SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

For the fiscal year ended December 31, 2005 or

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

For the transition period from                   to                  .

Commission File Number:     0-8908
                            ------

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

                California                                   95-3192402
 ----------------------------------------              ----------------------
      (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                   Identification Number)
 701 Western Avenue, Glendale, California                    91201-2349
 ----------------------------------------              ----------------------
 (Address of principal executive offices)                    (Zip Code)

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

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

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

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

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

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

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

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

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

  Large Accelerated Filer [ ] Accelerated Filer [ ] Non-accelerated Filer [X]

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

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates of the Registrant as of June 30, 2005:

Limited Partner Units, $500.00 Par Value - $29,102,000 (computed on the basis of
$1,926.00  per unit  which was the  highest  reported  sale  price  prior to the
quarter ended June 30, 2005).

                                       1

<PAGE>


The number of units outstanding of the registrant's  classes of common equity as
of March 30, 2006:

Units of Limited Partnership Interest, $500.00 Par Value - 40,000 units

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

                                       2

<PAGE>

                                     PART I

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

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

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

General
-------

         The Partnership is a publicly held limited partnership formed under the
California  Uniform  Limited  Partnership  Act in December 1977. The Partnership
raised  $20,000,000  in gross  proceeds  by  selling  40,000  units  of  limited
partnership interest ("Units") in an interstate offering, which commenced in May
1978 and completed in November 1978. The Partnership was formed to engage in the
business of developing  and operating  self-storage  facilities for personal and
business use.

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

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

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

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

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

                                       3

<PAGE>

         The term of the Partnership is until all properties have been sold and,
in any event, not later than December 31, 2038.

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

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

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

         o  Our investments consist of (i) 17 self-storage facilities,  (ii) 624
            shares  of Public  Storage,  Inc.  common  stock,  and (iii)  12,412
            depositary  shares of Public  Storage,  Inc. Series A, Equity Stock.
            All of these  investments are in real estate or real estate entities
            holding real estate located in the United States.  See "Self-storage
            Facilities"  and Item 2 "Properties"  for further  information.  The
            Partnership  distributed  substantially  all of the shares of Public
            Storage, Inc. common stock on a pro-rata basis to all unitholders of
            record as of January 1, 2005 on March 31,  2005.  These  investments
            were acquired both for income and capital gains.

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

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

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

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

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

         Self-storage facilities in which the Partnership has invested generally
consist  of  three  to  seven  buildings  containing  an  aggregate  of  between
approximately  265 to 985 storage spaces,  most of which have between 25 and 400
square feet and an interior height of approximately 8 to 12 feet.

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

         The Partnership's self-storage facilities are located in California and
Florida  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.

                                       4

<PAGE>

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

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

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

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

         o  Maintain high occupancy  levels and increase  annual realized rents.
            Subject to market  conditions,  the  Partnership  generally seeks to
            maximize  revenues  through  high  average  occupancy  levels and to
            eliminate  promotions  prior to  increasing  rental  rates.  Average
            occupancy for the Partnership's  self-storage facilities was 91% and
            92% in 2005  and  2004,  respectively.  Annual  realized  rents  per
            occupied  square  foot  increased  from  $13.83 in 2004 to $14.47 in
            2005.

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

         o  Professional  property  operation.  There  are  approximately  4,030
            persons who render services for the Public Storage system, primarily
            personnel engaged in property operations,  substantially all of whom
            are   employed  by  a  clearing   company  that   provides   certain
            administrative and cost-sharing  services to PSI and other owners of
            properties operated by PSI.

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

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

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

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

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

                                       5

<PAGE>

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

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

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

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

         One of the Partnership's real estate facilities is operated pursuant to
a management and performance agreement (the "Performance Agreement") with Public
Storage  Pickup and  Delivery,  LP  ("PSPUD"),  a subsidiary of PSI. See Item 13
below for more information.

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

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

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

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

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

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

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

Employees
---------

         There are approximately 25 persons who render services on behalf of the
Partnership. These persons include resident managers, assistant managers, relief
managers,  area managers,  and  administrative and maintenance  personnel.  Some
employees  may be  employed  on a  part-time  basis and may be employed by other
persons,  Partnerships,  REITs or other entities owning  facilities  operated by
PSI.

                                       6

<PAGE>

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

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

         THE GENERAL PARTNERS CONTROL THE PARTNERSHIP AS A GROUP.

         Public Storage is general partner and beneficially  owns  approximately
29.2% of our  outstanding  limited  partnership  units.  In  addition,  B. Wayne
Hughes,  General Partner of the Partnership,  and Chairman of PSI and members of
his family beneficially own 33.7% of the Limited Partnership units. As a result,
the General  Partners,  as a group,  control matters  submitted to a vote of our
unitholders,  including  amending our organizational  documents,  dissolving the
Partnership and approving other such transactions.

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

         Public Storage announced recently that it had entered into an agreement
to acquire  Shurgard Storage Centers,  Inc.  ("Shurgard"),  a publicly held REIT
that has interests in approximately 646 self-storage  facilities  located in the
United States and Europe.

         There would be no change in the financial  interests of the Partnership
if this acquisition of Shurgard is completed.  However, because the self-storage
facilities of the  Partnership and Public Storage are managed by Public Storage,
and the  self-storage  facilities  owned by  Shurgard  would  also be managed by
Public  Storage,  the  merger  could  have  potential  negative  impacts  on the
Partnership, as follows:

         o  Difficulties  in the  integration of operations,  technologies,  and
            personnel of Shurgard could negatively  impact the operations of the
            facilities managed by Public Storage, including the Partnership's.

         o  Public  Storage's   management  attention  to  the  integration  and
            acquisition  of  Shurgard  could  divert  attention  away  from  the
            operations of the existing  self-storage  portfolio that it manages,
            including the Partnership's properties.

         o  Individual  Partnership  properties  could  experience a decrease in
            move-ins,  reductions  to rental  rates,  increases  to  promotional
            discounts, or other negative impacts to revenues in the short and/or
            long term due to the competitive impact of Public Storage commencing
            management  of the former  Shurgard  facilities,  particularly  with
            respect  to those  facilities  that are  close to the  Partnership's
            facilities.

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

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

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

         o  changes in general economic or local conditions;

         o  natural disasters, such as earthquakes;

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

         o  potential terrorists attacks;

         o  the impact of environmental protection laws;

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

         o  changes in tax, real estate and zoning laws.

                                       7

<PAGE>

         There is significant competition among self-storage facilities and from
other storage alternatives.  All of our properties are self-storage  facilities,
which generated substantially all of our revenue for the year ended December 31,
2005.  Local market  conditions will play a significant  part in how competition
will affect us.  Competition in the market areas in which many of our properties
are located from other self-storage facilities and other storage alternatives is
significant  and has affected the occupancy  levels,  rental rates and operating
expenses of our properties. Any increase in availability of funds for investment
in real estate may accelerate  competition.  Further development of self-storage
facilities may intensify competition among operators of self-storage  facilities
in the market areas in which we operate.

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

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

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

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

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

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

         Terrorist attacks and other acts of violence or war, such as those that
took place on September 11, 2001,  could have a material  adverse  impact on our
business and operating results. There can be no assurance that there will not be
further  terrorist  attacks  against  the  United  States or its  businesses  or
interests.  Attacks or armed  conflicts that directly  impact one or more of our

                                       8

<PAGE>

properties  could  significantly  affect our ability to operate those properties
and thereby  impair our operating  results.  Further,  we may not have insurance
coverage for losses  caused by a terrorist  attack.  Such  insurance  may not be
available,  or if it is  available  and  we  decide  to  obtain  such  terrorist
coverage,  the cost for the insurance may be significant in  relationship to the
risk  overall.  In  addition,  the adverse  effects  that such  violent acts and
threats of future attacks could have on the U.S.  economy could similarly have a
material  adverse  effect on our  business and results of  operations.  Finally,
further terrorist acts could cause the United States to enter into a wider armed
conflict, which could further impact our business and operating results.

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

         Approximately  70% of  the  Partnership's  properties  are  located  in
California. California is facing budgetary problems. Action that may be taken in
response to these problems,  such as an increase in property taxes on commercial
properties,  could adversely  impact our business and results of operations.  In
addition,  the  Partnership  could be  adversely  impacted by efforts to reenact
legislation  mandating medical insurance for employees of California  businesses
and members of their families.

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

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

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

         The  Partnership  has a  1.6%  ownership  interest  in  STOR-Re  Mutual
Insurance  Corporation  ("STOR-Re"),  which was formed in 1994 as an association
captive  insurance  company,  and is controlled by PSI. STOR-Re provides limited
property  and  liability  insurance  coverage  to  the  Partnership,   PSI,  and
affiliates of PSI for losses  occurring prior to April 1, 2004.  Liabilities for
losses  and loss  adjustment  expenses  include an amount  determined  from loss
reports and individual  cases and an amount,  based on  recommendations  from an
outside actuary that is a member of the American  Academy of Actuaries,  using a
frequency and severity method, for losses incurred but not reported. Determining
the  liability  for  unpaid  losses  and loss  adjustment  expense is based upon
estimates  and while we believe that the amount is adequate,  the ultimate  loss
may be in excess of or less than the  amounts  provided,  which may  result in a
reduction in the value of the Partnership's investment or could result in future
payments to STOR-Re if its reserves were determined to be inadequate.  Financial
data with respect to STOR-Re is included in Note 5 to the Partnership's December
31, 2005 financial statements.

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

         Not applicable.

                                       9

<PAGE>

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

         The  following  table sets forth  information  as of December  31, 2005
about properties owned by the Partnership:

<TABLE>
<CAPTION>

                                                                                                            Completion
         Location             Size of Parcel    Net Rentable Area   Number of Spaces  Date of Purchase         Date
----------------------       ---------------    -----------------   ----------------  ----------------     -------------
CALIFORNIA
<S>                             <C>              <C>                      <C>           <C>                  <C>
Azusa                           5.85 acres       102,000 sq. ft.          980           July 14, 1978        Nov. 1978
Concord                         2.87 acres        52,000 sq. ft.          522           June 20, 1978        Jan. 1979
Oakland                         1.97 acres        41,000 sq. ft.          368           Oct. 11, 1978        Apr. 1979
Pasadena                        1.82 acres        37,000 sq. ft.          340           July 19, 1978        Nov. 1978
Redlands                        3.44 acres        63,000 sq. ft.          580           Aug. 24, 1978        Feb. 1979
Richmond                        1.82 acres        35,000 sq. ft.          350           Aug. 23, 1978        Mar. 1979
Riverside                       2.47 acres        45,000 sq. ft.          389           Jan. 2, 1979         May 1979
Sacramento
   Howe Avenue                  2.36 acres        41,000 sq. ft.          376           Dec. 14, 1978        Aug. 1979
Sacramento
   West Capitol                 3.38 acres        44,000 sq. ft.          457           Jan. 5, 1979         June 1979
San Carlos                      2.80 acres        51,000 sq. ft.          458           Jan. 30, 1979        Oct. 1979
Santa Clara                     4.45 acres        75,000 sq. ft.          691           Dec. 22, 1978      June 1979 and
                                                                                                             July 1981
Tustin                          4.40 acres        67,000 sq. ft.          560           July 3, 1978         Dec. 1978

FLORIDA
Miami Airport
   Expressway                   1.70 acres        29,000 sq. ft.          269           Aug. 24, 1978        Jan. 1979
Miami
   Cutler Ridge                 2.30 acres        46,000 sq. ft.          483           Sept. 6, 1978        Apr. 1979
Pembroke Park                   2.35 acres        49,000 sq. ft.          446           Sept. 1, 1978        July 1979
Ft. Lauderdale
   I95 & 23rd Ave.              2.77 acres        45,000 sq. ft.          503           Nov. 9, 1978        Sept. 1979
Ft. Lauderdale
   I95 & Sunrise                3.32 acres        56,000 sq. ft.          558           Dec. 4, 1979        Sept. 1979

</TABLE>


         The weighted average  occupancy level for the  self-storage  facilities
was 92% and 91% for 2004 and 2005, respectively.

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

         As of December 31, 2005, the properties were not encumbered.

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

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

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

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

                                       10

<PAGE>

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

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

         The Brinkley plaintiffs are suing PSI on behalf of a purported class of
California  property  managers who claim that they were not  compensated for all
the hours they worked.  The Brinkley suit is based upon California wage and hour
laws.  The  maximum  potential  liability  cannot  be  estimated,  but  would be
increased if a class or classes are  certified or, if claims are permitted to be
brought on behalf of others under the California Unfair Business  Practices Act.
PSI is  vigorously  contesting  the claims  and  intend to resist any  expansion
beyond the named plaintiffs on the grounds of lack of commonality of claims. PSI
does not believe that this matter will have any material  adverse  effect on the
results of operations of the Partnership.

         Other Items

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

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year ended December 31, 2005.

                                       11

<PAGE>

                                     PART II

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

         The Partnership has no common stock.

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

         Exclusive of the General Partners'  interest in the Partnership,  as of
December 31, 2005, there were approximately 964 unitholders of record.

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

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

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

<TABLE>
<CAPTION>

For the Year Ended December 31,              2005              2004             2003              2002              2001
------------------------------------    ---------------   --------------    --------------   --------------    --------------
<S>                                     <C>               <C>               <C>              <C>               <C>
Revenues                                $   12,271,000    $   12,210,000    $   11,672,000   $   11,165,000    $   11,358,000
Depreciation and amortization                  356,000           565,000           942,000          951,000           973,000
Interest expense                                     -                 -                 -                -           232,000
Casualty gain                                   38,000                 -                 -                -                 -
Gain on disposition of marketable
     securities (1)                         15,633,000                 -                 -                -                 -
Net income (1)                              24,190,000         8,233,000         7,537,000        7,311,000         7,326,000
Limited partners' share (1)                 16,458,000         6,284,000         5,648,000        5,345,000         7,246,000
General partners' share (1)                  7,732,000         1,949,000         1,889,000        1,966,000            80,000
Limited partners' per unit data (2)
     Net income (1)                           $411.45           $157.10           $141.20          $133.63           $181.15
     Cash Distributions                       $158.68           $140.00           $136.00          $142.00              -

As of December 31,
------------------------------------
Cash and cash equivalents               $    2,571,000    $    2,595,000    $    1,587,000   $      698,000    $      434,000
Total Assets                            $    9,721,000    $   31,000,000    $   25,526,000   $   21,012,000    $   21,928,000

</TABLE>


(1)  Increases  reflected in the amounts presented for 2005 as compared to other
     periods, are due to the distribution of marketable securities in affiliate.
     See  Note  2 to  the  Partnership's  financial  statements  for  additional
     information.

(2)  Per unit  data is based  on the  weighted  average  number  of the  limited
     partnership units (40,000) outstanding during each period.

                                       12

<PAGE>

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

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

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

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

OVERVIEW
--------

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

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

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

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

         IMPAIRMENT OF REAL ESTATE

         On a quarterly  basis, we evaluate our real estate for impairment.  The
evaluation of real estate for impairment requires determining whether indicators
of  impairment  exist,  which is a subjective  process.  When any  indicators of
impairment  are  found,  the  evaluation  then  entails  projections  of  future
operating cash flows, which also involves significant judgment. We identified no
such  impairments at December 31, 2005.  However,  future  events,  or facts and
circumstances that currently exist that we have not yet identified,  could cause
us to conclude in the future that our real  estate is  impaired.  Any  resulting
impairment loss could have a material, adverse impact on our financial condition
and results of operations.

         ESTIMATED USEFUL LIVES OF LONG-LIVED ASSETS

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

                                       13

<PAGE>

         ACCRUALS FOR CONTINGENCIES

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

         ACCRUALS FOR OPERATING EXPENSES

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

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

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

         The  Partnership's  net  income was  $24,190,000  in 2005  compared  to
$8,233,000 in 2004, representing a increase of $15,957,000. Net income increased
primarily due to a gain on disposition of marketable  securities of an affiliate
totaling $15,633,000 (described below).

         During 2005 property net operating  income  (rental income less cost of
operations,  management fees paid to an affiliate and depreciation  expense) was
$7,092,000 in 2005 compared to $6,446,000 in 2004,  representing  an increase of
$646,000  or 10%.  This  increase  is  attributable  to an  increase  in  rental
revenues,  partially  offset  by a  decrease  to  cost  of  operations,  at  the
Partnership's self-storage facilities.

         Rental income was  $10,726,000 in 2005 compared to $10,325,000 in 2004,
representing  an  increase  of  $401,000  or 4%. The  increase  is  attributable
primarily to an increase in realized rent per occupied  square foot occupancy at
the Partnership's self-storage facilities. The weighted average occupancy levels
at the self-storage facilities were 91% and 92% in 2005 and 2004,  respectively.
The annual realized rent per occupied square foot was $14.47 in 2005 compared to
$13.83 in 2004.

         On March 31,  2005,  we  distributed  substantially  all of the  Public
Storage  common stock on a pro-rata basis to unitholders of record as of January
1, 2005. Accordingly,  during the first quarter of 2005, we recognized a gain on
disposition totaling $15,633,000,  which represents the excess of the fair value
(based upon a value of $56.94 per share for the Public  Storage  common stock on
March 31, 2005) over the historical cost. The Partnership's dividend income with
respect to those securities that were distributed to unitholders ceased on April
1, 2005.  Dividend  income from marketable  securities of affiliate  declined to
$203,000  in  2005  from  $718,000  in  2004.  Based  upon  shares  held  by the
partnership at December 31, 2005, we expect dividend income to be  approximately
$32,000  in  2006.  See Note 2 to the  Partnership's  financial  statements  for
additional information.

         Cost of  operations  (including  management  fees paid to an affiliate)
decreased  $36,000 or 1% to  $3,278,000 in 2005 from  $3,314,000  in 2004.  This
decrease is  attributable  to decreased in repairs and  maintenance and eviction
costs  partially  offset  by  increased  management  fees as a result  of higher
revenues.

         Depreciation  expense was $356,000 for the year ended December 31, 2005
compared to $565,000 for the same period in 2004, a decrease of $209,000 or 37%.
The  decrease  in  depreciation  expense is  primarily  related  to the  initial
development costs of buildings for many self-storage  facilities  becoming fully
depreciated.

         Revenues  from  Affiliate  under the  Performance  Agreement  increased
$51,000 or 5% to  $1,117,000  in 2005 from  $1,066,000  in 2004.  These  amounts
include the  pre-depreciation  net income of the facility that has  self-storage
and containerized storage operations.

                                       14

<PAGE>

         During 2005, a casualty gain  pertaining to the Hurricanes  Katrina and
Wilma, in the amount of $38,000 was recorded.  Please see Note 2 "Accounting for
Casualties" to the Partnership's financials for further description.

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

         The  Partnership's  net  income  was  $8,233,000  in 2004  compared  to
$7,537,000 in 2003, representing an increase of $696,000 or 9%. This increase is
primarily  a  result  of  increased   operating  results  at  the  Partnership's
self-storage facilities.

         During 2004 property net operating  income  (rental income less cost of
operations,  management fees paid to an affiliate and depreciation  expense) was
$6,446,000 in 2004 compared to $5,854,000 in 2003,  representing  an increase of
$592,000  or 10%.  This  increase  is  attributable  to an  increase  in  rental
revenues,   partially  offset  by  increase  to  cost  of  operations,   at  the
Partnership's self-storage facilities.

         Rental income was  $10,325,000  in 2004 compared to $9,883,000 in 2003,
representing  an increase of $442,000 or 4%. The increase is  attributable to an
increase in average occupancy at the Partnership's  self-storage facilities. The
weighted average  occupancy  levels at the self-storage  facilities were 92% and
91% in 2004 and 2003, respectively. The annual realized rent per occupied square
foot was $13.83 in 2004 compared to $13.38 in 2003.

         Dividend  income from  marketable  securities of affiliate was $718,000
for both 2004 and 2003.

         Cost of  operations  (including  management  fees paid to an affiliate)
increased  $227,000 or 7% to  $3,314,000 in 2004 from  $3,087,000 in 2003.  This
increase is primarily  attributable  to increases  in payroll,  property  taxes,
management  fees (as a result of higher  revenues)  and repair  and  maintenance
expenses.

         Depreciation  expense was $565,000 for the year ended December 31, 2004
compared to $942,000 for the same period in 2003.  The decrease in  depreciation
expense is  primarily  related  to the full  depreciation  of the  Partnership's
buildings which were placed in service in 1978 and 1979.

         Revenues  from  Affiliate  under the  Performance  Agreement  increased
$75,000 or 8% to $1,066,000 in 2004 from $991,000 in 2003. These amounts include
the  pre-depreciation  net  income of the  facility  that has  self-storage  and
containerized storage operations.

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

         Cash flows from  operating  activities of $8,771,000 for the year ended
December 31, 2005 have been  sufficient to meet all current  obligations  of the
Partnership.   During  2005,  the  Partnership   incurred  $322,000  of  capital
improvements  in 2005  compared to $365,000  in 2004 and  $444,000 in 2003.  For
2006,  we have budgeted  $494,000,  including  remaining  amounts to restore our
facilities from hurricane damage.

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

         At December 31, 2004, we held 381,980  shares of Public  Storage common
stock and 12,412 shares of Public Storage  Equity Stock,  Series A. On March 31,
2005, we distributed all but 624 shares of our holdings of Public Storage common
stock on a pro-rata  basis to  unitholders.  At December 31,  2005,  we held 624
shares and 12,412 shares,  respectively,  of Public Storage, Inc.'s common stock
and Equity Stock,  Series A (marketable  securities)  with a fair value totaling
$386,000 (cost of $259,000 at December 31, 2005) in Public Storage, Inc.

         As a result of the distribution,  dividends received by the Partnership
declined to $203,000 in dividend  income  during  2005,  as compared to $718,000
during 2004 and 2003,  respectively.  Based on our  holdings  of Public  Storage
securities, we anticipate future annual dividend income to approximate $32,000.

                                       15

<PAGE>

         DISTRIBUTIONS

         The Partnership Agreement requires that cash available for distribution
(cash flow from all sources less cash  necessary for any  obligations or capital
improvement)  needs to be distributed at least  quarterly.  Distributions to the
limited and general  partners  for the years  1978-1991  aggregated  $62,032,000
including  $29,360,000  distributed to the partners in 1988 in connection with a
financing  of  the  properties.   In  the  third  quarter  of  1991,   quarterly
distributions  were discontinued to enable the Partnership to increase its funds
available  for debt  principal  payments.  As all debt  service was repaid as of
December 31, 2001, the Partnership resumed quarterly  distributions beginning in
the first quarter of 2002.

         We paid cash  distributions  during  2005 to the  limited  and  general
partners totaling $6,347,000 ($158.68 per unit) and $2,201,000, respectively. We
paid  distributions  during 2004 to the limited  and general  partners  totaling
$5,600,000 ($140.00 per unit) and $1,942,000,  respectively. Future distribution
rates may be adjusted to levels which are supported by operating cash flow after
capital improvements and any other necessary obligations.

         As  discussed  above,  on March 31,  2005,  we  distributed  all of our
holdings of Public  Storage  common stock on a pro-rata  basis to unitholders of
record as of  January  1,  2005,  totaling  $16,123,000  ($403.08  per unit) and
$5,591,000, respectively, to the limited and general partners.

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

         As of December 31, 2005, the Partnership had no outstanding debt.

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

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

ITEM 9.     CHANGES IN AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
            -----------------------------------------------------------------
            FINANCIAL DISCLOSURE
            --------------------

         Not applicable.

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

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

         At the end of the period covered by this report,  Public Storage,  Inc.
carried out an evaluation,  under the supervision and with the  participation of
the Partnership's  management,  including Public Storage, Inc.'s Chief Executive
Officer and Chief  Financial  Officer,  of the  effectiveness  of the design and
operation of the Partnership's  disclosure  controls and procedures.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and Chief  Financial  Officer
concluded  that  the  Partnership's  disclosure  controls  and  procedures  were
effective.  During the fourth quarter of 2005, there were no significant changes
in the  Partnership's  internal  controls  over  financial  reporting  that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Partnership's internal control over financial reporting.

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

         Not applicable

                                       16

<PAGE>

                                    PART III

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

         The Partnership has no directors or executive officers.

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

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

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

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

         B. Wayne  Hughes,  age 72, has been a director of the Company since its
organization in 1980 and was President and Co-Chief  Executive Officer from 1980
until  November  1991  when he  became  Chairman  of the  Board  and sole  Chief
Executive  Officer.  Mr. Hughes retired as Chief  Executive  Officer in November
2002 and remains Chairman of the Board.  Mr. Hughes is currently  engaged in the
acquisition  and  operation of commercial  properties  in California  and in the
acquisition and operation of self-storage  facilities in Canada.  Mr. Hughes has
been active in the real  estate  investment  field for over 30 years.  He is the
father of B. Wayne Hughes, Jr., a member of the Company's Board.

         Ronald  L.  Havner,  Jr.,  age 48,  has been the  Vice-Chairman,  Chief
Executive  Officer  and a  director  of the  Company  since  November  2002  and
President since July 1, 2005. Mr. Havner joined the Company in 1986 and has held
a variety of  positions,  including  Chairman  of the  Company's  affiliate,  PS
Business Parks, Inc. (PSB),  since March 1998 and was Chief Executive Officer of
PSB from  March  1998  until  August  2003.  He is also a member of the Board of
Governors of the National  Association of Real Estate  Investment  Trusts,  Inc.
(NAREIT) and a director of Business Machine  Security,  Inc., The Mobile Storage
Group and Union BanCal Corporation.

         Harvey Lenkin, age 69, retired as President and Chief Operating Officer
of the Company on June 30, 2005.  Mr.  Lenkin was employed by the Company or its
predecessor  for 27 years and has been a member of the Board of Directors  since
1991.  He has been a director of the  Company's  affiliate,  PS Business  Parks,
Inc.,  since March 1998 and was  President of PSB from 1990 until March 1998. He
is also a director of Paladin Realty Income Properties I, Inc. and a director of
Huntington  Memorial Hospital,  Pasadena,  California and a former member of the
Executive Committee of the Board of Governors of NAREIT.

                                       17

<PAGE>

         Robert J.  Abernethy,  age 66,  Chairman of the Audit  Committee  and a
member of the Compensation  Committee,  has been President of American  Standard
Development Company and of Self-Storage  Management  Company,  which develop and
operate  self-storage  facilities,  since  1976  and  1977,  respectively.   Mr.
Abernethy was controller of a division of Hughes  Aircraft from 1972 to 1974. He
has been a director of the Company since its organization. He is a member of the
board of trustees  of Johns  Hopkins  University,  a director of the Los Angeles
Music  Center,   a  member  of  the  Board  of  Overseers  of  the  Los  Angeles
Philharmonic,  a trustee  of Loyola  Marymount  University,  a  director  of the
Pacific Council on International  Policy, a director of the Atlantic Council,  a
member  of  the   Council  on  Foreign   Relations   and  a  former   California
Transportation  Commissioner.  Mr.  Abernethy is a former member of the board of
directors of the Los Angeles County Metropolitan Transportation Authority and of
the Metropolitan Water District of Southern  California,  a former member of the
California  State Board of Education,  a former member of the  California  State
Arts  Council,  a former  Planning  Commissioner,  a  former  Telecommunications
Commissioner and the former Vice-Chairman of the Economic Development Commission
of the City of Los Angeles.  He received an M.B.A.  from the Harvard  University
Graduate School of Business.

         Dann  V.  Angeloff,  age  70,  Chairman  of  the   Nominating/Corporate
Governance  Committee  and a  member  of the  Compensation  Committee,  has been
President of the Angeloff Company,  a corporate  financial  advisory firm, since
1976.  Mr.  Angeloff is currently the general  partner of a limited  partnership
that in 1974  purchased a  self-storage  facility  operated by the Company.  Mr.
Angeloff  has been a director of the  Company  since its  organization.  He is a
director of Bjurman, Barry Fund, Inc.,  Nicholas/Applegate Fund, ReadyPac Foods,
Retirement Capital Group and SoftBrands, Inc.

         William C. Baker, age 72, a member of  Nominating/Corporate  Governance
Committee,  became a director  of the Company in November  1991.  Mr.  Baker was
Chairman and Chief  Executive  Officer of Callaway Golf Company from August 2004
until August 2005.  From August 1998 through  April 2000,  he was  President and
Treasurer of Meditrust  Operating  Company, a real estate investment trust. From
April 1996 to December  1998,  Mr.  Baker was Chief  Executive  Officer of Santa
Anita Companies,  which then operated the Santa Anita Racetrack. From April 1993
through May 1995, he was President of Red Robin International, Inc., an operator
and  franchisor  of casual dining  restaurants  in the United States and Canada.
From  January  1992  through  December  1995,  Mr.  Baker was Chairman and Chief
Executive Officer of Carolina Restaurant Enterprises,  Inc., a franchisee of Red
Robin  International,  Inc.  From 1991 to 1999,  he was Chairman of the Board of
Coast Newport  Properties,  a real estate brokerage company.  From 1976 to 1988,
Mr. Baker was a principal  shareholder and Chairman and Chief Executive  Officer
of Del Taco,  Inc.,  an operator  and  franchisor  of fast food  restaurants  in
California.  He is a director of La Quinta, Inc., California Pizza Kitchen, Javo
Beverage Company and Callaway Golf Company.

         John T.  Evans,  age 67, a member  of the  Audit  Committee  and of the
Nominating/Corporate  Governance Committee,  became a director of the Company in
August  2003.  Mr.  Evans has been a partner in the law firm of Osler,  Hoskin &
Harcourt LLP, Toronto, Canada from April 1993 to the present and in the law firm
of Blake, Cassels & Graydon LLP, Toronto,  Canada from April 1966 to April 1993.
Mr.  Evans  specializes  in business law  matters,  securities,  restructurings,
mergers and  acquisitions and advising on corporate  governance.  Mr. Evans is a
director of Cara Operations  Inc.,  Kubota Metal  Corporation,  and Toronto East
General  Hospital.  Until  August  2003,  Mr.  Evans was a director  of Canadian
Mini-Warehouse  Properties Ltd., a Canadian corporation owned by B. Wayne Hughes
and members of his family.

         Uri P. Harkham, age 57, a member of the Compensation Committee,  became
a director of the Company 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
warehouses and retail and mixed-use real estate in California.

         B. Wayne  Hughes,  Jr.,  age 46,  became a director  of the  Company in
January 1998. He was employed by the Company from 1989 to 2002,  serving as Vice
President - Acquisitions  of the Company from 1992 to 2002.  Mr. Hughes,  Jr. is
currently Vice President of American Commercial Equities, LLC, a company engaged
in the acquisition and operation of commercial properties in California and is a
director  of  Canadian  Mini-Ware  Properties  Ltd.,  a company  engaged  in the
acquisition,  development and operation of self-storage facilities in Canada. He
is the son of B. Wayne Hughes.

         Daniel C. Staton, age 53, Chairman of the Compensation  Committee and a
member of the Audit Committee, became a director of the Company in March 1999 in
connection  with the merger of Storage  Trust Realty,  a real estate  investment
trust,  with the  Company.  Mr.  Staton was Chairman of the Board of Trustees of
Storage  Trust  Realty  from  February  1998  until  March 1999 and a Trustee of
Storage  Trust Realty from  November  1994 until March 1999.  He is President of
Walnut  Capital  Partners,  an investment  and venture  capital  company and the
Co-Chief  Executive Officer of PMGI (formerly Media General,  Inc.), a print and
electronic  media  company.  Mr.  Staton  was the Chief  Operating  Officer  and
Executive Vice President of Duke Realty Investments,  Inc. from 1993 to 1997 and

                                       18

<PAGE>

a director of Duke Realty  Investments,  Inc. from 1993 until August 1999.  From
1981  to  1993,  Mr.  Staton  was a  principal  owner  of Duke  Associates,  the
predecessor of Duke Realty Investments, Inc. Prior to joining Duke Associates in
1981, he was a partner and general  manager of his own moving  company,  Gateway
Van & Storage, Inc. in St. Louis, Missouri. From 1986 to 1988, Mr. Staton served
as president of the Greater  Cincinnati  Chapter of the National  Association of
Industrial and Office Parks.

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

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

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

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

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

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

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

         (a) At March 30, 2006, the following beneficially owned more than 5% of
the Units:

<TABLE>
<CAPTION>

          Title                           Name and Address                     Beneficial              Percent
        of Class                        of Beneficial Owners                    Ownership              of Class
-------------------        -------------------------------------------      -----------------          --------
<S>                        <C>                                              <C>                          <C>
Units of Limited           Public Storage, Inc.                             11,671 Units (1)             29.2%
Partnership Interest       701 Western Avenue
                           Glendale, California 91201

Units of Limited           B. Wayne Hughes, Tamara Hughes Gustavson,        13,497 Units (2)             33.7%
Partnership Interest       PS Orangeco Partnerships, Inc.
                           701 Western Avenue
                           Glendale, California 91201

</TABLE>

(1)  Includes  (i) 11,365 Units owned by PSI as to which PSI has sole voting and
     dispositive  power,  and (ii) 306 Units  which PSI has an option to acquire
     from Tamara Hughes Gustavson, an adult daughter of Hughes.

(2)  Includes  5,892 Units  owned by BWH Marina  Corporation  II, a  corporation
     wholly-owned by Hughes,  as to which Hughes has sole voting and dispositive
     power,  (ii) 306 Units owned by Tamara Hughes  Gustavson as to which Tamara
     Hughes  Gustavson has sole voting and dispositive  power; PSI has an option
     to acquire  these 306 units,  and (iii)  7,299  Units  owned by PS Orangeco
     Partnerships, Inc., a corporation in which Hughes and members of his family
     own  approximately  48% of the voting  stock,  PSI owns 46% and  members of
     PSI's management and related individuals own approximately 6%.

         (b) The Partnership has no officers and directors. The General Partners
contributed  $202,020 to the original capital of the Partnership and as a result
participate  in  the   distributions   to  the  limited   partners  and  in  the
Partnership's  profits  and  losses  in the same  proportion  that  the  General
Partners'  capital   contribution  bears  to  the  total  capital   contribution
(approximately  $161,616 was  contributed by PSI and $40,404 was  contributed by
Mr.  Hughes).  In 1995,  Mr.  Hughes  contributed  his  ownership  and rights to
distributions  from the Partnership to BWH Marina  Corporation II, a corporation

                                       19

<PAGE>

wholly-owned  by Mr. Hughes.  As such, Mr. Hughes  continues to act as a general
partner but  receives no direct  compensation  or other  consideration  from the
Partnership.  Information  regarding  ownership of Units by PSI and Hughes,  the
General  Partners,  is set forth under section (a) above.  Dann V.  Angeloff,  a
director  of PSI,  beneficially  owns  nine  Units  (0.02%  of the  Units).  The
directors  and  executive  officers of PSI  (including  Hughes),  as a group (17
persons),  beneficially own an aggregate of 13,210 Units,  representing 33.0% of
the Units  (including  the 5,892 Units owned by Hughes and the 7,299 Units owned
by PS Orangeco Partnerships, Inc.).

         (c) The Partnership knows of no contractual arrangements, the operation
of the terms of which may at a subsequent  date result in a change in control of
the  Partnership,  except  for  articles  16,  17 and 21.1 of the  Partnership's
Amended  Certificate  and  Agreement of Limited  Partnership  (the  "Partnership
Agreement"),  a copy  of  which  is  included  in the  Partnership's  prospectus
included in the  Partnership's  Registration  Statement File No. 2-60530.  Those
articles provide, in substance,  that the limited partners shall have the right,
by majority  vote,  to remove a general  partner and that a general  partner may
designate  a  successor  with the  consent of the other  general  partner  and a
majority of the limited partners.

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

         The Partnership  Agreement  provides that the General  Partners will be
entitled  to  cash  incentive  distributions  in an  amount  equal  to (i) 8% of
distributions  of cash  flow from  operations  until  the  distributions  to all
partners from all sources equal their capital contributions;  thereafter, 25% of
distributions of cash flow from operations,  and (ii) 25% of distributions  from
net proceeds from sale and financing of the Partnership's  properties  remaining
after  distribution  to all  partners of any portion  thereof  required to cause
distributions to partners from all sources to equal their capital contributions.
During  1986,  the partners  received  cumulative  distributions  equal to their
capital  contributions.  Mr. Hughes has assigned his ownership and  distribution
rights in the  Partnership  to BWH Marina  Corporation  II ("BWH  Marinas").  In
addition to their  distribution  rights with respect to their general  partner's
interests,  PSI and BWH Marinas own 11,365 and 5,892 Units. During 2005, PSI and
BWH  Marinas   received   $1,761,000   and  $440,000,   respectively,   in  cash
distributions  related  to  their  general  partner's  ownership  interests.  As
described  above,  the General  Partners  also hold Limited  Partnership  Units.
Through  these  holdings,  PSI and the  Hughes  Family,  respectively,  received
$1,803,000  and $983,000 of cash  distributions  and 82,874 and 44,518 shares of
Public Storage common stock as a result of the  distribution of the Partnerships
marketable securities.

         The   Partnership   has   a   Management   Agreement   with   PSI   (as
successor-in-interest  to PSMI). Under the Management Agreement, the Partnership
pays  PSI a fee of 6% of the  gross  revenues  of  the  self-storage  facilities
operated  for the  Partnership.  For as long as the  Management  Agreement is in
effect,  PSI has granted the Partnership a non-exclusive  license to use two PSI
service  marks and related  designs,  including  the "Public  Storage"  name, in
conjunction  with rental and  operation of  facilities  managed  pursuant to the
Management  Agreement.   Upon  termination  of  the  Management  Agreement,  the
Partnership  would no longer have the right to use the service marks and related
designs.  The  General  Partners  believe  that the loss of the right to use the
service marks and related  designs could have a material  adverse  effect on the
Partnership's  business.  The  Management  Agreement  with PSI provides that the
Management Agreement may be terminated without cause upon 60 days written notice
by the  Partnership or six months notice by PSI. During 2005, 2004 and 2003, the
Partnership paid fees of $643,000, $619,000 and $606,000,  respectively,  to PSI
pursuant to the Management Agreement.

         A real estate facility owned by the Partnership (the "Azusa  Property")
is operated pursuant to a management and performance agreement (the "Performance
Agreement") with Public Storage Pickup and Delivery, LP ("PSPUD"),  a subsidiary
of PSI.  Following the commencement of the Performance  Agreement,  the facility
was modified to include  self-storage  and  industrial  space,  with the cost of
these   improvements   entirely  funded  by  PSPUD.  The  industrial  space  was
constructed  for use in  PSPUD's  containerized  storage  operations.  Under the
Performance  Agreement,  the  Partnership  is guaranteed to receive the same net
operating  income it received  with respect to the Azusa  Property  prior to the
effective date of the agreement, with an annual increase of the greater of a) 1%
or  b)  the  percentage  increase  in  net  operating  income  achieved  at  the
self-storage  facilities  managed by PSI in the market in which this facility is
located (the "Guaranteed Amounts"). Where the net operating income earned by the
Azusa Property is less than these  Guaranteed  Amounts,  PSPUD  supplements  the
Partnership's  income. Where the amount earned by the Azusa Property exceeds the
Guaranteed  Amounts,  the excess is remitted to PSPUD.  The costs of all capital
improvements with respect to the Azusa Property are funded by PSPUD. Included in
the line item  "Revenues  from  Affiliate  under  Performance  Agreement" on the
Partnership's Statements of Income, is the pre-depreciation net operating income
with  respect  to the  Azusa  Property.  The  Partnership  recorded  a total  of
$1,117,000,  $1,066,000 and $991,000 in revenue with respect to the  Performance
Agreement for the years ended December 31, 2005, 2004 and 2003, respectively.

         In addition,  the Partnership  combines its insurance  purchasing power
with PSI through captive insurance entities controlled by PSI (see Note 5 to the
Partnership's  financial  statements).  The  captive  entities  provide  limited
property and liability insurance to the Partnership at commercially  competitive
rates. The Partnership and PSI also utilize  unaffiliated  insurance carriers to
provide  property and  liability  insurance  in excess of the captive  entities'
limitations.  Premiums paid to the captive entities for the years ended December
31, 2005, 2004 and 2003 were $77,000, $138,000 and $94,000, respectively.

                                       20

<PAGE>

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Fees billed to the  Partnership  by Ernst & Young LLP for 2004 and 2005
         as are follows:

         Audit  Fees:  Audit  fees  billed  (or  expected  to be  billed) to the
         Partnership  by Ernst & Young  LLP for the  audit of the  Partnership's
         annual  financial  statements  and reviews of the  quarterly  financial
         statements included in the Partnership's quarterly reports on Form 10-Q
         totaled $11,000 for 2005 and $8,000 for 2004.

         Tax Fees: Tax fees billed (or expected to be billed) to the Partnership
         by Ernst & Young  LLP for tax  services  (primarily  federal  and state
         income tax preparation) totaled $10,000 for 2005 and $8,000 for 2004.

         Audit-Related  Fees and Other Fees:  During 2004 and 2005 Ernst & Young
         LLP did not bill the  Partnership  for  audit-related  services  or any
         other services, except audit services and tax services denoted above.

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

                                       21

<PAGE>

                                     PART IV

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

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

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

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

         3. Exhibits: See Exhibit Index contained below.

(b)      Exhibits: See Exhibit Index contained below.

(c)      Not applicable.

                                       22

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.

                                  EXHIBIT INDEX

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


3.1      Amended  Certificate and Agreement of Limited  Partnership.  Previously
         filed with the Securities  and Exchange  Commission as Exhibit A to the
         Registrant's  Prospectus included in Registration Statement No. 2-60530
         and incorporated herein by references.

3.2      Thirty-fifth  Amendment to Amended Certificate and Agreement of Limited
         Partnership.   Previously   filed  with  the  Securities  and  Exchange
         Commission as an exhibit to the Registrant's Annual Report on Form 10-K
         for the year  ended  December  31,  1993  and  incorporated  herein  by
         reference.

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

10.2     Credit  Agreement dated September 1, 1998 by and between Public Storage
         Properties  IV,  Ltd.  and  Wells  Fargo  Bank,  National  Association.
         Previously  filed with the  Securities  and Exchange  Commission  as an
         exhibit  to the  Partnership's  Quarterly  Report  on Form 10-Q for the
         quarter ended September 30, 1998 and incorporated herein by reference.

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

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

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

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

                                       23

<PAGE>

                                   SIGNATURES

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

                              PUBLIC STORAGE PROPERTIES IV, LTD.
                              A California Limited Partnership
Dated:  March 31, 2006        By:  Public Storage, Inc., General Partner

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

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

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

<TABLE>
<CAPTION>

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

<S>                                         <C>                                                        <C>
/s/ Ronald L. Havner, Jr.                   Vice Chairman of the Board, Chief Executive                March 31, 2006
-------------------------                   Officer and President of Public Storage, Inc.,
Ronald L. Havner, Jr.                       Corporate General Partner

/s/ B. Wayne Hughes                         General Partner and Chairman of the Board of               March 31, 2006
-------------------------                   Public Storage, Inc.
B. Wayne Hughes

/s/ John Reyes                              Senior Vice President and Chief Financial Officer          March 31, 2006
-------------------------                   of Public Storage, Inc. (principal financial
John Reyes                                  officer and principal accounting officer)

/s/ Harvey Lenkin                           Director of Public Storage, Inc.                           March 31, 2006
------------------------
Harvey Lenkin

/s/ B. Wayne Hughes, Jr.                    Director of Public Storage, Inc.                           March 31, 2006
------------------------
B. Wayne Hughes, Jr.

/s/ Robert J. Abernethy                     Director of Public Storage, Inc.                           March 31, 2006
------------------------
Robert J. Abernethy

/s/ Dann V. Angeloff                        Director of Public Storage, Inc.                           March 31, 2006
------------------------
Dann V. Angeloff

/s/ William Baker                           Director of Public Storage, Inc.                           March 31, 2006
------------------------
William C. Baker

/s/ John T. Evans                           Director of Public Storage, Inc.                           March 31, 2006
------------------------
John T. Evans

/s/ Uri P. Harkham                          Director of Public Storage, Inc.                           March 31, 2006
------------------------
Uri P. Harkham

/s/ Daniel C. Staton                        Director of Public Storage, Inc.                           March 31, 2006
------------------------
Daniel C. Staton

</TABLE>


                                       24

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.

                          INDEX TO FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULE
                                  (Item 15 (a))

                                                                        Page
                                                                     References
                                                                     ----------
Report of Independent Registered Public Accounting Firm                   F-1

Financial Statements and Schedule:

Balance Sheets as of December 31, 2005 and 2004                           F-2

For the years ended December 31, 2005, 2004 and 2003:

         Statements of Income and Comprehensive Income                    F-3

         Statements of Partners' Equity                                   F-4

         Statements of Cash Flows                                         F-5

Notes to Financial Statements                                      F-6 - F-12

Schedule:

         III - Real Estate and Accumulated Depreciation           F-13 - F-14

         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 Registered Public Accounting Firm


The Partners
Public Storage Properties IV, Ltd.

We have audited the accompanying balance sheets of Public Storage Properties IV,
Ltd.  (the  "Partnership")  as of December  31,  2005 and 2004,  and the related
statements of income and comprehensive  income,  partners' equity and cash flows
for each of the three years in the period ended  December  31, 2005.  Our audits
also included the schedule  listed in the index at item 15(a).  These  financial
statements and schedule are the responsibility of the Partnership's  management.
Our  responsibility  is to express an opinion on these financial  statements and
schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Public Storage Properties IV,
Ltd. at December 31, 2005 and 2004,  and the results of its  operations  and its
cash flows for each of the three years in the period ended December 31, 2005, in
conformity with U.S.  generally  accepted  accounting  principles.  Also, in our
opinion,  the related financial statement schedule,  when considered in relation
to the  basic  financial  statements  taken as a whole,  presents  fairly in all
material respects the information set forth therein.

                                                               ERNST & YOUNG LLP


March 27, 2006
Los Angeles, California

                                      F-1

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                                 BALANCE SHEETS
                           December 31, 2005 and 2004

<TABLE>
<CAPTION>

                                                                                  2005                    2004
                                                                            ------------------      ------------------
                                ASSETS

<S>                                                                         <C>                     <C>
Cash and cash equivalents                                                   $      2,571,000        $      2,595,000
Marketable securities of affiliate (cost of  $259,000 and
     $6,340,000 as of December 31, 2005 and 2004, respectively)                      386,000              21,644,000
Rent and other receivables                                                           167,000                 128,000

Real estate facilities:
     Building and equipment                                                       18,973,000              18,738,000
     Land                                                                          5,021,000               5,021,000
                                                                            ------------------      ------------------
                                                                                  23,994,000              23,759,000

     Less accumulated depreciation                                               (17,480,000)            (17,208,000)
                                                                            ------------------      ------------------
                                                                                   6,514,000               6,551,000

Other assets                                                                          83,000                  82,000
                                                                            ------------------      ------------------
Total assets                                                                $      9,721,000        $     31,000,000
                                                                            ==================      ==================

                   LIABILITIES AND PARTNERS' EQUITY

Accounts payable                                                            $        189,000        $        226,000
Deferred revenue                                                                     321,000                 314,000

Commitments and contingencies (Note 8)                                                     -                       -

Partners' equity:
     Limited partners' equity, $500 per unit, 40,000 units
         authorized, issued and outstanding                                        6,745,000              11,253,000
     General partners' equity                                                      2,339,000               3,903,000
     Other comprehensive income                                                      127,000              15,304,000
                                                                            ------------------      ------------------
     Total partners' equity                                                        9,211,000              30,460,000
                                                                            ------------------      ------------------
Total liabilities and partners' equity                                      $      9,721,000        $     31,000,000
                                                                            ==================      ==================
</TABLE>

                            See accompanying notes.
                                      F-2

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
              For the years ended December 31, 2005, 2004 and 2003

<TABLE>
<CAPTION>

                                                                 2005                2004                 2003
                                                           -----------------   ----------------     ----------------
REVENUES:

<S>                                                        <C>                 <C>                  <C>
Rental income                                              $    10,726,000     $    10,325,000      $     9,883,000
Dividends from marketable securities of affiliate                  203,000             718,000              718,000
Revenues from affiliate under Performance Agreement
     (Note 5)                                                    1,117,000           1,066,000              991,000
Other income                                                       225,000             101,000               80,000
                                                           -----------------   ----------------     ----------------
                                                                12,271,000          12,210,000           11,672,000
                                                           -----------------   ----------------     ----------------
COSTS AND EXPENSES:

Cost of operations                                               2,635,000           2,695,000            2,481,000
Management fees paid to affiliate                                  643,000             619,000              606,000
Depreciation                                                       356,000             565,000              942,000
Administrative                                                     118,000              98,000              106,000
                                                           -----------------   ----------------     ----------------
                                                                 3,752,000           3,977,000            4,135,000
                                                           -----------------   ----------------     ----------------
  Net income before gain                                         8,519,000           8,233,000            7,537,000

Casualty gain                                                       38,000                   -                    -
Gain on disposition of marketable securities of
     affiliate                                                  15,633,000                   -                    -
                                                           -----------------   ----------------     ----------------
NET INCOME                                                 $    24,190,000     $     8,233,000      $     7,537,000
                                                           =================   ================     ================
Limited partners' share of net income ($411.45 per
     unit in 2005, $157.10 per unit in 2004 and
     $141.20 per unit in 2003)                             $    16,458,000     $     6,284,000      $     5,648,000
General partners' share of net income                            7,732,000           1,949,000            1,889,000
                                                           -----------------   ----------------     ----------------
                                                           $    24,190,000     $     8,233,000      $     7,537,000
                                                           =================   ================     ================

COMPREHENSIVE INCOME:
Net income                                                 $    24,190,000     $     8,233,000      $     7,537,000
Other Comprehensive Income:
     Change in unrealized gain on marketable equity
        securities of affiliate                                    456,000           4,699,000            4,272,000
     Realized gain on disposition of marketable
        securities of affiliate                                (15,633,000)                  -                  -
                                                           -----------------   ----------------     ----------------
                                                           $     9,013,000     $    12,932,000      $    11,809,000
                                                           =================   ================     ================
</TABLE>

                            See accompanying notes.
                                      F-3

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                         STATEMENTS OF PARTNERS' EQUITY
              For the years ended December 31, 2005, 2004 and 2003

<TABLE>
<CAPTION>

                                                                                        Other
                                                                                    Comprehensive     Total Partners'
                                            Limited Partners   General Partners        Income             Equity
                                            ----------------   -----------------    ---------------   -----------------

<S>                                          <C>                <C>                 <C>               <C>
Balance at December 31, 2002                 $   10,584,000     $     3,671,000     $    6,333,000    $    20,588,000

Change in unrealized gain on marketable
     securities                                           -                   -          4,272,000          4,272,000

Net income                                        5,648,000           1,889,000                  -          7,537,000

Cash distributions                               (5,440,000)         (1,887,000)                 -         (7,327,000)

Equity transfer                                     (52,000)             52,000                  -                  -
                                            ----------------   -----------------    ---------------   -----------------
Balance at December 31, 2003                     10,740,000           3,725,000         10,605,000         25,070,000

Change in unrealized gain on marketable
     securities                                           -                   -          4,699,000          4,699,000

Net income                                        6,284,000           1,949,000                  -          8,233,000

Cash distributions                               (5,600,000)         (1,942,000)                 -         (7,542,000)

Equity transfer                                    (171,000)            171,000                  -                  -
                                            ----------------   -----------------    ---------------   -----------------
Balance at December 31, 2004                     11,253,000           3,903,000         15,304,000         30,460,000

Change in unrealized gain on marketable
     securities                                           -                   -            456,000            456,000

Realized gain on disposition of
     marketable securities of affiliate                   -                   -        (15,633,000)       (15,633,000)

Net income                                       16,458,000           7,732,000                  -         24,190,000

Cash distributions                               (6,347,000)         (2,201,000)                 -         (8,548,000)

 Distribution of marketable securities
     of affiliate                               (16,123,000)         (5,591,000)                 -        (21,714,000)

Equity transfer                                   1,504,000          (1,504,000)                 -                  -
                                            ----------------   -----------------    ---------------   -----------------
Balance at December 31, 2005                $     6,745,000     $     2,339,000     $      127,000    $     9,211,000
                                            ===============    =================    ===============   =================

</TABLE>

                            See accompanying notes.
                                      F-4

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                            STATEMENTS OF CASH FLOWS
              For the years ended December 31, 2005, 2004 and 2003


<TABLE>
<CAPTION>
                                                                        2005               2004                2003
                                                                   ----------------   -----------------  -----------------
Cash flows from operating activities:
<S>                                                                <C>                <C>                <C>
     Net income                                                    $    24,190,000    $     8,233,000    $     7,537,000

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

         Depreciation                                                      356,000            565,000            942,000
         Decrease in rent and other receivables                              2,000             66,000             94,000
         (Increase) decrease in other assets                                (1,000)           (33,000)            55,000
         Casualty gain                                                     (38,000)                 -                  -
         Gain on disposition of marketable securities of
               affiliate                                               (15,633,000)                 -                  -
         (Decrease) increase in accounts payable and accrued
               liabilities                                                 (37,000)            56,000             20,000
         Increase in deferred revenue                                        7,000             28,000             12,000
                                                                   ----------------   -----------------  -----------------
         Total adjustments                                             (15,344,000)           682,000          1,123,000
                                                                   ----------------   -----------------  -----------------
         Net cash provided by operating activities                       8,846,000          8,915,000          8,660,000
                                                                   ----------------   -----------------  -----------------
Cash flows from investing activities:
     Additions to real estate facilities                                  (322,000)          (365,000)          (444,000)
                                                                   ----------------   -----------------  -----------------
         Net cash used in investing activities                            (322,000)          (365,000)          (444,000)
                                                                   ----------------   -----------------  -----------------
Cash flows from financing activities:
     Distributions paid to partners                                     (8,548,000)        (7,542,000)        (7,327,000)
                                                                   ----------------   -----------------  -----------------
         Net cash used in financing activities                          (8,548,000)        (7,542,000)        (7,327,000)
                                                                   ----------------   -----------------  -----------------
Net (decrease) increase in cash and cash equivalents                       (24,000)         1,008,000            889,000

Cash and cash equivalents at the beginning of the year                   2,595,000          1,587,000            698,000
                                                                   ----------------   -----------------  -----------------
Cash and cash equivalents at the end of the year                   $     2,571,000    $     2,595,000    $     1,587,000
                                                                   ================   =================  =================
Supplemental schedule of non-cash investing and financing
    activities:

     Increase in fair value of marketable securities:
       Marketable securities                                       $      (456,000)   $    (4,699,000)   $    (4,272,000)
       Other comprehensive income                                          456,000          4,699,000          4,272,000
     Distribution of marketable securities of affiliate:
       Marketable securities                                            21,714,000                  -                  -
       Partners' equity                                                (21,714,000)                 -                  -

</TABLE>

                            See accompanying notes.
                                      F-5

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

1.       DESCRIPTION OF PARTNERSHIP

                  Public Storage  Properties IV, Ltd., (the  "Partnership") is a
         publicly held limited  partnership  formed under the California Uniform
         Limited  Partnership  Act in  December  1977.  The  Partnership  raised
         $20,000,000  in gross  proceeds  by  selling  40,000  units of  limited
         partnership  interest  ("Units")  in  an  interstate  offering,   which
         commenced  in May 1978 and  completed  in  November  1978.  The general
         partners in the  Partnership are Public  Storage,  Inc.  ("PSI") and B.
         Wayne Hughes ("Hughes").

                  The  Partnership  was  formed  to engage  in the  business  of
         developing  and  operating  self-storage  facilities  for  personal and
         business  use.  The  Partnership  owns 17  self-storage  properties  in
         California and Florida.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

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

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

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

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

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

                  Cost of operations,  general and  administrative  expense,  as
         well as television, yellow page, and other advertising expenditures are
         expensed as incurred.  Television,  yellow page, and other  advertising
         expenditures  totaled  $402,000,  $417,000  and  $413,000 for the years
         ended December 31, 2005, 2004, and 2003, respectively.

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

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

                  Per unit data is based on the weighted  average  number of the
         limited partnership units (40,000) outstanding during the period.

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

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

                                      F-6

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

         Marketable Securities:
         ----------------------

                  In accordance with the Financial  Accounting Standards Board's
         Statement No. 130,  "Recording  Comprehensive  Income," at each balance
         sheet date,  the  Partnership  reflects its  marketable  securities  at
         market  value  (based upon their  closing  price on the  balance  sheet
         date), with the difference between the market value and historical cost
         shown as "Other Comprehensive Income" in Partners' Equity.  Adjustments
         to  market  value  are  reflected  as  "Change  in  Unrealized  Gain on
         Marketable Equity Securities" on the Statement of Comprehensive Income.
         When  marketable  securities are disposed of,  comprehensive  income is
         adjusted to reflect the change in market value through the  disposition
         date.  The  realized  gain is then  reflected  in net income,  and as a
         reduction to Other Comprehensive Income.

                  In accordance with this policy,  the Partnership has reflected
         adjustments to unrealized gains of $456,000, $4,699,000, and $4,272,000
         for the years ended December 31, 2005, 2004, and 2003, respectively.

                  Marketable securities consist of 624 shares of common stock of
         Public Storage,  Inc. at December 31, 2005 and 12,412 depositary shares
         of Equity Stock,  Series A, of Public  Storage,  Inc., at both December
         31, 2005 and 2004.  At December  31, 2004,  we held  381,980  shares of
         common  stock in  Public  Storage,  Inc;  all but 624  shares  of these
         securities were  distributed to unitholders in 2005 as described below.
         All of the  Partnership's  marketable  securities  for all periods have
         been designated as available-for-sale.

                  On March 31,  2005,  the  Partnership  distributed  all of its
         holdings in Public  Storage Inc.,  common stock on a pro-rata  basis to
         unitholders  of  record  as of  January  1,  2005.  As a result of this
         transaction,  the  Partnership  recorded a realized gain of $15,633,000
         during the first quarter of 2005,  representing the difference  between
         the closing  market  price on March 31, 2005 and the  weighted  average
         historical  cost of the  securities  disposed.  The limited and general
         partner's share of this distribution totaled approximately  $16,123,000
         ($403.08  per unit)  and  $5,591,000,  respectively.  The  limited  and
         general  partners'  share of the  realized  gain  attributable  to this
         transaction totaled  approximately  $10,102,000  ($252.55 per unit) and
         $5,531,000, respectively.

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

                  Real estate  facilities are recorded at cost. Costs associated
         with the  development,  construction,  renovation  and  improvement  of
         properties are capitalized.  Interest,  property taxes, and other costs
         associated with the development incurred during the construction period
         are  capitalized  as  building  cost.   Expenditures  for  repairs  and
         maintenance  are  charged  to  expense  as  incurred.  Depreciation  is
         computed using the straight-line method over the estimated useful lives
         of the buildings and improvements, which are generally between 5 and 25
         years.  Certain real estate facilities have been in service longer than
         25  years,  and  accordingly  the  original  development  cost  of such
         buildings are fully depreciated at December 31, 2005.

                  We  evaluate  our real  estate for  impairment  on a quarterly
         basis. We first evaluate these assets for indicators of impairment such
         as a) a significant  decrease in the market price of real estate,  b) a
         significant adverse change in the extent or manner in which real estate
         is being used or in its physical  condition,  c) a significant  adverse
         change in legal  factors or the business  climate that could affect the
         value of the real estate, d) an accumulation of costs  significantly in
         excess of the amount  originally  projected for the  acquisition  of or
         construction of the real estate,  or e) a  current-period  operating or
         cash flow loss combined with a history of operating or cash flow losses
         or  a  projection  or  forecast  that  demonstrates  continuing  losses
         associated with the use of the real estate. When any such indicators of
         impairment are noted,  we compare the carrying value of the real estate
         to the future  estimated  undiscounted  cash flows  attributable to the
         real estate. If the real estate's  recoverable  amount is less than the
         carrying  value of the asset,  then an impairment  charge is booked for
         the excess of carrying value over the real estate's fair value.  Except
         as noted below under  "Accounting for Casualties," our evaluations have
         identified no such impairments at December 31, 2005.

                                      F-7

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

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

         Accounting for Casualties:
         --------------------------

                  Our policy is to record casualty losses or gains in the period
         the  casualty  occurs  equal to the  differential  between (a) the book
         value of assets destroyed and (b) insurance  proceeds,  if any, that we
         expect to receive in accordance with our insurance contracts. Potential
         insurance   proceeds  that  are  subject  to  uncertainties,   such  as
         interpretation of deductible  provisions of the governing agreements or
         the  estimation  of costs of  restoration,  are treated as a contingent
         proceeds in accordance with Statement of Financial Accounting Standards
         No.  5  ("SFAS  5"),  and not  recorded  until  the  uncertainties  are
         satisfied.

                  During 2005, we recorded a casualty gain totaling $38,000 as a
         result of physical damage to our facilities  caused by Hurricane Wilma,
         which occurred in the fourth quarter of 2005.  This gain represents the
         excess  of  the  insurance  proceeds  that  we  expect  to  receive  of
         approximately  $41,000 over the aggregate net book values of the assets
         damaged  ($3,000).  We estimate,  however,  that the aggregate  cost to
         repair damage to our facilities will be approximately $226,000.

        Deferred revenue:
        -----------------

            Deferred  revenue  totaling  $321,000  and  $314,000 for each of the
         years  ended  December  31,  2005 and 2004,  respectively,  consists of
         prepaid rents, which are recognized when earned.

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

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

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

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

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

                  As of March 30,  2006,  there  have been no recent  accounting
         pronouncements   and   guidance,   which   were   not   effective   for
         implementation  prior to December 31, 2005,  that would have a material
         impact upon  reporting  the  operations  or  financial  position of the
         Partnership.

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

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

3.       CASH DISTRIBUTIONS

                  The  Partnership  Agreement  requires that cash  available for
         distribution  (cash flow from all sources less cash  necessary  for any
         obligations or capital  improvements)  needs to be distributed at least
         quarterly.  During  2004,  we paid  distributions  to the  limited  and
         general partners totaling $5,600,000 ($140.00 per unit) and $1,942,000,
         respectively.  During 2005,  we paid  distributions  to the limited and
         general partners totaling $6,347,000 ($158.68 per unit) and $2,201,000,
         respectively.  Future  distribution  rates may be  adjusted  to levels,
         which are supported by operating  cash flow after capital  improvements
         and any other obligations.

                                      F-8

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

4.       PARTNERS' EQUITY

                  PSI and Hughes are  general  partners of the  Partnership.  In
         1995, Hughes contributed his ownership and rights to distributions from
         the   Partnership   to  BWH  Marina   Corporation   II,  a  corporation
         wholly-owned by Hughes.  As such,  Hughes continues to act as a general
         partner  of  the  Partnership   but  does  not  directly   receive  any
         compensation,   distributions   or   other   consideration   from   the
         Partnership.

                  The general partners have a 1% interest in the Partnership. In
         addition, the general partners had an 8% interest in cash distributions
         attributable to operations (exclusive of distributions  attributable to
         sale and financing  proceeds) until the limited partners  recovered all
         of  their  investment.  Thereafter,  the  general  partners  have a 25%
         interest  in all  cash  distributions  (including  sale  and  financing
         proceeds).  During 1986,  the limited  partners  recovered all of their
         initial investment.  All subsequent distributions are being made 25.75%
         (including  the 1% interest) to the general  partners and 74.25% to the
         limited  partners.   Transfers  of  equity  are  made  periodically  to
         reconcile  the  partners'  equity  accounts  to the  provisions  of the
         Partnership Agreement. These transactions have no effect on the results
         of operations or distributions to partners.

5.       RELATED PARTY TRANSACTIONS

         Management Agreements and Shared Expenses with Affiliates
         ---------------------------------------------------------

                  The Partnership  has a Management  Agreement with PSI pursuant
         to which PSI operates the self-storage facilities for a fee equal to 6%
         of the facilities' gross revenue (as defined). For 2005, 2004 and 2003,
         the Partnership paid PSI $643,000, $619,000 and $606,000, respectively,
         under this management agreement.

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

                  A real estate  facility owned by the  Partnership  (the "Azusa
         Property")  is  operated  pursuant  to  a  management  and  performance
         agreement (the "Performance  Agreement") with Public Storage Pickup and
         Delivery, LP ("PSPUD"), a subsidiary of PSI. Following the commencement
         of the  Performance  Agreement in March 2001, the facility was modified
         to include  self-storage and industrial  space,  with the cost of these
         improvements  entirely  funded  by  PSPUD.  The  industrial  space  was
         constructed for use in PSPUD's containerized storage operations.  Under
         the Performance Agreement, the Partnership is guaranteed to receive the
         same net  operating  income  it  received  with  respect  to the  Azusa
         Property prior to the effective  date of the agreement,  with an annual
         increase of the greater of a) 1% or b) the  percentage  increase in net
         operating income achieved at the self-storage facilities managed by PSI
         in the  market in which  this  facility  is  located  (the  "Guaranteed
         Amounts").  Where the net operating income earned by the Azusa Property
         is  less  than  these  Guaranteed   Amounts,   PSPUD   supplements  the
         Partnership's  income.  Where the amount  earned by the Azusa  Property
         exceeds the Guaranteed  Amounts,  the excess is remitted to PSPUD.  The
         costs of all capital  improvements  with respect to the Azusa  Property
         are funded by PSPUD. Included in the line item "Revenues from Affiliate
         under Performance Agreement" on the Partnership's Statements of Income,
         is the  pre-depreciation net operating income with respect to the Azusa
         Property.  The Partnership  recorded a total of $1,117,000,  $1,066,000
         and $991,000 in revenue with respect to the  Performance  Agreement for
         the years ended December 31, 2005, 2004 and 2003, respectively.

                  The Partnership's  facilities,  along with facilities owned by
         PSI and its  affiliates,  are  managed and  marketed  jointly by PSI in
         order to take  advantage of scale and other  efficiencies.  Joint costs
         are allocated on a methodology  meant to fairly allocate such costs. As

                                      F-9

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

         a result, significant components of cost of operations, such as payroll
         costs,  advertising  and  promotion,   data  processing  and  insurance
         expenses  are  shared  and  allocated   among  the   properties   using
         methodologies  meant to  fairly  allocate  such  costs  based  upon the
         related  activities.  The total of such expenses,  substantially all of
         which are  included  in Cost of  Operations,  amounted  to  $1,197,000,
         $1,278,000, and $1,217,000 for the years ended December 31, 2005, 2004,
         and 2003, respectively.

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

                  PSI owns 11,365 Limited  Partnership  Units  ("Units"),  as to
         which PSI has sole voting and dispositive power.

                  Hughes and members of his family  (the  "Hughes  Family")  own
         6,198  Units.  Hughes  owns 5,892  Units,  as to which  Hughes has sole
         voting and dispositive  power,  through a wholly-owned  corporation and
         Tamara Hughes Gustavson, an adult daughter of Hughes, owns 306 Units as
         to which Tamara Hughes Gustavson has sole voting and dispositive power;
         PSI has an option to acquire these 306 Units.

                  In  addition,  there  are  7,299  Units  owned by PS  Orangeco
         Partnerships,   Inc.,  a  corporation   in  which  Hughes  Family  owns
         approximately  48% of the  voting  stock,  PSI owns 46% and  members of
         PSI's management and related individuals own approximately 6%.

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

                  The  Partnership  has a 1.6%  ownership  interest  in  STOR-Re
         Mutual Insurance Corporation  ("STOR-Re"),  which was formed in 1994 as
         an association captive insurance company, and is controlled by PSI. The
         Partnership  accounts for its investment in STOR-Re,  which is included
         in other assets, on the cost method,  and has received no distributions
         during the three years ended December 31, 2005.

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

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

<TABLE>
<CAPTION>

                                                                   2005                    2004
                                                          --------------------    --------------------
                                                                 (Amounts in thousands)
   For the year ended December 31,
<S>                                                       <C>                       <C>
   Premiums earned (a).............................       $            -            $        3,994
   Net investment income...........................                  663                       677
   Loss and loss adjustment expense................                  900                    (2,948)
   Other expenses..................................                 (349)                     (200)
                                                          --------------------    --------------------
      Net income...................................       $        1,214            $        1,523
                                                          ====================    ====================
   At December 31,
   Total assets (primarily cash and other                 $       26,876            $       31,326
      investments).................................
   Liabilities for losses and loss adjustment                     13,784                    20,227
      expenses.....................................
   Other liabilities...............................                  208                         -
   Member's surplus................................               12,884                    11,099

</TABLE>

                                      F-10
<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

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

                  Premiums  paid to the  Captive  Entities  for the years  ended
         December 31, 2005,  2004 and 2003 were  $77,000,  $138,000 and $94,000,
         respectively.

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

                  A corporation that reinsures  policies against losses to goods
         stored by tenants in PSI's storage facilities was purchased by PSI from
         Mr. Hughes and members of his family (the "Hughes  Family") on December
         31, 2001.  This  corporation  receives the premiums and bears the risks
         associated with the  re-insurance.  The Partnership  receives an access
         fee from this corporation in return for providing tenant listings. This
         fee is based on number of spaces the Partnership has to rent.  Included
         in  other  income  on the our  income  statement  for  these  fees  are
         $108,000,  $65,000 and $65,000 for the years ended  December  31, 2005,
         2004 and 2003, respectively.

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

6.       TAXES BASED ON INCOME

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

                  Unaudited  taxable net income was  $8,583,000,  $8,341,000 and
         $7,698,000  for the  years  ended  December  31,  2005,  2004  and 2003
         respectively.  The difference between taxable net income and net income
         is primarily related to depreciation expense resulting from differences
         in depreciation and capitalization methodologies.

7.       SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                            -------------------------------------------------------------------------------
                                            March 31, 2005      June 30, 2005      September 30, 2005     December 31, 2005
                                            ----------------    ---------------    ------------------     -----------------
<S>                                          <C>                <C>                 <C>                   <C>
Rental Income                                $    2,624,000     $    2,666,000      $    2,708,000        $    2,728,000
 Cost of Operations (including
  management fees and depreciation)          $      914,000     $      899,000      $      901,000        $      920,000
Net Income (1)                               $   17,792,000     $    2,055,000      $    2,140,000        $    2,203,000
 Net Income Per Limited Partner Unit         $       293.33     $        38.52      $        40.43        $        39.17
Cash distributions                           $    2,084,000     $    1,993,000      $    1,993,000        $    2,478,000
Casualty gain                                $            -     $            -      $            -        $       38,000
Distribution of marketable securities        $   21,714,000     $            -      $            -        $            -

                                                                           Three Months Ended
                                            -------------------------------------------------------------------------------
                                            March 31, 2004      June 30, 2004      September 30, 2004     December 31, 2004
                                            ----------------    ---------------    ------------------     -----------------
Rental Income                                $    2,524,000     $    2,581,000      $    2,616,000        $    2,604,000
 Cost of Operations(including management
  fees and depreciation)                     $    1,020,000     $      997,000      $      931,000        $      931,000
Net Income                                   $    1,930,000     $    2,016,000      $    2,164,000        $    2,123,000
 Net Income Per Limited Partner Unit         $        36.43     $        38.57      $        42.23        $        39.87
 Cash distributions                          $    1,832,000     $    1,831,000      $    1,832,000        $    2,047,000

</TABLE>

                                      F-11

<PAGE>

                       PUBLIC STORAGE PROPERTIES IV, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005

         (1) Net income includes gain on disposition of marketable securities in
            the amount of $15,633,000 in March 2005.

8.       COMMITMENTS AND CONTINGENCIES

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

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

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

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

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

                  The Brinkley plaintiffs are suing PSI on behalf of a purported
         class of  California  property  managers  who claim  that they were not
         compensated  for all the hours they worked.  The Brinkley suit is based
         upon  California  wage and hour laws. The maximum  potential  liability
         cannot be  estimated,  but would be increased if a class or classes are
         certified or, if claims are permitted to be brought on behalf of others
         under the California  Unfair Business  Practices Act. PSI is vigorously
         contesting  the claims and  intend to resist any  expansion  beyond the
         named  plaintiffs on the grounds of lack of commonality of claims.  PSI
         does not believe that this matter will have any material adverse effect
         on the results of operations of the Partnership.

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

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

                                      F-12

<PAGE>


                       Public Storage Properties IV, Ltd.
             Schedule III - Real Estate and Accumulated Depreciation
                      For the year ended December 31, 2005

<TABLE>
<CAPTION>


                                         Initial Cost
                                  ------------------------------
                                                 Building, Land    Costs Subsequent
                                                Imp & Equipment     to construction
         Description                Land                            (Improvements)
----------------------------      ------------- ----------------   -----------------
    California
<S>                                 <C>              <C>                 <C>
Concord                             $349,000         $805,000            $367,000
Tustin                               517,000          844,000             381,000
Pasadena                             379,000          496,000             282,000
Azusa                                501,000        1,093,000             335,000
Redlands                             227,000          771,000             390,000
Riverside                             51,000          595,000             344,000
Oakland                              177,000          650,000             363,000
Richmond                             225,000          639,000             398,000
Santa Clara                          633,000        1,156,000             577,000
San Carlos                           396,000          902,000             223,000
Sacramento/Howe                      194,000          666,000             322,000
Sacramento/West Capitol              100,000          719,000             359,000

    Florida
Miami/Airport Expressway             186,000          442,000             328,000
Miami/Cutler Ridge                   525,000          901,000              40,000
Pembroke Park                        255,000          607,000             443,000
Ft. Lauderdale/I-95 &
   23rd Ave.                         243,000          611,000             470,000
Ft. Lauderdale/I-95 & Sunrise        286,000          690,000             541,000
                                 -------------  ----------------   -----------------
                                  $5,244,000      $12,587,000          $6,163,000
                                 =============  ================   =================
</TABLE>

<TABLE>
<CAPTION>

                                            Gross Carrying Amount
                                             at December 31, 2005
                                  ---------------------------------------------
                                               Building, Land
                                              Imp & Equipment                      Accumulated
         Description              Land                                Total        Depreciation     Date Completed
----------------------------      ----------  ----------------    --------------   ------------    ----------------
    California
<S>                                <C>            <C>               <C>              <C>                <C>
Concord                            $349,000       $1,172,000        $1,521,000       $1,037,000         01/79
Tustin                              517,000        1,225,000         1,742,000        1,187,000         12/78
Pasadena                            379,000          778,000         1,157,000          697,000         11/79
Azusa                               501,000        1,428,000         1,929,000        1,347,000         11/78
Redlands                            227,000        1,161,000         1,388,000          987,000         02/79
Riverside                            51,000          939,000           990,000          902,000         05/79
Oakland                             177,000        1,013,000         1,190,000          933,000         04/79
Richmond                            225,000        1,037,000         1,262,000          977,000         03/79
Santa Clara                         633,000        1,733,000         2,366,000        1,424,000        6 & 7/79
San Carlos                          396,000        1,125,000         1,521,000        1,103,000         10/79
Sacramento/Howe                     194,000          988,000         1,182,000          951,000         08/79
Sacramento/West Capitol             100,000        1,078,000         1,178,000        1,025,000         06/79

    Florida
Miami/Airport Expressway            186,000          770,000           956,000          712,000         01/79
Miami/Cutler Ridge                  302,000        1,164,000         1,466,000        1,073,000         04/79
Pembroke Park                       255,000        1,050,000         1,305,000          995,000         07/79
Ft. Lauderdale/I-95 &
   23rd Ave.                        243,000        1,081,000         1,324,000          974,000         07/79
Ft. Lauderdale/I-95 & Sunrise       286,000        1,231,000         1,517,000        1,156,000         10/79
                                 ------------  --------------     -------------    ------------
                                 $5,021,000      $18,973,000       $23,994,000      $17,480,000
                                 ============  ==============     =============    ============
</TABLE>

                                      F-13

<PAGE>

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


           Reconciliation of Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>

                                                             2005                     2004
                                                      -------------------     --------------------
Investment in Real Estate
<S>                                                   <C>                      <C>
   Balance at the beginning of the year               $       23,759,000       $       23,394,000

   Disposition of real estate                                    (87,000)                       -
   Additions through capital expenditures                        322,000                  365,000
                                                      -------------------     --------------------
Balance at the end of the year                        $       23,994,000       $       23,759,000
                                                      ===================     ====================

Accumulated Depreciation
   Balance at the beginning of the year               $       17,208,000       $       16,643,000

   Disposition of real estate                                    (84,000)                       -
   Additions charged to costs and expenses                       356,000                  565,000
                                                      -------------------     --------------------
                                                      $       17,480,000       $       17,208,000
                                                      ===================     ====================

</TABLE>


(a)  The  aggregate  depreciable  cost,  prior to  depreciation,  of real estate
     (excluding   land)  for  Federal   income  tax   purposes  is   $18,068,000
     (unaudited).

                                      F-14