------------   ------------    -----------      -----------    -----------
Expenses:
  Cost of operations (excluding depreciation)...        378,631         362,269        341,182         309,819         279,564
  Depreciation and amortization.................        196,397         183,063        184,063         175,726         163,922
  General and administrative....................         21,115          18,813         17,127          15,619          21,038
  Interest expense..............................          8,216             760          1,121           3,809           3,227
                                                    -------------   ------------    -----------      -----------    -----------
                                                        604,359         564,905        543,493         504,973         467,751
                                                    -------------   ------------    -----------      -----------    -----------
Income from continuing operations before equity
  in earnings of real estate entities, gain
  (loss) on disposition of real estate
  investments and casualty loss and minority
  interest in income............................        456,602         394,396        350,463         346,616         328,544
Equity in earnings of real estate entities......         24,883          22,564         24,966          29,888          38,542
Gain(loss) on disposition of real estate
  investments and casualty loss.................          1,182              67          1,007          (2,541)          4,091
Minority interest in income (3).................        (32,651)        (49,913)       (43,703)        (44,087)        (46,015)
                                                    -------------   ------------    -----------      -----------    -----------
Income from continuing operations...............        450,016         367,114        332,733         329,876         325,162

Discontinued operations (2).....................          6,377            (901)         3,920         (11,138)           (954)
                                                    -------------   ------------    -----------      -----------    -----------
Net income......................................       $456,393        $366,213       $336,653        $318,738        $324,208
                                                    =============   ============    ===========      ===========    ===========
-----------------------------------------------------------------------------------------------------------------------------------
Per Common Share:
-----------------
Distributions...................................          $1.90           $1.80          $1.80           $1.80           $1.69

Net income - Basic..............................          $1.98           $1.39          $1.29           $1.15           $1.41
Net income - Diluted............................          $1.97           $1.38          $1.28           $1.14           $1.39

Weighted average common shares - Basic..........        128,159         127,836        125,181         123,005         122,310
Weighted average common shares - Diluted........        128,819         128,681        126,517         124,571         123,577
-----------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
-------------------
Total assets....................................     $5,552,486      $5,204,790     $4,968,069      $4,843,662      $4,625,879
Total debt......................................       $149,647        $145,614        $76,030        $115,867        $168,552
Minority interest (other partnership interests).        $28,970        $118,903       $141,137        $154,499        $169,601
Minority interest (preferred partnership
interests)......................................       $225,000        $310,000       $285,000        $285,000        $285,000
Shareholders' equity............................     $4,817,009      $4,429,967     $4,219,799      $4,158,969      $3,909,583
-----------------------------------------------------------------------------------------------------------------------------------
Other Data:
-----------
Net cash provided by operating activities.......      $ 692,048       $ 616,664      $ 571,387       $ 591,283        $538,534
Net cash used in investing activities...........      $(443,656)      $(157,638)     $(205,133)      $(325,786)      $(306,058)
Net cash used in financing activities...........      $(121,146)      $(297,604)     $(264,545)      $(211,720)      $(272,596)

</TABLE>

(1)  During 2005, 2004, 2003, 2002, and 2001, we completed  several  significant
     asset  acquisitions,  business  combinations and equity  transactions.  See
     Notes 4, 7, 8, 9 and 10 to our consolidated financial statements.
(2)  Commencing  January 1, 2002,  we adopted and modified a business  plan that
     included   the   closure  or   consolidation   of   certain   non-strategic
     containerized  storage facilities.  We sold two commercial properties - one
     in  2002,  the  other  in  2004.  During  2003  we sold  five  self-storage
     facilities. The historical operations of these facilities are classified as
     discontinued  operations,  with  the  rental  income,  cost of  operations,
     depreciation  expense and gain or loss on disposition  of these  facilities
     for  current and prior  periods  included  in the  line-item  "Discontinued
     Operations" on the consolidated income statement.
(3)  During 2004, holders of $200,000,000 of our Series N preferred  partnership
     units agreed to a restructuring  which included reducing their distribution
     rate  from  9.5%  to  6.4%  in  exchange  for  a  special  distribution  of
     $8,000,000.  This special  distribution,  combined with $2,063,000 in costs
     incurred at the time the units were  originally  issued  that were  charged
     against income in accordance with the Securities and Exchange  Commission's
     clarification  of EITF Topic D-42,  are  included  in minority  interest in
     income.
                                       28
<PAGE>

ITEM 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations
         -------------

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

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

         OVERVIEW

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

         We are the largest owner and operator of self-storage facilities in the
United  States with direct and indirect  ownership  interests as of December 31,
2005 in 1,501 self-storage  facilities  containing  approximately 92 million net
rentable  square feet.  All of our  facilities  are  operated  under the "Public
Storage" brand name,  which we believe is the most  recognized  and  established
name in the self-storage industry.  Located in the major metropolitan markets of
37 states,  our self-storage  facilities are geographically  diverse,  giving us
national recognition and prominence. This concentration establishes us as one of
the dominant providers of self-storage space in most markets in which we operate
and enables us to use a variety of  promotional  activities,  such as television
advertising as well as targeted  discounting and referrals,  which are generally
not economically viable to most of our competitors. In addition, we believe that
the  geographic  diversity  of the  portfolio  reduces the impact from  regional
economic downturns and provides a greater degree of revenue stability.

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

                                       29
<PAGE>

         o    We will  focus  on  enhancing  the  operating  performance  of our
              self-storage  properties,  primarily through increases in revenues
              achieved through the telephone  reservation  center and associated
              marketing  efforts,  as well as management of expense growth.  See
              "Self-Storage  Operations  - Same Store  Facilities"  for  further
              discussion.  We expect  future  increases in rental income to come
              primarily   from   increases  in  rental  rates,   as  opposed  to
              improvements in occupancies, although there can be no assurance.

         o    We will acquire  facilities  from third  parties.  During 2004 and
              2005, we acquired  interests in 77  self-storage  facilities  from
              third parties at an aggregate cost of approximately  $514 million.
              In  addition,  between  January  1, 2006 and March  15,  2006,  we
              acquired  three  additional  self-storage  facilities  from  third
              parties  (total  net  rentable  square  feet  of  170,000)  at  an
              aggregate cost of  approximately  $20 million and we currently are
              under contract to purchase seven  self-storage  facilities  (total
              net  rentable  square  feet of 574,000)  at an  aggregate  cost of
              approximately $69 million.  We believe that our national telephone
              reservation  system and our marketing and  promotional  activities
              present an  opportunity to increase  revenues at these  facilities
              through higher occupancies,  as well as cost efficiencies  through
              greater critical mass.

         o    We will  look to  expand  and  further  invest  into our  existing
              self-storage   locations  by  (i)   improving   their  visual  and
              structural appeal,  (ii) expanding our facilities'  density,  at a
              per-square  foot cost that is  favorable  compared  to a ground-up
              development,  to take advantage of increases in local demand since
              the  facilities  were  developed,  and (iii)  converting  existing
              vacant  space  previously  used  by  our   containerized   storage
              operations into traditional self-storage space. During 2003, 2004,
              and 2005, we have invested a total of approximately $96 million in
              such  expansion,   conversion,   and  repackaging  activities.  At
              December  31,  2005,  we have a pipeline  of 58 such  projects  to
              expand  or  repackage  our  existing  facilities,  and to  convert
              substantially all of the remaining vacant space previously used by
              our  containerized   storage  operations,   for  an  aggregate  of
              approximately $262 million, which will add approximately 3,573,000
              net rentable square feet.  Completion of these projects is subject
              to  contingencies,   including   obtaining   governmental   agency
              approvals.  We  continue  to  evaluate  our  existing  real estate
              portfolio  to  identify   additional   expansion  and  repackaging
              opportunities.

         o    In 2004 and  2005,  our rate of  development  of new  self-storage
              facilities  has declined due to  increases in  construction  cost,
              increases in competition with retail,  condominium,  and apartment
              operators for quality  self-storage sites in urban locations,  and
              more  difficult  zoning  and  permitting  requirements.  We  will,
              however,   continue  to  seek  favorable  sites  and  markets  for
              development.  During the five years ending  December 31, 2005, the
              Company and the Consolidated  Development  Joint Venture developed
              and opened a total of 70 storage  facilities  with total  costs of
              approximately $547 million. In 2005, we opened six facilities with
              an aggregate cost of $37 million.  At December 31, 2005, we have a
              development  pipeline which includes four self-storage  facilities
              that  are  expected  to cost an  aggregate  of  approximately  $61
              million, which we expect will open over the next 24 months.

         o    Through our  investment in PSB, we will continue to participate in
              the potential growth of this company's investment in approximately
              17.6  million  net  rentable  square feet of  commercial  space at
              December 31, 2005.

         The  acquisition  of interests in facilities  that we have an ownership
interest in and operate has  historically  comprised a significant  component of
our growth. The pool of such available acquisitions has continued to decrease as
we have acquired such remaining interests over the years, including $157 million
in such acquisitions in 2005. The potential remaining acquisition  opportunities
principally  include the  remaining  59% that we do not own in the 36 properties
owned  by the  "Other  Investments"  in  Note 5 to  the  consolidated  financial
statements  for  the  year  ended  December  31,  2005  with  a  book  value  of
approximately $37 million as well as the "Other partnership interests" in Note 9
to the  consolidated  financial  statements for the year ended December 31, 2005
with a book value of approximately  $23 million.  Accordingly,  we do not expect
such  acquisitions  to  comprise a  significant  component  of our growth  going
forward.
                                       30
<PAGE>

         We have entered into an agreement to acquire  Shurgard Storage Centers,
Inc. ("Shurgard"),  a publicly held REIT that has interests in approximately 646
self-storage  facilities  located in the United  States  and  Europe.  Under the
agreement,  and based upon our December 31, 2005  balance  sheet and  Shurgard's
September 30, 2005 balance sheet  included in its related Form 10-Q, i) we would
issue 0.82 shares of our common  stock for each share of Shurgard  common  stock
which  would  increase  our  common  shares   outstanding  from  128,089,563  to
approximately 166,460,200 shares, ii) we would assume Shurgard debt which totals
approximately   $1.8  billion  at  September  30,  2005,   increasing  our  debt
outstanding  (assuming no prepayment)  from $150 million to  approximately  $2.0
billion,  and iii) $136 million of Shurgard  preferred  stock would be redeemed.
The transaction is targeted to close by the end of the second quarter of 2006.

         Completion of the  transaction  is not assured and is subject to risks,
including that  shareholders of either Public Storage or Shurgard do not approve
the  transaction  or that the other closing  conditions  are not  satisfied.  In
addition,  Shurgard may under limited  circumstances  terminate the agreement to
take a superior  proposal.  Public  Storage  and  Shurgard  are not aware of any
significant  governmental  approvals that are required for  consummation  of the
merger. If any approval or action is required, it is presently contemplated that
Public  Storage and Shurgard would use their  reasonable  best efforts to obtain
such approval.  There can be no assurance that any approvals,  if required, will
be obtained.

         The  foregoing  description  of the terms of our  agreement  to acquire
Shurgard  does not purport to be  complete,  and is qualified in its entirety by
reference  to the full text of the  merger  agreement,  a copy of which is filed
with our current report on Form 8-K dated March 7, 2006.

          CRITICAL ACCOUNTING POLICIES

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

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

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

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

                                       31
<PAGE>

         IMPAIRMENT  OF  LONG-LIVED  ASSETS:  Substantially  all of  our  assets
consist  of  long-lived  assets,  including  real  estate,  goodwill,  and other
intangible  assets.  We evaluate our goodwill for impairment on an annual basis,
and on a quarterly basis evaluate other  long-lived  assets for  impairment.  As
described in Note 2 to the consolidated financial statements,  the evaluation of
goodwill  for  impairment  entails  valuation  of the  reporting  unit to  which
goodwill  is  allocated,  which  involves  significant  judgment  in the area of
projecting  earnings,  determining  appropriate  price-earnings  multiples,  and
discount  rates.  In addition,  the  evaluation of other  long-lived  assets for
impairment requires determining whether indicators of impairment exist, which is
a  subjective  process.  When  any  indicators  of  impairment  are  found,  the
evaluation  of  such  long-lived  assets  then  entails  projections  of  future
operating cash flows, which also involves  significant  judgment.  We identified
impairment charges in the years ended December 31, 2003 and 2004, related to our
plan to close and consolidate  certain  containerized  storage  facilities - see
Note 3 to the consolidated  financial  statements.  Future events,  or facts and
circumstances that currently exist, that we have not yet identified, could cause
us to conclude  in the future that other  long-lived  assets are  impaired.  Any
resulting  impairment loss could have a material adverse impact on our financial
condition and results of operations.

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

         ESTIMATED  LEVEL OF RETAINED RISK AND UNPAID TENANT CLAIM  LIABILITIES:
As  described in Notes 2 and 16 to the  consolidated  financial  statements,  we
retain certain risks with respect to property perils, legal liability, and other
such risks.  In addition,  a  wholly-owned  subsidiary of the Company  reinsures
policies   against  claims  for  losses  to  goods  stored  by  tenants  in  our
self-storage facilities.  In connection with these risks, we accrue losses based
upon the estimated level of losses incurred using certain actuarial  assumptions
followed  in the  insurance  industry  and  based  on  recommendations  from  an
independent actuary that is a member of the American Academy of Actuaries. While
we believe  that the amounts of the accrued  losses are  adequate,  the ultimate
liability may be in excess of or less than the amounts recorded.

         ACCRUALS  FOR  CONTINGENCIES:  We are  exposed  to  business  and legal
liability  risks with respect to events that have  occurred,  but in  accordance
with accounting  principles generally accepted in the United States, we have not
accrued for such potential  liabilities  because the loss is either not probable
or not estimable or because we are not aware of the event. Future events and the
result of pending  litigation  could result in such  potential  losses  becoming
probable  and  estimable,  which  could  have a material  adverse  impact on our
financial condition or results of operations. Some of these potential losses, of
which we are  aware,  are  described  in Note 16 to the  consolidated  financial
statements.

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

                                       32
<PAGE>

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

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

         Net  income  for the year  ended  December  31,  2004 was  $366,213,000
compared to $336,653,000  for the same period in 2003,  representing an increase
of  $29,560,000  or 9%. This increase is primarily due to improved net operating
income  (before  depreciation)  from our  Same  Store  self-storage  facilities,
acquired and newly developed self-storage  facilities,  combined with a decrease
in income allocable to minority interests based upon ongoing  distributions as a
result  of  our  restructuring  of  $200  million  of  our  Series  N  preferred
partnership  units.  These  factors are  partially  offset by an increase in the
allocation of income to minority  interest of  $10,063,000  attributable  to the
restructuring  of  preferred  partnership   interests,   increased  general  and
administrative   expense   attributable   primarily  to  increased   stock-based
compensation expense and reduced gains from the sale of discontinued real estate
facilities.

         ALLOCATIONS OF INCOME AMONG  SHAREHOLDERS:  In computing the net income
allocable to common  shareholders  for each period,  we have  deducted  from net
income (i)  distributions  paid to the  holders of the  Equity  Stock,  Series A
totaling  $21,443,000 in 2005, and  $21,501,000 in each of 2004, and 2003,  (ii)
distributions paid to our preferred  shareholders totaling $173,017,000 in 2005,
$157,925,000 in 2004, and  $146,196,000 in 2003, and (iii) amounts  allocated to
preferred  shareholders in connection with preferred stock redemption activities
as  described  below,  totaling  $7,538,000  in  2005,  $8,724,000  in 2004  and
$7,120,000 in 2003.

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

         Net income was $1.38 per common  share,  on a diluted  basis,  for 2004
compared to $1.28 per common share for 2003.  This increase was  attributable to
the factors  denoted  above with  respect to net income  offset  partially by an
increase in income allocated to preferred shareholders,  as described above, and
an  increase  in  diluted  shares   outstanding  from  126,517,000  in  2003  to
128,681,000 in 2004. The increase in shares outstanding was due primarily to the
issuance of shares in connection with the exercise of employee stock options.

         As described more fully under "Liquidity and Capital  Resources" below,
we have approximately $653,750,000 in higher coupon preferred stock that becomes
available for redemption  during 2006.  While there is no assurance that we will
be able to raise the necessary  capital and at appropriate rates to redeem these
securities,  if we do redeem  these  securities,  we expect  allocations  to our
preferred  shareholders  based upon  distributions  paid to  decrease.  However,
during  2006  there  would  be  an   additional   allocation  to  the  preferred
shareholders of  approximately  $22 million ($0.17 per common share,  based upon
weighted average shares during 2005) if these redemptions are completed.

                                       33
<PAGE>

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

         Self-Storage  Operations:  Our  self-storage  operations are by far the
largest component of our operating activities, representing approximately 90% of
our  revenues   generated  during  2005.  Rental  income  with  respect  to  our
self-storage  operations has grown from  $862,809,000 in 2004 to $952,284,000 in
2005,  representing  an increase  of  $89,475,000,  or  approximately  10%.  The
year-over-year  improvements  in rental  income are due to  improvements  in the
performance  of those  facilities  that we owned  throughout  each of the  three
years,  and the addition of new facilities to our portfolio,  either through our
acquisition or development activities.

         To enhance year-over-year comparisons,  the following table summarizes,
and the ensuing discussion describes, the self-storage operating results.

<TABLE>
<CAPTION>

Self - storage operations summary:                         Year Ended December 31,                Year Ended December 31,
----------------------------------                 -------------------------------------  ---------------------------------------
                                                                               Percentage                             Percentage
                                                       2005          2004        Change       2004          2003        Change
                                                   ------------ -------------  ----------  -----------  -----------   ----------
                                                                            (Dollar amounts in thousands)
Rental income (a):
------------------
<S>                                                 <C>          <C>             <C>       <C>          <C>              <C>
   Same Store Facilities (b)...................     $   811,040  $   773,185       4.9%    $   773,185  $   734,837       5.2%
   Acquired Facilities (c).....................          39,691        4,705     743.6%          4,705            -          -
   Expansion Facilities (d)....................          44,280       41,695       6.2%         41,695       37,557      11.0%
   Developed Facilities (e)....................          57,273       43,224      32.5%         43,224       25,527      69.3%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
     Total rental income.......................         952,284      862,809      10.4%        862,809      797,921       8.1%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
Cost of operations (excluding depreciation)(f):
------------------------------------------------
   Same Store Facilities.......................         267,969      266,544       0.5%        266,544      254,790       4.6%
   Acquired Facilities.........................          16,780        1,606     944.8%          1,606            -          -
   Expansion Facilities........................          15,332       14,430       6.3%         14,430       12,660      14.0%
   Developed Facilities........................          20,838       18,100      15.1%         18,100       13,272      36.4%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
   Total cost of operations....................         320,919      300,680       6.7%        300,680      280,722       7.1%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
Net operating income before depreciation (g):
---------------------------------------------
   Same Store Facilities.......................         543,071      506,641       7.2%        506,641      480,047       5.5%
   Acquired Facilities.........................          22,911        3,099     639.3%          3,099            -          -
   Expansion Facilities........................          28,948       27,265       6.2%         27,265       24,897       9.5%
   Developed Facilities........................          36,435       25,124      45.0%         25,124       12,255     105.0%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
   Total net operating income before depreciation       631,365      562,129      12.3%        562,129      517,199       8.7%
 Depreciation..................................        (191,267)    (176,403)      8.4%       (176,403)    (176,847)     (0.3)%
                                                   ------------ -------------  ----------  -----------  -----------   ----------
   Net operating income........................     $   440,098  $   385,726      14.1%    $   385,726  $   340,352      13.3%
                                                   ============ ============== ==========  ============ ============  ==========

Number of self-storage facilities (at end of
period)........................................           1,463        1,425       2.7%          1,425        1,373       3.8%
Net rentable square feet (in thousands, at end of
   period)(h): ................................          89,321       85,447       4.5%         85,447       81,121       5.3%

</TABLE>

(a)  Rental income includes late charges and  administrative  fees and is net of
     promotional  discounts  given.  Rental income excludes retail sales,  truck
     rental  income  and  tenant   reinsurance   revenues   generated  at  these
     facilities.  Such  ancillary  revenues  are  reflected  as a  component  of
     "Ancillary Operations" on our consolidated statements of income.

(b)  The Same Store Facilities  include 1,260 facilities  containing  73,311,000
     net rentable square feet that have been owned prior to January 1, 2003, and
     operated at a mature, stabilized occupancy level since January 1, 2003.

(c)  The Acquired  Facilities  include 77  facilities  containing  5,511,000 net
     rentable square feet that were acquired after January 1, 2003.

(d)  The Expansion  Facilities  include 56 facilities  containing  4,944,000 net
     rentable square feet of  self-storage  space;  these  facilities were owned
     since  January 1,  2003,  however,  operating  results  are not  comparable
     throughout  the periods  presented due primarily to expansions in their net
     rentable square feet (described below).

(e)  The Developed  Facilities  include 70 facilities  containing  5,555,000 net
     rentable square feet of self-storage space. These facilities were developed
     and opened since January 1, 2001 at a total cost of $546.6 million.

                                       34
<PAGE>

(f)  Cost of  operations  includes all costs,  both direct and  indirect  costs,
     incurred in the operating activities of the facilities.  Cost of operations
     excludes,  costs  associated with retail sales,  truck rentals,  and tenant
     reinsurance   activities;   such  costs  are  reflected  under   "Ancillary
     Operations" on our income statement. Cost of operations before depreciation
     is included herein because we believe it provides an important  measure for
     evaluating our ongoing operations.

(g)  Net operating  income before  depreciation  is included  herein  because we
     believe it  provides  an  important  measure  for  evaluating  our  ongoing
     operations.

(h)  Square  footages  do not  include  544,000  net  rentable  square  feet  of
     industrial space initially developed for containerized  storage activities.
     This space is being  converted  into  553,000 net  rentable  square feet of
     self-storage space; see "Development Pipeline Summary" below.

         SELF-STORAGE OPERATIONS - SAME STORE FACILITIES

         At December 31, 2005, we owned 1,260  self-storage  facilities  that we
have operated at a stabilized  level of  operations  throughout  the  three-year
period.  These Same Store  Facilities  contain  approximately  73.3  million net
rentable  square  feet,  representing  approximately  82% of the  aggregate  net
rentable square feet of our consolidated  self-storage  portfolio.  Revenues and
operating expenses with respect to this group of properties are set forth in the
above Self-Storage  Operations table under the caption, "Same Store Facilities."
The following  table sets forth  additional  operating  data with respect to the
Same Store Facilities of facilities:

SAME STORE FACILITIES
---------------------
<TABLE>
<CAPTION>
                                                           Year Ended December 31,                Year Ended December 31,
                                                    -------------------------------------  --------------------------------------
                                                                              Percentage                              Percentage
                                                       2005         2004        Change        2004          2003        Change
                                                    -----------  ------------ ----------- ------------- ------------  -----------
                                                            (Dollar amounts in thousands, except rents per square foot)

<S>                                                 <C>           <C>             <C>      <C>          <C>               <C>
Rental income..................................     $   775,012   $  740,619       4.6%    $   740,619  $   705,785        4.9%
Late charges and administrative fees collected.          36,028       32,566      10.6%         32,566       29,052       12.1%
                                                    -----------  ------------ ----------- ------------- ------------  -----------
   Total rental income.........................         811,040      773,185       4.9%        773,185      734,837        5.2%
                                                    -----------  ------------ ----------- ------------- ------------  -----------
Cost of operations (excluding depreciation) (a):
     Payroll expense...........................          81,981       83,434      (1.7)%        83,434       79,252        5.3%
     Property taxes............................          73,547       71,393       3.0%         71,393       70,229        1.7%
     Repairs and maintenance...................          25,840       25,821       0.1%         25,821       24,091        7.2%
     Advertising and promotion.................          23,518       22,022       6.8%         22,022       21,136        4.2%
     Utilities.................................          16,972       15,798       7.4%         15,798       14,938        5.8%
     Property insurance........................           8,067        8,960     (10.0)%         8,960        8,850        1.2%
     Telephone reservation center..............           7,884       10,599     (25.6)%        10,599       10,833       (2.2)%
     Other cost of management..................          30,160       28,517       5.8%         28,517       25,461       12.0%
                                                    -----------  ------------ ----------- ------------- ------------  -----------
   Total cost of operations....................         267,969      266,544       0.5%        266,544      254,790        4.6%
                                                    -----------  ------------ ----------- ------------- ------------  -----------
Net operating income before depreciation (a)...         543,071      506,641       7.2%        506,641      480,047        5.5%
Depreciation...................................        (154,653)    (151,966)      1.8%       (151,966)    (157,653)      (3.6)%
                                                    -----------  ------------ ----------- ------------- ------------  -----------
 Net operating income..........................     $   388,418  $   354,675       9.5%    $   354,675  $   322,394       10.0%
                                                    ============ ============ =========== ============= ============  ===========

Gross margin (before depreciation).............          67.0%        65.5%        2.3%         65.5%        65.3%         0.3%

Weighted average for the fiscal year:
   Square foot occupancy (b)...................          91.0%        91.0%        0.0%         91.0%        89.2%         2.0%
   Realized annual rent per occupied square
   foot (c)....................................         $11.62       $11.10        4.7%        $11.10       $10.79         2.9%
   REVPAF (d)..................................         $10.57       $10.10        4.7%        $10.10        $9.63         4.9%

 Weighted average at December 31:
   Square foot occupancy.......................           89.8%        90.1%       (0.3)%       90.1%        89.7%         0.4%
   In place annual rent per occupied square
   foot (e)....................................          $12.84       $12.21       5.2%        $12.21       $11.80         3.5%

Total net rentable square feet (in thousands)..          73,311       73,311                   73,311       73,311

</TABLE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

                                       35

<PAGE>

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

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

(d)  Annualized  revenue per available square foot ("REVPAF")  represents Rental
     income, net of discounts divided by total net rentable square feet.

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

         Rental income increased approximately 4.6% in 2005 as compared to 2004.
This increase was  primarily  attributable  to higher  average  realized  annual
rental  rates per  occupied  square  foot,  which  were  4.7%  higher in 2005 as
compared to 2004. Our occupancy levels remained flat on a  year-over-year  basis
at approximately 91.0% for each period.

         Rental  income  increased  by 4.9% in 2004 as  compared  to 2003.  This
increase was primarily  attributable  to a 2.9% increase in realized annual rent
per  occupied  square foot  combined  with a 2.0%  increase in weighted  average
square foot occupancy in 2004 as compared to 2003.

         Throughout  2005, 2004 and 2003, we continued  advertising  through the
use of television  commercials and we offered various  promotional  discounts in
order to improve both our  occupancy  levels and rental  rates.  We believe that
continued  growth in rental  income for these Same  Store  Facilities  will come
primarily  from  continued  increases in rental rates  charged to our tenants as
opposed to improvements in occupancy levels. We experience seasonal fluctuations
in the occupancy levels of self-storage  facilities with  occupancies  generally
higher in the summer  months than in the winter  months.  We believe  that these
fluctuations result in part from increased moving activity during the summer.

         Our primary  goal is to continue to grow rental  income in a consistent
and  sustainable  manner.  Growth in rental  income  will  depend  upon  various
factors,  including  our ability to (i) maintain  high  occupancy  levels,  (ii)
increase  rental  rates  charged to both new and existing  customers,  and (iii)
reduce the amount of  promotional  discounts  to attract  new  tenants.  In this
regard,  we are continuously  evaluating call volume,  reservation  activity and
move-in/move-out  rates  relative to our marketing  activities and rental rates.
When  warranted we will adjust our  pricing,  promotional  discounts,  and media
strategies  to  accommodate  changing  conditions  in each  market  in  which we
operate.

         We  believe  that our Same Store  Facilities  are well  positioned  for
continued  rental  income  growth going into 2006.  At December  31,  2005,  our
existing  tenants  were paying  rental rates that were 5.2% higher than one year
earlier.  This improvement,  however, was partially offset by a slight reduction
in occupancy of 0.3%.

         There can be no assurance  that we will achieve our goal of sustainable
growth in our rental income, while sustaining our occupancy levels.

         Cost of operations (excluding  depreciation)  increased by 0.5% in 2005
as compared to 2004.  This  increase  was modest  relative to  increases we have
experienced  over  the  last  several  years,  due to  reductions  in  telephone
reservation   center  costs  and  payroll  expense  described  below.  In  2005,
depreciation  expense  increased 1.8%, due primarily to the impact of additional
capital  expenditures.  Cost of operations increased by 4.6% in 2004 as compared
to 2003.  This  increase  was  attributable  primarily  to an increase in direct
property  payroll due to higher  incentives and other  compensation  to property
operating  and  management  personnel,  as well as an  increase in other cost of
management  due  primarily to  increased  recruiting  and training  expenses and
information  technology costs. In 2004,  depreciation expense declined 3.6%, due
to assets becoming fully depreciated relative to new capital expenditures.

                                       36
<PAGE>

         The  underlying  compensation  to our  personnel has increased in 2003,
2004 and 2005, as our field  organization  has focused upon  improving  customer
service and productivity. However, over the last few years we have bolstered our
safety programs and improved our workers  compensation claims management skills.
These  efforts  are having a positive  impact on reducing  workers  compensation
claims,  and have reduced the level of liability  for future claims during 2005.
This  resulted in a  significant  reduction in workers  compensation  expense in
2005,  resulting  in a decrease  in overall  payroll  expense in 2005.  While we
believe that there will be additional workers compensation expense reductions to
be achieved in 2006,  principally  through  reductions  in the ongoing  level of
claims  incurred,  the level of  reduction  will be lower than that  achieved in
2005.

         Advertising and promotion is comprised principally of media (television
and radio), yellow page, and internet advertising. We experienced an increase of
4.2% in 2004 and 6.8% in 2005 in advertising and promotion expense.  Yellow page
advertising has stayed  relatively  stable in each of the periods.  Our internet
advertising expenditures, though still a relatively small portion of our overall
expenditures,  have grown from  virtually  none in 2003 to  $701,000 in 2004 and
$1,977,000 in 2005. Media  advertising,  principally  television,  has increased
from  $9,118,000  in 2003 to  $10,294,000  in 2004 and  $10,912,000  in 2005. We
expect that internet advertising will continue to grow as that marketing channel
becomes a more important source of new tenants, and that yellow page advertising
will remain relatively  stable.  Future media  advertising  expenditures are not
determinable  at this  time,  and  will be  driven  in  part by  demand  for our
self-storage  spaces  as well as our  evaluation  of the most  effective  mix of
yellow page, media, and internet advertising.

         Repairs and maintenance has increased  throughout 2003, 2004, and 2005,
as we have  endeavored to improve the curb appeal and "rent ready"  condition of
our facilities.  Repairs and maintenance also includes snow removal costs, which
declined in 2004 as compared to 2003, but increased in 2005 as compared to 2004.
We expect to see a moderate increase in repairs and maintenance  expenditures in
2006.

         Telephone reservation center costs were $10,833,000 in 2003,
$10,599,000 in 2004, and $7,884,000 in 2005. These declines have resulted from
reduced call volume, as well as improvements in staffing efficiencies that have
occurred throughout 2004 and 2005. We believe that the 2005 expense represents
the stabilized level of expenditures for our telephone reservation center given
the current number of self-storage facilities in our portfolio and the related
call volume.

         Property  insurance  expense was relatively flat in 2004 as compared to
2003;  however,  it declined 10% in 2005 as compared to 2004. This reduction was
due to improved  cost  controls as well as a somewhat  softer  insurance  market
allowing us to get improved  premiums on our  policies.  We expect that property
insurance  will  increase  in 2006 as a result of the  adverse  impact  that the
recent hurricanes had on the insurance industry.

         Overall, our operating expense growth was more moderate in 2005 than we
anticipated.  We  believe  this  will  change  in 2006 and  return to a 3% to 5%
year-over-year growth, excluding advertising expenditures.

                                       37
<PAGE>

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

<TABLE>
<CAPTION>


                                               For the Quarter Ended
                     -------------------------------------------------------------------------
                         March 31            June 30       September 30         December 31        Entire Year
                     ----------------   ---------------   ----------------    ---------------    --------------
                             (Amounts in thousands, except for per square foot amount)
Total rental income:
     <C>              <C>                <C>                 <C>                 <C>               <C>
     2005             $   196,373        $   201,522         $  206,857          $  206,288        $   811,040
     2004             $   187,227        $   192,376         $  197,162          $  196,420        $   773,185
     2003             $   175,802        $   181,971         $  189,603          $  187,461        $   734,837

Total cost of operations (excluding depreciation):
     2005             $    69,164        $    66,837         $   66,927          $   65,041        $   267,969
     2004             $    67,448        $    66,135         $   65,616          $   67,345        $   266,544
     2003             $    59,451        $    63,469         $   64,713          $   67,157        $   254,790

Media advertising expense:
     2005             $     3,522        $     2,940         $    2,309          $    2,141        $    10,912
     2004             $     3,290        $     1,956         $    1,988          $    3,060        $    10,294
     2003             $     1,667        $     2,946         $    3,342          $    1,163        $     9,118

REVPAF:
     2005             $    10.25         $    10.51          $   10.77           $    10.75        $     10.57
     2004             $     9.77         $    10.06          $   10.31           $    10.27        $     10.10
     2003             $     9.22         $     9.53          $    9.92           $     9.83        $      9.63

Weighted average realized annual rent per occupied square foot:
     2005             $    11.41         $    11.41          $   11.74           $    11.88        $     11.62
     2004             $    10.90         $    10.99          $   11.22           $    11.31        $     11.10
     2003             $    10.88         $    10.70          $   10.79           $    10.83        $     10.79

Weighted average occupancy levels for the period:
     2005                  89.9%              92.1%               91.7%                90.5%              91.0%
     2004                  89.7%              91.5%               91.9%                90.8%              91.0%
     2003                  84.7%              89.1%               92.0%                90.8%              89.2%

</TABLE>

                                       38

<PAGE>

Analysis of Regional Trends
---------------------------

         The  following  table  sets  forth  regional  trends in our Same  Store
Facilities:

<TABLE>
<CAPTION>
                                   Same Store Facilities Operating Trends by Region
---------------------------------------------------------------------------------------------------------------------
                                                Year Ended December 31,                 Year Ended December 31,
                                         -------------------------------------  -------------------------------------
                                            2005         2004         Change        2004         2003        Change
                                         ------------  -----------  ----------  ------------  ------------  --------
                                                  (Dollar amounts in thousands, except rents per square foot)
Rental income:
   Southern California  (126
<S>                                       <C>          <C>            <C>        <C>          <C>              <C>
   facilities)......................      $  133,615   $  125,380      6.6%      $  125,380   $   119,090      5.3%
   Northern California  (131
   facilities)......................         101,428       97,702      3.8%          97,702        94,533      3.4%
   Texas  (150 facilities)..........          72,480       70,775      2.4%          70,775        68,140      3.9%
   Florida  (126 facilities)........          79,714       72,247     10.3%          72,247        67,225      7.5%
   Illinois  (88 facilities)........          59,323       57,549      3.1%          57,549        55,304      4.1%
   Georgia  (58 facilities).........          27,507       25,585      7.5%          25,585        24,356      5.0%
   All other states  (581 facilities)        336,973      323,947      4.0%         323,947       306,189      5.8%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total rental income.................         811,040      773,185      4.9%         773,185       734,837      5.2%

Cost of operations (excluding depreciation expense) (a):
   Southern California..............          29,076       29,605     (1.8)%         29,605        28,085      5.4%
   Northern California..............          26,143       25,580      2.2%          25,580        25,301      1.1%
   Texas............................          31,211       31,232     (0.1)%         31,232        31,079      0.5%
   Florida..........................          26,947       28,149     (4.3)%         28,149        26,310      7.0%
   Illinois.........................          24,288       25,348     (4.2)%         25,348        24,324      4.2%
   Georgia..........................           9,511        9,455      0.6%           9,455         9,017      4.9%
   All other states.................         120,793      117,175      3.1%         117,175       110,674      5.9%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total cost of operations............         267,969      266,544      0.5%         266,544       254,790      4.6%

Net operating income before depreciation (a):
   Southern California..............         104,539       95,775      9.2%          95,775        91,005      5.2%
   Northern California..............          75,285       72,122      4.4%          72,122        69,232      4.2%
   Texas............................          41,269       39,543      4.4%          39,543        37,061      6.7%
   Florida..........................          52,767       44,098     19.7%          44,098        40,915      7.8%
   Illinois.........................          35,035       32,201      8.8%          32,201        30,980      3.9%
   Georgia..........................          17,996       16,130     11.6%          16,130        15,339      5.2%
   All other states.................         216,180      206,772      4.5%         206,772       195,515      5.8%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total net operating income..........      $  543,071   $  506,641      7.2%      $  506,641   $   480,047      5.5%

Weighted average occupancy (b):
   Southern California..............           92.3%        92.1%       0.2%         92.1%         90.7%       1.5%
   Northern California..............           90.5%        89.5%       1.1%         89.5%         88.6%       1.0%
   Texas............................           90.0%        90.1%      (0.1)%        90.1%         89.5%       0.7%
   Florida..........................           93.2%        92.3%       1.0%         92.3%         90.2%       2.3%
   Illinois.........................           89.5%        90.0%      (0.6)%        90.0%         88.1%       2.2%
   Georgia..........................           92.4%        91.5%       1.0%         91.5%         90.1%       1.6%
   All other states.................           90.8%        91.1%      (0.3)%        91.1%         88.6%       2.8%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total weighted average occupancy....           91.0%        91.0%       0.0%         91.0%         89.2%       2.0%

REVPAF (c):
   Southern California..............       $  16.31     $  15.34       6.3%       $  15.34      $  14.62       4.9%
   Northern California..............          13.74        13.27       3.5%          13.27         12.89       2.9%
   Texas............................           7.42         7.26       2.2%           7.26          7.00       3.7%
   Florida..........................          10.59         9.59      10.4%           9.59          8.89       7.9%
   Illinois.........................          10.55        10.30       2.4%          10.30          9.93       3.7%
   Georgia..........................           7.77         7.23       7.5%           7.23          6.90       4.8%
   All other states.................           9.69         9.34       3.7%           9.34          8.86       5.4%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total REVPAF:.......................       $  10.57     $  10.10       4.7%       $  10.10      $   9.63       4.9%

</TABLE>

                                       39
<PAGE>

<TABLE>
<CAPTION>

                             Same Store Facilities Operating Trends by Region (Continued)
----------------------------------------------------------------------------------------------------------------------
                                                Year Ended December 31,                 Year Ended December 31,
                                         -------------------------------------  -------------------------------------
                                            2005         2004         Change        2004         2003        Change
                                         ------------  -----------  ----------  ------------  ------------  --------
Realized annual rent per occupied square foot (d):
<S>                                        <C>          <C>            <C>         <C>          <C>            <C>
   Southern California..............       $  17.68     $  16.66       6.1%        $  16.66     $  16.12       3.3%
   Northern California..............          15.18        14.82       2.4%           14.82        14.55       1.9%
   Texas............................           8.25         8.06       2.4%            8.06         7.82       3.1%
   Florida..........................          11.36        10.39       9.3%           10.39         9.86       5.4%
   Illinois.........................          11.79        11.44       3.1%           11.44        11.28       1.4%
   Georgia..........................           8.41         7.91       6.3%            7.91         7.66       3.3%
   All other states.................          10.67        10.25       4.1%           10.25        10.00       2.5%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total realized rent per square foot:...    $  11.62     $  11.10       4.7%        $  11.10     $  10.79       2.9%

In place annual rent per occupied square foot at December 31 (e):
   Southern California..............       $  19.44     $  18.25       6.5%        $  18.25     $  17.73       2.9%
   Northern California..............          16.78        16.05       4.5%           16.05        15.79       1.6%
   Texas............................           9.05         8.72       3.8%            8.72         8.60       1.4%
   Florida..........................          12.66        11.64       8.8%           11.64        11.06       5.2%
   Illinois.........................          12.92        12.55       2.9%           12.55        12.21       2.8%
   Georgia..........................           9.49         8.86       7.1%            8.86         8.47       4.6%
   All other states.................          11.83        11.30       4.7%           11.30        10.87       4.0%
                                         ------------  -----------  ----------  ------------  ------------  --------
Total in place rent per occupied
  square foot:......................       $  12.84     $  12.21       5.2%        $  12.21     $  11.80       3.5%

</TABLE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

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

(c)  Annualized  revenue per available square foot ("REVPAF")  represents Rental
     income, net of discounts divided by total net rentable square feet.

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

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

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

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

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

                                       40
<PAGE>

         The Florida market principally includes Miami, Orlando, Tampa, and West
Palm Beach.  These markets have been our strongest in terms of revenue growth in
2005,  due in part  to  increased  moving  and  storage  demand  resulting  from
hurricane damage. In addition,  over the longer term we believe that this market
benefits  from  continued  strong  population  growth  and  barriers  to  entry.
Accordingly,  we expect  this  market to  continue  to  perform at the upper end
relative to our other markets.

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

         Georgia, which includes principally Atlanta, has been benefiting from a
reduction in new supply relative to population growth in the last few years and,
as a result,  revenue  growth has been  favorable  in the last three  years.  We
believe that these  conditions  should  continue and expect Atlanta to be one of
our strongest markets in 2006.

         SELF-STORAGE OPERATIONS - ACQUIRED FACILITIES

         During 2004 and 2005, we acquired 77 self-storage facilities containing
5,511,000 net rentable square feet (no facilities were acquired during 2003).
The following table summarizes operating data with respect to these facilities.
<TABLE>
<CAPTION>

                               ACQUIRED SELF-STORAGE FACILITIES
-----------------------------------------------------------------------------------------------
                                                               Year Ended December 31,
                                                       ----------------------------------------
                                                            2005       2004         Change
                                                       -----------   ------------ -------------
                                                          (Amounts in thousands, except per
                                                       square foot amounts and facility count)
Rental income:
<S>                                                     <C>          <C>          <C>
   Self-storage facilities acquired in 2005......       $  9,285     $        -   $   9,285
   Self-storage facilities acquired in 2004......         30,406          4,705      25,701
                                                       -----------   ------------ -------------
   Total rental income...........................         39,691          4,705      34,986
                                                       -----------   ------------ -------------

Cost of operations (excluding depreciation) (a):
   Self-storage facilities acquired in 2005......          4,148              -       4,148
   Self-storage facilities acquired in 2004......         12,632          1,606      11,026
                                                       -----------   ------------ -------------
   Total cost of operations......................         16,780          1,606      15,174
                                                       -----------   ------------ -------------
Net operating income before depreciation (a):
   Self-storage facilities acquired in 2005......          5,137              -       5,137
   Self-storage facilities acquired in 2004......         17,774          3,099      14,675
                                                       -----------   ------------ -------------
   Total net operating income before depreciation         22,911          3,099      19,812
Depreciation.....................................        (10,061)          (841)     (9,220)
                                                       -----------   ------------ -------------
   Net operating income..........................       $ 12,850     $    2,258   $  10,592
                                                       ===========   ============ =============

Weighted average square foot occupancy during the period:
   Self-storage facilities acquired in 2005......          86.8%             -            -
   Self-storage facilities acquired in 2004......          87.0%          80.4%        8.2%
                                                       -----------   ------------ -------------
                                                           87.0%          80.4%        8.2%
                                                       ===========   ============ =============

Weighted average realized annual rent per occupied square foot for the year (b):
   Self-storage facilities acquired in 2005......          $10.17         -               -
   Self-storage facilities acquired in 2004......           10.80         9.51        13.6%
                                                       -----------   ------------ -------------
                                                           $10.65        $9.51        12.0%
                                                       ===========   ============ =============

In place annual rent per occupied square foot at December 31(c):
   Self-storage facilities acquired in 2005......          $12.00         -               -
   Self-storage facilities acquired in 2004......           12.14        11.47         5.8%
                                                       -----------   ------------ -------------
                                                           $12.08       $11.47         5.3%
                                                       ===========   ============ =============
</TABLE>

                                       41
<PAGE>

<TABLE>
<CAPTION>

                         ACQUIRED SELF-STORAGE FACILITIES (Continued)
-----------------------------------------------------------------------------------------------
                                                               Year Ended December 31,
                                                       ----------------------------------------
                                                          2005         2004          Change
                                                       -----------   ------------ -------------
                                                          (Amounts in thousands, except per
                                                       square foot amounts and facility count)
Number of Facilities:
   <S>                                                  <C>         <C>          <C>
     2005........................................              32             -         32
     2004........................................              45            45          -
                                                       -----------   ------------ -------------
                                                               77            45         32
                                                       ===========   ============ =============
Net rentable square feet at December 31:
   Self-storage facilities acquired in 2005......           2,390             -      2,390
   Self-storage facilities acquired in 2004 (d)..           3,121         3,109         12
                                                       -----------   ------------ -------------
                                                            5,511         3,109      2,402
                                                       ===========   ============ =============

Cumulative acquisition cost at December 31:
Self-storage facilities acquired in 2005.........       $  254,549  $         -  $  254,549
Self-storage facilities acquired in 2004 (d)...            260,801      259,487       1,314
                                                       -----------   ------------ -------------
                                                        $  515,350  $   259,487  $  255,863
                                                       ===========   ============ =============
</TABLE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

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

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

(d)  During 2005,  we expanded one of the 2004  acquisitions,  adding 12,000 net
     rentable square feet at a cost of $1,314,000.

         The  2004  and  2005   acquisitions  were  acquired  at  various  dates
throughout each respective year. Accordingly, rental income, cost of operations,
net operating income and weighted average square foot occupancy levels represent
the operating results for the partial period that we owned the facilities during
the year acquired.

         During 2004, we acquired a total of 45  self-storage  facilities for an
aggregate cost of approximately  $259,487,000.  These facilities  contain in the
aggregate  approximately  3,121,000  net  rentable  square  feet and are located
principally  in  the  Buffalo,   Dallas,  Miami,   Milwaukee,   and  Minneapolis
metropolitan areas.

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

         We believe our presence in and  knowledge of  substantially  all of the
major markets in the United States  enhances our ability to identify  attractive
acquisition  opportunities  and capitalize on the overall  fragmentation  in the
storage industry. Our 2004 and 2005 acquisitions consist of facilities that have
been  operating  for a number of years as well as newly  constructed  facilities
that were in the process of filling up to stabilized occupancy levels. In either
case, we have been able to leverage off of our operating  strategies and improve
the occupancy  levels of the facilities,  or with respect to the newly developed
facilities we have been able to accelerate the fill-up pace.

                                       42
<PAGE>

         We expect that our 2004 and 2005  acquisitions will continue to provide
earnings  growth  during  2006 as these  facilities  continue  to improve  their
occupancy  levels as well as realized rental rates. In addition,  during 2006 we
expect to  continue  to  acquire  additional  self-storage  facilities.  Between
January 1, 2006 and March 15, 2006, we acquired  three  self-storage  facilities
from third  parties  with  total net  rentable  square  feet of  170,000,  at an
aggregate cost of approximately $20.0 million,  comprised of cash totaling $15.4
million and the assumption of debt totaling $4.6 million.  At March 15, 2006, we
are under contract to purchase seven self-storage  facilities (total approximate
net rentable square feet of 574,000) at an aggregate cost of approximately $69.4
million.  We anticipate that these  acquisitions  will be funded entirely by us.
Each of these contracts is subject to significant contingencies, and there is no
assurance that any of these facilities will be acquired.

SELF-STORAGE OPERATIONS - EXPANSION FACILITIES

         Our expansion facilities consist of 48 self-storage  facilities that we
have owned for a number of years and have recently expanded the amount of square
footage available for rent combined with eight  self-storage  facilities located
in New Orleans that were heavily impacted by Hurricane  Katrina during 2005. The
48 self-storage  facilities are generally  older  facilities that are located in
prime locations where we have added additional space by either  constructing new
buildings on  available  land at the existing  site or by  demolishing  existing
single story buildings and rebuilding multi-story buildings in their place.

         The operating  results of these 48 expansion  facilities  and the eight
facilities  located in New Orleans are not comparable on a year over year basis.
The operating results for these facilities are presented in the table below.

<TABLE>
<CAPTION>

                        EXPANSION SELF-STORAGE FACILITIES
-----------------------------------------------------------------------------------------------------------------------------------
                                                           Year ended December 31,                   Year ended December 31,
                                                   ----------------------------------------   -------------------------------------
                                                       2005          2004         Change         2004           2003        Change
                                                   ------------   -----------  -------------   ----------    ----------   ---------
                                                                (Amounts in thousands, except per square foot amounts)
Rental income:
<S>                                                 <C>             <C>         <C>             <C>          <C>          <C>
   New Orleans facilities ...................       $    4,778      $  5,821    $   (1,043)     $  5,821     $    5,386   $     435
   Other expansion facilities................           39,502        35,874         3,628        35,874         32,171       3,703
                                                   ------------   -----------  -------------   ----------    ----------   ---------
     Total rental income.....................           44,280        41,695         2,585        41,695         37,557       4,138
                                                   ------------   -----------  -------------   ----------    ----------   ---------
Cost of operations (excluding depreciation) (a):
   New Orleans facilities....................            1,773         1,808           (35)        1,808          1,657         151
   Other expansion facilities................           13,559        12,622           937        12,622         11,003       1,619
                                                   ------------   -----------  -------------   ----------    ----------   ---------
     Total cost of operations................           15,332        14,430           902        14,430         12,660       1,770
                                                   ------------   -----------  -------------   ----------    ----------   ---------
Net operating income before depreciation (a):
   New Orleans facilities....................            3,005         4,013        (1,008)        4,013          3,729         284
   Other expansion facilities................           25,943        23,252         2,691        23,252         21,168       2,084
                                                   ------------   -----------  -------------   ----------    ----------   ---------
   Total net operating income before depreciation       28,948        27,265         1,683        27,265         24,897       2,368
 Depreciation................................          (11,187)       (9,579)       (1,608)       (9,579)        (8,669)      (910)
                                                   ------------   -----------  -------------   ----------    ----------   ---------
   Net operating income......................       $   17,761      $ 17,686    $       75      $ 17,686     $   16,228   $   1,458
                                                   ============   ===========  =============   ==========    ==========   =========
Weighted average square foot occupancy during the
   period:
   New Orleans facilities (b)................            90.7%         90.9%         (0.2)%        90.9%          89.0%        2.1%
   Other expansion facilities................            83.8%         84.5%         (0.8)%        84.5%          81.9%        3.2%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
                                                         84.5%         85.3%         (0.9)%        85.3%          82.9%        2.9%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
Weighted average realized rent per occupied square
   foot during the period (c):
   New Orleans facilities (b) ...............           $10.97        $11.65         (5.8)%       $11.65         $11.02        5.7%
   Other expansion facilities................            11.69         11.55          1.2%         11.55          11.82      (2.3)%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
                                                        $11.61        $11.56          0.4%        $11.56         $11.71      (1.3)%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
In place annual rent per occupied square foot at
   December 31 (d):
   New Orleans facilities (b) ...............           $13.25        $12.86          3.0%        $12.86         $12.29        4.6%
   Other expansion facilities................            13.17         12.59          4.6%         12.59          12.80      (1.6)%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
                                                        $13.17        $12.62          4.4%        $12.62         $12.72      (0.8)%
                                                   ------------   -----------  -------------   ----------    ----------   ---------
Net rentable square feet (in thousands, at end
of period): (e)
   New Orleans facilities....................              524          524             -            524            524           -
   Other expansion facilities................            4,420        3,699           721          3,699          3,383         316
                                                   ------------   -----------  -------------   ----------    ----------   ---------
                                                         4,944        4,223           721          4,223          3,907         316
                                                   ============   ===========  =============   ==========    ==========   =========
</TABLE>

                                       43
<PAGE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

(b)  Occupied and available  square  footage  excludes the impact of units taken
     offline due to hurricane damage,  where such amounts are factored in to the
     computations of weighted  average square foot occupancy,  weighted  average
     realized  rent per  occupied  square  foot,  and in place  annual  rent per
     occupied  square foot.

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

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

(e)  Square footage  excludes 371,000 net rentable  containerized  storage space
     initially developed for the containerized  storage business at December 31,
     2005, but includes square footage taken offline due to hurricane damage.

         All of the New  Orleans  facilities  were  closed  for  operations  for
several  weeks  following  the  hurricane;  however,  all  but  three  of  these
facilities have since reopened. The five that are operating are not operating at
full capacity, as many units are unavailable for lease due to damage. Two of the
three  facilities  that remain  closed will not be able to reopen at all without
substantial restoration and repair work.

         For the years ended  December 31, 2005,  2004 and 2003,  net  operating
income  (before   depreciation)  for  these  eight  facilities  was  $3,005,000,
$4,013,000 and $3,729,000, respectively. With respect to the two facilities that
have been significantly damaged and should remain inoperable for the foreseeable
future, net operating income (before  depreciation) for the years ended December
31, 2005, 2004 and 2003, was $503,000, $954,000 and $840,000, respectively.

         Notwithstanding  that  five  of  our  facilities  in  New  Orleans  are
currently  operating,  we  believe  that the  indirect  economic  effects of the
hurricane on the city may have a negative  impact on our  facilities'  operating
results,  and these effects are expected to continue for an  indeterminate  time
period.

         We expect  that the  Expansion  Facilities,  other than the New Orleans
facilities,  will  continue to provide  growth to our  earnings  into 2005 as we
continue to rent the newly added vacant space.  The weighted  average  occupancy
level of these  facilities  was  83.8%,  84.5%,  and 81.9% for each of the three
years ended December 31, 2005, 2004 and 2003 respectively.

         We expect that we will  continue  to  repackage  additional  facilities
during 2006. At December 31, 2005, we have seven projects with an aggregate cost
of $21.7 million to convert the  containerized  storage space into  self-storage
space,  and 51 other  expansion and  repackaging  projects to enhance the visual
appeal of our  facilities or increase  their net rentable  space at an aggregate
cost of $240.3 million. These activities will increase our self-storage space by
an aggregate of 3,573,000 net rentable square feet and will result in short-term
dilution  to  earnings.  However,  we believe  that  expansion  of our  existing
self-storage facilities in markets that have unmet storage demand, and improving
our existing facilities' competitive position through enhancing their visual and
structural appeal, provide an important means to improve the Company's earnings.
Further,  the  construction  cost for these  expansions is generally  lower on a
per-square  foot basis than the  development  of a new facility,  resulting in a
higher yield potential. There can be no assurance about the future level of such
expansion  and  enhancement  opportunities,  and these  projects  are subject to
contingencies.

SELF-STORAGE OPERATIONS - DEVELOPED FACILITIES

         We have 53 newly developed self-storage  facilities,  and 17 facilities
that were developed to contain both  self-storage and  containerized  storage at
the same location  ("Combination  Facilities") that have not been operating at a
stabilized  level of  operations  since  January 1, 2003.  At December 31, 2005,
these newly  developed  facilities  have an aggregate of 5,555,000  net rentable
square feet of  self-storage  space,  and 173,000  net  rentable  square feet of
industrial space developed  originally for our  containerized  storage business.
Aggregate  development  cost for these 70 facilities  was  approximately  $546.6
million  at  December  31,  2005.  The  operating  results  of the  self-storage
facilities  and  Combination   Facilities  are  reflected  in  the  Self-Storage
Operations table under the caption, "Developed Facilities." These facilities are
not included in the "Same Store"  portfolio  because their  operations  have not
been stabilized.

                                       44

<PAGE>

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

<TABLE>
<CAPTION>

                                                DEVELOPED SELF-STORAGE FACILITIES
----------------------------------------------------------------------------------------------------------------------------------
                                                           Year Ended December 31,                Year Ended December 31,
                                                   ---------------------------------------  --------------------------------------
                                                        2005          2004         Change        2004         2003       Change
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                      (Amounts in thousands, except per square foot amounts and facility count)
Rental income:
<S>                                                 <C>           <C>           <C>          <C>        <C>          <C>
  Self-storage facilities opened in 2005.......     $      464    $        -    $      464   $      -   $        -   $       -
  Self-storage facilities opened in 2004.......          5,336         1,234         4,102       1,234           -       1,234
  Self-storage facilities opened in 2003.......         12,789         8,705         4,084       8,705        1,566      7,139
  Self-storage facilities opened in 2002 and 2001       21,745        19,050         2,695      19,050       13,316      5,734
  Combination facilities.......................         16,939        14,235         2,704      14,235       10,645      3,590
                                                   ------------  ------------- ------------ ----------- ------------ -----------
     Total rental income.......................         57,273        43,224        14,049      43,224       25,527     17,697
                                                   ------------  ------------- ------------ ----------- ------------ -----------
Cost of operations (excluding depreciation)(a):
  Self-storage facilities opened in 2005.......     $      568    $        -    $     568   $        -   $        -   $      -
  Self-storage facilities opened in 2004.......          2,068         1,149          919        1,149            -      1,149
  Self-storage facilities opened in 2003.......          4,071         3,788          283        3,788        1,347      2,441
  Self-storage facilities opened in 2002 and 2001        7,806         7,464           342       7,464        7,049        415
  Combination facilities.......................          6,325         5,699           626       5,699        4,876        823
                                                   ------------  ------------- ------------ ----------- ------------ -----------
     Total cost of operations..................         20,838        18,100         2,738      18,100       13,272      4,828
                                                   ------------  ------------- ------------ ----------- ------------ -----------
Net operating income before depreciation (a):
  Self-storage facilities opened in 2005.......     $     (104)   $        -    $    (104)  $        -   $        -   $      -
  Self-storage facilities opened in 2004.......          3,268            85         3,183          85            -         85
  Self-storage facilities opened in 2003.......          8,718         4,917         3,801       4,917          219      4,698
  Self-storage facilities opened in 2002 and 2001       13,939        11,586         2,353      11,586        6,267      5,319
  Combination facilities.......................         10,614         8,536         2,078       8,536        5,769      2,767
                                                   ------------  ------------- ------------ ----------- ------------ -----------
   Net operating income before depreciation....         36,435        25,124        11,311      25,124       12,255     12,869
 Depreciation..................................        (15,366)      (14,017)       (1,349)    (14,017)     (10,525)    (3,492)
                                                   ------------  ------------- ------------ ----------- ------------ -----------
   Net operating income........................     $   21,069    $   11,107    $    9,962   $  11,107   $    1,730   $  9,377
                                                   ============  ============= ============ =========== ============ ===========
Weighted average square foot occupancy during the
  period:
  Self-storage facilities opened in 2005.......           26.9%           -            -             -          -            -
  Self-storage facilities opened in 2004.......           74.2%        35.2%        110.8%        35.2%         -            -
  Self-storage facilities opened in 2003.......           89.0%        64.8%         37.3%        64.8%        24.4%    165.6%
  Self-storage facilities opened in 2002 and 2001         92.3%        91.0%          1.4%        91.0%        67.4%     35.0%
  Combination facilities.......................           77.0%        81.2%        (5.2)%        81.2%        77.9%      4.2%
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                          82.5%        79.4%          3.9%        79.4%        66.2%     19.9%
                                                   ============  ============= ============ =========== ============ ===========
Weighted average realized rent per occupied square
  foot during the period (b):
  Self-storage facilities opened in 2005.......           $8.47  $      -             -     $      -     $      -            -
  Self-storage facilities opened in 2004.......           14.12        10.97         28.7%        10.97         -            -
  Self-storage facilities opened in 2003.......           13.77        11.96         15.1%        11.96         8.85     35.2%
  Self-storage facilities opened in 2002 and 2001         13.02        11.68         11.5%        11.68        11.17      4.6%
  Combination facilities.......................           12.80        12.47          2.6%        12.47        12.35      0.9%
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                         $13.13       $11.97          9.8%       $11.97       $11.45      4.5%
                                                   ============  ============= ============ =========== ============ ===========
In place annual rent per occupied square foot at
  December 31 (c):
  Self-storage facilities opened in 2005.......          $12.90  $      -             -     $      -     $      -            -
  Self-storage facilities opened in 2004.......           16.78        16.02          4.7%        16.02         -            -
  Self-storage facilities opened in 2003.......           15.63        14.47          8.0%        14.47        13.66      5.9%
  Self-storage facilities opened in 2002 and 2001         14.56        13.32          9.3%        13.32        12.33      8.0%
  Combination facilities.......................           14.09        13.68          3.0%        13.68        13.59      0.7%
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                         $14.77       $13.83          6.8%       $13.83       $12.95      6.8%
                                                   ============  ============= ============ =========== ============ ===========
</TABLE>

                                       45
<PAGE>

<TABLE>
<CAPTION>

                                          DEVELOPED SELF-STORAGE FACILITIES (Continued)
----------------------------------------------------------------------------------------------------------------------------------
                                                           Year Ended December 31,                Year Ended December 31,
                                                   ---------------------------------------  --------------------------------------
                                                       2005          2004        Change        2004         2003        Change
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                      (Amounts in thousands, except per square foot amounts and facility count)
Number of facilities:
<S>                                                  <C>          <C>           <C>         <C>          <C>          <C>
  Self-storage facilities opened in 2005.......               6            -             6           -             -          -
  Self-storage facilities opened in 2004.......               7            7             -           7             -          7
  Self-storage facilities opened in 2003.......              14           14             -          14            14          -
  Self-storage facilities opened in 2002 and 2001            26           26             -          26            26          -
  Combination facilities.......................              17           17             -          17            17          -
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                             70           64             6          64            57          7
                                                   ============  ============= ============ =========== ============ ===========
Square Footage:
  Self-storage facilities opened in 2005.......             463            -           463           -             -          -
  Self-storage facilities opened in 2004.......             505          505             -         505             -        505
  Self-storage facilities opened in 2003.......             994          994             -         994           994          -
  Self-storage facilities opened in 2002 and 2001         1,747        1,747             -       1,747         1,714         33
  Combination facilities (d)...................           1,846        1,558           288       1,558         1,195        363
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                          5,555        4,804           751       4,804         3,903        901
                                                   ============  ============= ============ =========== ============ ===========
Cumulative development cost:
  Self-storage facilities opened in 2005.......      $   37,073   $        -    $   37,073  $       -    $        -   $      -
  Self-storage facilities opened in 2004.......          60,579       60,579             -      60,579            -     60,579
  Self-storage facilities opened in 2003.......         107,322      107,322             -     107,322      105,026      2,296
  Self-storage facilities opened in 2002 and 2001       164,789      164,789             -     164,789      161,675      3,114
  Combination facilities  (d)..................         176,874      168,334         8,540     168,334      158,167     10,167
                                                   ------------  ------------- ------------ ----------- ------------ -----------
                                                     $  546,637   $  501,024    $  45,613   $  501,024   $  424,868   $ 76,156
                                                   ============  ============= ============ =========== ============ ===========
</TABLE>


(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.
(b)  Realized  annual  rent per  occupied  square  foot is  computed by dividing
     Rental income,  net of discounts by the weighted  average  occupied  square
     footage   for  the  year.   Realized   rents  per  square  foot  take  into
     consideration promotional discounts, credit card fees and other costs
     that reduce rental income from the contractual amounts due.
(c)  In place annual rent per occupied square foot represents  contractual rents
     per occupied square foot without reductions for promotional discounts.
(d)  Square  footages  exclude  industrial  space  developed  for  containerized
     storage  activities  totaling  173,000 net rentable square feet at December
     31, 2005. During 2003, 2004 and 2005, we have converted industrial space no
     longer  used  by  the  discontinued  containerized  storage  business  into
     1,483,000 net rentable square feet of traditional self-storage space, at an
     aggregate cost of $23,207,000.

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

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

         Property  operating  expenses  are  substantially   fixed,   consisting
primarily of payroll, property taxes, utilities, and marketing costs. The rental
revenue of a newly  developed  facility  will  generally  not cover its property
operating expenses  (excluding  depreciation)  until the facility has reached an
occupancy level of approximately 30% to 35%.  However,  at that occupancy level,
the rental  revenues from the facility are still not sufficient to cover related
depreciation  expense  and  cost  of  capital  with  respect  to the  facility's
development cost.

                                       46
<PAGE>

During construction of the self-storage  facility,  we capitalize interest costs
and include such cost as part of the overall  development  cost of the facility.
Once the facility is opened for operations interest is no longer capitalized.

         The yield on cost for these  facilities for the year ended December 31,
2005, based on net operating income before depreciation, was approximately 6.7%,
which is lower than our ultimate yield  expectations.  We expect these yields to
increase as these  facilities  reach  stabilization of both occupancy levels and
realized  rents.  Properties  that were developed  before 2005 have  contributed
greatly to our earnings  growth with net operating  income  before  depreciation
increasing  by  approximately  $11.4  million in 2005 as compared to 2004.  This
growth was primarily due to higher occupancy levels in 2005 as compared to 2004.
We expect that these facilities will continue to provide growth,  however,  at a
growth  rate that is much lower than  experienced  in 2005 as  occupancy  levels
become more stabilized.

         With  respect  to our  Combination  Facilities,  we have been  steadily
converting these facilities into entirely self-storage  facilities by converting
the industrial  space once used by our  containerized  storage  operations  into
self-storage space. As of December 31, 2005, 14 of the 17 Combination Facilities
have been  converted  into  entirely  self-storage.  We expect  to  convert  the
remaining three facilities over the next two years.  Weighted average  occupancy
levels for the  Combination  Facilities  was 77.9% in 2003,  81.2% in 2004,  and
77.0% in 2005. The drop in occupancy in 2005 is due  principally to the addition
of more space during 2005.

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

         However, the development  environment has changed in the last few years
due to increases in construction  costs,  increases in competition  with retail,
condominium,  and apartment  operators for quality  construction  sites in urban
locations,  and more  difficult  zoning and permitting  requirements,  which has
reduced the number of attractive sites available for development and reduced our
development  of  facilities.  It is unclear when, or if, these  conditions  will
improve.

         We  expect  that  over at  least  the  next 12  months,  the  Developed
Self-Storage Facilities will continue to have a negative impact to our earnings.
Furthermore,  the 4  newly  developed  facilities  in our  development  pipeline
described in "Liquidity and Capital  Resources - Acquisition  and Development of
Facilities"  that will be opened for operation over the next 24 months will also
negatively impact our earnings until they reach a stabilized occupancy level.

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

         Our  commercial  operations  are  comprised of  1,296,000  net rentable
square  feet  of  commercial  space,  operated  principally  at  certain  of the
self-storage facilities.

         As  noted  below,  we  sold a  commercial  facility  during  2004.  The
operating  results for this facility  prior to its  disposition  are included in
"discontinued operations" below.

                                       47

<PAGE>

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

COMMERCIAL PROPERTY OPERATIONS
(excluding discontinued operations):
------------------------------------
<TABLE>
<CAPTION>

                                          Year Ended                             Year Ended
                                         December 31,                            December 31,
                                    -------------------------               ----------------------
                                          2005      2004        Change           2004         2003     Change
                                   ------------- ------------ ----------  ------------  ----------- ----------
                                                          (Dollar amounts in thousands)
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>
  Rental income  ...............    $    11,560  $    10,750  $    810     $    10,750  $    11,001  $   (251)
  Cost of operations (excluding
      depreciation) (a).........          4,448        4,328       120           4,328        4,583      (255)
                                   ------------- ------------ ----------  ------------  ----------- ----------
      Net operating income before
        depreciation (a)............      7,112        6,422       690           6,422        6,418         4

  Depreciation expense..........         (2,322)      (2,114)     (208)         (2,114)      (2,436)      322
                                   ------------- ------------ ----------  ------------  ----------- ----------
     Net operating income.......    $     4,790  $     4,308  $    482     $     4,308  $     3,982  $    326
                                   ============= ============ ==========  ============  =========== ==========

</TABLE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

         Our commercial property operations consist primarily of facilities that
are at a stabilized level of operations, and generally reflect the conditions in
the markets in which they operate.  We do not expect any  significant  growth in
net operating income from this segment of our business for 2006.


         CONTAINERIZED STORAGE OPERATIONS:  Commencing in 2002, we significantly
curtailed  the  scope and  number of  facilities  of our  containerized  storage
operations,  and continue to evaluate  additional  facilities  for  closure.  At
December 31, 2005, we operated 12 containerized  storage  facilities  located in
major  markets  in which we have  significant  traditional  self-storage  market
presence.  The  operations  with respect to the  facilities  that were closed or
consolidated  in 2003,  2004,  and 2005  (the  "Closed  Facilities"),  including
historical operating results for previous periods, are not included in the table
below and  instead  are  included in  "Discontinued  Operations  " on our income
statement. The following table sets forth the operations of these 12 facilities:

CONTAINERIZED STORAGE
(excluding discontinued operations):
------------------------------------
<TABLE>
<CAPTION>

                                           Year Ended December 31,                  Year Ended December 31,
                                          ---------------------------             ---------------------------
                                                2005          2004       Change           2004         2003       Change
                                          ------------ ------------ -----------   -------------  ----------- -----------
                                                                  (Dollar amounts in thousands)
<S>                                           <C>       <C>          <C>           <C>           <C>          <C>
Rental and other income ............          $16,497   $  19,355    $ (2,858)     $   19,355    $   23,991   $ (4,636)
Cost of operations (excluding
   depreciation) (a):
    Direct operating costs..........           11,286      10,448         838          10,448        12,796     (2,348)
    Facility lease expense..........            1,600       1,326         274           1,326         1,143        183
                                          ------------ ------------ -----------   -------------  ----------- -----------
       Total cost of operations.....           12,886      11,774       1,112          11,774        13,939     (2,165)
                                          ------------ ------------ -----------   -------------  ----------- -----------
    Net operating income prior to
      depreciation (a)..............            3,611       7,581      (3,970)          7,581        10,052     (2,471)
Depreciation expense (b)............           (2,808)     (4,546)      1,738          (4,546)       (4,780)       234
                                          ------------ ------------ -----------   -------------  ----------- -----------
Net operating income ...............           $  803   $   3,035    $ (2,232)     $    3,035    $    5,272   $ (2,237)
                                          ============ ============ ===========   =============  =========== ===========

</TABLE>

(a)  Cost of operations  before  depreciation  and net  operating  income before
     depreciation are included herein because we believe they provide  important
     measures for evaluating our ongoing operations.

(b)  Depreciation expense principally relates to the depreciation related to the
     containers,  however, depreciation expense for 2005, 2004 and 2003 includes
     $1,048,000,  $1,020,000,  and  $1,218,000,  respectively,  related  to real
     estate facilities.

                                       48
<PAGE>

         Rental and other income  includes  monthly  rental charges to customers
for  storage  of the  containers  and  certain  non-core  services,  which  were
eliminated.  Rental and other income decreased to $16,497,000 for the year ended
December 31, 2005 from  $19,355,000  for the same period in 2004 and $23,991,000
for 2003,  primarily as a result of the termination of these non-core  services.
At December 31, 2005, there were approximately 21,354 occupied containers at the
12 facilities.

         Direct operating costs principally  includes  payroll,  equipment lease
expense,  utilities and vehicle expenses (fuel and insurance).  The reduction in
direct  operating  costs during 2004, when compared to 2003, is due primarily to
the  aforementioned   termination  of  non-core  services.  Cost  of  operations
increased in 2005, as compared to 2004,  due  principally to increases in yellow
page and media advertising  expense totaling  $3,147,000 in 2005 and $800,000 in
2004, partially offset by a decrease in expenses attributable to the termination
of the non-core  services in 2005 compared to 2004. Future yellow page and media
advertising  may  change  in  response  to  demand,  occupancy  levels,  and our
determination of the most appropriate marketing mix for this product.

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

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

         ANCILLARY  OPERATIONS:  Our Ancillary  operations include the operating
results of our tenant  insurance,  truck rental,  merchandise,  and  third-party
property  management  operations.  The following  table sets forth our ancillary
operations:
<TABLE>
<CAPTION>

                                           Year Ended December 31,                  Year Ended December 31,
                                          --------------------------            -----------------------------
                                             2005          2004       Change           2004         2003       Change
                                          ----------- ------------ -----------     -----------    ----------  ----------
                                                                  (Dollar amounts in thousands)
Revenues:
<S>                                         <C>        <C>           <C>             <C>           <C>         <C>
    Tenant reinsurance premiums.....        $  24,889  $   24,243    $    646        $ 24,243      $ 22,464    $ 1,779
    Merchandise sales...............           22,464      21,336       1,128          21,336        20,498        838
    Truck rentals...................           13,853      12,646       1,207          12,646        12,725        (79)
    Property management.............            2,967       2,771         196           2,771         2,819        (48)
                                          ----------- ------------ -----------     -----------    ----------  ----------
       Total revenues...............           64,173      60,996       3,177          60,996        58,506      2,490
                                          ----------- ------------ -----------     -----------    ----------  ----------
Cost of operations:
    Tenant reinsurance..............            8,234      13,508      (5,274)         13,508        11,987      1,521
    Merchandise sales...............           18,773      18,901        (128)         18,901        17,587      1,314
    Truck rentals...................           12,733      12,421         312          12,421        11,659        762
    Property management.............              638         657         (19)            657           705        (48)
                                          ----------- ------------ -----------     -----------    ----------  ----------
       Total cost of operations.....           40,378      45,487      (5,109)         45,487        41,938      3,549
                                          ----------- ------------ -----------     -----------    ----------  ----------
Net operating income:
    Tenant reinsurance..............           16,655      10,735       5,920          10,735        10,477        258
    Merchandise sales...............            3,691       2,435       1,256           2,435         2,911       (476)
    Truck rentals...................            1,120         225         895             225         1,066       (841)
    Property management.............            2,329       2,114         215           2,114         2,114          -
                                          ----------- ------------ -----------     -----------    ----------  ----------
       Total net operating income...        $  23,795  $   15,509    $  8,286        $ 15,509      $ 16,568    $(1,059)
                                          =========== ===========  ===========     ===========    ==========  ==========
</TABLE>


         Tenant reinsurance operations
         -----------------------------

         On  December  31,  2001,  we  acquired  PSIC from a related  party.  PS
Insurance  reinsures  policies  against losses to goods stored by tenants in our
self-storage  facilities.  Revenues  are  comprised  of fees  charged to tenants
electing such policies.  Cost of operations  primarily includes claims paid that
are not covered by our outside  third-party  insurers (described below), as well
as claims adjusting expenses.

         Throughout 2003, 2004, and 2005, we had outside  third-party  insurance
coverage for claims paid exceeding $500,000 resulting from any individual event,
to a limit of $10,000,000.  Effective January 1, 2006, such coverage was revised
to cover claims paid exceeding  $1,500,000  resulting from any individual event,
to a limit of $9,000,000.

                                       49
<PAGE>

         The decrease in cost of operations  for 2005 as compared to 2004 is due
principally to improved claims handling and claims management.  In addition,  in
2004, we recorded an estimated loss of approximately  $1,500,000 with respect to
potential tenant insured losses as a result of several hurricanes  affecting the
southeastern United States. During 2005, we determined that this accrual was too
high based upon  claims  history,  and  accordingly  we  reduced  the  estimated
liability by approximately  $500,000 and reduced cost of operations in 2005 by a
corresponding  amount.  Similarly  in 2005,  we  recorded  estimated  losses  of
approximately  $1 million relating to potential tenant insured claims for losses
incurred as a result of hurricanes  occurring in 2005. Other amounts included in
cost of operations for claims losses during 2003, 2004, and 2005 are isolated to
events  affecting  specific  properties  or tenants,  rather  than  catastrophic
events.

         The future level of tenant  reinsurance  revenues is largely  dependent
upon the number of new tenants electing to purchase  policies,  premiums charged
for such insurance,  and existing tenant retention to continue  participating in
the insurance  program.  For the years ended December 31, 2005,  2004, and 2003,
approximately 32%, 35%, and 37%,  respectively,  of our self-storage tenant base
had such policies.

         The future cost of  operations  will be  dependent  primarily  upon the
level of losses incurred,  including the level of catastrophic  events,  such as
hurricanes, that occur and affect our properties. The aforementioned increase in
the  deductible of  $1,500,000  per event could result in higher loss expense in
2006, depending upon the number of catastrophic losses that occur.

         Merchandise and truck rental operations
         ---------------------------------------

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

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

         The revenues and expenses of these activities have remained  relatively
stable  through the three years ended  December 31, 2005,  2004,  and 2003.  The
primary  factors  impacting the level of  operations of these  activities is the
level of customer and tenant traffic at our self-storage  facilities,  including
the level of move-ins.

         Property management operations
         ------------------------------

         We manage 27  self-storage  facilities on behalf of third-party  owners
and 38 self-storage  facilities that are owned by the  Unconsolidated  Entities,
affiliates of the Company.  Under the  supervision  of the property  owners,  we
coordinate rental policies, rent collections, marketing activities, the purchase
of  equipment  and  supplies,  maintenance  activities,  and the  selection  and
engagement of vendors,  suppliers, and independent  contractors.  We also assist
and advise the property owners in establishing policies for the hire, discharge,
and supervision of employees for the operation of these facilities.

         Our operating income from these activities is generally  dependent upon
the revenues  earned at the managed  facilities,  because our  management fee is
based upon revenues.  Management  contracts with the  third-party  owners can be
terminated by either party upon 60 days written notice.

         EQUITY  IN  EARNINGS  OF  REAL  ESTATE  ENTITIES:  In  addition  to our
ownership  of equity  interests  in PSB, we had general and limited  partnership
interests  in eight  limited  partnerships  at  December  31,  2005 (PSB and the
limited  partnerships  are  collectively  referred  to  as  the  "Unconsolidated
Entities").  Due to our limited ownership  interest and limited control of these
entities,  we do not  consolidate  the accounts of these  entities for financial
reporting purposes, and account for such investments using the equity method.

                                       50
<PAGE>

         Equity in earnings of real estate  entities for the year ended December
31, 2005 consists of our pro-rata  share of the  Unconsolidated  Entities  based
upon our ownership  interest for the period.  The following table sets forth the
significant components of equity in earnings of real estate entities:

<TABLE>
<CAPTION>

Historical summary:                            Year Ended December 31,                     Year Ended December 31,
-------------------                          --------------------------                  --------------------------
                                                  2005         2004        Change           2004         2003        Change
                                             ------------  -----------  -----------     -----------  ----------    ----------
                                                                           (Amounts in thousands)
Property operations:
<S>                                           <C>           <C>         <C>              <C>          <C>          <C>
  PSB                                         $  68,768     $  68,545   $     223        $  68,545    $  64,242    $   4,303
  Acquisition Joint Venture..............           277            23         254               23            -           23
  Other Investments (a)..................         7,903         6,587       1,316            6,587        6,288          299
                                             ------------  -----------  -----------     -----------  ----------    ----------
                                                 76,948        75,155       1,793           75,155       70,530        4,625
                                             ------------  -----------  -----------     -----------  ----------    ----------
Depreciation:
  PSB....................................       (33,593)      (32,063)     (1,530)         (32,063)     (26,048)      (6,015)
  Acquisition Joint Venture..............          (269)          (96)       (173)             (96)           -          (96)
  Other Investments (a)..................        (1,563)       (1,561)         (2)          (1,561)      (1,705)         144
                                             ------------  -----------  -----------     -----------  ----------    ----------
                                                (35,425)      (33,720)     (1,705)         (33,720)     (27,753)      (5,967)
                                             ------------  -----------  -----------     -----------  ----------    ----------
Other: (b)
  PSB (c)................................       (16,418)      (19,587)      3,169          (19,587)     (18,507)      (1,080)
  Other Investments (a)..................          (222)          716        (938)             716          696           20
                                             ------------  -----------  -----------     -----------  ----------    ----------
                                                (16,640)      (18,871)      2,231          (18,871)     (17,811)      (1,060)
                                             ------------  -----------  -----------     -----------  ----------    ----------

Total equity in earnings of real estate entities:
  PSB....................................        18,757        16,895       1,862           16,895       19,687       (2,792)
  Acquisition Joint Venture..............             8           (73)         81              (73)           -          (73)
  Other Investments (a)..................         6,118         5,742         376            5,742        5,279          463
                                             ------------  -----------  -----------     -----------  ----------    ----------
                                               $ 24,883      $ 22,564   $   2,319        $  22,564    $  24,966    $  (2,402)
                                             ============  ===========  ===========     ============ ==========    ==========
</TABLE>

(a)  Amounts include equity in earnings  recorded for investments that have been
     held consistently throughout the three years ended December 31, 2005.

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

(c)  Equity in earnings  includes our pro-rata  share of gain on  disposition of
     real estate investments, impairment charges on real estate assets, and EITF
     Topic  D-42  charges   totaling   $7,727,000,   $4,544,000   and  $187,000,
     respectively, during 2005, 2004 and 2003.

         The increase in equity in earnings for the year ended December 31, 2005
as compared to 2004,  and the decrease in equity in earnings in 2004 as compared
to 2003,  is due to our pro-rata  share of changes in PSB's  operating  results.
PSB's  earnings  increased  in the year ended  December  31, 2005 as compared to
2004, due to increased "same park" operating results,  an increased gain on sale
of real estate,  and reduced EITF Topic D-42 charges associated with redemptions
of  preferred  securities,  offset  partially  by  higher  depreciation  expense
associated  with property  acquisitions.  PSB's  earnings  decreased in the year
ended  December  31,  2004 as  compared  to  2003,  due to  impairment  charges,
increased  EITF Topic D-42  charges  associated  with  redemptions  of preferred
securities,  and increased  depreciation  expense  associated  with  significant
property acquisitions.

         Equity in earnings of PSB represents our pro-rata share  (approximately
44% throughout 2005, 2004, and 2003) of the earnings of PS Business Parks, Inc.,
a publicly traded real estate  investment  trust (American Stock Exchange symbol
"PSB")  organized by the Company on January 2, 1997. As of December 31, 2005, we
owned 5,418,273 common shares and 7,305,355  operating  partnership units (units
which are  convertible  into common  shares on a  one-for-one  basis) in PSB. At
December 31, 2005, PSB owned and operated 17.6 million net rentable  square feet
of commercial space located in eight states.

         Accordingly,  our  future  equity  income  from PSB  will be  dependent
entirely upon PSB's  operating  results.  PSB's  filings and selected  financial
information   can  be   accessed   through   the  SEC,   and  on  its   website,
www.psbusinessparks.com.
                                       51
<PAGE>

         In January 2004, we entered into a joint  venture  partnership  with an
institutional  investor  for the purpose of  acquiring  up to $125.0  million of
existing  self-storage  properties  in the United States from third parties (the
"Acquisition  Joint Venture").  The Acquisition Joint Venture is funded entirely
with equity consisting of 30% from us and 70% from the  institutional  investor.
As described more fully in Note 2 to the Consolidated  Financial  Statements for
the year ended December 31, 2005, our pro-rata share of earnings with respect to
two of the facilities  acquired  directly by the  Acquisition  Joint Venture are
reflected in Equity in Earnings in the table above.  These two  facilities  were
acquired by the  Acquisition  Joint  Venture  directly  from third parties at an
aggregate  cost  of  $9,086,000.  Our  investment  with  respect  to  these  two
facilities  was  approximately  $2,930,000.  Our future  equity in earnings with
respect to the  Acquisition  Joint  Venture will be dependent  upon the level of
earnings  generated  by these  two  properties  owned by the  Acquisition  Joint
Venture.

         The "Other Investments" includes our equity in earnings with respect to
our pro-rata share of earnings with respect to seven limited  partnerships,  for
which we held an  approximately  consistent  level of equity interest during the
three years ended December 31, 2005. These limited  partnerships  were formed by
the  Company  during the  1980's.  The  Company is the  general  partner in each
limited  partnership,  and manages each of these facilities for a management fee
that is included in  "Ancillary  Operations."  The limited  partners  consist of
numerous  individual  investors,  including the Company,  which  throughout  the
1990's  acquired  units  of  limited  partnership  interests  in  these  limited
partnerships in various transactions.

         Our future  earnings  with respect to the "Other  Investments"  will be
dependent  upon the operating  results of the 36  self-storage  facilities  that
these  entities  own. The  operating  characteristics  of these  facilities  are
similar to those of our  self-storage  facilities,  and are  subject to the same
operational  issues as the Same Store Facilities as discussed above with respect
to Self-Storage Operations.  See Note 5 to the consolidated financial statements
for the  operating  results of these  entities for the years ended  December 31,
2005 and 2004.

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

         INTEREST AND OTHER INCOME: Interest and other income increased in 2005
as compared to 2004, and in 2004 compared to 2003, due primarily to higher
interest income attributable to higher average cash balances and higher average
interest rates on short-term cash investments.

         As discussed more fully in "Liquidity and Capital  Resources" below, at
December 31, 2005, we had cash balances totaling  approximately  $493.5 million.
In addition,  during the first quarter of 2006, we issued  approximately  $105.0
million of our 6.95% Series H Cumulative  Preferred Stock. The net proceeds from
this issuance and our December 31, 2005 cash balances will be used  primarily to
fund future development,  acquisition,  and preferred redemption activities (see
also "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources"). In the interim, the net proceeds
from our cash  balances  is  expected  to earn  interest  income  (currently  at
approximately  4.0% at December 31, 2005) relative to the corresponding  divided
requirement  (approximately  6.95%  with  respect  to our  Series  H  Cumulative
Preferred  Stock).  This  difference  will result in an  estimated  reduction to
earnings per common share. In addition,  we may issue additional preferred stock
during the early part of 2006,  raising the necessary  funds in  anticipation of
the potential redemption of approximately  $653,750,000 in higher-rate preferred
stock that becomes available for redemption in September and October 2006. These
issuances  similarly will have a negative impact on earnings per share until the
proceeds are utilized.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
was  $196,397,000  in 2005,  $183,063,000  in 2004,  and  $184,063,000  in 2003.
Included in depreciation  expense with respect to our real estate facilities was
$185,989,000  in 2005,  $168,915,000  in 2004,  and  $171,032,000  in 2003.  The
increase  from  2004  to  2005  is due to the  acquisition  and  development  of
additional real estate facilities. The decrease in depreciation and amortization
with  respect to real  estate  facilities  for 2004 as  compared  to 2003 is due
primarily to a reduction in  depreciation  with respect to  maintenance  capital
expenditures,  offset  partially by an increase in depreciation  with respect to
newly developed and acquired facilities.

                                       52
<PAGE>

         Depreciation and  amortization  during 2005 with respect to real estate
facilities  acquired or developed during 2005 amounted to $3,177,000,  which was
for a partial  period for the time they were acquired  until  December 31, 2005,
and we expect the annual  depreciation  expense with respect to these facilities
for 2006 and forward will approximate $8,342,000.

         GENERAL AND ADMINISTRATIVE EXPENSE:  General and administrative expense
was $21,115,000 in 2005,  $18,813,000 in 2004, and $17,127,000 in 2003.  General
and  administrative  costs for each year  principally  consist  of state  income
taxes,  investor  relation  expenses,  and  corporate  and  executive  salaries,
including employee stock based compensation  expense.  In addition,  general and
administrative  expense includes  expenses that vary depending upon our activity
levels in certain areas,  such as overhead  associated  with the acquisition and
development of real estate facilities,  employee severance, and product research
and development expenditures.

         The increase in general and administrative expense from 2004 to 2005 is
primarily due to higher employee  stock-based  compensation  expense relating to
our stock  option and  restricted  stock  plans  which  resulted  in expenses of
$4,758,000 in 2005 as compared to  $2,963,000  in 2004.  The increase in general
and  administrative  expense from 2003 to 2004 is also  primarily  due to higher
employee stock-based  compensation expense which for 2003 amounted to $2,685,000
for 2003.

         Total restricted  stock and stock option expense,  exclusive of payroll
taxes on the exercise of options,  should  approximate  $4.9 million  based upon
options and  restricted  stock  outstanding  at  December  31,  2005.  Grants of
restricted  stock units and stock options after  December 31, 2005 could further
increase our future stock-based compensation expense.

         INTEREST EXPENSE:  Interest expense was $8,216,000 in 2005, $760,000 in
2004, and $1,121,000 in 2003. The increase in interest  expense in 2005 compared
to 2004 was caused by the  assumption  of mortgage  notes  payable in connection
with property  acquisitions in the fourth quarter of 2004, interest expense with
respect to debt due a joint venture partner,  interest expense paid to a related
party  in 2005 and a  decrease  in  capitalized  interest  due to lower  average
in-process development balances.

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

         As  described  more  fully  in  Note  2 to the  Consolidated  Financial
Statements,  on December 31, 2004, we sold seven self-storage  facilities to the
Acquisition  Joint Venture for an aggregate of $23.0 million in cash. In January
2005,  we sold an interest in three  additional  self-storage  facilities to the
Acquisition  Joint Venture for an aggregate of $27.4 million in cash.  Our Joint
Venture Partner's equity interest in these ten facilities has been accounted for
as a financing  arrangement  and has been included on our  consolidated  balance
sheet at December  31,  2005 and 2004 as "Debt to joint  venture  partner."  Our
partner's pro-rata share of net income with respect to these facilities has been
classified  as interest  expense,  which for 2005 totaled  $2,939,000  (none for
2004). Based upon the balance outstanding at December 31, 2005, interest expense
should be  approximately  $3,050,000  with respect to our Debt to Joint  Venture
Partner.

         As  described  more  fully  in  Note  9 to the  Consolidated  Financial
Statements,  during 2005 we incurred  interest expense totaling  $1,458,000 with
respect to debt due a related party.  This debt was extinguished on November 17,
2005.

         Capitalized interest expense totaled $2,820,000 in 2005,  $3,617,000 in
2004,  and  $6,010,000 in 2003 in connection  with our  development  activities.
Interest  expense,  including  capitalized  interest,  was  $11,036,000 in 2005,
$4,377,000 in 2004, and $7,131,000 in 2003.

                                       53
<PAGE>

         Minority interest in income: Minority interest in income represents the
income that is allocable to equity interests in the Consolidated Entities, which
are not owned by the Company.  The following table summarizes  minority interest
in income for each of the three years ended December 31, 2005:

<TABLE>
<CAPTION>

                                                   Minority interest in income for the year ended
                                                 --------------------------------------------------
                                                   December 31,     December 31,     December 31,
                  Description                          2005             2004             2003
--------------------------------------------     ---------------   --------------    -------------
                                                                   (in thousands)
Preferred partnership interests:
<S>                                                  <C>              <C>              <C>
     Ongoing distributions..................         $   16,147       $   22,423       $   26,906
     Redemptions of preferred units.........                874           10,063                -
Consolidated Development Joint Venture (a)..              4,229            5,652            4,211
Convertible Partnership Units (b)...........                469              328              305
Acquired minority interests (c).............              1,197            4,048            4,838
Other minority interests (d)................              9,735            7,399            7,443
                                                  ---------------   -------------    -------------
Total minority interests in income............       $   32,651       $   49,913       $   43,703
                                                  ===============   =============    =============

</TABLE>

(a)  Included in  minority  interest in income is  $2,051,000,  $3,619,000,  and
     $3,362,000 in  depreciation  expense for the years ended December 31, 2005,
     2004, and 2003, respectively.

(b)  See Note 9 to the  consolidated  financial  statements.  Included in income
     allocated  to  Convertible  Partnership  Units is $385,000,  $333,000,  and
     $342,000,  in  depreciation  expense for the years ended December 31, 2005,
     2004, and 2003, respectively.

(c)  These  amounts  reflect  income  allocated to minority  interests  that the
     Company  acquired as of December  31,  2005,  and are  therefore  no longer
     outstanding  at December  31,  2005.  Included in income  allocated  to the
     Acquired minority  interests is $295,000,  $1,197,000,  and $1,927,000,  in
     depreciation expense for the years ended December 31, 2005, 2004, and 2003,
     respectively.

(d)  Other minority  interests  reflect income  allocated to minority  interests
     that  were  outstanding  consistently  throughout  the  three  years  ended
     December  31,  2005.  Included in income  allocated  to the Other  minority
     interests is $672,000,  $897,000, and $697,000, in depreciation expense for
     the years ended December 31, 2005, 2004, and 2003, respectively, as well as
     gain on sale of assets totaling $251,000 in 2005 (none in 2004 or 2003).

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

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

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

                                       54
<PAGE>


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

         In  November   1999,  we  formed  a  development   joint  venture  (the
"Consolidated  Development  Joint  Venture") with a joint venture  partner (PSAC
Storage  Investors,  LLC) whose  partners  included a third party  institutional
investor and Mr. Hughes, the Company's Chairman,  to develop  approximately $100
million of  self-storage  facilities  and to purchase $100 million of our Equity
Stock, Series AAA (see Note 9 to the Consolidated Financial Statements).

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


         The acquired  minority  interests reflect interests in the Consolidated
Entities,  other  than  the  Consolidated  Development  Joint  Venture,  that we
acquired throughout the three years ended December 31, 2005 and are therefore no
longer outstanding. There will be no further income allocated to these interests
in 2006 and beyond.

         DISCONTINUED  OPERATIONS:  As  described  more  fully  in Note 3 to the
consolidated  financial  statements,  between  January 1, 2002 and  December 31,
2004, we  implemented a business plan that included the closure of all but 12 of
our  containerized  storage  facilities.  In  2003,  we sold  five  self-storage
facilities  exiting  entirely the  Knoxville,  Tennessee and  Perrysville,  Ohio
markets. In 2004, we sold one of our commercial  facilities located in West Palm
Beach,  Florida.  In  2005,  in  an  eminent  domain  proceeding,   one  of  our
self-storage facilities located in Portland, Oregon was condemned.

         During 2003 and 2004, we recorded  asset  impairment  charges  totaling
$3,229,000 and $1,575,000,  respectively,  relating to assets used at the closed
containerized storage facilities.

         In connection with the disposition of facilities;  in 2003, we recorded
a net gain of  approximately  $5,121,000;  in 2004,  we  recorded  a net gain of
approximately  $971,000;  and in 2005, we recorded a net gain of $5,180,000.  In
addition,  during  2005,  a gain on sale of  containerized  storage  assets  was
recorded in the amount of $1,143,000.

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


                                       55
<PAGE>

Discontinued Operations:
------------------------
<TABLE>
<CAPTION>
                                           Year Ended December 31,                  Year Ended December 31,
                                         --------------------------                ------------------------
                                             2005          2004       Change           2004         2003       Change
                                         ------------   ----------  ------------    -----------  -----------  -----------
                                                                   (Dollar amounts in thousand)
<S>                                         <C>          <C>           <C>            <C>          <C>          <C>
Rental income.......................        $    556     $  8,456      $(7,900)       $  8,456     $ 22,030     $(13,574)
Cost of operations...................           (414)      (7,055)        6,641         (7,055)     (16,062)       9,007
Depreciation and amortization ......             (88)      (1,282)        1,194         (1,282)      (3,940)       2,658
                                         ------------   ----------  ------------    -----------  -----------  -----------
Income before other items...........              54          119          (65)            119        2,028       (1,909)

Other items:
    Asset impairment charges.........              -       (1,575)        1,575         (1,575)      (3,229)       1,654
    Lease termination costs..........              -         (416)          416           (416)           -         (416)
    Net gain on disposition of assets          6,323          971         5,352            971        5,121       (4,150)
                                         ------------   ----------  ------------    -----------  -----------  -----------
       Total other items.............          6,323       (1,020)        7,343         (1,020)       1,892       (2,912)
                                         ------------   ----------  ------------    -----------  -----------  -----------
Net discontinued operations.........        $  6,377     $   (901)     $7,278         $   (901)    $  3,920     $ (4,821)
                                         ============   ==========  ============    ===========  ===========  ===========
</TABLE>



         CASUALTY  LOSSES:  During 2005, we incurred  casualty  losses  totaling
$2,592,000  as  a  result  of  physical  damage  to  our  facilities  caused  by
hurricanes.  These losses  represent the excess of the aggregate net book values
of the assets  damaged over the insurance  proceeds that we expect to receive to
repair such damages totaling  approximately $3.4 million. We estimate,  however,
that  the  aggregate  cost  to  repair   damages  to  our  facilities   will  be
approximately  $10.7 million.  Also included in the caption  "Casualty loss" for
the year ended  December  31, 2005 is  estimated  business  interruption  income
approximating  $675,000,  representing our estimated  recovery from our insurers
for loss of business through  December 31, 2005. We expect to record  additional
recoveries from our insurers for loss of business through at least approximately
September 30, 2006 for the two New Orleans facilities denoted above which remain
heavily  damaged  and are  expected to remain  closed for an extended  period of
time.

         Included in the caption "casualty loss" for the year ended December 31,
2004 was  $1,250,000,  representing  the net book  value of assets  damaged.  We
expect to receive no insurance  proceeds for our  hurricane  losses  incurred in
2004.

         GAIN ON DISPOSITION OF REAL ESTATE: During 2005, we recorded a net gain
on disposition of real estate assets of $3,099,000, as compared to a net gain of
$1,317,000  in 2004 and a net gain of  $1,007,000  in 2003.  The gain in 2005 is
composed  of a gain on sale of a parcel of land and partial  condemnations  with
respect to four existing self-storage  facilities.  The gain in 2004 is composed
of a gain on sale of four parcels of land and partial  condemnation with respect
to two existing self-storage facilities.  The gain in 2003 is composed of a gain
on sale of investments of $316,000,  and a gain on sale of seven parcels of land
and two self-storage facilities aggregating $691,000.

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

         We believe that our internally generated net cash provided by operating
activities  will  continue to be  sufficient  to enable us to meet our operating
expenses,  capital improvements,  debt service requirements and distributions to
shareholders  for the  foreseeable  future.  Cash and cash  equivalents  totaled
$493.5 million at December 31, 2005. We expect that these funds will be utilized
to fund our  acquisition  and  development  activities  and  partially  fund the
redemptions of preferred  securities  that become  callable at our option during
2006.

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

                                       56
<PAGE>

<TABLE>
<CAPTION>

                                                                                  For the Year Ended December 31,
                                                                               -----------------------------------------
                                                                                 2005            2004            2003
                                                                               ----------     ----------     -----------
                                                                                       (Amount in thousands)
<S>                                                                            <C>             <C>            <C>
Net cash provided by operating activities.............................         $692,048        $616,664       $571,387

Allocable to minority interests (Preferred Units) -
   ongoing distributions..............................................          (16,147)        (22,423)       (26,906)
Allocable to minority interests (Preferred Units) -
   special distribution (a)...........................................                -          (8,000)             -
Allocable to minority interests (common equity).......................          (18,177)        (21,349)       (23,469)
                                                                               ----------     ----------     -----------
Cash from operations allocable to our shareholders....................          657,724         564,892        521,012

Capital improvements to maintain our facilities.......................          (25,890)        (35,868)       (30,175)
                                                                               ----------     ----------     -----------
Remaining operating cash flow available for distributions to our                631,834         529,024        490,837
   shareholders.......................................................

Distributions paid to:
   Preferred shareholders.............................................         (173,017)       (157,925)      (146,196)
   Equity Stock, Series A shareholders................................          (21,443)        (21,501)       (21,501)
   Common and Class B shareholders....................................         (244,200)       (230,834)      (225,864)
                                                                               ----------     ----------     -----------
Cash available for principal payments on debt and reinvestment........         $193,174        $118,764        $97,276
                                                                               ==========     ==========     ===========
</TABLE>


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


         Our financial  profile is characterized by a low level of debt to total
capitalization  and a  conservative  dividend  payout  ratio with respect to the
common  stock.  We expect  to fund our  growth  strategies  with cash on hand at
December 31, 2005,  internally  generated  retained  cash flows,  proceeds  from
issuing  equity  securities or as the case with the planned merger with Shurgard
Storage Centers, Inc. (see below) the issuance of our common stock for shares of
Shurgard.  In general, our current strategy is to continue to finance our growth
with permanent  capital;  either common or preferred equity. We have in the past
used our $200 million line of credit as temporary  "bridge" financing and repaid
those  amounts  with  internally  generated  cash  flows and  proceeds  from the
placement of permanent  capital.  At December  31, 2005,  we had no  outstanding
borrowings under our $200 million bank line of credit.

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

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

         Our  portfolio  of  real  estate   facilities   remains   substantially
unencumbered.  At December 31, 2005,  we had  borrowings  under  mortgage  notes
totaling  $91.6  million  (which  encumbers 34  facilities  with a book value of
$196.9 million) and unsecured debt in the amount of $22.4 million.  We also have
Debt to Joint  Venture  Partner  amounting to $35.7  million with respect to ten
real estate facilities with an aggregate book value of $48.6 million.

                                       57
<PAGE>


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

         We believe that our size and financial flexibility enables us to access
capital when appropriate. Since the beginning of 2003 through December 31, 2005,
we have raised approximately $1.4 billion of our Cumulative Preferred Stock, and
used  approximately  $601.1  million  of these net  proceeds  in order to redeem
higher-coupon preferred securities.

         On January 19, 2006, we redeemed our 8.6% Series Q Cumulative Preferred
Stock totaling $172.5 million.  This redemption was funded with cash on hand. In
addition to the Series Q Preferred noted above, we currently have  approximately
$653.8 million of additional  preferred securities that become redeemable at our
option in 2006, as follows.
<TABLE>
<CAPTION>

                                            Earliest
                                            Redemption        Dividend       Liquidation
                 Security                     Date              Rate        Value (000's)
-------------------------------------    --------------    ------------    --------------

<S>                                             <C>             <C>          <C>
 Series R Preferred Stock                       9/28/06         8.000%       $  510,000
 Series S Preferred Stock                       10/31/06        7.875%          143,750
                                                              ----------     ------------
   Total securities available for
      redemption through 12/31/06                               7.974%       $  653,750
                                                              ==========     ============
</TABLE>


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

         Also in  January  2006,  we issued  4,200,00  depository  shares,  each
representing 1/1,000 of a share, of our 6.95% Cumulative preferred Stock, Series
H, raising net proceeds of approximately $101.5 million.

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

         Aggregate  dividends  paid during 2005  totaled  $173.0  million to the
holders of our Cumulative  Preferred Stock, $244.2 million to the holders of our
Common  Stock and $21.4  million to the holders of our Equity  Stock,  Series A.
Although we have not finalized the  calculation of our 2005 taxable  income,  we
believe that the aggregate dividends paid in 2005 to our shareholders enabled us
to continue to meet our REIT  distribution  requirements.  We estimate  that the
distribution  requirements  for  fiscal  2006  with  respect  to our  Cumulative
Preferred  Stock  outstanding  at March 15, 2006, and assuming the redemption of
the preferred securities mentioned above, will be approximately $172.3 million.

         During 2005, we paid distributions  totaling $16.1 million with respect
to  our  Preferred   Partnership   Units.  We  estimate  the  2006  distribution
requirements  with respect to the preferred  partnership  units  outstanding  at
December 31, 2005, to be approximately $14.4 million.

                                       58

<PAGE>

         For 2006,  distributions  with  respect to the Common  Stock and Equity
Stock, Series A will be determined based upon our REIT distribution requirements
after taking into consideration distributions to the preferred shareholders.  We
anticipate  that, at a minimum,  quarterly  distributions  per common share will
remain at $0.50 per common  share.  For the first  quarter of 2006,  a quarterly
distribution  of $0.50  per  common  share  has been  declared  by our  Board of
Directors.

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

         CAPITAL  IMPROVEMENT  REQUIREMENTS:   During  2006,  we  have  budgeted
approximately $35 million for capital improvements. Capital improvements include
major repairs or replacements  to the  facilities,  which keep the facilities in
good operating condition and maintain their visual appeal.  Capital improvements
do not include costs relating to the development or expansion of facilities.

         DEBT SERVICE  REQUIREMENTS:  We do not believe we have any  significant
refinancing  risks with respect to our Notes  Payable and Debt to Joint  Venture
Partner.  Except for the Debt to Joint  Venture  Partner  all such debt is fixed
rate.  At December  31, 2005,  we had total  outstanding  debt of  approximately
$149.6 million.  See Notes 7 & 8 to the  consolidated  financial  statements for
approximate  principal  maturities of such  borrowings.  We anticipate  that our
retained operating cash flow will continue to be sufficient to enable us to make
scheduled  principal  payments.  It is our current  intent to fully amortize our
debt as opposed to refinance debt maturities with additional debt.

         ACQUISITION  AND  DEVELOPMENT  OF  FACILITIES:  During  2006,  we  will
continue  to seek to  acquire  additional  self-storage  facilities  from  third
parties;  however,  it is  difficult  to  estimate  the  amount  of third  party
acquisitions  we  will  undertake.  For  2006,  we do not  anticipate  that  our
Acquisition Joint Venture will fund additional  acquisitions from third parties,
and we  expect  that  additional  acquisitions  and  development  will be funded
entirely by the Company.

         Between  January  1,  2006  and  March  15,  2006,  we  acquired  three
additional self-storage facilities from third parties (total net rentable square
feet of 170,000) at an aggregate cost of approximately  $20.0 million  comprised
of cash totaling $15.4 million and the assumption of debt totaling $4.6 million.
These acquisitions were funded entirely by us.

         As of  March  15,  2006,  we  are  under  contract  to  purchase  seven
self-storage  facilities (total approximate net rentable square feet of 574,000)
at an aggregate cost of  approximately  $69.4 million.  We anticipate that these
acquisitions  will be funded  entirely by us. Each of these contracts is subject
to  significant  contingencies,  and  there  is no  assurance  that any of these
facilities will be acquired.

         We  currently  have  a  development   "pipeline"  of  62   self-storage
facilities and expansions to existing self-storage  facilities with an aggregate
estimated cost of approximately $323.2 million (unaudited).  Approximately $46.1
million of  development  cost has been  incurred as of December  31,  2005.  The
development  and fill-up of these storage  facilities is subject to  significant
contingencies such as obtaining appropriate  governmental approvals. We estimate
that the amount  remaining to be spent of  approximately  $277.1 million will be
incurred  over the next 24  months.  The  following  table  sets  forth  certain
information with respect to our development pipeline.

                                       59
<PAGE>

Development Pipeline Summary
<TABLE>
<CAPTION>

                                                    Number      Net           Total       Costs incurred
                                                      of       rentable     estimated         through           Costs to
                                                   projects    sq. ft.     development       12/31/05           complete
                                                                             costs
                                                ------------ ----------   ------------   --------------     -------------
                                                                               (Amounts in thousands)
  FACILITIES CURRENTLY UNDER CONSTRUCTION:
<S>                                                    <C>        <C>      <C>              <C>              <C>
    Self-storage facilities                            3          281      $   54,698       $   35,050       $   19,648
    Expansions to existing self-storage
     facilities                                        9          239          16,456            7,001            9,455
                                                ------------ ----------   ------------   --------------     -------------
                                                      12          520          71,154           42,051           29,103

  FACILITIES AWAITING CONSTRUCTION, WHERE LAND IS ACQUIRED:
    Self-storage facilities                            1           57           6,458            2,163            4,295
    Expansions to existing self-storage
     facilities                                       49        3,334         245,572            1,854          243,718
                                                ------------ ----------   ------------   --------------     -------------
                                                      50        3,391         252,030            4,017          248,013

  TOTAL DEVELOPMENT PIPELINE                          62        3,911     $   323,184       $   46,068       $  277,116
                                                ============ ==========   ===========    ==============     =============
</TABLE>

         STOCK  REPURCHASE  PROGRAM:  Our Board of Directors has  authorized the
repurchase  from time to time of up to 25,000,000  shares of our common stock on
the open  market  or in  privately  negotiated  transactions.  During  2004,  we
repurchased  445,700 shares for  approximately  $20.3  million.  During 2005, we
repurchased 84,000 shares for approximately $5.0 million.  From the inception of
the repurchase program through December 31, 2005, we have repurchased a total of
22,201,720  shares of common stock at an aggregate cost of approximately  $567.2
million.

         PLANNED  MERGER WITH SHURGARD  STORAGE  CENTERS,  INC.: We have entered
into an agreement to acquire  Shurgard,  a publicly held REIT that has interests
in approximately  646 self-storage  facilities  located in the United States and
Europe. Under the agreement,  and based upon our December 31, 2005 balance sheet
and  Shurgard's  September 30, 2005 balance  sheet  included in its related Form
10-Q,  i) we would  issue  0.82  shares of our  common  stock for each  share of
Shurgard  common stock which would increase our common shares  outstanding  from
128,089,563 to approximately  166,460,200  shares,  ii) we would assume Shurgard
debt which totals  approximately $1.8 billion at September 30, 2005,  increasing
our debt outstanding (assuming no prepayment) from $150 million to approximately
$2.0  billion,  and iii) $136  million  of  Shurgard  preferred  stock  would be
redeemed.  The transaction is targeted to close by the end of the second quarter
of 2006.

         Completion of the  transaction  is not assured and is subject to risks,
including that  shareholders of either Public Storage or Shurgard do not approve
the  transaction  or that the other closing  conditions  are not  satisfied.  In
addition,  Shurgard may under limited  circumstances  terminate the agreement to
take a superior  proposal.  Public  Storage  and  Shurgard  are not aware of any
significant  governmental  approvals that are required for  consummation  of the
merger. If any approval or action is required, it is presently contemplated that
Public  Storage and Shurgard would use their  reasonable  best efforts to obtain
such approval.  There can be no assurance that any approvals,  if required, will
be obtained.

         We would  also be  acquiring  Shurgard's  international  operations  in
Europe,  which consist principally of facilities that have been completed in the
last few years and are in various  stages of fill-up.  Shurgard's  international
operations  have not  been  profitable,  and  there is no  assurance  they  will
ultimately  be  profitable.   We  have  limited   experience  in   international
operations,  which may  adversely  impact our ability to operate  profitably  in
Europe.  In connection  with the proposed  acquisition  of  Shurgard's  European
operations, we will be evaluating various strategic alternatives, including, but
not limited to, public or private offerings of securities,  one or more possible
joint ventures, and possible asset acquisitions and/or sales.

                                       60
<PAGE>

         Shurgard's  outstanding borrowings on its lines of credit ($569 million
at September 30, 2005) would become payable  immediately  upon completion of the
merger. In addition, there would be additional cash costs related to the merger,
cash  requirements  for the  redemption of $136 million of Shurgard's  preferred
stock on the merger date, and additional  possible cash  requirements  following
the merger.  Our current cash on hand and  available  borrowing  capacity on our
existing line of credit will be  insufficient  to fund these  immediate  capital
requirements.  We  are  currently  evaluating  several  financing  alternatives,
including,  but not limited to, expanding the borrowing  capacity of our line of
credit,  obtaining  short-term bridge financing,  and raising additional capital
through the issuance of preferred or common securities.  We would generally look
to repay incremental  borrowings,  including  principal payments with respect to
the debt assumed as a result of the merger,  with  retained  operating  cash and
capital raised through the issuance of either preferred or common securities.

         The  foregoing  description  of the terms of our  agreement  to acquire
Shurgard  does not purport to be  complete,  and is qualified in its entirety by
reference  to the full text of the  merger  agreement,  a copy of which is filed
with our current report on Form 8-K dated March 7, 2006.

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

         To limit our  exposure  to market  risk,  we  principally  finance  our
operations and growth with permanent equity capital  consisting either of common
stock,  preferred  stock or retained  operating cash flow. At December 31, 2005,
our debt,  including  preferred stock called for redemption,  as a percentage of
total shareholders' equity (based on book values) was 6.7%.

         Our  preferred  stock is not  redeemable  at the option of the holders.
Except under certain  conditions  relating to the Company's  qualification  as a
REIT,  the  Preferred  Stock  is not  redeemable  by the  Company  prior  to the
following  dates:  Series R - September  28, 2006,  Series S - October 31, 2006,
Series T - January 18, 2007,  Series U - February 19, 2007, Series V - September
30, 2007,  Series W - October 6, 2008,  Series X - November 13, 2008, Series Y -
January 2, 2009, Series Z - March 5, 2009, Series A - March 31, 2009, Series B -
June 30,  2009,  Series C - September  13,  2009,  Series D - February 28, 2010,
Series E - April 27, 2010,  Series F - August 23, 2010,  Series G - December 12,
2010 and Series H - January 19, 2011. On or after the respective  dates, each of
the series of Preferred  Stock will be  redeemable at the option of the Company,
in whole or in part,  at $25 per  depositary  share (or share in the case of the
Series Y), plus accrued and unpaid dividends through the redemption date.

         Our market risk  sensitive  instruments  include notes  payable,  which
totaled  $113,950,000  at  December  31,  2005.  All of our notes  payable  bear
interest at fixed rates. See Note 7 to the consolidated financial statements for
terms,  valuations and approximate  principal maturities of the notes payable as
of December 31, 2005.

         As mentioned  in  "Management's  Discussion  and Analysis of Results of
Operations - Liquidity  and Capital  Resources"  above,  we have entered into an
agreement to acquire Shurgard. This transaction,  if completed,  would result in
our assumption of the following areas of market risk:

         o    FOREIGN CURRENCY RISK:  Shurgard has a significant  amount of debt
              in its European  operations,  and a significant  investment in its
              European  operations.  As a result,  changes in  foreign  currency
              rates  could  have  a  significant  impact  on  their  results  of
              operations and liquidity.

         o    INTEREST  RATE RISK:  $569  million  (at  September  30,  2005) of
              Shurgard's debt  represents  line of credit  borrowings that would
              become  payable  immediately  upon  completion  of the merger.  In
              addition,  there  would be  additional  cash costs  related to the
              merger,  cash  requirements  for the redemption of $136 million of
              Shurgard's  preferred  stock on the merger  date,  and  additional
              possible cash requirements following the merger. Accordingly,  our
              short-term  borrowings  could  increase,  which may be at variable
              rates of interest. As a result, changes in interest rates could in
              the future  have a  significant  impact upon our level of interest
              expense.

                                       61
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------
         The  financial  statements  of the  Company at  December  31,  2005 and
December 31, 2004 and for each of the three years in the period  ended  December
31,  2005 and the report of Ernst & Young  LLP,  Independent  Registered  Public
Accountants,  thereon and the related financial statement schedule, are included
elsewhere  herein.  Reference is made to the Index to Financial  Statements  and
Schedules in Item 15.

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

         Not applicable.

ITEM 9A.  CONTROLS AND PROCEDURES
          -----------------------
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

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

         As of December 31, 2005, the Company  carried out an evaluation,  under
the  supervision  and  with  the  participation  of  the  Company's  management,
including  the  Company's  Chief  Executive  Officer  and  the  Company's  Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e)  under the Securities Act of 1934 as amended).  Based on
that  evaluation,  the Company's  Chief  Executive  Officer and Chief  Financial
Officer  concluded that the Company's  disclosure  controls and procedures  were
effective as of December 31, 2005.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Our management is responsible for establishing and maintaining adequate
internal control over financial  reporting,  as such term is defined in Exchange
Act Rules  13a-15(f).  Under the supervision and with the  participation  of our
management,  including our Chief Executive Officer and Chief Financial  Officer,
we conducted an evaluation  of the  effectiveness  of our internal  control over
financial  reporting  based  on the  framework  in  Internal  Control-Integrated
Framework  issued by the Committee on Sponsoring  Organizations  of the Treadway
Commission.   Based  on  our   evaluation   under  the   framework  in  Internal
Control-Integrated Framework, our management concluded that our internal control
over financial reporting was effective as of December 31, 2005.

         Our  management's  assessment  of the  effectiveness  of  our  internal
control  over  financial  reporting  as of December 31, 2005 has been audited by
Ernst & Young LLP, an independent  registered  public accounting firm, as stated
in their report which is included herein.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

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

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

         Not Applicable.

                                       62

<PAGE>

             Report of Independent Registered Public Accounting Firm


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

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal Control Over Financial  Reporting,  that Public
Storage,  Inc. maintained effective internal control over financial reporting as
of   December   31,   2005,   based  on   criteria   established   in   Internal
Control--Integrated   Framework   issued   by  the   Committee   of   Sponsoring
Organizations  of the Treadway  Commission (the COSO criteria).  Public Storage,
Inc.'s management is responsible for maintaining effective internal control over
financial  reporting  and for its  assessment of the  effectiveness  of internal
control over financial reporting. Our responsibility is to express an opinion on
management's  assessment  and an opinion on the  effectiveness  of the company's
internal control over financial reporting based on our audit.

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

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

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

In our opinion,  management's  assessment that Public Storage,  Inc.  maintained
effective internal control over financial  reporting as of December 31, 2005, is
fairly stated, in all material  respects,  based on the COSO criteria.  Also, in
our  opinion,  Public  Storage,  Inc.  maintained,  in  all  material  respects,
effective  internal  control over  financial  reporting as of December 31, 2005,
based on the COSO criteria.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
Public  Storage,  Inc.  as of  December  31,  2005  and  2004,  and the  related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2005 of Public Storage, Inc.
and our report dated March 10, 2006 expressed an unqualified opinion thereon.

                                                     Ernst & Young LLP

Los Angeles, CA
March 10, 2006

                                       63

<PAGE>

                                    PART III

ITEM 10. Directors and Executive Officers of the Registrant
         --------------------------------------------------

         BOARD  OF  DIRECTORS.   The  following  is   biographical   information
concerning the current directors of Public Storage:

         B. Wayne  Hughes,  age 72, 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 the  Board  and sole  Chief
Executive  Officer.  Mr. Hughes retired as Chief  Executive  Officer in November
2002 and remains Chairman of the Board.  Mr. Hughes is currently  engaged in the
acquisition  and  operation of commercial  properties  in California  and in the
acquisition and operation of self-storage  facilities in Canada.  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 member of the Company's Board.

         Ronald  L.  Havner,  Jr.,  age 48,  has been the  Vice-Chairman,  Chief
Executive  Officer  and a  director  of the  Company  since  November  2002  and
President since July 1, 2005. Mr. Havner joined the Company in 1986 and has held
a variety of  positions,  including  Chairman  of the  Company's  affiliate,  PS
Business Parks, Inc. (PSB),  since March 1998 and was Chief Executive Officer of
PSB from  March  1998  until  August  2003.  He is also a member of the Board of
Governors of the National  Association of Real Estate  Investment  Trusts,  Inc.
(NAREIT) and a director of Business Machine  Security,  Inc., The Mobile Storage
Group and Union BanCal Corporation.

         Harvey Lenkin, age 69, retired as President and Chief Operating Officer
of the Company on June 30, 2005.  Mr.  Lenkin was employed by the Company or its
predecessor  for 27 years and has been a member of the Board of Directors  since
1991.  He has been a director of the  Company's  affiliate,  PS Business  Parks,
Inc.,  since March 1998 and was  President of PSB from 1990 until March 1998. He
is also a director of Paladin Realty Income Properties I, Inc. and a director of
Huntington  Memorial Hospital,  Pasadena,  California and a former member of the
Executive Committee of the Board of Governors of NAREIT.

         Robert J.  Abernethy,  age 66,  Chairman of the Audit  Committee  and a
member of the Compensation  Committee,  has been President of American  Standard
Development Company and of Self-Storage  Management  Company,  which develop and
operate  self-storage  facilities,  since  1976  and  1977,  respectively.   Mr.
Abernethy was controller of a division of Hughes  Aircraft from 1972 to 1974. He
has been a director of the Company since its organization. He is a member of the
board of trustees  of Johns  Hopkins  University,  a director of the Los Angeles
Music  Center,   a  member  of  the  Board  of  Overseers  of  the  Los  Angeles
Philharmonic,  a trustee  of Loyola  Marymount  University,  a  director  of the
Pacific Council on International  Policy, a director of the Atlantic Council,  a
member  of  the   Council  on  Foreign   Relations   and  a  former   California
Transportation  Commissioner.  Mr.  Abernethy is a former member of the board of
directors of the Los Angeles County Metropolitan Transportation Authority and of
the Metropolitan Water District of Southern  California,  a former member of the
California  State Board of Education,  a former member of the  California  State
Arts  Council,  a former  Planning  Commissioner,  a  former  Telecommunications
Commissioner and the former Vice-Chairman of the Economic Development Commission
of the City of Los Angeles.  He received an M.B.A.  from the Harvard  University
Graduate School of Business.

         Dann  V.  Angeloff,  age  70,  Chairman  of  the   Nominating/Corporate
Governance  Committee  and a  member  of the  Compensation  Committee,  has been
President of the Angeloff Company,  a corporate  financial  advisory firm, since
1976.  Mr.  Angeloff is currently the general  partner of a limited  partnership
that in 1974  purchased a  self-storage  facility  operated by the Company.  Mr.
Angeloff  has been a director of the  Company  since its  organization.  He is a
director of Bjurman, Barry Fund, Inc.,  Nicholas/Applegate Fund, ReadyPac Foods,
Retirement Capital Group and SoftBrands, Inc.

                                       64
<PAGE>

         William C. Baker, age 72, a member of  Nominating/Corporate  Governance
Committee,  became a director  of the Company in November  1991.  Mr.  Baker was
Chairman and Chief  Executive  Officer of Callaway Golf Company from August 2004
until August 2005.  From August 1998 through  April 2000,  he was  President and
Treasurer of Meditrust  Operating  Company, a real estate investment trust. From
April 1996 to December  1998,  Mr.  Baker was Chief  Executive  Officer of Santa
Anita Companies,  which then operated the Santa Anita Racetrack. From April 1993
through May 1995, he was President of Red Robin International, Inc., an operator
and  franchisor  of casual dining  restaurants  in the United States and Canada.
From  January  1992  through  December  1995,  Mr.  Baker was Chairman and Chief
Executive Officer of Carolina Restaurant Enterprises,  Inc., a franchisee of Red
Robin  International,  Inc.  From 1991 to 1999,  he was Chairman of the Board of
Coast Newport  Properties,  a real estate brokerage company.  From 1976 to 1988,
Mr. Baker was a principal  shareholder and Chairman and Chief Executive  Officer
of Del Taco,  Inc.,  an operator  and  franchisor  of fast food  restaurants  in
California.  He is a director of La Quinta, Inc., California Pizza Kitchen, Javo
Beverage Company and Callaway Golf Company.

         John T.  Evans,  age 67, a member  of the  Audit  Committee  and of the
Nominating/Corporate  Governance Committee,  became a director of the Company in
August  2003.  Mr.  Evans has been a partner in the law firm of Osler,  Hoskin &
Harcourt LLP, Toronto, Canada from April 1993 to the present and in the law firm
of Blake, Cassels & Graydon LLP, Toronto,  Canada from April 1966 to April 1993.
Mr.  Evans  specializes  in business law  matters,  securities,  restructurings,
mergers and  acquisitions and advising on corporate  governance.  Mr. Evans is a
director of Cara Operations  Inc.,  Kubota Metal  Corporation,  and Toronto East
General  Hospital.  Until  August  2003,  Mr.  Evans was a director  of Canadian
Mini-Warehouse  Properties Ltd., a Canadian corporation owned by B. Wayne Hughes
and members of his family.

         Uri P. Harkham, age 57, a member of the Compensation Committee,  became
a director of the Company in March 1993.  Mr. Harkham has been the President and
Chief Executive Officer of the Jonathan Martin Fashion Group,  which specializes
in  designing,   manufacturing  and  marketing   women's  clothing,   since  its
organization in 1976. Since 1978, Mr. Harkham has been the Chairman of the Board
of Harkham  Properties,  a real estate firm  specializing in buying and managing
warehouses and retail and mixed-use real estate in California.

         B. Wayne  Hughes,  Jr.,  age 46,  became a director  of the  Company in
January 1998. He was employed by the Company from 1989 to 2002,  serving as Vice
President - Acquisitions  of the Company from 1992 to 2002.  Mr. Hughes,  Jr. is
currently Vice President of American Commercial Equities, LLC, a company engaged
in the acquisition and operation of commercial properties in California and is a
director  of  Canadian  Mini-Ware  Properties  Ltd.,  a company  engaged  in the
acquisition,  development and operation of self-storage facilities in Canada. He
is the son of B. Wayne Hughes.

         Daniel C. Staton, age 53, Chairman of the Compensation  Committee and a
member of the Audit Committee, became a director of the Company in March 1999 in
connection  with the merger of Storage  Trust Realty,  a real estate  investment
trust,  with the  Company.  Mr.  Staton was Chairman of the Board of Trustees of
Storage  Trust  Realty  from  February  1998  until  March 1999 and a Trustee of
Storage  Trust Realty from  November  1994 until March 1999.  He is President of
Walnut  Capital  Partners,  an investment  and venture  capital  company and the
Co-Chief  Executive Officer of PMGI (formerly Media General,  Inc.), a print and
electronic  media  company.  Mr.  Staton  was the Chief  Operating  Officer  and
Executive Vice President of Duke Realty Investments,  Inc. from 1993 to 1997 and
a director of Duke Realty  Investments,  Inc. from 1993 until August 1999.  From
1981  to  1993,  Mr.  Staton  was a  principal  owner  of Duke  Associates,  the
predecessor of Duke Realty Investments, Inc. Prior to joining Duke Associates in
1981, he was a partner and general  manager of his own moving  company,  Gateway
Van & Storage, Inc. in St. Louis, Missouri. From 1986 to 1988, Mr. Staton served
as president of the Greater  Cincinnati  Chapter of the National  Association of
Industrial and Office Parks.

         AUDIT  COMMITTEE  AND  AUDIT  COMMITTEE  FINANCIAL  EXPERT.  The  Audit
Committee  of the  Board of  Directors  is  comprised  of  Robert  J.  Abernethy
(chairman),  John T. Evans and Daniel C.  Staton.  The primary  functions of the
Audit Committee are to assist the Board in fulfilling its  responsibilities  for
oversight  of (1) the  integrity  of the  Company's  financial  statements,  (2)
compliance  with  legal and  regulatory  requirements,  (3) the  qualifications,
independence  and performance of the independent  registered  public  accounting
firm, and (4) the scope and results of internal audits,  the Company's  internal
controls over financial  reporting and the performance of the Company's internal
audit function. Among other things, the Audit Committee appoints,  evaluates and
determines the  compensation of the  independent  registered  public  accounting
firm;  reviews and approves the scope of the annual audit, the audit fee and the
financial  statements;  prepares the Audit Committee report for inclusion in the
annual proxy statement; and annually reviews its charter and performance.

                                       65
<PAGE>

         The Audit  Committee  operates under a written  charter  adopted by the
Board of Directors, a copy of which is available at  www.publicstorage.com.  The
Board of Directors  has  determined  that the  Chairman of the Audit  Committee,
Robert J. Abernethy and Audit Committee member Daniel C. Staton, each qualify as
an audit  committee  financial  expert  within  the  meaning of the rules of the
Securities  and  Exchange  Commission.  The Board has  further  determined  that
Messrs.  Abernethy  and Staton are each  independent  within the meaning of Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act.

         CODE OF ETHICS. The Board of Directors has adopted a Directors' Code of
Ethics as well as Business Conduct Standards applicable to directors,  officers,
and  employees.  The Board has also  adopted  a Code of  Ethics  for its  senior
financial  officers,   including  the  Company's  principal  executive  officer,
principal  financial  officer  and  principal   accounting  officer,   that  has
additional  requirements  for those  individuals.  The code covers those persons
serving  as the  Company's  principal  executive  officer,  principal  financial
officer and principal  accounting  officer,  currently Ronald L. Havner, Jr. and
John  Reyes.  Copies of the  Directors'  Code of Ethics,  the  Business  Conduct
Standards and the Code of Ethics for Senior Financial  Officers are available on
our  website at  www.publicstorage.com/Corporateinformation/CorpGovernance.aspx.
Any  amendments  to or  waivers of the code of ethics  granted to the  Company's
executive  officers  will be  published  promptly  on our  website  or by  other
appropriate  means in accordance with applicable SEC and New York Stock Exchange
requirements.

         SECTION 16(A) COMPLIANCE.  Section 16(a) of the Securities Exchange Act
of 1934 requires the Company's directors and executive officers, and persons who
own more than 10% of any registered class of the Company's equity  securities to
file with the Securities and Exchange  Commission  ("SEC")  initial  reports (on
Form 3) of ownership of the Company's  equity  securities and to file subsequent
reports (on Form 4 or Form 5) when there are changes in such ownership.  The due
dates of such reports are established by statute and the rules of the SEC. Based
on a review of the reports submitted to the Company,  the Company believes that,
with respect to reports  filed  during the fiscal year ended  December 31, 2005,
all directors and officers made timely reports.

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

         Ronald  L.  Havner,  Jr.,  age 48,  has been the  Vice-Chairman,  Chief
Executive  Officer  and a  director  of the  Company  since  November  2002  and
President  since July 1, 2005.  Mr.  Havner has been  Chairman of the  Company's
affiliate,  PS  Business  Parks,  Inc.  (PSB),  since  March  1998 and was Chief
Executive  Officer of PSB from March 1998 until August 2003. He is also a member
of the Board of Governors of the National  Association of Real Estate Investment
Trusts,  Inc.  (NAREIT) and a director of Business Machine  Security,  Inc., The
Mobile Storage Group and Union BanCal Corporation.

         John Reyes, age 45, a certified public  accountant,  joined the Company
in 1990 and was  Controller of the Company from 1992 until December 1996 when he
became Chief  Financial  Officer.  He became a Vice  President of the Company in
November 1995 and a Senior Vice President of the Company in December 1996.  From
1983 to 1990, Mr. Reyes was employed by Ernst & Young.

         John S. Baumann,  age 45, became Senior Vice  President and Chief Legal
Officer of the Company in June 2003.  From 1998 to 2002,  Mr. Baumann was Senior
Vice  President  and General  Counsel of Syncor  International  Corporation,  an
international  high technology health care services company.  From 1995 to 1998,
he was Associate General Counsel of KPMG LLP, an international  accounting,  tax
and consulting firm.

         John E. Graul,  age 54,  became Senior Vice  President  and  President,
Self-Storage  Operations,  in February 2004, with overall responsibility for the
Company's national  operations.  From 1982 until joining the Company,  Mr. Graul
was employed by  McDonald's  Corporation  where he served in various  management
positions,  most recently as Vice President and General Manager - Pacific Sierra
Region.

                                       66
<PAGE>

         David F. Doll, age 47, became Senior Vice President and President, Real
Estate Group,  in February 2005, with  responsibility  for Company's real estate
activities,  including property  acquisitions,  developments,  and repackagings.
Before  joining the Company,  Mr. Doll was Senior  Executive  Vice  President of
Development for Westfield Corporation,  a major international owner and operator
of shopping malls, where he was employed since 1995.

ITEM 11. EXECUTIVE COMPENSATION
         ----------------------

         The  following  table sets forth  certain  information  concerning  the
annual and long-term compensation paid to the Company's Chief Executive Officer,
and the four other most highly  compensated  persons who were executive officers
of the Company on December 31, 2005 (the "Named  Executive  Officers") for 2005,
2004 and 2003.

<TABLE>
<CAPTION>

                                                                                            Long-Term
                                               Annual Compensation                     Compensation Awards
                                                                           l      Restricted       Securities
Name and                                                        Other Annual      Stock Unit        Underlying         All Other
Principal Position        Year      Salary         Bonus       Compensation (1)  Awards ($)(2)      Options (#)     Compensation (3)
------------------       ------    ---------     ----------    ----------------  -------------      -----------     ----------------

<S>                       <C>       <C>          <C>                     <C>             <C>          <C>              <C>
Ronald L. Havner, Jr.     2005      $659,875     $715,000                                --           83,000           $8,400
   (4) Vice-Chairman,
   Chief Executive        2004       392,700      650,000                 --             --          166,000            6,150
   Officer and President
                          2003       313,800      500,000                 --             --               --            6,000

John Reyes                2005      $318,750      350,000                 --             --               --          $25,400
   Senior Vice
   President and Chief    2004       260,000      275,000                 --       $476,500          100,000           15,150
   Financial Officer
                          2003       238,800      250,500                 --             --               --            6,000

John S. Baumann           2005      $210,000      100,000                 --             --               --          $16,900
   Senior Vice
   President and Chief    2004       210,000      160,000                 --       $238,250           20,000            7,650
   Legal Officer
                          2003       105,800(5)    70,000                 --             --           60,000               --

John E. Graul             2005      $250,000      240,000                 --       $420,900           40,000          $22,650
   Senior Vice
   President and          2004       204,600(6)   200,000            140,600 (7)         --           50,000               --
   President,
   Self-Storage
   Operations

David F. Doll             2005       $205,538(8)  240,000                          $283,250           50,000           $9,500
   Senior Vice President
   President and President,
   Real Estate Group

----------------
</TABLE>


(1)    In  accordance  with  SEC  rules,  other  compensation  in  the  form  of
       perquisites  and  other  personal  benefits  has  been  omitted  in those
       instances  where the  aggregate of such  perquisites  and other  personal
       benefits  did not exceed the lesser of $50,000 or 10% of the total annual
       salary and bonus for the named executive officer for such year.

                                       67

<PAGE>

(2)    Represents  the value of grants of restricted  stock units made under the
       2001 Stock Option and  Incentive  Plan (with the value of one  restricted
       stock unit deemed  equivalent  to the value of one share of Common  Stock
       and based on the closing  price of the Common Stock on the New York Stock
       Exchange on the date of grant).  The restricted  stock units set forth in
       this table vest 20% on each of the first, second, third, fourth and fifth
       anniversary  of the date of grant.  On each vesting date, the holder will
       receive shares of Common Stock representing the applicable  percentage of
       the total number of restricted stock units granted. Holders of restricted
       stock units receive  payments equal to the dividends that would have been
       paid on an  equivalent  number of shares of Common  Stock.  The grants of
       restricted  stock units do not entitle the holders to any voting  rights.
       As of December 31, 2005, the total holdings of restricted  stock units of
       the Named Executive  Officers and the market value of such holdings (with
       the  value of one unit  deemed  equivalent  to the  value of one share of
       Common Stock on the New York Stock Exchange based on the closing price on
       December  30,  2005  of  $67.72)  were as  follows:  Mr.  Reyes -  10,000
       restricted stock units  ($677,200),  Mr. Baumann - 5,000 restricted stock
       units  ($338,600),  Mr. Graul - 7,500 restricted stock units  ($507,900),
       Mr. Doll - 5,000 restricted stock units ($338,600).

(3)    All Other Compensation  consists solely of employer  contributions to the
       401(k) Plan (3% of the annual cash compensation up to a maximum of $8,400
       in  2005)  and  dividend   equivalent  payments  based  on  ownership  of
       restricted  stock units in the case of Mr. Reyes of $17,000;  Mr. Baumann
       of $8,500; Mr. Graul of $14,250 and Mr. Doll of $9,500.

(4)    Mr. Havner  succeeded Mr. Hughes as Chief  Executive  Officer in November
       2002.  Compensation  to  Mr.  Havner  in  this  table  does  not  include
       compensation  paid to Mr.  Havner in 2003 and 2004 by PS Business  Parks,
       Inc., an affiliate of the Company.

(5)    For the period June 30, 2003,  the date Mr.  Baumann  joined the Company,
       through December 31, 2003.

(6)    For the period  February 23, 2004, the date Mr. Graul joined the Company,
       through December 31, 2004.

(7)    Represents reimbursement of relocation expenses.

(8)    For the period  February 21, 2005,  the date Mr. Doll joined the Company,
       through December 31, 2005.


         The following table sets forth certain information relating to options
to purchase shares of Common Stock granted to the Named Executive Officers
during 2005.

<TABLE>
<CAPTION>

                        OPTION GRANTS IN LAST FISCAL YEAR
                                Individual Grants
-----------------------------------------------------------------------------------------
                               Number of      Percent of                                      Potential Realizable Value
                              Securities    Total Options                                      at Assumed Annual Rates
                              Underlying      Granted to     Exercise                        of Share Price Appreciation
                                Options      Employees in      Price                               for Option Term
            Name              Granted (#)    Fiscal Year      ($/Sh)     Expiration Date         5%             10%
 --------------------------- -------------- --------------- ------------ ----------------- - -----------------------------

<S>                             <C>           <C>          <C>            <C>              <C>             <C>
Ronald L. Havner, Jr.           83,000        28.82%       $69.87         12/8/2015        $3,647,000      $9,242,000
John Reyes                           0        --            --            --                       --              --
John S. Baumann                      0        --            --            --                       --              --
John E. Graul                   40,000        13.89%       $56.12         3/3/2015          1,412,000       3,578,000
David F. Doll                   50,000        17.36%       $55.66         2/21/2015         1,750,000       4,435,000

</TABLE>

         Options  granted  to Mr.  Havner  become  exercisable  in  three  equal
installments  beginning on the first  anniversary of the date of grant.  Options
granted  in 2005 to  Messrs.  Doll and Graul  become  exercisable  in five equal
installments beginning on the first anniversary of the date of grant.

         The following table sets forth certain information concerning exercised
and  unexercised  options held by the Named  Executive  Officers at December 31,
2005.

                                       68

<PAGE>

               AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                         FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>

                                                                         Number of                 Value of Unexercised
                                Shares                             Securities Underlying               In-the-Money
                              Acquired on         Value             Unexercised Options                 Options at
           Name               Exercise(#)      Realized($)         at December 31, 2005           December 31, 2005 (1)
-----------------------       -----------     ------------  -------------------------------  -------------------------------
                                                            Exercisable      Unexercisable   Exercisable     Unexercisable
                                                            ------------     --------------  -------------   ---------------
<S>                                  <C>             <C>         <C>             <C>            <C>             <C>
Ronald L. Havner, Jr.                --              --          220,333         193,667        $6,927,538      $1,283,737
John Reyes                           --              --          122,000          80,000         4,739,465       1,605,600
John S. Baumann                      --              --           28,000          52,000           892,680       1,539,720
John E. Graul                        --              --           10,000          80,000           197,400       1,253,600
David F. Doll                        --              --               --          50,000                --         603,000
--------------
</TABLE>


(1)    Based on closing  price of $67.72 per share of Common  Stock on  December
       30, 2005, as reported by the New York Stock Exchange.  On March 13, 2006,
       the closing  price per share of Common  Stock as reported by the New York
       Stock Exchange was $82.00.

                                       69

<PAGE>

                      REPORT OF THE COMPENSATION COMMITTEE
                            ON EXECUTIVE COMPENSATION

         The Compensation  Committee (the  "Committee") is composed  entirely of
independent  directors  and has  furnished  the  following  report on  executive
compensation for fiscal 2005.

         EXECUTIVE  COMPENSATION  PHILOSOPHY.  Public Storage pays its executive
officers  compensation the Committee deems  appropriate in view of the nature of
the Company's business,  the performance of individual  executive officers,  and
the Company's  objective of providing  incentives  to its executive  officers to
achieve a level of  individual  and Company  performance  that will maximize the
value of shareholders'  investment in Public Storage.  To those ends, the Public
Storage  compensation  program  consists  of  payment  of  a  base  salary  and,
potentially,  bonus  compensation,  and incentive  awards of options to purchase
shares of Common Stock or of restricted stock or restricted stock units.  Grants
of options and  restricted  stock units are made under the 2001 Stock Option and
Incentive Plan (the "2001 Plan").

         CASH  COMPENSATION.  Base salary  levels are based  generally on market
compensation  rates and each individual's role at Public Storage.  The Committee
determines  market   compensation  rates  by  reviewing  public  disclosures  of
compensation  paid to executive  officers by other REITs of comparable  size and
market  capitalization.  Some of the  REITs  whose  executive  compensation  the
Committee  considered  in  establishing  the  compensation  it pays to executive
officers  are included in the NAREIT  Equity  Index  referred to below under the
caption  "Stock Price  Performance  Graph."  Generally,  the Committee  seeks to
compensate Public Storage executives at levels consistent with the middle of the
range of amounts paid by REITs deemed  comparable by the  Committee.  Individual
salaries may vary based on the experience and contribution to overall  corporate
performance by a particular executive officer.

         The Committee bases its payment of base compensation and annual bonuses
on corporate,  business unit and individual  performance.  In establishing  base
compensation  and individual  bonuses,  the Committee  takes into account Public
Storage's overall profitability,  internal revenue growth and revenue growth due
to  acquisitions,  and the  executive  officer's  contribution  to the Company's
growth and  profitability,  as well as compensation paid to executive  officers,
including  the  chief  executive  officer,  at REITs  deemed  comparable  by the
Committee.

         EQUITY-BASED  COMPENSATION.  The Committee believes that Public Storage
executive officers should have an incentive to improve the Company's performance
by having  an  ongoing  stake in the  success  of the  Company's  business.  The
Committee  seeks to create this incentive by granting to  appropriate  executive
officers  stock options that have an exercise price of not less than 100% of the
fair  market  value of the  underlying  stock on the date of grant,  so that the
executive officer will not profit from the option unless the price of the Common
Stock increases.  Options granted by the Committee also are designed to help the
Company retain executive officers because the options are not exercisable at the
time of grant, and achieve their maximum value only if the executive  remains in
the Company's employ for a period of years.

         The 2001 Plan also  authorizes  the Company to compensate its executive
officers and other employees with grants of restricted stock or restricted stock
units.  Restricted  stock and  restricted  stock units  increase in value as the
value of the  Common  Stock  increases,  and vest  over time  provided  that the
executive  officer  continues  to be  employed by Public  Storage.  Accordingly,
awards of  restricted  stock or  restricted  stock units  serve the  Committee's
objectives of retaining  executive  officers and other  employees and motivating
them to  advance  the  interests  of Public  Storage  and its  shareholders.  No
restricted stock units were granted to Mr. Havner during 2005.  Restricted stock
units were granted to other Named  Executive  Officers as reflected above in the
table captioned "Summary Compensation Table".

         CEO COMPENSATION.  In December 2004, following a review of compensation
of Chief Executive  Officers at comparable  REITs,  the Committee set three year
compensation targets for Mr. Havner's base salary, bonus target and stock option
grants. The targets were conditioned on Mr. Havner's  continued  employment with
the  Company  and  successful  achievement  of  performance  and other goals set
annually  by  the  Committee.  Accordingly,  in  November  2005,  the  Committee
increased  Mr.  Havner's base salary to $715,000.  In early 2006,  the Committee

                                       70

<PAGE>

awarded Mr. Havner a bonus for 2005  performance  of $715,000.  The  Committee's
decision to increase Mr.  Havner's  base  compensation  and his 2005 bonus award
were based on the  achievement  of three  goals  related to (1) FFO (funds  from
operations),  (2)  revenues,  and (3) the  Company's  FAD (funds  available  for
distribution).  The  Committee  noted that the Company's  performance  under Mr.
Havner's  leadership during 2005 with respect to these three goals substantially
exceeded the targets set in early 2005.

         Based on the same factors  described  above, the Committee also awarded
Mr.  Havner an option to acquire  83,000  shares of common  stock on December 8,
2005,  at an  exercise  price of $69.87,  the closing  price for Public  Storage
common stock on that date. Mr. Havner's options vest over three years and have a
ten year term. Under the  compensation  program put in place by the Committee in
2004, provided that Mr. Havner continues to be employed by the Company and meets
the  performance  and other goals set by the  Committee,  he will be eligible to
receive a 10% salary and bonus  target  increase  in 2006 and to receive a stock
option award of 83,000  shares of common stock in December of 2006.  In February
2006, the Committee set the performance targets for 2006 incentive  compensation
for the CEO and the other  Named  Executive  Officers  as  achievement  of goals
related to (1) FFO (funds from operations),  (2) revenues, and (3) the Company's
FAD (funds available for distribution).

         CODE SECTION  162(m).  Section  162(m) of the Code imposes a $1,000,000
limit on the annual deduction that may be claimed for compensation  paid to each
of the chief  executive  officer  and four other  highest  paid  employees  of a
publicly held corporation.  Certain performance-based compensation awarded under
a plan approved by shareholders is excluded from that  limitation.  In 2005, the
Company's shareholders approved the Company's  Performance-Based  Plan, which is
designed to permit the  Compensation  Committee to make awards that will qualify
for  deduction  as  performance-based  compensation.  The  Committee  intends to
structure awards to qualify for deductibility under Section 162(m) to the extent
consistent with business requirements.

                             COMPENSATION COMMITTEE

                           Daniel C. Staton (Chairman)
                           Robert J. Abernethy
                           Dann V. Angeloff
                           Uri P. Harkham

                 EMPLOYMENT AGREEMENTS AND TERMINATION PAYMENTS

         B. Wayne Hughes.  Pursuant to a consulting  arrangement approved by the
Compensation  Committee  and by the  disinterested  directors in March 2004,  B.
Wayne  Hughes,  Chairman of the Board and former Chief  Executive  Officer,  (1)
agreed to be available for up to 50 partial days a year for consulting services,
(2) receives  compensation  of $60,000 per year and the use of a car, and (3) is
provided with an executive  assistant and office at the Company's  headquarters.
The consulting arrangement expires on December 31, 2013.

         Harvey Lenkin. In August 2003, Harvey Lenkin entered into an employment
agreement with the Company that provided, among other terms, and that Mr. Lenkin
would  continue  to serve as  President  and Chief  Operating  Officer of Public
Storage until his retirement on June 30, 2005,  with  compensation  at a rate of
$550,000 per year.  Effective July 2, 2005 upon his retirement from the Company,
Mr. Lenkin  entered into a consulting  agreement  with the Company that provides
for  compensation  of $12,500 per month.  The  agreement  terminates on June 30,
2006, unless earlier  terminated on sixty days prior notice by the Company.  The
agreements  were  approved  by the  Compensation  Committee  and by the Board of
Directors (with Mr. Lenkin not participating).

                            COMPENSATION OF DIRECTORS

         Each director who is not an officer or employee of Public Storage or an
affiliate  is  considered  an  Outside   Director  and  receives  the  following
compensation:

                                       71

<PAGE>

     o   An annual retainer of $30,000 paid quarterly;

     o   Each  member  of  the  Audit,   Compensation  and  Nominating/Corporate
         Governance  Committees  of the Board is paid an  annual  fees of $5,000
         paid quarterly,  with the Chairman  receiving an additional  $2,500 per
         year; and

     o   In addition,  John T. Evans,  received a fee of $25,000 for services as
         chairman of a special  committee in 2005,  and the other members of the
         special  committee,  Robert J.  Abernethy  and Daniel C.  Staton,  each
         received $10,000.

         The following table presents the  compensation  provided by the Company
to Outside Directors (which do not include B. Wayne Hughes and Ronald L. Havner,
Jr.) for fiscal year ended December 31, 2005.

                       Outside Director Compensation Table

<TABLE>
<CAPTION>

                                                 Board/Committee
                                Annual Cash     Meeting & Chairman                       Stock Underlying
Name                             Retainer              Fees               Total          Options Granted
----------------------------- ---------------- --------------------- ----------------- ---------------------
<S>                                <C>                 <C>                 <C>                     <C>
Robert J. Abernethy                $30,000             $22,500             $52,500                 2,500

Dann V. Angeloff                   $30,000             $12,500             $42,500                 2,500

William C. Baker                   $30,000              $5,000             $35,000                 2,500
-
John T. Evans                      $30,000             $35,000             $65,000                 2,500

Uri P. Harkham                     $30,000              $5,000             $35,000                 2,500

B. Wayne Hughes, Jr.               $30,000                   -             $30,000                 2,500

Harvey Lenkin (a) (b)              $15,000                   -             $15,000                 2,500

Daniel C. Staton                   $30,000             $22,500             $52,500                 2,500

</TABLE>

(a)  Pro-rated for periods of service as an Outside Director.

(b)  B. Wayne Hughes and Harvey  Lenkin are also  compensated  under  consulting
     agreements with Public Storage. See "Employment  Agreements and Termination
     Payments" above.

         The  Company's  policy is also to reimburse  directors  for  reasonable
expenses.

DIRECTOR EQUITY AWARDS

         Each of the Company's  Outside  Directors who receives  directors' fees
also  receives  automatic  grants of  options  under the 2001  Stock  Option and
Incentive Plan (the "2001 Plan").  Ronald L. Havner,  Jr. is eligible to receive
discretionary  grants of options and restricted stock under the 2001 Plan in his
capacity as President & Chief  Executive  Officer of Public  Storage.  Under the
2001 Plan,  each new  Outside  Director  is, upon the date of his or her initial
election  by the  Board or the  shareholders  to serve as an  Outside  Director,
automatically granted a non-qualified option to purchase 15,000 shares of common
stock.  After each annual meeting of  shareholders,  each Outside  Director then
duly elected and serving (other than an Outside  Director  initially  elected to
the Board at such annual meeting) is  automatically  granted,  as of the date of
such annual meeting,  a non-qualified  option to purchase 2,500 shares of common
stock, so long as such person has attended, in person or by telephone,  at least
75% of the meetings held by the Board of Directors and of any committee on which
the director served during the immediately preceding calendar year.

           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Compensation Committee is comprised of Daniel C. Staton (Chairman),
Robert J. Abernethy,  Dann V. Angeloff and Uri P. Harkham, none of whom has ever
been an employee of the Company. No member of the committee had any relationship
with us requiring  disclosure under Item 404 of SEC Regulation S-K. No executive

                                       72

<PAGE>

officer  of Public  Storage  serves on the  compensation  committee  or board of
directors of any other entity which has an executive  officer who also serves on
the  Compensation  Committee or Board of Directors of Public Storage at any time
during 2005.

         Messrs.  Hughes,  Havner,  Lenkin  and  Hughes,  Jr.,  who  are or were
officers of Public Storage, are members of the Board of Directors.

                          STOCK PRICE PERFORMANCE GRAPH

         The graph set forth below  compares the yearly  change in the Company's
cumulative total shareholder return on its Common Stock for the five-year period
ended  December  31, 2005 to the  cumulative  total  return of the  Standard and
Poor's 500 Stock Index ("S&P 500 Index") and the  National  Association  of Real
Estate  Investment  Trusts  Equity Index  ("NAREIT  Equity  Index") for the same
period (total shareholder return equals price appreciation plus dividends).  The
stock price  performance  graph assumes that the value of the  investment in the
Company's Common Stock and each index was $100 on December 31, 2000 and that all
dividends were reinvested. The stock price performance shown in the graph is not
necessarily indicative of future price performance.

[Graph Omitted]
<TABLE>
<CAPTION>

---------------------------- --------------- --------------- --------------- ---------------- --------------- ---------------
                                12/31/00        12/31/01        12/31/02        12/31/03         12/31/04        12/31/05
---------------------------- --------------- --------------- --------------- ---------------- --------------- ---------------
<S>                             <C>              <C>            <C>            <C>               <C>             <C>
Public Storage, Inc.            $    100.00      $    144.82    $    147.57    $    208.29       $    277.44     $     347.18
S&P 500                              100.00            88.11           68.64         88.33             97.94           102.75
NAREIT Equity                        100.00           113.93          118.29        162.21            213.43           239.39

</TABLE>

                                       73

<PAGE>

ITEM 12. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------
         and Related Shareholder Matters
         -------------------------------

         The following  table sets forth  information as of the dates  indicated
with respect to persons known to the Company to be the beneficial owners of more
than 5% of the outstanding  shares of the Common Stock ("Common  Shares") or the
Depositary Shares:

<TABLE>
<CAPTION>

                                                                                        Depositary Shares Each
                                                                                       Representing 1/1,000 of a
                                                            Common Shares           Share of Equity Stock, Series A
                                                         Beneficially Owned               Beneficially Owned
                                                   -----------------------------    -------------------------------
                                                        Number          Percent          Number          Percent
                Name and Address                      of Shares        of Class        of Shares        of Class
----------------------------------------           -------------      ----------    --------------     ------------
<S>                                                  <C>                 <C>              <C>               <C>
B. Wayne Hughes (1)                                  19,901,850          15.4%            55,685            .6%
B. Wayne Hughes, Jr. (1)                              4,736,080           3.7%            39,089            .4%
Tamara Hughes Gustavson (1)                          21,470,312          16.6%         1,201,354          13.7%
B. Wayne Hughes, Jr. and
  Tamara Hughes Gustavson (1)                            11,348            --                 43            --
                                                   -------------      ----------    --------------     ------------
     Total                                           46,119,590          35.7%         1,296,171          14.8%
701 Western Avenue
Glendale, California 91201

Cohen & Steers Capital Management, Inc.                   (3)            (3)             826,200           9.4%
757 Third Avenue
New York, New York 10017 (2)
----------------
</TABLE>

(1)  This information is as of March 3, 2006. B. Wayne Hughes,  B. Wayne Hughes,
     Jr. and Tamara Hughes Gustavson have filed a joint Schedule 13D, as amended
     most recently on November 1, 2002,  reporting their collective ownership of
     Common Shares and Depositary Shares and may constitute a "group" within the
     meaning  of  section  13(d)(3)  of the  Securities  Exchange  Act of  1934,
     although each of these persons disclaims beneficial ownership of the shares
     owned by the others.

(2)  This  information is as of December 31, 2005 (except that the percent shown
     is based on the  Depositary  Shares  outstanding  at March 3,  2006) and is
     based on a  Schedule  13G  filed  on  February  14,  2006 by Cohen & Steers
     Capital Management,  Inc. ("CSCM"),  an investment adviser registered under
     the Investment Advisers Act of 1940. CSCM reports in this Schedule 13G that
     it has sole voting power of 802,400  Depositary Shares and sole dispositive
     power of 826,200 Depositary Shares.

(3)  Less than 5%.

         SECURITY OWNERSHIP OF MANAGEMENT

         The  following  table sets forth  information  as of February  28, 2006
concerning  the  beneficial  ownership of the Common  Shares and the  Depositary
Shares of each director of the Company,  the Company's Chief Executive  Officer,
the other four most highly  compensated  persons who were executive  officers of
the Company on December 31, 2005 and all directors  and executive  officers as a
group:

                                       74

<PAGE>

<TABLE>
<CAPTION>

                                       Common Shares:                                Depositary Shares Each Representing
                                       Beneficially Owned (excluding options)(1)     1/1,000 of a Share of Equity Stock,
                                       Shares Subject to Options(2)                  Series A Beneficially Owned
                                       -----------------------------------------     -----------------------------------------
         Name                            Number of Shares                Percent      Number of Shares               Percent
---------------------------            ------------------                -------     -----------------             -----------
<S>                                         <C>                             <C>          <C>                            <C>
B. Wayne Hughes                             19,901,850                      15.4%        55,685                         .6%

Ronald L. Havner, Jr.                           20,300                         *             --                          *
                                               220,333(2)                     .2%
                                               -------                        ---
                                               240,633                       .2%

Robert J. Abernethy                             91,567                         *          2,108                          *
                                                19,999(2)                      *
                                               -------                        ---
                                               111,566                         *

Dann V. Angeloff                                58,554(4)                      *         17,000                           *
                                                 9,999(2)                      *
                                               -------                        ---
                                                68,553                         *

William C. Baker                                25,000                         *            455                          *
                                                19,999(2)                      *
                                               -------                        ---
                                                44,999                         *

John T. Evans                                      600                         --            --                          --
                                                10,833(2)                      *
                                               -------                        ---
                                                11,433                         --

Uri P. Harkham                                  53,329                         *          3,402                          *
                                                12,499(2)                      *
                                               -------                        ---
                                                64,828                         *

B. Wayne Hughes, Jr.                         4,747,428(5)                    3.7%        35,921(5)                      .4%

Harvey Lenkin                                  134,279(3)                    .1%          3,966(3)                       *

Daniel C. Staton                                14,038                         *             47                          *
                                                 4,166(2)                      *
                                               -------                        ---
                                                18,204                         *

John Reyes                                      27,669                         *          1,905                          *
                                               122,000(2)                     .1%
                                               -------                        ---
                                               149,669                        .1%

John S. Baumann                                  1,000                         *             --                          --
                                                28,000(2)
                                               -------                        ---
                                                29,000

John E. Graul                                    1,500                         *             --                          --
                                                28,000(2)
                                               -------                        ---
                                                29,500

David F. Doll                                    1,000                         *             --                          --
                                                10,000(2)
                                               -------                        ---
                                                11,000

                                            25,078,114 (1)(3)(4)(5)(6)      19.4%
All Directors and Executive Officers           485,828 (2)                    .4%
as a Group                                     -------                        ---
(14 persons)                                25,563,942                      19.8%       120,489(1)(3)(5)(6)            1.4%
---------------
 *      Less than 0.1%

</TABLE>

                                       75

<PAGE>

(1)  Represents Common Shares or Depositary Shares, as applicable,  beneficially
     owned as of March 1, 2006.  Except as  otherwise  indicated  and subject to
     applicable  community property and similar statutes,  the persons listed as
     beneficial  owners of the shares have sole voting and investment power with
     respect to such  shares.  Includes  shares  credited to the accounts of the
     executive  officers of the Company that are held in the 401(k)  Plan.  Does
     not include  restricted  stock units  described  in note (1) to the summary
     compensation   table  under   "Compensation  -  Compensation  of  Executive
     Officers" unless such units would vest within 60 days of March 1, 2006.

(2)  Represents options  exercisable within 60 days of March 1, 2006 to purchase
     Common Shares.

(3)  Common Shares include 2,776 Common Shares held of record or beneficially by
     Mr.  Lenkin's  spouse  or a son as to  which  each  has  investment  power.
     Depositary   Shares  include  425  Depositary  Shares  held  of  record  or
     beneficially  by  Mr.  Lenkin's  spouse  or a son  as  to  which  each  has
     investment power.

(4)  Includes 2,000 Common Shares held by Mr.  Angeloff's spouse as to which she
     has investment power.

(5)  Common Shares include 378,434 Common Shares, held of record or beneficially
     by Mr.  Hughes,  Jr.'s  spouse  or  their  children  as to  which  she  has
     investment  power and 11,348 Common Shares held jointly by Mr. Hughes,  Jr.
     and  Ms.  Hughes  Gustavson  as  to  which  they  share  investment  power.
     Depositary  shares  include  1,371  Depositary  Shares  held of  record  or
     beneficially by Mr. Hughes,  Jr.'s spouse or their children as to which she
     has investment  power and 43 Depositary  Shares held jointly by Mr. Hughes,
     Jr. and Ms. Hughes Gustavson as to which they share investment power.

(6)  Includes  shares held of record or beneficially by members of the immediate
     family of  executive  officers of the  Company  and shares  credited to the
     accounts of the  executive  officers  of the  Company  that are held in the
     401(k) Plan.

         The following  table sets forth  information as of December 31, 2005 on
the Company's equity compensation plans:

<TABLE>
<CAPTION>

                                       Number of securities          Weighted average   Number of securities
                                         to be issued upon          exercise price of    remaining available
                                            exercise of                outstanding       for future issuance
                                       outstanding options,         options, warrants       under equity
                                        warrants and rights             and rights       compensation plans
                                       ---------------------        ------------------  --------------------
Equity  compensation  plans approved
<S>                                            <C>                       <C>                  <C>
 by security holders (a)..........             1,644,807     (b)         $    43.84           2,181,000

 Equity    compensation   plans   not
 approved by security holders (c).                78,169                      23.41             831,671

</TABLE>

(a)  The Company's  stock option and stock  incentive  plans are described  more
     fully in Note 13 to the consolidated financial statements.  All plans other
     than the 2000 and 2001  Non-Executive/Non-Director  Plans, were approved by
     the Company's shareholders.

(b)  Includes 299,830  restricted stock units that, if and when vested,  will be
     settled in shares of common stock of the Company on a one for one basis.

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


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

         RELATIONSHIPS AND TRANSACTIONS WITH THE HUGHES FAMILY

         The Hughes Family has ownership interests in, and operate approximately
44  self-storage  facilities  in Canada  under the name  "Public  Storage"  ("PS
Canada") pursuant to a license agreement with the Company.  The Company does not
currently own any

                                       76

<PAGE>

interests in these  facilities  nor does it own any  facilities  in Canada.  The
Hughes Family owns approximately 36% of our Common Stock outstanding at December
31,  2005.  The  Company  has a right of first  refusal to acquire  the stock or
assets of the corporation that manages the 44 self-storage facilities in Canada,
if the  Hughes  Family or the  corporation  agrees to sell  them.  However,  the
Company has no interest in the operations of this  corporation,  the Company has
no right to acquire  this stock or assets  unless the Hughes  Family  decides to
sell, the right of first refusal does not apply to the self-storage  facilities,
and the Company  receives no benefit from the profits and  increases in value of
the Canadian self-storage facilities.

         Prior to December 31, 2003, the Company's personnel were engaged in the
supervision  and the operation of these  Canadian  self-storage  facilities  and
provided certain  administrative  services for the Canadian owners,  and certain
other  services,  primarily tax  services,  with respect to certain other Hughes
Family  interests.  The  sharing of  personnel  and  systems  with the  Canadian
entities was  substantially  discontinued by December 31, 2003. In October 2005,
the Company's  Board of Directors  (with B. Wayne Hughes and B. Wayne Hughes Jr.
abstaining)  approved the  reimbursement  of CAD  $653,424  (plus CAD $52,274 in
interest  accrued  at 4%)  representing  the  amount  previously  charged to the
Canadian  entities  for  system  development  costs  that the  Company no longer
permits  them to use.  These  amounts were  reimbursed  to PS Canada in November
2005.

         The Company, through subsidiaries, continues to reinsure risks relating
to loss of goods stored by tenants in the self-storage facilities in Canada. The
Company had acquired the tenant insurance  business on December 31, 2001 through
its acquisition of PSIC.  During 2005,  PSIC received  $1,052,000 in reinsurance
premiums attributable to the Canadian Facilities.  Since PSIC's right to provide
tenant  reinsurance  to the Canadian  Facilities  may be qualified,  there is no
assurance that these premiums will continue.

         In November 1999, the Company,  through two wholly-owned  entities,  PS
Pennsylvania Trust and PS Texas Holdings, Ltd.  (collectively,  "PSA"), formed a
joint  venture (the  "Consolidated  Development  JV") that  developed  and owned
approximately $109 million of self-storage facilities and $100 million of shares
of the Company's  Equity Stock,  Series AAA. At August 5, 2005, the Consolidated
Development  JV also owned  712,400  shares of the Company's  Common Stock.  The
partners of the  Consolidated  Development  JV were PSA and a limited  liability
company  (referred to  hereinafter  as "PSAC").  The members of PSAC are a state
pension plan (the "Investor") and B. Wayne Hughes. The Consolidated  Development
JV  was   capitalized   with   approximately   $202  million;   PSA  contributed
approximately $104 million and had a 51% ownership interest and PSAC contributed
approximately  $98 million  and had a 49%  ownership  interest.  The term of the
Consolidated Development JV was 15 years. The Investor, as a member of PSAC, had
the  right at the end of the  sixth  year to cause an early  termination  of the
Consolidated  Development JV and PSAC, which it exercised in 2005.  Accordingly,
on August 5, 2005, we acquired the institutional investor's interest in PSAC for
approximately  $41,420,000  in  cash.  This  acquisition  gave us a  controlling
position in PSAC and the contractual right to acquire the remaining  interest in
PSAC held by Mr. Hughes, which we exercised in November 2005. In accordance with
the  preexisting  agreements,  we paid  Mr.  Hughes a total  of  $64,513,000  on
November 17, 2005 to acquire his interest.  In addition,  during 2005 Mr. Hughes
received a total of $4,756,000,  representing  his  contractual  interest in the
cash flow of the  partnership  from January 1, 2005 through the date we acquired
his interest.

         The  Company  and Mr.  Hughes  are  co-general  partners  in certain of
certain  partnerships,  some of which are consolidated with the Company and some
of which  are  unconsolidated.  Mr.  Hughes  and his  family  also  own  limited
partnership  interests  in certain of these  partnerships.  The  Company and Mr.
Hughes  and  his  family  receive   distributions  from  these  partnerships  in
accordance with the terms of the partnership agreements.

         MANAGEMENT AGREEMENT WITH PS BUSINESS PARKS, INC.

         PSB manages  certain of the commercial  facilities that we own pursuant
to management  agreements for a management  fee equal to 5% of revenues.  Public
Storage  paid a total of  $579,000  in  management  fees with  respect  to PSB's
property management services in 2005.

         COST SHARING ARRANGEMENTS WITH PSB

         Pursuant to a cost-sharing and administrative  services agreement,  PSB
reimburses us for certain  administrative  services.  PSB's share of these costs
totaled approximately $340,000 for the year ended December 31, 2005.

                                       77

<PAGE>

         Stor-RE and third party insurance carriers have provided PS Canada, the
Company,  PSB, and other  affiliates of the Company with  liability and casualty
insurance coverage until March 31, 2004. PS Canada has a 2.2% interest,  and PSB
has a 4.0% interest,  in Stor-RE. PS Canada and PSB obtained their own liability
and casualty insurance covering occurrences after April 1, 2004. For occurrences
before  April 1, 2004,  STOR-Re  continues  to provide  liability  and  casualty
insurance coverage consistent with the relevant agreements.

         LEGAL PROCEEDINGs

         In November  2002,  a  shareholder  of the Company made a demand on the
Board of Directors that challenged the fairness of the Company's  acquisition of
PS Insurance  Company,  Ltd.  ("PSIC") and related matters.  PSIC was previously
owned by the Hughes Family.

         In June 2003, the Hughes Family filed a complaint (Gustavson,  et al v.
Public Storage,  Inc.) for declaratory  relief asking the court to find that the
acquisition  of PSIC and related  matters were fair to the Company.  The Company
filed an answer to the Hughes  Family's  complaint  requesting a final  judicial
determination  of the Company's  rights of recovery against the Hughes Family in
respect of PSIC.  By order of the  Superior  Court,  the matter was tried before
Justice  Malcolm Lucas, a former chief justice of the California  Supreme Court.
In October 2005,  Judge Lucas rendered his decision,  ruling against the Company
by finding that the PSIC  transaction  was just and reasonable as to the Company
and holding  that the Hughes  Family was not required to make any payment to the
Company.  The Superior Court has formally entered judgment  accordingly and this
lawsuit has been concluded.

         At the end of December 2004, the same shareholder referred to above and
a second shareholder filed a shareholder's  derivative  complaint (Potter, et al
v. Hughes,  et al) naming as defendants the Company's  directors (and two former
directors)  and certain  officers  of the  Company.  The matters  alleged in the
Potter  complaint  relate to PSIC,  the Hughes  Family's  Canadian  self-storage
operations  and the  Company's  1995  reorganization.  In June  2005,  the court
granted the  defendants'  motion to dismiss the Potter  complaint  with leave to
amend the complaint.  In July 2005, the plaintiffs  filed an amended  complaint,
and the defendants filed a motion to dismiss the amended  complaint.  The matter
is  currently  under  submission.  We believe the  litigation  will not have any
financially  adverse  effect  on the  Company  (other  than the  costs and other
expenses relating to the lawsuit).


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
         --------------------------------------

         The  following  table shows the fees billed or expected to be billed to
the Company by Ernst & Young for audit and other  services  provided  for fiscal
2005 and 2004:

                                    2005           2004
                                ------------    -----------
   Audit Fees (a)               $   548,800     $   581,300
   Audit-Related Fees                     -               -
   Tax Fees (b)                     688,600         546,300
   All Other Fees                         -               -
                                ------------    -----------
   Total                        $ 1,237,400     $ 1,127,600
---------------------------

(a)  Audit Fees represent fees for professional  services provided in connection
     with the audits of the Company's annual  financial  statements and internal
     control  over  financial  reporting,  review  of  the  quarterly  financial
     statements  included in the  Company's  quarterly  reports on Form 10-Q and
     services in  connection  with the  Company's  registration  statements  and
     securities offerings.

(b)  During 2005 tax fees included $644,800 for preparation of federal and state
     income tax  returns  for the  Company  and its  consolidated  entities  and
     $43,800 for tax planning. During 2004, $12,200 of the tax services were for
     tax planning,  primarily  related to acquisitions.  All other 2004 tax fees
     were for preparation of federal and state income tax returns.

         The Audit  Committee has adopted a pre-approval  policy relating to any
services  provided by the Company's  independent  registered  public  accounting
firm.  Under this policy the Audit  Committee  of the Company  pre-approved  all
services  performed  by Ernst & Young LLP during  2005,  including  those listed
above.  At  this  time,  the  Audit  Committee  has not  delegated  pre-approval
authority to any member or members of the Audit Committee.

                                       78

<PAGE>

                                     PART IV

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

a.    1. Financial Statements

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

      2. Financial Statement Schedules

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

      3. Exhibits

            See Index to Exhibits contained herein.

b.    Exhibits:

         See Index to Exhibits contained herein.

c.    Financial Statement Schedules

         Not applicable.

                                       79

<PAGE>

                              PUBLIC STORAGE, INC.

                              INDEX TO EXHIBITS(1)

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       80
<PAGE>


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

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

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

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

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

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

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

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

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

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

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

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

                                       81

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       82

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

                                       83

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       84

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       85

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

10.18    Deposit Agreement dated as of 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  Registration  Statement  on Form  8-A/A  relating  to the
         Depositary  Shares  Each  Representing  1/1,000  of a Share  of  8-7/8%
         Cumulative  Preferred  Stock,  Series  G  and  incorporated  herein  by
         reference.

                                       86

<PAGE>

10.19    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  Registration  Statement  on Form  8-A/A  relating  to the
         Depositary  Shares  Each  Representing  1/1,000  of a  Share  of  8.45%
         Cumulative  Preferred  Stock,  Series  H  and  incorporated  herein  by
         reference.

10.20    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  Registration  Statement  on Form  8-A/A  relating  to the
         Depositary  Shares  Each  Representing  1/1,000  of a  Share  of 8 5/8%
         Cumulative  Preferred  Stock,  Series  I  and  incorporated  herein  by
         reference.

10.21    10.11 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  Registration  Statement  on Form  8-A/A  relating  to the
         Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative
         Preferred Stock, Series J and incorporated herein by reference.

10.22    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
         Registration  Statement on Form 8-A/A relating to the Depositary Shares
         Each  Representing  1/1,000 of a Share of 8 1/4%  Cumulative  Preferred
         Stock, Series K and incorporated herein by reference.

10.23    Deposit  Agreement  dated  as  of  March  10,  1999  among  Registrant,
         BankBoston,  N.A. and the holders of the depositary receipts evidencing
         the Depositary  Shares Each  Representing  1/1,000 of a Share of 8 1/4%
         Cumulative   Preferred  Stock,   Series  L.  Filed  with   Registrant's
         Registration  Statement on Form 8-A/A relating to the Depositary Shares
         Each  Representing  1/1,000 of a Share of 8 1/4%  Cumulative  Preferred
         Stock, Series L and incorporated herein by reference.

10.24    Deposit  Agreement  dated  as of  August  17,  1999  among  Registrant,
         BankBoston,  N.A. and the holders of the depositary receipts evidencing
         the  Depositary  Shares Each  Representing  1/1,000 of a Share of 8.75%
         Cumulative   Preferred  Stock,   Series  M.  Filed  with   Registrant's
         Registration  Statement on Form 8-A/A relating to the Depositary Shares
         Each  Representing  1/1,000  of a Share of 8.75%  Cumulative  Preferred
         Stock, Series M and incorporated herein by reference.

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

10.26    Deposit Agreement dated as of January 19, 2001 among Registrant,  Fleet
         National Bank and the holders of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a Share  of  8.600%
         Cumulative   Preferred  Stock,   Series  Q.  Filed  with   Registrant's
         Registration Statement on Form 8-A/A (SEC File No. 0010-08389) relating
         to the Depositary Shares Each Representing 1/1,000 of a Share of 8.600%
         Cumulative  Preferred  Stock,  Series  Q  and  incorporated  herein  by
         reference.

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

                                       87

<PAGE>

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

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

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

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

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

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

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

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

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

                                       88

<PAGE>

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

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

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

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

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

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

10.43    Deposit   Agreement  dated  January  19,  2006  among   Registrant  and
         Computershare  Trust  Company  N.A.  and the holders of the  depositary
         receipts evidencing the Depositary Shares Each Representing  1/1,000 of
         a share of 6.95%  Cumulative  Preferred  Stock,  Series H.  Filed  with
         Registrant's  Registration  Statement  on  Form  8-A  relating  to  the
         Depositary  Shares  Each  Representing  1/1,000  of a  share  of  6.95%
         Cumulative  Preferred  Stock,  Series  H  and  incorporated  herein  by
         reference.

10.44    Intentionally omitted.

10.45*   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.

10.46*   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.

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

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

                                       89

<PAGE>

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

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


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

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

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

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

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

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

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

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

10.59*   Employment  Agreement between  Registrant and Harvey Lenkin dated as of
         August 5, 2003. Filed with  Registrant's  Quarterly Report on Form 10-Q
         for the quarterly period ended June 30, 2003 and incorporated herein by
         reference.

10.60*   Consulting  Agreement between  Registrant and Harvey Lenkin dated as of
         June 30, 2005. Filed with Registrant's Current Report on Form 8-K dated
         July 1, 2005 and incorporated herein by reference.

10.61    Merger  Agreement,  dated as of March 6,  2006,  by and among  Shurgard
         Storage Centers, Inc., ASKL Sub LLC and Public Storage, Inc. Filed with
         Registrant's  Current  Report  on Form  8-K  dated  March  6,  2006 and
         incorporated herein by reference.

10.62    Voting Agreement, dated as of March 6, 2006, by and among Charles K.
         Barbo and Public Storage, Inc.. Filed with Registrant's Current Report
         on Form 8-K dated March 6, 2006 and incorporated herein by reference.

                                       90

<PAGE>

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

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

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

21       Subsidiaries of the Registrant.  Filed herewith.

23       Consent of Independent Auditors.  Filed herewith.


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

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

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

*    Compensatory benefit plan or arrangement or management contract.
(1)  SEC File No. 001-08389 unless otherwise indicated.

                                       91

<PAGE>

                                   SIGNATURES

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

                                 PUBLIC STORAGE, INC.

Date:  March 15, 2006            By:   /s/ Ronald L. Havner, Jr.
                                       -------------------------
                                       Ronald L. Havner, Jr., Vice-Chairman of
                                       the Board, Chief Executive Officer and
                                       President

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

<TABLE>
<CAPTION>

                Signature                                       Title                                             Date
-------------------------------            ------------------------------------------------------            --------------
<S>                                        <C>                                                               <C>
/s/ Ronald L. Havner, Jr.                  Vice-Chairman of the Board, Chief                                 March 15, 2006
-------------------------------
Ronald L. Havner, Jr.                      Executive Officer, President and Director
                                           (principal executive officer)
/s/ John Reyes                             Senior Vice President and                                         March 15, 2006
-------------------------------
John Reyes                                 Chief Financial Officer
                                           (principal financial officer and principal accounting
                                           officer)
/s/ B. Wayne Hughes                        Chairman of the Board                                             March 15, 2006
-------------------------------
B. Wayne Hughes
/s/ Harvey Lenkin                          Director                                                          March 15, 2006
-------------------------------
Harvey Lenkin
/s/ B. Wayne Hughes, Jr.                   Director                                                          March 15, 2006
-------------------------------
B. Wayne Hughes, Jr.
/s/ Robert J. Abernethy                    Director                                                          March 15, 2006
-------------------------------
Robert J. Abernethy
/s/ Dann V. Angeloff                       Director                                                          March 15, 2006
-------------------------------
Dann V. Angeloff
/s/ William C. Baker                       Director                                                          March 15, 2006
-------------------------------
William C. Baker
/s/ John T. Evans                          Director                                                          March 15, 2006
-------------------------------
John T. Evans
/s/ Uri P. Harkham                         Director                                                          March 15, 2006
-------------------------------
Uri P. Harkham
/s/ Daniel C. Staton                       Director                                                          March 15, 2006
-------------------------------
Daniel C. Staton

</TABLE>

                                       92

<PAGE>

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

                                  (Item 15 (a))


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

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

Consolidated balance sheets as of
December 31, 2005 and 2004.......................................           F-2

For each of the three years in the period ended
December 31, 2005:

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-41

Schedule:

III - Real estate and accumulated depreciation...................   F-42 - F-88



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


<PAGE>

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


The Board of Directors and Shareholders
Public Storage, Inc.

We have audited the accompanying  consolidated balance sheets of Public Storage,
Inc. as of December 31, 2005 and 2004, and the related  consolidated  statements
of income,  shareholders'  equity, and cash flows for each of the three years in
the period  ended  December  31, 2005.  Our audits also  included the  financial
statement schedule listed in the Index at Item 15(a). These financial statements
and  financial  statement  schedule  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and financial statement schedule based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Public
Storage,  Inc. at December 31, 2005 and 2004,  and the  consolidated  results of
their  operations and their cash flows for each of the three years in the period
ended December 31, 2005, in conformity with U.S. generally  accepted  accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States), the effectiveness of Public Storage,
Inc.'s internal control over financial  reporting as of December 31, 2005, based
on criteria established in Internal  Control-Integrated  Framework issued by the
Committee of Sponsoring  Organizations of the Treadway Commission and our report
dated March 10, 2006 expressed an unqualified opinion thereon.


                                                              ERNST & YOUNG LLP

Los Angeles, California

March 10, 2006

                                      F-1

<PAGE>

                              PUBLIC STORAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2005 and 2004
                    (amounts in thousands, except share data)

<TABLE>
<CAPTION>

                                                                                    December 31,         December 31,
                                                                                        2005                 2004
                                                                                 -----------------    ------------------

                                       ASSETS

<S>                                                                                <C>                  <C>
Cash and cash equivalents....................................................      $     493,501        $     366,255
Real estate facilities, at cost:
   Land......................................................................          1,540,357            1,431,148
   Buildings.................................................................          4,390,127            4,079,602
                                                                                 -----------------    ------------------
                                                                                       5,930,484            5,510,750
   Accumulated depreciation..................................................         (1,500,128)           (1,320,200)
                                                                                 -----------------    ------------------
                                                                                       4,430,356            4,190,550
   Construction in process...................................................             54,472               56,160
                                                                                 -----------------    ------------------
                                                                                       4,484,828            4,246,710
Investment in real estate entities...........................................            328,555              341,304
Goodwill.....................................................................             78,204               78,204
Intangible assets, net.......................................................             98,081              104,685
Other assets.................................................................             69,317               67,632
                                                                                 -----------------    ------------------
              Total assets...................................................      $   5,552,486        $   5,204,790
                                                                                 =================    ==================

                       LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable................................................................      $     113,950        $     129,519
Debt to joint venture partner................................................             35,697               16,095
Preferred stock called for redemption........................................            172,500               54,875
Accrued and other liabilities................................................            159,360              145,431
                                                                                 -----------------    ------------------
         Total liabilities...................................................            481,507              345,920
Minority interest:
   Preferred partnership interests...........................................            225,000              310,000
   Other partnership interests...............................................             28,970              118,903
Commitments and contingencies (Note 16)......................................                  -                    -
Shareholders' equity:
   Cumulative Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
     1,698,336 shares issued (in series) and outstanding, (3,980,186 at
     December 31, 2004) at liquidation preference............................          2,498,400            2,102,150
   Common Stock, $0.10 par value, 200,000,000 shares authorized, 128,089,563
     shares issued and outstanding (128,526,450 at December 31, 2004)........             12,809               12,853
   Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized,
     8,744.193 shares issued and outstanding
    (8,776.102 at December 31, 2004).........................................                  -                    -
   Paid-in capital...........................................................          2,430,671            2,457,568
   Cumulative net income.....................................................          3,189,266            2,732,873
   Cumulative distributions paid.............................................         (3,314,137)          (2,875,477)
                                                                                 -----------------    ------------------
         Total shareholders' equity..........................................          4,817,009            4,429,967
                                                                                 -----------------    ------------------
              Total liabilities and shareholders' equity.....................      $   5,552,486        $   5,204,790
                                                                                 =================    ==================

</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, 2005
                  (amounts in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                           2005                2004                2003
                                                                       --------------      --------------      --------------
Revenues:
   Rental income:
<S>                                                                     <C>                 <C>                 <C>
      Self-storage facilities...................................        $    952,284        $    862,809        $    797,921
      Commercial properties.....................................              11,560              10,750              11,001
      Containerized storage facilities..........................              16,497              19,355              23,991
   Ancillary operations.........................................              64,173              60,996              58,506
   Interest and other income....................................              16,447               5,391               2,537
                                                                       --------------      --------------      --------------
                                                                           1,060,961             959,301             893,956
                                                                       --------------      --------------      --------------
Expenses:
  Cost of operations (excluding depreciation and amortization below):
      Storage facilities........................................             320,919             300,680             280,722
      Commercial properties.....................................               4,448               4,328               4,583
      Containerized storage facilities..........................              12,886              11,774              13,939
      Ancillary operations......................................              40,378              45,487              41,938
  Depreciation and amortization.................................             196,397             183,063             184,063
  General and administrative....................................              21,115              18,813              17,127
  Interest expense, including interest paid to related party
  (Note 9)......................................................               8,216                 760               1,121
                                                                       --------------      --------------      --------------
                                                                             604,359             564,905             543,493
                                                                       --------------      --------------      --------------
Income from continuing operations before equity in earnings of real estate
   entities, casualty loss, gain on disposition of
   real estate and real estate investments, and minority interest
   in income....................................................             456,602             394,396             350,463

Equity in earnings of real estate entities (Note 5).............              24,883              22,564              24,966
Casualty loss ..................................................              (1,917)             (1,250)                  -
Gain on disposition of real estate and real estate investments..               3,099               1,317               1,007
Minority interest in income:
  Preferred partnership interests:
     Based on ongoing distributions paid........................             (16,147)            (22,423)            (26,906)
     Special distribution and restructuring allocation (Note 9).                (874)            (10,063)                  -
  Other partnership interests...................................             (15,630)            (17,427)            (16,797)
                                                                       --------------      --------------      --------------
Income from continuing operations...............................             450,016             367,114             332,733
Discontinued operations (Note 3)................................               6,377                (901)              3,920
                                                                       --------------      --------------      --------------
Net income......................................................        $    456,393        $    366,213        $    336,653
                                                                       ==============      ==============      ==============
Net income allocation:
----------------------
   Allocable to preferred shareholders:
     Based on distributions paid................................        $    173,017        $    157,925        $    146,196
     Based on redemptions of preferred stock (Note 2)...........               7,538               8,724               7,120
   Allocable to Equity Stock, Series A..........................              21,443              21,501              21,501
   Allocable to common shareholders.............................             254,395             178,063             161,836
                                                                       --------------      --------------      --------------
                                                                        $    456,393        $    366,213        $    336,653
                                                                       ==============      ==============      ==============
Net income per common share - basic
   Continuing operations........................................        $       1.93        $       1.40        $      1.26
   Discontinued operations......................................                0.05               (0.01)              0.03
                                                                       --------------      --------------      --------------
                                                                        $       1.98        $       1.39        $      1.29
                                                                       ==============      ==============      ==============
Net income per common share - diluted
   Continuing operations........................................        $       1.92        $       1.39        $      1.25
   Discontinued operations......................................                0.05               (0.01)              0.03
                                                                       --------------      --------------      --------------
                                                                        $       1.97        $       1.38        $      1.28
                                                                       ==============      ==============      ==============
Net income per depositary share of Equity Stock, Series A (basic
   and diluted) ................................................        $       2.45        $       2.45        $      2.45
                                                                       ==============      ==============      ==============
Basic weighted average common shares outstanding................             128,159             127,836            125,181
                                                                       ==============      ==============      ==============
Diluted weighted average common shares outstanding..............             128,819             128,681            126,517
                                                                       ==============      ==============      ==============
Weighted average shares of Equity Stock, Series A (basic and
   diluted) ....................................................               8,752               8,776              8,776
                                                                       ==============      ==============      ==============

</TABLE>

                            See accompanying notes.
                                      F-3

<PAGE>

                              PUBLIC STORAGE, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
        For each of the three years in the period ended December 31, 2005
           (Amounts in thousands, except share and per share amounts)

<TABLE>
<CAPTION>

                                                                       Cumulative                Class B
                                                                        Preferred     Common      Common      Paid-in
                                                                          Stock        Stock      Stock       Capital
                                                                     -------------  ----------- ----------  -------------
<S>                                                                 <C>             <C>          <C>        <C>
Balances at December 31, 2002...................................... $ 1,817,025     $  11,699    $    700   $  2,371,194
   Issuance of Cumulative Preferred Stock; Series W (5,300 shares)
     and Series X (4,800 shares)...................................       252,500            -          -         (8,354)
   Redemption of Cumulative Preferred Stock; Series B (2,300,000
     shares), Series C (1,200,000 shares) and Series K (4,600
     shares).......................................................      (202,500)           -          -            (35)
   Conversion of Class B Common Stock (7,000,000 shares) (Note 10)              -          700       (700)             -
   Issuance of Common Stock (3,170,279 shares) (Note 10)...........             -          317          -         81,281
   Repurchase of Common Stock (175,000 shares) (Note 10)...........             -          (17)         -         (5,984)
   Stock option and restricted stock expense (Note 12).............             -            -          -            530
   Net income......................................................             -            -          -              -
   Distributions to shareholders:
     Cumulative Preferred Stock....................................             -            -          -              -
     Equity Stock, Series A........................................             -            -          -              -
     Common Stock ($1.80 per share)................................             -            -          -              -
                                                                     -------------  ----------- ----------  -------------
Balances at December 31, 2003......................................     1,867,025       12,699          -      2,438,632
   Issuance of Cumulative Preferred Stock; Series Y (1,600,000
     shares), Series Z (4,500 shares), Series A (4,600 shares),
     Series B (4,350 shares), and Series C (4,600 shares) .........       491,250            -          -        (15,016)
   Redemption of Cumulative Preferred Stock; Series L (4,600
     shares), Series M (2,250 shares), Series D (1,200,000 shares),
     and Series E (2,195,000 shares)...............................      (256,125)           -          -            (81)
   Restructuring of Series N preferred partnership units (Note 9)..             -            -          -          2,063
   Issuance of common stock (1,985,416 shares) (Note 10)                                   199                    49,730
   Repurchase of common stock (445,700 shares) (Note 10)...........             -          (45)         -        (20,250)
   Stock option and restricted stock expense (Note 12).............             -            -          -          2,490
   Net income......................................................             -            -          -              -
   Distributions to shareholders:
     Cumulative Preferred Stock....................................             -            -          -              -
     Equity Stock, Series A........................................             -            -          -              -
     Common Stock ($1.80 per share)................................             -            -          -              -
                                                                     -------------  ----------- ----------  -------------
Balances at December 31, 2004......................................     2,102,150       12,853          -      2,457,568
   Issuance of Cumulative Preferred Stock; Series D (5,400 shares),
     Series E (5,650 shares), Series F (10,000 shares) and Series G
     (4,000 shares) ...............................................       626,250            -          -        (19,665)
   Redemption of Cumulative Preferred Stock; Series F  (2,300,000
     shares) and Series Q (6,900 shares)............................     (230,000)           -          -            (34)
   Repurchase of preferred partnership units, Series N and O
     (Note 9) ......................................................            -            -          -            874
   Issuance of common stock (282,998 shares) (Note 10) ............                         28          -          7,483
   Repurchase of common stock (84,000 shares) (Note 10)............             -           (8)         -         (4,982)
   Stock distribution from unconsolidated real estate entities
     (635,885 common shares and 31,909 Equity Stock, Series A,
     depositary shares)(Note 5)....................................             -          (64)         -        (14,456)
   Stock option and restricted stock expense (Note 12).............             -            -          -          3,883
   Net income......................................................             -            -          -              -
   Distributions to shareholders:
     Cumulative Preferred Stock....................................             -            -          -              -
     Equity Stock, Series A........................................             -            -          -              -
     Common Stock ($1.90 per share)................................             -            -          -              -
                                                                     -------------  ----------- ----------  -------------
Balances at December 31, 2005......................................   $ 2,498,400    $  12,809  $       -   $  2,430,671
                                                                     =============  =========== ==========  =============

</TABLE>


                              PUBLIC STORAGE, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
        For each of the three years in the period ended December 31, 2005
           (Amounts in thousands, except share and per share amounts)

<TABLE>
<CAPTION>

                                                                                                         Total
                                                                      Cumulative      Cumulative     Shareholders'
                                                                      Net Income    Distributions        Equity
                                                                     -----------   ---------------  ---------------
<S>                                                                  <C>           <C>               <C>
Balances at December 31, 2002......................................  $ 2,030,007   $  (2,071,656)    $   4,158,969
   Issuance of Cumulative Preferred Stock; Series W (5,300 shares)
     and Series X (4,800 shares)...................................            -               -           244,146
   Redemption of Cumulative Preferred Stock; Series B (2,300,000
     shares), Series C (1,200,000 shares) and Series K (4,600
     shares).......................................................            -               -          (202,535)
   Conversion of Class B Common Stock (7,000,000 shares) (Note 10)             -               -                 -
   Issuance of Common Stock (3,170,279 shares) (Note 10)...........            -               -            81,598
   Repurchase of Common Stock (175,000 shares) (Note 10)...........            -               -            (6,001)
   Stock option and restricted stock expense (Note 12).............            -               -               530
   Net income......................................................      336,653               -           336,653
   Distributions to shareholders:
     Cumulative Preferred Stock....................................            -        (146,196)         (146,196)
     Equity Stock, Series A........................................            -         (21,501)          (21,501)
     Common Stock ($1.80 per share)................................            -        (225,864)         (225,864)
                                                                     -----------   ---------------  ---------------
Balances at December 31, 2003......................................    2,366,660      (2,465,217)        4,219,799
   Issuance of Cumulative Preferred Stock; Series Y (1,600,000
     shares), Series Z (4,500 shares), Series A (4,600 shares),
     Series B (4,350 shares), and Series C (4,600 shares) .........            -               -           476,234
   Redemption of Cumulative Preferred Stock; Series L (4,600
     shares), Series M (2,250 shares), Series D (1,200,000 shares),
     and Series E (2,195,000 shares)...............................            -               -          (256,206)
   Restructuring of Series N preferred partnership units (Note 9)..            -               -             2,063
   Issuance of common stock (1,985,416 shares) (Note 10)                                                    49,929
   Repurchase of common stock (445,700 shares) (Note 10)...........            -               -           (20,295)
   Stock option and restricted stock expense (Note 12).............            -               -             2,490
   Net income......................................................      366,213               -           366,213
   Distributions to shareholders:
     Cumulative Preferred Stock....................................            -        (157,925)         (157,925)
     Equity Stock, Series A........................................            -         (21,501)          (21,501)
     Common Stock ($1.80 per share)................................            -        (230,834)         (230,834)
                                                                     -----------   ---------------  ---------------
Balances at December 31, 2004......................................    2,732,873      (2,875,477)        4,429,967
   Issuance of Cumulative Preferred Stock; Series D (5,400 shares),
     Series E (5,650 shares), Series F (10,000 shares) and Series G
     (4,000 shares) ...............................................            -               -           606,585
   Redemption of Cumulative Preferred Stock; Series F  (2,300,000
     shares) and Series Q (6,900 shares)............................           -               -          (230,034)
   Repurchase of preferred partnership units, Series N and O
     (Note 9) ......................................................           -               -               874
   Issuance of common stock (282,998 shares) (Note 10) ............            -               -             7,511
   Repurchase of common stock (84,000 shares) (Note 10)............            -               -            (4,990)
   Stock distribution from unconsolidated real estate entities
     (635,885 common shares and 31,909 Equity Stock, Series A,
     depositary shares)(Note 5)....................................            -               -           (14,520)
   Stock option and restricted stock expense (Note 12).............            -               -             3,883
   Net income......................................................      456,393               -           456,393
   Distributions to shareholders:
     Cumulative Preferred Stock....................................            -        (173,017)         (173,017)
     Equity Stock, Series A........................................            -         (21,443)          (21,443)
     Common Stock ($1.90 per share)................................            -        (244,200)         (244,200)
                                                                     -----------   ---------------  ---------------
Balances at December 31, 2005......................................  $ 3,189,266   $  (3,314,137)    $   4,817,009
                                                                     ===========   ===============  ===============

</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, 2005
                             (amounts in thousands)

<TABLE>
<CAPTION>

                                                                                         2005            2004           2003
                                                                                    -------------   -------------   ------------
Cash flows from operating activities:
<S>                                                                                 <C>             <C>             <C>
   Net income...............................................................        $   456,393     $   366,213     $   336,653
   Adjustments to reconcile net income to net cash provided by operating
     activities:
    Amortization of note premium (Note 7)...................................             (1,026)              -               -
    Excess of effective interest over cash interest paid on debt to joint
       venture partner (Note 8) ............................................                405               -               -
     Gain on sale of real estate assets.....................................             (8,279)         (2,288)         (6,128)
    Casualty loss (Note 2)..................................................              2,592           1,250               -
    Depreciation and amortization...........................................            196,397         183,063         184,063
    Equity in earnings of Real Estate Entities..............................            (24,883)        (22,564)        (24,966)
    Distributions received from the Real Estate Entities (Note 5)...........             23,112          20,961          17,754
    Non cash portion of stock-based compensation expense....................              3,883           2,490             530
    Minority interest in income.............................................             32,651          49,913          43,703
    Depreciation, impairment losses, and gain on sale of non-real estate
       assets associated with discontinued operations (Note 3)..............             (1,055)          2,857           7,169
    Other operating activities..............................................             11,858          14,769          12,609
                                                                                    -------------   -------------   ------------
       Total adjustments....................................................            235,655         250,451         234,734
                                                                                    -------------   -------------   ------------
       Net cash provided by operating activities............................            692,048         616,664         571,387
                                                                                    -------------   -------------   ------------
Cash flows from investing activities:
    Principal payments received on mortgage notes receivable................                  -              18          23,814
    Repayment/(issuance) of notes receivable to affiliates..................                  -         100,000        (100,000)
    Capital improvements to real estate facilities .........................            (25,890)        (35,868)        (30,175)
    Construction in process.................................................            (86,248)        (71,602)       (102,428)
    Acquisition of minority interests (Note 9)..............................            (92,815)        (24,851)         (9,867)
    Acquisition of real estate facilities...................................           (254,549)       (139,794)              -
    Investments in real estate entities.....................................                  -          (3,005)           (340)
    Proceeds from the sale of real estate and real estate investments.......             14,755          12,648          34,883
    Maturity of held to maturity debt securities  (Note 2) .................              7,452          20,729          10,205
    Acquisition of held to maturity debt securities (Note 2)................             (6,361)        (13,663)        (21,940)
    Other investing activities..............................................                  -          (2,250)         (9,285)
                                                                                    -------------   -------------   ------------
       Net cash used in investing activities................................           (443,656)       (157,638)       (205,133)
                                                                                    -------------   -------------   ------------
Cash flows from financing activities:
    Principal payments on notes payable and revolving line of credit........            (14,543)        (41,204)        (39,837)
    Repayment of debt to related party (Note 9) ............................            (64,513)              -               -
    Net proceeds from the issuance of common stock..........................              7,511          49,929          68,618
    Net proceeds from the issuance of cumulative preferred stock............            606,585         476,234         244,146
    Repurchase of common stock..............................................             (4,990)        (20,295)         (6,001)
    Redemption of cumulative preferred stock................................           (112,409)       (316,331)        (87,535)
    Redemption of preferred partnership interest............................            (85,000)              -               -
    Distributions paid to shareholders......................................           (438,660)       (410,260)       (393,561)
    Distributions paid to holders of preferred partnership interests
       (Note 9).............................................................            (16,147)        (30,423)        (26,906)
    Distributions paid to minority interests, net of reinvestments..........            (18,177)        (21,349)        (23,469)
    Net proceeds from financing through acquisition joint venture (Note 8)..             19,197          16,095               -
                                                                                    -------------   -------------   ------------
       Net cash used in financing activities................................           (121,146)       (297,604)       (264,545)
                                                                                    -------------   -------------   ------------
Net increase in cash and cash equivalents...................................            127,246         161,422         101,709
Cash and cash equivalents at the beginning of the year......................            366,255         204,833         103,124
                                                                                    -------------   -------------   ------------
Cash and cash equivalents at the end of the year............................        $   493,501     $   366,255     $   204,833
                                                                                    =============   =============   ============

</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, 2005
                             (amounts in thousands)

                                   (Continued)

<TABLE>
<CAPTION>

                                                                                      2005            2004           2003
                                                                                    -------------   -------------   ------------
Supplemental schedule of non cash investing and financing activities:
   Retirement of Common Stock and Equity Stock, Series A, received as a
     distribution from affiliated entities (Note 5):
<S>                                                                               <C>               <C>            <C>
       Common Stock.......................................................        $       (64)      $        -     $       -
       Paid-in capital....................................................            (14,456)
       Investment in real estate entities.................................             14,520                -             -
   Acquisition of minority interest in Consolidated Joint Venture in exchange
     for debt (Note 9):
        Minority interest - Other partnership interests....................           (62,013)               -             -
       Real estate facilities.............................................             (2,500)               -             -
       Debt to related party..............................................             64,513                -             -
   Acquisition of real estate facilities in exchange for minority interests and
     assumption of mortgage notes payable:
       Real estate facilities..............................................                 -         (119,693)            -
       Mortgage notes payable..............................................                 -           94,693             -
       Preferred partnership interests.....................................                 -           25,000             -
   Acquisition of minority interest in exchange for common stock (Note 9):
       Real estate facilities..............................................                 -                -       (16,687)
       Minority interest...................................................                 -                -        (6,690)
       Issuance of Common Stock to acquire minority interests..............                 -                -        13,510
   Exchange of Common Stock for Common Stock, Series B:
       Reduction in Common Stock, Series B (7,000,000 shares)..............                 -                -          (700)
       Increase in Common Stock (7,000,000 shares).........................                 -                -           700

</TABLE>

                            See accompanying notes.
                                      F-6

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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

              Public Storage, Inc. (the "Company") is a California  corporation,
     which was organized in 1980. We are a fully  integrated,  self-administered
     and  self-managed  real estate  investment  trust ("REIT") whose  principal
     business  activities  include the acquisition,  development,  ownership and
     operation of self-storage  facilities which offer storage spaces for lease,
     generally on a  month-to-month  basis,  for  personal and business  use. In
     addition,  we have  (i)  interests  in  commercial  properties,  containing
     commercial and industrial  rental space,  (ii) interests in facilities that
     lease  storage  containers,   and  (iii)  ancillary   operations  comprised
     principally of  reinsurance  of policies  against losses to goods stored by
     our   self-storage   tenants,   retail  sales  and  truck  rentals  at  our
     self-storage locations.

              Any  references to the number of properties  and square footage is
     unaudited.

              At December 31, 2005, we had direct and indirect equity  interests
     in 1,501  self-storage  facilities located in 37 states and operating under
     the  "Public  Storage"  name.  We also  have  direct  and  indirect  equity
     interests  in   approximately  19  million  net  rentable  square  feet  of
     commercial space located in 10 states.

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

              Consolidation policy and basis of presentation

              Entities  in which we have an  interest  are  first  evaluated  to
     determine  whether,  in  accordance  with the  provisions  of the Financial
     Accounting  Standards  Board's  Interpretation  No. 46R,  "Consolidation of
     Variable Interest  Entities," they represent  Variable  Interest  Entities.
     Variable  Interest  Entities  in  which  we  are  primary  beneficiary  are
     consolidated.  No entities were determined to be variable interest entities
     during the three years  ended  December  31,  2005.  Entities  that are not
     Variable Interest Entities that we control,  determined based our ownership
     of a voting interest excess of 50% are consolidated.

              We control 34 such entities  and,  accordingly,  the  consolidated
     financial   statements   include  the  accounts  of  these   entities  (the
     "Consolidated  Entities") as well as those of the Company. All siginificant
     intercompany balances and transactions have been eliminated.  Collectively,
     the Company and the Consolidated  Entities own a total of 1,470 real estate
     facilities,  consisting of 1,463 self-storage facilities,  three industrial
     facilities used by the containerized storage operations and four commercial
     properties.

              At December 31, 2005, we had equity  investments  in eight limited
     partnerships in which we do not have a controlling interest.  These limited
     partnerships collectively own 38 self-storage facilities, which are managed
     by the Company. In addition,  we own approximately 44% of the common equity
     of PS Business Parks,  Inc.  ("PSB"),  which owns and operates 17.6 million
     net rentable square feet of commercial space as of December 31, 2005. We do
     not control these entities;  accordingly,  our investments in these limited
     partnerships  and PSB  (collectively  the  "Unconsolidated  Entities")  are
     accounted for using the equity method.

              Certain  amounts  previously  reported have been  reclassified  to
     conform to the December 31, 2005 presentation.  In previous  presentations,
     net  income  from  our  truck  rental,   merchandise  sales,  and  property
     management  operations  were included on a net basis in "Interest and other
     income"  in  our  consolidated   statements  of  income.   In  our  current
     presentation, revenues with respect to each of these operations, along with
     revenues from our tenant  reinsurance  operations,  are included  under the
     caption "Revenues: Ancillary operations" and the related cost of operations
     are included in "Expenses:  Cost of operations - Ancillary  operations"  on
     our consolidated statements of income. Certain  reclassifications have also
     been  made  from  previous   presentations  as  a  result  of  discontinued
     operations (See Note 3).

                                      F-7

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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

              The  preparation  of  the  consolidated  financial  statements  in
     conformity  with United States  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 we intend to continue  to qualify the Company as a REIT,  as defined in
     Section 856 of the Internal  Revenue  Code. As a REIT, we are generally not
     taxed on that  portion of our  taxable  income that is  distributed  to our
     shareholders,  provided that we meet certain tests.  We believe we have met
     these tests during 2005 and, accordingly, no provision for income taxes has
     been made in the accompanying consolidated financial statements.

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

              We have  estimated  the fair  value of our  financial  instruments
     using available market information and appropriate valuation methodologies.
     Considerable  judgment is required in  interpreting  market data to develop
     estimates  of market  value.  Accordingly,  estimated  fair  values are not
     necessarily  indicative  of the  amounts  that could be realized in current
     market exchanges.

              For purposes of financial statement presentation, we consider all
     highly liquid financial instruments such as short-term treasury securities
     or investment grade short-term commercial paper to be cash equivalents.

              Due  to  the  short  period  to  maturity  of our  cash  and  cash
     equivalents,  accounts receivable,  other financial instruments included in
     other assets,  and accrued and other  liabilities,  the carrying  values as
     presented on the  consolidated  balance sheets are reasonable  estimates of
     fair value.  The  approximate  fair value of notes  payable is presented in
     Note 7 below.

              Financial assets that are exposed to credit risk consist primarily
     of cash  and  cash  equivalents  and  accounts  receivable.  Cash  and cash
     equivalents, which consist of short-term investments,  including commercial
     paper,  are only  invested in entities  with an  investment  grade  rating.
     Accounts  receivable are not a significant  portion of total assets and are
     comprised of a large number of individual customers.

              Included  in cash and cash  equivalents  at  December  31, 2005 is
     $18,962,000 ($1,984,000 at December 31, 2004) held by our captive insurance
     entities. Insurance and other regulations place significant restrictions on
     our  ability to  withdraw  these funds for  purposes  other than  insurance
     activities.  Other assets at December 31, 2005 include investments totaling
     $19,838,000  ($20,929,000 at December 31, 2004) in held to maturity Federal
     government agency  securities stated at amortized cost, which  approximates
     fair value.

              Real Estate Facilities
              ----------------------

              Real estate facilities are recorded at cost. Costs associated with
     the acquisition, development,  construction, renovation, and improvement of
     properties  are  capitalized.  Interest,  property  taxes,  and other costs
     associated with  development  incurred during the  construction  period are
     capitalized  as building  cost.  Expenditures  for repairs and  maintenance
     expense  are charged to expense  when  incurred.  Depreciation  is computed
     using the  straight-line  method  over the  estimated  useful  lives of the
     buildings and improvements, which are generally between 5 and 25 years.

                                      F-8

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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

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

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

              During the year ended  December 31, 2004,  the  Acquisition  Joint
     Venture acquired two facilities directly from third parties at an aggregate
     cost of  $9,086,000.  We account for our  investment  with respect to these
     facilities  using the equity method,  with our pro rata share of the income
     from  these  facilities  recorded  as "Equity in  earnings  of real  estate
     entities" on our consolidated  statements of income. See Note 5 for further
     discussion of these amounts.

              In December  2004,  we sold seven  facilities  to the  Acquisition
     Joint Venture for an aggregate of $22,993,000.  During the first quarter of
     2005, we sold an interest in three additional facilities to the Acquisition
     Joint  Venture  for an  aggregate  of  $27,424,000.  Due to our  continuing
     interest in these  facilities and the likelihood  that we will exercise our
     option  to  acquire  our  partner's  interest,  we have  accounted  for our
     partner's investment  ($35,697,000 and $16,095,000 at December 31, 2005 and
     2004,  respectively)  in  these  transactions  to be,  in  substance,  debt
     financing.  Accordingly, our partner's investment with respect to these ten
     facilities  is  accounted  for as a liability on our  consolidated  balance
     sheet under the caption "Debt to joint venture partner," with our partner's
     share of operations  with respect to these ten facilities  accounted for as
     interest  expense on our  consolidated  statements of income.  Quarterly we
     review  the fair  value of this  liability  and to the  extent  fair  value
     exceeds the carrying  value of the liability an adjustment  will be made to
     increase the liability to fair value; no adjustments were necessary in 2005
     or 2004 (See Note 8).

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

              We evaluate  impairment  of goodwill  annually  through a two-step
     process.  In the first  step,  if the fair value of the  reporting  unit to
     which the goodwill  applies is equal to or greater than the carrying amount
     of the assets of the reporting unit,  including the goodwill,  the goodwill
     is considered  unimpaired and the second step is unnecessary.  If, however,
     the fair value of the reporting  unit  including  goodwill is less than the
     carrying amount, the second step is performed. In this test, we compute the
     implied fair value of the goodwill based upon the allocations that would be
     made to the goodwill, other assets and liabilities of the reporting unit if
     a business  combination  transaction  were consummated at the fair value of
     the reporting  unit. An impairment  loss is recorded to the extent that the
     implied  fair value of the  goodwill is less than the  goodwill's  carrying
     amount.  No  impairments  of our  goodwill  were  identified  in our annual
     evaluations at December 31, 2003, 2004, and 2005.

                                      F-9

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              We evaluate  impairment of long-lived assets on a quarterly basis.
     We first evaluate  these assets for  indicators of impairment  such as a) a
     significant  decrease  in the  market  price of a  long-lived  asset,  b) a
     significant  adverse  change in the extent or manner in which a  long-lived
     asset is being used or in its physical condition,  c) a significant adverse
     change in legal factors or the business climate that could affect the value
     of the long-lived  asset,  d) an  accumulation  of costs  significantly  in
     excess  of  the  amount   originally   projected  for  the  acquisition  or
     construction of the long-lived  asset, or e) a current-period  operating or
     cash flow loss  combined with a history of operating or cash flow losses or
     a projection or forecast that  demonstrates  continuing  losses  associated
     with  the  use of  the  long-lived  asset.  When  any  such  indicators  of
     impairment are noted,  we compare the carrying value of these assets to the
     future estimated  undiscounted cash flows  attributable to these assets. If
     the  asset's  recoverable  amount  is less than the  carrying  value of the
     asset, then an impairment charge is booked for the excess of carrying value
     over the asset's fair value.

              Any long-lived assets which we expect to sell or otherwise dispose
     of prior to its  previously  estimated  useful  life is  stated  at what we
     estimate to be the lower of its estimated net  realizable  value (less cost
     to sell) or its carrying value. During 2004 and 2003 we recorded impairment
     charges  related  to  containers,   trucks,  and  other  equipment  in  our
     containerized  storage  segment  identified for closure (see Note 3). These
     impairment charges were based upon the differential  between book value and
     the estimated net realizable value, which was based upon prices for similar
     assets,  and  were  equal  to the  net  proceeds  ultimately  received.  No
     additional  impairments  were  identified from our  evaluations,  except as
     noted under "Accounting for casualty losses" below.

              Accounting for casualty losses
              ------------------------------

              Our policy is to record casualty losses or gains in the period the
     casualty  occurs  equal to the  differential  between (a) the book value of
     assets  destroyed  and (b)  insurance  proceeds,  if any, that we expect to
     receive in accordance  with our insurance  contracts.  Potential  insurance
     proceeds  that are  subject to  uncertainties,  such as  interpretation  of
     deductible  provisions  of the governing  agreements  or the  estimation of
     costs of  restoration,  are treated as a contingent  proceeds in accordance
     with Statement of Financial  Accounting Standards No. 5 ("SFAS 5"), and not
     recorded until the uncertainties are satisfied.

              During 2005, we incurred casualty losses totaling  $2,592,000 as a
     result of physical  damage to our facilities  caused by  hurricanes.  These
     losses  represent the excess of the aggregate net book values of the assets
     damaged  ($5,987,000) over the insurance proceeds that we expect to receive
     of approximately $3,395,000. We estimate,  however, that the aggregate cost
     to repair damages to our facilities  will be  approximately  $10.7 million.
     Also included in the caption  "Casualty  loss" for the year ended  December
     31,  2005  is  estimated  business  interruption  income  of  approximating
     $675,000, representing our estimated recovery from our insurers for loss of
     business through December 31, 2005.

              Included  in the  caption  "Casualty  loss"  for  the  year  ended
     December  31,  2004 was  $1,250,000,  representing  the excess the net book
     value of assets damaged. We expect to receive no insurance proceeds for our
     hurricane losses incurred in 2004.

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

              We  utilize  the Fair  Value  Method  (as  defined  in Note 12) of
     accounting  for our employee  stock options issued after December 31, 2001,
     and utilize the APB 25 Method (as  defined in Note 12) for  employee  stock
     options issued prior to January 1, 2002.  Restricted  stock unit expense is
     recorded  over  the  relevant  vesting  period.  See  Note  12  for a  full
     discussion  of our  accounting  with respect to employee  stock options and
     restricted stock units.

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

              Other assets primarily  consists of prepaid expenses,  investments
     in held to maturity debt securities (described below), accounts receivable,
     assets  associated with our  containerized  storage  business,  merchandise
     inventory and rental trucks.

                                      F-10

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              As  discussed  in Note 3,  during  2004 and 2003 asset  impairment
     charges amounting to $1,575,000 and $2,479,000, respectively, were recorded
     with  respect to  containers  and  equipment  utilized in the  discontinued
     containerized storage operations. No asset impairment charges were recorded
     during the year ended December 31, 2005.

              Included in depreciation and  amortization  expense for 2005, 2004
     and 2003 is $3,804,000, $7,544,000, and $6,427,000 respectively, related to
     depreciation of other assets. Included in discontinued operations for 2005,
     2004, and 2003, respectively, is depreciation expense of $29,000, $726,000,
     and  $2,644,000  respectively,  related to containers and equipment used in
     the  operations of the  containerized  storage  business that have now been
     discontinued.

              Other  assets  at  December  31,  2005 also  includes  investments
     totaling $19,838,000 ($20,929,000 at December 31, 2004) in held to maturity
     debt securities stated at amortized cost, which approximates fair value.

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

              Accrued  and  other  liabilities  consist  primarily  of real  and
     personal  property tax  accruals,  prepayments  of rents,  trade  payables,
     losses  and  loss  adjustment   liabilities  from  our  insurance  programs
     (described  below),  and accrued interest.  Prepaid rent totals $26,145,000
     and $26,289,000 at December 31, 2005 and 2004, respectively.

              STOR-Re  Mutual  Insurance  Company,  Inc.  ("STOR-Re"),  which is
     consolidated with the Company, was formed in 1994 as an association captive
     insurance  company  owned by the Company  and  affiliates  of the  Company.
     STOR-Re provides  limited  property and liability  insurance to the Company
     and its affiliates for losses incurred during policy periods prior to April
     1, 2004, and was succeeded by PS Insurance Company Hawaii, Ltd. ("PSIC-H"),
     a wholly owned  subsidiary  of the Company with respect to these  insurance
     activities  for policy  periods  following  March 31, 2004. We also utilize
     other  insurance  carriers  to provide  property  and  liability  insurance
     coverage  in  excess  of  STOR-Re's  and  PSIC-H's  limitations  which  are
     described in Note 16.  STOR-Re and PSIC-H  accrue  liabilities  for covered
     losses and loss  adjustment  expense,  which at December  31, 2005  totaled
     $32,797,000  ($34,192,000  at December  31, 2004) with respect to insurance
     provided to the Company and its affiliates.

              Liabilities  for losses and loss  adjustment  expenses  include an
     amount we determine from loss reports and  individual  cases and an amount,
     based on  recommendations  from an independent  actuary that is a member of
     the American  Academy of Actuaries  using a frequency and severity  method,
     for losses incurred but not reported.  Determining the liability for unpaid
     losses  and loss  adjustment  expense  is based  upon  estimates.  While we
     believe that the amount is adequate,  the ultimate loss may be in excess of
     or less than the amounts  provided.  The methods for making such  estimates
     and for establishing the resulting liability are continually reviewed.

              PS Insurance Company, Ltd ("PSIC"),  a wholly-owned  subsidiary of
     the Company,  reinsured  policies against claims for losses to goods stored
     by tenants in our self-storage facilities for policy periods prior to March
     31, 2004.  PSIC-H  succeeded  PSIC with  respect to these tenant  insurance
     activities  effective April 1, 2004. Prior to January 1, 2006 both of these
     entities  utilize  third-party  insurance  coverage  for  losses  from  any
     individual  event  that  exceeds  a  loss  of  $500,000,  to a  maximum  of
     $10,000,000.  Commencing  January 1, 2006,  PSIC-H will cover  losses up to

                                      F-11

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

     $1,500,000 with third party insurers  covering the next $9,000,000 from any
     individual event. Losses below the third-party insurers' deductible amounts
     are  accrued as cost of  operations  for the tenant  insurance  operations.
     Losses exceeding the third-party  insurers limit are the  responsibility of
     PSIC-H.

              Included  in cost of  operations  - ancillary  operations  for the
     years ended December 31, 2005 and 2004 are  approximately  $1.1 million and
     $1.5  million,  respectively  in  estimated  losses for tenant  claims as a
     result of damage  sustained  from  hurricanes.  The accrued  liability  for
     losses  and loss  adjustment  expense  with  respect  to  tenant  insurance
     activities  totaled  $4,773,000  at  December  31, 2005 and  $6,622,000  at
     December  31,  2004  including  the unpaid  portion  of the  aforementioned
     estimated losses from tenant claims.

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

              Intangible  assets  consist  of  property   management   contracts
     ($165,000,000)  that  were  acquired  in 1995  and  are net of  accumulated
     amortization of $66,919,000 ($60,315,000 at December 31, 2004). Included in
     depreciation and amortization  expense for each of the years ended December
     31, 2005, 2004 and 2003 is $6,604,000  with respect to the  amortization of
     property  management  contracts.  These  assets have a defined life and are
     amortized  on a  straight-line  basis  over a 25  year  period.  We  expect
     amortization  expense with respect to property  management  contracts to be
     $6,604,000  per year in each of the five  years  following  the year  ended
     December 31, 2005.

              Goodwill  ($94,719,000)  represents the excess of acquisition cost
     over the fair value of net  tangible  and  identifiable  intangible  assets
     acquired in business combinations. Each business combination from which our
     Goodwill  arose  was  for  the   acquisition   of  single   businesses  and
     accordingly,  the  allocation  of our goodwill to our business  segments is
     based  directly  on  such  acquisitions.  Goodwill  is net  of  accumulated
     amortization of $16,515,000 at December 31, 2005 and December 31, 2004. Our
     goodwill has an  indeterminate  life and, in accordance with the provisions
     of Statement of Financial  Accounting  Standards No. 142,  amortization  of
     goodwill ceased effective January 1, 2002.

              Revenue and expense recognition
              -------------------------------

              Rental   income,   which   is   generally   earned   pursuant   to
     month-to-month   leases  for  storage  space,   is  recognized  as  earned.
     Promotional  discounts are  recognized as a reduction to rental income over
     the  promotional  period,  which is  generally  during  the first  month of
     occupancy.  Late charges and  administrative  fees are recognized as income
     when  collected.  Tenant  reinsurance  premiums are  recognized  as premium
     revenue when collected.  Revenues from merchandise  sales and truck rentals
     are recognized when earned. Interest income is recognized as earned. Equity
     in earnings of real estate  entities is  recognized  based on our ownership
     interest  in the  earnings  of  each  of  the  unconsolidated  real  estate
     entities.

              We accrue  for  property  tax  expense  based upon  estimates  and
     historical trends. If these estimates are incorrect,  the timing of expense
     recognition could be affected.

              Cost of operations,  general and administrative expense,  interest
     expense, and advertising expenditures are expensed as incurred. Advertising
     expense  totaled  $31,743,000,  $26,995,000,  and $25,231,000 for the years
     ended December 31, 2005, 2004, and 2003, respectively.

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

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

                                      F-12

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              Net income per common share
              ---------------------------

              Distributions  paid to the  holders  of our  Cumulative  Preferred
     Stock totaling  $173,017,000,  $157,925,000  and $146,196,000 for the years
     ended December 31, 2005,  2004 and 2003,  respectively,  have been deducted
     from  net  income  to  arrive  at  net  income   allocable  to  our  common
     shareholders.

              Emerging Issues Task Force ("EITF") Topic D-42, "The Effect on the
     Calculation  of  Earnings  per  Share  for the  Redemption  or the  Induced
     Conversion  of Preferred  Stock"  provides,  among other  things,  that any
     excess of the fair value of the consideration transferred to the holders of
     preferred  stock redeemed over the carrying  amount of the preferred  stock
     should be subtracted from net earnings to determine net earnings  available
     to common  stockholders  in the  calculation of earnings per share.  At the
     July 31, 2003 meeting of the EITF, the  Securities and Exchange  Commission
     ("SEC")  Observer  clarified that for purposes of applying EITF Topic D-42,
     the  carrying  amount  of the  preferred  stock  should be  reduced  by the
     issuance  costs  of  the  preferred  stock,  regardless  of  where  in  the
     stockholders'  equity section those costs were initially  classified at the
     time issuance.

              In conformity with the SEC Observer's clarification, an additional
     $7,538,000 ($0.06 per diluted share),  $8,724,000 ($0.07 per diluted share)
     and  $7,120,000  ($0.06 per diluted  share) was  allocated to our preferred
     stockholders  in connection  with the redemption of such securities for the
     years ended December 31, 2005, 2004 and 2003, respectively.

              Net income  allocated to our common  shareholders has been further
     allocated between our two classes of common stock; our regular common stock
     and our Equity Stock,  Series A. The allocation  among each class was based
     upon the two-class  method under which earnings per share for each class of
     common stock is determined according to dividends declared (or accumulated)
     and  participation  rights in undistributed  earnings.  Using the two-class
     method, the Equity Stock,  Series A was allocated net income of $21,443,000
     for the year ended December 31, 2005 and  $21,501,000 for each of the years
     ended 2004 and 2003. The remaining net income of $254,395,000, $178,063,000
     and  $161,836,000  for the years ended  December 31, 2005,  2004, and 2003,
     respectively, was allocated to our regular common stockholders.

              Basic net income per share is computed using the weighted  average
     common shares  outstanding  (prior to the dilutive  impact of stock options
     and  restricted  stock  units  outstanding).  Diluted net income per common
     share is computed  using the weighted  average  common  shares  outstanding
     (adjusted  for the dilutive  impact of stock options and  restricted  stock
     units outstanding,  computed using the treasury stock method,  that totaled
     660,000 in 2005, 845,000 in 2004 and 1,336,000 in 2003).

3.       Discontinued Operations
         -----------------------

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

              Since January 1, 2002, we have closed a total of 43  containerized
     storage  facilities that were determined to be  non-strategic  (the "Closed
     Facilities."). As the decision was made to close each facility, the related
     assets were deemed not  recoverable  from  operations  and therefore  asset

                                      F-13

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

     impairment  charges  for the  excess of these  assets'  net book value over
     their fair value (less costs to sell),  determined based upon the values of
     similar  assets,  were recorded.  These asset  impairment  charges  totaled
     $1,575,000 and $3,229,000 (including $750,000 with respect to a real estate
     facility previously utilized by one of the Closed Facilities) for the years
     ended  December  31,  2004 and  2003,  respectively.  A loss on sale in the
     amount of $355,000 was also recorded in 2003 in connection with the sale of
     the real estate  facility  previously  utilized  by the Closed  Facilities.
     Amounts for 2004 also include $416,000 in lease termination costs.

              During  2005,  we sold the  non-real  estate  assets of six of the
     Closed Facilities, resulting in a gain of approximately $1,143,000.

              During  2005,  in  an  eminent  domain  proceeding,   one  of  our
     self-storage facilities located in the Portland, Oregon market was entirely
     condemned. We received the condemnation proceeds,  totaling $6,590,000, and
     recorded  a gain of  $5,180,000.  During  2003,  we sold five  self-storage
     facilities  and  recorded  an  aggregate  gain on sale of  $5,476,000.  The
     historical  operations of these six facilities are reported as discontinued
     operations in the table below as the "Sold Self-Storage Facilities."

              During 2004,  we sold a  commercial  property to a third party and
     recorded a gain on sale of $971,000.  The historical  operating  results of
     this facility are reported as discontinued operations in the table below as
     the "Sold Commercial Facility."

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

DISCONTINUED OPERATIONS:
------------------------
                                              Year Ended December 31,
                                        -------------------------------------
                                            2005         2004          2003
                                        ----------   -----------  -----------
                                               (Amounts in thousands)
Rental income:
  Closed Facilities...............      $      95    $   7,488     $  19,347
  Sold Self-Storage Facilities....            461          654         2,242
  Sold Commercial Facility........              -          314           441
                                        ----------   -----------  -----------
Total rental income...............            556        8,456        22,030
                                        ----------   -----------  -----------
Cost of operations:
  Closed Facilities...............           (194)      (6,733)      (15,157)
  Sold Self-Storage Facilities....           (220)        (241)         (800)
  Sold Commercial Facility........              -          (81)         (105)
                                        ----------   -----------  -----------
Total cost of operations..........           (414)      (7,055)      (16,062)
                                        ----------   -----------  -----------
Depreciation expense:
  Closed Facilities ..............            (29)      (1,115)       (3,335)
  Sold Self-Storage Facilities....            (59)         (85)         (506)
  Sold Commercial Facility........              -          (82)          (99)
                                        ----------   -----------  -----------
Total depreciation expense........            (88)      (1,282)       (3,940)
                                        ----------   -----------  -----------
Other:
  Asset impairment charges........              -       (1,575)       (3,229)
  Lease termination costs.........              -         (416)            -
  Net gain on dispositions........          6,323          971         5,121
                                        ----------   -----------  -----------
Total other ......................          6,323       (1,020)        1,892
                                        ----------   -----------  -----------
Total discontinued operations           $   6,377    $    (901)    $   3,920
                                        ==========   ===========  ===========

                                      F-14

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

4.       Real estate facilities
         ----------------------

              Activity in real estate  facilities  during 2005, 2004 and 2003 is
     as follows:

<TABLE>
<CAPTION>

                                                                        2005              2004              2003
                                                                  --------------    ---------------   ---------------
                                                                               (Amounts in thousands)
Operating facilities, at cost:
<S>                                                               <C>                <C>               <C>
  Beginning balance.......................................        $  5,510,750       $  5,125,498      $  4,988,526
  Property acquisitions...................................             254,549            259,487                 -
  Disposition of facilities...............................              (8,582)            (6,785)          (31,327)
  Completed projects opened for operations................              86,888             93,017           121,437
  Casualty loss (Note 2)..................................              (8,953)            (2,874)                -
  Acquisition of minority interest (Note 9)...............              69,942              6,539            16,687
  Capital improvements....................................              25,890             35,868            30,175
                                                                  --------------    ---------------   ---------------
  Ending balance..........................................           5,930,484          5,510,750         5,125,498
                                                                  --------------    ---------------   ---------------
Accumulated depreciation:
  Beginning balance.......................................          (1,320,200)        (1,153,059)         (987,546)
  Additions during the year...............................            (186,048)          (169,471)         (172,328)
  Casualty loss (Note 2)..................................               2,966              1,624                 -
  Disposition of facilities...............................               3,154                706             6,815
                                                                  --------------    ---------------   ---------------
  Ending balance..........................................          (1,500,128)        (1,320,200)       (1,153,059)
                                                                  --------------    ---------------   ---------------
Construction in process:
   Beginning balance......................................              56,160             81,856           105,323
   Current development....................................              86,248             71,602           102,428
  Dispositions............................................              (1,048)            (4,281)           (4,458)
   Completed projects opened for operations...............             (86,888)           (93,017)         (121,437)
                                                                  --------------    ---------------   ---------------
   Ending balance.........................................              54,472             56,160            81,856
                                                                  --------------    ---------------   ---------------
 Total real estate facilities.............................        $  4,484,828       $  4,246,710      $  4,054,295
                                                                  ==============    ===============   ===============

</TABLE>


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

              In 2005, we acquired from third parties 32 self-storage facilities
     (2,390,000 net rentable  square feet) at an aggregate cost of  $254,549,000
     in cash.

              During 2005, we opened six newly developed self-storage facilities
     (463,000 net rentable square feet),  completed 11 projects to convert space
     previously  used by our  containerized  storage  business  into 721,000 net
     rentable  square  feet  of  self-storage  space,  and  we  completed  seven
     expansion projects to existing  self-storage  facilities adding 288,000 net
     rentable  square feet. The total cost of these  projects was  approximately
     $86,888,000.

              During  2005,  we  disposed  of  various  parcels  of land  for an
     aggregate  of  $8,165,000,  recording  a  gain  on  sale  of  approximately
     $3,099,000.  In addition,  we disposed of a facility in connection  with an
     eminent domain proceeding,  for an aggregate of $6,590,000 recording a gain
     on sale of $5,180,000,  which is included in  Discontinued  Operations (see
     Note 3).

                                      F-15

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              During the year ended  December  31,  2004,  we opened seven newly
     developed  self-storage  facilities  (505,000  net rentable  square  feet),
     completed   nine  projects  to  convert  space   previously   used  by  our
     containerized  storage  business  into 604,000 net rentable  square feet of
     self-storage  space,  and  expanded  the  square  footage  of our  existing
     self-storage facilities (108,000 net rentable square feet) for an aggregate
     cost of  $91,498,000.  In addition,  we incurred  $1,519,000  in additional
     costs with respect to projects completed in 2003.

              In  2004 we also  acquired  interests  from  third  parties  in 45
     self-storage   facilities  (3,109,000  net  rentable  square  feet)  at  an
     aggregate cost of $259,487,000, comprised of $139,794,000 cash, $94,693,000
     in assumed  debt (Note 7), and the  issuance of $25 million of our Series Z
     Perpetual Preferred Units (Note 9).

              During year ended  December  31,  2004,  we sold one  discontinued
     commercial  facility,  four  vacant  parcels of land and  received  partial
     condemnation proceeds with respect to two existing self-storage facilities.
     Total aggregate net proceeds totaled  $12,648,000.  We recorded a gain from
     these  transactions of $2,288,000,  of which  $1,317,000 is recorded to the
     line item "Gain on disposition of real estate and real estate investments "
     on our  consolidated  statement  of income  and  $971,000  is  recorded  in
     discontinued  operations  (Note  3)  with  respect  to  the  aforementioned
     commercial facility.

              In addition,  in 2004, we recorded a $1,250,000 casualty loss with
     respect to real estate assets  damaged as a result of hurricanes  occurring
     in the state of Florida.  This  casualty loss is comprised of $2,874,000 in
     buildings and  $1,624,000 in accumulated  depreciation  and is reflected on
     the  consolidated  statement  of  income as  "Casualty  Loss." We expect to
     receive no insurance proceeds with respect to this loss.

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

              During  2003,  we  sold  five   self-storage   facilities  and  an
     industrial facility previously used by the containerized storage operations
     for aggregate net proceeds of $20,950,000 of cash. An aggregate net gain on
     sale  of  $5,121,000  was  recorded  for  these  sales,  combined  with  an
     impairment  charge in the amount of $750,000 which was recorded when it was
     determined  that the  industrial  facility  would be sold for less than its
     book value.  The gain and  impairment  charge are included in  Discontinued
     Operations. See Note 3.

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

              At December 31, 2005, the unaudited  adjusted basis of real estate
     facilities  for  federal  tax  purposes  was  approximately   $3.7  billion
     (unaudited).

              Construction in process
              -----------------------

              Construction in process at December 31, 2005 consists primarily of
     four  self-storage  facilities  (338,000  net  rentable  square  feet),  51
     expansion  projects and various  remodeling  projects to enhance the visual
     and structural appeal of existing  self-storage  facilities  (3,020,000 net
     rentable  square  feet)  and  seven  projects  to  convert  space at former
     containerized  storage  facilities  into  self-storage  space  (553,000 net
     rentable square feet).

5.       Investments in real estate entities
         -----------------------------------

              At December 31, 2005,  investments in real estate entities consist
     of our ownership  interests in eight  partnerships,  which  principally own
     self-storage facilities, and our ownership interest in PSB. These interests
     are non-controlling  interests of less than 50% and are accounted for using
     the equity method of accounting. Accordingly, earnings are recognized based
     upon our  ownership  interest  in each of these  entities.  The  accounting
     policies of these entities are similar to ours.

                                      F-16

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              Approximately $46 million of our consolidated retained earnings is
     represented by undistributed earnings of these Unconsolidated Entities.

              During  2005,  2004 and  2003,  we  recognized  earnings  from our
     investments of $24,883,000, $22,564,000, and $24,966,000, respectively, and
     received  cash  distributions   totaling  $23,112,000,   $20,961,000,   and
     $17,754,000,   respectively.  In  addition,  during  2005,  we  received  a
     distribution from affiliated entities of 635,885 shares of our common stock
     and  31,909  depositary  shares  of our  Equity  Stock,  Series  A, with an
     aggregate book value of $14,520,000.

              The   following   table   sets  forth  our   investments   in  the
     Unconsolidated  Entities  at  December  31, 2005 and 2004 and our equity in
     earnings  of real  estate  investments  for each of the three  years  ended
     December 31, 2005:

<TABLE>
<CAPTION>

                                  Investments in Real Estate            Equity in Earnings of Real Estate Entities
                                   Entities at December 31,                  for the year ended December 31,
                                  ------------------------------        ------------------------------------------
                                     2005             2004                2005            2004            2003
                                  -------------     ------------        -----------    -----------     -----------
<S>                                <C>               <C>                 <C>            <C>             <C>
Investment in PSB (a)..........    $   288,694       $   284,564         $  18,757      $  16,895       $  19,687
Other investments..............         36,996            53,883             6,118          5,742           5,279
Acquisition Joint Venture......          2,865             2,857                 8            (73)              -
                                  -------------     ------------        -----------    -----------     -----------
    Total......................     $  328,555        $  341,304         $  24,883      $  22,564       $  24,966
                                  =============     ============        ===========    ===========     ===========

</TABLE>

     (a) Included in equity in earnings  for is the net impact of PSB's gains on
         sale of real estate,  impairment charges,  and the impact from applying
         EITF Topic D-42  aggregating  $7,727,000,  $4,544,000,  and $187,000 in
         2005, 2004 and 2003 respectively.

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

              On  January  2,  1997,  we  reorganized  our  commercial  property
      operations  into an entity now known as PS Business  Parks,  Inc.,  a REIT
      traded  on the  American  Stock  Exchange,  and an  operating  partnership
      controlled  by PS Business  Parks,  Inc.  (collectively,  the REIT and the
      operating  partnership are referred to as "PSB"). The Company, and certain
      Consolidated  Entities,  have a 44% common  equity  interest  in PSB as of
      December 31,  2005.  This 44% common  equity  interest is comprised of the
      ownership of 5,418,273  shares of PSB common stock and  7,305,355  limited
      partnership units in the operating partnership;  these limited partnership
      units are convertible at our option,  subject to certain conditions,  on a
      one-for-one basis into PSB common stock. Based upon PSB's trading price at
      December  31, 2005  ($49.20),  the shares and units had a market  value of
      approximately  $626,002,000  as compared to a book value of  $288,694,000,
      which is substantially equivalent to our underlying equity in this entity.

              At December 31, 2005,  PSB owned and operated  approximately  17.6
      million net rentable  square feet of commercial  space.  In addition,  PSB
      manages  commercial  space  owned  by the  Company  and  the  Consolidated
      Entities pursuant to property management agreements.

                                      F-17

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              The following table sets forth selected  financial  information of
      PSB;  the amounts  represent  100% of PSB's  balances and not our pro-rata
      share.

<TABLE>
<CAPTION>

                                                                   2005              2004
                                                              ----------------   ---------------
                                                                  (Amount in thousands)
 For the year ended December 31,
<S>                                                           <C>                 <C>
   Total revenue, interest and other income.............      $      225,136      $     212,032
   Depreciation and amortization........................             (76,285)           (70,086)
   Other expenses and casualty loss.....................             (73,053)           (70,751)
   Minority interest in continuing operations...........             (16,227)           (24,746)
                                                              ----------------   ---------------
     Income from continuing operations..................              59,571             46,449
   Income from discontinued operations (a)..............              15,723             15,694
                                                              ----------------   ---------------
     Net income.........................................      $       75,294      $      62,143
                                                              ================   ================
 At December 31,
   Total assets (primarily real estate investments).....      $    1,463,678      $   1,366,052
   Total debt...........................................              25,893             11,367
   Other liabilities....................................              39,126             40,676
   Preferred equity and preferred minority interests....             729,100            638,600
   Common equity and common minority interests..........             669,559            675,409

</TABLE>

     (a) Included  in  discontinued  operations  are net  gains  on sale of real
         estate  facilities  totaling  $18,109,000 and $15,462,000 for the years
         ended December 31, 2005 and 2004,  respectively,  and minority interest
         totaling  $5,293,000  and  $5,259,000  for the years ended December 31,
         2005 and 2004 respectively.

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

              Other investments consist primarily of an average of approximately
      41% common  equity  ownership in seven  limited  partnerships  that own an
      aggregate  of  36  self-storage  facilities.   The  book  value  of  these
      investments  ($36,996,000)  is approximately  $18,011,000  higher than our
      aggregate  underlying  equity in these entities;  the portion allocated to
      building is amortized  as a reduction  to equity in earnings  over 25-year
      period.

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

                                                  2005             2004
                                             ---------------   ---------------
                                                 (Amount in thousands)
 For the year ended December 31,
 Total revenue........................       $       29,392    $       28,376
 Cost of operations and other expenses               (9,763)           (9,870)
 Depreciation and amortization........               (2,056)           (2,247)
                                             ---------------   ---------------
     Net income.......................       $       17,573    $       16,259
                                             ===============   ===============
 At December 31,
 Total assets (primarily storage
     facilities)......................       $       48,287    $       58,124
 Total liabilities....................                1,982             1,853
 Total Partners' equity...............               46,305            56,271

                                      F-18

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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


              As described more fully under  "Accounting for  Acquisition  Joint
     Venture"  in Note 2, the  Acquisition  Joint  Venture was formed in January
     2004  for  the  purpose  of  acquiring  up  to  $125  million  in  existing
     self-storage  facilities from third parties. In 2004, the Acquisition Joint
     Venture acquired two self-storage facilities directly from third parties at
     an  aggregate  cost  of  $9,086,000,  of  which  our  pro  rata  share  was
     $2,930,000,  and our  investment  in these two  facilities is accounted for
     using the equity method of accounting.

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

<TABLE>
<CAPTION>

                                                                 2005              2004
                                                            ---------------    -------------
                                                               (Amounts in thousands)
 For the year ended December 31,
 -------------------------------
<S>                                                         <C>                <C>
   Total revenue.......................................     $        1,302     $       447
   Cost of operations and other expenses...............               (482)           (192)
   Depreciation and amortization.......................               (270)            (97)
                                                            ---------------    -------------
     Net income........................................     $          550     $       158
                                                            ===============    =============

 At December 31,
 ---------------
  Total assets (primarily storage facilities).........      $        8,442     $     9,168
   Total liabilities...................................                 62              11
   Total Partners' equity..............................              8,380           9,157

</TABLE>

6.       Revolving line of credit
         ------------------------

              We have a $200  million  revolving  line of  credit  (the  "Credit
     Agreement")  that has a maturity  date of April 1, 2007 and bears an annual
     interest rate ranging from the London Interbank Offered Rate ("LIBOR") plus
     0.45% to LIBOR plus 1.20% depending on our credit ratings  (currently LIBOR
     plus 0.45%). In addition, we are required to pay a quarterly commitment fee
     ranging  from  0.15% per annum to 0.30% per annum  depending  on our credit
     ratings (currently the fee is 0.15% per annum). At December 31, 2005 and at
     March 15, 2006, we had no outstanding borrowings on our line of credit.

              The  Credit  Agreement  includes  various   covenants,   the  more
     significant  of which require us to (i) maintain a balance  sheet  leverage
     ratio of less than 0.55 to 1.00, (ii) maintain certain  quarterly  interest
     and fixed-charge coverage ratios (as defined therein) of not less than 2.25
     to 1.0 and 1.5 to 1.0,  respectively,  and (iii)  maintain a minimum  total
     shareholders' equity (as defined therein).  In addition,  we are limited in
     our ability to incur  additional  borrowings  (we are  required to maintain
     unencumbered  assets with an aggregate  book value equal to or greater than
     1.5 times our unsecured  recourse  debt).  We were in  compliance  with all
     covenants of the Credit Agreement at December 31, 2005.

              At December  31, 2005 and March 15, 2006,  we had undrawn  standby
     letters of credit,  which reduces our borrowing  capability with respect to
     our  line of  credit  by the  amount  of the  letter  of  credit,  totaling
     $17,985,000  ($13,935,000 at December 31, 2004). The beneficiaries of these
     standby letters of credit were certain insurance companies  associated with
     our captive insurance and tenant insurance activities.

                                      F-19

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

7.       Notes payable
         -------------

              Notes  payable  at  December  31,  2005  and 2004  consist  of the
     following:

<TABLE>
<CAPTION>

                                                                          2005                      2004
                                                                -------------------------  -----------------------
                                                                 Carrying                  Carrying
                                                                  amount     Fair value     amount      Fair value
                                                                ------------ ------------  -----------  ----------
                                                                              (Amounts in thousands)
Unsecured senior notes:
<S>                                                               <C>          <C>          <C>          <C>
  7.66% note due January 2007.............................        $ 22,400     $ 23,060     $ 33,600     $ 35,355

Mortgage notes payable:
  7.134% and 8.75% mortgage notes secured by two real estate
      facilities with an aggregate net book value of $10.8
      million, principal and interest payable monthly, due at
      October 2009 and September 2028.....................           1,484        1,632        1,629        1,782
  5.05% mortgage notes (including unamortized note premium of
      $1,921,000 and $2,382,000 at December 31, 2005 and 2004,
      respectively) secured by 25 real estate facilities with
      an aggregate net book value of $95.9 million, principal
      and interest due monthly, due at varying dates between
      October 2010 and May 2023...........................          38,568       37,511       41,470       41,470
  5.25% mortgage notes (including unamortized note premium of
      $3,499,000  and $4,064,000 at December 31, 2005 and
      2004, respectively) secured by seven real estate
      facilities with an aggregate net book value of $90.2
      million, principal and interest due monthly, due at
      varying dates between June 2011 and July 2013.......          51,498       50,679       52,820       52,820
                                                                ------------ ------------  -----------  ----------
         Total notes payable..............................        $113,950     $112,882     $129,519     $131,427
                                                                ============ ============  ===========  ==========

</TABLE>

              All of our notes  payable are fixed  rate.  The  unsecured  senior
     notes require semi-annual interest and annual principal payments to be paid
     and have  various  restrictive  covenants,  all of which  have  been met at
     December 31, 2005.

              All  of  the   mortgage   notes  have   prepayment   penalties  or
     restrictions on prepayment that make prepayment of these notes economically
     impractical.


              We assumed the 5.05% and 5.25% mortgage  notes in connection  with
     property acquisitions in 2004. The stated interest rates on the notes range
     from 5.4% to 8.0% with a weighted average of approximately 6.65%. The notes
     were recorded at their estimated fair value based upon the estimated market
     rate of 5.05% and 5.25%,  an  aggregate  of  approximately  $94,693,000  as
     compared  to  actual   outstanding   balances   aggregating   approximately
     $88,247,000.  This premium of  approximately  $6,446,000 over the principal
     balance of the notes payable is amortized  over the  remaining  term of the
     loans  based  upon the  effective  interest  method.  During the year ended
     December 31, 2005, we recorded  $6,639,000 in interest expense on our notes
     payable, comprised of $7,665,000 in cash less $1,026,000 in amortization of
     premium.

                                      F-20

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              At December 31, 2005,  approximate  principal  maturities of notes
     payable are as follows:

<TABLE>
<CAPTION>

                                      Unsecured            Mortgage
                                     senior notes        notes payable          Total
                                    ---------------      --------------      -----------
                                               (dollar amounts in thousands)
<C>                                  <C>                  <C>                  <C>
2006.........................        $     11,200         $    4,544           $  15,744
2007.........................              11,200              4,789              15,989
2008.........................                   -              5,041               5,041
2009.........................                   -              5,237               5,237
2010.........................                   -              5,276               5,276
Thereafter...................                   -             66,663              66,663
                                    ---------------      --------------      -----------
                                     $     22,400         $   91,550           $ 113,950
                                    ===============      ==============      ===========
Weighted average rate........               7.7%               5.2%                 5.7%
                                    ===============      ==============      ===========

</TABLE>

              Interest paid (including  interest related to the borrowings under
     the Credit  Agreement,  Debt to Joint Venture Partner  described in Note 8,
     and interest paid to Mr. Hughes  described in Note 9) during 2005, 2004 and
     2003  was  $11,657,000,   $4,377,000,  and  $7,131,000,   respectively.  In
     addition, in 2005, 2004 and 2003,  capitalized interest totaled $2,820,000,
     $3,617,000, and $6,010,000,  respectively,  related to construction of real
     estate facilities.

8.       Debt to Joint Venture Partner
         -----------------------------

              As  described  more  fully  in Note 2, we  accounted  for  certain
     transactions with the Acquisition Joint Venture as financing transactions:

              o    On December 31, 2004, we sold seven  self-storage  facilities
                   that  we had  acquired  in 2004  from  third  parties  to our
                   Acquisition Joint Venture for $22,993,000, an amount that was
                   equal  to fair  value  and our  cost.  Our  partner's  equity
                   contribution   with   respect  to  these   transactions   was
                   $16,095,000.

              o    On  January  14,  2005,  we sold an 86.7%  interest  in three
                   facilities to the Acquisition  Joint Venture for an aggregate
                   amount of $27,424,000. Our partner's equity contribution with
                   respect to these facilities was $19,197,000.

              Our  partner's   equity   contributions   with  respect  to  these
     transactions  has been  classified as debt under the caption "Debt to Joint
     Venture  Partner."  The  balances  of  $35,697,000  and  $16,095,000  as of
     December  31,  2005 and  2004,  each  approximates  the  fair  value of our
     partners' interest in these facilities as of each respective date.

              A total of  $2,939,000  was  recorded as  interest  expense on our
     consolidated statements of income with respect to our Debt to Joint Venture
     Partner during the year ended December 31, 2005, representing our partner's
     pro rata share of net earnings  with respect to the  properties  we sold to
     the Acquisition Joint Venture (an 8.5% return on their investment); a total
     of $2,534,000 was paid to our joint venture partner (an 8.0% return payable
     currently in accordance  with the  partnership  agreement)  during the year
     ended December 31, 2005, with the debt balance increasing $405,000.

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

                                      F-21

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

9.       Minority Interest
         -----------------

              In  consolidation,  we  classify  ownership  interests  in the net
     assets  of each of the  Consolidated  Entities,  other  than  our  own,  as
     minority  interest  on  the  consolidated  financial  statements.  Minority
     interest  in  income  consists  of the  minority  interests'  share  of the
     operating results of the Consolidated Entities, or in the case of preferred
     partnership  interests,  distributions paid, plus costs associated with the
     application of EITF topic D-42 as it relates to the redemption of preferred
     units.

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

              At December  31,  2005 and 2004,  we had the  following  series of
     preferred partnership units outstanding:

<TABLE>
<CAPTION>

                          Earliest                         At December 31, 2005        At December 31, 2004
                     Redemption Date or   Distribution     Units       Carrying        Units        Carrying
      Series           Dates Redeemed         Rate      Outstanding     Amount      Outstanding      Amount
------------------   -------------------  ------------  ------------  ------------  ------------   -----------
                                                                         (amounts in thousands)
<S>                      <C>                   <C>           <C>      <C>                <C>       <C>
Series NN........        March 17, 2010        6.400%        8,000    $   200,000        8,000     $   200,000
Series Z.........      October 12, 2009        6.250%        1,000         25,000        1,000          25,000
Series N.........        March 17, 2005        9.500%            -              -        1,600          40,000
Series O ........        March 29, 2005        9.125%            -              -        1,800          45,000
                                                        ------------  -------------  -----------   -----------
Total............                                            9,000    $   225,000       12,400     $   310,000
                                                        ============  =============  ===========   ===========

</TABLE>


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

              The  preferred  partnership  units are not  redeemable  during the
     first five  years,  thereafter,  at our  option,  we can call the units for
     redemption at the issuance amount plus any unpaid distributions. The Series
     NN  preferred  partnership  units are not  redeemable  by the  holder.  The
     holders of the Series Z preferred partnership units have a one-time option,
     exercisable  five years from issuance,  to require us to redeem their units
     for $25.0 million in cash plus any unpaid distributions.

              For each of the years ended December 31, 2005, 2004, and 2003, the
     holders  of  the  preferred   partnership  units  were  paid  in  aggregate
     approximately $16,147,000,  $22,423,000, and $26,906,000,  respectively, in
     distributions  (excluding the special  distribution paid on March 22, 2004,
     described  below),  and  received  an  equivalent  allocation  of  minority
     interest in earnings.

              On March  17,  2005,  we  redeemed  all the  outstanding  Series N
     preferred  partnership  units  ($40,000,000)  and on  March  29,  2005,  we
     redeemed  all  the  outstanding   Series  O  preferred   partnership  units
     ($45,000,000),  at their carrying  amount plus accrued  distributions.  The
     redemption of these preferred  partnership units resulted in an increase in
     income allocated to minority interests and a reduction to the Company's net
     income  during the year ended  December 31, 2005 of $874,000 as a result of
     the application of EITF Topic D-42 which allocates the excess of the stated
     amount of the preferred partnership units over their carrying amount to the
     holders of the redeemed securities.

              During October 2004, in connection with property acquisitions, one
     of our consolidated  operating  partnerships issued $25.0 million of 6.250%
     Series Z preferred partnership units.

                                      F-22

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              On March 22, 2004,  certain investors who held $200 million of our
     Series N preferred  partnership  units  agreed,  in exchange  for a special
     distribution  of  $8,000,000,  to  exchange  all their  Series N  preferred
     partnership  units for $200 million of our Series NN preferred  partnership
     units.  The investors  also  received a  distribution  for  dividends  that
     accrued from January 1, 2004 through the  effective  date of the  exchange.
     During the year ended  December  31,  2004,  income  allocated  to minority
     interests was increased by $10,063,000 from (i) the special distribution to
     the holders of the preferred units ($8,000,000) and (ii) the application of
     EITF Topic D-42 ($2,063,000).

              Other partnership interests

              Minority  interest at December  31,  2005 and 2004,  and  minority
     interest in income for the three years ended December 31, 2005 with respect
     to the other partnership interests are comprised of the following:

<TABLE>
<CAPTION>

                                          Minority interest at          Minority interest in income for the year ended
                                     -----------------------------      ----------------------------------------------
                                     December 31,     December 31,        December 31,    December 31,   December 31,
Description of Minority Interest        2005             2004                2005            2004           2003
---------------------------------    ------------     ------------      --------------   -------------- -------------
                                                                    (Amounts in thousands)
Consolidated Development Joint
<S>                                    <C>             <C>                 <C>            <C>           <C>
  Venture........................      $       -       $  64,297           $   4,229      $   5,652     $  4,211
Convertible Partnership Units...           6,177           6,160                 469            328          305
Other Consolidated Partnerships..         22,793          48,446              10,932         11,447        2,281
                                     ------------     ------------      --------------   -------------- -------------
Total other partnership interests      $  28,970       $ 118,903           $  15,630      $  17,427     $  6,797
                                     ============     ============      ==============   ============== =============

</TABLE>

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

              In November  1999,  we formed a  development  joint  venture  (the
     "Consolidated  Development  Joint  Venture")  with a joint venture  partner
     (PSAC  Storage  Investors,  LLC,  referred  to as  "PSAC")  whose  partners
     included a third party  institutional  investor  and B. Wayne  Hughes ("Mr.
     Hughes"),   the  Chairman  of  the  Board  of  the   Company,   to  develop
     approximately $100 million of self-storage  facilities and to purchase $100
     million  of the our  Equity  Stock,  Series  AAA (see Note 10).  We owned a
     controlling  interest in the  Consolidated  Development  Joint  Venture and
     included the accounts of this  partnership  in our  consolidated  financial
     statements  since  its  inception.  PSAC's  interest  in  the  Consolidated
     Development  Joint  Venture  was  accounted  for as minority  interest,  as
     denoted in the above table.

              On  August 5,  2005,  we  acquired  the  institutional  investor's
     interest in PSAC for  approximately  $41,420,000 in cash. This  acquisition
     gave us a  controlling  position  in PSAC  and the  right  to  acquire  the
     remaining  interest in PSAC, held by Mr. Hughes, for a stipulated amount on
     November  17, 2005.  We  immediately  notified Mr.  Hughes of our intent to
     acquire his interest on November 17, 2005.

              On August 5, 2005,  we  commenced  consolidating  the  accounts of
     PSAC.  The total  acquisition  cost of the  transaction  was  $105,933,000,
     comprised of the $41,420,000 in cash paid to the institutional investor and
     $64,513,000  in debt due to Mr. Hughes.  Mr.  Hughes'  interest in PSAC was
     accounted  for as debt due to the  exercise  of our  right to  acquire  his
     interest.  The total acquisition cost eliminated the book value of minority
     interest  on the  date of  acquisition  ($62,013,000)  with  the  remainder
     allocated to real estate ($43,920,000).

              The preferred  return that Mr. Hughes  accrued from August 5, 2005
     through  November  17, 2005  amounting  to  $1,458,000  is reflected on our

                                      F-23

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

     consolidated statements of income as interest expense. On November 17, 2005
     we acquired Mr.  Hughes'  interest for an aggregate of $64,513,000 in cash,
     plus accrued and unpaid interest, extinguishing the debt.

              Minority  interest at December 31, 2004 primarily  represented the
     total  contributions  received from PSAC combined with the  accumulated net
     income allocated to PSAC, net of cumulative distributions.

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

              As of December 31, 2005 and 2004, one of our Consolidated Entities
     had  approximately  237,934  convertible  partnership  units  ("Convertible
     Units")  outstanding,  representing a limited  partnership  interest in the
     partnership.  The Convertible  Units are convertible on a one-for-one basis
     (subject to certain  limitations)  into common  stock of the Company at the
     option of the  unitholder.  Minority  interest  in income  with  respect to
     Convertible  Units reflects the Convertible  Units' share of the net income
     of the  Company,  with net income  allocated  to  minority  interests  with
     respect to weighted  average  outstanding  Convertible  Units on a per unit
     basis equal to diluted  earnings per common  share.  During the years ended
     December 31, 2005, 2004, and 2003, no Convertible Units were converted.

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

              The partnership agreements of the Other Consolidated  Partnerships
     included  in  the  table  above  have  termination  dates  that  cannot  be
     unilaterally  extended  by  the  Company  and,  upon  termination  of  each
     partnership,  the net assets of these entities would be liquidated and paid
     to the  minority  interests  and the  Company  based  upon  their  relative
     ownership interests.

              At December 31, 2005, the Other Consolidated  Partnerships reflect
     common  equity  interests  that  we do not  own in 22  entities  owning  an
     aggregate of 73 self-storage facilities (24 entities owning an aggregate of
     123 self-storage facilities at December 31, 2004).

              In 2005, we acquired the remaining interests we did not own in the
     Consolidated  Entities  for  an  aggregate  of  $51,395,000  in  cash.  The
     acquisition  resulted in a reduction  of minority  interest of  $25,373,000
     with the excess of cost over underlying book value ($26,022,000)  allocated
     to real estate.

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

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

              Impact of SFAS No. 150
              ----------------------

              In May 2003,  the FASB issued  Statement of  Financial  Accounting
     Standards  No. 150 - "Accounting  for Certain  Financial  Instruments  with
     Characteristics  of both  Liabilities  and Equity"  ("SFAS No. 150").  This
     statement  prescribes  reporting  standards for financial  instruments that
     have   characteristics  of  both  liabilities  and  equity.  This  standard

                                      F-24

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

     generally indicates that certain financial instruments that give the issuer
     a choice of setting an obligation  with a variable  number of securities or
     settling  an  obligation  with  a  transfer  of  assets,   any  mandatorily
     redeemable   security,   and  certain  put  options  and  forward  purchase
     contracts,  should be classified as a liability on the balance sheet.  With
     the exception of minority  interests,  described below, we implemented SFAS
     No. 150 on July 1, 2003,  and the adoption  had no impact on our  financial
     statements.

              The provisions of SFAS No. 150 indicate that the minority interest
     in the  Other  Consolidated  Partnerships  would  have to be  treated  as a
     liability, because these partnerships have termination dates that cannot be
     unilaterally extended by us and, upon termination,  the net assets of these
     entities would be liquidated and paid to the minority interest and us based
     upon relative ownership  interests.  However, on October 29, 2003, the FASB
     decided to defer  indefinitely a portion of the  implementation of SFAS No.
     150, which thereby  deferred our  requirement  to recognize  these minority
     interest liabilities. If these partnerships were liquidated at December 31,
     2005,  we estimate  that the minority  interests  would  receive a total of
     approximately $162 million as their share of the liquidation proceeds.

                                      F-25

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

10.      Shareholders' equity
         --------------------

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

              At December 31, 2005 and December 31, 2004,  we had the  following
     series of Cumulative  Preferred Stock outstanding:  At December 31, 2005 At
     December 31, 2004

<TABLE>
<CAPTION>

                         Earliest
                        Redemption         Dividend        Shares        Carrying         Shares         Carrying
       Series             Date (a)           Rate       Outstanding        Amount       Outstanding       Amount
---------------------  -------------      -----------  --------------- --------------  -------------   ------------
                                                                       (Dollar amount in thousands)
<S>                      <C>                  <C>                  <C>  <C>       <C>     <C>          <C>
Series F  (b)            5/2/05               9.750%               -    $         -       2,300,000    $    57,500
Series Q  (b)            1/19/06              8.600%               -              -           6,900        172,500
Series R                 9/28/06              8.000%          20,400        510,000          20,400        510,000
Series S                 10/31/06             7.875%           5,750        143,750           5,750        143,750
Series T                 1/18/07              7.625%           6,086        152,150           6,086        152,150
Series U                 2/19/07              7.625%           6,000        150,000           6,000        150,000
Series V                 9/30/07              7.500%           6,900        172,500           6,900        172,500
Series W                 10/6/08              6.500%           5,300        132,500           5,300        132,500
Series X                 11/13/08             6.450%           4,800        120,000           4,800        120,000
Series Y                 1/2/09               6.850%       1,600,000         40,000       1,600,000         40,000
Series Z                 3/5/09               6.250%           4,500        112,500           4,500        112,500
Series A                 3/31/09              6.125%           4,600        115,000           4,600        115,000
Series B                 6/30/09              7.125%           4,350        108,750           4,350        108,750
Series C                 9/13/09              6.600%           4,600        115,000           4,600        115,000
Series D                 2/28/10              6.180%           5,400        135,000               -              -
Series E                 4/27/10              6.750%           5,650        141,250               -              -
Series F                 8/23/10              6.450%          10,000        250,000               -              -
Series G                 12/12/10             7.000%           4,000        100,000               -              -
                                                       --------------- --------------  -------------   ------------
      Total Cumulative Preferred Stock                     1,698,336    $ 2,498,400       3,980,186    $ 2,102,150
                                                       =============== ==============  =============   ============

</TABLE>

(a)  Except under certain conditions relating to the Company's  qualification as
     a REIT, the  Cumulative  Preferred  Stock are not  redeemable  prior to the
     dates indicated. On or after the dates indicated, each series of Cumulative
     Preferred Stock will be redeemable,  at our option, in whole or in part, at
     $25.00  per  depositary  share (or per share in the case of the  Series Y),
     plus accrued and unpaid dividends.

(b)  Series F and Series Q were  redeemed  on the date  indicated.  The Series Q
     Cumulative  Preferred  Stock was called for redemption on November 30, 2005
     and was  redeemed on January  19, 2006 along with the unpaid  distributions
     from  January  1,  2006  through  the  redemption  date.  Accordingly,  the
     redemption  value of $172,500,000 was classified as a liability at December
     31, 2005.

              During 2005, we issued four series of Cumulative  Preferred Stock:
     Series D - issued  February 28, 2005, net proceeds  totaling  $130,548,000,
     Series E - issued  April 27,  2005,  net  proceeds  totaling  $136,601,000,
     Series F - issued August 23, 2005, net proceeds  totaling  $242,550,000 and
     Series G - issued  December  12,  2005,  aggregate  net  proceeds  totaling
     $96,886,000.


              During  2005,  we  redeemed  our  Series F  (including  redemption
     expenses) of  $57,517,000,  plus accrued  dividends.  In November  2005, we
     called for redemption our Series Q Cumulative  Preferred Stock, at par. The
     total cost of  redemption  of the Series Q Cumulative  Preferred  Stock was
     approximately $172,517,000, plus accrued dividends, on the redemption date,
     January 19, 2006. Accordingly,  the redemption value of $172,500,000 Series
     Q Cumulative  Preferred Stock was classified as a liability at December 31,
     2005.

                                      F-26

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              During 2004, we issued five series of Cumulative  Preferred Stock:
     Series Y - issued  January 2, 2004,  net proceeds  $40,000,000,  Series Z -
     issued March 5, 2004,  net proceeds  $108,756,000,  Series A - issued March
     31, 2004, net proceeds  $111,177,000,  Series B - issued June 30, 2004, net
     proceeds  $105,124,000,  Series C - issued September 13, 2004, net proceeds
     $111,177,000.

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

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

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

              The  holders  of  our  Cumulative  Preferred  Stock  have  general
     preference  rights with respect to liquidation and quarterly  distributions
     and,  except  under  certain  conditions  and as noted  below,  will not be
     entitled to vote on most  matters.  In the event of a cumulative  arrearage
     equal to six  quarterly  dividends  or failure to maintain a Debt Ratio (as
     defined) of 50% or less,  holders of all  outstanding  series of  preferred
     stock  (voting as a single  class  without  regard to series) will have the
     right to elect two  additional  members to serve on the Company's  Board of
     Directors  until events of default  have been cured.  At December 31, 2005,
     there were no dividends in arrears and the Debt Ratio was 4.5%.

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

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

              During 2005, 2004 and 2003, activity with respect to our Common
Stock was as follows:

<TABLE>
<CAPTION>

                                                2005                        2004                        2003
                                        -----------------------    -------------------------   -------------------------
                                          Shares        Amount        Shares       Amount        Shares        Amount
                                        -----------  -----------   ------------ ------------   -----------  ------------
                                                                (Dollar amount in thousands)
Employee Stock based
<S>                                       <C>        <C>            <C>          <C>            <C>          <C>
     compensation...................      282,998    $    7,511     1,985,416    $   49,929     2,743,420    $   68,088
Acquisition of minority interests               -             -             -             -       426,859        13,510
Conversion of Class B Common Stock
                                                -             -             -             -     7,000,000           700
Shares received as a distribution
    From unconsolidated entities.        (635,885)      (14,520)            -             -             -             -
Repurchases of common stock......         (84,000)       (4,990)     (445,700)      (20,295)     (175,000)       (6,001)
                                        -----------  -----------   ------------ ------------   -----------  ------------
                                         (436,887)   $  (11,999)    1,539,716    $   29,634     9,995,279    $   76,297
                                        ===========  ===========   ============ ============   ===========  ============

</TABLE>
                                      F-27

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              During 2005, we received a distribution of 503,110 shares, and one
     of the Consolidated  Entities  received 132,775 shares, of our Common Stock
     previously  held by  Unconsolidated  Entities.  The 503,110  shares that we
     received were retired.

              At  December  31,  2005,  certain  entities we  consolidate  owned
     1,146,207  shares of our Common Stock.  These shares continue to be legally
     issued and outstanding.  In the consolidation process, these shares and the
     related  balance sheet  amounts have been  eliminated.  In addition,  these
     shares are not  included  in the  computation  of weighted  average  shares
     outstanding.

              The following chart  reconciles our legally issued and outstanding
     shares of Common Stock and the reported  outstanding shares of Common Stock
     at December 31, 2005 and December 31, 2004:

                                                At December 31,  At December 31,
Reconciliation of Common Shares Outstanding            2005             2004
----------------------------------------------  ---------------  ---------------
Legally issued and outstanding shares.......      129,235,770      129,455,882
Less - Shares owned by entities we consolidate
    that are eliminated in consolidation....       (1,146,207)        (929,432)
                                                ---------------  ---------------
Reported issued and outstanding shares......      128,089,563      128,526,450
                                                ===============  ===============

              As  previously  reported,  the Board of Directors  authorized  the
     repurchase from time to time of up to 10,000,000 shares of our Common Stock
     on the open market or in privately  negotiated  transactions.  During 2000,
     the Board of Directors  increased the  authorized  number of shares that we
     could  repurchase  to  15,000,000.  During  2001,  the  Board of  Directors
     increased  the  authorized  number of shares  that we could  repurchase  to
     25,000,000.  Cumulatively through December 31, 2005, we repurchased a total
     of 22,201,720  shares of Common Stock at an aggregate cost of approximately
     $567,148,000.

              At December  31, 2005 and 2004,  we had  5,276,412  and  5,548,277
     shares of Common Stock reserved in connection  with our stock option plans,
     respectively,  (see Note 12) and 237,934 shares reserved for the conversion
     of Convertible Partnership Units.

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

              The 7,000,000  shares of Class B Common Stock were  converted into
     7,000,000 shares of Common Stock on January 1, 2003.

              Equity Stock

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

              Equity Stock, Series A
              ----------------------

              At  December  31,  2005,  we  had  8,744,193   depositary   shares
     outstanding  (8,776,102 at December 31, 2004), each representing 1/1,000 of
     a share of Equity Stock,  Series A ("Equity  Stock A"). We received  31,909
     depositary shares from a distribution from affiliated entities at March 31,
     2005 (see Note 5).  We have not  issued  any  shares of our  Equity  Stock,
     Series A since May 2001.  The  issuance  amounts  were  recorded as part of
     Paid-in capital on the consolidated balance sheet.

                                      F-28

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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

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

              In  November  1999,  we sold  $100,000,000  (4,289,544  shares) of
     Equity  Stock,   Series  AAA  ("Equity  Stock  AAA")  to  the  Consolidated
     Development  Joint Venture.  On November 17, 2005,  upon the acquisition of
     Mr.  Hughes'  interest  in PSAC (Note 9), we owned 100% of the  partnership
     interest in the  Consolidated  Development  Joint Venture.  For all periods
     presented,  the  Equity  Stock,  Series  AAA  and  related  dividends  were
     eliminated in consolidation.

              Dividends
              ---------

              The unaudited characterization of dividends for Federal income tax
     purposes is made based upon earnings and profits of the Company, as defined
     by the Internal  Revenue  Code.  For the tax year ended  December 31, 2005,
     distributions  for the common stock,  Equity  Stock,  Series A, and all the
     various series of preferred stocks were classified as follows:

<TABLE>
<CAPTION>
                                                                 2005 (unaudited)
                                   --------------------------------------------------------------------------
                                      1st Quarter        2nd Quarter         3rd Quarter         4th Quarter
                                   ----------------   ----------------     --------------      --------------
<S>                                    <C>                <C>                 <C>                <C>
Ordinary Income                        98.5488%           99.3947%            99.9589%           100.0000%
Long-Term Capital Gain                  1.4512%            0.6053%             0.0411%             0.0000%
                                   ----------------   ----------------     --------------      --------------
Total                                      100%            100.00%             100.00%             100.00%
                                   ================   ================     ==============      ==============
</TABLE>

              A percentage of the long-term capital gain is unrecaptured section
     1250 gain for each quarter of 2005 as follows (unaudited):

<TABLE>
<CAPTION>
                                            2005 Percentage of Total Long-Term Capital Gain Distribution
                                       ----------------------------------------------------------------------
                                         1st Quarter       2nd Quarter      3rd Quarter        4th Quarter
                                       ----------------- ---------------- ----------------- -----------------
<S>                                        <C>               <C>              <C>                <C>
Unrecaptured Section 1250 Gain             7.3110%           0.0000%          8.0542%            0.0000%
                                       ================= ================ ================= =================

</TABLE>

              For  corporate  shareholders  a  portion  of the  total  long-term
     capital  gain is required to be  recaptured  as ordinary  income.  For each
     quarter of 2005 the percentages are as follows (unaudited):

<TABLE>
<CAPTION>
                                            2005 Percentage of Total Long-Term Capital Gain Distribution
                                       ----------------------------------------------------------------------
                                         1st Quarter       2nd Quarter      3rd Quarter        4th Quarter
                                       ----------------- ---------------- ----------------- -----------------
<S>                                          <C>               <C>              <C>                <C>
IRC ss.291 Recapture                         1.4621%           0.0000%          1.6121%            0.0000%
                                       ================= ================ ================= =================
</TABLE>
                                      F-29

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              The  following  table  summarizes  dividends  for the years  ended
     December 31, 2005, 2003 and 2002:

<TABLE>
<CAPTION>

                                                 2005                     2004                      2003
                                      ----------------------   ---------------------    ----------------------
                                       Per share     Total     Per share    Total       Per share      Total
                                      ----------- ----------   ---------- ----------    ----------  ----------
                                                          (in thousands, except per share data)
Cumulative Preferred Stock
<S>                                    <C>         <C>           <C>      <C>             <C>       <C>
Series B                               $     -     $     -       $    -   $     -         $0.575    $  1,322
Series C                                     -           -            -         -         $0.844       1,013
Series D                                     -           -       $1.776     2,131         $2.375       2,850
Series E                                $0.208         457       $2.500     5,488         $2.500       5,488
Series F                                $0.819       1,884       $2.437     5,606         $2.437       5,606
Series K                                     -           -       $0.109       501         $2.063       9,488
Series L                                     -           -       $0.395     1,818         $2.063       9,488
Series M                                     -           -       $1.373     3,089         $2.188       4,922
Series Q                                $2.150      14,835       $2.150    14,835         $2.150      14,835
Series R                                $2.000      40,800       $2.000    40,800         $2.000      40,800
Series S                                $1.969      11,320       $1.969    11,320         $1.969      11,320
Series T                                $1.906      11,601       $1.906    11,601         $1.906      11,601
Series U                                $1.906      11,438       $1.906    11,438         $1.906      11,438
Series V                                $1.875      12,938       $1.875    12,938         $1.875      12,938
Series W                                $1.625       8,612       $1.625     8,612         $0.388       2,057
Series X                                $1.613       7,740       $1.613     7,740         $0.215       1,030
Series Y                                $1.713       2,740       $1.708     2,732              -           -
Series Z                                $1.563       7,031       $1.289     5,801              -           -
Series A                                $1.531       7,044       $1.153     5,302              -           -
Series B                                $1.781       7,748       $0.896     3,896              -           -
Series C                                $1.650       7,590       $0.495     2,277              -           -
Series D                                $1.292       6,976            -         -              -           -
Series E                                $1.144       6,463            -         -              -           -
Series F                                $0.543       5,430            -         -              -           -
Series G                                $0.093         370            -         -              -           -
                                                  ----------             -----------                ----------
                                                   173,017                157,925                    146,196
Common Equivalent Stock
Common Stock                            $1.900      244,200      $1.800   230,834         $1.800     225,864
Equity Stock, Series A                  $2.450       21,443      $2.450    21,501         $2.450      21,501
                                                  ----------             -----------                ----------
Total Distributions                                $438,660              $410,260                   $393,561
                                                  ==========             ===========                ==========

</TABLE>

11.      Related party transactions
         --------------------------
              Relationships and transactions with the Hughes Family
              -----------------------------------------------------

              Mr.  Hughes and his family (the "Hughes  Family")  have  ownership
     interests  in, and operate  approximately  44  self-storage  facilities  in
     Canada under the name "Public Storage" ("PS Canada")  pursuant to a license
     agreement with the Company.  We currently do not own any interests in these
     facilities nor do we own any  facilities in Canada.  The Hughes Family owns
     approximately  36% of our Common Stock outstanding at December 31, 2005. We
     have a right of first  refusal  to  acquire  the  stock  or  assets  of the
     corporation that manages the 44 self-storage  facilities in Canada,  if the
     Hughes Family or the corporation agrees to sell them.  However,  we have no
     interest in the operations of this corporation, we have no right to acquire
     this stock or assets unless the Hughes Family decides to sell, the right of
     first refusal does not apply to the self-storage facilities, and we receive
     no  benefit  from the  profits  and  increases  in  value  of the  Canadian
     self-storage facilities.

                                      F-30

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              Prior to December  31,  2003,  our  personnel  were engaged in the
     supervision and the operation of these Canadian self-storage facilities and
     provided  certain  administrative  services  for the Canadian  owners,  and
     certain other  services,  primarily  tax services,  with respect to certain
     other Hughes Family  interests.  The Hughes Family and the Canadian  owners
     reimbursed  us at cost for these  services  (U.S.  $542,499 and $638,000 in
     respect of the Canadian  operations  for 2003 and 2002,  respectively,  and
     U.S.  $151,063  and  $167,930  for  other  services  during  2003 and 2002,
     respectively). There have been conflicts of interest in allocating the time
     of our  personnel  between our  properties,  the Canadian  properties,  and
     certain other Hughes Family interests. The sharing of personnel and systems
     with the Canadian entities was  substantially  discontinued by December 31,
     2003. In October 2005,  the Company's  Board of Directors  (with Mr. Hughes
     and B. Wayne  Hughes Jr.  abstaining)  approved  the  reimbursement  of CAD
     $653,424  (plus CAD $52,274 in  interest  accrued at 4%)  representing  the
     amount previously  charged to the Canadian entities for system  development
     costs that PSI no longer permits them to use. These amounts were reimbursed
     to PS Canada in November 2005.

              Through PSIC and PSCI-H, we continue to reinsure risks relating to
     loss of goods stored by tenants in the  self-storage  facilities in Canada.
     We acquired the tenant insurance  business on December 31, 2001 through its
     acquisition of PSIC. During 2005, 2004, and 2003, respectively, we received
     $1,052,000,  $1,069,000,  and  $1,017,000,   respectively,  in  reinsurance
     premiums  attributable  to the  Canadian  Facilities.  Since  our  right to
     provide  tenant  reinsurance  to the Canadian  Facilities may be qualified,
     there is no assurance that these premiums will continue.

              In November  1999, we formed the  Consolidated  Development  Joint
     Venture  with  a  joint   venture   partner  whose   partners   include  an
     institutional  investor and Mr. Hughes.  On August 5, 2005, we acquired the
     institutional investor's interest in PSAC for approximately  $41,420,000 in
     cash. This acquisition gave us a controlling position in PSAC and the right
     to acquire  the  remaining  interest  in PSAC,  held by Mr.  Hughes,  for a
     stipulated  amount of $64,513,000 plus accrued preferred return on November
     17, 2005. This transaction is discussed more fully in Note 9.

              The Company and Mr. Hughes are  co-general  partners in certain of
     the Consolidated Entities and the Unconsolidated  Entities.  Mr. Hughes and
     his  family  also own  limited  partnership  interests  in certain of these
     partnerships.   The  Company  and  Mr.   Hughes  and  his  family   receive
     distributions  from these  partnerships in accordance with the terms of the
     partnership agreements.

              Other Related Party Transactions
              --------------------------------

              Ronald L. Havner,  Jr. is our  vice-chairman  and chief  executive
     officer,  and he is chairman of the board of PSB.  Until August  2003,  Mr.
     Havner  was also the  Chief  Executive  Officer  of PSB.  For 2003 and 2004
     services, Mr. Havner was compensated by PSB, as well as by the Company.

              Dann V.  Angeloff,  a  director  of the  Company,  is the  general
     partner  of a  limited  partnership  formed  in June of  1973  that  owns a
     self-storage  facility that is managed by us. We recorded  management  fees
     with respect to this facility amounting to $45,000, $41,000 and $41,000 for
     the years ended December 31, 2005, 2004 and 2003, respectively.

              In December  2003, we loaned  $100,000,000  to PSB. This loan bore
     interest  at the rate of 1.45%  per year and was  fully  repaid on March 8,
     2004.

                                      F-31

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              PSB  manages  certain  of the  commercial  facilities  that we own
     pursuant  to  management  agreements  for a  management  fee equal to 5% of
     revenues.   We  paid  a  total  of  $579,000,   $562,000,   and   $581,000,
     respectively,  in 2005,  2004 and 2003 in  management  fees with respect to
     PSB's property management services.

              We manage the Company's  wholly-owned  self-storage  facilities as
     well  as the  facilities  owned  by the  Unconsolidated  Entities  and  the
     Consolidated Entities on a joint basis, in order to take advantage of scale
     and other efficiencies. As a result, significant components of self-storage
     operating  costs,  such as payroll costs,  advertising and promotion,  data
     processing,  and  insurance  expenses  are shared and  allocated  among the
     various  entities using  methodologies  meant to fairly allocate such costs
     based upon the related  activities.  The total of such expenses  which were
     included  in  the   operations   of  the   Unconsolidated   Entities   were
     approximately  $4.3 million,  $4.5 million,  and $4.1 million for the years
     ended December 31, 2005, 2004, and 2003, respectively.

              Pursuant to a cost-sharing and administrative  services agreement,
     PSB reimburses us for certain administrative services. PSB's share of these
     costs  totaled  approximately  $340,000  for each of the three  years ended
     December 31, 2005, 2004 and 2003, respectively.

              Stor-RE  and third  party  insurance  carriers  have  provided  PS
     Canada,  the  Company,  PSB,  and  other  affiliates  of the  Company  with
     liability and casualty  insurance  coverage until March 31, 2004. PS Canada
     has a 2.2% interest, and PSB has a 4.0% interest, in Stor-RE. PS Canada and
     PSB  obtained   their  own  liability  and  casualty   insurance   covering
     occurrences  after April 1, 2004.  For  occurrences  before  April 1, 2004,
     STOR-Re  continues to provide  liability  and casualty  insurance  coverage
     consistent with the relevant agreements.

12.      Stock-based Compensation
         ------------------------

              On December 31, 2004,  the Financial  Accounting  Standards  Board
     issued Statement of Financial  Accounting Standards No. 123 (revised 2004),
     "Share-Based  Payment."  We will  adopt the  provisions  of this  statement
     effective  January 1, 2006  utilizing  the modified  prospective  method of
     adoption.  Because we already comply with the provisions of this statement,
     the adoption will have no effect on our net income,  income from continuing
     operations, basic or diluted earnings per share, cash flow from operations,
     our cash flow from financing activities, or our disclosure.

              Description of Stock-Based Incentive Plan
              -----------------------------------------

              We have a 1990 Stock Option Plan (the "1990 Plan") which  provides
     for the grant of non-qualified  stock options.  We have a 1994 Stock Option
     Plan (the "1994 Plan"),  a 1996 Stock Option and Incentive  Plan (the "1996
     Plan"), a 2000  Non-Executive/Non-Director  Stock Option and Incentive Plan
     (the "2000  Plan"),  a 2001  Non-Executive/Non  Director  Stock  Option and
     Incentive Plan (the "2001 non-executive  Plan") and a 2001 Stock Option and
     Incentive  Plan (the "2001 Plan"),  each of which provides for the grant of
     non-qualified options and incentive stock options. (The 1990 Plan, the 1994
     Plan, the 1996 Plan, the 2000 Plan,  the 2001  Non-Executive  Plan, and the
     2001 Plan are collectively  referred to as the "PSI Plans").  Under the PSI
     Plans, the Company has granted  non-qualified options to certain directors,
     officers and key employees to purchase shares of the Company's common stock
     at a price equal to the fair market  value of the common  stock at the date
     of grant.  Generally,  options  under the PSI Plans vest over a  three-year
     period from the date of grant at the rate of  one-third  per year  (options
     granted after December 31, 2002 vest  generally over a five-year  period at
     the rate of  one-fifth  per year) and expire (i) under the 1990 Plan,  five
     years after the date they became  exercisable and (ii) under the 1994 Plan,
     the 1996 Plan and the 2000  Plan,  ten years  after the date of grant.  The
     1996 Plan,  the 2000 Plan,  the 2001  non-executive  Plan and the 2001 Plan
     also provide for the grant of restricted stock (see below) to officers, key
     employees  and  service  providers  on terms  determined  by an  authorized
     committee of the Board of Directors. A total of approximately 3,012,671 and
     3,338,986  securities  were  available  for grant at December  31, 2005 and
     2004, respectively.

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

              Information  with respect to stock options  during 2005,  2004 and
     2003 is as follows:

                                      F-32

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

<TABLE>
<CAPTION>

                                                        2005                          2004                         2003
                                             ---------------------------     ------------------------     --------------------------
                                                               Weighted                     Weighted                     Weighted
                                               Number          Average        Number        Average         Number        Average
                                                 of           Price per         of         Price per          of         Price per
                                               Options          Share         Options        Share         Options         Share
                                             -----------      ----------     -----------   ----------     -----------    -----------
<S>                                           <C>                <C>          <C>              <C>         <C>               <C>
 Options outstanding January 1                1,441,901          $35.07       3,088,618        $27.14      5,939,224         $25.79
   Granted                                      288,000           62.56         353,500         51.46        272,500          34.50
   Exercised (a)                               (249,520)          30.10      (1,957,907)        25.51     (2,743,420)         24.85
   Cancelled                                    (57,235)          36.84         (42,310)        32.75       (379,686)         28.33
                                             -----------      ----------     -----------   ----------     -----------    -----------
Options outstanding December 31 (b) (c)       1,423,146          $41.46       1,441,901        $35.08      3,088,618         $27.14
                                             ===========      ==========     ===========   ==========     ===========    ===========
 Price  range of options  outstanding  at
 December 31:                                        $18.00 to $69.87            $14.88 to $39.23             $14.88 to $37.40

Options exercisable at December 31 (d):         780,350          $31.38         651,013        $27.13      2,305,868         $25.24
                                             ===========      ==========     ===========   ==========     ===========    ===========

</TABLE>

(a)  The  aggregate  intrinsic  value of  shares  exercised  during  each  year,
     representing  the  differential  between the market  price and the exercise
     price  on the  respective  dates of  exercise,  amounted  to  approximately
     $7,508,000,  $45,673,000,  and $36,839,000 for the years ended December 31,
     2005, 2004, and 2003, respectively.

(b)  The options  outstanding  at December  31,  2005,  have  remaining  average
     contractual  lives of 7.2 years, and an aggregate  intrinsic  value,  based
     upon  the  December  31,  2005  closing  price  of  our  common  stock,  of
     approximately $37,372,000.

(c)  Approximately 372,570,  472,788, and 2,159,544 options have exercise prices
     less  than  $30  at  December  31,  2005,  2004,  and  2003,  respectively.
     Approximately 624,000 and 336,000 options have exercise prices greater than
     $45 at December  31,  2005 and 2004,  respectively  (none at  December  31,
     2003).

(d)  The aggregate  intrinsic value of exercisable options at December 31, 2005,
     based upon the  closing  price of our common  stock at December  31,  2005,
     amounted to approximately $28,358,000.  Options exercisable at December 31,
     2005 have a weighted  average  remaining  contractual life of approximately
     5.9 years.

              We recognize  compensation  expense for stock option  awards based
     upon their fair value on the date of grant  amortized  over the  applicable
     vesting  period (the "Fair Value  Method"),  with respect to stock  options
     granted  after  January  1, 2002.  The fair  value of the stock  options is
     determined   utilizing  the   Black-Scholes   option  pricing  model.   The
     Black-Scholes option pricing model utilizes several assumptions,  including
     the estimated life of the stock options,  the average  risk-free  rate, the
     expected  dividend  yield,  and expected  volatility.  We  establish  these
     assumptions based generally upon historical trends.

              We do not recognize  compensation  expense for stock option awards
     prior to January 1, 2002,  instead,  we disclose the amount of stock option
     expense that would have been  recognized in each year with respect to these
     options had we utilized the Fair Value Method with respect to these awards,
     in the table  below.  Because  stock-based  awards had a vesting  period of
     three years,  our accounting  method with respect to these pre-2002  awards
     has no effect after December 31, 2004.

              Outstanding  stock options are included on a one-for-one  basis in
     our diluted  weighted  average  shares,  less a reduction  for the treasury
     stock method applied to a) the average cumulative measured but unrecognized
     compensation  expense  during the period and b) the strike  price  proceeds
     expected from the employee upon exercise.

                                      F-33

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

The  following  table  sets  forth  financial  disclosures  with  respect to the
accounting for stock options:

<TABLE>
<CAPTION>

                                                                                For the years ended December 31,
                                                                            ------------------------------------------
Selected information with respect to employee stock options:                   2005            2004             2003
                                                                            -----------    ----------       ----------
                                                                                  (dollar amounts in thousands,
                                                                                    except per-share amounts)

Average estimated value per option granted, utilizing the
<S>                                                                            <C>             <C>              <C>
Black-Scholes method..............................................             $6.77           $4.40            $1.95

Assumptions used in valuing options with the Black-Scholes method:
    Expected life of options in years (a).........................                 5               5                5
    Risk-free interest rate.......................................               4.0%            3.5%             3.0%
    Expected volatility (b).......................................             0.234           0.210            0.180
    Expected dividend yield.......................................               7.0%            7.0%             7.0%

Net income information with respect to each year:

Net income, as reported...........................................          $456,393        $366,213         $336,653
Add back:  stock-based employee compensation expense included in net
   income (c).....................................................             1,010             709              530
Less: stock-based employee compensation cost that would have been
   included if the fair value method were applied for all awards..            (1,010)           (874)          (3,311)
                                                                            -----------    ----------       ----------
   Net income, assuming consistent application of the fair value method     $456,393        $366,048         $333,872
                                                                            ==========     ==========       ==========
Earnings per share, as reported:
   Basic .........................................................             $1.98           $1.39            $1.29
   Diluted........................................................             $1.97           $1.38            $1.28

Earnings per share, assuming consistent application of the fair value
method
   Basic .........................................................             $1.98           $1.39            $1.27
   Diluted........................................................             $1.97           $1.38            $1.26

</TABLE>


(a)  Expected life is based upon our  expectations  of stock option  recipients'
     expected exercise and termination patterns.

(b)  Expected  volatility  is based  upon the level of  volatility  historically
     experienced.

(c)  At December  31,  2005,  the total  compensation  cost related to nonvested
     stock option  awards  amounts to  approximately  $2,604,000,  which will be
     recognized over the remaining vesting period.

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

              Outstanding  restricted  stock units vest over a five-year  period
     from the date of grant at the rate of  one-fifth  per  year.  The  employee
     receives additional  compensation equal to the per-share dividends received
     by common  shareholders with respect to restricted stock units outstanding.
     Such compensation is accounted for as dividends paid. Any dividends paid on
     units which are  subsequently  forfeited  are expensed.  Upon vesting,  the
     employee  receives  common shares equal to the number of vested  restricted
     stock units in exchange for the units.  The total value of each  restricted
     stock unit grant,  based upon the market  price of our common  stock at the
     date of  grant,  is  amortized  over the  vesting  period  as  compensation
     expense.  The  related  employer  portion of payroll  taxes is  expensed as
     incurred.  Outstanding restricted stock units are included on a one-for-one
     basis in our diluted  weighted  average  shares,  less a reduction  for the
     treasury  stock  method  applied to the  average  cumulative  measured  but
     unrecognized  compensation  expense during the period.  For purposes of the
     disclosures  that follow,  "fair value" on any particular date reflects the
     closing market price of our common stock on that date.

                                      F-34

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              During the year ended December 31, 2005,  169,750 restricted stock
     units were  granted  with an  aggregate  fair value on the date of grant of
     approximately  $9,633,000,  74,200  restricted  stock units were  forfeited
     (aggregate  grant-date  fair value of  $3,388,000),  and 47,760  restricted
     stock units vested (aggregate  grant-date fair value of $2,053,000) with an
     aggregate  fair value on the date of vesting of  $3,156,000.  This  vesting
     resulted in the  issuance of 33,478  shares of common  stock.  In addition,
     cash  compensation was paid to employees in lieu of 14,282 shares of common
     stock based upon the market value of the stock at the date of vesting,  and
     used to settle the employees' tax liability generated by the vesting.

              During the year ended December 31, 2004,  94,500  restricted stock
     units were  granted  with an  aggregate  fair value on the date of grant of
     $4,649,000,  48,650  restricted  stock  units  were  forfeited,  and 42,810
     restricted  stock units vested with an aggregate  fair value on the date of
     vesting of approximately $2,419,000.  This vesting resulted in the issuance
     of 27,509 shares of common stock. In addition,  cash  compensation was paid
     to employees in lieu of 15,301 shares of common stock based upon the market
     value  of the  stock  at the  date  of  vesting,  and  used to  settle  the
     employees'  tax liability  generated by the vesting.  During the year ended
     December 31, 2003, we granted 249,000  restricted  stock units to employees
     of the  Company  with an  aggregate  fair  value  on the  date of  grant of
     approximately $10,180,000.

              At December 31, 2005, approximately 299,830 restricted stock units
     were  outstanding  (252,040  and  249,000 at  December  31,  2004 and 2003,
     respectively) with an aggregate fair value at December 31, 2005, based upon
     the closing price of our common stock, of  approximately  $20,304,000.  The
     aggregate  grant-date  fair value of the  299,830  restricted  stock  units
     outstanding at December 31, 2005 was approximately $14,922,000 ($10,895,000
     for the 252,040 restricted stock units at December 31, 2004), which will be
     recognized over the remaining  vesting period of approximately 3.5 years. A
     total of $3,748,000,  $2,254,000,  and $970,000 in restricted stock expense
     was  recorded  for the  years  ended  December  31,  2005,  2004 and  2003,
     respectively,  which includes  amortization  of the fair value of the grant
     reflected as an increase to paid-in  capital,  as well as payroll  taxes we
     incurred upon each respective vesting.

              Outstanding  restricted  stock units are included on a one-for-one
     basis in our diluted  weighted  average  shares,  less a reduction  for the
     treasury  stock  method  applied to the  average  cumulative  measured  but
     unrecognized compensation expense during the period.

13.      Disclosures Regarding Segment Reporting
         ---------------------------------------

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

              Our reportable segments reflect significant  operating  activities
     that are  evaluated  separately  by  management.  We have  four  reportable
     segments:   self-storage  operations,   containerized  storage  operations,
     commercial property operations,  and ancillary  operations.  These segments
     are organized generally based upon their operating characteristics.

              The   self-storage   segment   comprises  the  direct   ownership,
     development,  and  operation of  traditional  storage  facilities,  and the
     ownership of equity interests in entities that own storage properties.  The
     containerized  storage operations represent another segment. The commercial
     property  segment  reflects our interest in the ownership,  operation,  and
     management of commercial  properties.  The vast majority of the  commercial
     property  operations are conducted through PSB, and to a much lesser extent
     the Company and certain of its  unconsolidated  subsidiaries own commercial
     space,   managed  by  PSB,  within  facilities  that  combine  storage  and
     commercial space for rent. The ancillary operations include four sources of
     operating  income:  (i) the reinsurance of policies against losses to goods
     stored by tenants in our self-storage facilities,  (ii) sale of merchandise
     at our  self-storage  facilities,  (iii) truck rentals at our  self-storage
     facilities and (iv)  management of facilities  owned by third-party  owners
     and facilities owned by the Unconsolidated Entities.

                                      F-35

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

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

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

              Interest and other income, interest expense, corporate general and
     administrative expense, minority interest in income and gains and losses on
     sales  of  real  estate  assets  are  not  allocated  to  segments  because
     management  does not utilize them to evaluate the results of  operations of
     each segment.

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

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

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

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

                                      F-36

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

<TABLE>
<CAPTION>

                                                      Year Ended December 31,
                                                 ----------------------------------
                                                    2005        2004        2003
                                                 ----------- ----------- ----------
                                                        (Amounts in thousands)

  Reconciliation of Net Income by Segment:

  Self-storage
<S>                                               <C>         <C>         <C>
  Revenue less cost of operations...........      $631,365    $562,129    $517,199
  Depreciation and amortization.............      (191,267)   (176,403)   (176,847)
  Equity in earnings of real estate
      entities .............................         6,348       4,953       4,583
  Discontinued operations (Note 3)..........         5,362         328       6,412
                                                 ----------- ----------- ----------
     Total self-storage segment net income..       451,808     391,007     351,347
                                                 ----------- ----------- ----------
  Commercial properties
  Revenue less cost of operations...........         7,112       6,422       6,418
  Depreciation and amortization ............        (2,322)     (2,114)     (2,436)
  Equity in earnings of real estate
      entities .............................        35,175      36,482      38,194
  Discontinued operations (Note 3) .........             -       1,122         237
                                                 ----------- ----------- ----------
     Total commercial property segment net
       income...............................        39,965      41,912      42,413
                                                 ----------- ----------- ----------
  Containerized storage
  Revenue less cost of operations...........         3,611       7,581      10,052
  Depreciation and amortization ............        (2,808)     (4,546)     (4,780)
  Discontinued operations (Note 3) .........         1,015      (2,351)     (2,729)
                                                 ----------- ----------- ----------
     Total containerized storage segment net
       income...............................         1,818         684       2,543
                                                 ----------- ----------- ----------
  Ancillary Operations
   Revenue less cost of operations..........        23,795      15,509      16,568

  Other items not allocated to segments
  -------------------------------------
  Equity in earnings - general and
     administrative and other...............       (16,640)    (18,871)    (17,811)
  Interest and other income.................        16,447       5,391       2,537
  General and administrative ...............       (21,115)    (18,813)    (17,127)
  Interest expense..........................        (8,216)       (760)     (1,121)
  Minority interest in income ..............       (32,651)    (49,913)    (43,703)
  Casualty loss ............................        (1,917)     (1,250)          -
  Gain on disposition of real estate........         3,099       1,317       1,007
                                                 ----------- ----------- ----------
     Total other items not allocated to segments   (60,993)    (82,899)    (76,218)
                                                 ----------- ----------- ----------
     Total consolidated net income .........      $456,393    $366,213    $336,653
                                                 =========== =========== ==========
</TABLE>


14.      Events Subsequent to December 31, 2005 (unaudited)
         --------------------------------------------------

              As noted above, on November 30, 2005, we called for redemption all
     of the outstanding  shares (total liquidation value of $172,500,000) of our
     8.60% Cumulative  Preferred Stock, Series Q, at $25 per share, plus accrued
     dividends. These shares were subsequently redeemed on January 19, 2006.

                                      F-37

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              On January 19, 2006, we issued 4,000,000  depositary shares,  with
     each depositary share  representing  1/1,000 of a share of 6.95% Cumulative
     Preferred  Stock,  Series H (carrying  amount  totaling  $100,000,000).  On
     January 27, 2006, we issued an additional 200,000  depository shares,  with
     each  depositary  share  representing  1/1,000  of a  share  of  our  6.95%
     Cumulative Preferred Stock, Series H (carrying amount totaling $5,000,000).

              Between  January 1, 2006 and March 15,  2006,  we  acquired  three
     self-storage  facilities  from third parties with total net rentable square
     feet of  170,000,  at an  aggregate  cost of  approximately  $20.0  million
     comprised  of  cash  totaling  $15.4  million  and the  assumption  of debt
     totaling $4.6 million.  These property acquisitions were funded entirely by
     us.

              We have  entered into an  agreement  to acquire  Shurgard  Storage
     Centers,  Inc.  ("Shurgard"),  a publicly  held REIT that has  interests in
     approximately 646 self-storage  facilities located in the United States and
     Europe.  Under the agreement,  and based upon our December 31, 2005 balance
     sheet and  Shurgard's  September  30, 2005  balance  sheet  included in its
     related  Form 10-Q,  i) we would issue 0.82 shares of our common  stock for
     each share of Shurgard  common stock which would increase our common shares
     outstanding from 128,089,563 to approximately  166,460,200  shares,  ii) we
     would  assume  Shurgard  debt which  totals  approximately  $1.8 billion at
     September  30,  2005,   increasing  our  debt   outstanding   (assuming  no
     prepayment) from $150 million to approximately $2.0 billion,  and iii) $136
     million of Shurgard  preferred stock would be redeemed.  The transaction is
     targeted to close by the end of the second quarter of 2006.

              Completion  of the  transaction  is not  assured and is subject to
     risks,  including that shareholders of either Public Storage or Shurgard do
     not approve the  transaction  or that the other closing  conditions are not
     satisfied. In addition,  Shurgard may under limited circumstances terminate
     the agreement to take a superior proposal.  Public Storage and Shurgard are
     not aware of any significant  governmental  approvals that are required for
     consummation  of the merger.  If any approval or action is required,  it is
     presently  contemplated  that Public  Storage and Shurgard  would use their
     reasonable best efforts to obtain such approval.  There can be no assurance
     that any other approvals, if required, will be obtained.

              The foregoing description of the terms of our agreement to acquire
     Shurgard does not purport to be complete,  and is qualified in its entirety
     by reference to the full text of the merger  agreement,  a copy of which is
     filed with our current report on Form 8-K dated March 7, 2006.

15.      Recent Accounting Pronouncements and Guidance
         ---------------------------------------------

     EITF Issue 04-05
     ----------------

              Issue  04-05 of the  Emerging  Issues  Task Force  ("EITF  04-05")
     states that the  general  partner in a  partnership  is presumed to control
     that  limited   partnership,   for  purposes  of  determining   whether  to
     consolidate  an  interest  in an entity or to apply  the  equity  method of
     accounting. If the limited partners have either (1) the substantive ability
     - through a simple  majority vote - to liquidate the  partnership or remove
     the general partner without cause, or (2) substantive participating rights,
     the general partner does not control the limited partnership.

              The effective date for applying the guidance in EITF 04-05 is June
     29, 2005, for new limited partnerships, or no later than our fiscal year
     beginning January 1, 2006.

              We have not fully  quantified  the impact of this statement on our
     consolidated  financial  statements,  but we do not believe that the impact
     will be significant.

                                      F-38

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

     Accounting Changes and Error Corrections
     ----------------------------------------

              In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
     Errors Corrections - a replacement of APB Opinion No. 20 and FASB Statement
     No. 3." This statement replaces APB Opinion No. 20,  "Accounting  Changes,"
     and  SFAS  No.  3,  "Reporting  Accounting  Changes  in  Interim  Financial
     Statements,"  and  changes  the  requirements  for the  accounting  for and
     reporting of a voluntary change in accounting principle. It also applies to
     changes  required by an accounting  pronouncement  in the instance that the
     pronouncement does not include specific transition provisions.  APB Opinion
     No. 20  previously  required  that most  voluntary  changes  in  accounting
     principle  be  recognized  by  including  in net  income of the  period the
     cumulative effect of changing to the new accounting principle. SFAS No. 154
     requires  retrospective  application of changes in accounting  principle to
     prior  periods'  financial  statements,   unless  it  is  impracticable  to
     determine either the  period-specific  effects or the cumulative  effect of
     the change.  We will adopt the  provisions of SFAS No. 154 as of January 1,
     2006 and we do not believe this  statement  will have a material  impact on
     our financial position, operating results or cash flows.

     Accounting for Conditional Asset Retirement Obligations
     -------------------------------------------------------

              In March  2005,  the FASB  issued  FASB  FIN 47,  "Accounting  for
     Conditional  Asset Retirement  Obligations." FIN 47 clarifies that the term
     "conditional  asset  retirement  obligations"  as  used in  SFAS  No.  143,
     "Accounting for Asset Retirement Obligations," refers to a legal obligation
     to perform an asset  retirement  activity in which the timing and/or method
     of  settlements  are  conditional  on a future event that may or may not be
     within the  control of the  entity.  FIN 47  indicates  that an entity must
     record a liability for a  conditional  asset  retirement  obligation if the
     fair value of the obligation can be reasonably estimated and also clarifies
     when an entity should have  sufficient  information to reasonably  estimate
     the fair value of an asset retirement  obligation.  This interpretation was
     effective October 1, 2005. The adoption of FIN 47 had no material impact on
     our financial position, operating results or cash flows.

16.      Commitments and Contingencies
         -----------------------------

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

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

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

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

     Gustavson,  et al v. Public Storage, Inc. (filed June 2003) (Superior Court
     ---------------------------------------------------------------------------
     - Los Angeles County); Potter, et al v. Hughes, et al (filed December 2004)
     ---------------------------------------------------------------------------
     (United States District Court - Central District of California)
     ---------------------------------------------------------------

              As  previously reported, in November  2002, a  shareholder  of the
     Company  made a  demand  on the  Board of  Directors  that  challenged  the
     fairness  of  the  Company's  acquisition  of PS  Insurance  Company,  Ltd.
     ("PSIC")  and  related  matters.  PSIC was  previously  owned by the Hughes
     Family.

                                      F-39

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              In June 2003, the Hughes family filed a complaint  (Gustavson,  et
     al v. Public Storage, Inc.) for declaratory relief asking the court to find
     that the  acquisition of PSIC and related matters were fair to the Company.
     The Company filed an answer to the Hughes Family's  complaint  requesting a
     final judicial  determination  of the Company's  rights of recovery against
     the Hughes Family in respect of PSIC. By order of the Superior  Court,  the
     matter was tried before  Justice  Malcolm  Lucas, a former chief justice of
     the  California  Supreme Court.  In October 2005,  Judge Lucas rendered his
     decision,  ruling against the Company by finding that the PSIC  transaction
     was just and  reasonable  as to the  Company  and  holding  that the Hughes
     Family was not  required to make any payment to the  Company.  The Superior
     Court has formally entered  judgment  accordingly and this lawsuit has been
     concluded.

              At the end of  December  2004,  the same  shareholder  referred to
     above and a second shareholder filed a shareholder's  derivative  complaint
     (Potter,  et al v.  Hughes,  et al)  naming  as  defendants  the  Company's
     directors (and two former  directors) and certain  officers of the Company.
     The  matters  alleged in the Potter  complaint  relate to PSIC,  the Hughes
     Family's   Canadian   self-storage   operations   and  the  Company's  1995
     reorganization.  In June 2005, the court granted the defendants'  motion to
     dismiss the Potter  complaint  with leave to amend the  complaint.  In July
     2005, the plaintiffs filed an amended complaint, and the defendants filed a
     motion to dismiss  the amended  complaint.  The matter is  currently  under
     submission. We believe the litigation will not have any financially adverse
     effect on the Company (other than the costs and other expenses  relating to
     the lawsuit).

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

              The  Brinkley  plaintiffs  are  suing the  Company  on behalf of a
     purported  class of California  property  managers who claim that they were
     not compensated  for all the hours they worked.  The Brinkley suit is based
     upon California wage and hour laws. The maximum potential  liability cannot
     be  estimated,  but would be increased if a class or classes are  certified
     or, if claims are  permitted  to be  brought on behalf of others  under the
     California Unfair Business Practices Act. We are vigorously  contesting the
     claims and intend to resist any  expansion  beyond the named  plaintiffs on
     the grounds of lack of commonality  of claims.  We do not believe that this
     matter will have any material  adverse  effect on the results of operations
     of the Company.

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

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

         Insurance and Loss Exposure
         ---------------------------

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

              The Company, STOR-Re, PSIC-H and its affiliates' maximum aggregate
     annual  exposure for losses that are below the deductibles set forth in the
     third-party  insurance  contracts,  assuming  multiple  significant  events
     occur, is  approximately  $35 million.  In addition,  if losses exhaust the
     third-party  insurers'  limit of  coverage  of  $125,000,000  for  property
     coverage and  $102,000,000  for general  liability,  our exposure  could be
     greater.  These limits are higher than estimates of maximum probable losses
     that could occur from individual  catastrophic events (i.e.  earthquake and
     wind damage) determined in recent engineering and actuarial studies.

                                      F-40

<PAGE>

                              PUBLIC STORAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2005

              Our tenant insurance program, operating through PSIC through March
     31, 2004, and through PSIC-H  beginning April 1, 2004,  reinsures  policies
     against  claims for losses to goods  stored by tenants at our  self-storage
     facilities.  Throughout  2003,  2004, and 2005, we had outside  third-party
     insurance  coverage for claims paid exceeding  $500,000  resulting from any
     individual  event,  to a limit of $10,000,000.  Effective  January 1, 2006,
     such  coverage  was  revised  to cover  claims  paid  exceeding  $1,500,000
     resulting from any individual event, to a limit of $9,000,000.

         DEVELOPMENT AND ACQUISITION OF REAL ESTATE FACILITIES

              We  currently  have  62  projects  in  our  development  pipeline,
     including  newly  developed  facilities and expansions and  enhancements to
     existing  self-storage  facilities.  The  total  estimated  cost  of  these
     facilities (unaudited) is $323,184,000, of which $54,472,000 has been spent
     at  December  31,  2005.  Development  of  these  projects  is  subject  to
     contingencies.

              As of March 15,  2006,  we are under  contract to  purchase  seven
     self-storage  facilities  (total  approximate  net rentable  square feet of
     574,000) at an aggregate cost of approximately $69.4 million. We anticipate
     that  these  acquisitions  will be  funded  entirely  by us.  Each of these
     contracts  is  subject  to  significant  contingencies,  and  there  is  no
     assurance that any of these facilities will be acquired.

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

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                       --------------------------------------------------------------
                                          March 31,        June 30,      September 30,   December 31,
                                            2005             2005            2005             2005
                                       ------------      -----------    -------------    ------------
                                                     (in thousands, except per share data)
<S>                                      <C>              <C>             <C>              <C>
Revenues (a).....................        $  251,021       $  262,893      $  273,485       $  273,562
                                       ============      ===========    =============    ============
Cost of operations (a)...........        $   95,945       $   94,918      $   96,680       $   91,088
                                       ============      ===========    =============    ============
Income from continuing operations        $   95,348       $  108,228      $  123,068       $  123,372
                                       ============      ===========    =============    ============
Net income.......................        $   96,411       $  108,266      $  128,344       $  123,372
                                       ============      ===========    =============    ============
Per Common Share (Note 2):
   Net income -  Basic...........        $     0.38       $     0.47      $     0.62       $     0.51
                                       ============      ===========    =============    ============
   Net income -  Diluted.........        $     0.38       $     0.47      $     0.62       $     0.51
                                       ============      ===========    =============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                       --------------------------------------------------------------
                                         March 31,        June 30,      September 30,    December 31,
                                           2004             2004            2004             2004
                                       ------------      -----------    -------------    ------------
                                                     (in thousands, except per share data)
<S>                                      <C>              <C>             <C>              <C>
Revenues (a).....................        $  228,182       $  238,276      $  245,415       $  247,418
                                       ============      ===========    =============    ============
Cost of operations (a)...........        $   90,109       $   90,841      $   90,717       $   90,592
                                       ============      ===========    =============    ============
Income from continuing operations        $   69,116       $   92,828      $   98,516       $  106,654
                                       ============      ===========    =============    ============
Net income.......................        $   69,067       $   92,360      $   97,515       $  107,271
                                       ============      ===========    =============    ============
Per Common Share (Note 2):
   Net income - Basic............        $     0.17       $     0.38      $     0.38       $     0.46
                                       ============      ===========    =============    ============
   Net income - Diluted..........        $     0.17       $     0.37      $     0.38       $     0.46
                                       ============      ===========    =============    ============

</TABLE>

(a)  Revenues and cost of  operations as presented in this table differ from the
     revenue and cost of operations  as presented in our  quarterly  reports due
     primarily to reclassification  of our truck rental,  merchandise sales, and
     property  management  operations  which are now  included,  along  with our
     tenant reinsurance  operations,  under "Ancillary Operations" on our income
     statement. In previous presentations, the net income from our truck rental,
     merchandise sales, and property  management  operations were reflected as a
     component of "interest and other income." This  reclassification  increased
     revenues and cost of  operations  a total of  $7,558,000,  $8,719,000,  and
     $8,417,000 in each of the first three quarters of 2004,  respectively,  and
     $7,416,000,  $8,597,000,  and $8,557,000 in each of the first three quarter
     in 2005,  respectively.  Revenues and cost of operations also differ due to
     the impact of discontinued operations accounting as described in Note 3.

                                      F-41

<PAGE>

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

<TABLE>
<CAPTION>

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

Self-storage Facilities

<C>        <C>                                         <C>        <C>       <C>            <C>             <C>
1/1/81     Newport News / Jefferson Avenue             $-         $108      $1,071         $630            $-
1/1/81     Virginia Beach / Diamond Springs             -          186       1,094          737             -
8/1/81     San Jose / Snell                             -          312       1,815          407             -
10/1/81    Tampa / Lazy Lane                            -          282       1,899          650             -
6/1/82     San Jose / Tully                             -          645       1,579       10,726             -
6/1/82     San Carlos / Storage                         -          780       1,387          592             -
6/1/82     Mountain View                                -        1,180       1,182          318             -
6/1/82     Cupertino / Storage                          -          572       1,270          533             -
10/1/82    Sorrento Valley                              -        1,002       1,343        (815)             -
10/1/82    Northwood                                    -        1,034       1,522          359             -
12/1/82    Port/Halsey                                  -          357       1,150        (404)           326
12/1/82    Sacto/Folsom                                 -          396         329          676           323
1/1/83     Platte                                       -          409         953          490           428
1/1/83     Semoran                                      -          442       1,882        8,103           720
1/1/83     Raleigh/Yonkers                              -          203         914          474           425
3/1/83     Blackwood                                    -          213       1,559          329           595
4/1/83     Vailsgate                                    -          103         990          845           505
5/1/83     Delta Drive                                  -           67         481          312           241
6/1/83     Ventura                                      -          658       1,734          349           583
9/1/83     Southington                                  -          124       1,233          403           546
9/1/83     Southhampton                                 -          331       1,738          685           806
9/1/83     Webster/Keystone                             -          449       1,688          742           813
9/1/83     Dover                                        -          107       1,462          503           627
9/1/83     Newcastle                                    -          227       2,163          486           817
9/1/83     Newark                                       -          208       2,031          405           746
9/1/83     Langhorne                                    -          263       3,549          552         1,445

</TABLE>

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

<TABLE>
<CAPTION>


                                                      Gross Carrying Amount
                                                       At December 31, 2005
   Date                                          --------------------------------    Accumulated
 Acquired              Description                 Land     Buildings      Total    Depreciation
------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

Self-storage Facilities

<C>        <C>                                   <C>       <C>          <C>          <C>
1/1/81     Newport News / Jefferson Avenue       $108      $1,701       $1,809       $1,601
1/1/81     Virginia Beach / Diamond Springs       186       1,831        2,017        1,733
8/1/81     San Jose / Snell                       312       2,222        2,534        2,152
10/1/81    Tampa / Lazy Lane                      282       2,549        2,831        2,384
6/1/82     San Jose / Tully                     2,990       9,960       12,950        3,319
6/1/82     San Carlos / Storage                   780       1,979        2,759        1,844
6/1/82     Mountain View                        1,046       1,634        2,680        1,390
6/1/82     Cupertino / Storage                    572       1,803        2,375        1,609
10/1/82    Sorrento Valley                        651         879        1,530          792
10/1/82    Northwood                            1,034       1,881        2,915        1,672
12/1/82    Port/Halsey                            357       1,072        1,429          793
12/1/82    Sacto/Folsom                           396       1,328        1,724          993
1/1/83     Platte                                 409       1,871        2,280        1,371
1/1/83     Semoran                                442      10,705       11,147        3,172
1/1/83     Raleigh/Yonkers                        203       1,813        2,016        1,385
3/1/83     Blackwood                              213       2,483        2,696        1,804
4/1/83     Vailsgate                              103       2,340        2,443        1,552
5/1/83     Delta Drive                             68       1,033        1,101          720
6/1/83     Ventura                                658       2,666        3,324        1,872
9/1/83     Southington                            123       2,183        2,306        1,523
9/1/83     Southhampton                           331       3,229        3,560        2,351
9/1/83     Webster/Keystone                       449       3,243        3,692        2,372
9/1/83     Dover                                  107       2,592        2,699        1,862
9/1/83     Newcastle                              227       3,466        3,693        2,474
9/1/83     Newark                                 208       3,182        3,390        2,260
9/1/83     Langhorne                              263       5,546        5,809        4,003

</TABLE>

                                       F-42

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>            <C>           <C>
9/1/83     Hobart                                       -          215       1,491          732           838
9/1/83     Ft. Wayne/W. Coliseum                        -          160       1,395          521           535
9/1/83     Ft. Wayne/Bluffton                           -           88         675          293           285
10/1/83    Orlando J. Y. Parkway                        -          383       1,512          464           622
11/1/83    Aurora                                       -          505         758          359           341
11/1/83    Campbell                                     -        1,379       1,849        (472)           474
11/1/83    Col Springs/Ed                               -          471       1,640          220           554
11/1/83    Col Springs/Mv                               -          320       1,036          295           441
11/1/83    Thorton                                      -          418       1,400          178           536
11/1/83    Oklahoma City                                -          454       1,030          916           620
11/1/83    Tucson                                       -          343         778          665           420
11/1/83    Webster/Nasa                                 -        1,570       2,457        1,585         1,372
12/1/83    Charlotte                                    -          165       1,274          487           442
12/1/83    Greensboro/Market                            -          214       1,653          820           794
12/1/83    Greensboro/Electra                           -          112         869          384           382
12/1/83    Columbia                                     -          171       1,318          527           492
12/1/83    Richmond                                     -          176       1,360          635           468
12/1/83    Augusta                                      -           97         747          361           324
12/1/83    Tacoma                                       -          553       1,173          487           487
1/1/84     Fremont/Albrae                               -          636       1,659          523           532
1/1/84     Belton                                       -          175         858          794           378
1/1/84     Gladstone                                    -          275       1,799          604           640
1/1/84     Hickman/112                                  -          257       1,848        (757)           618
1/1/84     Holmes                                       -          289       1,333          472           455
1/1/84     Independence                                 -          221       1,848          470           609
1/1/84     Merriam                                      -          255       1,469          447           480
1/1/84     Olathe                                       -          107         992          381           361
1/1/84     Shawnee                                      -          205       1,420          503           502
1/1/84     Topeka                                       -           75       1,049          298           356
3/1/84     Marrietta/Cobb                               -           73         542          349           259
3/1/84     Manassas                                     -          320       1,556          471           553
3/1/84     Pico Rivera                                  -          743         807          363           321

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
9/1/83     Hobart                                   215       3,061        3,276        2,184
9/1/83     Ft. Wayne/W. Coliseum                    160       2,451        2,611        1,675
9/1/83     Ft. Wayne/Bluffton                        88       1,253        1,341          852
10/1/83    Orlando J. Y. Parkway                    383       2,598        2,981        1,840
11/1/83    Aurora                                   505       1,458        1,963        1,026
11/1/83    Campbell                               1,379       1,851        3,230        1,352
11/1/83    Col Springs/Ed                           471       2,414        2,885        1,736
11/1/83    Col Springs/Mv                           320       1,772        2,092        1,267
11/1/83    Thorton                                  418       2,114        2,532        1,512
11/1/83    Oklahoma City                            454       2,566        3,020        1,839
11/1/83    Tucson                                   343       1,863        2,206        1,301
11/1/83    Webster/Nasa                           1,571       5,413        6,984        3,701
12/1/83    Charlotte                                165       2,203        2,368        1,657
12/1/83    Greensboro/Market                        214       3,267        3,481        2,435
12/1/83    Greensboro/Electra                       112       1,635        1,747        1,237
12/1/83    Columbia                                 171       2,337        2,508        1,758
12/1/83    Richmond                                 176       2,463        2,639        1,758
12/1/83    Augusta                                   97       1,432        1,529        1,078
12/1/83    Tacoma                                   553       2,147        2,700        1,604
1/1/84     Fremont/Albrae                           636       2,714        3,350        2,043
1/1/84     Belton                                   175       2,030        2,205        1,487
1/1/84     Gladstone                                275       3,043        3,318        2,248
1/1/84     Hickman/112                              158       1,808        1,966        1,312
1/1/84     Holmes                                   289       2,260        2,549        1,665
1/1/84     Independence                             221       2,927        3,148        2,149
1/1/84     Merriam                                  255       2,396        2,651        1,799
1/1/84     Olathe                                   107       1,734        1,841        1,292
1/1/84     Shawnee                                  205       2,425        2,630        1,807
1/1/84     Topeka                                    75       1,703        1,778        1,261
3/1/84     Marrietta/Cobb                            73       1,150        1,223          861
3/1/84     Manassas                                 320       2,580        2,900        1,897
3/1/84     Pico Rivera                              743       1,491        2,234        1,129

</TABLE>

                                       F-43

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>         <C>      <C>            <C>           <C>
4/1/84     Providence                                   -           92       1,087          472           423
4/1/84     Milwaukie/Oregon                             -          289         584          285           311
5/1/84     Raleigh/Departure                            -          302       2,484          585           788
5/1/84     Virginia Beach                               -          509       2,121          812           776
5/1/84     Philadelphia/Grant                           -        1,041       3,262          716           971
5/1/84     Garland                                      -          356         844          318           360
6/1/84     Lorton                                       -          435       2,040          778           682
6/1/84     Baltimore                                    -          382       1,793          929           634
6/1/84     Laurel                                       -          501       2,349          869           824
6/1/84     Delran                                       -          279       1,472          385           573
6/1/84     Orange Blossom                               -          226         924          254           398
6/1/84     Cincinnati                                   -          402       1,573          889           672
6/1/84     Florence                                     -          185         740          506           376
7/1/84     Trevose/Old Lincoln                          -          421       1,749          480           582
8/1/84     Medley                                       -          584       1,016          455           464
8/1/84     Oklahoma City                                -          340       1,310          613           652
8/1/84     Newport News                                 -          356       2,395          810         1,013
8/1/84     Kaplan/Walnut Hill                           -          971       2,359          951         1,041
8/1/84     Kaplan/Irving                                -          677       1,592        4,684           639
9/1/84     Cockrell Hill                                -          380         913        1,155           675
11/1/84    Omaha                                        -          109         806          526           399
11/1/84    Hialeah                                      -          886       1,784          407           672
12/1/84    Austin/Lamar                                 -          643         947          589           443
12/1/84    Pompano                                      -          399       1,386          644           698
12/1/84    Fort Worth                                   -          122         928           53           303
12/1/84    Montgomeryville                              -          215       2,085          499           776
1/1/85     Cranston                                     -          175         722          368           267
1/1/85     Bossier City                                 -          184       1,542          628           656
2/1/85     Simi Valley                                  -          737       1,389          368           520
2/1/85     Hurst                                        -          231       1,220          253           480
3/1/85     Chattanooga                                  -          202       1,573          784           683
3/1/85     Portland                                     -          285         941          432           438

</TABLE>


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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                       <C>      <C>          <C>          <C>
4/1/84     Providence                                92       1,982        2,074        1,473
4/1/84     Milwaukie/Oregon                         289       1,180        1,469          886
5/1/84     Raleigh/Departure                        302       3,857        4,159        2,857
5/1/84     Virginia Beach                           499       3,719        4,218        2,714
5/1/84     Philadelphia/Grant                     1,040       4,950        5,990        3,596
5/1/84     Garland                                  356       1,522        1,878        1,044
6/1/84     Lorton                                   435       3,500        3,935        2,502
6/1/84     Baltimore                                382       3,356        3,738        2,458
6/1/84     Laurel                                   500       4,043        4,543        2,927
6/1/84     Delran                                   279       2,430        2,709        1,700
6/1/84     Orange Blossom                           226       1,576        1,802        1,123
6/1/84     Cincinnati                               402       3,134        3,536        2,076
6/1/84     Florence                                 185       1,622        1,807        1,141
7/1/84     Trevose/Old Lincoln                      421       2,811        3,232        2,061
8/1/84     Medley                                   584       1,935        2,519        1,341
8/1/84     Oklahoma City                            340       2,575        2,915        1,830
8/1/84     Newport News                             356       4,218        4,574        2,956
8/1/84     Kaplan/Walnut Hill                       971       4,351        5,322        3,083
8/1/84     Kaplan/Irving                            678       6,914        7,592        2,645
9/1/84     Cockrell Hill                            380       2,743        3,123        1,939
11/1/84    Omaha                                    109       1,731        1,840        1,225
11/1/84    Hialeah                                  886       2,863        3,749        1,999
12/1/84    Austin/Lamar                             643       1,979        2,622        1,355
12/1/84    Pompano                                  399       2,728        3,127        1,922
12/1/84    Fort Worth                               122       1,284        1,406          894
12/1/84    Montgomeryville                          215       3,360        3,575        2,291
1/1/85     Cranston                                 175       1,357        1,532          972
1/1/85     Bossier City                             184       2,826        3,010        1,950
2/1/85     Simi Valley                              737       2,277        3,014        1,572
2/1/85     Hurst                                    231       1,953        2,184        1,354
3/1/85     Chattanooga                              202       3,040        3,242        1,937
3/1/85     Portland                                 285       1,811        2,096        1,195

</TABLE>

                                       F-44

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>            <C>           <C>
3/1/85     Fern Park                                    -          144       1,107          241           432
3/1/85     Fairfield                                    -          338       1,187          532           527
3/1/85     Houston / Westheimer                         -          850       1,179          805             -
4/1/85     Austin/ S. First                             -          778       1,282          384           711
4/1/85     Cincinnati/ E. Kemper                        -          232       1,573          333           853
4/1/85     Cincinnati/ Colerain                         -          253       1,717          422           932
4/1/85     Florence/ Tanner Lane                        -          218       1,477          426           835
4/1/85     Laguna Hills                                 -        1,224       3,303          491         1,213
5/1/85     Tacoma/ Phillips Rd.                         -          396       1,204          319           669
5/1/85     Milwaukie/ Mcloughlin                        -          458         742          423           620
5/1/85     Manchester/ S. Willow                        -          371       2,129         (70)           854
5/1/85     Longwood                                     -          355       1,645          360           669
5/1/85     Columbus/Busch Blvd.                         -          202       1,559          612           592
5/1/85     Columbus/Kinnear Rd.                         -          241       1,865          694           771
5/1/85     Worthington                                  -          221       1,824          658           709
5/1/85     Arlington                                    -          201       1,497          581           618
6/1/85     N. Hollywood/ Raymer                         -          967         848          270           515
6/1/85     Grove City/ Marlane Drive                    -          150       1,157          511           471
6/1/85     Reynoldsburg                                 -          204       1,568          791           598
7/1/85     San Diego/ Kearny Mesa Rd                    -          783       1,750          367           962
7/1/85     Scottsdale/ 70th St                          -          632       1,368          374           742
7/1/85     Concord/ Hwy 29                              -          150         750          459           587
7/1/85     Columbus/Morse Rd.                           -          195       1,510          466           670
7/1/85     Columbus/Kenney Rd.                          -          199       1,531          562           598
7/1/85     Westerville                                  -          199       1,517          717           620
7/1/85     Springfield                                  -           90         699          474           332
7/1/85     Dayton/Needmore Road                         -          144       1,108          543           460
7/1/85     Dayton/Executive Blvd.                       -          160       1,207          479           569
7/1/85     Lilburn                                      -          331         969          250           424
9/1/85     Madison/ Copps Ave.                          -          450       1,150          467           665
9/1/85     Columbus/ Sinclair                           -          307         893          400           519
9/1/85     Philadelphia/ Tacony St                      -          118       1,782          305           856

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
3/1/85     Fern Park                                144       1,780        1,924        1,235
3/1/85     Fairfield                                338       2,246        2,584        1,524
3/1/85     Houston / Westheimer                     850       1,984        2,834        1,707
4/1/85     Austin/ S. First                         778       2,377        3,155        1,531
4/1/85     Cincinnati/ E. Kemper                    232       2,759        2,991        1,749
4/1/85     Cincinnati/ Colerain                     253       3,071        3,324        1,950
4/1/85     Florence/ Tanner Lane                    218       2,738        2,956        1,733
4/1/85     Laguna Hills                           1,224       5,007        6,231        3,440
5/1/85     Tacoma/ Phillips Rd.                     396       2,192        2,588        1,387
5/1/85     Milwaukie/ Mcloughlin                    458       1,785        2,243        1,137
5/1/85     Manchester/ S. Willow                    371       2,913        3,284        1,832
5/1/85     Longwood                                 355       2,674        3,029        1,829
5/1/85     Columbus/Busch Blvd.                     202       2,763        2,965        1,786
5/1/85     Columbus/Kinnear Rd.                     241       3,330        3,571        2,113
5/1/85     Worthington                              221       3,191        3,412        2,062
5/1/85     Arlington                                201       2,696        2,897        1,806
6/1/85     N. Hollywood/ Raymer                     967       1,633        2,600        1,039
6/1/85     Grove City/ Marlane Drive                150       2,139        2,289        1,419
6/1/85     Reynoldsburg                             204       2,957        3,161        1,854
7/1/85     San Diego/ Kearny Mesa Rd                783       3,079        3,862        1,966
7/1/85     Scottsdale/ 70th St                      632       2,484        3,116        1,547
7/1/85     Concord/ Hwy 29                          150       1,796        1,946        1,153
7/1/85     Columbus/Morse Rd.                       195       2,646        2,841        1,808
7/1/85     Columbus/Kenney Rd.                      199       2,691        2,890        1,799
7/1/85     Westerville                              305       2,748        3,053        1,832
7/1/85     Springfield                               90       1,505        1,595          974
7/1/85     Dayton/Needmore Road                     144       2,111        2,255        1,380
7/1/85     Dayton/Executive Blvd.                   159       2,256        2,415        1,548
7/1/85     Lilburn                                  330       1,644        1,974        1,126
9/1/85     Madison/ Copps Ave.                      450       2,282        2,732        1,403
9/1/85     Columbus/ Sinclair                       307       1,812        2,119        1,115
9/1/85     Philadelphia/ Tacony St                  118       2,943        3,061        1,853

</TABLE>

                                       F-45

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>      <C>         <C>            <C>         <C>
10/1/85    N. Hollywood/ Whitsett                       -        1,524       2,576          416         1,302
10/1/85    Portland/ SE 82nd St                         -          354         496          370           380
10/1/85    Columbus/ Ambleside                          -          124       1,526          170           644
10/1/85    Indianapolis/ Pike Place                     -          229       1,531          570           856
10/1/85    Indianapolis/ Beach Grove                    -          198       1,342          299           709
10/1/85    Hartford/ Roberts                            -          219       1,481          477           966
10/1/85    Wichita/ S. Rock Rd.                         -          501       1,478          302           657
10/1/85    Wichita/ E. Harry                            -          313       1,050          176           468
10/1/85    Wichita/ S. Woodlawn                         -          263         905          200           437
10/1/85    Wichita/ E. Kellogg                          -          185         658            5           261
10/1/85    Wichita/ S. Tyler                            -          294       1,004          138           530
10/1/85    Wichita/ W. Maple                            -          234         805         (27)           313
10/1/85    Wichita/ Carey Lane                          -          192         674           66           296
10/1/85    Wichita/ E. Macarthur                        -          220         775         (45)           323
10/1/85    Joplin/ S. Range Line                        -          264         904          216           465
10/1/85    San Antonio/ Wetmore Rd.                     -          306       1,079          558           638
10/1/85    San Antonio/ Callaghan                       -          288       1,016          451           543
10/1/85    San Antonio/ Zarzamora                       -          364       1,281          638           674
10/1/85    San Antonio/ Hackberry                       -          388       1,367        2,552         1,001
10/1/85    San Antonio/ Fredericksburg                  -          287       1,009          663           597
10/1/85    Dallas/ S. Westmoreland                      -          474       1,670          216           734
10/1/85    Dallas/ Alvin St.                            -          359       1,266          187           559
10/1/85    Fort Worth/ W. Beach St.                     -          356       1,252          207           531
10/1/85    Fort Worth/ E. Seminary                      -          382       1,346          223           552
10/1/85    Fort Worth/ Cockrell St.                     -          323       1,136          212           515
11/1/85    Everett/ Evergreen                           -          706       2,294          605         1,076
11/1/85    Seattle/ Empire Way                          -        1,652       5,348          779         2,198
12/1/85    Milpitas                                     -        1,623       1,577          334           913
12/1/85    Pleasanton/ Santa Rita                       -        1,226       2,078          430         1,160
12/1/85    Amherst/ Niagra Falls                        -          132         701          289           400
12/1/85    West Sams Blvd.                              -          164       1,159        (242)           383
12/1/85    MacArthur Rd.                                -          204       1,628          239           638

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
10/1/85    N. Hollywood/ Whitsett                 1,524       4,294        5,818        2,697
10/1/85    Portland/ SE 82nd St                     354       1,246        1,600          785
10/1/85    Columbus/ Ambleside                      124       2,340        2,464        1,411
10/1/85    Indianapolis/ Pike Place                 229       2,957        3,186        1,748
10/1/85    Indianapolis/ Beach Grove                198       2,350        2,548        1,455
10/1/85    Hartford/ Roberts                        219       2,924        3,143        1,762
10/1/85    Wichita/ S. Rock Rd.                     642       2,296        2,938        1,433
10/1/85    Wichita/ E. Harry                        285       1,722        2,007        1,088
10/1/85    Wichita/ S. Woodlawn                     263       1,542        1,805          952
10/1/85    Wichita/ E. Kellogg                      185         924        1,109          574
10/1/85    Wichita/ S. Tyler                        294       1,672        1,966        1,077
10/1/85    Wichita/ W. Maple                        234       1,091        1,325          687
10/1/85    Wichita/ Carey Lane                      192       1,036        1,228          650
10/1/85    Wichita/ E. Macarthur                    220       1,053        1,273          642
10/1/85    Joplin/ S. Range Line                    264       1,585        1,849        1,017
10/1/85    San Antonio/ Wetmore Rd.                 306       2,275        2,581        1,466
10/1/85    San Antonio/ Callaghan                   288       2,010        2,298        1,303
10/1/85    San Antonio/ Zarzamora                   364       2,593        2,957        1,674
10/1/85    San Antonio/ Hackberry                   389       4,919        5,308        2,027
10/1/85    San Antonio/ Fredericksburg              287       2,269        2,556        1,402
10/1/85    Dallas/ S. Westmoreland                  474       2,620        3,094        1,724
10/1/85    Dallas/ Alvin St.                        359       2,012        2,371        1,334
10/1/85    Fort Worth/ W. Beach St.                 356       1,990        2,346        1,312
10/1/85    Fort Worth/ E. Seminary                  382       2,121        2,503        1,402
10/1/85    Fort Worth/ Cockrell St.                 323       1,863        2,186        1,227
11/1/85    Everett/ Evergreen                       706       3,975        4,681        2,654
11/1/85    Seattle/ Empire Way                    1,651       8,326        9,977        5,492
12/1/85    Milpitas                               1,623       2,824        4,447        1,738
12/1/85    Pleasanton/ Santa Rita                 1,226       3,668        4,894        2,264
12/1/85    Amherst/ Niagra Falls                    132       1,390        1,522          914
12/1/85    West Sams Blvd.                          164       1,300        1,464          865
12/1/85    MacArthur Rd.                            204       2,505        2,709        1,629

</TABLE>

                                       F-46

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>          <C>             <C>
12/1/85    Brockton/ Main                               -          153       2,020        (155)           678
12/1/85    Eatontown/ Hwy 35                            -          308       4,067          655         1,648
12/1/85    Denver/ Leetsdale                            -          603         847          285           408
1/1/86     Mapleshade/ Rudderow                         -          362       1,811          383           825
1/1/86     Bordentown/ Groveville                       -          196         981          184           471
1/1/86     Sun Valley/ Sheldon                          -          544       1,836          399           793
1/1/86     Las Vegas/ Highland                          -          432         848          308           420
2/1/86     Costa Mesa/ Pomona                           -        1,405       1,520          409           693
2/1/86     Brea/ Imperial Hwy                           -        1,069       2,165          423           954
2/1/86     Skokie/ McCormick                            -          638       1,912          325           779
2/1/86     Colorado Springs/ Sinton                     -          535       1,115          424           631
2/1/86     Oklahoma City/ Penn                          -          146         829          164           406
2/1/86     Oklahoma City/ 39th                          -          238         812          351           477
3/1/86     Jacksonville/ Wiley                          -          140         510          296           331
3/1/86     St. Louis/ Forder                            -          517       1,133          339           534
3/3/86     Tampa / 56th                                 -          450       1,360          588             -
4/1/86     Reno/ Telegraph                              -          649       1,051          558           682
4/1/86     St. Louis/Kirkham                            -          199       1,001          246           401
4/1/86     St. Louis/Reavis                             -          192         958          248           384
4/1/86     Fort Worth/East Loop                         -          196         804          261           369
5/1/86     Westlake Village                             -        1,205         995        4,965           429
5/1/86     Sacramento/Franklin Blvd.                    -          872         978        3,287           389
6/1/86     Richland Hills                               -          543         857          459           404
6/1/86     West Valley/So. 3600                         -          208       1,552          464           413
7/1/86     Colorado Springs/ Hollow Tree                -          574         726          321           426
7/1/86     West LA/Purdue Ave.                          -        2,415       3,585          273         1,212
7/1/86     Capital Heights/Central Ave.                 -          649       3,851          493         1,277
7/1/86     Pontiac/Dixie Hwy.                           -          259       2,091          227           756
8/1/86     Laurel/Ft. Meade Rd.                         -          475       1,475          355           630
8/1/86     Hammond / Calumet                            -           97         751          646           366
9/1/86     Kansas City/S. 44th.                         -          509       1,906          641           737
9/1/86     Lakewood / Wadsworth - 6th                   -        1,070       3,155          749         1,027

</TABLE>

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

<TABLE>
<CAPTION>


                                                         Gross Carrying Amount
                                                          At December 31, 2005
   Date                                             --------------------------------    Accumulated
 Acquired              Description                    Land     Buildings      Total    Depreciation
---------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                       <C>       <C>          <C>          <C>
12/1/85    Brockton/ Main                            153       2,543        2,696        1,663
12/1/85    Eatontown/ Hwy 35                         308       6,370        6,678        4,141
12/1/85    Denver/ Leetsdale                         603       1,540        2,143          991
1/1/86     Mapleshade/ Rudderow                      362       3,019        3,381        1,965
1/1/86     Bordentown/ Groveville                    196       1,636        1,832        1,064
1/1/86     Sun Valley/ Sheldon                       544       3,028        3,572        1,984
1/1/86     Las Vegas/ Highland                       432       1,576        2,008        1,024
2/1/86     Costa Mesa/ Pomona                      1,405       2,622        4,027        1,719
2/1/86     Brea/ Imperial Hwy                      1,069       3,542        4,611        2,315
2/1/86     Skokie/ McCormick                         638       3,016        3,654        1,944
2/1/86     Colorado Springs/ Sinton                  535       2,170        2,705        1,382
2/1/86     Oklahoma City/ Penn                       146       1,399        1,545          914
2/1/86     Oklahoma City/ 39th                       238       1,640        1,878        1,076
3/1/86     Jacksonville/ Wiley                       140       1,137        1,277          747
3/1/86     St. Louis/ Forder                         517       2,006        2,523        1,302
3/3/86     Tampa / 56th                              450       1,948        2,398        1,542
4/1/86     Reno/ Telegraph                           649       2,291        2,940        1,500
4/1/86     St. Louis/Kirkham                         199       1,648        1,847        1,086
4/1/86     St. Louis/Reavis                          192       1,590        1,782        1,045
4/1/86     Fort Worth/East Loop                      196       1,434        1,630          953
5/1/86     Westlake Village                        1,247       6,347        7,594        1,069
5/1/86     Sacramento/Franklin Blvd.               1,139       4,387        5,526        1,729
6/1/86     Richland Hills                            543       1,720        2,263        1,151
6/1/86     West Valley/So. 3600                      208       2,429        2,637        1,569
7/1/86     Colorado Springs/ Hollow Tree             574       1,473        2,047          939
7/1/86     West LA/Purdue Ave.                     2,416       5,069        7,485        3,296
7/1/86     Capital Heights/Central Ave.              649       5,621        6,270        3,632
7/1/86     Pontiac/Dixie Hwy.                        259       3,074        3,333        1,968
8/1/86     Laurel/Ft. Meade Rd.                      475       2,460        2,935        1,579
8/1/86     Hammond / Calumet                          97       1,763        1,860        1,105
9/1/86     Kansas City/S. 44th.                      509       3,284        3,793        2,105
9/1/86     Lakewood / Wadsworth - 6th              1,070       4,931        6,001        3,377

</TABLE>

                                       F-47

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>            <C>           <C>
10/1/86    Peralta/Fremont                              -          851       1,074          327           456
10/1/86    Birmingham/Highland                          -           89         786          252           398
10/1/86    Birmingham/Riverchase                        -          262       1,338          460           645
10/1/86    Birmingham/Eastwood                          -          166       1,184          416           612
10/1/86    Birmingham/Forestdale                        -          152         948          280           519
10/1/86    Birmingham/Centerpoint                       -          265       1,305          419           525
10/1/86    Birmingham/Roebuck Plaza                     -          101         399          302           425
10/1/86    Birmingham/Greensprings                      -          347       1,173          359           281
10/1/86    Birmingham/Hoover-Lorna                      -          372       1,128          421           431
10/1/86    Midfield/Bessemer                            -          170         355          354           112
10/1/86    Huntsville/Leeman Ferry Rd.                  -          158         992          305           558
10/1/86    Huntsville/Drake                             -          253       1,172          302           538
10/1/86    Anniston/Whiteside                           -           59         566          225           329
10/1/86    Houston/Glenvista                            -          595       1,043          699           494
10/1/86    Houston/I-45                                 -          704       1,146          992           604
10/1/86    Houston/Rogerdale                            -        1,631       2,792          718         1,232
10/1/86    Houston/Gessner                              -        1,032       1,693        1,105           746
10/1/86    Houston/Richmond-Fairdale                    -        1,502       2,506        1,215         1,160
10/1/86    Houston/Gulfton                              -        1,732       3,036        1,173         1,398
10/1/86    Houston/Westpark                             -          503         854          221           435
10/1/86    Jonesboro                                    -          157         718          266           370
10/1/86    Houston / South Loop West                    -        1,299       3,491        1,302         1,366
10/1/86    Houston / Plainfield Road                    -          904       2,319          867           920
10/1/86    Houston / North Freeway                      -          719       1,987          238           609
10/1/86    Houston / Old Katy Road                      -        1,365       3,431           27         1,274
10/1/86    Houston / Long Point                         -          451       1,187          659           563
10/1/86    Austin / Research Blvd.                      -        1,390       1,710          595           672
11/1/86    Arleta / Osborne Street                      -          987         663          314           290
12/1/86    Lynnwood / 196th Street                      -        1,063       1,602        7,395           571
12/1/86    N. Auburn / Auburn Way N.                    -          606       1,144          448           533
12/1/86    Gresham / Burnside & 202nd                   -          351       1,056          455           482
12/1/86    Denver / Sheridan Boulevard                  -        1,033       2,792          981         1,007

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
10/1/86    Peralta/Fremont                          851       1,857        2,708        1,197
10/1/86    Birmingham/Highland                      150       1,375        1,525          909
10/1/86    Birmingham/Riverchase                    278       2,427        2,705        1,605
10/1/86    Birmingham/Eastwood                      232       2,146        2,378        1,359
10/1/86    Birmingham/Forestdale                    190       1,709        1,899        1,120
10/1/86    Birmingham/Centerpoint                   273       2,241        2,514        1,411
10/1/86    Birmingham/Roebuck Plaza                 340         887        1,227          576
10/1/86    Birmingham/Greensprings                   16       2,144        2,160        1,397
10/1/86    Birmingham/Hoover-Lorna                  266       2,086        2,352        1,329
10/1/86    Midfield/Bessemer                         95         896          991          569
10/1/86    Huntsville/Leeman Ferry Rd.              198       1,815        2,013        1,203
10/1/86    Huntsville/Drake                         248       2,017        2,265        1,301
10/1/86    Anniston/Whiteside                       107       1,072        1,179          706
10/1/86    Houston/Glenvista                        595       2,236        2,831        1,452
10/1/86    Houston/I-45                             703       2,743        3,446        1,785
10/1/86    Houston/Rogerdale                      1,631       4,742        6,373        3,051
10/1/86    Houston/Gessner                        1,032       3,544        4,576        2,335
10/1/86    Houston/Richmond-Fairdale              1,501       4,882        6,383        3,200
10/1/86    Houston/Gulfton                        1,732       5,607        7,339        3,664
10/1/86    Houston/Westpark                         503       1,510        2,013          975
10/1/86    Jonesboro                                157       1,354        1,511          876
10/1/86    Houston / South Loop West              1,299       6,159        7,458        4,267
10/1/86    Houston / Plainfield Road                904       4,106        5,010        2,828
10/1/86    Houston / North Freeway                  661       2,892        3,553        1,943
10/1/86    Houston / Old Katy Road                1,164       4,933        6,097        3,334
10/1/86    Houston / Long Point                     451       2,409        2,860        1,708
10/1/86    Austin / Research Blvd.                1,390       2,977        4,367        2,051
11/1/86    Arleta / Osborne Street                  987       1,267        2,254          842
12/1/86    Lynnwood / 196th Street                1,405       9,226       10,631        2,771
12/1/86    N. Auburn / Auburn Way N.                606       2,125        2,731        1,475
12/1/86    Gresham / Burnside & 202nd               351       1,993        2,344        1,334
12/1/86    Denver / Sheridan Boulevard            1,033       4,780        5,813        3,244

</TABLE>

                                       F-48

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>          <C>           <C>
12/1/86    Marietta / Cobb Parkway                      -          536       2,764        1,042         1,016
12/1/86    Hillsboro / T.V.Highway                      -          461         574          260           414
12/1/86    San Antonio / West Sunset Road               -        1,206       1,594          580           649
12/31/86   Monrovia / Myrtle Avenue                     -        1,149       2,446          220             -
12/31/86   Chatsworth / Topanga                         -        1,447       1,243        3,776             -
12/31/86   Houston / Larkwood                           -          247         602          387             -
12/31/86   Northridge                                   -        3,624       1,922        2,492             -
12/31/86   Santa Clara / Duane                          -        1,950       1,004          404             -
12/31/86   Oyster Point                                 -        1,569       1,490          468             -
12/31/86   Walnut                                       -          767         613        5,666             -
3/1/87     Annandale / Ravensworth                      -          679       1,621          339           596
4/1/87     City Of Industry / Amar                      -          748       2,052          520           702
5/1/87     Oklahoma City / W. Hefner                    -          459         941          352           417
7/1/87     Oakbrook Terrace                             -          912       2,688        1,741           399
8/1/87     San Antonio/Austin Hwy.                      -          400         850         (12)           164
10/1/87    Plantation/S. State Rd.                      -          924       1,801        (213)           298
10/1/87    Rockville/Fredrick Rd.                       -        1,695       3,305         (93)           519
2/1/88     Anaheim/Lakeview                             -          995       1,505           46           256
6/7/88     Mesquite / Sorrento Drive                    -          928       1,011        3,506             -
7/1/88     Fort Wayne                                   -          101       1,524          232           663
1/1/92     Costa Mesa                                   -          533         980          772             -
3/1/92     Dallas / Walnut St.                          -          537       1,008          303             -
5/1/92     Camp Creek                                   -          576       1,075          320             -
9/1/92     Orlando/W. Colonial                          -          368         713          218             -
9/1/92     Jacksonville/Arlington                       -          554       1,065          275             -
10/1/92    Stockton/Mariners                            -          381         730          218             -
11/18/92   Virginia Beach/General Booth Blvd            -          599       1,119          449             -
1/1/93     Redwood City/Storage                         -          907       1,684          262             -
1/1/93     City Of Industry                             -        1,611       2,991          879             -
1/1/93     San Jose/Felipe                              -        1,124       2,088          553             -
1/1/93     Baldwin Park/Garvey Ave                      -          840       1,561          433             -
3/19/93    Westminister / W. 80th                       -          840       1,586          317             -

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
12/1/86    Marietta / Cobb Parkway                  536       4,822        5,358        3,162
12/1/86    Hillsboro / T.V.Highway                  461       1,248        1,709          947
12/1/86    San Antonio / West Sunset Road         1,207       2,822        4,029        1,913
12/31/86   Monrovia / Myrtle Avenue               1,149       2,666        3,815        2,003
12/31/86   Chatsworth / Topanga                   1,448       5,018        6,466        1,427
12/31/86   Houston / Larkwood                       246         990        1,236          718
12/31/86   Northridge                             3,624       4,414        8,038        2,244
12/31/86   Santa Clara / Duane                    1,950       1,408        3,358        1,046
12/31/86   Oyster Point                           1,569       1,958        3,527        1,410
12/31/86   Walnut                                   769       6,277        7,046        1,448
3/1/87     Annandale / Ravensworth                  679       2,556        3,235        1,705
4/1/87     City Of Industry / Amar                  748       3,274        4,022        1,497
5/1/87     Oklahoma City / W. Hefner                459       1,710        2,169        1,127
7/1/87     Oakbrook Terrace                       1,580       4,160        5,740        2,901
8/1/87     San Antonio/Austin Hwy.                  400       1,002        1,402          879
10/1/87    Plantation/S. State Rd.                  924       1,886        2,810        1,598
10/1/87    Rockville/Fredrick Rd.                 1,694       3,732        5,426        3,171
2/1/88     Anaheim/Lakeview                         995       1,807        2,802        1,507
6/7/88     Mesquite / Sorrento Drive              1,045       4,400        5,445        1,913
7/1/88     Fort Wayne                               101       2,419        2,520        1,256
1/1/92     Costa Mesa                               535       1,750        2,285        1,377
3/1/92     Dallas / Walnut St.                      537       1,311        1,848        1,301
5/1/92     Camp Creek                               576       1,395        1,971          876
9/1/92     Orlando/W. Colonial                      367         932        1,299          556
9/1/92     Jacksonville/Arlington                   554       1,340        1,894          797
10/1/92    Stockton/Mariners                        381         948        1,329          573
11/18/92   Virginia Beach/General Booth Blvd        599       1,568        2,167          926
1/1/93     Redwood City/Storage                     907       1,946        2,853        1,086
1/1/93     City Of Industry                       1,611       3,870        5,481        2,283
1/1/93     San Jose/Felipe                        1,124       2,641        3,765        1,412
1/1/93     Baldwin Park/Garvey Ave                  840       1,994        2,834        1,161
3/19/93    Westminister / W. 80th                   840       1,903        2,743        1,074

</TABLE>

                                       F-49

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                        <C>        <C>         <C>          <C>               <C>
4/26/93    Costa Mesa / Newport                       867        2,141       3,989        5,397             -
5/13/93    Austin /N. Lamar                             -          919       1,695        8,576             -
5/28/93    Jacksonville/Phillips Hwy.                   -          406         771          224             -
5/28/93    Tampa/Nebraska Avenue                        -          550       1,043          180             -
6/9/93     Calabasas / Ventura Blvd.                    -        1,762       3,269          228             -
6/9/93     Carmichael / Fair Oaks                       -          573       1,052          272             -
6/9/93     Santa Clara / Duane                          -          454         834          120             -
6/10/93    Citrus Heights / Sylvan Road                 -          438         822          200             -
6/25/93    Trenton / Allen Road                         -          623       1,166          255             -
6/30/93    Los Angeles/W.Jefferson Blvd                 -        1,085       2,017          224             -
7/16/93    Austin / So. Congress Ave                    -          777       1,445          376             -
8/1/93     Gaithersburg / E. Diamond                    -          602       1,139          177             -
8/11/93    Atlanta / Northside                          -        1,150       2,149          363             -
8/11/93    Smyrna/ Rosswill Rd                          -          446         842          247             -
8/13/93    So. Brunswick/Highway                        -        1,076       2,033          370             -
10/1/93    Denver / Federal Blvd                        -          875       1,633          277             -
10/1/93    Citrus Heights                               -          527         987          124             -
10/1/93    Lakewood / 6th Ave                           -          798       1,489           54             -
10/27/93   Houston / S Shaver St                        -          481         896          225             -
11/3/93    Upland/S. Euclid Ave.                        -          431         807          551             -
11/16/93   Norcross / Jimmy Carter                      -          627       1,167          230             -
11/16/93   Seattle / 13th                               -        1,085       2,015          675             -
12/9/93    Salt Lake City                               -          765       1,422           31             -
12/16/93   West Valley City                             -          683       1,276          246             -
12/21/93   Pinellas Park / 34th St. W                   -          607       1,134          245             -
12/28/93   New Orleans / S. Carrollton Ave              -        1,575       2,941          207             -
12/29/93   Orange / Main                                -        1,238       2,317        1,478             -
12/29/93   Sunnyvale / Wedell                           -          554       1,037          779             -
12/29/93   El Cajon / Magnolia                          -          421         791          590             -
12/29/93   Orlando / S. Semoran Blvd.                   -          462         872          634             -
12/29/93   Tampa / W. Hillsborough Ave                  -          352         665          437             -
12/29/93   Irving / West Loop 12                        -          341         643          201             -

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>         <C>           <C>
4/26/93    Costa Mesa / Newport                   3,730       7,797       11,527        2,744
5/13/93    Austin /N. Lamar                       1,421       9,769       11,190        2,553
5/28/93    Jacksonville/Phillips Hwy.               406         995        1,401          586
5/28/93    Tampa/Nebraska Avenue                    550       1,223        1,773          690
6/9/93     Calabasas / Ventura Blvd.              1,762       3,497        5,259        1,863
6/9/93     Carmichael / Fair Oaks                   573       1,324        1,897          773
6/9/93     Santa Clara / Duane                      453         955        1,408          525
6/10/93    Citrus Heights / Sylvan Road             437       1,023        1,460          604
6/25/93    Trenton / Allen Road                     623       1,421        2,044          774
6/30/93    Los Angeles/W.Jefferson Blvd           1,085       2,241        3,326        1,199
7/16/93    Austin / So. Congress Ave                777       1,821        2,598        1,057
8/1/93     Gaithersburg / E. Diamond                602       1,316        1,918          706
8/11/93    Atlanta / Northside                    1,150       2,512        3,662        1,402
8/11/93    Smyrna/ Rosswill Rd                      446       1,089        1,535          639
8/13/93    So. Brunswick/Highway                  1,076       2,403        3,479        1,324
10/1/93    Denver / Federal Blvd                    875       1,910        2,785        1,000
10/1/93    Citrus Heights                           527       1,111        1,638          599
10/1/93    Lakewood / 6th Ave                       685       1,656        2,341          855
10/27/93   Houston / S Shaver St                    481       1,121        1,602          624
11/3/93    Upland/S. Euclid Ave.                    508       1,281        1,789          624
11/16/93   Norcross / Jimmy Carter                  626       1,398        2,024          748
11/16/93   Seattle / 13th                         1,085       2,690        3,775        1,559
12/9/93    Salt Lake City                           633       1,585        2,218          461
12/16/93   West Valley City                         682       1,523        2,205          814
12/21/93   Pinellas Park / 34th St. W               607       1,379        1,986          769
12/28/93   New Orleans / S. Carrollton Ave        1,575       3,148        4,723        1,679
12/29/93   Orange / Main                          1,593       3,440        5,033        1,713
12/29/93   Sunnyvale / Wedell                       725       1,645        2,370          861
12/29/93   El Cajon / Magnolia                      542       1,260        1,802          640
12/29/93   Orlando / S. Semoran Blvd.               601       1,367        1,968          744
12/29/93   Tampa / W. Hillsborough Ave              436       1,018        1,454          538
12/29/93   Irving / West Loop 12                    355         830        1,185          469

</TABLE>

                                       F-50

<PAGE>

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

<TABLE>
<CAPTION>

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

<C>        <C>                                          <C>        <C>       <C>          <C>               <C>
12/29/93   Fullerton / W. Commonwealth                  -          904       1,687        1,276             -
12/29/93   N. Lauderdale / Mcnab Rd                     -          628       1,182          725             -
12/29/93   Los Alimitos / Cerritos                      -          695       1,299          715             -
12/29/93   Frederick / Prospect Blvd.                   -          573       1,082          629             -
12/29/93   Indianapolis / E. Washington                 -          403         775          526             -
12/29/93   Gardena / Western Ave.                       -          552       1,035          608             -
12/29/93   Palm Bay / Bobcock Street                    -          409         775          576             -
1/10/94    Hialeah / W. 20Th Ave.                       -        1,855       3,497          (5)             -
1/12/94    Sunnyvale / N. Fair Oaks Ave                 -          689       1,285          335             -
1/12/94    Honolulu / Iwaena                            -            -       3,382          898             -
1/12/94    Miami / Golden Glades                        -          579       1,081          470             -
1/21/94    Herndon / Centreville Road                   -        1,584       2,981          523             -
2/8/94     Las Vegas/S. Martin Luther King Blvd.        -        1,383       2,592        1,101             -
2/28/94    Arlingtn/Old Jeffersn Davishwy               -          735       1,399          616             -
3/8/94     Beaverton / Sw Barnes Road                   -          942       1,810          211             -
3/21/94    Austin / Arboretum                           -          473         897        2,772             -
3/25/94    Tinton Falls / Shrewsbury Ave                -        1,074       2,033          280             -
3/25/94    East Brunswick / Milltown Road               -        1,282       2,411          455             -
3/25/94    Mercerville / Quakerbridge Road              -        1,109       2,111          341             -
3/31/94    Hypoluxo                                     -          735       1,404        1,876             -
4/26/94    No. Highlands / Roseville Road               -          980       1,835          408             -
5/12/94    Fort Pierce/Okeechobee Road                  -          438         842          160             -
5/24/94    Hempstead/Peninsula Blvd.                    -        2,053       3,832          350             -
5/24/94    La/Huntington                                -          483         905          206             -
6/9/94     Chattanooga / Brainerd Road                  -          613       1,170          267             -
6/9/94     Chattanooga / Ringgold Road                  -          761       1,433          499             -
6/18/94    Las Vegas / S. Valley View Blvd              -          837       1,571          275             -
6/23/94    Las Vegas / Tropicana                        -          750       1,408          283             -
6/23/94    Henderson / Green Valley Pkwy                -        1,047       1,960          317             -
6/24/94    Las Vegas / N. Lamb Blvd.                    -          869       1,629          100             -
6/30/94    Birmingham / W. Oxmoor Road                  -          532       1,004          480             -
7/20/94    Milpitas / Dempsey Road                      -        1,260       2,358          243             -

</TABLE>

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

<TABLE>
<CAPTION>


                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
12/29/93   Fullerton / W. Commonwealth            1,160       2,707        3,867        1,264
12/29/93   N. Lauderdale / Mcnab Rd                 798       1,737        2,535          871
12/29/93   Los Alimitos / Cerritos                  874       1,835        2,709          901
12/29/93   Frederick / Prospect Blvd.               692       1,592        2,284          825
12/29/93   Indianapolis / E. Washington             505       1,199        1,704          632
12/29/93   Gardena / Western Ave.                   695       1,500        2,195          746
12/29/93   Palm Bay / Bobcock Street                525       1,235        1,760          640
1/10/94    Hialeah / W. 20Th Ave.                 1,590       3,757        5,347        1,898
1/12/94    Sunnyvale / N. Fair Oaks Ave             657       1,652        2,309          827
1/12/94    Honolulu / Iwaena                          -       4,280        4,280        2,024
1/12/94    Miami / Golden Glades                    557       1,573        2,130          823
1/21/94    Herndon / Centreville Road             1,358       3,730        5,088        1,765
2/8/94     Las Vegas/S. Martin Luther King Blvd.  1,436       3,640        5,076        1,824
2/28/94    Arlingtn/Old Jeffersn Davishwy           630       2,120        2,750        1,074
3/8/94     Beaverton / Sw Barnes Road               807       2,156        2,963        1,207
3/21/94    Austin / Arboretum                     1,554       2,588        4,142        1,015
3/25/94    Tinton Falls / Shrewsbury Ave            921       2,466        3,387        1,286
3/25/94    East Brunswick / Milltown Road         1,099       3,049        4,148        1,587
3/25/94    Mercerville / Quakerbridge Road          950       2,611        3,561        1,363
3/31/94    Hypoluxo                                 630       3,385        4,015        2,604
4/26/94    No. Highlands / Roseville Road           840       2,383        3,223        1,284
5/12/94    Fort Pierce/Okeechobee Road              375       1,065        1,440          693
5/24/94    Hempstead/Peninsula Blvd.              1,762       4,473        6,235        2,235
5/24/94    La/Huntington                            414       1,180        1,594          613
6/9/94     Chattanooga / Brainerd Road              525       1,525        2,050          823
6/9/94     Chattanooga / Ringgold Road              652       2,041        2,693        1,126
6/18/94    Las Vegas / S. Valley View Blvd          718       1,965        2,683          951
6/23/94    Las Vegas / Tropicana                    643       1,798        2,441          932
6/23/94    Henderson / Green Valley Pkwy            898       2,426        3,324        1,173
6/24/94    Las Vegas / N. Lamb Blvd.                669       1,929        2,598          739
6/30/94    Birmingham / W. Oxmoor Road              456       1,560        2,016          909
7/20/94    Milpitas / Dempsey Road                1,080       2,781        3,861        1,384

</TABLE>

                                       F-51

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>          <C>               <C>
8/17/94    New Orleans/I-10                             -          784       1,470        (467)             -
8/17/94    Beaverton / S.W. Denny Road                  -          663       1,245          150             -
8/17/94    Irwindale / Central Ave.                     -          674       1,263          133             -
8/17/94    Suitland / St. Barnabas Rd                   -        1,530       2,913          400             -
8/17/94    North Brunswick / How Lane                   -        1,238       2,323          159             -
8/17/94    Lombard / 64th                               -          847       1,583          186             -
8/17/94    Alsip / 27th                                 -          406         765          152             -
9/15/94    Huntsville / Old Monrovia Road               -          613       1,157          253             -
9/27/94    West Haven / Bull Hill Lane                  -          455         873        5,356             -
9/30/94    San Francisco / Marin St.                    -        1,227       2,339        1,248             -
9/30/94    Baltimore / Hillen Street                    -          580       1,095          279             -
9/30/94    San Francisco /10th & Howard                 -        1,423       2,668          306             -
9/30/94    Montebello / E. Whittier                     -          383         732          202             -
9/30/94    Arlington / Collins                          -          228         435          273             -
9/30/94    Miami / S.W. 119th Ave                       -          656       1,221           61             -
9/30/94    Blackwood / Erial Road                       -          774       1,437          138             -
9/30/94    Concord / Monument                           -        1,092       2,027          432             -
9/30/94    Rochester / Lee Road                         -          469         871          332             -
9/30/94    Houston / Bellaire                           -          623       1,157          295             -
9/30/94    Austin / Lamar Blvd                          -          781       1,452          168             -
9/30/94    Milwaukee / Lovers Lane Rd                   -          469         871          264             -
9/30/94    Monterey / Del Rey Oaks                      -        1,093       1,897          128             -
9/30/94    St. Petersburg / 66Th St.                    -          427         793          205             -
9/30/94    Dayton Bch / N. Nova Road                    -          396         735          116             -
9/30/94    Maple Shade / Route 38                       -          994       1,846          253             -
9/30/94    Marlton / Route 73 N.                        -          938       1,742          151             -
9/30/94    Naperville / E. Ogden Ave                    -          683       1,268          159             -
9/30/94    Long Beach / South Street                    -        1,778       3,307          447             -
9/30/94    Aloha / S.W. Shaw                            -          805       1,495          140             -
9/30/94    Alexandria / S. Pickett                      -        1,550       2,879          308             -
9/30/94    Houston / Highway 6 North                    -        1,120       2,083          265             -
9/30/94    San Antonio/Nacogdoches Rd                   -          571       1,060          250             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                       Gross Carrying Amount
                                                        At December 31, 2005
   Date                                           --------------------------------    Accumulated
 Acquired              Description                  Land     Buildings      Total    Depreciation
-------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                     <C>       <C>          <C>            <C>
8/17/94    New Orleans/I-10                        672       1,115        1,787          550
8/17/94    Beaverton / S.W. Denny Road             568       1,490        2,058          732
8/17/94    Irwindale / Central Ave.                578       1,492        2,070          721
8/17/94    Suitland / St. Barnabas Rd            1,312       3,531        4,843        1,759
8/17/94    North Brunswick / How Lane            1,062       2,658        3,720        1,273
8/17/94    Lombard / 64th                          726       1,890        2,616          930
8/17/94    Alsip / 27th                            348         975        1,323          489
9/15/94    Huntsville / Old Monrovia Road          525       1,498        2,023          804
9/27/94    West Haven / Bull Hill Lane           1,964       4,720        6,684        1,457
9/30/94    San Francisco / Marin St.             1,371       3,443        4,814        1,654
9/30/94    Baltimore / Hillen Street               497       1,457        1,954          784
9/30/94    San Francisco /10th & Howard          1,221       3,176        4,397        1,563
9/30/94    Montebello / E. Whittier                329         988        1,317          508
9/30/94    Arlington / Collins                     195         741          936          464
9/30/94    Miami / S.W. 119th Ave                  562       1,376        1,938          655
9/30/94    Blackwood / Erial Road                  663       1,686        2,349          820
9/30/94    Concord / Monument                      936       2,615        3,551        1,350
9/30/94    Rochester / Lee Road                    402       1,270        1,672          669
9/30/94    Houston / Bellaire                      534       1,541        2,075          785
9/30/94    Austin / Lamar Blvd                     669       1,732        2,401          857
9/30/94    Milwaukee / Lovers Lane Rd              402       1,202        1,604          583
9/30/94    Monterey / Del Rey Oaks                 903       2,215        3,118        1,108
9/30/94    St. Petersburg / 66Th St.               366       1,059        1,425          564
9/30/94    Dayton Bch / N. Nova Road               339         908        1,247          495
9/30/94    Maple Shade / Route 38                  852       2,241        3,093        1,100
9/30/94    Marlton / Route 73 N.                   805       2,026        2,831          953
9/30/94    Naperville / E. Ogden Ave               585       1,525        2,110          745
9/30/94    Long Beach / South Street             1,524       4,008        5,532        1,918
9/30/94    Aloha / S.W. Shaw                       690       1,750        2,440          864
9/30/94    Alexandria / S. Pickett               1,329       3,408        4,737        1,649
9/30/94    Houston / Highway 6 North               960       2,508        3,468        1,256
9/30/94    San Antonio/Nacogdoches Rd              489       1,392        1,881          722

</TABLE>

                                       F-52

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
9/30/94    San Ramon/San Ramon Valley                   -        1,530       2,840          519             -
9/30/94    San Rafael / Merrydale Rd                    -        1,705       3,165          223             -
9/30/94    San Antonio / Austin Hwy                     -          592       1,098          197             -
9/30/94    Sharonville / E. Kemper                      -          574       1,070          261             -
10/13/94   Davie / State Road 84                        -          744       1,467          895             -
10/13/94   Carrollton / Marsh Lane                      -          770       1,437        1,419             -
10/31/94   Sherman Oaks / Van Nuys Blvd                 -        1,278       2,461          967             -
12/19/94   Salt Lake City/West North Temple             -          490         917         (59)             -
12/28/94   Milpitas / Watson                            -        1,575       2,925          311             -
12/28/94   Las Vegas / Jones Blvd                       -        1,208       2,243          185             -
12/28/94   Venice / Guthrie                             -          578       1,073          140             -
12/30/94   Apple Valley / Foliage Ave                   -          910       1,695          251             -
1/4/95     Chula Vista / Main Street                    -          735       1,802          197             -
1/5/95     Pantego / West Park                          -          315         735          156             -
1/12/95    Roswell / Alpharetta                         -          423         993          426             -
1/23/95    North Bergen / Tonne                         -        1,564       3,772          390             -
1/23/95    San Leandro / Hesperian                      -          734       1,726          147             -
1/24/95    Nashville / Elm Hill                         -          338         791          453             -
2/3/95     Reno / S. Mccarron Blvd                      -        1,080       2,537          207             -
2/15/95    Schiller Park                                -        1,688       3,939          408             -
2/15/95    Lansing                                      -        1,514       3,534          229             -
2/15/95    Pleasanton                                   -        1,257       2,932          130             -
2/15/95    LA/Sepulveda                                 -        1,453       3,390          135             -
2/28/95    Decatur / Flat Shoal                         -          970       2,288          660             -
2/28/95    Smyrna / S. Cobb                             -          663       1,559          276             -
2/28/95    Downey / Bellflower                          -          916       2,158          200             -
2/28/95    Vallejo / Lincoln                            -          445       1,052          227             -
2/28/95    Lynnwood / 180th St                          -          516       1,205          253             -
2/28/95    Kent / Pacific Hwy                           -          728       1,711          160             -
2/28/95    Kirkland                                     -        1,254       2,932          424             -
2/28/95    Federal Way/Pacific                          -          785       1,832          287             -
2/28/95    Tampa / S. Dale                              -          791       1,852          301             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
9/30/94    San Ramon/San Ramon Valley             1,311       3,578        4,889        1,753
9/30/94    San Rafael / Merrydale Rd              1,461       3,632        5,093        1,761
9/30/94    San Antonio / Austin Hwy                 507       1,380        1,887          724
9/30/94    Sharonville / E. Kemper                  492       1,413        1,905          745
10/13/94   Davie / State Road 84                    637       2,469        3,106        1,232
10/13/94   Carrollton / Marsh Lane                1,022       2,604        3,626        1,212
10/31/94   Sherman Oaks / Van Nuys Blvd           1,423       3,283        4,706        1,588
12/19/94   Salt Lake City/West North Temple         385         963        1,348          289
12/28/94   Milpitas / Watson                      1,350       3,461        4,811        1,647
12/28/94   Las Vegas / Jones Blvd                 1,035       2,601        3,636        1,235
12/28/94   Venice / Guthrie                         495       1,296        1,791          634
12/30/94   Apple Valley / Foliage Ave               780       2,076        2,856        1,026
1/4/95     Chula Vista / Main Street                735       1,999        2,734        1,030
1/5/95     Pantego / West Park                      315         891        1,206          471
1/12/95    Roswell / Alpharetta                     423       1,419        1,842          762
1/23/95    North Bergen / Tonne                   1,551       4,175        5,726        1,982
1/23/95    San Leandro / Hesperian                  734       1,873        2,607          875
1/24/95    Nashville / Elm Hill                     337       1,245        1,582          722
2/3/95     Reno / S. Mccarron Blvd                1,080       2,744        3,824        1,289
2/15/95    Schiller Park                          1,688       4,347        6,035        1,813
2/15/95    Lansing                                1,514       3,763        5,277        1,529
2/15/95    Pleasanton                             1,257       3,062        4,319        1,221
2/15/95    LA/Sepulveda                           1,453       3,525        4,978        1,414
2/28/95    Decatur / Flat Shoal                     970       2,948        3,918        1,455
2/28/95    Smyrna / S. Cobb                         663       1,835        2,498          935
2/28/95    Downey / Bellflower                      916       2,358        3,274        1,090
2/28/95    Vallejo / Lincoln                        445       1,279        1,724          656
2/28/95    Lynnwood / 180th St                      516       1,458        1,974          740
2/28/95    Kent / Pacific Hwy                       728       1,871        2,599          893
2/28/95    Kirkland                               1,254       3,356        4,610        1,523
2/28/95    Federal Way/Pacific                      785       2,119        2,904        1,072
2/28/95    Tampa / S. Dale                          791       2,153        2,944        1,055

</TABLE>

                                       F-53

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
2/28/95    Burlingame/Adrian Rd                         -        2,280       5,349          360             -
2/28/95    Miami / Cloverleaf                           -          606       1,426          310             -
2/28/95    Pinole / San Pablo                           -          639       1,502          307             -
2/28/95    South Gate / Firesto                         -        1,442       3,449          443             -
2/28/95    San Jose / Mabury                            -          892       2,088          176             -
2/28/95    La Puente / Valley Blvd                      -          591       1,390          256             -
2/28/95    San Jose / Capitol E                         -        1,215       2,852          153             -
2/28/95    Milwaukie / 40th Street                      -          576       1,388          123             -
2/28/95    Portland / N. Lombard                        -          812       1,900          226             -
2/28/95    Miami / Biscayne                             -        1,313       3,076          325             -
2/28/95    Chicago / Clark Street                       -          442       1,031          349             -
2/28/95    Palatine / Dundee                            -          698       1,643          544             -
2/28/95    Williamsville/Transit                        -          284         670          274             -
2/28/95    Amherst / Sheridan                           -          484       1,151          193             -
3/2/95     Everett / Highway 99                         -          859       2,022          285             -
3/2/95     Burien / 1St Ave South                       -          763       1,783          480             -
3/2/95     Kent / South 238th Street                    -          763       1,783          272             -
3/31/95    Cheverly / Central Ave                       -          911       2,164          233             -
5/1/95     Sandy / S. State Street                      -        1,043       2,442        (242)             -
5/3/95     Largo / Ulmerton Roa                         -          263         654          145             -
5/8/95     Fairfield/Western Street                     -          439       1,030           97             -
5/8/95     Dallas / W. Mockingbird                      -        1,440       3,371          176             -
5/8/95     East Point / Lakewood                        -          884       2,071          366             -
5/25/95    Falls Church / Gallows Rd                    -          350         835        9,335             -
6/12/95    Baltimore / Old Waterloo                     -          769       1,850          214             -
6/12/95    Pleasant Hill / Hookston                     -          766       1,848          138             -
6/12/95    Mountain View/Old Middlefield                -        2,095       4,913          191             -
6/30/95    San Jose / Blossom Hill                      -        1,467       3,444          231             -
6/30/95    Fairfield / Kings Highway                    -        1,811       4,273          275             -
6/30/95    Pacoima / Paxton Street                    617          840       1,976          211             -
6/30/95    Portland / Prescott                          -          647       1,509          220             -
6/30/95    St. Petersburg                               -          352         827          267             -


</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
2/28/95    Burlingame/Adrian Rd                   2,280       5,709        7,989        2,686
2/28/95    Miami / Cloverleaf                       606       1,736        2,342          875
2/28/95    Pinole / San Pablo                       639       1,809        2,448          900
2/28/95    South Gate / Firesto                   1,442       3,892        5,334        1,919
2/28/95    San Jose / Mabury                        892       2,264        3,156        1,045
2/28/95    La Puente / Valley Blvd                  591       1,646        2,237          841
2/28/95    San Jose / Capitol E                   1,215       3,005        4,220        1,401
2/28/95    Milwaukie / 40th Street                  579       1,508        2,087          737
2/28/95    Portland / N. Lombard                    812       2,126        2,938        1,038
2/28/95    Miami / Biscayne                       1,313       3,401        4,714        1,455
2/28/95    Chicago / Clark Street                   442       1,380        1,822          769
2/28/95    Palatine / Dundee                        698       2,187        2,885        1,007
2/28/95    Williamsville/Transit                    284         944        1,228          490
2/28/95    Amherst / Sheridan                       484       1,344        1,828          678
3/2/95     Everett / Highway 99                     859       2,307        3,166        1,119
3/2/95     Burien / 1St Ave South                   763       2,263        3,026        1,061
3/2/95     Kent / South 238th Street                763       2,055        2,818        1,044
3/31/95    Cheverly / Central Ave                   911       2,397        3,308        1,114
5/1/95     Sandy / S. State Street                  923       2,320        3,243          680
5/3/95     Largo / Ulmerton Roa                     262         800        1,062          430
5/8/95     Fairfield/Western Street                 439       1,127        1,566          521
5/8/95     Dallas / W. Mockingbird                1,440       3,547        4,987        1,613
5/8/95     East Point / Lakewood                    884       2,437        3,321        1,225
5/25/95    Falls Church / Gallows Rd              3,608       6,912       10,520          654
6/12/95    Baltimore / Old Waterloo                 769       2,064        2,833          936
6/12/95    Pleasant Hill / Hookston                 742       2,010        2,752          926
6/12/95    Mountain View/Old Middlefield          2,095       5,104        7,199        2,225
6/30/95    San Jose / Blossom Hill                1,467       3,675        5,142        1,659
6/30/95    Fairfield / Kings Highway              1,810       4,549        6,359        2,061
6/30/95    Pacoima / Paxton Street                  840       2,187        3,027          988
6/30/95    Portland / Prescott                      647       1,729        2,376          819
6/30/95    St. Petersburg                           352       1,094        1,446          552


</TABLE>

                                       F-54

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
6/30/95    Dallas / Audelia Road                        -        1,166       2,725          876             -
6/30/95    Miami Gardens                                -          823       1,929          222             -
6/30/95    Grand Prairie / 19th                         -          566       1,329          158             -
6/30/95    Joliet / Jefferson Street                    -          501       1,181          214             -
6/30/95    Bridgeton / Pennridge                        -          283         661          200             -
6/30/95    Portland / S.E.92nd                          -          638       1,497          221             -
6/30/95    Houston / S.W. Freeway                       -          537       1,254        6,875             -
6/30/95    Milwaukee / Brown                            -          358         849          257             -
6/30/95    Orlando / W. Oak Ridge                       -          698       1,642          274             -
6/30/95    Lauderhill / State Road                      -          644       1,508          192             -
6/30/95    Orange Park /Blanding Blvd                   -          394         918          231             -
6/30/95    St. Petersburg /Joe'S Creek                  -          704       1,642          204             -
6/30/95    St. Louis / Page Service Drive               -          531       1,241          195             -
6/30/95    Independence /E. 42nd                        -          438       1,023          187             -
6/30/95    Cherry Hill / Dobbs Lane                     -          716       1,676          218             -
6/30/95    Edgewater Park / Route 130                   -          683       1,593          132             -
6/30/95    Beaverton / S.W. 110                         -          572       1,342          206             -
6/30/95    Markham / W. 159Th Place                     -          230         539          188             -
6/30/95    Houston / N.W. Freeway                       -          447       1,066          150             -
6/30/95    Portland / Gantenbein                        -          537       1,262          240             -
6/30/95    Upper Chichester/Market St.                  -          569       1,329          164             -
6/30/95    Fort Worth / Hwy 80                          -          379         891          131             -
6/30/95    Greenfield/ S. 108th                         -          728       1,707          299             -
6/30/95    Altamonte Springs                            -          566       1,326          208             -
6/30/95    Seattle / Delridge Way                       -          760       1,779          270             -
6/30/95    Elmhurst / Lake Frontage Rd                  -          748       1,758          226             -
6/30/95    Los Angeles / Beverly Blvd                   -          787       1,886          426             -
6/30/95    Lawrenceville / Brunswick                    -          841       1,961          183             -
6/30/95    Richmond / Carlson                           -          865       2,025          317             -
6/30/95    Liverpool / Oswego Road                      -          545       1,279          325             -
6/30/95    Rochester / East Ave                         -          578       1,375          464             -
6/30/95    Pasadena / E. Beltway                        -          757       1,767          159             -


</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
6/30/95    Dallas / Audelia Road                  1,166       3,601        4,767        1,921
6/30/95    Miami Gardens                            823       2,151        2,974          997
6/30/95    Grand Prairie / 19th                     566       1,487        2,053          704
6/30/95    Joliet / Jefferson Street                501       1,395        1,896          677
6/30/95    Bridgeton / Pennridge                    283         861        1,144          454
6/30/95    Portland / S.E.92nd                      638       1,718        2,356          817
6/30/95    Houston / S.W. Freeway                 1,140       7,526        8,666        1,522
6/30/95    Milwaukee / Brown                        358       1,106        1,464          549
6/30/95    Orlando / W. Oak Ridge                   697       1,917        2,614          918
6/30/95    Lauderhill / State Road                  644       1,700        2,344          788
6/30/95    Orange Park /Blanding Blvd               394       1,149        1,543          590
6/30/95    St. Petersburg /Joe'S Creek              703       1,847        2,550          869
6/30/95    St. Louis / Page Service Drive           531       1,436        1,967          693
6/30/95    Independence /E. 42nd                    438       1,210        1,648          594
6/30/95    Cherry Hill / Dobbs Lane                 715       1,895        2,610          849
6/30/95    Edgewater Park / Route 130               683       1,725        2,408          781
6/30/95    Beaverton / S.W. 110                     572       1,548        2,120          729
6/30/95    Markham / W. 159Th Place                 229         728          957          364
6/30/95    Houston / N.W. Freeway                   447       1,216        1,663          592
6/30/95    Portland / Gantenbein                    537       1,502        2,039          712
6/30/95    Upper Chichester/Market St.              569       1,493        2,062          681
6/30/95    Fort Worth / Hwy 80                      379       1,022        1,401          502
6/30/95    Greenfield/ S. 108th                     727       2,007        2,734          955
6/30/95    Altamonte Springs                        566       1,534        2,100          692
6/30/95    Seattle / Delridge Way                   760       2,049        2,809          948
6/30/95    Elmhurst / Lake Frontage Rd              748       1,984        2,732          909
6/30/95    Los Angeles / Beverly Blvd               787       2,312        3,099        1,167
6/30/95    Lawrenceville / Brunswick                841       2,144        2,985          950
6/30/95    Richmond / Carlson                       865       2,342        3,207        1,139
6/30/95    Liverpool / Oswego Road                  545       1,604        2,149          788
6/30/95    Rochester / East Ave                     578       1,839        2,417          798
6/30/95    Pasadena / E. Beltway                    757       1,926        2,683          884


</TABLE>

                                       F-55

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
7/13/95    Tarzana / Burbank Blvd                       -        2,895       6,823          431             -
7/31/95    Orlando / Lakehurst                          -          450       1,063          169             -
7/31/95    Livermore / Portola                          -          921       2,157          212             -
7/31/95    San Jose / Tully                             -          912       2,137          502             -
7/31/95    Mission Bay                                  -        1,617       3,785          567             -
7/31/95    Las Vegas / Decatur                          -        1,147       2,697          354             -
7/31/95    Pleasanton / Stanley                         -        1,624       3,811          245             -
7/31/95    Castro Valley / Grove                        -          757       1,772          105             -
7/31/95    Honolulu / Kaneohe                           -        1,215       2,846        2,151             -
7/31/95    Chicago / Wabash Ave                         -          645       1,535          685             -
7/31/95    Springfield / Parker                         -          765       1,834          210             -
7/31/95    Huntington Bch/Gotham                        -          765       1,808          185             -
7/31/95    Tucker / Lawrenceville                       -          630       1,480          217             -
7/31/95    Marietta / Canton Road                       -          600       1,423          295             -
7/31/95    Wheeling / Hintz                             -          450       1,054          173             -
8/1/95     Gresham / Division                           -          607       1,428          107             -
8/1/95     Tucker / Lawrenceville                       -          600       1,405          359             -
8/1/95     Decatur / Covington                          -          720       1,694          268             -
8/11/95    Studio City/Ventura                          -        1,285       3,015          272             -
8/12/95    Smyrna / Hargrove Road                       -        1,020       3,038          489             -
9/1/95     Hayward / Mission Blvd                       -        1,020       2,383          267             -
9/1/95     Park City / Belvider                         -          600       1,405          138             -
9/1/95     New Castle/Dupont Parkway                    -          990       2,369          193             -
9/1/95     Las Vegas / Rainbow                          -        1,050       2,459          123             -
9/1/95     Mountain View / Reng                         -          945       2,216          163             -
9/1/95     Venice / Cadillac                            -          930       2,182          269             -
9/1/95     Simi Valley /Los Angeles                     -        1,590       3,724          309             -
9/1/95     Spring Valley/Foreman                        -        1,095       2,572          366             -
9/6/95     Darien / Frontage Road                       -          975       2,321          130             -
9/30/95    Whittier                                     -          215         384          199           781
9/30/95    Van Nuys/Balboa                              -          295         657           60         1,148
9/30/95    Huntington Beach                             -          176         321          125           738


</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>         <C>           <C>
7/13/95    Tarzana / Burbank Blvd                 2,895       7,254       10,149        3,328
7/31/95    Orlando / Lakehurst                      450       1,232        1,682          585
7/31/95    Livermore / Portola                      921       2,369        3,290        1,089
7/31/95    San Jose / Tully                         912       2,639        3,551        1,184
7/31/95    Mission Bay                            1,617       4,352        5,969        2,051
7/31/95    Las Vegas / Decatur                    1,147       3,051        4,198        1,436
7/31/95    Pleasanton / Stanley                   1,624       4,056        5,680        1,824
7/31/95    Castro Valley / Grove                    757       1,877        2,634          835
7/31/95    Honolulu / Kaneohe                     2,133       4,079        6,212        1,652
7/31/95    Chicago / Wabash Ave                     645       2,220        2,865        1,294
7/31/95    Springfield / Parker                     765       2,044        2,809          931
7/31/95    Huntington Bch/Gotham                    765       1,993        2,758          931
7/31/95    Tucker / Lawrenceville                   630       1,697        2,327          812
7/31/95    Marietta / Canton Road                   600       1,718        2,318          844
7/31/95    Wheeling / Hintz                         450       1,227        1,677          574
8/1/95     Gresham / Division                       607       1,535        2,142          703
8/1/95     Tucker / Lawrenceville                   600       1,764        2,364          864
8/1/95     Decatur / Covington                      720       1,962        2,682          924
8/11/95    Studio City/Ventura                    1,285       3,287        4,572        1,439
8/12/95    Smyrna / Hargrove Road                 1,020       3,527        4,547        1,524
9/1/95     Hayward / Mission Blvd                 1,020       2,650        3,670        1,157
9/1/95     Park City / Belvider                     600       1,543        2,143          688
9/1/95     New Castle/Dupont Parkway                990       2,562        3,552        1,151
9/1/95     Las Vegas / Rainbow                    1,050       2,582        3,632        1,138
9/1/95     Mountain View / Reng                     945       2,379        3,324        1,059
9/1/95     Venice / Cadillac                        930       2,451        3,381        1,133
9/1/95     Simi Valley /Los Angeles               1,590       4,033        5,623        1,768
9/1/95     Spring Valley/Foreman                  1,095       2,938        4,033        1,238
9/6/95     Darien / Frontage Road                   975       2,451        3,426        1,097
9/30/95    Whittier                                 215       1,364        1,579          666
9/30/95    Van Nuys/Balboa                          295       1,865        2,160          956
9/30/95    Huntington Beach                         176       1,184        1,360          594


</TABLE>

                                       F-56

<PAGE>

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


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

<C>        <C>                                          <C>        <C>         <C>         <C>            <C>
9/30/95    Monterey Park                                -          124         346         (38)           782
9/30/95    Downey                                       -          191         317          113           825
9/30/95    Del Amo                                      -          474         742          418           922
9/30/95    Carson                                       -          375         735          397           428
9/30/95    Van Nuys/Balboa Blvd                         -        1,920       4,504          627             -
10/31/95   San Lorenzo /Hesperian                       -        1,590       3,716          399             -
10/31/95   Chicago / W. 47th Street                     -          300         708          270             -
10/31/95   Los Angeles / Eastern                        -          455       1,070          176             -
11/15/95   Costa Mesa                                   -          522       1,218          159             -
11/15/95   Plano / E. 14th                              -          705       1,646          102             -
11/15/95   Citrus Heights/Sunrise                       -          520       1,213          148             -
11/15/95   Modesto/Briggsmore Ave                       -          470       1,097          124             -
11/15/95   So San Francisco/Spruce                      -        1,905       4,444          459             -
11/15/95   Pacheco/Buchanan Circle                      -        1,681       3,951          327             -
11/16/95   Palm Beach Gardens                           -          657       1,540          127             -
11/16/95   Delray Beach                                 -          600       1,407          156             -
1/1/96     Bensenville/York Rd                          -          667       1,602          251           895
1/1/96     Louisville/Preston                           -          211       1,060           96           594
1/1/96     San Jose/Aborn Road                          -          615       1,342           98           759
1/1/96     Englewood/Federal                            -          481       1,395          150           777
1/1/96     W. Hollywood/Santa Monica                    -        3,415       4,577          305         2,552
1/1/96     Orland Hills/W. 159th                        -          917       2,392          350         1,342
1/1/96     Merrionette Park                             -          818       2,020          167         1,122
1/1/96     Denver/S Quebec                              -        1,849       1,941          203         1,086
1/1/96     Tigard/S.W. Pacific                          -          633       1,206          140           705
1/1/96     Coram/Middle Count                           -          507       1,421          150           792
1/1/96     Houston/FM 1960                              -          635       1,294          233           783
1/1/96     Kent/Military Trail                          -          409       1,670          201           956
1/1/96     Turnersville/Black                           -          165       1,360          145           758
1/1/96     Sewell/Rts. 553                              -          323       1,138          134           658
1/1/96     Maple Shade/Fellowship                       -          331       1,421          145           803
1/1/96     Hyattsville/Kenilworth                       -          509       1,757          172         1,000

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
9/30/95    Monterey Park                            124       1,090        1,214          611
9/30/95    Downey                                   191       1,255        1,446          634
9/30/95    Del Amo                                  474       2,082        2,556        1,079
9/30/95    Carson                                   375       1,560        1,935          627
9/30/95    Van Nuys/Balboa Blvd                   1,920       5,131        7,051        1,954
10/31/95   San Lorenzo /Hesperian                 1,590       4,115        5,705        1,651
10/31/95   Chicago / W. 47th Street                 300         978        1,278          448
10/31/95   Los Angeles / Eastern                    454       1,247        1,701          519
11/15/95   Costa Mesa                               522       1,377        1,899          542
11/15/95   Plano / E. 14th                          705       1,748        2,453          732
11/15/95   Citrus Heights/Sunrise                   520       1,361        1,881          607
11/15/95   Modesto/Briggsmore Ave                   470       1,221        1,691          535
11/15/95   So San Francisco/Spruce                1,904       4,904        6,808        2,063
11/15/95   Pacheco/Buchanan Circle                1,681       4,278        5,959        1,816
11/16/95   Palm Beach Gardens                       657       1,667        2,324          746
11/16/95   Delray Beach                             600       1,563        2,163          715
1/1/96     Bensenville/York Rd                      667       2,748        3,415        1,040
1/1/96     Louisville/Preston                       211       1,750        1,961          628
1/1/96     San Jose/Aborn Road                      615       2,199        2,814          824
1/1/96     Englewood/Federal                        481       2,322        2,803          888
1/1/96     W. Hollywood/Santa Monica              3,415       7,434       10,849        2,673
1/1/96     Orland Hills/W. 159th                    917       4,084        5,001        1,529
1/1/96     Merrionette Park                         818       3,309        4,127        1,194
1/1/96     Denver/S Quebec                        1,849       3,230        5,079        1,194
1/1/96     Tigard/S.W. Pacific                      633       2,051        2,684          760
1/1/96     Coram/Middle Count                       507       2,363        2,870          838
1/1/96     Houston/FM 1960                          635       2,310        2,945          891
1/1/96     Kent/Military Trail                      409       2,827        3,236        1,022
1/1/96     Turnersville/Black                       165       2,263        2,428          828
1/1/96     Sewell/Rts. 553                          323       1,930        2,253          711
1/1/96     Maple Shade/Fellowship                   331       2,369        2,700          843
1/1/96     Hyattsville/Kenilworth                   509       2,929        3,438        1,039

</TABLE>

                                       F-57

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>         <C>
1/1/96     Waterbury/Captain                            -          434       2,089          209         1,162
1/1/96     Bedford Hts/Miles                            -          835       1,577          305           929
1/1/96     Livonia/Newburgh                             -          635       1,407          122           783
1/1/96     Sunland/Sunland Blvd.                        -          631       1,965          134         1,090
1/1/96     Des Moines                                   -          448       1,350          115           768
1/1/96     Oxonhill/Indianhead                          -          772       2,017          332         1,141
1/1/96     Sacramento/N. 16th                           -          582       2,610          181         1,466
1/1/96     Houston/Westheimer                           -        1,508       2,274          287         1,304
1/1/96     San Pablo/San Pablo                          -          565       1,232          157           713
1/1/96     Bowie/Woodcliff                              -          718       2,336          220         1,292
1/1/96     Milwaukee/S. 84th                            -          444       1,868          337         1,091
1/1/96     Clinton/Malcolm Road                         -          593       2,123          261         1,187
1/3/96     San Gabriel                                  -        1,005       2,345          259             -
1/5/96     San Francisco, Second St.                    -        2,880       6,814          215             -
1/12/96    San Antonio, TX                              -          912       2,170           91             -
2/29/96    Naples, FL/Old US 41                         -          849       2,016          242             -
2/29/96    Lake Worth, FL/S. Military Tr.               -        1,782       4,723           44             -
2/29/96    Brandon, FL/W Brandon Blvd.                  -        1,928       4,523        1,004             -
2/29/96    Coral Springs FL/W Sample Rd.                -        3,480       8,148        (115)             -
2/29/96    Delray Beach FL/S Military Tr.               -          941       2,222          174             -
2/29/96    Jupiter FL/Military Trail                    -        2,280       5,347          245             -
2/29/96    Lakeworth FL/Lake Worth Rd                   -          737       1,742          140             -
2/29/96    New Port Richey/State Rd 54                  -          857       2,025          265             -
2/29/96    Sanford FL/S Orlando Dr                      -          734       1,749        2,038             -
3/8/96     Atlanta/Roswell                              -          898       3,649          125             -
3/31/96    Oakland                                      -        1,065       2,764          440             -
3/31/96    Saratoga                                     -        2,339       6,081          226             -
3/31/96    Randallstown                                 -        1,359       3,527          313             -
3/31/96    Plano                                        -          650       1,682          127             -
3/31/96    Houston                                      -          543       1,402          131             -
3/31/96    Irvine                                       -        1,920       4,975          728             -
3/31/96    Milwaukee                                    -          542       1,402          158             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
1/1/96     Waterbury/Captain                        434       3,460        3,894        1,097
1/1/96     Bedford Hts/Miles                        835       2,811        3,646        1,070
1/1/96     Livonia/Newburgh                         635       2,312        2,947          820
1/1/96     Sunland/Sunland Blvd.                    631       3,189        3,820        1,085
1/1/96     Des Moines                               448       2,233        2,681          816
1/1/96     Oxonhill/Indianhead                      772       3,490        4,262        1,250
1/1/96     Sacramento/N. 16th                       582       4,257        4,839        1,270
1/1/96     Houston/Westheimer                     1,508       3,865        5,373        1,418
1/1/96     San Pablo/San Pablo                      565       2,102        2,667          747
1/1/96     Bowie/Woodcliff                          718       3,848        4,566        1,260
1/1/96     Milwaukee/S. 84th                        444       3,296        3,740        1,154
1/1/96     Clinton/Malcolm Road                     593       3,571        4,164        1,199
1/3/96     San Gabriel                            1,005       2,604        3,609        1,174
1/5/96     San Francisco, Second St.              2,880       7,029        9,909        2,939
1/12/96    San Antonio, TX                          912       2,261        3,173          945
2/29/96    Naples, FL/Old US 41                     849       2,258        3,107          955
2/29/96    Lake Worth, FL/S. Military Tr.         1,782       4,767        6,549        1,966
2/29/96    Brandon, FL/W Brandon Blvd.            1,928       5,527        7,455        2,716
2/29/96    Coral Springs FL/W Sample Rd.          3,480       8,033       11,513        3,273
2/29/96    Delray Beach FL/S Military Tr.           940       2,397        3,337        1,041
2/29/96    Jupiter FL/Military Trail              2,280       5,592        7,872        2,337
2/29/96    Lakeworth FL/Lake Worth Rd               736       1,883        2,619          817
2/29/96    New Port Richey/State Rd 54              856       2,291        3,147          966
2/29/96    Sanford FL/S Orlando Dr                  975       3,546        4,521        1,470
3/8/96     Atlanta/Roswell                          898       3,774        4,672        1,535
3/31/96    Oakland                                1,065       3,204        4,269        1,331
3/31/96    Saratoga                               2,339       6,307        8,646        2,526
3/31/96    Randallstown                           1,359       3,840        5,199        1,624
3/31/96    Plano                                    650       1,809        2,459          776
3/31/96    Houston                                  543       1,533        2,076          658
3/31/96    Irvine                                 1,920       5,703        7,623        2,330
3/31/96    Milwaukee                                542       1,560        2,102          664

</TABLE>

                                       F-58

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
3/31/96    Carrollton                                   -          578       1,495          106             -
3/31/96    Torrance                                     -        1,415       3,675          180             -
3/31/96    Jacksonville                                 -          713       1,845          224             -
3/31/96    Dallas                                       -          315         810        1,744             -
3/31/96    Houston                                      -          669       1,724          553             -
3/31/96    Baltimore                                    -          842       2,180          253             -
3/31/96    New Haven                                    -          740       1,907        (166)             -
4/1/96     Chicago/Pulaski                              -          764       1,869          200             -
4/1/96     Las Vegas/Desert Inn                         -        1,115       2,729          178             -
4/1/96     Torrance/Crenshaw                            -          916       2,243          138             -
4/1/96     Weymouth                                     -          485       1,187          187             -
4/1/96     St. Louis/Barrett Station Road               -          630       1,542          113             -
4/1/96     Rockville/Randolph                           -        1,153       2,823          221             -
4/1/96     Simi Valley/East Street                      -          970       2,374           73             -
4/1/96     Houston/Westheimer                           -        1,390       3,402        6,228             -
4/3/96     Naples                                       -        1,187       2,809          271             -
6/26/96    Boca Raton                                   -        3,180       7,468          275             -
6/28/96    Venice                                       -          669       1,575          172             -
6/30/96    Las Vegas                                    -          921       2,155          349             -
6/30/96    Bedford Park                                 -          606       1,419          256             -
6/30/96    Los Angeles                                  -          692       1,616          122             -
6/30/96    Silver Spring                                -        1,513       3,535          278             -
6/30/96    Newark                                       -        1,051       2,458          124             -
6/30/96    Brooklyn                                     -          783       1,830          528             -
7/2/96     Glen Burnie/Furnace Br Rd                    -        1,755       4,150          676             -
7/22/96    Lakewood/W Hampton                           -          717       2,092           84             -
8/13/96    Norcross/Holcomb Bridge Rd                   -          955       3,117          161             -
9/5/96     Spring Valley/S Pascack rd                   -        1,260       2,966          581             -
9/16/96    Dallas/Royal Lane                            -        1,008       2,426          222             -
9/16/96    Colorado Springs/Tomah Drive                 -          731       1,759          123             -
9/16/96    Lewisville/S. Stemmons                       -          603       1,451          145             -
9/16/96    Las Vegas/Boulder Hwy.                       -          947       2,279          394             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
3/31/96    Carrollton                               578       1,601        2,179          683
3/31/96    Torrance                               1,415       3,855        5,270        1,589
3/31/96    Jacksonville                             713       2,069        2,782          913
3/31/96    Dallas                                   315       2,554        2,869          719
3/31/96    Houston                                  669       2,277        2,946        1,046
3/31/96    Baltimore                                842       2,433        3,275        1,039
3/31/96    New Haven                                667       1,814        2,481          794
4/1/96     Chicago/Pulaski                          764       2,069        2,833          800
4/1/96     Las Vegas/Desert Inn                   1,115       2,907        4,022        1,127
4/1/96     Torrance/Crenshaw                        916       2,381        3,297          900
4/1/96     Weymouth                                 485       1,374        1,859          504
4/1/96     St. Louis/Barrett Station Road           630       1,655        2,285          630
4/1/96     Rockville/Randolph                     1,153       3,044        4,197        1,153
4/1/96     Simi Valley/East Street                  970       2,447        3,417          916
4/1/96     Houston/Westheimer                     1,390       9,630       11,020        3,052
4/3/96     Naples                                 1,186       3,081        4,267        1,318
6/26/96    Boca Raton                             3,180       7,743       10,923        3,171
6/28/96    Venice                                   669       1,747        2,416          757
6/30/96    Las Vegas                                921       2,504        3,425        1,032
6/30/96    Bedford Park                             606       1,675        2,281          739
6/30/96    Los Angeles                              691       1,739        2,430          719
6/30/96    Silver Spring                          1,513       3,813        5,326        1,599
6/30/96    Newark                                 1,051       2,582        3,633        1,045
6/30/96    Brooklyn                                 783       2,358        3,141        1,126
7/2/96     Glen Burnie/Furnace Br Rd              1,755       4,826        6,581        1,783
7/22/96    Lakewood/W Hampton                       716       2,177        2,893          848
8/13/96    Norcross/Holcomb Bridge Rd               954       3,279        4,233        1,294
9/5/96     Spring Valley/S Pascack rd             1,260       3,547        4,807        1,468
9/16/96    Dallas/Royal Lane                      1,007       2,649        3,656        1,082
9/16/96    Colorado Springs/Tomah Drive             730       1,883        2,613          747
9/16/96    Lewisville/S. Stemmons                   603       1,596        2,199          660
9/16/96    Las Vegas/Boulder Hwy.                   947       2,673        3,620        1,100

</TABLE>

                                       F-59

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>          <C>               <C>
9/16/96    Sarasota/S. Tamiami Trail                    -          584       1,407        1,456             -
9/16/96    Willow Grove/Maryland Road                   -          673       1,620          134             -
9/16/96    Houston/W. Montgomery Rd.                    -          524       1,261          204             -
9/16/96    Denver/W. Hampden                            -        1,084       2,609          230             -
9/16/96    Littleton/Southpark Way                      -          922       2,221          362             -
9/16/96    Petaluma/Baywood Drive                       -          861       2,074          175             -
9/16/96    Canoga Park/Sherman Way                      -        1,543       3,716          595             -
9/16/96    Jacksonville/South Lane Ave.                 -          554       1,334          246             -
9/16/96    Newport News/Warwick Blvd.                   -          575       1,385          189             -
9/16/96    Greenbrook/Route 22                          -        1,227       2,954          605             -
9/16/96    Monsey/Route 59                              -        1,068       2,572          181             -
9/16/96    Santa Rosa/Santa Rosa Ave.                   -          575       1,385          130             -
9/16/96    Fort Worth/Brentwood                         -          823       2,016          163             -
9/16/96    Glendale/San Fernando Road                   -        2,500       6,124          215             -
9/16/96    Houston/Harwin                               -          549       1,344          178             -
9/16/96    Irvine/Cowan Street                          -        1,890       4,631          348             -
9/16/96    Fairfield/Dixie Highway                      -          427       1,046          148             -
9/16/96    Mesa/Country Club Drive                      -          701       1,718          385             -
9/16/96    San Francisco/Geary Blvd.                    -        2,957       7,244          411             -
9/16/96    Houston/Gulf Freeway                         -          701       1,718        4,972             -
9/16/96    Las Vegas/S. Decatur Blvd.                   -        1,037       2,539          262             -
9/16/96    Tempe/McKellips Road                         -          823       1,972          277             -
9/16/96    Richland Hills/Airport Fwy.                  -          473       1,158          200             -
10/11/96   Hampton/Pembroke Road                        -        1,080       2,346        (176)             -
10/11/96   Norfolk/Widgeon Road                         -        1,110       2,405        (301)             -
10/11/96   Richmond/Bloom Lane                          -        1,188       2,512        (117)             -
10/11/96   Virginia Beach/Southern Blvd                 -          282         610          263             -
10/11/96   Chesapeake/Military Hwy                      -          912       1,974          442             -
10/11/96   Richmond/Midlothian Park                     -          762       1,588          535             -
10/11/96   Roanoke/Peters Creek Road                    -          819       1,776          279             -
10/11/96   Orlando/E Oakridge Rd                        -          927       2,020          274             -
10/11/96   Orlando/South Hwy 17-92                      -        1,170       2,549          204             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
9/16/96    Sarasota/S. Tamiami Trail                584       2,863        3,447          723
9/16/96    Willow Grove/Maryland Road               673       1,754        2,427          683
9/16/96    Houston/W. Montgomery Rd.                524       1,465        1,989          629
9/16/96    Denver/W. Hampden                      1,084       2,839        3,923        1,108
9/16/96    Littleton/Southpark Way                  922       2,583        3,505        1,070
9/16/96    Petaluma/Baywood Drive                   861       2,249        3,110          902
9/16/96    Canoga Park/Sherman Way                1,543       4,311        5,854        1,789
9/16/96    Jacksonville/South Lane Ave.             554       1,580        2,134          677
9/16/96    Newport News/Warwick Blvd.               575       1,574        2,149          655
9/16/96    Greenbrook/Route 22                    1,227       3,559        4,786        1,360
9/16/96    Monsey/Route 59                        1,068       2,753        3,821        1,066
9/16/96    Santa Rosa/Santa Rosa Ave.               575       1,515        2,090          604
9/16/96    Fort Worth/Brentwood                     823       2,179        3,002          867
9/16/96    Glendale/San Fernando Road             2,500       6,339        8,839        2,403
9/16/96    Houston/Harwin                           549       1,522        2,071          630
9/16/96    Irvine/Cowan Street                    1,890       4,979        6,869        1,915
9/16/96    Fairfield/Dixie Highway                  427       1,194        1,621          474
9/16/96    Mesa/Country Club Drive                  701       2,103        2,804          815
9/16/96    San Francisco/Geary Blvd.              2,957       7,655       10,612        2,946
9/16/96    Houston/Gulf Freeway                     701       6,690        7,391        1,430
9/16/96    Las Vegas/S. Decatur Blvd.             1,037       2,801        3,838        1,072
9/16/96    Tempe/McKellips Road                     823       2,249        3,072          914
9/16/96    Richland Hills/Airport Fwy.              473       1,358        1,831          586
10/11/96   Hampton/Pembroke Road                    914       2,336        3,250          703
10/11/96   Norfolk/Widgeon Road                     908       2,306        3,214          700
10/11/96   Richmond/Bloom Lane                      995       2,588        3,583          804
10/11/96   Virginia Beach/Southern Blvd             282         873        1,155          441
10/11/96   Chesapeake/Military Hwy                  912       2,416        3,328        1,085
10/11/96   Richmond/Midlothian Park                 762       2,123        2,885        1,040
10/11/96   Roanoke/Peters Creek Road                819       2,055        2,874          885
10/11/96   Orlando/E Oakridge Rd                    927       2,294        3,221          938
10/11/96   Orlando/South Hwy 17-92                1,170       2,753        3,923        1,107

</TABLE>

                                       F-60

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
10/25/96   Austin/Renelli                               -        1,710       3,990          303             -
10/25/96   Austin/Santiago                              -          900       2,100          214             -
10/25/96   Dallas/East N.W. Highway                     -          698       1,628          194             -
10/25/96   Dallas/Denton Drive                          -          900       2,100          153             -
10/25/96   Houston/Hempstead                            -          518       1,207          438             -
10/25/96   Pasadena/So. Shaver                          -          420         980          420             -
10/31/96   Houston/Joel Wheaton Rd                      -          465       1,085          204             -
10/31/96   Mt Holly/541 Bypass                          -          360         840          291             -
11/13/96   Town East/Mesquite                           -          330         770          179             -
11/14/96   Bossier City LA                              -          633       1,488        (104)             -
12/5/96    Lake Forest/Bake Parkway                     -          971       2,173          579             -
12/16/96   Cherry Hill/Old Cuthbert                     -          645       1,505          642             -
12/16/96   Oklahoma City/SW 74th                        -          375         875          115             -
12/16/96   Oklahoma City/S Santa Fe                     -          360         840          167             -
12/16/96   Oklahoma City/S. May                         -          360         840          143             -
12/16/96   Arlington/S. Watson Rd.                      -          930       2,170          566             -
12/16/96   Richardson/E. Arapaho                        -        1,290       3,010          436             -
12/23/96   Eagle Rock/Colorado                          -          330         813          422             -
12/23/96   Upper Darby/Lansdowne                        -          899       2,272          264             -
12/23/96   Plymouth Meeting /Chemical                   -        1,109       2,802          206             -
12/23/96   Philadelphia/Byberry                         -        1,019       2,575          224             -
12/23/96   Ft. Lauderdale/State Road                    -        1,199       3,030          265             -
12/23/96   Englewood/Costilla                           -        1,739       4,393          181             -
12/23/96   Lilburn/Beaver Ruin Road                     -          600       1,515          176             -
12/23/96   Carmichael/Fair Oaks                         -          809       2,045          214             -
12/23/96   Portland/Division Street                     -          989       2,499          165             -
12/23/96   Napa/Industrial                              -          660       1,666          158             -
12/23/96   Wheatridge/W. 44th Avenue                    -        1,439       3,636          184             -
12/23/96   Las Vegas/Charleston                         -        1,049       2,651          184             -
12/23/96   Las Vegas/South Arvill                       -          929       2,348          221             -
12/23/96   Los Angeles/Santa Monica                     -        3,328       8,407          307             -
12/23/96   Warren/Schoenherr Rd.                        -          749       1,894          182             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
10/25/96   Austin/Renelli                         1,710       4,293        6,003        1,697
10/25/96   Austin/Santiago                          900       2,314        3,214          962
10/25/96   Dallas/East N.W. Highway                 697       1,823        2,520          759
10/25/96   Dallas/Denton Drive                      900       2,253        3,153          904
10/25/96   Houston/Hempstead                        517       1,646        2,163          699
10/25/96   Pasadena/So. Shaver                      420       1,400        1,820          580
10/31/96   Houston/Joel Wheaton Rd                  465       1,289        1,754          557
10/31/96   Mt Holly/541 Bypass                      360       1,131        1,491          499
11/13/96   Town East/Mesquite                       330         949        1,279          394
11/14/96   Bossier City LA                          557       1,460        2,017          456
12/5/96    Lake Forest/Bake Parkway                 973       2,750        3,723          940
12/16/96   Cherry Hill/Old Cuthbert                 645       2,147        2,792          941
12/16/96   Oklahoma City/SW 74th                    375         990        1,365          413
12/16/96   Oklahoma City/S Santa Fe                 360       1,007        1,367          444
12/16/96   Oklahoma City/S. May                     360         983        1,343          431
12/16/96   Arlington/S. Watson Rd.                  930       2,736        3,666        1,167
12/16/96   Richardson/E. Arapaho                  1,290       3,446        4,736        1,347
12/23/96   Eagle Rock/Colorado                      444       1,121        1,565          314
12/23/96   Upper Darby/Lansdowne                    899       2,536        3,435        1,008
12/23/96   Plymouth Meeting /Chemical             1,109       3,008        4,117          798
12/23/96   Philadelphia/Byberry                   1,019       2,799        3,818        1,090
12/23/96   Ft. Lauderdale/State Road              1,199       3,295        4,494        1,289
12/23/96   Englewood/Costilla                     1,739       4,574        6,313        1,729
12/23/96   Lilburn/Beaver Ruin Road                 600       1,691        2,291          697
12/23/96   Carmichael/Fair Oaks                     809       2,259        3,068          922
12/23/96   Portland/Division Street                 989       2,664        3,653        1,041
12/23/96   Napa/Industrial                          659       1,825        2,484          737
12/23/96   Wheatridge/W. 44th Avenue              1,439       3,820        5,259        1,465
12/23/96   Las Vegas/Charleston                   1,049       2,835        3,884        1,090
12/23/96   Las Vegas/South Arvill                   929       2,569        3,498          971
12/23/96   Los Angeles/Santa Monica               3,327       8,715       12,042        3,282
12/23/96   Warren/Schoenherr Rd.                    749       2,076        2,825          843

</TABLE>

                                       F-61

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
12/23/96   Portland/N.E. 71st Avenue                    -          869       2,196          288             -
12/23/96   Seattle/Pacific Hwy. South                   -          689       1,742          194             -
12/23/96   Broadview/S. 25th Avenue                     -        1,289       3,257          345             -
12/23/96   Winter Springs/W. St. Rte 434                -          689       1,742          131             -
12/23/96   Tampa/15th Street                            -          420       1,060          335             -
12/23/96   Pompano Beach/S. Dixie Hwy.                  -          930       2,292          378             -
12/23/96   Overland Park/Mastin                         -          990       2,440        3,274             -
12/23/96   Auburn/R Street                              -          690       1,700          218             -
12/23/96   Federal Heights/W. 48th Ave.                 -          720       1,774          189             -
12/23/96   Decatur/Covington                            -          930       2,292          249             -
12/23/96   Forest Park/Jonesboro Rd.                    -          540       1,331          168             -
12/23/96   Mangonia Park/Australian Ave.                -          840       2,070           78             -
12/23/96   Whittier/Colima                              -          540       1,331          104             -
12/23/96   Kent/Pacific Hwy South                       -          930       2,292          195             -
12/23/96   Topeka/8th Street                            -          150         370          159             -
12/23/96   Denver East Evans                            -        1,740       4,288          217             -
12/23/96   Pittsburgh/California Ave.                   -          630       1,552          119             -
12/23/96   Ft. Lauderdale/Powerline                     -          660       1,626          324             -
12/23/96   Philadelphia/Oxford                          -          900       2,218          205             -
12/23/96   Dallas/Lemmon Ave.                           -        1,710       4,214          171             -
12/23/96   Alsip/115th Street                           -          750       1,848        4,583             -
12/23/96   Green Acres/Jog Road                         -          600       1,479           74             -
12/23/96   Pompano Beach/Sample Road                    -        1,320       3,253           55             -
12/23/96   Wyndmoor/Ivy Hill                            -        2,160       5,323          278             -
12/23/96   W. Palm Beach/Belvedere                      -          960       2,366          211             -
12/23/96   Renton  174th St.                            -          960       2,366          259             -
12/23/96   Sacramento/Northgate                         -        1,021       2,647          158             -
12/23/96   Phoenix/19th Avenue                          -          991       2,569          238             -
12/23/96   Bedford Park/Cicero                          -        1,321       3,426          348             -
12/23/96   Lake Worth/Lk Worth                          -        1,111       2,880          241             -
12/23/96   Arlington/Algonquin                          -          991       2,569          637             -
12/23/96   Seattle/15th Avenue                          -          781       2,024          260             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
12/23/96   Portland/N.E. 71st Avenue                869       2,484        3,353        1,004
12/23/96   Seattle/Pacific Hwy. South               689       1,936        2,625          814
12/23/96   Broadview/S. 25th Avenue               1,289       3,602        4,891        1,424
12/23/96   Winter Springs/W. St. Rte 434            689       1,873        2,562          734
12/23/96   Tampa/15th Street                        420       1,395        1,815          611
12/23/96   Pompano Beach/S. Dixie Hwy.              930       2,670        3,600        1,115
12/23/96   Overland Park/Mastin                   1,306       5,398        6,704        1,478
12/23/96   Auburn/R Street                          690       1,918        2,608          794
12/23/96   Federal Heights/W. 48th Ave.             720       1,963        2,683          746
12/23/96   Decatur/Covington                        930       2,541        3,471        1,015
12/23/96   Forest Park/Jonesboro Rd.                540       1,499        2,039          630
12/23/96   Mangonia Park/Australian Ave.            840       2,148        2,988          857
12/23/96   Whittier/Colima                          540       1,435        1,975          566
12/23/96   Kent/Pacific Hwy South                   930       2,487        3,417          985
12/23/96   Topeka/8th Street                        150         529          679          262
12/23/96   Denver East Evans                      1,740       4,505        6,245        1,736
12/23/96   Pittsburgh/California Ave.               630       1,671        2,301          670
12/23/96   Ft. Lauderdale/Powerline                 660       1,950        2,610          866
12/23/96   Philadelphia/Oxford                      900       2,423        3,323          952
12/23/96   Dallas/Lemmon Ave.                     1,710       4,385        6,095        1,679
12/23/96   Alsip/115th Street                       750       6,431        7,181        1,233
12/23/96   Green Acres/Jog Road                     600       1,553        2,153          634
12/23/96   Pompano Beach/Sample Road              1,320       3,308        4,628        1,283
12/23/96   Wyndmoor/Ivy Hill                      2,160       5,601        7,761        2,148
12/23/96   W. Palm Beach/Belvedere                  960       2,577        3,537        1,025
12/23/96   Renton  174th St.                        960       2,625        3,585        1,073
12/23/96   Sacramento/Northgate                   1,021       2,805        3,826        1,099
12/23/96   Phoenix/19th Avenue                      991       2,807        3,798        1,117
12/23/96   Bedford Park/Cicero                    1,321       3,774        5,095        1,495
12/23/96   Lake Worth/Lk Worth                    1,111       3,121        4,232        1,227
12/23/96   Arlington/Algonquin                      991       3,206        4,197        1,305
12/23/96   Seattle/15th Avenue                      781       2,284        3,065          890

</TABLE>

                                       F-62

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
12/23/96   Southington/Spring                           -          811       2,102          180             -
12/23/96   Clifton/Broad Street                         -        1,411       3,659          218             -
12/23/96   Hillside/Glenwood                            -          563       4,051          381             -
12/23/96   Nashville/Dickerson Pike                     -          990       2,440          215             -
12/23/96   Madison/Gallatin Road                        -          780       1,922          250             -
12/30/96   Concorde/Treat                               -        1,396       3,258          278             -
12/30/96   Virginia Beach                               -          535       1,248          156             -
12/30/96   San Mateo                                    -        2,408       5,619          224             -
1/22/97    Austin, 1033 E. 41 Street                    -          257       3,633           97             -
4/12/97    Annandale / Backlick                         -          955       2,229          377             -
4/12/97    Ft. Worth / West Freeway                     -          667       1,556          249             -
4/12/97    Campbell / S. Curtner                        -        2,550       5,950          723             -
4/12/97    Aurora / S. Idalia                           -        1,002       2,338          567             -
4/12/97    Santa Cruz / Capitola                        -        1,037       2,420          337             -
4/12/97    Indianapolis / Lafayette Road                -          682       1,590          295             -
4/12/97    Indianapolis / Route 31                      -          619       1,444          342             -
4/12/97    Farmingdale / Broad Hollow Rd.               -        1,568       3,658          771             -
4/12/97    Tyson's Corner / Springhill Rd.              -        3,861       9,010        1,312             -
4/12/97    Fountain Valley / Newhope                    -        1,137       2,653          344             -
4/12/97    Dallas / Winsted                             -        1,375       3,209          465             -
4/12/97    Columbia / Broad River Rd.                   -          121         282          155             -
4/12/97    Livermore / S. Front Road                    -          876       2,044          194             -
4/12/97    Garland / Plano                              -          889       2,073          237             -
4/12/97    San Jose / Story Road                        -        1,352       3,156          367             -
4/12/97    Aurora / Abilene                             -        1,406       3,280          457             -
4/12/97    Antioch / Sunset Drive                       -        1,035       2,416          224             -
4/12/97    Rancho Cordova / Sunrise                     -        1,048       2,445          391             -
4/12/97    Berlin / Wilbur Cross                        -          756       1,764          281             -
4/12/97    Whittier / Whittier Blvd.                    -          648       1,513          178             -
4/12/97    Peabody / Newbury Street                     -        1,159       2,704          536             -
4/12/97    Denver / Blake                               -          602       1,405          213             -
4/12/97    Evansville / Green River Road                -          470       1,096          189             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
12/23/96   Southington/Spring                       811       2,282        3,093          899
12/23/96   Clifton/Broad Street                   1,411       3,877        5,288        1,475
12/23/96   Hillside/Glenwood                        563       4,432        4,995        1,773
12/23/96   Nashville/Dickerson Pike                 990       2,655        3,645        1,061
12/23/96   Madison/Gallatin Road                    780       2,172        2,952          913
12/30/96   Concorde/Treat                         1,396       3,536        4,932        1,307
12/30/96   Virginia Beach                           535       1,404        1,939          568
12/30/96   San Mateo                              2,408       5,843        8,251        2,188
1/22/97    Austin, 1033 E. 41 Street                257       3,730        3,987        1,351
4/12/97    Annandale / Backlick                     955       2,606        3,561          979
4/12/97    Ft. Worth / West Freeway                 667       1,805        2,472          689
4/12/97    Campbell / S. Curtner                  2,550       6,673        9,223        2,410
4/12/97    Aurora / S. Idalia                     1,002       2,905        3,907        1,096
4/12/97    Santa Cruz / Capitola                  1,037       2,757        3,794        1,009
4/12/97    Indianapolis / Lafayette Road            682       1,885        2,567          737
4/12/97    Indianapolis / Route 31                  619       1,786        2,405          701
4/12/97    Farmingdale / Broad Hollow Rd.         1,568       4,429        5,997        1,625
4/12/97    Tyson's Corner / Springhill Rd.        3,861      10,322       14,183        3,845
4/12/97    Fountain Valley / Newhope              1,137       2,997        4,134        1,085
4/12/97    Dallas / Winsted                       1,375       3,674        5,049        1,381
4/12/97    Columbia / Broad River Rd.               121         437          558          225
4/12/97    Livermore / S. Front Road                876       2,238        3,114          825
4/12/97    Garland / Plano                          888       2,311        3,199          872
4/12/97    San Jose / Story Road                  1,352       3,523        4,875        1,328
4/12/97    Aurora / Abilene                       1,406       3,737        5,143        1,394
4/12/97    Antioch / Sunset Drive                 1,035       2,640        3,675          971
4/12/97    Rancho Cordova / Sunrise               1,048       2,836        3,884        1,119
4/12/97    Berlin / Wilbur Cross                    756       2,045        2,801          798
4/12/97    Whittier / Whittier Blvd.                648       1,691        2,339          619
4/12/97    Peabody / Newbury Street               1,159       3,240        4,399        1,262
4/12/97    Denver / Blake                           602       1,618        2,220          612
4/12/97    Evansville / Green River Road            470       1,285        1,755          496

</TABLE>

                                       F-63

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
4/12/97    Burien / First Ave. So.                      -          792       1,847          255             -
4/12/97    Rancho Cordova / Mather Field                -          494       1,153          181             -
4/12/97    Sugar Land / Eldridge                        -          705       1,644          225             -
4/12/97    Columbus / Eastland Drive                    -          602       1,405          334             -
4/12/97    Slickerville / Black Horse Pike              -          539       1,258          210             -
4/12/97    Seattle / Aurora                             -        1,145       2,671          316             -
4/12/97    Gaithersburg / Christopher Ave.              -          972       2,268          285             -
4/12/97    Manchester / Tolland Turnpike                -          807       1,883          235             -
6/25/97    L.A./Venice Blvd.                            -          523       1,221        1,797             -
6/25/97    Kirkland-Totem                               -        2,131       4,972          253             -
6/25/97    Idianapolis                                  -          471       1,098          158             -
6/25/97    Dallas                                       -          699       1,631           75             -
6/25/97    Atlanta                                      -        1,183       2,761          141             -
6/25/97    Bensalem                                     -        1,159       2,705          105             -
6/25/97    Evansville                                   -          429       1,000           62             -
6/25/97    Austin                                       -          813       1,897           78             -
6/25/97    Harbor City                                  -        1,244       2,904          271             -
6/25/97    Birmingham                                   -          539       1,258          119             -
6/25/97    Sacramento                                   -          489       1,396        (191)             -
6/25/97    Carrollton                                   -          441       1,029           43             -
6/25/97    La Habra                                     -          822       1,918           87             -
6/25/97    Lombard                                      -        1,527       3,564        1,753             -
6/25/97    Fairfield                                    -          740       1,727           88             -
6/25/97    Seattle                                      -        1,498       3,494          295             -
6/25/97    Bellevue                                     -        1,653       3,858          201             -
6/25/97    Citrus Heights                               -          642       1,244          539             -
6/25/97    San Jose                                     -        1,273       2,971           24             -
6/25/97    Stanton                                      -          948       2,212           67             -
6/25/97    Garland                                      -          486       1,135           61             -
6/25/97    Westford                                     -          857       1,999          192             -
6/25/97    Dallas                                       -        1,627       3,797          670             -
6/25/97    Wheat Ridge                                  -        1,054       2,459          418             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
4/12/97    Burien / First Ave. So.                  792       2,102        2,894          809
4/12/97    Rancho Cordova / Mather Field            494       1,334        1,828          520
4/12/97    Sugar Land / Eldridge                    705       1,869        2,574          724
4/12/97    Columbus / Eastland Drive                602       1,739        2,341          671
4/12/97    Slickerville / Black Horse Pike          539       1,468        2,007          605
4/12/97    Seattle / Aurora                       1,145       2,987        4,132        1,105
4/12/97    Gaithersburg / Christopher Ave.          972       2,553        3,525          972
4/12/97    Manchester / Tolland Turnpike            807       2,118        2,925          797
6/25/97    L.A./Venice Blvd.                      1,044       2,497        3,541          704
6/25/97    Kirkland-Totem                         2,131       5,225        7,356        1,957
6/25/97    Idianapolis                              471       1,256        1,727          478
6/25/97    Dallas                                   699       1,706        2,405          639
6/25/97    Atlanta                                1,183       2,902        4,085        1,080
6/25/97    Bensalem                               1,159       2,810        3,969        1,032
6/25/97    Evansville                               401       1,090        1,491          418
6/25/97    Austin                                   813       1,975        2,788          733
6/25/97    Harbor City                            1,244       3,175        4,419        1,243
6/25/97    Birmingham                               539       1,377        1,916          530
6/25/97    Sacramento                               489       1,205        1,694          454
6/25/97    Carrollton                               441       1,072        1,513          397
6/25/97    La Habra                                 822       2,005        2,827          735
6/25/97    Lombard                                2,047       4,797        6,844        1,649
6/25/97    Fairfield                                740       1,815        2,555          657
6/25/97    Seattle                                1,498       3,789        5,287        1,510
6/25/97    Bellevue                               1,653       4,059        5,712        1,452
6/25/97    Citrus Heights                           642       1,783        2,425          755
6/25/97    San Jose                               1,273       2,995        4,268        1,078
6/25/97    Stanton                                  948       2,279        3,227          835
6/25/97    Garland                                  486       1,196        1,682          451
6/25/97    Westford                                 857       2,191        3,048          804
6/25/97    Dallas                                 1,627       4,467        6,094        1,686
6/25/97    Wheat Ridge                            1,054       2,877        3,931        1,020

</TABLE>

                                       F-64

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
6/25/97    Berlin                                       -          825       1,925          318             -
6/25/97    Gretna                                       -        1,069       2,494          407             -
6/25/97    Spring                                       -          461       1,077          214             -
6/25/97    Sacramento                                   -          592       1,380          907             -
6/25/97    Houston/South Dairyashford                   -          856       1,997          355             -
6/25/97    Naperville                                   -        1,108       2,585          435             -
6/25/97    Carrollton                                   -        1,158       2,702          526             -
6/25/97    Waipahu                                      -        1,620       3,780          776             -
6/25/97    Davis                                        -          628       1,465          229             -
6/25/97    Decatur                                      -          951       2,220          411             -
6/25/97    Jacksonville                                 -          653       1,525          297             -
6/25/97    Chicoppe                                     -          663       1,546          341             -
6/25/97    Alexandria                                   -        1,533       3,576          533             -
6/25/97    Houston/Veterans Memorial Dr.                -          458       1,070          181             -
6/25/97    Los Angeles/Olympic                          -        4,392      10,247        1,262             -
6/25/97    Littleton                                    -        1,340       3,126          615             -
6/25/97    Metairie                                     -        1,229       2,868          234             -
6/25/97    Louisville                                   -          717       1,672          304             -
6/25/97    East Hazel Crest                             -          753       1,757        2,198             -
6/25/97    Edmonds                                      -        1,187       2,770          425             -
6/25/97    Foster City                                  -        1,064       2,483          342             -
6/25/97    Chicago                                      -        1,160       2,708          532             -
6/25/97    Philadelphia                                 -          924       2,155          405             -
6/25/97    Dallas/Vilbig Rd.                            -          508       1,184          223             -
6/25/97    Staten Island                                -        1,676       3,910          584             -
6/25/97    Pelham Manor                                 -        1,209       2,820          765             -
6/25/97    Irving                                       -          469       1,093          206             -
6/25/97    Elk Grove                                    -          642       1,497          286             -
6/25/97    LAX                                          -        1,312       3,062          555             -
6/25/97    Denver                                       -        1,316       3,071          645             -
6/25/97    Plano                                        -        1,369       3,193          480             -
6/25/97    Lynnwood                                     -          839       1,959          360             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
6/25/97    Berlin                                   825       2,243        3,068          802
6/25/97    Gretna                                 1,069       2,901        3,970        1,175
6/25/97    Spring                                   461       1,291        1,752          486
6/25/97    Sacramento                               720       2,159        2,879          758
6/25/97    Houston/South Dairyashford               856       2,352        3,208          853
6/25/97    Naperville                             1,108       3,020        4,128        1,075
6/25/97    Carrollton                             1,158       3,228        4,386        1,195
6/25/97    Waipahu                                1,620       4,556        6,176        1,576
6/25/97    Davis                                    628       1,694        2,322          624
6/25/97    Decatur                                  951       2,631        3,582          991
6/25/97    Jacksonville                             653       1,822        2,475          701
6/25/97    Chicoppe                                 663       1,887        2,550          735
6/25/97    Alexandria                             1,533       4,109        5,642        1,474
6/25/97    Houston/Veterans Memorial Dr.            458       1,251        1,709          467
6/25/97    Los Angeles/Olympic                    4,392      11,509       15,901        4,066
6/25/97    Littleton                              1,340       3,741        5,081        1,350
6/25/97    Metairie                               1,229       3,102        4,331        1,137
6/25/97    Louisville                               717       1,976        2,693          739
6/25/97    East Hazel Crest                       1,236       3,472        4,708        1,442
6/25/97    Edmonds                                1,187       3,195        4,382        1,165
6/25/97    Foster City                            1,064       2,825        3,889        1,003
6/25/97    Chicago                                1,160       3,240        4,400        1,196
6/25/97    Philadelphia                             924       2,560        3,484          928
6/25/97    Dallas/Vilbig Rd.                        508       1,407        1,915          533
6/25/97    Staten Island                          1,676       4,494        6,170        1,629
6/25/97    Pelham Manor                           1,209       3,585        4,794        1,345
6/25/97    Irving                                   468       1,300        1,768          495
6/25/97    Elk Grove                                642       1,783        2,425          659
6/25/97    LAX                                    1,312       3,617        4,929        1,340
6/25/97    Denver                                 1,316       3,716        5,032        1,333
6/25/97    Plano                                  1,369       3,673        5,042        1,305
6/25/97    Lynnwood                                 839       2,319        3,158          875

</TABLE>

                                       F-65

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
6/25/97    Lilburn                                      -          507       1,182          390             -
6/25/97    Parma                                        -          881       2,055          505             -
6/25/97    Davie                                        -        1,086       2,533          567             -
6/25/97    Allen Park                                   -          953       2,223          543             -
6/25/97    Aurora                                       -          808       1,886          463             -
6/25/97    San Diego/16th Street                        -          932       2,175          620             -
6/25/97    Sterling Heights                             -          766       1,787          459             -
6/25/97    East L.A./Boyle Heights                      -          957       2,232          510             -
6/25/97    Springfield/Alban Station                    -        1,317       3,074          674             -
6/25/97    Littleton                                    -          868       2,026          508             -
6/25/97    Sacramento/57th Street                       -          869       2,029          492             -
6/25/97    Miami                                        -        1,762       4,111          995             -
8/13/97    Santa Monica / Wilshire Blvd.                -        2,040       4,760          317             -
10/1/97    Marietta /Austell Rd                         -          398       1,326          306           681
10/1/97    Denver / Leetsdale                           -        1,407       1,682          254           952
10/1/97    Baltimore / York Road                        -        1,538       1,952          671         1,125
10/1/97    Bolingbrook                                  -          737       1,776          262           927
10/1/97    Kent / Central                               -          483       1,321          196           687
10/1/97    Geneva / Roosevelt                           -          355       1,302          219           665
10/1/97    Denver / Sheridan                            -          429       1,105          170           587
10/1/97    Mountlake Terrace                            -        1,017       1,783          232           950
10/1/97    Carol Stream/ St.Charles                     -          185       1,187          202           591
10/1/97    Marietta / Cobb Park                         -          420       1,131          314           619
10/1/97    Venice / Rose                                -        5,468       5,478          677         3,117
10/1/97    Ventura / Ventura Blvd                       -          911       2,227          273         1,146
10/1/97    Studio City/ Ventura                         -        2,421       1,610          192           995
10/1/97    Madison Heights                              -          428       1,686        2,590         1,014
10/1/97    Lax / Imperial                               -        1,662       2,079          194         1,159
10/1/97    Justice / Industrial                         -          233       1,181          177           589
10/1/97    Burbank / San Fernando                       -        1,825       2,210          252         1,223
10/1/97    Pinole / Appian Way                          -          728       1,827          205           935
10/1/97    Denver / Tamarac Park                        -        2,545       1,692          431         1,127

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
6/25/97    Lilburn                                  507       1,572        2,079          595
6/25/97    Parma                                    880       2,561        3,441          944
6/25/97    Davie                                  1,085       3,101        4,186        1,153
6/25/97    Allen Park                               953       2,766        3,719        1,015
6/25/97    Aurora                                   808       2,349        3,157          843
6/25/97    San Diego/16th Street                    932       2,795        3,727        1,088
6/25/97    Sterling Heights                         766       2,246        3,012          837
6/25/97    East L.A./Boyle Heights                  957       2,742        3,699          991
6/25/97    Springfield/Alban Station              1,317       3,748        5,065        1,355
6/25/97    Littleton                                868       2,534        3,402          915
6/25/97    Sacramento/57th Street                   869       2,521        3,390          935
6/25/97    Miami                                  1,762       5,106        6,868        1,804
8/13/97    Santa Monica / Wilshire Blvd.          2,040       5,077        7,117        1,880
10/1/97    Marietta /Austell Rd                     440       2,271        2,711          804
10/1/97    Denver / Leetsdale                     1,554       2,741        4,295        1,006
10/1/97    Baltimore / York Road                  1,700       3,586        5,286        1,245
10/1/97    Bolingbrook                              814       2,888        3,702        1,026
10/1/97    Kent / Central                           533       2,154        2,687          773
10/1/97    Geneva / Roosevelt                       392       2,149        2,541          778
10/1/97    Denver / Sheridan                        474       1,817        2,291          674
10/1/97    Mountlake Terrace                      1,123       2,859        3,982          985
10/1/97    Carol Stream/ St.Charles                 205       1,960        2,165          692
10/1/97    Marietta / Cobb Park                     464       2,020        2,484          736
10/1/97    Venice / Rose                          6,042       8,698       14,740        2,835
10/1/97    Ventura / Ventura Blvd                 1,006       3,551        4,557        1,244
10/1/97    Studio City/ Ventura                   2,676       2,542        5,218          883
10/1/97    Madison Heights                          473       5,245        5,718          893
10/1/97    Lax / Imperial                         1,837       3,257        5,094        1,169
10/1/97    Justice / Industrial                     258       1,922        2,180          681
10/1/97    Burbank / San Fernando                 2,016       3,494        5,510        1,199
10/1/97    Pinole / Appian Way                      804       2,891        3,695        1,019
10/1/97    Denver / Tamarac Park                  2,812       2,983        5,795        1,152

</TABLE>

                                       F-66

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>           <C>
10/1/97    Gresham / Powell                             -          322       1,298          215           646
10/1/97    Warren / Mound Road                          -          268       1,025          211           528
10/1/97    Woodside/Brooklyn                            -        5,016       3,950          588         3,195
10/1/97    Enfield / Elm Street                         -          399       1,900          291           945
10/1/97    Roselle / Lake Street                        -          312       1,411          215           710
10/1/97    Milwaukee / Appleton                         -          324       1,385          276           706
10/1/97    Emeryville / Bay St                          -        1,602       1,830          171         1,091
10/1/97    Monterey / Del Rey                           -          257       1,048          230           563
10/1/97    San Leandro / Washington                     -          660       1,142          170           653
10/1/97    Boca Raton / N.W. 20                         -        1,140       2,256          422         1,198
10/1/97    Washington Dc/So Capital                     -        1,437       4,489          459         2,274
10/1/97    Lynn / Lynnway                               -          463       3,059          430         1,513
10/1/97    Pompano Beach                                -        1,077       1,527          650           869
10/1/97    Lake Oswego/ N.State                         -          465       1,956          278           972
10/1/97    Daly City / Mission                          -          389       2,921          230         1,389
10/1/97    Odenton / Route 175                          -          456       2,104          254         1,053
10/1/97    Novato / Landing                             -        2,416       3,496          249         1,706
10/1/97    St. Louis / Lindberg                         -          584       1,508          335           711
10/1/97    Oakland/International                        -          358       1,568          249           700
10/1/97    Stockton / March Lane                        -          663       1,398          192           657
10/1/97    Des Plaines / Golf Rd                        -        1,363       3,093          256         1,118
10/1/97    Morton Grove / Wauke                         -        2,658       3,232        5,976           822
10/1/97    Los Angeles / Jefferson                      -        1,090       1,580          263           820
10/1/97    Los Angeles / Martin                         -          869       1,152          113           717
10/1/97    San Leandro / E. 14th                        -          627       1,289          116           608
10/1/97    Tucson / Tanque Verde                        -          345       1,709          270           709
10/1/97    Randolph / Warren St                         -        2,330       1,914          524         1,332
10/1/97    Forrestville / Penn.                         -        1,056       2,347          315         1,114
10/1/97    Bridgeport                                   -        4,877       2,739          683         1,651
10/1/97    North Hollywood/Vine                         -          906       2,379          232         1,211
10/1/97    Santa Cruz / Portola                         -          535       1,526          178           761
10/1/97    Hyde Park / River St                         -          626       1,748          309           665

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
10/1/97    Gresham / Powell                         356       2,125        2,481          719
10/1/97    Warren / Mound Road                      296       1,736        2,032          585
10/1/97    Woodside/Brooklyn                      5,542       7,207       12,749        2,075
10/1/97    Enfield / Elm Street                     441       3,094        3,535        1,015
10/1/97    Roselle / Lake Street                    344       2,304        2,648          803
10/1/97    Milwaukee / Appleton                     358       2,333        2,691          779
10/1/97    Emeryville / Bay St                    1,770       2,924        4,694        1,009
10/1/97    Monterey / Del Rey                       284       1,814        2,098          569
10/1/97    San Leandro / Washington                 730       1,895        2,625          639
10/1/97    Boca Raton / N.W. 20                   1,260       3,756        5,016        1,210
10/1/97    Washington Dc/So Capital               1,588       7,071        8,659        2,105
10/1/97    Lynn / Lynnway                           512       4,953        5,465        1,642
10/1/97    Pompano Beach                          1,190       2,933        4,123          852
10/1/97    Lake Oswego/ N.State                     514       3,157        3,671        1,013
10/1/97    Daly City / Mission                      430       4,499        4,929        1,475
10/1/97    Odenton / Route 175                      504       3,363        3,867        1,007
10/1/97    Novato / Landing                       2,905       4,962        7,867        1,720
10/1/97    St. Louis / Lindberg                     728       2,410        3,138          832
10/1/97    Oakland/International                    475       2,400        2,875          807
10/1/97    Stockton / March Lane                    811       2,099        2,910          691
10/1/97    Des Plaines / Golf Rd                  1,630       4,200        5,830        1,473
10/1/97    Morton Grove / Wauke                   3,111       9,577       12,688        2,087
10/1/97    Los Angeles / Jefferson                1,323       2,430        3,753          783
10/1/97    Los Angeles / Martin                   1,066       1,785        2,851          562
10/1/97    San Leandro / E. 14th                    775       1,865        2,640          619
10/1/97    Tucson / Tanque Verde                    469       2,564        3,033          829
10/1/97    Randolph / Warren St                   2,719       3,381        6,100          958
10/1/97    Forrestville / Penn.                   1,313       3,519        4,832        1,188
10/1/97    Bridgeport                             5,613       4,337        9,950        1,478
10/1/97    North Hollywood/Vine                   1,166       3,562        4,728        1,092
10/1/97    Santa Cruz / Portola                     689       2,311        3,000          737
10/1/97    Hyde Park / River St                     759       2,589        3,348          843

</TABLE>

                                       F-67

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>           <C>
10/1/97    Dublin / San Ramon Rd                        -          942       1,999          177           803
10/1/97    Vallejo / Humboldt                           -          473       1,651          191           757
10/1/97    Fremont/Warm Springs                         -          848       2,885          253         1,105
10/1/97    Seattle / Stone Way                          -          829       2,180          347         1,080
10/1/97    W. Olympia                                   -          149       1,096          294           452
10/1/97    Mercer/Parkside Ave                          -          359       1,763          273           962
10/1/97    Bridge Water / Main                          -          445       2,054          299           811
10/1/97    Norwalk / Hoyt Street                        -        2,369       3,049          576         1,391
11/2/97    Lansing                                      -          758       1,768        (101)             -
11/7/97    Phoenix                                      -        1,197       2,793          231             -
11/13/97   Tinley Park                                  -        1,422       3,319           80             -
3/17/98    Houston/De Soto Dr.                          -          659       1,537          151             -
3/17/98    Houston / East Freeway                       -          593       1,384          180             -
3/17/98    Austin/Ben White                             -          692       1,614           70             -
3/17/98    Arlington/E.Pioneer                          -          922       2,152          246             -
3/17/98    Las Vegas/Tropicana                          -        1,285       2,998          165             -
3/17/98    Branford / Summit Place                      -          728       1,698          189             -
3/17/98    Las Vegas / Charleston                       -          791       1,845          123             -
3/17/98    So. San Francisco                            -        1,550       3,617          220             -
3/17/98    Pasadena / Arroyo Prkwy                      -        3,005       7,012          254             -
3/17/98    Tempe / E. Broadway                          -          633       1,476          260             -
3/17/98    Phoenix / N. 43rd Ave                        -          443       1,033          178             -
3/17/98    Phoenix/No. 43rd                             -          380         886          437             -
3/17/98    Phoenix / Black Canyon                       -          380         886          154             -
3/17/98    Phoenix/Black Canyon                         -          136         317          195             -
3/17/98    Nesconset / Southern                         -        1,423       3,321          170             -
4/1/98     St. Louis / Hwy. 141                         -          659       1,628        4,464             -
4/1/98     Island Park / Austin                         -        2,313       3,015        (739)             -
4/1/98     Akron / Brittain Rd.                         -          275       2,248        (197)             -
4/1/98     Patchogue/W.Sunrise                          -          936       2,184          169             -
4/1/98     Havertown/West Chester                       -        1,254       2,926          132             -
4/1/98     Schiller Park/River                          -          568       1,390          110             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
10/1/97    Dublin / San Ramon Rd                  1,119       2,802        3,921          951
10/1/97    Vallejo / Humboldt                       620       2,452        3,072          779
10/1/97    Fremont/Warm Springs                   1,072       4,019        5,091        1,300
10/1/97    Seattle / Stone Way                    1,078       3,358        4,436        1,001
10/1/97    W. Olympia                               209       1,782        1,991          545
10/1/97    Mercer/Parkside Ave                      503       2,854        3,357          843
10/1/97    Bridge Water / Main                      576       3,033        3,609          930
10/1/97    Norwalk / Hoyt Street                  2,794       4,591        7,385        1,547
11/2/97    Lansing                                  730       1,695        2,425          640
11/7/97    Phoenix                                1,197       3,024        4,221        1,048
11/13/97   Tinley Park                            1,422       3,399        4,821        1,132
3/17/98    Houston/De Soto Dr.                      659       1,688        2,347          582
3/17/98    Houston / East Freeway                   593       1,564        2,157          577
3/17/98    Austin/Ben White                         682       1,694        2,376          575
3/17/98    Arlington/E.Pioneer                      922       2,398        3,320          837
3/17/98    Las Vegas/Tropicana                    1,285       3,163        4,448        1,069
3/17/98    Branford / Summit Place                  727       1,888        2,615          647
3/17/98    Las Vegas / Charleston                   791       1,968        2,759          668
3/17/98    So. San Francisco                      1,550       3,837        5,387        1,208
3/17/98    Pasadena / Arroyo Prkwy                3,005       7,266       10,271        2,358
3/17/98    Tempe / E. Broadway                      633       1,736        2,369          594
3/17/98    Phoenix / N. 43rd Ave                    443       1,211        1,654          453
3/17/98    Phoenix/No. 43rd                         380       1,323        1,703          465
3/17/98    Phoenix / Black Canyon                   380       1,040        1,420          398
3/17/98    Phoenix/Black Canyon                     136         512          648          265
3/17/98    Nesconset / Southern                   1,423       3,491        4,914        1,137
4/1/98     St. Louis / Hwy. 141                   1,344       5,407        6,751        1,332
4/1/98     Island Park / Austin                   1,374       3,215        4,589        1,040
4/1/98     Akron / Brittain Rd.                     669       1,657        2,326          490
4/1/98     Patchogue/W.Sunrise                      936       2,353        3,289          812
4/1/98     Havertown/West Chester                 1,249       3,063        4,312        1,027
4/1/98     Schiller Park/River                      568       1,500        2,068          524

</TABLE>

                                       F-68

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
4/1/98     Chicago / Cuyler                             -        1,400       2,695          220             -
4/1/98     Chicago Heights/West                         -          468       1,804          170             -
4/1/98     Arlington Hts/University                     -          670       3,004           98             -
4/1/98     Cicero / Ogden                               -        1,678       2,266          313             -
4/1/98     Chicago/W. Howard St.                        -          974       2,875          165             -
4/1/98     Chicago/N. Western Ave                       -        1,453       3,205          171             -
4/1/98     Chicago/Northwest Hwy                        -          925       2,412           86             -
4/1/98     Chicago/N. Wells St.                         -        1,446       2,828          103             -
4/1/98     Chicago / Pulaski Rd.                        -        1,276       2,858           82             -
4/1/98     Artesia / Artesia                            -          625       1,419           94             -
4/1/98     Arcadia / Lower Azusa                        -          821       1,369          207             -
4/1/98     Manassas / Centreville                       -          405       2,137          302             -
4/1/98     La Downtwn/10 Fwy                            -        1,608       3,358          242             -
4/1/98     Bellevue / Northup                           -        1,232       3,306          464             -
4/1/98     Hollywood/Cole & Wilshire                    -        1,590       1,785          117             -
4/1/98     Atlanta/John Wesley                          -        1,233       1,665          219             -
4/1/98     Montebello/S. Maple                          -        1,274       2,299          136             -
4/1/98     Lake City/Forest Park                        -          248       1,445          125             -
4/1/98     Baltimore / W. Patap                         -          403       2,650          169             -
4/1/98     Fraser/Groesbeck Hwy                         -          368       1,796           86             -
4/1/98     Vallejo / Mini Drive                         -          560       1,803           83             -
4/1/98     San Diego/54th & Euclid                      -          952       2,550          160             -
4/1/98     Miami / 5th Street                           -        2,327       3,234          209             -
4/1/98     Silver Spring/Hill                           -          922       2,080          157             -
4/1/98     Chicago/E. 95th St.                          -          397       2,357          178             -
4/1/98     Chicago / S. Harlem                          -          791       1,424          113             -
4/1/98     St. Charles /Highway                         -          623       1,501          197             -
4/1/98     Chicago/Burr Ridge Rd.                       -          421       2,165           78             -
4/1/98     Yonkers / Route 9a                           -        1,722       3,823          296             -
4/1/98     Silverlake/Glendale                          -        2,314       5,481          229             -
4/1/98     Chicago/Harlem Ave                           -        1,430       3,038          148             -
4/1/98     Bethesda / Butler Rd                         -        1,146       2,509           77             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
4/1/98     Chicago / Cuyler                       1,400       2,915        4,315        1,012
4/1/98     Chicago Heights/West                     468       1,974        2,442          696
4/1/98     Arlington Hts/University                 670       3,102        3,772        1,076
4/1/98     Cicero / Ogden                         1,678       2,579        4,257        1,013
4/1/98     Chicago/W. Howard St.                    974       3,040        4,014        1,092
4/1/98     Chicago/N. Western Ave                 1,453       3,376        4,829        1,183
4/1/98     Chicago/Northwest Hwy                    925       2,498        3,423          858
4/1/98     Chicago/N. Wells St.                   1,446       2,931        4,377        1,017
4/1/98     Chicago / Pulaski Rd.                  1,276       2,940        4,216        1,002
4/1/98     Artesia / Artesia                        625       1,513        2,138          630
4/1/98     Arcadia / Lower Azusa                    821       1,576        2,397          656
4/1/98     Manassas / Centreville                   405       2,439        2,844        1,023
4/1/98     La Downtwn/10 Fwy                      1,608       3,600        5,208        1,466
4/1/98     Bellevue / Northup                     1,232       3,770        5,002        1,505
4/1/98     Hollywood/Cole & Wilshire              1,590       1,902        3,492          770
4/1/98     Atlanta/John Wesley                    1,233       1,884        3,117          850
4/1/98     Montebello/S. Maple                    1,273       2,436        3,709          981
4/1/98     Lake City/Forest Park                    248       1,570        1,818          647
4/1/98     Baltimore / W. Patap                     402       2,820        3,222        1,136
4/1/98     Fraser/Groesbeck Hwy                     368       1,882        2,250          758
4/1/98     Vallejo / Mini Drive                     560       1,886        2,446          768
4/1/98     San Diego/54th & Euclid                  952       2,710        3,662        1,170
4/1/98     Miami / 5th Street                     2,327       3,443        5,770        1,428
4/1/98     Silver Spring/Hill                       922       2,237        3,159          998
4/1/98     Chicago/E. 95th St.                      397       2,535        2,932        1,111
4/1/98     Chicago / S. Harlem                      791       1,537        2,328          678
4/1/98     St. Charles /Highway                     623       1,698        2,321          741
4/1/98     Chicago/Burr Ridge Rd.                   421       2,243        2,664          985
4/1/98     Yonkers / Route 9a                     1,722       4,119        5,841        1,744
4/1/98     Silverlake/Glendale                    2,314       5,710        8,024        2,418
4/1/98     Chicago/Harlem Ave                     1,430       3,186        4,616        1,366
4/1/98     Bethesda / Butler Rd                   1,146       2,586        3,732        1,081

</TABLE>

                                       F-69

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
4/1/98     Dundalk / Wise Ave                           -          447       2,005          141             -
4/1/98     St. Louis / Hwy. 141                         -          659       1,628           66             -
4/1/98     Island Park / Austin                         -        2,313       3,015          109             -
4/1/98     Dallas / Kingsly                             -        1,095       1,712          109             -
5/1/98     Berkeley / 2nd St.                           -        1,914       4,466         (70)             -
5/8/98     Cleveland / W. 117th                         -          930       2,277          206             -
5/8/98     La /Venice Blvd                              -        1,470       3,599          137             -
5/8/98     Aurora / Farnsworth                          -          960       2,350          106             -
5/8/98     Santa Rosa / Hopper                          -        1,020       2,497          123             -
5/8/98     Golden Valley / Winn                         -          630       1,542          139             -
5/8/98     St. Louis / Benham                           -          810       1,983          153             -
5/8/98     Chicago / S. Chicago                         -          840       2,057          100             -
10/1/98    El Segundo / Sepulveda                       -        6,586       5,795          223             -
10/1/98    Atlanta / Memorial Dr.                       -          414       2,239          246             -
10/1/98    Chicago / W. 79th St                         -          861       2,789          279             -
10/1/98    Chicago / N. Broadway                        -        1,918       3,824          242             -
10/1/98    Dallas / Greenville                          -        1,933       2,892          116             -
10/1/98    Tacoma / Orchard                             -          358       1,987          147             -
10/1/98    St. Louis / Gravois                          -          312       2,327          140             -
10/1/98    White Bear Lake                              -          578       2,079          196             -
10/1/98    Santa Cruz / Soquel                          -          832       2,385          121             -
10/1/98    Coon Rapids / Hwy 10                         -          330       1,646          124             -
10/1/98    Oxnard / Hueneme Rd                          -          923       3,925          208             -
10/1/98    Vancouver/ Millplain                         -          343       2,000           89             -
10/1/98    Tigard / Mc Ewan                             -          597       1,652           80             -
10/1/98    Griffith / Cline                             -          299       2,118           88             -
10/1/98    Miami / Sunset Drive                         -        1,656       2,321        1,657             -
10/1/98    Farmington / 9 Mile                          -          580       2,526          157             -
10/1/98    Los Gatos / University                       -        2,234       3,890          184             -
10/1/98    N. Hollywood                                 -        1,484       3,143           90             -
10/1/98    Petaluma / Transport                         -          460       1,840        4,901             -
10/1/98    Chicago / 111th                              -          341       2,898        2,277             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
4/1/98     Dundalk / Wise Ave                       447       2,146        2,593          885
4/1/98     St. Louis / Hwy. 141                     659       1,694        2,353          795
4/1/98     Island Park / Austin                   2,313       3,124        5,437        1,460
4/1/98     Dallas / Kingsly                       1,095       1,821        2,916          758
5/1/98     Berkeley / 2nd St.                     1,837       4,473        6,310        1,487
5/8/98     Cleveland / W. 117th                     930       2,483        3,413          868
5/8/98     La /Venice Blvd                        1,470       3,736        5,206        1,180
5/8/98     Aurora / Farnsworth                      960       2,456        3,416          784
5/8/98     Santa Rosa / Hopper                    1,020       2,620        3,640          842
5/8/98     Golden Valley / Winn                     630       1,681        2,311          559
5/8/98     St. Louis / Benham                       810       2,136        2,946          728
5/8/98     Chicago / S. Chicago                     840       2,157        2,997          679
10/1/98    El Segundo / Sepulveda                 6,586       6,018       12,604        1,885
10/1/98    Atlanta / Memorial Dr.                   414       2,485        2,899          828
10/1/98    Chicago / W. 79th St                     861       3,068        3,929        1,082
10/1/98    Chicago / N. Broadway                  1,917       4,067        5,984        1,308
10/1/98    Dallas / Greenville                    1,933       3,008        4,941          958
10/1/98    Tacoma / Orchard                         358       2,134        2,492          684
10/1/98    St. Louis / Gravois                      312       2,467        2,779          821
10/1/98    White Bear Lake                          578       2,275        2,853          729
10/1/98    Santa Cruz / Soquel                      832       2,506        3,338          809
10/1/98    Coon Rapids / Hwy 10                     330       1,770        2,100          572
10/1/98    Oxnard / Hueneme Rd                      923       4,133        5,056        1,301
10/1/98    Vancouver/ Millplain                     342       2,090        2,432          677
10/1/98    Tigard / Mc Ewan                         597       1,732        2,329          571
10/1/98    Griffith / Cline                         299       2,206        2,505          686
10/1/98    Miami / Sunset Drive                   2,267       3,367        5,634          919
10/1/98    Farmington / 9 Mile                      580       2,683        3,263          836
10/1/98    Los Gatos / University                 2,234       4,074        6,308        1,286
10/1/98    N. Hollywood                           1,484       3,233        4,717        1,002
10/1/98    Petaluma / Transport                     857       6,344        7,201        1,338
10/1/98    Chicago / 111th                          431       5,085        5,516        1,212

</TABLE>

                                       F-70

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
10/1/98    Upper Darby / Market                         -          808       5,011          198             -
10/1/98    San Jose / Santa                             -          966       3,870          105             -
10/1/98    San Diego / Morena                           -        3,173       5,469          190             -
10/1/98    Brooklyn /Rockaway Ave                       -        6,272       9,691          517             -
10/1/98    Revere / Charger St                          -        1,997       3,727          297             -
10/1/98    Las Vegas / E. Charles                       -          602       2,545          259             -
10/1/98    Laurel / Baltimore Ave                       -        1,899       4,498          201             -
10/1/98    East La/Figueroa & 4th                       -        1,213       2,689           72             -
10/1/98    Oldsmar / Tampa Road                         -          760       2,154        2,760             -
10/1/98    Ft. Lauderdale /S.W.                         -        1,046       2,928          125             -
10/1/98    Miami / Nw 73rd St                           -        1,050       3,064           42             -
12/9/98    Miami / Nw 115th Ave                         -        1,095       2,349        4,807             -
1/1/99     New Orleans/St.Charles                       -        1,463       2,634        (432)             -
1/6/99     Brandon / E. Brandon Blvd                    -        1,560       3,695           62             -
3/12/99    St. Louis / N. Lindbergh Blvd.               -        1,688       3,939          352             -
3/12/99    St. Louis /Vandeventer Midtown               -          699       1,631          163             -
3/12/99    St. Ann / Maryland Heights                   -        1,035       2,414          297             -
3/12/99    Florissant / N. Hwy 67                       -          971       2,265          273             -
3/12/99    Ferguson Area-W.Florissant                   -        1,194       2,732          425             -
3/12/99    Florissant / New Halls Ferry Rd              -        1,144       2,670          351             -
3/12/99    St. Louis / Airport                          -          785       1,833          248             -
3/12/99    St. Louis/ S.Third St                        -        1,096       2,557          110             -
3/12/99    Kansas City / E. 47th St.                    -          610       1,424          172             -
3/12/99    Kansas City /E. 67th Terrace                 -        1,136       2,643          180             -
3/12/99    Kansas City / James A. Reed Rd               -          749       1,748          100             -
3/12/99    Independence / 291                           -          871       2,032          150             -
3/12/99    Raytown / Woodson Rd                         -          915       2,134          106             -
3/12/99    Kansas City / 34th Main Street               -          114       2,599          606             -
3/12/99    Columbia / River Dr                          -          671       1,566          278             -
3/12/99    Columbia / Buckner Rd                        -          714       1,665          345             -
3/12/99    Columbia / Decker Park Rd                    -          605       1,412          117             -
3/12/99    Columbia / Rosewood Dr                       -          777       1,814           97             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                         Gross Carrying Amount
                                                  n       At December 31, 2005
   Date                                             --------------------------------    Accumulated
 Acquired              Description                    Land     Buildings      Total    Depreciation
---------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                       <C>       <C>          <C>          <C>
10/1/98    Upper Darby / Market                      808       5,209        6,017        1,645
10/1/98    San Jose / Santa                          966       3,975        4,941        1,254
10/1/98    San Diego / Morena                      3,173       5,659        8,832        1,752
10/1/98    Brooklyn /Rockaway Ave                  6,272      10,208       16,480        3,259
10/1/98    Revere / Charger St                     1,997       4,024        6,021        1,321
10/1/98    Las Vegas / E. Charles                    602       2,804        3,406          926
10/1/98    Laurel / Baltimore Ave                  1,899       4,699        6,598        1,505
10/1/98    East La/Figueroa & 4th                  1,213       2,761        3,974          862
10/1/98    Oldsmar / Tampa Road                    1,049       4,625        5,674        1,188
10/1/98    Ft. Lauderdale /S.W.                    1,046       3,053        4,099          951
10/1/98    Miami / Nw 73rd St                      1,050       3,106        4,156          982
12/9/98    Miami / Nw 115th Ave                    1,178       7,073        8,251          788
1/1/99     New Orleans/St.Charles                  1,039       2,626        3,665          741
1/6/99     Brandon / E. Brandon Blvd               1,560       3,757        5,317          975
3/12/99    St. Louis / N. Lindbergh Blvd.          1,688       4,291        5,979        1,276
3/12/99    St. Louis /Vandeventer Midtown            699       1,794        2,493          546
3/12/99    St. Ann / Maryland Heights              1,035       2,711        3,746          795
3/12/99    Florissant / N. Hwy 67                    971       2,538        3,509          768
3/12/99    Ferguson Area-W.Florissant              1,178       3,173        4,351        1,002
3/12/99    Florissant / New Halls Ferry Rd         1,144       3,021        4,165          948
3/12/99    St. Louis / Airport                       785       2,081        2,866          612
3/12/99    St. Louis/ S.Third St                   1,096       2,667        3,763          769
3/12/99    Kansas City / E. 47th St.                 610       1,596        2,206          493
3/12/99    Kansas City /E. 67th Terrace            1,134       2,825        3,959          797
3/12/99    Kansas City / James A. Reed Rd            749       1,848        2,597          549
3/12/99    Independence / 291                        871       2,182        3,053          644
3/12/99    Raytown / Woodson Rd                      915       2,240        3,155          657
3/12/99    Kansas City / 34th Main Street            114       3,205        3,319        1,113
3/12/99    Columbia / River Dr                       671       1,844        2,515          572
3/12/99    Columbia / Buckner Rd                     714       2,010        2,724          709
3/12/99    Columbia / Decker Park Rd                 605       1,529        2,134          487
3/12/99    Columbia / Rosewood Dr                    777       1,911        2,688          581

</TABLE>

                                       F-71

<PAGE>

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


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

<C>        <C>                                          <C>        <C>         <C>          <C>             <C>
3/12/99    W. Columbia / Orchard Dr.                    -          272         634          152             -
3/12/99    W. Columbia / Airport Blvd                   -          493       1,151          128             -
3/12/99    Greenville / Whitehorse Rd                   -          882       2,058          124             -
3/12/99    Greenville / Woods Lake Rd                   -          364         849          130             -
3/12/99    Mauldin / N. Main Street                     -          571       1,333          140             -
3/12/99    Simpsonville / Grand View Dr                 -          582       1,358          126             -
3/12/99    Taylors / Wade Hampton Blvd                  -          650       1,517          126             -
3/12/99    Charleston/Ashley Phosphate                  -          839       1,950          183             -
3/12/99    N. Charleston / Dorchester Rd                -          380         886          134             -
3/12/99    N. Charleston / Dorchester                   -          487       1,137          156             -
3/12/99    Charleston / Sam Rittenberg Blvd             -          555       1,296          106             -
3/12/99    Hilton Head / Office Park Rd                 -        1,279       2,985          148             -
3/12/99    Columbia / Plumbers Rd                       -          368         858          146             -
3/12/99    Greenville / Pineknoll Rd                    -          927       2,163          206             -
3/12/99    Hilton Head / Yacht Cove Dr                  -        1,182       2,753          228             -
3/12/99    Spartanburg / Chesnee Hwy                    -          533       1,244          299             -
3/12/99    Charleston / Ashley River Rd                 -        1,114       2,581          185             -
3/12/99    Columbia / Broad River                       -        1,463       3,413          279             -
3/12/99    Charlotte / East Wt Harris Blvd              -          736       1,718          115             -
3/12/99    Charlotte / North Tryon St.                  -          708       1,653          580             -
3/12/99    Charlotte / South Blvd                       -          641       1,496          144             -
3/12/99    Kannapolis / Oregon St                       -          463       1,081          113             -
3/12/99    Durham / E. Club Blvd                        -          947       2,209          150             -
3/12/99    Durham / N. Duke St.                         -          769       1,794          131             -
3/12/99    Raleigh / Maitland Dr                        -          679       1,585          141             -
3/12/99    Greensboro / O'henry Blvd                    -          577       1,345          213             -
3/12/99    Gastonia / S. York Rd                        -          467       1,089          123             -
3/12/99    Durham / Kangaroo Dr.                        -        1,102       2,572          419             -
3/12/99    Pensacola / Brent Lane                       -          402         938        (151)             -
3/12/99    Pensacola / Creighton Road                   -          454       1,060           69             -
3/12/99    Jacksonville / Park Avenue                   -          905       2,113          149             -
3/12/99    Jacksonville / Phillips Hwy                  -          665       1,545          227             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>         <C>        <C>            <C>
3/12/99    W. Columbia / Orchard Dr.                272         786        1,058          278
3/12/99    W. Columbia / Airport Blvd               493       1,279        1,772          398
3/12/99    Greenville / Whitehorse Rd               882       2,182        3,064          649
3/12/99    Greenville / Woods Lake Rd               364         979        1,343          322
3/12/99    Mauldin / N. Main Street                 571       1,473        2,044          480
3/12/99    Simpsonville / Grand View Dr             574       1,492        2,066          472
3/12/99    Taylors / Wade Hampton Blvd              650       1,643        2,293          515
3/12/99    Charleston/Ashley Phosphate              823       2,149        2,972          698
3/12/99    N. Charleston / Dorchester Rd            380       1,020        1,400          324
3/12/99    N. Charleston / Dorchester               487       1,293        1,780          425
3/12/99    Charleston / Sam Rittenberg Blvd         555       1,402        1,957          444
3/12/99    Hilton Head / Office Park Rd           1,279       3,133        4,412          908
3/12/99    Columbia / Plumbers Rd                   368       1,004        1,372          331
3/12/99    Greenville / Pineknoll Rd                927       2,369        3,296          741
3/12/99    Hilton Head / Yacht Cove Dr            1,180       2,983        4,163          894
3/12/99    Spartanburg / Chesnee Hwy                533       1,543        2,076          554
3/12/99    Charleston / Ashley River Rd           1,108       2,772        3,880          817
3/12/99    Columbia / Broad River                 1,463       3,692        5,155        1,135
3/12/99    Charlotte / East Wt Harris Blvd          736       1,833        2,569          559
3/12/99    Charlotte / North Tryon St.              708       2,233        2,941          626
3/12/99    Charlotte / South Blvd                   641       1,640        2,281          516
3/12/99    Kannapolis / Oregon St                   463       1,194        1,657          378
3/12/99    Durham / E. Club Blvd                    947       2,359        3,306          703
3/12/99    Durham / N. Duke St.                     769       1,925        2,694          587
3/12/99    Raleigh / Maitland Dr                    679       1,726        2,405          539
3/12/99    Greensboro / O'henry Blvd                577       1,558        2,135          542
3/12/99    Gastonia / S. York Rd                    467       1,212        1,679          404
3/12/99    Durham / Kangaroo Dr.                  1,102       2,991        4,093          918
3/12/99    Pensacola / Brent Lane                   229         960        1,189          296
3/12/99    Pensacola / Creighton Road               454       1,129        1,583          381
3/12/99    Jacksonville / Park Avenue               905       2,262        3,167          693
3/12/99    Jacksonville / Phillips Hwy              663       1,774        2,437          570

</TABLE>

                                       F-72

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
3/12/99    Clearwater / Highland Ave                    -          724       1,690          256             -
3/12/99    Tarpon Springs / Us Highway 19               -          892       2,081          181             -
3/12/99    Orlando /S. Orange Blossom Trail             -        1,229       2,867          142             -
3/12/99    Casselberry Ii                               -        1,160       2,708          171             -
3/12/99    Miami / Nw 14th Street                       -        1,739       4,058          131             -
3/12/99    Tarpon Springs / Highway 19                  -        1,179       2,751          341             -
3/12/99    Ft. Myers / Tamiami Trail South              -          834       1,945        (266)             -
3/12/99    Jacksonville / Ft. Caroline Rd.              -        1,037       2,420          174             -
3/12/99    Orlando / South Semoran                      -          565       1,319           40             -
3/12/99    Jacksonville / Southside Blvd.               -        1,278       2,982          245             -
3/12/99    Miami / Nw 7th Ave                           -          783       1,827          138             -
3/12/99    Vero Beach / Us Hwy 1                        -          678       1,583           60             -
3/12/99    Ponte Vedra / Palm Valley Rd.                -          745       2,749          505             -
3/12/99    Miami Lakes / Nw 153rd St.                   -          425         992           59             -
3/12/99    Deerfield Beach / Sw 10th St.                -        1,844       4,302           76             -
3/12/99    Apopka / S. Orange Blossom                   -          307         717          145             -
3/12/99    Davie / University                           -          313       4,379          128             -
3/12/99    Arlington / Division                         -          998       2,328           84             -
3/12/99    Duncanville/S.Cedar Ridge                    -        1,477       3,447          222             -
3/12/99    Carrollton / Trinity Mills West              -          530       1,237           88             -
3/12/99    Houston / Wallisville Rd.                    -          744       1,736           75             -
3/12/99    Houston / Fondren South                      -          647       1,510          128             -
3/12/99    Houston / Addicks Satsuma                    -          409         954          126             -
3/12/99    Addison / Inwood Road                        -        1,204       2,808           65             -
3/12/99    Garland / Jackson Drive                      -          755       1,761           77             -
3/12/99    Garland / Buckingham Road                    -          492       1,149          114             -
3/12/99    Houston / South Main                         -        1,461       3,409          200             -
3/12/99    Plano / Parker Road-Avenue K                 -        1,517       3,539          157             -
3/12/99    Houston / Bingle Road                        -          576       1,345          127             -
3/12/99    Houston / Mangum Road                        -          737       1,719          246             -
3/12/99    Houston / Hayes Road                         -          916       2,138          121             -
3/12/99    Katy / Dominion Drive                        -          995       2,321           52             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
3/12/99    Clearwater / Highland Ave                724       1,946        2,670          581
3/12/99    Tarpon Springs / Us Highway 19           892       2,262        3,154          709
3/12/99    Orlando /S. Orange Blossom Trail       1,229       3,009        4,238          907
3/12/99    Casselberry Ii                         1,160       2,879        4,039          849
3/12/99    Miami / Nw 14th Street                 1,739       4,189        5,928        1,221
3/12/99    Tarpon Springs / Highway 19            1,179       3,092        4,271          888
3/12/99    Ft. Myers / Tamiami Trail South          834       1,679        2,513          431
3/12/99    Jacksonville / Ft. Caroline Rd.        1,037       2,594        3,631          809
3/12/99    Orlando / South Semoran                  565       1,359        1,924          393
3/12/99    Jacksonville / Southside Blvd.         1,278       3,227        4,505          994
3/12/99    Miami / Nw 7th Ave                       783       1,965        2,748          624
3/12/99    Vero Beach / Us Hwy 1                    678       1,643        2,321          486
3/12/99    Ponte Vedra / Palm Valley Rd.            745       3,254        3,999        1,021
3/12/99    Miami Lakes / Nw 153rd St.               425       1,051        1,476          326
3/12/99    Deerfield Beach / Sw 10th St.          1,844       4,378        6,222        1,241
3/12/99    Apopka / S. Orange Blossom               307         862        1,169          288
3/12/99    Davie / University                       313       4,507        4,820        1,274
3/12/99    Arlington / Division                     997       2,413        3,410          693
3/12/99    Duncanville/S.Cedar Ridge              1,477       3,669        5,146        1,109
3/12/99    Carrollton / Trinity Mills West          530       1,325        1,855          413
3/12/99    Houston / Wallisville Rd.                744       1,811        2,555          536
3/12/99    Houston / Fondren South                  647       1,638        2,285          482
3/12/99    Houston / Addicks Satsuma                409       1,080        1,489          341
3/12/99    Addison / Inwood Road                  1,204       2,873        4,077          815
3/12/99    Garland / Jackson Drive                  755       1,838        2,593          538
3/12/99    Garland / Buckingham Road                492       1,263        1,755          411
3/12/99    Houston / South Main                   1,461       3,609        5,070        1,021
3/12/99    Plano / Parker Road-Avenue K           1,517       3,696        5,213        1,086
3/12/99    Houston / Bingle Road                    576       1,472        2,048          461
3/12/99    Houston / Mangum Road                    737       1,965        2,702          603
3/12/99    Houston / Hayes Road                     916       2,259        3,175          657
3/12/99    Katy / Dominion Drive                    995       2,373        3,368          677

</TABLE>

                                       F-73

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
3/12/99    Houston / Fm 1960 West                       -          513       1,198          131             -
3/12/99    Webster / Fm 528 Road                        -          756       1,764           82             -
3/12/99    Houston / Loch Katrine Lane                  -          580       1,352          139             -
3/12/99    Houston / Milwee St.                         -          779       1,815          170             -
3/12/99    Lewisville / Highway 121                     -          688       1,605           93             -
3/12/99    Richardson / Central Expressway              -          465       1,085           99             -
3/12/99    Houston / Hwy 6 South                        -          569       1,328           67             -
3/12/99    Houston / Westheimer West                    -        1,075       2,508           48             -
3/12/99    Ft. Worth / Granbury Road                    -          763       1,781           63             -
3/12/99    Houston / New Castle                         -        2,346       5,473        1,291             -
3/12/99    Dallas / Inwood Road                         -        1,478       3,448          114             -
3/12/99    Fort Worth / Loop 820 North                  -          729       1,702          117             -
3/12/99    Arlington / Cooper St                        -          779       1,818           80             -
3/12/99    Webster / Highway 3                          -          677       1,580           74             -
3/12/99    Augusta / Peach Orchard Rd                   -          860       2,007          299             -
3/12/99    Martinez / Old Petersburg Rd                 -          407         950          149             -
3/12/99    Jonesboro / Tara Blvd                        -          785       1,827          284             -
3/12/99    Atlanta / Briarcliff Rd                      -        2,171       5,066          251             -
3/12/99    Decatur / N Decatur Rd                       -          933       2,177          261             -
3/12/99    Douglasville / Westmoreland                  -          453       1,056          216             -
3/12/99    Doraville / Mcelroy Rd                       -          827       1,931          247             -
3/12/99    Roswell / Alpharetta                         -        1,772       4,135          198             -
3/12/99    Douglasville / Duralee Lane                  -          533       1,244          160             -
3/12/99    Douglasville / Highway 5                     -          804       1,875          466             -
3/12/99    Forest Park / Jonesboro                      -          659       1,537          199             -
3/12/99    Marietta / Whitlock                          -        1,016       2,370          198             -
3/12/99    Marietta / Cobb                              -          727       1,696          478             -
3/12/99    Norcross / Jones Mill Rd                     -        1,142       2,670          186             -
3/12/99    Norcross / Dawson Blvd                       -        1,232       2,874          388             -
3/12/99    Forest Park / Old Dixie Hwy                  -          895       2,070          353             -
3/12/99    Decatur / Covington                          -        1,764       4,116          142             -
3/12/99    Alpharetta / Maxwell Rd                      -        1,075       2,509          139             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
3/12/99    Houston / Fm 1960 West                   513       1,329        1,842          415
3/12/99    Webster / Fm 528 Road                    756       1,846        2,602          548
3/12/99    Houston / Loch Katrine Lane              580       1,491        2,071          436
3/12/99    Houston / Milwee St.                     778       1,986        2,764          618
3/12/99    Lewisville / Highway 121                 688       1,698        2,386          513
3/12/99    Richardson / Central Expressway          465       1,184        1,649          371
3/12/99    Houston / Hwy 6 South                    569       1,395        1,964          406
3/12/99    Houston / Westheimer West              1,075       2,556        3,631          726
3/12/99    Ft. Worth / Granbury Road                763       1,844        2,607          534
3/12/99    Houston / New Castle                   2,346       6,764        9,110        1,779
3/12/99    Dallas / Inwood Road                   1,478       3,562        5,040        1,003
3/12/99    Fort Worth / Loop 820 North              729       1,819        2,548          546
3/12/99    Arlington / Cooper St                    779       1,898        2,677          546
3/12/99    Webster / Highway 3                      677       1,654        2,331          492
3/12/99    Augusta / Peach Orchard Rd               860       2,306        3,166          809
3/12/99    Martinez / Old Petersburg Rd             407       1,099        1,506          362
3/12/99    Jonesboro / Tara Blvd                    784       2,112        2,896          687
3/12/99    Atlanta / Briarcliff Rd                2,171       5,317        7,488        1,576
3/12/99    Decatur / N Decatur Rd                   933       2,438        3,371          728
3/12/99    Douglasville / Westmoreland              453       1,272        1,725          458
3/12/99    Doraville / Mcelroy Rd                   827       2,178        3,005          723
3/12/99    Roswell / Alpharetta                   1,772       4,333        6,105        1,252
3/12/99    Douglasville / Duralee Lane              533       1,404        1,937          441
3/12/99    Douglasville / Highway 5                 804       2,341        3,145          884
3/12/99    Forest Park / Jonesboro                  659       1,736        2,395          575
3/12/99    Marietta / Whitlock                    1,016       2,568        3,584          777
3/12/99    Marietta / Cobb                          727       2,174        2,901          665
3/12/99    Norcross / Jones Mill Rd               1,142       2,856        3,998          870
3/12/99    Norcross / Dawson Blvd                 1,232       3,262        4,494          984
3/12/99    Forest Park / Old Dixie Hwy              889       2,429        3,318          777
3/12/99    Decatur / Covington                    1,764       4,258        6,022        1,231
3/12/99    Alpharetta / Maxwell Rd                1,075       2,648        3,723          764

</TABLE>

                                       F-74

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
3/12/99    Alpharetta / N. Main St                      -        1,240       2,893          108             -
3/12/99    Atlanta / Bolton Rd                          -          866       2,019          178             -
3/12/99    Riverdale / Georgia Hwy 85                   -        1,075       2,508          175             -
3/12/99    Kennesaw / Rutledge Road                     -          803       1,874          251             -
3/12/99    Lawrenceville / Buford Dr.                   -          256         597           84             -
3/12/99    Hanover Park / W. Lake Street                -        1,320       3,081          180             -
3/12/99    Chicago / W. Jarvis Ave                      -          313         731           79             -
3/12/99    Chicago / N. Broadway St                     -          535       1,249          225             -
3/12/99    Carol Stream / Phillips Court                -          829       1,780          100             -
3/12/99    Winfield / Roosevelt Road                    -        1,109       2,587          118             -
3/12/99    Schaumburg / S. Roselle Road                 -          659       1,537          101             -
3/12/99    Tinley Park / Brennan Hwy                    -          771       1,799          174             -
3/12/99    Schaumburg / Palmer Drive                    -        1,333       3,111          157             -
3/12/99    Mobile / Hillcrest Road                      -          554       1,293          144             -
3/12/99    Mobile / Azalea Road                         -          517       1,206          156             -
3/12/99    Mobile / Moffat Road                         -          537       1,254          120             -
3/12/99    Mobile / Grelot Road                         -          804       1,877          176             -
3/12/99    Mobile / Government Blvd                     -          407         950          116             -
3/12/99    New Orleans / Tchoupitoulas                  -        1,092       2,548          173             -
3/12/99    Louisville / Breckenridge Lane               -          581       1,356          103             -
3/12/99    Louisville                                   -          554       1,292          134             -
3/12/99    Louisville / Poplar Level                    -          463       1,080          147             -
3/12/99    Chesapeake / Western Branch                  -        1,274       2,973          195             -
3/12/99    Centreville / Lee Hwy                        -        1,650       3,851          190             -
3/12/99    Sterling / S. Sterling Blvd                  -        1,282       2,992          186             -
3/12/99    Manassas / Sudley Road                       -          776       1,810          214             -
3/12/99    Longmont / Wedgewood Ave                     -          717       1,673           90             -
3/12/99    Fort Collins / So.College Ave                -          745       1,739          142             -
3/12/99    Colo Sprngs / Parkmoor Village               -          620       1,446          177             -
3/12/99    Colo Sprngs / Van Teylingen                  -        1,216       2,837          192             -
3/12/99    Denver / So. Clinton St.                     -          462       1,609           93             -
3/12/99    Denver / Washington St.                      -          795       1,846          395             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
3/12/99    Alpharetta / N. Main St                1,240       3,001        4,241          860
3/12/99    Atlanta / Bolton Rd                      865       2,198        3,063          673
3/12/99    Riverdale / Georgia Hwy 85             1,075       2,683        3,758          778
3/12/99    Kennesaw / Rutledge Road                 803       2,125        2,928          683
3/12/99    Lawrenceville / Buford Dr.               256         681          937          228
3/12/99    Hanover Park / W. Lake Street          1,320       3,261        4,581          947
3/12/99    Chicago / W. Jarvis Ave                  313         810        1,123          271
3/12/99    Chicago / N. Broadway St                 535       1,474        2,009          521
3/12/99    Carol Stream / Phillips Court            783       1,926        2,709          537
3/12/99    Winfield / Roosevelt Road              1,109       2,705        3,814          795
3/12/99    Schaumburg / S. Roselle Road             659       1,638        2,297          496
3/12/99    Tinley Park / Brennan Hwy                771       1,973        2,744          608
3/12/99    Schaumburg / Palmer Drive              1,333       3,268        4,601          943
3/12/99    Mobile / Hillcrest Road                  554       1,437        1,991          464
3/12/99    Mobile / Azalea Road                     517       1,362        1,879          444
3/12/99    Mobile / Moffat Road                     537       1,374        1,911          444
3/12/99    Mobile / Grelot Road                     804       2,053        2,857          619
3/12/99    Mobile / Government Blvd                 407       1,066        1,473          340
3/12/99    New Orleans / Tchoupitoulas            1,092       2,721        3,813          869
3/12/99    Louisville / Breckenridge Lane           581       1,459        2,040          440
3/12/99    Louisville                               554       1,426        1,980          459
3/12/99    Louisville / Poplar Level                463       1,227        1,690          411
3/12/99    Chesapeake / Western Branch            1,274       3,168        4,442          941
3/12/99    Centreville / Lee Hwy                  1,636       4,055        5,691        1,187
3/12/99    Sterling / S. Sterling Blvd            1,282       3,178        4,460          941
3/12/99    Manassas / Sudley Road                   776       2,024        2,800          627
3/12/99    Longmont / Wedgewood Ave                 717       1,763        2,480          512
3/12/99    Fort Collins / So.College Ave            745       1,881        2,626          570
3/12/99    Colo Sprngs / Parkmoor Village           620       1,623        2,243          484
3/12/99    Colo Sprngs / Van Teylingen            1,216       3,029        4,245          894
3/12/99    Denver / So. Clinton St.                 462       1,702        2,164          492
3/12/99    Denver / Washington St.                  792       2,244        3,036          662

</TABLE>

                                       F-75

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>             <C>            <C>
3/12/99    Colo Sprngs / Centennial Blvd                -        1,352       3,155           94             -
3/12/99    Colo Sprngs / Astrozon Court                 -          810       1,889          152             -
3/12/99    Arvada / 64th Ave                            -          671       1,566           96             -
3/12/99    Golden / Simms Street                        -          918       2,143          339             -
3/12/99    Lawrence / Haskell Ave                       -          636       1,484          157             -
3/12/99    Overland Park / Hemlock St                   -        1,168       2,725          132             -
3/12/99    Lenexa / Long St.                            -          720       1,644           42             -
3/12/99    Shawnee / Hedge Lane Terrace                 -          570       1,331          149             -
3/12/99    Mission / Foxridge Dr                        -        1,657       3,864          178             -
3/12/99    Milwaukee / W. Dean Road                     -        1,362       3,163          538             -
3/12/99    Columbus / Morse Road                        -        1,415       3,302          556             -
3/12/99    Milford / Branch Hill                        -          527       1,229        2,416             -
3/12/99    Fairfield / Dixie                            -          519       1,211          113             -
3/12/99    Cincinnati / Western Hills                   -          758       1,769          220             -
3/12/99    Austin / N. Mopac Expressway                 -          865       2,791           75             -
3/12/99    Atlanta / Dunwoody Place                     -        1,410       3,296          256             -
3/12/99    Kennedale/Bowman Sprgs                       -          425         991           69             -
3/12/99    Colo Sprngs/N.Powers                         -        1,124       2,622          204             -
3/12/99    St. Louis/S. Third St                        -          206         480           15             -
3/12/99    Orlando / L.B. Mcleod Road                   -          521       1,217           61             -
3/12/99    Jacksonville / Roosevelt Blvd.               -          851       1,986          301             -
3/12/99    Miami-Kendall / Sw 84th Street               -          935       2,180          126             -
3/12/99    North Miami Beach / 69th St                  -        1,594       3,720          193             -
3/12/99    Miami Beach / Dade Blvd                      -          962       2,245          283             -
3/12/99    Chicago / N. Natchez Ave                     -        1,684       3,930          266             -
3/12/99    Chicago / W. Cermak Road                     -        1,294       3,019          608             -
3/12/99    Kansas City / State Ave                      -          645       1,505          209             -
3/12/99    Lenexa / Santa Fe Trail Road                 -          713       1,663          186             -
3/12/99    Waukesha / Foster Court                      -          765       1,785          167             -
3/12/99    River Grove / N. 5th Ave.                    -        1,094       2,552           30             -
3/12/99    St. Charles / E. Main St.                    -          951       2,220        (292)             -
3/12/99    Chicago / West 47th St.                      -          705       1,645           72             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross CArrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
3/12/99    Colo Sprngs / Centennial Blvd          1,352       3,249        4,601          920
3/12/99    Colo Sprngs / Astrozon Court             810       2,041        2,851          632
3/12/99    Arvada / 64th Ave                        671       1,662        2,333          500
3/12/99    Golden / Simms Street                    918       2,482        3,400          784
3/12/99    Lawrence / Haskell Ave                   636       1,641        2,277          495
3/12/99    Overland Park / Hemlock St             1,168       2,857        4,025          827
3/12/99    Lenexa / Long St.                        709       1,697        2,406          482
3/12/99    Shawnee / Hedge Lane Terrace             570       1,480        2,050          453
3/12/99    Mission / Foxridge Dr                  1,656       4,043        5,699        1,176
3/12/99    Milwaukee / W. Dean Road               1,357       3,706        5,063        1,199
3/12/99    Columbus / Morse Road                  1,415       3,858        5,273        1,193
3/12/99    Milford / Branch Hill                    527       3,645        4,172          811
3/12/99    Fairfield / Dixie                        519       1,324        1,843          397
3/12/99    Cincinnati / Western Hills               758       1,989        2,747          635
3/12/99    Austin / N. Mopac Expressway             865       2,866        3,731          758
3/12/99    Atlanta / Dunwoody Place               1,390       3,572        4,962        1,053
3/12/99    Kennedale/Bowman Sprgs                   425       1,060        1,485          323
3/12/99    Colo Sprngs/N.Powers                   1,124       2,826        3,950          866
3/12/99    St. Louis/S. Third St                    206         495          701          141
3/12/99    Orlando / L.B. Mcleod Road               521       1,278        1,799          376
3/12/99    Jacksonville / Roosevelt Blvd.           851       2,287        3,138          794
3/12/99    Miami-Kendall / Sw 84th Street           935       2,306        3,241          717
3/12/99    North Miami Beach / 69th St            1,594       3,913        5,507        1,162
3/12/99    Miami Beach / Dade Blvd                  962       2,528        3,490          794
3/12/99    Chicago / N. Natchez Ave               1,684       4,196        5,880        1,214
3/12/99    Chicago / W. Cermak Road               1,294       3,627        4,921        1,267
3/12/99    Kansas City / State Ave                  645       1,714        2,359          557
3/12/99    Lenexa / Santa Fe Trail Road             713       1,849        2,562          559
3/12/99    Waukesha / Foster Court                  765       1,952        2,717          579
3/12/99    River Grove / N. 5th Ave.              1,034       2,642        3,676        1,001
3/12/99    St. Charles / E. Main St.                802       2,077        2,879          847
3/12/99    Chicago / West 47th St.                  705       1,717        2,422          497

</TABLE>

                                       F-76

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
3/12/99    Carol Stream / S. Main Place                 -        1,320       3,079          186             -
3/12/99    Carpentersville /N. Western Ave              -          911       2,120          144             -
3/12/99    Elgin / E. Chicago St.                       -          570       2,163          103             -
3/12/99    Elgin / Big Timber Road                      -        1,347       3,253          253             -
3/12/99    Chicago / S. Pulaski Road                    -          458       2,118          300             -
3/12/99    Aurora / Business 30                         -          900       2,097          153             -
3/12/99    Streamwood / Old Church Road                 -          855       1,991           78             -
3/12/99    Mt. Prospect / Central Road                  -          802       1,847          213             -
3/12/99    Geneva / Gary Ave                            -        1,072       2,501           76             -
3/12/99    Naperville / Lasalle Ave                     -        1,501       3,502          121             -
3/31/99    Forest Park                                  -          270       3,378        3,862             -
4/1/99     Fresno                                       -           44         206        (241)           804
5/1/99     Stockton                                     -          151         402        (256)         2,017
6/30/99    Winter Park/N. Semor                         -          342         638          331           728
6/30/99    N. Richland Hills                            -          455         769          278           832
6/30/99    Rolling Meadows/Lois                         -          441         849          371           898
6/30/99    Gresham/Burnside                             -          354         544          207           627
6/30/99    Jacksonville/University                      -          211         741          244           700
6/30/99    Irving/W. Airport                            -          419         960          216           857
6/30/99    Houston/Highway 6 So.                        -          751       1,006        1,001         1,057
6/30/99    Concord/Arnold                               -          827       1,553          484         1,874
6/30/99    Rockville/Gude Drive                         -          602         768          389           880
6/30/99    Bradenton/Cortez Road                        -          476         885          382           906
6/30/99    San Antonio/Nw Loop                          -          511         786          209           855
6/30/99    Anaheim / La Palma                           -        1,378         851          217         1,221
6/30/99    Spring Valley/Sweetwater                     -          271         380        5,058           416
6/30/99    Ft. Myers/Tamiami                            -          948         962          325         1,208
6/30/99    Littleton/Centennial                         -          421         804          301           812
6/30/99    Newark/Cedar Blvd                            -          729         971          325         1,067
6/30/99    Falls Church/Columbia                        -          901         975          327         1,141
6/30/99    Fairfax / Lee Highway                        -          586       1,078          346         1,106
6/30/99    Wheat Ridge / W. 44th                        -          480         789          271           831

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
3/12/99    Carol Stream / S. Main Place           1,320       3,265        4,585          995
3/12/99    Carpentersville /N. Western Ave          909       2,266        3,175          679
3/12/99    Elgin / E. Chicago St.                   570       2,266        2,836          638
3/12/99    Elgin / Big Timber Road                1,347       3,506        4,853        1,104
3/12/99    Chicago / S. Pulaski Road                458       2,418        2,876          664
3/12/99    Aurora / Business 30                     899       2,251        3,150          683
3/12/99    Streamwood / Old Church Road             854       2,070        2,924          591
3/12/99    Mt. Prospect / Central Road              795       2,067        2,862          654
3/12/99    Geneva / Gary Ave                      1,072       2,577        3,649          747
3/12/99    Naperville / Lasalle Ave               1,501       3,623        5,124        1,054
3/31/99    Forest Park                              270       7,240        7,510        2,368
4/1/99     Fresno                                   193         620          813          177
5/1/99     Stockton                                 590       1,724        2,314          498
6/30/99    Winter Park/N. Semor                     427       1,612        2,039          427
6/30/99    N. Richland Hills                        569       1,765        2,334          520
6/30/99    Rolling Meadows/Lois                     551       2,008        2,559          597
6/30/99    Gresham/Burnside                         441       1,291        1,732          368
6/30/99    Jacksonville/University                  263       1,633        1,896          483
6/30/99    Irving/W. Airport                        524       1,928        2,452          530
6/30/99    Houston/Highway 6 So.                    937       2,878        3,815          852
6/30/99    Concord/Arnold                         1,031       3,707        4,738        1,146
6/30/99    Rockville/Gude Drive                     751       1,888        2,639          557
6/30/99    Bradenton/Cortez Road                    594       2,055        2,649          607
6/30/99    San Antonio/Nw Loop                      638       1,723        2,361          470
6/30/99    Anaheim / La Palma                     1,720       1,947        3,667          499
6/30/99    Spring Valley/Sweetwater                 356       5,769        6,125          544
6/30/99    Ft. Myers/Tamiami                      1,184       2,259        3,443          605
6/30/99    Littleton/Centennial                     526       1,812        2,338          522
6/30/99    Newark/Cedar Blvd                        910       2,182        3,092          594
6/30/99    Falls Church/Columbia                  1,126       2,218        3,344          622
6/30/99    Fairfax / Lee Highway                    732       2,384        3,116          689
6/30/99    Wheat Ridge / W. 44th                    599       1,772        2,371          525

</TABLE>

                                       F-77

<PAGE>

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


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

<C>        <C>                                          <C>        <C>         <C>          <C>         <C>
6/30/99    Huntington Bch/Gotham                        -          952         890          322         1,130
6/30/99    Fort Worth/McCart                            -          372         942          180           703
6/30/99    San Diego/Clairemont                         -        1,601       2,035          412         2,034
6/30/99    Houston/Millridge N.                         -        1,160       1,983          281         2,433
6/30/99    Woodbridge/Jefferson                         -          840       1,689          296         1,446
6/30/99    Mountainside                                 -        1,260       1,237          337         1,523
6/30/99    Woodbridge / Davis                           -        1,796       1,623          478         1,996
6/30/99    Huntington Beach                             -        1,026       1,437          149         1,450
6/30/99    Edison / Old Post Rd                         -          498       1,267          329         1,175
6/30/99    Northridge/Parthenia                         -        1,848       1,486          197         1,839
6/30/99    Brick Township/Brick                         -          590       1,431          313         1,364
6/30/99    Stone Mountain/Rock                          -        1,233         288          320           852
6/30/99    Hyattsville                                  -          768       2,186          270         1,919
6/30/99    Union City / Alvarado                        -          992       1,776          223         1,690
6/30/99    Oak Park / Greenfield                        -          621       1,735          218         1,490
6/30/99    Tujunga/Foothill Blvd                        -        1,746       2,383          248         2,370
7/1/99     Pantego/W. Pioneer Pkwy                      -          432       1,228           61             -
7/1/99     Nashville/Lafayette St                       -          486       1,135          217             -
7/1/99     Nashville/Metroplex Dr                       -          380         886          143             -
7/1/99     Madison / Myatt Dr                           -          441       1,028          108             -
7/1/99     Hixson / Highway 153                         -          488       1,138          224             -
7/1/99     Hixson / Gadd Rd                             -          207         484          342             -
7/1/99     Red Bank / Harding Rd                        -          452       1,056          183             -
7/1/99     Nashville/Welshwood Dr                       -          934       2,179          219             -
7/1/99     Madison/Williams Ave                         -        1,318       3,076          501             -
7/1/99     Nashville/Mcnally Dr                         -          884       2,062          509             -
7/1/99     Hermitage/Central Ct                         -          646       1,508          173             -
7/1/99     Antioch/Cane Ridge Rd                        -          353         823          184             -
9/1/99     Charlotte / Ashley Road                      -          664       1,551           39             -
9/1/99     Raleigh / Capital Blvd                       -          927       2,166          217             -
9/1/99     Charlotte / South Blvd.                      -          734       1,715           39             -
9/1/99     Greensboro/W.Market St.                      -          603       1,409           53             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                         Gross Carrying Amount
                                                  n       At December 31, 2005
   Date                                             --------------------------------    Accumulated
 Acquired              Description                    Land     Buildings      Total    Depreciation
---------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                     <C>         <C>          <C>            <C>
6/30/99    Huntington Bch/Gotham                   1,189       2,105        3,294          605
6/30/99    Fort Worth/McCart                         464       1,733        2,197          372
6/30/99    San Diego/Clairemont                    1,999       4,083        6,082        1,107
6/30/99    Houston/Millridge N.                    1,449       4,408        5,857        1,193
6/30/99    Woodbridge/Jefferson                    1,048       3,223        4,271          733
6/30/99    Mountainside                            1,574       2,783        4,357          697
6/30/99    Woodbridge / Davis                      2,243       3,650        5,893        1,058
6/30/99    Huntington Beach                        1,282       2,780        4,062          721
6/30/99    Edison / Old Post Rd                      622       2,647        3,269          733
6/30/99    Northridge/Parthenia                    2,308       3,062        5,370          759
6/30/99    Brick Township/Brick                      736       2,962        3,698          754
6/30/99    Stone Mountain/Rock                     1,540       1,153        2,693          299
6/30/99    Hyattsville                               959       4,184        5,143        1,075
6/30/99    Union City / Alvarado                   1,239       3,442        4,681          871
6/30/99    Oak Park / Greenfield                     775       3,289        4,064          855
6/30/99    Tujunga/Foothill Blvd                   2,180       4,567        6,747        1,068
7/1/99     Pantego/W. Pioneer Pkwy                   432       1,289        1,721          223
7/1/99     Nashville/Lafayette St                    486       1,352        1,838          453
7/1/99     Nashville/Metroplex Dr                    379       1,030        1,409          358
7/1/99     Madison / Myatt Dr                        441       1,136        1,577          361
7/1/99     Hixson / Highway 153                      487       1,363        1,850          466
7/1/99     Hixson / Gadd Rd                          207         826        1,033          357
7/1/99     Red Bank / Harding Rd                     452       1,239        1,691          432
7/1/99     Nashville/Welshwood Dr                    934       2,398        3,332          747
7/1/99     Madison/Williams Ave                    1,318       3,577        4,895        1,103
7/1/99     Nashville/Mcnally Dr                      884       2,571        3,455          903
7/1/99     Hermitage/Central Ct                      646       1,681        2,327          536
7/1/99     Antioch/Cane Ridge Rd                     352       1,008        1,360          347
9/1/99     Charlotte / Ashley Road                   651       1,603        2,254          464
9/1/99     Raleigh / Capital Blvd                    909       2,401        3,310          675
9/1/99     Charlotte / South Blvd.                   719       1,769        2,488          521
9/1/99     Greensboro/W.Market St.                   591       1,474        2,065          436

</TABLE>

                                       F-78

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>            <C>             <C>
10/8/99    Belmont / O'neill Ave                        -          869       4,659          167             -
10/11/99   Matthews                                     -          937       3,165          256         1,665
11/15/99   Poplar, Memphis                              -        1,631       3,093          316         2,201
12/17/99   Dallas / Swiss Ave                           -        1,862       4,344          149             -
12/30/99   Oak Park/Greenfield Rd                       -        1,184       3,685         (95)             -
12/30/99   Santa Anna                                   -        2,657       3,293          462         3,083
1/21/00    Hanover Park                                 -          262       3,104           69             -
1/25/00    Memphis / N.Germantwn Pkwy                   -          884       3,024          194         1,237
1/31/00    Rowland Heights/Walnut                       -          681       1,589          117             -
2/8/00     Lewisville / Justin Rd                       -          529       2,919        2,772         1,585
2/28/00    Plano / Avenue K                             -        2,064      10,407        1,781             -
4/1/00     Hyattsville/Edmonson                         -        1,036       2,657           61             -
4/29/00    St.Louis/Ellisville Twn Centre               -          765       4,377          292         1,621
5/2/00     Mill Valley                                  -        1,412       3,294        (367)             -
5/2/00     Culver City                                  -        2,439       5,689        (656)             -
5/26/00    Phoenix/N. 35th Ave                          -          868       2,967           54             -
6/5/00     Mount Sinai / Route 25a                      -          950       3,338          287         1,923
6/15/00    Pinellas Park                                -          526       2,247          271         1,100
6/30/00    San Antonio/Broadway St                      -        1,131       4,558        1,262             -
7/13/00    Lincolnwood                                  -        1,598       3,727          344             -
7/17/00    La Palco/New Orleans                         -        1,023       3,204          111         1,709
7/29/00    Tracy/1615& 1650 W.11th S                    -        1,745       4,530          320             -
8/1/00     Pineville                                    -        2,197       3,417          348         2,262
8/23/00    Morris Plains                                -        1,501       4,300          636         3,596
8/31/00    Florissant/New Halls Fry                     -          800       4,225           92             -
8/31/00    Orange, CA                                   -          661       1,542           54             -
9/1/00     Bayshore, NY                                 -        1,277       2,980        1,564             -
9/1/00     Los Angeles, CA                              -          590       1,376          517             -
9/13/00    Merrillville                                 -          343       2,474          213         1,449
9/15/00    Gardena / W. El Segundo                      -        1,532       3,424          125             -
9/15/00    Chicago / Ashland Avenue                     -          850       4,880          361             -
9/15/00    Oakland / Macarthur                          -          678       2,751          151             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>          <C>
10/8/99    Belmont / O'neill Ave                    878       4,817        5,695        1,338
10/11/99   Matthews                               1,500       4,523        6,023          814
11/15/99   Poplar, Memphis                        2,378       4,863        7,241          824
12/17/99   Dallas / Swiss Ave                     1,878       4,477        6,355        1,270
12/30/99   Oak Park/Greenfield Rd                 1,196       3,578        4,774          935
12/30/99   Santa Anna                             3,705       5,790        9,495          882
1/21/00    Hanover Park                             256       3,179        3,435          715
1/25/00    Memphis / N.Germantwn Pkwy             1,301       4,038        5,339          774
1/31/00    Rowland Heights/Walnut                   688       1,699        2,387          471
2/8/00     Lewisville / Justin Rd                 1,680       6,125        7,805          802
2/28/00    Plano / Avenue K                       1,221      13,031       14,252        5,582
4/1/00     Hyattsville/Edmonson                   1,036       2,718        3,754          670
4/29/00    St.Louis/Ellisville Twn Centre         1,312       5,743        7,055        1,064
5/2/00     Mill Valley                            1,283       3,056        4,339          779
5/2/00     Culver City                            2,217       5,255        7,472        1,326
5/26/00    Phoenix/N. 35th Ave                      867       3,022        3,889          604
6/5/00     Mount Sinai / Route 25a                1,600       4,898        6,498          814
6/15/00    Pinellas Park                            887       3,257        4,144          472
6/30/00    San Antonio/Broadway St                1,131       5,820        6,951        1,227
7/13/00    Lincolnwood                            1,613       4,056        5,669        1,081
7/17/00    La Palco/New Orleans                   1,609       4,438        6,047          603
7/29/00    Tracy/1615& 1650 W.11th S              1,762       4,833        6,595        1,198
8/1/00     Pineville                              2,965       5,259        8,224          860
8/23/00    Morris Plains                          2,720       7,313       10,033        1,002
8/31/00    Florissant/New Halls Fry                 807       4,310        5,117        1,066
8/31/00    Orange, CA                               667       1,590        2,257          394
9/1/00     Bayshore, NY                           1,533       4,288        5,821        1,039
9/1/00     Los Angeles, CA                          708       1,775        2,483          489
9/13/00    Merrillville                             832       3,647        4,479          567
9/15/00    Gardena / W. El Segundo                1,532       3,549        5,081          740
9/15/00    Chicago / Ashland Avenue                 850       5,241        6,091        1,130
9/15/00    Oakland / Macarthur                      678       2,902        3,580          619

</TABLE>

                                       F-79

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
9/15/00    Alexandria / Pickett Ii                      -        2,743       6,198          369             -
9/15/00    Royal Oak / Coolidge Highway                 -        1,062       2,576          155             -
9/15/00    Hawthorne / Crenshaw Blvd.                   -        1,079       2,913          149             -
9/15/00    Rockaway / U.S. Route 46                     -        2,424       4,945          271             -
9/15/00    Evanston / Greenbay                          -          846       4,436          190             -
9/15/00    Los Angeles / Coliseum                       -        3,109       4,013          173             -
9/15/00    Bethpage / Hempstead Turnpike                -        2,899       5,457          861             -
9/15/00    Northport / Fort Salonga Road                -        2,999       5,698          279             -
9/15/00    Brooklyn / St. Johns Place                   -        3,492       6,026          296             -
9/15/00    Lake Ronkonkoma / Portion Rd.                -          937       4,199          165             -
9/15/00    Tampa/Gunn Hwy                               -        1,843       4,300           87             -
9/18/00    Tampa/N. Del Mabry                           -        2,204       2,447        7,533             -
9/30/00    Marietta/Kennestone& Hwy5                    -          622       3,388        1,409             -
9/30/00    Lilburn/Indian Trail                         -        1,695       5,170        1,649             -
11/15/00   Largo/Missouri                               -        1,092       4,270          293         2,215
11/21/00   St. Louis/Wilson                             -        1,608       3,913        1,931             -
12/21/00   Houston/7715 Katy Frwy                       -        2,274       5,307      (2,514)             -
12/21/00   Houston/10801 Katy Frwy                      -        1,664       3,884         (41)             -
12/21/00   Houston/Main St                              -        1,681       3,924          105             -
12/21/00   Houston/W. Loop/S. Frwy                      -        2,036       4,749          117             -
12/29/00   Chicago                                      -        1,946       6,002           37             -
12/30/00   Raleigh/Glenwood                             -        1,545       3,628          116             -
12/30/00   Frazier                                      -          800       3,324           43             -
1/5/01     Troy/E. Big Beaver Rd                        -        2,195       4,221          260         1,846
1/11/01    Ft Lauderdale                                -          954       3,972          387         2,183
1/16/01    No Hollywood/Sherman Way                     -        2,173       5,442           56             -
1/18/01    Tuscon/E. Speedway                           -          735       2,895          177         1,066
1/25/01    Lombard/Finley                               -          851       3,806          405         2,112
3/15/01    Los Angeles/West Pico                        -        8,579       8,630        2,513             -
4/1/01     Lakewood/Cedar Dr.                           -        1,329       9,356        3,751             -
4/7/01     Farmingdale/Rte 110                          -        2,364       5,807           10             -
4/17/01    Philadelphia/Aramingo                        -          968       4,539           26             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>          <C>
9/15/00    Alexandria / Pickett Ii                2,743       6,567        9,310        1,331
9/15/00    Royal Oak / Coolidge Highway           1,062       2,731        3,793          580
9/15/00    Hawthorne / Crenshaw Blvd.             1,079       3,062        4,141          639
9/15/00    Rockaway / U.S. Route 46               2,424       5,216        7,640        1,088
9/15/00    Evanston / Greenbay                      846       4,626        5,472          941
9/15/00    Los Angeles / Coliseum                 3,109       4,186        7,295          826
9/15/00    Bethpage / Hempstead Turnpike          2,899       6,318        9,217        1,252
9/15/00    Northport / Fort Salonga Road          2,998       5,978        8,976        1,211
9/15/00    Brooklyn / St. Johns Place             3,492       6,322        9,814        1,222
9/15/00    Lake Ronkonkoma / Portion Rd.            937       4,364        5,301          869
9/15/00    Tampa/Gunn Hwy                         1,843       4,387        6,230          966
9/18/00    Tampa/N. Del Mabry                     2,225       9,959       12,184        3,593
9/30/00    Marietta/Kennestone& Hwy5                628       4,791        5,419        1,015
9/30/00    Lilburn/Indian Trail                   1,712       6,802        8,514        1,352
11/15/00   Largo/Missouri                         1,838       6,032        7,870          937
11/21/00   St. Louis/Wilson                       1,628       5,824        7,452        1,163
12/21/00   Houston/7715 Katy Frwy                 1,500       3,567        5,067          557
12/21/00   Houston/10801 Katy Frwy                1,618       3,889        5,507          692
12/21/00   Houston/Main St                        1,684       4,026        5,710          724
12/21/00   Houston/W. Loop/S. Frwy                2,038       4,864        6,902          875
12/29/00   Chicago                                1,949       6,036        7,985        1,210
12/30/00   Raleigh/Glenwood                       1,560       3,729        5,289          840
12/30/00   Frazier                                  800       3,367        4,167          566
1/5/01     Troy/E. Big Beaver Rd                  2,821       5,701        8,522          877
1/11/01    Ft Lauderdale                          1,746       5,750        7,496          852
1/16/01    No Hollywood/Sherman Way               2,175       5,496        7,671        1,220
1/18/01    Tuscon/E. Speedway                     1,095       3,778        4,873          614
1/25/01    Lombard/Finley                         1,565       5,609        7,174          835
3/15/01    Los Angeles/West Pico                  8,610      11,112       19,722        2,120
4/1/01     Lakewood/Cedar Dr.                     1,331      13,105       14,436        2,311
4/7/01     Farmingdale/Rte 110                    2,378       5,803        8,181        1,159
4/17/01    Philadelphia/Aramingo                    968       4,565        5,533          861

</TABLE>

                                       F-80

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>          <C>               <C>
4/18/01    Largo/Walsingham Road                        -        1,000       3,545        (241)             -
6/17/01    Port Washington/Seaview &W.Sh                -        2,381       4,608        1,792             -
6/18/01    Silver Springs/Prosperity                    -        1,065       5,391        1,731             -
6/19/01    Tampa/W. Waters Ave & Wilsky                 -          953       3,785           23             -
6/26/01    Middletown                                   -        1,535       4,258          463         2,258
7/29/01    Miami/Sw 85th Ave                            -        2,755       4,951         (12)             -
8/28/01    Hoover/John Hawkins Pkwy                     -        1,050       2,453           43             -
9/30/01    Syosset                                      -        2,461       5,312          227         1,855
12/27/01   Los Angeles/W.Jefferson                      -        8,285       9,429          902             -
12/27/01   Howell/Hgwy 9                                -          941       4,070          269         1,260
12/29/01   Catonsville/Kent                             -        1,378       5,289        2,623             -
12/29/01   Old Bridge/Rte 9                             -        1,244       4,960         (10)             -
12/29/01   Sacremento/Roseville                         -          876       5,344        1,936             -
12/31/01   Santa Ana/E.Mcfadden                         -        7,587       8,612        1,027             -
1/1/02     Concord                                      -          650       1,332           64             -
1/1/02     Tustin                                       -          962       1,465         (13)             -
1/1/02     Pasadena/Sierra Madre                        -          706         872           45             -
1/1/02     Azusa                                        -          933       1,659        4,967             -
1/1/02     Redlands                                     -          423       1,202          171             -
1/1/02     Airport I                                    -          346         861           35             -
1/1/02     Miami / Marlin Road                          -          562       1,345           13             -
1/1/02     Riverside                                    -           95       1,106          (1)             -
1/1/02     Oakland / San Leandro                        -          330       1,116           60             -
1/1/02     Richmond / Jacuzzi                           -          419       1,224          (3)             -
1/1/02     Santa Clara / Laurel                         -        1,178       1,789           57             -
1/1/02     Pembroke Park                                -          475       1,259         (50)             -
1/1/02     Ft. Lauderdale / Sun                         -          452       1,254         (58)             -
1/1/02     San Carlos / Shorewa                         -          737       1,360         (35)             -
1/1/02     Ft. Lauderdale / Sun                         -          532       1,444            2             -
1/1/02     Sacramento / Howe                            -          361       1,181            1             -
1/1/02     Sacramento / Capitol                         -          186       1,284         (16)             -
1/1/02     Miami / Airport                              -          517         915           30             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
4/18/01    Largo/Walsingham Road                    800       3,504        4,304          668
6/17/01    Port Washington/Seaview &W.Sh          2,359       6,422        8,781          900
6/18/01    Silver Springs/Prosperity              1,065       7,122        8,187        1,048
6/19/01    Tampa/W. Waters Ave & Wilsky             954       3,807        4,761          695
6/26/01    Middletown                             2,295       6,219        8,514          831
7/29/01    Miami/Sw 85th Ave                      2,731       4,963        7,694          890
8/28/01    Hoover/John Hawkins Pkwy               1,051       2,495        3,546          453
9/30/01    Syosset                                3,090       6,765        9,855          924
12/27/01   Los Angeles/W.Jefferson                8,300      10,316       18,616        1,701
12/27/01   Howell/Hgwy 9                          1,365       5,175        6,540          719
12/29/01   Catonsville/Kent                       1,378       7,912        9,290        1,094
12/29/01   Old Bridge/Rte 9                       1,250       4,944        6,194          802
12/29/01   Sacremento/Roseville                     526       7,630        8,156        1,129
12/31/01   Santa Ana/E.Mcfadden                   7,601       9,625       17,226        1,617
1/1/02     Concord                                  650       1,396        2,046          345
1/1/02     Tustin                                   963       1,451        2,414          390
1/1/02     Pasadena/Sierra Madre                    706         917        1,623          229
1/1/02     Azusa                                    932       6,627        7,559          838
1/1/02     Redlands                                 422       1,374        1,796          338
1/1/02     Airport I                                347         895        1,242          227
1/1/02     Miami / Marlin Road                      562       1,358        1,920          350
1/1/02     Riverside                                 94       1,106        1,200          295
1/1/02     Oakland / San Leandro                    330       1,176        1,506          304
1/1/02     Richmond / Jacuzzi                       419       1,221        1,640          317
1/1/02     Santa Clara / Laurel                   1,179       1,845        3,024          485
1/1/02     Pembroke Park                            475       1,209        1,684          321
1/1/02     Ft. Lauderdale / Sun                     452       1,196        1,648          314
1/1/02     San Carlos / Shorewa                     737       1,325        2,062          356
1/1/02     Ft. Lauderdale / Sun                     533       1,445        1,978          384
1/1/02     Sacramento / Howe                        361       1,182        1,543          303
1/1/02     Sacramento / Capitol                     186       1,268        1,454          329
1/1/02     Miami / Airport                          517         945        1,462          270

</TABLE>

                                       F-81

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>             <C>            <C>
1/1/02     Marietta / Cobb Park                         -          419       1,571           39             -
1/1/02     Sacramento / Florin                          -          624       1,710           84             -
1/1/02     Belmont / Dairy Lane                         -          915       1,252           45             -
1/1/02     So. San Francisco                            -        1,018       2,464          103             -
1/1/02     Palmdale / P Street                          -          218       1,287           37             -
1/1/02     Tucker / Montreal Rd                         -          760       1,485           66             -
1/1/02     Pasadena / S Fair Oaks                       -        1,313       1,905           72             -
1/1/02     Carmichael/Fair Oaks                         -          584       1,431           12             -
1/1/02     Carson / Carson St                           -          507         877           89             -
1/1/02     San Jose / Felipe Ave                        -          517       1,482           31             -
1/1/02     Miami / 27th Ave                             -          272       1,572           47             -
1/1/02     San Jose / Capitol                           -          400       1,183           16             -
1/1/02     Tucker / Mountain                            -          519       1,385           58             -
1/3/02     St Charles/Veterans Memorial Pkwy            -          687       1,602          142             -
1/7/02     Bothell/ N. Bothell Way                      -        1,063       4,995          150             -
1/15/02    Houston / N.Loop                             -        2,045       6,178        1,885             -
1/16/02    Orlando / S. Kirkman                         -          889       3,180           41             -
1/16/02    Austin / Us Hwy 183                          -          608       3,856           23             -
1/16/02    Rochelle Park / 168                          -          744       4,430           30             -
1/16/02    Honolulu / Waialae                           -       10,631      10,783          152             -
1/16/02    Sunny Isles Bch                              -          931       2,845          (7)             -
1/16/02    San Ramon / San Ramo                         -        1,522       3,510           38             -
1/16/02    Austin / W. 6th St                           -        2,399       4,493          255             -
1/16/02    Schaumburg / W. Wise                         -        1,158       2,598           24             -
1/16/02    Laguna Hills / Moulton                       -        2,319       5,200          153             -
1/16/02    Annapolis / West St                          -          955       3,669           32             -
1/16/02    Birmingham / Commons                         -        1,125       3,938          105             -
1/16/02    Crestwood / Watson Rd                        -        1,232       3,093            2             -
1/16/02    Northglenn /Huron St                         -          688       2,075           29             -
1/16/02    Skokie / Skokie Blvd                         -          716       5,285           31             -
1/16/02    Garden City / Stewart                        -        1,489       4,039           26             -
1/16/02    Millersville / Veterans                      -        1,036       4,229           22             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                         Gross Carrying Amount
                                                          At December 31, 2005
   Date                                             --------------------------------    Accumulated
 Acquired              Description                    Land     Buildings      Total    Depreciation
---------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                       <C>       <C>          <C>            <C>
1/1/02     Marietta / Cobb Park                      420       1,609        2,029          465
1/1/02     Sacramento / Florin                       623       1,795        2,418          533
1/1/02     Belmont / Dairy Lane                      914       1,298        2,212          376
1/1/02     So. San Francisco                       1,019       2,566        3,585          753
1/1/02     Palmdale / P Street                       218       1,324        1,542          383
1/1/02     Tucker / Montreal Rd                      759       1,552        2,311          445
1/1/02     Pasadena / S Fair Oaks                  1,312       1,978        3,290          560
1/1/02     Carmichael/Fair Oaks                      584       1,443        2,027          409
1/1/02     Carson / Carson St                        506         967        1,473          270
1/1/02     San Jose / Felipe Ave                     516       1,514        2,030          481
1/1/02     Miami / 27th Ave                          271       1,620        1,891          484
1/1/02     San Jose / Capitol                        401       1,198        1,599          349
1/1/02     Tucker / Mountain                         520       1,442        1,962          433
1/3/02     St Charles/Veterans Memorial Pkwy         687       1,744        2,431          334
1/7/02     Bothell/ N. Bothell Way                 1,063       5,145        6,208          819
1/15/02    Houston / N.Loop                        2,045       8,063       10,108          994
1/16/02    Orlando / S. Kirkman                      889       3,221        4,110          542
1/16/02    Austin / Us Hwy 183                       608       3,879        4,487          658
1/16/02    Rochelle Park / 168                       744       4,460        5,204          742
1/16/02    Honolulu / Waialae                     10,631      10,935       21,566        1,833
1/16/02    Sunny Isles Bch                           931       2,838        3,769          479
1/16/02    San Ramon / San Ramo                    1,522       3,548        5,070          587
1/16/02    Austin / W. 6th St                      2,399       4,748        7,147          859
1/16/02    Schaumburg / W. Wise                    1,158       2,622        3,780          439
1/16/02    Laguna Hills / Moulton                  2,319       5,353        7,672          954
1/16/02    Annapolis / West St                       955       3,701        4,656          625
1/16/02    Birmingham / Commons                    1,125       4,043        5,168          675
1/16/02    Crestwood / Watson Rd                   1,232       3,095        4,327          514
1/16/02    Northglenn /Huron St                      688       2,104        2,792          359
1/16/02    Skokie / Skokie Blvd                      716       5,316        6,032          912
1/16/02    Garden City / Stewart                   1,489       4,065        5,554          677
1/16/02    Millersville / Veterans                 1,036       4,251        5,287          747

</TABLE>

                                       F-82

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>             <C>            <C>
1/16/02    W. Babylon / Sunrise                         -        1,609       3,959           33             -
1/16/02    Memphis / Summer Ave                         -        1,103       2,772           12             -
1/16/02    Santa Clara/Lafayette                        -        1,393       4,626            9             -
1/16/02    Naperville / Washington                      -        2,712       2,225          445             -
1/16/02    Phoenix/W Union Hills                        -        1,071       2,934           26             -
1/16/02    Woodlawn / Whitehead                         -        2,682       3,355           29             -
1/16/02    Issaquah / Pickering                         -        1,138       3,704           22             -
1/16/02    West La /W Olympic                           -        6,532       5,975           53             -
1/16/02    New Orleans/I-10                             -        1,286       3,380      (1,934)             -
1/16/02    Pasadena / E. Colorado                       -        1,125       5,160           49             -
1/16/02    Memphis / Covington                          -          620       3,076            5             -
1/16/02    Hiawassee / N.Hiawassee                      -        1,622       1,892           56             -
1/16/02    Longwood / State Rd                          -        2,123       3,083           88             -
1/16/02    Casselberry / State                          -        1,628       3,308           19             -
1/16/02    Honolulu/Kahala                              -        3,722       8,525           52             -
1/16/02    Waukegan / Greenbay                          -          933       3,826           19             -
1/16/02    Southfield / Telegraph                       -        2,869       5,507          110             -
1/16/02    San Mateo / S. Delaware                      -        1,921       4,602           36             -
1/16/02    Scottsdale/N.Hayden                          -        2,111       3,564           23             -
1/16/02    Gilbert/W Park Ave                           -          497       3,534            2             -
1/16/02    W.Palm Beach/Okeechobee                      -        2,149       4,650        (391)             -
1/16/02    Indianapolis / W.86th                        -          812       2,421            2             -
1/16/02    Indianapolis / Madison                       -          716       2,655           23             -
1/16/02    Indianapolis / Rockville                     -          704       2,704            3             -
1/16/02    Santa Cruz / River                           -        2,148       6,584           66             -
1/16/02    Novato / Rush Landing                        -        1,858       2,574           10             -
1/16/02    Martinez / Arnold Dr                         -          847       5,422           16             -
1/16/02    Charlotte/Cambridge                          -          836       3,908            6             -
1/16/02    Rancho Cucamonga                             -          579       3,222        3,356             -
1/16/02    Renton / Kent                                -          768       4,078           37             -
1/16/02    Hawthorne / Goffle Rd                        -        2,414       4,918            5             -
2/2/02     Nashua / Southwood Dr                        -        2,493       4,326          168             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
1/16/02    W. Babylon / Sunrise                   1,609       3,992        5,601          668
1/16/02    Memphis / Summer Ave                   1,103       2,784        3,887          461
1/16/02    Santa Clara/Lafayette                  1,393       4,635        6,028          764
1/16/02    Naperville / Washington                2,712       2,670        5,382          413
1/16/02    Phoenix/W Union Hills                  1,065       2,966        4,031          504
1/16/02    Woodlawn / Whitehead                   2,682       3,384        6,066          598
1/16/02    Issaquah / Pickering                   1,137       3,727        4,864          621
1/16/02    West La /W Olympic                     6,532       6,028       12,560        1,013
1/16/02    New Orleans/I-10                       1,292       1,440        2,732          240
1/16/02    Pasadena / E. Colorado                 1,125       5,209        6,334          860
1/16/02    Memphis / Covington                      620       3,081        3,701          513
1/16/02    Hiawassee / N.Hiawassee                1,622       1,948        3,570          332
1/16/02    Longwood / State Rd                    2,123       3,171        5,294          571
1/16/02    Casselberry / State                    1,628       3,327        4,955          551
1/16/02    Honolulu/Kahala                        3,722       8,577       12,299        1,416
1/16/02    Waukegan / Greenbay                      933       3,845        4,778          634
1/16/02    Southfield / Telegraph                 2,869       5,617        8,486          916
1/16/02    San Mateo / S. Delaware                1,921       4,638        6,559          760
1/16/02    Scottsdale/N.Hayden                    2,113       3,585        5,698          602
1/16/02    Gilbert/W Park Ave                       497       3,536        4,033          588
1/16/02    W.Palm Beach/Okeechobee                2,149       4,259        6,408          614
1/16/02    Indianapolis / W.86th                    812       2,423        3,235          400
1/16/02    Indianapolis / Madison                   716       2,678        3,394          441
1/16/02    Indianapolis / Rockville                 704       2,707        3,411          446
1/16/02    Santa Cruz / River                     2,148       6,650        8,798        1,079
1/16/02    Novato / Rush Landing                  1,858       2,584        4,442          427
1/16/02    Martinez / Arnold Dr                     847       5,438        6,285          876
1/16/02    Charlotte/Cambridge                      836       3,914        4,750          651
1/16/02    Rancho Cucamonga                       1,130       6,027        7,157          562
1/16/02    Renton / Kent                            768       4,115        4,883          683
1/16/02    Hawthorne / Goffle Rd                  2,413       4,924        7,337          805
2/2/02     Nashua / Southwood Dr                  2,493       4,494        6,987          703

</TABLE>

                                       F-83

<PAGE>

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


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

<C>        <C>                                          <C>        <C>       <C>             <C>            <C>
2/15/02    Houston/Fm 1960 East                         -          859       2,004           55             -
3/7/02     Baltimore / Russell Street                   -        1,763       5,821          190             -
3/11/02    Weymouth / Main St                           -        1,440       4,433          152             -
3/28/02    Clinton / Branch Ave & Schultz               -        1,257       4,108          449         3,253
4/17/02    La Mirada/Alondra                            -        1,749       5,044          346         2,443
5/1/02     N.Richlnd Hls/Rufe Snow Dr                   -          632       6,337        2,287             -
5/2/02     Parkville/E.Joppa                            -          898       4,306          132             -
6/17/02    Waltham / Lexington St                       -        3,183       5,733          278             -
6/30/02    Nashville / Charlotte                        -          876       2,004           88             -
7/2/02     Mt Juliet / Lebonan Rd                       -          516       1,203           70             -
7/14/02    Yorktown / George Washington                 -          707       1,684           39             -
7/22/02    Brea/E. Lambert & Clifwood Pk                -        2,114       3,555          147             -
8/1/02     Bricktown/Route 70                           -        1,292       3,690          176             -
8/1/02     Danvers / Newbury St.                        -        1,311       4,140          593             -
8/15/02    Montclair / Holt Blvd.                       -          889       2,074          196             -
8/21/02    Rockville Centre/Merrick Rd                  -        3,693       6,990          362             -
9/13/02    Lacey / Martin Way                           -        1,379       3,217           61             -
9/13/02    Lakewood / Bridgeport                        -        1,286       3,000           83             -
9/13/02    Kent / Pacific Highway                       -        1,839       4,291          130             -
11/4/02    Scotch Plains /Route 22                      -        2,124       5,072           50             -
12/23/02   Snta Clarita/Viaprincssa                     -        2,508       3,008        3,562             -
2/13/03    Pasadena / Ritchie Hwy                       -        2,253       4,218           10             -
2/13/03    Malden / Eastern Ave                         -        3,212       2,739           41             -
2/24/03    Miami / SW 137th Ave                         -        1,600       4,684        (292)             -
3/3/03     Chantilly / Dulles South Court               -        2,190       4,314           26             -
3/6/03     Medford / Mystic Ave                         -        3,886       4,982           19             -
5/27/03    Castro Valley / Grove Way                    -        2,247       5,881          917             -
8/2/03     Sacramento / E.Stockton Blvd                 -          554       4,175           31             -
8/13/03    Timonium / W. Padonia Road                   -        1,932       3,681           27             -
8/21/03    Van Nuys / Sepulveda                         -        1,698       3,886        2,406             -
9/9/03     Westwood / East St                           -        3,267       5,013          281             -
10/21/03   San Diego / Miramar Road                     -        2,244       6,653          656             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                      <C>       <C>          <C>            <C>
2/15/02    Houston/Fm 1960 East                     859       2,059        2,918          334
3/7/02     Baltimore / Russell Street             1,763       6,011        7,774          927
3/11/02    Weymouth / Main St                     1,440       4,585        6,025          707
3/28/02    Clinton / Branch Ave & Schultz         2,358       6,709        9,067          717
4/17/02    La Mirada/Alondra                      2,575       7,007        9,582          807
5/1/02     N.Richlnd Hls/Rufe Snow Dr               632       8,624        9,256        1,120
5/2/02     Parkville/E.Joppa                        898       4,438        5,336          654
6/17/02    Waltham / Lexington St                 3,187       6,007        9,194          844
6/30/02    Nashville / Charlotte                    876       2,092        2,968          320
7/2/02     Mt Juliet / Lebonan Rd                   516       1,273        1,789          200
7/14/02    Yorktown / George Washington             707       1,723        2,430          262
7/22/02    Brea/E. Lambert & Clifwood Pk          2,113       3,703        5,816          520
8/1/02     Bricktown/Route 70                     1,293       3,865        5,158          537
8/1/02     Danvers / Newbury St.                  1,312       4,732        6,044          611
8/15/02    Montclair / Holt Blvd.                   889       2,270        3,159          384
8/21/02    Rockville Centre/Merrick Rd            3,692       7,353       11,045          995
9/13/02    Lacey / Martin Way                     1,379       3,278        4,657          283
9/13/02    Lakewood / Bridgeport                  1,286       3,083        4,369          277
9/13/02    Kent / Pacific Highway                 1,839       4,421        6,260          399
11/4/02    Scotch Plains /Route 22                2,126       5,120        7,246          701
12/23/02   Snta Clarita/Viaprincssa               2,508       6,570        9,078          644
2/13/03    Pasadena / Ritchie Hwy                 2,253       4,228        6,481          494
2/13/03    Malden / Eastern Ave                   3,212       2,780        5,992          312
2/24/03    Miami / SW 137th Ave                   1,600       4,392        5,992          507
3/3/03     Chantilly / Dulles South Court         2,190       4,340        6,530          469
3/6/03     Medford / Mystic Ave                   3,886       5,001        8,887          536
5/27/03    Castro Valley / Grove Way              2,307       6,738        9,045          687
8/2/03     Sacramento / E.Stockton Blvd             554       4,206        4,760          463
8/13/03    Timonium / W. Padonia Road             1,932       3,708        5,640          374
8/21/03    Van Nuys / Sepulveda                   1,699       6,291        7,990          362
9/9/03     Westwood / East St                     3,281       5,280        8,561          531
10/21/03   San Diego / Miramar Road               2,244       7,309        9,553          682

</TABLE>

                                       F-84

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>            <C>             <C>
11/3/03    El Sobrante/San Pablo                        -        1,255       4,990          795             -
11/6/03    Pearl City / Kamehameha Hwy                  -        4,428       4,839          479             -
12/23/03   Boston / Southampton Street                  -        5,334       7,511          789             -
1/9/04     Farmingville / Horseblock Road               -        1,919       4,420        (115)             -
2/27/04    Salem / Goodhue St.                          -        1,544       6,160           52             -
3/18/04    Seven Corners / Arlington Blvd.              -        6,087       7,553        (290)             -
6/30/04    Marlton / Route 73                           -        1,103       5,195           15             -
7/1/04     Long Island City/Northern Blvd.              -        4,876       7,610        (246)             -
7/9/04     West Valley Cty/Redwood                  1,999          876       2,067           47             -
7/12/04    Hicksville/E. Old Country Rd.                -        1,693       3,910          145             -
7/15/04    Harwood/Ronald                               -        1,619       3,778           36             -
9/24/04    E. Hanover/State Rt                          -        3,895       4,943          233             -
10/14/04   Apple Valley/148th St                      774          591       1,375           27             -
10/14/04   Blaine / Hwy 65 NE                       1,029          789       1,833           27             -
10/14/04   Brooklyn Park / Lakeland Ave             1,846        1,411       3,278           66             -
10/14/04   Brooklyn Park / Xylon Ave                1,464        1,120       2,601           49             -
10/14/04   St Paul(Eagan)/Sibley Mem'l Hwy            800          615       1,431           16             -
10/14/04   Maple Grove / Zachary Lane               1,738        1,337       3,105           34             -
10/14/04   Minneapolis / Hiawatha Ave               1,930        1,480       3,437           53             -
10/14/04   New Hope / 36th Ave                      1,734        1,332       3,094           40             -
10/14/04   Rosemount / Chippendale Ave              1,130          864       2,008           39             -
10/14/04   St Cloud/Franklin                          752          575       1,338           24             -
10/14/04   Savage / W 128th St                      1,988        1,522       3,535           62             -
10/14/04   Spring Lake Park/Hwy 65 NE               1,998        1,534       3,562           50             -
10/14/04   St Paul / Terrace Court                  1,473        1,122       2,606           67             -
10/14/04   St Paul / Eaton St                       1,521        1,161       2,698           60             -
10/14/04   St Paul-Hartzell / Wabash Ave                -        1,207       2,816           68             -
10/14/04   West St Paul / Marie Ave                 1,888        1,447       3,361           56             -
10/14/04   Stillwater / Memorial Ave                2,175        1,669       3,876           57             -
10/14/04   St Paul(VadnaisHts/Birch Lake Rd         1,212          928       2,157           37             -
10/14/04   Woodbury / Hudson Road                   2,429        1,863       4,327           67             -
10/14/04   Brown Deer / N Green Bay Rd              1,382        1,059       2,461           40             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>          <C>            <C>
11/3/03    El Sobrante/San Pablo                  1,257       5,783        7,040          506
11/6/03    Pearl City / Kamehameha Hwy            4,430       5,316        9,746          481
12/23/03   Boston / Southampton Street            5,345       8,289       13,634          673
1/9/04     Farmingville / Horseblock Road         1,919       4,305        6,224          348
2/27/04    Salem / Goodhue St.                    1,544       6,212        7,756          457
3/18/04    Seven Corners / Arlington Blvd.        6,086       7,264       13,350          505
6/30/04    Marlton / Route 73                     1,103       5,210        6,313          321
7/1/04     Long Island City/Northern Blvd.        4,876       7,364       12,240          468
7/9/04     West Valley Cty/Redwood                  883       2,107        2,990          130
7/12/04    Hicksville/E. Old Country Rd.          1,693       4,055        5,748          228
7/15/04    Harwood/Ronald                         1,619       3,814        5,433          221
9/24/04    E. Hanover/State Rt                    3,895       5,176        9,071          257
10/14/04   Apple Valley/148th St                    592       1,401        1,993           67
10/14/04   Blaine / Hwy 65 NE                       790       1,859        2,649           88
10/14/04   Brooklyn Park / Lakeland Ave           1,413       3,342        4,755          158
10/14/04   Brooklyn Park / Xylon Ave              1,121       2,649        3,770          126
10/14/04   St Paul(Eagan)/Sibley Mem'l Hwy          616       1,446        2,062           68
10/14/04   Maple Grove / Zachary Lane             1,338       3,138        4,476          148
10/14/04   Minneapolis / Hiawatha Ave             1,482       3,488        4,970          165
10/14/04   New Hope / 36th Ave                    1,333       3,133        4,466          148
10/14/04   Rosemount / Chippendale Ave              865       2,046        2,911           98
10/14/04   St Cloud/Franklin                        576       1,361        1,937           65
10/14/04   Savage / W 128th St                    1,524       3,595        5,119          169
10/14/04   Spring Lake Park/Hwy 65 NE             1,535       3,611        5,146          169
10/14/04   St Paul / Terrace Court                1,123       2,672        3,795          126
10/14/04   St Paul / Eaton St                     1,163       2,756        3,919          130
10/14/04   St Paul-Hartzell / Wabash Ave          1,207       2,884        4,091          138
10/14/04   West St Paul / Marie Ave               1,449       3,415        4,864          160
10/14/04   Stillwater / Memorial Ave              1,671       3,931        5,602          185
10/14/04   St Paul(VadnaisHts/Birch Lake Rd         929       2,193        3,122          102
10/14/04   Woodbury / Hudson Road                 1,865       4,392        6,257          206
10/14/04   Brown Deer / N Green Bay Rd            1,061       2,499        3,560          117

</TABLE>

                                       F-85

<PAGE>

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


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

<C>        <C>                                        <C>          <C>       <C>             <C>            <C>
10/14/04   Germantown / Spaten Court                  797          607       1,411           34             -
10/14/04   Milwaukee/ N 77th St                     1,618        1,241       2,882           44             -
10/14/04   Milwaukee/ S 13th St                     1,933        1,484       3,446           48             -
10/14/04   Oak Creek / S 27th St                      980          751       1,746           27             -
10/14/04   Waukesha / Arcadian Ave                  2,170        1,665       3,868           56             -
10/14/04   West Allis / W Lincoln Ave               1,806        1,390       3,227           34             -
10/14/04   Garland / O'Banion Rd                    1,372          606       1,414           33             -
10/14/04   Grand Prairie/ Hwy360                    2,120          942       2,198           30             -
10/14/04   Duncanville/N Duncnvill                  3,424        1,524       3,556           41             -
10/14/04   Lancaster/ W Pleasant                    2,237          993       2,317           35             -
10/14/04   Mesquite / Oates Dr                      2,111          937       2,186           35             -
10/14/04   Dallas / E NW Hwy                        2,127          942       2,198           40             -
11/24/04   Pompano Beach/E. Sample                  4,729        1,608       3,754           73             -
11/24/04   Davie / SW 41st St.                      6,104        2,467       5,758           86             -
11/24/04   North Bay Village/Kennedy                6,697        3,275       7,644           53             -
11/24/04   Miami / Biscayne Blvd                    6,636        3,538       8,258         (44)             -
11/24/04   Miami Gardens/NW 57th St                 6,645        2,706       6,316           19             -
11/24/04   Tamarac/ N University Dr                 6,465        2,580       6,022          (6)             -
11/24/04   Miami / SW 31st Ave                     14,228       11,574      27,009          118             -       1
11/24/04   Hialeah / W 20th Ave                     5,555        2,224       5,192          (7)             -
11/24/04   Miami / SW 42nd St                       7,402        2,955       6,897           33             -
11/24/04   Miami / SW 40th St                       7,347        2,933       6,844           16             -
11/25/04   Carlsbad/CorteDelAbeto                       -        2,861       6,676        1,339             -
1/19/05    Cheektowaga / William St                     -          965       2,262           34             -
1/19/05    Amherst / Millersport Hwy                    -        1,431       3,350           13             -
1/19/05    Lancaster / Walden Ave                       -          528       1,244           19             -
1/19/05    Tonawanda/HospitalityCentreWay               -        1,205       2,823           20             -
1/19/05    Wheatfield / Niagara Falls Blv               -        1,130       2,649           24             -
1/20/05    Oak Lawn / Southwest Hwy                     -        1,850       4,330           63             -
2/25/05    Owings Mills / Reisterstown Rd               -          887       3,865            -             -
4/26/05    Hoboken / 8th St                             -        3,963       9,290            2             -
5/3/05     Bayville / 939 Route 9                       -        1,928       4,519           14             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                         Gross Carrying Amount
                                                          At December 31, 2005
   Date                                             --------------------------------    Accumulated
 Acquired              Description                    Land     Buildings      Total    Depreciation
---------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                       <C>       <C>          <C>             <C>
10/14/04   Germantown / Spaten Court                 608       1,444        2,052           67
10/14/04   Milwaukee/ N 77th St                    1,242       2,925        4,167          137
10/14/04   Milwaukee/ S 13th St                    1,486       3,492        4,978          164
10/14/04   Oak Creek / S 27th St                     752       1,772        2,524           83
10/14/04   Waukesha / Arcadian Ave                 1,667       3,922        5,589          184
10/14/04   West Allis / W Lincoln Ave              1,391       3,260        4,651          153
10/14/04   Garland / O'Banion Rd                     608       1,445        2,053           60
10/14/04   Grand Prairie/ Hwy360                     944       2,226        3,170           91
10/14/04   Duncanville/N Duncnvill                 1,526       3,595        5,121          147
10/14/04   Lancaster/ W Pleasant                     995       2,350        3,345           96
10/14/04   Mesquite / Oates Dr                       939       2,219        3,158           91
10/14/04   Dallas / E NW Hwy                         944       2,236        3,180           92
11/24/04   Pompano Beach/E. Sample                 1,621       3,814        5,435          165
11/24/04   Davie / SW 41st St.                     2,467       5,844        8,311          252
11/24/04   North Bay Village/Kennedy               3,274       7,698       10,972          334
11/24/04   Miami / Biscayne Blvd                   3,538       8,214       11,752          357
11/24/04   Miami Gardens/NW 57th St                2,706       6,335        9,041          274
11/24/04   Tamarac/ N University Dr                2,580       6,016        8,596          261
11/24/04   Miami / SW 31st Ave                    11,573      27,128       38,701        1,177
11/24/04   Hialeah / W 20th Ave                    2,224       5,185        7,409          229
11/24/04   Miami / SW 42nd St                      2,955       6,930        9,885          305
11/24/04   Miami / SW 40th St                      2,933       6,860        9,793          300
11/25/04   Carlsbad/CorteDelAbeto                  2,861       8,015       10,876          344
1/19/05    Cheektowaga / William St                  965       2,296        3,261           86
1/19/05    Amherst / Millersport Hwy               1,431       3,363        4,794          127
1/19/05    Lancaster / Walden Ave                    528       1,263        1,791           47
1/19/05    Tonawanda/HospitalityCentreWay          1,205       2,843        4,048          107
1/19/05    Wheatfield / Niagara Falls Blv          1,130       2,673        3,803          101
1/20/05    Oak Lawn / Southwest Hwy                1,850       4,393        6,243          164
2/25/05    Owings Mills / Reisterstown Rd            887       3,865        4,752          131
4/26/05    Hoboken / 8th St                        3,963       9,292       13,255          254
5/3/05     Bayville / 939 Route 9                  1,928       4,533        6,461          120

</TABLE>

                                       F-86

<PAGE>

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


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

<C>        <C>                                          <C>      <C>         <C>             <C>            <C>
5/3/05     Bricktown / Burnt Tavern Rd                  -        3,522       8,239           12             -
5/3/05     JacksonTwnshp/N.County Line Rd               -        1,555       3,647           15             -
5/16/05    Methuen / Pleasant Valley St                 -        2,263       4,540            -             -
5/19/05    Libertyville / Kelley Crt                    -        2,042       4,783           20             -
5/19/05    Joliet / Essington                           -        1,434       3,367           46             -
6/15/05    Atlanta/Howell Mill Rd NW                    -        1,864       4,363           18             -
6/15/05    Smyrna / Herodian Way SE                     -        1,294       3,032           28             -
7/7/05     Lithonia / Minola Dr                         -        1,273       2,985           36             -
7/13/05    Kennesaw / Bells Ferry Rd NW                 -        1,264       2,976           18             -
7/27/05    Atlanta / Monroe Dr NE                       -        2,914       6,829            -             -
8/11/05    Suwanee / Old Peachtree Rd NE                -        1,914       4,497            7             -
9/7/05     Brandon / Providence Rd                      -        2,592       6,067            3             -
9/15/05    Woodstock / Hwy 92                           -        1,251       2,935           25             -
9/22/05    Charlotte / W. Arrowood Rd                   -        1,426       3,335            4             -
10/4/05    Jacksonville Beach / Beach Bl                -        2,552       5,981            3             -
10/5/05    Bronx / Brush Ave                            -        4,517      10,581            -             -
10/11/05   Austin / E. Ben White Blvd                   -          213       3,461            -             -
10/12/05   Deerfield Beach/S. Powerline R               -        3,365       7,874            -             -
10/14/05   Cooper City / Sheridan St                    -        3,035       7,092            -             -
10/19/05   Staten Island / Veterans Rd W.               -        3,599       8,430            -             -
10/19/05   Pittsburg / LoveridgeCenter                  -        3,602       8,448            1             -
10/21/05   Norristown / W.Main St                       -        1,465       4,818            -             -
11/1/05    Miller Place / Route 25A                     -        2,757       6,459            -             -
11/17/05   Miami / Biscayne Blvd (Omni)                 -        7,434      17,268            -             -
11/30/05   Manchester / Taylor St                       -        1,305       3,029            1             -
12/6/05    Buffalo Grove/E. Aptakisic Rd                -        1,986       4,635            -             -
12/13/05   Lorton / Pohick Rd & I95                     -        1,167       4,582            -             -
12/16/05   Pico Rivera / Washington Blvd                -        4,719      11,012            -             -
12/27/05   Queens Village / Jamaica Ave                 -        3,409       5,494            -             -

</TABLE>

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


<TABLE>
<CAPTION>

                                                        Gross Carrying Amount
                                                         At December 31, 2005
   Date                                            --------------------------------    Accumulated
 Acquired              Description                   Land     Buildings      Total    Depreciation
--------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

<C>        <C>                                    <C>         <C>         <C>             <C>
5/3/05     Bricktown / Burnt Tavern Rd            3,522       8,251       11,773          218
5/3/05     JacksonTwnshp/N.County Line Rd         1,555       3,662        5,217           97
5/16/05    Methuen / Pleasant Valley St           2,263       4,540        6,803          115
5/19/05    Libertyville / Kelley Crt              2,042       4,803        6,845          121
5/19/05    Joliet / Essington                     1,434       3,413        4,847           85
6/15/05    Atlanta/Howell Mill Rd NW              1,864       4,381        6,245           96
6/15/05    Smyrna / Herodian Way SE               1,294       3,060        4,354           66
7/7/05     Lithonia / Minola Dr                   1,273       3,021        4,294           58
7/13/05    Kennesaw / Bells Ferry Rd NW           1,264       2,994        4,258           56
7/27/05    Atlanta / Monroe Dr NE                 2,914       6,829        9,743          117
8/11/05    Suwanee / Old Peachtree Rd NE          1,914       4,504        6,418           60
9/7/05     Brandon / Providence Rd                2,592       6,070        8,662           76
9/15/05    Woodstock / Hwy 92                     1,251       2,960        4,211           30
9/22/05    Charlotte / W. Arrowood Rd             1,426       3,339        4,765           34
10/4/05    Jacksonville Beach / Beach Bl          2,552       5,984        8,536           58
10/5/05    Bronx / Brush Ave                      4,517      10,581       15,098          101
10/11/05   Austin / E. Ben White Blvd               213       3,461        3,674          267
10/12/05   Deerfield Beach/S. Powerline R         3,365       7,874       11,239           69
10/14/05   Cooper City / Sheridan St              3,035       7,092       10,127           61
10/19/05   Staten Island / Veterans Rd W.         3,599       8,430       12,029           67
10/19/05   Pittsburg / LoveridgeCenter            3,602       8,449       12,051           68
10/21/05   Norristown / W.Main St                 1,465       4,818        6,283           37
11/1/05    Miller Place / Route 25A               2,757       6,459        9,216           42
11/17/05   Miami / Biscayne Blvd (Omni)           7,434      17,268       24,702           83
11/30/05   Manchester / Taylor St                 1,305       3,030        4,335           10
12/6/05    Buffalo Grove/E. Aptakisic Rd          1,986       4,635        6,621           13
12/13/05   Lorton / Pohick Rd & I95               1,167       4,582        5,749           17
12/16/05   Pico Rivera / Washington Blvd          4,719      11,012       15,731           19
12/27/05   Queens Village / Jamaica Ave           3,409       5,494        8,903            2

</TABLE>

                                       F-87

<PAGE>

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


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

Other Properties

<S>        <C>                                          <C>      <C>         <C>         <C>                <C>
           Glendale/Western Avenue                      -        1,622       3,771       14,287             -
12/13/99   Burlingame (Commercial & PUD)                -        4,043       9,434          328             -
4/28/00    San Diego/Sorrento                           -        1,282       3,016          268             -
6/1/98     Renton / Sw 39th St.                         -          725       2,196           52             -
6/29/98    Pompano Bch/Center Port Circle               -          795       2,312           25             -
12/30/99   Tamarac Parkway                              -        1,902       4,467        1,350             -
12/29/00   Gardena                                      -        1,737       5,456           30             -
4/2/02     Long Beach                                   -          887       6,251           16             -

           Construction in Progress                     -            -           -       54,472             -



                                              -----------------------------------------------------------------------
                                                 $127,247   $1,500,069  $3,518,756     $647,233      $318,898
                                              =======================================================================

</TABLE>

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


<TABLE>
<CAPTION>

                                                       Gross Carrying Amount
                                                        At December 31, 2005
   Date                                           --------------------------------    Accumulated
 Acquired              Description                  Land     Buildings      Total    Depreciation
-------------------------------------------------------------------------------------------------
                                                        (Dollar amounts in thousands)
                                               -------------------------------------------------

Other Properties

<S>        <C>                                   <C>        <C>          <C>          <C>
           Glendale/Western Avenue               1,615      18,065       19,680       16,120
12/13/99   Burlingame (Commercial & PUD)         4,044       9,761       13,805        2,369
4/28/00    San Diego/Sorrento                    1,024       3,542        4,566          955
6/1/98     Renton / Sw 39th St.                    725       2,248        2,973          765
6/29/98    Pompano Bch/Center Port Circle          795       2,337        3,132          731
12/30/99   Tamarac Parkway                       1,890       5,829        7,719          773
12/29/00   Gardena                               1,737       5,486        7,223          890
4/2/02     Long Beach                              887       6,267        7,154          493

           Construction in Progress                  -      54,472       54,472            -



                                            -----------------------------------------------------
                                            $1,540,357  $4,444,599   $5,984,956   $1,500,128
                                            =====================================================

</TABLE>

                                       F-88