Exhibit 99


Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations SUSA Partnership, L.P.

All statements contained herein that are not historical facts, including but not
limited to, statements regarding  anticipated future development and acquisition
activity,  the impact of  anticipated  rental rate  increases  on the  Operating
Partnership's revenue growth, the Operating Partnership's 1997 budgeted revenues
and expenses, and future capital requirements are based on current expectations.
These statements are forward looking in nature and involve a number of risks and
uncertainties.  Actual  results may differ  materially.  Among the factors  that
could cause actual results to differ  materially  are the following:  changes in
the  economic  conditions  in the  markets  in which the  Operating  Partnership
operates   negatively   impacting  the  financial  resources  of  the  Operating
Partnership's clients;  certain of the Operating Partnership's  competitors with
substantially   greater  financial  resources  than  the  Operating  Partnership
reducing  the  number  of  suitable  acquisition  opportunities  offered  to the
Operating  Partnership  and  increasing  the price  necessary to consummate  the
acquisition of particular  facilities;  increased  development of new facilities
and competition in the Operating  Partnership's markets resulting in over-supply
thereby  lowing  rental and  occupancy  rates;  the  availability  of sufficient
capital  to  finance  the  Operating   Partnership's   business  plan  on  terms
satisfactory to the Operating Partnership; increased costs related to compliance
with  laws,   including   environmental  laws;  general  business  and  economic
conditions;  and the other risk factors described in the Operating Partnership's
reports filed from time to time with the Securities and Exchange Commission. The
Operating  Partnership  cautions readers not to place undue reliance on any such
forward looking  statements,  which  statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the date
made.

The following  discussion and analysis of the consolidated  financial  condition
and results of operations  should be read in conjunction  with the  Consolidated
Financial Statements and Notes thereto. Storage USA, Inc. (the "Company") is the
sole general partner in the Operating  Partnership  and is a  self-administered,
self-managed  real estate  investment trust ("REIT").  As discussed in Note 1 to
the Consolidated Financial Statements, SUSA Partnership,  L.P.'s (the "Operating
Partnership")  1994 results of operations are presented from March 24, 1994, the
date the Operating Partnership  commenced operation.  As discussed in Note 11 to
the  Consolidated  Financial  Statements,  the accompanying  combined  financial
statements  for the periods  prior to March 24,  1994,  present only the "carved
out" accounts of Storage USA, Inc. (the "Predecessor") comprised of the combined
assets,  liabilities,  and  operations  of the  Predecessor  preceding  the IPO,
including  11 owned  facilities  and 6  controlled  facilities  and  Storage USA
Management  Corp. The  Predecessor  completed its initial  public  offering (the
"IPO") on March 23,  1994,  forming the Company and the  Operating  Partnership.
References  to the  "Operating  Partnership"  include SUSA  Management,  Inc., a
wholly owned subsidiary.

Due to the  substantial  number of facilities  acquired from the IPO to December
31,  1996,   management   believes  that  it  is  meaningful   and  relevant  in
understanding the present and ongoing operations of the Operating Partnership to
compare   information  using  occupancy  and  per  square  foot  and  pro  forma
information.

The following are definitions of terms used throughout this discussion analyzing
the Operating Partnership's business. Physical Occupancy is defined as the total
net rentable square feet rented as of the date computed divided by the total net
rentable square feet available.  Gross Potential Income is defined as the sum of
all units  available to rent at a facility  multiplied by the market rental rate
applicable to those units as of the date computed. Expected Income is defined as
the sum of the monthly rent being  charged for the rented units at a facility as
of the date  computed.  Economic  Occupancy  is defined as the  Expected  Income
divided by the Gross  Potential  Income.  Rent Per Square Foot is defined as the
annualized  result of dividing  Gross  Potential  Income on the date computed by
total net rentable  square feet  available.  Direct  Property  Operating Cost is
defined as the costs incurred in the operation of a facility, such as utilities,
real estate taxes, and on-site personnel.  Indirect Property  Operations Cost is
defined  as  costs  incurred  in the  management  of  all  facilities,  such  as
accounting  personnel and management level operations  personnel.  Net Operating
Income  ("NOI") is defined  as total  property  revenues  less  Direct  Property
Operating Costs.

Outlook:

Internal Growth Strategy:

The  Operating  Partnership's  internal  growth  strategy is to pursue an active
leasing  policy,  which  includes  aggressively  marketing  available  space and
renewing  existing  leases at higher rents per square foot. The following  table
details the same-store Physical Occupancy and Rent Per Square Foot at the end of
each quarter of 1996 and 1995:
<TABLE>
<CAPTION>
<S> <C>
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
Quarter ended:      Number of         Physical Occupancy    Physical            Rent Per Square    Rent Per       % increase in
                    same-store        1996                  Occupancy 1995      Foot 1996          Square Foot    Rent Per
                    facilities                                                                     1995           Square Foot
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
March 31            98                88%                   87%                 $9.61              $8.93          7.6%
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
June 30             132               90%                   90%                 $9.59              $8.91          7.6%
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
September 30        146               89%                   90%                 $9.60              $8.98          6.9%
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
December 31         153               87%                   88%                 $9.61              $8.94          7.5%
------------------- ----------------- --------------------- ------------------- ------------------ -------------- ---------------
</TABLE>

The Operating  Partnership was able to aggressively increase its Rent Per Square
Foot on facilities  it has owned for at least one year,  while  maintaining  its
Physical Occupancy.  This can be attributed,  in part, to Partnership-wide sales
and  marketing  programs  that are  customized  for each  location  by  facility
managers who have substantial authority and effective incentives.  The Operating
Partnership's policy is to raise rents, both rates to existing customers and its
"street" rates for new customers,  at all of its facilities at least once a year
regardless of the occupancy  level.  This increase  typically takes place in the
Spring, the beginning of the Operating  Partnership's highest rental season. The
Operating  Partnership  increases its street rates throughout the year, based on
facts and  circumstances  at individual  facilities.  The 1% decline in Physical
Occupancy at the end of both the third and fourth quarters  represents less than
one thousand self-storage units and can be attributed, in part, to the Operating
Partnership  increasing rates during 1996 at facilities acquired during the last
six months of 1995.  Historically,  as the Operating Partnership  implements its
rate policies at acquisition  facilities,  existing  tenants paying lower rental
rates may  vacate,  to be  replaced  by  tenants  leasing  under  the  Operating
Partnership's higher rate structure.

The greater than 7% increases in same-store Rent Per Square Foot translated into
1996  total  same-store  revenue  growth  of 7.7%,  or $3.8  million  over  1995
same-store  total  revenues  of  $49.2  million.  Revenues  include  late  fees,
administration  fees, lock and packaging income, and other miscellaneous  income
that account for the fact that total same-store  revenue growth was greater than
same-store Rent Per Square Foot growth.

The Operating  Partnership  anticipates  same-store  revenue growth will slow in
1997, as facilities  the Operating  Partnership  has owned for two or more years
will comprise a larger  percentage of the same-store  pool of facilities  during
1997.  Revenue  growth for a facility  generally  is  greatest in the first year
following  acquisition as the Operating  Partnership  implements its higher base
rate  structure.The  Operating  Partnership  anticipates  generating  same-store
revenue  growth of  approximately  5.5% in 1997  subject to the risks  discussed
above.

External Growth Strategy:

The Operating Partnership continued executing its strategy of acquiring suitably
located,  under  performing  facilities  that offer upside  potential due to low
occupancy rates or non premium  pricing,  and by developing and constructing new
self-storage  facilities  in favorable  markets.  During the year the  Operating
Partnership  invested  $304 million in acquiring 82  facilities  containing  5.4
million square feet. The Operating  Partnership  remains committed to its policy
of acquiring  facilities at projected annual  capitalization rates ("Cap Rates")
of not less  than 10% and  generally  is  acquiring  properties  at Cap Rates of
between 10.0-10.5%. The acquisition facilities continued to realize their upside
potential.  The 96 facilities  the Operating  Partnership  owned at December 31,
1994 generated  returns of 12.3% in 1995, 13.1% in  1996(calculated  by dividing
NOI by the  total  acquisition  costs  of the  facilities),  and  the  Operating
Partnership  is budgeting a return of  approximately  14.1% on the facilities in
1997. In 1997, the Operating  Partnership has budgeted to invest its acquisition
capital  at the same  levels as in the prior  three  years,  seeking  to acquire
between 65 and 75 facilities.  The Operating  Partnership's  acquisitions entail
risks that investments will fail to perform as expected and that judgements with
respect to acquisition  prices and costs of improvements will be inaccurate,  as
well as general real estate investment risks.

In addition  to its  acquisitions  during the year,  the  Operating  Partnership
opened two newly developed facilities in northern Virginia totaling 123 thousand
square feet for a cost of $9 million.  The Operating  Partnership also completed
expansions to five existing  facilities,  adding 129 thousand  square feet.  The
Operating  Partnership's  minimum  internal  rate of  return  on  investment  on
development opportunities is 12.5%. The 1997 budgeted un-leveraged return on the
two facilities  opened during 1996 is 8.8%. In addition to risks associated with
owning and operating  established  facilities,  development  involves additional
risks  relating to delays in  construction  and lease-up and less favorable than
anticipated  lease terms,  all of which could reduce the Company's  return.

The Operating Partnership believes that its external growth strategy is enhanced
by favorable  supply and demand  conditions.  According to industry data,  there
were less than four  hundred  construction  starts in 1996.  Barriers  to entry,
including availability of development capital and the absence in many markets of
appropriate  zoning for  self-storage,  contribute to the  favorable  supply and
demand balance in the business.  Based on Operating  Partnership surveys, 52% of
its customers are first time users. The Operating Partnership believes that this
low market penetration,  along with improving product quality and development of
a more  educated  consumer,  will  continue  to  validate  its  external  growth
strategy.  At December 31, 1996, the Operating  Partnership had $17.9 million of
development  in progress and the Operating  Partnership  had plans to develop 21
new facilities containing 1.7 million square feet. Expansions are planned for 23
existing  facilities.  Of these, 12 new construction  projects and 18 expansions
are underway with total estimated costs of $66.8 million. These 30 projects have
expected  completion  dates ranging from the second  quarter of 1997 through the
first quarter of 1998.


Capital Strategy:

The  Operating  Partnership  expects to finance  its  external  growth  strategy
primarily  through the issuance of debt  securities and  contributions  from the
Company's  issuance of equity  securities.  On February 19, 1997,  the Operating
Partnership and the Company filed a joint shelf registration  statement with the
Securities  and  Exchange  Commission  relating to $450  million of  securities,
including  up to $250  million  of common  stock,  preferred  stock,  depository
shares,  and  warrants  of the  Company  and up to $200  million  of  unsecured,
nonconvertable  senior  debt  securities  of  the  Operating   Partnership.   An
additional $150 million of unsecured,  nonconvertable senior debt securities are
issuable  under  the  Operating   Partnership's   existing  shelf   registration
statement,  permitting the Operating  Partnership and the Company to issue up to
$600 million of securities.

The Operating  Partnership  anticipates  using its lines of credit as an interim
source of acquisition funds,  repaying the credit lines with longer term debt or
contributions  from the Company's equity offerings,  when management  determines
market conditions are favorable.

Results of Operations:
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

In 1996,  the  Operating  Partnership  reported  growth in revenue,  income from
property  operations,  and net income,  respectively,  of $39.3  million,  $20.2
million,  and $15.8 million over the prior period.  These significant  increases
are primarily attributable to the Operating Partnership's  implementation of its
internal and external growth strategies.
 Facility  acquisitions  during 1996, by quarter,  were as follows (in thousands
except number of facilities):
<TABLE>
<CAPTION>
<S> <C>

                                      Number of Facilities             Cost              Net Rentable Square Feet
------------------------------------- --------------------- --------------------------- ----------------------------
                                                                                                                419
    Quarter ended March 31, 1996               6                               $21,960
------------------------------------- --------------------- --------------------------- ----------------------------
                                                                                91,754                        1,666
    Quarter ended June 30, 1996                26
------------------------------------- --------------------- --------------------------- ----------------------------
                                                                                85,588                        1,599
  Quarter ended September 30, 1996             23
------------------------------------- --------------------- --------------------------- ----------------------------
                                                                               104,610                        1,717
  Quarter ended December 31, 1996              27
------------------------------------- --------------------- --------------------------- ----------------------------
                                                                               303,912                        5,401
               Total                           82
------------------------------------- --------------------- --------------------------- ----------------------------
</TABLE>


These acquisitions  added 55 thousand units,  bringing the total square feet and
units of the 242 facilities  owned by the Operating  Partnership at December 31,
1996 to 16.37 million and 160 thousand,  respectively. At December 31, 1996, the
average  occupancy of the 242  facilities was 86% Physical and 79% Economic with
an average  Rent Per Square  Foot of $9.73.  For the 153  comparable  facilities
owned by the Operating  Partnership  since December 31, 1995,  average occupancy
was 87% Physical and 80%  Economic,  compared to 88% Physical and 81% Economic a
year ago. Rent Per Square Foot increased 7.5%, rising to $9.61 from $8.94 a year
ago. Same store  revenues were $52.96  million in 1996, a 7.7% increase over the
$49.19  million in 1995.  The  majority  of this  increase  is  attributable  to
increases in rental rates as occupancy remains fairly consistent.

Management income in 1996 was $701 thousand, a decline of $371 thousand from the
$1.07  million  reported in 1995,  as the  Operating  Partnership  purchased  16
self-storage  facilities  during  1996 that had been  managed  by the  Operating
Partnership during 1995.

Other  income grew to $1.52  million in 1996,  or $1.04  million,  from the $480
thousand  reported in 1995.  The increase is primarily  caused by $365  thousand
increase  in the sale of locks and boxes and a $222 thousand  increase  in truck
rental and billboard/cell tower income.

As a percentage of total revenue, rental and management income declined to 98.6%
of total revenue from 99.3% in 1995.  Other income grew to 1.4% of total revenue
from 0.7% in 1995.

Cost of property operations and maintenance was $28.03 million or 26.1% of total
revenue in 1996.  In 1995,  the  expense was $18.74  million,  or 27.2% of total
revenues.  The decline as a  percentage  of total  revenues is explained by same
store revenue growth  out-pacing the expense  growth,  combined with the revenue
impact of over $100 million of late fourth quarter  acquisitions.  The Operating
Partnership   historically   benefits  in  the  first  month  or  two  following
acquisitions  as the revenues  precede the costs of  implementing  the Operating
Partnership's  management  and  operational  strategy.  During  the first  three
quarters  of  1996,  expenses  averaged  26.5%  of  revenues,   a  more  typical
percentage.  Same-store  expenses were $11.82 million,  representing 6.4% growth
over the $11.12  million of expense in 1995.  The expense growth on a same-store
basis was caused by increased repair and maintenance  charges and  miscellaneous
expenses, including postage, printing, and trash removal.

Tax expense  was $8.9  million,  or 8.3% of  revenues in 1996,  compared to $4.9
million, or 7.2% of revenues in 1995. The growth in taxes is caused by increased
assessments  on  properties  acquired  during late 1994 and 1995.  The Operating
Partnership expects the expense to remain at a consistent level in 1997.

Direct Property  Operating Cost was 30.4% of revenues in 1996, a slight increase
from the 29.9% in 1995. This increase is primarily attributable to the increased
property tax expense in 1996.

General  and  administrative  expense  ("G&A")  was  $4.12  million,  or 3.8% of
revenues in 1996, as compared to $2.57 million or 3.8% of revenues in 1995.  The
growth in the  Acquisitions,  Administration,  and the  Development  departments
contributed to the majority of the dollar growth in the G&A expense.

The increase in depreciation and amortization expense to $12.6 million from $8.6
million  reflects  the  Operating  Partnership's  acquisition  of $304  and $220
million of facilities in 1996 and 1995, respectively.

Interest  expense was $8.2 million in 1996, an increase of $5.2 million over the
$3.0 million  reported in 1995.  Interest  expense in 1996  represents  weighted
average borrowings of $92.2 million under the Operating  Partnership's  lines of
credit at a weighted average interest rate of 6.99% as compared to 1995 weighted
average borrowings and interest rate of $47.2 million and 6.4%, respectively. In
addition,  on November 4, 1996, the Operating Partnership issued $100 million of
7.125% notes due November 1, 2003 and during the year assumed  $37.3  million of
mortgages on facilities acquired.

Interest  income grew to $687  thousand,  or 0.6% of total  revenue in 1996,  an
increase  of $521  thousand,  or 0.2% of total  revenue in 1995.  1996  interest
income  represents   primarily   earnings  on  overnight  deposits  and  amounts
outstanding  under the 1995  Employee  Stock  Purchase  and Loan  Plan.

Gain on investment of $288 thousand  represents a gain on the disposition of the
Operating Partnership's  investment in a Jacksonville,  Florida storage facility
that was exchanged for cash and two facilities located in Oklahoma.

Year Ended  December  31,  1995  Compared to Period  March 24, 1994  (inception)
through December 31, 1994

In 1995,  the  Operating  Partnership  reported  growth in revenue,  income from
property  operations,  and net income,  respectively,  of $42.2  million,  $27.3
million, and $18.2 million over the prior period.  Compared to pro forma results
for 1994, the Operating  Partnership's revenues grew $21.0 million,  income from
property  operations  increased  $12.2 million and net income rose $5.9 million.
These  significant  increases are primarily  attributable  to both the Operating
Partnership's   aggressive  acquisition  strategy  and  aggressive  rental  rate
increases.
Facility  acquisitions  during 1995, by quarter,  were as follows (in thousands,
except number of facilities):
<TABLE>
<CAPTION>
<S> <C>

                                      Number of Facilities             Cost              Net Rentable Square Feet
------------------------------------- --------------------- --------------------------- ----------------------------

    Quarter ended March 31, 1995               2                                $7,080                          180
------------------------------------- --------------------- --------------------------- ----------------------------

    Quarter ended June 30, 1995                34                              119,788                        2,248
------------------------------------- --------------------- --------------------------- ----------------------------

  Quarter ended September 30, 1995             14                               56,682                        1,110
------------------------------------- --------------------- --------------------------- ----------------------------

  Quarter ended December 31, 1995              13                               36,450                          890
------------------------------------- --------------------- --------------------------- ----------------------------

               Total                           63                             $220,000                        4,428
------------------------------------- --------------------- --------------------------- ----------------------------
</TABLE>

These acquisitions  added 44 thousand units,  bringing the total square feet and
units of the 159 facilities  owned by the Operating  Partnership at December 31,
1995 to 10.72  million  and 105  thousand,  respectively.  For the year,  the 96
facilities   owned  on  December  31,  1994,   provided  74%  of  the  Operating
Partnership's  rental income. These facilities' rental income grew 9.1% over pro
forma  1994  results.  Approximately  8% of this  growth  was  provided  by rate
increases.  At December 31, 1995,  the physical and economic  occupancy and rent
per square foot on these facilities was 88%, 81%, and $9.24,  respectively.  The
Operating  Partnership's  portfolio as a whole had average occupancy at December
31, 1995 of 88% physical and 81% economic,  with an average rent per square foot
of $8.93.

Management  income  increased  $365  thousand  over the prior  Period,  and $216
thousand over the 1994 pro forma results.  The pro forma  variance  reflects the
addition  of  three  managed  facilities  and  management  during  the  year  of
facilities that were subsequently purchased by the Operating Partnership.

Other Income,  which consists  primarily of sales of lock and packaging products
and truck rentals,  increased 4% over the prior Period.  This increase  reflects
primarily the growth in the number of facilities owned.

Cost of property  operations  and  maintenance  was 27.2% of revenue for 1995 as
compared to 26.5% for the prior Period.  This increase  reflects the addition of
Indirect Property  Operations Cost to support the level of growth experienced in
1995 and planned in 1996.

Taxes were 7.2% of revenue for 1995 as compared to 6.5% for the prior Period and
6.8% for the pro forma results.  This growth as a percentage of revenue reflects
the impact of  reassessments  on the properties  purchased during 1994 and 1995.
The majority of the increase is  attributable to  reassessments  on acquisitions
with the  remainder  attributable  to increased  tax rates or  reassessments  on
properties  owned for a full year.

Direct  Property  Operating  Cost was  29.9% of  rental  income,  both on the 96
properties owned at December 31, 1994 and the portfolio as a whole. The property
level margins remained consistent from 1994 to 1995.

G&A expense  declined as a percentage  of total revenue as compared to the prior
Period and was  consistent as compared to the 1994 pro forma  results.  1995 G&A
expense was $2.6  million,  or 3.8% of total revenue as compared to $1.4 million
or 5.3% in the  prior  Period.  G&A was  $762  thousand  for the  quarter  ended
December 31, 1995 and the Operating  Partnership  expects that the gross expense
will  grow  in  1996  as  the  Operating  Partnership  expands  its  accounting,
management  information systems, and human resource  departments,  in connection
with its ongoing growth strategy.



<PAGE>



The increase in depreciation  and amortization to $8.6 million from $2.9 million
in the prior Period and $5.7 million on a pro forma basis reflects the Operating
Partnership's  acquisition  of $220 million of  facilities in 1995. In addition,
the Operating  Partnership  amortized  $903 thousand of the loan fees related to
the Operating  Partnership's  short- term borrowings in 1995. As of December 31,
1995, the Operating  Partnership has unamortized loan fees of approximately $230
thousand.

Interest  expense was $3.0  million in 1995, a $1.6  million  increase  over the
prior Period.  1995 interest expense  represents  weighted average borrowings of
$47.2 million under the  Operating  Partnership's  lines of credit at a weighted
average interest rate of 6.4%.

Interest income in 1995 was $166 thousand, as compared to $658 thousand in 1994.
1995  interest  income  represents  earnings on  overnight  deposits and amounts
outstanding  under the 1995  Employee  Stock  Purchase and Loan Plan,  while the
prior Period  reflected  the  temporary  investment of a portion of the proceeds
from the Company's two common stock offerings during the Period.

Year Ended December 31, 1995 results of the Operating  Partnership,  as compared
to the  combined  (historical)  year  ended  December  31,  1994  results of the
Predecessor and the Operating Partnership:

Rental Income  increased  $39.4 million  (146%)  primarily as a result of rental
rate increases, and an increase in the number of facilities owned as a result of
the  Operating  Partnership  acquiring 63  facilities  during  fiscal year 1995.
Management  income increased $.18 million (20%) reflecting the addition of three
managed  facilities  and  management  during  the year of  facilities  that were
subsequently purchased by the Operating Partnership.

Cost of property operations and maintenance  increased $10.8 million (142%) as a
result of an increase in the number of facilities owned during fiscal year 1995.
Cost of property  operations  and  maintenance  was 27.2% of revenue for 1995 as
compared to 26.9% for the combined 1994 period.

Real  estate  taxes  increased  $3.1  million  (166%) as a result of  additional
expenses due to  acquisitions  of 63 facilities  during fiscal year 1995 and the
impact of property  reassessments.  Real  estate  taxes were 7.2% of revenue for
1995 as compared to 6.5% for the combined 1994 period.

G&A expense  increased  $.9  million  (51%) as a result of  additional  expenses
incurred to support the Operating Partnership's  aggressive growth strategy. G&A
expense was 3.8% of revenue for 1995 as compared to 6.0% for the  combined  1994
period. This decline as a percentage of revenue reflects the overall increase in
revenue.

Depreciation and amortization  expense  increased $5.5 million (175%) due to the
acquisition  of $220  million in  facilities  in 1995,  as well as the impact of
recognizing a full year of depreciation on the facilities  acquired in the prior
period.

Interest expense  increased $.4 million  reflecting the changes in the Operating
Partnership's debt structure between the periods.

Liquidity and Capital Resources

Capital Resources

The Operating  Partnership funds its capital requirements  primarily through the
issuance  of debt  securities  and the  contributions  from the  Company  of the
proceeds from the issuance of equity  securities.  On March 1, 1996, the Company
entered into a series of  agreements  providing  for a strategic  alliance  with
Security Capital U.S. Realty ("US Realty").  Pursuant to the agreement,  subject
to the terms and conditions  thereof,  US Realty  purchased  7,028,754 shares of
common stock at $31.30 per share in three fundings, and contributed the proceeds
to the Operating  Partnership.  The initial purchase of 1,948,882 shares for $61
million  occurred on March 19, 1996. The second funding of 1,916,933  shares for
$60 million took place on July 8, 1996.  The final  funding of 3,162,939  shares
for $99 million took place on September  30, 1996.  As of December 31, 1996,  US
Realty owned  approximately  34.6% of the outstanding  shares of common stock of
the Company. On November 4, 1996, the Operating  Partnership issued $100 million
of 7.125% Notes due November 1, 2003. The Notes are unsecured obligations of the
Operating  Partnership,  and may be  redeemed  at any time at the  option of the
Operating  Partnership,  subject to certain terms and conditions.  To fund short
term capital needs, the Operating Partnership had in place at December 31, 1996,
two lines of credit with total  borrowing  capacity of $105  million.  The lines
bear interest at various spreads over a base rate,  depending upon the Operating
Partnership's  debt service  coverage.  Amounts  outstanding  under the lines of
credit bore  interest  at a weighted  average  rate of 6.78% in  February  1997.
During 1996 the  Operating  Partnership  had net  repayments  under its lines of
credit of $54.9  million.  At December 31, 1996, the Operating  Partnership  had
$52.7 million of borrowings outstanding on its lines of credit.

The Operating  Partnership also assumed $37.3 million of mortgages on facilities
acquired during 1996. At December 31, 1996, the Operating  Partnership had $36.7
million of fixed rate mortgages with a weighted  average interest rate of 10.14%
and $9.1 million of variable rate  mortgages  with a weighted  average  interest
rate of 9.2%. These mortgages mature at various dates through 2021.

During  1996  the  Operating   Partnership   issued  901,374  units  of  limited
partnership  interest in the  Operating  Partnership  ("Units")  valued at $30.7
million in connection with the acquisition of facilities.  At December 31, 1996,
the Operating Partnership had 1,903,797 Operating Partnership Units outstanding.
Certain Operating  Partnership Units are redeemable for an amount equal to their
fair  market  value  ($3.1  million,  based  upon a price per Unit of $37.625 at
December 31, 1996)  payable by the Operating  Partnership  either in cash or (at
the Operating  Partnership's option, based upon a determination by the Company's
Board  of  Directors   that  the  Operating   Partnership's   anticipated   cash
requirements and anticipated  cash flow make a lump sum payment  imprudent) by a
promissory note payable in quarterly  installments  over two years with interest
at the prime rate. Units held by other Limited  Partners are redeemable,  at the
option of such Limited  Partners,  beginning on the first  anniversary  of their
issuance,  for amounts equal to the then fair market value of their Units ($35.5
million, based upon a price per Unit of $37.625 at December 31, 1996) payable by
the  Operating   Partnership  in  cash  or,  at  the  option  of  the  Operating
Partnership,  in shares of the  Company's  Common Stock at the initial  exchange
ratio of one share for each Unit. It is  anticipated  that a source of funds for
any such cash  redemption will be retained cash flow or proceeds from the future
sale  of  securities  of the  Operating  Partnership  or the  Company  or  other
Operating  Partnership  or  Company  indebtedness.  The  Company  has  agreed to
register  under the  Securities  Act of 1933 any shares of the Company's  common
stock issued upon redemption of Units.

The Operating  Partnership's  investing  activities  consisted  primarily of the
acquisition of 82 self-storage  facilities for approximately $304 million, along
with new  development  and expansion of existing  facilities.  During 1996,  the
Operating  Partnership  opened  two newly  constructed  facilities  in  northern
Virginia  totaling  123  thousand  square feet for a cost of $9.3  million.  The
Operating  Partnership  also  completed five  expansions to existing  facilities
totaling 129 thousand square feet. The Operating Partnership generated cash flow
from  operating  activities  of $ 60.04  million in 1996,  an  increase of $22.3
million  over 1995,  primarily as a result of the  significant  expansion of the
Operating Partnership's portfolio as discussed under "Results of Operations".

On February 19, 1997,  the Company and the Operating  Partnership  filed a shelf
registration  statement  relating to $450 million of  securities,  as more fully
discussed under "Outlook- Capital Strategy". In March , 1997, the Company issued
2.5 million  shares of its common stock for an aggregate  purchase  price of $90
million. The Company contributed the proceeds from the offering to the Operating
Partnership in exchange for additional units of partnership interest,  which the
Operating  Partnership  used to repay debt incurred under its revolving lines of
credit to finance the  acquisition of self-storage  facilities,  and for working
capital.

The Company  anticipates,  subject to  prevailing  market  conditions  and other
business  economic factors,  issuing preferred stock or debt securities  through
the  Operating  Partnership  to  finance  its  liquidity  requirements  for  the
remainder of 1997. In anticipation of a debt offering, the Operating Partnership
entered into a forward starting interest rate swap with a notional amount of $75
million,  which had the  effect of fixing  the  seven-year  U.S.  Treasury  rate
starting May 1, 1997 at 6.87%.  At December 31, 1996, the Operating  Partnership
had an unrealized loss on this derivative instrument of $1.1 million.

The proceeds from any debt or equity  offering by the Operating  Partnership  or
the  Company  would be used to repay  borrowings  under the  Company's  lines of
credit and for general purposes.  As a general matter, the Operating Partnership
anticipates  utilizing  its  lines of credit  as an  interim  source of funds to
acquire and develop self- storage  facilities and repaying the credit lines with
longer- term debt or equity when management  determines  that market  conditions
are favorable.  The Operating  Partnership  believes that the combination of the
Company's common stock issuance,  and debt or equity  issuances  pursuant to the
shelf  registration  statements,  in  addition  to  borrowings  under its credit
facilities  and  issuances  of Units,  as  described  above,  will  provide  the
Operating Partnership with necessary liquidity and capital resources to meet the
requirements of its operating strategies in 1997.

The  Operating  Partnership  expects to incur  approximately  $1.2  million  for
scheduled   maintenance   and  repairs   during  the  next  twelve   months  and
approximately  $7.2 million to conform  facilities  acquired during 1996,  1995,
and 1994 to Operating Partnership standards.

The  Operating  Partnership  at  December  31,  1996,  had  Partners  Capital of
approximately  $632  million,  a debt- to- partners'  capital ratio of 31.4%,  a
debt- to -total  assets ratio of 23.5%,  and a debt service  coverage  ration of
7:1.  The debt policy of the Company  and the  Partnership,  which is subject to
change at the discretion of the Company's Board of Directors,  is to limit total
indebtedness  to the lesser of 50% of total  assets at cost or that  amount that
will sustain a minimum debt service coverage ratio of 3:1.

Funds from Operations ("FFO")

The Operating  Partnership believes FFO should be considered in conjunction with
net income and cash flows to facilitate a clear  understanding  of its operating
results.  FFO is defined as net income,  computed in accordance  with  generally
accepted  accounting  principles  ("GAAP"),  excluding  gains (losses) from debt
restructuring and sales of property,  plus  depreciation and  amortization,  and
after adjustments for unconsolidated partnerships and joint ventures. FFO should
not be considered as an  alternative to net income as a measure of the Operating
Partnership's  financial  performance  or as an  alternative  to cash flows from
operating  activities  as a measure of liquidity.  FFO does not  represent  cash
generated  from  operating  activities  in  accordance  with  GAAP  and  is  not
necessarily  indicative of cash available to fund cash needs.  Effective January
1, 1996, the National  Association of Real Estate  Investment Trusts amended its
definition  of FFO. The Operating  Partnership, presented its 1996 FFO under the
amended   method  and  restated   prior  years  FFO.  As  such,   the  Operating
Partnership's  FFO may not be comparable to similarly  titled  measures of other
REITs who may have not restated  prior years FFO under the amended  method.  The
pro forma FFO was prepared as if the IPO and the related formation transactions,
including the acquisition of 26 facilities, had occurred on January 1, 1994.

The following table  illustrates  the components of the Operating  Partnership's
FFO for the years ended  December 31, 1996 and 1995,  and pro forma for the year
ended December 31, 1994:



<PAGE>

<TABLE>
<CAPTION>
<S> <C>
------------------------------------------------- --------------------- ---------------------- ----------------------
(Amounts in thousands)                            1996 Historical       1995 Historical        1994 Pro Forma
------------------------------------------------- --------------------- ---------------------- ----------------------

Net Income                                                     $46,211                $30,420                $14,531

Depreciation of real property                                   11,865                  6,996                  2,984

Amortization of non compete                                         83                    252                    167

Amortization of lease guarantees                                    70                    385                    186


Consolidated FFO                                               $58,229                $38,053                $17,868


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

The  Operating  Partnership  had weighted  average units  outstanding  of 22,108
and16,294,  for the years ended December 31, 1996, and 1995,  respectively.  The
Operating  Partnership  distributed  $2.25  and $2.04 per unit in 1996 and 1995,
respectively.

The  Company,  as a qualified  REIT,  is required to  distribute  a  substantial
portion of its net income as dividends to its shareholders. The Company's payout
ratio was 85.9% and 87.6% for 1996 and 1995,  respectively.  It is the intent of
the Operating  Partnership that cash distributions will be made each fiscal year
to enable the Company to meet it's  distribution  requirements for qualification
as a REIT.  While the  Operating  Partnership's  goal is to generate  and retain
sufficient cash flow to meet its operating,  capital and debt service needs, its
distribution  requirements may require the Operating  Partnership to utilize its
bank  lines of  credit  and other  sources  of  liquidity  to  finance  property
acquisitions and development, and major capital improvements.

The Operating  Partnership believes that its liquidity and capital resources are
adequate to meet its cash  requirements  for the next twelve  months.  Portfolio
expansion  and  repayment of principal  on  Operating  Partnership  indebtedness
represent the Operating  Partnership's primary long-term liquidity requirements.
The  Operating  Partnership  does not expect to generate  sufficient  funds from
operating  cash flow to meet such  long-  term  liquidity  needs and  intends to
finance them primarily  through  borrowings  under its lines of credit,  debt or
proceeds contributed from Company equity offerings, or additional borrowings for
such purpose.

Competition

The Operating  Partnership  monitors the development of self- storage facilities
in its markets.  The Operating  Partnership has identified four markets in which
potential  overbuilding  may be occurring.  In two of these markets  (Dallas and
Albuquerque)  the  Operating  Partnership  may be  required to reduce by 50% its
normal yearly rental rate increase,  and in two markets (Atlanta and Las Vegas),
the  Operating  Partnership  may  experience  a minimal  reduction  in  Physical
Occupancy during 1997. As a result of the geographic  diversity of the Operating
Partnership's portfolio, the Operating Partnership does not expect the potential
for excess supply in these markets to have a significant impact on its financial
condition or results of operations.

Inflation

The Operating Partnership does not believe that inflation has had or will have a
direct  effect  on  its  operations.  Substantially  all of  the  leases  at the
facilities  allow  for  monthly  rent  increases  which  provide  the  Operating
Partnership  with the opportunity to achieve  increases in rental income as each
lease matures.

Seasonality

The Operating Partnership's revenues typically have been higher in the third and
fourth quarter primarily because the Operating  Partnership increases its rental
rates on most of its  storage  units at the  beginning  of May,  and to a lesser
extent because  self-storage  facilities  tend to experience  greater  occupancy
during  the late  spring,  summer,  and early  fall  months  due to the  greater
incidence of moves during those periods. The Operating Partnership believes that
its tenant  mix,  rental  structure,  and  expense  structure  provide  adequate
protection  against  undue  fluctuations  in cash flows and net revenues  during
off-peak seasons. Thus, the Operating Partnership does not expect seasonality to
materially affect distributions to shareholders.

Recent Accounting Developments

In  February of 1997,  Statement  of  Financial  Accounting  Standards  No. 128,
"Earnings  per Share" was  issued.  The  statement  establishes  standards  for
computing  and  presenting  earnings  per share and is effective  for  financial
statements  issued for periods  ending after  December 15, 1997.  The  Operating
Partnership  has yet to assess  the  impact  of this standard  on the  financial
statements.

Qualification as a REIT

The  Company  intends to  operate so as to qualify as a REIT under the  Internal
Revenue Code (the "Code").  Qualification  as a REIT involves the application of
highly  technical and complex rules for which there are only limited judicial or
administrative interpretations.  The complexity of these rules is greater in the
case of a REIT that holds its assets in partnership form. Furthermore, there are
no controlling authorities that deal specifically with many tax issues affecting
a REIT that  operates  self-storage  facilities.  The  determination  of various
factual matters and  circumstances not entirely within the Company's control may
affect  its  ability  to  qualify  as a  REIT.  In  addition,  new  regulations,
administrative  interpretations  or court  decisions  could  have a  substantial
adverse  effect  with  respect to the  qualifications  as a REIT or the  federal
income tax  consequences of such  qualification.  If the Company were to fail to
qualify  as a REIT in any  taxable  year,  the  Company  would not be  allowed a
deduction for  distributions to shareholders in computing its taxable income and
would be subject to federal income tax  (including  any  applicable  alternative
minimum tax) on its taxable income at regular  corporate rates.  Unless entitled
to relief under certain Code provisions,  the Company also would be disqualified
from  treatment as a REIT for the four taxable  years  following the year during
which  qualification was lost. As a result,  the cash available for distribution
to shareholders  would be reduced for each of the years  involved.  Although the
Company  currently  intends to operate in a manner designed to qualify as a REIT
it is possible that future economic,  market, legal, tax or other considerations
may  cause  the  Board of  Directors,  with the  consent  of a  majority  of the
shareholders, to revoke the REIT election.



<PAGE>
                             SUSA Partnership, L.P.
                           Consolidated Balance Sheets
                    (Amounts in thousands, except share data)
<TABLE>
<CAPTION>
<S> <C>
                                                                                   as of                       as of
                                                                       December 31, 1996           December 31, 1995
                                                               --------------------------    ------------------------

Assets

Investments in storage facilities, at cost:
Land                                                                            $235,139                    $139,603
Buildings and equipment                                                          620,503                     369,694
                                                               --------------------------    ------------------------
                                                                                 855,642                     509,297

Accumulated depreciation                                                         (26,573)                    (14,561)
                                                               --------------------------    ------------------------
                                                                                 829,069                     494,736

Cash & cash equivalents                                                            1,349                       2,802
Other assets                                                                      14,889                      11,987
                                                               --------------------------    ------------------------

     Total assets                                                               $845,307                    $509,525
                                                               ==========================    ========================

Liabilities & shareholders' equity

Line of credit borrowings                                                        $52,730                    $107,605
Mortgage notes payable                                                            45,724                       6,670
Notes payable                                                                    100,000                           -
Accounts payable & accrued expenses                                                7,641                       5,910
Rents received in advance                                                          5,640                       3,680
Minority interest                                                                  1,592                         524
                                                               --------------------------    ------------------------

     Total liabilities                                                           213,327                     124,389
                                                               --------------------------    ------------------------

Commitments and contingencies

Partners' Capital:
General partnership units                                                                                    364,947
 24,723,027 and 17,562,363
 outstanding                                                                     585,419
Limited partnership units, 1,903,797
   and 1,025,423 outstanding                                                      56,814                      26,916
Notes receivable - employees                                                     (10,253)                     (6,727)
                                                               --------------------------    ------------------------

     Total partners' capital                                                     631,980                     385,136
                                                               --------------------------    ------------------------

     Total liabilities & partners' equity                                       $845,307                    $509,525
                                                               ==========================    ========================
</TABLE>

                 See notes to consolidated financial statements

<PAGE>
              SUSA Partnership, L.P. (the "Operating Partnership")
                                       and
                      Storage USA, Inc.(the "Predecessor")
                      Consolidated Statements of Operations

                  (amounts in thousands, except per share data)
<TABLE>
<CAPTION>
<S> <C>

                                                                                                                  PREDECESSOR
                                                                                  For the period March 24,  For the period January
                                                   Year ended         Year ended  1994(inception) through      1,1994 through
                                            December 31, 1996  December 31, 1995   December 31, 1994           March 23, 1994
                                              ---------------  -----------------  -----------------------   ----------------------


Property Revenues:
Rental income                                       $105,091            $66,455                  $24,667                   $2,358
Management income                                        701              1,072                      707                      188
Other income                                           1,517                480                      460                       52
                                              ---------------  -----------------  -----------------------   ----------------------

Total property revenues                              107,309             68,007                   25,834                    2,598
                                              ---------------  -----------------  -----------------------   ----------------------

Property Expenses:
Cost of property operations & maintenance             28,029             18,471                    6,851                      792
Taxes                                                  8,903              4,900                    1,686                      153
General & administrative                               4,122              2,568                    1,374                      325
Depreciation & amortization                           12,618              8,586                    2,882                      244
                                              ---------------  -----------------  -----------------------   ----------------------

Total property expenses                               53,672             34,525                   12,793                    1,514
                                              ---------------  -----------------  -----------------------   ----------------------

Income from property operations                       53,637             33,482                   13,041                    1,084
                                              ---------------  -----------------  -----------------------   ----------------------

Other income (expense):
Interest expense                                      (8,244)            (3,004)                  (1,404)                  (1,195)
Interest income                                          687                166                      658                  -------
                                              ---------------  -----------------  -----------------------   ----------------------

Income (loss) before minority interest
and gain on investment                                46,080             30,644                   12,295                     (111)

Gain on Investment                                       288                  0
                                              ---------------  -----------------  -----------------------   ----------------------

Income (loss) before minority interest                46,368             30,644                   12,295                     (111)

Minority interest                                       (157)              (224)                    (158)                     (54)
                                              ---------------  -----------------  -----------------------   ----------------------

Net income (loss)                                    $46,211            $30,420                  $12,137                    ($165)
                                              ===============  =================  =======================   ======================


Net income per unit                                    $2.09              $1.87                    $1.28
                                              ===============  =================  =======================

Weighted average units outstanding                    22,108             16,294                    9,467
                                              ===============  =================  =======================
</TABLE>


                 See notes to consolidated financial statements
<PAGE>
              SUSA Partnership, L.P. (the "Operating Partnership")
                                       and
                      Storage USA, Inc.(the "Predecessor")
                      Consolidated Statements of Cash Flows

                             (Amounts in thousands)
<TABLE>
<CAPTION>
<S> <C>


                                                                         Year ended             Year ended
                                                                  December 31, 1996      December 31, 1995
                                                                 ------------------     ------------------

Operating Activities:

Net Income                                                                 $46,211                $30,420

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

     Depreciation and amortization                                          12,618                  8,586
     Minority interest                                                         157                    224
     Gain on investment                                                       (288)
     Changes in assets and liabilities:
          Other assets                                                      (2,631)                (4,009)
          Other liabilities                                                  3,691                  2,554
                                                                 ------------------     ------------------
Net  cash provided by operating activities:                                 59,758                 37,775
                                                                 ==================     ==================

Investing Activities:
Acquisition and improvements of storage facilities                        (273,043)              (212,326)
Development of storage facilities                                           (3,837)                (4,842)
                                                                 ------------------     ------------------
Net cash used in investing activities                                     (276,880)              (217,168)
                                                                 ==================     ==================

Financing Activities:
Net borrowings (repayments) under line of credit                           (54,875)               103,605
Mortgage principal payments                                                   (298)                   (79)
Mortgage principal borrowings                                                2,063                  2,376
Increase in payable to affiliates                                                -                      -
Distributions to general partner                                           (47,934)               (33,414)
General partner contributions                                              220,721                108,169
Proceeds from issuance of notes payable                                     99,140                      -
Distribution to limited partners                                            (2,900)                (1,483)
Distribution to minority interests                                            (248)                  (257)
                                                                 ------------------     ------------------
Net cash provided by financing activities                                  215,669                178,917
                                                                 ==================     ==================

Net increase (decrease) in cash and equivalents                             (1,453)                  (476)
Cash and equivalents, beginning of period                                    2,802                  3,278
                                                                 ------------------     ------------------
Cash and equivalents, end of period                                         $1,349                 $2,802
                                                                 ==================     ==================

Supplemental schedule of non-cash activities:
General partnership units issued in exchange for notes receivable           $3,541                 $6,727
Mortgages assumed on storage facilities acquired                           $37,289                      -
Land contributed for minority interest                                      $1,162
Exchange of Operating Partnership units for common shares                     $613
Storage facilities acquired in exchange for Limited
  Partnership Units                                                        $30,726                $17,978
                                                                 ==================     ==================
<CAPTION>


                                                                                                       PREDECESSOR
                                                                  For the period March 24,  For the period January
                                                                   1994(inception) through          1,1994 through
                                                                         December 31, 1994          March 23, 1994
                                                                  ------------------------  ----------------------

Operating Activities:

Net Income                                                                        $12,137                   ($165)

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

     Depreciation and amortization                                                  2,882                     244
     Minority interest                                                                158                       -
     Gain on investment
     Changes in assets and liabilities:
          Other assets                                                             (4,385)                   (809)
          Other liabilities                                                         7,036                     393
                                                                  ------------------------  ----------------------
Net  cash provided by (used in) operating activities:                              17,828                    (337)
                                                                  ========================  ======================

Investing Activities:
Acquisition and improvements of storage facilities                               (264,561)                  -----
Development of storage facilities                                                    (327)                  -----
                                                                  ------------------------  ----------------------
Net cash used in investing activities                                            (264,888)                      0
                                                                  ========================  ======================

Financing Activities:
Net borrowings (repayments) under line of credit                                    4,000                     450
Mortgage principal payments                                                           (40)                    (44)
Mortgage principal borrowings                                                       4,413                       -
Increase in payable to affiliates                                                       -                     178
Distributions to general partner                                                  (13,070)                   (397)
General partner contributions                                                     255,483                       -
Proceeds from issuance of notes payable                                                 -                       -
Distribution to limited partners                                                     (271)
Distribution to minority interests                                                   (177)                      -
                                                                  ------------------------  ----------------------
Net cash provided by financing activities                                         250,338                     187
                                                                  ========================  ======================

Net increase (decrease) in cash and equivalents                                     3,278                    (150)
Cash and equivalents, beginning of period                                            ----                     150
                                                                  ------------------------  ----------------------
Cash and equivalents, end of period                                                $3,278                      $0
                                                                  ========================  ======================

Supplemental schedule of non-cash activities:
General partnership units issued in exchange for notes receivable                       -
Mortgages assumed on storage facilities acquired
Land contributed for minority interest
Exchange of Operating Partnership units for common shares
Storage facilities acquired in exchange for Limited                                     -
  Partnership Units                                                                $9,611
                                                                  ========================



</TABLE>


                 See notes to consolidated financial statements

<PAGE>
                             SUSA PARTNERSHIP, L.P.

                             CONSOLIDATED STATEMENTS
                              OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
<S> <C>


                                                  General      Limited       Notes         Total
                                                  Partnership  Partnership   Receivable-   Partners'
                                                  Capital      Capital       Employees     Capital
                                                  ---------------------------------------------------
                                                                 (amounts in thousands)

Initial capital contribution at March 24, 1994       $109,969                               $109,969

Contribution of self-storage facilities in
exchange for units                                                    9,611                    9,611

Capital contribution                                  145,514                                145,514

Net income                                             11,927           210                   12,137

Distributions                                         (13,070)         (271)                 (13,341)
                                                  ---------------------------------------------------

Balance at December 31, 1994                          254,340         9,550                  263,890
                                                  ===================================================


Capital contribution                                  114,896                                114,896

Contribution of self-storage facilities in
exchange for units                                                   17,554                   17,554

Issuance of units to employees in
exchange for notes receivable                                                      (6,727)    (6,727)

Net income                                             29,125         1,295                   30,420

Distributions                                         (33,414)       (1,483)                 (34,897)
                                                  ---------------------------------------------------

Balance at December 31, 1995                          364,947        26,916        (6,727)   385,136
                                                  ===================================================


Capital contribution                                  224,880                                224,880

Contribution of self-storage facilities in
exchange for units                                                   30,113                   30,113

Issuance of units to employees in
exchange for notes receivable                                                      (3,526)    (3,526)

Net income                                             43,526         2,685                   46,211

Distributions                                         (47,934)       (2,900)                 (50,834)
                                                  ---------------------------------------------------

Balance at December 31, 1996                          585,419        56,814       (10,253)   631,980
                                                  ===================================================
</TABLE>

                          See notes to consolidated financial statements.

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)

                                     NOTE 1
                                  ORGANIZATION

SUSA Partnership,  L.P. (the "Operating  Partnership") which commenced operation
on March 23, 1994, is engaged in owning, developing,  constructing and operating
self-storage  facilities  throughout the United  States.  Storage USA, Inc. (the
"Predecessor" See Note 13), a Tennessee corporation,  was formed in 1985 to own,
develop,  construct,  and operate self-storage  facilities throughout the United
States. On March 23, 1994, the Predecessor  completed an initial public offering
(the  "IPO") of  6,325,000  shares of common  stock at $21.75 per share  forming
Storage USA, Inc.  (the  "Company"),  the sole general  partner in the Operating
Partnership.  The Company is a  self-administered  and self-managed  real estate
investment trust ("REIT).

The  results  for the period  from  January 1, 1994  through  March 23, 1994 are
presented  for  the  Predecessor  and  are  labeled  as  such  on the  financial
statements related to predecessor activity.

On March 23, 1994, the Company  contributed  substantially all of its net assets
of $109,969 to the Operating  Partnership in exchange for an approximately 98.9%
general  partnership  interest  in  the  Operating  Partnership.  The  Operating
Partnership used the  contribution  from the Company to acquires 26 self-storage
facilities from unrelated third parties, to acquire the outstanding  partnership
interest in five controlled facilities, and for working capital.

In addition,  the Operating  Partnership  formed SUSA  Management,  Inc.  ("SUSA
Management"),  to provide  self-storage  management to third parties and certain
ancillary services.  The Operating Partnership owns 99% of the economic interest
of SUSA Management.


                                     NOTE 2
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                              Basis of Presentation

The  consolidated  financial  statements  include the accounts of the  Operating
Partnership and SUSA Management. All intercompany balances and transactions have
been  eliminated.  The  financial  statements  reflect  the  segregation  of the
operating  activities  for  the  periods  presented  related  to  the  Operating
Partnership  and  the  Predecessor,  which  has  been  accounted  for on a basis
consistent with the Operating Partnership except for the items noted in Note 13.


             Use of Estimates in Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets,  liabilities,  revenues and expenses and
disclosure of contingent  assets and  liabilities.  Actual  results could differ
from those estimates.

                              Federal Income Taxes

No  provision  has been made for income taxes in the  accompanying  consolidated
financial  statements  since such taxes, if any, are the  responsibility  of the
individual partners.

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                            Cash and Cash Equivalents

The Operating Partnership considers all highly liquid debt instruments purchased
with maturity of three months or less to be cash equivalents.


                               Revenue Recognition

Rental  income and  management  income is  recorded  when due from  tenants  and
customers.  Rental  income  received  prior to the start of the rental period is
included in rents received in advance.

                                  Other Income

Other income consists primarily of sales of  storage-related  merchandise (locks
and packing supplies) and commissions from truck rentals.

                                    Interest
Interest is capitalized on accumulated  expenditures relating to the development
of certain qualifying  properties.  During 1996, 1995, and 1994, total cash paid
by the Operating  Partnership  for the interest was $7,636,  $3,345,  and $1,404
respectively,  which includes $965, and $532, which was capitalized in 1996, and
1995, respectively. No interest was capitalized in 1994.

                            Deferred Financing Costs

Deferred  financing  costs are amortized over a period not to exceed the term of
the related  debt.  Amortization  of deferred  financing  costs is classified as
amortization expense and included in the consolidated statement of operations in
the amount of $361, $705, and $115 in 1996, 1995, and 1994, respectively.

                       Interest Rate Management Agreements

The Operating  Partnership enters into interest rate risk management  agreements
to manage interest rate risk associated with anticipated debt transactions.  The
Operating  Partnership  follows SFAS No. 80 "Accounting  for Futures  Contracts"
which permits hedge  accounting for  anticipatory  transactions  meeting certain
criteria.  Gains and losses,  if any, on these  transactions  are  deferred  and
amortized  over the  terms of the  related  debt as an  adjustment  to  interest
expense.  Changes  in the  fair  value  of the  interest  rate  risk  management
agreements are not recognized in the financial statements. In the event that the
anticipatory transaction is no longer likely to occur, the Operating Partnership
would mark the  derivative to market and would  recognize any  adjustment in the
consolidated  statement of operations.  The Operating Partnership does not enter
into  interest  rate risk  management  agreements  for  trading  or  speculative
purposes.

                        Investment in Storage Facilities

Storage  facilities  are recorded at cost.  Depreciation  is computed  using the
straight line method over  estimated  useful lives of 40 years for buildings and
improvements,  and three to ten years for  furniture,  fixtures  and  equipment.
Expenditures for significant  renovations or improvements that extend the useful
life of assets are  capitalized.  Repairs and maintenance  costs are expensed as
incurred.  Certain costs,  principally payroll,  directly related to real estate
acquisitions and development, are capitalized.


<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


If there is an event or a change in circumstances  that indicates that the basis
of the Operating  Partnership's  property may not be  recoverable  the Operating
Partnership's  policy is to  assess  any  impairment  of  value.  Impairment  is
evaluated  based  upon  comparing  the sum of the  expected  future  cash  flows
(undiscounted  and without interest charges) to the carrying value of the asset.
If the cash flow is less,  an impairment  loss is  recognized  for the amount by
which the carrying amount of the assets exceeds the fair value of the asset.



                                Minority Interest

The minority interest reflects the ownership interest of the limited partners in
three facilities in which the Operating  Partnership is a general  partner.  The
limited  partner's  share of the net  income  of the  Operating  Partnership  is
charged to minority  interest expense and increases the Operating  Partnership's
liability.   Distributions   to  the  limited  partners  reduces  the  Operating
Partnership's liability.



                                 Income Per Unit

Net income per unit is  calculated  using the weighted  average  number of units
outstanding during the period.

                                Reclassifications

Certain  previously  reported amounts have been reclassified to conform with the
current financial statement presentation.

<PAGE>


                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                                     NOTE 3
                        INVESTMENT IN STORAGE FACILITIES


The following summarizes activity in storage facilities during the period:

Cost

Balance at December 31, 1994                           278,993
Property acquisitions                                  220,541
Land acquisitions                                        5,733
Improvements                                             4,030
                                                     ---------
Balance at December 31, 1995                           509,297

Property acquisitions                                  305,760
Land acquisitions  and joint venture development        21,329
Facility expansions                                      8,986
Developments placed in service                           8,679
Improvements                                             4,711
Property Exchange                                       (3,120)
                                                     ---------
Balance at December 31, 1996                           855,642

Accumulated Depreciation

Balance at December 31, 1994                             7,224
Additions during the year                                7,337
                                                     ---------
Balance at December 31, 1995                            14,561

Additions during the year                               12,012
                                                     ---------
Balance at December 31, 1996                            26,573

The aggregate cost of real estate facilities for federal income tax purposes was
approximately $797,352 and $479,037 at December 31, 1996 and 1995, respectively.


                                     NOTE 4
                             MORTGAGE NOTES PAYABLE


Mortgage notes payable consist of the following at December 31:

                                            1996             1995
                                            ----             ----
Conventional fixed rate                   $36,666           $6,670
Conventional variable rate                  9,058              ---
                                           ------            -----
Total                                      45,724            6,670
                                           ------            -----

Conventional  fixed-rate  mortgage  notes  included 13 mortgages  encumbering 13
properties  with a cost basis of $68,572 at  December  31,  1996 and three loans
encumbering three properties with a cost basis of $16,032

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)

at December 31, 1995.  Mortgage notes are generally due in monthly  installments
of principal  and interest and mature at various dates through 2021. At December
31, 1996 and 1995,  this debt carried fixed rates of interest  ranging from 6.8%
to 11.5% (10.14% weighted average) and 8.375% to 10.6% (9.67% weighted average),
respectively.

Conventional  variable-rate  mortgage notes consist of 4 loans  encumbering four
properties  with a cost basis of $13,500 at December 31, 1996.  Two of the notes
require monthly  principal and interest  payments and mature in 2019. Two of the
notes require monthly  payments of interest only and mature in 2001. At December
31, 1996  conventional  variable rate debt had interest rates ranging from 7.81%
to 9.67% with a weighted average interest rate of 9. 2%.

The aggregate principal payments of mortgage notes (fixed and variable rate) for
the five years subsequent to December 31, 1996 are as follows:

1997                                                   $10,802
1998                                                       614
1999                                                       677
2000                                                       746
2001                                                       824
Thereafter                                             $32,061




                                     NOTE 5
                                  NOTES PAYABLE

On November 4, 1996, the Operating  Partnership issued $100,000 of 7.125% senior
unsecured  notes (the  "Notes") due  November 1, 2003.  Interest on the Notes is
payable on May 1 and November 1 of each year,  commencing May 1, 1997. The Notes
are  redeemable at any time at the option of the Operating  Partnership in whole
or in part, at a redemption  price equal to the sum of: (a) the principal amount
of the Notes being redeemed plus accrued interest or (b) a make-whole  amount as
more fully  defined in the Notes  prospectus.  The Notes are not  subject to any
mandatory  sinking  fund  and  are an  unsecured  obligation  of  the  Operating
Partnership.  The Notes  contain  various  covenants  restricting  the amount of
secured and unsecured indebtedness the Operating Partnership may incur. The $979
offering  discount  and  the  approximately  $353  of  offering  costs,  net  of
accumulated amortization, are included in other assets at December 31, 1996, and
are being amortized into interest expense over the term of the Notes.


                                     NOTE 6
                            LINE OF CREDIT BORROWINGS

                                                            1996         1995
                                                            ----         ----
Total lines of credit at December 31                      $105,000     $123,000
Borrowings outstanding at December 31                      $52,730     $107,605
Weighted average daily borrowing during the year           $92,225      $47,135
Maximum daily borrowing during the year                   $150,153     $121,700
Weighted average daily interest rate during the year        6.99%       6.42%


<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


At December 31, 1996, and 1995, the Operating  Partnership had a $75,000 line of
credit with a group of  commercial  banks.  This line bears  interest at various
spreads  over a base rate  based on the  Operating  Partnership's  debt  service
coverage.  The credit agreements mature annually in February,  and are renewable
at the option of the Operating  Partnership.  On January 28, 1997, the Operating
Partnership  exercised its option and extended the maturity to February 8, 1998.
At December 31, 1996,  the  Operating  Partnership  had a $30,000 line of credit
with a  commercial  bank.  The line bears  interest at spreads over LIBOR and is
payable  on  demand.   None  of  these  agreements  have  compensating   balance
requirements.

During 1996 the Operating  Partnership  entered into a $50,000  bridge loan with
the same group of  commercial  banks as the $75,000  line of credit.  The bridge
loan had a one-year  term and bore  interest  at various  LIBOR  spreads,  which
spreads  increased  with the passing of each  four-month  period.  The Operating
Partnership  borrowed the entire amount  available under the bridge loan in June
of 1996,  and repaid the amount in full in September  1996, and the facility was
terminated at that time.

At December 31, 1995, the Operating  Partnership had a $25,000 term note with an
initial  termination  date of April 21,  1996.  The note was  issued by the same
group of commercial banks  participating in the $75,000 line of credit, and bore
interest  at 1.35% over 30 day LIBOR.  The note was paid in full in March  1996,
and the facility was terminated at that time.

At  December  31,  1995,  the  Operating  Partnership  had  $23,000  line with a
commercial bank. The $23,000 line consisted of an $8,000 tranche that matured on
February 15,  1996,  and a $15,000  tranche  that matured on July 1, 1996.  Both
tranches, at the option of the Operating Partnership,  bore interest at prime or
LIBOR  plus  2.25%,  and were  collateralized  by  mortgages  on 13  facilities.
Subsequent  to December  31,  1995,  the  commercial  bank agreed to release the
mortgages and increase the line to $30,000.

                                     NOTE 7
                   PRO FORMA FINANCIAL INFORMATION (UNAUDITED)


The following summary of unaudited pro forma combined  financial  information of
the Operating Partnership is presented as if: (a) the acquisition during 1996 of
82 properties  totaling 5,401 square feet for a cost of  approximately  $304,000
and (b) the  issuance  of 7,029  shares of  common  stock  for net  proceeds  of
approximately  $220,528 had occurred on January 1, 1996. The unaudited  combined
financial  information is not  necessarily  indicative of what actual results of
operation of the company  would have been assuming  such  transactions  had been
completed as of January 1, 1996, nor does it purport to represent the results of
operations for future periods.

Year ended December 31,                1996
                                       ----
Pro Forma total revenues             $133,039
Pro forma net income                 $ 54,767
Pro forma earnings per unit          $   2.11




<PAGE>


                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                                     NOTE 8
                              FINANCIAL INSTRUMENTS

The  Operating  Partnership's  carrying  amounts and fair value of its financial
instruments were as follows:

<TABLE>
<CAPTION>
<S> <C>
as of December 31,                                        1996                             1995
                                             Carrying value    Fair value    Carrying value    Fair value
                                             --------------    ----------    --------------    ----------
Cash and cash equivalents                    $   1,349         $  1,349      $   2,802         $   2,802
Line of credit borrowings                       52,730           52,730        107,605           107,605
Mortgage notes payable                          45,724           49,963          6,670             7,003
Notes payable                                  100,000           99,587            ---               ---
Interest rate risk management agreements         ----            (1,118)           ---            (3,547)
</TABLE>

The Operating Partnership,  in determining the fair values set forth above, used
the following methods and assumptions:

            Mortgage and Notes Payable and Line of Credit Borrowings

The Operating  Partnership's line of credit borrowings bear interest at variable
rates and therefore cost approximates fair value. The fair value of the Mortgage
notes payable,  and the Notes payable were estimated using  discounted cash flow
analysis,  based on the Operating  Partnership's  current incremental  borrowing
rate at December 31, 1996 and 1995, for similar types of borrowing arrangements.


                     Interest Rate Risk Management Agreement

In 1996, the Operating  Partnership entered into a $75 million (notional amount)
fixed pay forward  starting swap agreement  with a major Wall Street  investment
banking  firm in order to reduce  the  interest  rate risk  associated  with the
anticipated  issuance of fixed rate debt by the Operating  Partnership  in 1997.
The  transaction  allowed  the  Operating  Partnership  to lock- in a seven year
Treasury  rate of 6.87% on or before  May 1,  1997.  The  Operating  Partnership
anticipates terminating the swap transaction upon the issuance of the fixed rate
debt. At December 31, 1996, the Operating  Partnership had a $(1,118) unrealized
loss on  this  transaction.  Any  gain or loss  from  this  transaction  will be
deferred and amortized as an adjustment to interest expense over the term of the
fixed rate debt. This  transaction  exposes the Operating  Partnership to credit
loss  in  the  event  of  non-performance  by  the  counterparty,  however  such
non-performance is not anticipated as the counterparty is a highly rated, credit
quality entity.

During  1996,  the  Operating  Partnership  entered  into an interest  rate swap
agreement in order to reduce the interest rate risk associated with the issuance
of the $100,000  Notes (see Note 5). The Operating  Partnership  terminated  the
agreement on the date the Notes were issued and recognized a $(2,481) loss. This
loss, net of accumulated  amortization,  is included in other assets at December
31,  1996 and is being  amortized  into  interest  expense  over the term of the
Notes.

During 1995,  the Operating  Partnership  had entered into an interest rate swap
agreement  with the  objective of reducing its exposure to future  interest rate
fluctuations. The agreement involved the exchange of a variable rate for a fixed
rate interest payment obligation.  The agreement had a notional principal amount
of $100,000, an effective date of March 1, 1996, and a maturity date of March 1,
2003. At December 31, 1995,  the fair value of the  agreement  was ($3,547).  On
March 8, 1996, the Operating Partnership closed the interest rate swap agreement
and received proceeds of approximately $50.

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


 The gain from this contract was deferred and is being  amortized  over the life
of the Notes  (see  Note 5).  The fair  value of the  interest  rate  management
agreements as of December 31, 1996 and 1995, represents the estimated amount the
Operating  Partnership  would have paid to  terminate  the  agreements  on those
dates.

                                     NOTE 9
                          COMMITMENTS AND CONTINGENCIES

                                Lease Agreements

The Operating  Partnership has various lease agreements for office space.  Total
future minimum  rental  payments on the office leases are $451 in year one: $471
in year two through three, and $478 in year four, and $433 in year five.

                                   Guarantees

The  Operating  Partnership  is a limited  guarantor  on the  financing  of five
development projects in which the Operating Partnership has either a partnership
interest  or  an  option  to  purchase  the  facility  at  various  times  after
completion.  Under the terms of the guarantee, the Operating Partnership has the
option, upon notice by the financial institution of an event which would require
payment by the Operating Partnership under the guarantee,  of (a) purchasing the
note and all  related  loan  documents  without  recourse  or (b) payment of the
guarantee.  At December 31, 1996 the Operating  Partnership had maximum exposure
under the guarantee arrangements of $18,250.

                     Redemption of Limited Partnership Units

At  December  31,  1996,  there  were  1,903,797   Limited   Partnership   Units
outstanding.  Certain  Limited  Partnership  Units are  redeemable for an amount
equal to their fair market value ($3.1  million,  based upon a price per Unit of
$37.625 at December 31, 1996) payable by the Operating Partnership in cash or by
a promissory note payable in quarterly installments over two years with interest
at the prime rate. Units held by other Limited  Partners are redeemable,  at the
option of such Limited  Partners,  beginning on the first  anniversary  of their
issue,  for amounts  equal to the then fair market  value of their Units  ($35.5
million, based upon a price per Unit of $37.625 at December 31, 1996) payable by
the Company in cash or, at the option of the Company, in shares of the Company's
common stock at the exchange ration of one share for each Unit.


                                     NOTE 10
                               PARTNERSHIP CAPITAL

The Company,  as a corporate general partner,  has Stock Option,  Employee Stock
Purchase and Loan, and Dividend Reinvestment and Stock Purchase Plans. Under the
terms of the  partnership  agreement,  all proceeds  from the issuance of common
stock under the plans are  contributed to the Operating  Partnership in exchange
for Operating Partnership Units.

The Company  applies APB25 and related  interpretations  in  accounting  for its
stock-based  compensation  plan.  In  accordance  with SFAS123  "Accounting  for
Stock-Based  Compensation",  the  Company  elected  to  continue  to  apply  the
provisions of APB25.  However,  pro forma  disclosures as if the Company adopted
the  cost  recognition  provisions  of  SFAS123  in 1995  are  required  and are
presented below along with a summary of the Plan and awards.

The  shareholders  of the Company have  approved and the Company has adopted the
Storage USA,  Inc. 1993 Omnibus Stock  Incentive  Plan.  The Company has granted
options to certain  directors,  officers and key employees to purchase shares of
the Company's common stock at a price not less than the fair market

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


value at the date of grant.  There are 1,000,000  shares  available to be issued
under the plan. Generally, the optionee has up to ten years from the date of the
grant to exercise the options. Plan activity is as follows:

                                     Number of Options       Price per Share
                                     -----------------       ---------------
Options outstanding :
  March 24, 1994                     --                           --
  Granted                            493,402                      $21.75-$25.625
  Exercised                          --                           --
  Cancelled                          --                           --
                                     ---------
Options outstanding December 31,
1994                                 493,402                      $21.75-$25.625
                                     =========
Exercisable at end of year           382,402                      $21.75-$25.625
                                     =========
  Granted                            175,834                      $21.75-$31.00
  Exercised                           (4,500)                     $21.75-$24.75
  Cancelled                           (3,000)                     $24.75
                                     ---------
Options outstanding December 31,
1995                                 661,736                      $21.75-$31.00
                                     =========
Exercisable at end of year           466,861                      $21.75-$31.00
                                     =========
  Granted                            385,614                      $31.25-$36.75
  Exercised                          (2,600)                      $24.75
  Cancelled                          (44,750)                     $31.00
                                     ---------
Options outstanding December 31,
1996                                 1,000,000                    $21.75-$36.75
                                     =========
Exercisable at end of year           690,762                      $21.75-$33.625
                                     =========

The Company has utilized a Black-Scholes option-pricing model with the following
assumptions in order to estimate the fair value of its stock options:

                                                1996                 1995
                                                ----                 ----
Risk free interest rates                        6.8%                 7.8%
Estimated dividend yields                       6.5%                 7.5%
Volatility factors of the expected market
   price of the Company's  Common Shares       25.8%                15.9%
Expected life of the options                  9.2-10 yrs.         8.75-10 yrs.
Weighted average fair value                    $5.72                $3.13

The following pro-forma disclosures were computed assuming the fair value of the
options is amortized  to  compensation  expense  over the vesting  period of the
options:

                                       1996                    1995
                                       ----                    ----
Historic net income                   $43,526                $29,153
Historic net income per share         $  2.09                $  1.87
Pro forma compensation expense (1)    $   858                $   112
Pro forma net income (1)              $42,668                $29,041
Pro forma net income per share (1)    $  2.05                $  1.86

(1) Due to the  inclusion  on only 1996 and 1995  option  grants,  the effect of
applying  SFAS123  in 1996 and 1995 may not be  representative  of the Pro Forma
impact in future years.


<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                      Employee Stock Purchase and Loan Plan

As of December 31,  1996,  the Company has issued  333,000  shares of its common
stock under the 1995  Employee  Stock  Purchase  and Loan Plan.  Pursuant to the
terms of the plan, the Company and certain  officers entered into stock purchase
agreements  whereby the  officers  purchased  common  stock at the then  current
market price. The Company provides 100% financing for the purchase of the shares
with interest at 7% per anum payable quarterly. The underlying notes are secured
by the shares and mature in November  2002.  Under the terms of the  partnership
agreement,  all  proceeds  from the  issuance of common stock under the plan are
contributed to the Operating  Partnership in exchange for operating  partnership
units.


                  Dividend Reinvestment and Stock Purchase Plan

In 1995, the Company adopted the Dividend  Reinvestment  and Stock Purchase Plan
(the "Plan"). Under the Plan, the Company offers holders of its common stock the
opportunity to purchase, through reinvestment of dividends or by additional cash
payments,  additional shares of its common stock. The shares of common stock for
participants  may be  purchased  from the  Company at the greater of the average
high and low sales price or the average  closing  sales price on the  investment
date or in the open market at 100% of the average price of all shares  purchased
for the Plan.  During 1996 and 1995,  2,022 and 653 shares,  respectively,  were
issued  under  the  Plan.  Under the  terms of the  partnership  agreement,  all
proceeds from the issuance of common stock under the plan are contributed to the
Operating Partnership in exchange for operating partnership units.


                          General Partner Contributions

On March 1, 1996,  the Company  entered  into a Stock  Purchase  Agreement  with
Security  Capital  U.S.  Realty (US Realty),  an  affiliate of Security  Capital
Group.  Under  the  Stock  Purchase  Agreement,  subject  to  certain  terms and
conditions,  US Realty  invested a total of  $220,000  in  purchasing  7,028,754
shares  of the  Company's  common  stock,  placed  two of  its  nominees  on the
Company's Board of Directors,  and executed a Strategic Alliance Agreement and a
Registration  Rights Agreement with the Company. At December 31, 1996, US Realty
owned approximately  34.6% of the outstanding common shares of the Company.  The
proceeds  received  from  US  Realty  were  contributed  by the  Company  to the
Operating  Partnership in exchange for operating partnership units and were used
by  the  Operating   Partnership  to  repay   borrowings   under  the  Operating
Partnership's  lines of credit,  to  acquire  self-storage  facilities,  and for
working capital.



                                     NOTE 11
                          POST EMPLOYMENT BENEFIT PLAN

The  Operating  Partnership  contributes  to a 401(k)  savings plan (a voluntary
defined  contribution  plan)  for  the  benefit  of  employees  meeting  certain
eligibility  requirements and electing  participation in the plan. Each year the
Operating  Partnership  is  obligated  to make a  matching  contribution  on the
employee's behalf equal to 50% of the participant's contribution to the plan, up
to 2% of the participant's  compensation.  Operating  Partnership profit sharing
contributions to the plan are determined annually by the Operating  Partnership.
Operating  Partnership  contributions  totaled $382, $223, and $137 during 1996,
1995 and 1994, respectively.


<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                                     NOTE 12
             Summary of Predecessor Significant Accounting Policies

                             Basis of Presentation:

The accompanying  combined  financial  statements for the periods prior to March
24, 1994 present only the "carved-out"  accounts of the Predecessor comprised of
the continuing assets,  liabilities and operations of the Predecessor  following
the IPO, including 11 owned facilities and six controlled  Facilities  (Original
Facilities) and Storage USA Management Corporation (Management Corp.). All other
accounts of the Predecessor  were excluded since the business  segments to which
they  relate were  discontinued  by the  Company  before the IPO.  Due to common
ownership and management of the Original  Facilities and Management  Corp.,  the
historical  combined financial  statements have been accounted for as a group of
entities under common  control,  which is similar to the accounting  method used
for a  pooling  of  interest.  All  significant  intercompany  transactions  and
balances  have been  eliminated  in the  combined  presentation.  The  financial
information  included herein may not necessarily  reflect the financial position
and results of operations of the Predecessor had it been a separate  stand-alone
entity during the periods prior to March 24, 1994.

                               Minority Interest:

The  Predecessor  financial  statements  include the accounts of six  facilities
(Selling Partnerships) which were owned by investment  partnerships in which the
Predecessor or its affiliates had a controlled interest.  The ownership interest
of the other partners in these  partnerships  is treated as a minority  interest
and reported as a liability of the Predecessor.  Increases in minority  interest
are charged to operations.

                              Federal Income Taxes:

The Predecessor was an S Corporation and thus was not subject to taxation at the
corporate  level.  The  self-storage  facilities  owned  through the  investment
partnerships  required the partners to include their respective share of profits
and  losses in their  individual  tax  returns.  Therefore,  the  statements  of
operations  contain no provision for federal  income taxes for any periods prior
to March 24, 1994.

                             Shareholders' Deficit:

The Predecessor's President and Chief Executive Officer contributed a portion of
his interest in two of the Selling Partnerships in exchange for the satisfaction
of his indebtedness tot he Predecessor.  The value attributed to his interest in
the Selling  Partnerships was determined on the same basis as the  determination
of payments made by the  Predecessor  to the unrelated  limited  partners in the
Selling Partnerships.

Corporate reorganization  adjustments consist primarily of dividends deemed cash
distributions,   reclassification  of  certain  minority  interests,  and  other
non-cash adjustments relating to the IPO.

                           Related Party Transactions:

The Predecessor had demand notes payable to the Predecessor's  founder,  bearing
interest  at  prime  plus  2%  (8% at  December  31,  1993).  These  notes  were
collateralized by second mortgages on certain of the Original Facilities.  Total
interest expense to affiliates  amounted to  approximately  $178 for period from
January 1, 1994 to March 23, 1994.

<PAGE>

                             SUSA Partnership, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except per unit data)


                                     Other:

Total cash paid for interest related to the mortgages  payable and notes payable
balances for the period from January 1, 1994 to March 23, 1994 was $1,017.


                                     NOTE 13
                                SUBSEQUENT EVENTS

                              Property Acquisitions

Subsequent  to December 31, 1996,  the Operating  Partnership  has completed the
acquisition  of 11  self-storage  facilities for  approximately  $34,625 . These
acquisitions were financed through operating cash flows and borrowings under the
$30,000 line of credit.

On March 11,  1997,  the  Company  issued  1,400  shares of common  stock for an
aggregate  purchase  price of  $50,739.  On March  17,  1997,  the  underwriters
exercised their option to purchase 210 additional  shares of common stock for an
aggregate  purchase  price of $7,610.  U.S.  Realty  currently owns 34.6% of the
outstanding common stock of the Company and has indicated it intends to purchase
approximately  851  thousand  shares of common stock  directly  from the Company
prior to March 31, 1997.  Net proceeds  from U.S.  Realty will be  approximately
$32,019.

The proceeds from the issuances are contributed to the Operating  Partnership in
exchange for additional Operating  Partnership units. The Operating  Partnership
will use the net proceeds to repay debt incurred  under its  revolving  lines of
credit to finance the  acquisitions of  self-storage  facilities and for working
capital.

                                     NOTE 14
                      QUARTERLY FINANCIAL DATA (UNAUDITED)


The following is a summary of quarterly results of operations for 1996 and 1995:
<TABLE>
<CAPTION>
<S> <C>
1996
                                    First Quarter     Second Quarter     Third Quarter     Fourth Quarter
                                    -------------     --------------     -------------     --------------
            Revenue                    $21,333            $24,356           $29,435            $32,185
           Net Income                   $8,886            $10,749           $12,327            $14,249
      Per Unit Net Income                $0.47              $0.52             $0.55              $0.54

<CAPTION>
1995
                                    First Quarter     Second Quarter     Third Quarter     Fourth Quarter
                                    -------------     --------------     -------------     --------------
            Revenue                    $12,312            $16,233           $18,667            $20,795
           Net Income                   $5,938             $6,992            $8,937             $8,553
      Per Unit Net Income                $0.43              $0.47             $0.49              $0.47
</TABLE>
<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors
of Storage USA, Inc.

                  We have audited the accompanying  consolidated  balance sheets
of SUSA Partnership,  L.P. (the "Operating Partnership") as of December 31, 1996
and 1995,  and the related  consolidated  statements  of  operations,  partners'
capital,  and cash flows for each of the two years in the period ended  December
31, 1996 and for the period from March 24, 1994 (inception) through December 31,
1994. We have also audited the accompanying  combined  statements of operations,
shareholders'  equity,  and cash flows of Storage USA, Inc. (the  "Predecessor")
for the period from January 1, 1994  through  March 23,  1994.  These  financial
statements   are  the   responsibility   of  the  management  of  the  Operating
Partnership.  Our  responsibility  is to express  an opinion on these  financial
statements 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 the  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 consolidated financial position of
the Operating Partnership as of December 31, 1996 and 1995, and the consolidated
results  of its  operations  and its cash flows for each of the two years in the
period  ended  December  31,  1996  and for  the  period  from  March  24,  1994
(inception)  through  December  31,  1994,  and  the  combined  results  of  the
Predecessor's  operations  and cash  flows for the period  from  January 1, 1994
through  March 23,  1994,  in  conformity  with  generally  accepted  accounting
principles.



                                                 COOPERS & LYBRAND L.L.P.


Baltimore, Maryland
January 29, 1997, except for Note 13,
          as to which the date is
          March 17, 1997
<PAGE>

                       SUSA Partnership, L.P., Facilities
                                  Schedule III
                    Real Estate and Accumulated Depreciation
                             as of December 31, 1996
<TABLE>
<CAPTION>


                                                                 Initial Cost to REIT            Cost of
                                                               --------------------------      Improvements
                                                                               Buiding &        Subsequent
State    Property Name                       Encumbrances        Land           Fixtures      to Acquisition
----------------------------------------------------------------------------------------------------------------
<S> <C>
  AL     Vestavia                                               652,309        1,771,282            48,781
  AL     Birmingham/Hwy 280                                     348,919          953,148                 0
  AZ     24th Street                                            500,232        1,362,657            31,565
  AZ     Oracle                                                 587,844        1,595,864            42,192
  AZ     22nd Street                                            529,702        1,439,965            33,363
  AZ     East Phoenix                                           370,586        1,021,566            42,203
  AZ     Tempe                                                  878,690        2,389,598            49,705
  AZ     Cave Creek                                             824,369        2,244,177            69,566
  AZ     Alma School                                            785,504        2,162,032                 0
  AZ     Metro-21st/Peoria-Phoenix                              599,712        1,638,042                 0
  AZ     7th St/Indian Sch-Phoenix                              518,977        1,418,677                 0
  AZ     Phoenix/32nd Street                 4,440,000        1,352,332        3,670,885                 0
  AZ     Mesa/Country Club                                      554,688        1,503,241                 0
  AZ     Mesa/East Main St                   1,482,225          913,783        2,479,293                 0
  AZ     Phoenix/Bell Road                                    1,312,139        3,547,636                 0
  CA     Miramar Self                                           387,430        1,059,395            43,165
  CA     Miramar Business                                     1,225,124        3,344,676           155,871
  CA     Marina Del Rey                                       1,954,097        5,293,255            89,201
  CA     Covina                                               1,234,592        3,356,433           179,300
  CA     Norwalk                                              1,529,221        4,152,897           124,870
  CA     Campbell                                             1,045,526        2,834,735            57,993
  CA     Monterey I & II                                      1,612,187        4,374,059            73,734
  CA     Palo Alto                                              654,944        1,780,329            37,677
  CA     San Jose                                             1,270,652        3,443,410            46,436
  CA     Santa Cruz                                           1,092,783        2,963,688            40,264
  CA     Scotts Valley                                          654,945        1,779,847            28,220
  CA     Santa Clara                                          1,362,331        3,738,431            75,299
  CA     Watsonville                                            483,703        1,316,251            29,433
  CA     Panorama City                                          961,128        2,608,919            45,806
  CA     Westminster                                            975,304        2,641,287            68,585
  CA     Point Loma                                           2,135,347        5,777,511           153,438
  CA     Rialto                                                 695,327        1,921,602           103,328
  CA     Yucaipa                                                411,580        1,130,757             9,567
  CA     Fallbrook                                              418,763        1,154,513            15,982
  CA     Hemet                                                  455,585        1,252,504             3,655
  CA     Victorville                                            491,597        1,347,613            17,994
  CA     San Bernardino/Baseline                              1,220,837        3,325,258            18,479
  CA     Colton                                                 514,276        1,425,550            22,070
  CA     San Marcos                                             318,260          879,411            19,487
  CA     Capitola                                               827,352        2,283,337            18,353
  CA     Oceanside                                            1,236,627        3,383,435             9,782
  CA     San Bernardino/Waterman                                708,661        1,941,602            49,045
  CA     Santee                                                 879,599        2,382,970            84,050
  CA     Santa Ana                                            1,273,489        3,456,542            18,862
  CA     Garden Grove                                         1,137,544        3,087,956            21,067
  CA     City of Industry                                       899,709        2,453,012            65,130
  CA     Chatsworth                                           1,740,975        4,744,309            41,104
  CA     Palm Springs/Tamarisk                                  816,416        2,229,985            96,439
  CA     Moreno Valley                                          413,759        1,142,629            55,335
  CA     San Bern/23rd St                                       655,883        1,803,082            78,881
  CA     San Bern/Mill Ave                                      368,526        1,023,905            60,662
  CA     Highlands                                              626,794        1,718,949            34,049
  CA     Redlands                                               673,439        1,834,612           248,932
  CA     Palm Springs/Gene Autry                                784,589        2,129,022            21,881
  CA     Thousand Palms                                         652,410        1,831,765                 0
  CA     Salinas                                                622,542        1,731,104                 0
  CA     Whittier                                               919,755        2,516,477                 0
  CA     Florin/Freeport-Sacrament                              824,241        2,262,310                 0
  CA     Sunrise/Sacramento                                     819,025        2,231,500                 0
  CA     Santa Rosa                                           1,351,168        3,669,084                 0
  CA     Huntington Beach                                       838,648        2,309,309                 0
  CA     La Puente/Valley Blvd                                  992,211        2,710,041                 0
  CA     Pacheco/First Ave North                              1,198,654        3,257,766                 0
  CA     Huntington Bch II/McFadden                           1,050,495        2,846,043                 0
  CA     Hawaiian Gardens/Norwalk                             1,956,411        5,353,015                 0
  CA     Sacramento/Auburn Blvd                                 666,995        1,808,847                 0
  CA     Sacramento/Perry                                       452,480        1,225,139                 0
  CT     Wethersfield                                           472,831        1,294,408           880,667
  CT     Enfield                                                506,875        1,395,631            55,945
  CT     East Hartford                                          992,547        2,700,212             3,256
  CT     Waterbury                                              746,487        2,036,915                 0
  CT     Rocky Hill                                           1,327,857        3,608,978                 0
  CT     Farmington                                           1,272,203        3,454,995                 0
  DC     U Street                                             1,388,564        3,769,506            44,584
  DE     Wilmington                                             610,689        2,512,985            32,263
  FL     Kendall                                              1,838,903        3,870,318            19,020
  FL     Ives Dairy                                           1,061,776        4,306,278            50,006
  FL     Longwood                                               862,849        2,387,142            22,238
  FL     Sarasota                                             1,281,966        2,007,843         1,772,379
  FL     WPB Southern                          875,804          226,524          922,193         2,877,838
  FL     WPB II                                                 572,284        2,365,372            21,371
  FL     Port Richey                                            605,850        1,668,041            60,725
  FL     Ft. Myers                                              489,609        1,347,207           273,981
  FL     North Lauderdale                                     1,050,449        2,867,443           695,949
  FL     Naples                                                 636,051        1,735,211            43,837
  FL     Hallandale                                           1,696,519        4,625,578            17,257
  FL     Davie                                                2,005,938        5,452,384            67,675
  FL     Tampa/Adamo                                            837,180        2,291,714            14,334
  FL     SR 84 (Southwest)                                    1,903,782        5,187,373            47,755
  FL     Quail Roost                         2,193,219        1,663,641        4,533,384            11,171
  FL     Tamiami                                              1,962,917        5,371,139             5,562
  FL     Highway 441 (2nd Avenue)                             1,734,958        4,760,420            10,342
  FL     Miami Sunset                                         2,205,018        6,028,210             9,105
  FL     Doral (Archway)                                      1,633,500        4,464,103            47,801
  FL     Boca Raton                                           1,505,564        4,123,885                 0
  FL     Ft Lauderdale                                        1,063,136        2,949,236                 0
  FL     Coral Way                           3,501,163        1,574,578        4,314,468                 0
  FL     Miller Rd.                          3,501,163        1,409,474        3,898,643                 0
  FL     Harborview/Port Charlotte                              883,344        2,400,333                 0
  FL     Miami Gardens/441                                      540,649        1,469,557                 0
  FL     Miramar/State Rd 7                                   1,797,370        4,892,278                 0
  FL     Delray Bch/W Atlantic Blvd                             388,538        1,059,895                 0
  FL     Okeechobee Partners, LP                              1,134,363                0                 0
  GA     South Cobb                                             161,509        1,349,816            77,109
  GA     Lilburn                                                634,879        1,724,697            27,775
  GA     Eastpoint                                              937,618        2,194,489           103,745
  GA     Acworth                                                493,504          917,825           685,678
  GA     Western Hills                                          842,094        1,855,712            92,569
  GA     Stone Mountain                                       1,053,620        2,908,080                 0
  IL     Brickyard                                              713,079        1,935,999            42,991
  IL     Cermak                                                 948,679        2,582,566           139,489
  IL     Schaumburg                                           1,159,033        3,158,017            57,901
  KS     Shawnee                                                546,118        1,490,460            23,250
  KS     Olathe                                                 429,808        1,176,442            44,729
  KS     Overland Park                                          561,549        1,530,969            26,053
  KS     State Avenue                                           448,025        1,224,381            41,991
  LA     Tchoup (New Orleans)                                   920,987        2,501,147           122,851
  MA     Worcester                                              661,235        1,541,427            82,380
  MA     Haverhill                                              573,068        1,568,047             5,743
  MA     New Bedford                                            768,959        2,099,751             9,609
  MA     Whitman                                                544,178        1,487,628            36,918
  MA     Brockton                                             1,134,761        3,104,615                 0
  MA     Northborough                                           822,364        2,279,586                 0
  MA     Nashua/Tyngsboro                                     1,211,930        3,293,838                 0
  MA     South Easton                                           909,912        2,465,382                 0
  MA     North Attleboro                                        908,949        2,460,427                 0
  MA     Fall River                                             773,781        2,097,333                 0
  MA     Salisbury                                              771,078        2,096,159                 0
  MD     Annapolis/Route 50                  3,377,572        1,565,664        4,324,670            26,895
  MD     Silver Spring                                        2,776,490        4,455,110            36,572
  MD     Essex                                                1,015,773        2,396,462            12,907
  MD     Columbia                                             1,057,034        3,289,952            29,901
  MD     Rockville                                            1,376,588        3,765,848            21,495
  MD     Annapolis/Trout                                      1,635,928        4,430,887            44,756
  MD     Montgomery Village                                   1,287,176        3,537,609            31,460
  MD     Millersville                                         1,501,123        4,101,854            30,274
  MD     Waldorf                                              1,168,869        3,175,314            12,727
  MD     Rt 3/Millersville                                      546,011        1,493,533                 0
  MD     Balto City/E Pleasant St                             1,547,767        4,185,072                 0
  MD     SUSA Partnership/Management                          3,531,744          650,997        15,150,726
  MI     Lincoln Park                                           761,209        2,097,502           338,822
  MI     Tel-Dixie                                              595,495        1,646,723            26,643
  MI     Troy/Coolidge Highway                                1,264,541        3,425,505                 0
  MI     Grand Rapids/28th St SE                                598,182        1,621,080                 0
  MI     Grandville/Spartan Ind Dr                              579,599        1,840,838                 0
  MO     Grandview                                              511,576        1,396,230            48,466
  MO     Raytown                                                427,056        1,171,397            59,940
  NC     Charlotte/Tryon St                                   1,003,418        2,731,345                 0
  NC     Raleigh/Hillsborough St                                753,296        2,051,496                 0
  NC     Charlotte/Amity Rd                                     947,871        2,583,190                 0
  NJ     Pennsauken                                             914,938        2,484,553            43,261
  NJ     Lawnside                                             1,095,126        2,972,032            17,123
  NJ     Cherry Hill/Cuthbert                                   720,183        1,894,545             6,407
  NJ     Cherry Hill/Route 70                                   693,314        1,903,413            13,564
  NJ     Pomona                                                 529,657        1,438,132                 0
  NJ     Mays Landing                                           386,592        1,051,300                 0
  NJ     Hackensack/S River St               7,630,393        3,646,649        9,863,617                 0
  NJ     Secaucus/Paterson Plank             5,629,669        2,851,097        7,712,681                 0
  NJ     Harrison/Harrison Ave               1,273,522          822,192        2,227,121                 0
  NJ     Orange/Oakwood Ave                  4,033,027        2,408,877        6,517,030                 0
  NJ     Flanders/Bartley Flanders                              645,486        1,749,362                 0
  NM     Lomas                                                  251,018          691,453            40,482
  NM     San Mateo                                              524,982        1,436,128            62,004
  NM     Montgomery                                             606,860        1,651,611            35,985
  NM     Legion                                                       0        1,873,666            40,527
  NM     Ellison                                                620,366        1,715,897            33,808
  NM     Hotel Circle                                           277,101          766,547           749,538
  NM     Eubank                                                 577,099        1,568,266           106,954
  NM     Coors                                                  494,400        1,347,792            32,358
  NM     Osuna                                                  696,685        1,891,849            83,264
  NM     East Central                                           292,031          801,475            46,511
  NV     Rainbow                                                892,753        2,419,779            55,293
  NV     Oakey                                                  663,607        1,825,505            20,380
  NV     Tropicana                                              815,085        2,211,925            75,947
  NV     Sunset                                                 947,534        2,569,938            60,172
  NV     Sahara                                               1,217,565        3,373,622            18,761
  NV     Charleston                                             557,678        1,520,140            10,145
  NV     Las Vegas-Sahara/Pioneer                             1,040,367        2,842,388                 0
  NY     Coram/Bald Hill                                      1,976,332        5,352,301                 0
  OK     Sooner Road                                            453,185        1,252,031            46,494
  OK     10th Street                                            621,413          743,356           126,516
  OK     Moore                                                  281,912          776,815            60,142
  OK     NW Expressway                                          353,735          977,978            70,659
  OK     Midwest City                                           443,545        1,216,512            15,455
  OK     Meridian                                               252,963          722,040           293,353
  OK     Air Depot                                              347,690          965,923            59,545
  OK     Peoria                                                 540,318        1,488,307            35,994
  OK     11th & Mingo                                           757,054        2,071,799            53,964
  OK     Skelly                                                 173,331          489,960            16,334
  OK     Lewis                                                  642,511        1,760,304            20,599
  OK     Sheridan                                               531,978        1,509,718            34,615
  OK     OKC/Roxbury Blvd                                       241,220          671,753                 0
  OK     OKC/33rd Street                                        267,059          741,710                 0
  OR     Hillsboro/229th Ave                                  1,198,358        3,249,301                 0
  OR     Beaverton/Murray Ave                                 1,086,999        2,948,220                 0
  OR     Aloha/185th Ave                                      1,337,157        3,624,573                 0
  PA     Philadelphia                                         1,574,064        2,838,049            20,927
  PA     King of Prussia                                      1,354,359        3,678,011            20,207
  PA     Warminster                                             891,048        2,446,648            72,092
  PA     Allentown                                              578,632        1,583,744            34,281
  PA     Bethlehem                                              843,324        2,317,298            23,507
  PA     Norristown                                             868,586        2,405,332                 0
  PA     Storage Partners of Paoli                              433,482          849,584                 0
  SC     Charleston/Ashley River Rd                             475,367        1,298,593                 0
  SC     Columbia/Broad River Rd                                461,455        1,267,675                 0
  TN     Summer                                                 172,093        2,663,644            21,959
  TN     Union                                                  286,925        1,889,030            44,303
  TN     Memphis/Mt Moriah                                    1,024,669        1,598,722           816,229
  TN     Antioch/Nashville                                      822,125        2,239,684            97,707
  TN     Keyport (Gateway)                                      403,492        1,100,184            49,041
  TN     Chattanooga                                            484,457        1,360,998            39,828
  TN     Memphis/Ridgeway                                       638,757        1,141,414           149,116
  TN     Winchester                                             774,069          974,471                 0
  TN     Nashville/Lebanon Pike                               1,366,208        3,748,062                 0
  TN     Nashville/Haywood                   1,131,359          423,170        1,166,891                 0
  TN     Nashville/Murfreesboro                845,495          344,720          950,811                 0
  TN     SUSA/Poplar Partners, LP                             1,750,000           10,635                 0
  TN     Nashville/Trousdale                                  1,440,860        3,901,994                 0
  TN     Nashville/Murfreesboro                               1,222,229        3,309,033                 0
  TN     Nashville/Old Hickory Rd                             1,271,786        3,444,402                 0
  TN     Antioch/Bell Road                                      841,235        2,280,513                 0
  TN     Franklin/Liberty Pike                                  844,335        2,287,937                 0
  TX     Ft. Worth Avenue                                       393,893        1,076,836           142,867
  TX     Euless                                                 359,330          979,859           125,238
  TX     North Freeway                                          687,758        1,867,833            63,901
  TX     South Freeway                                          441,599        1,202,291            94,184
  TX     White Settlement                                     1,347,379        2,531,920           605,479
  TX     Airport Freeway                                        616,535        1,678,683           172,303
  TX     Midway                                               1,125,514        2,344,420           601,450
  TX     Dallas/Preston                                       1,194,744        3,245,423            17,346
  TX     Bedford                                                923,948        2,525,303                 0
  TX     Spring/I-45 North                                    1,110,728        3,005,855                 0
  TX     Sugarland/Old Mill Rd                                  675,660        1,830,545                 0
  UT     Orem                                                   629,867        1,722,550            27,132
  UT     Sandy                                                  949,065        2,573,696            36,645
  UT     West Valley                                            576,248        1,579,605            12,697
  VA     Fairfax Station                                      1,019,015        2,115,385           111,899
  VA     Chantilly                                              882,257        2,395,841           119,234
  VA     Clarendon                                               37,575                0         6,351,724
  VA     Reston                                                 551,285                0         2,326,986
  VA     Falls Church                                         1,226,409        3,348,761            49,935
  VA     Willow Lawn                                          1,516,115        4,105,846                 0
  VA     Stafford/Jefferson Davis                               751,398        2,035,961                 0
  VA     Fredericksburg/Jefferson              983,000          668,526        1,812,040                 0
  VA     Charlottesville/Seminole            2,763,000          748,988        2,029,716                 0
  VA     Fredericksburg/Plank Rd                                846,358        2,287,063                 0
  WA     Vancouver/78th St                                      753,071        2,045,377                 0

                                        ======================================================================
                                           $43,660,611     $224,812,344     $588,937,361       $41,892,598
                                        ======================================================================

<CAPTION>




                                               Gross Amount at Close of Period                                          Depreciable
                                       ----------------------------------------------                                     Life of
                                                           Buiding &                     Accumulated     Year Placed      Building
State    Property Name                     Land            Fixtures           Total     Depreciation      in Service     Component
-------------------------------------- -------------------------------------------------------------------------------------------
<S> <C>
  AL     Vestavia                         652,309          1,820,064       2,472,372       (128,858)          1994             40
  AL     Birmingham/Hwy 280               348,919            953,148       1,302,067         (2,259)          1996             40
  AZ     24th Street                      500,232          1,394,222       1,894,454        (97,662)          1994             40
  AZ     Oracle                           587,844          1,638,056       2,225,900       (112,352)          1994             40
  AZ     22nd Street                      529,702          1,473,328       2,003,030       (103,352)          1994             40
  AZ     East Phoenix                     370,586          1,063,770       1,434,355        (48,131)          1995             40
  AZ     Tempe                            879,017          2,438,975       3,317,993        (81,714)          1995             40
  AZ     Cave Creek                       824,369          2,313,742       3,138,112        (63,841)          1995             40
  AZ     Alma School                      785,504          2,162,032       2,947,535        (54,707)          1996             40
  AZ     Metro-21st/Peoria-Phoenix        599,712          1,638,042       2,237,754        (24,283)          1996             40
  AZ     7th St/Indian Sch-Phoenix        518,977          1,418,677       1,937,654        (21,007)          1996             40
  AZ     Phoenix/32nd Street            1,352,332          3,670,885       5,023,217        (30,725)          1996             40
  AZ     Mesa/Country Club                554,688          1,503,241       2,057,929         (6,404)          1996             40
  AZ     Mesa/East Main St                913,783          2,479,293       3,393,075         (5,223)          1996             40
  AZ     Phoenix/Bell Road              1,312,139          3,547,636       4,859,776              0           1996             40
  CA     Miramar Self                     387,430          1,102,560       1,489,990        (75,500)          1994             40
  CA     Miramar Business               1,225,124          3,500,547       4,725,671       (247,934)          1994             40
  CA     Marina Del Rey                 1,954,097          5,382,456       7,336,553       (368,168)          1994             40
  CA     Covina                         1,234,592          3,535,733       4,770,325       (194,323)          1994             40
  CA     Norwalk                        1,529,221          4,277,767       5,806,988       (238,040)          1994             40
  CA     Campbell                       1,041,860          2,896,392       3,938,253       (151,443)          1994             40
  CA     Monterey I & II                1,613,922          4,446,057       6,059,979       (246,313)          1994             40
  CA     Palo Alto                        651,280          1,821,670       2,472,950       (101,932)          1994             40
  CA     San Jose                       1,266,988          3,493,510       4,760,498       (181,548)          1994             40
  CA     Santa Cruz                     1,092,718          3,004,016       4,096,734       (168,191)          1994             40
  CA     Scotts Valley                    651,281          1,811,732       2,463,012       (101,440)          1994             40
  CA     Santa Clara                    1,362,331          3,813,730       5,176,061       (145,696)          1995             40
  CA     Watsonville                      480,039          1,349,348       1,829,387        (70,021)          1994             40
  CA     Panorama City                    961,128          2,654,725       3,615,853       (151,370)          1994             40
  CA     Westminster                      975,304          2,709,871       3,685,176       (135,644)          1994             40
  CA     Point Loma                     2,139,342          5,926,953       8,066,296       (295,551)          1994             40
  CA     Rialto                           695,327          2,024,930       2,720,257        (84,644)          1995             40
  CA     Yucaipa                          411,580          1,140,324       1,551,904        (51,750)          1995             40
  CA     Fallbrook                        418,763          1,170,495       1,589,258        (52,107)          1995             40
  CA     Hemet                            455,585          1,256,159       1,711,744        (56,049)          1995             40
  CA     Victorville                      491,597          1,365,607       1,857,204        (59,287)          1995             40
  CA     San Bernardino/Baseline        1,220,837          3,343,738       4,564,574       (148,114)          1995             40
  CA     Colton                           514,276          1,447,620       1,961,896        (63,699)          1995             40
  CA     San Marcos                       318,260            898,898       1,217,158        (40,048)          1995             40
  CA     Capitola                         827,352          2,301,690       3,129,042        (88,529)          1995             40
  CA     Oceanside                      1,236,627          3,393,217       4,629,844       (150,885)          1995             40
  CA     San Bernardino/Waterman          708,988          1,990,320       2,699,308        (67,139)          1995             40
  CA     Santee                           879,599          2,467,019       3,346,619        (65,212)          1995             40
  CA     Santa Ana                      1,273,816          3,475,077       4,748,893       (116,112)          1995             40
  CA     Garden Grove                   1,137,871          3,108,696       4,246,567       (104,180)          1995             40
  CA     City of Industry                 900,036          2,517,815       3,417,851        (84,011)          1995             40
  CA     Chatsworth                     1,738,243          4,788,145       6,526,388       (158,904)          1995             40
  CA     Palm Springs/Tamarisk            816,743          2,326,096       3,142,840        (79,125)          1995             40
  CA     Moreno Valley                    414,614          1,197,109       1,611,723        (37,450)          1995             40
  CA     San Bern/23rd St                 655,883          1,881,963       2,537,846        (55,401)          1995             40
  CA     San Bern/Mill Ave                370,043          1,083,050       1,453,093        (32,564)          1995             40
  CA     Highlands                        627,594          1,752,198       2,379,792        (51,411)          1995             40
  CA     Redlands                         731,365          2,025,619       2,756,983        (58,366)          1995             40
  CA     Palm Springs/Gene Autry          784,589          2,150,904       2,935,492        (54,706)          1995             40
  CA     Thousand Palms                   652,410          1,831,765       2,484,175        (46,563)          1996             40
  CA     Salinas                          622,542          1,731,104       2,353,646        (32,309)          1996             40
  CA     Whittier                         919,755          2,516,477       3,436,232        (47,328)          1996             40
  CA     Florin/Freeport-Sacrament        824,241          2,262,310       3,086,551        (33,232)          1996             40
  CA     Sunrise/Sacramento               819,025          2,231,500       3,050,525        (28,379)          1996             40
  CA     Santa Rosa                     1,351,168          3,669,084       5,020,251        (46,240)          1996             40
  CA     Huntington Beach                 838,648          2,309,309       3,147,957        (25,398)          1996             40
  CA     La Puente/Valley Blvd            992,211          2,710,041       3,702,252        (28,883)          1996             40
  CA     Pacheco/First Ave North        1,198,654          3,257,766       4,456,420        (27,593)          1996             40
  CA     Huntington Bch II/McFadden     1,050,495          2,846,043       3,896,538        (17,858)          1996             40
  CA     Hawaiian Gardens/Norwalk       1,956,411          5,353,015       7,309,426        (34,128)          1996             40
  CA     Sacramento/Auburn Blvd           666,995          1,808,847       2,475,841         (3,860)          1996             40
  CA     Sacramento/Perry                 452,480          1,225,139       1,677,619              0           1996             40
  CT     Wethersfield                     472,831          2,175,076       2,647,906        (88,274)          1994             40
  CT     Enfield                          506,875          1,451,577       1,958,451        (89,857)          1994             40
  CT     East Hartford                    992,547          2,703,468       3,696,015       (118,612)          1995             40
  CT     Waterbury                        746,487          2,036,915       2,783,402        (26,436)          1996             40
  CT     Rocky Hill                     1,327,857          3,608,978       4,936,834        (45,453)          1996             40
  CT     Farmington                     1,272,203          3,454,995       4,727,198        (44,188)          1996             40
  DC     U Street                       1,388,564          3,814,090       5,202,654       (261,647)          1994             40
  DE     Wilmington                       610,689          2,545,248       3,155,937       (489,344)          1989             40
  FL     Kendall                        1,838,903          3,889,338       5,728,241       (791,879)          1988             40
  FL     Ives Dairy                     1,061,776          4,356,283       5,418,060       (859,355)          1988             40
  FL     Longwood                         862,849          2,409,380       3,272,229       (471,711)          1988             40
  FL     Sarasota                       2,007,894          3,054,294       5,062,188       (433,573)          1988             40
  FL     WPB Southern                     996,405          3,030,150       4,026,555       (173,421)          1991             40
  FL     WPB II                           572,284          2,386,742       2,959,027       (201,144)          1991             40
  FL     Port Richey                      605,850          1,728,767       2,334,616       (119,947)          1994             40
  FL     Ft. Myers                        645,219          1,465,579       2,110,797        (97,264)          1994             40
  FL     North Lauderdale               1,282,769          3,331,072       4,613,841       (201,113)          1994             40
  FL     Naples                           636,051          1,779,048       2,415,099        (99,882)          1994             40
  FL     Hallandale                     1,696,519          4,642,835       6,339,354       (196,603)          1995             40
  FL     Davie                          2,005,938          5,520,059       7,525,997       (222,970)          1995             40
  FL     Tampa/Adamo                      837,180          2,306,048       3,143,228        (92,383)          1995             40
  FL     SR 84 (Southwest)              1,903,782          5,235,128       7,138,910       (164,351)          1995             40
  FL     Quail Roost                    1,663,641          4,544,555       6,208,196       (142,233)          1995             40
  FL     Tamiami                        1,962,917          5,376,701       7,339,618       (213,171)          1995             40
  FL     Highway 441 (2nd Avenue)       1,734,958          4,770,762       6,505,720       (188,956)          1995             40
  FL     Miami Sunset                   2,205,018          6,037,315       8,242,333       (239,647)          1995             40
  FL     Doral (Archway)                1,633,500          4,511,904       6,145,404       (180,162)          1995             40
  FL     Boca Raton                     1,505,564          4,123,885       5,629,449        (77,657)          1996             40
  FL     Ft Lauderdale                  1,063,136          2,949,236       4,012,371        (55,535)          1996             40
  FL     Coral Way                      1,574,578          4,314,468       5,889,045        (73,458)          1996             40
  FL     Miller Rd.                     1,409,474          3,898,643       5,308,117        (67,744)          1996             40
  FL     Harborview/Port Charlotte        883,344          2,400,333       3,283,677        (35,513)          1996             40
  FL     Miami Gardens/441                540,649          1,469,557       2,010,206        (18,293)          1996             40
  FL     Miramar/State Rd 7             1,797,370          4,892,278       6,689,647        (61,244)          1996             40
  FL     Delray Bch/W Atlantic Blvd       388,538          1,059,895       1,448,433         (9,003)          1996             40
  FL     Okeechobee Partners, LP        1,134,363                  0       1,134,363              0           1996             40
  GA     South Cobb                       161,509          1,426,924       1,588,434       (141,428)          1992             40
  GA     Lilburn                          634,879          1,752,471       2,387,351       (123,132)          1994             40
  GA     Eastpoint                        937,618          2,298,234       3,235,852       (154,466)          1994             40
  GA     Acworth                          520,032          1,576,975       2,097,007        (62,376)          1994             40
  GA     Western Hills                    846,462          1,943,913       2,790,375       (108,755)          1994             40
  GA     Stone Mountain                 1,053,620          2,908,080       3,961,700        (55,241)          1996             40
  IL     Brickyard                        716,443          1,975,626       2,692,069       (122,000)          1994             40
  IL     Cermak                           949,042          2,721,692       3,670,734       (155,573)          1994             40
  IL     Schaumburg                     1,159,033          3,215,918       4,374,951       (134,255)          1995             40
  KS     Shawnee                          546,118          1,513,710       2,059,828       (105,054)          1994             40
  KS     Olathe                           429,808          1,221,171       1,650,979        (86,147)          1994             40
  KS     Overland Park                    561,549          1,557,022       2,118,571       (108,698)          1994             40
  KS     State Avenue                     448,025          1,266,372       1,714,397        (69,415)          1994             40
  LA     Tchoup (New Orleans)             920,987          2,623,998       3,544,985       (178,744)          1994             40
  MA     Worcester                        661,235          1,623,807       2,285,042        (94,723)          1994             40
  MA     Haverhill                        573,068          1,573,790       2,146,858        (89,595)          1994             40
  MA     New Bedford                      768,959          2,109,361       2,878,319       (120,038)          1994             40
  MA     Whitman                          544,178          1,524,546       2,068,724        (85,554)          1994             40
  MA     Brockton                       1,134,761          3,104,615       4,239,376        (59,023)          1996             40
  MA     Northborough                     822,364          2,279,586       3,101,950        (43,203)          1996             40
  MA     Nashua/Tyngsboro               1,211,930          3,293,838       4,505,768        (42,580)          1996             40
  MA     South Easton                     909,912          2,465,382       3,375,294        (31,173)          1996             40
  MA     North Attleboro                  908,949          2,460,427       3,369,376        (30,882)          1996             40
  MA     Fall River                       773,781          2,097,333       2,871,114        (26,379)          1996             40
  MA     Salisbury                        771,078          2,096,159       2,867,236        (27,170)          1996             40
  MD     Annapolis/Route 50             1,565,664          4,351,566       5,917,229       (712,851)          1989             40
  MD     Silver Spring                  2,776,490          4,491,681       7,268,172       (832,466)          1989             40
  MD     Essex                          1,015,773          2,409,368       3,425,142       (383,806)          1990             40
  MD     Columbia                       1,057,034          3,319,853       4,376,887       (477,431)          1991             40
  MD     Rockville                      1,376,588          3,787,342       5,163,931       (238,545)          1994             40
  MD     Annapolis/Trout                1,635,928          4,475,643       6,111,571       (260,670)          1994             40
  MD     Montgomery Village             1,287,176          3,569,068       4,856,245       (201,500)          1994             40
  MD     Millersville                   1,501,123          4,132,128       5,633,251       (126,679)          1995             40
  MD     Waldorf                        1,169,197          3,187,713       4,356,910       (107,308)          1995             40
  MD     Rt 3/Millersville                546,011          1,493,533       2,039,544        (18,984)          1996             40
  MD     Balto City/E Pleasant St       1,547,767          4,185,072       5,732,839         (8,718)          1996             40
  MD     SUSA Partnership/Management   10,427,038          8,906,429      19,333,467       (335,988)          1989              5
  MI     Lincoln Park                   1,028,677          2,168,856       3,197,533        (92,200)          1995             40
  MI     Tel-Dixie                        595,495          1,673,366       2,268,861        (71,627)          1995             40
  MI     Troy/Coolidge Highway          1,264,541          3,425,505       4,690,046        (14,324)          1996             40
  MI     Grand Rapids/28th St SE          598,182          1,621,080       2,219,261         (6,770)          1996             40
  MI     Grandville/Spartan Ind Dr        579,599          1,840,838       2,420,437         (7,686)          1996             40
  MO     Grandview                        511,576          1,444,696       1,956,272       (100,201)          1994             40
  MO     Raytown                          427,056          1,231,337       1,658,393        (68,659)          1994             40
  NC     Charlotte/Tryon St             1,003,418          2,731,345       3,734,763        (34,209)          1996             40
  NC     Raleigh/Hillsborough St          753,296          2,051,496       2,804,791        (25,935)          1996             40
  NC     Charlotte/Amity Rd               947,871          2,583,190       3,531,061        (32,365)          1996             40
  NJ     Pennsauken                       914,938          2,527,814       3,442,752       (169,533)          1994             40
  NJ     Lawnside                       1,095,126          2,989,156       4,084,281       (131,160)          1995             40
  NJ     Cherry Hill/Cuthbert             720,183          1,900,951       2,621,135        (84,236)          1995             40
  NJ     Cherry Hill/Route 70             693,641          1,916,650       2,610,291        (64,479)          1995             40
  NJ     Pomona                           529,657          1,438,132       1,967,790        (18,233)          1996             40
  NJ     Mays Landing                     386,592          1,051,300       1,437,892        (13,410)          1996             40
  NJ     Hackensack/S River St          3,646,649          9,863,617      13,510,266        (20,529)          1996             40
  NJ     Secaucus/Paterson Plank        2,851,097          7,712,681      10,563,778        (16,065)          1996             40
  NJ     Harrison/Harrison Ave            822,192          2,227,121       3,049,313         (4,637)          1996             40
  NJ     Orange/Oakwood Ave             2,408,877          6,517,030       8,925,907        (13,574)          1996             40
  NJ     Flanders/Bartley Flanders        645,486          1,749,362       2,394,848         (3,641)          1996             40
  NM     Lomas                            251,018            731,936         982,953        (47,970)          1994             40
  NM     San Mateo                        524,982          1,498,132       2,023,114        (97,359)          1994             40
  NM     Montgomery                       606,860          1,687,596       2,294,456       (111,549)          1994             40
  NM     Legion                                 0          1,914,193       1,914,193       (121,526)          1994             40
  NM     Ellison                          620,366          1,749,705       2,370,071       (115,271)          1994             40
  NM     Hotel Circle                     255,163          1,538,023       1,793,186        (49,355)          1994             40
  NM     Eubank                           577,099          1,675,220       2,252,319        (88,654)          1994             40
  NM     Coors                            494,400          1,380,150       1,874,550        (74,264)          1994             40
  NM     Osuna                            696,685          1,975,113       2,671,798       (102,833)          1994             40
  NM     East Central                     292,031            847,986       1,140,017        (46,882)          1994             40
  NV     Rainbow                          892,753          2,475,071       3,367,825       (131,642)          1994             40
  NV     Oakey                            663,607          1,845,885       2,509,492        (94,641)          1995             40
  NV     Tropicana                        815,085          2,287,872       3,102,957       (120,012)          1994             40
  NV     Sunset                           947,534          2,630,111       3,577,644       (139,850)          1994             40
  NV     Sahara                         1,217,565          3,392,383       4,609,948       (162,599)          1995             40
  NV     Charleston                       558,006          1,529,957       2,087,963        (51,586)          1995             40
  NV     Las Vegas-Sahara/Pioneer       1,040,367          2,842,388       3,882,755        (53,821)          1996             40
  NY     Coram/Bald Hill                1,976,332          5,352,301       7,328,633        (67,340)          1996             40
  OK     Sooner Road                      453,185          1,298,525       1,751,710        (90,560)          1994             40
  OK     10th Street                      621,413            869,872       1,491,285        (53,202)          1994             40
  OK     Moore                            281,912            836,956       1,118,869        (58,369)          1994             40
  OK     NW Expressway                    353,735          1,048,637       1,402,372        (72,390)          1994             40
  OK     Midwest City                     443,545          1,231,967       1,675,512        (85,931)          1994             40
  OK     Meridian                         244,143          1,024,213       1,268,356        (55,885)          1994             40
  OK     Air Depot                        347,690          1,025,468       1,373,158        (70,357)          1994             40
  OK     Peoria                           540,318          1,524,301       2,064,619        (58,023)          1995             40
  OK     11th & Mingo                     757,054          2,125,763       2,882,817        (80,906)          1995             40
  OK     Skelly                           173,331            506,294         679,625        (20,454)          1995             40
  OK     Lewis                            642,511          1,780,903       2,423,414        (67,987)          1995             40
  OK     Sheridan                         531,978          1,544,333       2,076,311        (56,703)          1995             40
  OK     OKC/Roxbury Blvd                 241,220            671,753         912,972         (6,175)          1996             40
  OK     OKC/33rd Street                  267,059            741,710       1,008,769         (6,678)          1996             40
  OR     Hillsboro/229th Ave            1,198,358          3,249,301       4,447,659        (40,650)          1996             40
  OR     Beaverton/Murray Ave           1,086,999          2,948,220       4,035,219        (36,886)          1996             40
  OR     Aloha/185th Ave                1,337,157          3,624,573       4,961,730        (45,342)          1996             40
  PA     Philadelphia                   1,574,064          2,858,975       4,433,040       (522,705)          1990             40
  PA     King of Prussia                1,354,359          3,698,219       5,052,577       (159,123)          1995             40
  PA     Warminster                       891,048          2,518,740       3,409,788       (106,125)          1995             40
  PA     Allentown                        578,632          1,618,025       2,196,657        (72,028)          1995             40
  PA     Bethlehem                        843,324          2,340,805       3,184,129       (104,295)          1995             40
  PA     Norristown                       868,586          2,405,332       3,273,918        (50,835)          1996             40
  PA     Storage Partners of Paoli        433,482            849,584       1,283,065              0           1996             40
  SC     Charleston/Ashley River Rd       475,367          1,298,593       1,773,960        (16,293)          1996             40
  SC     Columbia/Broad River Rd          461,455          1,267,675       1,729,130        (15,995)          1996             40
  TN     Summer                           172,093          2,685,603       2,857,696       (615,157)          1986             40
  TN     Union                            286,925          1,933,333       2,220,258       (412,368)          1987             40
  TN     Memphis/Mt Moriah              1,034,883          2,404,737       3,439,620       (317,408)          1989             40
  TN     Antioch/Nashville                822,125          2,337,391       3,159,516       (163,330)          1994             40
  TN     Keyport (Gateway)                403,492          1,149,225       1,552,717        (67,663)          1994             40
  TN     Chattanooga                      484,457          1,400,826       1,885,283        (40,530)          1995             40
  TN     Memphis/Ridgeway                 638,849          1,290,438       1,929,287        (49,378)          1995             40
  TN     Winchester                       774,069            974,471       1,748,539              0           1996             40
  TN     Nashville/Lebanon Pike         1,366,208          3,748,062       5,114,270        (47,170)          1996             40
  TN     Nashville/Haywood                423,170          1,166,891       1,590,061         (5,164)          1996             40
  TN     Nashville/Murfreesboro           344,720            950,811       1,295,530         (4,263)          1996             40
  TN     SUSA/Poplar Partners, LP       1,750,000             10,635       1,760,635              0           1996             40
  TN     Nashville/Trousdale            1,440,860          3,901,994       5,342,853         (8,223)          1996             40
  TN     Nashville/Murfreesboro         1,222,229          3,309,033       4,531,263         (6,932)          1996             40
  TN     Nashville/Old Hickory Rd       1,271,786          3,444,402       4,716,188         (7,271)          1996             40
  TN     Antioch/Bell Road                841,235          2,280,513       3,121,747         (4,854)          1996             40
  TN     Franklin/Liberty Pike            844,335          2,287,937       3,132,272         (9,607)          1996             40
  TX     Ft. Worth Avenue                 393,893          1,219,703       1,613,596        (71,018)          1994             40
  TX     Euless                           359,330          1,105,097       1,464,427        (58,295)          1994             40
  TX     North Freeway                    687,758          1,931,734       2,619,492       (105,869)          1994             40
  TX     South Freeway                    441,599          1,296,475       1,738,074        (68,112)          1994             40
  TX     White Settlement               1,370,309          3,114,469       4,484,778       (169,012)          1994             40
  TX     Airport Freeway                  616,535          1,850,985       2,467,521        (98,519)          1994             40
  TX     Midway                         1,169,859          2,901,525       4,071,384       (129,345)          1994             40
  TX     Dallas/Preston                 1,194,744          3,262,768       4,457,513        (95,509)          1995             40
  TX     Bedford                          923,948          2,525,303       3,449,251        (32,439)          1996             40
  TX     Spring/I-45 North              1,110,728          3,005,855       4,116,583        (18,795)          1996             40
  TX     Sugarland/Old Mill Rd            675,660          1,830,545       2,506,205         (7,636)          1996             40
  UT     Orem                             629,867          1,749,682       2,379,549       (100,127)          1994             40
  UT     Sandy                            949,065          2,610,341       3,559,406       (147,269)          1994             40
  UT     West Valley                      576,248          1,592,302       2,168,550        (44,482)          1995             40
  VA     Fairfax Station                1,019,015          2,227,285       3,246,299       (164,583)          1993             40
  VA     Chantilly                        882,257          2,515,075       3,397,332       (160,743)          1994             40
  VA     Clarendon                      1,187,575          5,201,724       6,389,299        (70,764)          1996             40
  VA     Reston                           551,285          2,326,986       2,878,271        (40,304)          1996             40
  VA     Falls Church                   1,226,736          3,398,369       4,625,105       (114,597)          1995             40
  VA     Willow Lawn                    1,516,115          4,105,846       5,621,961        (34,258)          1996             40
  VA     Stafford/Jefferson Davis         751,398          2,035,961       2,787,359         (8,523)          1996             40
  VA     Fredericksburg/Jefferson         668,526          1,812,040       2,480,566         (7,592)          1996             40
  VA     Charlottesville/Seminole         748,988          2,029,716       2,778,704         (8,502)          1996             40
  VA     Fredericksburg/Plank Rd          846,358          2,287,063       3,133,422         (9,566)          1996             40
  WA     Vancouver/78th St                753,071          2,045,377       2,798,447        (25,602)          1996             40

                                       =============================================================
                                       $235,139,274     $620,503,025    $855,642,289   ($26,572,972)
                                       =============================================================
</TABLE>
<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors
of Storage USA, Inc.

                  Our report on the  consolidated  financial  statements of SUSA
Partnership,  L.P. is included  in this Form 10-K of SUSA  Partnership,  L.P. In
connection  with our audits of such financial  statements,  we have also audited
the related financial statement schedule included in this Form 10-K.

                  In our opinion,  the financial  statement schedule referred to
above, when considered in relation to the basic financial  statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.






                                                 COOPERS & LYBRAND L.L.P.



Baltimore, Maryland
January 29, 1997