PUBLIC STORAGE PROPERTIES LTD, 10-K, 1999-03-31

PUBLIC STORAGE PROPERTIES LTD
10-K, 1999-03-31
LESSORS OF REAL PROPERTY, NEC

Previous: SYNCOR INTERNATIONAL CORP /DE/, 10-K, 1999-03-31

Next: METATEC CORP, 10-K, 1999-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 1998

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]

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

Commission File Number 0-8667
------

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

California 95-3196921
- ------------------------------------------ ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

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

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

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

NONE

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

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

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

Yes X No
--- ---

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

DOCUMENTS INCORPORATED BY REFERENCE

NONE

<PAGE>

PART I

ITEM 1. BUSINESS.

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

When used within this document, the words "expects," "believes,"
"anticipates," "should," "estimates," and similar expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the Securities Exchange Act of 1933, as amended, and in Section 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors, which may
cause the actual results and performance of the Partnership 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 real estate
facilities which could impact rents and occupancy levels at the real estate
facilities that the Partnership has an interest in; the Partnership's ability to
effectively compete in the markets that it does business in; the impact of the
regulatory environment as well as national, state, and local laws and
regulations including, without limitation, those governing Partnerships; and the
impact of general economic conditions upon rental rates and occupancy levels at
the real estate facilities that the Partnership has an interest in.

General
- -------

Public Storage Properties, Ltd. (the "Partnership") is a publicly held
limited partnership formed under the California Uniform Limited Partnership Act
in November 1976. The Partnership raised $10,000,000 in gross proceeds by
selling 20,000 units of limited partnership interest ("Units") in an interstate
offering, which commenced in October, 1977 and was completed in January, 1978.
The Partnership was formed to engage in the business of developing and operating
storage space for personal and business use ("mini-warehouses").

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

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

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

The Partnership's objectives are to (i) maximize the potential for
appreciation in value of the Partnership's properties and (ii) generate
sufficient cash flow from operations to pay all expenses, including the payment
of interest to Noteholders. All of the properties were financed in September
1987.

The term of the Partnership is until all properties have been sold and,
in any event, not later than December 31, 2035.

Investment in Facilities
- ------------------------

At December 31, 1998, the Partnership owned nine properties. The
Partnership purchased its last property in June 1978.

<PAGE>

The Partnership believes that its operating results have benefited from
favorable industry trends and conditions. Notably, the level of new
mini-warehouse construction has decreased since 1988 while consumer demand has
increased. In addition, in recent years consolidation has occurred in the
fragmented mini-warehouse industry.

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

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

Mini-warehouses in which the Partnership has invested generally consist
of three to seven buildings containing an aggregate of between 350 to 750
storage spaces, most of which have between 25 and 400 square feet and an
interior height of approximately 8 to 12 feet.

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

The Partnership's mini-warehouses are geographically diversified and
are generally located in heavily populated areas and close to concentrations of
apartment complexes, single family residences and commercial developments.
However, there may be circumstances in which it may be appropriate to own a
property in a less populated area, for example, in an area that is highly
visible from a major thoroughfare and close to, although not in, a heavily
populated area. Moreover, in certain population centers, land costs and zoning
restrictions may create a demand for space in nearby less populated areas.

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

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

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

* CAPITALIZE ON "PUBLIC STORAGE'S" NAME RECOGNITION. PSI, together
with its predecessor, has more than 20 years of operating
experience in the mini-warehouse business, and is the largest
operator of mini-warehouses in the United States. PSI believes that
its marketing and advertising programs improve its competitive
position in the market. PSI's in-house Yellow Pages staff designs
and places advertisements in approximately 700 directories.
Commencing in early 1996, PSI began to experiment with a telephone
reservation system designed to provide added customer service.
Customers calling either PSI's toll-free telephone referral system,
(800) 44-STORE, or a mini-warehouse facility are directed to PSI's
reservation system where a trained representative discusses with
the customer space requirements, price and location preferences and
also informs the customer of other products and services provided
by PSI. The telephone reservation system supports rental activity
at all of the Partnership's properties. PSI's toll-free telephone
referral system services approximately 175,000 calls per month from
potential customers inquiring as to the nearest Public Storage
mini-warehouse.

* MAINTAIN HIGH OCCUPANCY LEVELS AND INCREASE REALIZED RENTS. Subject
to market conditions, the Partnership generally seeks to achieve
average occupancy levels in excess of 90% and to eliminate
promotions prior to increasing rental rates. Average occupancy for

<PAGE>

the Partnership's mini-warehouses has decreased from 95% in 1997 to
94% in 1998. Realized monthly rents per square foot increased from
$0.75 in 1997 to $0.81 in 1998. The Partnership has increased
rental rates in many markets where it has achieved high occupancy
levels.

* SYSTEMS AND CONTROLS. PSI has an organizational structure and a
property operation system, "CHAMP" (Computerized Help and
Management Program), which links its corporate office with each
mini-warehouse. This enables PSI to obtain daily information from
each mini-warehouse and to achieve efficiencies in operations and
maintain control over its space inventory, rental rates,
promotional discounts and delinquencies. Expense management is
achieved through centralized payroll and accounts payable systems
and a comprehensive property tax appeals department, and PSI has an
extensive internal audit program designed to ensure proper handling
of cash collections.

* PROFESSIONAL PROPERTY OPERATION. There are approximately 3,800
persons who render services for the Public Storage system,
primarily personnel engaged in property operations, substantially
all of whom are employed by a clearing company that provides
certain administrative and cost-sharing services to PSI and other
owners of properties operated by PSI.

Mini-warehouse Property Operator
- --------------------------------

The Partnership's mini-warehouses are managed by PSI (as
successor-in-interest to PSMI) under a Management Agreement. PSI has informed
the Partnership that it is the largest mini-warehouse facility operator in the
United States in terms of both number of facilities and rentable space operated.

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

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

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

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

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

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

The Management Agreement between the Partnership and PSI provides that
the Management Agreement may be terminated without cause upon 60 days' written
notice by either party.

<PAGE>

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

Competition in the market areas in which the Partnership operates is
significant and affects the occupancy levels, rental rates and operating
expenses of certain of the Partnership's facilities. Competition may be
accelerated by any increase in availability of funds for investment in real
estate. Recent increases in plans for development of mini-warehouses is expected
to further intensify competition among mini-warehouse operators in certain
market areas. In addition to competition from mini-warehouses operated by PSI,
there are three other national firms and numerous regional and local operators.
The Partnership believes that the significant operating and financial experience
of PSI, and the "Public Storage" name, should enable the Partnership to continue
to compete effectively with other entities.

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

A corporation owned by the Hughes Family reinsures policies against
losses to goods stored by tenants in the Partnership's mini-warehouses. The
Partnership believes that the availability of insurance reduces the potential
liability of the Partnership to tenants for losses to their goods from theft or
destruction. This corporation receives the premiums and bears the risks
associated with the insurance.

A corporation, in which PSI has a 95% economic interest and the Hughes
Family has a 5% economic interest, sells locks, boxes and tape to tenants to be
used in securing their spaces and moving their goods. PSI believes that the
availability of locks, boxes and tape for sale promotes the rental of spaces.

Employees
- ---------

There are 9 persons who render services on behalf of the Partnership on
a full-time basis, and 21 persons who render services on a part-time basis.
These persons include resident managers, assistant managers, relief managers,
area managers, and administrative and maintenance personnel. Some employees may
be employed on a part-time basis and may be employed by other persons,
Partnerships, REITs or other entities owning facilities operated by PSI.

ITEM 2. PROPERTIES.

The following table sets forth information as of December 31, 1998
about properties owned by the Partnership:

<TABLE>
<CAPTION>
Net Number
Location Size of Parcel Rentable Area of Spaces Date of Purchase Completion Date
- ----------------- -------------- ------------- --------- ---------------- ---------------
CALIFORNIA
<S> <C> <C> <C> <C> <C>
Corona 2.82 acres 52,000 sq. ft. 471 June 29, 1978 Dec. 1978
Fremont 3.00 acres 53,000 sq. ft. 481 Mar. 21, 1978 Nov. 1978
Milpitas 3.46 acres 54,000 sq. ft 436 May 8, 1978 Nov. 1978
Norco 1.66 acres 29,000 sq. ft 257 July 19, 1978 Dec. 1978
North Hollywood 2.06 acres 38,000 sq. ft. 343 Mar. 17, 1978 Dec. 1979
Pasadena 1.84 acres 38,000 sq. ft. 385 Feb. 24, 1978 Aug. 1978
Sun Valley 2.72 acres 53,000 sq. ft. 477 May 30, 1978 Oct. 1978
Wilmington 6.32 acres 133,000 sq. ft. 1,093 Apr. 18, 1978 Aug. 1978
Whittier -
El Monte 4.06 acres 58,000 sq. ft. 537 Nov. 29, 1977 July 1978

</TABLE>

The weighted average occupancy levels for the mini-warehouse facilities
were 94% and 95% in 1998 and 1997, respectively.

Substantially all of the Partnership's facilities were acquired prior
to the time that it was customary to conduct environmental investigations in
connection with property acquisitions. During the fourth quarter of 1995, the
Partnership completed environmental assessments of its properties to evaluate
the environmental condition of, and potential environmental liabilities of such
properties. These assessments were performed by an independent environmental
consulting firm. Although there can be no assurances. Based on the assessments,

<PAGE>

the Partnership is not aware of any environmental contamination of any of its
property sites which individually or in the aggregate would be material to the
Partnership's overall business, financial condition or results of operation.

The properties are held subject to encumbrances which are described in
this report under Note 7 of the Notes to the Financial Statements included in
Item 8.

ITEM 3. LEGAL PROCEEDINGS.

No material legal proceeding is pending against the Partnership.

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

No matters were submitted to a vote of security holders during the
fourth quarter of 1998.

PART II

ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The Partnership has no common stock.

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

Exclusive of the General Partners' interest in the Partnership, as of
December 31, 1998, there were approximately 642 record holders of Units.

In August 1998, Public Storage, Inc. ("PSI"), a general partner of the
Partnership, completed a cash tender offer, which commenced in June 1998,
pursuant to which PSI acquired a total of 3,972 limited partnership units at
$460 per unit.

Distributions to the general and limited partners of all cash available
for distribution (as defined) are made quarterly. Cash available for
distribution is generally funds from operations of the Partnership, without
deductions for depreciation, but after deducting funds to pay or establish
reserves for all other expenses (other than incentive distributions to the
General Partners) and capital improvements, plus net proceeds from any sale or
financing of the Partnership's properties. In the fourth quarter of 1990,
quarterly distributions were discontinued to enable the Partnership to increase
its reserves for principal repayments on the Partnership's note payable that
commenced in 1992.

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

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

For the Year Ended
December 31, 1998 1997 1996 1995 1994
- ------------------------------------ ------------- --------------- --------------- --------------- ---------------

<S> <C> <C> <C> <C> <C>
Revenues (2) $ 4,629,000 $ 4,337,000 $ 4,007,000 $ 4,235,000 $ 4,181,000

Depreciation and
amortization 498,000 446,000 402,000 356,000 296,000

Interest expense 1,077,000 1,252,000 1,358,000 1,520,000 1,658,000

Net income 1,622,000 1,341,000 1,008,000 1,125,000 1,075,000

Limited partners' share 1,605,000 1,328,000 998,000 1,114,000 1,064,000

General partners' share 17,000 13,000 10,000 11,000 11,000

Limited partners' per unit data (1):
Net income $80.25 $66.40 $49.90 $55.70 $53.20

As of December 31,
- ------------------------------------

Cash and cash equivalents $ 248,000 $ 546,000 $ 69,000 $ 89,000 $ 162,000

Total assets $ 5,349,000 $ 5,760,000 $ 5,503,000 $ 5,845,000 $ 6,418,000

Notes payable $ 12,000,000 $ 14,093,000 $ 15,217,000 $ 16,351,000 $ 17,995,000

</TABLE>

(1) Per unit data is based on the weighted average number of the limited
partnership units (20,000) outstanding during the period.

(2) Revenues for the year ended December 31, 1995 and 1994, include a
gain on sale of marketable securities of an affiliate of $361,000 and
$479,000 ($18.05 and $23.95 per Unit).

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

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

<PAGE>

Results of Operations
- ---------------------

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997:

The Partnership's net income in 1998 was $1,622,000 compared to
$1,341,000 in 1997, representing an increase of $281,000. This increase is
primarily a result of increased operating results at the Partnership's real
estate facilities combined with a decrease in interest expense.

During 1998, property net operating income (rental income less cost of
operations, management fees paid to an affiliate and depreciation expense)
increased $118,000 or 4.5% from $2,639,000 in 1997 to $2,757,000 in 1998. This
increase is primarily attributable to an increase in rental revenues at the
Partnership's mini-warehouse facilities partially offset by increases in cost of
operations and depreciation expense.

Rental income was $4,610,000 in 1998 compared to $4,321,000 in 1997,
representing an increase of $289,000, or 7%. This increase was primarily
attributable to increased rental rates at the Partnership's real estate
facilities. Weighted average occupancy levels at the mini-warehouses were 94%
and 95% in 1998 and 1997, respectively. The average monthly realized rent per
square foot at the mini-warehouses was $.81 in 1998 compared to $.75 in 1997.

Other income increased from $16,000 in 1997 to $19,000 in 1998. This
increase is primarily due to an increase in invested cash balances.

Cost of operations (including management fees paid to an affiliate) was
$1,355,000 and $1,236,000 in 1998 and 1997, respectively, representing an
increase of $119,000, or 10%. This increase is mainly attributable to increases
in management fees, property tax and advertising and promotion expenses.

Interest expense was $1,077,000 and $1,252,000 in 1998 and 1997,
respectively, representing a decrease of $175,000, or 14%. The decrease was
primarily a result of a lower average outstanding loan balance in 1998 compared
to 1997 and lower interest rates on the Partnership's indebtedness. See
Liquidity and Capital Resources for a discussion of the refinancing of the
Partnership's indebtedness.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996:

The Partnership's net income in 1997 was $1,341,000 compared to
$1,008,000 in 1996, representing an increase of $333,000. This increase is
primarily a result of increased operating results at the Partnership's real
estate facilities combined with a decrease in interest expense.

During 1997, property net operating income (rental income less cost of
operations, management fees paid to an affiliate and depreciation expense)
increased $226,000 from $2,413,000 in 1996 to $2,639,000 in 1997. This increase
is primarily attributable to an increase in rental revenues at the Partnership's
mini-warehouse facilities partially offset by increases in cost of operations
and depreciation expense.

Rental income was $4,321,000 in 1997 compared to $4,002,000 in 1996,
representing an increase of $319,000, or 8%. This increase was primarily
attributable to increased occupancies and rental rates at the Partnership's real
estate facilities. Weighted average occupancy levels at the mini-warehouses were
95% and 92% in 1997 and 1996, respectively. The average monthly realized rent
per square foot at the mini-warehouses was $.75 in 1997 compared to $.72 in
1996.

Other income increased from $5,000 in 1996 to $16,000 in 1997. This
increase is primarily due to an increase in invested cash balances.

Cost of operations (including management fees paid to an affiliate) was
$1,236,000 and $1,187,000 in 1997 and 1996, respectively, representing an
increase of $49,000, or 4%. This increase is mainly attributable to increases in
management fees, property tax and advertising and promotion expenses.

In 1995, the Partnership prepaid eight months of 1996 management fees
on its mini-warehouse operations discounted at the rate of 14% effective rate to
compensate for early payment. As a result, management fee expense for the twelve
months ended December 31, 1996 was $20,000 lower than it would have been without
the discounted fee structure.

<PAGE>

Interest expense was $1,252,000 and $1,358,000 in 1997 and 1996,
respectively, representing a decrease of $106,000, or 8%. The decrease was
primarily a result of a reduction in the average outstanding debt balance in
1997 compared to 1996.

Liquidity and Capital Resources
- -------------------------------

Cash flow from operating activities of $2,234,000 in 1998 has been
sufficient to meet all current obligations of the Partnership. During 1999, the
Partnership anticipates approximately $142,000 of capital improvements compared
to $439,000 in 1998 and $280,000 in 1997.

During 1987, the Partnership financed all of its facilities with a
$20,885,000 loan. Proceeds of $20,202,000 were distributed to the partners in
September 1987 and are included in the 1987 distribution.

In January 1996, the Partnership obtained a $1,500,000 loan from PSI to
repay and terminate an unsecured note payable to Wells Fargo Bank. The PSI loan
bears interest at the prime rate plus 1%, payable monthly, in addition to
monthly principal payments of $50,000. In March 1998, the Partnership paid the
remaining balance of the loan.

On June 1, 1998, the Partnership paid down its mortgage note with a
third party lender by $11,641,000. The payment was made from cash reserves and
an $11,000,000 loan from Public Storage, Inc. The loan from Public Storage, Inc.
bears interest at the fixed rate of 7.3% and matures June 1999. The loan calls
for monthly payments of interest only. Principal may be paid at anytime without
penalty. Public Storage, Inc. has also provided the Partnership with options to
extend the loan term through June 2003. Interest paid to Public Storage, Inc. in
1998 was $317,000.

During October 1998, the Partnership borrowed $12,400,000 from a
commercial bank to payoff the loan from Public storage, Inc. and the mortgage
note with a third party. The loan is unsecured and bears interest at the London
Interbank Offering Rate ("LIBOR") plus 0.55% (5.61% as of December 31, 1998).
The loan requires monthly payments of interest and matures October 2002.
Principal may be paid, in whole or in part, at any time without penalty or
premium. The loan proceeds were used to pay off the Partnership's existing
indebtedness.

The Partnership also entered into interest rate swap agreements to
reduce the impact of changes in interest rates on a portion of its floating rate
debt. The agreement, which covers $5,000,000 of debt through October 2000,
effectively changes the interest rate exposure from floating rate to a fixed
rate of 5.205%. The second agreement, which covers $2,500,000 of debt through
October 2001 and effectively changes the interest rate exposure from floating
rate to a fixed rate of 5.33%. Market gains and losses on the value of the swap
are deferred and included in income over the life of the contract. The
Partnership records the differences paid or received on the interest rate swap
in interest expense as payments are made or received.

Distributions to the limited and general partners for the years
1978-1990 aggregated $37,832,000 including $20,202,000 distributed to the
partners in 1987.

Year 2000 System Issues
- -----------------------

The Partnership utilizes PSI's information systems in connection with a
cost sharing and administrative services agreement. PSI has completed an
assessment of all of its hardware and software applications to identify
susceptibility to what is commonly referred to as the "Y2K Issue" whereby
certain computer programs have been written using two digits rather than four to
define the applicable year. Any of PSI's computer programs or hardware with the
Y2K Issue that have date-sensitive applications or embedded chips may recognize
a date using "00" as the year 1900 rather than the year 2000, resulting in
miscalculations or system failure causing disruptions of operations.

PSI has two phases in its process with respect to each of its systems;
i) assessment, whereby PSI evaluates whether the system is Y2K compliant and
identifies the plan of action with respect to remediating any Y2K issues
identified and ii) implementation, whereby PSI completes the plan of action
prepared in the assessment phase and verifies that Y2K compliance has been
achieved.

Many of PSI's critical applications, relative to the direct management
of properties, have recently been replaced and PSI believes they are already
Year 2000 compliant. PSI has an implementation in process on the remaining
critical applications, including its general ledger and related systems, that
are believed to have Y2K issues. PSI expects the implementation to be complete

<PAGE>

by June 1999. Contingency plans have been developed for use in case PSI's
implementations are not completed on a timely basis. While PSI presently
believes that the impact of the Y2K Issue on its systems can be mitigated, if
PSI's plan for ensuring Year 2000 Compliance and the related contingency plans
were to fail, be insufficient, or not be implemented on a timely basis,
Partnership operations could be materially impacted.

Certain of PSI's other non-computer related systems that may be
impacted by the Y2K Issue, such as security systems, are currently being
evaluated, and PSI expects the evaluation to be complete by June 1999. PSI
expects the implementation of any required solutions to be complete in advance
of December 31, 1999. PSI has not fully evaluated the impact of lack of Year
2000 compliance on these systems, but has no reason to believe that lack of
compliance would materially impact the Partnership's operations.

The Partnership exchanges electronic data with certain outside vendors
in the banking and payroll processing areas. The Partnership has been advised by
these vendors that their systems are or will be Year 2000 compliant, but has
requested a Year 2000 compliance certification from these entities. The
Partnership is not aware of any other vendors, suppliers, or other external
agents with a Y2K Issue that would materially impact the Partnership's results
of operations, liquidity, or capital resources. However, the Partnership has no
means of ensuring that external agents will be Year 2000 compliant, and there
can be no assurance that the Partnersip has identified all such external agents.
The inability of external agents to complete their Year 2000 compliance process
in a timely fashion could materially impact the Partnership. The effect of
non-compliance by external agents is not determinable.

The cost of the PSI's Year 2000 compliance activities (which primarily
consists of the costs of new systems) to be allocated to the Partnership and the
Joint Venture is estimated at approximately $40,311. These costs are
capitalized. PSI's Year 2000 compliance efforts have not resulted in any
significant deferrals in other information system projects.

The costs of the projects and the date on which PSI and the Partnership
expect to achieve Year 2000 Compliance are based upon management's best
estimates, and were derived utilizing numerous assumptions of future events.
There can be no assurance that these estimates will be achieved, and actual
results could differ materially from those anticipated. There can be no
assurance that the Partnership or PSI has identified all potential Y2K Issues
either within the Partnership, at PSI, or at external agents. In addition, the
impact of the Y2K issue on governmental entities and utility providers and the
resultant impact on the Partnership, as well as disruptions in the general
economy, may be material but cannot be reasonably determined or quantified.

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

The Partnership's interest expense is sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest paid on the Partnership's debt. To mitigate the impact
of fluctuations in U.S. interest rates, the Partnership generally maintains its
debt as fixed rate in nature by borrowing on a long-term basis or entering into
interest swap transactions. As of December 31, 1998, the Partnership had
$12,000,000 of outstanding debt maturing on October, 2002. Also, the Partnership
has an interest rate swap in the notional amount of $7,500,000 through October,
2001.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Partnership's financial statements are included elsewhere herein.
Reference is made to the Index to Financial Statements and Financial Statement
Schedules in Item 14(a).

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

None.

<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.

The Partnership has no directors or executive officers.

The Partnership's general partners are PSI and B. Wayne Hughes. PSI,
acting through its directors and executive officers and Mr. Hughes manage and
make investment decisions for the Partnership.

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

Name Positions with PSI
- --------------------- -------------------------------------------------
B. Wayne Hughes Chairman of the Board and Chief Executive Officer
Harvey Lenkin President and Director
B. Wayne Hughes, Jr. Vice President and Director
John Reyes Senior Vice President and Chief Financial Officer
Carl B. Phelps Senior Vice President
Obren B. Gerich Senior Vice President
Marvin M. Lotz Senior Vice President
David Goldberg Senior Vice President and General Counsel
A. Timothy Scott Senior Vice President and Tax Counsel
David P. Singelyn Vice President and Treasurer
Sarah Hass Vice President and Secretary
Robert J. Abernethy Director
Dann V. Angeloff Director
William C. Baker Director
Thomas J. Barrack Jr. Director
Uri P. Harkham Director
Daniel C. Staton Director

B. Wayne Hughes, age 65, a general partner of the Partnership, has been
a director of PSI since its organization in 1980 and was President and Co-Chief
Executive Officer from 1980 until November 1991 when he became Chairman of the
Board and sole Chief Executive Officer. Mr. Hughes has been active in the real
estate investment field for over 25 years. He is the father of B. Wayne Hughes,
Jr.

Harvey Lenkin, age 62, has been employed by PSI for 21 years and became
President and a director of PSI in November 1991. Mr. Lenkin has been a director
of PS Business Parks, Inc. ("PSBP"), an affiliated REIT, since March 16, 1998
and was President of PSBP (formerly Public Storage Properties XI, Inc.) from
1990 until March 16, 1998. He is a member of the Board of Governors of the
National Association of Real Estate Investment Trusts (NAREIT).

B. Wayne Hughes, Jr., age 39 became director of PSI in January 1998. He
has been a Vice President - Acquisitions of PSI since 1992. He is the son of B.
Wayne Hughes.

John Reyes, age 38, a certified public accountant, joined PSI in 1990
and was Controller of PSI from 1992 until December 1996 when he became Chief
Financial Officer. He became a Vice President of PSI in November 1995 and a
Senior Vice President of PSI in December 1996. From 1983 to 1990, Mr. Reyes was
employed by Ernst & Young.

Carl B. Phelps, age 60, became a Senior Vice President of PSI in
January 1998 with overall responsibility for property acquisition and
development. From June 1991 until joining PSI, he was a partner in the law firm
of Andrews & Kurth, L.L.P., which performed legal services for PSI. From
December 1982 through May 1991, his professional corporation was a partner in
the law firm of Sachs & Phelps, then counsel to PSI.

Obren B. Gerich, age 60, a certified public accountant, has been a Vice
President of PSI since 1980 and became Senior Vice President of PSI in November
1995. He was Chief Financial Officer of PSI until November 1991.

<PAGE>

Marvin M. Lotz, age 56, has had overall responsibility for Public
Storage's mini-warehouse operations since 1988. He became a Senior Vice
President of PSI in November 1995. Mr. Lotz was an officer of PSI with
responsibility for property acquisitions from 1983 until 1988.

David Goldberg, age 49, joined PSI's legal staff in June 1991. He
became Senior Vice President and General Counsel of PSI in November 1995. From
December 1982 until May 1991, he was a partner in the law firm of Sachs &
Phelps, then counsel to PSI.

A. Timothy Scott, age 47, became a Senior Vice President and Tax
Counsel of PSI and Vice President and Tax Counsel of the Public Storage REITs in
November 1996. From June 1991 until joining PSI, Mr. Scott practiced tax law as
a shareholder of the law firm of Heller, Ehrman, White & McAuliffe, counsel to
PSI. Prior to June 1991, his professional corporation was a partner in the law
firm of Sachs & Phelps, then counsel to PSI.

David P. Singleyn, age 37, a certified public accountant, has been
employed by PSI since 1989 and became Vice President and Treasurer of PSI in
November 1995. From 1987 to 1989, Mr. Singelyn was Controller of Winchell's
Donut Houses, L.P.

Sarah Hass, age 43, became Secretary of PSI in February 1992. She
became a Vice President of PSI in November 1995. She joined PSI's legal
department in June 1991, rendering services on behalf of PSI. From 1987 until
May 1991, her professional corporation was a partner in the law firm of Sachs &
Phelps, then counsel to PSI, and from April 1986 until June 1987, she was
associated with that firm, practicing in the area of securities law. From
September 1979 until September 1985, Ms. Hass was associated with the law firm
of Rifkind & Sterling, Incorporated.

Robert J. Abernethy, age 59, has been President of American Standard
Development Company and of Self-Storage Management Company, which develop and
operate mini-warehouses, since 1976 and 1977, respectively. Mr. Abernethy has
been a director of PSI since its organization in 1980. He is a member of the
board of trustees of Johns Hopkins University and a director of Marathon
National Bank. Mr. Abernethy is a former member of the board of directors of the
Los Angeles County Metropolitan Transportation Authority and the Metropolitan
Water District of Southern California and a former Planning Commissioner and
Telecommunications Commissioner and former Vice-Chairman of the Economic
Development Commission of the City of Los Angeles.

Dann V. Angeloff, age 63, has been President of the Angeloff Company, a
corporate financial advisory firm, since 1976. The Angeloff Company has
rendered, and is expected to continue to render, financial advisory and
securities brokerage services for PSI. Mr. Angeloff is the general partner of a
limited partnership that owns a mini-warehouse operated by PSI and which secures
a note owned by PSI. Mr. Angeloff has been a director of PSI since its
organization in 1980. He is a director of Balboa Capital Corporation,
Compensation Resource Group, Nicholas/Applegate Growth Equity Fund,
Nicholas/Applegate Mutual Funds, ReadyPac Produce, Inc., Royce Medical Company,
SupraLife International and WorldxChange Communications, Inc. He was a director
of SPI from 1989 until June 1996.

William C. Baker, age 65, became a director of PSI in November 1991.
Since January 1999, Mr. Baker has been President and Chief Executive Officer of
Los Angeles Turf Club, Incorporated, which operates the Santa Anita Racetrack
and is wholly-owned subsidiary of Magna International Inc. Since August 1998, he
has been President of Meditrust Operating Company, a paired share real estate
investment trust. From November 1997 until December 1998, he was Chairman of the
Board and Chief Executive Officer of The Santa Anita Companies, Inc., a
wholly-owned subsidiary of Meditrust Operating Company which then operated the
Santa Anita Racetrack. From August 1996 until November 1997, he was Chairman of
the Board and Chief Executive Officer of Santa Anita Operating Company and
Chairman of the Board of Santa Anita Realty Enterprises, Inc., the companies
which were merged with Meditrust in November 1997. From April 1993 through May
1995, Mr. Baker was President of Red Robin International, Inc., an operator and
franchiser of casual dining restaurants in the United States and Canada. From
January 1992 through December 1995 he was Chairman and Chief Executive Officer
of Carolina Restaurant Enterprises, Inc., a franchisee of Red Robin
International, Inc. Since 1991, he has been Chairman of the Board of Coast
Newport Properties, a real estate brokerage company. From 1976 to 1988, he was a
principal shareholder and Chairman and Chief Executive Officer of Del Taco,
Inc., an operator and franchiser of fast food restaurants in California. Mr.
Baker is a director of Callaway Golf Company and Meditrust Operating Company.

Thomas J. Barrack, Jr., age 51, became a director of PSI in February
1998. Mr. Barrack has been the Chairman and Chief Executive Officer of Colony
Capital, Inc. since September, 1991. Colony Capital, Inc. is one of the largest
real estate investors in America, having acquired properties in the U.S., Europe
and Asia. Prior to founding Colony Capital, Inc., from 1987 to 1991, Mr. Barrack
was a principal with the Robert M. Bass Group, Inc., the principal investment
vehicle for Robert M. Bass of Fort Worth, Texas. From 1985 to 1987, Mr. Barrack
was President of Oxford Ventures, Inc., a Canadian-based real estate development

<PAGE>

company. From 1984 to 1985 he was a Senior Vice President at E. F. Hutton
Corporate Finance in New York. Mr. Barrack was appointed by President Ronald
Reagan as Deputy Under Secretary at the U.S. Department of the Interior from
1982 to 1983. Mr. Barrack currently is a director of Continental Airlines, Inc.,
Harvey's Acquisition Corp. and Kennedy-Wilson, Inc.

Uri P. Harkham, age 50, became a director of PSI in March 1993. Mr.
Harkham has been the President and Chief Executive Officer of the Jonathan
Martin Fashion Group, which specializes in designing, manufacturing and
marketing women's clothing, since its organization in 1976. Since 1978, Mr.
Harkham has been the Chairman of the Board of Harkham Properties, a real estate
firm specializing in buying and managing fashion warehouses in Los Angeles.

Daniel C. Staton, age 46, became a director of PSI on March 12, 1999 in
connection with the merger of Storage Trust Realty, a real estate investment
trust, with PSI. Mr. Staton was Chairman of the Board of Trustees of Storage
Trust Realty from February 1998 until March 12, 1999 and a Trustee of Storage
Trust Realty from November 1994 until March 12, 1999. He is President of Walnut
Capital Partners, an investment and venture capital company. Mr. Staton was the
Chief Operating Officer and Executive Vice President of Duke Realty Investments,
Inc. from 1993 to 1997. He has been a director of Duke Associates, the
predecessor of Duke Realty Investments, Inc. Prior to joining Duke Associates in
1981, he was a partner and general manager of he own moving company, Gate way
Van & Storage, Inc. in St. Louis, Missouri. From 1986 to 1988, Mr. Staton served
as president of the Greater Cincinnati Chapter of the National Association of
Industrial and Office Parks.

Pursuant to Articles 16 and 22 of the Partnership's Certificate and
Agreement of Limited Partnership, a copy of which is included in the
Partnership's prospectus included in the Partnership's Registration Statement
File No. 2-57750, each of the General Partners continues to serve until (i)
retirement, withdrawal, adjudication of bankruptcy, insolvency or dissolution,
or (ii) removal by a majority vote of the limited partners.

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

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

SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on a review of the reports filed under Section 16(a) of the
Securities Exchange Act of 1934 with respect to the units that were submitted to
the Partnership, the Partnership believes that with respect to the fiscal year
ended December 31, 1998, B. Wayne Hughes, Jr. And Thomas J. Barrak, Jr., each of
whom is a director of PSI, a General Partner of the Partnership, each filed his
Initial Statement of Beneficial Ownership of Securities on Form 3 after its due
date.

ITEM 11. EXECUTIVE COMPENSATION.

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

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

(a) At March 10, 1999, the following persons beneficially owned
more than 5% of the Units:

Title Name and Address Percent
of Class of Beneficial Owner Beneficial Ownership of Class
- -------------------- -------------------------- -------------------- --------
Units of Limited Public Storage, Inc. 5,735 Units (1) 28.7%
Partnership Interest 701 Western Ave.
Glendale, California 91201

Units of Limited B. Wayne Hughes, 6,273 Units (2) 31.4%
Partnership Interest Tamara Hughes Gustavson,
PS Orangeco. Inc.
701 Western Ave.
Glendale, California 91201

(1) Includes (i) 5,630 Units owned by PSI as to which PSI has sole voting and
dispositive power, (ii) 25 Units which PSI has an option to acquire from
Hughes and (iii) 80 Units which PSI has an option to acquire from Tamara
Hughes Gustavson, an adult daughter of Hughes.

(2) Includes (i) 6,025 Units owned by BWH Marina Corporation II, a corporation
wholly-owned by Hughes, as to which Hughes has sole voting and dispositive
power; PSI has an option to acquire 25 of these Units, (ii) 80 Units owned
by Tamara Hughes Gustavson as to which Tamara Hughes Gustavson has sole
voting and dispositive power; PSI has an option to acquie these 80 Units,
and (iii) 168 Units owned by PS Orangeco, Inc., a corporation which common
stock (representing 5% of the equity) is owned by Hughes and member of his
family and whose non-voting preferred stock (representing 95% of the
equity) is owned by PSI, and as to which Units PS Orangeco, Inc. and Hughes
share voting and dispositive power.

(b) The Partnership has no officers and directors.

The General Partners (or their predecessor-in-interest) have
contributed $101,010 to the capital of the Partnership and as a result
participates in the distributions to the limited partners and in the
Partnership's profits and losses in the same proportion that the General
Partners' capital contribution bears to the total capital contribution.
Information regarding ownership of Units by PSI and Hughes, the General
Partners, is set forth under section (a) above. The directors and executive
officers of PSI (including Hughes), as a group (17 persons), beneficially own an
aggregate of 6,211 Units, representing 31.1% of the Units (including the 6,025
Units owned by Hughes and the 168 Units owned by PS Orangeco, Inc. as to which
Hughes shares voting and dispositive power as set forth above).

(c) The Partnership knows of no contractual arrangements, the
operation of the terms of which may at a subsequent date result in a change in
control of the Partnership, except for articles 16, 17 and 21.1 of the
Partnership's Amended Certificate and Agreement of Limited Partnership (the
"Partnership Agreement"), a copy of which is included in the Partnership's
prospectus included in the Partnership's Registration Statement File No.
2-57750. Those articles provide, in substance, that the limited partners shall
have the right, by majority vote, to remove a general partner and that a general
partner may designate a successor with the consent of the other general partner
and a majority of the limited partners.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Partnership Agreement provides that the General Partners will be
entitled to cash incentive distributions in an amount equal to (i) 8% of
distributions of cash flow from operations until the distributions to all
partners from all sources equal their capital contributions; thereafter, 25% of
distributions of cash flow from operations, and (ii) 25% of distributions from
net proceeds from sale and financing of the Partnership's properties remaining
after distribution to all partners of any portion thereof required to cause
distributions to partners from all sources to equal their capital contributions.
During 1985, the partners received cumulative distributions equal to their
capital contributions. During 1997, there were no incentive distributions paid
by the Partnership.

<PAGE>

The Partnership has a Management Agreement with PSI (as
successor-in-interest to PSMI). Under the Management Agreement, the Partnership
pays PSI a fee of 6% of the gross revenues of the mini-warehouse properties
operated for the Partnership. During 1998, the Partnership paid fees of $277,000
to PSI pursuant to the Management Agreement.

PART IV

ITEM 14. EXHIBITS. FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) List of Documents filed as part of the Report.

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

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

3. Exhibits: See Exhibit Index contained below.

(b) Reports on Form 8-K: No reports on Form 8-K were filed during
the last quarter of fiscal 1996.

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.

EXHIBIT INDEX
(Item 14(c))

3.1 Amended Certificate and Agreement of Limited Partnership. Previously
filed with the Securities and Exchange Commission as Exhibit A to the
Partnership's Prospectus included in Registration Statement No. 2-57750
and incorporated herein by reference.

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

10.2 Loan documents dated August 28, 1987 between the Partnership and The
Travelers Insurance Company. Previously filed with the Securities and
Exchange Commission as an exhibit to the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1993 and incorporated herein
by reference.

10.3 Modified loan documents dated September 1, 1993 between the Partnership
and The Travelers Insurance Company. Previously filed with the
Securities and Exchange Commission as an exhibit to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.

10.4 Loan documents dated June 30, 1994 between the Partnership and Wells
Fargo Bank. Previously filed with the Securities and Exchange
Commission as an exhibit to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1994 and incorporated herein by
reference.

10.5 Loan documents dated January 26, 1996 between the Partnership and
Public Storage, Inc. Previously filed with the Securities and Exchange
Commission as an exhibit to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated herein by
reference.

10.6 Loan documents dated January 27, 1997 between the Partnership and
Public Storage, Inc. Previously filed with the Securities and Exchange
Commission as an exhibit to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1996 and incorporated herein by
reference.

10.7 Loan documents dated January 27, 1998 between the Partnership and
Public Storage, Inc. Filed herewith. Previously filed with the
Securities and Exchange Commission as an exhibit to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1997 and
incorporated herein by reference.

10.8 Credit Agreement dated October 23, 1998 between Public Storage
Properties, Ltd. and First Union Bank. Previously filed with the
Securities and Exchange Commission as an exhibit to the Partnership's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998
and incorporated herein by reference.

10.9 Interest Rate Swap Confirmation dated October 26, 1998 by and between
Public Storage Properties, Ltd. and first Union National Bank expires
on October 23, 2001. Previously filed with the Securities and Exchange
Commission as an exhibit to the Partnership's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998 and incorporated herein
by reference.

10.10 Interest Rate Swap Confirmation dated October 27, 1998 by and between
Public Storage Properties, Ltd. and first Union National Bank expires
on October 23, 2000. Previously filed with the Securities and Exchange
Commission as an exhibit to the Partnership's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998 and incorporated herein
by reference.

27 Financial Data Schedule. Filed herewith.

<PAGE>

SIGNATURES

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

PUBLIC STORAGE PROPERTIES, LTD.
a California Limited Partnership

Dated: March 31, 1999 By: Public Storage, Inc., General Partner

By: /s/ B. Wayne Hughes
--------------------------------------
B. Wayne Hughes, Chairman of the Board

By: /s/ B. Wayne Hughes
--------------------------------------
B. Wayne Hughes, General Partner

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

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

<S> <C> <C>
/s/ B. Wayne Hughes Chairman of the Board and Chief Executive March 31, 1999
- ---------------------------- Officer of Public Storage, Inc. (principal
B. Wayne Hughes executive officer)

/s/ Harvey Lenkin President and Director March 31, 1999
- ---------------------------- of Public Storage, Inc.
Harvey Lenkin

/s/ B. Wayne Hughes, Jr. Vice President and Director March 31, 1999
- ---------------------------- of Public Storage, Inc.
B. Wayne Hughes, Jr.

/s/ John Reyes Senior Vice President and Chief Financial March 31, 1999
- ---------------------------- Officer of Public Storage, Inc.
John Reyes (principal financial officer and principal
accounting officer)

/s/ Robert J. Abernethy Director of Public Storage, Inc. March 31, 1999
- ----------------------------
Robert J. Abernethy

/s/ Dann V. Angeloff Director of Public Storage, Inc. March 31, 1999
- ----------------------------
Dann V. Angeloff

/s/ William C. Baker Director of Public Storage, Inc. March 31, 1999
- ----------------------------
William C. Baker

Director of Public Storage, Inc.
- ----------------------------
Thomas J. Barrack, Jr.

/s/ Uri P. Harkham Director of Public Storage, Inc. March 31, 1999
- ----------------------------
Uri P. Harkham

Director of Public Storage, Inc.
- ----------------------------
Daniel C. Staton

</TABLE>

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
INDEX TO
FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULE
(Item 14 (a))

Page
References
----------

Report of Independent Auditors F-1

Financial Statements and Schedule:

Balance Sheets as of December 31, 1998 and 1997 F-2

For the years ended December 31, 1998, 1997 and 1996:

Statements of Income F-3

Statements of Partners' Deficit F-4

Statements of Cash Flows F-5

Notes to Financial Statements F-6 - F-9

Schedule:

III - Real Estate and Accumulated Depreciation F-10 - F-11

All other schedules have been omitted since the required information is
not present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements or the notes thereto.

<PAGE>

Report of Independent Auditors

The Partners
Public Storage Properties, Ltd.

We have audited the accompanying balance sheets of Public Storage Properties,
Ltd. as of December 31, 1998 and 1997, and the related statements of income,
partners' deficit and cash flows for each of the three years in the period ended
December 31, 1998. Our audits also included the schedule listed in the index at
item 14(a). These financial statements and schedule are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Public Storage Properties, Ltd.
at December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. Also, in our opinion,
the related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

ERNST & YOUNG LLP

February 26, 1999
Los Angeles, California

F-1

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
BALANCE SHEETS
December 31, 1998 and 1997

<TABLE>
<CAPTION>
1998 1997
----------------- ----------------

ASSETS
------

<S> <C> <C>
Cash and cash equivalents $ 248,000 $ 546,000
Rent and other receivables 36,000 46,000

Real estate facilities, at cost:
Building, land improvements and equipment 8,440,000 8,001,000
Land 2,511,000 2,511,000
----------------- ----------------
10,951,000 10,512,000

Less accumulated depreciation (5,990,000) (5,492,000)
----------------- ----------------
4,961,000 5,020,000

Other assets 104,000 148,000
----------------- ----------------

Total assets $ 5,349,000 $ 5,760,000
================= ================

LIABILITIES AND PARTNERS' DEFICIT
---------------------------------

Accounts payable $ 96,000 $ 32,000
Deferred revenue 127,000 131,000
Note payable to affiliate - 300,000
Mortgage note - 13,793,000
Note payable to commercial bank 12,000,000 -

Partners' deficit:
Limited partners' deficit, $500 per unit, 20,000 units
authorized, issued and outstanding (5,104,000) (6,308,000)
General partners' deficit (1,770,000) (2,188,000)
----------------- ----------------

Total partners' deficit (6,874,000) (8,496,000)
----------------- ----------------

Total liabilities and partners' deficit $ 5,349,000 $ 5,760,000
================= ================

</TABLE>
See accompanying notes.
F-2

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
STATEMENTS OF INCOME
For each of the three years in the
period ended December 31, 1998

1998 1997 1996
------------------ ------------------ ------------------
REVENUES:

<S> <C> <C> <C>
Rental income $ 4,610,000 $ 4,321,000 $ 4,002,000
Other income 19,000 16,000 5,000
------------------ ------------------ ------------------

4,629,000 4,337,000 4,007,000
------------------ ------------------ ------------------
COSTS AND EXPENSES:

Cost of operations 1,078,000 977,000 967,000
Management fees paid to affiliate 277,000 259,000 220,000
Depreciation 498,000 446,000 402,000
Administrative 77,000 62,000 52,000
Interest expense 1,077,000 1,252,000 1,358,000
------------------ ------------------ ------------------

3,007,000 2,996,000 2,999,000
------------------ ------------------ ------------------

NET INCOME $ 1,622,000 $ 1,341,000 $ 1,008,000
================== ================== ==================

Limited partners' share of net income ($80.25 per
unit in 1998, $66.40 per unit in 1997, and
$49.90 per unit in 1996) $ 1,605,000 $ 1,328,000 $ 998,000

General partners' share of net income 17,000 13,000 10,000
------------------ ------------------ ------------------
$ 1,622,000 $ 1,341,000 $ 1,008,000
================== ================== ==================
</TABLE>
See accompanying notes.
F-3

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
STATEMENTS OF PARTNERS' DEFICIT
For each of the three years in the
period ended December 31, 1998

<TABLE>
<CAPTION>
Total Partners'
Limited Partners General Partners Deficit
------------------- ------------------- -------------------

<S> <C> <C> <C>
Balance at December 31, 1995 $ (8,052,000) $ (2,793,000) $ (10,845,000)

Net income 998,000 10,000 1,008,000

Equity transfer (250,000) 250,000 -
------------------- ------------------- -------------------

Balance at December 31, 1996 (7,304,000) (2,533,000) (9,837,000)

Net income 1,328,000 13,000 1,341,000

Equity transfer (332,000) 332,000 -
------------------- ------------------- -------------------

Balance at December 31, 1997 (6,308,000) (2,188,000) (8,496,000)

Net income 1,605,000 17,000 1,622,000

Equity transfer (401,000) 401,000 -
------------------- ------------------- -------------------
Balance at December 31, 1998 $ (5,104,000) $ (1,770,000) $ (6,874,000)
=================== =================== ===================
</TABLE>
See accompanying notes.
F-4

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
STATEMENTS OF CASH FLOWS
For each of the three years in the
period ended December 31, 1998

1998 1997 1996
--------------- --------------- ---------------
Cash flows from operating activities:

<S> <C> <C> <C>
Net income $ 1,622,000 $ 1,341,000 $ 1,008,000

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

Depreciation 498,000 446,000 402,000
Decrease (increase) in rent and other receivables 10,000 2,000 (6,000)
Amortization of prepaid management fees - - 138,000
Amortization of prepaid loan fees 110,000 33,000 33,000
Decrease (increase) in other assets (66,000) 19,000 (17,000)
Increase (decrease) in accounts payable 64,000 27,000 (72,000)
(Decrease) increase in deferred revenue (4,000) 13,000 (14,000)
--------------- --------------- ---------------

Total adjustments 612,000 540,000 464,000
--------------- --------------- ---------------

Net cash provided by operating activities 2,234,000 1,881,000 1,472,000
--------------- --------------- ---------------
Cash flows from investing activities:

Additions to real estate facilities (439,000) (280,000) (228,000)
--------------- --------------- ---------------

Net cash used in investing activities (439,000) (280,000) (228,000)
--------------- --------------- ---------------
Cash flows from financing activities:

Proceeds from note payable to affiliate 11,000,000 - -
Principal payments on note payable to affiliate (11,300,000) (600,000) (130,000)
Proceeds from note payable to commercial bank 12,400,000 - -
Principal payments on note payable to commercial bank (400,000) - -
Principal payments on mortgage note payable (13,793,000) (524,000) (1,134,000)
--------------- --------------- ---------------
Net cash used in financing activities (2,093,000) (1,124,000) (1,264,000)
--------------- --------------- ---------------

Net (decrease) increase in cash and cash equivalents (298,000) 477,000 (20,000)

Cash and cash equivalents at the beginning of the year 546,000 69,000 89,000
--------------- --------------- ---------------

Cash and cash equivalents at the end of the year $ 248,000 $ 546,000 $ 69,000
=============== =============== ===============
</TABLE>
See accompanying notes.
F-5

<PAGE>

PUBLIC STORAGE PROPERTIES, LTD.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998

1. DESCRIPTION OF PARTNERSHIP

Public Storage Properties, Ltd. (the "Partnership") was formed
with the proceeds of a public offering. The general partners in the
Partnership are Public Storage, Inc. ("PSI") and B. Wayne Hughes
("Hughes"). The Partnership owns nine mini-warehouse facilities located
in California.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS

Mini-Warehouse Facilities:
--------------------------

Cost of land includes appraisal fees and legal fees related to
acquisition and closing costs. Buildings, land improvements and
equipment reflect costs incurred through December 31, 1998 and 1997 to
develop mini-warehouse facilities which provide self-service storage
spaces for lease, usually on a month-to-month basis, to the general
public. The buildings and equipment are depreciated on a straight-line
basis over estimated useful lives of 25 and 5 years, respectively.

In 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" ("Statement 121"). Statement 121 requires impairment
losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The Partnership
has not identified any assets which indicate an impairment in the
carrying value of the asset is present.

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

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

Per unit data is based on the weighted average number of the
limited partnership units (20,000) outstanding during the period.

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

For financial statement purposes, the Partnership considers
all highly liquid investments purchased with a maturity of three months
or less to be cash equivalents.

Other Assets:
-------------

Included in other assets are deferred financing costs. In
1993, the Partnership incurred deferred financing costs of
approximately $246,000 in connection with the modification of its
mortgage note payable (Note 7). In October 1998 the mortgage note
payable was paid in full. The remaining balance of the financing costs
were fully amortized in 1998.

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

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

F-6

<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)

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

Substantially all of the Partnership's facilities were
acquired prior to the time that it was customary to conduct
environmental investigations in connection with property acquisitions.
During 1995, the Partnership completed environmental assessments of its
properties to evaluate the environmental condition of, and potential
environmental liabilities of such properties. These assessments were
performed by an independent environmental consulting firm. Although
there can be no assurance, the Partnership is not aware of any
environmental contamination of any of its property sites which
individually or in the aggregate would be material to the Partnership's
overall business, financial condition or results of operations.

Segement Reporting:
-------------------

Effective January 1, 1998, the Partnership adopted SFAS No.
131, "Disclosure about Segments of an Enterprise and Related
Information." SFAS No. 131 established standards for the way public
business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial
reports. SFAS No. 131 also establishes standards for related
disclosures about products and services, geographic areas and major
customers. The Partnership only has one reportable segment as defined
within SFAS No. 131, therefore the adoption of SFAS No. 131 had no
effect on the Partnership's disclosure.

Derivatives:
------------

In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, which is required to be adopted in years beginning after
June 15, 1999. Management does not anticipate that the adoption of the
new Statement will have a significant effect on earnings or the
financial position of the Partnership.

3. CASH DISTRIBUTIONS

The Partnership Agreement requires that cash available for
distribution (cash flow from all sources less cash necessary for any
obligations or capital improvement needs) be distributed at least
quarterly. Cash distributions have been suspended since the fourth
quarter of 1990 for debt service payments.

4. PARTNERS' DEFICIT

The general partners have a 1% interest in the Partnership. In
addition, the general partners have an 8% interest in cash
distributions attributable to operations (exclusive of distributions
attributable to sale and financing proceeds until the limited partners
recover all of their initial investment). Thereafter, the general
partners have a 25% interest in all cash distributions (including sale
and financing proceeds). In 1985, the limited partners recovered all of
their initial investment. All subsequent cash distributions are being
made 25.75% (including the 1% interest) to the general partners and
74.25% to the limited partners. Transfers of equity are made
periodically to conform the partners' equity accounts to the provisions
of the Partnership Agreement. These transfers have no effect on the
results of operations or distributions to partners.

Concurrent with the financing of the Partnership's properties
in 1987 (Note 7), the Partnership made a special distribution totaling
$20,202,000 to the partners. This special distribution had no effect on
the Partnership's taxable income, however, resulted in a deficit in the
limited and general partners' equity accounts.

F-7

<PAGE>

5. RELATED PARTY TRANSACTIONS

The Partnership has a Management Agreement with PSI (as
successor-in-interest to PSMI). Under the terms of the agreement, PSI
operates the mini-warehouse facilities for a fee equal to 6% of the
facilities' gross revenue (as defined).

In November 1995, the Management Agreement was amended to
provide that upon demand from PSI or PSMI made prior to December 15,
1995, the Partnership agreed to prepay (within 15 days after such
demand) up to 12 months of management fees (based on the management
fees for the comparable period during the calendar year immediately
preceding such prepayment) discounted at the rate of 14% per year to
compensate for early payment.

See footnote 7, on related party note payable.

6. TAXES BASED ON INCOME

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

Unaudited taxable net income was $1,763,000, $1,553,000 and
$1,122,000 for the years ended December 31, 1998, 1997 and 1996,
respectively. The difference between taxable net income and net income
is primarily related to depreciation expense resulting from difference
in depreciation methods.

7. NOTES PAYABLE

Notes payable at December 31, 1998 and 1997 consist of the
following:

<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
8.25% mortgage note payable to an insurance company
with principal and interest of $141,000 due monthly. $ - $ 13,793,000

Unsecured note payable to affiliate, bearing interest at
the prime rate plus 1%, payable monthly, and requiring 50,000
principal payments; remaining principal due July 1, 1998. - 300,000

Unsecured note payable to a commercial bank bearing
interest at the London Interbank Offering Rate ("LIBOR)
plus 0.55%. The loan requires monthly payments of
interest and matures October 2002. 12,000,000 -
--------------- ---------------

$ 12,000,000 $ 14,093,000
=============== ===============

</TABLE>

During 1987, the Partnership financed all of its properties
with a $20,885,000, nonrecourse note secured by the Partnership's
properties which was scheduled to mature in 1994. In September 1993,
the Partnership and the lender modified the terms of the note whereby
(i) the Partnership was required to make a $5,000,000 principal
repayment, (ii) the interest rate was reduced from 10.25% to 8.25% per
annum, and (iii) the maturity date was extended from September 1, 1994
to September 1, 2001.

In January 1996 the Partnership obtained a $1,510,000 loan
from PSI to repay and terminate the unsecured note payable to a
commercial financial bank. The PSI loan bears interest at the prime
rate plus 1%, payable monthly, in addition to monthly principal
payments of $50,000. In March 1998, the Partnership paid the remaining
balance of the loan.

F-8

<PAGE>

7. NOTES PAYABLE (CONTINUED)

On June 1, 1998, the Partnership paid down its mortgage note
with a third party lender by $11,641,000. The payment was made from
cash reserves and an $11,000,000 loan from Public Storage, Inc. The
loan from Public Storage, Inc. bears interest at the fixed rate of 7.3%
and matures June 1999. The loan calls for monthly payments of interest
only. Principal may be paid at anytime without penalty. Public Storage,
Inc. has also provided the Partnership with options to extend the loan
term through June 2003. Interest paid to Public Storage, Inc. in 1998
was $317,000.

During October 1998, the Partnership borrowed $12,400,000 from
a commercial bank to payoff the loan from Public storage, Inc. and the
mortgage note with a third party. The loan is unsecured and bears
interest at the London Interbank Offering Rate ("LIBOR") plus 0.55%
(5.61% as of December 31, 1998). The loan requires monthly payments of
interest and mature October 2002. Principal may be paid, in whole or in
part, at any time without penalty or premium. The loan proceeds were
used to pay off the Partnership's existing indebtedness.

The Partnership also entered into interest rate swap
agreements to reduce the impact of changes in interest rates on a
portion of its floating rate debt. The agreement, which covers
$5,000,000 of debt through October 2000, effectively changes the
interest rate exposure from floating rate to a fixed rate of 5.205%.
The second agreement, which covers $2,500,000 of debt through October
2001 and effectively changes the interest rate exposure from floating
rate to a fixed rate of 5.33%. Market gains and losses on the value of
the swap are deferred and included in income over the life of the
contract. The Partnership records the differences paid or received on
the interest rate swap in interest expense as payments are made or
received. The unrealized loss of the interest rate swaps if required to
be liquidated at December 31, 1998 was approximatley $3,000.

The estimated fair value of the Partnership's notes payable as
of December 31, 1998 are their current outstanding balances. This value
is based on notes currently available with similar terms and remaining
maturities.

Interest paid on the notes was $933,000, $1,219,000 and
$1,325,000 for the years ended December 31, 1998, 1997 and 1996,
respectively.

F-9

<PAGE>

Public Storage Properties, Ltd.
Schedule III - Real Estate and Accumulated Depreciation

Initial Cost
----------------------------
Costs
Building, Subsequent to
Land Imp & construction
Description Encumbrances Land Equipment (Improvements)
- ----------------------- ----------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Corona $ - $ 155,000 $ 757,000 $ 186,000

Fremont - 112,000 741,000 301,000
Milpitas - 198,000 649,000 174,000
Norco - 95,000 456,000 88,000
North Hollywood - 314,000 553,000 192,000
Pasadena - 327,000 515,000 217,000
Sun Valley - 329,000 611,000 256,000
Wilmington - 815,000 1,336,000 437,000
Whittier - El Monte - 166,000 763,000 208,000
----------------- ------------- ------------- -------------
$ 12,000,000(1) $ 2,511,000 $ 6,381,000 $ 2,059,000
================= ============= ============= =============
</TABLE>

<TABLE>
<CAPTION>
Gross Carrying Amount
at December 31, 1998
-----------------------------------------

Building,
Land Imp & Accumulated Date
Description Land Equipment Total Depreciation Completed
- ----------------------- ------------ ------------- ------------ -------------- ---------

<S> <C> <C> <C> <C> <C>
Corona $ 155,000 $ 943,000 $ 1,098,000 $ 665,000 12/78

Fremont 112,000 1,042,000 1,154,000 750,000 11/78
Milpitas 198,000 823,000 1,021,000 573,000 11/78
Norco 95,000 544,000 639,000 392,000 12/78
North Hollywood 314,000 745,000 1,059,000 470,000 12/79
Pasadena 327,000 732,000 1,059,000 524,000 08/78
Sun Valley 329,000 867,000 1,196,000 655,000 10/78
Wilmington 815,000 1,773,000 2,588,000 1,279,000 08/78
Whittier - El Monte 166,000 971,000 1,137,000 682,000 07/78
------------ ------------- ----------- --------------
$ 2,511,000 $ 8,440,000 $ 10,951,000 $ 5,990,000
============ ============= ============ ==============
</TABLE>

(1) All nine properties are encumbered by a promissory note. The
$12,000,000 listed above is the principal balance remaining on the note
at December 31, 1998.

F-10

<PAGE>

Public Storage Properties, Ltd.

Real Estate Reconciliation

Schedule III (continued)

(a) The following is a reconciliation of costs and related accumulated
depreciation:

COST

1998 1997 1996
----------- ----------- -----------

Balance at the beginning of the period $10,512,000 $10,232,000 $10,004,000

Additions during the period

Improvements 439,000 280,000 228,000

Deductions during the period - -
----------- ----------- -----------

Balance at the close of the period $10,951,000 $10,512,000 $10,232,000
=========== =========== ===========

ACCUMULATED DEPRECIATION RECONCILIATION

1998 1997 1996
----------- ----------- -----------
Balance at the beginning of the period $5,492,000 $5,046,000 $4,644,000

Additions during the period

Depreciation 498,000 446,000 402,000
----------- ----------- -----------

Balance at the close of the period $5,990,000 $5,492,000 $5,046,000
=========== =========== ===========

(b) The aggregate depreciable cost of real estate (excluding land) for Federal
income tax purposes is $3,202,000 (unaudited).

F-11

<ARTICLE> 5
<CIK> 0000202953
<NAME> Public Storage Properties, Ltd.
<MULTIPLIER> 1
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Dec-31-1998
<EXCHANGE-RATE> 1
<CASH> 248,000
<SECURITIES> 0
<RECEIVABLES> 36,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 388,000
<PP&E> 10,951,000
<DEPRECIATION> (5,990,000)
<TOTAL-ASSETS> 5,349,000
<CURRENT-LIABILITIES> 223,000
<BONDS> 12,000,000
0
0
<COMMON> 0
<OTHER-SE> (6,874,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,349,000
<SALES> 0
<TOTAL-REVENUES> 4,629,000
<CGS> 0
<TOTAL-COSTS> 1,355,000
<OTHER-EXPENSES> 575,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,077,000
<INCOME-PRETAX> 1,622,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,622,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,622,000
<EPS-PRIMARY> 80.25
<EPS-DILUTED> 80.25

</TABLE>