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

                                    FORM 10-K

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

For the fiscal year ended December 31, 1995

                                       or

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

For the transition period from      to
                              ------   ------

Commission File Number 0-8676
                       ------
                        PUBLIC STORAGE PARTNERS II, LTD.
             (Exact name of registrant as specified in its charter)

         California                                             95-3146963
-------------------------------                          ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                           Identification Number)

       600 N. Brand Boulevard
       Glendale, California                                     91203  
---------------------------------------                      ---------
(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. Yes X No

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

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE
<PAGE>

                                     PART I

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

General
-------

     Public  Storage  Partners II, Ltd. (the  "Partnership")  is a publicly held
limited  partnership formed under the California Uniform Limited Partnership Act
in November,  1976.  The  Partnership  raised  $4,945,000  in gross  proceeds by
selling 9,890 units of limited  partnership  interest ("Units") in an intrastate
offering,  available only to California residents,  which commenced in February,
1977 and was completed in August 1977. The  Partnership  was formed to engage in
the business of developing and operating storage space for personal and business
use ("mini-warehouses").

     In 1995,  there were a series of mergers among Public  Storage  Management,
Inc. (which was the Partnership's mini-warehouse operator), Public Storage, Inc.
(which was the  Partnership's  general partner) ("Old PSI") 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
organized as a California  corporation.  In the PSMI Merger,  Storage  Equities,
Inc.'s  name was  changed  to Public  Storage,  Inc.  ("PSI")  and PSI  acquired
substantially  all of PSMI's United States real estate operations and became the
general  partner  of the  Partnership  and  the  operator  of the  Partnership's
mini-warehouse properties.

     The Partnership's general partner is PSI (the "General Partner").  B. Wayne
Hughes  ("Hughes") is chairman of the board and chief executive  officer of PSI,
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 the
executive  officers and directors of PSI, including Hughes. The limited partners
of the  Partnership  have no right to participate in the operation or conduct of
its business and affairs.

     The  Partnership's  objectives  are  to  (i)  maximize  the  potential  for
appreciation  in  value  of  the  Partnership's  properties  and  (ii)  generate
sufficient cash flow from operations to pay all expenses,  including the payment
of interest to  Noteholders.  All of the  properties  were  financed in October,
1986.

     The term of the  Partnership is until all properties have been sold and, in
any event, not later than September 30, 2036.

Investment in Facilities
------------------------

     At  December  31,  1995,  the  Partnership   owned  four  properties.   The
Partnership purchased its last property in October, 1977.

     The  Partnership  believes that its operating  results have  benefited from
favorable   industry   trends  and  conditions.   Notably,   the  level  of  new
mini-warehouse  construction  has decreased since 1988 while consumer demand has
increased.  In  addition,  in recent  years  consolidation  has  occurred in the
fragmented mini-warehouse industry.

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

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

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

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

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

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

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

     -    Capitalize on "Public Storage's name  recognition.  PSI, together with
          its predecessor, has more than 20 years of operating experience in the
          mini-warehouse    business,   and   is   the   largest   operator   of
          mini-warehouses  in the United  States.  In the past eight  years,  in
          excess of $56 million has been expended promoting the "Public Storage
          " name.  PSI believes  that its  marketing  and  advertising  programs
          improve its competitive  position in the market.  PSI believes that it
          is  the  only  mini-warehouse   operator  regularly  using  television
          advertising  in several  major  markets  around the  country,  and its
          in-house  Yellow  Pages  staff  designs and places  advertisements  in
          approximately  700  directories.  In addition,  PSI offers a toll-free
          referral system,  800-44-STORE,  which services  approximately 100,000
          calls per year from  potential  customers  inquiring as to the nearest
          Public Storage mini-warehouse.

     -    Maintain high occupancy levels and increase realized rents. Subject to
          market conditions,  the Partnership generally seeks to achieve average
          occupancy levels in excess of 90% and to eliminate promotions prior to
          increasing  rental  rates.  Average  occupancy  for the  Partnership's
          mini-warehouses  has  increased  from  80% in  1994  to  84% in  1995.
          Realized  monthly rents per square foot decreased from $.90 in 1994 to
          $.86 in 1995.  The  Partnership  has  increased  rental  rates in many
          markets where it has achieved high occupancy  levels and eliminated or
          minimized promotions.

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

     -    Professional property operation.  In addition to the approximately 120
          support personnel at the Public Storage corporate  offices,  there are
          approximately  2,700  on-site  personnel  who  manage  the  day-to-day
          operations of the mini-warehouses in the Public Storage system.  These
          on-site personnel are supervised by 107 district managers, 14 regional
          managers and three  divisional  managers (with an average of 12 years'
          experience in the mini-warehouse industry) who report to the president
          of  the  mini-warehouse   property  operator  (who  has  11  years  of
          experience  with  the  Public  Storage  organization).  PSI  carefully
          selects and extensively  trains the operational and support  personnel
          and offers them a progressive career path. See "Property Operation."


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

     The    Partnership's    mini-warehouses    are    managed    by   PSI   (as
successor-in-interest  to PSMI) under a Management  Agreement  (as amended,  the
"Management  Agreement",   which  term  shall  include  the  Amended  Management
Agreement dated as of February 21, 1995).  PSI has informed the Partnership that
it is the largest mini-warehouse facility operator in the United States in terms
of both number of facilities and rentable space operated.

     Under the supervision of the Partnership,  PSI coordinates the operation of
the  facilities,  establishes  rental  policies  and  rates,  directs  marketing
activity and 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  resident  managers,   assistant
managers, relief managers, and billing and maintenance personnel. Some or all of
these employees may be employed on a part-time basis and may also be employed by
other persons,  partnerships,  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 they operate.  Facilities  operated
by PSI  have  historically  carried  comprehensive  insurance,  including  fire,
earthquake, liability and extended coverage.

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

     The Partnership's  facilities are typically advertised via signage,  yellow
pages,  flyers  and  broadcast  media  advertising  (television  and  radio)  in
geographic  areas in which many of the  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 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  except as  described
below.  The  General  Partner  believes  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  provides that the  Management  Agreement may be
terminated  without cause upon 60 days' written  notice by the  Partnership  and
upon seven years' written  notice by PSI. The  Management  Agreement may also be
terminated at any time by either party for cause, but if terminated for cause by
the Partnership,  the Partnership retains the right to use the service marks and
related designs until a date seven years after such termination.

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

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

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

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

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

Employees
---------

     There are 4 persons who render  services on behalf of the  Partnership on a
full-time basis, and 11 persons who render services on a part-time basis.  These
persons include resident managers,  assistant  managers,  relief managers,  area
managers, and administrative and maintenance personnel.


ITEM 2.   PROPERTIES.
          ----------
     The following  table sets forth  information  as of December 31, 1995 about
properties owned by the Partnership:
<TABLE>
<CAPTION>

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

California
----------
<S>               <C>            <C>             <C>           <C>              <C>    

Eagle Rock         3.65          70,000           687           Oct. 21,        Apr. 1978
                   acres         sq. ft.                           1977

Long Beach         3.32          70,000           702           July 22,        Dec. 1977
                   acres         sq. ft.                           1977

Los Angeles        3.14          59,000           569           Mar. 17,         May 1978
                   acres         sq. ft.                           1978

San Dimas          2.93          54,000           547            Aug. 3,        Dec. 1977
                   acres         sq. ft.                           1977
</TABLE>

     The weighted  average  occupancy levels for the  mini-warehouse  facilities
were 84% and 80% in 1995 and 1994.

     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.  During 1995, the Partnership  completed
environmental  assessments  of its  properties  to  evaluate  the  environmental
condition of, and potential environmental liabilities of such properties.  These
assessments  were performed by an  independent  environmental  consulting  firm.
Based on the assessments, the Partnership has expensed, as of December 31, 1995,
an estimated $10,000 for known environmental remediation requirements.

     The properties are held subject to encumbrances which are described in this
report under Note 7 of the Notes to the  Financial  Statements  included in Item
14(a).

ITEM 3.  LEGAL PROCEEDINGS.
         ------------------
         No material legal proceeding is pending against 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 1995.

                                     PART II


ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED STOCKHOLDER 
        MATTERS.
       ------------------------------------------------------------------
     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 Partner monitors transfers of the Units (a) because the admission of the
transferee as a substitute  limited partner  requires the consent of the General
Partner 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 Partner (and its  predecessor-in-interest)
and Hughes have  purchased  Units.  However,  the General  Partner does 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 certain  limited
partnership  interests,  including  the  prices at which  such  secondary  sales
transactions are effectuated.

     Exclusive  of the  General  Partner's  interest in the  Partnership,  as of
December 31, 1995, there were approximately 468 record holders of Units.

     In October 1995, Old PSI and Hughes completed a cash tender offer, in which
Old PSI  acquired  3,000  Units  and  Hughes  acquired  864  Units of the  9,890
outstanding  limited partnership Units in the Partnership at $267 per Unit. As a
result of the PSMI Merger, PSI owns all of the Units that were owned by Old PSI,
and PSI has an  option  to  acquire  all of the  Units  owned by  Hughes.  As of
February  29,  1996,  PSI and Hughes owned an aggregate of 4,100 Units (41.5% of
the Units).

     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  deductions  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. In the fourth quarter of 1990, quarterly distributions
were  discontinued  to enable the  Partnership  to  increase  its  reserves  for
principal repayments that commenced in 1992.

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

                        PUBLIC STORAGE PARTNERS II, LTD.

ITEM 6.    SELECTED FINANCIAL DATA.
           -----------------------

                                                                        
<TABLE>
<CAPTION>
For the Year Ended
December 31,                    1995                1994               1993                1992             1991    
------------                    ----                ----               ----                ----             ----    
                                                                                                                    
                                                                                                                    
<S>                            <C>                  <C>                <C>                <C>              <C>  
Revenues (2)                  $2,242,000           $2,187,000         $2,532,000          $2,265,000       $2,228,000
                                                                                                                    
Depreciation and                                                                                                    
  amortization                   148,000              139,000            139,000             136,000          131,000
                                                                                                                    
Interest expense                 950,000            1,026,000          1,199,000           1,184,000        1,201,000
                                                                                                                    
Net income                       533,000              433,000            588,000             347,000          347,000
                                                                                                                    
Limited partners' share          528,000              428,000            582,000             343,000          343,000
                                                                                                                    
General partner's share            5,000                5,000              6,000               4,000            4,000
                                                                                                                    
Limited partners'                                                                                                   
  per unit data (1):                                                                                                
                                                                                                                    
   Net income                      53.29                43.28              58.85               34.68            34.68


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

Cash and cash
  equivalents                 $       -            $  159,000         $   90,000         $   275,000      $   572,000

Total assets                  $2,585,000           $2,813,000         $2,806,000         $ 3,625,000      $ 3,438,000

Notes payable                 $8,602,000           $9,384,000         $9,815,000         $11,188,000      $11,373,000

</TABLE>
(1)  Per unit  data is based  on the  weighted  average  number  of the  limited
     partnership units (9,890) outstanding during the period.
(2)  Revenues for the years ended  December 31, 1993 and 1995,  include gains on
     sale of marketable securities of an affiliate of $312,000 ($31.26 per unit)
     and $21,000 ($2.10 per Unit), respectively.

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

Results of Operations
---------------------

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994:   
     The  Partnership's  net income in 1995 was $533,000 compared to $433,000 in
1994, representing an increase of $100,000. This increase is primarily due to an
increase in property net operating  income  combined with a decrease in interest
expense offset by environmental cost incurred in 1995.

     During 1995,  property net  operating  income  (rental  income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $8,000 from $1,489,000 in 1994 to $1,497,000 in 1995. This increase is
primarily  attributable to an increase in rental  revenues at the  Partnership's
mini-warehouse  facilities  partially  offset by increases in cost of operations
and depreciation expense.

     Rental  income was  $2,211,000  in 1995  compared  to  $2,182,000  in 1994,
representing an increase of $29,000. This increase was primarily attributable to
increased  occupancies at the  Partnership's  real estate  facilities.  Weighted
average  occupancy  levels at the  mini-warehouses  were 84% and 80% in 1995 and
1994,  respectively.  The average  monthly  realized rent per square foot at the
mini-warehouses was $0.86 in 1995 compared to $0.72 in 1994.

     In November  1995,  the  Partnership  sold its  marketable  securities  for
$89,000 and realized a gain on the sale of $21,000.

     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.  During the fourth quarter of 1995, the
Partnership  completed  environmental  assessments of its properties to evaluate
the environmental condition of, and potential environmental  liabilities of such
properties.  These  assessments  were performed by an independent  environmental
consulting  firm.  Based on the  assessments,  the Partnership  expensed,  as of
December  31, 1995  $10,000 for known  environmental  remediation  requirements.
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.

     Cost of operations  (including  management  fees paid to an affiliate)  was
$566,000 and $554,000 in 1995 and 1994,  respectively,  representing an increase
of $12,000,  or 2%. This  increase was  primarily  attributable  to increases in
payroll  cost,  and  management  fees  paid to an  affiliate  as a result  of an
increase in rental revenues.

     Interest   expense  was   $950,000  and   $1,026,000   in  1995  and  1994,
respectively,  representing  a decrease  of  $76,000,  or 8%. The  decrease  was
primarily a result of a reduction  in the average  outstanding  debt  balance in
1995 compared to 1994.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993:

     The  Partnership's  net income was $433,000 in 1994 compared to $588,000 in
1993,  representing a decrease of $155,000. This decrease was primarily a result
of the gain on sale of  marketable  securities  totaling  $312,000 in 1993.  The
Partnership's  net income before the gain on sale of marketable  securities  was
$276,000  in 1993;  therefore,  prior to  recognition  of the gain,  net  income
increased in 1994 by $157,000 or 57%.  This increase was primarily a result of a
decrease in interest expense,  partially offset by decreases in rental and other
income.

     During 1994,  property net  operating  income  (rental  income less cost of
operations,  management  fees paid to an  affiliate  and  depreciation  expense)
increased $2,000 from $1,487,000 in 1993 to $1,489,000 in 1994. This increase is
primarily  attributable  to a decrease  in cost of  operations  that  exceeded a
decrease in rental revenues at the Partnership's mini-warehouse facilities.

     Rental  income was  $2,182,000  in 1994  compared  to  $2,192,000  in 1993,
representing a decrease of $10,000. This decrease was primarily  attributable to
an  overall  decrease  in  occupancy  levels at the  Partnership's  real  estate
facilities.  The weighted average occupancy levels at the  mini-warehouses  were
80%  compared  to  86%  for  the  years  ended   December  31,  1994  and  1993,
respectively.  The  monthly  average  realized  rent  per  square  foot  for the
mini-warehouse facilities was $0.72 in 1994 and 1993.

     Cost of  operations  (including  management  fees) was $554,000 in 1994 and
$566,000  and 1993,  representing  a decrease  of  $12,000.  This  decrease  was
primarily  attributable to a decrease in advertising expenses,  partially offset
by increased payroll expenses.

     Other income  decreased by $23,000 in 1994 compared to 1993.  This decrease
was principally  due to the reduction in dividend income from the  Partnership's
investment in  marketable  securities.  The  reduction in dividend  income was a
result of the sale of such securities in 1993.

     Interest  expense was  $1,026,000  in 1994  compared to $1,199,000 in 1993,
representing  a  decrease  of  $173,000  or 14%.  This  decrease  was  primarily
attributable to a decrease in overall debt,  largely resulting from a $2,000,000
paydown of principal  made in conjunction  with a modification  of loan terms on
the mortgage note payable in September 1993.

Liquidity and Capital Resources
-------------------------------

     Cash flow from operating  activities ($621,000 in 1995) has been sufficient
to meet all current obligations of the Partnership. During 1996, the Partnership
anticipates approximately $87,000 of capital improvements compared to $87,000 in
1995, $45,000 in 1994 and $45,000 in 1993.

     In January 1996 the Partnership  obtained a $230,000 loan from PSI to repay
and  terminate the  unsecured  note payable from Wells Fargo Bank.  The PSI loan
bears  interest  at the prime rate plus 1%,  payable  monthly,  in  addition  to
monthly principal payments of $17,708.

     At December 31,  1994,  the  Partnership  held 5,000 shares of common stock
(marketable  securities)  with a fair value of $72,000 (cost basis of $68,000 at
December 31, 1994) in Public  Storage,  Inc. In November 1995,  the  Partnership
sold its marketable securities in Public Storage, Inc. for $89,000. The proceeds
from  the  sale  were  used to  make an  unscheduled  principal  payment  on the
Partnership's notes payable.

     In November 1995, the Management Agreement was amended to provide that upon
demand from PSI or PSMI made prior to December 15, 1995, the Partnership  agreed
to prepay (within 15 days after such demand) up to 12 months of management  fees
(based on the management fees for the comparable period during the calendar year
immediately preceding such prepayment) discounted at the rate of 14% per year to
compensate for early payment. In December 1995, the Partnership prepaid, to PSI,
8 months of 1996 management fees at a cost of $83,000. The amount is included in
prepaid expenses on the Balance Sheet at December 31, 1995 and will be amortized
as management fee expense in 1996.

     In the fourth quarter of 1990, quarterly distributions were discontinued to
enable the  Partnership  to increase its reserves for  principal  payments  that
commenced in 1990.

     The  distributions  to the limited partners and general partner for each of
the prior years were as follows:

      1977                                         $    88,000
      1978                                             394,000
      1979                                             706,000
      1980                                             843,000
      1981                                           1,032,000
      1982                                           1,087,000
      1983                                           1,128,000
      1984                                           1,481,000
      1985                                           1,800,000
      1986                                          13,352,000
      1987                                             369,000

     Distributions  to limited  partners  and  general  partner  for prior years
(continued):

      1988                                             400,000
      1989                                             417,000
      1990                                             283,000
      1991                                                -
      1992                                                -
      1993                                                -
      1994                                                -
      1995                                                -

     During  1987,  the  Partnership  financed  all  of  its  facilities  with a
$12,075,000  loan.  Proceeds of $11,920,000  were distributed to the partners in
October  1986 and are included in the 1986  distribution.  At December 31, 1995,
the outstanding balance of the mortgage note was $8,356,000.

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 14(a).

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
       DISCLOSURE.
       ------------------------------------------------------------------------
     None.


                                    PART III

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

     The Partnership has no directors or executive officers.

     The Partnership's general partner is PSI. PSI, acting through its directors
and  executive  officers,  including  Mr.  Hughes,  manage  and make  investment
decisions for the Partnership.


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


         Name                            Positions with PSI
-------------------------  ----------------------------------------------------
B. Wayne Hughes            Chairman of the Board and Chief Executive Officer
Harvey Lenkin              President and Director
Ronald L. Havner, Jr.      Senior Vice President and Chief Financial Officer
Hugh W. Horne              Senior Vice President
Obren B. Gerich            Senior Vice President
Marvin M. Lotz             Senior Vice President
Mary Jayne Howard          Senior Vice President
David Goldberg             Senior Vice President
John Reyes                 Vice President and Controller
Sarah Hass                 Vice President and Secretary
Robert J. Abernethy        Director
Dann V. Angeloff           Director
William C. Baker           Director
Uri P. Harkham             Director
Berry Holmes               Director

B. Wayne Hughes,  age 62, 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 has been a director of Storage  Properties,  Inc. ("SPI"),  a real estate
investment  trust whose  investment  adviser is PSI, since 1989. Since 1990, Mr.
Hughes has been  Chairman  of the Board of Public  Storage  Properties  X, Inc.,
Public Storage  Properties XI, Inc., Public Storage Properties XII, Inc., Public
Storage Properties XIV, Inc., Public Storage Properties XV, Inc., Public Storage
Properties  XVI, Inc.,  Public Storage  Properties  XVII,  Inc.,  Public Storage
Properties  XVIII,  Inc.,  Public Storage  Properties XIX, Inc.,  Public Storage
Properties XX, Inc.,  Partners Preferred Yield,  Inc.,  Partners Preferred Yield
II, Inc. and  Partners  Preferred  Yield III,  Inc.  (collectively,  the "Public
Storage  Properties   REITs"),   real  estate  investment  trusts  organized  by
affiliates PSMI. Mr. Hughes has been active in the real estate  investment field
for over 25 years.

Harvey Lenkin,  age 59, became President and a director of PSI in November 1991.
He has been President of the Public Storage  Properties REITs since 1990. He was
President  of PSMI  from  January  1978  until  September  1988,  when he became
Chairman of the Board of PSMI, and assumed overall responsibility for investment
banking and investor  relations.  In 1989,  Mr.  Lenkin  became  President and a
director of SPI.

Ronald L. Havner, Jr., age 38, a certified public accountant,  became an officer
of PSI in 1990,  Chief  Financial  Officer in  November  1991,  and Senior  Vice
President of PSI in November  1995. He was an officer of PSMI from 1986 to 1995,
and Chief  Financial  Officer of PSMI and its  affiliates  from 1991 to November
1995.  Mr.  Havner has been an officer of SPI since  1989,  and Chief  Financial
Officer of SPI since  November  1991. He has been a Vice President of the Public
Storage  Properties  REITs since 1990, and was Controller  from 1990 to November
1995 when he became Chief Financial Officer.

Hugh W.  Horne,  age 51,  has been a Vice  President  of PSI since  1980 and was
Secretary of PSI from 1980 until February 1992, and became Senior Vice President
of PSI in November  1995. He was an officer of PSMI from 1973 to November  1995.
He is responsible for managing all aspects of property  acquisition for PSI. Mr.
Horne has been a Vice  President  of SPI since 1989,  and of the Public  Storage
Properties REITs since 1993.

Obren B. Gerich,  age 56, a certified public accountant and certified  financial
planner,  has been a Vice  President of PSI since 1980,  and became  Senior Vice
President of PSI in November 1995. He was Chief  Financial  Officer of PSI until
November 1991. Mr. Gerich was an officer of PSMI from 1975 to November 1995. Mr.
Gerich has been Vice  President and  Secretary of SPI since 1989,  and was Chief
Financial  Officer of SPI until  November  1991. He has been Vice  President and
Secretary  of the Public  Storage  Properties  REITs since  1990,  and was Chief
Financial Officer until November 1995.

Marvin M. Lotz,  age 53, has had  overall  responsibility  for Public  Storage's
mini-warehouse  operations  since 1988. He became a Senior Vice President of PSI
in  November  1995.  Mr.  Lotz was an  officer of PSMI with  responsibility  for
property acquisitions from 1983 until 1988.

Mary Jayne Howard,  age 50, has had overall  responsibility for Public Storage's
commercial  property  operations  since  December 1985. She became a Senior Vice
President of PSI in November 1995.

David  Goldberg,  age 46,  joined  PSMI's  legal  staff in June 1991,  rendering
services  on  behalf  of the  Partnership  and  PSMI.  He  became a Senior  Vice
President and General  Counsel of PSI in November 1995. From December 1982 until
May 1991,  he was a partner in the law firm of Sachs & Phelps,  then  counsel to
PSI and PSMI.

John Reyes, age 34, a certified public accountant,  joined PSMI in 1990, and has
been the  Controller  of PSI since 1992.  He became a Vice  President  of PSI in
November 1995. From 1983 to 1990, Mr. Reyes was employed by Ernst & Young.

Sarah Hass, age 40, became  Secretary of PSI in February 1992. She became a Vice
President of PSI in November  1995.  She joined PSMI's legal  department in June
1991,  rendering  services on behalf of PSI and PSMI.  From 1987 until May 1991,
her  professional  corporation  was a partner in the law firm of Sachs & Phelps,
then  counsel to PSI and PSMI,  and from  April  1986  until June 1987,  she was
associated  with that  firm,  practicing  in the area of  securities  law.  From
September 1979 until  September  1985, Ms. Hass was associated with the law firm
of Rifkind & Sterling, Incorporated.

Robert J.  Abernethy,  age 55, is  President  of American  Standard  Development
Company  and of  Self-Storage  Management  Company,  which  develop  and operate
mini-warehouses.   Mr.   Abernethy   has  been  a  director  of  PSI  since  its
organization.  He is a member of Johns Hopkins University and of the Los Angeles
County Metropolitan  Transportation  Authority, and a former member of the board
of directors of the Metropolitan Water District of Southern California.

Dann V.  Angeloff,  age 60, is President of the  Angeloff  Company,  a corporate
financial  advisory firm. The Angeloff Company has rendered,  and is expected to
continue to render,  financial  advisory and securities  brokerage  services for
PSI. Mr.  Angeloff is the general partner of a limited  partnership  that owns a
mini-warehouse  operated  by PSI,  and which  secures a note owned by PSI..  Mr.
Angeloff has been a director of PSI since its organization.  He is a director of
Compensation Resource Group, Datametrics Corporation,  Nicholas/Applegate Growth
Equity Fund,  Nicholas/Applegate  Investment Trust, Royce Medical Company,  Seda
Specialty Packaging Corp. and SPI.

William C. Baker,  age 62, became a director of PSI in November 1991. 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.  Since January 1992, he has been Chairman and Chief Executive Officer of
Carolina Restaurant Enterprises,  Inc., a franchisee of Red Robin International,
Inc.  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 Santa  Anita  Realty
Enterprises, Inc., Santa Anita Operating Company and Callaway Golf Company.

Uri P. Harkham,  age 47, 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 and Australia.

Berry Holmes,  age 65, is a private investor.  Mr. Holmes has been a director of
PSI since  its  organization.  He was  President  and a  director  of  Financial
Corporation  of Santa  Barbara and Santa  Barbara  Savings and Loan  Association
through  1983  and  was  a  consultant  with  Santa  Barbara  Savings  and  Loan
Association during 1984. Mr. Holmes is a director of SPI.

     Pursuant  to  Articles  16  and  22 of the  Partnership's  Certificate  and
Agreement  of  Limited  Partnership,   a  copy  of  which  is  included  in  the
Partnership's  prospectus included in the Partnership's  Registration  Statement
File No. 2-57750,  the General Partner  continues to serve until (i) retirement,
withdrawal,  adjudication  of  bankruptcy,  insolvency or  dissolution,  or (ii)
removal by a majority vote of the limited partners.

     Each  director of PSI serves  until he resigns or is removed from office by
the  shareholders  of 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 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.

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
Partner and their affiliates.

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

     (a) At February 29, 1996, the following persons  beneficially owned more 
         than 5% of the Units:
<TABLE>

                         Name and Address
Title of Class           of Beneficial Owners               Beneficial Ownership           Percent of Class
--------------           --------------------               --------------------           ----------------

<S>                      <C>                               <C>                             <C>  
Units of Limited         Public Storage, Inc.               4,100 Units (1)                41.5%
Partnership              600 North Brand Boulevard
Interest                 Glendale, California 91203

Units of Limited         B. Wayne Hughes                    865 Units (2)                  8.7%
Partnership              600 North Brand Boulevard
Interest                 Glendale, California 91203
</TABLE>

(1)  Includes  (i) 3,236  Units owned by PSI as to which PSI has sole voting and
     dispositive  power  and (ii) 864 Units  which PSI has an option to  acquire
     (together with other  securities) from B. Wayne Hughes as trustee of the B.
     W. Hughes Living Trust and as to which PSI has sole voting power  (pursuant
     to an irrevocable proxy) and no dispositive power.

(2)  Units owned by B. Wayne Hughes as trustee of the B. W. Hughes  Living Trust
     as to which Mr. Hughes has sole dispositive  power and no voting power; PSI
     has an option to acquire these Units and an irrevocable proxy to vote these
     Units (see footnote 1 above).


     (b)   The Partnership has no officers and directors.

     The  General  Partner  (or its  predecessor-in-interest)  have  contributed
$101,010 to the capital of the Partnership  and as a result  participates in the
distributions  to the  limited  partners  and in the  Partnership's  profits and
losses in the same proportion that the General  Partner's  capital  contribution
bears to the total  capital  contribution.  Information  regarding  ownership of
Units by PSI , the General Partner, and Hughes, a director and executive officer
of PSI,  is set forth under  section  (a) above.  The  directors  and  executive
officers of PSI (including Hughes), as a group (15 persons), own an aggregate of
890 Units,  representing 9.0% of the Units (including the 864 Units beneficially
owned by Hughes as set forth above.).


     (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 the  general  partner and that the  general  partner  may  designate a
successor with the consent of a majority of the limited partners.

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

     The  Partnership  Agreement  provides  that  the  General  Partner  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.  During 1995, there were no incentive  distributions paid
by the Partnership.

     The    Partnership    has   a   Management    Agreement    with   PSI   (as
successor-in-interest  to PSMI). Under the Management Agreement, the Partnership
pays PSI (and  previously  paid PSMI) a fee of 6% of the gross  revenues  of the
mini-warehouse  spaces  operated  for the  Partnership.  In November  1995,  the
Management  Agreement  was amended to provide  that upon demand from PSI or PSMI
made prior to December 15, 1995,  the  Partnership  agreed to prepay  (within 15
days  after  such  demand)  up to 12 months  of  management  fees  (based on the
management fees for the comparable  period during the calendar year  immediately
preceding such prepayment)  discounted at the rate of 14% per year to compensate
for early payment.  In December 1995, the Partnership  prepaid, to PSI, 8 months
of 1996 management fees at a cost of $83,000.  During 1995, the Partnership paid
or accrued fees of $115,000 to PSMI and $16,000 to PSI (including the prepayment
described  above)  pursuant to the  Management  Agreement  with  respect to 1995
management fees (i.e., exclusive of the prepayment described below).



                                     PART IV

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

          (a)    List of Documents filed as part of the Report.
                 1.  Financial Statements. See Index to Financial Statements 
                     and Financial Statement Schedules.

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

                 3.  Exhibits: See Exhibit Index contained herein.

                         (b) Reports on Form 8-K: No reports on Form 8-K were
                             filed during the last quarter of fiscal 1995.

                         (c) Exhibits:  See Exhibit Index contained herein.


<PAGE>

                        PUBLIC STORAGE PARTNERS II, LTD.

                                  EXHIBIT INDEX
                                  (Item 14(c))


3.1       Amended Certificate and Agreement of Limited  Partnership.  Previously
          filed with the Securities and Exchange Commission as an exhibit to the
          Registrant's  Registration Statement of Form 10, filed on May 1, 1978,
          and incorporated herein by reference.

10.1      Amended  Management  Agreement dated February 21, 1995 between Storage
          Equities,  Inc. and Public Storage  Management,  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, 1994 and incorporated herein by reference.

10.2      Loan documents dated October 7, 1986 between the Partnership and Aetna
          Life  Insurance  Company.  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,  1993 and  incorporated
          herein by reference.

10.3      Modified  loan   documents   dated   September  1,  1993  between  the
          Partnership and Aetna Life Insurance  Company.  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, 1993 and incorporated herein by reference.

10.4      Loan documents  dated March 17, 1994 between the Partnership and Wells
          Fargo  Bank.   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, 1994 and  incorporated  herein by
          reference.

10.5      Loan  documents  dated  January 26, 1996 between the  Partnership  and
          Public Storage, Inc. Filed herewith.

27        Finaancial Data Schedule. Filed herewith.


                                   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 PARTNERS II, LTD. 
                                          a California  Limited  Partnership
Dated:  March 26, 1996                By: Public Storage, Inc., General Partner


                                      By:  /s/B. Wayne Hughes
                                         --------------------------------------
                                         B. Wayne Hughes, Chairman of the Board


     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.  
<TABLE>
<CAPTION>

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


<S>                      <C>                                               <C> 
/s/B. Wayne Hughes       Chairman of the Board and                         March 26, 1996
--------------------     Chief Executive Officer of Public Storage, Inc.
B. Wayne Hughes          (principal executive officer)
                       

/s/Harvey Lenkin         President and Director                            March 26, 1996
--------------------     of Public Storage, Inc.
Harvey Lenkin          


/s/Ronald L. Havner, Jr. Senior Vice President and Chief Financial         March 26, 1996
--------------------     Officer of Public Storage, Inc.
Ronald L. Havner, Jr.    (principal financial officer)
                     

/s/John Reyes            Vice President and Controller of Public           March 26, 1996
--------------------     Storage, Inc. (principal accounting officer)
John Reyes             


/s/Robert J. Abernethy   Director of Public Storage, Inc.                  March 26,  1996
--------------------
Robert J. Abernethy


/s/Dann V. Angeloff      Director of Public Storage, Inc.                  March 26,  1996
--------------------
Dann V. Angeloff


/s/William C. Baker      Director of Public Storage, Inc.                  March 26,  1996
--------------------
William C. Baker



/s/Uri P. Harkham        Director of Public Storage, Inc.                  March 26,  1996
--------------------
Uri P. Harkham



/s/Berry Holmes          Director of Public Storage, Inc.                  March 26,  1996
--------------------
Berry Holmes

</TABLE>
<PAGE>

                        PUBLIC STORAGE PARTNERS II, LTD.

                                    INDEX TO
                              FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE
                                  (Item 14 (a))


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

Report of Independent Auditors                                           F-1


Financial Statements and Schedule:


  Balance Sheets as of December 31, 1995 and 1994                        F-2

  For the years ended December 31, 1995, 1994 and 1993:
    Statements of Income                                                 F-3

    Statements of Partners' Deficit                                      F-4

    Statements of Cash Flows                                             F-5

  Notes to Financial Statements                                       F-6 - F-9


  Schedule for the years ended December 31, 1995,
    1994, and 1993:

   III - Real Estate and Accumulated Depreciation                   F-10 -  F11





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



                         Report of Independent Auditors




The Partners
Public Storage Partners II, Ltd.


We have audited the  accompanying  balance sheets of Public Storage Partners II,
Ltd. as of December  31, 1995 and 1994,  and the related  statements  of income,
partners' deficit and cash flows for each of the three years in the period ended
December 31, 1995. Our audits also included the schedule  listed in the index at
item 14(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  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Public Storage  Partners II,
Ltd. at December 31, 1995 and 1994,  and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.  Also, in our opinion,
the related  financial  statement  schedule,  when considered in relation to the
basic  financial  statements  taken as a whole,  presents fairly in all material
respects the information set forth therein.





                                               ERNST & YOUNG LLP

February 27, 1996
Los Angeles, California
<PAGE>


                        PUBLIC STORAGE PARTNERS II, LTD.
                                 BALANCE SHEETS
                           December 31, 1995 and 1994

<TABLE>
<CAPTION>

                                                              1995                 1994
                                                              ----                 ----

                                     ASSETS
                                     ------

<S>                                                     <C>                    <C>        
Cash and cash equivalents                               $       -              $   159,000
Marketable securities of affiliate
      (cost of $68,000 in 1994)                                 -                   72,000
Rent and other receivables                                     23,000               32,000

Real estate facilities at cost:
      Building, land improvements and equipment             3,281,000            3,194,000
      Land                                                  1,267,000            1,267,000
                                                          -----------          ------------
                                                            4,548,000            4,461,000

      Less accumulated depreciation                        (2,265,000)          (2,117,000)
                                                          -----------          ------------
                                                            2,283,000            2,344,000
                                                          -----------          ------------

Other assets                                                  279,000              206,000
                                                          -----------          ------------

           Total assets                                   $ 2,585,000          $ 2,813,000
                                                          -----------          ------------


                        LIABILITIES AND PARTNERS' DEFICIT
                        ---------------------------------

Accounts payable                                          $    35,000          $     10,000
Deferred revenue                                               74,000                74,000
Note payable                                                8,602,000             9,384,000

Partners' deficit:
      Limited partners' deficit, $500 per
           unit, 10,000 units authorized, 9,890
           issued and outstanding                          (4,544,000)           (4,939,000)
      General partner's deficit                            (1,582,000)           (1,720,000)
      Unrealized gain on marketable
           securities                                              -                  4,000
                                                          -----------          ------------
 
           Total partners' deficit                         (6,126,000)           (6,655,000)
                                                          -----------          ------------

Total liabilities and partners' deficit                   $ 2,585,000          $  2,813,000
                                                          -----------          ------------

</TABLE>

<PAGE>

                        PUBLIC STORAGE PARTNERS II, LTD.
                              STATEMENTS OF INCOME
                       For each of the three years in the
                         period ended December 31, 1995
<TABLE>
<CAPTION>


                                                                   1995                 1994               1993    
                                                                   ----                 ----               ----    
REVENUES:

<S>                                                           <C>                   <C>                  <C>       
Rental income                                                 $2,211,000            $2,182,000           $2,192,000
Gain on sale of marketable securities                             21,000               -                    312,000
Other income                                                      10,000                 5,000               28,000
                                                               ---------             ---------            ---------
                                                               2,242,000             2,187,000            2,532,000
                                                               ---------             ---------            ---------


COSTS AND EXPENSES:

Cost of operations                                               432,000               423,000              434,000
Management fees paid to affiliates                               134,000               131,000              132,000
Depreciation and amortization                                    148,000               139,000              139,000
Administrative                                                    35,000                35,000               40,000
Environmental cost                                                10,000               -                    -
Interest expense                                                 950,000             1,026,000            1,199,000
                                                               ---------             ---------            ---------
                                                               1,709,000             1,754,000            1,944,000
                                                               ---------             ---------            ---------

NET INCOME                                                  $    533,000          $    433,000          $   588,000
                                                               ---------             ---------            ---------

Limited partners' share of net income
($53.89 per unit in 1995, $43.28 per unit in 1994,
and $58.85 per unit in 1993)                                $    527,000          $    428,000          $   582,000

General partner's share of net income                              6,000                 5,000                6,000
                                                               ---------             ---------            ---------

                                                             $   533,000          $    433,000          $   588,000
                                                               ---------             ---------            ---------
</TABLE>
<PAGE>

                        PUBLIC STORAGE PARTNERS II, LTD.
                         STATEMENTS OF PARTNERS' DEFICIT
                       For each of the three years in the
                         period ended December 31, 1995
<TABLE>
<CAPTION>

                                                                               Unrealized
                                                                                 Gain on
                                                Limited        General         Marketable
                                                Partners       Partner         Securities                    Total  
                                                --------       -------         ----------                    -----  

<S>                                         <C>             <C>              <C>                       <C>          
Balance at December 31, 1992                $ (5,697,000)   $ (1,983,000)    $       -                 $ (7,680,000)

Net income                                       582,000           6,000             -                      588,000

Equity transfer                                 (145,000)        145,000             -                         -   

Balance at December 31, 1993                  (5,260,000)     (1,832,000)            -                   (7,092,000)

Unrealized gain on marketable
       Securities (Note 2)                       -              -                        4,000                4,000

Net income                                       428,000           5,000              -                     433,000

Equity transfer                                 (107,000)        107,000               -                       -   


Balance at December 31, 1994                  (4,939,000)     (1,720,000)                4,000           (6,655,000)

Sale of marketable securities (Note 2)           -              -                       (4,000)              (4,000)

Net income                                       528,000           5,000              -                     533,000

Equity transfer                                 (133,000)        133,000               -                       -   


Balance at December 31, 1995                $ (4,544,000)    $ (1,582,000)     $      -                $ (6,126,000)
</TABLE>
<PAGE>

                        PUBLIC STORAGE PARTNERS II, LTD.
                            STATEMENTS OF CASH FLOWS
                       For each of the three years in the
                         period ended December 31, 1995

<TABLE>
                                                                  1995                 1994                  1993  
                                                                  ----                 ----                  ----  
Cash flows from operating activities:

<S>                                                          <C>                   <C>                  <C>        
      Net income                                             $   533,000           $   433,000          $   588,000

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

        Depreciation and amortization                            148,000               139,000              139,000
        Gain on sale of marketable securities                    (21,000)              -                   (312,000)
        Decrease (increase) in rent and other receivables          9,000                (6,000)              93,000
        Write off prepaid loan fees                               11,000                47,000               70,000
        (Increase) decrease in other assets                      (84,000)               (1,000)              13,000
        Increase (decrease) in accounts payable                   25,000                 1,000               (8,000)
        Decrease in advance payments from renters                 -                    -                    (26,000)
                                                             -----------           -----------          -----------

           Total adjustments                                      88,000               180,000              (31,000)
                                                             -----------           -----------          -----------

           Net cash provided by operating activities             621,000               613,000              557,000
                                                             -----------           -----------          -----------

Cash flows from investing activities:

      Proceeds from sale of marketable securities                 89,000               (68,000)             828,000
      Additions to real estate facilities                        (87,000)              (45,000)             (45,000)
                                                             -----------           -----------          -----------

           Net cash (used in) provided by investing activities     2,000              (113,000)             783,000
                                                             -----------           -----------          -----------

Cash flows from financing activities:

      Increase in prepaid financing fees                          -                    -                   (152,000)
      Proceeds from note payable to bank                          -                    850,000               -
      Proceeds from note payable to affiliate                     -                    -                    950,000
      Principal payments on note payable to affiliate             -                   (850,000)            (100,000)
      Principal payments on notes payable                       (782,000)             (431,000)          (2,223,000)
                                                             -----------           -----------          -----------

           Net cash used in financing activities                (782,000)             (431,000)          (1,525,000)
                                                             -----------           -----------          -----------

Net (decrease) increase in cash and cash equivalents            (159,000)               69,000             (185,000)

Cash and cash equivalents at the beginning of the year           159,000                90,000              275,000
                                                             -----------           -----------          -----------

Cash and cash equivalents at the end of the year             $   -                 $   159,000           $   90,000
                                                             -----------           -----------          -----------

Supplemental schedule of non-cash
    investing and financing activities:

      Increase in fair value of
          marketable securities of affiliate                 $   -                 $    (4,000)          $       -
                                                             -----------           -----------          -----------

      Unrealized gain on marketable
          securities of affiliate                            $   -                 $     4,000           $       -
                                                             -----------           -----------          -----------
</TABLE>

<PAGE>

                         PUBLIC STORAGE PARTNERS II, LTD

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1995
                                       F-8


1.     DESCRIPTION OF PARTNERSHIP

     Public Storage  Partners II, Ltd. (the  "Partnership")  was formed with the
proceeds of a public offering.  The general partner in the Partnership is Public
Storage,  Inc.,  formerly known as Storage  Equities,  Inc. In 1995, there was a
series  of  mergers  among  Public  Storage  Management,  Inc.  (which  was  the
Partnership's mini-warehouse property operator), Public Storage, Inc. (which was
the Partnership's general partner) and their affiliates (collectively,  "PSMI"),
culminating in the November 16, 1995 merger of PSMI into Storage Equities, Inc.,
a real estate  investment  trust listed on the New York Stock  Exchange.  In the
PSMI merger,  Storage Equities,  Inc.'s name was changed to Public Storage, Inc.
("PSI") and PSI became the general  partner of the  Partnership and the operator
of the Partnership's mini-warehouse properties.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

       Mini-Warehouse 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, 1995 and 1994 to develop mini-warehouse 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 depreciated on the
straight-line basis over estimated useful lives of 25 and 5 years, respectively.

       Allocation of Net Income:
       -------------------------
     The general partner's 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  partner's 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 (9,890) outstanding during the period.

       Cash and Cash Equivalents:
       --------------------------
     For financial  statement  purposes,  the  Partnership  considers all highly
liquid investments  purchased with a maturity of three months or less to be cash
equivalents.


       Marketable Securities:
       ----------------------
     Marketable  securities  at December  31, 1994  consisted of 5,000 shares of
common stock of PSI. The  Partnership had designated its portfolio of marketable
securities as being available for sale.  Accordingly,  at December 31, 1994, the
Partnership has recorded the marketable securities at fair value, based upon the
closing  quoted price of the securities at December 31, 1994, and has recorded a
corresponding  unrealized gain in partners' equity.  The Partnership  recognized
$4,000 in dividends in both 1995 and 1994. In November 1995 the Partnership sold
its 5,000 shares of common stock of PSI, and recognized a gain totaling  $21,000
on the sale.

       Other Assets:
       -------------
     Included  in other  assets are  deferred  financing  costs of  $72,000.  In
addition, deferred financing costs of approximately $11,000, $47,000 and $70,000
relating to the  pre-modified  mortgage loan were expensed during 1995, 1994 and
1993, respectively, and included in interest expense.



2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
       (CONTINUED)

       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.  During 1995, the Partnership  completed
environmental  assessments  of its  properties  to  evaluate  the  environmental
condition of, and potential environmental liabilities of such properties.  These
assessments  were performed by an  independent  environmental  consulting  firm.
Based on the assessments,  the Partnership expensed, as of December 31, 1995, an
estimated $10,000 for known  environmental  remediation  requirements.  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.

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) be distributed at least quarterly.  Cash  distributions have
been suspended  since the fourth quarter of 1990 in order to build cash reserves
for future debt service payments.

4.     PARTNERS' EQUITY

     The general  partner has a 1.1% interest in the  Partnership.  In addition,
the general partner has an 8% interest in all 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  partner has a 25%  interest in all cash  distributions
(including sale and financing proceeds). In 1984, the limited partners recovered
all of their initial  investment.  All subsequent cash  distributions  are being
made 25.83%  (including the 1.1% interest) to the general  partner and 74.17% to
the limited  partners.  Transfers of equity are made periodically to conform 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.

     Concurrent with the financing of the Partnership's properties in 1986 (Note
7), the  Partnership  made a special  distribution  totaling  $11,920,000 to the
partners.  This special distribution had no effect on the Partnership's  taxable
income,  however,  resulted in a deficit in the  limited  and general  partner's
equity accounts.

5.     RELATED PARTY TRANSACTIONS

     The    Partnership    has   a   Management    Agreement    with   PSI   (as
successor-in-interest  to PSMI). Under the terms of the agreement,  PSI operates
the mini-warehouse  facilities for a fee equal to 6% of the facilities'  monthly
gross revenue (as defined).

     In November 1995, the Management Agreement was amended to provide that upon
demand from PSI or PSMI made prior to December 15, 1995, the Partnership  agreed
to prepay (within 15 days after such demand) up to 12 months of management  fees
(based on the management fees for the comparable period during the calendar year
immediately preceding such prepayment) discounted at the rate of 14% per year to
compensate for early payment. In December 1995, the Partnership prepaid, to PSI,
8 months of 1996 management fees at a cost of $83,000. The amount is included in
other assets on the Balance  Sheet at December 31, 1995 and will be amortized as
management fee expense in 1996.



6.     TAXES BASED ON INCOME

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

     Taxable net income was $556,000,  $446,000 and $577,000 for the years ended
December 31, 1995, 1994 and 1993,  respectively.  The difference between taxable
net income and net income is primarily related to depreciation expense resulting
from difference in depreciation methods.

7.     NOTES PAYABLE

     Notes payable at December 31, 1995 and 1994 consist of the following:

                                                         1995             1994
                                                      ----------      ----------
 10.3152% (9% after November 1, 1996)
 mortgage note payable to an insurance company
 with principal and interest due monthly,
 remaining principal due November 2002                $8,356,000      $8,676,000

 Unsecured note payable, bearing interest at
 1% above bank's prime rate interest payable
 monthly, and requiring $50,000 monthly principal
 payments; remaining principal due April 1998            246,000         708,000
                                                      ----------      ----------

                                                      $8,602,000      $9,384,000
                                                      ----------      ----------

     During  1986,  the  Partnership  financed  all  of  its  properties  with a
$12,075,000,  ten year nonrecourse note secured by the Partnership's properties.
In September 1993, the General Partner and the lender agreed to modify the terms
of the mortgage note payable, which the General Partner believed to be favorable
to the  Partnership.  Under the modified terms (i) the interest rate was reduced
from 10.3152% to 9.00% (effective  November 1, 1996), and (ii) the maturity date
was  extended  from  November  1, 1996 to November 1, 2002 and (iii) the monthly
debt service  payments  (principal  and interest)  were reduced from $112,400 to
$100,000 based on a 25 year amortization period.

     To obtain the mortgage note modifications,  the Partnership was required to
make an initial  prepayment of principal totaling  $2,000,000.  In order to make
such  prepayment,  the Partnership  used funds from cash reserves,  the proceeds
from a sale of marketable  equity  securities,  and the proceeds from a $950,000
loan from PSI. The related unsecured  promissory note bore interest at a rate of
10% (which is less than the interest rate on the  pre-modified  mortgage  note),
with  interest only  payments due monthly.  Principal  payments of $100,000 were
made in 1993,  and the  remaining  principal  balance was repaid  with  proceeds
obtained from a term loan with Wells Fargo Bank in March 1994.


7.     NOTES PAYABLE (CONTINUED)

     On March 17,  1994,  the  Partnership  obtained an $850,000  term loan from
Wells Fargo Bank.  The loan,  which matures on April 1, 1998,  bears interest at
the bank's prime rate plus 1% (payable monthly),  and requires monthly principal
payments  totaling  $17,708.  Proceeds  from the loan were used to repay the 10%
unsecured  promissory  note due to PSI.  The terms of the Wells  Fargo Bank loan
require  compliance  by  the  Partnership  with  certain  financial   covenants,
including the  maintenance  of a debt coverage  ratio,  as defined.  In December
1995, the Partnership made an unscheduled  principal payment of $250,000.  As of
December 31, 1995, the Partnership was in compliance with all financial covenant
requirements.

     The principal  repayment schedule of the above notes payable as of December
31, 1995, is as follows:

   1996                        $     533,000
   1997                              532,000
   1998                              545,000
   1999                              596,000
   2000                              652,000
   Thereafter                      5,744,000
                                   ---------
                                $  8,602,000
                                ============

     Interest paid on the notes was $939,000,  $977,000 and  $1,107,000  for the
years ended December 31, 1995, 1994 and 1993, respectively.

8.     SUBSEQUENT EVENT

     In January 1996 the Partnership  obtained a $230,000 loan from PSI to repay
and  terminate the  unsecured  note payable from Wells Fargo Bank.  The PSI loan
bears  interest  at the prime rate plus 1%,  payable  monthly,  in  addition  to
monthly principal payments of $17,708.


                        Public Storage Partners II, Ltd.

             Schedule III - Real Estate and Accumulated Depreciation

<TABLE>


                                                                   Cost
                                                                 subsequent to          Gross Carrying Amount
                                         Initial Cost            Acquisition             at December 31, 1995
                                     ---------------------                        ------------------------------------           
Description       Encumbrance        Land        Buildings     (Improvements)     Land           Buildings       Total        
-----------       -----------        ----        ---------     --------------     ----           ---------       -----        

<S>               <C>              <C>             <C>            <C>               <C>             <C>            <C>        
Eagle Rock             -        $   531,000     $  758,000     $   130,000       $  531,000      $ 888,000      $1,419,000    
Long Beach             -            343,000        727,000         106,000          343,000        833,000       1,176,000    
Los Angeles            -            298,000        686,000         156,000          298,000        842,000       1,140,000    
San Dimas              -             95,000        584,000         134,000           95,000        718,000         813,000   
                ------------    -----------    -----------     -----------       ----------     ----------    ------------   
 
Total           $8,356,000(1)   $ 1,267,000    $ 2,755,000     $   526,000       $1,267,000     $3,281,000    $  4,548,000   
                ============    ===========    ===========     ===========       ==========     ==========    ============   

(1) All four  properties  are  encumbered by a promissory  note.  The $8,356,000
listed  above is the  principal  balance  remaining  on the note at December 31,
1995.
</TABLE>
<TABLE>
                  
                  
                          Accumulated          Date
Description               Depreciation        Acquired
-----------               ------------        --------

<S>                      <C>                 <C> 
Eagle Rock            $   610,000            4/78
Long Beach                584,000           12/77
Los Angeles               577,000            5/78
San Dimas                 494,000           12/77
                       ----------
 
Total                  $2,265,000
                       ==========

</TABLE>
<PAGE>


                        Public Storage Partners II, Ltd.

                           Real Estate Reconciliation

                            Schedule III (continued)



(a)  The  following  is  a  reconciliation  of  costs  and  related  accumulated
depreciation:
<TABLE>

                                      COST

                                                        1995                 1994              1993 

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

<S>                                                 <C>                 <C>               <C>        
Balance at the beginning of the period              $ 4,461,000         $ 4,416,000       $ 4,371,000

Additions during the period

         Improvements                                    87,000              45,000            45,000

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

Balance at the close of the period                  $ 4,548,000         $ 4,461,000       $ 4,416,000
                                                    -----------         -----------       -----------




                     ACCUMULATED DEPRECIATION RECONCILIATION


                                                        1995                 1994            1993    
                                                    -----------         -----------       -----------

Balance at the beginning of the period              $ 2,117,000          $ 1,978,000      $ 1,839,000

Additions during the period

         Depreciation                                   148,000              139,000          139,000

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

Balance at the close of the period                  $ 2,265,000          $ 2,117,000      $ 1,978,000
                                                    -----------         -----------       -----------
</TABLE>