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

                                    FORM 10-K

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

For the fiscal year ended December 31, 1997

                                       or

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

Commission File Number 1-10850

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

        California                                          95-4300893
-------------------------------              -----------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

      701 Western Avenue
     Glendale, California                                    91201-2349
     --------------------                                    ----------
(Address of principal executive offices)                     (Zip Code)


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

           Securities registered pursuant to Section 12(b) of the Act

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

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


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

                                    Yes X  No
                                        --   --

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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Company  as  of  February   28,   1998:   Common   Stock   Series  A,  $.01  Par
Value-$18,608,150 (computed on the basis of $22 per share which was the reported
closing sale price of the Company's  Common Stock Series A on the American Stock
Exchange on February 28, 1998).

The number of shares  outstanding of the Company's classes of common stock as of
February 28, 1998:

             Common Stock, $.01 Par Value - Series A 860,734 shares
              Common Stock, $.01 Par Value - Series B 90,859 shares
             Common Stock, $.01 Par Value - Series C 257,432 shares

                       DOCUMENTS INCORPORATED BY REFERENCE

     (a)  Information  required by Part III will be included in an  amendment to
this  Form  10-K  under  cover of a Form 10- K/A  filed  within  120 days of the
Company's 1997 fiscal year, which  information is incorporated by reference into
Part III.
<PAGE>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                                     PART I.

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

General
-------

     Public  Storage  Properties  XX,  Inc.  (the  "Company")  is a real  estate
investment trust ("REIT") organized as a California  corporation that was formed
to succeed to the business of Public  Storage  Properties XX, Ltd., a California
limited  partnership  (the  "Partnership"),   in  a  reorganization  transaction
completed on August 27, 1991.

     The Partnership offered 100,000 units of limited partnership  interest (the
"Units") to the public in July 1989;  41,377 units were sold. The  Partnership's
general partners were PSI Associates II, Inc. ("PSA"), a California corporation,
and  B.  Wayne  Hughes  ("Hughes").  PSA  was an  affiliate  of  Public  Storage
Management, Inc., a California corporation (see below).

     Effective  August 27, 1991, the  Partnership  transferred all of its assets
and liabilities to the Company pursuant to a plan of Reorganization  approved by
a majority of the limited partners. In exchange for the Partnership's assets and
liabilities,  the  Company  issued  1,044,874  shares of common  stock  Series A
("Series A shares"),  90,859 shares of common stock Series B ("Series B shares")
and 257,432  shares of common  stock Series C ("Series C shares") of the Company
to the Partnership.  The Partnership then made a liquidating distribution to the
limited partners by distributing 99 percent of the Series A shares (on the basis
of 25 Series A shares for each  Unit).  The  remaining 1 percent of the Series A
shares and all of the Series B shares and Series C shares  were  distributed  to
the  general  partners  in  respect  of  their  interests  in  the  Partnership.
Subsequent thereto, the Partnership was dissolved. The Company has elected to be
taxed as a REIT for Federal income tax purposes.

     The Company is a finite life REIT, with a term until December 31, 2038 (the
same  as the  predecessor  Partnership).  However,  pursuant  to  the  Company's
by-laws, in 1999 the Company will be required to present the shareholders with a
proposal for the sale or financing of the properties and, in the case of a sale,
a liquidation of the Company,  unless the  properties  have already been sold or
financed. See " Sale or Financing" below.

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

     The Company has acquired 7 properties,  all of which are in operation.  The
Company   believes   that  its   mini-warehouses   have   attractive   operating
characteristics.

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

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

     At December 31, 1997, the Company owned 7 mini-warehouse facilities located
in 5 states:  California (2), Illinois (2), Minnesota (1), Missouri (1) and Ohio
(1).

     The  Company  believes  that its  operating  results  have  benefited  from
favorable   industry   trends  and  conditions.   Notably,   the  level  of  new
mini-warehouse construction has decreased somewhat from the peak mid-1980 levels
while consumer demand has increased. In addition, the Company's  mini-warehouses
are  characterized  by a low level of capital  expenditures  to  maintain  their
condition and appearance.
                                       2
<PAGE>

     Mini-warehouses

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

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

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

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

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

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

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

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

*    Capitalize on "Public  Storage's" name recognition.  PSI, together with its
     predecessor,  has  more  than  20  years  of  operating  experience  in the
     mini-warehouse  business, and is the largest operator of mini-warehouses in
     the United States. PSI believes that its marketing and advertising programs
     improve its competitive position in the market. PSI's in-house Yellow Pages
     staff designs and places  advertisements  in approximately 700 directories.
     Commencing  in  early  1996,  PSI  began  to  experiment  with a  telephone
     reservation  system designed to provide added customer  service.  Customers
     calling either PSI's toll-free  telephone referral system,  (800) 44-STORE,
     or a mini-warehouse facility are directed to PSI's reservation system where
     a trained  representative  discusses with the customer space  requirements,
     price and  location  preferences  and also  informs  the  customer of other
     products and services  provided by PSI. The  telephone  reservation  system
     supports  rental  activity  at  all  of  the  Company's  properties.  PSI's
     toll-free  telephone referral system services  approximately  160,000 calls
     per month from  potential  customers  inquiring  as to the  nearest  Public
     Storage mini-warehouse.

*    Maintain  high  occupancy  levels  and  increase  realized  rents.  Average
     occupancy for the Company's  mini-warehouses has decreased from 94% in 1996
     to 92% in 1997.  Realized  monthly rents per occupied square foot increased
     from $8.45 in 1996 to $9.28 in 1997.

                                       3
<PAGE>

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

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

Property Operator
-----------------

     The  Company's  mini-warehouse  properties  are  managed  by  PSI  under  a
Management Agreement (as amended, the "Management Agreement").

     Under the supervision of the Company,  PSI coordinates the operation of the
facilities,  establishes rental policies and rates,  directs marketing activity,
and directs the purchase of equipment and supplies,  maintenance  activity,  and
the  selection  and  engagement  of  all  vendors,   supplies  and   independent
contractors.

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

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

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

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

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

     The Management  Agreement,  as amended in February 1995,  provides that (i)
the Management  Agreement will expire in February 2002 provided that in February
of  each  year  it  shall  be  automatically  extended  for  one  year  (thereby
maintaining a seven-year  term) unless either party  notifies the other that the
Management  Agreement  is not being  extended,  in which  case it expires on the
first  anniversary  of  its  then  scheduled  expiration  date.  The  Management
Agreement may also be  terminated  by either party for cause,  but if terminated
for cause by the  Company,  the  Company  retains  the rights to use the service
marks  and  related  designs  until  the  then  scheduled  expiration  date,  if
applicable, or otherwise a date seven years after such termination.
 
                                      4
<PAGE>

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

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

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

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

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

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

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

     The by-laws of the Company provide that, during 1999,  unless  shareholders
have previously  approved such a proposal,  the  shareholders  will be presented
with a proposal to approve or  disapprove  (a) the sale or  financing  of all or
substantially  all of the  properties and (b) the  distribution  of the proceeds
from  such  transaction  and,  in the  case of a sale,  the  liquidation  of the
Company.

Employees
---------

     As of December  31,  1997,  the Company  had 28  employees,  14 persons who
render services on behalf of the Company on a full-time basis and 14 persons who
render services on a part-time basis (6 of whom were executive officers).  These
persons include resident managers, assistant managers, relief managers, district
managers, and administrative and maintenance personnel.

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

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

Year 2000 Compliance
--------------------

     PSI has  completed  an initial  assessment  of its  computer  systems.  The
majority of the computer  programs were  installed or upgraded over the past few
years and are Year 2000 compliant.  Some of the older computer programs utilized
by PSI were written  without  regard for Year 2000 issues and could
cause  a  system  failure  or  miscalculations   with  possible   disruption  of
operations. Each of these computer programs and systems has been evaluated to be
upgraded or replaced as part of PSI Year 2000 project.

     The cost of the Year 2000 project will be allocated to all  companies  that
use the PSI  computer  systems.  The  cost of the  Year  2000  project  which is
expected to be allocated to the Company is less than $30,000.  This cost will be
expensed as incurred.

                                       5
<PAGE>

     The project is expected to be completed by March 31, 1999 which is prior to
any   anticipated   impact  on  operating   systems.   PSI  believes  that  with
modifications to existing software and, in some instances, the conversion to new
software,  the Year 2000 issue will not pose significant  operational  problems.
However,  if such  modifications are not made, or are not completed timely,  the
Year 2000 issue could have a material impact on the operations of the Company.

     The  costs  of the  project  and the  date on which  PSI  believes  it will
complete the Year 2000  modifications  are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. There can be
no guarantee  that these  estimates  will be achieved and actual  results  could
differ materially from those anticipated.

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

     In  February  1998,  the  Company  and  PSI  agreed,   subject  to  certain
conditions,  to merge. Upon the merger,  each outstanding share of the Company's
common  stock  series A (other  than  shares  held by PSI or by  holders  of the
Company's  common stock  series A ("Series A  Shareholders")  who have  properly
exercised dissenters' rights under California law ("Dissenting Shares")) will be
converted  into the right to receive cash,  PSI common stock or a combination of
the two,  as  follows:  (i) with  respect  to a certain  number of shares of the
Company's  common  stock series A (not to exceed 20% of the  outstanding  common
stock  series A of the Company,  less any  Dissenting  Shares),  upon a Series A
Shareholder's election,  $22.57 in cash, subject to reduction as described below
or (ii)  that  number  (subject  to  rounding)  of shares  of PSI  common  stock
determined by dividing  $22.57,  subject to reduction as described below, by the
average of the per share  closing  prices on the New York Stock  Exchange of PSI
common stock during the 20 consecutive  trading days ending on the fifth trading
day  prior  to  the  special   meeting  of  the  Company's   shareholders.   The
consideration  paid by PSI to the Series A  Shareholders  in the merger  will be
reduced by the amount of cash distributions  required to be paid to the Series A
Shareholders  by the Company  prior to  completion  of the merger  (estimated at
$0.93  per  share)  in  order  to  satisfy  the  Company's   REIT   distribution
requirements ("Required REIT Distributions").  The consideration received by the
Series A  Shareholders  in the merger,  however,  along with any  Required  REIT
Distributions,  will not be less than $22.57 per share of the  Company's  common
stock series A, which amount  represents  the market value of the Company's real
estate  assets at  October  1,  1997  (based on an  independent  appraisal)  and
interest of the Series A  Shareholders  in the  estimated net asset value of its
other assets at April 30,  1998.  Additional  distributions  will be made to the
Series A Shareholders to cause the Company's estimated net asset value allocable
to the Series A  Shareholders  as of the date of the merger to be  substantially
equivalent  to $22.57 per share.  Upon the merger,  each share of the  Company's
common  stock series B and common stock series C (other than shares held by PSI)
would be converted  into the right to receive $10.90 in PSI common stock (valued
as in the case of the Company's  common stock series A) plus (i) any  additional
distributions  equal to the amount by which the  Company's  estimated  net asset
value  allocable to the holders of the Company's  common stock series B and C as
of the date of the  merger  exceeds  $10.90  per  share  and (ii) the  estimated
Required REIT Distributions payable to the holders of the Company's common stock
series B of $0.93 per share. The common stock of the Company held by PSI will be
canceled in the merger. The merger is conditioned on, among other  requirements,
approval by the  Company's  shareholders.  It is  expected  that the merger will
close in the first half of 1998.  PSI is the Company's  mini-warehouse  operator
and owns  24.18% of the total  combined  shares of the  Company's  common  stock
series A, B and C.
                                       6
<PAGE>

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

     The following  table sets forth  information  as of December 31, 1997 about
properties owned by the Company:
<TABLE>
<CAPTION>


                                               Size of        Net Rentable       Number of         Completion
                   Location                     Parcel            Area             Spaces             Date
     -----------------------------            -----------     ---------------    ----------         ---------

     CALIFORNIA
<S>                                           <C>              <C>                   <C>                <C> 
     Los Angeles, Airdrome St.                1.20 acres       56,000 sq. ft.        670           Sep. 1989
     Santa Rosa, Hopper Ave.                  2.31 acres       55,000 sq. ft.        573           Nov. 1989


     ILLINOIS
     Aurora, Farnsworth Ave.                  5.45 acres       60,000 sq. ft.        530           Jul. 1989
     Chicago, So. Chicago Ave.                1.38 acres       52,000 sq. ft.        580           Dec. 1991

     MINNESOTA
     Golden Valley, Winnetka Ave.             2.03 acres       44,000 sq. ft.        474           Dec. 1989

     MISSOURI
     St. Louis, Benham Rd.                    3.95 acres       63,000 sq. ft.        567           Nov. 1990
                                                                                         

     OHIO
     Cleveland, 117th St.                     4.11 acres       70,000 sq. ft.        631           Apr. 1989
</TABLE>

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

     Substantially  all of the Company's  facilities  were acquired prior to the
time that it was customary to conduct environmental investigations in connection
with  property  acquisitions.  During the fourth  quarter of 1995,  the  Company
completed   environmental   assessments   of  its  properties  to  evaluate  the
environmental  condition of, and  potential  environmental  liabilities  of such
properties.  These  assessments  were performed by an independent  environmental
consulting firm. Based on the assessments, the Company expensed $156,000 in 1995
for known environmental remediation requirements.

     The  Company's  properties  are operated to maximize  cash flow through the
regular  review of and,  when  warranted by market  conditions,  adjustments  to
scheduled  rents.  As reflected in the table below,  the Company has experienced
overall improved property operations:
<TABLE>
<CAPTION>

                                                                           For the year ended December 31,
                                                                           -------------------------------
                                                                        1997              1996             1995
                                                                        ----              ----             ----
<S>                                                                      <C>               <C>              <C>
Weighted average occupancy level                                         92%               94%              92%
Realized annual rent per occupied
   square foot (1)                                                     $9.28             $8.45            $7.82
Operating margin: (2)
   Before reduction for depreciation expense                             60%               62%              61%
   After reduction for depreciation expense                              46%               47%              45%

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

                                       7
<PAGE>

     Additional  information  is set  forth  below  with  respect  to the  Santa
Rosa/Hopper Avenue, Los Angeles/Airdrome Street,  Aurora/Farnsworth  Avenue, St.
Louis/Benham, Cleveland/117th Street and Chicago/South Chicago Avenue properties
because  they each  have a book  value of at least  10% of the  estimated  total
assets of the Company or that have  accounted for gross revenues of at least 10%
of the aggregate gross revenues of the Company.

         SANTA ROSA/HOPPER AVENUE. This mini-warehouse is located in Santa Rosa,
California,  approximately 50 miles north of San Francisco in Sonoma County. The
surrounding area includes commercial, industrial and residential developments.

     The  2.31-acre  property,   which  was  completed  in  November  1989,  has
approximately  55,000 net rentable square feet divided into 573 units. No tenant
occupies 10% or more of the rentable area. As of December 31, 1997, the property
was 99% occupied by 567 tenants.

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


                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
   December 31, 1997                       99%                      $8.67
   December 31, 1996                       97                        8.01
   December 31, 1995                       96                        7.26
   December 31, 1994                       92                        7.02
   December 31, 1993                       92                        6.53

     LOS ANGELES/AIRDROME STREET. This mini-warehouse is located in Los Angeles,
California, approximately seven miles west of downtown Los Angeles. The property
is visible from Venice Boulevard,  a major traffic thoroughfare in the area. The
area surrounding the site contains  residential units,  commercial  developments
and office buildings.

         The 1.2-acre  property,  which was  completed in  September  1989,  has
approximately  56,000 net rentable square feet divided into 670 units. No tenant
occupies 10% or more of the rentable area. As of December 31, 1997, the property
was 87% occupied by 583 tenants.

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


                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
  December 31, 1997                       87%                     $13.73
  December 31, 1996                       88                       13.17
  December 31, 1995                       88                       12.55
  December 31, 1994                       88                       12.19
  December 31, 1993                       79                       11.80

     AURORA/FARNSWORTH  AVENUE. This mini-warehouse is located  approximately 32
miles southwest of downtown Chicago,  Illinois, in an area which has experienced
increased  development in recent years. The property is located near commercial,
office  and  industrial   developments  as  well  as  single  and   multi-family
residential units.

     The 5.45-acre property, which was completed in July 1989, has approximately
60,000 net rentable  square feet divided into 530 units.  No tenant occupies 10%
or more of the rentable  area.  As of December  31,  1997,  the property was 88%
occupied by 466 tenants.

                                       8
<PAGE>

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


                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
 December 31, 1997                       88%                      $8.65
 December 31, 1996                       94                        7.67
 December 31, 1995                       95                        7.08
 December 31, 1994                       95                        6.29
 December 31, 1993                       93                        5.73

     ST.  LOUIS/BENHAM.  This  mini-warehouse is located  approximately 11 miles
northwest of downtown St.  Louis,  Missouri.  The  surrounding  area  includes a
combination of residential and commercial developments.

     The  3.95-acre  property,   which  was  completed  in  November  1990,  has
approximately  63,000 net  rentable  square  feet  divided  into 567 units.  The
property  commenced  operations on November 21, 1990. No tenant  occupies 10% or
more of the  rentable  area.  As of December  31,  1997,  the  property  was 90%
occupied by 510 tenants.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the facility at the dates indicated:
                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
  December 31, 1997                       90%                      $7.16
  December 31, 1996                       96                        6.48
  December 31, 1995                       96                        5.96
  December 31, 1994                       86                        5.66
  December 31, 1993                       76                        5.19

     CLEVELAND/117TH  STREET.  This  mini-warehouse  is located  five miles from
downtown Cleveland, Ohio at the intersection of 117th Street and Western Avenue.
The property is visible from 117th Street,  which is a busy thoroughfare linking
three  major  highways  in the area:  the 71  Freeway,  Interstate  90 and the 2
Freeway.  The  local  area  includes  industrial  developments  and  single  and
multi-family units.

     The  4.11-acre   property,   which  was   completed  in  April  1989,   has
approximately  70,000 net rentable square feet divided into 631 units. No tenant
occupies 10% or more of the rentable area. As of December 31, 1997, the property
was 94% occupied by 593 tenants.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the facility at the dates indicated:
                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
 December 31, 1997                       94%                      $7.60
 December 31, 1996                       95                        6.71
 December 31, 1995                       95                        6.14
 December 31, 1994                       94                        5.86
 December 31, 1993                       94                        5.31


                                       9
<PAGE>
     CHICAGO/SOUTH  CHICAGO AVENUE. This mini-warehouse is located approximately
ten miles southeast of downtown Chicago on South Chicago Avenue.  Development in
the  surrounding  area includes a combination of residential  units,  commercial
development and light manufacturing.

     The  1.38-acre  property,   which  was  completed  in  December  1991,  has
approximately  52,000 net rentable square feet divided into 580 units. No tenant
occupies 10% or more of the rentable area. As of December 31, 1997, the property
was 93% occupied by 539 tenants.

     Set forth below is a schedule  showing the occupancy  rate and the rent per
square foot for the facility at the dates indicated:
                                                             Annual Realized
                                                                  Rent Per
          Date                        Occupancy Rate            Square Foot
          ----                        --------------            -----------
 December 31, 1997                       93%                     $11.27
 December 31, 1996                       94                        9.95
 December 31, 1995                       89                        9.30
 December 31, 1994                       88                        8.88
 December 31, 1993                       79                        8.94

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

         None.

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

     No matters were  submitted to a vote of security  holders during the fourth
quarter 1997.

                                    PART II.

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

     The  Company's  Series A shares are  registered  under Section 12(b) of the
Securities  Exchange Act of 1934 on the American  Stock Exchange  ("AMEX"),  and
commenced  trading on September  16, 1991 under the symbol PSZ. The Series B and
Series C shares were not registered under Section 12 of the Securities  Exchange
Act of 1934 and no public  trading  market  exists for the Series B and Series C
shares.

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

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


                                       10
<PAGE>

Market Prices and Dividends
---------------------------

     The  following  table sets forth the high and low sales  prices on the AMEX
composite  tape per Series A share and dividends per Series A share and Series B
share for fiscal 1996 and 1997:
<TABLE>
<CAPTION>
                                                                   Sales Price          Cash Dividends
     Year                      Quarter Ended                    High         Low           Declared*
     ----                      -------------                    ----         ---           ---------
<C>              <C>                                            <C>         <C>              <C>  
1996             March 31                                       $17-3/8     $16-1/4          $0.28
                 June 30                                         17-3/8      16-3/8           0.28
                 September 30                                    19-1/2      16-3/8           0.28
                 December 31                                     22-1/4      19-1/8           0.75 (1)

1997             March 31                                       $22-7/8     $20-1/2          $0.28
                 June 30                                         22-3/4      21-7/8           0.28
                 September 30                                        22      19-3/8           0.28
                 December 31                                     21-3/4      20-3/4           0.68(2)

</TABLE>
*  No dividends were declared on the Series C shares.
(1) Includes special dividend of $.47.
(2) Includes special dividend of $.40.

     As of December 31, 1997, there were  approximately 653 holders of record of
the Company's Series A shares.

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

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

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

     Under generally accepted accounting principles, the amount of distributions
declared to shareholders exceeded income by $80,000 during 1996.

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

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

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

     The Board of  Directors  has  authorized  the Company to  repurchase  up to
300,000 Series A shares.  Through 1996, the Company repurchased 184,140 Series A
shares.  No Series A shares were  repurchased  in 1997 or through  February  28,
1998.

                                       11
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA.
         -----------------------

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

                                                                 Years Ended December 31,
                                           -----------------------------------------------------------------------
                                            1997            1996           1995            1994             1993
                                           --------   -------------   ------------   --------------    -----------
                                                           (In thousands, except per share data)
Operating data:
---------------
REVENUES:
<S>                                         <C>            <C>             <C>            <C>             <C>   
   Rental income                            $3,420         $3,192          $2,913         $2,742          $2,426
   Interest and other income                    46             34              43             57              33
                                           --------   -------------   ------------   --------------    -----------
                                             3,466          3,226           2,956          2,799           2,459
                                           --------   -------------   ------------   --------------    -----------

EXPENSES:
   Cost of operations                        1,165          1,045             969            969             912
   Management fees paid to affiliate           205            169             175            164             146
   Depreciation                                475            469             471            483             480
   General and administrative                  112            102             100            109             115
   Environmental cost                           -              -              156             -               -
   Interest expense                             -               2              -              -               -
                                           --------   -------------   ------------   --------------    -----------
                                             1,957          1,787           1,871           1,725          1,653
                                           --------   -------------   ------------   --------------    -----------

NET INCOME                                  $1,509         $1,439          $1,085          $1,074           $806
                                           ========   =============   ============   ==============    ===========

Balance sheet data:
-------------------
Total cash and cash equivalents           $  1,252      $     881       $     538       $  1,347        $  1,968
Total assets                               $15,752        $15,726         $15,739        $16,819         $17,763
Shareholders' equity                        14,595         14,548          14,697         16,085          16,984

Net income per Series A share(2):
   Basic                                      $1.59          $1.49           $1.06          $1.00           $0.71
   Fully diluted                              $1.25          $1.18           $0.85          $0.81           $0.59

Dividends declared per share(3)(4):
   Series A                                   $1.52          $1.59           $1.40          $1.03           $0.87
   Series B                                   $1.52          $1.59           $1.40          $1.03           $0.87
Book value (at end of period)(5)             $12.07         $12.03          $12.06         $12.43          $12.51

Weighted average Common shares outstanding:
    Basic- Series A                            861            867             898            982           1,019
    Diluted- Series A                        1,209          1,216           1,246          1,330           1,368

Other data:
Net cash provided by
   operating activities                     $2,016         $1,959          $1,629         $1,557          $1,282
Net cash used in investing activities         (132)           (64)            (41)          (172)            (44)
Net cash used in financing activities       (1,513)        (1,552)         (2,397)        (2,006)         (1,025)
Funds from operations (1)                    1,984          1,908           1,712          1,557           1,286
Capital expenditures
   to maintain facilities                     (132)           (64)            (41)           (24)            (44)


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

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

(2)  Net  income  per share is  presented  on a basic  and  diluted  basis.  The
     earnings per share amount prior to 1997 have been  reflected as required to
     comply with statement of Financial  Accounting  Standards No. 128, Earnings
     per Share.  For further  discussion of earnings per share and the impact of
     Statement No. 128, see notes to the financial  statements beginning on page
     F-6.  Basic  earnings  per share  represents  the  shareholders'  rights to
     distribution out of the respective period's net income, which is calculated
     by dividing net income after  reduction for any  distributions  made to the
     holders of the Company Common Stock Series B (holders of the Company Common
     Stock  Series C are not  entitled to cash  distributions)  by the  weighted
     average  number of shares of the Company Common Stock Series A. (See note 4
     below.) Diluted earnings per share assumes conversion of the Company Common
     Stock Series B and C into the Company Common Stock Series A.

(3)  In connection  with the  reorganizations  of the Company  Partnership,  the
     Company  issued the  Company  Common  Stock  Series A, B and C. The capital
     structure of the Company was designed to reflect the economic rights of the
     limited  partners and general  partners in the Company  Partnership and the
     capital  shares were  distributed  to the  limited and general  partners in
     respect of their interest in the Company Partnership.

     The  Company  Common  Stock  Series A shares are  entitled  to 100% of cash
     distributions from operations from the Company until (a) the sum of (1) all
     cumulative  dividends  and  other  distributions  from all  sources  to the
     holders of the Common  Stock  Series A shares  and (2) the  cumulative  the
     Company  distributions from all sources with respect to all units equal (b)
     the product of $20 multiplied by the number of the then-outstanding "Common
     Stock Series A shares," at which time the Company Common Stock Series B and
     Common  Stock  Series C shares  will  automatically  convert to the Company
     Common Stock Series A shares ("Conversion").

     As of  December  31,  1997,  Conversion  will  occur  when  $10,046,000  in
     additional  distributions  are made to holders of the Company  Common Stock
     Series A  (assuming  no further  repurchases  of the Company  Common  Stock
     Series A).

(4)  For federal income tax purposes,  distributions on the Company Common Stock
     for 1993, 1994,  1995,  1996, and 1997 were from ordinary income.  For GAAP
     income purposes, distributions exceeded net income in 1993, 1994, 1995, and
     1996  by   $157,000,   $19,000,   $287,000,   and   $80,000   respectively.
     Distributions  for each year  include  distributions  declared  during  the
     fourth quarter and paid in January.  The difference  between the components
     of distributions  for GAAP purposes and tax purposes results primarily from
     the methods used to compute depreciation expense.

(5)  Book value per share  computed based on the number of shares of the Company
     Common Stock Series A, B and C outstanding at the end of the period.

                                       13
<PAGE>

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

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

     YEAR ENDED  DECEMBER  31, 1997  COMPARED TO YEAR ENDED  DECEMBER  31, 1996.
     --------------------------------------------------------------------------
Netincome in 1997 was $1,509,000 compared to $1,439,000 in 1996, representing an
increase  of $70,000 or 5%. Net income per  diluted  Series A share was $1.25 in
1997  compared  to $1.18 in 1996,  representing  an  increase  of $.07 or 6% per
share. These increases are due to an increase in property net operating income.

     During 1997,  property net  operating  income  (rental  income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased  $66,000 from  $1,509,000 in 1996 to $1,575,000 in 1997. This increase
is attributable to an increase in rental income at the Company's  mini-warehouse
operations.

     Rental income for the  mini-warehouse  operations  increased $228,000 or 7%
from  $3,192,000 in 1996 to $3,420,000  in 1997.  Cost of operations  (including
management fees paid to an affiliate of the Company)  increased  $156,000 or 13%
from  $1,214,000 in 1996 to $1,370,000 in 1997. The results of these changes was
a net increase in property net operating income before  depreciation  expense of
$72,000 or 4% from  $1,978,000  in 1996 to  $2,050,000  in 1997.  Rental  income
increased  primarily  due to an  increase  in  rental  rates at all seven of the
Company's  properties.  The  increase  in cost of  operations  is mainly  due to
increases in management fees, payroll, advertising and property tax expense.

     Weighted  average   occupancy  levels  for  the  Company's   mini-warehouse
facilities were 92% and 94% in 1997 and 1996, respectively.

     In 1995, the Company  prepaid eight months of 1996  management  fees on its
mini-warehouse  discounted at the rate of 14% per year to  compensate  for early
payment. As a result, management fee expense for the twelve month ended December
31,  1996 was  $22,000  lower  than it would have  without  the  discounted  fee
structure.


     YEAR ENDED  DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995. 
     -----------------------------------------------------------------------
Net  income   in   1996   was  $1,439,000  compared  to  $1,085,000  in  1995,
representing  an increase of  $354,000 or 33%.  Net income per diluted  Series A
share was $1.18 in 1996  compared to $.85 in 1995,  representing  an increase of
$.33 or 39% per share.  These  increases  are  primarily  due to an  increase in
property net operating income combined with the favorable impact of comparing to
expenses  for 1995 which  included  a  non-recurring  charge  for  environmental
assessments and provision for future remediation costs.

     During 1996,  property net  operating  income  (rental  income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased  $211,000 from $1,298,000 in 1995 to $1,509,000 in 1996. This increase
is  primarily  attributable  to an  increase in rental  income at the  Company's
mini-warehouse operations.

     Rental income for the mini-warehouse  operations  increased $279,000 or 10%
from  $2,913,000 in 1995 to $3,192,000  in 1996.  Cost of operations  (including
management  fees paid to an affiliate of the  Company)  increased  $70,000 or 6%
from  $1,144,000 in 1995 to $1,214,000 in 1996. The results of these changes was
a net increase in property net operating income before  depreciation  expense of
$209,000 or 12% from  $1,769,000 in 1995 to  $1,978,000  in 1996.  Rental income
increased  primarily  due to an  increase  in  rental  rates at all seven of the
Company's  properties.  The  increase  in cost of  operations  is mainly  due to
increases in payroll,  advertising  and  property  tax expense.  The increase in
property taxes is mainly  attributable  to a one-time tax refund received at the
Company's Los Angeles,  California  property in early 1995 from appealing  prior
years tax assessments.

     Weighted  average   occupancy  levels  for  the  Company's   mini-warehouse
facilities were 94% and 92% in 1996 and 1995, respectively.

     In 1995, the Company  prepaid eight months of 1996  management  fees on its
mini-warehouse  operations  (based  on the  management  fees for the  comparable
period during the calendar year immediately preceding the prepayment) discounted
at the  rate of 14% per year to  compensate  for  early  payment.  In 1996,  the
Company  expensed  the  prepaid  management  fees.  The  amount is  included  in
management  fees paid to affiliate in the  statements of income.  As a result of
the  prepayment,  the Company saved  approximately  $22,000 in management  fees,
based on the  management  fees that  would have been  payable  on rental  income
generated in 1996 compared to the amount prepaid.
  
                                     14
<PAGE>
     During 1996, the Company incurred $2,000 in interest expense on its line of
credit facility.

MINI-WAREHOUSE OPERATING TRENDS.
--------------------------------

     The following table  illustrates  the operating  trends for the Company's 7
mini-warehouses:
<TABLE>
<CAPTION>

                                                                       For the year ended December 31,
                                                                  ----------------------------------------
                                                                   1997             1996             1995
                                                                  ---------      ------------    ---------

<S>                                                                 <C>              <C>              <C>
Weighted average occupancy level                                    92%              94%              92%
Realized annual rent per occupied
  square foot (1)                                                  $9.28            $8.45            $7.82
Operating margin: (2)
     Before reduction for depreciation expense                      60%              62%              61%
     After reduction for depreciation expense                       46%              47%              45%

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

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

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

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

     Net cash provided by operating  activities  (net income plus  depreciation)
reflects the cash generated from the Company's business before  distributions to
shareholders,  capital  expenditures  and principal  payments on debt.  Net cash
provided  by  operating  activities  has  increased  over  the past  years  from
$1,629,000 in 1995 to $2,016,000 in 1997.

     The Company has an  unsecured  revolving  credit  facility  with a bank for
borrowings up to $750,000 for working  capital  purposes and to  repurchase  the
Company's stock. Outstanding borrowings on the credit facility, at the Company's
option,  bear  interest  at either the bank's  prime rate plus .25% or the LIBOR
rate plus 2.25%.  Interest is payable  monthly until  maturity.  On December 31,
1999, all unpaid principal and accrued  interest is due and payable.  During the
first quarter of 1996, the Company  borrowed and repaid  $150,000 on its line of
credit facility.  At December 31, 1997, there was no outstanding  balance on the
credit facility.

                                       15
<PAGE>

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

                                                                             Years ended December 31,
                                                                        ------------------------------------------
                                                                         1997             1996             1995
                                                                       ---------   --------------    -------------

<S>                                                                  <C>               <C>              <C>       
                Net income                                           $1,509,000        $1,439,000       $1,085,000
                Environmental cost                                        -                 -              156,000
                Depreciation                                            475,000           469,000          471,000
                Changes in working capital                               32,000            51,000          (83,000)
                                                                       ---------   --------------    -------------

                Net cash provided by operating activities             2,016,000         1,959,000        1,629,000
                Capital improvements to maintain facilities            (132,000)          (64,000)         (41,000)
                                                                       ---------   --------------    -------------
                Funds available for distributions to
                     shareholders and repurchase of stock             1,884,000         1,895,000        1,588,000
                Cash distributions to shareholders                   (1,513,000)       (1,363,000)      (1,250,000)
                                                                       ---------   --------------    -------------
                Excess funds available for principal
                     payments, cash distributions to
                     shareholders and repurchase of stock              $371,000          $532,000         $338,000
                                                                       =========   ==============    =============
</TABLE>

     The Company believes that its rental revenues and interest and other income
will be  sufficient  over at least the next twelve  months to meet the Company's
operating expenses, capital improvements and distributions to shareholders.  For
1997,  the Company  anticipates  expending  approximately  $159,000  for capital
improvements.  During 1995, the Company's  property operator commenced a program
to enhance the visual appearance of the  mini-warehouse  facilities  operated by
it.  Such  enhancements   include  new  signs,   exterior  color  schemes,   and
improvements  to the rental offices.  The vast majority of the costs  associated
with these enhancements were incurred in 1995 and 1996.

     FFO is defined by the Company, consistent with the definition of FFO by the
National  Association of Real Estate Investment  Trusts (NAREIT),  as net income
(loss) (computed in accordance with generally  accepted  accounting  principles)
before depreciation and extraordinary or non-recurring  items. FFO for the years
ended December 31, 1997 and 1996 was $1,984,000  and  $1,908,000,  respectively.
FFO is  presented  because  the  Company,  as well as  many  industry  analysts,
consider FFO to be one measure of the performance of the Company, i.e., one that
generally  reflects changes in the Company's net operating income.  FFO does not
take  into  consideration  scheduled  principal  payments  on debt  and  capital
improvements. Accordingly, FFO is not necessarily a substitute for the Company's
cash flow or net income,  as a measure of the  Company's  liquidity or operating
performance or ability to pay distributions.  Furthermore, the NAREIT definition
of FFO does not  address  the  treatment  of certain  items and all REITs do not
treat items the same way in computing FFO. Accordingly, comparisons of levels of
FFO among REITs may not necessarily be meaningful.

     Funds from operations is computed as follows:
<TABLE>
<CAPTION>
                                                           Year ended December 31,
                                           --------------------------------------------------------
                                                    1997                 1996                 1995
                                           ---------------   ------------------    ----------------
<S>                                        <C>                  <C>                  <C>          
          Net income                       $   1,509,000        $   1,439,000        $   1,085,000
          Environmental cost                           -                    -              156,000
          Depreciation                           475,000              469,000              471,000
                                           ---------------   ------------------    ----------------
          Funds from operation             $   1,984,000        $   1,908,000        $   1,712,000
                                           ===============   ==================    ================
</TABLE>
     In February  1994,  the Company  purchased  10,000  common shares of Public
Storage,  Inc.  ("PSI"),  a publicly traded real estate  investment trust and an
affiliate of the Company, for $148,000.  The market value of these securities at
December  31, 1997 was  $294,000.  The Company  recognized  $9,000 in  dividends
during 1997 and 1996.

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

                                       16
<PAGE>

     On November 12, 1997, the Company's  Board of Directors  declared a regular
quarterly  distribution  per share of $0.28.  In addition,  consistent  with the
Company's  REIT  distribution  requirements,  the  Company's  Board of Directors
declared  a special  distribution  of $0.40 per  share.  The  distributions  are
payable on January 15, 1998 to shareholders of record on December 31, 1997.

     In August 1995, the Management Agreement for the mini-warehouse  facilities
was amended to provide  that upon  demand  from PSI made prior to  December  15,
1995,  the Company  agreed to prepay (within 15 days after such demand) up to 12
months of  management  fees  (based on the  management  fees for the  comparable
period  during  the  calendar  year   immediately   preceding  such  prepayment)
discounted  at the rate of 14% per year to  compensate  for  early  payment.  In
November 1995, the Company prepaid,  to PSI, 8 months of 1996 management fees at
a cost of  $102,000.  The amount has been  expensed as  management  fees paid to
affiliate during 1996.

DISTRIBUTIONS
-------------

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

                                                               Series A                   Series B                  Total
                                                          -----------------          -----------------       -----------------
                    <S>                                         <C>                       <C>                       <C>    
                    1988                                        $52,000                   $4,000                    $56,000
                    1989                                        196,000                   17,000                    213,000
                    1990                                        209,000                   18,000                    227,000
                    1991                                        339,000                   30,000                    369,000
                    1992                                        568,000                   50,000                    618,000
                    1993                                        884,000                   79,000                    963,000
                    1994                                        999,000                   94,000                  1,093,000
                    1995                                      1,243,000                  129,000                  1,372,000
                    1996                                      1,373,000                  146,000                  1,519,000
                    1997                                      1,306,000                  140,000                  1,446,000
                                                          -----------------          -----------------       -----------------
                    Total                                    $7,169,000                 $707,000                 $7,876,000
                                                          =================          =================       =================
</TABLE>
     The  Convertible  Series  B shares  and  Convertible  Series C shares  will
convert  automatically  into  Series A shares on a  share-for-share  basis  (the
"Conversion")  when  (A) the  sum of (1)  all  cumulative  dividends  and  other
distributions  from  all  sources  paid  with  respect  to the  Series  A shares
(including liquidating distributions,  but not including payments made to redeem
such  stock  other  than in  liquidation)  and (2)  the  cumulative  Partnership
distributions  from all sources with respect to all units equals (B) the product
of $20  multiplied  by the  number of the then  outstanding  "Original  Series A
shares". The term "Original Series A shares" means the Series A shares issued in
the Reorganization. Through December 31, 1997, the Company has made and declared
cumulative cash  distributions of  approximately  $7,169,000 with respect to the
Series A shares. Accordingly, assuming no repurchases or redemptions of Series A
shares after  December  31,  1997,  Conversion  will occur when  $10,046,000  in
additional distributions with respect to the Series A shares have been made.

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

     The  Company  has  elected  and  intends to continue to qualify as REIT for
Federal  income tax  purposes.  As a REIT,  the Company  must meet,  among other
tests, sources of income,  share ownership,  and certain asset tests. As a REIT,
the  Company  is not  taxed  on that  portion  of its  taxable  income  which is
distributed to its shareholders provided that at least 95% of its taxable income
is so distributed to its shareholders  prior to filing the Company's tax return.
Under certain  circumstances,  the Company can rectify a failure to meet the 95%
distribution  test by  making  distributions  after  the  close of a  particular
taxable year and  attributing  those  distributions  to the prior year's taxable
income.  The Company has satisfied the REIT  distribution  requirement for 1995,
1996 and 1997 by attributing  distributions  in 1995, 1996 and 1997 to the prior
year's  taxable  income.  The extent to which the  Company  will be  required to
attribute distributions to the prior year will depend on the Company's operating
results  (taxable  income) and the level of  distributions  as determined by the
Board of Directors.  The basic difference between book income and taxable income
is depreciation  expense.  In 1997, the Company's  Federal tax  depreciation was
$352,000.
                                       17
<PAGE>
     The Company's  Board of Directors has authorized the Company to purchase up
to 300,000 shares of Series A common stock. As of December 31, 1997, the Company
had purchased and retired 184,140 shares of Series A common stock.

YEAR 2000 SYSTEM ISSUES
-----------------------

     PSI has  completed  an initial  assessment  of its  computer  systems.  The
majority of the computer  programs were  installed or upgraded over the past few
years and are Year 2000 compliant.  Some of the older computer programs utilized
by PSI were written without regard for Year 2000 issues and could cause a system
failure or miscalculations with possible disruption of operations. Each of these
computer  programs and systems has been  evaluated to be upgraded or replaced as
part of PSI's Year 2000 project.

     The cost of the Year 2000 project will be allocated to all  companies  that
use the PSI  computer  systems.  The  cost of the  Year  2000  project  which is
expected to be allocated to the Company is less than $30,000.  This cost will be
expensed as incurred.

     The project is expected to be completed by March 31, 1999 which is prior to
any   anticipated   impact  on  operating   systems.   PSI  believes  that  with
modifications to existing software and, in some instances, the conversion to new
software,  the Year 2000 issue will not pose significant  operational  problems.
However,  if such  modifications are not made, or are not completed timely,  the
Year 2000 issue could have a material impact on the operations of the Company.

     The  costs  of the  project  and the  date on which  PSI  believes  it will
complete the Year 2000  modifications  are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. There can be
no guarantee  that these  estimates  will be achieved and actual  results  could
differ materially from those anticipated.

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

     In  February  1998,  the  Company  and  PSI  agreed,   subject  to  certain
conditions,  to merge. Upon the merger,  each outstanding share of the Company's
common  stock  series A (other  than  shares  held by PSI or by  holders  of the
Company's  common stock  series A ("Series A  Shareholders")  who have  properly
exercised dissenters' rights under California law ("Dissenting Shares")) will be
converted  into the right to receive cash,  PSI common stock or a combination of
the two,  as  follows:  (i) with  respect  to a certain  number of shares of the
Company's  common  stock series A (not to exceed 20% of the  outstanding  common
stock  series A of the Company,  less any  Dissenting  Shares),  upon a Series A
Shareholder's election,  $22.57 in cash, subject to reduction as described below
or (ii)  that  number  (subject  to  rounding)  of shares  of PSI  common  stock
determined by dividing  $22.57,  subject to reduction as described below, by the
average of the per share  closing  prices on the New York Stock  Exchange of PSI
common stock during the 20 consecutive  trading days ending on the fifth trading
day  prior  to  the  special   meeting  of  the  Company's   shareholders.   The
consideration  paid by PSI to the Series A  Shareholders  in the merger  will be
reduced by the amount of cash distributions  required to be paid to the Series A
Shareholders  by the Company  prior to  completion  of the merger  (estimated at
$0.93  per  share)  in  order  to  satisfy  the  Company's   REIT   distribution
requirements ("Required REIT Distributions").  The consideration received by the
Series A  Shareholders  in the merger,  however,  along with any  Required  REIT
Distributions,  will not be less than $22.57 per share of the  Company's  common
stock series A, which amount  represents  the market value of the Company's real
estate  assets at  October  1,  1997  (based on an  independent  appraisal)  and
interest of the Series A  Shareholders  in the  estimated net asset value of its
other assets at April 30,  1998.  Additional  distributions  will be made to the
Series A Shareholders to cause the Company's estimated net asset value allocable
to the Series A  Shareholders  as of the date of the merger to be  substantially
equivalent  to $22.57 per share.  Upon the merger,  each share of the  Company's
common  stock series B and common stock series C (other than shares held by PSI)
would be converted  into the right to receive $10.90 in PSI common stock (valued
as in the case of the Company's  common stock series A) plus (i) any  additional
distributions  equal to the amount by which the  Company's  estimated  net asset
value  allocable to the holders of the Company's  common stock series B and C as
of the date of the  merger  exceeds  $10.90  per  share  and (ii) the  estimated
Required REIT Distributions payable to the holders of the Company's common stock
series B of $0.93 per share. The common stock of the Company held by PSI will be
canceled in the merger. The merger is conditioned on, among other  requirements,
approval by the  Company's  shareholders.  It is  expected  that the merger will
close in the first half of 1998.  PSI is the Company's  mini-warehouse  operator
and owns  24.18% of the total  combined  shares of the  Company's  common  stock
series A, B and C.

                                       18

<PAGE>



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

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

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

         None.

                                    PART III.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1997 fiscal year.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1997 fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
          -------------------------------------------------------------
     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1997 fiscal year.

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

     Incorporated  by  reference  herein is  information  required by this item,
which is to be included in an  amendment  on Form 10-K/A to this Form 10-K filed
within 120 days of the end of the Registrant's 1997 fiscal year.

                                    PART IV.

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

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

      (b)   Reports on Form 8-K filed during the last quarter of the period 
            ended December 31, 1997:
                  None.

      (c)   Exhibits:
                  See Exhibit Index contained herein.


                                       19
<PAGE>

                                   SIGNATURES

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

                                              PUBLIC STORAGE PROPERTIES XX, INC.

Dated:          March 9, 1998                 By:/s/ Harvey Lenkin
                                                   ------------------
                                                      Harvey Lenkin, President

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

                Signature                                   Capacity                            Date
--------------------------------           --------------------------------           --------------------------------    
<S>                                         <C>                                      <C>
/s/ B. Wayne Hughes                         Chairman of the Board, Chief Executive    March  9, 1998
-------------------------                     Officer and Director
B. Wayne Hughes                               (Principal Executive Officer)
                                              


/s/ Vern O. Curtis                          Director                                  March  9, 1998
-------------------------
Vern O. Curtis


/s/ Jack D. Steele                          Director                                  March  9, 1998
-------------------------
Jack D. Steele


/s/ David P. Singelyn                       Vice President and Chief Financial        March  9, 1998
-------------------------                    Officer (Principal Financial Officer
David P. Singelyn                            and Principal Accounting Officer)
                                              

                                      20
</TABLE>
<PAGE>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                                    INDEX TO
                              FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE
                                  (Item 14 (a))


<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                   References
<S>                                                                                                <C>
Report of Independent Auditors                                                                         F-1

Financial Statements and Schedule:

     Balance Sheets as of December 31, 1997 and 1996                                                   F-2

     For each of the three years in the period ended December 31, 1997:

         Statements of Income                                                                          F-3

         Statements of Shareholders' Equity                                                            F-4

         Statements of Cash Flows                                                                      F-5

     Notes to Financial Statements                                                                 F-6 - F-10

Schedule for the years ended December 31, 1997, 1996 and 1995:

     III  Real Estate and Accumulated Depreciation                                                F-11 - F-12

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


<PAGE>
                         Report of Independent Auditors


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


We have audited the accompanying balance sheets of Public Storage Properties XX,
Inc. as of December  31, 1997 and 1996,  and the related  statements  of income,
shareholders'  equity and cash  flows for each of the three  years in the period
ended  December 31, 1997.  Our audits also  included the schedule  listed in the
index  at  item  14(a).   These  financial   statements  and  schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Public Storage Properties XX,
Inc. at December 31, 1997 and 1996,  and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.  Also, in our opinion,
the related  financial  statement  schedule,  when considered in relation to the
basic  financial  statements  taken as a whole,  presents fairly in all material
respects the information set forth therein.






                                                        /s/ ERNST & YOUNG LLP


February 18, 1998
Los Angeles, California


                                       F-1

<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                                 BALANCE SHEETS
                           December 31, 1997 and 1996


                                                                              1997                  1996
                                                                          -------------        -------------
                                                     ASSETS
<S>                                                                       <C>                  <C>          
Cash and cash equivalents                                                 $   1,252,000        $     881,000
Marketable securities of affiliate,
     at market value (cost of $148,000)                                         294,000              310,000
Rent and other receivables                                                       43,000               40,000
Prepaid expenses                                                                 57,000               46,000

Real estate facilities at cost:
     Building, land improvements and equipment                               11,927,000           11,795,000
     Land                                                                     5,824,000            5,824,000
                                                                          -------------        -------------
                                                                             17,751,000           17,619,000

     Less accumulated depreciation                                           (3,645,000)          (3,170,000)
                                                                          -------------        -------------
                                                                             14,106,000           14,449,000
                                                                          -------------        -------------

Total assets                                                              $  15,752,000        $  15,726,000
                                                                          =============        =============

                                      LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable                                                          $     419,000        $     383,000
Dividends payable                                                               647,000              714,000
Note payable to bank                                                             -                    -
Advance payments from renters                                                    91,000               81,000

Shareholders' equity:
     Series A common, $.01 par value,
         1,393,165 shares authorized,
         860,734 shares issued and outstanding                                    8,000                8,000

     Convertible Series B common, $.01 par
         value, 90,859 shares authorized,
         issued and outstanding                                                   1,000                1,000
     Convertible Series C common, $.01 par
         value, 257,432 shares authorized,
         issued and outstanding                                                   3,000                3,000

     Paid-in-capital                                                         15,634,000           15,634,000
     Cumulative net income                                                    6,679,000            5,170,000
     Cumulative distributions                                                (7,876,000)          (6,430,000)
     Unrealized gain in marketable securities                                   146,000              162,000
                                                                          -------------        -------------

     Total shareholders' equity                                              14,595,000           14,548,000
                                                                          -------------        -------------

Total liabilities and shareholders' equity                                $  15,752,000        $  15,726,000
                                                                          =============        =============

</TABLE>
                              See accompanying notes.
                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                       PUBLIC STORAGE PROPERTIES XX, INC.
                              STATEMENTS OF INCOME
                       For each of the three years in the
                         period ended December 31, 1997


                                                                   1997              1996             1995
                                                               ------------     ------------      ------------

REVENUES:

<S>                                                            <C>              <C>               <C>         
Rental income                                                  $  3,420,000     $  3,192,000      $  2,913,000
Dividends from marketable securities of affiliate                     9,000            9,000             9,000
Interest income                                                      37,000           25,000            34,000
                                                               ------------     ------------      ------------
                                                                  3,466,000        3,226,000         2,956,000
                                                               ------------     ------------      ------------


COSTS AND EXPENSES:

Cost of operations                                                1,165,000        1,045,000           969,000
Management fees paid to affiliate                                   205,000          169,000           175,000
Depreciation                                                        475,000          469,000           471,000
Administrative                                                      112,000          102,000           100,000
Interest expense                                                       -               2,000             -
Environmental cost                                                     -                -              156,000
                                                               ------------     ------------      ------------

                                                                  1,957,000        1,787,000         1,871,000
                                                               ------------     ------------      ------------

NET INCOME                                                     $  1,509,000     $  1,439,000      $  1,085,000
                                                               ============     ============      ============


Basic earnings per share-Series A                              $       1.59     $       1.49      $       1.06
                                                               ============     ============      ============

Diluted earnings per share-Series A                            $       1.25     $       1.18      $       0.85
                                                               ============     ============      ============

Dividends declared per share:
     Series A                                                  $       1.52     $       1.59      $       1.40
                                                               ============     ============      ============
     Series B                                                  $       1.52     $       1.59      $       1.40
                                                               ============     ============      ============

Weighted average Common shares outstanding:
     Basic- Series A                                                860,734          867,309           898,001
                                                               ============     ============      ============
     Diluted- Series A                                            1,209,025        1,215,600         1,246,292
                                                               ============     ============      ============
</TABLE>
                              See accompanying notes.
                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 For each of the three years in the period ended
                                December 31, 1997


                                                                  Convertible          
                                        Series A                   Series B            
                                  Shares        Amount       Shares        Amount      
                                  -------       -------      --------      --------    
<S>                               <C>            <C>           <C>           <C>       
Balances at December 31, 1994     945,534        $9,000        90,859        $1,000    

Net income                                                                             
Repurchase of shares              (74,800)       (1,000)                               
Unrealized gain
   in marketable securities                                                            

Cash distributions declared:
$1.40 per share-Series A                                                               
$1.40 per share-Series B                                                               
                                  -------       -------      --------      --------    

Balances at December 31, 1995     870,734         8,000        90,859         1,000    

Net income                                                                             
Repurchase of shares              (10,000)            -                                
Unrealized gain
   in marketable securities                                                            

Cash distributions declared:
$1.59 per share-Series A                                                               
$1.59 per share-Series B                                                               
                                  -------       -------      --------      --------    

Balances at December 31, 1996     860,734         8,000        90,859         1,000    

Net income                                                                             
Repurchase of shares
Unrealized loss
   in marketable securities                                                            

Cash distributions declared:
$1.52 per share-Series A                                                               
$1.52 per share-Series B                                                               
                                  -------       -------      --------      --------    
Balances at December 31, 1997     860,734        $8,000        90,859        $1,000    
                                  =======       =======      ========      ========    

</TABLE>
<TABLE>
<CAPTION>

                       PUBLIC STORAGE PROPERTIES XX, INC.
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 For each of the three years in the period ended
                                December 31, 1997
                                                                                                         
                                                                                                         Unrealized     
                                         Convertible                        Cumulative                  gain (loss)      Total
                                          Series C              Paid-in         net       Cumulative   in marketable shareholders'
                                    Shares        Amount        Capital       income     distributions  securities      equity
                                     -------       ------    -----------     ----------   -----------   -----------  -----------
<S>                                  <C>           <C>       <C>             <C>          <C>             <C>        <C>        
Balances at December 31, 1994        257,432       $3,000    $16,969,000     $2,646,000   $(3,539,000)    $(4,000)   $16,085,000

Net income                                                                    1,085,000                                1,085,000
Repurchase of shares                                          (1,146,000)                                             (1,147,000)
Unrealized gain
   in marketable securities                                                                                46,000         46,000

Cash distributions declared:
$1.40 per share-Series A                                                                   (1,243,000)                (1,243,000)
$1.40 per share-Series B                                                                     (129,000)                  (129,000)
                                     -------       ------    -----------     ----------   -----------   -----------  -----------

Balances at December 31, 1995        257,432        3,000     15,823,000      3,731,000    (4,911,000)     42,000     14,697,000

Net income                                                                    1,439,000                                1,439,000
Repurchase of shares                                            (189,000)                                               (189,000)
Unrealized gain
   in marketable securities                                                                               120,000        120,000

Cash distributions declared:
$1.59 per share-Series A                                                                   (1,373,000)                (1,373,000)
$1.59 per share-Series B                                                                     (146,000)                  (146,000)
                                     -------       ------    -----------     ----------   -----------   -----------  -----------

Balances at December 31, 1996        257,432        3,000     15,634,000      5,170,000    (6,430,000)    162,000     14,548,000

Net income                                                                    1,509,000                                1,509,000
Repurchase of shares
Unrealized loss
   in marketable securities                                                                               (16,000)       (16,000)

Cash distributions declared:
$1.52 per share-Series A                                                                   (1,306,000)                (1,306,000)
$1.52 per share-Series B                                                                     (140,000)                  (140,000)
                                     -------       ------    -----------     ----------   -----------   -----------  -----------
Balances at December 31, 1997        257,432       $3,000    $15,634,000     $6,679,000   $(7,876,000)   $146,000    $14,595,000
                                     =======       ======    ===========     ==========   ===========   ===========  ===========

</TABLE>


                              See accompany notes.
                                      F4
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                            STATEMENTS OF CASH FLOWS
                       For each of the three years in the
                         period ended December 31, 1997


                                                                   1997              1996             1995
                                                               -------------    -------------    -------------
Cash flows from operating activities:
<S>                                                            <C>              <C>               <C>         
     Net income                                                $  1,509,000     $  1,439,000      $  1,085,000

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

     Depreciation                                                   475,000          469,000           471,000
     Increase in rent and other receivables                          (3,000)         (12,000)           (9,000)
     Increase in prepaid expenses                                   (11,000)         (19,000)           (2,000)
     Amortization (payment) of prepaid management fees                 -             102,000          (102,000)
     Increase (decrease) in accounts payable                         36,000          (13,000)          182,000
     Increase (decrease) in advance payments from renters            10,000           (7,000)            4,000
                                                               -------------    -------------    -------------

         Total adjustments                                          507,000          520,000           544,000
                                                               -------------    -------------    -------------

         Net cash provided by operating activities                2,016,000        1,959,000         1,629,000
                                                               -------------    -------------    -------------

Cash flows from investing activities:

     Additions to real estate facilities                           (132,000)         (64,000)          (41,000)
                                                               -------------    -------------    -------------

         Net cash used in investing activities                     (132,000)         (64,000)          (41,000)
                                                               -------------    -------------    -------------

Cash flows from financing activities:

     Distributions paid to shareholders                          (1,513,000)      (1,363,000)       (1,250,000)
     Borrowing on credit facility                                      -             150,000             -
     Repayment of borrowing on credit facility                         -            (150,000)            -
     Purchase of Company Series A common stock                         -            (189,000)       (1,147,000)
                                                               -------------    -------------    -------------

         Net cash used in financing activities                   (1,513,000)      (1,552,000)       (2,397,000)
                                                               -------------    -------------    -------------

Net increase (decrease) in cash and cash equivalents                371,000          343,000          (809,000)

Cash and cash equivalents at the beginning of the year              881,000          538,000         1,347,000
                                                               -------------    -------------    -------------

Cash and cash equivalents at the end of the year               $  1,252,000     $    881,000      $    538,000
                                                               =============    =============    =============

Supplemental schedule of non-cash
     investing and financing activities:

     Decrease (increase) in fair value of
         marketable securities of affiliate                    $     16,000     $   (120,000)     $    (46,000)
                                                               =============    =============    =============
     Unrealized (loss) gain  on
         marketable securities of affiliate                    $    (16,000)    $    120,000      $     46,000
                                                               =============    =============    =============

</TABLE>
                              See accompanying notes.
                                      F-5
<PAGE>

                       PUBLIC STORAGE PROPERTIES XX, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

1.       DESCRIPTION OF BUSINESS

     Public  Storage  Properties  XX,  Inc.  (the  "Company")  is  a  California
corporation  which has  elected  to qualify as a real  estate  investment  trust
("REIT") for Federal income tax purposes.  The Company succeeded to the business
of Public Storage  Properties XX, Ltd. (the  "Partnership")  in a reorganization
transaction which was effective August 27, 1991 (the "Reorganization").

     The Company owns and operates seven self-storage facilities located in five
states.

     The term of the Company is until all properties  have been sold and, in any
event, not later than December 31, 2038. The bylaws of the Company provide that,
during 1999, unless shareholders have previously  approved such a proposal,  the
shareholders  will be presented with a proposal to approve or disapprove (a) the
sale or  financing of all or  substantially  all of the  properties  and (b) the
distribution of the proceeds from such  transaction  and, in the case of a sale,
the liquidation of the Company.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Income Taxes:

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

     Statements of Cash Flows:

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

     Real Estate Facilities:

     Cost of land includes  appraisal and legal fees related to acquisition  and
closing costs. Buildings, land improvements and equipment reflect costs incurred
through  December 31, 1997 and 1996 to develop  mini-warehouse  facilities.  The
mini-warehouse facilities provide self-service storage spaces for lease, usually
on a  month-to-month  basis, to the general public.  The buildings and equipment
are depreciated on the straight-line basis over estimated useful lives of 25 and
5 years, respectively.

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

                                      F-6

<PAGE>


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Real Estate Facilities (continued):

     At December 31, 1997, the basis of real estate facilities  (excluding land)
for Federal income tax purposes (after  adjustment for accumulated  depreciation
of $2,562,000) is $9,344,000.

     Revenue Recognition:

     Property rents are recognized as earned.

     Investment in Affiliate:

     In February  1994,  the Company  purchased  10,000  common shares of Public
Storage, Inc. (PSI), a publicly traded REIT and an affiliate of the Company, for
$148,000.  The Company has designated its portfolio of marketable  securities as
being  available  for sale.  Accordingly,  at December  31,  1997 and 1996,  the
Company has recorded the  marketable  securities  at fair value,  based upon the
closing  quoted price of the  securities at December 31, 1997 and 1996,  and has
recorded a corresponding  unrealized  loss, gain totaling  $16,000 and $120,000,
respectively,   in  shareholders'  equity.  The  Company  recognized  $9,000  in
dividends in 1997, 1996 and 1995.

     Net Income Per Share:

     In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share.  Statement 128 replaced the calculation of primary and fully
diluted  earnings per share with basic and diluted  earnings  per share.  Unlike
primary  earnings  per share,  basic  earnings  per share  excludes any dilutive
effects of convertible securities. Diluted earnings per share is very similar to
the previously reported fully diluted earnings per share. All earnings per share
amounts for all periods  have been  presented  to conform to the  Statement  128
requirements.

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

     Use of Estimates:

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

     Environmental Cost:

     Substantially  all of the Company's  facilities  were acquired prior to the
time that it was customary to conduct environmental investigations in connection
with  property  acquisitions.  During the fourth  quarter of 1995,  the  Company
completed   environmental   assessments   of  its  properties  to  evaluate  the
environmental  condition of, and  potential  environmental  liabilities  of such
properties.  These  assessments  were performed by an independent  environmental
consulting firm. Based on the assessments, the Company expensed $156,000 in 1995
for  known  environmental  remediation  requirements.  Although  there can be no
assurance, the Company is not aware of any environmental contamination of any of
its property sites which  individually  or in the aggregate would be material to
the Company's overall business, financial condition, or results of operations.

                                      F-7
<PAGE>
3.       RELATED PARTY TRANSACTIONS

     The Company has a Management  Agreement with Public Storage,  Inc. ("PSI").
Under the terms of the agreement, PSI operates the mini-warehouse facilities for
a fee equal to 6% of the facilities' monthly gross revenue (as defined).

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

     In August 1995, the Management Agreement for the mini-warehouse  facilities
was amended to provide  that upon  demand  from PSI made prior to  December  15,
1995,  the Company  agreed to prepay (within 15 days after such demand) up to 12
months of  management  fees  (based on the  management  fees for the  comparable
period  during  the  calendar  year   immediately   preceding  such  prepayment)
discounted  at the rate of 14% per year to  compensate  for  early  payment.  In
November 1995, the Company prepaid,  to PSI, 8 months of 1996 management fees at
a cost of $102,000. The amount was expensed as management fees paid to affiliate
during 1996.

4.       SHAREHOLDERS' EQUITY

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

     The  Convertible  Series  B shares  and  Convertible  Series C shares  will
convert  automatically  into  Series A shares on a  share-for-share  basis  (the
"Conversion")  when  (A) the  sum of (1)  all  cumulative  dividends  and  other
distributions  from  all  sources  paid  with  respect  to the  Series  A shares
(including liquidating distributions,  but not including payments made to redeem
such  stock  other  than in  liquidation)  and (2)  the  cumulative  Partnership
distributions  from all sources with respect to all units equals (B) the product
of $20  multiplied  by the  number of the then  outstanding  "Original  Series A
shares". The term "Original Series A shares" means the Series A shares issued in
the Reorganization. Through December 31, 1997, the Company has made and declared
cumulative cash  distributions of  approximately  $7,169,000 with respect to the
Series A shares. Accordingly, assuming no repurchases or redemptions of Series A
shares after  December  31,  1997,  Conversion  will occur when  $10,046,000  in
additional distributions with respect to the Series A shares have been made.

     Assuming  liquidation  of the Company at its net book value at December 31,
1997 and 1996,  each Series of common  shares would  receive the  following as a
liquidating distribution:

                                                    1997              1996
                                                 ------------    ------------
     Series A                                    $13,283,000      $13,626,000
     Convertible Series B                            342,000          241,000
     Convertible Series C                            970,000          681,000
                                                 ------------    ------------
     Total                                       $14,595,000      $14,548,000
                                                 ============    ============

     The Series A shares,  Convertible  Series B shares and Convertible Series C
shares have equal voting  rights.  The holders of the  Convertible  Series B and
Convertible  Series C shares have agreed to vote along with the  majority of the
unaffiliated  Series A shareholders on matters other than control of the Company
and its business.
                                      F-8
<PAGE>
4.       SHAREHOLDERS' EQUITY (CONTINUED)

     The Company's  Board of Directors has authorized the Company to purchase up
to 300,000  shares of the Company's  Series A common  stock.  As of December 31,
1997,  the Company had purchased and retired  184,140  shares of Series A common
stock, of which 10,000 were purchased and retired in 1996.

     For Federal income tax purposes, all distributions declared by the Board of
Directors in 1997, 1996 and 1995 were ordinary income.

5.       NOTE PAYABLE TO BANK

     The Company has an  unsecured  revolving  credit  facility  with a bank for
borrowings up to $750,000 for working  capital  purposes and to  repurchase  the
Company's stock. Outstanding borrowings on the credit facility, at the Company's
option,  bear  interest at either the bank's  prime rate plus .25% or the bank's
LIBOR rate plus 2.25%.  Interest is payable monthly until maturity.  On December
31, 1999, all unpaid principal and accrued interest is due and payable.

     During the first quarter of 1996, the Company  borrowed and repaid $150,000
on its line of credit  facility.  At December 31, 1996, there was no outstanding
balance on the credit facility.

     Under  covenants  of the credit  facility,  the Company is (1)  required to
maintain a ratio of  liabilities  to assets (as defined) for each fiscal quarter
of not more than .3 to 1.0, (2) required to maintain a debt  coverage  ratio (as
defined) for each fiscal quarter of not less than 8 times the debt service,  (3)
required to maintain a fixed charge  coverage ratio (as defined) for each fiscal
quarter  of not less  than 1.0 to 1.0 and (4)  required  to  maintain  a minimum
shareholder's equity (as defined) for each fiscal quarter of $10 million.

6.       PROPOSED MERGER

     In February  1998, the Company and Public  Storage,  Inc.  ("PSI")  agreed,
subject to certain conditions, to merge. Upon the merger, each outstanding share
of the  Company's  common  stock  series A (other  than shares held by PSI or by
holders of the  Company's  common stock series A ("Series A  Shareholders")  who
have properly  exercised  dissenters'  rights under  California law ("Dissenting
Shares"))  will be converted into the right to receive cash, PSI common stock or
a combination  of the two, as follows:  (i) with respect to a certain  number of
shares  of the  Company's  common  stock  series  A (not  to  exceed  20% of the
outstanding common stock series A of the Company,  less any Dissenting  Shares),
upon a Series A Shareholder's election,  $22.57 in cash, subject to reduction as
described  below or (ii) that  number  (subject  to  rounding)  of shares of PSI
common stock  determined by dividing  $22.57,  subject to reduction as described
below,  by the  average  of the per share  closing  prices on the New York Stock
Exchange of PSI common  stock during the 20  consecutive  trading days ending on
the  fifth   trading  day  prior  to  the  special   meeting  of  the  Company's
shareholders.  The consideration paid by PSI to the Series A Shareholders in the
merger will be reduced by the amount of cash  distributions  required to be paid
to the Series A  Shareholders  by the Company  prior to completion of the merger
(estimated  at  $0.93  per  share)  in  order  to  satisfy  the  Company's  REIT
distribution  requirements  ("Required REIT  Distributions").  The consideration
received by the Series A  Shareholders  in the merger,  however,  along with any
Required  REIT  Distributions,  will not be less  than  $22.57  per share of the
Company's common stock series A, which amount represents the market value of the
Company's  real  estate  assets  at  October  1, 1997  (based on an  independent
appraisal) and interest of the Series A Shareholders  in the estimated net asset
value of its other assets at April 30, 1998.  Additional  distributions  will be
made to the Series A  Shareholders  to cause the  Company's  estimated net asset
value  allocable to the Series A Shareholders as of the date of the merger to be
substantially equivalent to $22.57 per share. Upon the merger, each share of the
Company's  common  stock  series B and common  stock series C (other than shares
held by PSI) would be converted  into the right to receive  $10.90 in PSI common
stock  (valued as in the case of the  Company's  common stock series A) plus (i)
any  additional  distributions  equal  to the  amount  by  which  the  Company's
estimated net asset value allocable to the holders of the Company's common stock
series B and C as of the date of the  merger  exceeds  $10.90 per share and (ii)
the  estimated  Required  REIT  Distributions  payable  to  the  holders  of the
Company's  common  stock  series B of $0.93 per share.  The common  stock of the
Company held by PSI will be canceled in the merger.

                                      F-9
<PAGE>
6.       PROPOSED MERGER (CONTINUED)

     The merger is  conditioned  on, among other  requirements,  approval by the
Company's  shareholders.  It is expected that the merger will close in the first
half of 1998.  PSI is the Company's  mini-warehouse  operator and owns 24.18% of
the total combined shares of the Company's common stock series A, B and C.

7.       QUARTERLY RESULTS (UNAUDITED)

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

                                                                            Three months ended
                                                         --------------------------------------------------------
                                                         March 1997      June 1997      Sept. 1997      Dec. 1997
                                                         ----------      ---------      ----------      ---------
<S>                                                       <C>             <C>            <C>             <C>      
           Revenues                                       $ 807,000       $ 845,000      $ 912,000       $ 902,000
                                                         ----------      ---------      ----------      ----------
           Expenses                                         513,000         469,000        456,000         519,000
                                                         ----------      ---------      ----------      ----------
           Net income                                     $ 294,000       $ 376,000      $ 456,000       $ 383,000
                                                         ==========      ==========     ==========      ==========

           Basic earnings per share- Series A                 $0.31           $0.41          $0.50           $0.37
                                                         ==========      ==========     ==========      ==========
           Diluted earnings per share- Series A               $0.24           $0.31          $0.38           $0.32
                                                         ==========      ==========     ==========      ==========

                                                                            Three months ended
                                                         --------------------------------------------------------
                                                         March 1996      June 1996      Sept. 1996      Dec. 1996
                                                         ----------      ---------      ----------      ----------
           Revenues                                        $755,000        $793,000       $836,000        $842,000
                                                         ----------      ---------      ----------      ----------
           Expenses                                         464,000         423,000        423,000         477,000
                                                         ----------      ---------      ----------      ----------
           Net income                                      $291,000        $370,000       $413,000        $365,000
                                                         ==========      ==========     ==========      ==========
           Basic earnings per share- Series A                 $0.31           $0.39          $0.45           $0.34
                                                         ==========      ==========     ==========      ==========
           Diluted earnings per share- Series A               $0.24           $0.30          $0.34           $0.30
                                                         ==========      ==========     ==========      ==========
</TABLE>

     The 1996 and first three  quarters of 1997  earnings per share amounts have
been  reflected to comply with Statement of Financial  Accounting  Standards No.
128, Earnings per Share.

                                      F-10
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

                                                                                                         
                                                                        Initial Cost         Costs       
                                                                         Bldg., Land   subsequent to     
    Date                                                                    Imp &       construction     
  Completed           Description           Encumbrances       Land       Equipment    (Improvements)    
-------------  -------------------------   -------------    -----------  ------------- -------------     
Mini-warehouses:
<S>           <C>                              <C>           <C>            <C>             <C>         
    4/89      Cleveland / W 117th                -           $1,010,000    $1,467,000         $116,000   
    9/89      Los Angeles / Airdrome St          -              361,000     1,506,000           24,000   
    7/89      Aurora / Farnsworth                -            2,811,000     2,013,000          121,000   
    11/89     Santa Rosa / Hopper                -              714,000     1,614,000           58,000   
    12/89     Golden Valley / Winnetka           -              165,000     1,247,000           24,000   
    11/90     St Louis / Benham                  -              534,000     1,672,000          280,000   
    7/91      Chicago/S Chicago Ave.             -              222,000     1,563,000          229,000   
                                          ---------------------------------------------------------------
                                                 -           $5,817,000   $11,082,000         $852,000   
                                          ===============================================================
</TABLE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                           SCHEDULE III - REAL ESTATE
                          AND ACCUMULATED DEPRECIATION

                                                                                                             Life on Which
                                                  Gross Carrying Amount At December 31, 1997                 Depreciation in
                                                            Bldg., Land                                      Latest Income
    Date                                                  Imp & Equipment                   Accumulated      Statements is
  Completed           Description               Land                          Total         Depreciation        Computed
-------------  -------------------------      ----------  --------------    -------------  -------------     -------------
Mini-warehouses:
<S>           <C>                                <C>            <C>                <C>           <C>           <C>
    4/89      Cleveland / W 117th              $1,010,000      $1,583,000     $2,593,000         ($541,000)    5-25 Years
    9/89      Los Angeles / Airdrome St           361,000       1,530,000      1,891,000          (507,000)    5-25 Years
    7/89      Aurora / Farnsworth               2,811,000       2,134,000      4,945,000          (693,000)    5-25 Years
    11/89     Santa Rosa / Hopper                 714,000       1,672,000      2,386,000          (552,000)    5-25 Years
    12/89     Golden Valley / Winnetka            165,000       1,271,000      1,436,000          (411,000)    5-25 Years
    11/90     St Louis / Benham                   534,000       1,952,000      2,486,000          (472,000)    5-25 Years
    7/91      Chicago/S Chicago Ave.              229,000       1,785,000      2,014,000          (469,000)    5-25 Years
                                          ------------------------------------------------------------------
                                               $5,824,000     $11,927,000    $17,751,000       ($3,645,000)
                                          ==================================================================

                                      F-11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                       PUBLIC STORAGE PROPERTIES XX, INC.
                           REAL ESTATE RECONCILIATION
                            SCHEDULE III (CONTINUED)

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

                              COSTS RECONCILIATION


                                                                           Years Ended December 31,
                                                                ----------------------------------------------------
                                                                   1997                 1996                  1995
                                                                ----------           ----------           ----------
<S>                                                       <C>                  <C>                  <C>             
Balance at the beginning of the period                    $     17,619,000     $     17,555,000     $     17,514,000

Additions during the period:

  Improvements                                                     132,000               64,000               41,000

Deductions during the period                                        -                     -                    -
                                                                ----------           ----------           ----------

Balance at the close of the period                        $     17,751,000     $     17,619,000     $     17,555,000
                                                                ==========           ==========           ==========



                     ACCUMULATED DEPRECIATION RECONCILIATION


                                                                            Years Ended December 31,
                                                                ----------------------------------------------------
                                                                  1997                  1996                 1995
                                                                ----------           ----------           ----------

Balance at the beginning of the period                    $      3,170,000     $      2,701,000     $      2,230,000

Additions during the period:

  Depreciation                                                     475,000              469,000              471,000

Deductions during the period                                        -                     -                    -
                                                                ----------           ----------           ----------

Balance at the close of the period                        $      3,645,000     $      3,170,000     $      2,701,000
                                                                ==========           ==========           ==========


</TABLE>
(b)      The  aggregate  depreciable  cost of real estate  (excluding  land) for
         Federal income tax purposes is 11,906,000.
<PAGE>
                       PUBLIC STORAGE PROPERTIES XX, INC.

                                  EXHIBIT INDEX
                                  (Item 14(c))

2    Agreement  and Plan of  Reorganization  between  Public  Storage,  Inc. and
     Registrant dated as of February 13, 1998. Filed herewith.

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

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

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

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

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

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

10.3 Revolving  Note  and Loan  Agreement  between  the  Company  and The  First
     National  Bank of Boston dated as of December 29,  1995.  Previously  filed
     with the Securities and Exchange  Commission as an exhibit to the Company's
     Annual  Report  on Form  10-K  for the year  ended  December  31,  1995 and
     incorporated herein by reference.

27   Financial Data Schedule. Filed herewith.