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 September 30, 2001
                               ------------------

                                       or

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

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

Commission File Number:     1-8389
                            ------

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


               California                                       95-3551121
-----------------------------------------                 ----------------------
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                       Identification Number)

701 Western Avenue, Glendale, California                        91201-2349
-----------------------------------------                 ----------------------
(Address of principal executive offices)                        (Zip Code)


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



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

                                [ X ] Yes [ ] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 8, 2001:

Common Stock, $.10 Par Value - 113,779,638 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 - 8,676,102 depositary shares  (representing  8,676.102 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
              September 30, 2001 and December 31, 2000                         1

         Condensed Consolidated Statements of Income for the
              Three and Nine Months Ended September 30, 2001 and 2000          2

         Condensed Consolidated Statements of Shareholders' Equity
              for the Nine Months Ended September 30, 2001                     3

         Condensed Consolidated Statements of Cash Flows
              for the Nine Months Ended September 30, 2001 and 2000        4 - 5

         Notes to Condensed Consolidated Financial Statements             6 - 20

Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations              21 - 36

Item 3.  Quantitative and Qualitative Disclosures about Market Risk           37

PART II. OTHER INFORMATION (Items 1 through 4 are not applicable)
         -----------------

Item 5.  Other Information                                                    37

Item 6.  Exhibits and Reports on Form 8-K                                37 - 43

<PAGE>

                              PUBLIC STORAGE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (Amounts in thousands, except share data)

<TABLE>
<CAPTION>
                                                                             September 30,        December 31,
                                                                                 2001                 2000
                                                                            --------------       --------------
                                                                             (Unaudited)
                                     ASSETS
                                     ------

<S>                                                                         <C>                  <C>
Cash and cash equivalents..........................................         $     288,393        $      89,467
Real estate facilities, at cost:
     Land..........................................................             1,147,562            1,107,867
     Buildings.....................................................             3,204,231            3,026,550
                                                                            --------------       --------------
                                                                                4,351,793            4,134,417
     Accumulated depreciation......................................              (780,089)            (668,018)
                                                                            --------------       --------------
                                                                                3,571,704            3,466,399
     Construction in process.......................................               142,786              217,140
     Land held for development.....................................                32,369               21,447
                                                                            --------------       --------------
         Total real estate.........................................             3,746,859            3,704,986

Investment in real estate entities.................................               464,442              448,928
Intangible assets, net.............................................               178,033              185,017
Mortgage notes receivable from affiliates..........................                24,152               26,238
Other assets.......................................................                71,767               59,305
                                                                            --------------       --------------
              Total assets.........................................         $   4,773,646        $   4,513,941
                                                                            ==============       ==============

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

Notes payable......................................................         $     149,058        $     156,003
Accrued and other liabilities......................................               116,999              100,903
                                                                            --------------       --------------
              Total liabilities....................................               266,057              256,906

Minority interest:
     Preferred partnership interests...............................               335,000              365,000
     Other.........................................................               168,102              167,918

Commitments and contingencies

Shareholders' equity:
     Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
       11,161,500 shares issued and outstanding, (11,141,100 at December
       31, 2000) at liquidation preference:
         Cumulative Preferred Stock, issued in series..............             1,665,150            1,155,150
     Common Stock, $0.10 par value, 200,000,000 shares authorized,
       113,416,605 shares issued and outstanding (123,703,874 at
       December 31, 2000)..........................................                11,342               12,370
     Equity Stock, Series A, $0.01 par value, 200,000,000 shares
       authorized, 8,676.102 shares issued and outstanding (5,635.602
       at December 31, 2000).......................................                     -                    -
     Class B Common Stock, $0.10 par value, 7,000,000 shares
       authorized and issued.......................................                   700                  700
     Paid-in capital...............................................             2,288,128            2,506,736
     Cumulative net income.........................................             1,627,073            1,387,061
     Cumulative distributions paid.................................            (1,587,906)          (1,337,900)
                                                                            --------------       --------------
         Total shareholders' equity................................             4,004,487            3,724,117
                                                                            --------------       --------------
              Total liabilities and shareholders' equity...........         $   4,773,646        $   4,513,941
                                                                            ==============       ==============
</TABLE>
                            See accompanying notes.
                                       1

<PAGE>

                              PUBLIC STORAGE, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in thousands, except share amounts)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          For the Three Months Ended            For the Nine Months Ended
                                                                 September 30,                        September 30,
                                                        --------------------------------     --------------------------------
                                                            2001               2000              2001               2000
                                                        -------------      -------------     -------------      -------------
Revenues:
<S>                                                     <C>                <C>               <C>                <C>
   Rental income:
       Self-storage facilities...................       $    186,615       $    167,900      $    537,530       $    483,669
       Commercial properties.....................              3,081              2,847             9,353              8,433
       Containerized storage facilities..........             13,019             11,045            35,275             27,834
  Equity earnings of real estate entities........              9,826              9,479            28,912             26,910
  Interest and other income......................              3,178              4,695             9,916             13,865
                                                        -------------      -------------     -------------      -------------
                                                             215,719            195,966           620,986            560,711
                                                        -------------      -------------     -------------      -------------
Expenses:
  Cost of operations:
       Self-storage facilities...................             58,680             54,455           169,753            156,084
       Commercial properties.....................              1,013                926             2,845              2,756
       Containerized storage facilities..........             10,828              9,429            31,356             25,931
   Depreciation and amortization.................             42,701             37,731           123,646            109,509
   General and administrative....................              5,965              5,436            16,549             14,057
   Interest expense..............................                928                626             3,023              3,293
                                                        -------------      -------------     -------------      -------------
                                                             120,115            108,603           347,172            311,630
                                                        -------------      -------------     -------------      -------------
   Income before minority interest and gain on
     disposition of real estate..................             95,604             87,363           273,814            249,081

Minority interest in income:
   Preferred partnership interests...............             (7,820)            (8,018)          (24,830)           (16,354)
   Other partnership interests...................             (4,180)            (3,693)          (10,540)           (10,211)
                                                        -------------      -------------     -------------      -------------

Income before gain on disposition of real estate.             83,604             75,652           238,444            222,516
   Gain on disposition of real estate............                  -                  -             1,568                  -
                                                        -------------      -------------     -------------      -------------
Net income.......................................       $     83,604       $     75,652      $    240,012       $    222,516
                                                        =============      =============     =============      =============

Net income allocation:
  Allocable to preferred shareholders............       $     28,736       $     25,027      $     85,508       $     75,110
  Allocable to equity shareholders, Series A.....              5,314              2,666            14,080              7,590
  Allocable to common shareholders...............             49,554             47,959           140,424            139,816
                                                        -------------      -------------     -------------      -------------
                                                        $     83,604       $     75,652      $    240,012       $    222,516
                                                        =============      =============     =============      =============
Per common share:
  Net income per share - Basic...................             $0.41              $0.37             $1.14              $1.06
                                                        =============      =============     =============      =============
  Net income per share - Diluted.................             $0.41              $0.37             $1.13              $1.06
                                                        =============      =============     =============      =============
  Net income per depositary share of Equity Stock,
     Series A - Basic and Diluted................             $0.61              $0.61             $1.84              $1.84
                                                        =============      =============     =============      =============

  Weighted average common shares - Basic.........            120,092            131,084           122,951            131,815
                                                        =============      =============     =============      =============
  Weighted average common shares - Diluted.......            121,754            131,261           123,977            131,975
                                                        =============      =============     =============      =============
  Weighted average depositary shares of Equity
     Stock, Series A - Basic and Diluted.........              8,676              4,353             7,663              4,131
                                                        =============      =============     =============      =============
</TABLE>
                            See accompanying notes.
                                       2

<PAGE>

                              PUBLIC STORAGE, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (Amounts in thousands)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Cumulative
                                                                Senior                         Class B
                                                              Preferred        Common           Common          Paid-in
                                                                Stock          Stock            Stock           Capital
                                                             ------------     ---------     -------------     ------------
<S>                                                          <C>               <C>            <C>              <C>
Balances at December 31, 2000..........................      $  1,155,150      $12,370        $       700      $2,506,736


Issuance of preferred stock, net of issuance costs:
   Series Q (6,900 shares).............................           172,500               -               -          (5,534)
   Series R (20,400 shares)............................           510,000               -               -         (16,915)

 Redemption of Series G preferred stock, including
   redemption costs (6,900 shares).....................          (172,500)              -               -             (25)

 Issuance of common stock via exercise of stock
   options (281,324 shares)............................                 -              28               -           6,040

Repurchase of common stock (10,568,593 shares) ........                 -          (1,056)              -        (275,214)

Issuance of Equity Stock, Series A (3,040.500 shares)..                 -               -               -          72,130

Issuance of Put Option  (Note 8).......................                 -               -               -             910

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

Cash distributions (Note 8):
   Cumulative Senior Preferred Stock ..................                 -               -               -               -
   Equity Stock, Series A..............................                 -               -               -               -
   Class B Common Stock................................                 -               -               -               -
   Common Stock........................................                 -               -               -               -
                                                             ------------     ---------     -------------     ------------
Balances at September 30, 2001.........................      $  1,665,150      $11,342        $       700      $2,288,128
                                                             ============     =========     =============     ============
</TABLE>

<TABLE>
<CAPTION>

                                                                                                  Total
                                                              Cumulative       Cumulative      Shareholders'
                                                              Net Income     Distributions         Equity
                                                             -------------   -------------    ---------------
<S>                                                           <C>            <C>                <C>
Balances at December 31, 2000..........................       $ 1,387,061    $ (1,337,900)      $3,724,117


Issuance of preferred stock, net of issuance costs:
   Series Q (6,900 shares).............................                 -              -           166,966
   Series R (20,400 shares)............................                 -              -           493,085

 Redemption of Series G preferred stock, including
   redemption costs (6,900 shares).....................                 -              -          (172,525)

 Issuance of common stock via exercise of stock
   options (281,324 shares)............................                 -              -             6,068

Repurchase of common stock (10,568,593 shares) ........                 -              -          (276,270)

Issuance of Equity Stock, Series A (3,040.500 shares)..                 -              -            72,130

Issuance of Put Option  (Note 8).......................                 -              -               910

Net income.............................................           240,012              -           240,012

Cash distributions (Note 8):
   Cumulative Senior Preferred Stock ..................                 -        (85,508)          (85,508)
   Equity Stock, Series A..............................                 -        (14,080)          (14,080)
   Class B Common Stock................................                 -         (8,420)           (8,420)
   Common Stock........................................                 -       (141,998)         (141,998)
                                                             -------------   -------------    ---------------
Balances at September 30, 2001.........................       $ 1,627,073    $ (1,587,906)      $4,004,487
                                                             =============   =============    ===============
</TABLE>
                            See accompanying notes.
                                       3

<PAGE>

                              PUBLIC STORAGE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                           For the Nine Months Ended
                                                                                                 September 30,
                                                                                        ---------------------------------
                                                                                            2001                2000
                                                                                        --------------     --------------
Cash flows from operating activities:
<S>                                                                                     <C>                <C>
   Net income..................................................................         $     240,012      $     222,516
   Adjustments to reconcile net income to net cash provided by operating
     activities:
     Gain on disposition of real estate........................................                (1,568)                 -
     Depreciation and amortization.............................................               123,646            109,509
     Depreciation included in equity earnings of real estate entities..........                17,727             15,522
     Minority interest in income...............................................                35,370             26,565
                                                                                        --------------     --------------
         Total adjustments.....................................................               175,175            151,596
                                                                                        --------------     --------------
             Net cash provided by operating activities.........................               415,187            374,112
                                                                                        --------------     --------------

Cash flows from investing activities:
     Principal payments received on notes receivable from affiliates...........                 2,086              2,573
     Mortgage notes receivable from affiliates.................................                     -            (11,400)
     Capital improvements to real estate facilities............................               (24,484)           (16,605)
     Construction in process and acquisition of land held for development......              (135,207)          (159,403)
     Acquisition of minority interests.........................................               (11,212)           (29,700)
     Proceeds from the disposition of real estate facilities...................                13,415              8,652
     Proceeds from the disposition of real estate investments..................                     -             21,929
     Acquisition of investment in real estate entities.........................               (33,241)           (63,380)
     Acquisition of real estate facilities.....................................                (3,503)           (37,756)
     Acquisition cost of business combinations.................................                     -            (66,776)
                                                                                        --------------     --------------
             Net cash used in investing activities.............................              (192,146)          (351,866)
                                                                                        --------------     --------------

Cash flows from financing activities:
     Principal payments on notes payable.......................................                (6,945)            (6,615)
     Net proceeds from the issuance of common stock............................                 6,068              4,404
     Net proceeds from the issuance of preferred stock.........................               660,051                  -
     Net proceeds from the issuance of equity stock............................                72,130             39,800
     Issuance of Put Option (Note 8)...........................................                   910                  -
     Net proceeds from the issuance of preferred partnership units.............                     -            361,250
     Repurchase of common stock................................................              (276,270)           (65,004)
     Repurchase of preferred partnership units.................................               (30,000)                 -
     Redemption of preferred stock.............................................              (172,525)                 -
     Distributions paid to shareholders........................................              (250,006)          (285,831)
     Distributions to holders of preferred partnership units...................               (24,830)           (16,354)
     Distributions from operations to minority interests.......................               (16,274)           (15,224)
     Investment by minority interests..........................................                13,142             15,241
     Net reinvestment (divestment) of minority interests.......................                 1,068             (7,569)
     Other.....................................................................                  (634)             3,130
                                                                                        --------------     --------------
             Net cash (used in) provided by financing activities...............               (24,115)            27,228
                                                                                        --------------     --------------

Net increase in cash and cash equivalents.....................................                198,926             49,474
Cash and cash equivalents at the beginning of the period......................                 89,467             55,125
                                                                                        --------------     --------------
Cash and cash equivalents at the end of the period............................          $     288,393      $     104,599
                                                                                        ==============     ==============
</TABLE>
                            See accompanying notes.
                                       4

<PAGE>

                              PUBLIC STORAGE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

                                   (Unaudited)


                                   (Continued)

<TABLE>
<CAPTION>
                                                                                For the Nine Months Ended
                                                                                      September 30,
                                                                            -----------------------------------
                                                                                 2001                 2000
                                                                            ---------------     ---------------
Supplemental schedule of non-cash investing and financing activities:
<S>                                                                         <C>                 <C>
 Business combinations:
   Real estate facilities...........................................        $            -      $     (82,163)
   Other assets.....................................................                     -               (183)
   Accrued and other liabilities....................................                     -              1,177

 Reduction to investment in real estate entities in connection with:
   Business combinations............................................                     -             14,393
   Acquisition of real estate facilities............................                     -              3,144

 Real estate acquired in exchange for equity stock and reduction to
   investment in real estate entities...............................                     -             (4,169)

 Acquisition of minority interest and real estate in exchange for
   common stock:
     Real estate facilities.........................................                     -            (17,103)
     Minority interest..............................................                     -            (19,426)

 Real estate facilities and accumulated depreciation disposed of in
   exchange for notes receivable and minority interests.............                     -             18,769

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

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

Issuance of Equity Stock, Series A:
   In connection with special distribution to common shareholders...                     -             44,010
   In connection with acquisition of real estate facilities.........                     -              1,025

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

Issuance of common stock :
   To acquire minority interest in consolidated real estate entities                     -              6,829

</TABLE>
                            See accompanying notes.
                                       5

<PAGE>

                              PUBLIC STORAGE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2001

                                   (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 September 30, 2001,  PSPUD had 53 facilities in
     operation in 14 states.

              We invest in real estate  facilities  by  acquiring  wholly  owned
     facilities or by acquiring interests in real estate entities which own real
     estate facilities. At September 30, 2001, we had direct and indirect equity
     interests in 1,378  storage  facilities  located in 37 states and operating
     under the "Public  Storage"  name. We also have direct and indirect  equity
     interests  in  approximately  14.0  million  net  rentable  square  feet of
     commercial space located in 11 states.

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 the  Consolidated  Entities  own a total of
     1,264 storage facilities and six commercial facilities.

              At September  30, 2001,  we had equity  investments  in 11 limited
     partnerships in which we do not have a controlling interest.  These limited
     partnerships  collectively  own  114  self-storage  facilities,  which  are
     managed by the Company. In addition, we own approximately 44% of the common
     interest in PS Business Parks, Inc.  ("PSB"),  which owns and operates 13.6
     million net rentable square feet of commercial space at September 30, 2001.
     We do not control these  entities.  Accordingly,  our  investments in these
     limited partnerships and PSB are accounted for using the equity method.

              Certain  amounts  previously  reported have been  reclassified  to
     conform to the September 30, 2001 presentation.

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

              The  preparation  of  the  consolidated  financial  statements  in
     conformity  with  accounting  principles  generally  accepted in the United
     States 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.

                                       6

<PAGE>

     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 2001 and,
     accordingly,   no  provision   for  income  taxes  has  been  made  in  the
     accompanying financial statements.

     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.  The  carrying  amount of
     mortgage  notes  receivable  approximates  fair value because the aggregate
     mortgage notes  receivable  applicable  interest rates  approximate  market
     rates for those loans.

              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.

                                       7

<PAGE>

     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  intangibles),  by  identifying  indicators of impairment and by
     comparing the sum of the estimated  undiscounted future cash flows for each
     asset to the asset's  carrying  amount.  When  indicators of impairment are
     present  and the sum of the  undiscounted  cash  flows  is  less  than  the
     carrying value of such asset,  an impairment  loss is recorded equal to the
     difference  between the asset's current  carrying value and its value based
     upon  discounting its estimated  future cash flows.  Statement No. 121 also
     addresses  the  accounting  for  long-lived  assets that are expected to be
     disposed of. Such assets are to be reported at the lower of their  carrying
     amount or fair value,  less cost to sell. Our evaluations have indicated no
     impairment in the carrying amount of our assets.

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

              Other assets primarily consist of furniture,  fixtures, equipment,
     and other such assets associated with the containerized  storage facilities
     business as well as accounts receivable,  prepaid expenses,  and other such
     assets  of the  Company.  Included  in other  assets  with  respect  to the
     containerized storage business is furniture,  fixtures,  and equipment (net
     of accumulated  depreciation)  of $30,629,000  and $28,544,000 at September
     30, 2001 and December 31, 2000, respectively.  Included in depreciation and
     amortization expense for the three months ended September 30, 2001 and 2000
     is $1,379,000 and $1,204,000,  respectively,  and $4,268,000 and $3,612,000
     for the nine months ended  September  30, 2001 and 2000,  respectively,  of
     depreciation  of furniture,  fixtures,  and equipment of the  containerized
     storage business.

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

              Intangible  assets are amortized  straight-line  over 25 years. At
     September 30, 2001 intangible assets are net of accumulated amortization of
     $54,693,000  ($47,709,000  at December 31, 2000).  Included in depreciation
     and amortization  expense for the three and nine months ended September 30,
     2001 and 2000 is $2,328,000 and  $6,984,000,  respectively,  related to the
     amortization of intangible assets.

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

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

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

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

                                      8

<PAGE>

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

              Dividends paid to our preferred  shareholders totaling $28,736,000
     and  $25,027,000  for the three months ended  September  30, 2001 and 2000,
     respectively,  and  $85,508,000  and  $75,110,000 for the nine months ended
     September  30, 2001 and 2000,  respectively,  have been  deducted  from net
     income to arrive at net income allocable to our common shareholders.

              Net income  allocated to our common  shareholders has been further
     allocated  among our two classes of common stock;  our regular common stock
     and our Equity Stock,  Series A. The allocation  among each class was based
     upon the two-class method.  Under the two-class method,  earnings per share
     for each  class  of  common  stock is  determined  according  to  dividends
     declared  (or  accumulated)  and  participation   rights  in  undistributed
     earnings.  Under the two-class method,  the Equity Stock,  Series A for the
     three and nine months ended  September 30, 2001 was allocated net income of
     approximately $5,314,000 and $14,080,000,  respectively, as compared to the
     three and nine months ended September 30, 2000 of approximately  $2,666,000
     and $7,590,000,  respectively.  The remaining $49,554,000 and $140,424,000,
     for the three and nine months ended  September 30, 2001  respectively,  and
     $47,959,000 and $139,816,000, for the three and nine months ended September
     30, 2000 respectively, was allocated to the regular common shares.

              Basic net income per share is computed using the weighted  average
     common shares (prior to the dilutive impact of stock options  outstanding).
     Diluted net income per common share is computed using the weighted  average
     common shares outstanding  (adjusted for stock options).  Effective 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 includes  6,790,000  (7,000,000 x
     97%) Class B common shares in the weighted average common equivalent shares
     for the three and nine months ended September 30, 2000 and 2001.

     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.

     Recent accounting  pronouncements  and guidance - accounting for derivative
     ---------------------------------------------------------------------------
     instruments and hedging activities
     ----------------------------------

              In June 1998, the Financial  Accounting  Standards  Board ("FASB")
     issued  Statement of Financial  Accounting  Standards No. 133 ("SFAS 133"),
     Accounting for Derivative  Instruments and Hedging  Activities," as amended
     in June 2000 by Statement of Financial  Accounting Standards No. 138 ("SFAS
     138"),  "Accounting for Certain Derivative  Instruments and Certain Hedging
     Activities,"  which  requires  companies to recognize  all  derivatives  as
     either  assets  or  liabilities  in the  balance  sheet  and  measure  such
     instruments at fair value. The Company adopted SFAS 133, as amended by SFAS
     138, on January 1, 2001,  and the  adoption  had no material  impact on the
     Company's consolidated financial statements.

                                       9

<PAGE>

     Recent  accounting   pronouncements  and  guidance  -  goodwill  and  other
     ---------------------------------------------------------------------------
     intangible assets
     -----------------

              In July 2001,  the FASB issued  Statement of Financial  Accounting
     Standards No. 142 ("SFAS 142"),  "Goodwill  and Other  Intangible  Assets,"
     under which goodwill and indefinite  life  intangible  assets are no longer
     amortized but are reviewed annually for impairment.  The provisions of this
     statement are  applicable  to our fiscal year ending  December 31, 2002. We
     are  studying  this  statement  to  determine  its impact on our  financial
     statements,  and will adopt this statement in the year ending  December 31,
     2002.

3.   Business combinations
     ---------------------

              During 2000,  we acquired the remaining  ownership  interests in a
     partnership,  of  which  we are  the  general  partner,  for  an  aggregate
     acquisition cost of $81,169,000. Prior to the acquisition, we accounted for
     our investment in this partnership on the equity method.

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

              Activity in real estate facilities during 2001 is as follows:

                                                             In thousands
                                                            ---------------
Operating facilities, at cost:
  Balance at December 31, 2000....................          $    4,134,417
  Developed facilities............................                 191,105
  Acquisition of real estate facilities...........                   3,503
  Disposition of real estate facilities...........                  (4,636)
  Acquisition of minority interest  (Note 7)......                   2,920
  Capital improvements............................                  24,484
                                                            ---------------
  Balance at September 30, 2001...................               4,351,793
                                                            ---------------

Accumulated depreciation:
  Balance at December 31, 2000....................                (668,018)
  Disposition of real estate facilities...........                     323
  Additions during the year.......................                (112,394)
                                                            ---------------
  Balance at September 30, 2001...................                (780,089)
                                                            ---------------

Construction in process:
  Balance at December 31, 2000....................                 217,140
  Current development.............................                 122,946
  Transfers to land held for development..........                  (6,195)
  Developed facilities............................                (191,105)
                                                            ---------------
  Balance at September 30, 2001...................                 142,786
                                                            ---------------

Land held for development:
  Balance at December 31, 2000....................                  21,447
  Acquisitions....................................                  12,261
  Transfers from construction in process..........                   6,195
  Dispositions....................................                  (7,534)
                                                            ---------------
  Balance at September 30, 2001...................                  32,369
                                                            ---------------

  Total real estate facilities at September 30, 2001        $    3,746,859
                                                            ===============

                                       10

<PAGE>

              During the nine months  ended  September  30,  2001,  we opened 17
     newly developed  facilities having  approximately  1,230,000  aggregate net
     rentable  square  feet and a total  cost of $119.1  million.  In  addition,
     expansions of existing  facilities  totaling  $72.1 million were  completed
     during the nine months ended September 30, 2001. Construction in process at
     September  30, 2001  consists of 50 storage  facilities  and  expansions of
     existing  storage  facilities.  Land held for  development  consists  of 15
     parcels of land held for development.

              During  2001,  we disposed of a storage  facility  and a parcel of
     land, in separate  transactions,  for an aggregate of $13,415,000  cash. An
     aggregate gain of $1,568,000 was recorded on these dispositions.

              In August 2001, we purchased an existing  storage  facility from a
     third party for approximately $3,503,000 cash.

              Our policy is to capitalize  interest  incurred on debt during the
     course of  construction  of our  self-storage  and  industrial  facilities.
     Interest  capitalized  during the three and nine months ended September 30,
     2001 was $2,044,000 and  $6,263,000,  respectively,  compared to $2,672,000
     and $6,828,000, respectively, for the same periods in 2000.

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

              At September  30, 2001,  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 entities.  During the three and nine months ended September 30,
     2001  we  recognized  earnings  from  our  investments  of  $9,826,000  and
     $28,912,000,  respectively,  compared to $9,479,000 and $26,910,000 for the
     same period in 2000.  We received  distributions  from our  investments  of
     $15,607,000  and  $12,755,000  for the nine months ended September 30, 2001
     and 2000, respectively.

              In  April  1997,  we  formed  a  joint  venture  partnership  (the
     "Development Joint Venture") with an institutional  investor to participate
     in the development of approximately $220 million of storage facilities. The
     Development  Joint Venture has a total of 47 opened facilities with a total
     cost of $232 million and was fully  committed  at December  31,  2000.  The
     Company has the right, but not the obligation,  to purchase the interest of
     our joint venture partner between approximately  December,  2002 and April,
     2004. The purchase price will be based upon the joint venture partner's pro
     rata share, as defined, of the value of the assets of the partnership.  The
     purchase  price,  however,  will be limited to an amount that  provides the
     limited  partner  with a maximum  return of 11.5%.  If the Company does not
     exercise its right, the assets of the partnership are liquidated,  with the
     proceeds  distributed  to the partners in accordance  with the  partnership
     agreement.

                                       11

<PAGE>

              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 September 30, 2001 are as follows:

<TABLE>
<CAPTION>
                                                               For the nine months ended September 30, 2001
                                                    ----------------------------------------------------------------------
                                                     Other Equity        Development
                                                     Investments        Joint Venture         PSB               Total
                                                    --------------      --------------   --------------     --------------
                                                                          (Amounts in thousands)
<S>                                                 <C>                 <C>              <C>                <C>
Rental income (a)............................       $      34,203       $      24,650    $     121,964      $     180,817
Other income (a).............................               1,574                 455            2,493              4,522
                                                    --------------      --------------   --------------     --------------
Total revenues (a)...........................              35,777              25,105          124,457            185,339
                                                    --------------      --------------   --------------     --------------

Cost of operations (a).......................              10,292               9,648           33,423             53,363
Depreciation (a).............................               3,382               5,141           30,058             38,581
Other expenses (a)...........................               1,723                 150            4,089              5,962
                                                    --------------      --------------   --------------     --------------
Total expenses (a)...........................              15,397              14,939           67,570             97,906
                                                    --------------      --------------   --------------     --------------

Income before minority interest (a)..........              20,380              10,166           56,887             87,433
Minority interest (a)........................                   -                   -          (19,743)           (19,743)
                                                    --------------      --------------   --------------     --------------
Net income (a)...............................       $      20,380       $      10,166    $      37,144      $      67,690
                                                    ==============      ==============   ==============     ==============
At September 30, 2001:
Real estate, net (a).........................       $      65,388       $     214,679    $     941,998      $   1,222,065
Total assets (a).............................             110,982             219,862        1,028,505          1,359,349
Total debt (a)...............................              17,843                   -           30,354             48,197
Total liabilities (a)........................              27,740               3,643           65,556             96,939
Minority interest (a)........................                   -                   -          360,088            360,088
Total equity (a).............................              83,257             216,219          602,861            902,337

The Company's investment (book value) at
  September 30, 2001.........................       $     131,161       $      64,866    $     268,415      $     464,442

The Company's effective average common
  ownership interest at September 30, 2001...             46%                 30%              44%

</TABLE>

     (a) Amounts represent 100% of the unconsolidated entities' balances and not
         the Company's pro-rata share.

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 September 30, 2001, we had no borrowings on our
     line of credit. See Note 11.

                                       12

<PAGE>

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. The following table sets forth the components of
     our  minority  interest  and  minority  interest in income (all  amounts in
     thousands):

<TABLE>
<CAPTION>
                                                                                   Minority interest in income for
                                                    Minority interest at:              the nine months ended:
                                               ---------------------------------   -------------------------------
                                               September 30,      December 31,     September 30,    September 30,
                                                    2001              2000             2001              2000
                                               --------------     --------------   --------------   --------------

 <S>                                            <C>               <C>               <C>              <C>
 Preferred Partnership Interests........        $   335,000       $   365,000       $    24,830      $    16,354
                                               ==============     ==============   ==============   ==============

 Consolidated Development Joint Venture.        $    86,360       $    77,126       $       725      $       167
 Other..................................             81,742            90,792             9,815           10,044
                                               --------------     --------------   --------------   --------------
     Other Minority Interests...........        $   168,102       $   167,918       $    10,540      $    10,211
                                               ==============     ==============   ==============   ==============
</TABLE>

              In November  1999,  we formed a  development  joint  venture  (the
     "Consolidated  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 $86,360,000  relative to the joint venture,  primarily
     representing  total  contributions  received from our joint venture partner
     and income  allocated to our joint venture partner,  net of  distributions.
     Minority interest increased $13,142,000 since December 31, 2000 as a result
     of  contributions  by our joint venture  partner,  increased  $725,000 as a
     result of income allocated to our joint venture  partner,  and decreased by
     $4,633,000 as a result of distributions  to our joint venture partner.  The
     term of the joint venture is 15 years;  however,  during the sixth year the
     joint venture  partner has the right to cause an early  termination  of the
     partnership.  If the joint venture  partner  exercises this right,  we then
     have the  option,  but not the  obligation,  to acquire  the joint  venture
     partner's interest for a value that will allow our joint venture partner to
     receive an annual  return of 10.75%.  If the Company  does not exercise its
     option to acquire the joint venture partner's  interest,  the partnership's
     assets will be sold to third  parties and the proceeds  distributed  to the
     Company and our joint venture  partner in accordance  with the  partnership
     agreement.  If the joint  venture  partner  does not  exercise its right to
     early termination during the sixth year, the partnership will be liquidated
     15 years after its formation  with the assets sold to third parties and the
     proceeds  distributed  to the  Company  and our joint  venture  partner  in
     accordance with the partnership agreement.

              On March 17,  2000,  we issued  $240.0  million  of 9.5%  Series N
     Cumulative  Redeemable  Perpetual  Preferred  Units,  on March 29, 2000, we
     issued $75.0  million of 9.125%  Series O Cumulative  Redeemable  Perpetual
     Preferred  Units,  and on August 11, 2000, we issued $50.0 million of 8.75%
     Series P  Cumulative  Redeemable  Perpetual  Preferred  Units in one of our
     operating   partnerships   (collectively,    the   "Preferred   Partnership
     Interests").  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 and the Series P preferred units
     are convertible into shares of 8.75% Series P Cumulative Preferred Stock.

                                       13

<PAGE>

              In August 2001,  we purchased  $30 million of the 9.125%  Series O
     Cumulative Redeemable Perpetual Preferred Units at par.

              The $335 million in Preferred  OP Units  outstanding  at September
     30, 2001 are reflected as minority  interest.  The holders of the Preferred
     OP Units were paid  distributions in aggregate of approximately  $7,820,000
     and  $24,830,000  for the three and nine months ended  September  30, 2001,
     respectively, compared to $8,018,000 and $16,354,000 for the three and nine
     months ended September 30, 2000, respectively, and received a corresponding
     allocation of minority interest in earnings for these periods.

              As of September 30, 2001, there were 237,935 operating partnership
     units ("OP Units")  outstanding  in one of the  Consolidated  Entities.  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 is allocated to minority interests
     with respect to OP Units on a per unit basis equal to diluted  earnings per
     common  share.  During the nine months ended  September  30, 2001, no units
     were redeemed or issued.

              In the nine months ended September 30, 2001, the Company  acquired
     other minority interests in the Consolidated Entities for an aggregate cost
     of $11,212,000 cash; these acquisitions had the effect of reducing minority
     interest by $8,292,000,  with the excess of cost over underlying book value
     ($2,920,000) allocated to real estate.

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

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

              At September  30, 2001 and December 31, 2000, we had the following
     series of Preferred Stock outstanding:

<TABLE>
<CAPTION>
                                                        At September 30, 2001              At December 30, 2000
                                                     -----------------------------     ------------------------------
                                      Dividend         Shares          Carrying          Shares          Carrying
              Series                    Rate         Outstanding        Amount         Outstanding        Amount
-----------------------------------   ----------     ------------     ------------     ------------   ---------------
                                                    (Dollar amount in thousands)       (Dollar amount in thousands)
<S>                                      <C>           <C>            <C>                <C>            <C>
Series A                                 10.000%       1,825,000      $    45,625        1,825,000      $    45,625
Series B                                  9.200%       2,386,000           59,650        2,386,000           59,650
Series C                              Adjustable       1,200,000           30,000        1,200,000           30,000
Series D                                  9.500%       1,200,000           30,000        1,200,000           30,000
Series E                                 10.000%       2,195,000           54,875        2,195,000           54,875
Series F                                  9.750%       2,300,000           57,500        2,300,000           57,500
Series G                                  8.875%               -                -            6,900          172,500
Series H                                  8.450%           6,750          168,750            6,750          168,750
Series I                                  8.625%           4,000          100,000            4,000          100,000
Series J                                  8.000%           6,000          150,000            6,000          150,000
Series K                                  8.250%           4,600          115,000            4,600          115,000
Series L                                  8.250%           4,600          115,000            4,600          115,000
Series M                                  8.750%           2,250           56,250            2,250           56,250
Series Q                                  8.600%           6,900          172,500                -                -
Series R                                  8.000%          20,400          510,000                -                -
                                                     ------------     ------------     ------------   ---------------

Total Senior Preferred Stock                          11,161,500      $ 1,665,150       11,141,100      $ 1,155,150
                                                     ============     ============     ============   ===============
</TABLE>

                                       14

<PAGE>

              The  Series Q  preferred  stock was issued on  January  19,  2001,
     resulting in net proceeds from the issuance of approximately  $166,966,000.
     The Series R preferred stock was issued on September 28, 2001, resulting in
     net proceeds from the issuance of approximately $493,085,000.  The Series G
     preferred stock was redeemed at par on September 28, 2001 for a total cost,
     which includes redemption costs, of $172,525,000.

              The Series A through Series R 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 September  30, 2001,  there were no
     dividends in arrears and the Debt Ratio was 2.7%.

              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 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, Series Q -
     January  19,  2006 and  Series R -  September  28,  2006.  On or after  the
     respective  dates,  each of the  series of Senior  Preferred  Stock will be
     redeemable  (the Series C, H and I are presently  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 H through  Series M and  Series Q through  Series
     R), 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  April  2001,  the  Company  completed  a  public  offering  of
     2,210,500  depositary shares each representing 1/1,000 of a share of Equity
     Stock, Series A, raising net proceeds of approximately $51,836,000 million.
     In May 2001, the Company completed a direct placement of 830,000 depositary
     shares  each  representing  1/1,000 of a share of Equity  Stock,  Series A,
     raising net proceeds of approximately $20,294,000 million.

              At  September  30,  2001,  we  had  8,676,102   depositary  shares
     outstanding, each representing 1/1,000 of a share of Equity Stock, Series A
     ("Equity  Stock A"). The Equity Stock A ranks on a parity with common stock
     and junior to the Senior Preferred Stock with respect to general preference
     rights and has a  liquidation  amount which cannot exceed $24.50 per share.
     Distributions with respect to each depositary share shall be the lesser of:
     a) five times the per share  dividend  on the Common  Stock or b) $2.45 per
     annum.  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, 2010.
     On or after March 31, 2010 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

                                       15

<PAGE>

     one-tenth of a vote per  depositary  share.  We have no  obligation  to pay
     distributions  on the  depositary  shares if no  distributions  are paid to
     common shareholders.

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

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

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

              As  previously   announced,   the  Company's  Board  of  Directors
     authorized the repurchase  from time to time of up to 25,000,000  shares of
     the  Company's  common stock on the open market or in privately  negotiated
     transactions.  In the nine months ended  September  30,  2001,  the Company
     repurchased a total of 10,568,593  shares,  for a total  aggregate  cost of
     approximately   $276,270,000.   From  the  initial   authorization  through
     September  30,  2001,  the Company has  repurchased  a total of  21,469,020
     shares of common stock at an aggregate cost of approximately $534,890,000.

              During April 2001, we entered into an arrangement with a financial
     institution  whereby we sold to the  institution the right to require us to
     purchase from the institution up to 1,000,000 shares of our common stock at
     a price of $26.26 on certain dates in September  2001 and October 2001 (the
     institution's  rights are collectively  referred to hereinafter as the "Put
     Option.").  In exchange for the Put Option, the financial  institution paid
     us $910,000,  the amount of which has been  reflected as an increase to our
     paid-in  capital.  The outstanding put options,  upon exercise,  could have
     been settled by us, at our option, if the price was below $26.26 on certain
     dates in September  and October  2001,  by (i) the  issuance of  additional
     common  shares  to the  financial  institution  with a value  equal  to the
     difference in market value of the shares subject to the exercise and $26.26
     per  share,  (ii) by  payment of cash to the  financial  institution  in an
     amount equal to the difference in market value of the shares subject to the
     exercise  and $26.26 per share or (iii) by  purchasing  the shares from the
     institution  at $26.26 per  share.  The Put Option  expired  without  being
     exercised.

                                       16

<PAGE>

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

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

              For these  purposes,  FFO means net income  (loss) before (i) gain
     (loss) on early  extinguishment  of debt, (ii) minority  interest in income
     and (iii) gain (loss) on disposition  of real estate,  adjusted as follows:
     (a) plus  depreciation and  amortization,  and (b) less FFO attributable to
     minority  interest.  FFO per common  share means FFO less  preferred  stock
     dividends and Equity Stock,  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 $2.83 for the four consecutive calendar quarters ended September
     30, 2001.

     Dividends
     ---------

              The following summarizes dividends during the first nine months of
     2001:

                                            Distributions Per
                                                Share or             Total
Preferred Stock:                            Depositary Share     Distributions
----------------                           -------------------   --------------
Series A..............................            $1.875          $   3,422,000
Series B..............................            $1.725              4,116,000
Series C..............................            $1.266              1,519,000
Series D..............................            $1.782              2,137,000
Series E..............................            $1.875              4,116,000
Series F..............................            $1.828              4,205,000
Series G..............................            $1.665             11,482,000
Series H..............................            $1.584             10,694,000
Series I..............................            $1.617              6,469,000
Series J..............................            $1.500              9,000,000
Series K..............................            $1.547              7,116,000
Series L..............................            $1.547              7,116,000
Series M..............................            $1.640              3,690,000
Series Q..............................            $1.511             10,426,000
Series R..............................             -                          -
                                                                 --------------
                                                                     85,508,000
Common Stock:
Equity Stock, Series A................            $1.838             14,080,000
Common  (1)...........................            $1.240            141,998,000
Class B Common  (1)...................            $1.203              8,420,000
                                                                 --------------
   Total dividends....................                            $ 250,006,000
                                                                 ==============

     (1) Common  dividends  include  regular  distributions  of $0.89 per common
         share and a special distribution of $0.35 per common share.

                                       17

<PAGE>

              The  dividend  rate on the Series Q preferred  stock was  prorated
     from January 19, 2001 (the date of issuance)  through  March 31, 2001.  The
     dividend  rate on the Series C Preferred  Stock for the nine  months  ended
     September  30,  2001 was equal to 6.75% 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
     December 31, 2001 will be equal to 6.75% 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,  "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, 2000.

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

RECONCILIATION OF REVENUES BY SEGMENT
-------------------------------------
<TABLE>
<CAPTION>
                                                           Three months ended                      Nine months ended
                                                              September 30,                           September 30,
                                                          ----------------------                 ----------------------
                                                            2001         2000        Change        2001          2000       Change
                                                          ---------    ---------    ---------    ---------    ---------    ---------
                                                                                (Dollar amounts in thousands)
Self storage
------------
<S>                                                       <C>          <C>           <C>         <C>          <C>           <C>
  Self storage property rentals........................   $186,615     $167,900      $18,715     $537,530     $483,669      $53,861
  Equity in earnings - self storage property operations      5,788        5,006          782       16,636       15,988          648
  Equity in earnings - depreciation (self storage) ....     (1,726)      (1,989)         263       (5,105)      (5,015)         (90)
                                                          ---------    ---------    ---------    ---------    ---------    ---------
      Self storage segment revenues....................    190,677      170,917       19,760      549,061      494,642       54,419
                                                          ---------    ---------    ---------    ---------    ---------    ---------

Containerized storage .................................     13,019       11,045        1,974       35,275       27,834        7,441
---------------------                                     ---------    ---------    ---------    ---------    ---------    ---------

Commercial  properties
----------  ----------
  Commercial property rentals..........................      3,081        2,847          234        9,353        8,433          920
  Equity in earnings - commercial property operations..     13,330       10,878        2,452       37,368       31,436        5,932
  Equity in earnings - depreciation (commercial
     properties).......................................     (4,787)      (3,403)      (1,384)     (12,622)     (10,507)      (2,115)
                                                          ---------    ---------    ---------    ---------    ---------    ---------
      Commercial properties  segment revenues..........     11,624       10,322        1,302       34,099       29,362        4,737
                                                          ---------    ---------    ---------    ---------    ---------    ---------

Other items not allocated to segments
-------------------------------------
  Equity in earnings - general and administrative and       (2,779)      (1,013)      (1,766)      (7,365)      (4,992)      (2,373)
     other.............................................
  Interest and other income............................      3,178        4,695       (1,517)       9,916       13,865       (3,949)
                                                          ---------    ---------    ---------    ---------    ---------    ---------
      Total other items not allocated to segments......        399        3,682       (3,283)       2,551        8,873       (6,322)
                                                          ---------    ---------    ---------    ---------    ---------    ---------

      Total revenues...................................   $215,719     $195,966      $19,753     $620,986     $560,711      $60,275
                                                          =========    =========    =========    =========    =========    =========
</TABLE>
                                       18

<PAGE>

RECONCILIATION OF NET INCOME BY SEGMENT
---------------------------------------
<TABLE>
<CAPTION>
                                                             Three months ended                      Nine months ended
                                                                 September 30,                          September 30,
                                                            ----------------------                ----------------------
                                                               2001        2000         Change       2001         2000       Change
                                                            ---------    ---------    ---------   ---------    ---------    --------
                                                                                          (Dollar amounts in thousands)
Self storage
<S>                                                         <C>          <C>          <C>         <C>          <C>          <C>
  Self storage properties .............................     $127,935     $113,445     $14,490     $367,777     $327,585     $40,192
  Depreciation and amortization - self storage.........      (40,305)     (35,844)     (4,461)    (116,614)    (103,988)    (12,626)
  Equity in earnings - self storage property operations        5,788        5,006         782       16,636       15,988         648
  Equity in earnings - depreciation (self-storage) ....       (1,726)      (1,989)        263       (5,105)      (5,015)        (90)
                                                            ---------    ---------    ---------   ---------    ---------    --------
      Total self storage segment net income............       91,692       80,618      11,074      262,694      234,570      28,124
                                                            ---------    ---------    ---------   ---------    ---------    --------

Containerized storage
  Containerized storage operations.....................        2,191        1,616         575        3,919        1,903       2,016
  Containerized storage depreciation...................       (1,763)      (1,317)       (446)      (5,029)      (3,951)     (1,078)
                                                            ---------    ---------    ---------   ---------    ---------    --------
      Total containerized storage segment net income...          428          299         129       (1,110)      (2,048)        938
                                                            ---------    ---------    ---------   ---------    ---------    --------

Commercial  properties
  Commercial properties................................        2,068        1,921         147        6,508        5,677         831
  Depreciation and amortization - commercial properties         (633)        (570)        (63)      (2,003)      (1,570)       (433)
  Equity in earnings - commercial property operations..       13,330       10,878       2,452       37,368       31,436       5,932
  Equity in earnings - depreciation (commercial
     properties) ......................................       (4,787)      (3,403)     (1,384)     (12,622)     (10,507)     (2,115)
                                                            ---------    ---------    ---------   ---------    ---------    --------
      Total commercial property segment net income.....        9,978        8,826       1,152       29,251       25,036       4,215
                                                            ---------    ---------    ---------   ---------    ---------    --------

Other items not allocated to segments
  Equity in earnings - general and administrative and         (2,779)      (1,013)     (1,766)      (7,365)      (4,992)     (2,373)
     other.............................................
  Interest and other income............................        3,178        4,695      (1,517)       9,916       13,865      (3,949)
  General and administrative...........................       (5,965)      (5,436)       (529)     (16,549)     (14,057)     (2,492)
  Interest expense.....................................         (928)        (626)       (302)      (3,023)      (3,293)        270
  Gain on disposition of real estate...................            -            -           -        1,568            -       1,568
  Minority interest in income..........................      (12,000)     (11,711)       (289)     (35,370)     (26,565)     (8,805)
                                                            ---------    ---------    ---------   ---------    ---------    --------
      Total other items not allocated to segments......      (18,494)     (14,091)     (4,403)     (50,823)     (35,042)    (15,781)
                                                            ---------    ---------    ---------   ---------    ---------    --------

      Total net income ................................      $83,604      $75,652      $7,952     $240,012     $222,516     $17,496
                                                            =========    =========    =========   =========    =========    ========
</TABLE>
                                       19

<PAGE>

10.  Agreement to Acquire PS Insurance Company
     -----------------------------------------

              On March 15, 2001, the Company's  disinterested directors approved
     the acquisition of PS Insurance Company  ("PSIC").  PSIC is currently owned
     by B. Wayne Hughes (Chairman) and members of his family. PSIC is engaged in
     the business of reinsuring risks relating to damage,  destruction, or other
     loss of goods  stored  by  tenants  in  self-storage  facilities  owned and
     operated by the Company.  In the transaction,  the Company will acquire all
     of the  capital  stock of PSIC  from the  Hughes  family  in  exchange  for
     1,243,298 shares of the Company's  Common Stock,  subject to adjustment for
     changes  in  PSIC's  working  capital.  PSIC  owns  301,032  shares  of the
     Company's Common Stock,  which would continue to be owned by PSIC after the
     transaction.  The  transaction  (1) is conditioned  on, among other things,
     adoption of changes to California's  tax laws that would permit the Company
     to  acquire  PSIC  and (2) is  scheduled  to close on  December  31,  2001,
     although there can be no assurance.

11.  Subsequent Events
     -----------------

              In October 2001,  the Company  purchased,  at par,  $50,000,000 of
     8.75% Series P Cumulative Perpetual Preferred Redeemable Units.

              In October 2001, the Company  redeemed all  outstanding  shares of
     its 8.45% Cumulative  Preferred Stock, Series H held by the depositary and,
     as a result,  the depositary  redeemed in full all  outstanding  depositary
     shares  representing  interests  in  the  Series  H  Preferred  Stock  at a
     redemption  price of $25 per depositary  share for a total of  $168,750,000
     plus accrued dividends.

              In October  2001,  the  Company  completed  a public  offering  of
     5,750,000  depositary  shares ($25 stated value per depositary  share) each
     representing  1/1,000  of a share of  7.875%  Cumulative  Preferred  Stock,
     Series S, raising net proceeds of approximately $139,000,000.

              On November 13, 2001, the Company redeemed all outstanding  shares
     of its 8 5/8% Cumulative  Preferred Stock,  Series I held by the depositary
     and,  as  a  result,  the  depositary  redeemed  in  full  all  outstanding
     depositary shares representing interests in the Series I Preferred Stock at
     a redemption  price of $25 per depositary share for a total of $100,000,000
     plus accrued dividends.

              In  November  2001,  we entered  into a new  agreement  for a $200
     million  revolving  line of credit (the "Credit  Agreement") to replace our
     existing  $150  million  line of credit due to expire on July 1, 2002.  The
     Credit Agreement has a maturity date of October 31, 2004,  extendable for a
     period of one year on each anniversary of the credit agreement and bears an
     interest rate ranging from the London Interbank Offered Rate ("LIBOR") plus
     0.45% to LIBOR  plus  1.25%  depending  on our  credit  ratings  (currently
     0.45%).  In  addition,  we are required to pay a quarterly  commitment  fee
     ranging  from  0.20% per annum to 0.30% per annum  depending  on our credit
     ratings  (currently  0.20%). The Credit Agreement allows us, at our option,
     to  request  the banks to  propose an  interest  rate they would  charge on
     specific borrowings not to exceed $70 million;  however, in no case may the
     interest  rate  proposal be greater than the amount  provided by the Credit
     Agreement.  At  November  9,  2001,  we had no  borrowings  on this line of
     credit.

                                       20

<PAGE>

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


         The following  discussion  and analysis  should be read in  conjunction
with our consolidated financial statements and notes thereto.

         FORWARD LOOKING STATEMENTS:  When used within this document,  the words
"expects,"  "believes,"   "anticipates,"   "should,"  "estimates,"  and  similar
expressions  are intended to identify  "forward-looking  statements"  within the
meaning of that term in Section 27A of the  Securities  Exchange Act of 1933, as
amended,  and in Section 21F of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve known and unknown risks,  uncertainties,
and other  factors,  which may cause our actual  results and  performance  to be
materially  different  from those  expressed  or implied in the forward  looking
statements. Such factors include the impact of competition from new and existing
self-storage  and commercial  facilities  which could impact rents and occupancy
levels at our  facilities;  our  ability to  evaluate,  finance,  and  integrate
acquired and developed properties into our existing  operations;  our ability to
effectively  compete in the markets in which we do  business;  the impact of the
regulatory  environment  as  well  as  national,   state,  and  local  laws  and
regulations   including,   without  limitation,   those  governing  Real  Estate
Investment  Trusts;  the  acceptance  by  consumers  of the Pickup and  Delivery
concept;  the  impact of  general  economic  conditions  upon  rental  rates and
occupancy levels at our facilities; and the availability of permanent capital at
attractive rates.

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

         Net  income  for  the  three  months  ended   September  30,  2001  was
$83,604,000 compared to $75,652,000 for the same period in 2000, representing an
increase of  $7,952,000  or 10.5%.  The increase in net income was primarily the
result of improved property operations  combined with increased  operations from
acquired and newly  developed real estate  properties  during 2000 and 2001. The
impact of these items was partially  offset by increased  depreciation  expense,
resulting primarily from new property additions.

         During the three months ended September 30, 2001 and 2000, we allocated
$28,736,000  and  $25,027,000 of our net income (based on  distributions  paid),
respectively, to our preferred shareholders,  representing an increase of 14.8%.
This  increase is due to an additional  issuance of preferred  stock in 2001. In
addition,  during  the three  months  ended  September  30,  2001 and  2000,  we
allocated  $5,314,000 and  $2,666,000 of our net income (based on  distributions
paid), respectively, to our Equity Stock, Series A shareholders, representing an
increase of 99.3%. This increase is due to additional  issuances of equity stock
in 2001 and 2000.

         Net  income  remaining  to  our  regular  common  shareholders,   after
allocating  net  income  to  our  preferred  and  equity  shareholders,  totaled
$49,554,000   for  the  three  months  ended  September  30,  2001  compared  to
$47,959,000  for the same period in 2000,  representing an increase of 3.3%. Net
income  per  common  share was $0.41 on a diluted  basis  (based on  121,754,000
weighted  average diluted common  equivalent  shares) for the three months ended
September  30, 2001 compared to $0.37 per common share on a diluted basis (based
on 131,261,000 weighted average diluted common equivalent shares),  representing
an increase of 10.8%.  The year over year  increase in net income on a per share
basis  (10.8%)  was  significantly  higher  than the year over year  increase in
aggregate net income allocated to the common  shareholders  (3.3%) due primarily
to the reduction in weighted average shares outstanding as a result of our share
repurchase activities.

         Net  income  for  the  nine  months  ended   September   30,  2001  was
$240,012,000 compared to $222,516,000 for the same period in 2000,  representing
an increase of $17,496,000 or 7.9%. The increase in net income was primarily the
result of improved property operations  combined with increased  operations from
acquired and newly  developed real estate  properties  during 2000 and 2001. The
impact of these items was partially  offset by increased  depreciation  expense,
resulting  primarily  from  new  property  additions,  and  an  increase  in the
allocation  of income to minority  interests.  During  2000 we issued  preferred
operating partnership units and, as a result, distributions to these unitholders
increased  from  $16,354,000  in the nine  months  ended  September  30, 2000 to
$24,830,000  in the same  period  in 2001.  Unlike  distributions  to  preferred
shareholders,  distributions to preferred  unitholders are presented as minority

                                       21

<PAGE>

interest in income and a reduction in net income. Primarily as a result of these
distributions,  minority  interest in income  increased  $8,805,000 for the nine
months ended September 30, 2001 as compared to the same period in 2000.

         During the nine months ended  September 30, 2001 and 2000, we allocated
$85,508,000  and  $75,110,000 of our net income (based on  distributions  paid),
respectively, to our preferred shareholders,  representing an increase of 13.8%.
This  increase is due to an additional  issuance of preferred  stock in 2001. In
addition, during the nine months ended September 30, 2001 and 2000, we allocated
$14,080,000  and  $7,590,000  of our net income (based on  distributions  paid),
respectively,  to our  Equity  Stock,  Series A  shareholders,  representing  an
increase of 85.5%. This increase is due to additional  issuances of equity stock
in 2001 and 2000.

         Net  income  remaining  to  our  regular  common  shareholders,   after
allocating  net  income  to  our  preferred  and  equity  shareholders,  totaled
$140,424,000   for  the  nine  months  ended  September  30,  2001  compared  to
$139,816,000  for  the  same  period  in  2000,   representing  an  increase  of
approximately  0.4%.  Net income per common  share was $1.13 on a diluted  basis
(based on 123,977,000 weighted average diluted common equivalent shares) for the
nine months  ended  September  30, 2001  compared to $1.06 per common share on a
diluted basis (based on 131,975,000  weighted average diluted common  equivalent
shares),  representing  an increase of 6.6%.  The year over year increase in net
income on a per share basis (6.6%) was  significantly  higher than the year over
year  increase  in  aggregate  net  income   allocated  to  our  regular  common
shareholders  (0.4%) due to the reduction in weighted average shares outstanding
due to our share repurchase activities.

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

         Rental income and cost of operations  have  increased for the three and
nine months ended  September 30, 2001 compared to the same period in 2000 due to
the  opening  of  newly  developed  real  estate   properties  and  acquisitions
throughout  2000 and 2001.  As a result of these  items,  the  number of storage
facilities included in the consolidated  financial statements has increased from
1,238 at September 30, 2000 to 1,264 at September 30, 2001.

         Self-Storage  Operations:  The following table summarizes the operating
results (before depreciation) of (i) the 913 stabilized  self-storage facilities
that we owned as of  December  31,  1999 (the  "Consistent  Group") and (ii) all
other facilities (the "Other Facilities"):

                                       22

<PAGE>

SUMMARY OF SELF-STORAGE OPERATIONS - HISTORICAL
-----------------------------------------------

<TABLE>
<CAPTION>
                                           Three months ended                       Nine months ended
                                             September 30,                            September 30,
                                        ------------------------                ------------------------
                                                                   Percentage                               Percentage
                                           2001         2000         Change        2001          2000         Change
                                        -----------   -----------  -----------  -----------   -----------   -----------
                                                      (Amounts in thousands, except per square foot data)

Rental income  (a)
-------------
<S>                                     <C>           <C>            <C>        <C>           <C>              <C>
    Consistent Group...............     $  143,965    $ 134,072      7.4%       $  417,658    $ 389,115        7.3%
    Other Facilities...............         42,650       33,828     26.1%          119,872       94,554       26.8%
                                        -----------   -----------  -----------  -----------   -----------   -----------
                                           186,615      167,900     11.1%          537,530      483,669       11.1%
                                        -----------   -----------  -----------  -----------   -----------   -----------

Cost of Operations
    Consistent Group...............         41,707       39,795      4.8%          120,082      118,145        1.6%
    Other Facilities...............         16,973       14,660     15.8%           49,671       37,939       30.9%
                                        -----------   -----------  -----------  -----------   -----------   -----------
                                            58,680       54,455      7.8%          169,753      156,084        8.8%
                                        -----------   -----------  -----------  -----------   -----------   -----------

Net operating income
    Consistent Group...............        102,258       94,277      8.5%          297,576      270,970        9.8%
    Other Facilities...............         25,677       19,168     34.0%           70,201       56,615       24.0%
                                        -----------   -----------  -----------  -----------   -----------   -----------
                                           127,935      113,445     12.8%          367,777      327,585       12.3%
                                        -----------   -----------  -----------  -----------   -----------   -----------

Depreciation and amortization              (40,305)     (35,844)    12.4%         (116,614)    (103,988)      12.1%
                                        -----------   -----------  -----------  -----------   -----------   -----------

   Net Income                           $   87,630    $  77,601     12.9%       $  251,163    $ 223,597       12.3%
                                        ===========   ===========  ===========  ===========   ===========   ===========
Consistent Group data
  Gross margin.....................          71.0%        70.3%      0.7%            71.2%        69.6%        1.6%
  Weighted average for the period:
     Occupancy  (b)................          91.2%        92.8%     (1.6)%           90.4%        92.4%       (2.0)%
     Realized annual rent per square
     foot  (c).....................          11.73        10.73      9.3%            11.45        10.42        9.9%

Number of facilities at end of period:
  Consistent group.................           913          913       0.0%             913          913         0.0%
  Other Facilities.................           351          325       8.0%             351          325         8.0%

Net rentable sq. ft. at end of period
(in thousands):
  Consistent group.................        53,882       53,882       0.0%          53,882       53,882         0.0%
  Other Facilities.................        22,503       20,003      12.5%          22,503       20,003        12.5%

</TABLE>

     (a) Rental income  includes late charges and  administrative  fees. For the
         Consistent  Group,  late charges and  administrative  fees in aggregate
         totaled  $5,020,000 and $4,976,000 for the three months ended September
         30, 2001 and 2000,  respectively,  and  $14,655,000 and $14,483,000 for
         the nine months ended September 30, 2001 and 2000, respectively.

     (b) Occupancies in the above table  represent  weighted  average  occupancy
         levels  over the  entire  three and nine  month  periods.  The  average
         occupancy level at September 30, 2001 was 90.7% as compared to 92.2% at
         September 30, 2000, representing a decline of 1.5%.

     (c) Realized annual rent per square foot is computed by annualizing  rental
         income  including late charges and  administrative  fees divided by the
         weighted average occupied square footage for the period.

                                       23

<PAGE>

         The Consistent  Group's net operating  income  increased 8.5% and 9.8%,
respectively, for the three and nine months ended September 30, 2001 as compared
to the same periods in 2000. Rental income increased 7.4% and 7.3% for the three
and nine months ended September 30, 2001,  respectively,  and cost of operations
increased 4.8% and 1.6% for the three and nine months ended  September 30, 2001,
respectively, as compared to the same periods in 2000.

         The  increase  in  rental  income  is  attributable  to a 9.3% and 9.9%
increase in realized rent per occupied square foot for the three and nine months
ended September 30, 2001, respectively, as compared to the same periods in 2000,
partially  offset by a reduction in weighted  average  occupancy  level.  Higher
realized  rent per  occupied  square foot was achieved  through more  aggressive
pricing  of our  self-storage  space.  Over the  past  several  months,  we have
increased rents charged to new tenants and have significantly  reduced the level
of discounts  offered to new  tenants.  In addition,  in many  markets,  we have
increased the level of rent charged to our existing tenant base.

         As expected,  our more  aggressive  rental rates and  reductions in the
amount of  discounts  offered have  resulted in a reduction in weighted  average
occupancy  levels for both the three and nine months  periods.  We experienced a
decline of 1.6% and 2.0% in weighted  average  occupancy levels during the three
and nine month periods.

         Promotional discounts for the three and nine months ended September 30,
2001 totaled  $256,000 and $3,905,000,  respectively,  as compared to $3,021,000
and $11,305,000, respectively, for the same periods in 2000.

         We  believe  that our  ability to raise  rents and  reduce  promotional
discounts  and  thereby  increase  rental  income  was  facilitated  by 1)  more
aggressive  marketing  efforts,  including a $3,970,000  increase in  television
advertising  expenditures  for the  nine  months  ended  September  30,  2001 as
compared to the same period in 2000,  as well as an increase in the intensity of
our yellow page  advertising,  and 2) the continuing  impact of our efforts over
the last several years to improve the value of the Public  Storage  brand,  most
significantly  through the  completion of our program to enhance our visual icon
and to modernize the appearance of our self-storage facilities.

         Cost of  operations  for the  Consistent  Group  increased  4.8% in the
quarter  ended  September  30, 2001 as compared to the same period in 2000,  and
increased  1.6% in the nine months ended  September  30, 2001 as compared to the
same period in 2000.  The expense  moderation on a year to date basis was due to
our  continued  focus upon cost control and the result of specific  cost control
programs, such as a trial program instituted in some markets to close the rental
offices on Sunday to reduce payroll expense. There can be no assurance as to the
level of expenses in future periods.

         The following table summarizes major operating expenses with respect to
the Consistent Group:

<TABLE>
<CAPTION>
                                           Three months ended                             Nine months ended
                                             September 30,                                  September 30,
                                      -----------------------------                  ----------------------------
                                          2001            2000          Change           2001           2000          Change
                                      -------------   -------------   -------------  -------------  -------------   -------------
                                                                        (Amounts in thousands)
<S>                                   <C>             <C>                  <C>       <C>            <C>                <C>
Payroll expense                       $     11,246    $     11,169         0.7%      $     33,019   $     33,572       (1.6)%
Property taxes                              11,477          11,395         0.7%            34,037         33,692        1.0%
Repairs and maintenance                      2,790           4,222       (33.9)%            8,680         11,374      (23.7)%
Advertising                                  5,505           1,609       242.1%            10,801          5,673       90.4%
Telephone reservation center costs           2,022           2,446       (17.3)%            6,219          6,827       (8.9)%
Other                                        8,667           8,954        (3.2)%           27,326         27,007        1.2%
                                      -------------   -------------   -------------  -------------  -------------   -------------
                                      $     41,707    $     39,795         4.8%      $    120,082   $    118,145        1.6%
                                      =============   =============   =============  =============  =============   =============
</TABLE>
                                       24

<PAGE>

         Cost of  operations  includes  both direct costs and  indirect  cost of
operating and managing the  facilities.  Payroll,  property  taxes,  repairs and
maintenance,  advertising  and the  telephone  reservation  center in  aggregate
account  for  approximately  77% of the total  cost of  operations  for the nine
months  ended  September  30,  2001.  With  respect to the  Consistent  Group of
facilities,  cost of  operations  for  the  quarter  ended  September  30,  2001
increased  approximately  4.8%  compared to the same  period of last year.  This
increase was primarily a result of increases in advertising  offset by decreases
in repairs and maintenance and telephone  reservation center costs. The increase
in  advertising  for the three  and nine  months  ended  September  30,  2001 is
principally due to increased television advertising.

         During 1999, 2000 and the nine months ended September 30, 2001, we have
opened 47 newly developed  facilities with a total cost of approximately  $264.8
million.  Included in the self-storage operations table above, under the caption
"Other  Facilities",  are rental income and cost of operations of $4,668,000 and
$2,828,000,  respectively,  for the three months ended  September 30, 2001,  and
$10,220,000  and $6,969,000,  respectively,  for the nine months ended September
30,  2001,  with  respect  to these  facilities.  Included  in the  self-storage
operations table above, under the caption "Other Facilities",  are rental income
and cost of operations of $1,259,000 and $843,000,  respectively,  for the three
months ended  September 30, 2000, and $2,006,000 and  $1,736,000,  respectively,
for the nine months ended September 30, 2000, with respect to these  facilities.
We also  completed  expansions of storage  facilities  with  aggregate  costs of
approximately $72.1 million in the nine months ended September 30, 2001.

         Due to the fill-up nature of a newly developed  self-storage  facility,
our earnings have been negatively impacted by our development activities. Unlike
many other types of real estate,  we do not pre-lease our storage space prior to
the opening of a newly developed facility.  Generally, it takes approximately 24
months for a newly developed  facility to reach a stabilized  occupancy level of
90%. At this stabilized occupancy level, operating costs represent approximately
30% of stabilized  rental revenues.  Since the operating costs are substantially
fixed  in  nature,  a newly  developed  facility  will  not  reach a  break-even
operating cash flow until it achieves an occupancy level of  approximately  30%.
At  September  30,  2001,  the 47  newly  developed  facilities  had an  average
occupancy  level of  approximately  60%.  We expect  that over at least the next
twelve months our development activities will continue to have a negative impact
to our  earnings as  additional  newly  developed  facilities  are  opened.  See
"Liquidity and Capital Resources - Acquisition and Development of Facilities."

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

         During  the  second   quarter  of  2000,  we  acquired  two  commercial
facilities  (which are expected to be converted into storage  facilities) for an
aggregate cost of  $5,930,000.  Included in commercial  property  operations are
rental income and cost of operations of $181,000 and $46,000,  respectively, for
the  three  months  ended   September  30,  2001,  and  $495,000  and  $173,000,
respectively,  for the nine months ended  September  30,  2001,  with respect to
these facilities.  Included in commercial  property operations are rental income
and cost of  operations  of $174,000  and $60,000,  respectively,  for the three
months ended September 30, 2000, and $310,000 and $81,000, respectively, for the
nine months ended  September  30, 2000,  with respect to these  facilities.  The
following table sets forth the historical  commercial  property amounts included
in the financial statements:

                                       25

<PAGE>

COMMERCIAL PROPERTY OPERATIONS
------------------------------
<TABLE>
<CAPTION>
                                    Three months ended                             Nine months ended
                                       September 30,                                 September 30,
                                 ------------------------                      -------------------------
                                   2001            2000          Change           2001           2000           Change
                                 ---------      ---------      ---------       ---------       ---------      ---------
                                                                 (Amounts in thousands)
<S>                              <C>            <C>                 <C>        <C>             <C>               <C>
Rental income.............       $  3,081       $  2,847            8.2%       $  9,353        $  8,433          10.9%
Cost of operations........          1,013            926            9.4%          2,845           2,756           3.2%
                                 ---------      ---------      ---------       ---------       ---------      ---------

 Net operating income prior
   to depreciation........          2,068          1,921            7.7%          6,508           5,677          14.6%

Depreciation..............            633            570           11.1%          2,003           1,570          27.6%
                                 ---------      ---------      ---------       ---------       ---------      ---------

Net income................       $  1,435       $  1,351            6.2%       $  4,505        $  4,107           9.7%
                                 =========      =========      =========       =========       =========      =========
</TABLE>

         Containerized  Storage  Facilities  Operations:  At September 30, 2001,
PSPUD  operated 53  facilities.  PSPUD  generated  operating  income of $428,000
compared to $299,000  for the three months  ended  September  30, 2001 and 2000,
respectively. For the nine months ended September 30, 2001 and 2000, we incurred
operating losses totaling approximately $1,110,000 and $2,048,000, respectively:

CONTAINERIZED STORAGE FACILITIES
--------------------------------
<TABLE>
<CAPTION>
                                           Three months ended                         Nine months ended
                                             September 30,                              September 30,
                                      ----------------------------                  -----------------------------
                                          2001           2000           Change          2001            2000           Change
                                      ------------    ------------   ------------   ------------     ------------   ------------
                                                                      (Amounts in thousands)
<S>                                   <C>             <C>            <C>            <C>              <C>            <C>
Rental and other income .........     $    13,019     $  11,045      $   1,974      $    35,275      $  27,834      $   7,441
                                      ------------    ------------   ------------   ------------     ------------   ------------
Cost of operations:
  Direct operating costs.........           9,428         7,289          2,139           26,569         19,312          7,257
  Facility lease expense.........           1,400         2,140           (740)           4,787          6,619         (1,832)
                                      ------------    ------------   ------------   ------------     ------------   ------------
    Total cost of operations.....          10,828         9,429          1,399           31,356         25,931          5,425

Operating income prior to
  depreciation...................           2,191         1,616            575            3,919          1,903          2,016

  Depreciation (a)...............           1,763         1,317            446            5,029          3,951          1,078
                                      ------------    ------------   ------------   ------------     ------------   ------------
Operating income (losses)........     $       428     $     299      $     129      $    (1,110)     $  (2,048)     $     938
                                      ============    ============   ============   ============     ============   ============
</TABLE>

     (a) Depreciation  includes $384,000 and $113,000 for the three months ended
         September  30, 2001 and 2000,  respectively,  and $761,000 and $339,000
         for the nine months ended  September  30, 2001 and 2000,  respectively,
         with respect to real estate facilities.

         At September 30, 2001, 21 of the 53  containerized  storage  facilities
were leased from third  parties.  We are currently  developing  nine  facilities
(which  includes one storage  facility that is being  converted to a combination
facility) that combine self-storage and containerized  storage space in the same
location.  These  facilities  are  expected  to  replace  seven  of  the  leased
facilities.  We expect  that an  increasing  part of the  containerized  storage
business will be operated  from this type of facility.  To the extent that these
developed combination facilities replace existing third-party leased facilities,
lease expense should continue to be reduced.

         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 11 limited partnerships at September 30, 2001. (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.

                                       26

<PAGE>

         Equity in  earnings of real  estate  entities  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 self-storage
facilities,  which we manage.  PSB is an equity  real  estate  investment  trust
specializing  in  the  ownership,  management,   acquisition,   development  and
redevelopment of business parks containing  principally  office "flex" space. In
the aggregate, the Unconsolidated Entities own a total of 114 storage facilities
and PSB has  interest in 13.6  million net  rentable  square feet of  commercial
space. As of September 30, 2001, PSB had interests in approximately 13.6 million
net rentable square feet located in 9 states. The following table sets forth the
significant components of equity in earnings of real estate entities:

HISTORICAL SUMMARY
------------------
<TABLE>
<CAPTION>
                                      Three months ended                             Nine months ended
                                         September 30,                                 September 30,
                                 ----------------------------                   ---------------------------
                                    2001             2000          Change          2001            2000          Change
                                 -----------      -----------   -----------     -----------     -----------   -----------
                                                                            (Amounts in thousands)
Property operations:
<S>                              <C>              <C>           <C>             <C>             <C>           <C>
    PSB......................    $   13,330       $  10,878     $   2,452       $   37,368      $  31,436     $   5,932
    Development Joint Venture         1,651           1,197           454            4,500          3,169         1,331
    Other partnerships.......         4,137           3,809           328           12,136         12,819          (683)
                                 -----------      -----------   -----------     -----------     -----------   -----------
                                     19,118          15,884         3,234           54,004         47,424         6,580
                                 -----------      -----------   -----------     -----------     -----------   -----------

Depreciation:
    PSB......................        (4,787)         (3,403)       (1,384)         (12,622)       (10,507)       (2,115)
    Development Joint Venture          (530)           (479)          (51)          (1,542)        (1,407)         (135)
    Other partnerships.......        (1,196)         (1,510)          314           (3,563)        (3,608)           45
                                 -----------      -----------   -----------     -----------     -----------   -----------
                                     (6,513)         (5,392)       (1,121)         (17,727)       (15,522)       (2,205)
                                 -----------      -----------   -----------     -----------     -----------   -----------

Other: (a)
    PSB......................        (3,200)         (1,678)       (1,522)          (7,742)        (5,117)       (2,625)
    Development Joint Venture            43              65           (22)              92             80            12
    Other partnerships.......           378             600          (222)             285             45           240
                                 -----------      -----------   -----------     -----------     -----------   -----------
                                     (2,779)         (1,013)       (1,766)          (7,365)        (4,992)       (2,373)
                                 -----------      -----------   -----------     -----------     -----------   -----------

Total equity in earnings of
  real estate entities.......    $    9,826       $   9,479     $     347       $   28,912      $  26,910     $   2,002
                                 ===========      ===========   ===========     ===========     ===========   ===========
</TABLE>

     (a) "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 equity in earnings  of real  estate  entities  for the
three and nine months ended September 30, 2001, respectively, as compared to the
same periods in 2000 is primarily  the result of improved  operations of PSB. In
April  1997,  we formed a joint  venture  partnership  (the  "Development  Joint
Venture") with an  institutional  investor to participate in the  development of
approximately $220 million of storage  facilities.  The venture is funded solely
with  equity  capital  consisting  of 30%  from  the  Company  and 70%  from the
institutional  investor.  Equity in earnings from the Development  Joint Venture
reflects  our  pro  rata  share,  based  upon  our  ownership  interest,  of the
operations of the Development Joint Venture. From inception through December 31,
2000, the Development Joint Venture  developed and opened 47 storage  facilities
at  an  aggregate  cost  of  approximately  $232  million.   Generally  a  newly
constructed  facility  undergoes  an 18 to 24 month  fill-up  process  until the
facility reaches a stabilized  occupancy level of approximately 90%. For each of
the periods  ending  September 30, 2001 and 2000,  the majority of the completed
facilities  were  in the  fill-up  process  and  had not  reached  a  stabilized
occupancy  level.  We expect that our earnings with respect to our investment in
the  Development  Joint  Venture  will  continue  to  increase  as the  existing
properties continue to fill up.

                                       27

<PAGE>

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

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

         Interest  and other  income has  decreased in the three and nine months
ended  September 30, 2001 as compared to the same periods in 2000 primarily as a
result of lower cash balances invested in interest bearing accounts,  as well as
lower interest rates.

         DEPRECIATION AND  AMORTIZATION:  Depreciation and amortization  expense
has increased $4,970,000 to $42,701,000 for the three months ended September 30,
2001 as compared to $37,731,000  for the same period in 2000.  Depreciation  and
amortization  expense has increased  $14,137,000  to  $123,646,000  for the nine
months ended September 30, 2001 as compared to $109,509,000  for the same period
in 2000.  These increases are principally due to the acquisition and development
of  additional  real  estate  facilities  during  2000  and  2001.  Included  in
depreciation  and amortization  expense is amortization  expense with respect to
intangible  assets of $2,328,000  and  $6,984,000  for the three and nine months
ended  September 30, 2001 and 2000.  Included in depreciation  and  amortization
expense for the three months ended September 30, 2001 and 2000 is $1,379,000 and
$1,204,000,  respectively,  and  $4,268,000  and  $3,612,000 for the nine months
ended September 30, 2001 and 2000,  respectively,  of depreciation of furniture,
fixtures, and equipment of the containerized storage business.

         GENERAL  AND  ADMINISTRATIVE:  General and  administrative  expense has
increased  $529,000 to $5,965,000 for the three months ended  September 30, 2001
as  compared  to   $5,436,000   for  the  same  period  in  2000.   General  and
administrative  expense has  increased  $2,492,000 to  $16,549,000  for the nine
months ended  September 30, 2001 as compared to $14,057,000  for the same period
in 2000. General and administrative expense principally consists of state income
taxes,  investor  relations  expenses,  certain  overhead  associated  with  the
acquisition and development of real estate facilities,  overhead associated with
the containerized storage business, and certain product research and development
activities.

         The increase  for the quarter is due  primarily to an increase in lease
termination  expense  associated with leased  containerized  storage  facilities
which were replaced by  newly-developed  facilities  and an increase in overhead
associated  with the  acquisition  and  development  of real estate  facilities,
offset partially by decreases in consulting and other expenses.

         The year to date  increase  is due  primarily  to an  increase in lease
termination  expense  associated with leased  containerized  storage  facilities
which were replaced by  newly-developed  facilities  and an increase in overhead
associated with the acquisition  and development of real estate  facilities,  as
well as severance as a result of employee terminations. The increase in the nine
months  ended  September  30,  2001 as  compared  to 2000 of these  three  items
aggregated approximately $4,020,000.

         INTEREST EXPENSE:  Interest expense was $928,000 and $3,023,000 for the
three and nine months ended  September  30, 2001,  respectively,  as compared to
$626,000 and $3,293,000,  respectively,  for the same periods in 2000.  Interest
expense was net of  capitalized  interest of $2,044,000  and  $6,263,000 for the
three and nine months ended  September  30, 2001,  respectively,  as compared to
$2,672,000  and  $6,828,000,  respectively,  for the same  periods in 2000;  the
decrease  in  capitalized  interest  was  due to  lower  levels  of  development
activities.  Interest  expense,  prior to capitalized  interest,  decreased from
$3,298,000  for the three months ended  September 30, 2000 to $2,972,000 for the
three months ended  September 30, 2001 and from  $10,121,000  in the nine months
ended  September 30, 2000 to $9,286,000 for the nine months ended  September 30,
2001. The decreases in interest expense,  prior to capitalized interest, for the
three and nine  months  periods  are due  primarily  to  reductions  in  average
outstanding debt balances.

         MINORITY INTEREST IN INCOME: Minority interest in income represents the
income allocable to equity interests in the Consolidated Entities, which are not
owned by us.

                                       28

<PAGE>

         On  March  17,  2000,  one  of  our  operating   partnerships  that  is
consolidated  issued  $240.0  million  of 9.5%  Series N  Cumulative  Redeemable
Perpetual  Preferred Units. On March 29, 2000 the operating  partnership  issued
$75.0 million of 9.125% Series O Cumulative Redeemable Perpetual Preferred Units
and on August  11,  2000,  issued  $50.0  million of 8.75%  Series P  Cumulative
Redeemable  Perpetual  Preferred Units. In August 2001, we repurchased,  at par,
$30 million of 9.125% Series O Cumulative  Redeemable Perpetual Preferred Units.
For the nine months  ended  September  30,  2001 and 2000,  the holders of these
units  were  paid  in  aggregate  approximately   $24,830,000  and  $16,354,000,
respectively,  in  distributions  and  received a  corresponding  allocation  of
minority  interest  in earnings  for the partial  period in which the units were
outstanding.

         Minority  interest in income - other partnership  interests  (excluding
amounts  paid  to the  perpetual  preferred  unitholders),  was  $4,180,000  and
$10,540,000,  respectively,  for the three and nine months ended  September  30,
2001, compared to $3,693,000 and $10,211,000, respectively, for the same periods
in 2000.

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

         At September 30, 2001, there were  approximately 45 ownership  entities
owning in aggregate 1,378 storage facilities,  including the facilities which we
own and/or operate. At September 30, 2001, 114 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  1,264
storage facilities are owned by the Company and the Consolidated Entities.

         The following table summarizes our investment in storage  facilities as
of September 30, 2001 (net rentable square feet in thousands):

                                                                   Net Rentable
                                                                  Square Footage
                                                  Number of         of Storage
                                              Storage Facilities    Facilities
                                              ------------------- --------------
Wholly-owned facilities....................              643           40,258
Facilities owned by Consolidated Entities..              621           36,127
                                              ------------------- --------------
    Total consolidated facilities..........            1,264           76,385
Facilities owned by Unconsolidated Entities              114            6,732
                                              ------------------- --------------
    Total  facilities  in which  the  Company
      has an ownership interest............            1,378           83,117
                                              =================== ==============

         In  addition to the  Company's  interest  in storage  facilities  noted
above,  the Company and the  Consolidated  Entities own 6 commercial  facilities
with an aggregate of 394,000 net rentable square feet. We also have a 44% common
interest in PSB, which owns 13.6 million net rentable  square feet of commercial
space.

         In  order  to  evaluate  how  our  overall   portfolio  has  performed,
management  analyzes  the  operating   performance  of  a  consistent  group  of
self-storage facilities representing 945 (54.9 million net rentable square feet)
of the  1,378  self-storage  facilities  (herein  referred  to as  "Same  Store"
self-storage  facilities).  The 945  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 863 consolidated facilities
and  82  facilities  owned  by  Unconsolidated  Entities.  The  following  table
summarizes the  pre-depreciation  historical operating results of the Same Store
self-storage facilities:

                                       29

<PAGE>

SAME STORE MINI-WAREHOUSE FACILITIES (945 FACILITIES)
-----------------------------------------------------
(historical property operations)

<TABLE>
<CAPTION>
                                              Three months ended                            Nine months ended
                                                 September 30,                                September 30,
                                         ----------------------------                 ----------------------------
                                             2001            2000          Change         2001            2000         Change
                                         ------------    ------------   ------------  ------------    ------------  ------------
                                                                          (Amounts in thousands)
<S>                                      <C>             <C>               <C>        <C>             <C>              <C>
Rental income (a)...................     $   150,525     $  139,829        7.6%       $   436,376     $  405,896       7.5%
Cost of operations  (b).............          42,559         40,595        4.8%           123,179        121,211       1.6%
                                         ------------    ------------   ------------  ------------    ------------  ------------
Net operating income................     $   107,966     $   99,234        8.8%       $   313,197     $  284,685      10.0%
                                         ============    ============   ============  ============    ============  ============
Gross profit margin (c).............          71.7%          71.0%         0.7%            71.8%          70.1%        1.7%

Weighted Average:
----------------
  Occupancy  (d)...................           91.3%          93.0%        (1.7)%           90.5%          92.7%       (2.2)%
   Realized annual rent per sq. ft. (e)      $12.01         $10.94         9.8%           $11.71         $10.62       10.3%

</TABLE>

     (a) Rental  income  includes late charges and  administrative  fees of $5.2
         million and $5.1 million for the three months ended  September 30, 2001
         and 2000, respectively and $15.1 million and $14.9 million for the nine
         months ended September 30, 2001 and 2000,  respectively.  Rental income
         for the  Same  Store  facilities  is net of  discounts  offered  to new
         tenants. Discounts totaled $0.3 million and $4.0 million, respectively,
         for the three and nine months ended September 30, 2001, respectively as
         compared  to $3.1  million and $11.5  million  for the same  periods in
         2000.

     (b) Cost of operations consists of the following:

<TABLE>
<CAPTION>
                                              Three months ended                            Nine months ended
                                                 September 30,                                September 30,
                                         ---------------------------                  ---------------------------
                                              2001           2000          Change          2001           2000          Change
                                         ------------   ------------   ------------   ------------   ------------   ------------
                                                                          (Amounts in thousands)
<S>                                      <C>            <C>                  <C>      <C>            <C>                <C>
Payroll expense                          $    11,503    $     11,491         0.1%     $     33,829   $    34,622        (2.3)%
Property taxes                                11,688          11,517         1.5%           35,002        34,444         1.6%
Repairs and maintenance                        2,900           4,257       (31.9)%           9,000        11,706       (23.1)%
Advertising                                    5,567           1,672       233.0%           10,988         5,837        88.2%
Telephone reservation center costs             2,061           2,486       (17.1)%           6,341         6,922        (8.4)%
Other                                          8,840           9,172        (3.6)%          28,019        27,680         1.2%
                                         ------------   ------------   ------------   ------------   ------------   ------------
                                         $    42,559    $     40,595         4.8%     $    123,179   $   121,211         1.6%
                                         ============   ============   ============   ============   ============   ============
</TABLE>

     (c) Gross  profit  margin is computed by dividing  property  net  operating
         income (before depreciation expense) by rental revenues.

     (d) Occupancies in the above table  represent  weighted  average  occupancy
         levels  over the  entire  three and nine  month  periods.  The  average
         occupancy level at September 30, 2001 was 90.8% as compared to 92.5% at
         September 30, 2000, representing a decline of 1.7%.

     (e) Realized annual rent per square foot is computed by annualizing  rental
         income  including  late  charges  and  administrative  fees  divided by
         weighted average occupied square footage for the period.

         Net operating  income increased 8.8% in the quarter ended September 30,
2001 as compared to the same period in 2000, with rental income  increasing 7.6%
and cost of operations increasing 4.8%.

                                       30

<PAGE>

         The increase in rental  income is  attributable  to a 9.8%  increase in
realized  rent per  occupied  square foot  partially  offset by a  reduction  in
weighted average  occupancy  levels during the period.  Higher realized rent per
occupied  square  foot was  achieved  through  more  aggressive  pricing  of our
self-storage  space.  Over the past  several  months,  we have  increased  rents
charged to new tenants  and have  significantly  reduced the level of  discounts
offered to new tenants.  In addition,  in many  markets,  we have  increased the
level of rent charged to our existing tenant base.

         As expected,  our more  aggressive  rental rates and  reductions in the
amount of promotional discounts offered have resulted in a reduction in weighted
average  occupancy  levels  for  both the  three  and nine  months  periods.  We
experienced  a decline of 1.7% and 2.2% in  weighted  average  occupancy  levels
during the three and nine month periods, respectively.

         We believe that our ability to raise rents and thereby  increase rental
income was facilitated by 1) more  aggressive  marketing  efforts,  including an
increase in  television  advertising  expenditures  of $4.0  million in the nine
months ended  September  30, 2001 as compared to the same period in 2000 as well
as an  increase in the  intensity  of our yellow  page  advertising,  and 2) the
continuing  impact of our  efforts  over the last  several  years to improve the
value of the Public Storage brand, most significantly  through the completion of
our program to enhance our visual icon and to modernize  the  appearance  of our
self-storage facilities.

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

         We believe that our internally generated net cash provided by operating
activities  will  continue to be  sufficient  to enable us 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
payment on debt and for reinvestment.

                                       31

<PAGE>

<TABLE>
<CAPTION>
                                                                                           For the nine months ended
                                                                                                 September 30,
                                                                                          ------------------------------
                                                                                              2001              2000
                                                                                          ------------      ------------
                                                                                             (Amounts in thousands)
<S>                                                                                       <C>               <C>
Net income...........................................................................     $   240,012       $ 222,516
Less - Gain on sale of real estate...................................................          (1,568)              -
Depreciation and amortization (a)....................................................         123,646         109,509
Depreciation from Unconsolidated Entities............................................          17,727          15,522
Minority interest in income..........................................................          35,370          26,565
                                                                                          ------------      ------------
  Net cash provided by operating activities..........................................         415,187         374,112

Allocable to minority interests (Preferred OP Units)..................................        (24,830)        (16,354)
Allocable to minority interests (Common equity).......................................        (16,274)        (15,224)
                                                                                          ------------      ------------
Cash from operations allocable to the Company's shareholders.........................         374,083         342,534

Less: preferred stock dividends......................................................         (85,508)        (75,110)
Less: equity stock, Series A dividends...............................................         (14,080)         (7,590)
                                                                                          ------------      ------------
Cash from operations available to common shareholders................................         274,495         259,834

Capital improvements to maintain facilities:.........................................         (24,484)        (16,605)
Add back: minority interest share of capital improvements to maintain facilities.....             452             385
                                                                                          ------------      ------------
Cash available for principal payments on debt, common dividends and reinvestment.....         250,463         243,614

Cash distributions to common and Class B common shareholders (b).....................        (150,418)       (165,055)
                                                                                          ------------      ------------

Cash available for principal payments on debt and reinvestment.......................     $   100,045       $  78,559
                                                                                          ============      ============
</TABLE>

     (a) Depreciation and amortization  includes  $4,268,000 and $3,612,000 with
         respect to non-real  estate assets for the nine months ended  September
         30, 2001 and 2000, respectively.

     (b) Cash  distributions  to common  shareholders  for the nine months ended
         September 30, 2001 and 2000 include  regular  common  distributions  of
         $0.89  per  share  and  $0.66  per  share,  respectively.  The  regular
         quarterly  common  dividend paid in September 2001 was $0.45 per share,
         an  increase  of  $0.23  from the  previous  regular  quarterly  common
         dividend of $0.22 per share.  In  addition,  for the three months ended
         September  30, 2001 and 2000, a special  distribution  was declared and
         paid in the  amount of $0.35  per  common  share  and $0.60 per  common
         share, respectively.

         We expect to fund our growth  strategies with cash on hand at September
30, 2001, internally generated retained cash flows, proceeds from issuing equity
securities and borrowings under our $200 million credit facility.

         Our  portfolio  of  real  estate   facilities   remains   substantially
unencumbered.  At September 30, 2001, we had mortgage debt  outstanding of $24.6
million and had  consolidated  real estate  facilities with a book value of $3.7
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.

         ISSUANCES  OF  EQUITY  SECURITIES:  We  have  completed  the  following
issuances of equity during 2001:

     *   During the nine months ended  September 30, 2001,  we raised  aggregate
         net proceeds of $660,051,000 from issuances of our Cumulative Preferred
         Stock,  as follows.  In January 2001, we completed a public offering of
         6,900,000  depositary  shares ($25 stated value per  depositary  share)
         each  representing  1/1,000  of a share  of 8.6%  Cumulative  Preferred
         Stock, Series Q, raising net proceeds of approximately $166,966,000 and
         in  September  2001,  we  completed  a public  offering  of  20,400,000
         depositary   shares  ($25  stated  value  per  depositary  share)  each
         representing  1/1,000 of a share of 8.0%  Cumulative  Preferred  Stock,
         Series R, raising net proceeds of approximately $493,085,000.

                                       32

<PAGE>

     *   During the nine months ended  September 30, 2001,  we raised  aggregate
         net proceeds of $72,130,000 from issuances of our Equity Stock,  Series
         A, as  follows.  In April  2001,  we  completed  a public  offering  of
         2,210,500  depositary  shares each  representing  1/1,000 of a share of
         Equity  Stock,   Series  A,  raising  net  proceeds  of   approximately
         $51,836,000 and in May 2001, we completed a direct placement of 830,000
         depositary shares each representing 1/1,000 of a share of Equity Stock,
         Series A, raising net proceeds of approximately $20,294,000.

     *   In October 2001, we completed a public offering of 5,750,000 depositary
         shares  ($25  stated  value per  depositary  share)  each  representing
         1/1,000  of a share of 7.875%  Cumulative  Preferred  Stock,  Series S,
         raising net proceeds of approximately $139,000,000.

         Approximately  $521.3  million  of  the  total  $632.1  million  in net
proceeds  from the issuance of Series R and S were used to fund  redemptions  of
preferred  stock and purchases of preferred  operating  partnership  units noted
below.

         Recent  Redemptions  of  Preferred  Stock and  Purchases  of  Preferred
Operating  Partnership  Units:  During 2001,  we have  completed  the  following
redemptions and purchases of preferred equity:

     *   In August 2001, we purchased,  at par,  $30,000,000  of 9.125% Series O
         Cumulative   Perpetual  Preferred  Redeemable  Units  of  an  operating
         partnership of the Company.

     *   In September  2001,  we redeemed all  outstanding  shares of our 8 7/8%
         Cumulative  Preferred Stock,  Series G held by the depositary and, as a
         result,  the  depositary  redeemed  all  6,900,000   depositary  shares
         representing interests in its 8 7/8% Cumulative Preferred Stock, Series
         G at a  redemption  price of $25 per  depositary  share  for a total of
         $172,500,000 plus accrued dividends.

     *   In  October  2001,  we  redeemed  all  outstanding  shares of our 8.45%
         Cumulative  Preferred Stock,  Series H held by the depositary and, as a
         result,  the  depositary  redeemed  all  6,750,000   depositary  shares
         representing  interests in its 8.45% Cumulative Preferred Stock, Series
         H at a  redemption  price of $25 per  depositary  share  for a total of
         $168,750,000 plus accrued dividends.

     *   In October 2001, we purchased,  at par,  $50,000,000  of 8.75% Series P
         Cumulative   Perpetual  Preferred  Redeemable  Units  of  an  operating
         partnership of the Company.

     *   On November 13, 2001, we redeemed all outstanding  shares of our 8 5/8%
         Cumulative  Preferred Stock,  Series I held by the depositary and, as a
         result,  the  depositary  redeemed  all  4,000,000   depositary  shares
         representing interests in its 8 5/8% Cumulative Preferred Stock, Series
         I at a  redemption  price of $25 per  depositary  share  for a total of
         $100,000,000 plus accrued dividends.

         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 nine months ended  September 30, 2001 and 2000, we paid cash
dividends totaling $85,508,000 and $75,110,000,  respectively, to the holders of
our Senior Preferred  Stock.  The amounts paid in 2001 include  $10,426,000 with
respect to the Series Q preferred stock,  which reflects a payment for a partial
period from the date of issuance.  We estimate the regular  annual  distribution
requirements with respect to Senior Preferred Stock outstanding at September 30,
2001 to be approximately  $140.4 million.  With the issuance of Series S and the
redemption  of Series H and  Series I during  the  fourth  quarter  of 2001,  we
estimate the total annual  distribution  requirement  with respect to the Senior
Preferred  Stock to be  approximately  $128.9  million.  The total  distribution
requirement  with respect to Senior Preferred Stock for fiscal 2001 is estimated
at $118.0 million.

                                       33

<PAGE>

         During the nine months ended  September 30, 2001 and 2000, we paid cash
dividends totaling $14,080,000 and $7,590,000,  respectively,  to the holders of
Equity Stock,  Series A. With respect to the Equity Stock,  Series A outstanding
at September 30, 2001, we estimate the total annual regular  distribution  to be
approximately  $21.3 million assuming that dividends of at least $0.49 per share
per  year are paid to the  common  shareholders.  The  total  distribution  with
respect to Equity Stock, Series A for fiscal 2001 is estimated at $19.4 million.

         During the nine  months  ended  September  30,  2001 and 2000,  we paid
dividends totaling $150,418,000 and $247,141,000,  respectively,  to the holders
of our common  stock and Class B common  stock.  Included in the amounts paid in
2000 is a  special  distribution  declared  in 1999  but  paid in 2000  totaling
approximately $82,086,000,  consisting of $38,076,000 in cash and $44,010,000 in
the issuance of depositary shares of Equity Stock,  Series A.  Distributions for
the nine months  ended  September  30,  2001 and 2000,  include  regular  common
distributions of $0.89 per share ($0.22 per share for each of the quarters ended
March 31,  2001 and June 30,  2001 and $0.45  per  share for the  quarter  ended
September  30,  2001)  and  $0.66 per  share  ($0.22  per  share  per  quarter),
respectively.  In addition,  for the three months ended  September  30, 2001 and
2000,  a special  distribution  was  declared  in the amount of $0.35 per common
share and $0.60 per common share, respectively. Based upon shares outstanding at
September 30, 2001 and a regular  quarterly  distribution of $0.45 per share, we
estimate a  dividend  with  respect  to our common and Class B Common  shares of
$54.1 million for the fourth quarter of 2001.

         During the nine months ended  September 30, 2001 and 2000, we paid cash
dividends totaling $24,830,000 and $16,354,000,  respectively, to the holders of
our  preferred  operating  partnership  units.  The  total  annual  distribution
requirement  with  respect  to  the  preferred   operating   partnership   units
outstanding  at  September  30, 2001 is  estimated  at $31.2  million.  With the
repurchase of preferred operating partnership units in October 2001 noted above,
we  estimate  the total  annual  distribution  requirement  with  respect to the
preferred   operating   partnership  units  to  be  $26.9  million.   The  total
distribution  requirement  with respect to the preferred  operating  partnership
units for the  period  outstanding  during  fiscal  2001 is  estimated  at $31.7
million.

         CAPITAL  IMPROVEMENT  REQUIREMENTS:   During  2001,  we  have  budgeted
approximately $26,800,000 for capital improvements. During the nine months ended
September  30,  2001,  we  incurred   capital   improvements  of   approximately
$24,484,000.

         DEBT SERVICE  REQUIREMENTS:  We do not believe we have any  significant
refinancing risks with respect to our notes payable, all of which is fixed rate.
At September 30, 2001, we had total  outstanding  notes payable of $149,058,000.
Approximate  principal  maturities of notes payable at September 30, 2001 are as
follows:

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

2001 (remainder of)..........      $   4,750      $       715      $    5,465
2002.........................         24,450            3,530          27,980
2003.........................         35,900            3,585          39,485
2004.........................         25,800           15,063          40,863
2005.........................         11,200              156          11,356
Thereafter...................         22,400            1,509          23,909
                               ---------------   -------------    -------------
                                   $ 124,500      $    24,558      $  149,058
                               ===============   =============    =============
Weighted average rate........           7.5%            10.2%            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
25,000,000  shares  of our  common  stock on the  open  market  or in  privately
negotiated  transactions.  In the nine  months  ended  September  30,  2001,  we
repurchased a total of 10,568,593  shares for a total  aggregate  cost of $276.3
million.   From  the  initial  authorization  through  September  30,  2001,  we
repurchased a total of 21,469,020 shares of common stock at an aggregate cost of
approximately $534.9 million.

                                       34

<PAGE>

         DEVELOPMENT  OF  SELF-STORAGE  FACILITIES:  At September 30, 2001,  the
Company and the Consolidated  Development  Joint Venture have a "pipeline" of 50
projects  that are in  construction  or are  expected to begin  construction  by
December  2002,  which  includes new and expansion  self-storage  facilities and
facilities that combine containerized storage and self-storage space in the same
location.  These 50 projects have total estimated costs of approximately  $334.7
million,  of which $142.8 million has been spent,  with opening dates  estimated
through the fourth quarter of 2003. The development and fill-up of these storage
facilities is subject to significant contingencies.  We estimate that the amount
remaining to be spent of  approximately  $191.9  million on these 50 projects in
the pipeline will be incurred over the next 30 months.

         We have acquired the land for 32 of the projects in the pipeline, which
have an aggregate  estimated cost of $203.1  million and costs incurred  through
September 30, 2001 of approximately  $138.0 million. The remaining 18 facilities
represent  identified sites as to which we have an agreement in place to acquire
the land, generally within one year. However,  there can be no assurance that we
will complete the development of these facilities.

         With respect to the facilities that combine  containerized  storage and
self-storage space in the same location, the identification of appropriate sites
and the entitlement  process of those sites have been  substantially  completed.
The Company anticipates that the cost of development of self-storage  facilities
in 2002 and beyond will be approximately $125 million to $150 million per year.

         In addition to the projects in the pipeline,  at September 30, 2001, we
had approximately $32.4 million of land held for development.

         The following table sets forth our development  pipeline and a range of
estimated opening dates for these projects:

<TABLE>
<CAPTION>
                                           Number      Total Estimated        Total Cost          Estimated time
                                             of            Cost of         Incurred through     Frames of Facility
                                         Facilities      Development      September 30, 2001         Openings
                                        -------------  ----------------   ------------------    -------------------
Development - land acquired at 9/30/01
<S>                                            <C>        <C>                 <C>                  <C>     <C>
Self-storage facilities...............         19         $   116,930         $   72,070          Q4'01 - Q1'03
Expansions of existing self-storage
    facilities........................          5              17,088              7,380          Q4'01 - Q3'03
Combination facilities................          8              69,100             58,520          Q4'01 - Q3'02
                                        -------------  ----------------   ------------------
     Total............................         32             203,118            137,970
                                        -------------  ----------------   ------------------

Potential  development  -  land  to  be
acquired after 9/30/01
Self-storage facilities - development
    starts estimated by 12/31/01......          5              34,566              1,688          Q2'02 - Q4'02
Self-storage   facilities  -  development
starts estimated after 12/31/01.......         13              97,001              3,128          Q4'02 - Q3'03
                                        -------------  ----------------   ------------------

     Total............................         18             131,567              4,816
                                        -------------  ----------------   ------------------
     Totals...........................         50         $   334,685         $  142,786
                                        =============  ================   ==================
</TABLE>

         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  90% of our  taxable
income is so  distributed  prior to filing of our tax return.  We have satisfied
the REIT distribution requirement since 1980.

                                       35

<PAGE>

         FUNDS FROM  OPERATIONS:  Total funds from operations or "FFO" increased
to  $369,815,000  for the nine  months  ended  September  30,  2001  compared to
$338,922,000  for the same period in 2000. FFO available to common  shareholders
(after  deducting  preferred stock dividends but before deducting Equity Stock A
dividends)  increased to  $284,307,000  for the nine months ended  September 30,
2001 compared to $263,812,000  for the same period in 2000. 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.

                                       36

<PAGE>

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 September  30, 2001,  our debt as a percentage of total
shareholders' equity (based on book values) was 3.7%.

         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 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,  Series Q - January 19, 2006, Series R - September 28, 2006 and Series
S - October 31, 2006. On or after the  respective  dates,  each of the series of
Senior Preferred Stock will be redeemable at our option, in whole or in part, at
$25 per share (or depositary  share in the case of the Series G through Series M
and Series Q through Series S), plus accrued and unpaid dividends.  The Series H
Preferred  Stock was redeemed on October 5, 2001.  The Series I Preferred  Stock
was redeemed on November 13, 2001.

         Our market risk  sensitive  instruments  include notes  payable,  which
totaled $149.1 million at September 30, 2001. Substantially all of the Company's
notes payable bear interest at fixed rates.  See " " -  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 September 30, 2001.

PART II.  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION
--------------------------

         On  November  1, 2001,  the  Company  entered  into a new $200  million
revolving  credit line with a group of banks with Wells  Fargo  acting as agent.
This line of credit  replaces  the existing  $150  million  line of credit.  The
credit  facility  bears  interest on borrowings at LIBOR plus .045%.  The credit
agreement  is file  herein  as  Exhibit  10.37.  See  Note  11 to the  financial
statements  of the Company for the quarter ended  September  30, 2001,  for more
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.

                                       37

<PAGE>

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.

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.

                                       38

<PAGE>

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  1/1,000 of a Share
         of 8.75% Cumulative  Preferred Stock,  Series M and incorporated herein
         by reference.

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

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

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

3.30     Certificate of  Determination  for 8.75%  Cumulative  Preferred  Stock,
         Series P. Filed with Registrant's Quarterly Report on Form 10-Q for the
         quarterly  period  ended  June 30,  2000  and  incorporated  herein  by
         reference.

3.31     Certificate of  Determination  for 8.600%  Cumulative  Preferred Stock,
         Series Q. Filed with  Registrant's  Form 8-A/A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8.600% Cumulative  Preferred Stock, Series Q and incorporated herein
         by reference.

3.32     Amendment to Certificate of Determination  for Equity Stock,  Series A.
         Filed with Registrant's Quarterly Report on Form 10-Q for the quarterly
         period ended June 30, 2001 and incorporated herein by reference.

3.33     Certificate of  Determination  for 8.000%  Cumulative  Preferred Stock,
         Series R.  Filed  with  Registrant's  Form 8-A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 8.000% Cumulative  Preferred Stock, Series R and incorporated herein
         by reference.

3.34     Certificate of  Determination  for 7.875%  Cumulative  Preferred Stock,
         Series S.  Filed  with  Registrant's  Form 8-A  Registration  Statement
         relating to the Depositary Shares Each Representing  1/1,000 of a Share
         of 7.875% Cumulative  Preferred Stock, Series S and incorporated herein
         by reference.

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

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

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

                                       39

<PAGE>

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

3.39     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.

3.40     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.

3.41     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.

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,
         2000 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.

                                       40

<PAGE>

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 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.

10.17    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.

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

10.19    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.

10.20    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.

10.21*   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.

10.22    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.

                                       41

<PAGE>

10.23    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.

10.24    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.

10.25    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.

10.26    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.

10.27    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.

10.28    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.

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

10.30    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 August 11, 2000.  Filed with  Registrant's
         Quarterly  Report on Form 10-Q for the quarterly  period ended June 30,
         2000 and incorporated herein by reference.

10.31*   Registrant's 2000 Non-Executive/Non-Director Stock Option and Incentive
         Plan. Filed with Registrant's  Registration Statement No. 333-52400 and
         incorporated herein by reference.

10.32    Deposit Agreement dated as of January 19, 2001 among Registrant,  Fleet
         National Bank and the holders of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a Share  of  8.600%
         Cumulative  Preferred  Stock,  Series Q. Filed with  Registrant's  Form
         8-A/A  Registration  Statement  relating to the Depositary  Shares Each
         Representing  1/1,000 of a Share of 8.600% Cumulative  Preferred Stock,
         Series Q and incorporated herein by reference.

10.33*   Registrant's 2001 Non-Executive/Non-Director Stock Option and Incentive
         Plan. Filed with Registrant's  Registration Statement No. 333-59218 and
         incorporated herein by reference.

10.34*   Registrant's   2001  Stock  Option  and  Incentive  Plan.   Filed  with
         Registrant's  Registration  Statement No.  333-59218  and  incorporated
         herein by reference.

                                       42

<PAGE>

10.35    Deposit  Agreement  dated as of  September  28, 2001 among  Registrant,
         Fleet  National  Bank  and  the  holders  of  the  depositary  receipts
         evidencing the Depositary Shares Each  Representing  1/1,000 of a Share
         of 8.000% Cumulative Preferred Stock, Series R. Filed with Registrant's
         Form 8-A Registration  Statement relating to the Depositary Shares Each
         Representing  1/1,000 of a Share of 8.000% Cumulative  Preferred Stock,
         Series R and incorporated herein by reference.

10.36    Deposit Agreement dated as of October 31, 2001 among Registrant,  Fleet
         National Bank and the holders of the depositary receipts evidencing the
         Depositary  Shares  Each  Representing  1/1,000  of a Share  of  7.875%
         Cumulative  Preferred Stock, Series S. Filed with Registrant's Form 8-A
         Registration   Statement   relating  to  the  Depositary   Shares  Each
         Representing  1/1,000 of a Share of 7.875% Cumulative  Preferred Stock,
         Series S and incorporated herein by reference.

10.37    Credit Agreement by and among  Registrant,  Wells Fargo Bank,  National
         Association,  as agent,  and the financial  institutions  party thereto
         dated as of November 1, 2001. Filed herewith.

11       Statement Re: Computation of Earnings Per Share. Filed herewith.

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

(b)      Reports on Form 8-K:

         The Company filed a Current Report on form 8-K dated  September 4, 2001
         (filed  September 5, 2001),  pursuant to Item 5, in connection with the
         Company's public offering of depositary shares each representing 1/1000
         of a share of 8.000% Cumulative  Preferred Stock, Series R in September
         2001.

--------------------
*        Compensatory benefit plan.
**       Management contract.

                                       43

<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: November 14, 2001

                        PUBLIC STORAGE, INC.


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

                                       44