SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934

For the fiscal year ended December 31, 2006 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:     0-8667
                            -------

                         PUBLIC STORAGE PROPERTIES, LTD.
                         -------------------------------
             (Exact name of Registrant as specified in its charter)

                        California                                   95-3196921
------------------------------------------------- ------------------------------
              (State or other jurisdiction of                  (I.R.S. Employer
              incorporation or organization)              Identification Number)
         701 Western Avenue, Glendale, California                     91201-2349
------------------------------------------------- ------------------------------
         (Address of principal executive offices)                     (Zip Code)

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


Securities registered pursuant to Section 12(b) of the Act:   NONE

Securities registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
                      -------------------------------------
                                (Title of class)
                      -------------------------------------


Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes [ ] No [ X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]

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

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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer (as defined in Rule 12b-2 of the
Exchange Act). Large Accelerated Filer [ ] Accelerated Filer [ ] Non-accelerated
Filer [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant as of June 30, 2006:

                                       1
<PAGE>


Limited Partner Units, $500.00 Par Value - $9,014,000 (computed on the basis of
$1,200 per unit which was the highest reported sale price prior to the quarter
ended June 30, 2006).

The number of units outstanding of the registrant's classes of common equity as
of March 30, 2007:

Units of Limited Partnership Interest, $500.00 Par Value - 20,000 units

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE


                                       2
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                                     PART I

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

Forward Looking Statements
--------------------------

         When  used  within  this  document,  the words  "expects,"  "believes,"
"anticipates,"  "should,"  "estimates," and similar  expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the  Securities  Exchange Act of 1933, as amended,  and in Section 21E of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks,  uncertainties,  and other  factors,  which may
cause the actual results and performance of Public Storage Properties, Ltd. (the
"Partnership") to be materially different from those expressed or implied in the
forward  looking  statements.  Such  factors  are  described  in Item 1A,  "Risk
Factors" and include changes in general  economic  conditions and in the markets
in which the  Partnership  operates and the impact of  competition  from new and
existing storage and commercial facilities and other storage alternatives, which
could impact rents and occupancy  levels at the  Partnership's  facilities;  the
impact of the regulatory environment as well as national,  state, and local laws
and regulations,  which could increase the Partnership's  expense and reduce the
Partnership's cash available for distribution;  and economic  uncertainty due to
the impact of war or terrorism  could  adversely  affect our business  plan.  We
disclaim  any  obligation  to publicly  release the results of any  revisions to
these   forward-looking   statements   reflecting  new   estimates,   events  or
circumstances after the date of this report.

General
-------

         The Partnership is a publicly held limited partnership formed under the
California  Uniform  Limited  Partnership  Act in November 1976. The Partnership
raised  $10,000,000  in gross  proceeds  by  selling  20,000  units  of  limited
partnership  interest  ("Units") in an interstate  offering,  which commenced in
October 1977 and completed in January 1978. The Partnership was formed to engage
in the business of developing and operating self-storage facilities for personal
and business use.

         The  Partnership  has reported  annually to the Securities and Exchange
Commission ("SEC") on form 10-K which includes financial statements certified by
independent public  accountants.  The Partnership has also reported quarterly to
the SEC on Form  10-Q and  includes  unaudited  financial  statements  with such
filings. The Partnership expects to continue such reporting. On an annual basis,
the Partnership mails the audited financial  statements and related footnotes to
all limited partners.

         The public may read and copy any materials this Partnership  files with
the SEC at the SEC's Public Reference Room at 450 Fifth Street,  NW, Washington,
DC 20549.  The public  may obtain  information  on the  operation  of the Public
Reference Room by calling the SEC at  1-800-732-0330.  The partnership  does not
maintain a website.  However,  the SEC  maintains an Internet site that contains
reports,  proxy and  information  statements,  and other  information  regarding
issuers,  including the Partnership,  that file  electronically  with the SEC at
http://www.sec.gov.

         In  1995,   there  were  a  series  of  mergers  among  Public  Storage
Management, Inc. (which was the Partnership's self-storage facilities operator),
Public Storage,  Inc. (which was one of the Partnership's  general partners) and
their affiliates  (collectively,  "PSMI"),  culminating in the November 16, 1995
merger (the "PSMI  Merger") of PSMI into Storage  Equities,  Inc., a real estate
investment  trust ("REIT")  organized as a California  corporation.  In the PSMI
Merger, Storage Equities,  Inc. was renamed Public Storage, Inc. ("PSI") and PSI
acquired  substantially  all of PSMI's United States real estate  operations and
became  a  co-general  partner  of  the  Partnership  and  the  operator  of the
Partnership's self-storage facilities.

         The  Partnership's  general  partners  are  PSI  and  B.  Wayne  Hughes
("Hughes") (collectively referred to as the "General Partners"). Hughes has been
a general partner of the Partnership since its inception.  Hughes is chairman of
the board of PSI, and was its chief executive  officer through November 7, 2002,
and  Hughes  and  members  of his family  (the  "Hughes  Family")  are the major
shareholders of PSI.

         The  Partnership is managed,  and its investment  decisions are made by
Hughes and the executive  officers and directors of PSI. The limited partners of
the Partnership  have no right to participate in the operation or conduct of its
business and affairs.

                                       3
<PAGE>

         The term of the Partnership is until all properties have been sold and,
in any event, not later than December 31, 2035.

Investment Objectives and Policies
----------------------------------

         The Partnership's investment objectives are to (i) preserve and protect
invested  capital,  (ii) maximize the potential for appreciation in value of its
investments, and (iii) provide for cash distributions from operations.

         Following are the Partnership's  investment practices and policies. The
partnership  does not anticipate  any new  investments,  other than  maintenance
capital  expenditures,  and  does not  anticipate  liquidating  the real  estate
investments  it now holds.  While a vote of the limited  partners  is  generally
required to change the Partnership's  investment policies,  the general partners
hold a majority of the limited  partnership  units, and as a result, the General
Partners could change these policies through their vote.

         o Our investments  consist of nine self-storage  facilities  located in
           the  United  States.   See  "Self-storage   Facilities"  and  Item  2
           "Properties" for further information. These investments were acquired
           both for income and capital gains.

         o There is no limitation  on the amount or percentage of assets,  which
           can be invested in any specific person.

         The Partnership does not anticipate issuing senior  securities,  making
loans to other  persons,  investing in the  securities  of other issuers for the
purpose of exercising  control,  underwriting  the  securities of other issuers,
engaging  in the  purchase  and  sale of  investments,  offering  securities  in
exchange for property,  or repurchasing or otherwise reacquiring its outstanding
securities.  The  partnership  may consider  borrowing  money with the intent of
using the proceeds for distribution to partners.

Self-storage Facilities
-----------------------

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

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

         Self-storage facilities in which the Partnership has invested generally
consist  of  three  to  seven  buildings  containing  an  aggregate  of  between
approximately 250 to 1,100 storage spaces, most of which have between 25 and 400
square feet and an interior height of approximately 8 to 12 feet.

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

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

         As with most other types of real estate, the conversion of self-storage
facilities  to  alternative  uses in connection  with a sale or otherwise  would
generally  require  substantial  investment.  However,  the Partnership does not
intend to convert its self-storage facilities to other uses.

                                       4
<PAGE>

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

         The Partnership's self-storage facilities are operated by PSI under the
"Public  Storage"  brand  name,  which  the  Partnership  believes  is the  most
recognized  name  in  the  self-storage  industry.  The  major  elements  of the
Partnership's operating strategies are as follows:

o    Capitalize on "Public  Storage's"  name  recognition.  PSI has more than 20
     years  of  operating  experience  in the  self-storage  business.  PSI  has
     informed  the  Partnership  that it is the  largest  self-storage  facility
     operator  in the United  States in terms of both number of  facilities  and
     rentable space  operated.  PSI believes that its marketing and  advertising
     programs  improve its  competitive  position in the market.  PSI's in-house
     Yellow Pages staff  designs and places  advertisements  in  directories  in
     virtually all markets in which it operates.  Customers calling either PSI's
     toll-free  telephone  referral  system,  (800) 44-STORE,  or a self-storage
     facility  are  directed  to  PSI's  reservation   system  where  a  trained
     representative  discusses with the customer space  requirements,  price and
     location  preferences  and also informs the customer of other  products and
     services provided by PSI. The telephone  reservation system supports rental
     activity at all of the Partnership's properties.

o    Maintain high occupancy levels and increase annual realized rents.  Subject
     to market conditions,  the Partnership generally seeks to maximize-revenues
     through  high  occupancy  levels  and  to  eliminate  promotions  prior  to
     increasing   rental  rates.   Average   occupancy  for  the   Partnership's
     self-storage  facilities  was 90% and 91% in 2006 and  2005,  respectively.
     Annual  realized  rents per occupied  square foot  increased from $14.69 in
     2005 to $15.53 in 2006.

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

o    Professional property operation.  There are approximately 6,000 persons who
     render services for the Public Storage system,  primarily personnel engaged
     in  property  operations,  substantially  all of  whom  are  employed  by a
     clearing  company that provides  certain  administrative  and  cost-sharing
     services to PSI and other owners of properties operated by PSI.

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

         The  Partnership's  self-storage  facilities  are  managed  by PSI  (as
successor to PSMI) pursuant to a Management Agreement.

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

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

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

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

                                       5
<PAGE>

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

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

         The Management  Agreement between the Partnership and PSI provides that
the  Management  Agreement may be terminated  without cause upon 60 days written
notice by the Partnership or six months notice by PSI.

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

         Local market conditions play a significant role in how competition will
affect the  Partnership's  operations.  Competition from other  self-storage and
other storage alternatives in the market areas in which the Partnership operates
is  significant  and affects the  occupancy  levels,  rental rates and operating
expenses  of  certain  of  the   Partnership's   facilities.   Any  increase  in
availability of funds for investment in real estate may accelerate  competition.
Further development of self-storage  facilities may intensify  competition among
self-storage  facilities in the market areas in which the Partnership  operates.
In addition to competition from self-storage  facilities  operated by PSI, there
are other publicly traded REITs and numerous  regional and local operators.  The
Partnership believes that the significant  operating and financial experience of
PSI,  and  the  "Public  Storage"  brand  name  recognition  should  enable  the
Partnership to continue to compete effectively with other entities.

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

         A corporation that reinsures policies against losses to goods stored by
tenants in PSI's  storage  facilities  was  purchased by PSI from Mr. Hughes and
members of his family (the "Hughes  Family") on December  31,  2001.  We believe
that the  availability of insurance  reduces our potential  liability to tenants
for losses to their goods from theft or destruction.  This corporation  receives
the premiums and bears the risks associated with the re-insurance.

         A  subsidiary  of PSI sells  locks  and  boxes and rents  trucks to the
general  public and tenants to be used in securing their spaces and moving their
goods.  The  subsidiary  of PSI  receives the revenues and bears the cost of the
activities. We believe that the availability of locks and boxes for sale and the
rental of trucks promote the rental of spaces.

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

         Public Storage Properties, Ltd. is treated as a partnership for Federal
income tax  purposes  with the taxable  income of the entity  allocated  to each
partner in accordance with the partnership agreement.

Employees
---------

         There are approximately 36 persons who render services on behalf of the
Partnership. These persons include resident managers, assistant managers, relief
managers,  area managers,  and  administrative and maintenance  personnel.  Some
employees  may be  employed  on a  part-time  basis and may be employed by other
persons,  partnerships,  REITs or other entities owning  facilities  operated by
PSI.

                                       6
<PAGE>


ITEM 1A. RISK FACTORS
         ------------

         In  addition  to the other  information  in our Form  10-K,  you should
consider the following factors in evaluating the Partnership:

         THE GENERAL PARTNERS CONTROL THE PARTNERSHIP AS A GROUP.

         Public  Storage,  Inc.  is a  general  partner  and  beneficially  owns
approximately  31.4% of our outstanding  limited partnership units. In addition,
B. Wayne Hughes,  General  Partner of the  Partnership,  and Chairman of PSI and
members of his family  beneficially own 31.5% of the limited  partnership units.
As a result,  the General Partners,  as a group,  control matters submitted to a
vote  of our  unitholders,  including  amending  our  organizational  documents,
dissolving the Partnership and approving other such transactions.

         SINCE OUR BUSINESS CONSISTS  PRIMARILY OF OPERATING REAL ESTATE, WE ARE
SUBJECT TO REAL ESTATE OPERATING RISKS.

         The value of our  investments  may be reduced by general  risks of real
estate  ownership.  Since we derive  substantially  all of our income  from real
estate  operations,  we  are  subject  to  the  general  risks  of  owning  real
estate-related assets, including:

         o lack of demand for rental spaces or units in a locale;

         o changes in general economic or local conditions;

         o natural disasters, such as earthquakes;

         o potential terrorist attacks;

         o changes in supply of or demand for similar or competing facilities in
           an area;

         o the impact of environmental protection laws;

         o changes in interest  rates and  availability  of  permanent  mortgage
           funds which may render the sale or financing of a property  difficult
           or unattractive; and

         o changes in tax, real estate and zoning laws.

         There is significant competition among self-storage facilities and from
other storage alternatives.  All of our properties are self-storage  facilities,
which generated substantially all of our revenue for the year ended December 31,
2006.  Local market  conditions will play a significant  part in how competition
will affect us.  Competition in the market areas in which many of our properties
are located from other self-storage facilities and other storage alternatives is
significant  and has affected the occupancy  levels,  rental rates and operating
expenses of our properties. Any increase in availability of funds for investment
in real estate may accelerate  competition.  Further development of self-storage
facilities may intensify competition among operators of self-storage  facilities
in the market areas in which we operate.

         We may incur  significant  environmental  costs and liabilities.  As an
owner and operator of real properties,  under various  federal,  state and local
environmental  laws,  we are  required  to clean up spills or other  releases of
hazardous or toxic substances on or from our properties.  Certain  environmental
laws impose liability  whether or not the owner knew of, or was responsible for,
the presence of the hazardous or toxic substances.  In some cases, liability may
not be limited to the value of the property.  The presence of these  substances,
or the failure to properly remediate any resulting  contamination,  whether from
environmental  or microbial  issues,  also may  adversely  affect the owner's or
operator's ability to sell, lease or operate its property or to borrow using its
property as collateral.

         We  have  conducted  preliminary   environmental   assessments  on  the
Partnership's  properties  to  evaluate  the  environmental  condition  of,  and
potential  environmental  liabilities  associated  with, our  properties.  These
assessments generally consist of an investigation of environmental conditions at
the property (not including soil or groundwater  sampling or analysis),  as well
as a review of available  information  regarding the site and publicly available
data  regarding  conditions at other sites in the vicinity.  In connection  with
these  property  assessments,  we have  become  aware that prior  operations  or
activities at some facilities or from nearby locations have or may have resulted
in contamination to the soil or groundwater at these facilities. In this regard,
some of our facilities are or may be the subject of federal or state environment
investigations  or remedial  actions.  Although we cannot provide any assurance,
based on the  preliminary  environmental  assessments,  we believe we have funds
available to cover any liability from  environmental  contamination or potential
contamination  and we are not aware of any  environmental  contamination  of our
facilities  material to our overall business,  financial condition or results of
operation.

                                       7
<PAGE>

         There has been an increasing  number of claims and  litigation  against
owners and  managers of rental  properties  relating  to moisture  infiltration,
which can result in mold or other property  damage.  When we receive a complaint
concerning  moisture  infiltration,  condensation or mold problems and/or become
aware that an air quality concern exists,  we implement  corrective  measures in
accordance  with  guidelines and protocols we have developed with the assistance
of outside  experts.  We seek to work  proactively  with our  tenants to resolve
moisture  infiltration  and  mold-related  issues,  subject  to our  contractual
limitations on liability for such claims.  However,  we can provide no assurance
that material legal claims  relating to moisture  infiltration  and the presence
of, or exposure to, mold will not arise in the future.

         Property   taxes  can  increase  and  cause  a  decline  in  yields  on
investments.  Each of our  properties is subject to real property  taxes.  These
real property  taxes may increase in the future as property tax rates change and
as our properties are assessed or reassessed by tax authorities.  Such increases
could adversely impact our profitability.

         We must comply with the Americans  with  Disabilities  Act and fire and
safety  regulations,   which  can  require  significant  expenditures.  All  our
properties must comply with the Americans with Disabilities Act and with related
regulations  (the  "ADA").  The ADA has  separate  compliance  requirements  for
"public accommodations" and "commercial facilities," but generally requires that
buildings be made  accessible to persons with  disabilities.  Various state laws
impose similar  requirements.  A failure to comply with the ADA or similar state
laws could result in government  imposed fines on us and the award of damages to
individuals affected by the failure. In addition, we must operate our properties
in compliance with numerous local fire and safety  regulations,  building codes,
and other land use regulations.  Compliance with these  requirements can require
us to spend  substantial  amounts of money,  which would  reduce cash  otherwise
available  for  distribution  to  shareholders.  Failure  to comply  with  these
requirements could also affect the marketability of our real estate facilities.

         PUBLIC STORAGE'S ACQUISITION OF SHURGARD MAY SUBJECT THE PARTNERSHIP TO
ADDITIONAL RISKS.

         In August 2006,  Public Storage  completed the  acquisition of Shurgard
Storage Centers, Inc.  ("Shurgard"),  a publicly held REIT that had interests in
approximately  646  self-storage  facilities  located in the  United  States and
Europe.  The  Shurgard  merger  did not change the  financial  interests  of the
Partnership. However, because the self-storage facilities of the Partnership and
Public  Storage are managed by Public  Storage,  together with the  self-storage
facilities previously owned by Shurgard,  individual  Partnership properties may
experience  a decrease in move-ins,  reductions  to rental  rates,  increases to
promotional discounts, or other negative impacts to revenues in the short and/or
long term due to the  competitive  impact of Public  Storage  management  of the
former Shurgard  facilities,  particularly with respect to those facilities that
are close to the Partnership's facilities.


         TERRORIST  ATTACKS AND THE POSSIBILITY OF WIDER ARMED CONFLICT MAY HAVE
AN ADVERSE  IMPACT ON OUR BUSINESS AND OPERATING  RESULTS AND COULD DECREASE THE
VALUE OF OUR ASSETS.

         Terrorist attacks and other acts of violence or war, such as those that
took place on September 11, 2001,  could have a material  adverse  impact on our
business and operating results. There can be no assurance that there will not be
further  terrorist  attacks  against  the  United  States or its  businesses  or
interests.  Attacks or armed  conflicts that directly  impact one or more of our
properties  could  significantly  affect our ability to operate those properties
and thereby  impair our operating  results.  Further,  we may not have insurance
coverage for losses  caused by a terrorist  attack.  Such  insurance  may not be
available,  or if it is  available  and  we  decide  to  obtain  such  terrorist
coverage,  the cost for the insurance may be significant in  relationship to the
risk  overall.  In  addition,  the adverse  effects  that such  violent acts and
threats of future attacks could have on the U.S.  economy could similarly have a
material  adverse  effect on our  business and results of  operations.  Finally,
further terrorist acts could cause the United States to enter into a wider armed
conflict, which could further impact our business and operating results.

                                       8
<PAGE>

         DEVELOPMENTS  IN CALIFORNIA  MAY HAVE AN ADVERSE IMPACT ON OUR BUSINESS
AND OPERATING RESULTS AND COULD DECREASE THE VALUE OF OUR ASSETS.

         All  of  the  Partnership's   properties  are  located  in  California.
California is facing budgetary problems. Action that may be taken in response to
these problems,  such as an increase in property taxes on commercial properties,
could adversely impact our business and results of operations.  In addition, the
Partnership  could be  adversely  impacted  by efforts  to  reenact  legislation
mandating medical  insurance for employees of California  businesses and members
of their families.

         INCREASES  IN  INTEREST  RATES MAY  ADVERSELY  AFFECT  THE PRICE OF OUR
PARTNERSHIP UNITS.

         One of the factors that  influences the market price of our partnership
units is the annual  rate of  distributions  that we pay on the  securities,  as
compared with interest  rates. An increase in interest rates may lead purchasers
of partnership  units to demand higher annual  distribution  rates,  which could
adversely affect the market price of our partnership units.

         OUR OWNERSHIP INTEREST IN STOR-RE MAY LOSE VALUE OR BECOME A LIABILITY.

         The  Partnership  has a  0.9%  ownership  interest  in  STOR-Re  Mutual
Insurance  Corporation  ("STOR-Re"),  which was formed in 1994 as an association
captive  insurance  company,  and is controlled by PSI. STOR-Re provided limited
property  and  liability  insurance  coverage  to  the  Partnership,   PSI,  and
affiliates of PSI for losses  occurring prior to April 1, 2004.  Liabilities for
losses  and loss  adjustment  expenses  include an amount  determined  from loss
reports and individual  cases and an amount,  based on  recommendations  from an
outside actuary that is a member of the American  Academy of Actuaries,  using a
frequency and severity method, for losses incurred but not reported. Determining
the  liability  for  unpaid  losses  and loss  adjustment  expense is based upon
estimates  and while we believe that the amount is adequate,  the ultimate  loss
may be in excess of or less than the  amounts  provided,  which may  result in a
reduction in the value of the Partnership's investment or could result in future
payments to STOR-Re if its reserves were determined to be inadequate.  Financial
data with respect to STOR-Re is included in Note 5 to the Partnership's December
31, 2006 financial statements.

ITEM 1B. UNRESOLVED STAFF COMMENTS
         -------------------------

         Not applicable.

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

         The  following  table sets forth  information  as of December  31, 2006
about properties owned by the Partnership:

<TABLE>
<CAPTION>

                                          Net           Number          Date       Completion
Location            Size of Parcel   Rentable Area    of Spaces     of Purchase       Date
---------------   ----------------- --------------- ------------ ---------------- -------------
CALIFORNIA
----------
<S>                   <C>             <C>                 <C>     <C>              <C>
Corona                2.82 acres      52,000 sq. ft.      467     June 29, 1978    Dec. 1978
Fremont               3.00 acres      53,000 sq. ft.      464     Mar. 21, 1978    Nov. 1978
Milpitas              3.40 acres      40,000 sq. ft       419      May 8, 1978     Nov. 1978
Norco                 1.66 acres      29,000 sq. ft       257     July 19, 1978    Dec. 1978
North Hollywood       2.06 acres      38,000 sq. ft.      343     Mar. 17, 1978    Dec. 1979
Pasadena              1.84 acres      37,000 sq. ft.      385     Feb. 24, 1978    Aug. 1978
Sun Valley            2.72 acres      53,000 sq. ft.      477      May 30, 1978    Oct. 1978
Wilmington            6.32 acres     133,000 sq. ft.    1,089     Apr. 18, 1978    Aug. 1978
Whittier - El Monte   3.28 acres      58,000 sq. ft.      532     Nov. 29, 1977    July 1978

</TABLE>

         The weighted average  occupancy level for the  self-storage  facilities
was 91% during 2005 and 90% during 2006.


         The  Partnership  does not have any  agreements to buy or sell any real
estate.  The  partnership  does not anticipate any new  investments,  other than
maintenance capital expenditures,  and does not anticipate  liquidating the real
estate investments it now holds.

         As of December 31, 2006, none of the properties were encumbered.

                                       9
<PAGE>

ITEM 3.           LEGAL PROCEEDINGS
                  -----------------

         Serrao v. Public  Storage,  Inc.  (filed April 2003)  (Superior Court -
         ----------------------------------------------------------------------
         Orange County)
         --------------

         The  plaintiff  in this case  filed a suit  against  PSI on behalf of a
putative  class of renters  who rented  self-storage  units from PSI.  Plaintiff
alleges  that PSI  misrepresented  the size of its  storage  units,  has brought
claims  under   California   statutory  and  common  law  relating  to  consumer
protection,  fraud, unfair competition, and negligent misrepresentation,  and is
seeking monetary damages, restitution, and declaratory and injunctive relief.

         The claim in this case is  substantially  similar to those in Henriquez
v. Public Storage,  Inc., which was disclosed in prior reports. In January 2003,
the plaintiff caused the Henriquez action to be dismissed.

         Based upon the uncertainty  inherent in any putative class action,  PSI
cannot  presently  determine  the  potential  damages,  if any, or the  ultimate
outcome of this litigation.  On November 3, 2003, the court granted PSI's motion
to strike the plaintiff's nationwide class allegations and to limit any putative
class to California residents only. In August 2005, PSI filed a motion to remove
the case to federal court, but the case has been remanded to the Superior Court.
PSI is  vigorously  contesting  the claims  upon  which  this  lawsuit is based,
including class certification efforts.

         Brinkley et al v. Public Storage,  Inc.  (filed April,  2005) (Superior
         -----------------------------------------------------------------------
         court of California - Los Angeles County)
         -----------------------------------------

         The  plaintiff  sued PSI on behalf of a purported  class of  California
non-exempt  employees based on various California wage and hour laws and seeking
monetary  damages  and  injunctive  relief.  In May  2006,  a motion  for  class
certification  was filed seeking to certify five  subclasses.  Plaintiff  sought
certification  for alleged  meal  period  violations,  rest  period  violations,
failure to pay for travel time,  failure to pay for mileage  reimbursement,  and
for wage  statement  violations.  In October 2006, the Court declined to certify
three out of the five subclasses.  The Court did,  however,  certify  subclasses
based  on  alleged  meal  period  and wage  statement  violations.  The  maximum
potential  liability  cannot  presently be estimated.  PSI intends to vigorously
contest  the  substantive  merits  of the two  remaining  subclasses  that  were
certified.  PSI does not believe that this matter will have any material adverse
effect on the results of operations of the Partnership.

         Other Items
         -----------

         PSI and the Partnership are a party to various claims,  complaints, and
other legal  actions that have arisen in the normal course of business from time
to time,  that are not described  above. We believe that it is unlikely that the
outcome of these other pending legal proceedings including employment and tenant
claims,  in the  aggregate,  will  have  a  material  adverse  effect  upon  the
operations or financial position of the Partnership.

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year ended December 31, 2006.


                                       10
<PAGE>


                                     PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
              --------------------------------------------------------------
              MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
              -------------------------------------------------

         The Partnership has no common stock.

         The Units are not listed on any national  securities exchange or quoted
on the NASDAQ System and there is no  established  public trading market for the
Units. Secondary sales activity for the Units has been limited and sporadic. The
General Partners monitor transfers of the Units (a) because the admission of the
transferee as a substitute  limited partner  requires the consent of the General
Partners under the Partnership's  Amended and Restated Certificate and Agreement
of  Limited  Partnership,  (b) in order to ensure  compliance  with safe  harbor
provisions  to  avoid  treatment  as a  "publicly  traded  partnership"  for tax
purposes,  and (c) because  the General  Partners  (and their  affiliates)  have
purchased Units. However, the General Partners do not have information regarding
the  prices at which all  secondary  sale  transactions  in the Units  have been
effectuated.   Various   organizations   offer  to  purchase  and  sell  limited
partnership  interests  (including  securities of the type such as the Units) in
secondary sales  transactions.  Various  publications such as The Stanger Report
summarize  and report  information  (on a monthly,  bimonthly  or less  frequent
basis) regarding secondary sales transactions in limited  partnership  interests
(including  the  Units),  including  the  prices at which such  secondary  sales
transactions are effectuated.

         Exclusive of the General Partners'  interest in the Partnership,  as of
December 31, 2006, there were approximately 591 unitholders of record.

         Distributions to the general and limited partners of all cash available
for   distribution   (as  defined)  are  made  quarterly.   Cash  available  for
distribution  is generally  funds from  operations of the  Partnership,  without
deduction  for  depreciation,  but  after  deducting  funds to pay or  establish
reserves  for all other  expenses  (other than  incentive  distributions  to the
general  partner) and capital  improvements,  plus net proceeds from any sale or
financing of the Partnership's properties.

         Reference is made to Item 6 and 7 hereof for  information on the amount
of such distributions.

ITEM 6.       SELECTED FINANCIAL DATA
              -----------------------
<TABLE>
<CAPTION>


       For the Year Ended
          December 31,                    2006               2005               2004               2003               2002
-----------------------------    -------------------  -------------------  ----------------  -------------------  -----------------
<S>                                <C>                <C>                <C>                <C>                <C>
Revenues                           $     7,371,000    $     7,002,000    $     6,593,000    $     6,246,000    $     5,938,000

Depreciation and
  amortization                             165,000            181,000            217,000            454,000            516,000


Interest expense                                 -                  -                  -                  -             14,000

Net income                               5,042,000          4,888,000          4,475,000          3,977,000          3,729,000

Limited partners' share                  3,751,000          3,619,000          3,397,000          3,004,000          3,242,000

General partners' share                  1,291,000          1,269,000          1,078,000            973,000            487,000

Limited partners'
  per unit data (1):
  Net income                               $187.55            $180.95            $169.85            $150.20            $162.10
  Cash Distributions                       $186.00            $183.00            $155.00            $140.00             $67.50

As of December 31,
------------------
Cash and cash equivalents          $     1,483,000    $     1,448,000    $     1,407,000    $     1,070,000    $       538,000

Total assets                       $     4,720,000    $     4,682,000    $     4,737,000    $     4,422,000    $     4,178,000

(1)   Per unit data is based on the weighted  average  number of the limited  partnership  units  (20,000)  outstanding  during each
      period.
</TABLE>


                                       11
<PAGE>


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

         The  following  discussion  should  be read  in  conjunction  with  the
Partnership's financial statements and notes thereto.

FORWARD LOOKING STATEMENTS
--------------------------

         When  used  within  this  document,  the words  "expects,"  "believes,"
"anticipates,"  "should,"  "estimates," and similar  expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the  Securities  Exchange Act of 1933, as amended,  and in Section 21E of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks,  uncertainties,  and other  factors,  which may
cause the actual  results and  performance  of the  Partnership to be materially
different  from those  expressed or implied in the forward  looking  statements.
Such factors are  described in Item 1A,  "Risk  Factors" and include  changes in
general economic conditions and in the markets in which the Partnership operates
and the impact of  competition  from new and  existing  storage  and  commercial
facilities  and  other  storage  alternatives,  which  could  impact  rents  and
occupancy levels at the Partnership's  facilities;  the impact of the regulatory
environment as well as national,  state, and local laws and  regulations,  which
could  increase  the  Partnership's  expense and reduce the  Partnership's  cash
available for distribution; and economic uncertainty due to the impact of war or
terrorism could  adversely  affect our business plan. We disclaim any obligation
to  publicly  release  the  results of any  revisions  to these  forward-looking
statements  reflecting new estimates,  events or circumstances after the date of
this report.

OVERVIEW
--------

         The  self-storage   industry  is  highly  fragmented  and  is  composed
predominantly  of numerous  local and  regional  operators.  Competition  in the
markets in which we  operate  is  significant  and has  increased  over the past
several years due to  additional  development  of  self-storage  facilities.  We
believe  that the  increase  in  competition  has had a  negative  impact to the
Partnership's  occupancy  levels and rental rates in many markets.  However,  we
believe  that  the   Partnership's   affiliation   with  PSI  provides   several
distinguishing   characteristics   that  enable  the   Partnership   to  compete
effectively with other owners and operators.

         PSI is the largest owner and operator of self-storage facilities in the
United States.  All of PSI's  facilities in the United States are operated under
the "Public  Storage"  brand name,  which we believe is the most  recognized and
established name in the self-storage industry.  Market concentration establishes
PSI as one of the dominant  providers of  self-storage  space in most markets in
which PSI operates and enables PSI to use a variety of  promotional  activities,
such as television  advertising as well as targeted  discounting  and referrals,
which are generally not economically viable to most of PSI's competitors.

         We will  continue  to focus our  growth  strategies  on  improving  the
operating performance of our existing self-storage  properties primarily through
increases in revenues  achieved  through the  telephone  reservation  center and
associated  marketing  efforts.  We expect  potential future increases in rental
income to come primarily from increases in realized rent,  although there can be
no assurance.

CRITICAL ACCOUNTING POLICIES
----------------------------

         IMPAIRMENT OF REAL ESTATE

         Substantially  all of our assets consist of real estate. On a quarterly
basis, we evaluate our real estate for impairment. The evaluation of real estate
for impairment  requires  determining  whether  indicators of impairment  exist,
which is a subjective process.  When any indicators of impairment are found, the
evaluation then entails  projections of future operating cash flows,  which also
involves significant judgment. We identified no such impairments at December 31,
2006.  However,  future events, or facts and circumstances  that currently exist
that we have not yet  identified,  could cause us to conclude in the future that
our real estate is impaired. Any resulting impairment loss could have a material
adverse impact on our financial condition and results of operations.

                                       12
<PAGE>

         ESTIMATED USEFUL LIVES OF LONG-LIVED ASSETS

         Substantially  all of our  assets  consist of  depreciable,  long-lived
assets. We record  depreciation  expense with respect to these assets based upon
their estimated  useful lives. Any change in the estimated useful lives of those
assets,  caused by functional or economic  obsolescence or other factors,  could
have a  material  adverse  impact  on our  financial  condition  or  results  of
operations.

         ACCRUALS FOR CONTINGENCIES

         We are exposed to business  and legal  liability  risks with respect to
events that have occurred,  but in accordance with generally accepted accounting
principles  in the U.S.,  we have not  accrued  for such  potential  liabilities
because the loss is either not  probable or not  estimable or because we are not
aware of the event.  Future  events and the result of pending  litigation  could
result in such potential  losses  becoming  probable and estimable,  which could
have a  material,  adverse  impact on our  financial  condition  or  results  of
operations. Some of these potential losses, which we are aware of, are described
in Notes 5 and 8 to the Partnership's financial statements.

         ACCRUALS FOR OPERATING EXPENSES

         We accrue for property tax expense and other  operating  expenses based
upon estimates and historical trends and current and anticipated local and state
government  rules  and  regulations.  If these  estimates  and  assumptions  are
incorrect,  the timing of the recognition our expenses could be incorrect.  Cost
of operations,  interest expense, general and administrative expense, as well as
television,  yellow page,  and other  advertising  expenditures  are expensed as
incurred.

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

         YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005:

         The  Partnership's  net  income  in 2006  was  $5,042,000  compared  to
$4,888,000 in 2005,  representing  an increase of $154,000 or 3.2%. The increase
is primarily  attributable to improved property  operations at the Partnership's
self-storage facilities.

         During 2006,  property net operating income (rental income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $160,000 or 3.3% from $4,862,000 in 2005 to $5,022,000 in 2006.

         Rental  income was  $7,220,000  in 2006 compared to $6,879,000 in 2005,
representing  an increase of $341,000,  or 5.0%. The increase is attributable to
an increase  in  realized  rent per  occupied  square foot at the  Partnership's
self-storage facilities.  Weighted average occupancy levels were 90% during 2006
compared to 91% during 2005.  The average  annual  realized rent per square foot
was $15.53 during 2006 compared to $14.69 during 2005.

         Cost of operations (including management fees paid to an affiliate) was
$2,033,000  and  $1,836,000  in 2006 and  2005,  respectively,  representing  an
increase of  $197,000,  or 10.7%.  This  increase is primarily  attributable  to
increases in advertising, repairs and maintenance, payroll and management fees.

         Depreciation  expense was $165,000 for the year ended December 31, 2006
compared  to  $181,000  for  the  same  period  in  2005.  Depreciation  expense
comparisons  for 2006,  and in future  periods,  will  fluctuate  based upon the
timing  and  amount of new  capital  expenditures  and the  extent to which past
capital  expenditures  become  fully  depreciated.  Administrative  expense  was
$131,000 and $97,000 in 2006 and 2005, respectively, representing an increase of
$34,000,  or 35%. This increase is primarily  attributable  to a cost of $32,000
for termination of a contract.

         YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004:

         The  Partnership's  net  income  in 2005  was  $4,888,000  compared  to
$4,475,000 in 2004,  representing an increase of $413,000 or 9%. The increase is
primarily  attributable  to improved  property  operations at the  Partnership's
self-storage facilities.

         During 2005,  property net operating income (rental income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $356,000 or 8% from $4,506,000 in 2004 to $4,862,000 in 2005.

                                       13
<PAGE>

         Rental  income was  $6,879,000  in 2005 compared to $6,537,000 in 2004,
representing an increase of $342,000,  or 5%. The increase is attributable to an
increase  in  realized  rent  per  occupied  square  foot  at the  Partnership's
self-storage facilities.  Weighted average occupancy levels were 91% during 2005
compared to 92% during 2004.  The average  annual  realized rent per square foot
was $14.69 during 2005 compared to $13.86 during 2004.

         Cost of operations (including management fees paid to an affiliate) was
$1,836,000  and  $1,814,000  in 2005 and  2004,  respectively,  representing  an
increase of $22,000, or 1%. This increase is primarily attributable to increases
in  management  fees (as a result of higher  revenues) and property and casualty
insurance expense, partially offset by a decrease in repairs and maintenance and
advertising expenses.

         Depreciation  expense was $181,000 for the year ended December 31, 2005
compared to $217,000 for the same period in 2004.  The decrease in  depreciation
expense is primarily  related to the Partnership's  buildings,  which were fully
depreciated  in 2004,  as such,  depreciation  expense for 2005 is entirely  for
capital  improvements,   which  generally  are  depreciated  over  an  estimated
five-year  average  useful  life.  The level of  depreciation  expense in future
periods will depend upon the timing and amount of new capital  expenditures  and
the extent to which past capital expenditures become fully depreciated.

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

         Cash flows from  operating  activities of $5,188,000 for the year ended
December  31,  2006  were  sufficient  to meet all  current  obligations  of the
Partnership.  Capital  improvements totaled $143,000 for the year ended December
31, 2006 compared to $48,000 in 2005 and $152,000 in 2004.

         The Partnership does not anticipate issuing senior  securities,  making
loans to other  persons,  investing in the  securities  of other issuers for the
purpose of exercising  control,  underwriting  the  securities of other issuers,
engaging  in the  purchase  and  sale of  investments,  offering  securities  in
exchange for property,  or repurchasing or otherwise reacquiring its outstanding
securities.  The  partnership  may consider  borrowing  money with the intent of
using the proceeds for distribution to partners.

         DISTRIBUTIONS

         Distributions  to the  limited  and  general  partners  for  the  years
1978-1990  aggregated  $37,832,000  including  $20,202,000  distributed  to  the
partners  in 1987 in  connection  with  the  financing  of the  properties.  The
Partnership  Agreement  requires that cash available for distribution (cash flow
from all sources less cash necessary for any obligations or capital improvement)
needs to be distributed at least quarterly.

         Cash distributions were suspended during the fourth quarter of 1990 for
debt service  payments.  Because all debt service was repaid as of September 30,
2002, the Partnership  resumed  quarterly  distributions  beginning in the third
quarter of 2002.

         We paid  distributions  to the limited and  general  partners  totaling
$3,720,000 ($186.00 per unit) and $1,290,000,  respectively,  for the year ended
December 31, 2006.  We paid  distributions  to the limited and general  partners
totaling  $3,660,000  ($183.00 per unit) and $1,269,000,  respectively,  for the
year ended  December  31,  2005.  Future  distribution  rates may be adjusted to
levels which are supported by operating cash flow after capital improvements and
any other necessary obligations.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              ----------------------------------------------------------

         As of December 31, 2006, the Partnership had no outstanding debt.

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

         The Partnership's  financial  statements are included elsewhere herein.
Reference is made to the Index to Financial  Statements and Financial  Statement
Schedules in Item 15(a).

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              ---------------------------------------------------------------
              FINANCIAL DISCLOSURE
              --------------------
         Not applicable.

                                       14
<PAGE>

ITEM 9A.      CONTROLS AND PROCEDURES
              -----------------------

         Public Storage,  Inc. maintains disclosure controls and procedures that
are designed to ensure that information  required to be disclosed in reports the
Partnership  files and submits under the Exchange  Act, is recorded,  processed,
summarized and reported within the time periods specified in accordance with SEC
guidelines  and that  such  information  is  communicated  to the  Partnership's
management,  including its Chief Executive Officer and Chief Financial  Officer,
to allow timely decisions  regarding required disclosure based on the definition
of "disclosure  controls and  procedures" in Rule 13a-15(e) of the Exchange Act.
In designing and evaluating the disclosure  controls and procedures,  management
recognized  that any controls and  procedures,  no matter how well  designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives.

         At the end of the period covered by this report,  Public Storage,  Inc.
carried out an evaluation,  under the supervision and with the  participation of
the Partnership's  management,  including Public Storage, Inc.'s Chief Executive
Officer and Chief  Financial  Officer,  of the  effectiveness  of the design and
operation of the Partnership's  disclosure  controls and procedures.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and Chief  Financial  Officer
concluded  that  the  Partnership's  disclosure  controls  and  procedures  were
effective.  During the fourth quarter of 2006, there were no significant changes
in the  Partnership's  internal  controls  over  financial  reporting  that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Partnership's internal control over financial reporting.

ITEM 9B.      OTHER INFORMATION
              -----------------

         Not applicable.


                                       15
<PAGE>


                                    PART III

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

         The Partnership has no directors or executive officers.

         The  Partnership's  General Partners are PSI and B. Wayne Hughes.  PSI,
acting through its directors and executive  officers,  and Mr. Hughes manage and
make investment decisions for the Partnership.  The self-storage  facilities are
managed by PSI pursuant to a Management Agreement.

         Pursuant to the  Partnership's  Amended  Certificate  and  Agreement of
Limited Partnership (the "Partnership  Agreement"),  a copy of which is included
in the  Partnership's  prospectus  included  in the  Partnership's  Registration
Statement,  each of the  General  Partners  continues  to serve until (i) death,
insanity,  insolvency,  bankruptcy  or  dissolution,  (ii)  withdrawal  with the
consent  of the  other  general  partner  and a  majority  vote  of the  limited
partners, or (iii) removal by a majority vote of the limited partners.

         The names of all directors  and executive  officers of PSI, the offices
held by each of them with PSI, and their ages and business experience during the
past five years are as follows:

      Name                     Positions with PSI
--------------------   ----------------------------------
B. Wayne Hughes         Chairman of the Board
                        Chief Executive Officer, Vice Chairman of the Board
Ronald L. Havner, Jr.     and President
John Reyes              Senior Vice President and Chief Financial Officer
John S. Baumann         Senior Vice President and Chief Legal Officer
                        Senior Vice President and President,
John E. Graul             Self-storage Operations
Candace N. Krol         Senior Vice President of Human Resources
David F. Doll           Senior Vice President and President, Real Estate Group
Harvey Lenkin           Director
B. Wayne Hughes, Jr.    Director
Dann V. Angeloff        Director
William C. Baker        Director
John T. Evans           Director
Uri P. Harkham          Director
Gary E. Pruitt          Director
Daniel C. Staton        Director

         B.  WAYNE  HUGHES,  age  73,  has  been a  director  of PSI  since  its
organization  in 1980. Mr. Hughes was President and Co-Chief  Executive  Officer
from 1980  until  November  1991 when he became  Chairman  of the Board and sole
Chief  Executive  Officer.  Mr.  Hughes  retired as Chief  Executive  Officer in
November 2002 and remains Chairman of the Board. Mr. Hughes is currently engaged
in the  acquisition  and operation of commercial  properties in California.  Mr.
Hughes has been active in the real estate investment field for over 30 years. He
is the father of B. Wayne Hughes, Jr., a member of PSI's Board.

         RONALD  L.  HAVNER,  JR.,  age 49,  has been the  Vice-Chairman,  Chief
Executive  Officer and a director of PSI since November 2002 and President since
July 1,  2005.  Mr.  Havner  joined  PSI in 1986 and held a  variety  of  senior
management  positions until his appointment as Vice-Chairman and Chief Executive
Officer in 2002.  Mr. Havner has been Chairman of PSI's  affiliate,  PS Business
Parks, Inc. (PSB),  since March 1998 and was Chief Executive Officer of PSB from
March 1998 until August 2003.  He is also a member of the Board of Governors and
the Executive  Committee of the National  Association of Real Estate  Investment
Trusts,  Inc.  (NAREIT) and a director of Union BanCal  Corporation and Pac Van,
Inc.

         DANN  V.  ANGELOFF,  age  71,  Chairman  of  the   Nominating/Corporate
Governance  Committee  and a member of the  Compensation  Committee,  has been a
director of PSI since its  organization in 1980. Mr. Angeloff has been President
of the Angeloff Company,  a corporate  financial  advisory firm, since 1976. Mr.
Angeloff  is  currently  the general  partner  and owner of a 20%  interest in a
limited  partnership that in 1974 purchased a self-storage  facility operated by
PSI.  He is a director  of  Bjurman,  Barry  Fund,  Inc.,  Electronic  Recyclers
International, Nicholas/Applegate Fund, ReadyPac Foods, Retirement Capital Group
and SoftBrands, Inc.

                                       16
<PAGE>

         WILLIAM C. BAKER, age 73, a member of  Nominating/Corporate  Governance
Committee, became a director of PSI in November 1991. Mr. Baker was Chairman and
Chief  Executive  Officer of Callaway Golf Company from August 2004 until August
2005.  From August 1998 through  April 2000,  he was  President and Treasurer of
Meditrust  Operating Company, a real estate investment trust. From April 1996 to
December 1998, Mr. Baker was Chief Executive  Officer of Santa Anita  Companies,
which then operated the Santa Anita Racetrack. From April 1993 through May 1995,
he was President of Red Robin International, Inc., an operator and franchisor of
casual dining  restaurants  in the United  States and Canada.  From January 1992
through  December  1995, Mr. Baker was Chairman and Chief  Executive  Officer of
Carolina Restaurant Enterprises,  Inc., a franchisee of Red Robin International,
Inc.  From  1991  to  1999,  he was  Chairman  of the  Board  of  Coast  Newport
Properties,  a real estate brokerage company. From 1976 to 1988, Mr. Baker was a
principal  shareholder  and  Chairman and Chief  Executive  Officer of Del Taco,
Inc., an operator and franchisor of fast food restaurants in California. He is a
director of La Quinta, Inc., California Pizza Kitchen, Javo Beverage Company and
Callaway Golf Company.

         JOHN T. EVANS,  age 68,  Chairman of the Audit  Committee and member of
the  Nominating/Corporate  Governance  Committee,  became a  director  of PSI in
August  2003.  Mr.  Evans has been a partner in the law firm of Osler,  Hoskin &
Harcourt LLP, Toronto, Canada from April 1993 to the present and in the law firm
of Blake, Cassels & Graydon LLP, Toronto,  Canada from April 1966 to April 1993.
Mr.  Evans  specializes  in business law  matters,  securities,  restructurings,
mergers and  acquisitions and advising on corporate  governance.  Mr. Evans is a
director of Cara Operations Inc., Kubota Metal Corporation, and Vice-Chairman of
Toronto East General  Hospital.  Until August 2003,  Mr. Evans was a director of
Canadian  Mini-Warehouse  Properties  Ltd., a Canadian  corporation  owned by B.
Wayne Hughes and members of his family.

         URI P. HARKHAM, age 58, a member of the Compensation Committee,  became
a director of PSI in March 1993.  Mr.  Harkham has been the  President and Chief
Executive  Officer  of  Harkham  Industries,  which  specializes  in  designing,
manufacturing  and marketing  women's  clothing under its four labels,  Harkham,
Hype,  Jonathan Martin and Johnny Martin,  since its organization in 1976. Since
1978,  Mr.  Harkham  has been the Chief  Executive  Officer  of  Harkham  Family
Enterprises, a real estate firm specializing in buying and rebuilding retail and
mixed use real estate throughout Southern California.

         B. WAYNE HUGHES, JR., age 47, became a director of PSI in January 1998.
He was  employed  by PSI  from  1989  to  2002,  serving  as  Vice  President  -
Acquisitions  of PSI from  1992 to 2002.  Mr.  Hughes,  Jr.  is  currently  Vice
President of American  Commercial  Equities,  LLC and its affiliates,  companies
engaged in the acquisition and operation of commercial properties in California.
He is the son of B. Wayne Hughes.

         HARVEY  LENKIN,  age 70,  became a director of PSI in 1991.  Mr. Lenkin
retired as  President  and Chief  Operating  Officer  of PSI in 2005,  and was a
consultant for Public Storage until July 1, 2006. Mr. Lenkin was employed by PSI
or its predecessor for 27 years. He has been a director of PSI's  affiliate,  PS
Business Parks,  Inc., since March 1998 and was President of PSB from 1990 until
March 1998. He is also a director of Paladin  Realty  Income  Properties I, Inc.
and a director of  Huntington  Memorial  Hospital,  Pasadena,  California  and a
former member of the Executive Committee of the Board of Governors of NAREIT.

         GARY E.  PRUITT,  age 57, a member  of the Audit  Committee  and of the
Compensation  Committee,  became a director of PSI in August 2006 in  connection
with the merger of Shurgard  Storage  Centers,  Inc.  with PSI.  Mr.  Pruitt was
previously a director of Shurgard.  He is the Chief Executive  Officer of Univar
N.V.,  a  chemical  distribution  company  based in  Bellevue,  Washington  with
distribution centers in the United States,  Canada and Europe. Mr. Pruitt joined
Univar  in 1978 and held a  variety  of senior  management  positions  until his
appointment as Chairman and Chief Executive  Officer in 2002. He was a certified
public accountant prior to joining Univar.

         DANIEL C. STATON, age 54, Chairman of the Compensation  Committee and a
member  of the  Audit  Committee,  became a  director  of PSI in  March  1999 in
connection  with the merger of Storage  Trust  Realty,  with PSI. Mr. Staton was
Chairman of the Board of Trustees of Storage  Trust  Realty from  February  1998
until March 1999 and a Trustee of Storage  Trust Realty from November 1994 until
March 1999. He is Chairman of Staton Capital,  an investment and venture capital
company and the Co-Chief  Executive  Officer of PMGI  (formerly  Media  General,
Inc.), a print and electronic media company.  Mr. Staton was the Chief Operating
Officer and Executive Vice President of Duke Realty Investments,  Inc. from 1993
to 1997 and a director of Duke Realty  Investments,  Inc. from 1993 until August
1999.

                                       17
<PAGE>

         Each  director of PSI serves until he resigns or is removed from office
by PSI,  and may  resign or be removed  from  office at any time with or without
cause. Each officer of PSI serves until he resigns or is removed by the board of
directors  of PSI.  Any such officer may resign or be removed from office at any
time with or without cause.

         There  have  been no events  under  any  bankruptcy  act,  no  criminal
proceedings,  and no judgments or injunctions  material to the evaluation of the
ability of any director or executive officer of PSI during the past five years.

         The members of the PSI Audit  Committee of the Board are: John T. Evans
(Chairman),  Daniel  C.  Staton,  and  Gary  E.  Pruitt.  The  Board  of PSI has
determined  that Audit  Committee  members  Daniel C. Staton and Gary E. Pruitt,
each qualify as an audit  committee  financial  expert within the meaning of the
rules  of  the  Securities  and  Exchange  Commission.  The  Board  has  further
determined  that Messrs.  Abernethy and Staton are each  independent  within the
meaning of Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

         The financial records of the Partnership are maintained and prepared by
employees of PSI. The Board of Directors of PSI has adopted a code of ethics for
its senior  financial  officers.  The Code of Ethics  applies  to those  persons
serving as PSI's principal  executive officer,  principal  financial officer and
principal  accounting  officer.  A copy of the Code of  Ethics is  available  by
written  request from the  Secretary of PSI at 701 Western  Ave.,  Glendale,  CA
91201-2349.

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

         The Partnership has no subsidiaries, directors or officers. See Item 13
for a  description  of certain  transactions  between  the  Partnership  and its
General Partners and their affiliates.

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

         (a) At March 30, 2007, the following beneficially owned more than 5% of
the Units:

<TABLE>
<CAPTION>

          Title            Name and Address                          Beneficial          Percent
        of Class           of Beneficial Owner                       Ownership           of Class
------------------- -------------------------------------------- ------------------- -------------
<S>                    <C>                                          <C>                   <C>
Units of Limited       Public Storage, Inc.                         6,274 Units (1)       31.4%
Partnership Interest   701 Western Ave.
                       Glendale, California 91201

Units of Limited       H-G Family Corporation, Tamara Hughes        6,301 Units (2)       31.5%
Partnership Interest   Gustavson, PS Orangeco Partnerships, Inc.
                       701 Western Ave.
                       Glendale, California 91201

(1)      Includes  (i) 6,169  Units owned by PSI as to which PSI has sole voting
         and dispositive power, (ii) 25 Units which PSI has an option to acquire
         from a corporation of which Hughes' children are shareholders and (iii)
         80  Units  which  PSI has an  option  to  acquire  from  Tamara  Hughes
         Gustavson, an adult daughter of Hughes.

(2)      Includes (i) 6,025 Units owned by H-G Family Corporation, a corporation
         of which  Hughes'  children  are  shareholders;  PSI has an  option  to
         acquire  25 of these  Units,  (ii) 80  Units  owned  by  Tamara  Hughes
         Gustavson  as to which  Tamara  Hughes  Gustavson  has sole  voting and
         dispositive  power;  PSI has an option to acquire  these 80 Units,  and
         (iii) 196 Units owned by PS Orangeco Partnerships,  Inc., a corporation
         in which Hughes and members of his family own  approximately 48% of the
         voting stock,  PSI owns 46% and members of PSI's management and related
         individuals own approximately 6%.
</TABLE>

                                       18
<PAGE>

         (b) The Partnership has no officers and directors.

         The   General   Partners   (or  their   predecessor-in-interest)   have
contributed  $101,010  to  the  capital  of  the  Partnership  and  as a  result
participate  in  the   distributions   to  the  limited   partners  and  in  the
Partnership's  profits  and  losses  in the same  proportion  that  the  General
Partners'  capital   contribution  bears  to  the  total  capital   contribution
(approximately $80,808 was contributed by PSI and $20,202 was contributed by Mr.
Hughes).   In  1995,  Mr.  Hughes   contributed  his  ownership  and  rights  to
distributions  from the Partnership to BWH Marina  Corporation II, a corporation
wholly-owned by Mr. Hughes. In 2002, BWH Marina Corporation II sold its interest
to H-G Family  Corporation.  As such,  Mr. Hughes  continues to act as a general
partner but  receives no direct  compensation  or other  consideration  from the
Partnership.  Information  regarding  ownership of Units by PSI and Hughes,  the
General  Partners,  is set forth under  section  (a) above.  The  directors  and
executive  officers  of  PSI  (including  Hughes),  as  a  group  (17  persons),
beneficially  own an aggregate of 6,239 Units,  representing  31.2% of the Units
(including  the 6,025  Units owned by H-G Family  Corporation  and the 196 Units
owned by PS Orangeco Partnerships, Inc.).

         (c) The Partnership knows of no contractual arrangements, the operation
of the terms of which may at a subsequent  date result in a change in control of
the  Partnership,  except  for  articles  16,  17 and 21.1 of the  Partnership's
Amended  Certificate  and  Agreement of Limited  Partnership  (the  "Partnership
Agreement"),  a copy  of  which  is  included  in the  Partnership's  prospectus
included in the  Partnership's  Registration  Statement File No. 2-57750.  Those
articles provide, in substance,  that the limited partners shall have the right,
by majority  vote,  to remove a general  partner and that a general  partner may
designate  a  successor  with the  consent of the other  general  partner  and a
majority of the limited partners.

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

         The Partnership  Agreement  provides that the General  Partners will be
entitled  to  cash  incentive  distributions  in an  amount  equal  to (i) 8% of
distributions  of cash  flow from  operations  until  the  distributions  to all
partners from all sources equal their capital contributions;  thereafter, 25% of
distributions of cash flow from operations,  and (ii) 25% of distributions  from
net proceeds from sale and financing of the Partnership's  properties  remaining
after  distribution  to all  partners of any portion  thereof  required to cause
distributions to partners from all sources to equal their capital contributions.
During  1985,  the partners  received  cumulative  distributions  equal to their
capital  contributions.  Mr. Hughes has assigned his ownership and  distribution
rights in the Partnership to BWH Marina Corporation II ("BWH Marinas"),  and BWH
Marinas sold its  interests to H-G Family  Corporation  in 2002.  In addition to
their distribution rights with respect to their general partner's interests, PSI
and  H-G  Family   Corporation  own  6,169  and  6,025  Limited  Partner  Units,
respectively. During 2006, PSI and H-G Family Corporation received approximately
$1,032,000 and $258,000, respectively, in distributions related to their general
partner's  ownership  interests.  As described  above, the General Partners also
hold Limited  Partnership  Units.  Through  these  holdings,  PSI and the Hughes
Family, respectively, received $1,147,000 and $1,121,000 of cash distributions.

         The   Partnership   has   a   Management   Agreement   with   PSI   (as
successor-in-interest  to PSMI). Under the Management Agreement, the Partnership
pays PSI a fee of 6% of the  gross  revenues  of the  mini-warehouse  properties
operated  for the  Partnership.  For as long as the  Management  Agreement is in
effect,  PSI has granted the Partnership a non-exclusive  license to use two PSI
service  marks and related  designs,  including  the "Public  Storage"  name, in
conjunction  with rental and  operation of  facilities  managed  pursuant to the
Management  Agreement.   Upon  termination  of  the  Management  Agreement,  the
Partnership  would no longer have the right to use the service marks and related
designs.  The  General  Partners  believe  that the loss of the right to use the
service marks and related  designs could have a material  adverse  effect on the
Partnership's  business.  The  Management  Agreement  with PSI provides that the
Management Agreement may be terminated without cause upon 60 days written notice
by the  Partnership or 6 months notice by PSI.  During 2006,  2005 and 2004, the
Partnership paid fees of $433,000, $413,000 and $392,000,  respectively,  to PSI
pursuant to the Management Agreement.

         In addition,  the Partnership  combines its insurance  purchasing power
with PSI through captive insurance entities controlled by PSI (see Note 5 to the
Partnership's  financial  statements).  These captive  entities  provide limited
property and liability insurance to the Partnership at commercially  competitive
rates. The Partnership and PSI also utilize  unaffiliated  insurance carriers to
provide  property and  liability  insurance  in excess of the captive  entities'
limitations.  Premiums paid to the captive entities for the years ended December
31, 2006, 2005 and 2004 were $54,000, $46,000 and $79,000, respectively.

         The  Partnership's  facilities,  along with facilities owned by PSI and
its  affiliates,  are  managed  and  marketed  jointly  by PSI in  order to take
advantage of scale and other efficiencies.  As a result,  significant components
of cost of operations,  such as payroll costs,  advertising and promotion,  data
processing and insurance  expenses are shared and allocated among the properties
using  methodologies  meant to fairly allocate such costs based upon the related
activities. The total of such expenses,  substantially all of which are included
in Cost of Operations, amounted to $867,000, $703,000 and $704,000 for the years
ended December 31, 2006, 2005, and 2004, respectively.
                                       19
<PAGE>


ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES
              --------------------------------------

         Fees billed to the  Partnership by Ernst & Young LLP for 2006 and 2005,
         as are follows:

         Audit  Fees:  Audit  fees  billed  (or  expected  to be  billed) to the
         Partnership  by Ernst & Young  LLP for the  audit of the  Partnership's
         annual  financial  statements  and reviews of the  quarterly  financial
         statements included in the Partnership's quarterly reports on Form 10-Q
         totaled $18,000 for 2006 and $16,000 for 2005.

         Tax Fees: Tax fees billed (or expected to be billed) to the Partnership
         by Ernst & Young  LLP for tax  services  (primarily  federal  and state
         income tax preparation) totaled $10,000 for 2006 and $10,000 for 2005.

         Audit-Related  Fees and Other Fees:  During 2006 and 2005 Ernst & Young
         LLP did not bill the  Partnership  for  audit-related  services  or any
         other services, except audit services and tax services denoted above.

         The Audit Committee of PSI pre-approves all services performed by Ernst
         & Young LLP,  including  those listed  above.  At this time,  the Audit
         Committee  has not  delegated  pre-approval  authority to any member or
         members of the Audit Committee.


                                       20
<PAGE>


                                     PART IV

ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
              ------------------------------------------

(a)      List of documents filed as part of this Report.

         1.  Financial  Statements.   See  Index  to  Financial  Statements  and
         Financial Statement Schedule.

         2. Financial Statement Schedules. See Index to Financial Statements and
         Financial Statement Schedule.

         3. Exhibits: See Exhibit Index contained below.

(b)      Exhibits: See Exhibit Index contained below.

(c)      Not applicable.


                                       21
<PAGE>


                         PUBLIC STORAGE PROPERTIES, LTD.

                                  EXHIBIT INDEX

                           (Items 15(a)(3) and 15(b))


3.1      Amended  Certificate and Agreement of Limited  Partnership.  Previously
         filed with the Securities  and Exchange  Commission as Exhibit A to the
         Partnership's Prospectus included in Registration Statement No. 2-57750
         and incorporated herein by reference.

10.1     Second  Amended and Restated  Management  Agreement  dated November 16,
         1995 between the Partnership and Public Storage,  Inc. Previously filed
         with the  Securities  and  Exchange  Commission  as an  exhibit  to the
         Partnership's  Annual  Report on Form 10-K for the year ended  December
         31, 1996 and incorporated herein by reference.

10.2     Loan  documents  dated  January 27, 1998  between the  Partnership  and
         Public Storage,  Inc. Previously filed with the Securities and Exchange
         Commission  as an exhibit to the  Partnership's  Annual  Report on Form
         10-K for the year ended  December 31, 1997 and  incorporated  herein by
         reference.

14       Code of Ethics for Senior  Financial  Officers of Public Storage,  Inc.
         Filed with the  Partnership's  Annual  Report on Form 10-K for the year
         ended December 31, 2003 and incorporated herein by reference.

31.1     Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
         signed and dated by Ronald L. Havner, Jr. Filed herewith.

31.2     Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
         signed and dated by John Reyes. Filed herewith.

32       Certification  pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002. Furnished herewith.




                                       22
<PAGE>


                                   SIGNATURES

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

                             PUBLIC STORAGE PROPERTIES, LTD.
                             a California Limited Partnership
Dated:  March 30, 2007       By:    Public Storage, Inc., General Partner

                                   By:  /s/ Ronald L. Havner, Jr.
                                        ----------------------------------------
                                        Ronald L. Havner, Jr., Vice Chairman of
                                        the Board, Chief Executive Officer and
                                        President of Public Storage, Inc.,
                                        Corporate General Partner

                             By:   /s/ B. Wayne Hughes
                                   ---------------------------------------------
                                   B. Wayne Hughes,General Partner and
                                   Chairman of the Board of Public Storage, Inc.


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

                                       23
<PAGE>

<TABLE>
<CAPTION>


              Signature                                                     Capacity                                   Date
---------------------------------------                --------------------------------------------------      --------------------

<S>                                                    <C>                                                        <C>
                                                       Vice Chairman of the Board, Chief Executive
                                                       Officer and President of Public Storage, Inc.,
/s/ Ronald L. Havner Jr.                               Corporate General Partner                                  March 30, 2007
---------------------------------------
Ronald L. Havner, Jr.

                                                       General Partner and Chairman of the Board of
/s/ B. Wayne Hughes                                    Public Storage, Inc.                                       March 30, 2007
---------------------------------------
B. Wayne Hughes

                                                       Senior Vice President and Chief Financial Officer
                                                       of Public Storage, Inc. (principal financial
/s/ John Reyes                                         officer and principal accounting officer)                  March 30, 2007
---------------------------------------
John Reyes

/s/ Harvey Lenkin                                      Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
Harvey Lenkin

/s/ B. Wayne Hughes, Jr.                               Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
B. Wayne Hughes, Jr.

/s/ Dann V. Angeloff                                   Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
Dann V. Angeloff

/s/ William Baker                                      Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
William C. Baker

/s/ John T. Evans                                      Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
John T. Evans

/s/ Uri P. Harkham                                     Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
Uri P. Harkham

/s/ Gary E. Pruitt                                     Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
Gary E. Pruitt

/s/ Daniel C. Staton                                   Director of Public Storage, Inc.                           March 30, 2007
---------------------------------------
Daniel C. Staton

</TABLE>


                                       24
<PAGE>



                         PUBLIC STORAGE PROPERTIES, LTD.
                          INDEX TO FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE
                                  (Item 15 (a))

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

Report of Independent Registered Public Accounting Firm                 F-1

Financial Statements and Schedule:

Balance Sheets as of December 31, 2006 and 2005                         F-2

For the years ended December 31, 2006, 2005 and 2004:

     Statements of Income                                               F-3

     Statements of Partners' Equity                                     F-4

     Statements of Cash Flows                                           F-5

Notes to Financial Statements                                    F-6 - F-11


Schedule:

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

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


                                       25
<PAGE>






             Report of Independent Registered Public Accounting Firm




The Partners
Public Storage Properties, Ltd.


We have audited the  accompanying  balance sheets of Public Storage  Properties,
Ltd.  (the  "Partnership")  as of December  31,  2006 and 2005,  and the related
statements  of  income,  partners'  equity  and cash flows for each of the three
years in the period  ended  December  31,  2006.  Our audits also  included  the
schedule  listed in the index at item  15(a).  These  financial  statements  and
schedule  are  the   responsibility   of  the  Partnership's   management.   Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Partnership's internal control over financial reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Partnership's internal control over financial reporting.  Accordingly we express
no such opinion.  An audit also includes  examining,  on a test basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Public Storage Properties, Ltd.
at December 31, 2006 and 2005,  and the results of its  operations  and its cash
flows for each of the three years in the period  ended  December  31,  2006,  in
conformity with U.S.  generally  accepted  accounting  principles.  Also, in our
opinion,  the related financial statement schedule,  when considered in relation
to the  basic  financial  statements  taken as a whole,  presents  fairly in all
material respects the information set forth therein.





                                                               ERNST & YOUNG LLP




March 28, 2007
Los Angeles, California

                                      F-1
<PAGE>

<TABLE>
<CAPTION>


                         PUBLIC STORAGE PROPERTIES, LTD.
                                 BALANCE SHEETS
                           December 31, 2006 and 2005


                                                                                 2006                   2005
                                                                           ------------------    ------------------

                                ASSETS
                                ------

<S>                                                                         <C>                    <C>
Cash and cash equivalents                                                   $     1,483,000        $     1,448,000
Rent and other receivables                                                           73,000                 69,000

Real estate facilities, at cost:
     Building, land improvements and equipment                                    9,765,000              9,622,000
     Land                                                                         2,476,000              2,476,000
                                                                           ------------------    ------------------
                                                                                 12,241,000             12,098,000

     Less accumulated depreciation                                               (9,169,000)            (9,004,000)
                                                                           ------------------    ------------------
                                                                                  3,072,000              3,094,000

Other assets                                                                         92,000                 71,000
                                                                           ------------------    ------------------

Total assets                                                                $     4,720,000        $     4,682,000
                                                                           ==================    ==================


                   LIABILITIES AND PARTNERS' EQUITY
                   --------------------------------

Accounts payable                                                            $        98,000        $        88,000
Deferred revenue                                                                    159,000                163,000
                                                                           ------------------    ------------------
      Total liabilities                                                             257,000                251,000

Commitments and contingencies (Note 8)

Partners' equity:
    Limited partners' equity, $500 per unit, 20,000 units
       authorized, issued and outstanding                                         3,314,000              3,290,000
    General partners' equity                                                      1,149,000              1,141,000
                                                                           ------------------    ------------------

     Total partners' equity                                                       4,463,000              4,431,000
                                                                           ------------------    ------------------

Total liabilities and partners' equity                                      $     4,720,000        $     4,682,000
                                                                           ==================    ==================
</TABLE>

                            See accompanying notes.
                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                         PUBLIC STORAGE PROPERTIES, LTD.
                              STATEMENTS OF INCOME
              For the years ended December 31, 2006, 2005 and 2004


                                                               2006                   2005                   2004
                                                      -------------------- ----------------------- -----------------------
REVENUES:

<S>                                                    <C>                    <C>                    <C>
Rental income                                          $       7,220,000      $       6,879,000      $       6,537,000
Other income                                                     151,000                123,000                 56,000
                                                      -------------------- ----------------------- -----------------------

                                                               7,371,000              7,002,000              6,593,000
                                                      -------------------- ----------------------- -----------------------

COSTS AND EXPENSES:

Cost of operations                                             1,600,000              1,423,000              1,422,000
Management fees paid to affiliate                                433,000                413,000                392,000
Depreciation                                                     165,000                181,000                217,000
Administrative                                                   131,000                 97,000                 87,000
                                                      -------------------- ----------------------- -----------------------

                                                               2,329,000              2,114,000              2,118,000
                                                      -------------------- ----------------------- -----------------------

NET INCOME                                             $       5,042,000      $       4,888,000      $       4,475,000
                                                      ==================== ======================= =======================

Limited partners' share of net income ($187.55 per
   unit in 2006, $180.95 per unit in 2005 and
   $169.85 per unit in 2004)                           $       3,751,000      $       3,619,000      $       3,397,000

General partners' share of net income                          1,291,000              1,269,000              1,078,000
                                                      -------------------- ----------------------- -----------------------

                                                       $       5,042,000      $       4,888,000      $       4,475,000
                                                      ==================== ======================= =======================
</TABLE>


                            See accompanying notes.
                                      F-3
<PAGE>

<TABLE>
<CAPTION>

                         PUBLIC STORAGE PROPERTIES, LTD.
                         STATEMENTS OF PARTNERS' EQUITY
              For the years ended December 31, 2006, 2005 and 2004




                                                                                              Total Partners'
                                                   Limited Partners     General Partners           Equity
                                                   ----------------    -------------------   -------------------


<S>                                                       <C>                  <C>                  <C>
Balance at December 31, 2003                              3,097,000            1,075,000            4,172,000

Net income                                                3,397,000            1,078,000            4,475,000

Distributions paid to partners                           (3,100,000)          (1,075,000)          (4,175,000)

Equity transfer                                             (73,000)              73,000                    -
                                                   ----------------    -------------------   -------------------

Balance at December 31, 2004                              3,321,000            1,151,000            4,472,000

Net income                                                3,619,000            1,269,000            4,888,000

Distributions paid to partners                           (3,660,000)          (1,269,000)          (4,929,000)

Equity transfer                                              10,000              (10,000)                   -
                                                   ----------------    -------------------   -------------------

Balance at December 31, 2005                              3,290,000            1,141,000            4,431,000

Net income                                                3,751,000            1,291,000            5,042,000

Distributions paid to partners                           (3,720,000)          (1,290,000)          (5,010,000)

Equity transfer                                              (7,000)               7,000                    -
                                                   ----------------    -------------------   -------------------

Balance at December 31, 2006                       $      3,314,000     $      1,149,000     $      4,463,000
                                                   ================    ===================   ===================

</TABLE>

                            See accompanying notes.
                                      F-4
<PAGE>


                         PUBLIC STORAGE PROPERTIES, LTD.
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 2006, 2005 and 2004

<TABLE>
<CAPTION>

                                                                           2006              2005              2004
                                                                      ---------------- ----------------- ----------------
Cash flows from operating activities:

<S>                                                                   <C>               <C>               <C>
     Net income                                                       $    5,042,000    $    4,888,000    $    4,475,000

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

         Depreciation and amortization                                       165,000           181,000           217,000
         (Increase) decrease in rent and other receivables                    (4,000)          (34,000)           12,000
         Increase in other assets                                            (21,000)           (3,000)          (19,000)
         Increase (decrease) in accounts payable                              10,000             6,000           (28,000)
         (Decrease) increase in deferred revenue                              (4,000)          (20,000)            7,000
                                                                      ---------------- ----------------- ----------------

         Total adjustments                                                   146,000           130,000           189,000
                                                                      ---------------- ----------------- ----------------

         Net cash provided by operating activities                         5,188,000         5,018,000         4,664,000
                                                                      ---------------- ----------------- ----------------

Cash flows from investing activities:

     Additions to real estate facilities                                    (143,000)          (48,000)         (152,000)
                                                                      ---------------- ----------------- ----------------

         Net cash used in investing activities                              (143,000)          (48,000)         (152,000)
                                                                      ---------------- ----------------- ----------------

Cash flows from financing activities:

    Distributions paid to partners                                        (5,010,000)       (4,929,000)       (4,175,000)
                                                                      ---------------- ----------------- ----------------

         Net cash used in financing activities                            (5,010,000)       (4,929,000)       (4,175,000)
                                                                      ---------------- ----------------- ----------------

Net increase in cash and cash equivalents                                     35,000            41,000           337,000

Cash and cash equivalents at the beginning of the year                     1,448,000         1,407,000         1,070,000
                                                                      ---------------- ----------------- ----------------

Cash and cash equivalents at the end of the year                      $    1,483,000    $    1,448,000    $    1,407,000
                                                                      ================ ================= ================

</TABLE>

                            See accompanying notes.
                                      F-5
<PAGE>


                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006


1.       DESCRIPTION OF PARTNERSHIP

                  Public  Storage  Properties,  Ltd.  (the  "Partnership")  is a
         publicly held limited  partnership  formed under the California Uniform
         Limited  Partnership  Act in  November  1976.  The  Partnership  raised
         $10,000,000  in gross  proceeds  by  selling  20,000  units of  limited
         partnership  interest  ("Units")  in  an  interstate  offering,   which
         commenced in October 1977 and  completed in January  1978.  The general
         partners in the  Partnership are Public  Storage,  Inc.  ("PSI") and B.
         Wayne Hughes ("Hughes").

                  The  Partnership  was  formed  to engage  in the  business  of
         developing  and  operating  self-storage  facilities  for  personal and
         business use. The Partnership owns nine self-storage facilities located
         in California.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

         Use of Estimates:
         -----------------

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

         Revenue and Expense Recognition:
         --------------------------------

                  Rental  income,   which  is  generally   earned   pursuant  to
         month-to-month  leases for  storage  space,  is  recognized  as earned.
         Promotional  discounts  are  recognized as a reduction to rental income
         over the promotional period,  which is generally during the first month
         of occupancy.  Late charges and  administrative  fees are recognized as
         income when collected. Interest income is recognized as earned.

                  We accrue for property tax expense  based upon  estimates  and
         historical  trends.  If these  estimates are  incorrect,  the timing of
         expense recognition could be affected.

                  Cost of operations,  general and  administrative  expense,  as
         well as television, yellow page, and other advertising expenditures are
         expensed as incurred.  Included in cost of operations  are  television,
         yellow page,  and other  advertising  expenditures  totaling  $281,000,
         $222,000 and $226,000 for the years ended  December 31, 2006,  2005 and
         2004, respectively.

         Allocation of Net Income:
         -------------------------

                  The general  partners' share of net income consists of amounts
         attributable  to  their  1%  capital  contribution  and  an  additional
         percentage  of cash flow (as  defined)  which  relates  to the  general
         partners' share of cash  distributions  as set forth in the Partnership
         Agreement  (Note 4).  All  remaining  net  income is  allocated  to the
         limited partners.

                  Per unit data is based on the weighted  average  number of the
         limited partnership units (20,000) outstanding during the period.

         Cash and Cash Equivalents:
         --------------------------

                  For financial  statement purposes,  the Partnership  considers
         all highly liquid  financial  instruments  such as short-term  treasury
         securities or investment grade  short-term  commercial paper to be cash
         equivalents.

                                      F-6
<PAGE>

                        PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

         Real Estate Facilities and Evaluation of Asset Impairment:
         ----------------------------------------------------------

                  Real estate  facilities are recorded at cost. Costs associated
         with the  development,  construction,  renovation  and  improvement  of
         properties are capitalized.  Interest,  property taxes, and other costs
         associated with the development incurred during the construction period
         are  capitalized  as  building  cost.   Expenditures  for  repairs  and
         maintenance  are  charged  to  expense  as  incurred.  Depreciation  is
         computed using the straight-line method over the estimated useful lives
         of the buildings and improvements, which are generally between 5 and 25
         years.  At December 31, 2006,  all of the real estate  facilities  have
         been in service  longer than 25 years,  and  accordingly  the  original
         development  cost of such  buildings are fully  depreciated at December
         31, 2006.

                  We  evaluate  our real  estate for  impairment  on a quarterly
         basis. We first evaluate these assets for indicators of impairment such
         as a) a significant  decrease in the market price of real estate,  b) a
         significant adverse change in the extent or manner in which real estate
         is being used or in its physical  condition,  c) a significant  adverse
         change in legal  factors or the business  climate that could affect the
         value of the real estate, d) an accumulation of costs  significantly in
         excess of the amount  originally  projected for the  acquisition  of or
         construction of the real estate,  or e) a  current-period  operating or
         cash flow loss combined with a history of operating or cash flow losses
         or  a  projection  or  forecast  that  demonstrates  continuing  losses
         associated with the use of the real estate. When any such indicators of
         impairment are noted,  we compare the carrying value of the real estate
         to the future  estimated  undiscounted  cash flows  attributable to the
         real estate. If the real estate's  recoverable  amount is less than the
         carrying  value of the asset,  then an impairment  charge is booked for
         the excess of carrying  value over the real  estate's  fair value.  Our
         evaluations have identified no such impairments at December 31, 2006.

                  Any real estate  facility,  which we expect to sell or dispose
         of prior to its previously estimated useful life is stated at the lower
         of its  estimated  net  realizable  value,  less  cost to sell,  or its
         carrying value.

         Environmental Cost:
         -------------------

                  The   Partnership's   policy   is  to   accrue   environmental
         assessments  and/or  remediation  costs when it is  probable  that such
         efforts  will be  required  and the  related  costs  can be  reasonably
         estimated.  Although there can be no assurance, we are not aware of any
         environmental   contamination   at  any  of  our   facilities,   which,
         individually  or in the  aggregate,  would be  material  to our overall
         business, financial condition or results of operations.

         Income Taxes:
         -------------

                  Public  Storage  Properties,  Ltd. is treated as a partnership
         for Federal and state  income tax purposes  with the taxable  income of
         the entity allocated to each partner in accordance with the partnership
         agreement. Accordingly no Federal income tax expense is recorded by the
         Partnership.

         Recent Accounting Pronouncements and Guidance:
         ----------------------------------------------

                  As of March 30,  2007,  there  have been no recent  accounting
         pronouncements   and   guidance,   which   were   not   effective   for
         implementation  prior to December 31, 2006,  that would have a material
         impact upon  reporting  the  operations  or  financial  position of the
         Partnership.

         Segment Reporting:
         ------------------

                  The  Partnership  only has one  reportable  segment as defined
         within Statement of Financial Accounting Standards No. 131.

                                      F-7
<PAGE>
                        PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

3.       CASH DISTRIBUTIONS

                  The  Partnership  Agreement  requires that cash  available for
         distribution  (cash flow from all sources less cash  necessary  for any
         obligations or capital  improvements)  needs to be distributed at least
         quarterly.  During  2005,  we paid  distributions  to the  limited  and
         general partners totaling $3,660,000 ($183.00 per unit) and $1,269,000,
         respectively.  During 2006,  we paid  distributions  to the limited and
         general partners totaling $3,720,000 ($186.00 per unit) and $1,290,000,
         respectively. Future distribution rates may be adjusted to levels which
         are supported by operating cash flow after capital improvements and any
         other obligations.

4.       PARTNERS' EQUITY

                  PSI and Hughes are  general  partners of the  Partnership.  In
         1995, Hughes contributed his ownership and rights to distributions from
         the   Partnership   to  BWH  Marina   Corporation   II,  a  corporation
         wholly-owned  by Hughes.  In 2002,  BWH Marina  Corporation II sold its
         interests to H-G Family  Corporation.  As such, Mr. Hughes continues to
         act as a general  partner but receives no direct  compensation or other
         consideration from the Partnership.

                  The general partners have a 1% interest in the Partnership. In
         addition,   the   general   partners   have  an  8%  interest  in  cash
         distributions  attributable to operations  (exclusive of  distributions
         attributable to sale and financing  proceeds until the limited partners
         recover  all of their  initial  investment).  Thereafter,  the  general
         partners have a 25% interest in all cash distributions  (including sale
         and financing proceeds). In 1985, the limited partners recovered all of
         their initial  investment.  All subsequent cash distributions are being
         made 25.75%  (including  the 1% interest)  to the general  partners and
         74.25%  to  the  limited   partners.   Transfers  of  equity  are  made
         periodically  to  reconcile  the  partners'   equity  accounts  to  the
         provisions of the Partnership Agreement. These transfers have no effect
         on the results of operations or distributions to partners.

5.       RELATED PARTY TRANSACTIONS

         Management Agreement and Shared Expenses with PSI:
         --------------------------------------------------

                  The Partnership  has a Management  Agreement with PSI pursuant
         to which PSI operates the self-storage facilities for a fee equal to 6%
         of the facilities' gross revenue (as defined). For 2006, 2005 and 2004,
         the Partnership paid PSI $433,000, $413,000 and $392,000, respectively,
         under this management agreement.

                  The  Management  Agreement  between  the  Partnership  and PSI
         provides that the Management  Agreement may be terminated without cause
         upon 60 days written notice by the  Partnership or six months notice by
         PSI.

                  The Partnership's  facilities,  along with facilities owned by
         PSI and its  affiliates,  are  managed and  marketed  jointly by PSI in
         order to take advantage of scale and other  efficiencies.  As a result,
         significant  components of cost of  operations,  such as payroll costs,
         advertising and promotion,  data processing and insurance  expenses are
         shared and allocated among the properties using  methodologies meant to
         fairly allocate such costs based upon the related activities. The total
         of such  expenses,  substantially  all of which are included in Cost of
         Operations,  amounted to $867,000,  $703,000 and $704,000 for the years
         ended December 31, 2006, 2005, and 2004, respectively.

         Ownership Interest by the General Partners
         ------------------------------------------

                  PSI owns 6,169  Limited  Partnership  Units  ("Units"),  as to
         which PSI has sole voting and dispositive power.

                                      F-8
<PAGE>
                        PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

                  Hughes and members of his family  (the  "Hughes  Family")  own
         6,105  Units.  Hughes  owns 6,025  Units,  as to which  Hughes has sole
         voting and dispositive  power,  through a wholly-owned  corporation and
         Tamara Hughes Gustavson,  an adult daughter of Hughes, owns 80 Units as
         to which Tamara Hughes Gustavson has sole voting and dispositive power.
         PSI has an option to  acquire 25 of the Units held by Hughes and the 80
         Units held by Tamara Hughes Gustavson.

                  In  addition,  there  are  196  Units  owned  by  PS  Orangeco
         Partnerships,   Inc.,  a  corporation   in  which  Hughes  Family  owns
         approximately  48% of the  voting  stock,  PSI owns 46% and  members of
         PSI's management and related individuals own approximately 6%.

         Captive Insurance Activities with PSI
         -------------------------------------

                  The  Partnership  has a 0.9%  ownership  interest  in  STOR-Re
         Mutual Insurance Corporation  ("STOR-Re"),  which was formed in 1994 as
         an association captive insurance company, and is controlled by PSI. The
         Partnership  accounts for its investment in STOR-Re,  which is included
         in other assets, on the cost method,  and has received no distributions
         during the three years ended December 31, 2006.

                  STOR-Re  provides  limited  property and  liability  insurance
         coverage to the  Partnership,  PSI, and affiliates for losses occurring
         before  April 1, 2004.  STOR-Re  was  succeeded  with  respect to these
         activities for losses  occurring after March 31, 2004 by a wholly owned
         subsidiary of PSI  (collectively,  this entity and STOR-Re are referred
         to  as  the  "Captive  Entities").  Liabilities  for  losses  and  loss
         adjustment  expenses include an amount determined from loss reports and
         individual  cases  and an  amount,  based  on  recommendations  from an
         outside actuary that is a member of the American  Academy of Actuaries,
         using a frequency  and  severity  method,  for losses  incurred but not
         reported.   Determining  the  liability  for  unpaid  losses  and  loss
         adjustment  expense is based upon  estimates  and while we believe that
         the amount is adequate,  the ultimate  loss may be in excess of or less
         than the amounts  provided.  The methods for making such  estimates and
         for establishing the resulting liability are continually reviewed.

                  The following table sets forth certain condensed  consolidated
         financial  information  with respect to STOR-Re  (representing  100% of
         this entity's operations and not the Partnership's pro-rata share):

                                                              2006      2005
                                                          ----------- ----------
                                                          (Amounts in thousands)
          For the year ended December 31,
          Net investment income...........................  $    890  $    663
          Loss and loss adjustment expense................    (1,053)      900
          Other expenses..................................      (234)     (349)
                                                          ----------- ----------
             Net income (loss)............................  $   (397) $  1,214
                                                          =========== ==========

          At December 31,
          Total assets (primarily cash and other
             investments).................................  $ 27,772  $ 26,876
          Liabilities for losses and loss adjustment
             expenses.....................................    11,470    13,784
          Other liabilities...............................     1,314       208
          Member's surplus................................    14,988    12,884


                  Premiums  paid to the  Captive  Entities  for the years  ended
         December 31,  2006,  2005 and 2004 were  $54,000,  $46,000 and $79,000,
         respectively.

                                      F-9
<PAGE>
                        PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

         Other Activities with PSI
         -------------------------

                  A corporation that reinsures  policies against losses to goods
         stored by tenants in PSI's storage facilities was purchased by PSI from
         Mr. Hughes and members of his family (the "Hughes  Family") on December
         31, 2001.  This  corporation  receives the premiums and bears the risks
         associated with the  re-insurance.  The Partnership  receives an access
         fee from this corporation in return for providing tenant listings. This
         fee is based on number of spaces the Partnership has to rent.  Included
         in other  income on our income  statement  for these fees are  $58,000,
         $58,000 and $35,000 for the years ended  December  31,  2006,  2005 and
         2004, respectively.

                  A subsidiary  of PSI sells locks and boxes and rents trucks to
         the general  public and tenants to be used in securing their spaces and
         moving their  goods.  The  subsidiary  of PSI receives the revenues and
         bears the cost of the activities.

6.       TAXES BASED ON INCOME

                  Taxes based on income are the responsibility of the individual
         partners and,  accordingly,  the Partnership's  financial statements do
         not reflect a provision for such taxes.

                  Taxable net income (unaudited) was $5,030,000,  $4,874,000 and
         $4,505,000  for the  years  ended  December  31,  2006,  2005 and 2004,
         respectively.  The difference between taxable net income and net income
         is primarily related to depreciation expense resulting from differences
         in depreciation and capitalization methodologies.

7.       SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>


                                                                      Three Months Ended
                                        --------------------------------------------------------------------------------
                                         March 31, 2006      June 30, 2006      September 30, 2006    December 31, 2006
                                        ----------------- ------------------- --------------------- --------------------
<S>                                      <C>                 <C>                  <C>                   <C>
Rental Income                            $    1,758,000      $    1,808,000       $     1,835,000       $     1,819,000
Cost of Operations (including
 management fees and depreciation)       $      556,000      $      565,000       $       531,000       $       546,000
Net Income                               $    1,201,000      $    1,245,000       $     1,296,000       $     1,300,000
Net Income Per Limited Partner Unit      $        45.10      $        47.30       $         49.80       $         45.35
Distributions                            $    1,158,000      $    1,158,000       $     1,159,000       $     1,535,000


                                                                      Three Months Ended
                                        --------------------------------------------------------------------------------
                                         March 31, 2005      June 30, 2005      September 30, 2005    December 31, 2005
                                        ----------------- ------------------- --------------------- --------------------
Rental Income                            $    1,681,000      $    1,710,000       $     1,749,000       $     1,739,000
Cost of Operations (including
 management fees and depreciation)       $      501,000      $      498,000       $       497,000       $       521,000
Net Income                               $    1,172,000      $    1,205,000       $     1,255,000       $     1,256,000
Net Income Per Limited Partner Unit      $        44.70      $        45.30       $         47.75       $         43.20
Distributions                            $    1,077,000      $    1,159,000       $     1,158,000       $     1,535,000

</TABLE>

                                      F-10
<PAGE>
                        PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

8.       COMMITMENTS AND CONTINGENCIES


         Serrao v. Public Storage, Inc. (filed April 2003) (Superior Court -
         --------------------------------------------------------------------
         Orange County)
         --------------

                  The  plaintiff in this case filed a suit against PSI on behalf
         of a putative class of renters who rented  self-storage units from PSI.
         Plaintiff  alleges  that PSI  misrepresented  the  size of its  storage
         units,  has brought  claims under  California  statutory and common law
         relating  to  consumer  protection,   fraud,  unfair  competition,  and
         negligent   misrepresentation,   and  is  seeking   monetary   damages,
         restitution, and declaratory and injunctive relief.

                  The claim in this case is  substantially  similar  to those in
         Henriquez  v.  Public  Storage,  Inc.,  which  was  disclosed  in prior
         reports.  In January 2003, the plaintiff caused the Henriquez action to
         be dismissed.

                  Based upon the  uncertainty  inherent  in any  putative  class
         action, PSI cannot presently  determine the potential damages,  if any,
         or the ultimate  outcome of this  litigation.  On November 3, 2003, the
         court granted PSI's motion to strike the plaintiff's  nationwide  class
         allegations  and to limit any putative  class to  California  residents
         only. In August 2005,  PSI filed a motion to remove the case to federal
         court,  but the case has been  remanded to the Superior  Court.  PSI is
         vigorously  contesting  the claims  upon  which this  lawsuit is based,
         including class certification efforts.

         Brinkley et al v. Public Storage, Inc. (filed April, 2005) (Superior
         ---------------------------------------------------------------------
         court of California - Los Angeles County)
         -----------------------------------------

                  The  plaintiff  sued PSI on  behalf  of a  purported  class of
         California  non-exempt  employees based on various  California wage and
         hour laws and seeking  monetary damages and injunctive  relief.  In May
         2006,  a motion for class  certification  was filed  seeking to certify
         five subclasses. Plaintiff sought certification for alleged meal period
         violations,  rest period  violations,  failure to pay for travel  time,
         failure  to pay  for  mileage  reimbursement,  and for  wage  statement
         violations. In October 2006, the Court declined to certify three out of
         the five subclasses.  The Court did, however,  certify subclasses based
         on alleged  meal  period and wage  statement  violations.  The  maximum
         potential  liability  cannot  presently  be  estimated.  PSI intends to
         vigorously   contest  the  substantive  merits  of  the  two  remaining
         subclasses that were  certified.  PSI does not believe that this matter
         will have any material  adverse  effect on the results of operations of
         the Partnership.

         Other Items
         -----------

                  PSI  and  the  Partnership  are a  party  to  various  claims,
         complaints,  and other  legal  actions  that have  arisen in the normal
         course of business from time to time, that are not described  above. We
         believe  that it is unlikely  that the  outcome of these other  pending
         legal  proceedings  including  employment  and  tenant  claims,  in the
         aggregate,  will have a material  adverse effect upon the operations or
         financial position of the Partnership.



                                      F-11
<PAGE>


<TABLE>
<CAPTION>

                         Public Storage Properties, Ltd.
             Schedule III - Real Estate and Accumulated Depreciation
                      For the year ended December 31, 2006

                                                                              Gross Carrying Amount
                                Initial Cost                                   at December 31, 2006
                          -----------------------                     -----------------------------------

                                        Building,  Costs Subsequent to           Building,
                                        Land Imp &    construction               Land Imp &                Accumulated      Date
        Description          Land       Equipment   (Improvements)      Land     Equipment      Total      Depreciation   Completed
----------------------- ------------- ------------ ----------------- ---------- ------------ ----------- --------------- -----------

<S>                         <C>          <C>            <C>            <C>          <C>        <C>              <C>          <C>
Pasadena                    $327,000     $515,000       306,000        327,000      821,000    1,148,000        779,000      08/78
Whittier - El Monte          166,000      763,000       389,000        134,000    1,184,000    1,318,000      1,141,000      07/78
Fremont                      112,000      741,000       382,000        112,000    1,123,000    1,235,000      1,098,000      11/78
Milpitas                     198,000      649,000       352,000        195,000    1,004,000    1,199,000        853,000      11/78
Wilmington                   815,000    1,336,000       700,000        815,000    2,036,000    2,851,000      1,937,000      08/78
Sun Valley                   329,000      611,000       350,000        329,000      961,000    1,290,000        925,000      10/78
Corona                       155,000      757,000       354,000        155,000    1,111,000    1,266,000      1,031,000      12/78
Norco                         95,000      456,000       200,000         95,000      656,000      751,000        603,000      12/78
North Hollywood              314,000      553,000       316,000        314,000      869,000    1,183,000        802,000      12/79
                        ------------- ------------ ----------------- ---------- ------------ ----------- ---------------

                          $2,511,000   $6,381,000     3,349,000      2,476,000    9,765,000   12,241,000      9,169,000
                        ============= ============ ================= ========== ============ =========== ===============

</TABLE>

                                      F-12
<PAGE>


                         Public Storage Properties, Ltd.
             Schedule III - Real Estate and Accumulated Depreciation
                                   (continued)


         Reconciliation of Real Estate Cost and Accumulated Depreciation


                                 COST RECONCILIATION

                                                     2006             2005
                                               --------------- ----------------

Balance at the beginning of the year            $ 12,098,000     $  12,050,000

Additions during the year: Improvements              143,000            48,000
                                               --------------- ----------------

Balance at the close of the year                $ 12,241,000     $  12,098,000
                                               =============== ================

                       ACCUMULATED DEPRECIATION RECONCILIATION

                                                      2006             2005

Balance at the beginning of the year            $   9,004,000    $   8,823,000

Additions during the year: Depreciation               165,000          181,000
                                               --------------- ----------------

Balance at the close of the year                $   9,169,000    $   9,004,000
                                               =============== ================

(a)  The  aggregate  depreciable  cost  prior  to  depreciation  of real  estate
     (excluding land) for Federal income tax purposes is $9,382,000 (unaudited).





                                      F-13