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

                                    FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required]

For the fiscal year ended December 31, 1996
                                       or


[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]

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

Commission File Number 1-10792
                       -------

                       PUBLIC STORAGE PROPERTIES XIV, INC.
                       -----------------------------------
             (Exact name of registrant as specified in its charter)

        California                                      95-4300884
---------------------------------        --------------------------------------
(State or other jurisdiction of           (IRS Employer Identification Number)
 incorporation or organization)         

       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

Common Stock Series A, $.01 par value           American Stock Exchange
--------------------------------------    --------------------------------------
    (Title of each class)            (Name of each exchange on which registered)

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


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


                                    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 the Company'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
           --

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Company as of February 28, 1997:
Common  Stock  Series A, $.01 Par  Value-$43,098,169  (computed  on the basis of
$21-1/8 per share which was the  reported  closing  sale price of the  Company's
Common Stock Series A on the American Stock Exchange on February 28, 1997).

The number of shares  outstanding of the Company's classes of common stock as of
February 28, 1997:

            Common Stock, $.01 Par Value - Series A 2,263,218 shares
             Common Stock, $.01 Par Value - Series B 232,762 shares
             Common Stock, $.01 Par Value - Series C 659,494 shares
             ------------------------------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE
     (a)  Information  required by Part III will be included in an  amendment to
this  Form  10-K  under  cover of a Form  10-K/A  filed  within  120 days of the
Company's 1996 fiscal year, which  information is incorporated by reference into
Part III.
<PAGE>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                                     PART I.

ITEM 1.   BUSINESS
          --------
General
-------

     Public  Storage  Properties  XIV,  Inc.  (the  "Company")  is a real estate
investment trust ("REIT") organized as a California  corporation that was formed
to succeed to the business of Public Storage  Properties XIV, Ltd., a California
limited  partnership  (the  "Partnership"),   in  a  reorganization  transaction
completed on June 3, 1991.

     The Partnership offered 106,000 units of limited partnership  interest (the
"Units") to the public in May 1985. The Partnership's  general partners were PSI
Associates  II, Inc.  ("PSA"),  a  California  corporation,  and B. Wayne Hughes
("Hughes").  PSA  was  an  affiliate  of  Public  Storage  Management,  Inc.,  a
California corporation (see below).

     Effective June 3, 1991, the  Partnership  transferred all of its assets and
liabilities to the Company  pursuant to a plan of  Reorganization  approved by a
majority of the limited partners.  In exchange for the Partnership's  assets and
liabilities,  the  Company  issued  2,676,768  shares of common  stock  Series A
("Series A shares"), 232,762 shares of common stock Series B ("Series B shares")
and 659,494  shares of common  stock Series C ("Series C shares") of the Company
to the Partnership.  The Partnership then made a liquidating distribution to the
limited partners by distributing 99 percent of the Series A shares (on the basis
of 25 Series A shares for each  Unit).  The  remaining 1 percent of the Series A
shares and all of the Series B shares and Series C shares  were  distributed  to
the  general  partners  in  respect  of  their  interests  in  the  Partnership.
Subsequent thereto, the Partnership was dissolved. The Company has elected to be
taxed as a REIT for Federal income tax purposes.

     The Company is a finite life REIT, with a term until December 31, 2038 (the
same  as the  predecessor  Partnership).  However,  pursuant  to  the  Company's
by-laws, in 1997 the Company will be required to present the shareholders with a
proposal for the sale or financing of the properties and, in the case of a sale,
a liquidation of the Company,  unless the  properties  have already been sold or
financed. See " Sale or Financing" below.

     The Company's  investment  objectives  are (as were the  Partnership's)  to
maximize cash flow from operations and to maximize capital appreciation.

         The Company has acquired 14 properties,  all of which are in operation.
The  Company  believes  that  its  mini-warehouses   have  attractive  operating
characteristics.

     The Company's  senior officers have been responsible for the acquisition of
more than 350 mini-warehouses,  the development of more than 650 mini-warehouses
and the  management of more than 1,000  mini-warehouses  during their average 18
years of experience with the Public Storage organization.

     In 1995,  there were a series of mergers among Public  Storage  Management,
Inc. (which was the Company's mini-warehouse operator), Public Storage, Inc. and
their affiliates  (collectively,  "PSMI"),  culminating in the November 16, 1995
merger (the "PSMI Merger") of PSMI into Storage Equities, Inc., a REIT listed on
the New York Stock  Exchange.  In the PSMI Merger,  Storage  Equities,  Inc. was
renamed  Public  Storage,  Inc.  ("PSI") and PSI acquired  substantially  all of
PSMI's  United  States real  estate  operations  and became the  operator of the
Company's  mini-warehouse  properties.  Hughes,  the Company's  Chief  Executive
Officer,  and  members  of his  family  (the  "Hughes  Family")  are  the  major
shareholders of PSI. As a result of the PSMI Merger,  PSI owns all of the shares
of the Company's common stock that was owned by PSMI or its affiliates,  and PSI
has an option to acquire all of the shares of the  Company's  common stock owned
by Hughes.

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

     At December 31, 1996, the Company owned 14 facilities  located in 7 states:
California  (5),  Colorado (1),  Indiana (2), New York (1),  South Carolina (1),
Texas (2) and Virginia (2). These facilities consist of 12  mini-warehouses  and
two business park facilities.

                                       2
<PAGE>

     The  Company  believes  that its  operating  results  have  benefited  from
favorable   industry   trends  and  conditions.   Notably,   the  level  of  new
mini-warehouse  construction  has decreased while consumer demand has increased.
In addition,  the Company's  mini-warehouses are characterized by a low level of
capital expenditures to maintain their condition and appearance.

     MINI-WAREHOUSES

     Mini-warehouses,  which comprise the majority of the Company's  investments
(approximately  82% of the  Company's  revenues  for  the  twelve  months  ended
December 31, 1996), are designed to offer accessible  storage space for personal
and business use at a relatively  low cost. A user rents a fully  enclosed space
which is for the user's  exclusive  use and to which only the user has access on
an  unrestricted   basis  during  business  hours.   On-site  operation  is  the
responsibility  of resident  managers who are supervised by area managers.  Some
mini-warehouses  also  include  rentable  uncovered  parking  areas for  vehicle
storage.  Leases for  mini-warehouse  space may be on a long-term or  short-term
basis,  although typically spaces are rented on a month-to-month  basis.  Rental
rates vary according to the location of the property and the size of the storage
space.

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

     Mini-warehouses  in which the Company  has  invested  generally  consist of
three to seven  buildings  containing an aggregate of between 350 to 750 storage
spaces, most of which have between 25 and 400 square feet and an interior height
of approximately 8 to 12 feet.

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

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

     As with most other types of real estate,  the conversion of mini-warehouses
to  alternative  uses in  connection  with a sale or otherwise  would  generally
require substantial capital  expenditures.  However, the Company does not intend
to convert its mini-warehouses to other uses.

     COMMERCIAL PROPERTIES

     The  Company's  non-mini-warehouse   investments  are  business  parks  and
low-rise office buildings. The business parks include both industrial and office
space. Industrial space may be used for, among other things, light manufacturing
and assembly, storage and warehousing, distribution and research and development
activities.  The Company  believes  that most of the office space is occupied by
tenants who are also renting  industrial  space.  The remaining  office space is
used for general office  purposes.  A business park may also include  facilities
for commercial uses such as banks, travel agencies,  restaurants,  office supply
shops, professionals or other tenants providing services to the public.

     A business  park  property is typically  divided into units ranging in size
from 600 to 5,000  square  feet.  Parking is open or  covered,  and the ratio of
spaces to rentable square feet ranges from one to four per thousand square feet,
depending upon the use of the property and its location.  Office space generally
requires a greater parking ratio than most industrial uses.

                                       3
<PAGE>

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

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

*    CAPITALIZE ON "PUBLIC  STORAGE'S" NAME RECOGNITION.  PSI, together with its
     predecessor,  has  more  than  20  years  of  operating  experience  in the
     mini-warehouse  business, and is the largest operator of mini-warehouses in
     the United States. PSI believes that its marketing and advertising programs
     improve its competitive position in the market. PSI's in-house Yellow Pages
     staff designs and places  advertisements  in approximately 700 directories.
     Commencing  in  early  1996,  PSI  began  to  experiment  with a  telephone
     reservation  system designed to provide added customer  service.  Customers
     calling either PSI's toll-free  telephone referral system,  (800) 44-STORE,
     or a mini-warehouse facility are directed to PSI's reservation system where
     a trained  representative  discusses with the customer space  requirements,
     price and  location  preferences  and also  informs  the  customer of other
     products  and  services  provided  by PSI.  As of December  31,  1996,  the
     telephone  reservation  system was supporting rental activity at all of the
     Company's  properties.  PSI's toll-free  telephone referral system services
     approximately 120,000 calls per month from potential customers inquiring as
     to the nearest Public Storage mini-warehouse.

*    MAINTAIN HIGH  OCCUPANCY  LEVELS AND INCREASE  REALIZED  RENTS.  Subject to
     market conditions, the Company generally seeks to achieve average occupancy
     levels in excess of 90% and to  eliminate  promotions  prior to  increasing
     rental  rates.  Average  occupancy for the  Company's  mini-warehouses  has
     increased  from  93% in 1995 to 94% in 1996.  Realized  monthly  rents  per
     occupied  square  foot  increased  from  $.82 in 1995 to $.86 in 1996.  The
     Company has  increased  rental rates in many markets  where it has achieved
     high occupancy levels and eliminated or minimized promotions.

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

*    PROFESSIONAL  PROPERTY  OPERATION.  In  addition to the  approximately  150
     support  personnel  at the  Public  Storage  corporate  offices,  there are
     approximately 2,700 on-site personnel who manage the day-to-day  operations
     of  the  mini-warehouses  in  the  Public  Storage  system.  These  on-site
     personnel are supervised by 110 district managers, 15 regional managers and
     three divisional  managers (with an average of 13 years'  experience in the
     mini-warehouse  industry) who report to the president of the mini-warehouse
     property  operator (who has 12 years of experience  with the Public Storage
     organization). PSI carefully selects and extensively trains the operational
     and  support  personnel  and offers them a  progressive  career  path.  See
     "Property Operators."

Property Operators
------------------

     The Company's mini-warehouse properties are managed by PSI (as successor to
PSMI) pursuant to a Management Agreement. Through 1996, the Company's commercial
properties  were managed by Public Storage  Commercial  Properties  Group,  Inc.
("PSCPG") pursuant to a Management Agreement. PSI has a 95% economic interest in
PSCPG (represented by nonvoting  preferred stock) and the Hughes Family had a 5%
economic  interest in PSCPG  (represented by voting common stock) until December
1996,  when the  Hughes  Family  sold its  interest  to Ronald L.  Havner,  Jr.,
formerly  Senior Vice President and Chief  Financial  Officer of PSI, who became
the Chief  Executive  Officer of PSCPG.  PSCPG issued  additional  voting common
stock to two other unaffiliated investors. In January 1997, American Office Park
Properties,  L.P.  ("AOPPLP")  became the  manager of the  Company's  commercial
properties  pursuant  to  the  Management  Agreement.  AOPPLP  is  an  operating
partnership  formed  to own and  operate  business  parks  in  which  PSI has an
approximate 85% economic  interest.  The general partner of AOPPLP is PSCPG, now
known as American Office Park Properties, Inc.

     Under  the  supervision  of the  Company,  PSI and  AOPPLP  coordinate  the
operation  of the  facilities,  establish  rental  policies  and  rates,  direct
marketing  activity,   and  direct  the  purchase  of  equipment  and  supplies,
maintenance activity, and the selection and engagement of all vendors,  supplies
and independent contractors.

                                       4
<PAGE>
     PSI and AOPPLP  engage,  at the expense of the Company,  employees  for the
operation of the Company's  facilities,  including resident managers,  assistant
managers, relief managers, and billing and maintenance personnel. Some or all of
these employees may be employed on a part-time basis and may also be employed by
other persons, partnerships,  REITs or other entities owning facilities operated
by PSI or AOPPLP.

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

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

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

     For as long as the respective  Management  Agreement is in effect,  PSI has
granted the  Company a  non-exclusive  license to use two PSI service  marks and
related designs (and AOPPLP has granted the Company a  non-exclusive  license to
use a PSI service  mark and related  designs),  including  the "Public  Storage"
name, in conjunction with rental and operation of facilities managed pursuant to
the  Management  Agreement.   Upon  termination  of  the  respective  Management
Agreement,  the Company  would no longer have the right to use the service marks
and related designs except as described below. Management believes that the loss
of the right to use the service marks and related  designs could have a material
adverse effect on the Company's business.

     Each Management  Agreement,  as amended in February 1995, provides that (i)
the Management  Agreement will expire in February 2002 provided that in February
of  each  year  it  shall  be  automatically  extended  for  one  year  (thereby
maintaining a seven-year  term) unless either party  notifies the other that the
Management  Agreement  is not being  extended,  in which  case it expires on the
first  anniversary  of its  then  scheduled  expiration  date.  Each  Management
Agreement may also be  terminated  by either party for cause,  but if terminated
for cause by the  Company,  the  Company  retains  the rights to use the service
marks  and  related  designs  until  the  then  scheduled  expiration  date,  if
applicable, or otherwise a date seven years after such termination.

     Certain of the directors and officers of the Company are also directors and
officers of PSI.

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

     Competition  in  the  market  areas  in  which  the  Company   operates  is
significant  and  affects  the  occupancy  levels,  rental  rates and  operating
expenses of certain of the Company's facilities.  Competition may be accelerated
by any increase in availability  of funds for investment in real estate.  Recent
increases in plans for  development  of  mini-warehouses  is expected to further
intensify competition among mini-warehouse operators in certain market areas. In
addition to competition  from  mini-warehouses  operated by PSI, there are three
other  national  firms and numerous  regional and local  operators.  The Company
believes  that  the  significant  operating  and  financial  experience  of  its
executive  officers and directors,  PSI,  AOPPLP and the "Public  Storage" name,
should  enable  the  Company  to  continue  to  compete  effectively  with other
entities.

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

     A corporation owned by the Hughes Family reinsures  policies against losses
to goods  stored  by  tenants  in the  Company's  mini-warehouses.  The  Company
believes that the availability of insurance  reduces the potential  liability of
the Company to tenants for losses to their goods from theft or destruction. This
corporation  receives  the  premiums  and bears the  risks  associated  with the
insurance.

                                       5
<PAGE>

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

Sale or Financing
-----------------

     The by-laws of the Company provide that, during 1997,  unless  shareholders
have previously  approved such a proposal,  the  shareholders  will be presented
with a proposal to approve or  disapprove  (a) the sale or  financing  of all or
substantially  all of the  properties and (b) the  distribution  of the proceeds
from  such  transaction  and,  in the  case of a sale,  the  liquidation  of the
Company.

Employees
---------

     As of December  31,  1996,  the Company  had 54  employees,  18 persons who
render services on behalf of the Company on a full-time basis and 36 persons who
render services on a part-time basis (5 of whom were executive officers).  These
persons include resident managers, assistant managers, relief managers, district
managers, and administrative and maintenance personnel.

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

     The Company  intends to continue to operate in a manner so as to qualify as
a REIT under the Internal Revenue Code of 1986, as amended, but no assurance can
be given that the Company  will be able to continue to qualify at all times.  By
qualifying  as a REIT,  the Company  can deduct  dividend  distributions  to its
shareholders for Federal income tax purposes,  thus effectively  eliminating the
"double  taxation"  (at the  corporate and  shareholder  levels) that  typically
applies to corporate  dividends.  The Company  believes it is in compliance with
these  requirements  and,  accordingly,  no provision  for income taxes has been
made.

Proposed Merger
---------------

     In December  1996, the Company and Public  Storage,  Inc.  ("PSI")  agreed,
subject to certain conditions, to merge. Upon the merger, each outstanding share
of the  Company's  common  stock  series A (other  than shares held by PSI or by
holders of the  Company's  common stock series A ("Series A  Shareholders")  who
have properly  exercised  dissenters'  rights under  California law ("Dissenting
Shares"))  will be converted into the right to receive cash, PSI common stock or
a combination  of the two, as follows:  (i) with respect to a certain  number of
shares  of the  Company's  common  stock  series  A (not  to  exceed  20% of the
outstanding common stock series A of the Company,  less any Dissenting  Shares),
upon a Series A Shareholder's election,  $21.73 in cash, subject to reduction as
described  below or (ii) that  number  (subject  to  rounding)  of shares of PSI
common stock  determined by dividing  $21.73,  subject to reduction as described
below,  by the  average  of the per share  closing  prices on the New York Stock
Exchange of PSI common  stock during the 20  consecutive  trading days ending on
the  fifth   trading  day  prior  to  the  special   meeting  of  the  Company's
shareholders.  The consideration paid by PSI to the Series A Shareholders in the
merger will be reduced by the amount of cash  distributions  required to be paid
to the Series A  Shareholders  by the Company  prior to completion of the merger
(estimated  at  $1.18  per  share)  in  order  to  satisfy  the  Company's  REIT
distribution  requirements  ("Required REIT  Distributions").  The consideration
received by the Series A  Shareholders  in the merger,  however,  along with any
Required  REIT  Distributions,  will not be less  than  $21.73  per share of the
Company's common stock series A, which amount represents the market value of the
Company's  real  estate  assets at October  31,  1996  (based on an  independent
appraisal) and interest of the Series A Shareholders  in the estimated net asset
value of its other assets at March 31, 1997.  Additional  distributions  will be
made to the Series A  Shareholders  to cause the  Company's  estimated net asset
value  allocable to the Series A Shareholders as of the date of the merger to be
substantially equivalent to $21.73 per share. Upon the merger, each share of the
Company's  common  stock  series B and common  stock series C (other than shares
held by PSI) would be converted  into the right to receive  $16.07 in PSI common
stock  (valued as in the case of the  Company's  common stock series A) plus (i)
any  additional  distributions  equal  to the  amount  by  which  the  Company's
estimated net asset value allocable to the holders of the Company's common stock
series B and C as of the date of the  merger  exceeds  $16.07 per share and (ii)
the  estimated  Required  REIT  Distributions  payable  to  the  holders  of the
Company's  common  stock  series B of $1.18 per share.  The common  stock of the
Company  held by PSI will be canceled in the merger.  The merger is  conditioned
on, among other  requirements,  approval by the  Company's  shareholders.  It is
expected  that the  merger  will  close in the  first  half of 1997.  PSI is the
Company's  mini-warehouse  operator and owns 33.27% of the total combined shares
of the Company's common stock series A, B and C.

                                       6

<PAGE>



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

     The following  table sets forth  information  as of December 31, 1996 about
properties owned by the Company:
<TABLE>
<CAPTION>

                                                                    Net            Number
                                                Size of           Rentable           of          Completion
Location                                         Parcel             Area           Spaces           Date
---------------------------------          --------------     ---------------    ------------  --------------
<S>                                          <C>              <C>                     <C>       <C>    
CALIFORNIA
Campbell, State Hwy 17 (a)                    2.71 acres       86,000 sq. ft.          742      Aug. 1985
Fountain Valley, Newhope (a)                  2.78 acres       71,000 sq. ft.          521      Feb. 1986
Santa Cruz, Soquel Ave. (a)                   1.59 acres       43,000 sq. ft.          404      Nov. 1985
So. San Francisco, Airport (b)                2.43 acres       51,000 sq. ft.           40      Dec. 1986
Torrance, Crenshaw Blvd. (b)                  6.52 acres      111,000 sq. ft.           60      Jan. 1986

COLORADO
Aurora, Mississippi Ave. (a)                  3.37 acres       72,000 sq. ft.          489     Sept. 1985

INDIANA
Indianapolis, Hwy 31                          4.22 acres       59,000 sq. ft.          505     Sept. 1985
Indianapolis, Lafayette Rd                    3.60 acres       60,000 sq. ft.          501     Sept. 1985

NEW YORK
Farmingdale, Broad Hollow Rd.                 2.96 acres       52,000 sq. ft.          517      Apr. 1986

SOUTH CAROLINA
Columbia, Broad River Rd.                      .79 acres       14,000 sq. ft.          159      Jul. 1985

TEXAS
Dallas, Winsted Rd.                           1.73 acres       71,000 sq. ft.          866      Feb. 1986
Fort Worth, Interstate 30                     2.49 acres       62,000 sq. ft.          569      Jul. 1985

VIRGINIA
Fairfax, Backlick Rd.                         2.35 acres       42,000 sq. ft.          383     Sept. 1985
Fairfax County, Tyson's Corner (a)            3.57 acres      116,000 sq. ft.        1,219      Nov. 1986

</TABLE>
-------------
(a)  This  property's  rentable  area  contains  office  or  retail  space  or a
     combination of office or light industrial space.
(b)  This property has been developed as a business park.

     The Company,  in  connection  with a proposed  merger  described in Item 1,
obtained an appraisal which stated the value of the Company's  properties  were,
on a portfolio, $62,000,000 as of October 31, 1996.

     Substantially  all of the Company's  facilities  were acquired prior to the
time that it was customary to conduct environmental investigations in connection
with  property  acquisitions.  During the fourth  quarter of 1995,  the  Company
completed   environmental   assessments   of  its  properties  to  evaluate  the
environmental  condition of, and  potential  environmental  liabilities  of such
properties.  These  assessments  were performed by an independent  environmental
consulting firm. Based on the assessments, the Company expensed $244,000 in 1995
for known environmental remediation requirements.

                                       7
<PAGE>
     The  Company's  properties  are operated to maximize  cash flow through the
regular  review of and,  when  warranted by market  conditions,  adjustments  to
scheduled rents. Approximately 82% of the Company's portfolio (based on revenues
for 1996) are mini-warehouses and the balance consists of commercial properties.
As reflected in the table below, the Company has experienced  improved  property
operations:
<TABLE>
<CAPTION>

                                                                                  For the year ended December 31,
                                                                          -----------------------------------------
                                                                            1996           1995              1994
                                                                          ---------      ---------        ----------
<S>                                                                        <C>               <C>               <C>
Weighted average occupancy level (1)                                       94%               93%               93%
Realized monthly rent per occupied square foot (1) (2)                    $.86              $.82              $.81

Operating margin: (3)
    Before reduction for depreciation expense                              68%               68%               68%
    After reduction for depreciation expense                               51%               51%               52%
</TABLE>

---------------
(1)  Mini-warehouse facilities only.
(2)  Realized  rent per square foot  represents  the actual  revenue  earned per
     occupied square foot.  Management  believes this is a more relevant measure
     than the posted rental rates,  since posted rates can be discounted through
     the use of promotions. Includes administrative and late fees.
(3)  Operating margin (before reduction for depreciation expense) is computed by
     dividing rental income less cost of operations by rental income.  Operating
     margin (after reduction for  depreciation  expense) is computed by dividing
     rental income less cost of operations  and  depreciation  expense by rental
     income.

     Additional   information   is  set  forth   below   with   respect  to  the
Campbell/State  Highway 17,  Torrance/Crenshaw  Blvd. and Fairfax County/Tyson's
Corner properties,  because they are the only properties with a book value of at
least 10% of the total  assets of the Company or that have  accounted  for gross
revenues of at least 10% of the aggregate gross revenues of the Company.

     CAMPBELL/STATE  HIGHWAY  17.  This  mini-warehouse  property  is located in
Campbell, California, approximately three miles from downtown Campbell. The site
is situated along State Highway 17 near the San Tomas Expressway.  Both of these
thoroughfares  link Campbell with San Jose.  The site is visible and  accessible
from State Highway 17. The local  businesses  consist of  commercial  and retail
establishments.  The surrounding residential neighborhood consists of single and
multi-family developments.

     The  2.71-acre  property,  which was  completed in 1985,  consists of seven
buildings of approximately  86,000 square feet of net rentable area divided into
742 units.  No tenant  occupies 10% or more of the rentable area. As of December
31, 1996, the property was 99% occupied by 740 tenants.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the property at the dates indicated:

                                                            Annual Scheduled
                                                                Rent Per
        Date                          Occupancy Rate           Square Foot
-----------------------         ------------------------  ---------------------
  December 31, 1996                       99%                      $13.92
  December 31, 1995                       99                        12.24
  December 31, 1994                       99                        11.16


     TORRANCE/CRENSHAW  BOULEVARD. This property, a business park, is located in
Torrance, California, approximately 13 miles from Los Angeles. The business park
offers office space which is suitable for general management use and interaction
with  customers.  The business park is in a business  community  which  includes
commercial,   industrial  and  research  and  development  establishments.   The
residential  market in the immediate  area  consists of single and  multi-family
developments.

     The property is visible and  accessible  from Crenshaw  Boulevard,  a major
north/south  artery.   Situated  on  6.52  acres,  the  business  park  contains
 
                                      8
<PAGE>

approximately  111,000  square feet of net rentable  area divided into 60 units.
The property, which opened in 1986, was 88% occupied at December 31, 1996, by 53
tenants. No tenant occupies 10% or more of the rentable area.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the property at the dates indicated:


                                                           Annual Realized Rent
                                                                    Per
         Date                          Occupancy Rate           Square Foot
--------------------------        --------------------     --------------------
   December 31, 1996                       88%                      $10.08
   December 31, 1995                       77                         9.72
   December 31, 1994                       85                        11.40


     A schedule  showing  total annual base rent and  percentage of total income
relating to leases according to their expiration dates is set forth below:


              Year of                Total Amt.            Percentage of
            Expiration*               Base Rent             Total Income
         --------------          ----------------         ----------------
               1997                  $664,000                   52.91%
               1998                   336,000                   26.77
               1999                   156,000                   12.43
               2000                    67,000                    5.34
               2001                    32,000                    2.55
                                 ----------------         ----------------
               Total               $1,255,000                  100.00%
                                 ================         ================

          --------------
          * Assumes that none of the renewal  options  included in the leases
            will be exercised.

     FAIRFAX COUNTY/TYSON'S  CORNER. This mini-warehouse  property is located in
Fairfax  County,  Virginia,  approximately  three miles from the Fairfax central
business   district.   The  site  is  surrounded  by  industrial   developments,
condominiums and high-rise office buildings.

     The  3.57-acre  property,  which was  completed  in 1986,  consists  of two
four-story  buildings  containing  approximately  116,000  square  feet  of  net
rentable  area divided into 1,219 units.  No tenant  occupies 10% or more of the
rentable  area. As of December 31, 1996,  the property was 94% occupied by 1,151
tenants.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the property at the dates indicated:

                                                               Annual Scheduled
                                                                   Rent Per
           Date                          Occupancy Rate           Square Foot
   ---------------------               -------------------     ----------------
     December 31, 1996                       94%                      $15.84
     December 31, 1995                       94                        14.16
     December 31, 1994                       95                        13.32


ITEM 3.   LITIGATION.
          -----------

     None.


                                       9
<PAGE>

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

     The Company held an annual  meeting of  shareholders  on December 17, 1996.
Proxies for the annual  meeting were  solicited  pursuant to Regulation 14 under
the Securities Exchange Act of 1934. The annual meeting involved the election of
directors,  and the vote was as follows (the common Stock Series A, Series B and
Series C vote together as a single class):
<TABLE>
<CAPTION>

                                  Number of Shares of                  Number of Shares of
                                 Common Stock Series A                Common Stock Series B
                          -------------------------------          -------------------------------
          Name               Voted For         Withheld             Voted For           Withheld
--------------------      -------------      ------------          -------------      ------------
<S>                        <C>                   <C>                <C>                     
B. Wayne Hughes              1,629,125         26,682                 232,762               -
                          -------------      ------------          -------------      ------------
Vern O. Curtis               1,629,025         26,782                 232,762               -
                          -------------      ------------          -------------      ------------
Jack D. Steele               1,628,725         27,082                 232,762               -
                          -------------      ------------          -------------      ------------


                                   Number of Shares of
                                  Common Stock Series C                  Total Common Stock
                          -------------------------------          -------------------------------
          Name               Voted For          Withheld             Voted For          Withheld
-------------------       -------------      ------------          -------------      ------------
B. Wayne Hughes                659,494              -                 2,521,381          26,682
                          -------------      ------------          -------------      ------------
Vern O. Curtis                 659,494              -                 2,521,281          26,782
                          -------------      ------------          -------------      ------------
Jack D. Steele                 659,494              -                 2,520,981          27,082
                          -------------      ------------          -------------      ------------
</TABLE>

                                    PART II.


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

     The  Company's  Series A shares are  registered  under Section 12(b) of the
Securities  Exchange Act of 1934 on the American  Stock Exchange  ("AMEX"),  and
commenced  trading on July 8, 1991 under the symbol PSP. The Series B and Series
C shares were not registered under Section 12 of the Securities  Exchange Act of
1934 and no public trading market exists for the Series B and Series C shares.

     The Company's  Articles of  Incorporation  provide that the Series B shares
and  Series  C shares  will  convert  automatically  into  Series A shares  on a
share-for-share  basis (the "Conversion") when (A) the sum of (1) all cumulative
dividends  and other  distributions  from all sources  paid with  respect to the
Series A shares (including liquidating distributions, but not including payments
made to redeem  such stock  other than in  liquidation)  and (2) the  cumulative
Partnership  distributions from all sources with respect to all Units (including
the General  Partners' 1% interest)  equals (B) the product of $20 multiplied by
the  number  of the  then  outstanding  "Original  Series  A  shares".  The term
"Original   Series  A  shares"   means  the  Series  A  shares   issued  in  the
Reorganization.

     In general,  the Series A shares,  Series B shares and Series C shares have
equal voting rights.  The Company's  bylaws provide that during the period prior
to the  conversion of the Series B and Series C shares into Series A shares,  in
all  shareholder  matters voted on by the  Partnership's  general  partners (the
"General  Partners") or their  successors in interest as holders of Series B and
Series C shares,  other than the  election  and removal of  directors  and other
proposals  relating to the control of the Company and its business,  the General
Partners and any  successors  in interest have agreed to vote their Series B and
Series C shares with the holders of a majority of the  outstanding  unaffiliated
Series A shares entitled to vote.

                                       10
<PAGE>
Market Prices and Dividends
---------------------------

     The  following  table sets forth the high and low sales  prices on the AMEX
composite  tape per Series A share and dividends per Series A share and Series B
share for fiscal 1995 and 1996:
<TABLE>
<CAPTION>

                                                                     Sales Price          
                                                                -------------------       Cash Dividends
     Year                      Quarter Ended                      High         Low           Declared*
-----------     -------------------------------------           -------     -------       ---------------
<C>             <C>                                            <C>         <C>                 <C>  
1995             March 31                                       $17-1/4     $15-1/4             $0.34
                 June 30                                         17-3/8      15-5/8              0.34
                 September 30                                    17-7/8      16-3/8              0.34
                 December 31                                     18-1/2      17-1/4              0.34

1996             March 31                                       $19-1/2     $17-3/8             $0.34
                 June 30                                         19-1/4      17-5/8              0.34
                 September 30                                    19-3/4          18              0.34
                 December 31                                     21-1/8      19-1/4              0.34
</TABLE>

*  No dividends were declared on the Series C shares.

     As of December 31, 1996, there were  approximately  1,272 holders of record
of the Company's Series A shares.

     Holders of Series A shares are entitled to receive  distributions  when, as
and if declared by the Board of Directors out of any funds legally available for
that purpose. The Company, as a REIT, is required to distribute, prior to filing
its tax  return,  at least  95% of its "real  estate  investment  trust  taxable
income,"  which,  as defined by the relevant tax  statutes and  regulations,  is
generally   equivalent   to  net  taxable   ordinary   income.   Under   certain
circumstances,  the  Company  can  rectify a failure  to meet this  distribution
requirement by paying dividends after the close of a particular taxable year.

     A principal policy of the Company is to make quarterly cash  distributions.
The Company  intends to make quarterly cash  distributions  out of funds legally
available, as determined by the Company's Board of Directors.

     For Federal income tax purposes,  distributions to shareholders are treated
as ordinary income,  capital gains, return of capital or a combination  thereof,
and for the past three years all distributions  have been classified as ordinary
income.

     Under generally accepted accounting principles, the amount of distributions
declared to shareholders was less than income by $964,000, $353,000 and $391,000
during 1996, 1995 and 1994, respectively.

     Series A shares are entitled to participate  equally in distributions  when
declared  by the  Board  of  Directors  and in the  Company's  net  assets  upon
dissolution and liquidation  after repayment of the Company's  liabilities.  The
Series B shares (prior to  conversion  into Series A shares) are not entitled to
participate  in  distributions  attributable  to  sales  or  financings  of  the
properties or the  liquidation  of the Company,  but will  participate  in other
distributions  on the same  basis as the  Series A shares.  The  Series C shares
(prior to conversion  into Series A shares) are not entitled to  participate  in
any distributions, including liquidating distributions.

Repurchase of Company's common stock
------------------------------------

     If  considered  to be an  attractive  investment  opportunity  or in  other
appropriate circumstances, the Company may repurchase its Series A shares out of
legally available funds, if approved by the Board of Directors.

     As of February 27, 1997,  the Board of Directors has authorized the Company
to repurchase up to 600,000 Series A shares.  From July 8, 1991 through February
28,  1997,  the Company has  repurchased  413,550  Series A shares.  The Company
repurchased 41,000 Series A shares during 1996 and no additional Series A shares
between January 1, 1997 and February 28, 1997.


                                       11
<PAGE>



ITEM 6.   SELECTED FINANCIAL DATA.
          ------------------------

     The following selected  historical  financial  information has been derived
from the audited financial statements of the Company.
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                         ------------------------------------------------------------------------------
                                             1996           1995              1994               1993           1992
                                         -----------    -----------       -----------        -----------    ----------- 
                                                             (In thousands, except per share data)

Operating data:
---------------
REVENUES:
<S>                                          <C>            <C>             <C>              <C>              <C>   
   Rental income                             $8,811         $8,448          $8,206             $7,749           $7,573
   Interest and other income                     51             52              25                 15               39
                                         -----------    -----------       -----------        -----------    ----------- 
                                              8,862          8,500           8,231              7,764            7,612
                                         -----------    -----------       -----------        -----------    ----------- 
EXPENSES:                                                                                                
   Cost of operations                         2,381          2,251           2,155              2,141            2,037
   Management fees paid to affiliates           475            491             476                449              438
   Depreciation                               1,421          1,403           1,338              1,264            1,253
   General and administrative                   217            241             241                252              328
   Environmental cost                            -             244               -                  -                -
   Interest expense paid to affiliate            -              -                8                  -                -
                                         -----------    -----------       -----------        -----------    ----------- 
                                                                                                         
                                              4,494          4,630           4,218              4,106            4,056
                                         -----------    -----------       -----------        -----------    ----------- 
NET INCOME                                   $4,368         $3,870          $4,013             $3,658           $3,556
                                         ===========    ===========       ===========        ===========    ===========
                                                                                                         
Net income per Series A share:                                                                           
   Primary                                    $1.78          $1.50           $1.52              $1.34            $1.27
   Fully diluted                              $1.38          $1.19           $1.21              $1.08            $1.03
                                                                                                         
Dividends declared per share:                                                                            
   Series A                                   $1.36          $1.36           $1.36              $1.36            $1.36
   Series B                                   $1.36          $1.36           $1.36              $1.36            $1.36
                                                                                                         
Weighted average Common shares outstanding:                                                              
     Primary- Series A                        2,274          2,362           2,431              2,491            2,558
     Fully diluted- Series A                  3,166          3,254           3,323              3,383            3,450
                                                                                                         
Other data:
-----------
Net cash provided                                                                                        
  by operating activities                    $5,826         $5,394          $5,200             $4,972           $4,708
Net cash used in investing activities          (450)          (370)           (331)              (433)            (309)
Net cash used in financing activities        (4,189)        (5,615)         (3,874)            (4,948)          (5,326)
Funds from operations (1)                     5,789          5,517           5,351              4,922            4,809
Capital expenditures to maintain                                                                         
  facilities                                   (450)          (370)           (331)              (433)            (309)
                                                                                                         
Balance sheet data:
-------------------
Total assets                                $38,787        $38,794         $40,091            $40,097          $41,357
Shareholders' equity                         36,978         36,785          38,489             38,345           39,611
</TABLE>

                                       12
<PAGE>
ITEM 6.   SELECTED FINANCIAL DATA (CONTINUED)
          ----------------------------------

(1)  Funds from operations (FFO) is defined by the Company,  consistent with the
     definition  of FFO by the National  Association  of Real Estate  Investment
     Trusts  (NAREIT),  as  net  income  (loss)  (computed  in  accordance  with
     generally  accepted   accounting   principles)   before   depreciation  and
     extraordinary or non-recurring items. FFO is presented because the Company,
     as well as many  industry  analysts,  consider FFO to be one measure of the
     performance of the Company,  ie, one that generally reflects changes in the
     Company's  net  operating  income.  FFO does not  take  into  consideration
     scheduled principal payments on debt and capital improvements. Accordingly,
     FFO is not  necessarily  a substitute  for the  Company's  cash flow or net
     income as a measure of the Company's liquidity or operating  performance or
     ability to pay  distributions.  Furthermore,  the NAREIT  definition of FFO
     does not address the  treatment of certain items and all REITs do not treat
     items the same way in computing FFO. Accordingly,  comparisons of levels of
     FFO among REITs may not necessarily be meaningful.


                                       13
<PAGE>



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

Results of Operations.
----------------------

     YEAR ENDED  DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995. Net
income in 1996 was $4,368,000  compared to $3,870,000 in 1995,  representing  an
increase  of $498,000 or 13%.  Net income per fully  diluted  Series A share was
$1.38 in 1996  compared  to $1.19 in 1995,  representing  an increase of $.19 or
16%.  These  increases  are  primarily the result of an increase in property net
operating income combined with the favorable impact of comparing to expenses for
1995 which included a  non-recurring  charge for  environmental  assessments and
provision for future remediation costs.

     During 1996,  property net  operating  income  (rental  income less cost of
operations,  management  fees  paid  to  affiliates  and  depreciation  expense)
increased  $231,000 from $4,303,000 in 1995 to $4,534,000 in 1996. This increase
is attributable to an increase in rental income at the Company's  mini-warehouse
and business park operations.

     Rental income for the  mini-warehouse  operations  increased $330,000 or 5%
from  $6,893,000 in 1995 to $7,223,000  in 1996.  Cost of operations  (including
management  fees paid to an affiliate of the  Company)  increased  $96,000 or 5%
from  $2,084,000 in 1995 to $2,180,000 in 1996. The results of these changes was
a net increase in property net operating income before  depreciation  expense of
$234,000 or 5% from  $4,809,000 in 1995 to  $5,043,000 in 1996.  The increase in
rental  income is  primarily  due to an increase in rental  rates and  occupancy
levels at a majority of the Company's mini-warehouse operations. The increase in
cost of  operations  is  primarily  due to  increases  in  payroll,  repairs and
maintenance,  advertising  and  property tax  expense.  Repairs and  maintenance
increased due primarily to increases in snow removal and landscaping costs. Snow
removal costs increased due to the higher than normal snow levels experienced at
the Company's mini-warehouse properties in the eastern states.

     Property net operating income before  depreciation  expense with respect to
the Company's business park operations  increased by $15,000 or 2% from $897,000
in 1995 to $912,000 in 1996.  This  increase is primarily  due to an increase in
rental income combined with an increase in cost of operations. The Company's San
Francisco,  California business park generated the increase in rental income due
to an increase in rental rates. The increase in cost of operations is mainly due
to an increase in payroll expense.

     Weighted  average   occupancy  levels  were  94%  for  the   mini-warehouse
facilities and 93% for the business park  facilities in 1996 compared to 93% for
the mini-warehouse facilities and 94% for the business park facilities in 1995.

     In 1995, the Company  prepaid eight months of 1996  management  fees on its
mini-warehouse  operations  (based  on the  management  fees for the  comparable
period during the calendar year immediately preceding the prepayment) discounted
at the  rate of 14% per year to  compensate  for  early  payment.  In 1996,  the
Company  expensed  the  prepaid  management  fees.  The  amount is  included  in
management  fees paid to affiliates in the statements of income.  As a result of
the  prepayment,  the Company saved  approximately  $37,000 in management  fees,
based on the  management  fees that  would have been  payable  on rental  income
generated in 1996 compared to the amount prepaid.

     YEAR ENDED  DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994. Net
income in 1995 was  $3,870,000  compared to $4,013,000 in 1994,  representing  a
decrease  of  $143,000  or 4%. Net income per fully  diluted  Series A share was
$1.19 in 1995 compared to $1.21 in 1994,  representing  a decrease of $.02 or 2%
per share.  This  decrease  is  primarily  due to a  decrease  in  property  net
operating  income at the Company's  business park facilities in 1995 compared to
1994 and environmental costs incurred on the Company's  properties in the fourth
quarter of 1995 (see discussion below).

     During 1995,  property net  operating  income  (rental  income less cost of
operations,  management  fees  paid  to  affiliates  and  depreciation  expense)
increased  $66,000 from  $4,237,000 in 1994 to $4,303,000 in 1995. This increase
is attributable to an increase in rental income at the Company's  mini-warehouse
operations.

     Rental income for the  mini-warehouse  operations  increased $298,000 or 5%
from  $6,595,000 in 1994 to $6,893,000  in 1995.  Cost of operations  (including
management  fees paid to an affiliate of the  Company)  increased  $98,000 or 5%
from  $1,986,000 in 1994 to $2,084,000 in 1995. The results of these changes was
a net increase in property net operating income before  depreciation  expense of
$200,000 or 4% from  $4,609,000 in 1994 to  $4,809,000 in 1995.  The increase in
rental  income is primarily  due to an increase in rental rates at a majority of

                                       14
<PAGE>

the Company's mini-warehouse  operations.  The increase in cost of operations is
primarily due to increases in payroll,  repairs and maintenance and property tax
expense. Repairs and maintenance increased due to an increase in painting costs,
sign, and roof repairs.

     Property net operating income before  depreciation  expense with respect to
the Company's business park operations  decreased by $69,000 or 7% from $966,000
in 1994 to $897,000 in 1995.  This  decrease is  primarily  due to a decrease in
rental income  combined with an increase in cost of operations.  The decrease in
rental  income is due to a decrease in rental rates at the  Company's  Torrance,
California business park. On new and renewal leases, the Company has lowered its
rates in  response  to lower  current  market  rates.  The  increase  in cost of
operations is due to an increase in repairs and maintenance offset by a decrease
in property tax expense. The increase in repairs and maintenance is due to storm
damage  sustained  at the  Torrance,  California  facility  in early  1995.  The
decrease  in  property  taxes is  primarily  due to a tax refund  received  from
appealing a prior period tax assessment on the Torrance facility.

     Substantially  all of the Company's  facilities  were acquired prior to the
time that it was customary to conduct environmental investigations in connection
with  property  acquisitions.  During the fourth  quarter of 1995,  the  Company
completed   environmental   assessments   of  its  properties  to  evaluate  the
environmental  condition of, and  potential  environmental  liabilities  of such
properties.  These  assessments  were performed by an independent  environmental
consulting firm. Based on the assessments, the Company expensed $244,000 in 1995
for  known  environmental  remediation  requirements.  Although  there can be no
assurance, the Company is not aware of any environmental contamination of any of
its property sites which  individually  or in the aggregate would be material to
the Company's overall business, financial condition, or results of operations.

     Weighted  average   occupancy  levels  were  93%  for  the   mini-warehouse
facilities and 94% for the business park facilities in 1995 and 1994.

Mini-warehouse Operating Trends.
--------------------------------

     The following table  illustrates the operating  trends for the Company's 12
mini-warehouses:
<TABLE>
<CAPTION>

                                                                                       For the year ended December 31,
                                                                          -----------------------------------------------------
                                                                            1996                  1995                   1994
                                                                          ------------        ----------------       ----------
<S>                                                                         <C>                   <C>                    <C>
Weighted average occupancy level                                            94%                   93%                    93%
Realized monthly rent per occupied square foot (1)                          $.86                 $.82                   $.81
Operating margin: (2)
     Before reduction for depreciation expense                              70%                   70%                    70%
     After reduction for depreciation expense                               58%                   57%                    57%
</TABLE>
--------
(1)   Realized rent per square foot  represents  the actual  revenue  earned per
      occupied square foot.  Management believes this is a more relevant measure
      than the posted rental rates, since posted rates can be discounted through
      the use of promotions. Includes administrative and late fees.
(2)   Operating margin (before  reduction for depreciation  expense) is computed
      by  dividing  rental  income  less cost of  operations  by rental  income.
      Operating margin (after reduction for depreciation expense) is computed by
      dividing rental income less cost of operations and  depreciation by rental
      income.

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

     CAPITAL STRUCTURE.  The Company's  financial profile has been characterized
by increasing  cash provided by operating  activities and increasing  funds from
operations ("FFO").

     NET CASH PROVIDED BY OPERATING  ACTIVITIES AND FUNDS FROM  OPERATIONS.  The
Company believes that important measures of its performance as well as liquidity
are net cash provided by operating activities and FFO.

                                       15
<PAGE>

     Net cash provided by operating  activities  (net income plus  depreciation)
reflects the cash generated from the Company's business before  distributions to
shareholders and capital expenditures. Net cash provided by operating activities
has increased over the past years from $5,200,000 in 1994 to $5,826,000 in 1996.

     FFO is defined by the Company, consistent with the definition of FFO by the
National  Association of Real Estate Investment  Trusts (NAREIT),  as net income
(loss) (computed in accordance with generally  accepted  accounting  principles)
before depreciation and extraordinary or non-recurring  items. FFO for the years
ended December 31, 1996 and 1995 was $5,789,000  and  $5,517,000,  respectively.
FFO is  presented  because  the  Company,  as well as  many  industry  analysts,
consider FFO to be one measure of the performance of the Company, i.e., one that
generally  reflects changes in the Company's net operating income.  FFO does not
take  into  consideration  scheduled  principal  payments  on debt  and  capital
improvements. Accordingly, FFO is not necessarily a substitute for the Company's
cash flow or net income,  as a measure of the  Company's  liquidity or operating
performance or ability to pay distributions.  Furthermore, the NAREIT definition
of FFO does not  address  the  treatment  of certain  items and all REITs do not
treat items the same way in computing FFO. Accordingly, comparisons of levels of
FFO among REITs may not necessarily be meaningful.

     In February 1996, the Company's  Board of Directors  authorized the Company
to obtain a line of credit  facility  for a maximum of  $2,500,000  for  working
capital purposes, including the repurchase of the Company's stock.

     In March 1996, the Company obtained an unsecured  revolving credit facility
with a bank for  borrowings  up to  $2,500,000.  Outstanding  borrowings  on the
credit  facility  which,  at the Company's  option,  bear interest at either the
bank's prime rate plus .25% or the bank's LIBOR rate plus 2.25%, will convert to
a term loan on December 31, 1998.  Interest is payable  monthly.  Commencing  on
January 31, 1999, principal will be payable monthly in eleven installments equal
to one-forty eighth of the outstanding principal amount of the line of credit on
December 31, 1998.  On December 31, 1999,  the  remaining  unpaid  principal and
interest is due and  payable.  At December 31,  1996,  there was no  outstanding
balance on the credit facility.

     The  following  table  summarizes  the  Company's  ability to make  capital
improvements  to maintain  its  facilities  through the use of cash  provided by
operating activities. The remaining cash flow is available to the Company to pay
distributions to shareholders and repurchase its stock.
<TABLE>
<CAPTION>

                                                                                    Years ended December 31,
                                                                           ----------------------------------------------
                                                                               1996              1995             1994
                                                                          ------------     -------------      -----------
<S>                                                                        <C>               <C>               <C>       
Net income                                                                 $4,368,000        $3,870,000        $4,013,000
Depreciation                                                                1,421,000         1,403,000         1,338,000
Environmental cost                                                                  -           244,000                 -
                                                                          ------------     -------------      -----------
Funds from operations
     (Net cash provided by operating activities
     before changes in working capital components)                          5,789,000         5,517,000         5,351,000
Capital improvements to maintain facilities                                  (450,000)         (370,000)         (331,000)
                                                                          ------------     -------------      -----------
Funds available for distributions to
     shareholders and repurchase of stock                                   5,339,000         5,147,000         5,020,000
Cash distributions to shareholders                                         (3,418,000)       (3,558,000)       (3,627,000)
                                                                          ------------     -------------      -----------
Excess funds available for cash distributions
     to shareholders and repurchase of stock                               $1,921,000        $1,589,000        $1,393,000
                                                                          ============      ============      ===========
</TABLE>

     The Company believes that its rental revenues and interest and other income
will be  sufficient  over at least the next twelve  months to meet the Company's
operating expenses, capital improvements and distributions to shareholders.  For
1997,  the Company  anticipates  expending  approximately  $549,000  for capital
improvements.  During 1995, the Company's  property operator commenced a program
to enhance the visual appearance of the  mini-warehouse  facilities  operated by
it.  Such  enhancements   include  new  signs,   exterior  color  schemes,   and
improvements  to the rental offices.  The vast majority of the costs  associated
with these enhancements were incurred in 1995 and 1996.
  
                                       16
<PAGE>

     In January  1994,  the Company  borrowed  $750,000  from an  affiliate  for
working  capital  purposes.  The  advance,  which was repaid in June 1994,  bore
interest at the prime rate plus .25%.  Interest expense of $8,000 was charged to
income in 1994 with respect to this advance.

     On November 12, 1996, the Company's  Board of Directors  declared a regular
quarterly  distribution  per  share of $0.34  payable  on  January  15,  1997 to
shareholders of record on December 31, 1996.

     The Company believes its geographically diverse portfolio has resulted in a
relatively stable and predictable investment portfolio.

     In August 1995, the Management Agreement for the mini-warehouse  facilities
was amended to provide  that upon  demand  from PSI made prior to  December  15,
1995,  the Company  agreed to prepay (within 15 days after such demand) up to 12
months of  management  fees  (based on the  management  fees for the  comparable
period  during  the  calendar  year   immediately   preceding  such  prepayment)
discounted  at the rate of 14% per year to  compensate  for  early  payment.  In
November 1995, the Company prepaid,  to PSI, 8 months of 1996 management fees at
a cost of  $248,000.  The amount has been  expensed as  management  fees paid to
affiliate during 1996.

Distributions
-------------

     The  Company  has  established  a  conservative  distribution  policy.  The
aggregate  amount of dividends paid or accrued to the  shareholders in each year
since inception of the Company were as follows:

                           Series A             Series B             Total
                         ------------         -----------        ------------
     1984                   $17,000               $1,000             $18,000
     1985                   897,000               78,000             975,000
     1986                 1,071,000               93,000           1,164,000
     1987                 1,306,000              114,000           1,420,000
     1988                 1,775,000              154,000           1,929,000
     1989                 2,944,000              256,000           3,200,000
     1990                 3,480,000              303,000           3,783,000
     1991                 4,546,000              399,000           4,945,000
     1992                 3,459,000              317,000           3,776,000
     1993                 3,381,000              317,000           3,698,000
     1994                 3,305,000              317,000           3,622,000
     1995                 3,201,000              316,000           3,517,000
     1996                 3,088,000              316,000           3,404,000
                        -------------         -----------        ------------
     Total              $32,470,000           $2,981,000          $35,451,000
                        =============         ===========        ============

     The  Convertible  Series  B shares  and  Convertible  Series C shares  will
convert  automatically  into  Series A shares on a  share-for-share  basis  (the
"Conversion")  when  (A) the  sum of (1)  all  cumulative  dividends  and  other
distributions  from  all  sources  paid  with  respect  to the  Series  A shares
(including liquidating distributions,  but not including payments made to redeem
such  stock  other  than in  liquidation)  and (2)  the  cumulative  Partnership
distributions  from all sources with respect to all units equals (B) the product
of $20  multiplied  by the  number of the then  outstanding  "Original  Series A
shares". The term "Original Series A shares" means the Series A shares issued in
the Reorganization. Through December 31, 1996, the Company has made and declared
cumulative cash  distributions of approximately  $32,470,000 with respect to the
Series A shares. Accordingly, assuming no repurchases or redemptions of Series A
shares after  December  31,  1996,  Conversion  will occur when  $12,794,000  in
additional distributions with respect to the Series A shares have been made.

REIT DISTRIBUTION REQUIREMENT
-----------------------------

     The  Company  has  elected  and  intends to continue to qualify as REIT for
Federal  income tax  purposes.  As a REIT,  the Company  must meet,  among other
tests, sources of income,  share ownership,  and certain asset tests. As a REIT,
the  Company  is not  taxed  on that  portion  of its  taxable  income  which is
                                       17
<PAGE>

distributed to its shareholders provided that at least 95% of its taxable income
is so distributed to its shareholders  prior to filing the Company's tax return.
Under certain  circumstances,  the Company can rectify a failure to meet the 95%
distribution  test by  making  distributions  after  the  close of a  particular
taxable year and  attributing  those  distributions  to the prior year's taxable
income. The Company has satisfied the REIT distribution requirement for 1995 and
1996 by attributing  distributions  in 1996 and 1997 to the prior year's taxable
income.  The  extent  to  which  the  Company  will  be  required  to  attribute
distributions to the prior year will depend on the Company's  operating  results
(taxable  income) and the level of  distributions  as determined by the Board of
Directors.  The primary  difference  between  book income and taxable  income is
depreciation  expense.  In 1996,  the  Company's  Federal tax  depreciation  was
$1,444,000.

     The Company's  Board of Directors has authorized the Company to purchase up
to 600,000 shares of Series A common stock. As of December 31, 1996, the Company
had purchased and retired 413,550 shares of Series A common stock.

PROPOSED MERGER
---------------

     In December  1996, the Company and Public  Storage,  Inc.  ("PSI")  agreed,
subject to certain conditions, to merge. Upon the merger, each outstanding share
of the  Company's  common  stock  series A (other  than shares held by PSI or by
holders of the  Company's  common stock series A ("Series A  Shareholders")  who
have properly  exercised  dissenters'  rights under  California law ("Dissenting
Shares"))  will be converted into the right to receive cash, PSI common stock or
a combination  of the two, as follows:  (i) with respect to a certain  number of
shares  of the  Company's  common  stock  series  A (not  to  exceed  20% of the
outstanding common stock series A of the Company,  less any Dissenting  Shares),
upon a Series A Shareholder's election,  $21.73 in cash, subject to reduction as
described  below or (ii) that  number  (subject  to  rounding)  of shares of PSI
common stock  determined by dividing  $21.73,  subject to reduction as described
below,  by the  average  of the per share  closing  prices on the New York Stock
Exchange of PSI common  stock during the 20  consecutive  trading days ending on
the  fifth   trading  day  prior  to  the  special   meeting  of  the  Company's
shareholders.  The consideration paid by PSI to the Series A Shareholders in the
merger will be reduced by the amount of cash  distributions  required to be paid
to the Series A  Shareholders  by the Company  prior to completion of the merger
(estimated  at  $1.18  per  share)  in  order  to  satisfy  the  Company's  REIT
distribution  requirements  ("Required REIT  Distributions").  The consideration
received by the Series A  Shareholders  in the merger,  however,  along with any
Required  REIT  Distributions,  will not be less  than  $21.73  per share of the
Company's common stock series A, which amount represents the market value of the
Company's  real  estate  assets at October  31,  1996  (based on an  independent
appraisal) and interest of the Series A Shareholders  in the estimated net asset
value of its other assets at March 31, 1997.  Additional  distributions  will be
made to the Series A  Shareholders  to cause the  Company's  estimated net asset
value  allocable to the Series A Shareholders as of the date of the merger to be
substantially equivalent to $21.73 per share. Upon the merger, each share of the
Company's  common  stock  series B and common  stock series C (other than shares
held by PSI) would be converted  into the right to receive  $16.07 in PSI common
stock  (valued as in the case of the  Company's  common stock series A) plus (i)
any  additional  distributions  equal  to the  amount  by  which  the  Company's
estimated net asset value allocable to the holders of the Company's common stock
series B and C as of the date of the  merger  exceeds  $16.07 per share and (ii)
the  estimated  Required  REIT  Distributions  payable  to  the  holders  of the
Company's  common  stock  series B of $1.18 per share.  The common  stock of the
Company  held by PSI will be canceled in the merger.  The merger is  conditioned
on, among other  requirements,  approval by the  Company's  shareholders.  It is
expected  that the  merger  will  close in the  first  half of 1997.  PSI is the
Company's  mini-warehouse  operator and owns 33.27% of the total combined shares
of the Company's common stock series A, B and C.

                                       18
<PAGE>

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

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


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

         None.
                                                         
                                    PART III.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1996 fiscal year.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1996 fiscal year.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1996 fiscal year.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1996 fiscal year.

                                    PART IV.

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

     (a)  List of Documents filed as part of the Report.
          1.   Financial  Statements:  See  Index to  Financial  Statements  and
               Financial Statement Schedule.
          2.   Financial Statement Schedules:  See Index to Financial Statements
               and Financial Statement Schedule.
          3.   Exhibits: See Exhibit Index contained herein.

     (b)  Reports on Form 8-K filed  during the last quarter of the period ended
          December 31, 1996:
               A form 8-K dated  December  5, 1996 was filed on  December 6, 
               1996,  which reported that the Company and PSI had agreed,
               subject to certain conditions, to merge.

     (c)  Exhibits:
              See Exhibit Index contained herein.

                                       19
<PAGE>
                                 SIGNATURES

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

                                       PUBLIC STORAGE PROPERTIES XIV, INC.

Dated: March 27, 1997                  By:/s/ Harvey Lenkin
                                          -------------------------
                                          Harvey Lenkin, President

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

       Signature                                  Capacity                                 Date
-------------------------             ---------------------------------------         -------------------
<S>                                   <C>                                               <C> 
/s/ B. Wayne Hughes                   Chairman of the Board, Chief Executive            March 27, 1997
-------------------------               Officer and Director
B. Wayne Hughes                         (Principal Executive Officer)
                                    


/s/ Vern O. Curtis                    Director                                          March 27, 1997
-------------------------
Vern O. Curtis


/s/ Jack D. Steele                    Director                                          March 27, 1997
-------------------------
Jack D. Steele


/s/ David P. Singelyn                 Vice President and Chief Financial Officer        March 27, 1997
---------------------                   (Principal Financial Officer and
David P. Singelyn                       Principal Accounting Officer)

</TABLE>

<PAGE>
                       PUBLIC STORAGE PROPERTIES XIV, INC.

                                    INDEX TO
                              FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE
                                  (Item 14 (a))


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

Report of Independent Auditors                                          F-1

Financial Statements and Schedule:

Balance Sheets as of December 31, 1996 and 1995                         F-2

     For each of the three years in the period ended December 31, 1996:

         Statements of Income                                           F-3

         Statements of Shareholders' Equity                             F-4

         Statements of Cash Flows                                       F-5

     Notes to Financial Statements                                  F-6 - F-11

Schedule for the years ended December 31, 1996, 1995 and 1994:

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

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


<PAGE>


                         Report of Independent Auditors





The Board of Directors and Shareholders
Public Storage Properties XIV, Inc.

We have audited the  accompanying  balance sheets of Public  Storage  Properties
XIV,  Inc. as of  December  31, 1996 and 1995,  and the  related  statements  of
income,  shareholders'  equity and cash flows for each of the three years in the
period ended December 31, 1996. Our audits also included the schedule  listed in
the  index at item  14(a).  These  financial  statements  and  schedule  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Public Storage Properties XIV,
Inc. at December 31, 1996 and 1995,  and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.  Also, in our opinion,
the related  financial  statement  schedule,  when considered in relation to the
basic  financial  statements  taken as a whole,  presents fairly in all material
respects the information set forth therein.









                                                            ERNST & YOUNG LLP


February 18, 1997
Los Angeles, California

                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                                 BALANCE SHEETS
                           December 31, 1996 and 1995
                                                                                         1996                  1995
                                                                                    -----------           -----------
                                     ASSETS
                                     ------

<S>                                                                                  <C>                     <C>     
Cash and cash equivalents                                                            $2,136,000              $949,000
Rent and other receivables                                                               57,000                98,000
Prepaid expenses                                                                        147,000               329,000

Real estate facilities at cost:
  Building, land improvements and equipment                                          30,936,000            30,575,000
  Land                                                                               18,712,000            18,712,000
                                                                                    -----------           -----------
                                                                                     49,648,000            49,287,000

  Less accumulated depreciation                                                     (13,201,000)          (11,869,000)
                                                                                    -----------           -----------
                                                                                     36,447,000            37,418,000
                                                                                    -----------           -----------
Total assets                                                                        $38,787,000           $38,794,000
                                                                                    ===========           ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Accounts payable                                                                       $645,000              $824,000
Dividends payable                                                                       849,000               863,000
Advance payments from renters                                                           315,000               322,000

Shareholders' equity:
  Series A common, $.01 par value,
     3,569,024 shares authorized,
     2,263,218 shares issued and
     outstanding (2,304,218 shares
     issued and outstanding in 1995)                                                     23,000                23,000
  Convertible Series B common, $.01 par
     value, 232,762 shares authorized,
     issued and outstanding                                                               2,000                 2,000
  Convertible Series C common, $.01 par
     value, 659,494 shares authorized,
     issued and outstanding                                                               7,000                 7,000

  Paid-in-capital                                                                    40,170,000            40,941,000
  Cumulative net income                                                              32,227,000            27,859,000
  Cumulative distributions                                                          (35,451,000)          (32,047,000)
                                                                                    -----------           -----------

  Total shareholders' equity                                                         36,978,000            36,785,000
                                                                                    -----------           -----------

Total liabilities and shareholders' equity                                          $38,787,000           $38,794,000
                                                                                    ===========           ===========

</TABLE>
                             See accompanying notes.
                                       F-2
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                              STATEMENTS OF INCOME
                       For each of the three years in the
                         period ended December 31, 1996

                                                                       1996                 1995                 1994
                                                                   ------------         -----------          ----------
REVENUES:
<S>                                                                <C>                  <C>                  <C>       
Rental income                                                      $8,811,000           $8,448,000           $8,206,000
Interest income                                                        51,000               52,000               25,000
                                                                   ------------         -----------          ----------
                                                                    8,862,000            8,500,000            8,231,000
                                                                   ------------         -----------          ----------

COSTS AND EXPENSES:

Cost of operations                                                  2,381,000            2,251,000            2,155,000
Management fees paid to affiliates                                    475,000              491,000              476,000
Depreciation                                                        1,421,000            1,403,000            1,338,000
Administrative                                                        217,000              241,000              241,000
Environmental cost                                                          -              244,000                    -
Interest expense paid to affiliate                                          -                    -                8,000
                                                                   ------------         -----------          ----------
                                                                    4,494,000            4,630,000            4,218,000
                                                                   ------------         -----------          ----------

NET INCOME                                                         $4,368,000           $3,870,000           $4,013,000
                                                                   ============         ============         ==========


Primary earnings per share-Series A                                     $1.78                $1.50                $1.52
                                                                   ============         ============         ==========

Fully diluted earnings per share-Series A                               $1.38                $1.19                $1.21
                                                                   ============         ============         ==========

Dividends declared per share:
    Series A                                                            $1.36                $1.36                $1.36
                                                                   ============         ============         ==========
    Series B                                                            $1.36                $1.36                $1.36
                                                                   ============         ============         ==========

Weighted average Common shares outstanding:
    Primary- Series A                                               2,274,160            2,361,951            2,430,935
                                                                   ============         ============         ==========
    Fully diluted- Series A                                         3,166,416            3,254,207            3,323,191
                                                                   ============         ============         ==========


</TABLE>
                             See accompanying notes.
                                       F-3

<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 For each of the three years in the period ended
                                December 31, 1996


                                                                 Convertible           Convertible         
                                            Series A               Series B              Series C          
                                        Shares     Amount     Shares     Amount     Shares     Amount      
                                       ---------    -------    -------     ------   -------      ------    
<S>                                    <C>          <C>        <C>         <C>      <C>          <C>       
Balances at December 31, 1993          2,438,868    $24,000    232,762     $2,000   659,494      $7,000    

Net income                                                                                                 
Repurchase of shares                     (15,250)        -                                                    

Cash distributions declared:
 $1.36 per share - Series A                                                                                
 $1.36 per share - Series B                                                                                
                                       ---------    -------    -------     ------   -------      ------    

Balances at December 31, 1994          2,423,618     24,000    232,762      2,000    659,494      7,000    


Net income                                                                                                 
Repurchase of shares                    (119,400)    (1,000)                                                

Cash distributions declared:
 $1.36 per share - Series A                                                                                
 $1.36 per share - Series B                                                                                
                                       ---------    -------    -------     ------   -------      ------    

Balances at December 31, 1995          2,304,218     23,000    232,762      2,000    659,494      7,000    

Net income                                                                                                 
Repurchase of shares                    (41,000)      -                                                    

Cash distributions declared:
 $1.36 per share - Series A                                                                                
 $1.36 per share - Series B                                                                                
                                       ---------    -------    -------     ------   -------      ------    

Balances at December 31, 1996          2,263,218    $23,000    232,762     $2,000    659,494     $7,000    
                                       =========    =======    =======     ======   ========     ======    
</TABLE>
<TABLE>
<CAPTION>
                                                     Cumulative                            Total
                                        Paid-in          Net         Cumulative         Shareholders'
                                        Capital        Income       Distributions         Equity
                                       -----------    -----------    ------------       -----------
<S>                                    <C>            <C>            <C>                 <C>        
Balances at December 31, 1993          $43,244,000    $19,976,000    ($24,908,000)       $38,345,000

Net income                                              4,013,000                          4,013,000
Repurchase of shares                      (247,000)                                         (247,000)

Cash distributions declared:
 $1.36 per share - Series A                                            (3,305,000)       (3,305,000)
 $1.36 per share - Series B                                              (317,000)         (317,000)
                                       -----------    -----------    ------------       -----------

Balances at December 31, 1994           42,997,000     23,989,000     (28,530,000)       38,489,000


Net income                                              3,870,000                         3,870,000
Repurchase of shares                    (2,056,000)                                      (2,057,000)

Cash distributions declared:
 $1.36 per share - Series A                                            (3,201,000)       (3,201,000)
 $1.36 per share - Series B                                              (316,000)         (316,000)
                                       -----------    -----------    ------------       -----------

Balances at December 31, 1995           40,941,000     27,859,000     (32,047,000)       36,785,000

Net income                                              4,368,000                         4,368,000
Repurchase of shares                      (771,000)                                        (771,000)

Cash distributions declared:
 $1.36 per share - Series A                                            (3,088,000)       (3,088,000)
 $1.36 per share - Series B                                              (316,000)         (316,000)
                                       -----------    -----------    ------------        -----------

Balances at December 31, 1996          $40,170,000    $32,227,000    ($35,451,000)      $36,978,000
                                       ===========    ===========    =============      ===========
</TABLE>
                            See accompanying notes.
                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                            STATEMENTS OF CASH FLOWS
                       For each of the three years in the
                         period ended December 31, 1996


                                                                    1996                 1995                 1994
                                                                 ----------           ----------           ----------
Cash flows from operating activities:
<S>                                                              <C>                  <C>                  <C>       
     Net income                                                  $4,368,000           $3,870,000           $4,013,000

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

       Depreciation                                               1,421,000            1,403,000            1,338,000
       Decrease (increase) in rent and                               41,000              (78,000)              (6,000)
         other receivables
       Increase in prepaid expenses                                 (66,000)              (1,000)                   -
       Amortization (payment) of prepaid
         management fees                                            248,000             (248,000)                   -
       (Decrease) increase in accounts payable                     (179,000)             475,000              (78,000)
       Decrease in advance payments from renters                     (7,000)             (27,000)             (67,000)
                                                                 ----------           ----------           ----------
         Total adjustments                                        1,458,000            1,524,000            1,187,000
                                                                 ----------           ----------           ----------

         Net cash provided by operating activities                5,826,000            5,394,000            5,200,000
                                                                 ----------           ----------           ----------

Cash flows from investing activities:

       Additions to real estate facilities                         (450,000)            (370,000)            (331,000)
                                                                 ----------           ----------           ----------
         Net cash used in investing activities                     (450,000)            (370,000)            (331,000)
                                                                 ----------           ----------           ----------
Cash flows from financing activities:

       Distributions paid to shareholders                        (3,418,000)          (3,558,000)         (3,627,000)
       Advances from affiliate                                        -                   -                  750,000
       Repayment of advances from affiliate                           -                   -                 (750,000)
       Purchase of Company Series A common stock                   (771,000)          (2,057,000)           (247,000)
                                                                 ----------           ----------           ----------
         Net cash used in financing activities                   (4,189,000)          (5,615,000)         (3,874,000)
                                                                 ----------           ----------           ----------
Net increase (decrease) in
   cash and cash equivalents                                      1,187,000             (591,000)            995,000

Cash and cash equivalents at
   the beginning of the year                                        949,000            1,540,000             545,000
                                                                 ----------           ----------           ----------
Cash and cash equivalents at
   the end of the year                                           $2,136,000             $949,000          $1,540,000
                                                                 ==========            =========           ==========
</TABLE>
                             See accompanying notes.
                                       F-5

<PAGE>
                       PUBLIC STORAGE PROPERTIES XIV, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

1.        DESCRIPTION OF BUSINESS

               Public  Storage   Properties  XIV,  Inc.  (the  "Company")  is  a
          California  corporation  which has elected to qualify as a real estate
          investment trust ("REIT") for Federal income tax purposes. The Company
          succeeded to the business of Public Storage  Properties XIV, Ltd. (the
          "Partnership")  in a  reorganization  transaction  which was effective
          June 3, 1991 (the "Reorganization").

               The Company owns and operates primarily  self-storage  facilities
          and,  to  a  lesser  extent,   business  park  facilities   containing
          commercial or industrial spaces.

               The term of the  Company is until all  properties  have been sold
          and, in any event, not later than December 31, 2038. The bylaws of the
          Company provide that, during 1997, unless shareholders have previously
          approved such a proposal,  the  shareholders  will be presented with a
          proposal to approve or disapprove  (a) the sale or financing of all or
          substantially  all of the properties and (b) the  distribution  of the
          proceeds  from  such  transaction  and,  in the  case of a  sale,  the
          liquidation of the Company. See Proposed Merger-Note 7.

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Basis of Presentation:

               Certain  prior year  amounts have been  reclassified  in order to
          conform with the 1996 presentation.

          Income Taxes:

               The Company has and intends to continue to qualify as a REIT,  as
          defined in Section 856 of the Internal  Revenue Code (the Code).  As a
          REIT,  the Company is not taxed on that portion of its taxable  income
          which is  distributed  to its  shareholders  provided that the Company
          meets the  requirements  of the Code.  The  Company  believes it is in
          compliance with these requirements and, accordingly,  no provision for
          income taxes has been made.

          Statements of Cash Flows:

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

          Real Estate Facilities:

               Cost of  land  includes  appraisal  and  legal  fees  related  to
          acquisition  and  closing  costs.  Buildings,  land  improvements  and
          equipment reflect costs incurred through December 31, 1996 and 1995 to
          develop  primarily  mini-warehouse  facilities and to a lesser extent,
          business  park  facilities.   The  mini-warehouse  facilities  provide
          self-service  storage  spaces for lease,  usually on a  month-to-month
          basis,  to  the  general  public.  The  buildings  and  equipment  are
          depreciated on the straight-line  basis over estimated useful lives of
          25 and 5 years, respectively. Included in depreciation is depreciation
          of tenant  improvements  on the Company's  business park facilities of
          $150,000, $117,000 and $85,000 in 1996, 1995, and 1994, respectively.

               In  1995,  the  Financial   Accounting   Standards  Board  issued
          Statement of Financial Accounting Standards No. 121 ("Statement 121"),
          "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
          Assets to be Disposed of." Statement 121 requires impairment losses to
          be recorded on long-lived assets used in operations when indicators of
          impairment are present and the undiscounted cash flows estimated to be
          generated by those assets are less than the assets'  carrying  amount.
          Statement 121 also addresses the accounting for long-lived assets that
          are expected to be disposed of. The Company  adopted  Statement 121 in
          1996 and based on current  circumstances,  such  adoption did not have
          any effect on the financial statements.

                                      F-6
<PAGE>
2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
          Real Estate Facilities (continued):

               At  December  31,  1996,  the  basis  of real  estate  facilities
          (excluding land) for Federal income tax purposes (after adjustment for
          accumulated depreciation of $16,014,000) is $13,698,000.

          Revenue Recognition:

               Property rents are recognized as earned.

          Net Income Per Share:

               Net income per share is based on net income  attributable to each
          series of common shares and the weighted average number of such shares
          outstanding during the periods presented.

               Net income per share is presented on a primary and fully  diluted
          basis.   Primary   earnings   per  share   represents   the  Series  A
          shareholders'  rights to distributions out of the respective  period's
          net income, which is calculated by dividing net income after reduction
          for distributions to the Convertible  Series B shareholders  (Series C
          shareholders are not entitled to cash  distributions)  by the weighted
          average number of outstanding  Series A shares (Note 4). Fully diluted
          earnings per share assumes  conversion of the Convertible Series B and
          Series C shares into Series A shares.

          Use of Estimates:

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

          Environmental Cost:

               Substantially all of the Company's facilities were acquired prior
          to  the  time  that  it  was   customary   to  conduct   environmental
          investigations  in connection with property  acquisitions.  During the
          fourth   quarter  of  1995,   the  Company   completed   environmental
          assessments of its properties to evaluate the environmental  condition
          of, and potential environmental liabilities of such properties.  These
          assessments were performed by an independent  environmental consulting
          firm. Based on the assessments,  the Company expensed $244,000 in 1995
          for known environmental remediation  requirements.  Although there can
          be no  assurance,  the  Company  is not  aware  of  any  environmental
          contamination  of any of its property sites which  individually  or in
          the  aggregate  would be material to the Company's  overall  business,
          financial condition, or results of operations.

3.        RELATED PARTY TRANSACTIONS

               The Company has a Management Agreement with Public Storage,  Inc.
          ("PSI")  pursuant to which PSI operates the  Company's  mini-warehouse
          facilities  for a fee  equal to 6% of the  facilities'  monthly  gross
          revenue  (as  defined).   Through  1996,   the  Company's   commercial
          properties  were  operated  by Public  Storage  Commercial  Properties
          Group,  Inc.  ("PSCPG")  pursuant  to  a  Management  Agreement  which
          provides  for a fee  equal  to 5% of  the  facilities'  monthly  gross
          revenue (as defined).

               PSI  has  a  95%  economic  interest  in  PSCPG  (represented  by
          nonvoting  preferred  stock) and B. Wayne Hughes,  the Company's Chief
          Executive Officer, and members of his family (the "Hughes Family") had
          a 5% economic  interest in PSCPG  (represented by voting common stock)
          until December 1996 when the Hughes Family sold its interest to Ronald
          L. Havner,  Jr.,  formerly  Senior Vice President and Chief  Financial
          Officer of PSI, who became the Chief Executive Officer of PSCPG. PSCPG
          issued  additional  voting  common  stock  to two  other  unaffiliated
          investors.

               In January 1997, American Office Park Properties, L.P. ("AOPPLP")
          became the operator of the Company's commercial properties pursuant to
          the Management Agreement. AOPPLP is an operating partnership formed to
          own and operate  business  parks in which PSI has an  approximate  85%
          economic  interest.  The general partner of AOPPLP is PSCPG, now known
          as American Office Park Properties, Inc.

                                      F-7
<PAGE>
3.        RELATED PARTY TRANSACTIONS (CONTINUED)

               Each Management Agreement,  as amended in February 1995, provides
          that the  agreement  will expire in  February  2002  provided  that in
          February of each year it shall be automatically  extended for one year
          (thereby  maintaining a seven-year  term) unless either party notifies
          the other that the  Management  Agreement  is not being  extended,  in
          which case it expires,  on the first anniversary of its then scheduled
          expiration  date. Each Management  Agreement may also be terminated by
          either party for cause,  but if  terminated  for cause by the Company,
          the Company  retains  the rights to use the service  marks and related
          designs until the then scheduled  expiration  date, if applicable,  or
          otherwise a date seven years after such termination.

               In August 1995, the Management  Agreement for the  mini-warehouse
          facilities was amended to provide that upon demand from PSI made prior
          to December 15,  1995,  the Company  agreed to prepay  (within 15 days
          after such  demand) up to 12 months of  management  fees (based on the
          management  fees for the  comparable  period  during the calendar year
          immediately  preceding such prepayment)  discounted at the rate of 14%
          per year to  compensate  for early  payment.  In  November  1995,  the
          Company prepaid, to PSI, 8 months of 1996 management fees at a cost of
          $248,000.  The amount has been  expensed  as  management  fees paid to
          affiliate during 1996.

               In January 1994, the Company borrowed  $750,000 from an affiliate
          for working capital  purposes.  The advance,  which was repaid in June
          1994, bore interest at the prime rate plus .25%.  Interest  expense of
          $8,000 was charged to income in 1994 with respect to this advance.

4.        Shareholders' Equity

               Series A shares are  entitled to all  distributions  of cash from
          sale or  refinancing  and  participate  ratably  with the  Convertible
          Series B shares in  distributions  of cash flow from  operations.  The
          Convertible Series C shares (prior to conversion into Series A shares)
          will not participate in any distributions.

               The Convertible  Series B shares and Convertible  Series C shares
          will convert  automatically  into Series A shares on a share-for-share
          basis  (the  "Conversion")  when  (A) the  sum of (1)  all  cumulative
          dividends and other  distributions  from all sources paid with respect
          to the Series A shares (including liquidating  distributions,  but not
          including   payments   made  to  redeem   such  stock  other  than  in
          liquidation) and (2) the cumulative Partnership distributions from all
          sources  with  respect  to all units  equals  (B) the  product  of $20
          multiplied by the number of the then  outstanding  "Original  Series A
          shares". The term "Original Series A shares" means the Series A shares
          issued in the  Reorganization.  Through December 31, 1996, the Company
          has made and declared  cumulative cash  distributions of approximately
          $32,470,000 with respect to the Series A shares. Accordingly, assuming
          no  repurchases  or  redemptions of Series A shares after December 31,
          1996,   Conversion   will  occur  when   $12,794,000   in   additional
          distributions with respect to the Series A shares have been made.

               Assuming  liquidation  of the  Company  at its net book  value at
          December 31, 1996 and 1995, each Series of common shares would receive
          the following as a liquidating distribution:


                                                  1996                 1995
                                            -------------         -------------
             Series A                        $30,139,000           $31,178,000
             Convertible Series B              1,784,000             1,463,000
             Convertible Series C              5,055,000             4,144,000
                                             -------------         -------------
                      Total                  $36,978,000           $36,785,000
                                            =============         =============

               The Series A shares,  Convertible Series B shares and Convertible
          Series  C  shares  have  equal  voting  rights.  The  holders  of  the
          Convertible  Series B and  Convertible  Series C shares have agreed to
          vote along with the majority of the unaffiliated Series A shareholders
          on matters other than control of the Company and its business.

                                      F-8
<PAGE>
4.        SHAREHOLDERS' EQUITY (CONTINUED)

               The Company's  Board of Directors has  authorized  the Company to
          purchase up to 600,000 shares of the Company's  Series A common stock.
          As of December 31, 1996, the Company had purchased and retired 413,550
          shares of Series A common  stock,  of which  41,000 and  119,400  were
          purchased and retired in 1996 and 1995, respectively.

               For Federal income tax purposes,  all  distributions  declared by
          the Board of Directors in 1996, 1995 and 1994 were ordinary income.

5.        NOTE PAYABLE TO BANK

               In February 1996, the Company's Board of Directors authorized the
          Company  to  obtain  a  line  of  credit  facility  for a  maximum  of
          $2,500,000 for working capital  purposes,  including the repurchase of
          the Company's stock.

               In March 1996, the Company obtained an unsecured revolving credit
          facility  with a bank for  borrowings  up to  $2,500,000.  Outstanding
          borrowings on the credit facility which, at the Company's option, bear
          interest at either the bank's prime rate plus .25% or the bank's LIBOR
          rate plus 2.25%,  will  convert to a term loan on December  31,  1998.
          Interest is payable monthly. Commencing on January 31, 1999, principal
          will  be  payable  monthly  in  eleven   installments   equal  to  one
          forty-eighth of the outstanding principal amount of the line of credit
          on December 31, 1998. On December 31, 1999,  all unpaid  principal and
          accrued interest is due and payable.

               At December 31,  1996,  there was no  outstanding  balance on the
          credit facility.

               Under  covenants  of the  credit  facility,  the  Company  is (1)
          required to maintain a ratio of advances to assets (as defined) of not
          more than .15 to 1.0,  (2) required to maintain a debt to equity ratio
          (as  defined) of not more than .20 to 1.0 and (3) required to maintain
          a fixed  charge  coverage  ratio (as  defined) of not less than 1.0 to
          1.0.

6.        LEASE AGREEMENTS

               The Company has invested primarily in  mini-warehouses  which are
          operated  as  self-storage  facilities.  Leases  for  such  space  are
          generally on a month-to-month basis.

               The Company has also invested in office and industrial properties
          which are  operated  as  business  parks.  Leases  for such  space are
          generally long-term  non-cancelable  operating leases. At December 31,
          1996, the minimum amounts receivable under these non-cancelable leases
          were as follows:

            Year                               Amount
            -----                             ----------
 
            1997                             $1,014,000
            1998                                369,000
            1999                                156,000
            2000                                 67,000
            2001                                 31,000
                                             ----------
            Total                            $1,637,000
                                             ===========
   

                                       F-9
<PAGE>

7.        PROPOSED MERGER

               In December 1996, the Company and Public  Storage,  Inc.  ("PSI")
          agreed, subject to certain conditions, to merge. Upon the merger, each
          outstanding  share of the Company's  common stock series A (other than
          shares held by PSI or by holders of the Company's  common stock series
          A ("Series A Shareholders")  who have properly  exercised  dissenters'
          rights under California law  ("Dissenting  Shares")) will be converted
          into the right to receive cash,  PSI common stock or a combination  of
          the two, as follows: (i) with respect to a certain number of shares of
          the  Company's  common  stock  series  A  (not  to  exceed  20% of the
          outstanding common stock series A of the Company,  less any Dissenting
          Shares),  upon a  Series A  Shareholder's  election,  $21.73  in cash,
          subject to reduction as described  below or (ii) that number  (subject
          to  rounding)  of shares of PSI common  stock  determined  by dividing
          $21.73, subject to reduction as described below, by the average of the
          per share closing  prices on the New York Stock Exchange of PSI common
          stock  during  the 20  consecutive  trading  days  ending on the fifth
          trading   day  prior  to  the   special   meeting  of  the   Company's
          shareholders.   The  consideration   paid  by  PSI  to  the  Series  A
          Shareholders  in the  merger  will be  reduced  by the  amount of cash
          distributions  required to be paid to the Series A Shareholders by the
          Company  prior to  completion  of the merger  (estimated  at $1.18 per
          share)  in  order  to  satisfy   the   Company's   REIT   distribution
          requirements   ("Required  REIT  Distributions").   The  consideration
          received by the Series A Shareholders  in the merger,  however,  along
          with any Required REIT Distributions, will not be less than $21.73 per
          share of the Company's common stock series A, which amount  represents
          the market value of the  Company's  real estate  assets at October 31,
          1996 (based on an independent  appraisal) and interest of the Series A
          Shareholders  in the  estimated net asset value of its other assets at
          March 31, 1997. Additional  distributions will be made to the Series A
          Shareholders  to  cause  the  Company's   estimated  net  asset  value
          allocable to the Series A Shareholders as of the date of the merger to
          be substantially equivalent to $21.73 per share. Upon the merger, each
          share of the Company's common stock series B and common stock series C
          (other than shares held by PSI) would be  converted  into the right to
          receive  $16.07  in PSI  common  stock  (valued  as in the case of the
          Company's common stock series A) plus (i) any additional distributions
          equal to the amount by which the  Company's  estimated net asset value
          allocable to the holders of the Company's  common stock series B and C
          as of the date of the  merger  exceeds  $16.07  per share and (ii) the
          estimated  Required REIT  Distributions  payable to the holders of the
          Company's  common stock series B of $1.18 per share.  The common stock
          of the Company held by PSI will be canceled in the merger.  The merger
          is conditioned on, among other requirements, approval by the Company's
          shareholders.  It is expected  that the merger will close in the first
          half of 1997.  PSI is the Company's  mini-warehouse  operator and owns
          33.27% of the total  combined  shares of the  Company's  common  stock
          series A, B and C.

8.        QUARTERLY RESULTS (UNAUDITED)

               The  following  is a summary of  unaudited  quarterly  results of
          operations:
<TABLE>
<CAPTION>

                                                                          Three months ended
                                                      ---------------------------------------------------------
                                                      March 1996      June 1996      Sept. 1996      Dec. 1996
                                                      ----------     -----------   -------------    ------------
<S>                                                   <C>            <C>            <C>              <C>       
       Revenues                                      $2,120,000       $2,204,000     $2,275,000       $2,263,000
                                                      ----------     -----------   -------------    ------------

       Expenses                                       1,112,000        1,110,000      1,052,000        1,220,000
                                                      ----------     -----------   -------------    ------------

       Net income                                    $1,008,000       $1,094,000     $1,223,000       $1,043,000
                                                      ==========     ===========   =============    ============

       Primary earnings per share- Series A               $0.41            $0.44          $0.51            $0.42
                                                      ==========     ===========   =============    ============

       Fully diluted earnings per share- Series A         $0.32            $0.34          $0.39            $0.33
                                                      ==========     ===========   =============    ============

</TABLE>

                                      F-10
<PAGE>
<TABLE>
<CAPTION>
8.        QUARTERLY RESULTS (UNAUDITED) (CONTINUED)


                                                                         Three months ended
                                                      ----------------------------------------------------------
                                                      March 1995      June 1995      Sept. 1995      Dec. 1995
                                                      ----------     -----------   -------------    ------------
<S>                                                  <C>              <C>               <C>              <C>       
       Revenues                                      $2,074,000       $2,136,000     $2,167,000       $2,123,000
                                                      ----------     -----------   -------------    ------------

       Expenses                                       1,086,000        1,103,000      1,037,000        1,404,000
                                                      ----------     -----------   -------------    ------------

       Net income                                      $988,000       $1,033,000     $1,130,000         $719,000
                                                      ==========     ===========   =============    =============

       Primary earnings per share- Series A               $0.38            $0.40          $0.45            $0.27
                                                      ==========     ===========   =============    =============

       Fully diluted earnings per share- Series A         $0.30            $0.32          $0.34            $0.23
                                                      ==========     ===========   =============    =============

                                      F-11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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


                                                                                                          
                                                                  Initial Cost                            
                                                              -----------------------      Costs          
                                                                         Bldg., Land   subsequent to      
    Date                                                                    Imp &       construction      
  Completed           Description           Encumbrances       Land       Equipment    (Improvements)     
----------------------------------------------------------------------------------------------------------

Mini-warehouses:
 
    <S>      <C>                              <C>            <C>           <C>                 <C>        
    9/85      Annandale / Backlick               -           $1,109,000    $1,305,000          $71,000    
    7/85      Ft Worth / West Freeway            -              436,000     1,117,000          142,000    
    8/85      Campbell / S Curtner               -            1,923,000     2,062,000           67,000    
    9/85      Aurora / S Idalia                  -            1,237,000     1,849,000          228,000    
    11/85     Santa Cruz / Soquel Ave            -              762,000     1,296,000           56,000    
    9/85      Indianapolis / Lafayette           -              306,000     1,195,000           41,000    
              Road
    9/85      Indianapolis / Route 31            -              388,000     1,087,000           74,000    
    4/86      Farmingdale/ Broad Hollow          -              636,000     1,953,000          171,000    
    11/86     Tyson's Corner / Springhill        -            3,777,000     4,248,000           93,000    
    2/86      Fountain Valley / Newhope          -            1,329,000     1,850,000           82,000    
    2/86      Dallas / Winsted                   -              993,000     1,828,000           52,000    
    7/85      Columbia / Broad River Rd          -               53,000       324,000           32,000    

Business parks:

    1/86      Torrance II                        -            4,212,000     5,660,000        1,044,000     
    12/86     S San Francisco / Airport          -            1,551,000     2,642,000          367,000     
                                          ------------------------------------------------------------
                                                 -          $18,712,000   $28,416,000       $2,520,000     
                                          ==================================================+=========

</TABLE>
<TABLE>
<CAPTION>
                                                      At December 31, 1996                                  Life on Which
                                             -------------------------------------------                   Depreciation in
                                                           Bldg., Land                                        Latest Income
    Date                                                       Imp                         Accumulated      Statements is
  Completed           Description              Land        & Equipment       Total         Depreciation        Computed
----------------------------------------------------------------------------------------------------------------------------

Mini-warehouses:
    <S>      <C>                              <C>             <C>            <C>                <C>           <C>       
    9/85      Annandale / Backlick            $1,109,000      $1,376,000     $2,485,000         ($605,000)    5-25 Years
    7/85      Ft Worth / West Freeway            436,000       1,259,000      1,695,000          (563,000)    5-25 Years
    8/85      Campbell / S Curtner             1,923,000       2,129,000      4,052,000          (963,000)    5-25 Years
    9/85      Aurora / S Idalia                1,237,000       2,077,000      3,314,000          (986,000)    5-25 Years
    11/85     Santa Cruz / Soquel Ave            762,000       1,352,000      2,114,000          (586,000)    5-25 Years
    9/85      Indianapolis / Lafayette           306,000       1,236,000      1,542,000          (536,000)    5-25 Years
              Road
    9/85      Indianapolis / Route 31            388,000       1,161,000      1,549,000          (513,000)    5-25 Years
    4/86      Farmingdale/ Broad Hollow          636,000       2,124,000      2,760,000          (908,000)    5-25 Years
    11/86     Tyson's Corner / Springhill      3,777,000       4,341,000      8,118,000        (1,695,000)    5-25 Years
    2/86      Fountain Valley / Newhope        1,329,000       1,932,000      3,261,000          (825,000)    5-25 Years
    2/86      Dallas / Winsted                   993,000       1,880,000      2,873,000          (806,000)    5-25 Years
    7/85      Columbia / Broad River Rd           53,000         356,000        409,000          (168,000)    5-25 Years

Business parks:

    1/86      Torrance II                      4,212,000       6,704,000     10,916,000        (2,762,000)    5-25 Years
    12/86     S San Francisco / Airport        1,551,000       3,009,000      4,560,000        (1,285,000)    5-25 Years
                                            --------------------------------------------------------------
                                             $18,712,000     $30,936,000    $49,648,000      ($13,201,000)
                                            ==============================================================
</TABLE>
                                      F-12
<PAGE>
<TABLE>
<CAPTION>
                      PUBLIC STORAGE PROPERTIES XIV, INC.
                           REAL ESTATE RECONCILIATION
                            SCHEDULE III (CONTINUED)

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

                              COSTS RECONCILIATION

                                                                            Years Ended December 31,
                                                         ---------------------------------------------------------------
                                                                 1996                 1995                 1994
                                                         ---------------------------------------------------------------

<S>                                                          <C>                  <C>                  <C>        
Balance at the beginning of the period                       $49,287,000          $48,992,000          $48,724,000

Additions during the period:

  Improvements                                                   450,000              370,000              331,000

Deductions during the period                                     (89,000)             (75,000)             (63,000)
                                                         ---------------------------------------------------------------

Balance at the close of the period                           $49,648,000          $49,287,000          $48,992,000
                                                         ===============================================================



                     ACCUMULATED DEPRECIATION RECONCILIATION


                                                                            Years Ended December 31,
                                                         ---------------------------------------------------------------
                                                                 1996                 1995                 1994
                                                         ---------------------------------------------------------------

Balance at the beginning of the period                       $11,869,000          $10,541,000           $9,266,000

Additions during the period:

  Depreciation                                                 1,419,000            1,403,000            1,338,000

Deductions during the period                                     (87,000)             (75,000)             (63,000)
                                                         ---------------------------------------------------------------

Balance at the close of the period                           $13,201,000          $11,869,000          $10,541,000
                                                         ===============================================================


(b) The aggregate  depreciable cost of real estate (excluding land) for Federal
    income tax purposes is $29,712,000.

</TABLE>
                                      F-13

<PAGE>
                       PUBLIC STORAGE PROPERTIES XIV, INC.

                                  EXHIBIT INDEX
                                  (Item 14(c))

2         Agreement and Plan of Reorganization among PSI, the Company and Public
          Storage  Properties XV, Inc. dated December 5, 1996.  Filed with PSI's
          Registration  Statement  No.  333-22665  and  incorporated  herein  by
          reference.

3.1       Articles of  Incorporation.  Previously  filed with the Securities and
          Exchange  Commission as an exhibit to the  Company's  Annual Report on
          Form 10-K for the year ended December 31, 1991 and incorporated herein
          by reference.

3.2       Certificate  of  Amendment  of Articles of  Incorporation.  Previously
          filed with the Securities and Exchange Commission as an exhibit to the
          Company's  Annual Report on Form 10-K for the year ended  December 31,
          1992 and incorporated herein by reference.

3.3       Amended and Restated Bylaws.  Previously filed with the Securities and
          Exchange  Commission as an exhibit to the  Company's  Annual Report on
          Form 10-K for the year ended December 31, 1991 and incorporated herein
          by reference.

3.4       Amendments to Bylaws Adopted on July 30, 1992.  Previously  filed with
          the Securities and Exchange  Commission as an exhibit to the Company's
          Annual  Report on Form 10-K for the year ended  December  31, 1992 and
          incorporated herein by reference.

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

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

10.3      Amendment to Amended Management Agreement dated August 8, 1995 between
          the Company,  Public Storage  Management,  Inc. and Storage  Equities,
          Inc.  Previously filed with the Securities and Exchange  Commission as
          an  exhibit  to the  Company's  Quarterly  Report on Form 10-Q for the
          period ended September 30, 1995 and incorporated herein by reference.

10.4      Line of Credit Agreement between the Company and Sanwa Bank California
          dated as of March 26, 1996. Filed herewith.

27        Financial Data Schedule. Filed herewith.