SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2000
                               -------------

                                       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:     1-8389
                            ------



                              PUBLIC STORAGE, INC.
                              --------------------
             (Exact name of registrant as specified in its charter)


              California                                        95-3551121
----------------------------------------                  ----------------------
    (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.
                                                    --------------


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

                                [ X ] Yes [ ] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of August 3, 2000:

Common Stock, $.10 Par Value - 124,304,775 shares
-------------------------------------------------

Class B Common Stock, $.10 Par Value - 7,000,000 shares
-------------------------------------------------------

Depositary Shares Each Representing  1/1,000 of a Share of Equity Stock,  Series
--------------------------------------------------------------------------------
A, $.01 Par Value - 4,353,102 depositary shares  (representing  4,353.102 shares
--------------------------------------------------------------------------------
of Equity Stock, Series A)
--------------------------

Equity Stock, Series AA, $.01 Par Value - 225,000 shares
--------------------------------------------------------

Equity Stock, Series AAA, $.01 Par Value - 4,289,544 shares
-----------------------------------------------------------

<PAGE>

                              PUBLIC STORAGE, INC.

                                      INDEX


                                                                         Pages
                                                                         -----
PART I. FINANCIAL INFORMATION
        ---------------------

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets at
              June 30, 2000 and December 31, 1999                            1

         Condensed Consolidated Statements of Income for the
              Three and Six Months Ended June 30, 2000 and 1999              2

         Condensed Consolidated Statements of Shareholders' Equity
              for the Six Months Ended June 30, 2000                         3

         Condensed Consolidated Statements of Cash Flows
              for the Six Months Ended June 30, 2000 and 1999            4 - 5

         Notes to Condensed Consolidated Financial Statements           6 - 19

Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations            20 - 31

Item 3.  Quantitative and Qualitative Disclosures about Market Risk         31

PART II. OTHER INFORMATION (Items 1, 2, 3 and 5 are not applicable)
         -----------------

Item 4.  Submission of Matters to a Vote of Security Holders                32

Item 6.  Exhibits and Reports on Form 8-K                              32 - 37

<PAGE>

                              PUBLIC STORAGE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                               JUNE 30,          DECEMBER 31,
                                                                                 2000                1999
                                                                            --------------     --------------
                                                                             (Unaudited)
                                     ASSETS
                                     ------
<S>                                                                         <C>                <C>
Cash and cash equivalents..........................................         $     239,951      $      55,125
Real estate facilities, at cost:
     Land..........................................................             1,050,461          1,036,958
     Buildings.....................................................             2,860,695          2,785,475
                                                                            --------------     --------------
                                                                                3,911,156          3,822,433
     Accumulated depreciation......................................              (597,875)          (533,412)
                                                                            --------------     --------------
                                                                                3,313,281          3,289,021
     Construction in process.......................................               169,903            140,764
                                                                            --------------     --------------
                                                                                3,483,184          3,429,785

Investment in real estate entities.................................               459,006            457,529
Intangible assets, net.............................................               189,670            194,326
Notes receivable from affiliates...................................                31,558             18,798
Other assets.......................................................                72,863             58,822
                                                                            --------------     --------------
              Total assets.........................................         $   4,476,232      $   4,214,385
                                                                            ==============     ==============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Notes payable......................................................         $     161,386      $     167,338
Distributions payable..............................................                     -             82,086
Accrued and other liabilities......................................                87,112             89,261
                                                                            --------------     --------------
              Total liabilities....................................               248,498            338,685

Minority interest:
     Preferred operating partnership units.........................               315,000                  -
     Other.........................................................               165,259            186,600

Commitments and contingencies

Shareholders' equity:
     Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
       11,141,100 shares issued and outstanding, at liquidation
       preference..................................................             1,155,150          1,155,150
     Common Stock, $0.10 par value, 200,000,000 shares authorized,
       124,153,422 shares issued and outstanding (126,697,023 at
       December 31, 1999)..........................................                12,415             12,671
     Equity Stock, Series A, $0.01 par value, 200,000,000 shares
       authorized, 4,353.102 shares issued and outstanding (none
       issued and outstanding at December 31, 1999)................                     -                  -
     Class B Common Stock, $0.10 par value, 7,000,000 shares
       authorized and issued.......................................                   700                700
     Paid-in capital...............................................             2,487,855          2,463,193
     Cumulative net income.........................................             1,236,837          1,089,973
     Cumulative distributions paid.................................            (1,145,482)        (1,032,587)
                                                                            --------------     --------------
         Total shareholders' equity................................             3,747,475          3,689,100
                                                                            --------------     --------------
              Total liabilities and shareholders' equity...........         $   4,476,232      $   4,214,385
                                                                            ==============     ==============
</TABLE>
                            See accompanying notes.
                                       1

<PAGE>

                              PUBLIC STORAGE, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        For the Three Months Ended            For the Six Months Ended
                                                                 June 30,                             June 30,
                                                       -------------------------------      -------------------------------
                                                           2000              1999               2000              1999
                                                       -------------     -------------      -------------     -------------
REVENUES:
   Rental income:
<S>                                                    <C>               <C>                <C>               <C>
       Self-storage facilities.................        $    161,295      $    149,745       $    315,929      $    278,774
       Commercial properties...................               2,827             1,948              5,586             3,862
       Portable self-storage...................               9,240             6,448             16,789            11,876
  Equity earnings of real estate entities......               9,155             9,347             17,431            17,469
  Interest and other income....................               5,633             4,749              9,010             8,271
                                                       -------------     -------------      -------------     -------------
                                                            188,150           172,237            364,745           320,252
                                                       -------------     -------------      -------------     -------------

EXPENSES:
  Cost of operations:
       Self-storage facilities.................              51,272            45,602            101,629            86,231
       Commercial properties...................                 881               631              1,830             1,269
       Portable self-storage...................               8,648             7,690             16,502            15,525
   Depreciation and amortization...............              35,744            34,769             71,778            64,925
   General and administrative..................               5,576             3,060              8,621             5,418
   Interest expense............................               1,261             2,530              2,667             3,734
                                                       -------------     -------------      -------------     -------------
                                                            103,382            94,282            203,027           177,102
                                                       -------------     -------------      -------------     -------------

   Income before minority interest.............              84,768            77,955            161,718           143,150

Minority interest in income:
   Preferred operating partnership units.......              (7,411)                -             (8,336)                -
   Other.......................................              (3,054)           (4,304)            (6,518)           (7,657)
                                                       -------------     -------------      -------------     -------------
NET INCOME.....................................        $     74,303      $     73,651       $    146,864      $    135,493
                                                       =============     =============      =============     =============


NET INCOME ALLOCATION:
  Allocable to preferred shareholders..........        $     25,045      $     23,824       $     50,083      $     45,354
  Allocable to equity shareholders, Series A...               2,666                 -              4,924                 -
  Allocable to common shareholders.............              46,592            49,827             91,857            90,139
                                                       -------------     -------------      -------------     -------------
                                                       $     74,303      $     73,651       $    146,864      $    135,493
                                                       =============     =============      =============     =============
PER COMMON SHARE:
  Net income per share - Basic.................              $0.35             $0.39              $0.69             $0.73
                                                       =============     =============      =============     =============
  Net income per share - Diluted...............              $0.35             $0.39              $0.69             $0.73
                                                       =============     =============      =============     =============
  Net income per depositary share of Equity
  Stock, Series A - Basic and Diluted..........              $0.61              -                 $1.23              -
                                                       =============     =============      =============     =============

  Weighted average common shares - Basic.......             131,588           128,904            132,184           123,793
                                                       =============     =============      =============     =============
  Weighted average common shares - Diluted.....             131,734           129,250            132,335           124,133
                                                       =============     =============      =============     =============
  Weighted average depositary shares of Equity
      Stock, Series A - Basic and Diluted......               4,353                 -              4,028                 -
                                                       =============     =============      =============     =============
</TABLE>
                            See accompanying notes.
                                       2

<PAGE>

                              PUBLIC STORAGE, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (AMOUNTS IN THOUSANDS)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                             Cumulative
                                                                Senior                          Class B
                                                              Preferred         Common         Common           Paid-in
                                                                Stock            Stock          Stock           Capital
                                                             ------------     -----------     ----------     -------------
<S>                                                          <C>               <C>             <C>           <C>
Balances at December 31, 1999..........................      $ 1,155,150       $ 12,671        $   700       $  2,463,193

Issuance of common stock:
   Exercise of stock options (197,599 shares)..........                              19                             3,698
   Conversion of OP units (98,900 shares) .............                               9                             2,631

Repurchase of common stock (2,840,100 shares) .........                            (284)                          (63,303)

Issuance of Equity Stock, Series A to Public (4,300.555
shares)................................................                                                            83,810

Issuance of Equity Stock, Series A to affiliate
(52.547 shares)........................................                                                             1,026

Costs in connection with issuance of preferred operating
partnership units (see note 7).........................                                                            (3,200)

Net income.............................................

Cash distributions:
   Cumulative Senior Preferred Stock ..................
   Equity Stock, Series A..............................
   Class B Common Stock................................
   Common Stock........................................
                                                             ------------     -----------     ----------     -------------
Balances at June 30, 2000..............................      $ 1,155,150       $ 12,415        $   700       $  2,487,855
                                                             ============     ===========     ==========     =============
</TABLE>
<TABLE>
<CAPTION>

                                                                                                     Total
                                                               Cumulative        Cumulative      Shareholders'
                                                               Net Income      Distributions         Equity
                                                             -------------     -------------     -------------
<S>                                                          <C>               <C>               <C>
Balances at December 31, 1999..........................      $  1,089,973      $ (1,032,587)     $  3,689,100

Issuance of common stock:
   Exercise of stock options (197,599 shares)..........                                                 3,717
   Conversion of OP units (98,900 shares) .............                                                 2,640

Repurchase of common stock (2,840,100 shares) .........                                               (63,587)

Issuance of Equity Stock, Series A to Public (4,300.555
shares)................................................                                                83,810

Issuance of Equity Stock, Series A to related party
(52.547 shares)........................................                                                 1,026

Costs in connection with issuance of preferred operating
partnership units (see note 7).........................                                                (3,200)

Net income.............................................           146,864                             146,864

Cash distributions:
   Cumulative Senior Preferred Stock ..................                             (50,083)          (50,083)
   Equity Stock, Series A..............................                              (4,924)           (4,924)
   Class B Common Stock................................                              (2,988)           (2,988)
   Common Stock........................................                             (54,900)          (54,900)
                                                             -------------     -------------     -------------
Balances at June 30, 2000..............................      $  1,236,837      $ (1,145,482)     $  3,747,475
                                                             =============     =============     =============
</TABLE>

                            See accompanying notes.
                                        3
<PAGE>

                              PUBLIC STORAGE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                           For the Six Months Ended
                                                                                                    June 30,
                                                                                        ---------------------------------
                                                                                             2000               1999
                                                                                        --------------     --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   <S>                                                                                  <C>                <C>
   Net income..................................................................         $     146,864      $     135,493
   Adjustments to reconcile net income to net cash provided by operating
     activities:
     Depreciation and amortization.............................................                71,778             64,925
     Depreciation included in equity earnings of real estate entities..........                10,130              9,574
     Minority interest in income...............................................                14,854              7,657
                                                                                        --------------     --------------
         Total adjustments.....................................................                96,762             82,156
                                                                                        --------------     --------------
             Net cash provided by operating activities.........................               243,626            217,649
                                                                                        --------------     --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal payments received on notes receivable from affiliates...........                 1,980             26,818
     Notes receivable from affiliates..........................................               (11,400)           (29,500)
     Capital improvements to real estate facilities............................                (9,182)           (10,156)
     Construction in process...................................................               (93,002)           (45,238)
     Acquisition of minority interests.........................................               (28,141)           (14,654)
     Proceeds from the disposition of real estate facilities...................                 8,652              8,417
     Proceeds from the disposition of real estate investments..................                20,276                  -
     Acquisition of investment in real estate entities.........................               (49,462)           (50,456)
     Acquisition of real estate facilities.....................................               (14,848)            (5,243)
     Acquisition cost of business combinations.................................                     -           (171,896)
                                                                                        --------------     --------------
             Net cash used in investing activities.............................              (175,127)          (291,908)
                                                                                        --------------     --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on notes payable.......................................                (5,952)            (8,875)
     Net proceeds from the issuance of common stock............................                 3,717              8,083
     Net proceeds from the issuance of preferred stock.........................                     -            222,555
     Net proceeds from the issuance of equity stock............................                39,800                  -
     Net proceeds from the issuance of preferred partnership units.............               311,800                  -
     Repurchase of common stock................................................               (63,587)           (17,578)
     Distributions paid to preferred and common shareholders...................              (112,895)          (102,121)
     Special distribution paid to common shareholders..........................               (38,076)                 -
     Investment by minority interests..........................................                 6,593                  -
     Distributions to holders of preferred partnership units...................                (8,336)
     Distributions from operations to minority interests.......................               (18,328)           (12,472)
     Net reinvestment (divestment) of minority interests.......................                 5,753             (2,068)
     Other.....................................................................                (4,162)             3,445
                                                                                        --------------     --------------
             Net cash provided by financing activities.........................               116,327             90,969
                                                                                        --------------     --------------

Net increase in cash and cash equivalents.....................................                184,826             16,710
Cash and cash equivalents at the beginning of the period......................                 55,125             51,225
                                                                                        --------------     --------------
Cash and cash equivalents at the end of the period............................          $     239,951      $      67,935
                                                                                        ==============     ==============
</TABLE>
                            See accompanying notes.
                                       4

<PAGE>

                              PUBLIC STORAGE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)

                                   (UNAUDITED)

                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                 For the Six Months Ended
                                                                                          June 30,
                                                                              ----------------------------------
                                                                                   2000               1999
                                                                              --------------      --------------
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 Business combinations:
     <S>                                                                      <C>                 <C>
     Real estate facilities.........................................          $          -        $    (720,197)
     Construction in process........................................                     -              (11,449)
     Investment in real estate entities.............................                     -                 (356)
     Mortgage notes receivable......................................                     -               (6,739)
     Other assets...................................................                     -               (1,633)
     Accrued and other liabilities..................................                     -               22,824
     Minority interest..............................................                     -               32,201
     Notes payable..................................................                     -              100,000

 Reduction to investment in real estate entities in connection with:
     Business combinations..........................................                     -               66,230
     Acquisitions of real estate facilities.........................                 3,143

 Disposition of real estate investment in exchange for other assets:
     Investment in real estate entities.............................                14,435                    -
     Other assets...................................................               (14,435)                   -

 Real estate acquired in exchange for equity stock and reduction to
    investment in real estate entities..............................               (19,017)                   -

 Acquisition of minority interest and real estate in exchange for
    common stock:
     Real estate facilities.........................................               (15,681)             (17,155)
     Minority interest..............................................               (15,450)             (13,446)

Mortgage notes receivable forgiven in exchange for minority interest
   and real estate..................................................                   350                    -

 Real estate facilities and accumulated depreciation disposed of in
   exchange for notes receivable, minority interests and other assets               18,769               22,677

 Minority interests acquired in exchange for  the disposition of
   real estate facilities...........................................                (6,427)                   -

 Note receivable received in exchange for the disposition of real
   estate facilities................................................                (3,690)             (10,460)

Issuance of Equity Stock, Series A:
    In connection with special distribution to common shareholders..                44,010                    -
    In connection with acquisition of real estate facilities........                 1,026                    -

Decrease in distributions payable through the issuance of   Equity
   Stock, Series A..................................................               (44,010)                   -

Other assets received in connection with real estate dispositions...                     -               (3,800)

Issuance of common stock :
     In connection with business combinations.......................                     -              347,223
     To acquire minority interest in consolidated real estate                        2,640               15,947
     entities.......................................................

</TABLE>
                            See accompanying notes.
                                       5

<PAGE>

                              PUBLIC STORAGE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)


1.   Description of the business
     ---------------------------

              Public Storage, Inc. (the "Company") is a California  corporation,
     which was organized in 1980. We are a fully  integrated,  self-administered
     and  self-managed  real estate  investment  trust ("REIT") whose  principal
     business  activities  include the acquisition,  development,  ownership and
     operation of storage  facilities  which offer storage spaces and containers
     for lease,  usually on a  month-to-month  basis,  for personal and business
     use. In addition,  to a much lesser extent, we have interests in commercial
     properties.

              In 1996 and 1997, we organized Public Storage Pickup and Delivery,
     Inc.,  as a separate  corporation  and  partnership  (the  corporation  and
     partnership  are  collectively  referred to as "PSPUD") to operate  storage
     facilities that rent portable  storage  containers to customers for storage
     in  central  warehouses.  At June 30,  2000,  PSPUD  had 37  facilities  in
     operation.

              We invest in real estate  facilities  by  acquiring  wholly  owned
     facilities or by acquiring interests in real estate entities which own real
     estate  facilities.  At June 30, 2000,  we had direct and  indirect  equity
     interests in 1,455 properties located in 38 states, including 1,325 storage
     facilities   and  130  commercial   properties.   We  operate  all  of  the
     self-storage facilities under the "Public Storage" name.

2.   Summary of significant accounting policies
     ------------------------------------------

     Basis of presentation
     ---------------------

              The consolidated  financial statements include the accounts of the
     Company  and  34  controlled   entities  (the   "Consolidated   Entities").
     Collectively,  the  Company  and these  entities  own a total of 1,219 real
     estate   facilities,   consisting  of  1,213  storage  facilities  and  six
     commercial properties.

              At  June  30,  2000,  we  had  equity  investments  in 11  limited
     partnerships in which we do not have a controlling interest.  These limited
     partnerships  collectively  own  112  self-storage  facilities,  which  are
     managed by the Company. In addition, we own approximately 41% of the common
     interest in PS Business Parks,  Inc.  ("PSB"),  which owns and operates 124
     commercial properties. We do not control these entities,  accordingly,  our
     investments in these limited  partnerships  and PSB are accounted for using
     the equity method.

     Use of estimates
     ----------------

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

     Income tax
     ----------

              For all taxable years  subsequent to 1980,  the Company  qualified
     and intends to continue to qualify as a REIT,  as defined in Section 856 of
     the Internal  Revenue  Code. As a REIT, we are not taxed on that portion of
     our taxable income, which is distributed to our shareholders, provided that
     we meet certain tests. We believe we will meet these tests during 2000 and,
     accordingly,   no  provision   for  income  taxes  has  been  made  in  the
     accompanying financial statements.

                                       6

<PAGE>


     Financial instruments
     ---------------------

              The methods  and  assumptions  used to estimate  the fair value of
     financial  instruments is described below. We have estimated the fair value
     of  our  financial  instruments  using  available  market  information  and
     appropriate valuation  methodologies.  Considerable judgment is required in
     interpreting market data to develop estimates of market value. Accordingly,
     estimated  fair values are not  necessarily  indicative of the amounts that
     could be realized in current market exchanges.

              For purposes of financial statement presentation,  we consider all
     highly liquid debt instruments purchased with a maturity of three months or
     less to be cash equivalents.

              Due  to  the  short  period  to  maturity  of our  cash  and  cash
     equivalents,  accounts  receivable,  other  assets,  and  accrued and other
     liabilities,  the carrying values as presented on the consolidated  balance
     sheets are reasonable estimates of fair value.

              Financial assets that are exposed to credit risk consist primarily
     of cash and cash equivalents,  accounts  receivable,  and notes receivable.
     Cash  and  cash  equivalents,  which  consist  of  short-term  investments,
     including  commercial paper and treasury  securities,  are only invested in
     entities  with  an   investment   grade  rating.   Notes   receivable   are
     substantially  all  secured by real estate  facilities  that we believe are
     valued in excess of the related note  receivable.  Accounts  receivable are
     not a  significant  portion of total  assets and are  comprised  of a large
     number of individual customers.

     Real estate facilities
     ----------------------

              Real  estate  facilities  are  recorded at cost.  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.

     Evaluation of asset impairment
     ------------------------------

              In 1995, the Financial Accounting Standards Board issued Statement
     No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
     Long-Lived Assets to be Disposed Of" which requires impairment losses to be
     recorded on  long-lived  assets.  We annually  evaluate  long-lived  assets
     (including  goodwill),  by  identifying  indicators  of  impairment  and by
     comparing the sum of the estimated  undiscounted future cash flows for each
     asset to the asset's  carrying  amount.  When  indicators of impairment are
     present  and the sum of the  undiscounted  cash  flows  is  less  than  the
     carrying value of such asset,  an impairment  loss is recorded equal to the
     difference  between the asset's current  carrying value and its value based
     upon  discounting its estimated  future cash flows.  Statement No. 121 also
     addresses  the  accounting  for  long-lived  assets that are expected to be
     disposed of. Such assets are to be reported at the lower of their  carrying
     amount or fair value,  less cost to sell. Our evaluations have indicated no
     impairment in the carrying amount of our assets.

     Other assets
     ------------

              Other assets primarily consist of furniture,  fixtures, equipment,
     and other assets, including those associated with the portable self-storage
     business.   Included  in  other   assets  with   respect  to  the  portable
     self-storage  business  is  furniture,  fixtures,  and  equipment  (net  of
     accumulated  depreciation)  of $32,999,000 and $34,704,000 at June 30, 2000
     and  December  31,  1999,   respectively.   Included  in  depreciation  and
     amortization  expense for the three  months ended June 30, 2000 and 1999 is
     $1,255,000 and $1,250,000,  respectively, and $2,408,000 and $2,432,000 for
     the six months ended June 30, 2000 and 1999, respectively,  of depreciation
     of  furniture,   fixtures,  and  equipment  of  the  portable  self-storage
     business.

                                       7

<PAGE>

     Intangible assets
     -----------------

              Intangible  assets  consist  of  property   management   contracts
     ($165,000,000)  and the  cost  over  the fair  value  of net  tangible  and
     identifiable  intangible assets ($67,726,000)  acquired.  Intangible assets
     are  amortized  straight-line  over 25 years.  At June 30, 2000  intangible
     assets are net of accumulated  amortization of $43,056,000  ($38,400,000 at
     December 31, 1999).  Included in depreciation and amortization  expense for
     the three and six months  ended June 30,  2000 and 1999 is  $2,328,000  and
     $4,656,000, respectively, related to the amortization of intangible assets.

     Revenue and expense recognition
     -------------------------------

              Property  rents are  recognized  as earned.  Equity in earnings of
     real estate entities is recognized  based on our ownership  interest in the
     earnings of each of the  unconsolidated  real estate entities.  Advertising
     costs are expensed as incurred.

     Environmental costs
     -------------------

              Our  policy  is  to  accrue   environmental   assessments   and/or
     remediation cost when it is probable that such efforts will be required and
     the related costs can be reasonably  estimated.  Our current practice is to
     conduct   environmental   investigations   in   connection   with  property
     acquisitions.  Although there can be no assurance,  we are not aware of any
     environmental  contamination of any of our facilities which individually or
     in the  aggregate  would be  material to our  overall  business,  financial
     condition, or results of operations.

     Net income per common share
     ---------------------------

              Dividends paid to our preferred  shareholders totaling $25,045,000
     and  $23,824,000  for the  three  months  ended  June 30,  2000  and  1999,
     respectively, and $50,083,000 and $45,354,000 for the six months ended June
     30,  2000 and 1999,  respectively,  have been  deducted  from net income to
     arrive at net income allocable to our common shareholders.

              Net income  allocated to our common  shareholders has been further
     allocated  among our two classes of common stock;  our regular common stock
     and our Equity Stock,  Series A. The allocation  among each class was based
     upon the two-class method.  Under the two-class method,  earnings per share
     for each  class  of  common  stock is  determined  according  to  dividends
     declared  (or  accumulated)  and  participation   rights  in  undistributed
     earnings.  Under the two-class method,  the Equity Stock,  Series A for the
     three  and six  months  ended  June 30,  2000 was  allocated  approximately
     $2,666,000 and  $4,924,000,  respectively,  of net income and the remaining
     $46,592,000  and  $91,857,000,  respectively,  was allocated to the regular
     common shares.

              Diluted net income per common share is computed using the weighted
     average common shares outstanding (adjusted for stock options).  Commencing
     January 1, 2000, the Company's  7,000,000 Class B common shares outstanding
     began  to  participate  in   distributions   of  the  Company's   earnings.
     Distributions per share of Class B common stock are equal to 97% of the per
     share distribution paid to the Company's regular common shares. As a result
     of  this  participation  in  distribution  of  earnings,  for  purposes  of
     computing  net  income  per common  share,  we began to  include  6,790,000
     (7,000,000  x 97%) Class B common  shares in the  weighted  average  common
     equivalent  shares  for the  three  and six  months  ended  June 30,  2000.
     Weighted  average  shares for the three and six months  ended June 30, 1999
     does not  include any shares  with  respect to the Class B common  stock as
     these shares did not participate in distributions of the Company's earnings
     prior to January 1, 2000.

                                        8

<PAGE>

     Stock-based compensation
     ------------------------

              In October 1995, the Financial  Accounting  Standards Board issued
     Statement No. 123 "Accounting for Stock-Based  Compensation" which provides
     companies an  alternative  to accounting for  stock-based  compensation  as
     prescribed under APB Opinion No. 25 (APB 25). Statement 123 encourages, but
     does not require  companies to  recognize  expense for  stock-based  awards
     based on their  fair  value at date of  grant.  Statement  No.  123  allows
     companies to continue to follow existing  accounting rules (intrinsic value
     method under APB 25) provided that pro-forma  disclosures  are made of what
     net income and  earnings  per share  would have been had the new fair value
     method been used. We have elected to adopt the disclosure  requirements  of
     Statement No. 123 but will continue to account for stock-based compensation
     under APB 25.

     Reclassifications
     -----------------

         Certain  reclassifications have been made to the consolidated financial
     statements for 1999 in order to conform to the 2000 presentation.

3.   Merger with Storage Trust Realty, Inc.
     --------------------------------------

              On March 12,  1999,  we  completed  a merger  with  Storage  Trust
     Realty, Inc. ("Storage Trust").  All the outstanding stock of Storage Trust
     was exchanged for  13,009,485  shares of the Company's  common stock and an
     additional  1,011,963  shares were reserved for issuance upon conversion of
     limited partnership units in Storage Trust's operating partnership. In this
     merger, the Company acquired interests in 215 storage facilities located in
     16 states totaling approximately 12 million net rentable square feet.

              The historical  operating results of the merger with Storage Trust
     prior to March 12, 1999 have not been included in our historical  operating
     results.  Pro forma  selected  financial data for the six months ended June
     30, 1999 as though the merger had been  effective at January 1, 1999 are as
     follows:

                                                            Six Months Ended
              (In thousands, except per share data)           June 30, 1999
        --------------------------------------------        -----------------
        Revenues....................................            $  337,651
        Net income..................................            $  139,422
        Net income per common share (Basic).........            $     0.73
        Net income per common share (Diluted).......            $     0.73

                  The pro  forma  data  does not  purport  to be  indicative  of
     operations  that  would  have  occurred  had  the  merger  occurred  at the
     beginning  of the period or future  results of  operations  of the Company.
     Certain pro forma adjustments were made to the combined  historical amounts
     to reflect (i) expected reductions in general and administrative  expenses,
     (ii) estimated  increased interest costs to finance the cash portion of the
     acquisition  cost,  and (iii)  estimated  increased  depreciation  expense.

                                       9

<PAGE>

4.   Real estate facilities
     ----------------------

              Activity in real estate facilities during 2000 is as follows:

                                                             In thousands
                                                            ---------------
Operating facilities, at cost
  Balance at December 31, 1999....................          $    3,822,433
  Developed facilities............................                  63,863
  Acquired facilities.............................                  19,017
  Disposition of facilities.......................                 (19,020)
  Acquisition of minority interest................                  15,681
  Capital improvements............................                   9,182
                                                            ---------------
  Balance at June 30,2000.........................               3,911,156
                                                            ---------------

Accumulated depreciation:
  Balance at December 31, 1999....................                (533,412)
  Additions during the year.......................                 (64,714)
  Disposition of facilities.......................                     251
                                                            ---------------
  Balance at June 30,2000.........................                (597,875)
                                                            ---------------

Construction in progress:
  Balance at December 31, 1999....................                 140,764
  Current development.............................                  93,002
  Developed facilities............................                 (63,863)
                                                            ---------------
  Balance at June 30,2000.........................                 169,903
                                                            ---------------

  Total real estate facilities at June 30, 2000...          $    3,483,184
                                                            ===============

              During the six  months  ended  June 30,  2000,  we opened 13 newly
     developed  facilities having  approximately  910,000 aggregate net rentable
     square  feet  and a total  cost of $57.5  million,  and two  expansions  of
     facilities having a total cost of $6.4 million. Construction in progress at
     June 30,  2000  consists of 29 storage  facilities,  and 15  expansions  of
     existing storage facilities.

              During  the  six  months  ended  June  30,  2000 we  acquired  two
     commercial  facilities and two storage facilities in separate  transactions
     for an aggregate  cost of  $19,017,000,  comprised of  $14,848,000  cash, a
     $3,143,000  investment  in real  estate  entities,  and  $1,026,000  in the
     issuance of the Company's Equity Stock, Series A.


              As  previously  reported in our Form 10-K, we granted an option to
     acquire eight of our properties.  In January, 2000, the buyer exercised the
     option and, as a result,  we disposed of eight  storage  facilities  for an
     aggregate of  $18,769,000,  composed of cash  ($8,652,000),  a reduction of
     minority interests ($6,427,000), and a note receivable ($3,690,000).  There
     was no gain or loss on this transaction.

              Our policy is to capitalize  interest  incurred on debt during the
     course of  construction  of our  self-storage  and  industrial  facilities.
     Interest  capitalized  during the three and six months  ended June 30, 2000
     was  $2,045,000  and  $4,156,000,  respectively,  compared to $988,000  and
     $1,946,000, respectively, for the same periods in 1999.

                                       10

<PAGE>

5.   Investment in real estate entities:
     -----------------------------------

              At June 30, 2000, our investment in real estate entities  consists
     of (i)  partnership  interests in 11  partnerships,  which  principally own
     self-storage  facilities  and  (ii) our  ownership  interest  in PSB.  Such
     interests are non-controlling  interests of less than 50% and are accounted
     for using  the  equity  method of  accounting.  Accordingly,  earnings  are
     recognized based upon our ownership  interest in each of the  partnerships.
     During the three and six months ended June 30, 2000 we recognized  earnings
     from our investments of $9,155,000 and $17,431,000,  respectively, compared
     to $9,347,000 and $17,469,000 for the same period in 1999.

              In April  1997,  we  formed a joint  venture  partnership  with an
     institutional   investor  (the  "Joint  Venture")  to  participate  in  the
     development of approximately $220 million of storage facilities.  The Joint
     Venture  has a total of 45 opened  facilities  with a total  cost of $217.4
     million at June 30, 2000, and has two projects in process with an aggregate
     cost  incurred  to  date  of  approximately  $10.8  million  ($1.3  million
     estimated to complete) at June 30, 2000.

              Summarized combined financial data (based on historical cost) with
     respect to those  unconsolidated  real estate entities in which the Company
     had an ownership interest at June 30, 2000 are as follows:

<TABLE>
<CAPTION>
                                                            For the six months ended June 30, 2000
                                             --------------------------------------------------------------------------
                                              Other Equity        Development
                                              Investments        Joint Venture            PSB                Total
                                             --------------      --------------      --------------      --------------
                                                                    (Amounts in thousands)
<S>                                          <C>                 <C>                 <C>                 <C>
Rental income.........................       $      19,945       $      11,614       $      70,467       $     102,026
Other income..........................                 612                 122               3,485               4,219
                                             --------------      --------------      --------------      --------------
Total revenues........................              20,557              11,736              73,952             106,245
                                             --------------      --------------      --------------      --------------

Cost of operations....................               6,257               5,040              19,670              30,967
Depreciation..........................               2,221               3,096              17,274              22,591
Other expenses........................               1,805                  73               2,722               4,600
                                             --------------      --------------      --------------      --------------
Total expenses........................              10,283               8,209              39,666              58,158
                                             --------------      --------------      --------------      --------------
Income before minority interest.......              10,274               3,527              34,286              48,087
Minority interest ....................                   -                   -             (12,031)            (12,031)
                                             --------------      --------------      --------------      --------------
Net income............................       $      10,274       $       3,527       $      22,255       $      36,056
                                             ==============      ==============      ==============      ==============

At June 30, 2000:
-----------------
Real estate, net......................       $      68,777       $     219,496       $     822,054       $   1,110,327
Total assets..........................              98,594             224,085             906,321           1,229,000
Total liabilities.....................              47,991               4,087              57,964             110,042
Minority interest.....................                   -                   -             291,296             291,296
Total equity..........................              50,603             219,998             557,061             827,662

The Company's investment (book value) at
  June 30, 2000.......................       $     142,594       $      65,999       $     250,413       $     459,006

The Company's effective average
  ownership interest at June 30, 2000.             46%                 30%                 41%

</TABLE>

6.   Revolving line of credit
     ------------------------

              The credit agreement (the "Credit Facility") has a borrowing limit
     of $150 million and an expiration date of July 1, 2002. The expiration date
     may be extended by one year on each  anniversary  of the credit  agreement.
     Interest on outstanding  borrowings is payable monthly.  At our option, the
     rate of  interest  charged  is equal to (i) the  prime  rate or (ii) a rate

                                       11

<PAGE>

     ranging  from the London  Interbank  Offered Rate  ("LIBOR")  plus 0.40% to
     LIBOR plus 1.10%  depending on the  Company's  credit  ratings and coverage
     ratios, as defined. In addition, the Company is required to pay a quarterly
     commitment fee of 0.250% (per annum). The Credit Facility allows us, at our
     option,  to request  the group of banks to propose the  interest  rate they
     would charge on specific borrowings not to exceed $50 million;  however, in
     no case may the interest rate proposal be greater than the amount  provided
     by the Credit Facility.  At June 30, 2000, we had no borrowings on our line
     of credit.

7.   Minority interest
     -----------------

              In  consolidation,  we  classify  ownership  interests  in the net
     assets  of each of the  Consolidated  Entities,  other  than  our  own,  as
     minority  interest  on  the  consolidated  financial  statements.  Minority
     interest  in  income  consists  of the  minority  interests'  share  of the
     operating results of the Company relating to the consolidated operations of
     the Consolidated Entities.

              In November  1999,  we formed a second  development  joint venture
     with a joint venture partner to develop $100 million of storage  facilities
     and to purchase $100 million of the Company's Equity Stock, Series AAA. The
     joint venture is funded solely with equity  capital  consisting of 51% from
     the Company and 49% from the joint  venture  partner.  The joint venture is
     consolidated and,  accordingly,  the Equity Stock, Series AAA is eliminated
     in   consolidation.   Included  in  minority   interest  is   approximately
     $69,893,000 contributed by our joint venture partner since inception of the
     venture. Minority interest has increased $6,593,000 since December 31, 1999
     as a result of contributions by our joint venture partner.

              On March 17, 2000, one of our operating partnerships issued $240.0
     million of 9.5% Series N Cumulative  Redeemable  Perpetual  Preferred Units
     and on March 29,  2000,  one of our  operating  partnerships  issued  $75.0
     million of 9.125% Series O Cumulative Redeemable Perpetual Preferred Units.
     The units are not redeemable during the first 5 years,  thereafter,  at our
     option,  we can call the units for  redemption at the issuance  amount plus
     any  unpaid  distributions.  The units are not  redeemable  by the  holder.
     Subject to certain conditions, the Series N preferred units are convertible
     into shares of 9.5% Series N  Cumulative  Preferred  Stock and the Series O
     preferred units are  convertible  into shares of 9.125% Series O Cumulative
     Preferred  Stock of the Company.  We incurred  $3,200,000 in costs in these
     issuances;  these costs were  recorded  as a reduction  to Paid in Capital.
     These transactions had the effect of increasing minority interest by $315.0
     million.  For the three and six months ended June 30, 2000,  the holders of
     these preferred units were paid in aggregate  approximately  $7,411,000 and
     $8,336,000,  respectively,  in  distributions  and received a corresponding
     allocation of minority interest in earnings.

              In  connection  with the merger with Storage  Trust in March 1999,
     minority interest  increased by approximately  $27,009,000,  reflecting the
     fair value of operating  partnership  units ("OP Units") in Storage Trust's
     operating partnership owned by minority interests. OP Units are convertible
     on a one-for-one basis (subject to certain  limitations) into common shares
     of the Company at the option of the unitholder. Minority interest in income
     with respect to OP Units  reflects the OP Units' share of the net income of
     the Company,  with net income allocated to weighted average  outstanding OP
     Units on a per unit basis  equal to  diluted  earnings  per  common  share.
     During the six months ended June 30, 2000,  376,004 OP units were  redeemed
     in connection  with the sale of real estate  facilities  and other minority
     interest  transactions,  and the  related  impact on  minority  interest is
     included in the transactions summarized below. As of June 30, 2000, 394,888
     of such units are outstanding.

              During the six months ended June 30, 2000,  minority  interest was
     reduced by  $6,427,000 in connection  with the  disposition  of real estate
     facilities. In addition, in the six months ended June 30, 2000, the Company
     acquired  interests in the  Consolidated  Entities for an aggregate cost of
     $31,131,000,   comprised  of  $28,141,000  cash,   forgiveness  of  a  note

                                       12

<PAGE>

     receivable of $350,000,  and issuance of common stock of $2,640,000;  these
     acquisitions had the effect of reducing  minority  interest by $15,450,000,
     with the excess of cost over underlying book value ($15,681,000)  allocated
     to real estate.

8.   Shareholders' equity
     --------------------

     Preferred stock
     ---------------

              At June 30, 2000, we had the following  series of Preferred  Stock
outstanding:

                              Dividend         Shares          Carrying
       Series                    Rate       Outstanding         Amount
-----------------------      -----------    ------------     ------------
                                            (Dollar amount in thousands)
Series A                         10.000%       1,825,000     $     45,625
Series B                          9.200%       2,386,000           59,650
Series C                      Adjustable       1,200,000           30,000
Series D                          9.500%       1,200,000           30,000
Series E                         10.000%       2,195,000           54,875
Series F                          9.750%       2,300,000           57,500
Series G                          8.875%           6,900          172,500
Series H                          8.450%           6,750          168,750
Series I                          8.625%           4,000          100,000
Series J                          8.000%           6,000          150,000
Series K                          8.250%           4,600          115,000
Series L                          8.250%           4,600          115,000
Series M                          8.750%           2,250           56,250
                                            ------------     ------------
Total Senior Preferred Stock                  11,141,100     $  1,155,150
                                            ============     ============

              The Series A through Series M preferred  stock  (collectively  the
     "Senior  Preferred  Stock") have general  preference rights with respect to
     liquidation and quarterly  distributions.  Holders of the preferred  stock,
     except under certain conditions and as noted above, will not be entitled to
     vote on most matters.  In the event of a cumulative  arrearage equal to six
     quarterly  dividends or failure to maintain a Debt Ratio (as defined in the
     governing  documents) of 50% or less,  holders of all outstanding series of
     preferred  stock (voting as a single class  without  regard to series) will
     have the right to elect two  additional  members to serve on the  Company's
     Board of Directors  until  events of default  have been cured.  At June 30,
     2000, there were no dividends in arrears and the Debt Ratio was 3.2%.

              Except  under  certain   conditions   relating  to  the  Company's
     qualification as a REIT, the Senior Preferred Stock is not redeemable prior
     to the following dates: Series A - September 30, 2002, Series B - March 31,
     2003,  Series C - June 30, 1999,  Series D - September 30, 2004, Series E -
     January 31, 2005,  Series F - April 30, 2005, Series G - December 31, 2000,
     Series H - January 31, 2001, Series I - October 31, 2001, Series J - August
     31, 2002,  Series K - January 19, 2004, Series L - March 10, 2004, Series M
     - August 17, 2004. On or after the respective  dates, each of the series of
     Senior Preferred Stock will be redeemable at the option of the Company,  in
     whole or in part, at $25 per share (or depositary  share in the case of the
     Series G,  Series H,  Series I, Series J, Series K, Series L and Series M),
     plus accrued and unpaid dividends.

                                       13

<PAGE>

     Equity Stock
     ------------

              The Company is  authorized to issue  200,000,000  shares of Equity
     Stock. The Articles of  Incorporation  provide that the Equity Stock may be
     issued  from  time to time in one or more  series  and  gives  the Board of
     Directors  broad  authority to fix the dividend  and  distribution  rights,
     conversion and voting rights,  redemption provisions and liquidation rights
     of each series of Equity Stock.

              In January 2000, we issued 4,300,555  depositary shares (2,200,555
     shares as part of a special distribution  declared on November 15, 1999 and
     2,100,000 shares in a separate public offering) each  representing  1/1,000
     of a share of Equity Stock,  Series A ("Equity  Stock A"). In addition,  in
     the second  quarter of 2000, we issued 52,547  depositary  shares of Equity
     Stock A to a  related  party in  connection  with the  acquisition  of real
     estate  facilities.  The Equity Stock A ranks on a parity with common stock
     and junior to the Senior Preferred Stock with respect to general preference
     rights and has a  liquidation  amount which cannot exceed $24.50 per share.
     Distributions with respect to each depositary share shall be the lesser of:
     a) five times the per share  dividend  on the Common  Stock or b) $2.45 per
     annum  (prorated  for the year  2000).  Except  in order  to  preserve  the
     Company's  federal  income  tax  status as a REIT,  we may not  redeem  the
     depositary  shares  before March 31, 2005.  On or after March 31, 2005,  we
     may, at our option,  redeem the depositary  shares at $24.50 per depositary
     share.  If the Company fails to preserve its federal income tax status as a
     REIT, the depositary  shares will be convertible into common stock on a one
     for one basis.  The depositary  shares are otherwise not  convertible  into
     common stock.  Holders of depositary shares vote as a single class with our
     holders of common stock on shareholder  matters,  but the depositary shares
     have the equivalent of one-tenth of a vote per depositary share. We have no
     obligation  to pay  distributions  if no  distributions  are paid to common
     shareholders.

              In June  1997,  we  contributed  $22,500,000  (225,000  shares) of
     equity stock, now designated as Equity Stock, Series AA ("Equity Stock AA")
     to a partnership in which we are the general  partner.  As a result of this
     contribution,  we obtained a controlling  interest in the  partnership  and
     began to  consolidate  the accounts of the  partnership  and  therefore the
     equity stock is eliminated in consolidation. The Equity Stock AA ranks on a
     parity  with  Common  Stock and junior to the Senior  Preferred  Stock with
     respect to general  preference  rights and has a liquidation  amount of ten
     times the  amount  paid to each  Common  Share up to a maximum  of $100 per
     share.  Quarterly  distributions per share on the Equity Stock AA are equal
     to the  lesser of (i) 10 times the  amount  paid per  Common  Stock or (ii)
     $2.20. We have no obligation to pay  distributions if no distributions  are
     paid to common shareholders.

              In  November  1999,  we sold  $100,000,000  (4,289,544  shares) of
     Equity  Stock,  Series AAA  ("Equity  Stock AAA") to a newly  formed  joint
     venture.  We control the joint venture and  consolidate the accounts of the
     joint  venture,  and  accordingly  the Equity  Stock AAA is  eliminated  in
     consolidation. The Equity Stock AAA ranks on a parity with common stock and
     junior to the Senior  Preferred  Stock (as defined  below) with  respect to
     general  preference  rights,  and has a liquidation amount equal to 120% of
     the amount distributed to each common share. Annual distributions per share
     are equal to the lesser of (i) five times the amount paid per common  share
     or  (ii)  $2.1564.  We  have  no  obligation  to  pay  distributions  if no
     distributions are paid to common shareholders.

     Common Stock
     ------------

              During the six months  ended June 30,  2000,  the  Company  issued
     197,599  shares of common  stock in  connection  with the exercise of stock
     options and 98,900  shares in  connection  with the  redemption  of Storage
     Trust OP Units.

                                       14

<PAGE>

              As  previously   announced,   the  Company's  Board  of  Directors
     authorized the repurchase  from time to time of up to 15,000,000  shares of
     the  Company's  common stock on the open market or in privately  negotiated
     transactions.   In  the  six  months  ended  June  30,  2000,  the  Company
     repurchased  a total of 2,840,100  shares,  for a total  aggregate  cost of
     approximately $63,585,000.  From the initial authorization through June 30,
     2000,  the Company has  repurchased a total of 10,248,927  shares of common
     stock at an aggregate cost of approximately $244,406,000. From July 1, 2000
     through August 9, 2000, we have not repurchased any additional shares.

     Class B Common Stock
     --------------------

              The Class B Common  Stock was  eligible  to receive  distributions
     commencing  January 1, 2000 and will  participate in  distributions  at the
     rate of 97% of the per share  distributions  on the Common Stock,  provided
     that cumulative  distributions of at least $0.22 per quarter per share have
     been  paid  on  the  Common  Stock,  (i)  not  participate  in  liquidating
     distributions,  (ii) not be entitled to vote (except as expressly  required
     by California law) and (iii) automatically  convert into Common Stock, on a
     share for share  basis,  upon the  later to occur of FFO per  common  share
     aggregating  $3.00 during any period of four consecutive  calendar quarters
     or January 1, 2003.

              For these  purposes,  FFO means net income  (loss) before (i) gain
     (loss) on early  extinguishment  of debt, (ii) minority  interest in income
     and (iii) gain (loss) on disposition  of real estate,  adjusted as follows:
     (a) plus  depreciation and  amortization,  and (b) less FFO attributable to
     minority  interest.  FFO per common  share means FFO less  preferred  stock
     dividends and Equity Stock A dividends divided by the outstanding  weighted
     average  shares of Common  Stock  assuming  conversion  of all  outstanding
     convertible securities and the Class B Common Stock.

              For these  purposes,  FFO per share of  Common  Stock (as  defined
     above) was $2.57 for the four consecutive  calendar quarters ended June 30,
     2000.

                                       15

<PAGE>

     Dividends
     ---------

              The following  summarizes dividends during the first six months of
     2000:

                                         Distributions Per
                                             Share or
                                         Depositary Share   Total Distributions
                                         -----------------  -------------------
Series A...........................            $1.250            $2,280,000
Series B...........................            $1.150             2,744,000
Series C...........................            $0.867             1,041,000
Series D...........................            $1.188             1,426,000
Series E...........................            $1.250             2,744,000
Series F...........................            $1.219             2,802,000
Series G...........................            $1.109             7,656,000
Series H...........................            $1.056             7,130,000
Series I...........................            $1.078             4,312,000
Series J...........................            $1.000             6,000,000
Series K ..........................            $1.031             4,744,000
Series L ..........................            $1.031             4,744,000
Series M ..........................            $1.094             2,460,000
                                                            -------------------
                                                                 50,083,000
Equity Stock, Series A.............            $1.130             4,924,000
Common.............................            $0.440            54,900,000
Common, Series B...................            $0.427             2,988,000
                                                            -------------------
   Total dividends.................                            $112,895,000
                                                            ===================

              At December  31,  1999,  the  Company  had  accrued  distributions
     totaling  $82,086,000 ($0.64 per share) of the common dividend for 1999, of
     which  $38,076,000 was paid on January 14, 2000 in cash and $44,010,000 was
     paid in the issuance of depositary shares of Equity Stock A.

              The  dividend  rate on the Series C Preferred  Stock for the first
     and second  quarters of 2000 was equal to 6.897% and 6.974%,  respectively,
     per annum. The dividend rate per annum will be adjusted  quarterly and will
     be equal to the  highest of one of three U.S.  Treasury  indices  (Treasury
     Bill  Rate,  Ten Year  Constant  Maturity  Rate,  or Thirty  Year  Constant
     Maturity  Rate)  multiplied  by 110%.  However,  the dividend  rate for any
     dividend  period will neither be less than 6.75% per annum nor greater than
     10.75%. The dividend rate for the quarter ending September 30, 2000 will be
     equal to 6.75% per annum.

10.  Segment Information
     -------------------

              In July 1997,  the  Financial  Accounting  Standards  Board issued
     Statement No. 131, "Disclosures about Segments of an Enterprise and Related
     Information"  ("FAS 131"),  which  establishes  standards  for the way that
     public business  enterprises report  information about operating  segments.
     This statement is effective for financial  statements for periods beginning
     after  December 15, 1997. We adopted this  standard  effective for the year
     ended December 31, 1998.

     Description of each reportable segment
     --------------------------------------

              Our reportable segments reflect significant  operating  activities
     that are  evaluated  separately  by  management.  We have three  reportable
     segments:  self-storage operations,  portable self-storage operations,  and
     commercial property operations.

                                       16

<PAGE>

              The   self-storage   segment   comprises  the  direct   ownership,
     development,  and  operation  of  traditional  storage  facilities  and the
     ownership of equity interests in entities that own storage properties.  The
     portable  self-storage   operations  reflect  the  containerized   portable
     self-storage  operations of PSPUD. The commercial property segment reflects
     our interest in the ownership and operation of commercial  properties.  The
     vast majority of the commercial  property  operations are conducted through
     PSB,  and  to  a  much  lesser  extent  the  Company  and  certain  of  its
     unconsolidated  subsidiaries  own  commercial  space,  managed  by PSB,  in
     facilities that combine storage and commercial space for rent.

     Measurement of segment profit or loss
     -------------------------------------

              We evaluate  performance and allocate resources based upon the net
     segment income of each segment. Net segment income represents net income in
     conformity   with  generally   accepted   accounting   principles  and  our
     significant  accounting  policies as denoted in Note 2, before interest and
     other income,  interest expense,  general and administrative  expense,  and
     minority  interest in income.  The  accounting  policies of the  reportable
     segments  are the same as those  described  in the  Summary of  Significant
     Accounting Policies.

              Interest and other income, interest expense, corporate general and
     administrative  expense,  and minority interest in income are not allocated
     to segments  because  management  does not utilize  them to evaluate of the
     results of operations of each segment.

     Measurement of segment assets
     -----------------------------

              No segment data  relative to assets or  liabilities  is presented,
     because we do not evaluate performance based upon the assets or liabilities
     of the segments.  We believe that the historical cost of the Company's real
     property does not have any significant  bearing upon the performance of the
     commercial  property and storage segments.  In the same manner,  management
     believes  that the book value of  investment  in real  estate  entities  as
     having no bearing  upon the  results of those  investments.  The only other
     types of assets that might be  allocated to  individual  segments are trade
     receivables,  payables, and other assets which arise in the ordinary course
     of business,  but they are also not a significant factor in the measurement
     of segment  performance.  We perform  post-acquisition  analysis of various
     investments; however, such evaluations are beyond the scope of FAS 131.

              Our income statement provides most of the information  required in
     order to  determine  the  performance  of each of our three  segments.  The
     following  tables  reconcile the  performance of each segment,  in terms of
     segment revenues and segment income,  to our consolidated  revenues and net
     income. It further provides detail of the segment  components of the income
     statement item, "Equity in earnings of real estate entities."

                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                              Three months ended                     Six months ended
                                                                    June 30,                             June 30,
                                                             ----------------------               ----------------------
                                                               2000         1999      Change        2000         1999       Change
                                                             ---------    ---------  ---------    ---------    ---------  ---------
                                                                                  (Dollar amounts in thousands)
RECONCILIATION OF REVENUES BY SEGMENT

SELF STORAGE
<S>                                                          <C>          <C>         <C>         <C>          <C>          <C>
  Self-storage property rentals........................      $161,295     $149,745    $11,550     $315,929     $278,774    $37,155
  Equity in earnings - self storage property operations         5,733        6,852     (1,119)      10,982       11,119       (137)
  Equity in earnings - Depreciation (self storage) ....        (1,384)      (2,505)     1,121       (3,026)      (3,967)       941
                                                             ---------    ---------  ---------    ---------    ---------  ---------
      Self storage segment revenues....................       165,644      154,092     11,552      323,885      285,926     37,959
                                                             ---------    ---------  ---------    ---------    ---------  ---------

PORTABLE SELF STORAGE .................................         9,240        6,448      2,792       16,789       11,876      4,913
                                                             ---------    ---------  ---------    ---------    ---------  ---------

COMMERCIAL  PROPERTIES
  Commercial property rentals..........................         2,827        1,948        879        5,586        3,862      1,724
  Equity in earnings - commercial property operations..        10,729        8,878      1,851       20,558       17,300      3,258
  Equity in earnings - Depreciation (commercial
     properties).......................................        (3,714)      (2,940)      (774)      (7,104)      (5,607)    (1,497)
                                                             ---------    ---------  ---------    ---------    ---------  ---------
      Commercial properties  segment revenues..........         9,842        7,886      1,956       19,040       15,555      3,485
                                                             ---------    ---------  ---------    ---------    ---------  ---------

OTHER ITEMS NOT ALLOCATED TO SEGMENTS
  Equity in earnings - general and administrative and          (2,209)        (938)    (1,271)      (3,979)      (1,376)    (2,603)
     other.............................................
  Interest and other income............................         5,633        4,749        884        9,010        8,271        739
                                                             ---------    ---------  ---------    ---------    ---------  ---------
      Total other items not allocated to segments......         3,424        3,811       (387)       5,031        6,895     (1,864)
                                                             ---------    ---------  ---------    ---------    ---------  ---------

      Total revenues...................................      $188,150     $172,237    $15,913     $364,745     $320,252    $44,493
                                                             =========    =========  =========    =========    =========  =========
</TABLE>
                                       18

<PAGE>

<TABLE>
<CAPTION>
                                                            Three months ended                     Six months ended
                                                                 June 30,                                June 30,
                                                          ------------- ---------                 ----------------------
                                                            2000          1999        Change        2000         1999        Change
                                                          ---------     ---------    ---------    ---------    ---------   ---------
                                                                                (Dollar amounts in thousands)
RECONCILIATION OF NET INCOME BY SEGMENT

Self storage
<S>                                                       <C>           <C>            <C>        <C>          <C>          <C>
  Self-storage properties .............................   $110,023      $104,143       $5,880     $214,300     $192,543     $21,757
  Depreciation and amortization - self storage.........    (33,730)      (33,089)        (641)     (68,165)     (61,639)     (6,526)
  Equity in earnings - self storage property operations      5,733         6,852       (1,119)      10,982       11,119        (137)
  Equity in earnings - depreciation (self-storage) ....     (1,384)       (2,505)       1,121       (3,026)      (3,967)        941
                                                          ---------     ---------    ---------    ---------    ---------   ---------
      Total self storage segment net income............     80,642        75,401        5,241      154,091      138,056      16,035
                                                          ---------     ---------    ---------    ---------    ---------   ---------

Portable self storage..................................       (663)       (2,492)       1,829       (2,121)      (6,081)      3,960
                                                          ---------     ---------    ---------    ---------    ---------   ---------

Commercial  properties
  Commercial properties................................      1,946         1,317          629        3,756        2,593       1,163
  Depreciation and amortization - commercial properties       (759)         (430)        (329)      (1,205)        (854)       (351)
  Equity in earnings - commercial property operations..     10,729         8,878        1,851       20,558       17,300       3,258
   Equity in earnings - depreciation (commercial
   properties) ........................................     (3,714)       (2,940)        (774)      (7,104)      (5,607)     (1,497)
                                                          ---------     ---------    ---------    ---------    ---------   ---------
      Total commercial property segment net income.....      8,202         6,825        1,377       16,005       13,432       2,573
                                                          ---------     ---------    ---------    ---------    ---------   ---------

Other items not allocated to segments:
  Equity in earnings - general and administrative and
     other.............................................     (2,209)         (938)      (1,271)      (3,979)      (1,376)     (2,603)
  Interest and other income............................      5,633         4,749          884        9,010        8,271         739
  General and administrative...........................     (5,576)       (3,060)      (2,516)      (8,621)      (5,418)     (3,203)
  Interest expense.....................................     (1,261)       (2,530)       1,269       (2,667)      (3,734)      1,067
  Minority interest in income..........................    (10,465)       (4,304)      (6,161)     (14,854)      (7,657)     (7,197)
                                                          ---------     ---------    ---------    ---------    ---------   ---------
      Total other items not allocated to segments......    (13,878)       (6,083)      (7,795)     (21,111)      (9,914)    (11,197)
                                                          ---------     ---------    ---------    ---------    ---------   ---------

      Total net income ................................    $74,303       $73,651         $652     $146,864     $135,493     $11,371
                                                          =========     =========    =========    =========    =========   =========
</TABLE>

11.  Subsequent Event
     ----------------

              On August 11, 2000, one of our operating partnerships issued $50.0
     million of 8.75% Series P Cumulative  Redeemable Perpetual Preferred Units.
     The units are not redeemable during the first 5 years,  thereafter,  at our
     option,  we can call the units for  redemption at the issuance  amount plus
     any  unpaid  distributions.  The units are not  redeemable  by the  holder.
     Subject to certain conditions, the Series P preferred units are convertible
     into shares of 8.75% Series P Cumulative Preferred Stock.

                                       19

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

         The following  discussion  and analysis  should be read in  conjunction
with our consolidated 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 21F 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 our actual  results and  performance  to be
materially  different  from those  expressed  or implied in the forward  looking
statements. Such factors include the impact of competition from new and existing
self-storage  and commercial  facilities  which could impact rents and occupancy
levels at our  facilities;  our  ability to  evaluate,  finance,  and  integrate
acquired and developed properties into our existing  operations;  our ability to
effectively  compete in the markets that it does  business in; the impact of the
regulatory  environment  as  well  as  national,   state,  and  local  laws  and
regulations   including,   without  limitation,   those  governing  Real  Estate
Investment  Trusts;  the  acceptance  by  consumers  of the Pickup and  Delivery
concept;  the  impact of  general  economic  conditions  upon  rental  rates and
occupancy levels at our facilities; and the availability of permanent capital at
attractive rates.

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

         Net income for the three  months  ended June 30,  2000 was  $74,303,000
compared to $73,651,000 for the same period in 1999, representing an increase of
$652,000  or 0.9%.  The  increase  in net  income  was  primarily  the result of
improved property operations, reduced operating losses from the portable storage
business,  and the acquisition of additional real estate investments during 1999
and 2000.  The impact of these  items was offset  partially  by certain  factors
including  increased  dilution  from  uninvested  proceeds  from the issuance of
equity securities,  increased dilution from development activities and increased
general and administrative expense.

         Net  income for the six months  ended  June 30,  2000 was  $146,864,000
compared to $135,493,000  for the same period in 1999,  representing an increase
of  $11,371,000  or 8.4%. The increase in net income was primarily the result of
improved property operations, reduced operating losses from the portable storage
business,  and the acquisition of additional real estate investments during 1999
and 2000 (including the acquisition of Storage Trust). The impact of these items
was offset  partially  by certain  factors  including  increased  dilution  from
uninvested  proceeds from the issuance of equity securities,  increased dilution
from development activities and increased general and administrative expense.

         Net income  allocable to common  shareholders  was $46,592,000 or $0.35
per common  share on a diluted  basis  (based on  131,734,000  weighted  average
diluted common equivalent  shares) for the three months ended June 30, 2000. For
the same  period  in 1999,  net  income  allocable  to common  shareholders  was
$49,827,000  or $0.39 per common share on a diluted basis (based on  129,250,000
weighted average diluted common equivalent  shares).  In addition to the factors
noted above with respect to the change in net income, the decrease in net income
allocable  to common  shareholders  includes  the impact of the  issuance of the
Equity  Stock,  Series A. The  decrease  in net  income  per  common  share also
reflects the  inclusion of 6,790,000  common  equivalent  shares  related to the
Class B common shares in 2000, but not in 1999, as described more fully below.

         Net income  allocable to common  shareholders  was $91,857,000 or $0.69
per common  share on a diluted  basis  (based on  132,335,000  weighted  average
diluted  common  equivalent  shares) for the six months ended June 30, 2000. For
the same  period  in 1999,  net  income  allocable  to common  shareholders  was
$90,139,000  or $0.73 per common share on a diluted basis (based on  124,133,000
weighted average diluted common equivalent  shares).  In addition to the factors
noted above with respect to net income,  the decrease in net income allocable to
common shareholders  reflects the impact of the issuance of Equity Stock, Series
A. The  decrease in net income per common share also  reflects the  inclusion of
6,790,000  common  equivalent  shares  related to the  Company's  Class B common
shares in 2000, but not in 1999, as described more fully below.

                                       20

<PAGE>

         In  computing  net income  allocable  to common  shareholders  for each
period,  aggregate  dividends paid to the holders of the Equity Stock,  Series A
and preferred  equity  securities  have been deducted in determining  net income
allocable to the common shareholders.

         Commencing  January  1,  2000,  the  7,000,000  Class B  common  shares
outstanding  began to participate in  distributions  of the Company's  earnings.
Distributions  per  share of Class B common  stock  are  equal to 97% of the per
share  distribution  paid to the Company's regular common shares. As a result of
this  participation in distributions of earnings,  for purposes of computing net
income per common share, we began to include 6,790,000 (7,000,000 x 97%) Class B
common shares in the weighted average common  equivalent  shares for the quarter
and six months  ended June 30, 2000.  Weighted  average  diluted  shares for the
three and six  months  ended June 30,  1999 does not  include  any  shares  with
respect  to the Class B common  stock as these  shares  did not  participate  in
distributions of earnings prior to January 1, 2000.

REAL ESTATE OPERATIONS
--------------------------------------------------------------------------------

         Rental income and cost of operations  have  increased for the three and
six months  ended June 30,  2000  compared to the same period in 1999 due to our
merger and acquisition activities throughout 1999 and 2000. As a result of these
items,  the  number  of  facilities  included  in  the  consolidated   financial
statements  has  increased  from 951 at  December  31, 1998 to 1,213 at June 30,
2000.

         SELF-STORAGE  OPERATIONS:  The following table summarizes the operating
results (before depreciation) of (i) the 946 stabilized  self-storage facilities
(56.1  million net  rentable  square feet) that we owned as of December 31, 1998
(the "Consistent Group") and (ii) all other facilities for which operations were
not reflected in the Company's financial statements throughout the three and six
months   ended  June  30,  2000  and  the  same  periods  in  1999  (the  "Other
Facilities"):

                                       21

<PAGE>

SUMMARY OF SELF-STORAGE OPERATIONS - HISTORICAL

<TABLE>
<CAPTION>
                                           Three months ended                           Six months ended
                                                June 30,                                   June 30,
                                         ----------------------    Percentage        ----------------------    Percentage
                                           2000         1999        Change             2000         1999        Change
                                         ---------    ---------    ---------         ---------    ---------    ---------
                                                       (Amounts in thousands, except per square foot data)

Rental income
<S>                                      <C>          <C>            <C>             <C>          <C>             <C>
    Consistent Group.............        $ 135,339    $ 129,517      4.5%            $ 265,313    $ 255,441       3.9%
    Other Facilities.............           25,956       20,228     28.3%               50,616       23,333     116.9%
                                         ---------    ---------    ---------         ---------    ---------    ---------
                                           161,295      149,745      7.7%              315,929      278,774      13.3%
                                         ---------    ---------    ---------         ---------    ---------    ---------

Cost of Operations
    Consistent Group.............           40,910       38,053      7.5%               81,263       77,515       4.8%
    Other Facilities.............           10,362        7,549     37.3%               20,366        8,716     133.7%
                                         ---------    ---------    ---------         ---------    ---------    ---------
                                            51,272       45,602     12.4%              101,629       86,231      17.9%
                                         ---------    ---------    ---------         ---------    ---------    ---------

Net operating income
    Consistent Group.............           94,429       91,464      3.2%              184,050      177,926       3.4%
    Other Facilities.............           15,594       12,679     23.0%               30,250       14,617     107.0%
                                         ---------    ---------    ---------         ---------    ---------    ---------
                                           110,023      104,143      5.6%              214,300      192,543      11.3%

Depreciation and amortization               33,730       33,089      1.9%               68,165       61,639      10.6%
                                         ---------    ---------    ---------         ---------    ---------    ---------

   Net Income                            $  76,293    $  71,054      7.4%            $ 146,135    $ 130,904      11.6%
                                         =========    =========    =========         =========    =========    =========
CONSISTENT GROUP DATA

  Gross margin........................       69.8%        70.6%     (0.8)%               69.4%        69.7%     (0.3)%
  Weighted average :
     Occupancy........................       92.9%        92.8.%     0.1%                92.2%        91.9%      0.3%
     Realized annual rent per square
     foot.............................      $10.41        $9.97      4.4%               $10.28        $9.93      3.5%
     Scheduled annual rent per square
     foot.............................      $11.07       $10.32      7.3%               $10.80       $10.29      5.0%

Number of facilities at end of period:
  Consistent group....................        946          946       0.0%                 946          946       0.0%
  Other Facilities....................        267          245       9.0%                 267          245       9.0%

Net rentable sq. ft. at end of period
 (in thousands):
  Consistent group....................     56,050       56,050       0.0%              56,050       56,050       0.0%
  Other Facilities....................     16,194       14,356      12.8%              16,194       14,356      12.8%

</TABLE>

         Rental  income for the three and six months  ended June 30, 2000 is net
of promotional  discounts  totaling $4.1 million and $8.6 million,  respectively
compared to $3.9 million and $8.0 million,  respectively  for the same period in
1999. In addition,  included in cost of operations  for the three and six months
ended June 30, 2000 are costs associated with the telephone  reservation  center
and advertising totaling $2.4 million and $4.6 million, respectively compared to
$1.9 million and $3.9 million, respectively for the same period in 1999.

         The 7.5% increase in cost of operations for the three months ended June
30,  2000  as  compared  to the  same  period  in  1999  includes  increases  in
advertising and promotion (including the telephone  reservation center),  repair
and maintenance expense, and payroll.

                                       22

<PAGE>

         During the six  months  ended June 30,  2000,  we have  opened 13 newly
developed facilities with a total cost of approximately $57.5 million.  Included
above with respect to these facilities was revenues of $225,000 and $256,000 for
the  three  and six  months  ended  June  30,  2000,  respectively,  and cost of
operations  of $249,000 and $381,000 for the three and six months ended June 30,
2000, respectively.

         In addition,  during the six months  ended June 30,  2000,  the Company
acquired two storage  facilities for an aggregate cost of $13,087,000.  Included
above with  respect to these  facilities  was revenues of $328,000 for the three
and six months ended June 30, 2000,  and cost of  operations  of $96,000 for the
three and six months ended June 30, 2000.

         COMMERCIAL  PROPERTY  OPERATIONS:.  Our commercial  property operations
included in the consolidated financial statements include commercial space owned
by the Company and Consolidated Entities. Our investment in PSB is accounted for
on the equity method of accounting,  and accordingly our share of PSB's earnings
is reflected as "Equity in earnings of real estate entities."

         During the six months  ended June 30,  2000,  the Company  acquired two
commercial   facilities  (which  are  expected  to  be  converted  into  storage
facilities)  for an aggregate cost of  $5,930,000.  Included  within  commercial
property  operations  with respect to these  facilities was revenues of $136,000
for the three and six months  ended June 30,  2000,  and cost of  operations  of
$21,000 for the three and six months ended June 30, 2000.

         The  following  table sets  forth the  historical  commercial  property
amounts included in the financial statements:

COMMERCIAL PROPERTY OPERATIONS - HISTORICAL

<TABLE>
<CAPTION>
                                    Three months ended                              Six months ended
                                         June 30,                                       June 30,
                                 ------------- ---------                         -----------------------
                                   2000           1999        Change               2000          1999         Change
                                 ---------     ---------     ---------           ---------     ---------     ---------
                                                              (Amounts in thousands)

<S>                              <C>           <C>              <C>              <C>           <C>            <C>
Rental income.............       $  2,827      $  1,948         45.1%            $  5,586      $  3,862       44.6%
Cost of operations........            881           631         39.6%               1,830         1,269       44.2%
                                 ---------     ---------     ---------           ---------     ---------     ---------

 Net operating income prior
   to depreciation expense          1,946         1,317         47.8%               3,756         2,593       44.9%

Depreciation expense......            759           430         76.5%               1,205           854       41.1%
                                 ---------     ---------     ---------           ---------     ---------     ---------

Net income................       $  1,187      $    887         33.8%            $  2,551      $  1,739       46.7%
                                 =========     =========     =========           =========     =========     =========
</TABLE>

         PORTABLE SELF-STORAGE  OPERATIONS:  At June 30, 2000, PSPUD operated 36
facilities. Due to the start-up nature of the business, PSPUD incurred operating
losses  totaling  approximately  $633,000 and  $2,121,000  for the three and six
months ended June 30, 2000,  compared to $2,492,000  and $6,081,000 for the same
periods in 1999:

                                       23

<PAGE>

PORTABLE SELF-STORAGE

<TABLE>
<CAPTION>
                                           Three months ended                              Six months ended
                                                June 30,                                       June 30,
                                        ------------------------                       -------------------------
                                          2000           1999         Change             2000           1999         Change
                                        ---------      ---------      ---------        ---------       ---------     ---------
                                                                       (Amounts in thousands)
<S>                                     <C>            <C>            <C>              <C>             <C>           <C>
Rental and other income .........       $   9,240      $   6,448      $  2,792         $  16,789       $ 11,876      $ 4,913
                                        ---------      ---------      ---------        ---------       ---------     ---------
Cost of operations:
  Direct operating costs.........           6,076          4,524         1,552            11,232          9,137        2,095
  Marketing and advertising......             358            307            51               802            729           73
  Facility lease expense.........           2,214          2,859          (645)            4,468          5,659       (1,191)
                                        ---------      ---------      ---------        ---------       ---------     ---------
    Total cost of operations.....           8,648          7,690           958            16,502         15,525          977

Operating income (loss) prior to
  depreciation...................             592         (1,242)        1,834               287         (3,649)       3,936

  Depreciation ..................           1,255          1,250             5             2,408          2,432          (24)
                                        ---------      ---------      ---------        ---------       ---------     ---------
Operating losses.................       $    (663)     $  (2,492)     $  1,829         $  (2,121)      $ (6,081)     $ 3,960
                                        =========      =========      =========        =========       =========     =========
</TABLE>

         Until the PSPUD facilities are operating profitably, PSPUD's operations
are expected to continue to  adversely  impact the  Company's  earnings and cash
flows. There can be no assurance as to the level of PSPUD's expansion,  level of
gross rentals, level of move-outs or profitability.

         EQUITY  IN  EARNINGS  OF  REAL  ESTATE  ENTITIES:  In  addition  to our
ownership  of equity  interests  in PSB, we had general and limited  partnership
interests  in 12 limited  partnerships  at June 30,  2000.  (PSB and the limited
partnerships are collectively referred to as the "Unconsolidated Entities.") Due
to our  limited  ownership  interest  and control of these  entities,  we do not
consolidate the accounts of these entities for financial reporting purposes, and
account for such investments using the equity METHOD.

        Equity in earnings of real estate  entities  for the year ended June 30,
2000 consists of our pro rata share of the  Unconsolidated  Entities  based upon
our   ownership   interest  for  the  period.   Similar  to  the  Company,   the
Unconsolidated  Entities  (other than PSB) generate  substantially  all of their
income  from their  ownership  of storage  facilities,  which we manage.  In the
aggregate,  the Unconsolidated  Entities (including PSB) own a total of 236 real
estate facilities, 112 of which are storage facilities. The following table sets
forth the significant components of equity in earnings of real estate entities:

                                       24

<PAGE>

HISTORICAL SUMMARY

<TABLE>
<CAPTION>
                                     Three months ended                             Six months ended
                                          June 30,                                      June 30,
                                  ------------------------                      ------------------------
                                     2000          1999         Change             2000          1999        Change
                                  ----------    ----------     ----------       ----------    ----------    ----------
                                                                (Amounts in thousands)
Property operations:
<S>                               <C>           <C>            <C>              <C>           <C>           <C>
    PSB......................     $  10,729     $   8,878      $   1,851        $  20,558     $  17,300     $   3,258
    Development Joint Venture         1,087           569            518            1,972           915         1,057
    Other partnerships.......         4,646         6,283         (1,637)           9,010        10,204        (1,194)
                                  ----------    ----------     ----------       ----------    ----------    ----------
                                     16,462        15,730            732           31,540        28,419         3,121
                                  ----------    ----------     ----------       ----------    ----------    ----------

Depreciation:
    PSB......................        (3,714)       (2,940)          (774)          (7,104)       (5,607)       (1,497)
    Development Joint Venture          (467)         (304)          (163)            (928)         (565)         (363)
    Other partnerships.......          (917)       (2,201)         1,284           (2,098)       (3,402)        1,304
                                  ----------    ----------     ----------       ----------    ----------    ----------
                                     (5,098)       (5,445)           347          (10,130)       (9,574)         (556)
                                  ----------    ----------     ----------       ----------    ----------    ----------
Other: (1)
    PSB......................        (1,903)       (1,057)          (846)          (3,439)       (1,883)       (1,556)
    Development Joint Venture           (38)           21            (59)              15            43           (28)
    Other partnerships.......          (268)           98           (366)            (555)          464        (1,019)
                                  ----------    ----------     ----------       ----------    ----------    ----------
                                     (2,209)         (938)        (1,271)          (3,979)       (1,376)       (2,603)
                                  ----------    ----------     ----------       ----------    ----------    ----------
Total equity in earnings of
  real estate entities.......     $   9,155     $   9,347      $    (192)       $  17,431     $  17,469     $     (38)
                                  ==========    ==========     ==========       ==========    ==========    ==========
</TABLE>

     (1) "Other"  reflects  our share of  general  and  administrative  expense,
         interest   expense,    interest   income,   and   other   non-property,
         non-depreciation related operating results of these entities.

         The  decrease  in 2000  equity  in  earnings  of real  estate  entities
compared to 1999 includes the  acquisition of  controlling  interests in certain
entities and the Company's beginning to include the accounts of such entities in
the Company's consolidated financial statements. Prior to the inclusion of these
entities in the  Company's  financial  statements,  the Company  used the equity
method to report its share of these entities' earnings. This decrease was offset
by improved  earnings of PSB and an  increase in earnings  from the  Development
Joint Venture.  Equity in earnings with respect to the Development Joint Venture
represent our pro rata share of the operating results of an unconsolidated joint
venture  formed in April  1997 in which we have a 30%  ownership  interest.  The
joint  venture  was formed  for the  purpose of  developing  approximately  $220
million  of  self-storage  facilities.  As of June  30,  2000,  45 of the  joint
venture's 47 properties are completed and operating,  substantially all of which
are in the fill-up process and have not reached stabilized occupancy levels.

OTHER INCOME AND EXPENSE ITEMS
--------------------------------------------------------------------------------

         INTEREST AND OTHER  INCOME:  Interest in other income  includes (i) the
net operating results from our property management operations,  (ii) merchandise
sales and consumer truck rentals and (iii) interest income.

         Interest  and other  income has  increased  in the three and six months
ended  June 30,  2000 as  compared  to the same  periods  in 1999 as a result of
higher  uninvested  cash  balances,  primarily  due to our issuance of preferred
operating partnership units in 2000.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
has increased  $975,000 to $35,744,000  for the three months ended June 30, 2000
as  compared  to  $34,769,000  for the same  period  in 1999.  Depreciation  and
amortization  expense has increased $6,853,000 to $71,778,000 for the six months
ended June 30,  2000 as  compared  to  $64,925,000  for the same period in 1999.
These increases are principally due to the acquisition of additional real estate
facilities  during 1999 and 2000.  Included  in  depreciation  and  amortization
expense is amortization  expense with respect to intangible assets of $2,328,000
and  $4,656,000  for the  three and six  months  ended  June 30,  2000 and 1999.
Included in  depreciation  and  amortization  expense for the three months ended

                                       25

<PAGE>

June  30,  2000  and  1999  is  $1,255,000  and  $1,250,000,  respectively,  and
$2,408,000  and  $2,432,000  for the six months  ended  June 30,  2000 and 1999,
respectively,  of  depreciation  of  furniture,  fixtures,  and equipment of the
portable self-storage business.

         GENERAL  AND  ADMINISTRATIVE:  General and  administrative  expense has
increased  $2,516,000 to $5,576,000  for the three months ended June 30, 2000 as
compared to $3,060,000 for the same period in 1999.  General and  administrative
expense has increased $3,203,000 to $8,621,000 for the six months ended June 30,
2000 as  compared  to  $5,418,000  for the same  period  in 1999.  The  increase
includes an expansion in our product research and development  efforts,  as well
as costs  associated  with lease  terminations  on leased  Pickup  and  Delivery
facilities  which were  replaced by  newly-developed  facilities,  and increased
consulting fees. We anticipate that additional  product research and development
efforts and lease  termination  costs will  continue  to be incurred  throughout
fiscal 2000.

         MINORITY INTEREST IN INCOME: Minority interest in income represents the
income allocable to equity interests in the Consolidated Entities, which are not
owned by us.  Minority  interest  in income  was  $10,465,000  and  $14,854,000,
respectively,  for the three and six months  ended June 30,  2000,  compared  to
$4,304,000 and $7,657,000, respectively, for the same periods in 1999.

         In November 1999, we formed a joint venture partnership for the purpose
of  developing  approximately  $100 million of  self-storage  facilities  and to
purchase  $100 million of our Equity Stock,  Series AAA. The venture,  which has
been  consolidated,  is funded solely with equity capital consisting of 51% from
us and 49% from the joint venture partner.  Minority interest in income includes
approximately $138,000 of loss allocated to our joint venture partner.

         On March 17, 2000,  one of our  operating  partnerships  issued  $240.0
million of 9.5% Series N Cumulative  Redeemable Perpetual Preferred Units and on
March 29, 2000, one of our operating partnerships issued $75.0 million of 9.125%
Series O  Cumulative  Redeemable  Perpetual  Preferred  Units.  The  issuance of
preferred  partnership  units had the effect of increasing  minority interest by
$315 million. For the six months ended June 30, 2000, these preferred units were
paid in  aggregate  approximately  $8,336,000  in  distributions  and received a
corresponding allocation of minority interest in earnings for the partial period
in which  the units  were  outstanding.  On March  30,  2000,  we  acquired  the
remaining  minority  interest  in  one  of our  consolidated  partnerships.  The
aggregate  cost of the  acquisition  was  approximately  $23.6  million in cash.
Minority interest in income for the three months ended March 31, 2000,  includes
income allocated to these interests of approximately $602,000.

SUPPLEMENTAL PROPERTY DATA AND TRENDS
--------------------------------------------------------------------------------

         At June 30, 2000, there were approximately 46 ownership entities owning
in aggregate  1,325 storage  facilities,  including the facilities  which we own
and/or  operate.  At June  30,  2000,  112 of  these  facilities  were  owned by
Unconsolidated Entities, entities in which we have an ownership interest and use
the equity  method for financial  statement  presentation.  The remaining  1,213
facilities are owned by the Company and Consolidated Entities.

         The following table summarizes our investment in real estate facilities
as of June 30, 2000:

<TABLE>
<CAPTION>
                                                  Number of Facilities in which the            Net Rentable Square Footage
                                                  Company has an ownership interest                  (in thousands)
                                               ----------------------------------------  ---------------------------------------
                                               Self-Storage   Commercial                 Self-Storage   Commercial
                                                Facilities    Properties      Total      Facilities     Properties      Total
                                               ------------   ------------   ----------  ------------   ------------   ---------
<S>                                                <C>              <C>         <C>         <C>           <C>           <C>
Wholly-owned facilities....................          609              6           615       37,191           394        37,585
Facilities owned by Consolidated Entities..          604              -           604       35,053             -        35,053
                                               ------------   ------------   ----------  ------------   ------------   ---------
    Total consolidated facilities..........        1,213              6         1,219       72,244           394        72,638
Facilities owned by Unconsolidated Entities          112            124           236        6,602        12,274        18,876
                                               ------------   ------------   ----------  ------------   ------------   ---------
    Total  facilities  in which  the  Company
      has an ownership interest............        1,325            130         1,455       78,846        12,668        91,514
                                               ============   ============   ==========  ============   ============   =========
</TABLE>

                                       26

<PAGE>

In order  to  evaluate  how our  overall  portfolio  has  performed,  management
analyzes  the  operating  performance  of a  consistent  group  of  self-storage
facilities representing 949 (55.3 million net rentable square feet) of the 1,325
self-storage  facilities  (herein  referred  to  as  "Same  Store"  self-storage
facilities).  The 949 facilities represent a pool of properties, which have been
operated under the "Public Storage" name, at a stabilized  level, by the Company
since January 1, 1994.  From time to time, the Company  removes  facilities from
the "Same Store" pool as a result of expansions or other activities,  which make
such  facilities'  results not  comparable to previous  periods.  The Same Store
group of properties includes 884 consolidated facilities and 65 facilities owned
by Unconsolidated  Entities. The following table summarizes the pre-depreciation
historical operating results of the Same Store self-storage facilities:

SAME STORE MINI-WAREHOUSE FACILITIES (949 FACILITIES):
------------------------------------------------------
(historical property operations)

<TABLE>
<CAPTION>
                                       Three months ended June 30,                 Six months ended June 30,
                                 ----------------------------------------   ---------------------------------------
                                     2000            1999        Change         2000           1999        Change
                                 ------------   ------------   ----------   ------------   ------------   ---------
                                                               (Amounts in thousands)
<S>                               <C>             <C>               <C>      <C>            <C>              <C>
Rental income...............      $  135,991      $  129,717        4.8%     $  266,402     $  255,670       4.2%
Cost of operations (includes
  an imputed 6% property
  management fee) (1).......          47,106          43,954        7.2%         93,706         89,304       4.9%
                                 ------------   ------------   ----------   ------------   ------------   ---------
Net operating income........      $   88,885      $   85,763        3.6%     $  172,696     $  166,366       3.8%
                                 ============   ============   ==========   ============   ============   =========

Gross profit margin (2).....          65.4%           66.1%        (0.7)%        64.8%          65.1%       (0.3)%

Weighted Average:
----------------
  Occupancy during the
     period................           93.3%           93.1%         0.2%         92.5%          92.2%        0.3%
   Annualized realized rent
     per sq. ft. for period.(3)      $10.54          $10.09         4.5%        $10.42         $10.04        3.8%
   Annualized scheduled rent
     per sq. ft. for period (3)      $11.24          $10.45         7.6%        $10.95         $10.42        5.1%

</TABLE>

1.       Cost  of  operations   includes  both  direct  and  indirect  costs  of
         ownership,  management  and  operations  of  the  properties.  Cost  of
         operations  includes a 6% management fee on all  facilities,  including
         those  facilities  owned by the Company  for which no fee is paid.  The
         7.2% increase in cost of operations for the three months ended June 30,
         2000 as  compared  to the same  period in 1999  includes  increases  in
         advertising and promotion, repair and maintenance expense, and payroll.

2.       Gross  profit  margin is computed by dividing  property  net  operating
         income  (before  depreciation  expense) by rental  revenues.  The gross
         profit margin excluding the facility management fee was 71.4% and 72.1%
         for the three  months ended June 30, 2000 and 1999,  respectively,  and
         70.8%  and  71.1%  for the six  months  ended  June 30,  2000 and 1999,
         respectively.

3.       Realized  rent per square  foot as  presented  throughout  this  report
         represents  the  actual  revenue  earned  per  occupied   square  foot.
         Management  believes this is a more relevant measure than the scheduled
         rental rates,  since scheduled rates can be discounted  through the use
         of promotions.

         Rental  income  for the  Same  Store  facilities  included  promotional
discounts  totaling $3.9 million and $8.4 million,  respectively,  for the three
and six months ended June 30, 2000, respectively as compared to $3.8 million and
$7.8 million for the same period in 1999.

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

         We believe that our internally generated net cash provided by operating
activities  will  continue to be  sufficient  to enable it to meet our operating
expenses,  capital improvements,  debt service requirements and distributions to
shareholders for the foreseeable future.

                                       27

<PAGE>

         Operating as a real estate  investment  trust ("REIT"),  our ability to
retain cash flow for reinvestment is restricted. In order for us to maintain our
REIT status,  a substantial  portion of our operating  cash flow must be used to
make  distributions  to our  shareholders  (see "REIT STATUS"  below).  However,
despite the significant distribution requirements, we have been able to retain a
significant  amount of our operating cash flow. The following  table  summarizes
our ability to make the minority interests' distributions,  dividend payments to
the preferred  shareholders and capital  improvements to maintain the facilities
through the use of cash provided by operating  activities.  The  remaining  cash
flow  generated  is  available to make both  scheduled  and  optional  principal
payments on debt and for reinvestment.

<TABLE>
<CAPTION>
                                                                                            For the six months ended
                                                                                                    June 30,
                                                                                            -------------------------
                                                                                               2000           1999
                                                                                            ----------     ----------
                                                                                             (Amounts in thousands)
<S>                                                                                         <C>             <C>
Net income...........................................................................       $ 146,864       $ 135,493
Depreciation and amortization........................................................          71,778          64,925
Less:  Depreciation with respect to non-real estate assets...........................          (2,408)         (2,432)
Depreciation from Unconsolidated Entities............................................          10,130           9,574
Minority interest in income..........................................................          14,854           7,657
                                                                                            ----------     ----------
  Net cash provided by operating activities..........................................         241,218         215,217

Distributions to Minority Interests:
   Preferred operating partnership units.............................................          (8,336)              -
   Other.............................................................................          (9,992)        (12,472)
                                                                                            ----------     ----------
Cash from operations allocable to the Company's shareholders.........................         222,890         202,745

Less: preferred stock dividends......................................................         (50,083)        (45,354)
Less: equity stock, Series A dividends...............................................          (4,924)              -
                                                                                            ----------     ----------
Cash from operations available to common shareholders................................         167,883         157,391

Capital improvements to maintain facilities..........................................          (9,182)        (10,156)
Add back: minority interest share of capital improvements to maintain facilities.....             177             518
                                                                                            ----------     ----------
Funds available for principal payments on debt, common dividends and reinvestment....         158,878         147,753

Cash distributions to common shareholders (A)........................................         (57,888)        (56,767)
                                                                                            ----------     ----------

Funds available for principal payments on debt and reinvestment (A)..................       $ 100,990       $  90,986
                                                                                            ==========     ==========
</TABLE>

(A)      Cash distributions to common shareholders for the six months ended June
         30,  2000  and  1999  only  include  the   Company's   regular   common
         distributions  ($0.44 per common  share in each  period).  In  November
         1999,  the  Company  declared a special  distribution  in the amount of
         $82,086,000. The Company expects to increase its common distribution in
         the final six months of the year ended  December 31, 2000 and in future
         years  from the  level  paid in the six  months  ended  June  30,  2000
         assuming a  continuation  of its  increasing  level of taxable  income.
         These  increased   distributions   will  be  in  the  form  of  special
         distributions  in  cash  or  securities,  an  increase  in the  regular
         quarterly common distribution, or a combination thereof.

         We expect to fund our growth  strategies  with cash on hand at June 30,
2000,  internally  generated  retained cash flows,  proceeds from issuing equity
securities and borrowings under our $150 million credit  facility.  We intend to
repay amounts  borrowed under the credit facility from  undistributed  operating
cash flow or, as market conditions permit and are determined to be advantageous,
from the public or private placement of equity securities.

         Our  portfolio  of  real  estate   facilities   remains   substantially
unencumbered.  At June 30,  2000,  we had  mortgage  debt  outstanding  of $27.8
million and had  consolidated  real estate  facilities with a book value of $3.5
billion.  We have not  financed our  acquisitions  with debt and  generally  our
borrowing has increased  through the assumption of pre-existing debt on acquired
real estate  facilities,  including  $100 million in debt assumed in  connection
with the merger with Storage Trust.

         During the first  quarter of 2000,  one of our  operating  partnerships
issued $240.0 million of 9.5% Series N Cumulative Redeemable Perpetual Preferred
Units  (issued  March 17, 2000) and $75.0  million of 9.125% Series O Cumulative
Redeemable  Perpetual Preferred Units (issued March 29, 2000). The units are not

                                       28

<PAGE>

redeemable during the first 5 years, thereafter,  at our option, we can call the
units for redemption at the issuance amount plus any unpaid  distributions.  The
units are not  redeemable  by the  holder.  Subject to certain  conditions,  the
Series N preferred units are convertible into shares of 9.5% Series N Cumulative
Preferred Stock and the Series O preferred units are convertible  into shares of
9.125%  Series O Cumulative  Preferred  Stock of the  Company.  The net proceeds
raised  through the  issuance  of the  preferred  units are  expected to be used
primarily to fund our development activities.

         DISTRIBUTION  REQUIREMENTS:  Our conservative  distribution  policy has
been the  principal  reason  for the  Company's  ability  to retain  significant
operating  cash flows which have been used to make  additional  investments  and
reduce debt. In 1999, we distributed to common shareholders, in regular and in a
special  distribution  of Equity  Stock A and cash  declared in  November  1999,
approximately  58% of our cash  available  from  operations  allocable to common
shareholders.

         During the six months ended June 30, 2000 and 1999, we  distributed  to
common shareholders in regular common  distributions  ($0.44 per common share in
each period) approximately 34.5% and 36.1% of our cash available from operations
allocable to common shareholders,  respectively. The Company expects to increase
its common  distribution  in the final six months of the year ended December 31,
2000 and in future  years from the level  paid in the six months  ended June 30,
2000 assuming a continuation of its increasing  level of taxable  income.  These
increased  distributions will be in the form of special distributions of cash or
securities,  an increase  in the regular  quarterly  common  distribution,  or a
combination thereof.

         During  the six  months  ended June 30,  2000,  we paid cash  dividends
totaling $50,083,000 to the holders of our Senior Preferred Stock and $4,924,000
to the holders of Equity Stock,  Series A. We estimate the regular  distribution
requirements for fiscal 2000 with respect to Senior Preferred Stock  outstanding
at June 30, 2000 to be approximately $100.2 million.  With respect to the Equity
Stock,  Series A, the prorated annual  distribution  for 2000 (assuming at least
$0.49 is paid per common share) is approximately $10.3 million.

         During the six months ended June 30, 2000, we paid  dividends  totaling
$139,975,000  to the  holders  of our  common  stock  which  includes  a special
distribution of  approximately  $82,086,000  related to fiscal 1999. The special
distribution  was  paid on  January  14,  2000 to our  common  shareholders  and
consisted of $38,076,000  in cash and  $44,010,000 in the issuance of depositary
shares of Equity  Stock,  Series A. As of June 30,  2000 we paid cash  dividends
totaling  $54,900,000  to common  shareholders  and $2,988,000 to Class B common
shareholders.  Distributions with respect to the classes of common stock will be
determined  based upon our REIT  distribution  requirements  after  taking  into
consideration distributions to the Company's preferred shareholders.

         PREFERRED OPERATING PARTNERSHIP UNIT DISTRIBUTION REQUIREMENTS: For the
three and six months ended June 30, 2000, the holders of these  preferred  units
were paid in aggregate approximately $7,411,000 and $8,336,000, respectively, in
distributions,  which  represented a prorated  dividend for the period the units
were outstanding.  We estimate that the annual distribution  requirement for the
preferred  operating  partnership  units  outstanding  at June 30, 2000 will  be
approximately $29.6 million.

         On August 11,  2000,  one of our  operating  partnerships  issued $50.0
million of 8.75% Series P Cumulative  Redeemable  Perpetual Preferred Units. The
units are not redeemable during the first 5 years, thereafter, at our option, we
can call the  units  for  redemption  at the  issuance  amount  plus any  unpaid
distributions.  The units are not  redeemable by the holder.  Subject to certain
conditions,  the Series P preferred units are  convertible  into shares of 8.75%
Series P  Cumulative  Preferred  Stock.  We  estimate  the  annual  distribution
requirement for these units will be approximately $4.4 million; these units will
receive a  prorated  distribution  in 2000  based upon the period the units were
outstanding.

         CAPITAL  IMPROVEMENT  REQUIREMENTS:   During  2000,  we  have  budgeted
approximately  $26.2 million for capital  improvements.  The minority interests'
share of the budgeted capital improvements is approximately $0.7 million. During
the six  months  ended  June 30,  2000,  we  incurred  capital  improvements  of
approximately $9,182,000.

                                       29

<PAGE>

         DEBT SERVICE  REQUIREMENTS:  We do not believe we have any  significant
refinancing risks with respect to our notes payable, all of which is fixed rate.
At June 30,  2000,  we had total  outstanding  notes  payable  of  $161,386,000.
Approximate  principal  maturities  of notes  payable  at June  30,  2000 are as
follows:


                                   Unsecured
                                 Senior Notes    Mortgage debt         Total
                                 ------------    --------------    -----------
                                              (Amounts in thousands)

2000 (remainder of)..........      $   4,375      $     1,045      $    5,420
2001.........................          9,500            2,910          12,410
2002.........................         24,450            3,530          27,980
2003.........................         35,900            3,585          39,485
2004.........................         25,800           15,063          40,863
Thereafter...................         33,600            1,628          35,228
                                 ------------    --------------    -----------
                                   $ 133,625      $    27,761      $  161,386
                                 ============    ==============    ===========
Weighted average rate........           7.4%            10.3%            7.9%
                                 ============    ==============    ===========

         REPURCHASES OF THE COMPANY'S COMMON STOCK: As previously announced, our
Board  of  Directors  authorized  the  repurchase  from  time  to  time of up to
15,000,000  shares  of the  Company's  common  stock  in the open  market  or in
privately  negotiated  transactions.  In the  quarter  ended June 30,  2000,  we
repurchased  a  total  of  1,459,800  shares,  for a  total  aggregate  cost  of
approximately  $32.8 million.  From the initial  authorization  through June 30,
2000, the Company has  repurchased a total of 10,262,027  shares of common stock
at an aggregate cost of approximately $244.7 million.  From July 1, 2000 through
August 9, 2000, we have not repurchased any additional shares.

         DEVELOPMENT OF SELF-STORAGE  FACILITIES:  As previously  announced,  in
April 1997, we formed a joint venture partnership with an institutional investor
for the purpose of developing up to $220 million of self-storage facilities. The
joint venture is funded solely with equity capital consisting of 30% from us and
70% from the institutional investor. Our share of the cost of the real estate in
the joint venture is approximately $68.4 million at June 30, 2000.

         As of June 30, 2000,  the joint  venture had 45  operating  facilities,
with  2,740,000  net  rentable  square  feet  and  total  development  costs  of
approximately  $217.4  million.  As of June  30,  2000,  the  joint  venture  is
developing two additional  projects  (approximately  140,000 net rentable square
feet) that were in  process,  with total  costs  incurred  of $10.8  million and
estimated remaining costs to complete of $1.3 million.

         In November 1999, we formed a second joint venture  partnership for the
development  of  approximately  $100  million of  self-storage  facilities.  The
venture is funded solely with equity  capital  consisting of 51% from us and 49%
from the joint venture partner.  At June 30, 2000, the second  development joint
venture was committed to develop  eight  facilities  (approximately  530,000 net
rentable  sq. ft.) with an estimated  development  cost of  approximately  $35.8
million, of which seven facilities  (approximately 446,000 net rentable sq. ft.)
were completed at an aggregate cost of approximately  $30.3 million.  As of June
30, 2000,  the second  development  joint venture is developing  one  additional
project  (approximately  84,000 net  rentable  square feet) that was in process,
with total costs  incurred  of $5.2  million and  estimated  remaining  costs to
complete  of $0.3  million.  We have  submitted  12  additional  facilities  for
approval with total  estimated  costs of  approximately  $60.5 million;  we have
incurred approximately $35.2 million through June 30, 2000 with respect to these
12 projects.  Upon  approval,  these  projects will be  transferred to the joint
venture and the joint venture partner will contribute its 49% share.

         Excluding  the 12  properties  that are being  reviewed  by the  second
development  joint venture and the three  properties that the two joint ventures
are developing,  we are developing 18 additional storage facilities. At June 30,
2000, we had incurred costs of $82.3 million with respect to these 18 facilities
(estimated remaining costs to complete of approximately $44.4 million).  We have
also identified 35 additional  storage  facilities for  development,  with total
estimated costs of approximately  $214.8 million.  These projects are subject to
significant contingencies.

                                       30

<PAGE>


         REIT STATUS:  We believe that we have operated,  and intend to continue
to operate,  in such a manner as to qualify as a REIT under the Internal Revenue
Code of  1986,  but no  assurance  can be  given  that we will at all  times  so
qualify.  To the extent that we  continue  to qualify as a REIT,  we will not be
taxed,  with  certain  limited  exceptions,   on  the  taxable  income  that  is
distributed  to our  shareholders,  provided  that at least  95% of our  taxable
income is so  distributed  prior to filing of our tax return.  We have satisfied
the REIT distribution requirement since 1980.

         FUNDS FROM  OPERATIONS:  Total funds from operations or "FFO" increased
to $222,890,000  for the six months ended June 30, 2000 compared to $202,745,000
for the same  period  in 1999.  FFO  available  to  common  shareholders  (after
deducting  preferred  stock  dividends  but  before  deducting  Equity  Stock  A
dividends)  increased  to  $172,807,000  for the six months  ended June 30, 2000
compared to  $157,391,000  for the same period in 1999.  FFO means net income or
(loss) (computed in accordance with generally  accepted  accounting  principles)
before:  (i) gain or  (loss)  on early  extinguishment  of debt,  (ii)  minority
interest in income and (iii) gain or (loss) on the  disposition  of real estate,
adjusted as follows:  (a) plus  depreciation  and  amortization  (including  our
pro-rata  share  of  depreciation  and  amortization  of  unconsolidated  equity
interests and  amortization of assets acquired in a merger,  including  property
management  agreements and goodwill),  and (b) less FFO attributable to minority
interest.

         FFO is a supplemental  performance  measure for equity REITs as defined
by the National  Association of Real Estate Investment Trusts, Inc.  ("NAREIT").
The NAREIT  definition does not  specifically  address the treatment of minority
interest in the  determination  of FFO or the treatment of the  amortization  of
property management agreements and goodwill. In our case, FFO represents amounts
attributable to our  shareholders  after deducting  amounts  attributable to the
minority  interests  and before  deductions  for the  amortization  of  property
management agreements and goodwill. FFO is presented because management, as well
as many industry analysts, consider FFO to be one measure of our performance and
it is used in establishing  the terms of the Class B Common Stock.  FFO does not
take into consideration  capital  improvements,  scheduled principal payments on
debt,  distributions  and  our  other  obligations.  Accordingly,  FFO  is not a
substitute for cash flow or net income (as discussed  above) as a measure of our
liquidity or operating performance.  FFO is not comparable to similarly entitled
items  reported by other REITs that do not define it exactly as we have  defined
it.

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

         To limit our  exposure  to market  risk,  we  principally  finance  our
operations and growth with permanent equity capital, consisting of either common
or  preferred  stock.  At June  30,  2000,  our  debt as a  percentage  of total
shareholders' equity (based on book values) was 4.3%.

         Our  preferred  stock is not  redeemable  by the holders.  Except under
certain  conditions  relating to our  qualification as a REIT, we may not redeem
the Senior  Preferred Stock prior to the following  dates:  Series A - September
30,  2002,  Series B - March  31,  2003,  Series C - June 30,  1999,  Series D -
September  30,  2004,  Series E - January 31,  2005,  Series F - April 30, 2005,
Series G - December  31, 2000,  Series H - January 31, 2001,  Series I - October
31, 2001,  Series J - August 31, 2002,  Series K - January 19, 2004,  Series L -
March 10, 2004 and Series M - August 17, 2004. On or after the respective dates,
each of the  series of Senior  Preferred  Stock  will be  redeemable  at the our
option,  in whole or in part, at $25 per share (or depositary  share in the case
of the Series G, Series H, Series I, Series J, Series K, Series L and Series M),
plus accrued and unpaid dividends.

         Our preferred  operating  partnership  units are not  redeemable by the
holders.  Five years after issuance, we can call the units for redemption at the
issuance amount plus any unpaid distributions.

         Our market risk  sensitive  instruments  include notes  payable,  which
totaled  $161.4  million at June 30, 2000.  Substantially  all of the  Company's
notes payable bear interest at fixed rates. See Item 2 - Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations - Liquidity and
Capital Resources for approximate  principal  maturities of the notes payable as
of June 30, 2000.

                                       31

<PAGE>

PART II.  OTHER INFORMATION

Item 4   Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

         The  Company  held an annual  meeting of  shareholders  on May 1, 2000.
Proxies for the annual  meeting were  solicited  pursuant to Regulation 14 under
the Securities  Exchange Act of 1934. The annual meeting  involved the following
matter:

         Election of Directors

<TABLE>
<CAPTION>
                                     Total Common Stock and Equity Stock, Series A
                           ---------------------------------------------------------------
             Name          Total Votes For   Total Votes Withheld    Total Votes Abstained
------------------------   ---------------   --------------------    ---------------------
<S>                          <C>                     <C>                      <C>
B. Wayne Hughes              99,484,724.2            394,612.1                770.3
Harvey Lenkin                99,495,224.2            384,112.1                770.3
Marvin M. Lotz               99,490,947.8            388,388.5                770.3
B. Wayne Hughes, Jr.         99,484,594.4            394,741.9                770.3
Robert J. Abernethy          99,497,382.7            381,953.6                770.3
Dann V. Angeloff             99,488,931.8            390,404.5                770.3
William C. Baker             99,493,558.1            385,778.2                770.3
Thomas J. Barrack, Jr.       89,789,748.5         10,089,587.8                770.3
Uri P. Harkham               99,497,037.7            382,298.6                770.3
Daniel C. Staton             99,497,281.8            382,054.5                770.3

</TABLE>

         There was no solicitation in opposition to the management's nominees to
the Board of Directors listed in the proxy statement.

Item 6   Exhibits and Reports on Form 8-K
         --------------------------------

(a)      Exhibits:

3.1      Restated   Articles   of   Incorporation.   Filed   with   Registrant's
         Registration   Statement  No.  33-54557  and  incorporated   herein  by
         reference.

3.2      Certificate of  Determination  for the 10% Cumulative  Preferred Stock,
         Series A. Filed with Registrant's  Registration  Statement No. 33-54557
         and incorporated herein by reference.

3.3      Certificate of Determination for the 9.20% Cumulative  Preferred Stock,
         Series B. Filed with Registrant's  Registration  Statement No. 33-54557
         and incorporated herein by reference.

3.4      Amendment to  Certificate  of  Determination  for the 9.20%  Cumulative
         Preferred  Stock,  Series  B.  Filed  with  Registrant's   Registration
         Statement No. 33-56925 and incorporated herein by reference.

3.5      Certificate of Determination for the 8.25% Convertible Preferred Stock.
         Filed  with  Registrant's   Registration  Statement  No.  33-54557  and
         incorporated herein by reference.

3.6      Certificate  of  Determination   for  the  Adjustable  Rate  Cumulative
         Preferred  Stock,  Series  C.  Filed  with  Registrant's   Registration
         Statement No. 33-54557 and incorporated herein by reference.

3.7      Certificate of Determination for the 9.50% Cumulative  Preferred Stock,
         Series D. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating  to  the  9.50%  Cumulative  Preferred  Stock,  Series  D  and
         incorporated herein by reference.

3.8      Certificate of  Determination  for the 10% Cumulative  Preferred Stock,
         Series E. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating  to  the  10%  Cumulative   Preferred  Stock,   Series  E  and
         incorporated herein by reference.

                                       32

<PAGE>

3.9      Certificate of Determination for the 9.75% Cumulative  Preferred Stock,
         Series F. Filed with Registration's  Form 8-A/A Registration  Statement
         relating  to  the  9.75%  Cumulative  Preferred  Stock,  Series  F  and
         incorporated herein by reference.

3.10     Certificate  of   Determination   for  the  Convertible   Participating
         Preferred Stock.  Filed with  Registrant's  Registration  Statement No.
         33-63947 and incorporated herein by reference.

3.11     Certificate  of  Amendment  of  Articles of  Incorporation,  Filed with
         Registrant's  Registration  Statement  No.  33-63947  and  incorporated
         herein by reference.

3.12     Certificate of Determination for the 8-7/8% Cumulative Preferred Stock,
         Series G. Filed with Registration's  Form 8-A/A Registration  Statement
         relating to the  Depositary  Shares Each  Representing  1/1,000th  of a
         Share of 8-7/8% Cumulative  Preferred Stock,  Series G and incorporated
         herein by reference.

3.13     Certificate of Determination for the 8.45% Cumulative  Preferred Stock,
         Series H. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the  Depositary  Shares Each  Representing  1/1,000th  of a
         Share of 8.45% Cumulative  Preferred  Stock,  Series H and incorporated
         herein by reference.

3.14     Certificate  of  Determination  for the  Convertible  Preferred  Stock,
         Series CC. Filed with Registrant's Registration Statement No. 333-03749
         and incorporated herein by reference.

3.15     Certificate  of  Correction of  Certificate  of  Determination  for the
         Convertible  Participating  Preferred  Stock.  Filed with  Registrant's
         Registration   Statement  No.  333-08791  and  incorporated  herein  by
         reference.

3.16     Certificate of  Determination  for 8-5/8%  Cumulative  Preferred Stock,
         Series I. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8-5/8% Cumulative  Preferred Stock, Series I and incorporated herein
         by reference.

3.17     Certificate  of  Amendment  of  Articles of  Incorporation.  Filed with
         Registrant's  Registration  Statement No.  333-18395  and  incorporated
         herein by reference.

3.18     Certification of Determination  for Equity Stock,  Series A. Filed with
         Registrant's Form 10-Q for the quarterly period ended June 30, 1997 and
         incorporated herein by reference.

3.19     Certificate of  Determination  for Equity Stock,  Series AA. Filed with
         Registrant's  Form 10-Q for the  quarterly  period ended  September 30,
         1999 and incorporated herein by reference.

3.20     Certificate  Decreasing  Shares  Constituting  Equity Stock,  Series A.
         Filed  with  Registrant's  Form  10-Q for the  quarterly  period  ended
         September 30, 1999 and incorporated herein by reference.

3.21     Certificate  of  Determination  for Equity Stock,  Series A. Filed with
         Registrant's  Form 10-Q for the  quarterly  period ended  September 30,
         1999 and incorporated herein by reference.

3.22     Certification  of  Determination  for 8%  Cumulative  Preferred  Stock,
         Series J. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8% Cumulative  Preferred Stock,  Series J and incorporated herein by
         reference.

3.23     Certificate of Correction of Certificate of Determination for the 8.25%
         Convertible  Preferred  Stock.  Filed  with  Registrant's  Registration
         Statement No. 333-61045 and incorporated herein by reference.

3.24     Certification of Determination for 8-1/4%  Cumulative  Preferred Stock,
         Series K. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8-1/4% Cumulative  Preferred Stock, Series K and incorporated herein
         by reference.

                                       33
<PAGE>

3.25     Certificate of  Determination  for 8-1/4%  Cumulative  Preferred Stock,
         Series L. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8-1/4% Cumulative  Preferred Stock, Series L and incorporated herein
         by reference.

3.26     Certificate of  Determination  for 8.75%  Cumulative  Preferred  Stock,
         Series M. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each  Representing  1/1000 of a Share
         of 8.75% Cumulative  Preferred Stock,  Series M and incorporated herein
         by reference.

3.27     Certificate of Determination  for Equity Stock,  Series AAA. Filed with
         Registrant's  Current  Report on Form 8-K dated  November  15, 1999 and
         incorporated herein by reference.

3.28     Certification  of  Determination  for 9.5% Cumulative  Preferred Stock,
         Series N. Filed with  Registrant's  Annual  Report on Form 10-K for the
         year ended December 31, 1999 and incorporated herein by reference.

3.29     Certification of Determination for 9.125%  Cumulative  Preferred Stock,
         Series O. Filed with Registrant's Quarterly Report on Form 10-Q for the
         quarterly  period  ended  March  31,  2000 and  incorporated  herein by
         reference.

3.30     Certificate of  Determination  for 8.75%  Cumulative  Preferred  Stock,
         Series P. Filed herewith.

3.31     Bylaws, as amended. Filed with Registrant's  Registration Statement No.
         33-64971 and incorporated herein by reference.

3.32     Amendment  to Bylaws  adopted on May 9, 1996.  Filed with  Registrant's
         Registration   Statement  No.  333-03749  and  incorporated  herein  by
         reference.

3.33     Amendment to Bylaws adopted on June 26, 1997.  Filed with  Registrant's
         Registration   Statement  No.  333-41123  and  incorporated  herein  by
         reference.

3.34     Amendment to Bylaws adopted on January 6, 1998. Filed with Registrant's
         Registration   Statement  No.  333-41123  and  incorporated  herein  by
         reference.

3.35     Amendment  to  Bylaws   adopted  on  February  10,  1998.   Filed  with
         Registrant's  Current  Report on Form 8-K dated  February  10, 1998 and
         incorporated herein by reference.

3.36     Amendment to Bylaws adopted on March 4, 1999.  Filed with  Registrant's
         Current Report on Form 8-K dated March 4, 1999 and incorporated  herein
         by reference.

3.37     Amendment  to Bylaws  adopted on May 6, 1999.  Filed with  Registrant's
         Form  10-Q  for  the   quarterly   period  ended  March  31,  1999  and
         incorporated herein by reference.

10.1     Second  Amended  and  Restated   Management   Agreement  by  and  among
         Registrant  and the entities  listed  therein  dated as of November 16,
         1995. Filed with PS Partners, Ltd.'s Annual Report on Form 10-K for the
         year ended December 31, 1996 and incorporated herein by reference.

10.2     Amended  Management  Agreement  between  Registrant  and Public Storage
         Commercial  Properties Group, Inc. dated as of February 21, 1995. Filed
         with  Registrant's  Annual  Report  on Form  10-K  for the  year  ended
         December 31, 1994 and incorporated herein by reference.

10.3     Loan Agreement  between  Registrant  and Aetna Life  Insurance  Company
         dated as of July 11, 1988.  Filed with  Registrant's  Current Report on
         Form 8-K dated July 14, 1988 and incorporated herein by reference.

                                       34

<PAGE>

10.4     Amendment to Loan Agreement between Registrant and Aetna Life Insurance
         Company dated as of September 1, 1993. Filed with  Registrant's  Annual
         Report  on  Form  10-K  for  the  year  ended  December  31,  1993  and
         incorporated herein by reference.

10.5     Second Amended and Restated Credit  Agreement by and among  Registrant,
         Wells Fargo Bank,  National  Association,  as agent,  and the financial
         institutions  party thereto  dated as of February 25, 1997.  Filed with
         Registrant's  Registration  Statement No.  333-22665  and  incorporated
         herein by reference.

10.6     Note  Assumption  and Exchange  Agreement  by and among Public  Storage
         Management,  Inc., Public Storage,  Inc., Registrant and the holders of
         the notes  dated as of  November  13,  1995.  Filed  with  Registrant's
         Registration   Statement  No.  33-64971  and  incorporated   herein  by
         reference.

10.7     Registrant's  1990 Stock Option Plan.  Filed with  Registrant's  Annual
         Report  on  Form  10-K  for  the  year  ended  December  31,  1994  and
         incorporated herein by reference.

10.8     Registrant's  1994 Stock Option Plan.  Filed with  Registrant's  Annual
         Report  on  Form  10-K  for  the  year  ended  December  31,  1997  and
         incorporated herein by reference.

10.9     Registrant's   1996  Stock  Option  and  Incentive  Plan.   Filed  with
         Registrant's Annual Report on Form 10-K for the year ended December 31,
         1997 and incorporated herein by reference.

10.10    Deposit Agreement dated as of December 13, 1995, among Registrant,  The
         First  National  Bank of  Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing  1/1,000 of
         a Share of 8-7/8  Cumulative  Preferred  Stock,  Series G.  Filed  with
         Registrant's  Form  8-A/A   Registration   Statement  relating  to  the
         Depositary  Shares  Each  Representing  1/1000th  of a Share  of  8-7/8
         Cumulative  Preferred  Stock,  Series  G  and  incorporated  herein  by
         reference.

10.11    Deposit Agreement dated as of January 25, 1996, among  Registrant,  The
         First  National  Bank of  Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing  1/1,000 of
         a Share of 8.45%  Cumulative  Preferred  Stock,  Series H.  Filed  with
         Registrant's  Form  8-A/A   Registration   Statement  relating  to  the
         Depositary  Shares  Each  Representing  1/1000th  of a Share  of  8.45%
         Cumulative  Preferred  Stock,  Series  H  and  incorporated  herein  by
         reference.

10.12    Employment Agreement between Registrant and B. Wayne Hughes dated as of
         November 16, 1995. Filed with  Registrant's  Annual Report on Form 10-K
         for the year  ended  December  31,  1995  and  incorporated  herein  by
         reference.

10.13    Deposit Agreement dated as of November 1, 1996, among  Registrant,  The
         First  National  Bank of  Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing  1/1,000 of
         a Share of 8-5/8%  Cumulative  Preferred  Stock,  Series I.  Filed with
         Registrant's  Form  8-A/A   Registration   Statement  relating  to  the
         Depositary  Shares  Each  Representing  1/1000th  of a Share of  8-5/8%
         Cumulative  Preferred  Stock,  Series  I  and  incorporated  herein  by
         reference.

10.14    Limited  Partnership  Agreement  of PSAF  Development  Partners,  L. P.
         between  PSAF  Development,  Inc. and the Limited  Partner  dated as of
         April 10, 1997.  Filed with  Registrant's  Form 10-Q for the  quarterly
         period ended March 31, 1997 and incorporated herein by reference.

                                       35

<PAGE>

10.15    Deposit  Agreement  dated as of August 28, 1997 among  Registrant,  The
         First  National  Bank of  Boston,  and the  holders  of the  depositary
         receipts evidencing the Depositary Shares Each Representing  1/1,000 of
         a  Share  of 8%  Cumulative  Preferred  Stock,  Series  J.  Filed  with
         Registrant's  Form  8-A/A   Registration   Statement  relating  to  the
         Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative
         Preferred Stock, Series J and incorporated herein by reference.

10.16    Agreement  and Plan of  Reorganization  between  Registrant  and Public
         Storage  Properties XX, Inc. dated as of December 13, 1997.  Filed with
         Registrant's  Registration  Statement No.  333-49247  and  incorporated
         herein by reference.

10.17    Agreement of Limited  Partnership of PS Business  Parks, L. P. dated as
         of March 17,  1998.  Filed with PS  Business  Parks,  Inc.'s  Quarterly
         Report on Form 10-Q for the  quarterly  period  ended June 30, 1998 and
         incorporated herein by reference.

10.18    Deposit  Agreement  dated as of  January  19,  1999  among  Registrant,
         BankBoston, N. A. and the holders of the depositary receipts evidencing
         the Depositary  Shares Each  Representing  1/1,000 of a Share of 8-1/4%
         Cumulative  Preferred  Stock,  Series K. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  relating to the Depositary  Shares Each
         Representing  1/1,000 of a Share of 8-1/4% Cumulative  Preferred Stock,
         Series K and incorporated herein by reference.

10.19    Agreement and Plan of Merger among Storage Trust Realty, Registrant and
         Newco Merger Subsidiary, Inc. dated as of November 12, 1998. Filed with
         Registrant's  Registration  Statement No.  333-68543  and  incorporated
         herein by reference.

10.20    Amendment  No. 1 to Agreement  and Plan of Merger among  Storage  Trust
         Realty,  Registrant,  Newco  Merger  Subsidiary,  Inc.  and STR  Merger
         Subsidiary,  Inc. dated as of January 19, 1999. Filed with Registrant's
         Registration   Statement  No.  333-68543  and  incorporated  herein  by
         reference.

10.21    Amended and Restated Agreement of Limited  Partnership of Storage Trust
         Properties,  L. P., dated as of March 12, 1999. Filed with Registrant's
         Form 10-Q for the quarterly period ended June 30, 1999 and incorporated
         herein by reference.

10.22    Storage  Trust  Realty 1994 Share  Incentive  Plan.  Filed with Storage
         Trust  Realty's  Annual Report on Form 10-K for the year ended December
         31, 1997 and incorporated herein by reference.

10.23    Amended  and  Restated   Storage  Trust  Realty  Retention  Bonus  Plan
         effective as of November 12, 1998. Filed with Registrant's Registration
         Statement No. 333-68543 and incorporated herein by reference.

10.24    Deposit  Agreement  dated as of March 10, 1999 among  Registrant,  Bank
         Boston,  N.A. and the holders of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a Share  of  8-1/4%
         Cumulative  Preferred  Stock,  Series L. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  relating to the Depositary  Shares Each
         Representing  1/1,000 of a Share of 8-1/4% Cumulative  Preferred Stock,
         Series L and incorporated herein by reference.

10.25    Note  Purchase   Agreement  and  Guaranty  Agreement  with  respect  to
         $100,000,000  of Senior Notes of Storage Trust  Properties,  L.P. Filed
         with Storage  Trust  Realty's  Annual  Report on Form 10-K for the year
         ended December 31, 1996 and incorporated herein by reference.

10.26    Deposit  Agreement dated as of August 17, 1999 among  Registrant,  Bank
         Boston,  N.A. and the holders of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a  Share  of  8.75%
         Cumulative  Preferred  Stock,  Series M. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  relating to the Depositary  Shares Each
         Representing  1/1,000 of a Share of 8.75%  Cumulative  Preferred Stock,
         Series M and incorporated herein by reference.

                                       36

<PAGE>

10.27    Limited Partnership Agreement of PSAC Development Partners,  L.P. among
         PS Texas  Holdings,  Ltd.,  PS  Pennsylvania  Trust  and  PSAC  Storage
         Investors,  L.L.C.  dated as November 15, 1999. Filed with Registrant's
         Current  Report on Form 8-K dated  November  15, 1999 and  incorporated
         herein by reference.

10.28    Agreement  of  Limited  Liability  Company of PSAC  Storage  Investors,
         L.L.C.  dated as of November 15, 1999. Filed with Registrant's  Current
         Report on Form 8-K dated November 15, 1999 and  incorporated  herein by
         reference.

10.29    Deposit  Agreement  dated as of  January  14,  2000  among  Registrant,
         BankBoston,  N.A. and the holders of the depositary receipts evidencing
         the Depositary  Shares Each  Representing  1/1,000 of a Share of Equity
         Stock,  Series A.  Filed  with  Registrant's  Form  8-A/A  Registration
         Statement  relating to the Depositary Shares Each Representing  1/1,000
         of a Share  of  Equity  Stock,  Series  A and  incorporated  herein  by
         reference.

10.30    Amended  and  Restated   Agreement  of  Limited   Partnership   of  PSA
         Institutional  Partners,  L.P.  among PS Texas  Holdings,  Ltd. and the
         Limited  Partners dated as of March 29, 2000.  Filed with  Registrant's
         Annual  Report on Form 10-K for the year ended  December  31,  1999 and
         incorporated herein by reference.

10.31    Amendment to Amended and Restated  Agreement of Limited  Partnership of
         PSA Institutional  Partners, L.P. among PS Texas Holdings, Ltd. and the
         Limited Partners dated as of August 11, 2000. Filed herewith.

11.      Statement re: Computation of Earnings per Share. Filed herewith.

12.      Statement re: Computation of Ratio of Earnings to Fixed Charges.  Filed
         herewith.

27.      Financial Data Schedule. Filed herewith.

(b)      Reports on Form 8-K

         None.

                                       37

<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                           DATED: August 14, 2000

                           PUBLIC STORAGE, INC.


                           BY: /s/ John Reyes
                               --------------
                               John Reyes
                               Senior Vice President and Chief Financial Officer
                               (Principal financial officer and duly authorized
                               officer)

                                       38