PS PARTNERS V LTD, 10-K405, 1998-03-30

PS PARTNERS V LTD
10-K405, 1998-03-30
LESSORS OF REAL PROPERTY, NEC

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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, 1997
-----------------

[ ] 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 0-14476
-------

PS PARTNERS V, LTD., a California Limited Partnership
-------------------------------------------------------
(Exact name of registrant as specified in its charter)

California 95-3979727
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

701 Western Avenue
Glendale, California 91201-2394
- ----------------------------------- --------------------
(Address of principal executive (Zip Code)
offices)

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. [ X ]

- -------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE

NONE

<PAGE>
PART I

ITEM 1. BUSINESS.
---------

General
- -------
PS Partners V, Ltd. (the "Partnership") is a publicly held limited
partnership under the California Revised Limited Partnership Act. Commencing in
June 1985, 148,000 units of limited partnership interest (the "Units") were
offered to the public in an interstate offering. The offering was completed in
November 1985.

The Partnership was formed to invest in and operate existing self-service
facilities offering storage space for personal and business use (the
"mini-warehouses") and to invest up to 40% of the net proceeds of the offering
in and operate existing office and industrial properties. The Partnership's
investments were made through general partnerships with Storage Equities, Inc.,
now known as Public Storage, Inc. ("PSI"), a real estate investment trust
("REIT") organized as a corporation under the laws of California. For tax
administrative efficiency, the original general partnerships with PSI were
consolidated into a single general partnership effective December 31, 1990.

In 1995, there was a series of mergers among Public Storage Management,
Inc. (which was the Partnership's mini-warehouse operator), Public Storage, Inc.
and their affiliates (collectively, "PSMI"), culminating in the November 16,
1995 merger (the "PSMI Merger") of PSMI into Storage Equities, Inc. In the PSMI
Merger, Storage Equities, Inc. was renamed Public Storage, Inc. and it acquired
substantially all of PSMI's United States real estate operations and became the
operator of the Partnership's mini-warehouse properties.

The Partnership's general partners (the "General Partners") are PSI and B.
Wayne Hughes ("Hughes"). PSI became a co-general partner in September 1993, when
PSI acquired the interest of PSI Associates, Inc. ("PSA"), an affiliate of PSMI,
relating to PSA's general partner capital contribution in the Partnership.
Hughes has been a general partner of the Partnership since its inception. Hughes
is the chairman of the board and chief executive officer of PSI, and Hughes and
members of his family (the "Hughes Family") are the major shareholders 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 management or conduct of its
business affairs.

The Partnership's mini-warehouse properties are managed by PSI pursuant to
a Management Agreement. PSI believes that it is the largest operator of
mini-warehouse facilities in the United States.

Through 1996, the Partnership's commercial property was managed by Public
Storage Commercial Properties Group, Inc. ("PSCPG") pursuant to a Management
Agreement. In January 1997, the Partnership and PSI and other related
partnerships transferred a total of 35 business parks to PS Business Parks, L.P.
("PSBPLP"), formerly known as American Office Park Properties, L.P., an
operating partnership formed to own and operate business parks in which PSI has
a significant interest. Included among the properties transferred were the
Partnership's business parks in exchange for a partnership interest in PSBPLP.
Until March 17, 1998, the general partner of PSBPLP was American Office Park
Properties, Inc., an affiliate of PSI. On March 17, 1998, American Office Park
Properties, Inc. was merged into Public Storage Properties XI, Inc., which
changed its name to PS Business Parks, Inc. ("PSBP"). PSBP is a REIT affiliated
with PSI, and is publicly traded on the American Stock Exchange. As a result of
the merger, PSBP became the general partner of PSBPLP (which changed its name
from American Office Park Properties, L.P. to PS Business Parks, L.P.). See Item
13.

PSI's current relationship with the Partnership includes (i) the joint
ownership of 32 of the Partnership's 33 properties (which excludes the
properties transferred to PSBPLP in January 1997), (ii) PSI is a co-general
partner along with Hughes, who is chairman of the board and chief executive
officer of PSI, (iii) as of December 31, 1997, PSI owned approximately 60.79% of
the Partnership's limited partnership units and (iv) PSI is the operator of the
Partnership's mini-warehouse facilities.

2
<PAGE>

Investments in Facilities
- -------------------------
The Partnership owns interests in 33 properties (excluding the properties
transferred to PSBPLP in January 1997); 32 of such properties are held in a
general partnership comprised of the Partnership and PSI. The Partnership
purchased its last property in July, 1986. Reference is made to the table in
Item 2 for a summary of information about the Partnership's properties.

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
- ---------------
Mini-warehouses, which comprise the majority of the Partnership's
investments, 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 235 to 1,469 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.

Commercial Properties
- ---------------------
Through 1996, the Partnership owned and operated two business parks; one in
San Diego, California and one in Culver City, California. These properties were
transferred to PSBPLP in January 1997 in exchange for a partnership interest in
PSBPLP.

Investment Objectives and Polices; Sale or Financing of Investments
- -------------------------------------------------------------------
The Partnership's objectives are to (i) preserve and protect invested
capital, (ii) maximize the potential for appreciation in value of its
properties, (iii) provide Federal income tax deductions so that during the early
years of property operations a portion of cash distributions may be treated as a
return of capital for tax purposes, and therefore, may not represent taxable
income to the limited partners and (iv) provide for cash distributions from
operations.

3
<PAGE>

The Partnership will terminate on December 31, 2038 unless dissolved
earlier. Under the terms of the general partnership agreement with PSI, PSI has
the right to require the Partnership to sell all of the joint venture properties
(see Item 12(c)). The General Partners have no present intention to seek the
liquidation of the Partnership because they believe that it is not an opportune
time to sell mini-warehouses. Although the General Partners originally
anticipated a liquidation of the Partnership in 1993-1996, since the completion
of the Partnership's offering in 1985, significant changes have taken place in
the financial and real estate markets that must be taken into account in
considering the timing of any proposed sale or financing, including: (i) the
increased construction of mini-warehouses from 1984 to 1988, which has increased
competition, (ii) the general deterioration of the real estate market (resulting
from a variety of factors, including changes in tax laws), which has
significantly affected property values and decreased sales activities and (iii)
the reduced sources of real estate financing.

The Partnership engaged Lawrence R. Nicholson, MAI, a principal with the
firm of Nicholson-Douglas Realty Consultants, Inc. ("NDRC") to perform a limited
investigation and appraisal of the Partnership's property portfolio. In a letter
appraisal report dated December 31, 1996, NDRC indicated that, based on the
assumptions contained in the report, the aggregate market value of the
Partnership's 35 properties (consisting not only of the Partnership's interest
but also including PSI's interest), as of November 30, 1996, was $99,300,000
($85,100,000 for the 33 mini-warehouses and $14,200,000 for the 2 business
parks). (In January 1997, after the date of the appraisal, the Partnership
transferred its business parks to AOPPLP in exchange for a 10.4% interest in
AOPPLP.) NDRC's report is limited in that NDRC did not inspect the properties
and relied primarily upon the income capitalization approach in arriving at its
opinion. NDRC's aggregate value conclusion represents the 100% property
interests, and although not valued separately, includes both the interest of the
Partnership in the properties, as well as the interest of PSI, which owns a
joint venture interest (ranging from about 50% to 90%) in 33 of the 35
properties. The analytical process that was undertaken in the appraisal included
a review of the properties' unit mix, rental rates and historical financial
statements. Following these reviews, a stabilized level of net operating income
was projected for the properties (an aggregate of $8,312,000 for the 33
mini-warehouses and $1,606,000 for the 2 business parks). In the case of the
mini-warehouses, value estimates were then made using both a direct
capitalization analysis ($86,600,000) and a discounted cash flow analysis
($85,000,000). In applying the discounted cash flow analysis to the
mini-warehouses, projections of cash flow from each property were developed for
an 11-year period ending in the year 2007. Growth rates for income and expenses
were assumed to be 3.5% per year. NDRC then used a terminal capitalization rate
of 10.0% to capitalize each property's 11th year net operating income into a
residual value at the end of the holding period. The ten yearly cash flows plus
the residual or reversionary proceeds net of sales costs were then discounted to
present worth using a discount rate of 12.5%. In the direct capitalization
analysis, NDRC applied a 9.5% capitalization rate to the mini-warehouses'
stabilized net operating income. These value estimates were then compared to an
estimated value ($84,500,000) using a regression analysis applied to
approximately 300 sales of mini-warehouses to evaluate the reasonableness of the
estimates using the direct capitalization and discounted cash flow analysis.

The business parks were valued using a direct capitalization analysis by
applying a 10.5% capitalization rate to the business parks' stabilized net
operating income and then making adjustments for any necessary capital
improvements and stabilization costs. NDRC has prepared other appraisals for the
General Partners and their affiliates and is expected to continue to prepare
appraisals for the General Partners and their affiliates. No environmental
investigations were conducted with respect to the limited investigation of the
Partnership's properties. Accordingly, NDRC's appraisal did not take into
account any environmental cleanup or other costs that might be incurred in
connection with a disposition of the properties. Although there can be no
assurance, based on recently completed environmental investigations (see Item
2), the Partnership is not aware of any environmental contamination of its
facilities material to its overall business or financial condition. In addition
to assuming compliance with applicable environmental laws, the appraisal also
assumed, among other things, compliance with applicable zoning and use
regulations and the existence of required licenses.

Limited Partners should recognize that appraisals are opinions as of the
date specified, are subject to certain assumptions and the appraised value of
4
<PAGE>

the Partnership's properties may not represent their true worth or realizable
value. There can be no assurance that, if these properties were sold, they would
be sold at the appraised values; the sales price might be higher or lower than
the appraised values.

In August 1997, PSI completed a cash tender offer, which had commenced in
June 1997, pursuant to which PSI acquired a total of 13,847 limited partnership
units at $355 per unit.

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. 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. 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
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. As of
December 31, 1997, the telephone reservation system was supporting rental
activity at all of the Partnership's properties. PSI's toll-free telephone
referral system services approximately 160,000 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. The weighted average occupancy levels at the
mini-warehouse facilities increased from 92% in 1996 to 93% in 1997. The
monthly average realized rent per occupied square foot for the
mini-warehouse facilities was $.69 in 1997 compared to $.65 in 1996. The
Partnership has increased rental rates in many markets where it has
achieved high occupancy levels and eliminated or minimized promotions.

* 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. In addition to the approximately 150
support personnel at the Public Storage corporate offices, there are
approximately 2,700 on-site personnel who manage the day-to-day operations
of the mini-warehouses in the Public Storage system. These on-site
personnel are supervised by 110 district managers, 15 regional managers and
3 divisional managers (with an average of 13 years experience in the

5
<PAGE>

mini-warehouse industry) who report to the president of the mini-warehouse
property operator (who has 14 years of experience with the Public Storage
organization). PSI carefully selects and extensively trains the operational
and support personnel and offers them a progressive career path. See
"Mini-warehouse Property Operator."

Mini-warehouse Property Operator
- --------------------------------
The Partnership's mini-warehouse properties are managed by PSI pursuant to
a Management Agreement.

Under the supervision of the Partnership, PSI coordinates the operation of
the facilities, establishes rental policies and rates, directs marketing
activity and directs 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, REITs 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 it operates. 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. 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.

Commercial Property Operator
- ----------------------------
Through 1996, the Partnership's commercial properties were managed by
PSCPG, now known as PS Business Parks, Inc., pursuant to a Management Agreement.
In January 1997, the Partnership transferred its commercial properties to PSBPLP
in exchange for a partnership interest.

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 are

6
<PAGE>

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's executive officers and directors 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 had 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 111 persons who render services on behalf of the Partnership.
These persons include resident managers, assistant managers, relief managers,
area managers, and administrative personnel. Some of these employees may be
employed on a part-time basis and may also be employed by other persons,
partnerships, REITs, or other entities owning facilities operated by PSI or
PSBPLP.

Impact of Year 2000
- -------------------
PSI has completed an initial assessment of its computer systems. The
majority of the computer programs were installed or upgraded over the past few
years and are Year 2000 compliant. Some of the older computer programs utilized
by PSI were written without regard for Year 2000 issues and could cause a system
failure or miscalculations with possible disruption of operations. Each of these
computer programs and systems has been evaluated to be upgraded or replaced as
part of PSI's Year 2000 project.

The cost of the Year 2000 project will be allocated to all entities that
use the PSI computer systems. The cost of the Year 2000 project which is
expected to be allocated to the Partnership is approximately $99,000. The cost
of new software will be capitalized and the cost of maintenance to existing
systems will be expensed as incurred.

The project is expected to be completed by March 31, 1999 which is prior to
any anticipated impact on operating systems. PSI believes that with
modifications to existing software and, in some instances, the conversion to new
software, the Year 2000 issue will not pose significant operational problems.
However, if such modifications are not made, or are not completed timely, the
Year 2000 issue could have a material impact on the operations of the
Partnership.

The costs of the project and the date on which PSI believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. There can be
no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated.

ITEM 2. PROPERTIES.
-----------
The following table sets forth information as of December 31, 1997 about
properties owned by the Partnership. All but one of these properties were
acquired jointly with PSI and were contributed to a general partnership
comprised of the Partnership and PSI.
<TABLE>
<CAPTION>

Net Number
Rentable of Date of Ownership
Location Square Feet Spaces Acquisition Percentage
- ------------------------------------- ------------------ ------------ --------------- -------------
CALIFORNIA
<S> <C> <C> <C> <C>
Brea E. 82,100 772 02/28/86 60.0%
Imperial Way
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>

Net Number
Rentable of Date of Ownership
Location Square Feet Spaces Acquisition Percentage
- ------------------------------------- ------------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
Costa Mesa 44,700 495 02/21/86 50.0%
Pomona Ave.
Sun Valley 47,500 482 01/08/86 50.0
Sheldon St.
Westlake Village
Agoura Rd. 36,000 303 05/09/86 60.0
COLORADO
Colorado Springs 45,100 433 07/15/86 100.0
Hollow Tree Ct.
Colorado Springs 58,800 578 02/19/86 50.0
N. Stinton Rd.
Denver 32,300 235 12/06/85 50.0
Leetsdale Ave.
FLORIDA
Jacksonville 31,800 348 03/12/86 60.0
Wiley Rd.
ILLINOIS
Skokie 49,200 457 02/27/86 50.0
McCormick Blvd.
MASSACHUSETTS
Brockton 49,800 441 12/03/85 50.0
Main St.
MISSOURI
St. Louis 44,200 383 03/28/86 69.7
Forder Rd.
NEVADA
Las Vegas 47,200 453 01/17/86 50.0
S. Highland Dr.
Reno 80,800 578 04/01/86 70.6
Telegraph Rd.
NEW JERSEY
Bordentown 30,500 290 01/16/86 50.0
Route 130
Eatontown 81,200 937 12/31/85 60.0
Highway 35
Mapleshade 55,400 517 01/16/86 50.0
Rudderow Ave.
NEW YORK
Amherst 32,000 316 12/31/85 50.0
Niagra Falls Blvd.
OKLAHOMA
Oklahoma City 35,500 284 02/20/86 60.0
N. Pennsylvania
Oklahoma City 32,900 280 02/28/86 60.3
NW 39th Expressway
PENNSYLVANIA
Whitehall 54,300 541 12/03/85 50.0
MacArthur Rd.

8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Net Number
Rentable of Date of Ownership
Location Square Feet Spaces Acquisition Percentage
- ------------------------------------- ------------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
TEXAS
Dallas 53,200 457 10/04/85 66.4%
Alvin St.
Dallas 64,600 660 10/04/85 66.4
S. Westmoreland
Ft. Worth 52,400 504 10/04/85 66.4
Cockrell St.
Ft. Worth 58,600 588 10/04/85 66.4
E. Seminary Dr.
Ft. Worth 54,400 529 10/04/85 66.4
W. Beach St.
San Antonio 52,400 494 10/04/85 66.4
Callaghan Rd.
San Antonio 53,400 510 10/04/85 66.4
Fredericksburg Rd.
San Antonio 54,000 528 10/04/85 66.4
Hackberry St.
San Antonio 56,300 561 10/04/85 66.4
Wetmore Rd.
San Antonio 48,700 530 10/04/85 66.4
Zarzamora Rd.
UTAH
Kearns 48,400 489 12/18/85 50.0
W. Sams Blvd.
WASHINGTON
Everett 83,300 1,020 11/07/85 50.0
Evergreen Way
Seattle 132,300 1,469 11/07/85 50.0
Empire Way South
</TABLE>

The weighted average occupancy level for the mini-warehouse facilities was
93% in 1997 compared to 92% in 1996. The monthly average realized rent per
square foot for the mini-warehouse facilities was $.69 in 1997 compared to $.65
in 1996.

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, an
independent environmental consulting firm completed environmental assessments
(which commenced in 1994) on the Partnership's properties to evaluate the
environmental condition of, and potential environmental liabilities of, such
properties. Based on the assessments, the Partnership believes that it is
probable that it will incur costs totaling $110,000 after December 31, 1997 for
known environmental remediation requirements. Although there can be no
assurance, the Partnership is not aware of any unaccrued 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.

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 1997.

9
<PAGE>

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 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 PSI has 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 limited partnership
interests (including the Units), including the prices at which such secondary
sales transactions are effectuated.

Exclusive of the General Partners' interest in the Partnership, as of
December 31, 1997, there were approximately 2,709 record holders of Units.

The Partnership makes quarterly distributions of all "Cash Available for
Distribution" and will make distributions of "Cash from Sales or Refinancing."
Cash Available for Distribution is cash flow from all sources less cash
necessary for any obligations or capital improvements or reserves.

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

10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
-----------------------
<TABLE>
<CAPTION>

For the Years Ended December 31,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
-------------------------------------------------------------------
(In thousands, except per Unit data)

<S> <C> <C> <C> <C> <C>
Revenues $ 14,470 $ 15,938 $ 15,770 $ 15,349 $ 14,276

Depreciation and amortization 2,619 3,793 3,603 3,537 3,771

Interest expense - 214 290 294 425

Net income 3,118 2,187 2,403 2,336 1,289

Limited partners' share 2,692 1,771 1,885 1,918 954

General partners' share 426 416 518 418 335

Limited partners' per unit data (a)

Net income $ 18.19 $ 11.97 $ 12.74 $ 12.96 $ 6.45

Cash distributions (b) $ 24.00 $ 24.00 $ 30.02 $ 24.00 $ 19.60

As of December 31,

Cash and cash equivalents $ 1,238 $ 453 $ 2,059 $ 1,794 $ 657

Total assets $ 69,738 $ 70,356 $ 74,525 $ 76,818 $ 78,462

Mortgage notes payable $ - $ - $ 2,935 $ 2,976 $ 3,014

a) Limited Partners' per unit data is based on the weighted average number of units (148,000) outstanding during the period.
b) The General Partners distributed, concurrent with the distribution for the
third quarter of 1995, a portion of the operating reserve of the
Partnership estimated to be $6.02 per Unit.

</TABLE>
11
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
----------------------------------------------------------------
Results of Operations
- ---------------------

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

The Partnership's net income was $3,118,000 in 1997 compared to $2,187,000
in 1996, representing an increase of $931,000, or 43%. Excluding the 1996
operations for the Partnership's business park facilities as compared to the
1997 equity in income of real estate partnership, the increase is due to an
increase in the Partnership's mini-warehouse operations, combined with a
decrease in interest expense, partially offset by an increase in minority
interest in income for those properties held in joint venture with PSI.

Rental income for the Partnership's mini-warehouse operations was
$13,595,000 in 1997 compared to $12,780,000 during 1996, representing an
increase of $815,000, or 6%. The increase in rental income was primarily
attributable to increased rental rates and occupancy rates at the mini-warehouse
facilities. The monthly average realized rent per square foot for the
mini-warehouse facilities was $.69 in 1997 compared to $.65 in 1996. The
weighted average occupancy levels at the mini-warehouse facilities increased to
93% in 1997 from 92% in 1996. Cost of operations (including management fees)
increased $204,000, or 4%, to $4,939,000 during 1997 from $4,735,000 in 1996.
This increase was primarily attributable to increases in property tax,
advertising, and management fee expenses, partially offset by a decrease in
repairs and maintenance expenses. Accordingly, for the Partnership's
mini-warehouse operations, property net operating income increased by $611,000,
or 8%, to $8,656,000 in 1997 from $8,045,000 in 1996.

The following table summarizes the Partnership's operating income, net of
depreciation, from its investment in PSBPLP during 1997 compared to that of the
exchanged business park facilities in 1996:

1997 1996
------------ ------------
Equity in earnings of real estate partnership $ 839,000 $ -
Rental income - 3,062,000
Cost of operations - 1,418,000
------------ ------------
Net operating income 839,000 1,644,000
Depreciation - 1,244,000
------------ ------------
Operating income, net of depreciation $ 839,000 $ 400,000
============ ============

The difference in operating income, net of depreciation, in 1997 and 1996
is primarily due to the effect of depreciation and an improvement in property
operations.

Depreciation and amortization attributable to the Partnership's
mini-warehouse facilities increased $70,000 from $2,549,000 in 1996 to
$2,619,000 in 1997. This increase was primarily attributable to the depreciation
of capital expenditures made during 1996 and 1997.

Minority interest in income was $3,653,000 in 1997 compared to $3,457,000
in 1996, representing an increase of $196,000, or 6%. This increase was
primarily attributable to an increase in operations at the Partnership's real
estate facilities owned jointly with PSI.

Interest expense in 1996 represents interest on the Partnership's mortgage
note payable that was paid off in September 1996.

Interest income decreased in 1997 over 1996 as a result of a decrease in
average invested cash balances.

<PAGE>

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995:

The Partnership's net income in 1996 was $2,187,000 compared to $2,403,000
in 1995, representing a decrease of $216,000, or 9%. The decrease was primarily
a result of increases in depreciation expense and minority interest in income
for those properties held in a joint venture with PSI, combined with decreases
in property operations and interest income, partially offset by decreases in
environmental costs and interest expense.

Property net operating income (rental income less cost of operations and
management fees and excluding depreciation expense) decreased approximately
$89,000 in 1996 compared to 1995, as rental income increased by $200,000 and
cost of operations (including management fees) increased by $289,000, or 5%.

Rental income for the Partnership's mini-warehouse operations was
$12,780,000 in 1996 compared to $12,371,000 in 1995, representing an increase of
$409,000, or 3%. The increase in rental income was primarily attributable to
increased rental rates at the mini-warehouse facilities. The monthly average
realized rent per square foot for the mini-warehouse facilities was $.65 in 1996
compared to $.63 in 1995. The weighted average occupancy levels at the
mini-warehouse facilities remained stable at 92% in both 1996 and 1995. Cost of
operations (including management fees) increased $292,000, or 7%, to $4,735,000
in 1996 from $4,443,000 in 1995. The increase in cost of operations was
primarily attributable to increases in repairs and maintenance, advertising and
property tax expenses. Accordingly, for the Partnership's mini-warehouse
operations, property net operating income increased by $117,000 to $8,045,000 in
1996 from $7,928,000 in 1995.

Rental income for the Partnership's business park operations was $3,062,000
in 1996 compared to $3,271,000 in 1995, representing a decrease of $209,000 or
6%. The decrease in rental income is primarily attributable to a decrease in the
rental rates and occupancy level at the Culver City, California business park.
During the first quarter of 1996, a major tenant vacated the facility following
the termination of its lease. The Partnership is actively marketing the
facility, and has been able to re-lease a portion of the office space that was
vacated by the major tenant. Rental rates on the re-leased space is less than
was previously being earned. The monthly average realized rent per square foot
for the business park facilities was $1.26 in 1996 compared to $1.34 in 1995.
The weighted average occupancy levels at the business park facilities were 92%
in 1996 compared to 93% in 1995. Cost of operations (including management fees)
decreased $3,000 to $1,418,000 in 1996 from $1,421,000 in 1995. Accordingly, for
the Partnership's business park facilities, property net operating income
decreased by $206,000, or 11%, to $1,644,000 in 1996 from $1,850,000 in 1995.

Interest income decreased in 1996 over 1995 as a result of a decrease in
average invested cash balances.

Depreciation and amortization increased $190,000 to $3,793,000 in 1996 from
$3,603,000 in 1995. This increase is principally attributable to depreciation of
capital expenditures made during 1995 and 1996.

Interest expense decreased approximately $76,000 to $214,000 in 1996 from
$290,000 in 1995 as a result of the payoff of the Partnership's mortgage note
payable in September 1996.

Minority interest was $3,457,000 and $3,364,000 in 1996 and 1995,
respectively, representing an increase of $93,000, or 3%. The increase was
primarily due to improved operations at the Partnership's mini-warehouse
facilities held in joint venture with PSI.

Liquidity and Capital Resources
- -------------------------------
The Partnership has adequate sources of cash to finance its operations,
both on a short-term and long-term basis, primarily by internally generated cash
from property operations. The Partnership had cash and cash equivalents totaling
$1,238,000 at December 31, 1997.

Cash flow from operating activities ($8,748,000 for the year ended December
31, 1997) has been sufficient to meet all current obligations of the
Partnership. Total capital improvements were $924,000, $1,039,000, and

13
<PAGE>

$1,035,000 in 1997, 1996, and 1995, respectively. During 1995, the Partnership's
property manager commenced a program to enhance the visual appearance of the
mini-warehouse facilities. Such enhancements include new signs, exterior color
schemes, and improvements to the rental offices. During 1998, the Partnership
anticipates approximately $771,000 of capital improvements (including PSI's
joint venture share of $314,000).

In September 1996, the Partnership repaid early its remaining mortgage note
payable, utilizing cash reserves.

The Partnership expects to continue making quarterly distributions. Total
distributions paid to the General Partners and the limited partners (including
per Unit amounts) for 1997 and prior years were as follows:

Total Per Unit
-------------- ----------------
1997 $3,987,000 $24.00
1996 3,986,000 24.00
1995 4,986,000 30.02
1994 3,987,000 24.00
1993 3,256,000 19.60
1992 3,326,000 20.02
1991 4,224,000 25.43
1990 3,378,000 20.34
1989 4,983,000 30.00
1988 4,983,000 30.00
1987 4,671,000 28.12
1986 4,153,000 25.00
1985 1,192,000 8.22

The General Partners distributed, concurrent with distributions for the
fourth quarter of 1991, a portion of the operating reserve of the Partnership,
and adjusted the on-going distribution level. The operating reserve that was
distributed was estimated at $7.25 per Unit. The 1995 distribution includes a
portion of the operating reserve of the Partnership estimated to be $6.02 per
Unit. Future distribution levels will be based on cash available for
distributions (cash flow from all sources, less cash necessary for capital
improvement needs and to establish reserves).

14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
--------------------------------------------
The Partnership's financial statements are included elsewhere herein.
Reference is made to the Index to Consolidated Financial Statements and
Financial Statement Schedules in Item 14(a).

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
-----------------------------------------------------
None

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 Partnership's mini-warehouse
properties are managed by PSI pursuant to a Management Agreement. Through 1996,
the Partnership's commercial properties were managed by PSCPG, now known as PS
Business Parks, Inc., pursuant to a Management Agreement. In January 1997, the
Partnership transferred its business parks to PSBPLP in exchange for a
partnership interest in PSBPLP.

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

B. Wayne Hughes, age 64, 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 61, has been employed by PSI for 20 years and became
President and a director of PSI in November 1991. Mr. Lenkin is a director of
the National Association of Real Estate Investment Trusts (NAREIT).

15
<PAGE>

B. Wayne Hughes, Jr., age 38, became a director of PSI in January 1998. He
has been Vice President - Acquisitions of the Company since 1992. He is the son
of B. Wayne Hughes.

John Reyes, age 37, 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 58, 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 59, 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.

Marvin M. Lotz, age 55, 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 48, 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 46, 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. Singelyn, age 36, 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 42, 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 58, 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 directors of Johns Hopkins University and of the Los Angeles County
Metropolitan Transportation Authority and a former member of the board of
directors of the Metropolitan Water District of Southern California.

Dann V. Angeloff, age 62, 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 Compensation Resource Group, Eagle
Lifestyle Nutrition, Inc., Nicholas/Applegate Growth Equity Fund,
Nicholas/Applegate Investment Trust, ReadyPac Produce, Inc. and Royce Medical
Company.

16
<PAGE>

William C. Baker, age 64, became a director of PSI in November 1991. Since
November 1997, Mr. Baker has been Chairman of the Board and Chief Executive
Officer of The Santa Anita Companies, Inc., which operates the Santa Anita
Racetrack and is a wholly-owned subsidiary of Meditrust Operating Company. 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
the Board of Santa Anita Realty Enterprises, Inc., the companies which were
merged with Meditrust in November 1992. 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 50, 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
company. From 1984 to 1985, he was 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.
and Virgin Entertainment Group, Ltd.

Uri P. Harkham, age 49, 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 and
Australia.

Pursuant to Articles 16 and 17 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. 2-95773, each of the General Partners continues
to serve until (i) death, insanity, insolvency, bankruptcy or dissolution, (ii)
withdrawal with the consent of the other general partner and a majority vote of
the limited partners, or (iii) removal by a majority vote of the limited
partners.

Each director of PSI serves until he resigns or is removed from office by
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 at any
time 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.

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 the General
Partners and their affiliates.

<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
---------------------------------------------------------------

(a) At December 31, 1997, PSI beneficially owned more than 5% or more of
the Units of the Partnership:

Title Amount of Percent
of Name and Address of Beneficial of
Class Beneficial Owner Ownership Class
- ------------------- ------------------------------------------------- -------------------- -----------
<S> <C> <C>
Units of Limited Public Storage, Inc.
Partnership 701 Western Avenue
Interest Glendale, CA 91201-2394 (1) 89,976 Units (1) 60.79%

</TABLE>
- ---------------
(1) These Units are held of record by SEI Arlington Acquisition
Corporation, a wholly-owned subsidiary of PSI.

In August 1997, PSI completed a cash tender offer, which had commenced in
June 1997, pursuant to which PSI acquired a total of 13,847 limited partnership
units at $355 per unit.

The Partnership is not aware of any other beneficial owners of more than 5%
of the Units.

(b) The Partnership has no officers and directors.

The General Partners (or their predecessor-in-interest) have
contributed $747,000 to the capital of the Partnership representing 1% of the
aggregate capital contributions and as a result participate 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 the Units by PSI, a
General Partner, is set forth under section (a) above. The directors and
executive officers of PSI, as a group, do not own any Units.

(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, a copy of which is included in
the Partnership's prospectus included in the Partnership's Registration
Statement File No. 2-95773. 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.

The Partnership owns interests in 33 properties (which exclude the
properties transferred to PSBPLP in January 1997); 32 of such properties are
held in a general partnership comprised of the Partnership and PSI. Under the
terms of the partnership agreement relating to the ownership of the properties,
PSI has the right to compel a sale of each property at any time after seven
years from the date of acquisition at not less than its independently determined
fair market value provided the Partnership receives its share of the net sales
proceeds solely in cash. As of December 31, 1997, PSI has the right to require
the Partnership to sell all of the joint venture properties on these terms.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
The Partnership Agreement provides that the General Partners and their
affiliates are entitled to the following compensation:
1. Incentive distributions equal to 10% of Cash Flow from Operations.
2. Provided the limited partners have received distributions equal to
100% of their investment plus a cumulative 8% per year (not
compounded) on their investment (reduced by distributions other than
from Cash Flow from Operations), subordinated incentive distributions
equal to 15% of remaining Cash from Sales or Refinancings.

18
<PAGE>

3. Provided the limited partners have received distributions equal to
100% of their capital contributions plus a cumulative 6% per year (not
compounded) on their investment (reduced by distributions other than
distributions from Cash Flow from Operations), brokerage commissions
at the lesser of 3% of the sales price of a property or 50% of a
competitive commission.

During 1997, approximately $399,000 was paid to PSI with respect to items
1, 2, and 3 above. The Partnership owns interests in 33 properties (which
exclude the properties transferred to PSBPLP in January 1997); 32 of such
properties are held in a general partnership comprised of the Partnership and
PSI.

The Partnership has a Management Agreement with PSI pursuant to which the
Partnership pays PSI a fee of 6% of the gross revenues of the mini-warehouse
spaces operated for the Partnership. During 1997, the Partnership paid fees of
$816,000 to PSI pursuant to the Management Agreement.

Through 1996, the Partnership's commercial properties were managed by PSCPG
pursuant to a Management Agreement which provides for the payment of a fee by
the Partnership of 5% of the gross revenues of the commercial space operated for
the Partnership. In January 1997, the Partnership and PSI and other related
partnerships transferred a total of 35 business parks to PSBPLP, an operating
partnership formed to own and operate business parks in which PSI has a
significant interest. Included among the properties transferred were the
Partnership's business parks in exchange for a partnership interest in PSBPLP.
The general partner of PSBPLP is PS Business Parks, Inc., a REIT traded on the
American Stock Exchange.

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 Consolidated Financial
Statements and Financial Statement Schedules.
2. Financial Statement Schedules: See Index to Consolidated
Financial Statements and Financial Statement Schedules.
3. Exhibits: See Exhibit Index contained herein.

(b) Reports on Form 8-K:
None

19
<PAGE>

PS PARTNERS V, LTD.,
a California Limited Partnership
INDEX TO EXHIBITS

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. 2-95773 and incorporated herein by
reference.

10.1 Second Amended and Restated Management Agreement dated November
16, 1995, between the Partnership and Public Storage Management,
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 Amended Management Agreement dated February 21, 1995 between
Storage Equities, Inc. and Public Storage Commercial Properties
Group, 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, 1994, and incorporated
herein by reference.

10.3 Participation Agreement dated as of June 20, 1985, among Storage
Equities, Inc., the Partnership, Public Storage, Inc., B. Wayne
Hughes and Kenneth Q. Volk, Jr. Previously filed with the
Securities and Exchange Commission as an exhibit to Storage
Equities, Inc.'s Annual Report on Form 10-K dated April 18, 1985,
and incorporated herein by reference.

27 Financial data schedule. Filed herewith.

20
<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.

PS PARTNERS V, LTD.,
a California Limited Partnership
Dated: March 26, 1998 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 March 26, 1998
- ---------------------------- Executive Officer of Public Storage, Inc. and
B. Wayne Hughes General Partner (principal executive officer)

/s/ Harvey Lenkin President and Director March 26, 1998
- ---------------------------- of Public Storage, Inc.
Harvey Lenkin

/s/ B. Wayne Hughes, Jr. Vice President and Director March 26, 1998
- ---------------------------- of Public Storage, Inc.
B. Wayne Hughes, Jr.

/s/ John Reyes Senior Vice President and Chief Financial Officer March 26, 1998
- ---------------------------- of Public Storage, Inc. (principal financial
John Reyes officer and principal accounting officer)

/s/ Robert J. Abernethy Director of Public Storage, Inc. March 26, 1998
- -----------------------------
Robert J. Abernethy

/s/ Dann V. Angeloff Director of Public Storage, Inc. March 26, 1998
- ------------------------------
Dann V. Angeloff

/s/ William C. Baker Director of Public Storage, Inc. March 26, 1998
- ------------------------------
William C. Baker

/s/ Uri P. Harkham Director of Public Storage, Inc. March 26, 1998
- ------------------------------
Uri P. Harkham
</TABLE>
21
<PAGE>
PS PARTNERS V, LTD.
a California Limited Partnership

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

(Item 14 (a))

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

Report of Independent Auditors F-1

Consolidated Financial Statements and Schedules:

Consolidated Balance Sheets as of December 31, 1997
and 1996 F-2

For the years ended December 31, 1997, 1996 and 1995:
F-3
Consolidated Statements of Income

Consolidated Statements of Partners' Equity F-4

Consolidated Statements of Cash Flows F-5 - F-6

Notes to Consolidated Financial Statements F-7 - F-10

Schedule

III - Real Estate and Accumulated Depreciation F-11 - F-13

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 consolidated
financial statements or the notes thereto.

22
<PAGE>
Report of Independent Auditors

The Partners
PS Partners V, Ltd.,
A California Limited Partnership

We have audited the consolidated balance sheets of PS Partners V, Ltd., a
California Limited Partnership as of December 31, 1997 and 1996 and the related
consolidated statements of income, partners' equity, and cash flows for each of
the three years in the period ended December 31, 1997. Our audits also included
the financial statement 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of PS
Partners V, Ltd., a California Limited Partnership, at December 31, 1997 and
1996, and the consolidated results of its operations and its cash flows for each
of the three years in the period ended December 31, 1997, 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 23, 1998
Los Angeles, California

F-1
<PAGE>
<TABLE>
<CAPTION>

PS PARTNERS V, LTD.
a California Limited Partnership
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996

1997 1996
------------ ------------

ASSETS

<S> <C> <C>
Cash and cash equivalents $ 1,238,000 $ 453,000

Rent and other receivables 82,000 160,000

Real estate facilities, at cost:
Land 16,099,000 25,610,000
Buildings and equipment 56,486,000 80,098,000
------------- ------------
72,585,000 105,708,000

Less accumulated depreciation (26,916,000) (36,248,000)
------------- ------------
45,669,000 69,460,000

Investment in real estate partnership 22,612,000 -

Other assets 137,000 283,000
------------- ------------

$ 69,738,000 $ 70,356,000
============ ============

LIABILITIES AND PARTNERS' EQUITY

Accounts payable $ 786,000 $ 806,000

Advance payments from renters 406,000 413,000

Minority interest in general partnerships 31,335,000 31,057,000

Partners' equity:
Limited partners' equity, $500 per unit, 148,000
units authorized, issued and outstanding 36,743,000 37,603,000
General partners' equity 468,000 477,000
------------- ------------

Total partners' equity 37,211,000 38,080,000
------------- ------------

$ 69,738,000 $ 70,356,000
============ ============

</TABLE>

See accompanying footnotes.
F-2

<PAGE>
<TABLE>
<CAPTION>
PS PARTNERS V, LTD.
a California Limited Partnership
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 1997, 1996, and 1995

1997 1996 1995
---------------- --------------- --------------

REVENUE:
<S> <C> <C> <C>
Rental income $ 13,595,000 $ 15,842,000 $ 15,642,000
Equity in income of real estate partnership 839,000 - -
Interest income 36,000 96,000 128,000
---------------- --------------- --------------
14,470,000 15,938,000 15,770,000
---------------- --------------- --------------

COSTS AND EXPENSES:

Cost of operations 4,123,000 5,233,000 4,959,000
Management fees 816,000 920,000 905,000
Depreciation and amortization 2,619,000 3,793,000 3,603,000
Interest expense - 214,000 290,000
Administrative 141,000 134,000 134,000
Environmental costs - - 112,000
---------------- --------------- --------------
7,699,000 10,294,000 10,003,000
---------------- --------------- --------------

Income before minority interest 6,771,000 5,644,000 5,767,000

Minority interest in income (3,653,000) (3,457,000) (3,364,000)
---------------- --------------- --------------

NET INCOME $ 3,118,000 $ 2,187,000 $ 2,403,000
================ =============== ==============

Limited partners' share of net income
($18.19, $11.97, and $12.74 per unit in
1997, 1996, and 1995, respectively) $ 2,692,000 $ 1,771,000 $ 1,885,000
General partners' share of net income 426,000 416,000 518,000
---------------- --------------- --------------
$ 3,118,000 $ 2,187,000 $ 2,403,000
================ =============== ==============

</TABLE>
See accompanying footnotes.
F-3

<PAGE>
<TABLE>
<CAPTION>
PS PARTNERS V, LTD.
a California Limited Partnership
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
For the years ended December 31, 1997, 1996, and 1995

Limited General
Partners Partners Total
-------------- ------------ --------------
<S> <C> <C> <C>
Balances at December 31, 1994 $ 41,942,000 $ 520,000 $ 42,462,000

Net income 1,885,000 518,000 2,403,000

Distributions (4,443,000) (543,000) (4,986,000)
-------------- ------------ --------------

Balances at December 31, 1995 39,384,000 495,000 39,879,000

Net income 1,771,000 416,000 2,187,000

Distributions (3,552,000) (434,000) (3,986,000)
-------------- ------------ --------------

Balances at December 31, 1996 37,603,000 477,000 38,080,000

Net income 2,692,000 426,000 3,118,000

Distributions (3,552,000) (435,000) (3,987,000)
-------------- ------------ --------------

Balances at December 31, 1997 $ 36,743,000 $ 468,000 $ 37,211,000
============== ============ ==============

</TABLE>
See accompanying footnotes.
F-4
<PAGE>
<TABLE>
<CAPTION>
PS PARTNERS V, LTD.
a California Limited Partnership
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996, and 1995

1997 1996 1995
----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S> <C> <C> <C>
Net income $ 3,118,000 $ 2,187,000 $ 2,403,000

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

Depreciation and amortization 2,619,000 3,793,000 3,603,000
Decrease (increase) in rent and other receivables 78,000 (83,000) (4,000)
Decrease (increase) in other assets 146,000 (108,000) (6,000)
(Decrease) increase in accounts payable (20,000) (26,000) 170,000
Decrease in advance payments from renters (7,000) (7,000) (42,000)
Equity in income of real estate partnership (839,000) - -
Minority interest in income 3,653,000 3,457,000 3,364,000
----------- ------------ -----------

Total adjustments 5,630,000 7,026,000 7,085,000
----------- ------------ -----------

Net cash provided by operating activities 8,748,000 9,213,000 9,488,000
----------- ------------ -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Distributions from real estate partnership 356,000 - -
Investment in real estate partnership (33,000) - -
Additions to real estate facilities (924,000) (1,039,000) (1,035,000)
----------- ------------ -----------

Net cash used in investing activities (601,000) (1,039,000) (1,035,000)
----------- ------------ -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on mortgage notes payable - (2,935,000) (41,000)
Distributions to holder of minority interest (3,375,000) (2,859,000) (3,161,000)
Distributions to partners (3,987,000) (3,986,000) (4,986,000)
----------- ------------ -----------

Net cash used in financing activities (7,362,000) (9,780,000) (8,188,000)
----------- ------------ -----------

Net increase (decrease) in cash and cash equivalents 785,000 (1,606,000) 265,000

Cash and cash equivalents at the beginning of the period 453,000 2,059,000 1,794,000
----------- ------------ -----------

Cash and cash equivalents at the end of the period $ 1,238,000 $ 453,000 $ 2,059,000
=========== ============ ===========

</TABLE>
See accompanying footnotes.
F-5

<PAGE>
<TABLE>
<CAPTION>
PS PARTNERS V, LTD.
a California Limited Partnership
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996, and 1995
(Continued)

1997 1996 1995
----------- ----------- -----------

Supplemental schedule of noncash investing and financing activities:

<S> <C> <C> <C>
Investment in real estate partnership $ (22,096,000) $ - $ -

Transfer of real estate facilities for interest in real estate 22,096,000 - -
partnership, net

</TABLE>
See accompanying footnotes.
F-6

<PAGE>

PS PARTNERS V, Ltd.,
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
Description of Partnership
--------------------------
PS Partners V, Ltd., a California Limited Partnership (the
"Partnership") was formed with the proceeds of an interstate public
offering. PSI Associates II, Inc. ("PSA"), an affiliate of Public
Storage Management, Inc., organized the Partnership along with B.
Wayne Hughes ("Hughes"). In September 1993, Storage Equities, Inc.,
now known as Public Storage, Inc. ("PSI"), a California corporation,
acquired the interest of PSA relating to its general partner capital
contribution in the Partnership and was substituted as a co-general
partner in place of PSA.

In 1995, there was a series of mergers among Public Storage
Management, Inc. (which was the Partnership's mini-warehouse
operator), Public Storage, Inc. and their affiliates (collectively,
"PSMI"), culminating in the November 16, 1995 merger (the "PSMI
Merger") of PSMI into Storage Equities, Inc. In the PSMI Merger,
Storage Equities, Inc. was renamed Public Storage, Inc. and it
acquired substantially all of PSMI's United States real estate
operations and became the operator of the Partnership's mini-warehouse
properties.

The Partnership has invested in existing mini-warehouse storage
facilities which offer self-service storage spaces for lease, usually
on a month-to-month basis, to the general public and, to a lesser
extent, in existing business park facilities which offer industrial
and office space for lease.

The Partnership has ownership interests in 33 properties in 14
states, which exclude 2 properties transferred to PS Business Parks,
L.P. ("PSBPLP") in January 1997. 32 of the properties are owned
jointly through 22 general partnerships (the "Joint Ventures") with
PSI. For tax administrative efficiency the Joint Ventures were
subsequently consolidated into a single general partnership. The
Partnership is the managing general partner of the Joint Ventures,
with ownership interests in the Joint Ventures ranging from 50% to
70.6%.

Basis of Presentation
---------------------
The consolidated financial statements include the accounts of the
Partnership and the Joint Ventures. PSI's ownership interest in the
Joint Ventures is shown as minority interest in general partnerships
in the accompanying consolidated balance sheets. All significant
intercompany balances and transactions have been eliminated.

Minority interest in income represents PSI's share of net income
with respect to the Joint Ventures. Under the terms of the partnership
agreements all depreciation and amortization with respect to each
Joint Venture is allocated solely to the Partnership until the limited
partners recover their initial capital contribution. Thereafter, all
depreciation and amortization is allocated solely to PSI until it
recovers its initial capital contribution. All remaining depreciation
and amortization is allocated to the Partnership and PSI in proportion
to their ownership percentages.

Depreciation and amortization allocated to PSI was $36,000 in
1997 and none in 1996. The allocation of depreciation and amortization
to PSI has the effect of reducing minority interest in income and has
no effect on the reported depreciation and amortization expense.

Under the terms of the partnership agreements, for property
acquisitions in which PSI issued convertible securities to the sellers
for its interest, PSI's rights to receive cash flow distributions from
the partnerships for any year after the first year of operation are
subordinated to cash distributions to the Partnership equal to a
cumulative annual 7% of its cash investment (not compounded). These
agreements also specify that upon sale or refinancing of a property
for more than its original purchase price, distribution of proceeds

F-7
<PAGE>

PS PARTNERS V, Ltd.,
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
Basis of Presentation (continued)
---------------------------------
to PSI is subordinated to the return to the Partnership of the amount
of its cash investment and the 7% distribution described above. In
addition to the above provisions, PSI has the right to compel the sale
of each property in the general partnerships at any time after seven
years from the date of acquisition at not less than its independently
determined fair market value provided the Partnership receives its
share of the net sales proceeds solely in cash. PSI's right to require
the Partnership to sell all of the jointly owned properties became
exercisable during 1993.

Real Estate Facilities
----------------------
The Partnership depreciates the buildings and equipment on a
straight-line method over estimated useful lives of 25 and 5 years,
respectively. Leasing commissions relating to business park properties
are expensed when incurred.

In 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 ("Statement 121"),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." 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 method of accounting for long-lived
assets that are expected to be disposed. The Partnership adopted
Statement 121 in 1996 and the adoption had no effect.

In January 1997, the Partnership and PSI and other related
partnerships transferred a total of 35 business parks to PSBPLP, an
operating partnership formed to own and operate business parks in
which PSI has a significant interest. Included among the properties
transferred were the Partnership's business parks in exchange for a
partnership interest in PSBPLP. The general partner of PSBPLP is PS
Business Parks, Inc.

Revenue Recognition
-------------------
Property rents are recognized as earned.

Allocation of Net Income
------------------------
The General Partners' share of net income consists of an amount
attributable to their 1% capital contribution and an additional
percentage of cash flow (as defined, see Note 3) which relates to the
General Partners' share of cash distributions as set forth in the
Partnership Agreement. All remaining net income is allocated to the
limited partners.

Per Unit Data
-------------
Per unit data is based on the number of limited partnership units
(148,000) outstanding during the year.

Environmental Cost
------------------
Substantially all of the Partnership's facilities were acquired
prior to the time that it was customary to conduct extensive
environmental investigations in connection with the property
acquisitions. During the fourth quarter of 1995, an independent
environmental consulting firm completed environmental assessments on
the Partnership's properties to evaluate the environmental condition
of, and potential environmental liabilities of such properties. Based
on the assessments, the Partnership believes that it is probable that
it will
F-8
<PAGE>

PS PARTNERS V, Ltd.,
a California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

1. Summary of Significant Accounting Policies and Partnership Matters
------------------------------------------------------------------
Environmental Cost (continued)
---------------------------------
incur costs totaling $110,000 after December 31, 1997 for known
environmental remediation requirements. During 1997, 1996, and 1995,
the Partnership paid none, $1,000, and $36,000, respectively, in
connection with the environmental remediations. Although there can be
no assurance, the Partnership is not aware of any unaccrued
environmental contamination of its facilities which individually or in
the aggregate would be material to the Partnership's overall business,
financial condition, or results of operations.

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.

Cash Distributions
------------------
The Partnership Agreement provides for quarterly distributions of
cash flow from operations (as defined). Cash distributions per unit
were $24.00, $24.00 and $30.02 for 1997, 1996, and 1995, respectively.

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.

2. Mortgage Note Payable
---------------------
Mortgage note payable at December 31, 1995 consisted of a single
note which was secured by a business park facility with a net book
value of $16,056,000 at December 31, 1995. The balance was paid off in
September 1996.

Interest paid during 1996 and 1995 was $214,000 and $290,000,
respectively.

3. General Partners' Equity
------------------------
The General Partners have a 1% interest in the Partnership. In
addition, the General Partners have a 10% interest in cash
distributions attributable to operations, exclusive of distributions
attributable to sales and refinancing proceeds.

Proceeds from sales and refinancings will be distributed entirely
to the limited partners until the limited partners recover their
investment plus a cumulative 8% annual return (not compounded);
thereafter, the General Partners have a 15% interest in remaining
proceeds.

4. Related Party Transactions
--------------------------
The Partnership has a management agreement with PSI whereby PSI
operates the Partnership's mini-warehouse facilities for a fee equal
to 6% of the facilities' monthly gross revenue (as defined).

In January 1997, the Partnership transferred its business park
facilities to PSBPLP in exchange for a partnership interest in PSBPLP.

PSI has a significant economic interest in PSBPLP and PSBP.

F-9
<PAGE>

5. Leases
------
The Partnership has invested primarily in existing mini-warehouse
storage facilities which offer self-service storage spaces for lease
to the general public. Leases for such space are usually on a
month-to-month basis.

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

Taxable net income was $6,409,000, $1,831,000 and $1,813,000 for
the years ended December 31, 1997, 1996 and 1995, respectively. The
difference between taxable income and book income is primarily related
to timing differences in depreciation expense.

F-10
<PAGE>
<TABLE>
<CAPTION>

PS PARTNERS V, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION

Costs Gross Carrying Amount
Initial Cost subsequent At December 31, 1997
----------------------to acquisition ----------------------------------------------
Date Building & Building & Building & Accumulated
Acquired Description Encumbrances Land Improvement Improvements Land Improvements Total Depreciation
- -----------------------------------------------------------------------------------------------------------------------------------
Mini-warehouse
<C> <C> <C> <C> <C> <C> <C> <C> <C>
10/85 San Antonio/ Wetmore Rd. $- $ 306,000 $ 1,079,000 $ 391,000 $ 306,000 $ 1,470,000 $ 1,776,000 $ 681,000
10/85 San Antonio/ Callaghan - 288,000 1,016,000 329,000 288,000 1,345,000 1,633,000 629,000
10/85 San Antonio/ Zarzamora - 364,000 1,281,000 404,000 364,000 1,685,000 2,049,000 768,000
10/85 San Antonio/ Hackberry - 388,000 1,367,000 358,000 388,000 1,725,000 2,113,000 803,000
10/85 San Antonio/ Fredericksburg - 287,000 1,009,000 352,000 287,000 1,361,000 1,648,000 634,000
10/85 Dallas/ S. Westmoreland - 474,000 1,670,000 154,000 474,000 1,824,000 2,298,000 890,000
10/85 Dallas/ Alvin St. - 359,000 1,266,000 152,000 359,000 1,418,000 1,777,000 680,000
10/85 Fort Worth/ W. Beach St. - 356,000 1,252,000 151,000 356,000 1,403,000 1,759,000 673,000
10/85 Fort Worth/ E. Seminary - 382,000 1,346,000 173,000 382,000 1,519,000 1,901,000 724,000
10/85 Fort Worth/ Cockrell St. - 323,000 1,136,000 157,000 323,000 1,293,000 1,616,000 620,000
11/85 Everett/ Evergreen - 706,000 2,294,000 440,000 706,000 2,734,000 3,440,000 1,368,000
11/85 Seattle/ Empire Way - 1,652,000 5,348,000 571,000 1,652,000 5,919,000 7,571,000 2,901,000
12/85 Amherst/ Niagra Falls - 132,000 701,000 208,000 132,000 909,000 1,041,000 464,000
12/85 West Sams Blvd. - 164,000 1,159,000 (294,000) 164,000 865,000 1,029,000 421,000
3/86 Jacksonville/ Wiley - 140,000 510,000 225,000 140,000 735,000 875,000 339,000
12/85 MacArthur Rd. - 204,000 1,628,000 143,000 204,000 1,771,000 1,975,000 854,000
2/86 Costa Mesa/ Pomona - 1,405,000 1,520,000 327,000 1,405,000 1,847,000 3,252,000 879,000
12/85 Brockton/ Main - 153,000 2,020,000 (257,000) 153,000 1,763,000 1,916,000 869,000
1/86 Mapleshade/ Rudderow - 362,000 1,811,000 226,000 362,000 2,037,000 2,399,000 969,000
1/86 Bordentown/ Groveville - 196,000 981,000 130,000 196,000 1,111,000 1,307,000 526,000
12/85 Eatontown/ Hwy 35 - 308,000 4,067,000 412,000 308,000 4,479,000 4,787,000 2,145,000
2/86 Brea/ Imperial Hwy - 1,069,000 2,165,000 331,000 1,069,000 2,496,000 3,565,000 1,224,000
12/85 Denver/ Leetsdale - 603,000 847,000 187,000 603,000 1,034,000 1,637,000 503,000
2/86 Skokie/ McCormick - 638,000 1,912,000 224,000 638,000 2,136,000 2,774,000 997,000
1/86 Sun Valley/ Sheldon - 544,000 1,836,000 326,000 544,000 2,162,000 2,706,000 1,009,000
3/86 St. Louis/ Forder - 517,000 1,133,000 251,000 517,000 1,384,000 1,901,000 636,000

</TABLE>

F-11
<PAGE>
<TABLE>
<CAPTION>

PS PARTNERS V, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION

TOTAL $- $16,099,000 $48,730,000 $ 7,756,000 $ 16,099,000 $ 56,486,000 $ 72,585,000 $26,916,000
==============================================================================================

</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
PS PARTNERS V, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
REAL ESTATE RECONCILIATION
SCHEDULE III (CONTINUED)

(A) The following is a reconciliation of cost and related accumulated
depreciation.

GROSS CARRYING COST RECONCILIATION

Years Ended December 31,
------------------------------------------------
1997 1996 1995
------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of the period $ 105,708,000 $ 104,669,000 $ 103,634,000

Additions during the period:
Improvements, etc. 924,000 1,039,000 1,035,000

Deductions during the period:
Disposition of real estate (34,047,000) - -
------------------------------------------------

Balance at the close of the period $ 72,585,000 $ 105,708,000 $ 104,669,000
================================================

ACCUMULATED DEPRECIATION RECONCILIATION

Years Ended December 31,
------------------------------------------------
1997 1996 1995
------------------------------------------------
Balance at beginning of the period $ 36,248,000 $ 32,455,000 $ 28,852,000

Additions during the period:
Depreciation 2,619,000 3,793,000 3,603,000

Deductions during the period:
Disposition of real estate (11,951,000) - -
------------------------------------------------

Balance at the close of the period $ 26,916,000 $ 36,248,000 $ 32,455,000
================================================

</TABLE>

(B) The aggregate cost of real estate for Federal income tax purposes is
$73,030,000.

F-13

<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000763541
<NAME> PS PARTNERS V, LTD.
<MULTIPLIER> 1
<CURRENCY> U.S. $

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 1,238,000
<SECURITIES> 0
<RECEIVABLES> 82,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 72,585,000
<DEPRECIATION> (26,916,000)
<TOTAL-ASSETS> 69,738,000
<CURRENT-LIABILITIES> 1,192,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37,211,000
<TOTAL-LIABILITY-AND-EQUITY> 69,738,000
<SALES> 0
<TOTAL-REVENUES> 14,470,000
<CGS> 0
<TOTAL-COSTS> 4,940,000
<OTHER-EXPENSES> 2,759,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,118,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,118,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,118,000
<EPS-PRIMARY> 18.19
<EPS-DILUTED> 18.19

</TABLE>