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, 2004 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  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                [ X ] Yes [ ] No

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 the
Form 10-K. [ X ]

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act)

                                Yes [ ] No [ X ]

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant as of June 30, 2004:

Limited Partner Units, $500.00 Par Value - $9,590,000 (computed on the basis of
$1,264.22 per unit which was the highest reported sale price prior to the
quarter ended June 30, 2004).

The number of units outstanding of the registrant's classes of common equity as
of March 25, 2005:

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

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE


<PAGE>

                                     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 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.

                                       2
<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  making any additional  investments  other than
maintenance  capital  expenditures  and  does  not  anticipate  liquidating  the
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.  These investments
     are  in  real  estate  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 257 to
1,089 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.

                                       3

<PAGE>

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

         The Partnership's self-storage facilities are operated by PSI under the
"Public  Storage" 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, together with its
     predecessor,  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 achieve average
     occupancy  levels  in excess of 92% and to  eliminate  promotions  prior to
     increasing   rental  rates.   Average   occupancy  for  the   Partnership's
     self-storage  facilities  was 92% and 90% in 2004 and  2003,  respectively.
     Annual  realized rents per occupied  square foot increased 3.2% from $13.43
     in 2003 to $13.86 in 2004.

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 4,100 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 others 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.

                                       4

<PAGE>

         The  Partnership's  facilities  are typically  advertised  via signage,
yellow pages, flyers and broadcast media advertising (i.e. television and radio)
in geographic areas in which many of the  Partnership's  facilities are located.
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" 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 14 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.

                                       5

<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 HAVE A SIGNIFICANT DEGREE OF CONTROL OVER THE
PARTNERSHIP.

         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  have a  significant  degree of control over
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,
2004.  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 some 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.

                                       6

<PAGE>

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.

         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 make 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.

         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.

         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  serious  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 reenacted
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.

                                       7

<PAGE>

         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, 2004 financial statements.

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

         The  following  table sets forth  information  as of December  31, 2004
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 (1)                    3.40 acres          40,000 sq. ft            373          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 (2)         3.28 acres          58,000 sq. ft.           532        Nov. 29, 1977          July 1978

</TABLE>


(1)  In the first quarter of 2000, the Partnership sold  approximately 2% of the
     land.

(2)  In the second quarter of 2000, the Partnership  sold  approximately  19% of
     the land.

         The weighted average occupancy level for the self-storage facilities
was 90% during 2003 and 92% during 2004.

         As of December 31, 2004, the properties were not encumbered. See Note 7
to the Financial Statements included in Item 15(a).

         The Partnership does not have any agreements to buy or sell any real
estate nor does it expect to further develop any new or existing facilities
except for capital improvements.

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 Public Storage, Inc. on
behalf of a putative class of renters who rented  self-storage units from Public
Storage,  Inc.. Plaintiff alleges that Public Storage,  Inc.  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.

                                       8

<PAGE>

         Based upon the  uncertainty  inherent  in any  putative  class  action,
Public Storage,  Inc. cannot presently  determine the potential damages, if any,
or the  ultimate  outcome of this  litigation.  On November  3, 2003,  the court
granted Public Storage, Inc.'s motion to strike the plaintiff's nationwide class
allegations and to limit any putative class to California residents only. Public
Storage,  Inc. is  vigorously  contesting  the claims upon which this lawsuit is
based including class certification efforts.

         Salaam et al v. Public Storage,  Inc. (filed  February 2000)
         ------------------------------------------------------------
         (Superior Court - Sacramento  County);  Holzman et al v. Public Storage
         -----------------------------------------------------------------------
         Inc. (filed October 2004) (Superior Court - Sacramento County)
         --------------------------------------------------------------

         This action,  which was described in the  Partnership's  prior reports,
was disposed of in February 2005.

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

         Public  Storage  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, 2004.

                                       9

<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, 2004, there were approximately 600 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,                  2004               2003               2002               2001               2000
---------------------------------  ----------------   ----------------   ----------------   ---------------    ----------------
<S>                                <C>                <C>                <C>                <C>                <C>
Revenues                           $     6,593,000    $     6,246,000    $     5,938,000    $     6,006,000    $     5,401,000

Depreciation and
  amortization                             217,000            454,000            516,000            533,000            534,000


Interest expense                                 -                  -             14,000            221,000            415,000

Net income (2)                           4,475,000          3,977,000          3,729,000          3,643,000          2,997,000

Limited partners' share                  3,397,000          3,004,000          3,242,000          3,607,000          2,967,000

General partners' share                  1,078,000            973,000            487,000             36,000             30,000

Limited partners' per unit data (1):
  Net income (2)                           $169.85            $150.20            $162.10            $180.35            $148.35
  Cash Distributions                       $155.00            $140.00             $67.50               -                  -

As of December 31,
---------------------------------

Cash and cash equivalents          $     1,407,000    $     1,070,000    $       538,000    $       175,000    $       324,000

Total assets                       $     4,697,000    $     4,422,000    $     4,178,000    $     4,242,000    $     4,664,000

Notes payable                      $             -    $             -    $             -    $     2,000,000    $     6,025,000

</TABLE>

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

(2)  Net income for the year ended December 31, 2000 includes a gain relating to
     a sale of land totaling $136,000 ($5.05 per limited partnership unit).

                                       10

<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 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,
2004.  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.

         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.

                                       11

<PAGE>

         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 9 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, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003:

         The  Partnership's  net  income  in 2004  was  $4,475,000  compared  to
$3,977,000 in 2003, representing an increase of $498,000 or 13%. The increase is
primarily  attributable  to improved  property  operations at the  Partnership's
self-storage facilities.

         During 2004,  property net operating income (rental income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $491,000 or 12% from $4,015,000 in 2003 to $4,506,000 in 2004.

         Rental  income was  $6,537,000  in 2004 compared to $6,201,000 in 2003,
representing an increase of $336,000,  or 5%. The increase is attributable to an
increase in average  occupancy  at the  Partnership's  self-storage  facilities.
Weighted  average  occupancy  levels were 92% during 2004 compared to 90% during
2003. In addition,  the average annual  realized rent per square foot was $13.86
during 2004 compared to $13.43 during 2003.

         Cost of operations (including management fees paid to an affiliate) was
$1,814,000  and  $1,732,000  in 2004 and  2003,  respectively,  representing  an
increase of $82,000, or 5%. This increase is primarily attributable to increases
in repair and maintenance  expense,  payroll and management fees (as a result of
higher  revenues),  partially  offset  by  a  decrease  in  office  expense  and
advertising expenses.

         Depreciation  expense was $217,000 for the year ended December 31, 2004
compared to $454,000 for the same period in 2003.  The decrease in  depreciation
expense is primarily related to the Partnership's buildings which were placed in
service in 1978 and 1979  becoming  fully  depreciated.  We expect  depreciation
expense with respect to the original cost of buildings to decline  approximately
$20,000 in 2005  compared  to 2004  primarily  as a result of the  Partnership's
buildings becoming fully depreciated.

         YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002:

         The  Partnership's  net  income  in 2003  was  $3,977,000  compared  to
$3,729,000 in 2002,  representing an increase of $248,000 or 7%. The increase is
primarily  attributable  to improved  property  operations at the  Partnership's
self-storage facilities.

         During 2003,  property net operating income (rental income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $228,000 or 6% from $3,787,000 in 2002 to $4,015,000 in 2003.

         Rental  income was  $6,201,000  in 2003 compared to $5,900,000 in 2002,
representing an increase of $301,000,  or 5%. The increase is attributable to an
increase in average  occupancy  at the  Partnership's  self-storage  facilities.
Weighted  average  occupancy  levels were 90% during 2003 compared to 87% during
2002.  The average  annual  realized rent per square foot was $13.43 during 2003
compared to $13.69 during 2002.

                                       12

<PAGE>

         Cost of operations (including management fees paid to an affiliate) was
$1,732,000  and  $1,597,000  in 2003 and  2002,  respectively,  representing  an
increase  of  $135,000,  or 8%.  This  increase  is  primarily  attributable  to
increases in payroll,  property  taxes,  management  fees (as a result of higher
revenues) and insurance expenses, partially offset by a reduction in advertising
expenses.

         Depreciation  expense was $454,000 for the year ended December 31, 2003
compared to $516,000 for the same period in 2002.  The decrease in  depreciation
expense  is  primarily  related  to the  full  depreciation  of  several  of the
Partnership's buildings which were placed in service in 1978.

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

         Cash flow from  operating  activities of $4,664,000  for the year ended
December 31, 2004 have been  sufficient to meet all current  obligations  of the
Partnership.  During 2005, the Partnership anticipates  approximately $45,000 of
capital improvements compared to $152,000 in 2004, $205,000 in 2003 and $196,000
in 2002. Such enhancements will include new signs,  exterior color schemes,  and
improvements to the rental offices.

         During  October  1998,  the  Partnership  borrowed  $12,400,000  from a
commercial  bank to payoff  existing  notes.  Interest on the unsecured loan was
based on the London  Interbank  Offering Rate  ("LIBOR") plus a spread of 0.55%.
The loan  required  monthly  payments of interest  and matured on October  2002.
During the second quarter of 2002, the Partnership paid the loan in full without
premium or penalty.  The Partnership may borrow in the future with the intent of
using the proceeds to finance distributions to the limited and general 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  $3,100,000  (155.00 per unit) and
$1,075,000,  respectively,  for  the  year  ended  December  31,  2004.  We paid
distributions to the limited and general partners  totaling  $2,800,000  (140.00
per unit) and  $971,000,  respectively,  for the year ended  December  31, 2003.
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, 2004, 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.

                                       13

<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 2004, 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.

                                       14

<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:

<TABLE>
<CAPTION>

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

</TABLE>


         B. Wayne Hughes, age 71, a general partner of the Partnership, has been
a director of PSI since its  organization in 1980 and 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 of PSI in November 2002 and remains Chairman of the Board. Mr. Hughes is
currently  engaged in the acquisition and operation of commercial  properties in
California and in the acquisition and operation of mini-warehouses in Canada. He
was Chairman of the Board and Chief Executive Officer from 1990 until March 1998
of Public Storage Properties XI, Inc., which was renamed PS Business Parks, Inc.
("PSB"),  an  affiliated  REIT.  Mr.  Hughes has been  active in the real estate
investment  field for over 30 years.  He is the father of B. Wayne Hughes,  Jr.,
also a member of the PSI Board.

         Ronald L. Havner, Jr., age 47, has been Vice Chairman,  Chief Executive
Officer and a director of PSI since  November 2002. Mr. Havner has been Chairman
of PS Business Parks,  Inc. (PSB) since March 1998,  Chief Executive  Officer of
PSB from March 1998 until  August 2003 and  President  of PSB from March 1998 to
September  2002.  He is a member  of the  Board  of  Governors  of the  National
Association of Real Estate Investment Trusts (NAREIT) and a director of Business
Machine  Security,  Inc.,  The Mobile  Storage  Group,  and Union BanCal and its
primary subsidiary, Union Bank of California, N.A.

                                       15

<PAGE>

         Harvey  Lenkin,  age 68,  became  President  and a  director  of PSI in
November  1991.  Mr. Lenkin has been employed by PSI or its  predecessor  for 27
years.  He has been a director  of PS  Business  Parks  since March 1998 and was
President of PS Business  Parks from 1990 until March 1998.  He is a director of
Paladin  Realty Income  Properties  I, Inc., a director of  Huntington  Memorial
Hospital in Pasadena, California, and a former member of the Executive Committee
of the Board of Governors of the National  Association of Real Estate Investment
Trusts, Inc. (NAREIT).

         John Reyes, age 44, a certified public  accountant,  joined PSI in 1990
and was  Controller  of PSI from 1992 until  December  1996 when he became Chief
Financial  Officer.  He became a Vice  President  of PSI in November  1995 and a
Senior Vice President of PSI in December 1996.  From 1983 to 1990, Mr. Reyes was
employed by Ernst & Young.

         John S. Baumann,  age 44, became Senior Vice  President and Chief Legal
Officer of PSI in June 2003.  From 1998 to 2002,  Mr.  Baumann  was Senior  Vice
President  and  General  Counsel  of  Syncor   International   Corporation,   an
international  high technology health care services company.  From 1995 to 1998,
he was Associate General Counsel of KPMG LLP, an international  accounting,  tax
and consulting firm.

         John E. Graul,  age 53,  became Senior Vice  President  and  President,
Self-Storage  Operations,  for PSI in February 2004, with overall responsibility
for PSI's national  operations.  From 1992 until joining the Company,  Mr. Graul
was employed by  McDonald's  Corporation  where he served in various  management
positions,  most recently as Vice President and General Manager - Pacific Sierra
Region.

         David F. Doll, age 46, became Senior Vice President and President, Real
Estate  Group,  for PSI in February  2005,  with  responsibility  for PSI's real
estate  activities,   including   property   acquisitions,   developments,   and
repackagings.  Before joining PSI, Mr. Doll was Senior  Executive Vice President
of  Development  for  Westfield  Corporation,  a major  international  owner and
operator of shopping malls, where he was employed since 1995.

         B. Wayne Hughes, Jr., age 45 became 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  engaged  in the
acquisition   and   operation  of   commercial   property  in   California   and
mini-warehouses in Canada. He is the son of B. Wayne Hughes, Chairman of the PSI
Board.

         Robert J.  Abernethy,  age 65, has been President of American  Standard
Development  Company and of Self-Storage  Management Company and of Self-Storage
Management Company,  which develop and operate  self-storage  facilities,  since
1976 and 1977, respectively.  Mr. Abernethy has been a director of PSI since its
organization  in 1980.  He is a member of the board of trustees of Johns Hopkins
University, a director of the Los Angeles Music Center, a member of the Board of
Overseers  of the Los  Angeles  Philharmonic,  a  trustee  of  Loyola  Marymount
University,  a director  of the  Pacific  Council  on  International  Policy,  a
director of the Atlantic  Council,  a member of the Council on Foreign Relations
and a former California Transportation  Commissioner.  Mr. Abernethy is a former
member  of the  board  of  directors  of the  Los  Angeles  County  Metropolitan
Transportation  Authority  and of the  Metropolitan  Water  District of Southern
California, a former member of the California State Board of Education, a former
member of the California State Arts Council, a former Planning  Commissioner,  a
former  Telecommunications  Commissioner  and the  former  Vice-Chairman  of the
Economic  Development  Commission  of the City of Los  Angeles.  He  received an
M.B.A. from the Harvard University Graduate School of Business.

         Dann V. Angeloff, age 69, has been President of the Angeloff Company, a
corporate  financial  advisory firm,  since 1976. Mr.  Angeloff is currently the
general partner of a limited partnership that in 1974 purchased a mini-warehouse
operated by PSI. Mr. Angeloff has been a director of PSI since its  organization
in  1980.  He  is  a  director  of  Bjurman,  Barry  Fund,  Inc.,   Corporation,
Nicholas/Applegate  Fund,  ReadyPac  Foods,  Retirement  Capital  Group and Soft
Brands, Inc.

         William C. Baker,  age 71,  became a director of PSI in November  1991.
Mr.  Baker has been the Chairman and Chief  Executive  Officer of Calloway  Golf
Company since August 2004. 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, Mr. Baker was President of Red Robin  International,  Inc., an
operator and  franchiser of casual dining  restaurants  in the United States and
Canada.  From  January  1992  through  December  1995 he 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, he
was a principal  shareholder  and  Chairman and Chief  Executive  Officer of Del
Taco,  Inc., an operator and franchiser of fast food  restaurants in California.
Mr.  Baker is a director  of  LaQuinta,  Inc.,  California  Pizza  Kitchen,  and
Callaway Golf Company.

                                       16

<PAGE>

         John T. Evans,  age 66,  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  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 56,  became a director of PSI in March 1993.  Mr.
Harkham  has been the  President  and Chief  Executive  Officer of the  Jonathan
Martin  Fashion  Group,  which  specializes  in  designing,   manufacturing  and
marketing  women's  clothing,  since its  organization in 1976.  Since 1978, Mr.
Harkham has been the Chairman of the Board of Harkham Properties,  a real estate
firm specializing in buying and managing fashion warehouses in Los Angeles.

         Daniel C.  Staton,  age 52,  became a director  of PSI in March 1999 in
connection  with the merger of Storage  Trust Realty,  a real estate  investment
trust,  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 President of Walnut  Capital
Partners,  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. From 1981 to 1983, Mr. Staton was
a  principal  owner  of  Duke   Associates,   the  predecessor  of  Duke  Realty
Investments, Inc. Prior to joining Duke Associates in 1981, he was a partner and
general  manager of his own moving company,  Gateway Van & Storage,  Inc. in St.
Louis,  Missouri.  Form 1986 to 1988,  Mr.  Staton  served as  president  of the
Greater Cincinnati Chapter of the National  Association of Industrial and Office
Parks.

         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:  Robert J.
Abernethy  (Chairman),  John T. Evans,  and Daniel Staton.  The Board of PSI has
determined that Mr.  Abernethy  satisfies the audit committee  financial  expert
criteria  established  by the  SEC  and  the  accounting  or  related  financial
management expertise criteria established by the New York Stock Exchange (NYSE).
All members of the Audit  Committee are  independent  as that term is defined in
applicable SEC Rules and NYSE listing standards.

         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.

                                       17

<PAGE>

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

         (a) At March 25, 2005, 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

</TABLE>

(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%.

         (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.

                                       18

<PAGE>

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 2004, PSI and H-G Family Corporation received $860,000 and
$215,000,  respectively,  in  distributions  related to their general  partner's
ownership interests.

         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 2004,  2003 and 2002, the
Partnership paid fees of $392,000, $374,000 and $352,000,  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, 2004, 2003 and 2002 were  $79,000,  $52,000 and $38,000, respectively.

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

         Fees billed to the  Partnership  by Ernst & Young LLP for 2003 and 2004
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 $9,000 for 2003 and $8,000 in 2004.

         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 $7,000 in 2003 and $7,000 in 2004.

         Audit-Related  Fees and Other Fees:  During 2003 and 2004 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.

                                       19

<PAGE>

                                     PART IV

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

(a) List of Documents filed as part of the Report.

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

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

         3.  Exhibits: See Exhibit Index contained below.

(b) Exhibits: See Exhibit Index contained below.

(c) Not applicable.

                                       20

<PAGE>


                         PUBLIC STORAGE PROPERTIES, LTD.

                                  EXHIBIT INDEX

                                  (Item 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 PS
         Partners, Ltd.'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.

10.3     Credit   Agreement  dated  October  23,  1998  between  Public  Storage
         Properties,  Ltd.  and First  Union  Bank.  Previously  filed  with the
         Securities and Exchange  Commission as an exhibit to the  Partnership's
         Quarterly  Report on Form 10-Q for the quarter ended September 30, 1998
         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.

                                       21

<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 31, 2005          By:    Public Storage, Inc., General Partner

                                  By: /s/ Ronald L. Havner, Jr.
                                     -------------------------------------------
                                      Ronald L Havner, Jr., Vice Chairman of the
                                      Board and Chief Executive Officer 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.

                                       22

<PAGE>

<TABLE>
<CAPTION>

                      Signature                                             Capacity                                   Date
---------------------------------------                --------------------------------------------------         --------------
<S>                                                    <C>                                                        <C>
/s/ Ronald L. Havner Jr.                               Vice Chairman of the Board and Chief Executive             March 31, 2005
---------------------------------------                Officer of Public Storage, Inc., Corporate General
Ronald L. Havner, Jr.                                  Partner

/s/ B. Wayne Hughes                                    General Partner and Chairman of the Board of               March 31, 2005
---------------------------------------                Public Storage, Inc.

B. Wayne Hughes

/s/ Harvey Lenkin                                      President and Director of Public Storage, Inc.             March 31, 2005
---------------------------------------
Harvey Lenkin

/s/ John Reyes                                         Senior Vice President and Chief Financial Officer          March 31, 2005
---------------------------------------                of Public Storage, Inc. (principal financial
John Reyes                                             officer and principal accounting officer)

/s/ B. Wayne Hughes, Jr.                               Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
B. Wayne Hughes, Jr.

/s/ Robert J. Abernethy                                Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
Robert J. Abernethy

/s/ Dann V. Angeloff                                   Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
Dann V. Angeloff

                                                       Director of Public Storage, Inc.
---------------------------------------
William C. Baker

/s/ John T. Evans                                      Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
John T. Evans

/s/ Uri P. Harkham                                     Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
Uri P. Harkham

/s/ Daniel C. Staton                                   Director of Public Storage, Inc.                           March 31, 2005
---------------------------------------
Daniel C. Staton


</TABLE>

                                       23

<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, 2004 and 2003                      F-2

For the years ended December 31, 2004, 2003 and 2002:

     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.

                                       24

<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,  2004 and 2003,  and the related
statements of income,  comprehensive income, partners' equity and cash flows for
each of the three years in the period ended  December 31, 2004.  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, 2004 and 2003,  and the results of its  operations  and its cash
flows for each of the three years in the period  ended  December  31,  2004,  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 25, 2005
Los Angeles, California

                                      F-1

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                                 BALANCE SHEETS
                           December 31, 2004 and 2003

<TABLE>
<CAPTION>

                                                                         2004                   2003
                                                                    ----------------       ----------------
                                ASSETS

<S>                                                                 <C>                    <C>
Cash and cash equivalents                                           $     1,407,000        $     1,070,000
Rent and other receivables                                                   35,000                 47,000

Real estate facilities, at cost:
     Building, land improvements and equipment                            9,574,000              9,422,000
     Land                                                                 2,476,000              2,476,000
                                                                    ----------------       ----------------
                                                                         12,050,000             11,898,000

     Less accumulated depreciation                                       (8,823,000)            (8,606,000)
                                                                    ----------------       ----------------
                                                                          3,227,000              3,292,000

Other assets                                                                 28,000                 13,000
                                                                    ----------------       ----------------
Total assets                                                        $     4,697,000        $     4,422,000
                                                                    ================       ================

                   LIABILITIES AND PARTNERS' EQUITY

Accounts payable                                                    $        42,000        $        74,000
Deferred revenue                                                            183,000                176,000

Commitments and contingencies (Note 9)                                            -                      -

Partners' equity
    Limited partners' equity, $500 per unit, 20,000 units
       authorized, issued and outstanding                                 3,321,000              3,097,000
    General partners' equity                                              1,151,000              1,075,000
                                                                    ----------------       ----------------
     Total partners' equity                                               4,472,000              4,172,000
                                                                    ----------------       ----------------
Total liabilities and partners' equity                              $     4,697,000        $     4,422,000
                                                                    ================       ================

</TABLE>

                            See accompanying notes.
                                      F-2

<PAGE>


                         PUBLIC STORAGE PROPERTIES, LTD.
                              STATEMENTS OF INCOME
              For the years ended December 31, 2004, 2003 and 2002


<TABLE>
<CAPTION>

                                                             2004                   2003                   2002
                                                       ------------------     ------------------     -----------------
REVENUES:

<S>                                                    <C>                    <C>                    <C>
Rental income                                          $       6,537,000      $       6,201,000      $       5,900,000
Other income                                                      56,000                 45,000                 38,000
                                                       ------------------     ------------------     -----------------
                                                               6,593,000              6,246,000              5,938,000
                                                       ------------------     ------------------     -----------------
COSTS AND EXPENSES:

Cost of operations                                             1,422,000              1,358,000              1,245,000
Management fees paid to affiliate                                392,000                374,000                352,000
Depreciation                                                     217,000                454,000                516,000
Administrative                                                    87,000                 83,000                 82,000
Interest expense                                                       -                      -                 14,000
                                                       ------------------     ------------------     -----------------
                                                               2,118,000              2,269,000              2,209,000
                                                       ------------------     ------------------     -----------------
NET INCOME                                             $       4,475,000      $       3,977,000      $       3,729,000
                                                       ==================     ==================     =================

Limited partners' share of net income ($169.85 per
   unit in 2004, $150.20 per unit in 2003 and
   $162.10 per unit in 2002)                           $       3,397,000      $       3,004,000      $       3,242,000

General partners' share of net income                          1,078,000                973,000                487,000
                                                       ------------------     ------------------     -----------------
                                                       $       4,475,000      $       3,977,000      $       3,729,000
                                                       ==================     ==================     =================

</TABLE>

                            See accompanying notes.
                                      F-3

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                         STATEMENTS OF PARTNERS' EQUITY
              For the years ended December 31, 2004, 2003 and 2002


<TABLE>
<CAPTION>

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

<S>                                                <C>                  <C>                  <C>
Balance at December 31, 2001                       $      1,525,000     $        529,000     $      2,054,000

Net income                                                3,242,000              487,000            3,729,000

Distributions paid to partners                           (1,350,000)            (467,000)          (1,817,000)

Equity transfer                                            (473,000)             473,000                    -
                                                   -----------------    -----------------    -----------------
Balance at December 31, 2002                              2,944,000            1,022,000            3,966,000

Net income                                                3,004,000              973,000            3,977,000

Distributions paid to partners                           (2,800,000)            (971,000)          (3,771,000)

Equity transfer                                             (51,000)              51,000                    -
                                                   -----------------    -----------------    -----------------
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
                                                   =================    =================    =================

</TABLE>

                            See accompanying notes.
                                      F-4

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 2004, 2003 and 2002


<TABLE>
<CAPTION>

                                                                           2004              2003              2002
                                                                      ---------------   ---------------   ----------------
Cash flows from operating activities:

<S>                                                                   <C>               <C>               <C>
     Net income                                                       $    4,475,000    $    3,977,000    $    3,729,000

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

         Depreciation                                                        217,000           454,000           516,000
         Decrease in rent and other receivables                               12,000             2,000           108,000
         (Increase) decrease in other assets                                 (15,000)           37,000            (1,000)
         (Decrease) increase in accounts payable                             (32,000)           22,000            (4,000)
         Increase in deferred revenue                                          7,000            16,000            28,000
                                                                      ---------------   ---------------   ----------------
         Total adjustments                                                   189,000           531,000           647,000
                                                                      ---------------   ---------------   ----------------
         Net cash provided by operating activities                         4,664,000         4,508,000         4,376,000
                                                                      ---------------   ---------------   ----------------
Cash flows from investing activities:

     Additions to real estate facilities                                    (152,000)         (205,000)         (196,000)
                                                                      ---------------   ---------------   ----------------
         Net cash used in investing activities                              (152,000)         (205,000)         (196,000)
                                                                      ---------------   ---------------   ----------------
Cash flows from financing activities:

    Distributions paid to partners                                        (4,175,000)       (3,771,000)       (1,817,000)
    Principal payments on note payable to commercial bank                          -                 -        (2,000,000)
                                                                      ---------------   ---------------   ----------------
         Net cash used in financing activities                            (4,175,000)       (3,771,000)       (3,817,000)
                                                                      ---------------   ---------------   ----------------
Net increase in cash and cash equivalents                                    337,000           532,000           363,000

Cash and cash equivalents at the beginning of the year                     1,070,000           538,000           175,000
                                                                      ---------------   ---------------   ----------------
Cash and cash equivalents at the end of the year                      $    1,407,000    $    1,070,000    $      538,000
                                                                      ===============   ===============   ================

</TABLE>

                            See accompanying notes.
                                      F-5

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

1.       DESCRIPTION OF PARTNERSHIP

                  Public Storage Properties, Ltd. (the "Partnership") was formed
         with the  proceeds of a public  offering.  The general  partners in the
         Partnership  are Public  Storage,  Inc.  ("PSI")  and B.  Wayne  Hughes
         ("Hughes").  The Partnership owns nine self-storage  facilities located
         in California.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

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

                  Cost of land includes appraisal fees and legal fees related to
         acquisition  and  closing  costs.  Buildings,   land  improvements  and
         equipment  reflect costs incurred through December 31, 2004 and 2003 to
         develop and improve self-storage  facilities which provide self-service
         storage spaces for lease,  usually on a  month-to-month  basis,  to the
         general public.  The buildings and equipment are generally  depreciated
         on a straight-line  basis over estimated  useful lives of approximately
         25 and 5 years, respectively.

         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
         rental 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,
         interest  expense,  as well  as  television,  yellow  page,  and  other
         advertising expenditures are expensed as incurred.  Television,  yellow
         page, and other advertising expenditures totaled $226,000, $233,000 and
         $266,000  for the  years  ended  December  31,  2004,  2003  and  2002,
         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 investments with an original maturity of three months
         or less to be cash equivalents.

         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.

                                      F-6

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

         Impairment of Real Estate:
         --------------------------

                  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
         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, 2004.
         Certain  real  estate  facilities  have been in service  longer than 25
         years,  and  accordingly  these  buildings are fully  depreciated as of
         December 31, 2004.

                  Any  long-lived  assets  which we expect to sell or dispose of
         prior to their previously estimated useful life are stated at the lower
         of their  estimated net  realizable  value (less cost to sell) or their
         carrying value.

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

                  Substantially  all  of  the   Partnership's   facilities  were
         acquired   prior  to  the  time  that  it  was   customary  to  conduct
         environmental  investigations in connection with property acquisitions.
         Although there can be no assurance, the Partnership is not aware of any
         environmental   contamination  of  any  of  its  property  sites  which
         individually or in the aggregate would be material to the Partnership's
         overall business, financial condition, or results of operations.

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

                  As of March 25,  2005,  there  have been no recent  accounting
         pronouncements   and   guidance,   which   were   not   effective   for
         implementation  prior to December 31, 2004,  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.

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  improvement)  needs to be distributed at least
         quarterly.  Cash  distributions were suspended since the fourth quarter
         of 1990 until September 30, 2002,  because available cash flow was used
         to service debt. During 2003, we paid  distributions to the limited and
         general partners totaling  $2,800,000  ($140.00 per unit) and $971,000,
         respectively.  During 2004,  we paid  distributions  to the limited and
         general partners totaling  $3,100,000 (155.00 per unit) and $1,075,000,
         respectively. Future distribution rates may be adjusted to levels which
         are supported by operating cash flow after capital improvements and any
         other obligations.

                                      F-7

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

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

                  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 2004, 2003 and 2002,
         the Partnership paid PSI $392,000, $374,000 and $352,000, 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.  Joint costs
         are  allocated on a  methodology  meant to fairly  allocate such costs.
         Such  joint  costs  include  supervisory,  relief,  and  administrative
         personnel  costs,   television   advertising   expenses,   yellow  page
         advertising,  data processing, and insurance (including amounts paid to
         STOR-Re  and its  successor,  as  described  below).  The total of such
         expenses,   substantially   all  of  which  are  included  in  Cost  of
         Operations,  amounted to $636,000,  $624,000 and $581,000 for the years
         ended December 31, 2004, 2003, and 2002, respectively.

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

                  In  addition,   B.  Wayne  Hughes,   General  Partner  of  the
         "Partnership",  and Chairman of PSI and members of his family own 30.5%
         of the Limited  Partnership  units. PSI and its affiliates own 31.8% of
         the Limited Partnership units.

         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, 2004.

                                      F-8

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

                  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.  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):

                                                        2004 (a)         2003
                                                     ------------   ------------
                                                          (Amount in thousands)
   For the year ended December 31,
   ------------------------------------------------
   Premiums earned.................................  $     3,994    $    14,766
   Net investment income...........................          677            721
   Loss and loss adjustment expense................       (2,948)       (14,731)
   Other expenses..................................         (200)          (298)
                                                     ------------   ------------
      Net income (loss)............................  $     1,523    $       458
                                                     ============   ============
   At December 31,
   ------------------------------------------------
   Total assets (primarily cash and other            $    33,071    $    41,778
      investments).................................
   Liabilities for losses and loss adjustment             20,222         29,634
      expenses.....................................
   Other liabilities...............................            -          4,053
   Member's surplus................................       12,849          8,091

                  (a)  Effective  April  1,  2004,   STOR-Re  ceased   providing
         insurance for losses  occurring  after April 1, 2004, and was succeeded
         with respect to these  activities by PSIC-H,  a wholly owned subsidiary
         of PSI.  Accordingly,  premiums and associated loss expense for periods
         after March 31, 2004 are not included in this table.

                  Premiums  paid to the  captive  entities  for the years  ended
         December 31,  2004,  2003 and 2002 were  $79,000,  $52,000 and $38,000,
         respectively.

         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.

                  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.

                  Unaudited  taxable net income was  $4,505,000,  $4,081,000 and
         $3,863,000  for the  years  ended  December  31,  2004,  2003 and 2002,
         respectively.  The difference between taxable net income and net income
         is primarily related to depreciation  expense resulting from difference
         in depreciation methods.

                                      F-9
<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

7.       NOTES PAYABLE

                  During October 1998, the Partnership borrowed $12,400,000 from
         a commercial bank to payoff  existing notes.  Interest on the unsecured
         loan was based on the London  Interbank  Offering Rate ("LIBOR") plus a
         spread of 0.55%. The loan required monthly payments of interest. During
         the  second  quarter  of 2002,  the  Partnership  paid the loan in full
         without premium or penalty.

                  Interest paid during 2002 was $21,000. No interest was paid in
         2003 and 2004.

8.       SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                            -------------------------------------------------------------------------------
                                            March 31, 2004      June 30, 2004      September 30, 2004     December 31, 2004
                                            ----------------    --------------     ------------------     -----------------
<S>                                          <C>                <C>                  <C>                    <C>
Rental Income                                $    1,572,000     $    1,601,000       $     1,666,000        $     1,698,000
Cost of Operations (including management
 fees and depreciation)                      $      520,000     $      523,000       $       496,000        $       492,000
Net Income                                   $    1,039,000     $    1,063,000       $     1,166,000        $     1,207,000
 Net Income Per Limited Partner Unit         $        39.75     $        39.30       $         44.40        $         46.40
Distributions                                $      943,000     $    1,077,000       $     1,078,000        $     1,077,000


                                                                           Three Months Ended
                                            -------------------------------------------------------------------------------
                                            March 31, 2003      June 30, 2003      September 30, 2003     December 31, 2003
                                            ----------------    --------------     ------------------     -----------------
Rental Income                                $    1,503,000     $    1,543,000       $     1,577,000        $     1,578,000
Cost of Operations (including management
 fees and depreciation)                      $      550,000     $      588,000       $       550,000        $       498,000
Net Income                                   $      938,000     $      942,000       $     1,025,000        $     1,072,000
 Net Income Per Limited Partner Unit         $        34.80     $        34.95       $         39.05        $         41.40
 Distributions                               $      943,000     $      943,000       $       943,000        $       942,000

</TABLE>


9.       COMMITMENTS AND CONTINGENCIES

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

                  The  plaintiff  in  this  case  filed  a suit  against  Public
         Storage,  Inc.  on behalf of a  putative  class of  renters  who rented
         self-storage  units from Public Storage,  Inc..  Plaintiff alleges that
         Public Storage, Inc.  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,  Public Storage,  Inc. cannot presently determine the potential
         damages,  if  any,  or the  ultimate  outcome  of this  litigation.  On
         November 3, 2003,  the court granted Public  Storage,  Inc.'s motion to
         strike the plaintiff's  nationwide  class  allegations and to limit any
         putative class to California  residents only.  Public Storage,  Inc. is
         vigorously  contesting  the claims  upon  which  this  lawsuit is based
         including class certification efforts.

                                      F-10

<PAGE>

                         PUBLIC STORAGE PROPERTIES, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2004

         Salaam et al v. Public  Storage,  Inc.  (filed February 2000) (Superior
         -----------------------------------------------------------------------
         Court - Sacramento County); Holzman et al v. Public Storage, Inc.
         -----------------------------------------------------------------
         (filed October 2004) (Superior Court - Sacramento County)
         ---------------------------------------------------------

                  This action,  which was described in the  Partnership's  prior
         reports, was disposed of in February 2005.

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

                  Public  Storage,  Inc.  and the  Partnership  are  parties  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>


                         Public Storage Properties, Ltd.
             Schedule III - Real Estate and Accumulated Depreciation
                      For the year ended December 31, 2004

<TABLE>
<CAPTION>

                                                                                                 Gross Carrying Amount
                                     Initial Cost                                                 at December 31, 2004
                               ----------------------------                           ---------------------------------------------
                                               Building,    Costs Subsequent to                       Building,
                                              Land Imp &        construction                          Land Imp &
        Description               Land         Equipment       (Improvements)           Land          Equipment            Total
------------------------       ------------  -------------  -------------------       ------------    ------------      -----------
<S>                              <C>             <C>               <C>                  <C>              <C>             <C>
Pasadena                         $327,000        $515,000          $291,000             $327,000         $806,000        $1,133,000
Whittier - El Monte               166,000         763,000           379,000              134,000        1,174,000         1,308,000
Fremont                           112,000         741,000           375,000              112,000        1,116,000         1,228,000
Milpitas                          198,000         649,000           274,000              195,000          926,000         1,121,000
Wilmington                        815,000       1,336,000           680,000              815,000        2,016,000         2,831,000
Sun Valley                        329,000         611,000           334,000              329,000          945,000         1,274,000
Corona                            155,000         757,000           347,000              155,000        1,104,000         1,259,000
Norco                              95,000         456,000           195,000               95,000          651,000           746,000
North Hollywood                   314,000         553,000           283,000              314,000          836,000         1,150,000
                               ------------  -------------  -------------------       ------------    ------------      -----------
                               $2,511,000      $6,381,000        $3,158,000           $2,476,000       $9,574,000       $12,050,000
                               ============  =============  ===================       ============    ============      ===========

</TABLE>

<TABLE>
<CAPTION>





                               Accumulated         Date
        Description            Depreciation     Completed
------------------------       ------------     ---------
<S>                               <C>             <C>
Pasadena                          $759,000        08/78
Whittier - El Monte              1,081,000        07/78
Fremont                          1,079,000        11/78
Milpitas                           812,000        11/78
Wilmington                       1,879,000        08/78
Sun Valley                         903,000        10/78
Corona                             981,000        12/78
Norco                              566,000        12/78
North Hollywood                    763,000        12/79
                               ------------
                                $8,823,000
                               ============

</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

                                                  2004             2003
                                             --------------   -------------
Balance at the beginning of the period       $  11,898,000    $  11,693,000

Additions during the period: Improvements          152,000          205,000
                                             --------------   -------------
Balance at the close of the period           $  12,050,000    $  11,898,000
                                             ==============   =============

                       ACCUMULATED DEPRECIATION RECONCILIATION

                                                  2004             2003
                                             --------------   -------------
Balance at the beginning of the period       $   8,606,000    $   8,152,000

Additions during the period: Depreciation          217,000          454,000
                                             --------------   -------------
Balance at the close of the period           $   8,823,000    $   8,606,000
                                             ==============   =============

(a)      The aggregate  depreciable  cost prior to  depreciation  of real estate
         (excluding   land)  for  Federal  income  tax  purposes  is  $9,217,000
         (unaudited).

                                      F-13