<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

     [x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                       For the quarter ended June 30, 2000
                                       or
  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934
                        For the transition period from to

                        Commission File Number: 001-12403

                              SUSA PARTNERSHIP L.P.
             (Exact name of registrant as specified in its charter)

                                    Tennessee
                         (State or other jurisdiction of
                         incorporation or organization)

                                   62-1554135
                                  (IRS Employer
                             Identification Number)

                   165 Madison Avenue, Suite 1300, Memphis, TN
                    (Address of principal executive offices)

                                      38103
                                   (Zip Codes)

       Registrant's telephone number, including area code: (901) 252-2000

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

                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                             SUSA Partnership, L.P.
                      Consolidated Statements of Operations
                                   (unaudited)
                  (amounts in thousands, except per unit data)

<TABLE>
<CAPTION>



                                                             Three months      Three months       Six months       Six months
                                                                    ended             ended            ended            ended
                                                            June 30, 2000     June 30, 1999    June 30, 2000    June 30, 1999
                                                           ---------------  ----------------  ---------------  ---------------
<S> <C>
Operating Revenues:
Rental and other property income                                  $63,724           $62,407         $123,290         $122,809
Service income                                                      1,267               441            2,873              718
Other income                                                          601               947            1,317              935
                                                           ---------------  ----------------  ---------------  ---------------

Total operating revenues                                           65,592            63,795          127,480          124,462
                                                           ---------------  ----------------  ---------------  ---------------

Operating Expenses:
Cost of property operations & maintenance                          15,498            15,079           31,228           30,112
Taxes                                                               5,450             5,280           10,637           10,277
Costs of providing services                                           979               385            2,265              710
General & administrative                                            3,649             4,107            5,914            7,805
Depreciation & amortization                                        10,097             9,017           19,291           17,373
                                                           ---------------  ----------------  ---------------  ---------------

Total operating expenses                                           35,673            33,868           69,335           66,277
                                                           ---------------  ----------------  ---------------  ---------------

Income from property operations                                    29,919            29,927           58,145           58,185

Other income (expense):
Interest expense, net                                            (11,478)          (10,416)         (22,525)         (21,263)
                                                           ---------------  ----------------  ---------------  ---------------

Income before gain(loss) on exchange, minority
  interest and distribution to preferred unitholders               18,441            19,511           35,620           36,922

Gain/(Loss) on sale of assets                                           -               441              890            (137)
                                                           ---------------  ----------------  ---------------  ---------------

Income before minority interest and
  distribution to preferred unitholders                            18,441            19,952           36,510           36,785

Minority interest                                                       5              (68)             (38)             (92)
                                                           ---------------  ----------------  ---------------  ---------------

Income before distributions to preferred unitholders               18,446            19,884           36,472           36,693

Distributions to preferred unitholders                            (1,442)           (1,293)          (2,884)          (2,551)
                                                           ---------------  ----------------  ---------------  ---------------

Net Income                                                        $17,004           $18,591          $33,588          $34,142
                                                           ---------------  ----------------  ---------------  ---------------

Basic net income per unit                                           $0.55             $0.59            $1.07            $1.09
                                                           ---------------  ----------------  ---------------  ---------------

Diluted net income per unit                                         $0.55             $0.59            $1.07            $1.08
                                                           ---------------  ----------------  ---------------  ---------------

</TABLE>


                 See Notes to Consolidated Financial Statements


                                       2
<PAGE>

                             SUSA Partnership, L.P.
                           Consolidated Balance Sheets
                    (amounts in thousands, except unit data)

<TABLE>
<CAPTION>


                                                                           as of                   as of
                                                                   June 30, 2000       December 31, 1999
                                                            ---------------------   ---------------------
                                                                     (unaudited)
<S> <C>
Assets

Investments in storage facilities, at cost:
Land                                                                     426,651                $441,080
Buildings and equipment                                                1,246,393               1,229,812
                                                            ---------------------   ---------------------
                                                                       1,673,044               1,670,892

Accumulated depreciation                                               (112,993)                (94,538)
                                                            ---------------------   ---------------------
                                                                       1,560,051               1,576,354

Cash & cash equivalents                                                    2,453                   1,699
Advances and investments in real estate                                  135,978                 120,246
Other assets                                                              71,243                  56,620
                                                            ---------------------   ---------------------

     Total assets                                                     $1,769,725              $1,754,919
                                                            ---------------------   ---------------------

Liabilities & partners' capital

Notes payable                                                           $600,000                $600,000
Line of credit borrowings                                                154,960                 105,500
Mortgage notes payable                                                    68,809                  70,163
Other borrowings                                                          43,204                  42,453
Accounts payable & accrued expenses                                       22,111                  21,982
Dividends payable                                                         18,816                  18,831
Rents received in advance                                                 11,689                  10,869
Deferred gain from contribution of self-storage facilities                37,076                  37,125
Minority Interest                                                            954                     959
                                                            ---------------------   ---------------------

     Total liabilities                                                   957,619                 907,882
                                                            ---------------------   ---------------------

Limited common partnership units
  3,426,840 and 3,655,093 outstanding
  at redemption value                                                    101,145                 110,567

Commitments and contingencies

Partners' capital:
Preferred Partnership units
  650,000 outstanding                                                     65,000                  65,000
Deferred compensation
                                                                            (458)                   (517)
General Common Partnership units
 27,269,114 and 27,865,932 outstanding                                   658,344                 683,355
Notes receivable - officers                                             (11,925)                (11,368)
                                                            ---------------------   ---------------------

     Total partners' capital                                             710,961                 736,470
                                                            ---------------------   ---------------------

     Total liabilities & partners' capital                            $1,769,725              $1,754,919
                                                            ---------------------   ---------------------

</TABLE>


                 See Notes to Consolidated Financial Statements

                                       3
<PAGE>

                             SUSA Partnership, L.P.
                      Consolidated Statements of Cash Flows
                                   (unaudited)
                             (amounts in thousands)

<TABLE>
<CAPTION>


                                                                          Six months ended      Six months ended
                                                                             June 30, 2000         June 30, 1999
                                                                       --------------------  --------------------
<S> <C>
Operating activities:
Net income                                                                         $33,588               $34,142

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

     Depreciation and amortization                                                  19,291                17,373
     Minority interest                                                                  38                    92
     (Gain)/Loss on exchange of self-storage facilities                              (890)                   137
     Changes in assets and liabilities:
          Other assets                                                            (18,914)                (6,619)
          Other liabilities                                                          4,317                 8,653
                                                                       --------------------  --------------------
Net cash provided by operating activities                                           37,430                53,778
                                                                       --------------------  --------------------

Investing activities:
Acquisition and improvements of storage facilities                                (12,987)              (59,228)
Proceeds from sale/exchange of storage facilities                                   21,682              137,130
Development of storage facilities                                                 (18,729)              (29,062)
Net change in funds in escrow account used for asset acquisition                        -               (51,679)
Advances and investments in real estate                                            (9,846)              (15,202)
Proceeds from liquidation of advances and investments in real estate                6,344                16,607
                                                                       --------------------  --------------------
Net cash used in investing activities                                             (13,536)                (1,434)
                                                                       --------------------  --------------------

Financing activities:
Net (repayments)/borrowings under line of credit                                    49,460               (3,597)
Mortgage principal payments                                                          (831)               (3,417)
Other borrowings principal payments/payoffs                                          (100)               (1,102)
Payment of debt issuance costs                                                         (4)               (1,084)
Distributions to general partner                                                  (38,044)              (36,422)
Distribution to limited partners                                                   (4,917)               (4,831)
Distribution to minority interests                                                    (44)                  (38)
Preferred unit dividends                                                           (2,884)               (2,452)
Proceeds from issuance of preferred units                                              148                     -
Repurchase of units from general partner                                          (25,967)                     -
Payments on notes receivable                                                            43                    54
Distribution of minority interest capital                                                -                 (233)
Other financing transactions, net                                                        -                 1,876
                                                                       --------------------  --------------------
Net cash used in financing activities                                              (23,140)              (51,246)
                                                                       --------------------  --------------------

Net increase in cash and equivalents                                                   754                 1,098
Cash and equivalents, beginning of period                                            1,699                 2,358
                                                                       --------------------  --------------------
Cash and equivalents, end of period                                                 $2,453                $3,456
                                                                       --------------------  --------------------

Supplemental schedule of non-cash activities:
 Equity share of joint venture received in exchange for assets                      $6,526                $5,900
 Note received in consideration for facility/land sold                               2,200                   875
 Common Stock issued in exchange for notes receivable  and
    contributed to Partnership in exchange for Partnership units                       756                     -
 Partnership units received in payment of notes receivable                             156                     -
 Common stock issued to Directors and contributed to Partnership
    in exchange for Partnership units                                                  160                   160
 Storage facilities acquired in exchange for  Partnership Units                          -                 4,238
 Restricted stock issued by GP                                                           -                   246
 Exchange of Partnership Units for shares of GP common stock                         8,234                 5,717
 Exchange of storage facilities (net)                                                    -                   137
                                                                       --------------------  --------------------

</TABLE>




                 See Notes to Consolidated Financial Statements

                                       4
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)


1.       Unaudited Interim Financial Statements

         References  to the  "Company"  and  the  "Partnership"  refer  to  SUSA
         Partnership,  L.P.  References to the "GP" refer to Storage USA,  Inc.,
         general  partner  and  holder  of  approximately  89% of  the  interest
         therein.  Interim consolidated  financial statements of the Company are
         prepared  pursuant  to the  requirements  for  reporting  on Form 10-Q.
         Accordingly,   certain   disclosures   accompanying   annual  financial
         statements  prepared in accordance with generally  accepted  accounting
         principles are omitted. In the opinion of management,  all adjustments,
         consisting  solely of normal recurring  adjustments,  necessary for the
         fair presentation of consolidated  financial statements for the interim
         periods have been included.  The current period's results of operations
         are not  necessarily  indicative  of  results  that  ultimately  may be
         achieved for the year. The interim  consolidated  financial  statements
         and notes  thereto  should be read in  conjunction  with the  financial
         statements  and notes thereto  included in the Company's  Form 10-K for
         the year  ended  December  31,  1999 as filed with the  Securities  and
         Exchange Commission.

         The  preparation of financial  statements in accordance  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 vary from these
         estimates.

2.       Organization

         The  Company  was  formed  by  the  GP in  1985  to  acquire,  develop,
         construct,   franchise,   own  and  operate   self-storage   facilities
         throughout  the United  States.  On March 23, 1994, the GP completed an
         initial public offering (the "IPO") of 6,325,000 shares of common stock
         at $21.75 per share.  The GP is structured  as an umbrella  partnership
         real estate  investment trust ("UPREIT") in which  substantially all of
         the GP's  business is  conducted  through the  Partnership.  Under this
         structure,  the Company is able to acquire  self-storage  facilities in
         exchange for units of limited  partnership  interest in the Partnership
         ("Units"),  permitting the sellers to at least partially defer taxation
         of capital gains. At June 30, 2000 and December 31, 1999, respectively,
         the GP owned approximately 88.8% and 88.4% of the partnership  interest
         in the Partnership.

         In 1996, the Company formed Storage USA Franchise Corp ("Franchise"), a
         Tennessee  corporation.  The  Partnership  owns 100% of the  non-voting
         common stock of Franchise. The Partnership accounts for Franchise under
         the equity method and includes its 97.5% share of the profit or loss of
         Franchise in Other Income.

3.       Summary of Significant Accounting Policies

         Rental and Other Property Income
         Rental and other property  income  consists of rental income plus other
         income from property specific  activities  (rental of floor and storage
         space for locks and packaging material,  truck rentals and ground rents
         for  cellular  telephone  antenna  towers and  billboards).  Below is a
         summary of rental and other property  income for the second quarter and
         for the six months ended June 30, 2000:

<TABLE>
<CAPTION>



                                           Three months    Three months     Six months     Six months
                                                  ended           ended          ended          ended
                                          June 30, 2000   June 30, 1999  June 30, 2000  June 30, 1999
                                          ------------------------------------------------------------
<S> <C>
Rental Income                                 $  62,805       $  61,441      $ 121,251      $ 120,848
Other Property Specific Income                      919             966          2,039          1,961
                                          ------------------------------------------------------------
Total Rental and Other Property Income        $  63,724       $  62,407      $ 123,290      $ 122,809
                                          ============================================================

</TABLE>


                                       5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)



         Service Income
         Service income consists of revenue derived from providing services to
         third parties and related joint ventures. These services include the
         management of self-storage facilities, as well as general contractor,
         development and acquisition services provided to the GE Capital Corp
         Development and Acquisition Ventures ("GE Capital Ventures"). Below is
         a summary of service income for the second quarter and for the six
         months ended June 30, 2000:

<TABLE>
<CAPTION>


                                Three months    Three months      Six months       Six months
                                       ended           ended           ended            ended
                               June 30, 2000   June 30, 1999   June 30, 2000    June 30, 1999
                              ----------------------------------------------------------------
<S> <C>
Management fees                     $    686        $    441        $  1,298          $   718
General Contractor fees                  184               -             633
Development fees                         120               -             665
Acquisition fees                         277               -             277
                              ----------------------------------------------------------------
Total service income               $   1,267        $    441        $  2,873          $   718
                              ================================================================

</TABLE>



         Other Income
         Other income  consists solely of the Company's  proportionate  share of
         the net  income of equity  investments  including  joint  ventures  and
         Franchise.

         Interest Expense, net
         Interest  income and expense are netted  together  and the  breakout of
         income and expense is as follows:
<TABLE>
<CAPTION>



                             Three months    Three months      Six months      Six months
                                    ended           ended           ended           ended
                            June 30, 2000   June 30, 1999   June 30, 2000   June 30, 1999
                           ---------------------------------------------------------------
<S> <C>
Interest income                 $   3,335       $   3,310        $  6,674        $  6,302
Interest expense                  (14,813)        (13,726)        (29,199)        (27,565)
                           ---------------------------------------------------------------
Interest expense, net           $ (11,478)     $  (10,416)      $ (22,525)      $ (21,263)
                           ===============================================================

</TABLE>


         Reclassifications
         Certain  previously  reported amounts have been reclassified to conform
         to the  current  financial  statement  presentation  with no  impact on
         previously reported net income or partners' capital.



                                       6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)



4.       Investment in Storage Facilities

         The following table summarizes the activity in storage facilities
         during the period:

Cost:
        Balance on January 1, 2000            $ 1,670,892
        Property Acquisitions                       3,169
        Development Investment                     18,729
        Disposition of Property                   (29,533)
        Improvements and other                      9,787
                                              ------------
        Balance on June 30, 2000              $ 1,673,044
                                              ============


Accumulated Depreciation:
        Balance on January 1, 2000            $    94,538
        Additions during the period                18,500
        Disposition of Property                       (45)
                                              ------------
        Balance on June 30, 2000              $   112,993
                                              ============


         The preceding cost balances include facilities acquired through capital
         leases of $31,395 at June 30, 2000 and $31,334 at December 31, 1999 and
         construction  in  progress  of $43,980 at June 30,  2000 and $89,870 at
         December 31, 1999.  Also included above is $14,500 at June 30, 2000 and
         $11,800  at  December  31,  1999  of  corporate  office  furniture  and
         fixtures.  Accumulated  depreciation  associated  with  the  facilities
         acquired through capital leases was $1,102 at June 30, 2000 and $771 at
         December 31, 1999.

         The Company  acquired one  self-storage  facility for $3,200 during the
         second  quarter.  The Company also placed into service three  developed
         facilities during the quarter, representing a $15,100 investment.

5.       Advances and Investments in Real Estate

         Advances

         As of June 30,  2000 and  December  31,  1999,  $121,451  and  $117,022
         respectively of advances had been made by the Company to franchisees of
         Franchise  to fund  the  development  and  construction  of  franchised
         self-storage facilities. The loans are collateralized by the property.

         Joint Ventures

         Fidelity Venture
         On June 7, 1999,  the  Company  formed a joint  venture  with  Fidelity
         Management  Trust  Company  (the  "Fidelity   Venture").   The  Company
         contributed 32 self-storage facilities with a fair value of $144,000 to
         the Fidelity  Venture in return for a 25% interest and cash proceeds of
         approximately  $131,000. The Company recognized $367 in equity earnings
         from the Fidelity Venture and $341 in management fees for operating the
         venture's  properties in the second  quarter.  For the six months ended
         June 30, 2000, $639 in equity earnings have been recognized, as well as
         $664 in  management  fees.  As of June  30,  2000,  the  Company  had a
         recorded negative  investment  balance in the Fidelity Venture of $219.
         The following table summarizes certain financial information related to
         the Fidelity Venture:


                                       7
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)


                              Three months       Six months
                                     ended            ended
                             June 30, 2000    June 30, 2000
                             --------------  ---------------

Income Statement:
   Property revenues                $5,764          $11,113
   Property expenses                 1,810            3,669
   Net Operating Income              3,954            7,444
   Net income                        1,469            2,556
Balance Sheet:
   Total assets                                    $149,246
   Total debt                                        92,327



         GE Capital Ventures
         On December  1, 1999,  the Company  formed two joint  ventures  with GE
         Capital Corp ("GE Capital"), the "Acquisition Venture" and "Development
         Venture,"  providing  for a total  investment  capacity of $400,000 for
         acquisitions  and development of self-storage  facilities.  The Company
         has a 25%  interest  in the  $160,000  Development  Venture and a 16.7%
         interest in the $240,000 Acquisition Venture. During the first quarter,
         the Company  transferred  nine projects that were in various  stages of
         development  into  the GE  Capital  Development  Venture,  representing
         projected   aggregate  total  costs  of  $53,000.   The  projects  were
         transferred  to the  Development  Venture  at  the  Company's  cost  of
         $26,030.  The  Company  received  $19,856  in  cash,  and  recorded  an
         investment in the venture of $6,526, representing a 25% interest.

         On  February  14,  2000,  the  Development  Venture  closed on a credit
         facility with a commercial  bank.  Under the facility,  the Development
         Venture  can  borrow  up to  50% of  the  cost  of  each  project.  The
         borrowings  are supported by mortgages  which are  non-recourse  to the
         joint venture partners, except for an environmental indemnification and
         construction  completion  guaranty  that SUSA  Partnership,  L.P.  will
         provide.  The  facility  bears  interest  at various  spreads  over the
         Eurodollar  Rate.  During the second quarter,  the Development  Venture
         invested a total of $4,788 in  construction.  As of June 30, 2000,  the
         Development  Venture had one property  open and  operating and eight in
         design and construction.

         Also during the second  quarter,  the  Acquisition  Venture closed on a
         debt facility with a group of commercial  banks.  Under this  facility,
         the Acquisition  venture can borrow up to 50% of the lesser of the cost
         or appraised value of the acquired properties.  The facility is secured
         by those properties,  and bears interest at various spreads over LIBOR.
         The  Acquisition Venture proceeded during  the quarter to acquire  five
         self-storage facilities for a cost of approximately  $32,400. Four of
         the properties  are located in Chicago with the fifth in New York City.

         The  Company  has  recognized  certain  fees  related to the GE Capital
         Ventures as summarized below:

                                           Three months      Six months
                                                  ended           ended
                                          June 30, 2000   June 30, 2000
                                         ---------------  --------------
General contractor fees                         $   184         $   633
Development fees                                    120             665
Acquisition fees                                    277             277
Management fees                                       -              23
                                         ---------------  --------------
                                                $   581        $  1,598
                                         ---------------  --------------

                                       8
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)



         The Company has  recognized  $5 in equity  earnings from the GE Capital
         Ventures for the six months  ended June 30,  2000,  all relating to the
         second  quarter.  The Company has also  recognized $109 in amortization
         expense for the second quarter of 2000, and $181  amortization  expense
         for the six  months  ended  June 30,  2000 for  costs  relating  to the
         amortization  of the  difference  between  the  Company's  cost and the
         underlying equity in the Ventures' net assets. As of June 30, 2000, the
         Company had a combined recorded investment of $14,776 in the GE Capital
         Ventures.  The following table summarizes certain financial information
         related to the Ventures for the quarter and the six months ended June
         30, 2000:


                     3 months ended June 30, 2000   6 months ended June 30, 2000
                     -----------------------------------------------------------
                        Development   Acquisition    Development     Acquisition
                            Venture       Venture        Venture         Venture
                     ---------------------------- ------------------------------
Income Statement:
Property revenues           $  28         $   -          $  32          $  334
Property expenses              46             -             74              67
Net Operating Income  (loss)  (18)            -            (42)            267
Net income (loss)             (58)            -            (83)            146
Balance Sheet:
Total assets                                          $ 32,343        $ 34,768
Total third party debt                                   9,574               -


         Other Ventures
         The Company  has equity  interests  in several  single  facility  joint
         ventures.  As of June 30,  2000,  the Company  had a combined  recorded
         negative investment balance in the other joint ventures of $30.


6.       Other Assets

                                               As of             As of
                                            June 30,      December 31,
                                                2000              1999
                                         ------------------------------

Deposits                                    $  4,770          $  4,147
Deferred costs of issuances of
   notes payable                               9,029            10,006
Accounts receivable                            3,934             4,855
Mortgages receivable                           5,912             4,449
Notes receivable                              10,989             7,445
Other receivables                              6,055             4,988
Advances and investments in Franchise         21,724            13,906
Other                                          8,830             6,824
                                         ------------------------------
Total Other Assets                         $  71,243         $  56,620
                                         ==============================



7.       Lines of credit, Mortgages payable, and Other borrowings

         The Company can borrow under a $200,000 line of credit with a group of
         commercial banks and under a $40,000 line of credit with a commercial
         bank. The lines bear interest at various spreads above LIBOR. The
         following table lists additional information about the lines of credit.

                                       9
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
                (amounts in thousands, except unit per unit data)



                                                           As of
Line of Credit Borrowings                          June 30, 2000
-----------------------------------------------------------------
Total lines of credit                                $   240,000
Borrowings outstanding                               $   154,960
Weighted average daily interest
    rate year-to-date                                      7.37%


         The Company from time to time assumes mortgages on facilities acquired.
         Certain mortgages were assumed at above market interest rates. Premiums
         were recorded upon  assumption and amortized  using the interest method
         over the  terms of the  related  debt.  The  following  table  provides
         information about the mortgages:



Mortgage Notes Payable
as of June 30, 2000                               Face Amount     Maturity Range
--------------------------------------------------------------------------------

Fixed rate                                        $    57,541          2000-2021
Variable rate                                           5,278          2006-2016
                                             -----------------------------------
                                                  $    62,819
Premiums                                                5,990
                                             -----------------
Mortgage notes payable                            $    68,809



         The  Company has other  borrowings  used in the  financing  of property
         acquisitions.  The following table provides information about the other
         borrowings.


Other Borrowings
as of June 30, 2000           Face Amount       Carry Value      Imputed Rate
------------------------------------------------------------------------------

Non-interest bearing notes    $   9,150         $   8,667             7.50%
Deferred units                   12,000            10,639             7.50%
Capital Leases                        -            23,898             7.50%
                             -------------------------------------------------
                                                  $  43,204
                                              ==============



         During the six months ended June 30, 2000,  total  interest paid on all
         debt was $31,118 and total interest  capitalized for construction costs
         was $2,583.



                                       10
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
              (amounts in thousands, except unit and per unit data)



8.       Income per Unit

         Basic and diluted  income per unit is  calculated  as  presented in the
         following table:

<TABLE>
<CAPTION>



                                                    Three months    Three months     Six months     Six months
                                                           ended           ended          ended          ended
                                                   June 30, 2000   June 30, 1999  June 30, 2000  June 30, 1999
                                                   ------------------------------------------------------------
<S> <C>
Basic net income per Unit:
    Net income attributable to common unitholders      $  17,004       $  18,591      $  33,588      $  34,142
    Basic weighted average Units outstanding              30,975          31,558         31,181         31,519
    -----------------------------------------------------------------------------------------------------------
    Basic net income per Unit                          $    0.55       $    0.59      $    1.07      $    1.09

Diluted net income per Unit:
    Net income attributable to common unitholders      $  17,004       $  18,591      $  33,588      $  34,142

    Basic weighted average Units outstanding              30,975          31,558         31,181         31,519
    Dilutive effect of the GP's stock options                 47             122             50             81
                                                   ------------------------------------------------------------
    Diluted weighted average Units outstanding            31,022          31,680         31,231         31,600
    -----------------------------------------------------------------------------------------------------------
    Diluted net income per Unit                        $    0.55       $    0.59      $    1.07      $    1.08

</TABLE>


9.       Commitments

         As of June 30, 2000,  the Company is committed to advance an additional
         $16,348  to   franchisees   of  Franchise  for  the   construction   of
         self-storage  facilities.  These  advances  are  collateralized  by the
         facility.  The  Company  is a  limited  guarantor  on  $7,768  of  loan
         commitments  made by third party lenders to  franchisees  of Franchise.
         This entire amount has been funded as of June 30, 2000.

10.      Subsequent Events

         From June 30, 2000 to July 14, 2000, the Company completed the
         acquisition of one self-storage facility for approximately $3.1 million
         and also acquired the remaining franchisee equity interest in two
         franchised properties for $1.3 million. These two facilities are
         located in New York and Florida. These acquisitions were financed
         primarily through operating cash flows and borrowings under available
         lines of credit. The Company has entered into no further property
         acquisition contracts to date.

         The  GP also continued with its  Board-authorized  plan to repurchase
         up to 5% of its common  shares  outstanding  through open market and
         private purchases.  Between July 1 and August 1, 2000, an additional 86
         shares were repurchased at an average price of  approximately  $30 per
         share. The  total  of  1,194 shares as of August 1, 2000 represents
         approximately 85% of the announced repurchase.

11.      Legal Proceedings

         On July 22, 1999, a purported  statewide class action was filed against
         the REIT and  Partnership  in the Circuit Court of  Montgomery  County,
         Maryland, under the style Ralph Grunewald v. Storage USA, Inc. and SUSA
         Partnership,  L.P., case no. 201546V,  seeking recovery of certain late
         fees paid by tenants and an injunction  against  further  assessment of
         similar fees. The Company filed a responsive  pleading on September 17,
         1999,  setting  out its answer and  affirmative  defenses.  The Company
         believes  that it has defenses to the claims in the suit and intends to
         vigorously  defend it.  Plaintiff  filed a Motion for  Partial  Summary
         Judgment and a Motion for Class  Certification,  but before Storage USA
         was  required  to  respond  to  these  motions,  the  case  was  stayed
         indefinitely.  The  stay was entered in part because of a new  statute

                                       11
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2000
             (amounts in thousands, except units and per unit data)



         passed  by  the  Maryland   legislature  relating  to  late  fees.  The
         constitutionality  of that statute has been  challenged in an unrelated
         litigation not involving the Company.

         On November  15, 1999,  a purported  nationwide  class action was filed
         against the REIT and  Partnership  in the Supreme Court of the State of
         New York, Ulster County,  under the style West 125th Street Associates,
         L.L.C.  v.  Storage  USA,  Inc.  and SUSA  Partnership,  L.P.,  case no
         99-3278,  seeking the recovery of certain late and administrative  fees
         paid by tenants and an injunction  against  similar  fees.  The Company
         filed a  responsive  pleading on January 28, 2000 and the case has been
         transferred to New York County, case no. 401589/00. On July 6, 2000 the
         Plaintiff   filed  an  Amended   Complaint   and  a  Motion  for  Class
         Certification.  The Company  believes  that it has defenses to the suit
         and intends to vigorously defend it, including  opposing the Motion for
         Class Certification.

         On March 28, 2000,  separate actions (now  consolidated) were commenced
         in the Supreme  Court of the State of New York,  New York County styled
         SMB Hochman  Partners,  et al. v. Goldman,  et al., Index No. 601346/00
         and Kramer, et al. v. Goldman, et al., Index No. 601347/00,  by certain
         limited partnerships and their limited partners relating to the sale to
         the  Partnership  of two  storage  facilities  located  in  Westchester
         County,  New York. The consolidated  action alleges fraud and breach of
         fiduciary duty by the general  partners of the limited  partnerships in
         connection  with their  negotiation  of the sale of the  facilities  on
         behalf of the limited  partnerships.  It further  alleges that the REIT
         and the Partnership aided and abetted the breach of fiduciary duty. The
         consolidated  action  seeks  unspecified  compensatory  damages and $25
         million in punitive  damages.  The Company  believes it has defenses to
         the suit,  which is in the early  stages of  discovery,  and intends to
         vigorously  defend it.

         While the ultimate  resolution  of these cases will not have a material
         adverse  effect on the  Company's  financial  position,  if during  any
         period the potential contingency should become probable, the results of
         operations in such period could be materially affected.




                                       12
<PAGE>

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                                 OF OPERATIONS

The following  discussion and analysis of the consolidated  financial  condition
and  results  of  operations  should  be read  together  with  the  Consolidated
Financial  Statements  and  Notes  thereto.  References  to "we,"  "our" or "the
Company" or "the Partnership" refer to SUSA Partnership, L.P. References to "the
GP" refer to Storage USA, Inc.,  general partner and holder of approximately 88%
of the interest in the Partnership.

The following are definitions of terms used throughout this discussion that will
be helpful in understanding our business.

o    Physical  Occupancy means the total net rentable square feet rented as of
     the date (or period if indicated) divided by the total net rentable square
     feet available.
o    Scheduled  Rent Per Square Foot means the average  market rate per square
     foot of rentable space.
o    Net Rental Income means income from self-storage rentals less discounts.
o    Realized Rent Per Square Foot means the annualized  result of dividing
     rental income, less discounts by total square fee rented.
o    Direct Property Operating Cost means the costs incurred in the operation of
     a facility,  such as utilities,  real estate taxes, and on-site  personnel.
     Costs  incurred in the  management  of all  facilities,  such as accounting
     personnel and management level operations personnel are excluded.
o    Net Operating Income ("NOI") means  total  property  revenues less Direct
     Property Operating Costs.
o    Annual Capitalization Rate ("Cap Rate")/ Yield means NOI of a facility
     divided by the total capitalized costs of the facility.
o    Funds from Operations ("FFO") means net income, computed in accordance with
     generally accepted accounting principles ("GAAP"), excluding gains (losses)
     from  debt  restructuring  and sales of  property,  plus  depreciation  and
     amortization  of  revenue-producing  property,  and after  adjustments  for
     unconsolidated partnerships and joint ventures.
o    Same-Store  Facilities  include all facilities that we owned for the entire
     period of both comparison  periods.  Development  properties and expansions
     are removed from these groups to avoid skewing the results.


Overview
As of June 30, 2000, we owned, managed and franchised 521 facilities  containing
35.2 million square feet in 31 states and the District of Columbia.

Internal Growth

The  following  table  compares  Same-Store  Facilities  for  the  quarter  (330
properties  owned since April 1, 1999) and for the first six months of 2000 (326
properties owned since January 1, 1999). Newly developed and expanded facilities
are removed from the same-store pool to avoid skewing the results.


                                       13
<PAGE>

<TABLE>
<CAPTION>



                                               Quarter Ended                             Six Months Ended
                                  -------------------------------------------------------------------------------------
Same-Store Results                 June 30, 2000   June 30, 1999   Growth %     June 30, 2000    June 30, 1999  Growth %
-----------------------------------------------------------------------------------------------------------------------
<S> <C>
(amounts in thousands except occupancy and per square foot figures)

Revenues excluding late fees             $51,769       $49,057        5.5%           $99,433       $94,654        5.0%

Expenses
Operating Expenses                         9,186         8,778        4.6%            18,454        17,741        4.0%
Property Tax & Other                       5,727         5,658        1.2%            11,235        11,325      (0.8%)
                                  -------------------------------------------------------------------------------------
Total Expenses                            14,913        14,436        3.3%            29,689        29,066        2.1%
                                  -------------------------------------------------------------------------------------

NOI excluding late fees                  $36,856       $34,621        6.5%           $69,744       $65,588        6.3%
                                  -------------------------------------------------------------------------------------

Late fee Income                            1,716         2,960     (42.0%)             3,134         5,933     (47.2%)

NOI including late fees                  $38,572       $37,581        2.6%           $72,878       $71,521        1.9%
                                  =====================================================================================

Physical Occupancy                         85.8%         86.4%      (0.6%)             84.8%         85.5%      (0.7%)
Scheduled Rent per Square Foot            $11.82        $11.28        4.8%            $11.85        $11.27        5.1%
Realized Rent per Square Foot             $10.82        $10.15        6.6%            $10.66        $10.05        6.1%

</TABLE>



o    Our Same-Store  Facilities  achieved 6.5% NOI growth excluding late fees in
     the second  quarter of 2000,  and a 2.6%  growth  including  late fees,  as
     compared to the same quarter in 1999. The 6.5% NOI growth without late fees
     resulted from revenue  increases of 5.5%, offset by expense growth of 3.3%.
     For the six months ended June 30, 2000,  same-store NOI excluding late fees
     grew 6.3%,  due to revenue  increases  of 5.0% offset by expense  growth of
     2.1%.
o    The  revenue  increase of 5.5% for the quarter was driven by an increase in
     realized rent per square foot of 6.6% partially  offset by a 0.6 percentage
     point  decrease in physical  occupancy.  For the six months ending June 30,
     there was a 5.0%  increase  in  revenues  over the same  period  last year,
     caused by a 6.1%  increase  in  realized  rent per square  foot,  partially
     offset by a 0.7 percentage point decrease in physical occupancy.
o    Our operating  expenses grew 4.6% over the second  quarter of 1999 and 4.0%
     over the first six months of 1999. This growth is primarily attributable to
     increases  in  repairs  and  maintenance  expense,   health  insurance  and
     utilities.  Meanwhile,  property tax and other expenses increased 1.2% over
     the second  quarter of 1999 and decreased 0.8% over the first six months of
     1999. The second quarter  increase is mainly due to timing,  while the year
     to date decrease is attributable to significant  reductions in property and
     liability insurance costs experienced in the first quarter.

The  following  table lists changes in the 10 largest  same-store  markets (on a
percentage of year to date  same-store  NOI basis,  excluding late fees) and the
change in net rental income,  realized rent per square foot, and occupied square
feet for the second  quarter of 2000 versus the same period in 1999,  as well as
for the six  months  ended June 30.  The  largest 10 markets in total  represent
68.2% of the total same-store NOI.


                                       14
<PAGE>

<TABLE>
<CAPTION>



                                                             % of  Change in Net Rental     % Change in         % Change in
                                                 # of   YTD same-       Income (1)       Realized RPSF (2)    Occupied sq. ft.
Market                                      Facilities  store NOI         QTD       YTD        QTD      YTD       QTD      YTD
------------------------------------------------------------------------------------------------------------  -----------------
<S> <C>
Los Angeles-Riverside-Orange County, CA            45       17.8%        9.6%      9.1%       9.1%     9.1%      0.4%     0.1%
New York-N. New Jersey-Long Island, NY             25       14.9%        7.3%      7.0%       6.7%     7.5%      0.5%    (0.4%)
Washington-Baltimore, DC-MD-VA-WV                  21        9.8%        4.4%      4.3%       7.5%     6.5%     (2.8%)   (2.0%)
Miami-Fort Lauderdale, FL                          15        6.5%        8.5%      6.1%      10.8%     8.0%     (2.1%)   (1.8%)
Philadelphia-Wilm-Atlantic City, PA-NJ             14        4.0%        4.5%      3.6%       6.8%     5.9%     (2.2%)   (2.2%)
San Francisco-Oakland-San Jose, CA                  8        3.3%        3.0%      2.0%       8.4%     5.5%     (5.0%)   (3.3%)
Detroit, Ann Arbor-Flint, MI                       12        3.1%        9.0%      9.0%       7.3%     8.1%      1.6%     0.8%
Phoenix,-Mesa, AZ                                  15        3.1%        5.9%      4.7%       6.8%     6.9%     (0.0%)   (2.0%)
Dallas-Forth Worth, TX                             10        3.1%        2.2%      2.4%       2.7%     2.0%     (4.0%)    0.3%
San Diego, CA                                       6        2.6%        7.0%      6.6%       9.0%     8.6%     (1.9%)   (1.8%)

</TABLE>


 (1)  The  percentage  change in Realized  Rent per Square Foot plus the percent
      change in occupied square feet  approximates the percentage  change in net
      rental income.
 (2)  Rent Per Square Foot.


External Growth

Acquisitions
There was one new property  acquisition in the second quarter of 2000.  This new
self-storage  facility,  in the Denver,  Colorado  market,  increased  our total
available square feet by approximately 67 thousand at a cost of $3.1 million. We
expect that the  majority of property  acquisitions  transacted  throughout  the
remainder of the year will be through the General Electric  Capital  Corporation
("GE  Capital")  Acquisition  Venture.  There were no new property  acquisitions
during the first quarter of 2000.

New Development and Expansion
The following newly  developed and expanded  facilities were opened in the first
and second quarters of 2000:

<TABLE>
<CAPTION>



                                             Developments                                Expansions
                                Number of        Total     Net Rentable    Number of       Total     Net Rentable
Quarter ended                  Facilities      Investment   Square Feet   Facilities     Investment   Square Feet
------------------------------------------------------------------------------------------------------------------
(amounts in thousands except number of facilities)

<S> <C>
March 31, 2000                          -         $     -             -            4      $  4,814             86
June 30, 2000                           3         $ 15,059          206            3      $  3,702             53
                              ------------------------------------------------------------------------------------
 Total year-to-date                     3         $ 15,059          206            7      $  9,168            139
                              ====================================================================================

</TABLE>


 In  connection  with  our  joint  ventures  with GE  Capital  discussed  in the
Financing  section  below,  we  transferred  nine projects in various  stages of
development into the GE Capital  Development Venture during the first quarter of
2000.  These  projects had a total  projected  cost of $53.0  million,  and were
transferred to the venture at our cost of $26.0 million.  We do plan to continue
the  development  of eight new facilities  within the REIT. The following  chart
summarizes the details of these eight projects as well as our expansion projects
under construction or in construction planning as of June 30, 2000:

<TABLE>
<CAPTION>


                                      # of     Square       Expected      Investment     Remaining
                                      Prop.      Feet      Investment      to Date      Investment
 ---------------------------------------------------------------------------------------------------
 (amounts in thousands except for number of facilities)
<S> <C>

 Total development in process                8    584        $ 53,640      $ 28,079     $  25,561
 Total expansions in process                19    450        $ 26,096      $  5,648     $  20,448
                                   -----------------------------------------------------------------
 Total                                      27  1,034        $ 79,736      $ 33,727     $  46,009
                                   =================================================================

</TABLE>

                                       15
<PAGE>

The following table presents the anticipated  timing of completion and the total
expected  dollar  amounts  invested in opening the  facilities in the process of
being newly developed or expanded.


                      -------------------------------------------------------
                        3rd Qtr 00     4th Qtr 00      2001-2002       Total
                      -------------------------------------------------------
(amounts in thousands)
Development                $ 4,077      $  16,372       $ 33,191    $ 53,640
Expansions                   1,434          2,939         21,723      26,096
                      -------------------------------------------------------
Total                      $ 5,511       $ 19,311       $ 54,914    $ 79,736
                      =======================================================


Financing

During the fourth quarter of 1999, we formed two joint ventures with GE Capital,
providing a total  investment  capacity of $400  million  for  acquisitions  and
development of self-storage properties. We plan to fund substantially all of our
new acquisition and development through 2001 through the GE Ventures.  As stated
above, in the "External Growth" section, we transferred nine projects in various
stages of development into the GE Capital  Development  Venture during the first
quarter of 2000.  These  projects had a total  projected  cost of $53.0 million,
$26.0 million of which  represented  the  Company's  total costs as of March 31,
2000.  We received  $19.9  million in cash,  and recorded an  investment  in the
venture of $6.5 million,  representing a 25% interest.  As of June 30, 2000, the
GE  Development  Venture had invested  $32.3  million,  of which $5.4 was funded
through advances and investments  by the Company. The GE Acquisition Venture had
invested  $34.8  million as  of June 30, 2000,  of which $9.4 was funded through
advances and investments by the Company.

In December of 1999, the GP announced a Board  authorized  plan to repurchase up
to 5%  of  its  common  shares  outstanding  through  open  market  and  private
purchases. The timing of the purchases, the length of time that the program will
continue  and the  exact  number of shares to be  purchased  is  dependent  upon
prevailing market conditions.  As of June 30, 2000, the GP had repurchased 1.108
million  shares at an  average  price of  $29.97.  Subsequent  to the end of the
second quarter of 2000, the GP purchased an additional 86 thousand  shares at an
average price of $30.08.  The total of 1.194 million  shares  repurchased  as of
August 1, 2000 represents approximately 85% of the announced repurchase.

Other Initiatives

On May 8, 2000, we announced the formation of a strategic alliance with Access
Storage, S.A. and Millers Storage, S.A., the leading self-storage operators in
Europe and Australia, respectively, to provide management advisory services. As
part of the agreement, we received an option to purchase convertible debt and
also to acquire up to a 20% interest in these companies, which are indirect
affiliates of Security Capital Group Incorporated. We do not expect to exercise
such option in 2000.

Commencing  on May 1, 2000,  we began  offering our  customers  direct access to
tenant  insurance,  which insures their goods against  described  perils, in all
Storage USA  facilities  except those located in the states of Florida and North
Carolina.  The net profits from the premiums written during 2000 will ultimately
accrue to the benefit of a charitable trust  established by the Company.  We are
anticipating  that  profits  from  premiums  written  subsequent  to  2000  will
ultimately  accrue to the  benefit  of a taxable  REIT  subsidiary  that will be
formed and wholly  owned by the  Partnership  pursuant to the Ticket to Work and
Work Incentives Improvement Act of 1999.


Results of Operations

The following table reflects the profit and loss statement for the quarter ended
June 30, 2000 and June 30, 1999,  and for the six months ended June 30, 2000 and
June 30,  1999,  based on a  percentage  of  total  revenues  and is used in the
discussion that follows:


                                       16
<PAGE>

<TABLE>
<CAPTION>


                                    Three months ended June 30,     Six months ended June 30,
                                            2000           1999        2000             1999
---------------------------------------------------------------------------------------------
<S> <C>
Revenue
Rental and other property income           97.2%          97.8%       96.7%            98.7%
Service income                              1.9%           0.7%        2.3%             0.6%
Other income                                0.9%           1.5%        1.0%             0.8%
---------------------------------------------------------------------------------------------
Total Income                              100.0%         100.0%      100.0%           100.0%

Expenses
Property operations                        23.6%          23.6%       24.5%            24.2%
Taxes                                       8.3%           8.3%        8.3%             8.3%
Cost of Providing Services                  1.5%           0.6%        1.8%             0.6%
General and administrative                  5.6%           6.4%        4.6%             6.3%


</TABLE>


Rental and other  property  income  consists of rental  income plus other income
from property specific  activities  (rental of floor and storage space for locks
and packaging  material,  truck rentals and ground rents for cellular  telephone
antenna  towers  and  billboards).  Following  is a summary  of rental and other
property  income for the second  quarter  and for the six months  ended June 30,
2000.


<TABLE>
<CAPTION>

                                           Three months    Three months     Six months     Six months
                                                  ended           ended          ended          ended
                                          June 30, 2000   June 30, 1999  June 30, 2000  June 30, 1999
                                          ------------------------------------------------------------
<S> <C>
Rental Income                                 $  62,805       $  61,441      $ 121,251      $ 120,848
Other Property Specific Income                      919             966          2,039          1,961
                                          ------------------------------------------------------------
Total Rental and Other Property Income        $  63,724       $  62,407      $ 123,290      $ 122,809
                                          ============================================================

</TABLE>


Rental and other property income increased $1.3 million, or 2.1%, in the quarter
ended June 30,  2000  compared to the same period in 1999,  and  increased  $481
thousand,  or 0.4%,  in the six months ended June 30, 2000  compared to the same
six months in 1999. The primary contributors to the increase in rental and other
property income are summarized in the following table.


Rental and Other Property Income Growth in 2000 over 1999
for comparable periods ended June 30 (in thousands)

<TABLE>
<CAPTION>


                                                 3 months ended June 30, 2000           6 months ended June 30, 2000
                                             ----------------------------------------------------------------------------
                                                   Before                                 Before
                                                Late fees    Late fees       Total     Late fees   Late fees       Total
                                             ----------------------------------------------------------------------------
<S> <C>
1999 acquisitions                                 $ 2,662       $   51     $ 2,713      $  5,421      $   99     $ 5,520
1999 developments                                     728           13         741         1,306          24       1,330
1999 dispositions                                  (4,359)        (297)     (4,656)       (9,901)       (641)    (10,542)
Same-store facilities                               2,712       (1,244)      1,468         4,779      (2,799)      1,980
Other lease-up, expansion and development
  Facilities                                        1,142          (91)      1,051          2,388       (195)      2,193
                                             ----------------------------------------------------------------------------
                                                  $ 2,885     $ (1,568)    $ 1,317      $   3,993    $(3,512)    $   481
                                             ----------------------------------------------------------------------------

</TABLE>



The one-time impact of our change in late fee policy, as described in our Form
10-K for the year ended 1999, produced an unfavorable $1.6 million variance in
late fee revenue in the second quarter, or approximately 43.8%, and an
unfavorable $3.5 million in late fee revenue for the six months ended June 30,
2000 compared to the same period in 1999, or 48.7%. Rental and other property
income was also limited due to 1999 property dispositions, most notably the 32
properties contributed to the joint venture with Fidelity Management Trust
Company in the second quarter of 1999.

                                       17
<PAGE>

The impact of the  dispositions  was an unfavorable $4.4 million for the quarter
and an  unfavorable  $9.9  million  for the six  months  ended  June  30.  These
reductions  in  rental  and  other  property  income  were  partially  offset by
increased revenues from 1999 acquisitions, $2.7 million for the quarter and $5.4
million  for the six  months  ended June 30,  and from 1999  developments,  $728
thousand  for the  quarter and $1.3  million  for the six months  ended June 30.
These two groups of properties  were held for the full quarter and six months in
2000, versus partial periods in 1999. Growth in rental and other property income
also occurred due to occupancy increases at our facilities currently in lease-up
(including expansions and pre-1999  developments):  $1.1 million for the quarter
and $2.4 million for the six months ending June 30. The  remaining  $2.7 million
growth  for the  quarter  and $4.8  million  for the six  months  ended  June 30
occurred  in  Same-Store  Facilities.  For the  quarter,  this was  caused by an
approximate  6.6% increase in realized rent per square foot, from $10.15 in 1999
to $10.82 in 2000,  partially offset by a slight decrease in physical occupancy,
from  86.4% in 1999 to 85.8% in 2000.  For the six months  ended  June 30,  this
Same-Store growth was caused by an  approximate  6.1% increase in realized rent
per square foot,  from $10.05 in 1999 to $10.66 in 2000,  partially  offset by a
slight decrease in physical occupancy, from 85.5% in 1999 to 84.8% in 2000.

As stated  above,  we  reevaluated  the amounts that we charge our customers for
late fees and  implemented  reduced late fees in the first quarter of 2000.  The
impact of the change in late fee policy on our total  revenues  was and  remains
difficult  to  determine  due to a number of  factors:  differences  in late fee
charges  across the  country;  variances  in late fee  calculation  in  acquired
facilities;  and the discretion of facility  managers to waive late fees. As set
forth in our form 10-K for the year ended 1999, we established an estimate of as
much as $5.0  million  in  reduced  revenue  in the year 2000 due to the  policy
change.  After a review of our  operations for the quarter of 2000, we increased
our estimate for late fee revenue  reduction to approximately  $6.8 million.  We
believe that this  estimate is still valid,  although  there can be no assurance
that the  reduction  will be limited to this  amount due to the  factors set out
above.  You  should  refer to the  discussions  under  "Legal  Proceedings"  and
"Forward-Looking   Statements  and  Risk  Factors"  for  additional  information
relevant to our late fee policy.

Service income increased by $826 thousand from the second quarter of 1999 to the
same period in 2000, and by $2.2 million from the first six months of 1999 to
the same period in 2000. Service income also grew as a percentage of total
revenue: from 0.7% in 1999 to 1.9% in 2000 in the second quarter; and from 0.6%
in 1999 to 2.3% in 2000 for the six months ended June 30. The bulk of the
increases, $581 thousand for the quarter and $1.6 million for the six months
ended June 30, is due to the service fees received from the GE Capital Ventures.
The ventures had no activity until March 2000, so there are no comparable
general contractor, development or acquisition fees for 1999. The remaining
increases are due to management fees, $245 thousand for the quarter and $580
thousand for the six months ended June 30, as a result of an increased number of
managed and franchised facilities paying fees to the Company. There were 96 such
properties as of June 30, 1999, compared to 116 as of June 30, 2000. One third
of the 96 facilities at June 30, 1999 did not join our franchised group of
properties until June, hence contributing only one month's fees to the 1999
totals. Below is a summary of service income for the second quarter and for the
six months ended June 30, 1999 and 2000.

<TABLE>
<CAPTION>


                           Three months    Three months      Six months       Six months
                                  ended           ended           ended            ended
                          June 30, 2000   June 30, 1999   June 30, 2000    June 30, 1999
                          ---------------------------------------------------------------
<S> <C>
Management fees                $    686        $    441        $  1,298          $   718
General Contractor fees             184               -             633
Development fees                    120               -             665
Acquisition fees                    277               -             277
                          ---------------------------------------------------------------
Total service income          $   1,267        $    441        $  2,873          $   718
                          ===============================================================

</TABLE>


Other income  consists  solely of the Company's  proportionate  share of the net
income of equity  investments  including  joint  ventures and  Franchise.  Other
income  decreased by $346 thousand  from the second  quarter of 1999 to the same
period in 2000, and increased by $382 thousand from the first six months of 1999
to the same period in 2000.  The quarterly  change is primarily due to Franchise
Corp.'s  equity  participation  in the  sale of  some  jointly  held  franchisee
properties  in the second  quarter of 1999.  The year to date  increase  of $382
thousand is due to the  Company's  income from its  investment  in the  Fidelity
joint  venture.  As the joint venture was formed in June 1999,  only one month's
income was  recorded as of June 1999,  compared to a full quarter and a full six
months in 2000.

As a  percentage  of  revenues,  cost of  property  operations  and  maintenance
remained  constant  between  the second  quarter of 1999 and the same  period in
2000, at 23.6%.  Actual expenses rose $419 thousand,  from $15.1 million in 1999

                                       18

<PAGE>

to $15.5  million in 2000.  For the six months  ended June 30,  cost of property
operations and maintenance as a percentage of revenues increased slightly,  from
24.2% in 1999 to 24.5% in 2000, reflecting a $1.1 million expense increase, from
$30.1  million  in 1999 to $31.2  million  in 2000.  The  trend  for the cost of
property  operations as a percentage of revenues is to decrease over time due to
Same-Store  Facility revenue growth outpacing expense growth. This was generally
the case here,  except for a few notable  exceptions.  Salary expense  increased
between the two periods,  primarily due to two strategic initiatives  commencing
in 1999: the national reservation center and the internal information technology
help desk. As stated,  these  departments  started  operations in 1999,  and had
gradually increasing expenses as staffing progressed.  Comparatively,  year 2000
contains  expenses for two mature  departments for a full quarter and for a full
six  months.  Health  insurance  expense  also  showed a  significant  increase,
following what we believe is a national trend.  Finally,  2000 utility  expenses
exceeded  those of 1999  due to the  unusually  mild  winter  in  1999.  Looking
forward,  we will also experience  similar  exceptions in property and liability
insurance over the next twelve months.  Effective July 1, 2000,  higher premiums
went into effect  relating to our renewal of this coverage for the policy period
July 1, 2000 through June 30, 2001.  Premiums  over the twelve month period will
be  approximately  $500 thousand  higher that those that were in place under the
previous policy.

Tax expense as a percentage of revenues  remained 8.3% for the second quarter of
1999 and 2000,  and for the six months ended June 30, 1999 and 2000. Tax expense
as a  percentage  of  revenues  tends to trend  down as a result  of  Same-Store
Facility  revenue  growth  outpacing  tax  expense  growth.  This trend has been
negated  throughout  the first six months of 2000 by the impact of property  tax
reassessments on a number of our larger facilities.

During the second  quarter of 2000,  the State of Tennessee  passed  legislation
that  granted  REITS  relief  from a 1999  enacted  law  that  subjects  limited
partnerships  and  limited  liability  corporations  to the  states  excise  and
franchise tax (the  "Tennessee  Tax").  The  legislation  is  retroactive to the
beginning of the year and will eliminate the  applicability of the Tennessee Tax
to  the  Company.  During  1999,  we  incurred  approximately  $600  of  expense
associated with such tax.

Costs of providing  services  increased from $385 thousand in the second quarter
of 1999 to $979  thousand  in the  same  period  in  2000,  and  increased  as a
percentage  of  revenues  from 0.6% to 1.5%.  For the six months  ended June 30,
costs of providing services increased from $710 thousand in 1999 to $2.3 million
in 2000,  and increased as a percentage of revenues from 0.6% to 1.8%.  This was
due  primarily  to the new  services  provided  in  2000,  general  contracting,
development and acquisition  services,  and their corresponding costs. The costs
of providing  management services also increased as more managed properties were
added to the Storage USA system between June 30 of 1999 and 2000.

General  and  administrative  expenses  ("G&A")  as  a  percentage  of  revenues
decreased from 6.4% in the second quarter of 1999 to 5.6% for the same period of
2000, indicative of a G&A expense decrease from $4.1 to $3.6 million between the
two periods.  G&A expenses as a percentage of revenues also  decreased from 6.3%
for the first  six  months  of 1999 to 4.6% for the  comparable  period in 2000,
indicative  of an expense  decrease  from $7.8 to $5.9  million  between the two
periods.  Contributing  substantially  to these  decreases  in  expense  was the
classification in 2000 of development,  construction and acquisition  department
overhead as part of the cost of providing  services,  continued benefits in 2000
from various cost  containment  programs and lower  management bonus accruals in
2000 compared to 1999.

Depreciation and amortization  expense increased from $9.0 million in the second
quarter of 1999 to $10.1 million for the same period in 2000. For the six months
ended June 30,  depreciation  and amortization  expense  increased from $17.4 in
1999 to $19.3  million  in 2000.  This was due to a $78.6  million  increase  in
depreciable assets since June 30, 1999.

Interest income and expense are netted together for presentation. The breakout
of income and expense follows:

<TABLE>
<CAPTION>



                        Three months    Three months      Six months      Six months
                               ended           ended           ended           ended
                       June 30, 2000   June 30, 1999   June 30, 2000   June 30, 1999
                      ---------------------------------------------------------------
<S> <C>
Interest income            $   3,335       $   3,310        $  6,674        $  6,302
Interest expense             (14,813)        (13,726)        (29,199)        (27,565)
                      ---------------------------------------------------------------
Interest expense, net      $ (11,478)      $ (10,416)       $(22,525)       $(21,263)
                      ---------------------------------------------------------------

Capitalized interest       $   1,165       $   1,029        $  2,583        $  2,161

</TABLE>


Interest  expense  grew $1.1  million  from the second  quarter  of 1999,  $13.7
million,  to the same period in 2000,  $14.8  million.  For the six months ended
June 30, interest  expense  increased $1.6 million,  from $27.6 in 1999 to $29.2
million in 2000.  The interest  expense  increase was primarily from the sources
listed in the table below and was offset by capitalized interest of $1.0 million
in the second quarter of 1999 and $2.2 million for the six months ended June 30,
1999, and $1.2 million and $2.6 million for the comparable periods in 2000.


                                       19
<PAGE>

<TABLE>
<CAPTION>



                                Three months ended June 30,                  Six months ended June 30,
                         --------------------------------------------------------------------------------------
                                 2000                 1999                   2000                 1999
                         --------------------------------------------------------------------------------------
                                      Wtd Avg               Wtd Avg                Wtd Avg             Wtd Avg
                             Wtd Avg Interest     Wtd Avg  Interest      Wtd Avg  Interest    Wtd Avg Interest
Debt                       Borrowing     Rate   Borrowing      Rate    Borrowing      Rate  Borrowing     Rate
---------------------------------------------------------------------------------------------------------------
<S> <C>
Notes payable                600,000    7.37%     600,000     7.37%      600,000     7.37%    600,000    7.37%
Lines of credit              137,988    7.57%     101,385     6.03%      133,199     7.41%     96,752    6.12%
Mortgages payable             69,133    7.50%      66,593     7.50%       69,509     7.50%     67,052    7.50%
Leases & other                42,991    7.50%      47,439     7.50%       42,806     7.50%     47,578    7.50%
  borrowings

</TABLE>


Interest  income  improved $25 thousand  from the second  quarter of 1999 to the
same period in 2000. For the six months ended June 30, interest income increased
approximately $400 thousand,  from $6.3 million in 1999 to $6.7 million in 2000.
This increase was due to additional  advances from us to Franchisees  since June
30, 1999, and the resulting  interest  growth.  The remainder of the increase is
from  interest  earned on  amounts  outstanding  under the 1995  Employee  Stock
Purchase and Loan Plan and earnings on overnight deposits.

We recorded an $890 thousand gain on the sale of storage facilities in the first
quarter of 2000. $414 thousand of that gain relates to the sale of two Columbus,
Indiana  storage  facilities;  $295  thousand  to the  sale  of a  non-operating
development project in White Marsh, Maryland to a franchisee;  and the remaining
$180 to adjustments from prior period dispositions. There were no second quarter
dispositions.


Liquidity and Capital Resources

Cash provided by operating  activities  was $37.4 million  during the six months
ended June 30, 2000 as compared to $53.8 million  during thesame period in 1999.
The items  affecting  the operating  cash flows are discussed  more fully in the
"Results of Operations" section.

We  invested  $13.0  million  during  the  first  six  months  of  2000  for the
acquisition and improvement of self-storage facilities compared to $59.2 million
during the same period in 1999.  $3.1 million of the $13.0 for 2000 reflects our
single  acquisition  in the Denver,  Colorado  market,  with the remaining  $9.9
million  representing  improvements.  The 1999 acquisition activity reflects the
reinvestment of proceeds from the Fidelity transaction  discussed below. We also
received $21.7 million in proceeds from the sale/exchange of storage  facilities
in the first six months of 2000 consisting of: $1.0 million from the sale of two
self-storage  facilities in Indiana; $19.9 from the transfer of nine development
projects to the GE Capital Development  Venture;  $463 thousand from the sale of
another  non-operating  development  project to a franchisee;  and $332 thousand
from the sale of vacant land  adjacent to one of our  operating  facilities.  As
part of the GE Capital  transaction,  we also received a 25% equity  interest in
the venture  valued at $6.5  million.  In the  transaction  involving the single
development project, we accepted a $2.2 million note and received the balance of
the sales price in cash. In the first six months of 1999, we received  $137.1 in
proceeds from the sale/exchange of storage facilities,  mostly from the Fidelity
transaction.

In addition to  improvements, we invested $18.7 million for the development and
construction of self-storage facilities in the six months ended June 30, 2000,
compared to $29.1 million for the same time period in 1999. There were 8 newly
developed facilities and 19 expansions of existing facilities in process with
$33.7 million cumulative invested at June 30, 2000. The total budget for these
facilities is $79.7 million, of which $46.0 million remains to be invested. We
invested $9.8 million in real estate during the first six months of 2000,
compared to $15.2 million one year ago. In 2000, we have invested $6.5 million
in cash in the GE Capital Ventures, and provided $3.3 million in financing to
franchisees of Franchise. Proceeds were also received from certain franchisees,
as four repaid their loans during the six months ended June 30, 2000, generating
$6.3 million in cash. We have $16.3 million of loan commitments to franchisees
to fund as of June 30, 2000. Additionally, we expect to invest approximately
$9.3 million as part of our required equity contributions in the GE Capital
joint ventures during the remainder of 2000.

Sometimes we acquire  facilities in exchange for Units. The Units are redeemable
after one year for cash or, at our  option,  shares  of the GP's  common  stock.
Sellers  taking Units  instead of cash are able to defer  recognizing  a taxable
gain on the sale of their  facilities  until they sell or redeem their Units. At
June 30, 2000 we had 3.4 million Units outstanding, of which the following Units
were redeemable:

                                       20
<PAGE>

o   82  thousand  Units  for an  amount  equal to the fair  market  value  ($2.4
    million,  based upon a price per Unit of $29.52 at June 30, 2000) payable in
    cash  or,  at  our  option,  by  a  promissory  note  payable  in  quarterly
    installments over two years with interest at the prime rate.
o   3.3 million Units for amounts equal to the fair market value ($98.7 million,
    based  upon a price per Unit of $29.52 at June 30,  2000)  payable  by us in
    cash or, at our option,  in shares of the GP's  common  stock at the initial
    exchange ratio of one share for each Unit.

We anticipate  that the source of funds for any cash redemption of Units will be
retained cash flow or proceeds  from the future sale of our  securities or other
indebtedness.  We have  agreed to register  any shares of the GP's common  stock
issued upon redemption of Units under the Securities Act of 1933.

Between  November  1996 and July 1998,  the  Partnership  issued $600 million of
notes payable. The notes are unsecured  obligations of the Partnership,  and may
be redeemed at any time at the option of the  Partnership,  subject to a premium
payment  and other terms and  conditions.  The  combined  notes carry a weighted
average  interest  rate of 7.37% and were  issued at a price to yield a weighted
average of 7.42%. The terms of the notes are staggered  between seven and thirty
years, maturing between 2003 and 2027.

During  the  first  six  months  of 2000,  the GP  repurchased,  under its stock
buy-back plan, 858 thousand  shares of its common stock at a total cost of $26.0
million.  Subject to  prevailing  market  conditions  and price  levels,  the GP
expects to commit an additional  estimated  $8.9 million during the remainder of
2000 to this plan to  purchase  up to a total of 5% of its  outstanding  shares,
inclusive of shares repurchased in 1999.

We initially fund our capital requirements primarily through the available lines
of credit with the intention of refinancing  these with long-term capital in the
form of equity and debt securities when we determine that market  conditions are
favorable.  At June 30, 2000, the GP can issue under  currently  effective shelf
registration  statements  up to $650 million of common stock,  preferred  stock,
depository  shares and warrants  and can also issue $250  million of  unsecured,
non-convertible  senior debt securities of the Partnership.  Our lines of credit
bear interest at various  spreads over LIBOR.  We had net  borrowings in the six
months ended June 30, 2000 of $49.5  million.  For the same period in 1999,  net
repayments  totaled $3.6  million.  We currently  have a $200 million  unsecured
revolving  credit line with a group of commercial  banks,  bearing interest at a
spread of 120 basis  points  over LIBOR,  based on our  current  debt rating and
maturing on March 31,  2002.  We also have a $40  million  line of credit with a
commercial  bank. The line bears interest at spread over LIBOR,  matures on July
1, 2001, and is renewable at that time.

We paid approximately $43.0 million in distributions during the first six months
of 2000, $38 million to the general  partner,  $4.9 million to limited  partners
and $44 thousand to minority  interests.  This compares to a total $41.3 million
in  distributions  for the same  period  in 1999,  $36  million  to the  general
partner,  $4.8  million  to  limited  partners  and  $38  thousand  to  minority
interests.  The GP increased its dividend to common  shareholders 3% between the
two periods,  from $.67 to $.69 per share.  Distributions to common  unitholders
are made at the same rate used by the GP for common stock  dividends.  Preferred
unit  dividends  also  increased  from 1999 to 2000,  from $2.5  million to $2.9
million for the six months ended June 30.

We expect to incur  approximately  $4.5 million for  scheduled  maintenance  and
repairs  during  2000 and  approximately  $5.8  million  to  conform  facilities
acquired  from 1994 to 1999 to our standards of which $1.5 million for scheduled
maintenance  and $848  thousand  for  conforming  acquired  facilities  has been
incurred to date.  In the second  quarter of 2000,  we  committed to several new
leases relating to corporate office space in Memphis.  The leases have a term of
fifteen years with estimated  annual payments of $2.7 million.  We have rented a
portion of this space to others  under  several  subleases  at the same rent and
substantially  similar  terms  to our  primary  leases  and  expect  to  receive
approximately $0.8 million annually from such subleases.

We believe that  borrowings  under our current credit  facilities  combined with
cash from  operations  will  provide us with  necessary  liquidity  and  capital
resources to meet the funding  requirements  of our  remaining  development  and
expansion  pipeline,  commitments to provide  financing to  franchisees,  equity
commitments  of  the  GE  Capital  joint  ventures,  dividend  and  distribution
requirements  and  expected  investments  under the GP's  stock  buy-back  plan.
Additionally,   no  significant  maturities  are  scheduled  under  any  of  our
borrowings until 2003.


                                       21
<PAGE>

Qualitative and Quantitative Disclosure About Market Risk

We are exposed to certain  financial market risks,  the most  predominant  being
fluctuations in interest rates on existing  variable rate debt and the repricing
of fixed rate debt upon maturity.  We monitor  interest rate  fluctuations as an
integral  part of our overall risk  management  program,  which  recognizes  the
unpredictability  of  financial  markets  and  seeks to reduce  the  potentially
adverse  effect  on our  results.  The  effect  of  interest  rate  fluctuations
historically  has been  small  relative  to other  factors  affecting  operating
results, such as rental rates and occupancy.

Our operating  results are affected by changes in interest rates  primarily as a
result of borrowing under our lines of credit. If interest rates increased by 25
basis points,  our interest expense for the six months ended June 30, 2000 would
have  increased by  approximately  $140 thousand,  based on average  outstanding
balances during that period.


Funds from Operations ("FFO")

We believe  FFO should be  considered  in  conjunction  with net income and cash
flows to facilitate a clear  understanding of our operating results.  FFO should
not be considered as an alternative to net income, as a measure of our financial
performance or as an  alternative  to cash flows from operating  activities as a
measure of  liquidity.  FFO does not represent  cash  generated  from  operating
activities in  accordance  with GAAP and is not  necessarily  indicative of cash
available to fund cash needs. We follow the current National Association of Real
Estate Investment Trust's (NAREIT)  definition of FFO which effective January 1,
2000, now includes non-recurring results of operations,  except those defined as
"extraordinary  items"  under GAAP.  Since we have  historically  not added back
non-recurring  items to our  calculation,  we were not required to restate prior
period FFO amounts.  Our FFO may not be comparable to similarly  titled measures
of other REITs that calculate FFO  differently.  In calculating FFO, we add back
only depreciation and amortization of revenue-producing  property.  As such, Our
FFO and FFO per share may not be  comparable  to other  REITs  that may add back
total depreciation and amortization.

The following  table  illustrates the components of our FFO for the three months
and six months ended June 30, 2000 and June 30, 1999.

<TABLE>
<CAPTION>


                                                     Three Months    Three Months      Six Months       Six Months
Funds from Operations Attributable                          Ended           Ended           Ended            Ended
to Unit holders:                                    June 30, 2000   June 30, 1999   June 30, 2000    June 30, 1999
                                                  ---------------- --------------- ---------------  ---------------
(in thousands)
<S> <C>
Net Income Attributable to Common Unitholders          $   17,004      $   18,591      $   33,588       $   34,142

Loss/(Gain) on Sale of Assets*                                              (441)           (595)              137
                                                                -
Total Depreciation and Amortization                        10,097           9,017          19,291           17,373
Depreciation from Unconsolidated Entities                     183              49             335               49
Less Depreciation of Non-Revenue Producing
  Property                                                   (998)           (592)         (1,912)          (1,164)
                                                  ---------------- --------------- ---------------  ---------------
FFO attributable to common unitholders                 $   26,286      $   26,624      $   50,707       $   50,537

</TABLE>



*Excludes $295 gain on sale of undepreciated land in the first quarter of 2000.


During  the  second  quarter of 2000,  the GP  declared a dividend  per share of
$0.69,  which is an increase of 3.0% over the second  quarter  1999  dividend of
$0.67.  To date,  $1.38 per share in dividends have been  declared,  compared to
$1.34 in 1999, again a 3.0% increase. As a qualified REIT, the GP is required to
distribute a substantial  portion of its net taxable  income as dividends to its
shareholders.  While our goal is to generate and retain  sufficient cash flow to
meet  our  operating,   capital  and  debt  service  needs,  the  GP's  dividend
requirements  may  require  us to  utilize  our bank  lines of credit  and other
sources of liquidity to finance property acquisitions and development, and major
capital improvements. See "Liquidity and Capital Resources" section.


                                       22
<PAGE>

Legal Proceedings

On July 22, 1999, a purported  statewide class action was filed against the REIT
and Partnership in the Circuit Court of Montgomery County,  Maryland,  under the
style Ralph Grunewald v. Storage USA, Inc. and SUSA Partnership,  L.P., case no.
201546V, seeking recovery of certain late fees paid by tenants and an injunction
against  further  assessment  of similar  fees.  The Company  filed a responsive
pleading on September 17, 1999, setting out its answer and affirmative defenses.
The Company  believes that it has defenses to the claims in the suit and intends
to vigorously  defend it.  Plaintiff filed a Motion for Partial Summary Judgment
and a Motion for Class  Certification,  but before  Storage USA was  required to
respond to these motions, the case was stayed indefinitely. The stay was entered
in part because of a new statute passed by the Maryland  legislature relating to
late fees.  The  constitutionality  of that  statute has been  challenged  in an
unrelated litigation not involving the Company.

On November 15, 1999, a purported  nationwide class action was filed against the
REIT and  Partnership  in the  Supreme  Court of the State of New  York,  Ulster
County,  under the style West 125th Street  Associates,  L.L.C.  v. Storage USA,
Inc.  and SUSA  Partnership,  L.P.,  case no 99-3278,  seeking  the  recovery of
certain late and  administrative  fees paid by tenants and an injunction against
similar fees.  The Company  filed a responsive  pleading on January 28, 2000 and
the case has been transferred to New York County, case no. 401589/00. On July 6,
2000  the  Plaintiff  filed  an  Amended   Complaint  and  a  Motion  for  Class
Certification. The Company believes that it has defenses to the suit and intends
to vigorously defend it, including opposing the Motion for Class Certification.

On March 28, 2000,  separate  actions (now  consolidated)  were commenced in the
Supreme  Court of the State of New York,  New York  County  styled  SMB  Hochman
Partners,  et al. v. Goldman,  et al., Index No. 601346/00 and Kramer, et al. v.
Goldman, et al., Index No. 601347/00,  by certain limited partnerships and their
limited  partners  relating  to the  sale  to  the  Partnership  of two  storage
facilities  located in Westchester  County,  New York. The  consolidated  action
alleges  fraud and  breach of  fiduciary  duty by the  general  partners  of the
limited  partnerships  in connection  with their  negotiation of the sale of the
facilities on behalf of the limited  partnerships.  It further  alleges that the
REIT and the  Partnership  aided and abetted the breach of fiduciary  duty.  The
consolidated  action seeks unspecified  compensatory  damages and $25 million in
punitive damages.  The Company believes it has defenses to the suit, which is in
the early stages of discovery,  and intends to vigorously defend it.

While the ultimate  resolution  of these cases will not have a material  adverse
effect on the Company's financial  position,  if during any period the potential
contingency  should  become  probable,  the results of operations in such period
could be materially affected.


Forward Looking Statements and Risk Factors

Certain  information  included in this Form 10-Q that is not historical  fact is
based on our current  expectations.  This  includes  statements  regarding:  (a)
anticipated  future  development,  acquisition and expansion  activity,  (b) the
impact of  anticipated  rental rate  increases  and our newly  revised  late fee
policy on our revenue growth,  (c) our 2000 anticipated  revenues,  expenses and
returns,  (d) future  capital  requirements,  (e)  sources of  capital,  and (f)
sources of funds for  payment  of our  indebtedness.  Words such as  "believes",
"expects",  "anticipate",  "intends",  "plans" and "estimates" and variations of
such words and similar  words also identify  forward  looking  statements.  Such
statements  are  forward  looking  in nature  and  involve a number of risks and
uncertainties.  Actual  results may differ  materially.  The following  factors,
among  others,  could  cause  actual  results  to  differ  materially  from  the
forward-looking statements:

o   Changes in the economic  conditions in the markets in which we operate could
    negatively  impact the financial  resources of our customers,  impairing our
    ability to raise rents.
o   Certain of our competitors with  substantially  greater financial  resources
    than us could  reduce  the  number  of  suitable  acquisition  opportunities
    offered to us and increase the price necessary to consummate the acquisition
    of particular facilities.
o   Competition for development sites could drive up costs, making it unfeasible
    for us to develop properties in certain markets.
o   Increased  development of new facilities in our markets could result in over
    -supply  and lower rental rates.
o   Amounts  that we charge  for late fees are under  review,  have been and are
    the subject of litigation against us and are, in some states, the subject of
    governmental regulation. Consequently, such amounts could change, materially
    affecting the results of operations.
o   The conditions affecting the bank, debt and equity markets could change.
o   The  availability of sufficient capital to  finance  our  business  plan on
    satisfactory  terms could  decrease.
o   Competition could increase, adversely effecting occupancy and rental rates,
    thereby  reducing our revenue.
o   Costs related to compliance with laws, including  environmental laws could
    increase.
o   General  business and economic  conditions could change, adversely effecting
    occupancy and rental rates, thereby reducing our revenue.

                                       23
<PAGE>

o   Other risk factors  exist as described in our Annual Report on Form 10-K for
    the year ended  December 31, 1999 and other  reports filed from time to time
    with the Securities and Exchange Commission.

We  caution  you  not  to  place  undue  reliance  on any  such  forward-looking
statements. We assume no obligation to update any forward-looking  statements as
a result of new information,  subsequent events or any other circumstances. Such
statements speak only as of the date that they are made.



                                       24
<PAGE>

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

See disclosure in the section entitled "Qualitative and Quantitative  Disclosure
About  Market  Risk"  in  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations.





                                       25
<PAGE>

                           Part II- OTHER INFORMATION

Item 1. Legal Proceedings

See  disclosure in the section  entitled  "Legal  Proceedings"  in  Management's
Discussion and Analysis of Financial Condition and Results of Operations on page
22.


Item 2. Changes in Securities and Use of Proceeds

None


Item 3. Defaults Upon Senior Securities

None


Item 4. Submission of Matters to a Vote of Security Holders.

On May 3, 2000, the GP held its Annual Meeting of Shareholders. Three matters
were submitted to the shareholders for consideration:

1.   election of nine Directors (being all of its Directors);

2.   ratification of the selection of PricewaterhouseCoopers LLP as its
     independent public accountants for the fiscal year ending December 31,
     2000; and

3.   a proposal to approve an amendment to its 1995 Employee Stock Purchase and
     Loan Plan, increasing the shares available under the plan from 750,000 to
     1,250,000.

1.  Election of Nine Directors:

     Director:                             For              Withheld
     ---------                             ---              --------
     C. Ronald Blankenship          25,847,263                68,794
     Howard P. Colhoun              25,851,692                64,365
     Alan B. Graf, Jr.              25,851,723                64,334
     Dean Jernigan                  25,851,823                64,234
     Mark Jorgensen                 25,851,823                64,234
     Caroline S. McBride            25,851,409                64,648
     John P. McCann                 25,850,823                65,234
     William D. Sanders             25,847,823                68,234
     Harry J. Thie                  25,851,717                64,340

2.  Ratification of the selection of PricewaterhouseCoopers LLP as the GP's
    independent public accountants for the fiscal year ending December 31, 2000.


                                    For              25,873,965
                                    Against              21,230
                                    Abstain              20,772

3.  Proposal to approve an amendment to the GP's 1995 Employee  Stock  Purchase
    and Loan Plan,  increasing the shares available under the plan from 750,000
    to 1,250,000.

                                    For              24,987,559
                                    Against             862,160
                                    Abstain              66,338

                                       26
<PAGE>

Item 5. Other Information

None


Item 6. Exhibits and Reports on Form 8-K.

a.       Exhibit 10.1 Amendment No. 4 to the GP's 1995 Employee Stock Purchase
         and Loan Plan dated as of May 3, 2000.
         Exhibit 10.2 Employment Agreement between the GP and Bruce F. Taub,
         Senior Vice President, Acquisitions, dated as of February 3, 2000.
         Exhibit 27 - Financial Data Schedule


b.       Reports on Form 8-K

         On May 2, 2000, we filed our current report on Form 8-K. The filing
         included information relating to our April 26, 2000 press release
         announcing our financial results for the first quarter of 2000.


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<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


         Dated:         August 14, 2000

                        SUSA Partnership, L.P.
                        By Storage USA, Inc.,
                        General Partner



         By:           /s/ Christopher P. Marr
                       -----------------------
                       Christopher P. Marr
                       Chief Financial Officer
                       (Principal Financial and Accounting Officer)




                                       28
<PAGE>

                                  EXHIBIT INDEX


Exhibit No.   Description
-----------   -----------

10.1          Amendment No. 4 to the GP's 1995 Employee Stock Purchase
              and Loan Plan dated as of May 3, 2000.

10.2          Employment Agreement between the GP and Bruce F. Taub,
              Senior Vice President, Acquisitions, dated as of February 3, 2000.

27            Financial Data Schedule



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