RATABLE LOAN NOTE


$75,000,000                                                   New York, New York
                                                                  March 31, 1998

     For value received, Price Enterprises, Inc. ("Borrower"), hereby promises
to pay to the order of Union Bank of Switzerland (New York Branch) or its
successors or assigns (collectively, the "Bank"), at the principal office of
Union Bank of Switzerland (New York Branch) located at 299 Park Avenue, New
York, New York 10171 ("Administrative Agent") for the account of the Applicable
Lending Office of the Bank, the principal sum of Seventy Five Million Dollars
($75,000,000), or if less, the amount loaned by the Bank under its Ratable Loan
to Borrower pursuant to the Loan Agreement (as defined below) and actually
outstanding, in lawful money of the United States and in immediately available
funds, in accordance with the terms set forth in the Loan Agreement. Borrower
also promises to pay interest on the unpaid principal balance hereof, for the
period such balance is outstanding, in like money, at said office for the
account of said Applicable Lending Office, at the time and at a rate per annum
as provided in the Loan Agreement. Any amount of principal hereof which is not
paid when due, whether at stated maturity, by acceleration, or otherwise, shall
bear interest from the date when due until said principal amount is paid in
full, payable on demand, at the rate set forth in the Loan Agreement.

     The date and amount of each advance of the Ratable Loan made by the Bank to
Borrower under the Loan Agreement referred to below, and each payment of said
Ratable Loan, shall be recorded by the Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Bank, at any other time),
may be endorsed by the Bank on the schedule attached hereto and any continuation
thereof.

     This Note is one of the Ratable Loan Notes referred to in the Revolving
Credit Agreement dated as of March 31, 1998 (as the same may be amended from
time to time, the "Loan Agreement") among Borrower, the Banks named therein
(including the Bank) and Administrative Agent, as administrative agent for the
Banks. All of the terms, conditions and provisions of the Loan Agreement are
hereby incorporated by reference. All capitalized terms used herein and not
defined herein shall have the meanings given to them in the Loan Agreement.

     The Loan Agreement contains, among other things, provisions for the
prepayment of and acceleration of this Note upon the happening of certain stated
events.

     All parties to this Note, whether principal, surety, guarantor or endorser,
hereby waive presentment for payment, demand, protest, notice of protest and
notice of dishonor.



<PAGE>

     This Note shall be governed by the laws of the State of New York, provided
that, as to the maximum lawful rate of interest which may be charged or
collected, if the laws applicable to the Bank permit it to charge or collect a
higher rate than the laws of the State of New York, then such law applicable to
the Bank shall apply to the Bank under this Note.

     IN WITNESS WHEREOF, Borrower has executed and delivered this Note on the
day and year first above written.

                                               PRICE ENTERPRISES, INC.,
                                                 a Maryland corporation


                                               By /s/ JACK MCGRORY
                                                 -------------------------------
                                                 Name: Jack McGrory
                                                 Title:  Chief Executive Officer


                          See attached acknowledgement


<PAGE>

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================

State of California

County of San Diego

On March 26, 1998 before me, Patricia A. Sweeney, Notary Public
        Date         Name and Title of Officer (e.g., "Jane Doe, Notary Public")

personally appeared                     Jack McGrory
                                    Name(s) of Signer(s)

|X| personally  known  to  me  to  be the person whose name is subscribed to the
                                       within  instrument and acknowledged to me
------------------------------------   that  he   executed   the   same  in  his
            PATRICIA A. SWEENEY        authorized  capacity,  and  that  by  his
            Commission #1081411        signature on the instrument the person or
[LOGO]   Notary Public - California    the  entity  upon  behalf  of  which  the
              San Diego County         person acted, executed the instrument.   
       My Comm. Expires Dec 20, 1999   
------------------------------------   Witness my hand and official seal.

                                         /s/ Patricia A. Sweeney
                                       -----------------------------------------
                                            Signature of Notary Public

----------------------------------- OPTIOINAL ----------------------------------
 Though the information below is not required by law, it may prove valuable to
    persons relying on the document and could prevent fraudulent removal and
                 reattachment of this form to another document.

Description of Attached Document

Title or Type of Document: Ratable Loan Note

Document Date: __________--___________________________ Number of Pages ___3_____

Signer(s) Other Than Named Above: ______________________________________________

Capacity(ies) Claimed by Signer(s)

Signer's Name: Jack McGrory

|_| Individual
|X| Corporate Officer
    Titles: CEO
|_| Partner-|_| Limited |_| General
|_| Attorney-in-Fact                    ================
|_| Trustee                             RIGHT THUMBPRINT
|_| Guardian or Conservator                OF SIGNER
|_| Other: _____________________        -----------------
    ____________________________        Top of thumb here

Signer is Representing:

Price Enterprises, Inc.

_________________________________
                                        -----------------

Signer's Name: __________________

|_| Individual
|X| Corporate Officer
    Title(s): CEO
              -------
|_| Partner-|_| Limited |_| General
|_| Attorney-in-Fact                    ================
|_| Trustee                             RIGHT THUMBPRINT
|_| Guardian or Conservator                OF SIGNER
|_| Other: _____________________        ----------------- 
    ____________________________        Top of thumb here 
                                        
Signer is Representing:

Price enterprises, Inc.
---------------------------------

_________________________________
                                        -----------------


                                       40


<PAGE>

                   Amount                  Amount
Date             of Advance              of Payment            Notation By
----             ----------              ----------            -----------