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 March 31, 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                         91201-2394
-----------------------------------------                 ----------------------
(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 May 1, 2000:

Common Stock, $.10 Par Value - 125,293,791 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
              March 31, 2000 and December 31, 1999                             1

         Condensed Consolidated Statements of Income for the
              Three Months Ended March 31, 2000 and 1999                       2

         Condensed Consolidated Statements of Shareholders' Equity
              for the Three Months Ended March 31, 2000                        3

         Condensed Consolidated Statements of Cash Flows
              for the Three Months Ended March 31, 2000 and 1999           4 - 5

         Notes to Condensed Consolidated Financial Statements             6 - 18

Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations              19 - 28

PART II. OTHER INFORMATION (Items 1, 2, 3, 4 and 5 are not applicable)
         -----------------

Item 6.  Exhibits and Reports on Form 8-K                                29 - 34

<PAGE>

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


<TABLE>
<CAPTION>
                                                                                     MARCH 31,           DECEMBER 31,
                                                                                       2000                 1999
                                                                                  ---------------       ---------------

                                     ASSETS
                                     ------

<S>                                                                               <C>                   <C>
Cash and cash equivalents......................................................   $      274,681        $      55,125
Real estate facilities, at cost:
   Land........................................................................        1,038,575            1,036,958
   Buildings...................................................................        2,817,775            2,785,475
                                                                                  ---------------       ---------------
                                                                                       3,856,350            3,822,433
   Accumulated depreciation....................................................        (565,714)            (533,412)
                                                                                  ---------------       ---------------
                                                                                       3,290,636            3,289,021
   Construction in process.....................................................          150,706              140,764
                                                                                  ---------------       ---------------
                                                                                       3,441,342            3,429,785

Investment in real estate entities.............................................          475,642              457,529
Intangible assets, net.........................................................          191,998              194,326
Mortgage notes receivable from affiliates......................................           33,185               18,798
Other assets...................................................................           75,500               58,822
                                                                                  ---------------       ---------------
              Total assets.....................................................   $    4,492,348        $   4,214,385
                                                                                  ===============       ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Notes payable..................................................................   $      166,741        $     167,338
Distributions payable..........................................................                -               82,086
Accrued and other liabilities..................................................           84,135               89,261
                                                                                  ---------------       ---------------
         Total liabilities.....................................................          250,876              338,685
Minority interest..............................................................          484,339              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 (11,141,100 issued and  outstanding  at
     December 31, 1999), at liquidation preference:
         Cumulative Preferred Stock, issued in series..........................        1,155,150            1,155,150
   Common Stock, $0.10 par value, 200,000,000 shares authorized, 125,422,557
     shares issued and outstanding (126,697,023 at December 31, 1999)..........           12,543               12,671
   Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized,
     4,300.555 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.............................................................        2,515,173            2,463,193
   Cumulative net income.......................................................        1,162,534            1,089,973
   Cumulative distributions paid...............................................       (1,088,967)          (1,032,587)
                                                                                  ---------------       ---------------
         Total shareholders' equity............................................        3,757,133            3,689,100
                                                                                  ---------------       ---------------
              Total liabilities and shareholders' equity.......................    $   4,492,348        $   4,214,385
                                                                                  ===============       ===============
</TABLE>
                            See accompanying notes.
                                       1

<PAGE>

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

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                For the Three Months Ended
                                                                                        March 31,
                                                                           ------------------------------------
                                                                                2000                 1999
                                                                           ---------------      ---------------
REVENUES:
     Rental income:
<S>                                                                        <C>                  <C>
         Self-storage facilities...................................        $      154,634       $      129,029
         Commercial properties.....................................                 2,759                1,914
         Portable self-storage.....................................                 7,549                5,428
     Equity earnings of real estate entities.......................                 8,276                8,122
     Interest and other income.....................................                 3,377                3,522
                                                                           ---------------      ---------------
                                                                                  176,595              148,015
EXPENSES:
     Cost of operations:
         Self-storage facilities...................................                50,357               40,629
         Commercial properties.....................................                   949                  638
         Portable self-storage.....................................                 7,854                7,831
     Depreciation and amortization.................................                36,034               30,156
     General and administrative....................................                 3,045                2,362
     Interest expense..............................................                 1,406                1,204
                                                                           ---------------      ---------------
                                                                                   99,645               82,820
                                                                           ---------------      ---------------

     Income before minority interest...............................                76,950               65,195

     Minority interest in income...................................                (4,389)              (3,353)
                                                                           ---------------      ---------------

NET INCOME.........................................................        $       72,561       $       61,842
                                                                           ===============      ===============

NET INCOME ALLOCATION:
     Allocable to preferred shareholders...........................        $       25,038       $       21,530
     Allocable to equity shareholders, Series A....................                 2,258                    -
                                                                           ---------------      ---------------
     Allocable to common shareholders..............................                45,265               40,312
                                                                           ===============      ===============
                                                                           $       72,561       $       61,842
                                                                           ===============      ===============
PER COMMON SHARE:
     Net income per common share - Basic...........................        $         0.34       $         0.34
                                                                           ===============      ===============
     Net income per common share - Diluted.........................        $         0.34       $         0.34
                                                                           ===============      ===============
     Net income per depositary share of Equity Stock, Series A -
         Basic and Diluted.........................................        $         0.61       $            -
                                                                           ===============      ===============
     Weighted average common shares - Basic........................               132,781              118,624
                                                                           ===============      ===============
     Weighted average common shares - Diluted......................               132,902              119,014
                                                                           ===============      ===============
     Weighted average depositary shares of Equity Stock, Series A -
         Basic and Diluted.........................................                 3,702                    -
                                                                           ===============      ===============
</TABLE>
                            See accompanying notes.
                                       2

<PAGE>

                              PUBLIC STORAGE, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                    FOR THE THREE MONTHS ENDED MARCH 31, 2000
                    (AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

                                   (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 (105,834 shares)..........            -          10          -            1,969

Repurchase of common stock (1,380,300 shares) .........            -        (138)         -          (30,599)

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

Costs in connection with capital raising activities....            -           -          -           (3,200)

Net income.............................................            -           -          -                -

Cash distributions:
   Cumulative Senior Preferred Stock...................            -           -          -                -
   Equity Stock, Series A..............................            -           -          -                -
   Class B Common Stock................................            -           -          -                -
   Common Stock........................................            -           -          -                -
                                                          ----------     --------     -------     -----------
Balances at March 31, 2000.............................   $1,155,150     $12,543       $700       $2,515,173
                                                          ==========     ========     =======     ===========
</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 (105,834 shares)..........            -                -            1,979

Repurchase of common stock (1,380,300 shares) .........            -                -          (30,737)

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

Costs in connection with capital raising activities....            -                -           (3,200)

Net income.............................................       72,561                -           72,561

Cash distributions:
   Cumulative Senior Preferred Stock...................            -          (25,038)         (25,038)
   Equity Stock, Series A..............................            -           (2,258)          (2,258)
   Class B common stock................................            -           (1,494)          (1,494)
   Common Stock........................................            -          (27,590)         (27,590)
                                                          ----------     -------------     -------------
Balances at March 31, 2000.............................   $1,162,534      $(1,088,967)      $3,757,133
                                                          ==========     =============     =============
</TABLE>
                            See accompanying notes.
                                       3

<PAGE>

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

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                For the Three Months Ended
                                                                                        March 31,
                                                                            -----------------------------------
                                                                                2000                 1999
                                                                            --------------       --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                         <C>                  <C>
   Net income......................................................         $      72,561        $      61,842
   Adjustments to reconcile net income to net cash provided by
     operating activities:
     Depreciation and amortization.................................                36,034               30,156
     Depreciation included in equity earnings of real estate
       entities....................................................                 5,032                4,129
     Minority interest in income...................................                 4,389                3,353
                                                                            --------------       --------------
         Total adjustments.........................................                45,455               37,638
                                                                            --------------       --------------
             Net cash provided by operating activities.............               118,016               99,480
                                                                            --------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal payments received on notes receivable from
       affiliates..................................................                   353               13,864
     Notes receivable from affiliates..............................               (11,400)             (41,200)
     Capital improvements to real estate facilities................                (4,126)              (2,935)
     Construction in process.......................................               (44,318)             (31,309)
     Acquisition of minority interests in consolidated real estate
       partnerships................................................               (26,613)              (3,069)
     Acquisition of investment in real estate entities.............               (37,538)             (22,802)
     Acquisition of real estate facilities.........................                     -               (5,255)
     Acquisition cost of business combinations.....................                     -             (103,646)
     Proceeds from the sale of real estate facilities..............                 8,638                    -
                                                                            --------------       --------------
             Net cash used in investing activities.................              (115,004)            (196,352)
                                                                            --------------       --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on notes payable...........................                  (597)                (581)
     Net proceeds from the issuance of common stock................                 1,979                  313
     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....................................               (30,737)             (17,578)
     Distributions paid to preferred and common shareholders.......               (56,380)             (49,309)
     Special distribution paid to common shareholders..............               (38,076)                   -
     Distributions from operations to minority interests...........                (6,178)              (5,664)
     Distributions to minority interests in excess of operating
       activities..................................................                (1,268)              (5,003)
     Other.........................................................                (3,799)               3,489
                                                                            --------------       --------------
              Net cash provided by financing activities............               216,544              148,222
                                                                            --------------       --------------

Net increase in cash and cash equivalents..........................               219,556               51,350
Cash and cash equivalents at the beginning of the period...........                55,125               51,225
                                                                            --------------       --------------
Cash and cash equivalents at the end of the period.................         $     274,681        $     102,575
                                                                            ==============       ==============
</TABLE>
                            See accompanying notes.
                                       4

<PAGE>

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

                                   (UNAUDITED)
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                For the Three Months Ended
                                                                                        March 31,
                                                                            ------------------------------------
                                                                                2000                 1999
                                                                            ---------------      ---------------

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 Business combinations:
<S>                                                                         <C>                  <C>
     Real estate facilities......................................           $            -       $     (596,266)
     Construction in process.....................................                        -              (11,449)
     Investment in real estate entities..........................                        -                 (356)
     Mortgage notes receivable...................................                        -               (6,739)
     Other assets................................................                        -               (1,933)
     Accrued and other liabilities...............................                        -               15,651
     Minority interest...........................................                        -               27,009
     Notes payable...............................................                        -              100,000

 Reduction to investment in real estate entities in connection with:
     Business combinations.......................................                        -               23,214
     Sale of investments.........................................                   14,393                    -

 Increase in other assets in connection with sale of investments.                  (14,393)                   -

 Acquisition of minority interest and real estate in exchange for
   mortgage notes receivable:
     Real estate facilities......................................                  (14,421)
     Minority interest...........................................                  (12,542)

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

 Disposition of real estate facilities in exchange for note
   receivable and acquisition of minority interest:
     Real estate facilities......................................                   19,006                    -
     Accumulated depreciation....................................                     (251)

 Acquisition of minority interest 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)                   -

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

Issuance of common stock in connection with a business
   combination...................................................                        -              347,223

Issuance of Equity Stock, Series A in connection with special
   distributions to common shareholders..........................                   44,010                    -

</TABLE>
                           See accompanying notes.
                                       5

<PAGE>

                              PUBLIC STORAGE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 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 March 31,  2000,  PSPUD had 36  facilities  in
     operation.

              We invest in real estate  facilities  by  acquiring  wholly  owned
     facilities or by acquiring interests in real estate entities which also own
     real  estate  facilities.  At March 31,  2000,  we had direct and  indirect
     equity interests in 1,446 properties located in 38 states,  including 1,316
     storage  facilities  and 130 commercial  properties.  The Company under the
     "Public Storage" name operates all of the self-storage facilities.

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 1,209 real
     estate  facilities,   consisting  of  1,205  storage  facilities  and  four
     commercial properties.

              At  March  31,  2000,  we had  equity  investments  in 11  limited
     partnerships in which we do not have a controlling interest.  These limited
     partnerships  collectively  own  111  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 126
     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,  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.

                                       7

<PAGE>

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

              Other assets primarily consist of furniture,  fixtures, equipment,
     and other such assets associated with the portable self-storage business as
     well as accounts receivable, prepaid expenses, and other such assets of the
     Company. Included in other assets with respect to the portable self-storage
     business  is  furniture,   fixtures,  and  equipment  (net  of  accumulated
     depreciation) of $33,742,000 and $34,704,000 at March 31, 2000 and December
     31, 1999,  respectively.  Included in depreciation and amortization expense
     for the three  months  ended  March  31,  2000 and 1999 is  $1,153,000  and
     $1,182,000,  respectively,  of  depreciation  of furniture,  fixtures,  and
     equipment of the portable self-storage business.

     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 March 31, 2000  intangible
     assets are net of accumulated  amortization of $40,728,000  ($38,400,000 at
     December 31, 1999).  Included in depreciation and amortization  expense for
     the three months ended March 31, 2000 and 1999 is $2,328,000, 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.   As  a  result  of  environmental   investigations   of  our
     properties,  which commenced in 1995, we recorded an amount,  which, in our
     best  estimate,  will be sufficient to satisfy  anticipated  costs of known
     investigation  and  remediation  requirements.  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 $25,038,000
     and  $21,530,000  for the  three  months  ended  March  31,  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 was
     allocated  approximately   $2,258,000  of  net  income  and  the  remaining
     $45,265,000 was allocated to the regular common shares.

                                       8

<PAGE>

              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,  the  Company  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  months  ended  March  31,  2000.
     Weighted  average shares for the three months ended March 31, 1999 does not
     include any shares with respect to the Class B common stock as these shares
     were not participating in distributions of the Company's  earnings prior to
     January 1, 2000.

     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 three months ended March
     31, 1999 as though the merger had been  effective at January 1, 1999 are as
     follows:

                                                   Three Months Ended
      (In thousands, except per share data)          March 31, 1999
-----------------------------------------------    ------------------
Revenues....................................            $  165,414
Net income..................................            $   65,771
Net income per common share (Basic).........            $     0.34
Net income per common share (Diluted).......            $     0.34

                                       9

<PAGE>

              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.

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 ...................................               34,376
  Disposition of facilities ..............................              (19,006)
  Acquisition of minority interest .......................               14,421
  Capital improvements ...................................                4,126
                                                                    ------------
  Balance at March 31, 2000 ..............................            3,856,350
                                                                    ------------

Accumulated depreciation:
  Balance at December 31, 1999 ...........................             (533,412)
  Additions during the year ..............................              (32,553)
  Disposition of facilities ..............................                  251
                                                                    ------------
  Balance at March 31, 2000 ..............................             (565,714)
                                                                    ------------

Construction in progress:
  Balance at December 31, 1999 ...........................              140,764
  Current development ....................................               44,318
  Developed facilities ...................................              (34,376)
                                                                    ------------
  Balance at March 31, 2000 ..............................              150,706
                                                                    ------------

  Total real estate facilities ...........................          $ 3,441,342
                                                                    ============

              During the three  months  ended March 31,  2000,  we opened  seven
     newly  developed  facilities  having  approximately  562,000  aggregate net
     rentable  square feet.  Construction in progress at March 31, 2000 consists
     of  40  storage  facilities,  and  eight  expansions  of  existing  storage
     facilities.

              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  months  ended  March 31,  2000 was
     $2,111,000 compared to $958,000 for the same period in 1999.

                                       10

<PAGE>

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

              At March 31, 2000, our investment in real estate entities consists
     of (i)  partnership  interests  in  approximately  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  months  ended March 31, 2000 and 1999,  we
     recognized  earnings from our  investments  of $8,276,000  and  $8,122,000,
     respectively.

              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 44 opened  facilities  with a total  cost of $211.8
     million  at March 31,  2000,  and has three  projects  in  process  with an
     aggregate  cost  incurred  to date of  approximately  $15.3  million  ($2.8
     million estimated to complete) at March 31, 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 March 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                          For the three months ended March 31, 2000
                                           ----------------------------------------------------------------------
                                                 Other           Development
                                           Equity Investments   Joint Venture          PSB              Total
                                           ------------------   -------------     --------------    -------------
                                                                    (Amounts in thousands)

<S>                                            <C>               <C>              <C>               <C>
Rental income.........................         $     9,810       $    5,314       $    34,053       $    49,177
Other income..........................                 357              176             1,811             2,344
                                           ------------------   -------------     --------------    -------------
Total revenues........................              10,167            5,490            35,864            51,521
                                           ------------------   -------------     --------------    -------------

Cost of operations....................               3,028            2,365             9,577            14,970
Depreciation..........................               1,112            1,538             8,376            11,026
Other expenses........................                 953               28             1,257             2,238
                                           ------------------   -------------     --------------    -------------
Total expenses........................               5,093            3,931            19,210            28,234
                                           ------------------   -------------     --------------    -------------

Net income before minority interest...               5,074            1,559            16,654            23,287
Minority interest ....................                   -                -            (5,911)           (5,911)
                                           ------------------   -------------     --------------    -------------
Net income............................         $     5,074       $    1,559       $    10,743       $    17,376
                                           ==================   =============     ==============    =============

At March 31, 2000:
Real estate, net .....................         $    69,801       $  219,749       $   828,207       $ 1,117,757
Total assets..........................              96,696          224,293           897,428         1,218,417
Total liabilities.....................              51,824            4,379            54,020           110,223
Minority interest.....................                   -                -           288,797           288,797
Total equity..........................              44,872          219,914           554,611           819,397

The Company's investment (book value)
  at March 31, 2000...................         $   161,677       $   65,974       $   247,991       $   475,642

The Company's effective average
  ownership interest at March 31, 2000                  46%              30%              41%

</TABLE>

                                       11

<PAGE>

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
     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 March 31, 2000, we had no borrowing 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  $67.1  million
     contributed by the joint venture partner since inception of the venture.

              On March 17,  2000,  we issued  $240.0  million  of 9.5%  Series N
     Cumulative  Redeemable  Perpetual Preferred Units and on March 29, 2000, we
     issued $75.0  million of 9.125%  Series O Cumulative  Redeemable  Perpetual
     Preferred  Units in one of our  operating  partnerships.  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.  These  transactions  had the  effect  of
     increasing  minority  interest by $315 million.  For the three months ended
     March 31, 2000, these preferred units were paid in aggregate  approximately
     $925,000  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 minority  interests with respect
     to  weighted  average  outstanding  OP Units on a per unit  basis  equal to
     diluted earnings per common share.  During the three months ended March 31,
     2000,  277,104 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 March 31, 2000, 493,788 of such units are outstanding.

                                       12

<PAGE>

              Minority interest was reduced by $6,427,000 in connection with the
     disposition  of real estate  facilities.  In addition,  in the three months
     ended March 31, 2000, the Company  acquired  interests in the  Consolidated
     Entities for an aggregate  cost of  $26,963,000,  comprised of  $26,613,000
     cash  and  the  forgiveness  of  a  note  receivable  of  $350,000;   these
     acquisitions had the effect of reducing  minority  interest by $12,542,000,
     with the excess of cost over underlying book value ($14,421,000)  allocated
     to real estate.

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

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

              At March 31, 2000 and  December  31,  1999,  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) 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 March 31,  2000,  there  were no
     dividends in arrears and the Debt Ratio was 3.3%.

                                       13

<PAGE>

              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.

     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"). The Equity Stock,
     Series 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.

                                       14

<PAGE>

              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 three months ended March 31, 1999,  the Company  issued
     105,834  shares of common  stock in  connection  with the exercise of stock
     options.

              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 quarter ended March 31, 2000, the Company repurchased
     a total of 1,380,300  shares,  for a total aggregate cost of  approximately
     $30.7 million.  From the initial  authorization through March 31, 2000, the
     Company has  repurchased a total of 8,789,127  shares of common stock at an
     aggregate cost of approximately $211.6 million.  From April 1, 2000 through
     April 26, 2000, the Company has repurchased  129,600 shares at an aggregate
     cost of approximately $2.9 million.

     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:
     (i) 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,  Series 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 March 31,
     2000.

                                       15

<PAGE>

     Dividends
     ---------

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

                                         Distributions Per
                                             Share or
                                         Depositary Share    Total Distributions
                                         ----------------    -------------------
Series A .............................        $  0.625           $ 1,140,000
Series B .............................        $  0.575             1,372,000
Series C .............................        $  0.431               517,000
Series D .............................        $  0.594               713,000
Series E .............................        $  0.625             1,372,000
Series F .............................        $  0.609             1,401,000
Series G .............................        $  0.555             3,828,000
Series H .............................        $  0.528             3,565,000
Series I .............................        $  0.539             2,156,000
Series J .............................        $  0.500             3,000,000
Series K .............................        $  0.516             2,372,000
Series L .............................        $  0.516             2,372,000
Series M .............................        $  0.547             1,230,000
                                                             -------------------
                                                                  25,038,000
Equity Stock, Series A ...............        $  0.525             2,258,000
Common ...............................        $  0.220            27,590,000
Common, Series B .....................        $  0.213             1,494,000
                                                             -------------------
   Total dividends ...................                           $56,380,000
                                                             ===================

              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 the  Company's  Equity Stock,
     Series A.

              The  dividend  rate on the Series C Preferred  Stock for the first
     quarter of 2000 was equal to 6.897% 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
     June 30, 2000 will be equal to 6.974% per annum.

9.   Segment Information
     -------------------

              In July 1997,  the FASB issued  Statement of Financial  Accounting
     Standards 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. For information  regarding the description of each
     reportable segment,  policies relating to the measurement of segment profit
     or loss, and segment assets, refer to the consolidated financial statements
     and footnotes  thereto included in the Company's annual report on Form 10-K
     for the year ended December 31, 1999.

                                       16

<PAGE>

              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,  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."

<TABLE>
<CAPTION>
                                                                Three months ended
                                                                     March 31,
                                                             -----------------------
                                                                2000         1999       Change
                                                             -----------  -----------  -----------
                                                                (Dollar amounts in thousands)
RECONCILIATION OF REVENUES BY SEGMENT:
--------------------------------------

Self storage
------------
<S>                                                           <C>          <C>          <C>
  Self-storage property rentals ...........................   $ 154,634    $ 129,029    $  25,605
  Equity in earnings - self storage property operations ...       5,249        4,233        1,016
  Interest and other income - self storage property
     management operations ................................       1,090        1,159          (69)
                                                             -----------  -----------  -----------
      Self storage segment revenues .......................     160,973      134,421       26,552
                                                             -----------  -----------  -----------
Portable self storage .....................................       7,549        5,428        2,121
----------------------                                       -----------  -----------  -----------


Commercial  properties
----------------------
  Commercial property rentals .............................       2,759        1,914          845
  Equity in earnings - commercial property operations .....       9,829        8,456        1,373
                                                             -----------  -----------  -----------
      Commercial properties  segment revenues .............      12,588       10,370        2,218
                                                             -----------  -----------  -----------

Other items not allocated to segments:
--------------------------------------
  Equity in earnings - Depreciation (self storage) ........      (1,642)      (1,458)        (184)
  Equity in earnings - Depreciation (commercial properties)      (3,390)      (2,670)        (720)
  Equity in earnings - general and administrative and other      (1,770)        (439)      (1,331)
  Interest and other income excluding property management
     operations ...........................................       2,287        2,363          (76)
                                                             -----------  -----------  -----------
      Total other items not allocated to segments .........      (4,515)      (2,204)      (2,311)
                                                             -----------  -----------  -----------

      Total revenues ......................................   $ 176,595    $ 148,015    $  28,580
                                                             ===========  ===========  ===========
</TABLE>
                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                                     Three months ended
                                                                          March 31,
                                                                  ------------------------
                                                                     2000         1999      Change
                                                                  -----------  -----------  -----------
                                                                     (Dollar amounts in thousands)
RECONCILIATION OF NET INCOME BY SEGMENT:
----------------------------------------

Self storage
<S>                                                                <C>         <C>          <C>
  Self-storage properties .................................        $ 104,277   $  88,400    $ 15,877
  Facility management......................................            1,090       1,159         (69)
  Equity in earnings - self storage property operations....            5,249       4,233       1,016
                                                                  -----------  -----------  -----------
      Total self storage segment net income................          110,616      93,792      16,824
                                                                  -----------  -----------  -----------

Portable self storage                                                 (1,832)     (3,936)      2,104
----------------------                                            -----------  -----------  -----------

Commercial  properties
----------  ----------
  Commercial properties....................................            1,810       1,276         534
  Equity in earnings - commercial property operations......            9,829       8,456       1,373
                                                                  -----------  -----------  -----------
      Total commercial property segment net income.........           11,639       9,732       1,907
                                                                  -----------  -----------  -----------

Other items not allocated to segments:
--------------------------------------
  Equity in earnings - depreciation (self-storage) ........           (1,642)     (1,458)       (184)
  Equity in earnings - depreciation (commercial properties)           (3,390)     (2,670)       (720)
  Equity in earnings - general and administrative and other           (1,770)       (439)     (1,331)
  Depreciation - self storage..............................          (34,435)    (28,550)     (5,885)
  Depreciation - commercial properties.....................             (446)       (424)        (22)
  Interest and other income................................            2,287       2,363         (76)
  General and administrative...............................           (2,671)     (2,011)       (660)
  Interest expense.........................................           (1,406)     (1,204)       (202)
  Minority interest in income..............................           (4,389)     (3,353)     (1,036)
                                                                  -----------  -----------  -----------
      Total other items not allocated to segments..........          (47,862)    (37,746)    (10,116)
                                                                  -----------  -----------  -----------

      Total net income ....................................        $  72,561   $  61,842    $ 10,719
                                                                  ===========  ===========  ===========
</TABLE>
                                       18

<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 the Company's 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 the actual  results and  performance of the
Company  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 the  Company's  facilities;  the  Company's  ability to
evaluate,  finance,  and integrate  acquired and developed  properties  into the
Company's existing  operations;  the Company's 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 the Company's  facilities;
and the availability of permanent capital at attractive rates.

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

         Net income for the three  months  ended March 31, 2000 was  $72,561,000
compared to $61,842,000 for the same period in 1999, representing an increase of
$10,719,000  or 17.3%.  The increase in net income was  primarily  the result of
improved  property  operations  and the  acquisition  of additional  real estate
investments during 1999 and 2000 (including the merger with Storage Trust, which
occurred on March 12, 1999).

         Net income  allocable to common  shareholders  was $45,265,000 or $0.34
per common  share on a diluted  basis  (based on  132,902,000  weighted  average
common  equivalent  shares) for the three months  ended March 31, 2000.  For the
same period in 1999, net income allocable to common shareholders was $40,312,000
or $0.34 per common  share on a diluted  basis  (based on  119,014,000  weighted
average common equivalent  shares).  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 stock have been deducted from net income in
determining net income allocable to the common shareholders.  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,
the Company 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 months ended
March 31, 2000. Weighted average diluted shares for the three months ended March
31, 1999 does not include any shares with respect to the Class B common stock as
these shares were not  participating in distributions of the Company's  earnings
prior to January 1, 2000.

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

         Rental  income  and cost of  operations  have  increased  for the three
months  ended  March 31,  2000  compared  to the same  period in 1999 due to our
merger and  acquisition  activities  throughout  1999 and 2000, most notably the
merger with  Storage  Trust on March 12, 1999.  As a result of these items,  the
number of facilities included in the Company's consolidated financial statements
has increased from 1,168 at March 31, 1999 to 1,209 at March 31, 2000.

                                       19

<PAGE>

         SELF-STORAGE  OPERATIONS:  The following table summarizes the operating
results (before  depreciation)  of (i) the 946  self-storage  facilities 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 months ended March 31, 2000 and the same period
in 1999 (the "Other Facilities"):

SELF-STORAGE OPERATIONS:                      Three months ended
------------------------                           March 31,
                                             -----------------------  Percentage
                                                2000         1999       Change
                                             ----------   ----------  ----------
                                            (Dollar amounts in thousands, except
                                                  per square foot amounts)
Rental income:
--------------
  Consistent Group.......................    $ 129,974    $ 125,924        3.2%
  Other Facilities.......................       24,660        3,105      694.2%
                                             ----------   ----------  ----------
                                               154,634      129,029       19.8%
                                             ----------   ----------  ----------
Cost of operations:
-------------------
  Consistent Group.......................       40,353       38,849        3.9%
  Other Facilities.......................       10,004        1,780      462.0%
                                             ----------   ----------  ----------
                                                50,357       40,629       23.9%
                                             ----------   ----------  ----------
Net operating income:
---------------------
  Consistent Group.......................       89,621       87,075        2.9%
  Other Facilities.......................       14,656        1,325     1006.1%
                                             ----------   ----------  ----------
                                             $ 104,277    $  88,400       18.0%
                                             ==========   ==========  ==========

Consistent Group data:
----------------------
  Gross margin...........................       69.0%        69.1%        (0.1)%
  Weighted average :
     Occupancy...........................       91.4%        91.0%         0.4%
     Realized annual rent per square foot.     $10.15        $9.89         2.6%
     Scheduled annual rent per square foot     $10.52       $10.27         2.4%

Number of facilities:
  Consistent group.......................        946          946          -
  Other Facilities.......................        251          218         15.1%

Net rentable sq. ft.(in thousands):
  Consistent group.......................     56,050       56,050          -
  Other Facilities.......................     14,895       12,830         16.1%

         Rental  income  for the three  months  ended  March 31,  2000 is net of
promotional  discounts  totaling  $5.7 million  compared to $4.2 million for the
same period in 1999. In addition,  included in cost of operations  for the three
months ended March 31, 2000 are costs associated with the telephone  reservation
center and advertising  totaling $4.9 million,  compared to $4.0 million for the
same period in 1999.  During the three months ended March 31, 2000,  the Company
opened seven newly constructed storage  facilities,  which had an aggregate cost
of approximately  $34.4 million.  Rental income and cost of operations  included
above  with  respect  to these  facilities  totaled  approximately  $31,000  and
$131,000, respectively, for the three months ended March 31, 2000.

         COMMERCIAL  PROPERTY  OPERATIONS:.  Our commercial  property operations
principally  consist  of our  investment  in  PSB,  an  affiliated  real  estate
investment  trust,  and to a much lesser  extent  commercial  space owned by the
Company and Consolidated Entities. The following table sets forth the historical
commercial property amounts included in the financial statements:

                                       20

<PAGE>


COMMERCIAL PROPERTY OPERATIONS                   Three months ended
------------------------------                         March 31,
                                               ------------------------
                                                  2000         1999       Change
                                               ----------    ----------  -------
                                                     (Amounts in thousands)
Rental income..............................     $  2,759     $  1,914      44.1%
Cost of operations.........................          949          638      48.7%
                                               ----------    ----------  -------
Net operating income.......................     $  1,810     $  1,276      41.8%
                                               ==========    ==========  ======-

         PORTABLE SELF-STORAGE OPERATIONS:  At March 31, 2000, PSPUD operated 36
facilities. Due to the start-up nature of the business, PSPUD incurred operating
losses  totaling  approximately  $1,832,000  and  $3,936,000 in the three months
ended March 31, 2000 and 1999, respectively, summarized as follows:

PORTABLE SELF-STORAGE
---------------------
                                                 Three months ended
                                                      March 31,
                                                --------------------
                                                  2000        1999       Change
                                                --------    --------    --------

Rental and Other Income ....................    $ 7,549     $ 5,428     $ 2,121

Cost of Operations:
  Direct Operating Costs ...................      5,156       4,609         547
  Marketing and Advertising ................        444         422          22
  Facility lease expense ...................      2,254       2,800        (546)
                                                --------    --------    --------
       Total cost of operations ............      7,854       7,831          23

  Operating loss prior to depreciation
    and G&A ................................       (305)     (2,403)      2,098

Depreciation (A) ...........................      1,153       1,182         (29)
General and Administrative (A) .............        374         351          23
                                                --------    --------    --------
Operating losses ...........................    $(1,832)    $(3,936)    $ 2,104
                                                ========    ========    ========

(A)  Amounts reflect that portion of consolidated  depreciation  and general and
     administrative  expense  that  is  directly  attributable  to the  portable
     self-storage business.

         Until the PSPUD facilities are operating profitable, PSPUD's operations
are expected to continue to  adversely  impact the  Company's  earnings and cash
flows. There can be no assurances 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 March 31,  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 March 31,
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 237 real
estate facilities, 111 of which are storage facilities. The following table sets
forth the significant components of equity in earnings of real estate entities:

                                       21

<PAGE>

HISTORICAL SUMMARY:                              Three months ended
-------------------                                    March 31,
                                               ----------------------    Dollar
                                                 2000         1999       Change
                                               ---------    ---------    -------
                                                     (Amounts in thousands)
Property operations:
  PSB....................................      $  9,829     $  8,422     $1,407
  Development Joint Venture..............           885          346        539
  Other investments......................         4,364        3,921        443
                                               ---------    ---------    -------
                                                 15,078       12,689      2,389
                                               ---------    ---------    -------
Depreciation:
  PSB....................................        (3,390)      (2,668)      (722)
  Development Joint Venture..............          (461)        (261)      (200)
  Other investments......................        (1,181)      (1,200)        19
                                               ---------    ---------    -------
                                                 (5,032)      (4,129)      (903)
                                               ---------    ---------    -------

Other: (1)
  PSB....................................        (1,536)        (826)      (710)
  Development Joint Venture..............            53           22         31
  Other investments......................          (287)         366       (653)
                                               ---------    ---------    -------
                                                 (1,770)        (438)    (1,332)
                                               ---------    ---------    -------

Total equity in earnings of real estate
entities.................................      $  8,276     $  8,122     $ 154
                                               =========    =========    =======

(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  increase  in 2000  equity  in  earnings  of real  estate  entities
compared to 1999 is principally the result of improved operations of PSB. 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 March 31, 2000, 44 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:  The net operating results from our property
management  operations and  merchandise  sales are presented along with interest
and other income, as "interest and other income." The components of interest and
other income are detailed as follows:

                                       22

<PAGE>

                                           Three months ended
                                                 March 31,
                                          -------------------------
                                             2000         1999         Change
                                          -----------   -----------   --------
                                                 (Amounts in thousands)
Facility management:
   Revenues...........................    $    1,301    $    1,414      (8.0)%
   Cost of operations.................           211           255     (17.3)%
                                          -----------   -----------   --------
     Net operating income                      1,090         1,159      (6.0)%
                                          -----------   -----------   --------
Sales of packaging material and truck
rental income:
   Revenues...........................         3,668         2,135      71.8%
   Cost of operations.................         3,450         1,810      90.6%
                                          -----------   -----------   --------
     Net operating income.............           218           325     (32.9)%

Interest and other income.............         2,069         2,038       1.5%
                                          -----------   -----------   --------
  Total interest and other income.....    $    3,377    $    3,522      (4.1)%
                                          ===========   ===========   ========

         Facility management operations are primarily attributable to management
of  self-storage  properties.   At  March  31,  2000,  we  managed  159  storage
facilities.

         Sales of  packaging  material  and truck  rentals  have  increased as a
result of  opening  additional  stores,  as well as  increases  at our  existing
stores.

         Interest and other income is primarily  attributable to interest income
on cash balances and interest income from mortgage notes receivable.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
has  increased  $5,878,000 to  $36,034,000  for the three months ended March 31,
2000 as compared to $30,156,000 for the same period in 1999. These increases are
principally due to the acquisition of additional real estate  facilities  during
1999 and 2000.  Amortization  expense with respect to intangible  assets totaled
$2,328,000 for the three months ended March 31, 2000 and 1999.

         MINORITY INTEREST IN INCOME: Minority interest in income represents the
income allocable to equity interests in the Consolidated Entities, which are not
owned by the  Company.  Minority  interest in income for the three  months ended
March 31,  2000 was  $4,389,000  compared to  $3,353,000  for the same period 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  $68,000 of loss  allocated to our joint  venture  partner.  As of
March 31,  2000,  our joint  venture  partner had invested  approximately  $67.1
million.

         On March 17, 2000, we issued $240.0 million of 9.5% Series N Cumulative
Redeemable  Perpetual  Preferred  Units and on March 29,  2000,  we issued $75.0
million of 9.125% Series O Cumulative  Redeemable  Perpetual  Preferred Units in
one of our  consolidated  operating  partnerships.  The  issuance  of  preferred
partnership  units  had the  effect  of  increasing  minority  interest  by $315
million.  For the three months ended March 31, 2000,  these preferred units were
paid in  aggregate  approximately  $925,000  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.

                                       23

<PAGE>

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

         At March 31,  2000,  there were  approximately  46  ownership  entities
owning in aggregate 1,316 storage facilities,  including the facilities which we
own and/or  operate.  At March 31, 2000, 111 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  1,205
facilities are owned by the Company and Consolidated Entities.

         The following table summarizes our investment in real estate facilities
as of March 31, 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....................          608            4         612      37,123         307      37,430
Facilities owned by Consolidated Entities..          597            -         597      34,700           -      34,700
                                               ------------  ----------  --------   ------------  ----------  --------
    Total consolidated facilities..........        1,205            4       1,209      71,823         307      72,130
Facilities owned by Unconsolidated Entities          111          126         237       6,516      12,539      19,055
                                               ------------  ----------  --------   ------------  ----------  --------
    Total  facilities  in which  the  Company
      has an ownership interest............        1,316          130       1,446      78,339      12,846      91,185
                                               ============  ==========  ========   ============  ==========  ========
</TABLE>

         In  order  to  evaluate  how  our  overall   portfolio  has  performed,
management  analyzes  the  operating   performance  of  a  consistent  group  of
self-storage facilities representing 965 (56.5 million net rentable square feet)
of the  1,316  self-storage  facilities  (herein  referred  to as  "Same  Store"
self-storage  facilities).  The 965  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 896 consolidated facilities
and  69  facilities  owned  by  Unconsolidated  Entities.  The  following  table
summarizes the  pre-depreciation  historical operating results of the Same Store
self-storage facilities:

SAME STORE SELF-STORAGE FACILITIES:          Three months ended
-----------------------------------              March 31,
(historical property operations)             ------------------      Percentage
                                             2000         1999         Change
                                           ----------   ----------   ----------
                                                  (Amounts in thousands,
                                               except rent per square foot)

Rental income ........................     $ 133,078     $128,590        3.5%
Cost of operations (includes an
  imputed 6% property management fee)
  (1).................................        47,529       46,274        2.7%
                                           ----------   ----------   ----------
Net operating income .................     $  85,549     $ 82,316        3.9%
                                           ==========   ==========   ==========
Gross profit margin (2) ..............          64.3%        64.0%       0.3%

WEIGHTED AVERAGE:
  Occupancy ..........................          91.7%        91.3%       0.4%
  Realized annual rent per sq. ft (3)      $    10.28    $    9.98       3.0%
  Scheduled annual rent per sq. ft (3)     $    10.65    $   10.39       2.5%
  -----------------------------------------------------------------------------

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.

                                       24

<PAGE>

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 70.3%,  and
         70.0% for the three months ended March 31, 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  $4.5  million  for the three  months  ended  March 31, 2000
compared to $4.0 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.

         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 three months ended
                                                                                                   March 31,
                                                                                           ----------------------------
                                                                                               2000           1999
                                                                                           ------------    ------------
                                                                                             (Amounts in thousands)
<S>                                                                                         <C>             <C>
Net income...........................................................................       $  72,561       $  61,842
Depreciation and amortization........................................................          36,034          30,156
Less - Depreciation with respect to non real estate assets...........................          (1,153)         (1,182)
Depreciation from Unconsolidated Entities............................................           5,032           4,129
Minority interest in income..........................................................           4,389           3,353
                                                                                           ------------    ------------
  Net cash provided by operating activities..........................................         116,863          98,298

Distributions from operations to minority interests..................................          (6,178)         (5,664)
                                                                                           ------------    ------------
Cash from operations allocable to the Company's shareholders.........................         110,685          92,634

Less: preferred stock dividends......................................................         (25,038)        (21,530)
Less: equity stock, Series A dividends...............................................          (2,258)              -
                                                                                           ------------    ------------
Cash from operations available to common shareholders................................          83,389          71,104

Capital improvements to maintain facilities:.........................................          (4,126)         (2,935)
Add back: minority interest share of capital improvements to maintain facilities.....              66             192
                                                                                           ------------    ------------
Funds available for principal payments on debt, common dividends and reinvestment....          79,329          68,361

Cash distributions to common shareholders............................................         (29,084)        (28,332)
                                                                                           ------------    ------------
Funds available for principal payments on debt and reinvestment......................       $  50,245       $  40,029
                                                                                           ============    ============
</TABLE>

                                       25

<PAGE>

         We expect to fund our growth  strategies with cash on hand at March 31,
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 March 31, 2000,  we had  mortgage  debt  outstanding  of $28.7
million and had  consolidated  real estate  facilities with a book value of $3.4
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,  we 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) in one of our  operating  partnerships.  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. 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.  During  the  three  months  ended  March 31,  2000 and  1999,  we
distributed  to common  shareholders  approximately  34.9% and 39.8% of our cash
available from operations allocable to common shareholders, respectively.

         During the three months  ended March  31,2000,  we paid cash  dividends
totaling $25,038,000 to the holders of our Senior Preferred Stock and $2,258,000
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 March 31, 2000 to be approximately $100.2 million. With respect to the Equity
Stock,  Series A issued in January 2000, the prorated  annual  distribution  for
2000  (assuming  that at least $0.49 is paid per common share) is  approximately
$10.2 million.

         During  the three  months  ended  March  31,  2000,  we paid  dividends
totaling  $111,170,000  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. On March  31,  2000 we paid cash  dividends
totaling  $27,590,000  to common  shareholders  and $1,494,000 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.

         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 three months  ended March 31,  2000,  we incurred  capital  improvements  of
approximately $4.1 million.

         DEBT SERVICE  REQUIREMENTS:  We do not believe we have any  significant
refinancing risks with respect to our note payable,  all of which is fixed rate.
At March 31,  2000,  we had total  outstanding  notes  payable of  approximately
$166.7 million.  Approximate  principal maturities of notes payable at March 31,
2000 are as follows:

                                       26

<PAGE>

                                Unsecured
                               Senior Notes       Mortgage debt         Total
                              --------------     --------------     ------------
                                                (in thousands)
2000 (remainder of).......    $       8,750      $       2,025        $   10,775
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
                              --------------     --------------     ------------
                              $     138,000      $      28,741        $  166,741
                              ==============     ==============     ============
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 March 31,  2000,  we
repurchased  a  total  of  1,380,300  shares,  for a  total  aggregate  cost  of
approximately $30.7 million.  From the initial  authorization  through March 31,
2000, the Company has repurchased a total of 8,789,127 shares of common stock at
an aggregate cost of  approximately  $211.6 million.  From April 1, 2000 through
April 26, 2000,  we have  repurchased  129,600  shares at an  aggregate  cost of
approximately $2.9 million.

         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 million at March 31, 2000.

         As of March 31, 2000,  the joint  venture had 44 operating  facilities,
with  2,659,000  net  rentable  square  feet  and  total  development  costs  of
approximately  $211.8  million.  As of March  31,  2000,  the joint  venture  is
developing three additional projects  (approximately 221,000 net rentable square
feet) that were in  process,  with total  costs  incurred  of $15.3  million and
estimated remaining costs to complete of $2.8 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 March 31, 2000, the second development joint
venture  was  committed  to  develop 8  facilities  (approximately  530,000  net
rentable  sq. ft.) with an estimated  development  cost of  approximately  $39.4
million, of which five facilities  (approximately  304,000 net rentable sq. ft.)
were  completed  with an aggregate cost of  approximately  $22.0 million.  As of
March 31,  2000,  the  second  development  joint  venture is  developing  three
additional projects  (approximately  226,000 net rentable square feet) that were
in process,  with total costs incurred of $14.9 million and estimated  remaining
costs to complete of $2.5 million.  We have  submitted 14 additional  facilities
for approval with total estimated costs of approximately  $67.7 million; we have
incurred  approximately  $25.2  million  through  March 31, 2000 with respect to
these 14 projects, and upon approval,  these projects will be transferred to the
joint venture and the joint venture partner will contribute its 49% share.

         Excluding  the 14  properties  that are being  reviewed  by the  second
development joint venture and the six properties that the two joint ventures are
developing,  we are developing 23 additional  storage  facilities.  At March 31,
2000, we had incurred costs of $79.2 million with respect to these 23 facilities
(estimated remaining costs to complete of approximately $79.1 million).  We have
also identified 18 additional  storage  facilities for  development,  with total
estimated costs of approximately  $113.6 million.  These projects are subject to
significant contingencies.

                                       27

<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  $110,685,000  for  the  three  months  ended  March  31,  2000  compared  to
$92,634,000  for the same period in 1999.  FFO available to common  shareholders
(after  deducting  preferred stock  dividends)  increased to $83,389,000 for the
three months ended March 31, 2000 compared to $71,104,000 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 March  31,  2000,  our debt as a  percentage  of total
shareholders' equity (based on book values) was 4.4%.

         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 market risk  sensitive  instruments  include notes  payable,  which
totaled  $166.7  million at March 31, 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 March 31, 2000.

                                       28

<PAGE>

PART II.  OTHER INFORMATION

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.

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.

                                       29

<PAGE>

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.

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.

                                       30

<PAGE>

3.29     Certificate of  Determination  for 9.125%  Cumulative  Preferred Stock,
         Series O. Filed herewith.

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

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

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

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

3.34     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.

3.35     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.

3.36     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.

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.

                                       31

<PAGE>

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.

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.

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<PAGE>

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.

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.

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

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

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<PAGE>

27.      Financial Data Schedule. Filed herewith.

(b)      Reports on Form 8-K

         The Company  filed a Current  Report on form 8-K dated January 13, 2000
         (filed  January 14, 2000),  pursuant to Item 5, in connection  with the
         Company's public offering of depositary shares each representing 1/1000
         of a share of Equity Stock, Series A in January 2000.

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<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:  May 15, 2000

                      PUBLIC STORAGE, INC.


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

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