SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                   FORM 8-K

              Current Report Pursuant to Section 13 or 15(d) of
                     The Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported)  December 23, 1996
                                                        -----------------

                       Partners Preferred Yield III, Inc.
                       ---------------------------------
            (Exact name of registrant as specified in its charter)

         California                   1-10925           95-4325983
         ----------                   -------           ----------
      (State or other juris-        (Commission       (IRS Employer
      diction of incorporation)     File Number)    Identification No.)

      701 Western Avenue, Suite 200, Glendale, California    91203-1241
      ---------------------------------------------------    ----------
           (Address of principal executive office)           (Zip Code)

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

                                   N/A
                                  -----
        (Former name or former address, if changed since last report)

   Item 2.   Acquisition or Disposition of Assets.
             -------------------------------------

         On December 23, 1996, Registrant was merged into Public Storage,
   Inc. ("PSI") pursuant to an Agreement and Plan of Reorganization dated
   as of August 15, 1996.  In the merger, (a) the Registrant's outstanding
   Common Stock Series A (1,313,384 shares) was converted as follows: 
   82,547 shares of the Registrant's Common Stock Series A owned by PSI
   were cancelled, and the balance of the Registrant's Common Stock Series
   A (1,230,837 shares) was converted into an aggregate of approximately
   (i) 716,000 shares of PSI common stock (at the rate of 0.771 shares of
   PSI common stock for each share of the Registrant's Common Stock Series
   A) and (ii) $5,974,258 in cash (at the rate of $19.68 per share of the
   Registrant's Common Stock Series A); and (b) the Registrant's
   outstanding Common Stock Series B (168,709 shares), Common Stock
   Series C (99,241 shares) and Common Stock Series D (65,354 shares)
   was converted as follows:  134,967 shares of the Registrant's Common
   Stock Series B, 79,393 shares of the Registrant's Common Stock Series C
   and 52,283.2 shares of the Registrant's Common Stock Series D owned by
   PSI were cancelled, and the balance of the Registrant's Common Stock
   Series B (33,742 shares), Common Stock Series C (19,848 shares) and
   Common Stock Series D (13,070.8 shares) was converted into an aggregate
   of 32,463 shares of PSI common stock (at the rate of 0.487 shares of
   PSI common stock for each share of the Registrant's Common Stock
   Series B, Common Stock Series C and Common Stock Series D).  The amounts
   set forth above exclude, in each case, a liquidating cash distribution
   of $.91 per share of the Registrant's Common Stock Series A and Common
   Stock Series B.

   Item 7.   Financial Statements and Exhibits.

             (a)   Financial Statements.

                   None.

             (b)   Exhibits.

                   (1)   Agreement and Plan of Reorganization among PSI,
                         Registrant, Partners Preferred Yield, Inc. and
                         Partners Preferred Yield II, Inc. dated as of
                         August 15, 1996.  Filed with PSI's registration
                         statement on Form S-4 (File No. 333-14161) and
                         incorporated herein by reference.

   <PAGE>

                               SIGNATURES

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

                                     PARTNERS PREFERRED YIELD III, INC.


                                     By: /S/ HARVEY LENKIN
                                         -------------------
                                         Harvey Lenkin
                                         President

   Date:  December 23, 1996
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{"company-data": {"conformed-name": "PARTNERS PREFERRED YIELD III INC", "cik": "0000870871", "assigned-sic": "6798", "irs-number": "954325983", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-10925", "film-number": "96686894"}, "business-address": {"street1": "701 WESTERN AVE", "street2": "SUITE 200", "city": "GLENDALE", "state": "CA", "zip": "91201-2397", "phone": "8182448080"}, "mail-address": {"street1": "701 WESTERN AVE", "street2": "SUITE 200", "city": "GLENDALE", "state": "CA", "zip": "91201"}}
SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                   FORM 8-K

              Current Report Pursuant to Section 13 or 15(d) of
                     The Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported)  December 23, 1996
                                                        -----------------

                       Partners Preferred Yield III, Inc.
                       ---------------------------------
            (Exact name of registrant as specified in its charter)

         California                   1-10925           95-4325983
         ----------                   -------           ----------
      (State or other juris-        (Commission       (IRS Employer
      diction of incorporation)     File Number)    Identification No.)

      701 Western Avenue, Suite 200, Glendale, California    91203-1241
      ---------------------------------------------------    ----------
           (Address of principal executive office)           (Zip Code)

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

                                   N/A
                                  -----
        (Former name or former address, if changed since last report)

   Item 2.   Acquisition or Disposition of Assets.
             -------------------------------------

         On December 23, 1996, Registrant was merged into Public Storage,
   Inc. ("PSI") pursuant to an Agreement and Plan of Reorganization dated
   as of August 15, 1996.  In the merger, (a) the Registrant's outstanding
   Common Stock Series A (1,313,384 shares) was converted as follows: 
   82,547 shares of the Registrant's Common Stock Series A owned by PSI
   were cancelled, and the balance of the Registrant's Common Stock Series
   A (1,230,837 shares) was converted into an aggregate of approximately
   (i) 716,000 shares of PSI common stock (at the rate of 0.771 shares of
   PSI common stock for each share of the Registrant's Common Stock Series
   A) and (ii) $5,974,258 in cash (at the rate of $19.68 per share of the
   Registrant's Common Stock Series A); and (b) the Registrant's
   outstanding Common Stock Series B (168,709 shares), Common Stock
   Series C (99,241 shares) and Common Stock Series D (65,354 shares)
   was converted as follows:  134,967 shares of the Registrant's Common
   Stock Series B, 79,393 shares of the Registrant's Common Stock Series C
   and 52,283.2 shares of the Registrant's Common Stock Series D owned by
   PSI were cancelled, and the balance of the Registrant's Common Stock
   Series B (33,742 shares), Common Stock Series C (19,848 shares) and
   Common Stock Series D (13,070.8 shares) was converted into an aggregate
   of 32,463 shares of PSI common stock (at the rate of 0.487 shares of
   PSI common stock for each share of the Registrant's Common Stock
   Series B, Common Stock Series C and Common Stock Series D).  The amounts
   set forth above exclude, in each case, a liquidating cash distribution
   of $.91 per share of the Registrant's Common Stock Series A and Common
   Stock Series B.

   Item 7.   Financial Statements and Exhibits.

             (a)   Financial Statements.

                   None.

             (b)   Exhibits.

                   (1)   Agreement and Plan of Reorganization among PSI,
                         Registrant, Partners Preferred Yield, Inc. and
                         Partners Preferred Yield II, Inc. dated as of
                         August 15, 1996.  Filed with PSI's registration
                         statement on Form S-4 (File No. 333-14161) and
                         incorporated herein by reference.
SIGNATURES

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

                                     PARTNERS PREFERRED YIELD III, INC.

                                     By: /S/ HARVEY LENKIN
                                         -------------------
                                         Harvey Lenkin
                                         President

   Date:  December 23, 1996