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 March 31, 1997
                                       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: 333-3344

                              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)

               10440 Little Patuxent Parkway, #1100, Columbia, MD
                    (Address of principal executive offices)

                                      21044
                                   (Zip Codes)

Registrant's telephone number, including area code: (410) 730-9500

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>
<TABLE>


                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements
                             SUSA Partnership, L.P.
                      Consolidated Statements of Operations
                                   (unaudited)
                  (amounts in thousands, except per unit data)
<CAPTION>
<S> <C>

                                                                  Three months ended            Three months ended
                                                                      March 31, 1997                March 31, 1996
                                                           --------------------------    --------------------------


Property Revenues:
Rental income                                                                $33,476                       $20,819
Management income                                                                  -                           240
Other income                                                                     441                           274
                                                           --------------------------    --------------------------

Total property revenues                                                       33,917                        21,333
                                                           --------------------------    --------------------------

Property Expenses:
Cost of property operations & maintenance                                      8,422                         5,733
Taxes                                                                          2,972                         1,693
General & administrative                                                       1,267                           780
Depreciation & amortization                                                    4,174                         2,670
                                                           --------------------------    --------------------------

Total property expenses                                                       16,835                        10,876
                                                           --------------------------    --------------------------

Income from property operations                                               17,082                        10,457
                                                           --------------------------    --------------------------

Other income (expense):
Interest expense                                                              (3,269)                       (1,665)
Interest income                                                                  237                           155
                                                           --------------------------    --------------------------

Income before minority interest                                               14,050                         8,947

Minority interest                                                                (37)                          (61)
                                                           --------------------------    --------------------------

Net income                                                                   $14,013                        $8,886
                                                           ==========================    ==========================


Net income per unit                                                             $.52                         $0.47
                                                           ==========================    ==========================

Weighted average units outstanding                                            26,939                        18,617
                                                           ==========================    ==========================



                               See notes to consolidated financial statements.


<PAGE>



                                          SUSA Partnership, L.P.
                                       Consolidated Balance Sheets
                                               (unaudited)
                               (Amounts in thousands, except unit data)
<CAPTION>

                                                                           as of                     as of
                                                                  March 31, 1997         December 31, 1996
                                                          -----------------------    ----------------------

Assets

Investments in storage facilities, at cost:
Land                                                                    $247,948                  $235,139
Buildings and equipment                                                  650,845                   620,503
                                                          -----------------------    ----------------------
                                                                         898,793                   855,642

Accumulated depreciation                                                 (30,620)                  (26,573)
                                                          -----------------------    ----------------------
                                                                         868,173                   829,069

Cash & cash equivalents                                                    9,444                     1,349
Other assets                                                              15,447                    14,889
                                                          -----------------------    ----------------------

     Total assets                                                       $893,064                  $845,307
                                                          =======================    ======================

Liabilities & partners' capital

Line of credit borrowings                                                      -                  $ 52,730
Mortgage notes payable                                                  $ 40,179                    45,724
Notes payable                                                            100,000                   100,000
Accounts payable & accrued expenses                                        8,792                     7,641
Dividends payable                                                         16,322                         -
Rents received in advance                                                  5,939                     5,640
Minority interest                                                          1,614                     1,592
                                                          -----------------------    ----------------------

     Total liabilities                                                   172,846                   213,327
                                                          -----------------------    ----------------------

Commitments and contingencies

Partners' capital:
General partnership units                                                672,591                   585,419
 27,204,802 and 24,723,027
 outstanding
Limited partnership units 1,898,397                                       57,843                    56,814
and 1,903,797 outstanding
Notes receivable - employees                                             (10,216)                  (10,253)
                                                          -----------------------    ----------------------

     Total partners' capital                                             720,218                   631,980
                                                          -----------------------    ----------------------

     Total liabilities & partners' capital                              $893,064                  $845,307
                                                          =======================    ======================




                               See notes to consolidated financial statements.


<PAGE>



                             SUSA Partnership, L.P.
                      Consolidated Statements of Cash Flows
                                   (unaudited)
                    (Amounts in thousands, except unit data)
<CAPTION>

                                                                   Three months ended          Three months ended
                                                                       March 31, 1997              March 31, 1996
                                                                ----------------------      ----------------------

Operating Activities:

Net Income                                                                    $14,013                      $8,886

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

     Depreciation and amortization                                              4,174                       2,670
     Minority interest                                                             37                          61
     Changes in assets and liabilities:
          Other assets                                                           (721)                      1,583
          Other liabilities                                                     1,449                      (2,109)
                                                                ----------------------      ----------------------
Net  cash provided by operating activities:                                    18,952                      11,091
                                                                ======================      ======================

Investing Activities:
Acquisition and improvement of storage facilities                             (37,275)                    (27,329)
Development of storage facilities                                              (4,041)                       (930)
                                                                ----------------------      ----------------------
Net cash used in investing activities                                         (41,316)                    (28,259)
                                                                ======================      ======================

Financing Activities:
Net repayments under line of credit                                           (52,730)                    (43,440)
Mortgage principal payments                                                    (8,312)                        (58)
Mortgage principal borrowings                                                     932                           -
General partner contributions                                                  90,584                      60,919
Distribution to minority interests                                                (15)                        (70)
                                                                ----------------------      ----------------------
Net cash provided by financing activities                                      30,459                      17,351
                                                                ======================      ======================

Net increase in cash and equivalents                                            8,095                         183
Cash and equivalents, beginning of period                                       1,349                       2,802
                                                                ----------------------      ----------------------
Cash and equivalents, end of period                                            $9,444                      $2,985
                                                                ======================      ======================

Supplemental schedule of non-cash activities:
 Operating Partnership Units issued in exchange for 
  notes receivable                                                                  -                      $1,253
 Mortgages assumed on storage facilities acquired                              $1,835                           -
 Storage facilities acquired in exchange for Operating
  Partnership Units                                                                 -                      $1,538
                                                                ======================      ======================




                               See notes to consolidated financial statements.
</TABLE>

<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997
                   (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 REIT refer to Storage USA,  Inc.,
         general  partner  and  holder  of  approximately  93% 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, as
         amended by Form  10-K/A,  as filed  with the  Securities  and  Exchange
         Commission.

2.       Organization

         The  Partnership,  which  commenced  operation  on March 23,  1994,  is
         engaged in owning, developing,  constructing and operating self-storage
         facilities  throughout the United States.  The sole general  partner in
         the   Partnership,   the   REIT,   a   Tennessee   corporation,   is  a
         self-administered and self-managed real estate investment trust.

         On March 23, 1994, the REIT  contributed  substantially  all of its net
         assets of  approximately  $109,969 to the  Partnership  in exchange for
         approximately  98.9%  of  the  general  partnership   interest  in  the
         Partnership.  The REIT  contributes  the  proceeds of  issuances of its
         equity  securities to the Partnership in exchange for additional  units
         of partnership  interest.  The  Partnership  also issues,  from time to
         time,  additional  units of partnership  interest in the acquisition of
         self-storage   facilities.   At  March  31,   1997,   the  REIT   owned
         approximately  93%  of the  outstanding  partnership  interests  in the
         Partnership.  In addition, the Partnership formed SUSA Management, Inc.
         ("SUSA Management") to provide self-storage management to third parties
         and to provide certain ancillary services.  The Partnership owns 99% of
         the economic interest of SUSA Management.

         In June of 1996,  the REIT formed  Storage USA Trust (the  "Trust"),  a
         Maryland  real  estate  investment  trust,  of  which  it is  the  sole
         shareholder,   and  transferred  approximately  99%  of  the  Company's
         interest in the  Partnership  to the Trust.  The REIT  remains the sole
         general partner of the Partnership.

3.       Partnership Capital

                             Common Stock Offerings

         On March 17, 1997, the REIT issued  1,400,000 shares of common stock to
         the public for an  aggregate  purchase  price of $50,739.  On March 19,
         1997,  the  underwriters  exercised  their  option to purchase  210,000
         additional  shares of common stock for an aggregate  purchase  price of
         $7,610.   Security   Capital   US  Realty   ("US   Realty")   purchased
 

                                       1
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                 March 31, 1997
                   (thousands, except unit and per unit data)


3.       Partnership Capital, continued

         approximately  851,000 shares of common stock directly from the REIT on
         March 28, 1997  through the exercise of its  participation  right under
         the Strategic  Alliance  Agreement,  dated March 19, 1996,  between the
         Company,  US  Realty  and an  affiliate  of US Realty  (the  "Strategic
         Alliance Agreement"). Under the Strategic Alliance Agreement, US Realty
         has the right,  subject to certain  limitations,  to purchase  directly
         from the Company  that number of shares of common  stock  necessary  to
         preserve its percentage  ownership of the Company's  outstanding common
         stock  upon an  offering  of  such  stock.  US  Realty  currently  owns
         approximately  37% of the  outstanding  common  stock of the REIT.  Net
         proceeds from US Realty were $32,019.

         The proceeds from the issuances were  contributed to the Partnership in
         exchange for additional Partnership Units. The Partnership used the net
         proceeds to repay debt incurred under its revolving  lines of credit to
         finance the  acquisition  of  self-storage  facilities  and for working
         capital.


4.       Investment in Storage Facilities

         The  following  summarizes  activity in storage  facilities  during the
         period:


                 Cost:
                         Balance on January 1, 1997        $      855,642

                         Property acquisitions                     34,854

                         Existing facility expansions               1,086

                         Land acquisition and
                           joint venture development                4,041

                         Improvements and other                     3,170
                                                           ---------------
                         Balance on March 31, 1997         $      898,793
                                                           ---------------

                 Accumulated depreciation:
                         Balance on January 1, 1997        $       26,573
                         Additions during the period                4,047
                                                           ---------------
                         Balance on March 31, 1997         $       30,620
                                                           ---------------


                                       2


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                 March 31, 1997
                   (thousands, except unit and per unit data)


4.       Investment in Storage Facilities, continued

         The following pro forma  combined  results of operations of the Company
         for the three  months ended March 31, 1997 has been  prepared  assuming
         that the  acquisition  of the 11  properties  acquired  during the same
         three month period had been completed as of January 1, 1997.

                                                Pro forma for
                                                quarter ended
                                               March 31, 1997

                    Revenues                          $34,922

                    Net income                        $14,118

                    Earnings per unit                   $0.52



         The unaudited pro forma  information is not  necessarily  indicative of
         what  actual  results  of  operations  of the  Company  would have been
         assuming such  transactions  had been  completed as of January 1, 1997,
         nor does it purport to represent the results of  operations  for future
         periods.


5.       Interest Rate Swap Agreement

         In 1996, the Company entered into a $75,000 (notional amount) fixed pay
         forward  starting swap  agreement  with a major Wall Street  investment
         banking firm in order to reduce the interest rate risk  associated with
         the anticipated issuance of fixed rate debt by the Company in 1997. The
         transaction  allowed the Company to lock-in a seven-year  Treasury rate
         of 6.87% on or before May 31, 1997. The Company anticipates terminating
         the swap transaction upon the issuance of the fixed rate debt. At March
         31, 1997, the Company had a $803 unrealized  gain on this  transaction.
         Any gain or loss from this  transaction  will be deferred and amortized
         into  interest  expense  over the term of the  fixed  rate  debt.  This
         transaction  exposes  the  Company  to  credit  loss  in the  event  of
         non-performance  by the counterparty,  however such  non-performance is
         not anticipated because of the counterparty's high credit rating.




                                       3
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                 March 31, 1997
                   (thousands, except unit and per unit data)


6.       Notes Payable and Mortgages Payable

         The Company can borrow  under a $75,000  line of credit with a group of
         commercial  banks and under a $30,000  line of credit with a commercial
         bank.  These lines of credit  bear  interest  at various  spreads  over
         LIBOR.  During the quarter ended March 31, 1997,  the weighted  average
         borrowings  were $57,880,  and the weighted  average  interest rate was
         6.96%. At March 31, 1997 there were no amounts outstanding on the lines
         of credit.  At March 31,  1997  there were $30.8  million of fixed rate
         mortgage notes payable and $9.4 million of variable rate mortgage notes
         payable.  As of March 31, 1997,  the fixed rate mortgage  notes carried
         rates of interest  ranging  from 8.4% to 11.5% with a weighted  average
         rate of 10.4%.  The  variable  rate  mortgage  notes  carried  rates of
         interest  ranging  from 7.69% to 9.67% with a weighted  average rate of
         9.2%.


7.       Other Income

         Other income at March 31, 1997 and 1996  consists  primarily of revenue
         from the sale of locks  and  packaging  supplies,  truck  rentals,  and
         ground rents for billboards and cellular towers.  Effective  January 1,
         1997, the contracts to manage  facilities for third parties between the
         owners  of  these  self-storage  facilities  and  SUSA  Management,   a
         consolidated  subsidiary,  were  transferred  to Storage USA  Franchise
         Corp.,  an  unconsolidated  entity being accounted for under the equity
         method. As a result,  the Company's  proportionate  share of management
         income of  approximately  $183 is included in other income at March 31,
         1997.


8.       Recent Accounting Developments

         In February of 1997,  Statement of Financial  Accounting  Standards No.
         128,  "Earnings  per  Share"  was  issued.  The  statement  establishes
         standards  for  computing  and  presenting  earnings  per  share and is
         required to be adopted in the Company's  financial  statements  for the
         year ended  December 31, 1997.  The statement is not expected to have a
         material impact on the Company's financial results.


9.       Subsequent Events

         From  March  31,  1997 to May  14,  1997,  the  Company  completed  the
         acquisition  of  18  self-storage   facilities  for  approximately  $30
         million.  These acquisitions were financed through operating cash flows
         and borrowings under the available line of


                                       4
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                 March 31, 1997
                   (thousands, except unit and per unit data)


9.       Subsequent Events, continued

         credit. The Company has also entered into various property  acquisition
         contracts with an aggregate cost of  approximately  $96 million.  These
         acquisitions are subject to customary conditions to closing,  including
         satisfactory due diligence, and should close during the second quarter.
         Should these contracts be terminated, the costs incurred by the Company
         would be immaterial.



                                       5
<PAGE>


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

References to the Company and the Partnership  refer to SUSA  Partnership,  L.P.
References to the REIT refer to Storage USA, Inc., general partner and holder of
approximately 93% of the interest therein. The following discussion and analysis
of the consolidated financial condition and results of operations of the Company
should be read in conjunction  with the  Consolidated  Financial  Statements and
Notes thereto.

Due to the  substantial  number of  facilities  acquired  from March 31, 1996 to
March 31,  1997,  management  believes  that it is  meaningful  and  relevant in
understanding  the  present  and  ongoing  operations  of the Company to compare
certain information using occupancy and per square foot information.

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


Results of  Operations-  Quarter  Ended March 31, 1997 Compared to Quarter Ended
March 31, 1996.

In the first quarter of 1997, the Company  reported  growth in revenue,  NOI and
net income,  respectively,  of $12.6 million, $8.6 million and $5.1 million over
the same  quarter of 1996.  Since March 31,  1996,  the Company has  acquired 87
facilities and placed 2 development  properties in service.  These 89 facilities
added  5.8  million  square  feet,  bringing  the total  square  feet of the 253
facilities  owned by the Company at March 31, 1997 to 17 million.  For the first
quarter of 1997,  the 159  facilities  owned during the entire first  quarter of
1996 provided 65% of the Company's rental income.  These same facilities' rental
income grew 5% over first quarter 1996 results.  The majority of this growth was
provided by an approximate 7% rate increase,  which was offset by discounts, the
timing of rate increases, and, to a lesser extent, occupancy. At March 31, 1997,
the  physical  and  economic  occupancy  and  rent  per  square  foot of the 159
comparable  facilities  owned at March  31,  1996,  was 86%,  80%,  and  $10.00,


                                       6
<PAGE>

respectively,  while the figures as of March 31, 1996, were 87%, 81%, and $9.39,
respectively.  The  Company's  portfolio of facilities as a whole had an average
occupancy at March 31, 1997, of 85% physical and 78%  economic,  with an average
rent per square foot of $10.02.

Management  contracts  were  transferred  to Storage  USA  Franchise  Corp.,  an
unconsolidated  subsidiary,  on January 1, 1997 and the Company's  proportionate
share of the  management  fee revenue is  included in other  income at March 31,
1997.  Management  income for the quarter  ended March 31, 1997 was $183,  a $57
decrease over the same period in 1996. The decline was due to the acquisition of
14 facilities  that were managed by the Company  during the same period of 1996.
Other  income,  exclusive  of the  proportionate  share  of  management  income,
primarily  reflects sales of lock and packaging  products,  truck  rentals,  and
equity  investment  in an  unconsolidated  subsidiary.  Other  income  increased
primarily  due to the increase in the number of properties  owned,  resulting in
incremental growth in the revenue from these ancillary services, and to a lesser
extent, rental income on cellular tower and billboard leases.

Cost of property  operations  and  maintenance  was $8.4 million for the quarter
ended  March 31,  1997,  representing  a $2.7  million  increase  over the first
quarter of 1996. Cost of property operations and maintenance was 25% of revenues
for the  quarter  ended  March 31,  1997,  which is a  decrease  from the 27% of
revenues for the quarter  ended March 31,  1996.  The decline in the common size
percentage  is explained by same store  revenue  growth  out-pacing  the expense
growth  combined  with the revenue  impact of over $34 million of first  quarter
acquisitions.  The  Company  will  benefit in the first  month or two  following
acquisitions  as the revenues  precede the costs of  implementing  the Company's
management and operational strategy.

Tax expense  increased from $1.7 million or 8% of revenues for the quarter ended
March 31, 1996, to $3.0 million or 9% of revenue for the quarter ended March 31,
1997. The majority of the growth as a percentage of revenues is  attributable to
reassessments on the properties purchased during 1994 and 1995. The remainder is
due to increased state and franchise taxes as a result of the Company  acquiring
self-storage facilities in additional states with higher tax rates.

General and  administrative  expense ("G&A") increased from $0.8 million to $1.3
million in the first quarter of 1997 over the  comparable  quarter of 1996. As a
percentage of revenues,  this  category of expense has remained  constant at 4%.
The  growth  in  this   expense   reflects  the   Company's   expansion  of  its
administration,  development and acquisition, management information systems and
human resource departments in connection with its ongoing growth strategy.

Depreciation  expense  increased to $4.2 million for the quarter ended March 31,
1997  from $2.7  million  for the  comparable  period  in 1996,  reflecting  the
increase in the number of facilities  owned.  The Company has acquired or placed
in service approximately $260 million in depreciable assets since April 1, 1996.



                                       7
<PAGE>

Interest  expense for the  quarter  ended March 31,  1997,  was $3.3  million as
compared  to $1.7  million  for the  comparable  period in 1996.  The 1997 first
quarter interest expense represents weighted average borrowings of $57.9 million
under the Company's lines of credit at a weighted average interest rate of 6.96%
and $100  million  notes  payable at an  interest  rate of 7.125%.  In the first
quarter of 1996, the weighted  average  borrowings  under the Company's lines of
credit were $105.5  million at a weighted  average  interest  rate of 6.1%,  and
there were no notes payable outstanding.

Interest  income  remained  $0.2 million for the quarter ended March 31, 1997 as
compared  to the  quarter  ended  March 31,  1996.  Interest  income  represents
earnings on overnight  deposits and amounts  outstanding under the 1995 Employee
Stock Purchase and Loan Plan.

Liquidity and Capital Resources

Cash  provided  from  operating  activities  grew to $19.0 million for the three
months ended March 31, 1997 from $11.1  million for the three months ended March
31,  1996.  This  increase  is  primarily a result of the  Company's  net income
growing  $5.1  million or 57.7%,  over the same three month  period in the prior
year,  primarily as a result of the increase in number of  facilities  owned and
the improvement of operations at the facilities acquired.

During the first  three  months of 1997,  the  Company  acquired  11  facilities
totaling  657,984  square feet for an  aggregate  cost of $34.9  million,  which
includes  the  assumption  of a  mortgage.  The Company  currently  has plans to
develop  25  new  facilities,   primarily  in  the  Washington,  D.C.,  Memphis,
Tennessee, and San Francisco,  California areas. Of these, 13 projects are under
construction or are in construction planning, with expected costs totaling $44.0
million and completion dates ranging from the second quarter of 1997 through the
first quarter of 1998. Expansions are planned for 22 existing facilities, and of
these,  17 are under way with planned  completion  dates ranging from the second
quarter  of 1997  to the  first  quarter  of  1998.  Estimated  costs  of the 17
expansions under way are $13.4 million.

On February  19, 1997 the REIT and the  Partnership  filed a shelf  registration
statement with the Securities and Exchange  Commission  relating to $450 million
of securities,  including up to $250 million of common stock,  preferred  stock,
depository  shares and warrants of the REIT and up to $200 million of unsecured,
nonconvertible  senior debt  securities of the  Partnership.  An additional $150
million of unsecured,  nonconvertible  debt  securities  are issuable  under the
Partnership's existing shelf registration statement.



                                       8
<PAGE>

In March 1997,  the REIT issued  2,461,000  shares of common stock under the new
shelf  registration  statement for an aggregate purchase price of $90.4 million.
The proceeds from the issuance were  contributed to the  Partnership in exchange
for additional Partnership Units. The Partnership used the net proceeds to repay
debt incurred under its revolving lines of credit, to finance the acquisition of
self-storage facilities, and for working capital.

At March 31, 1997,  the Company had no  borrowings  outstanding  on its lines of
credit, $100 million of 7.125% senior unsecured notes payable,  $30.8 million of
fixed rate mortgage  notes  payable,  and $9.4 million of variable rate mortgage
notes payable. As of March 31, 1997, the fixed rate mortgage notes carried rates
of interest  ranging  from 8.4% to 11.5% with a weighted  average rate of 10.4%.
The variable rate mortgage notes carried rates of interest ranging from 7.69% to
9.67% with a weighted  average  rate of 9.2%.  The Company  had $105  million of
unused borrowing capacity under its lines of credit at March 31, 1997.

The Company  anticipates,  subject to  prevailing  market  conditions  and other
business  and  economic  factors,  issuing  preferred  stock or debt  securities
through the Partnership to finance its liquidity  requirements for the remainder
of 1997. In anticipation of a debt offering,  the Company entered into a forward
starting interest rate swap with a notional amount of $75 million, which had the
effect of fixing the seven year  Treasury  starting  May 31,  1997 at 6.87%.  At
March 31, 1997, the company had an unrealized gain on this derivative instrument
of $.8 million.

As of March 31, 1997, there were approximately 1,898,000 outstanding Units owned
by third parties.  Beginning one year after their  issuance,  1,816,000 of these
Units are  redeemable  for cash equal to the market value of one share of Common
Stock at the time of redemption or, at the Company's option, one share of Common
Stock per Unit.  The remaining  82,000 Units are  redeemable for cash or, at the
Company's option, a two-year  promissory note. Any shares of Common Stock issued
in redemption of Units are expected to be registered under the Securities Act of
1933, as amended, and to be freely tradeable.

From March 31,  1997  through  May 14,  1997,  the  Company  has  completed  the
acquisition of 18 self-storage  facilities for approximately $30 million.  These
acquisitions were financed through operating cash flows and borrowings under the
available line of credit.

The  Company  has  entered  into  various  property  acquisition  contracts  for
facilities  with  an  aggregate  cost  of  approximately   $96  million.   These
acquisitions  are  subject  to  customary   conditions  to  closing,   including
satisfactory due diligence,  and should close during the second quarter.  Should
these  contracts  be  terminated,  the costs  incurred by the  Company  would be
immaterial.

The Company has incurred  approximately  $0.63 million for  regularly  scheduled
maintenance  and repairs  during the three months ended March 31, 1997.  For the
year,  the Company  expects to incur  approximately  $2.9 million for  scheduled
maintenance  and repairs and  approximately  $7.2 million to conform  facilities
acquired during 1996, 1995 and 1994 to Company standards.



                                       9
<PAGE>

Funds From Operations ("FFO")

The Company  believes that FFO should be considered in conjunction  with its net
income and cash flows to  facilitate  a clear  understanding  of its  results of
operations.  FFO is defined as net  income,  computed in  accordance  with GAAP,
excluding  gains (losses) from debt  restructuring  and sales of property,  plus
depreciation  and  amortization,   and  after  adjustments  for   unconsolidated
partnerships and joint ventures.  FFO should not be considered an alternative to
net  income as a measure  of the  Company's  performance  or to cash  flows as a
measure of liquidity.

Effective  January 1, 1996, the National  Association of Real Estate  Investment
Trusts amended its definition of FFO. Because of the change in the definition of
FFO, FFO for the Company may not be comparable to similarly  titled  measures of
operating performance disclosed by other companies.

The  following  table  illustrates  the  components of the Company's FFO for the
quarters ended March 31, 1997 and March 31, 1996.

<TABLE>
<CAPTION>
<S> <C>
                                                       Three months ended     Three months ended
                                                           March 31, 1997         March 31, 1996
                                                       -------------------    -------------------
             Net Income                                          $ 14,013                $ 8,886

             Depreciation of real property                          3,957                  2,445

             Amortization of lease guarantees                           0                     53

             Amortization of non-compete                                0                     62
                                                       -------------------    -------------------
             Consolidated FFO                                     $17,970                $11,446
                                                       ===================    ===================

</TABLE>
The  Company,  in order to  qualify  as a REIT,  is  required  to  distribute  a
substantial  portion of its net income as dividends to its  shareholders.  While
the Company's  goal is to generate and retain  sufficient  cash flow to meet its
operating,  capital,  and debt  service  needs,  its dividend  requirements  may
require  the  Company  to utilize  its bank lines of credit to finance  property
acquisitions and development and major capital improvements.  For the year ended
December 31, 1996, distributions were approximately 86% of the REIT's FFO.

The Company  believes that its  liquidity and capital  resources are adequate to
meet its cash  requirements  relating to its  existing  operations  for the next
twelve months.

Inflation

The Company does not believe that inflation has had or will have a direct effect
on its operations.  Substantially  all of the leases at the facilities allow for


                                       10
<PAGE>

monthly  rental  increases  that  provide the Company  with the  opportunity  to
achieve increases in rental income as each lease matures.

Seasonality

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

Recent Accounting Developments

In  February of 1997,  Statement  of  Financial  Accounting  Standards  No. 128,
"Earnings  per  Share" was  issued.  The  statement  establishes  standards  for
computing and presenting earnings per share and is required to be adopted in the
Company's  financial  statements  for the year  ended  December  31,  1997.  The
statement is not expected to have a material  impact on the Company's  financial
results.





                                       11
<PAGE>





                           Part II- OTHER INFORMATION

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

         a.       Exhibit 27 - Financial Data Schedule













                                       12
<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:    May 15, 1997

                                           SUSA PARTNERSHIP, L.P.
                                           By STORAGE USA, Inc.,
                                           General Partner


                                 By:       /s/ Thomas E. Robinson
                                           -----------------------
                                           Thomas E. Robinson
                                           President & Chief Financial Officer
                                           (Principal Financial and Accounting
                                           Officer)




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