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

þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year EndedDECEMBER 31, 20082010

OR

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to

_______________

Commission File Number: 0-24920

ERP OPERATING LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)

Illinois 36-3894853
Illinois
(State or Other Jurisdiction of Incorporation or Organization)
 36-3894853
(I.R.S. Employer Identification No.)
Two North Riverside Plaza, Chicago, Illinois60606

(Address of Principal Executive Offices)
 60606
(Zip Code)

(312) 474-1300


(Registrant’s Telephone Number, Including Area Code)

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

7.57% Notes due August 15, 2026 New York Stock Exchange
(Title of Each Class) (Name of Each Exchange on Which Registered)

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

Units of Limited Partnership Interest


(Title of Each Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YesXþ Noo

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YesoNoXþ

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. YesXþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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 this Form 10-K. [    ]

þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerXo

 

Accelerated filero

Non-accelerated filerþSmaller reporting companyo

Non-accelerated filer     (Do

(Do not check if a smaller reporting company)

 

Smaller reporting company__

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YesoNoXþ


DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information to be contained in Equity Residential’s definitive proxy statement,Proxy Statement relating to its 2011 Annual Meeting of Shareholders, which Equity Residential anticipates will be filedintends to file no later than April 16, 2009.120 days after the end of its fiscal year ended December 31, 2010. Equity Residential is the general partner and 94.2%95.5% owner of ERP Operating Limited Partnership.

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ERP OPERATING LIMITED PARTNERSHIP

TABLE OF CONTENTS

PART I.

       PAGE    

Item 1.

 

PAGE

 4

Risk Factors

 8

Unresolved Staff Comments

 1415

 

Properties

15 14

Legal Proceedings

 17

 

Submission of Matters to a Vote of Security Holders

 17

PART II.

  

Item 5.

 

 18

Selected Financial Data

 19

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 21

Quantitative and Qualitative Disclosures about Market Risk

 3842

Financial Statements and Supplementary Data

 4043

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 4043

Controls and Procedures

 4043

 

Other Information

44
 40

PART III.

 
 

Item 10.

 

 4145

 

Executive Compensation

45 41

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

 4145

Certain Relationships and Related Transactions, and Trustee Independence

 4145

Principal Accounting Fees and Services

 4145

PART IV.

  

Item 15.

 

 4246
EX-12
EX-21
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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PART I

Item 1. Business

General

ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”). EQR, a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. EQR has elected to be taxed as a REIT.

EQR is one of the largest publicly traded real estate companies and is the largest publicly traded owner of multifamily properties in the United States (based on the aggregate market value of its outstanding Common Shares, the number of apartment units wholly owned and total revenues earned). The Operating Partnership’s corporate headquarters are located in Chicago, Illinois and the Operating Partnership also operates property management offices throughout the United States.

in each of its markets.

EQR is the general partner of, and as of December 31, 20082010 owned an approximate 94.2%95.5% ownership interest in ERPOP. EQR is structured as an umbrella partnership REIT (“UPREIT”) under which allAll of EQR’s property ownership, development and related business operations are conducted through ERPOP and its subsidiaries. References to the “Operating Partnership” include ERPOP and those entities owned or controlled by it. References to the “Company” mean EQR and the Operating Partnership.

As of December 31, 2008,2010, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 548451 properties located in 2317 states and the District of Columbia consisting of 147,244129,604 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

        Properties          Units    

Wholly Owned Properties

  477  127,002

Partially Owned Properties:

    

Consolidated

  28  5,757

Unconsolidated

  41  9,776

Military Housing (Fee Managed)

  2  4,709
      
              548        147,244

         
  Properties  Apartment Units 
Wholly Owned Properties  425   119,634 
Partially Owned Properties — Consolidated  24   5,232 
Military Housing  2   4,738 
       
   451   129,604 
As of February 5, 2009,December 31, 2010, the Operating Partnership hashad approximately 4,7004,000 employees who provideprovided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements.

See also Note 19 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s segment disclosures.

Available Information

You may access our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to any of those reports we file with the SEC free of charge at our website,www.equityresidential.com. These reports are made available at our website as soon as reasonably practicable after we file them with the SEC.

Business Objectives and Operating and Investing Strategies

The Operating Partnership seeks to maximize current income, capital appreciation of each property and the total return for its partners. The Operating Partnership’s strategy for accomplishing these objectives includes:

Leveraging our size and scale in four critical ways:

Investinginvests in apartment communities located in strategically targeted markets with the goal of maximizing our risk adjusted total return (operating income plus capital appreciation) on invested capital.

          Our operating focus is on balancing occupancy and rental rates to maximize our totalrevenue while exercising tight cost control to generate the highest possible return on an enterprise level;

Meetingto our shareholders. Revenue is maximized by driving qualified resident prospects to our properties, converting this traffic cost-effectively into new leases at the needshighest rent possible, keeping our residents satisfied and renewing their leases at yet higher rents. While we believe that it is our high-quality, well-located assets that bring our customers to us, it is our customer service that keeps them renting with us and recommending us to their friends.

          We use technology to engage our customers in the way that they want to be engaged. Many of our residents by offering a wide arrayutilize our web-based resident portal which allows them to review their account and make payments, provide feedback and make

4


service requests on-line.
          We seek to maximize capital appreciation of product choices and a commitment to service;

Engaging, retaining and attracting the best employees by providing them with the education, resources and opportunities to succeed; and

Sharing resources, customers and best practices in property management and across the enterprise.

Owning a highly diversified portfolioour properties by investing in target markets definedthat are characterized by a combinationconditions favorable to multifamily property appreciation. These markets generally feature one or more of the following criteria:

High barrier-to-entry (low supply);

following:

Strong economic predictors (high demand); and

High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties leading to low supply;
High single family home prices making our apartments a more economical housing choice;
Strong economic growth leading to household formation and job growth, which in turn leads to high demand for our apartments; and
An attractive quality of life leading to high demand and retention and allowing us to more readily increase rents.

Attractive quality of life (high demand and retention).

Giving residents reasons to stay with the Operating Partnership by providing a range of product options available in our diversified portfolio and by enhancing their experience through our employees and our services.

Being open and responsive to market realities to take advantage of investment opportunities that align with our long-term vision.

Acquisition, Development and Disposition Strategies

The Operating Partnership anticipates that future property acquisitions, developments and dispositions will occur within the United States.          Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt securities, sales of properties, joint venture agreements and collateralized and uncollateralized borrowings. In addition, the Operating Partnership may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“OP Units”) as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. ERPOP may also acquire land parcels to hold and/or sell based on market opportunities.

When evaluating potential The Operating Partnership may also seek to acquire properties by purchasing defaulted or distressed debt that encumbers desirable properties in the hope of obtaining title to property through foreclosure or deed-in-lieu of foreclosure proceedings. The Operating Partnership has also, in the past, converted some of its properties and sold them as condominiums but is not currently active in this line of business.

          The Operating Partnership primarily sources the funds for its new property acquisitions developments and dispositions,in its core markets with the sales proceeds from selling assets that are older or located in non-core markets. During the last five years, the Operating Partnership generally considershas sold over 97,000 apartment units for an aggregate sales price of $7.2 billion and acquired nearly 25,000 apartment units in its core markets for approximately $5.5 billion. We are currently acquiring and developing assets primarily in the following factors:

strategically targeted markets;

metropolitan areas: Boston, New York, Washington DC, South Florida, Southern California, San Francisco, Seattle and to a lesser extent Denver. We also have investments (in the aggregate about 18% of our NOI) in other markets including Atlanta, Phoenix, Portland, Oregon, New England excluding Boston, Tampa, Orlando and Jacksonville but do not intend to acquire or develop assets in these markets.

income levels and employment growth trends in the relevant market;

employment and household growth and net migration          As part of the relevant market’s population;

barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction costs, among other factors);

the location, construction quality, condition and design of the property;

the current and projected cash flow of the property and the ability to increase cash flow;

the potential for capital appreciation of the property;

the terms of resident leases, including the potential for rent increases;

the potential for economic growth and the tax and regulatory environment of the community in which the property is located;

the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);

the prospects for liquidity through sale, financing or refinancing of the property;

the benefits of integration into existing operations;

purchase prices and yields of available existing stabilized properties, if any;

competition from existing multifamily properties, comparably priced single family homes or rentals, residential properties under development and the potential for the construction of new multifamily properties in the area; and

opportunistic selling based on demand and price of high quality assets, including condominium conversions.

The Operating Partnership generally reinvests the proceeds received from property dispositions primarily to achieve its acquisition, development and rehab strategies and at times to fund its debt and EQR’s equity repurchase activities. In addition, when feasible,strategy, the Operating Partnership purchases completed and fully occupied apartment properties, partially completed or partially unoccupied properties or land on which apartment properties can be constructed. We intend to hold a diversified portfolio of assets across our target markets. Currently, no single metropolitan area accounts for more than 17% of our NOI, though no guarantee can be made that NOI concentration may structure these transactions as tax-deferred exchanges.

See also Note 20not increase in the Notesfuture.

          We endeavor to Consolidated Financial Statements for additional discussion regardingattract and retain the Operating Partnership’s segment disclosures.

best employees by providing them with the education, resources and opportunities to succeed. We provide many classroom and on-line training courses to assist our employees in interacting with prospects and residents as well as extensively train our customer service specialists in maintaining the equipment and appliances on our property sites. We actively promote from within and many senior corporate and property leaders have risen from entry level or junior positions. We monitor our employees’ engagement by surveying them annually and have consistently received high engagement scores.

          We have a commitment to sustainability and consider the environmental impacts of our business activities. With its high density, multifamily housing is, by its nature, an environmentally friendly property type. Our recent acquisition and development activities have been primarily concentrated in pedestrian-friendly urban locations near public transportation. When developing and renovating our properties, we strive to reduce energy and water usage by investing in energy saving technology while positively impacting the experience of our residents and the value of our assets. We continue to implement a combination of irrigation, lighting and HVAC improvements at our properties that will reduce energy and water consumption.
Debt and Equity Activity

Please refer to Item 7,Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the Operating Partnership’s Capital Structure chart as of December 31, 2008.2010.

5


Major Debt and Equity Activities for the Years Ended December 31, 2008, 20072010, 2009 and 20062008

During 2008:

The Operating Partnership obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of October 1, 2019) cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties.

2010:

The Operating Partnership obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of March 1, 2020) cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties.

The Operating Partnership obtained $543.0 million of mortgage loan proceeds through the issuance of an 8 year (stated maturity date of January 1, 2017) cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties.

EQR issued 995,129 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $24.6 million.

EQR issued 195,961 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $6.2 million.

EQR repurchased and retired 220,085 of its Common Shares at an average price of $35.93 per share for total consideration of $7.9 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

The Operating Partnership repurchased $72.6 million of its 4.75% fixed rate public notes due June 15, 2009 at a discount to par of approximately 1.0%. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Operating Partnership repurchased $101.4 million of its 3.85% convertible fixed rate public notes due August 15, 2026 at a discount to par of approximately 17.7%. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

During 2007:

The Operating Partnership issued $350.0 million of five-year 5.50% fixed rate notes (the “October 2012 Notes”) in a public debt offering in May/June 2007. The October 2012 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The October 2012 Notes are due October 1, 2012 with interest payable semiannually in arrears on January 15 and July 15, commencing January 15, 2008. The Operating Partnership received net proceeds of approximately $346.1 million in connection with this issuance.

The Operating Partnership issued $650.0 million of ten-year 5.75% fixed rate notes (the “June 2017 Notes”) in a public debt offering in May/June 2007. The June 2017 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The June 2017 Notes are due June 15, 2017 with interest payable semiannually in arrears on January 15 and July 15, commencing January 15, 2008. The Operating Partnership received net proceeds of approximately $640.6 million in connection with this issuance.

The Operating Partnership obtained a three-year (subject to two one-year extension options) $500.0 million senior unsecured credit facility (term loan) which generally pays a variable interest rate of LIBOR plus a spread dependent upon the current credit rating on the Operating Partnership’s long-term unsecured debt. The Operating Partnership paid $1.1 million in upfront costs, which will be deferred and amortized over the three-year term. EQR has guaranteed the Operating Partnership’s term loan facility up to the maximum amount and for the full term of the facility.

EQR issued 1,040,765 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $28.8 million.

EQR issued 189,071 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $7.2 million.

EQR repurchased and retired 27,484,346 of its Common Shares at an average price of $44.62 per share for

 

The Operating Partnership issued $600.0 million of ten-year 4.75% fixed rate public notes in a public offering at an all-in effective interest rate of 5.09%, receiving net proceeds of $595.4 million before underwriting fees and other expenses.
EQR issued 2,506,645 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $71.6 million.
EQR issued 157,363 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.1 million.
EQR issued 6,151,198 Common Shares at an average price of $47.45 per share for total consideration of $1.2 billion.

$291.9 million pursuant to its At-The-Market (“ATM”) share offering program. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
EQR repurchased and retired 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million (all related to the vesting of employee restricted shares). See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

During 2006:2009:
The Operating Partnership obtained $500.0 million of mortgage loan proceeds through the issuance of an 11 year (stated maturity date of July 1, 2020) cross-collateralized loan with an all-in fixed interest rate for 10 years at approximately 5.6% secured by 13 properties.
EQR issued 422,713 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $9.1 million.
EQR issued 324,394 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.3 million.
EQR issued 3,497,300 Common Shares at an average price of $35.38 per share for total consideration of $123.7 million pursuant to its ATM share offering program. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
EQR repurchased and retired 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million (all related to the vesting of employee restricted shares). See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $75.8 million of its 5.20% fixed rate tax-exempt notes.
The Operating Partnership repurchased at par $105.2 million of its 4.75% fixed rate public notes due June 15, 2009. In addition, the Operating Partnership repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $185.2 million at par and $21.7 million at a price of 106% of par of its 6.95% fixed rate public notes due March 2, 2011. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $146.1 million of its 6.625% fixed rate public notes due March 15, 2012 at a price of 108% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $127.9 million of its 5.50% fixed rate public notes due October 1, 2012 at a price of 107% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $17.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 (putable in 2011) at a price of 88.4% of par. In addition, the Operating Partnership repurchased $48.5 million of these notes at par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
During 2008:
The Operating Partnership obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of October 1, 2019) cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties.
The Operating Partnership obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of March 1, 2020) cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties.
The Operating Partnership obtained $543.0 million of mortgage loan proceeds through the issuance of an 8

6


The Operating Partnership issued $400.0 million of ten and one-half year 5.375% unsecured fixed rate notes (the “August 2016 Notes”) in a public debt offering in January 2006. The August 2016 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The August 2016 Notes are due August 1, 2016 with interest payable semiannually in arrears on February 1 and August 1, commencing August 1, 2006. The Operating Partnership received net proceeds of approximately $395.5 million in connection with this issuance.

The Operating Partnership issued $650.0 million of twenty-year 3.85% exchangeable senior notes (the “August 2026 Notes”) in a public debt offering in August 2006. The August 2026 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The August 2026 Notes are due August 15, 2026 with interest payable semiannually in arrears on February 15 and August 15, commencing February 15, 2007. The Operating Partnership received net proceeds of approximately $637.0 million in connection with this issuance. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

year (stated maturity date of January 1, 2017) cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties.
EQR issued 995,129 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $24.6 million.
EQR issued 195,961 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $6.2 million.
EQR repurchased and retired 220,085 of its Common Shares at an average price of $35.93 per share for total consideration of $7.9 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $72.6 million of its 4.75% fixed rate public notes due June 15, 2009 at a price of 99.0% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.
The Operating Partnership repurchased $101.4 million of its 3.85% convertible fixed rate public notes due August 15, 2026 (putable in 2011) at a price of 82.3% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

EQR issued 2,647,776 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $69.7 million.

EQR issued 213,427 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $8.0 million.

EQR repurchased 1,897,912 of its Common Shares on the open market at an average price of $43.85 per share. EQR paid approximately $83.2 million for these shares, which were retired subsequent to the repurchase.

EQR contributed all of the net proceeds of the above equity offerings to the Operating Partnership in exchange for OP Units or preference units.

On

          During the first quarter of 2011 through January 27, 2009,13, 2011, EQR has issued approximately 3.0 million Common Shares at an average price of $50.84 per share for total consideration of approximately $154.5 million through the Operating Partnership repurchased at par $105.2 million of its 4.75% unsecured notes due June 15, 2009 and $185.2 million of its 6.95% unsecured notes due March 2, 2011 pursuant to a cash tender offer announced onATM share offering program. EQR has not issued any shares under this program since January 16, 2009.

As of February 26, 2009, an13, 2011.

          An unlimited amount of equity and debt securities remains available for issuance by EQR and the Operating Partnership under effective shelf registration statements filed with the SEC. Most recently, EQR and the Operating Partnership filed a universal shelf registration statement for an unlimited amount of equity and debt securities that became automatically effective upon filing with the SEC in December 2008October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 21, 2011October 14, 2013 and does not contain a maximum issuance amount). AsHowever, as of February 26, 2009, an unlimited amount of equity securities remains available for issuance by EQR16, 2011, issuances under a registration statement that became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not contain a maximum issuance amount).ATM share offering program are limited to 10,000,000  additional shares. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

Credit Facilities

The Operating Partnership has a $1.5$1.425 billion (net of $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing) unsecured revolving credit facility maturing on February 28, 2012, with the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods plus a spread (currently 0.50%) dependent upon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR has guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility.

During the year ended December 31, 2008, one of the providers of the Operating Partnership’s unsecured revolving credit facility declared bankruptcy. Under the existing terms of the credit facility, the provider’s share is up to $75.0 million of potential borrowings. As a result, the Operating Partnership’s borrowing capacity under the unsecured revolving credit facility has in essence been permanently reduced to $1.425 billion of potential borrowings. The obligation to fund by all of the other providers has not changed.

On April 1, 2005, the Operating Partnership obtained a three-year $1.0 billion unsecured revolving credit facility maturing on May 29, 2008. Advances under the credit facility bore interest at variable rates based upon LIBOR at various interest periods plus a spread dependent upon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility. This credit facility was repaid in full and terminated on February 28, 2007. The Operating Partnership recorded $0.4 million of write-offs of unamortized deferred financing costs as additional interest in connection with this termination.

On May 7, 2007, the Operating Partnership obtained a one-year $500.0 million unsecured revolving credit facility maturing on May 5, 2008. Advances under this facility bore interest at variable rates based on LIBOR at various interest periods plus a spread dependent upon the Operating Partnership’s credit rating. EQR guaranteed this credit facility up to the maximum amount and for its full term. This credit facility was repaid in full and terminated on June 4, 2007.

As of December 31, 2008,2010, the amount available on the credit facility was $1.29$1.28 billion (net of $130.0$147.3 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above) and there was no amount outstanding. During the year ended December 31, 2010, the weighted average interest rate was 0.66%. As of December 31, 2009, the amount available on the credit facility was $1.37 billion (net of $56.7 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). As of December 31, 2007, $139.0 million wasThe Operating Partnership did not draw and had no balance outstanding and $80.8 million was restricted/dedicated to support letters ofon its revolving credit and not available for borrowing onfacility at any time during the credit facilities. During the yearsyear ended December 31, 2008 and 2007, the weighted average interest rates were 4.31% and 5.68%, respectively.

2009.

Competition

All of the Operating Partnership’s properties are located in developed areas that include other multifamily properties. The number of competitive multifamily properties in a particular area could have a material effect on the Operating Partnership’s ability to lease apartment units at the properties or at any newly acquired properties and on the rents charged. The Operating Partnership may be competing with other entities that have greater resources than the Operating Partnership and whose managers have more experience than the Operating Partnership’s managers. In addition, other forms of rental properties and single-familysingle family housing provide housing alternatives to potential residents of multifamily properties. See Item 1A.Risk Factorsfor additional information with respect to competition.

7


Environmental Considerations

See Item 1A.Risk Factorsfor information concerning the potential effects of environmental regulations on our operations.

Item 1A. Risk Factors

General

The following Risk Factors may contain defined terms that are different from those used in the other sections of this report. Unless otherwise indicated, when used in this section, the terms “we” and “us” refer to ERP Operating Limited Partnership, an Illinois limited partnership, and its subsidiaries. ERP Operating Limited Partnership is controlled by its general partner, Equity Residential, a Maryland real estate investment trust. This Item 1A. includes forward-looking statements. You should refer to our discussion of the qualifications and limitations on forward-looking statements included in Item 7.

The occurrence of the events discussed in the following risk factors could adversely affect, possibly in a material manner, our business, financial condition or results of operations, which could adversely affect the value of our preference interests (“Interests”) of a subsidiary of ERP Operating Limited Partnership; preference units, (“Units”); or units of limited partnership interest (“OP Units”) and Long-Term Incentive Plan Units (“LTIP Units”) of ERP Operating Limited Partnership. In this section, we refer to the Interests,preference units, OP Units and the OPLTIP Units together as our “securities” and the investors who own Interests, Units and/or OPOP/LTIP Units as our “security holders”.

Our Performance and OP UnitSecurities Value are Subject to Risks Associated with the Real Estate Industry

General

Real property investments are subject to varying degrees of risk and are relatively illiquid. SeveralNumerous factors may adversely affect the economic performance and value of our properties.properties and the ability to realize that value. These factors include changes in the global, national, regional and local economic climates, local conditions such as an oversupply of multifamily properties or a reduction in demand for our multifamily properties, the attractiveness of our properties to residents, competition from

other available multifamily property ownersproperties and single family homes and changes in market rental rates. Our performance also depends on our ability to collect rent from residents and to pay for adequate maintenance, insurance and other operating costs, including real estate taxes, all of which could increase over time. Sources of labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated. Also, the expenses of owning and operating a property are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the property.

We May Not Have Sufficient Cash Flows From Operations After Capital Expenditures to Cover Our Distributions

We May Not Have Sufficient Cash Flows From Operations After Capital Expenditures to Cover Our Distributions and Our New Dividend Policy May Lead to Quicker Dividend Reductions
We generally consider our cash flows provided by operating activities after capital expenditures to be adequate to meet operating requirements and payment of distributions to our security holders. However, there may be times when we experience shortfalls in our coverage of distributions, which may cause us to consider reducing our distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, our financial condition may be adversely affected and we may not be able to maintain our current distribution levels.

While our new dividend policy makes it less likely we will over distribute, it will also lead to a dividend reduction more quickly than in the past should operating results deteriorate. See Item 7 for additional discussion regarding our new dividend policy.

We May Be Unable to Renew Leases or Relet Apartment Units as Leases Expire

When our residents decide not to renew their leases upon expiration, we may not be able to relet their apartment units. Even if the residents do renew or we can relet the apartment units, the terms of renewal or reletting may be less favorable than current lease terms. Because virtually all of our leases are for apartments, they are generally for terms of no more than one year. If we are unable to promptly renew the leases or relet the apartment units, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then our results of operations and financial condition will be adversely affected. Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers and the potential for geopolitical instability, all of which are beyond

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the Operating Partnership’s control. In addition, various state and local municipalities are considering and may continue to consider rent control legislation which could limit our ability to raise rents. Finally, the federal government is considering and may continue to considergovernment’s policies, many of which may encourage home ownership, thus increasingcan increase competition and possibly limitinglimit our ability to raise rents. Consequently, our cash flow and ability to service debt and make distributions to security holders could be reduced.

New Acquisitions and/or Development Projects May Fail to Perform as Expected and Competition for Acquisitions May Result in Increased Prices for Properties

New Acquisitions and/or Development Projects May Fail to Perform as Expected and Competition for Acquisitions May Result in Increased Prices for Properties
We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate. The Operating Partnership does not currently intendWe may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to begin the development of any new wholly-owned projects but has a substantial number oflease up these apartment properties under development nowon schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and may commence new development activities if conditions warrant.rates as well as higher than expected concessions. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. To the extent that we do develop more properties if conditions warrant, we expect to do so ourselves in addition to co-investing with our development partners. The total number of development units, costcosts of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation.

          In connection with such government regulation, we may incur liability if our properties are not constructed and operated in compliance with the accessibility provisions of the Americans with Disabilities Act, the Fair Housing Act or other federal, state or local requirements. Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance.
BecauseRisks Involved in Real Estate Investments Are Illiquid,Activity Through Joint Ventures
          We May Not Be Ablehave in the past and may in the future develop and acquire properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures. Joint venture investments involve risks, including the possibility that our partners might refuse to Sell Properties When Appropriate

make capital contributions when due; that we may be responsible to our partner for indemnifiable losses; that our partner might at any time have business or economic goals which are inconsistent with ours; and that our partner may be in a position to take action or withhold consent contrary to our instructions or requests. Frequently, we and our partner may each have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction. In some instances, joint venture partners may have competing interests in our markets that could create conflicts of interest. Further, the Operating Partnership’s joint venture partners may experience financial distress and to the extent they do not meet their obligations to us or our joint ventures with them, we may be adversely affected.

Because Real Estate Investments Are Illiquid, We May Not Be Able to Sell Properties When Appropriate
Real estate investments generally cannot be sold quickly. We may not be able to reconfigure our portfolio promptly in response to economic or other conditions. This inability to respondreallocate our capital promptly to changes in the performance of our investments could adversely affect our financial condition and ability to make distributions to our security holders.
The Value of Investment Securities Could Result In Losses to the Operating Partnership
          From time to time, the Operating Partnership holds investment securities and/or cash investments that have a higher risk profile than the government obligations and bond funds, money market funds or bank deposits in which we generally invest. On occasion we may purchase securities of companies in our own industry as a means to invest funds. There may be times when we experience declines in the value of these investment securities, which may result in losses to the Operating Partnership and our financial condition or results of operations could be adversely affected. Sometimes the cash we deposit at a bank exceeds the FDIC insurance limit resulting in risk to the Operating Partnership of loss of funds if these banks fail.

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Changes in Market Conditions and Volatility of Share Prices Could Adversely Affect the Market Price of EQR’s Common Shares
          The stock markets, including the New York Stock Exchange, on which EQR’s Common Shares are listed, have experienced significant price and volume fluctuations. As a result, the market price of EQR’s Common Shares could be similarly volatile, and investors in EQR’s Common Shares may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The market price of EQR’s Common Shares may decline or fluctuate significantly in response to many factors, including but not limited to the following:
general market and economic conditions;
actual or anticipated variations in our quarterly operating results or dividends;
changes in our funds from operations, normalized funds from operations or earnings estimates;
difficulties or inability to access capital or extend or refinance debt;
decreasing (or uncertainty in) real estate valuations;
a change in analyst ratings;
adverse market reaction to any additional debt we incur in the future;
governmental regulatory action, including changes or proposed changes to the mandates of Fannie Mae or Freddie Mac, and changes in tax laws; and
the issuance of additional Common Shares, or the perception that such issuances might occur, including under EQR’s ATM program.
Changes in Laws and Litigation Risk Could Affect Our Business

We are generally not able to pass through to our residents under existing leases any real estate or other federal, state or local taxes. Consequently, any such tax increases may adversely affect our financial condition and limit our

ability to make distributions to our security holders. Similarly, changes that increase our potential liability under environmental laws or our expenditures on environmental compliance would adversely affect our cash flow and ability to make distributions on our securities.

We may become involved in legal proceedings, including but not limited to, proceedings related to consumer, employment, development, condominium conversion, tort and commercial legal issues that, if decided adversely to or settled by us, could result in liability material to our financial condition or results of operations.

Any Weaknesses Identified in Our Internal Control Over Financial Reporting Could Have an Adverse Effect on EQR’s Share Price
          Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on EQR’s share price.
Environmental Problems Are Possible and Can Be Costly

Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at such property. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site.

Substantially all of our properties have been the subject of environmental assessments completed by qualified independent environmental consultantconsulting companies. While these environmental assessments have not revealed, nor are we aware of, any environmental liability that our management believes would have a material adverse effect on our business, results of operations, financial condition or liquidity, there can be no assurance that we will not incur such liabilities in the future.

Over the past several years, there

          There have been an increasing number of lawsuits against owners and managers of multifamily properties alleging personal injury and property damage caused by the presence of mold in residential real estate. As some of these lawsuits have resulted in substantial monetary judgments or settlements, insurance carriers have reacted by excluding mold-related claims from standard policies and pricing mold endorsements at

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prohibitively high rates. WeWhile we have adopted programs designed to minimize the existence of mold in any of our properties as well as guidelines for promptly addressing and resolving reports of mold to minimize any impact mold might have on our residents or the property.

property, should mold become an issue in the future, our financial condition or results of operations may be adversely affected.

We cannot be assured that existing environmental assessments of our properties reveal all environmental liabilities, that any prior owner of any of our properties did not create a material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any of our properties.

Climate Change
          To the extent that climate change does occur, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage or a decrease in demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, including destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected.
          In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our new development properties without a corresponding increase in revenue.
Insurance Policy Deductibles, Exclusions and ExclusionsCounterparties

In order to manage insurance costs, management has gradually increased deductible and self-insured retention amounts.

          As of December 31, 2008,2010, the Operating Partnership’s property insurance policy provides for a per occurrence deductible of $250,000 and self-insured retention of $5.0 million per occurrence, subject to a maximum annual aggregate self-insured retention of $7.5 million, with approximately 80% of any excess losses being covered by insurance. Any earthquake and named windstorm losses are subject to a deductible of 5% of the values of the buildings involved in the losses and are not subject to the aggregate self-insured retention. The Operating Partnership’s general liability and worker’s compensation policies at December 31, 20082010 provide for a $2.0 million and $1.0 million per occurrence deductible, respectively. These higher deductible and self-insured retention amounts do expose the Operating Partnership to greater potential uninsured losses, but management has reviewed its claims history over the years and believes the savings in insurance premium expense justify this potential increased exposure over the long-term.

However, the potential impact of climate change and increased severe weather could cause a significant increase in insurance premiums and deductibles, particularly for our coastal properties, or a decrease in the availability of coverage, either of which could expose the Operating Partnership to even greater uninsured losses which may adversely affect our financial condition or results of operations.

As a result of the terrorist attacks of September 11, 2001, property insurance carriers created exclusions for losses from terrorism from our “all risk” property insurance policies. As of December 31, 2008,2010, the Operating Partnership was insured for $500.0 million in terrorism insurance coverage, with a $100,000 deductible. This coverage excludes losses from nuclear, biological and chemical attacks. In the event of a terrorist attack impacting one or more of our properties, we could lose the revenues from the property, our capital investment in the property and possibly face liability claims from residents or others suffering injuries or losses. The Operating Partnership believes, however, that the number of properties in and geographic diversity ofhas become more susceptible to large losses as it has transformed its portfolio, becoming more concentrated in fewer, more valuable assets over a smaller geographical footprint.
          In addition, the Operating Partnership relies on third party insurance providers for its property, general liability and its terrorismworker’s compensation insurance. While there has yet to be any non-performance by these major insurance coverage helpproviders, should any of them experience liquidity issues or other financial distress, it could negatively impact the Operating Partnership.
Non-Performance by Our Operating Counterparties Could Adversely Affect Our Performance
     We have relationships with and, from time to mitigate its exposuretime, we execute transactions with or receive services from many counterparties. As a result, defaults by counterparties could result in services not being provided, or volatility in the financial markets could affect counterparties’ ability to the risks associatedcomplete transactions with potential terrorist attacks.us as intended, both of which could result in disruptions to our operations that may adversely affect our business and results of operations.

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Debt Financing and Preference Interests and Units Could Adversely Affect Our Performance

General

Please refer to Item 7,Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the Operating Partnership’s total debt and unsecured debt summaries as of December 31, 2008.

2010.

In addition to debt, we have $209.0$200.0 million of combined liquidation value of outstanding preference interests and units with a weighted average dividend preference of 6.94%6.93% per annum as of December 31, 2008.2010. Our use of debt and preferred equity financing creates certain risks, including the following:

Disruptions in the Financial Markets Could Adversely Affect Our Ability to Obtain Debt Financing and Impact our Acquisitions and Dispositions
          Dislocations and liquidity disruptions in the Financial Markets Could Adversely Affect Our Ability to Obtain Debt Financing and Impact our Acquisitions and Dispositions

The United States capital and credit markets continue to experience significant dislocations and liquidity disruptions. These circumstances have materially impactedcould impact liquidity in the debt markets, makingresulting in financing terms for usthat are less attractive and resulted into us and/or the unavailability of certain types of debt financing. IfShould the capital and credit markets continue to experience volatility and the availability of funds remainsagain become limited, or be available only on unattractive terms, or non-existent, we will incur increased costs associated with issuing debt instruments. In addition, it is possible that our ability to access the capital and credit markets may be limited or precluded by these or other factors at a time when we would like, or need, to do so, which would adversely impact our ability to refinance maturing debt and/or react to changing economic and business conditions. Due to disruptions in the floating rate tax-exempt bond market where the interest rates reset weekly and in the credit market’s perception of Fannie Mae and Freddie Mac, which guaranty and provide liquidity for these bonds, we have experienced and could experience in the future an increase in interest rates on these debt obligations. These bonds could also be put to our consolidated subsidiaries if Fannie Mae or Freddie Mac fail to satisfy their guaranty obligations. While this obligation is in almost all cases non-recourse to us, this could cause the Operating Partnership to have to repay these obligations on short notice or risk foreclosure actions on the collateralized assets. Furthermore, while we believe Fannie Mae and Freddie Mac will continue to provide liquidity to our sector, should they discontinue doing so, have their mandates changed or reduced or be disbanded by the government, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly reduce our sales of assets. Uncertainty in the credit markets could negatively impact our ability to make acquisitions and make it more difficult or not possible for us to sell properties or may adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing. Potential continued disruptions in the financial markets could also have other unknown adverse effects on us or the economy generally and may cause the price of EQR’s Common Shares to fluctuate significantly and/or to decline.

Potential Reforms to Fannie Mae and Freddie Mac Could Adversely Affect Our Performance
          There is significant uncertainty surrounding the futures of Fannie Mae and Freddie Mac. Should Fannie Mae and Freddie Mac have their mandates changed or reduced, be disbanded or reorganized by the government or otherwise discontinue providing liquidity to our sector, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly reduce our sales of assets and/or the values realized upon sale. Disruptions in the floating rate tax-exempt bond market (where interest rates reset weekly) and in the credit market’s perception of Fannie Mae and Freddie Mac, which guarantee and provide liquidity for these bonds, have been experienced in the past and may be experienced in the future and could result in an increase in interest rates on these debt obligations. These bonds could also be put to our consolidated subsidiaries if Fannie Mae or Freddie Mac fail to satisfy their guaranty obligations. While this obligation is in almost all cases non-recourse to us, this could cause the Operating Partnership to have to repay these obligations on short notice or risk foreclosure actions on the collateralized assets.
Non-Performance by Our Financial Counterparties Could Adversely Affect Our Performance

Although we have not experienced any material counterparty non-performance, the disruptiondisruptions in financial and credit markets could, among other things, impede the ability of our counterparties to perform on their contractual obligations. There are multiple financial institutions that are individually committed to lend us varying amounts as part of our revolving credit facility. Should any of these institutions fail to fund their committed amounts when contractually required, our financial condition could be adversely affected. Should several of these institutions fail to fund, we could experience significant financial distress.

One of the financial institutions, with a commitment of $75.0 million, has recently declared bankruptcy in 2008 and it is unlikely that they wouldwill not honor theirits financial commitment. Our borrowing capacity under the credit facility has in essence been permanently reduced to $1.425 billion.

          The Operating Partnership also has severaldeveloped assets under development with joint venture partners which were financed by financial institutions that are sufferinghave experienced varying degrees of distress.distress in the past and could experience similar distress as economic conditions change. If one or more of these lenders fail to fund when contractually required, the Operating Partnership or its joint venture partner may be unable to complete construction of its development properties. In addition, the parent of one of the Operating Partnership’s insurance providers has also experienced liquidity issues and while there has yet to be any non-performance, should any occur it could negatively impact the Operating Partnership. Should any of our other major insurance providers experience similar financial or other distress, it could negatively impact the Operating Partnership. Finally, we are also party to various derivative contracts with a number of counterparties. Any failure of any of our counterparties to perform under these contracts could negatively impact us.

A Significant Downgrade in Our Credit Ratings Could Adversely Affect Our Performance

A significant downgrade in our credit ratings, while not affecting our ability to draw proceeds under the revolving credit facility, would cause our borrowing costs to increase under the facility and also would impact our ability to

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borrow secured and unsecured debt, by increasing borrowing costs, or otherwise limit our access to capital. In addition, a downgrade below investment grade would require us to post cash collateral and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles.

deductibles or to obtain lower deductible insurance compliant with the lenders’ requirements at the lower rating level.

Scheduled Debt Payments Could Adversely Affect Our Financial Condition

In the future, our cash flow could be insufficient to meet required payments of principal and interest or to pay distributions on our securities at expected levels.

We may not be able to refinance existing debt, including joint venture indebtedness (which in virtually all cases requires substantial principal payments at maturity) and, if we can, the terms of such refinancing might not be as favorable as the terms of existing indebtedness. If principal payments due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our operating cash flow will not be sufficient in all years to repay all maturing debt. As a result, certain of our other debt may cross default, we may be forced to postpone capital expenditures necessary for the maintenance of our properties, we may have to dispose of one or more properties on terms that would otherwise be unacceptable to us or we may be forced to allow the mortgage holder to foreclose on a property.

Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations.

Please refer to Item 7,Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the Operating Partnership’s debt maturity schedule as of December 31, 2008.

2010.

Financial Covenants Could Adversely Affect the Operating Partnership’s Financial Condition

If a property we own is mortgaged to secure debt and we are unable to meet the mortgage payments, the holder of the mortgage could foreclose on the property, resulting in loss of income and asset value. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations.

The mortgages on our properties may contain customary negative covenants that, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property and to reduce or change insurance coverage. In addition, our unsecured credit facilities contain certain restrictions, requirements and other limitations on our ability to incur debt. The indentures under which a substantial portion of our unsecured debt was issued also contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios, as well as limitations on our ability to incur secured and unsecured debt (including acquisition financing), and to sell all or substantially all of our assets. Our credit facilities and indentures are cross-defaulted and also contain cross default provisions with other material debt. TheWhile the Operating Partnership believes it was in compliance with its unsecured public debt covenants for both the years ended December 31, 20082010 and 2007.

2009, should it fall out of compliance, it would likely have a negative impact on our financial condition and results of operations.

Some of the properties were financed with tax-exempt bonds that contain certain restrictive covenants or deed restrictions. We have retained an independent outside consultant to monitor compliance with the restrictive covenants and deed restrictions that affect these properties. If these bond compliance requirements restrict our ability to increase our rental rates to attract low or moderate-income residents, or eligible/qualified residents, then our income from these properties may be limited. Generally,While we generally believe that the interest rate benefit attendant to properties with tax-exempt bonds more than outweighs any loss of income due to restrictive covenants or deed restrictions.

restrictions, this may not always be the case.

Our Degree of Leverage Could Limit Our Ability to Obtain Additional Financing

Our consolidated debt-to-total market capitalization ratio was 54.3% as of December 31, 2008.

          Our degree of leverage could have important consequences to security holders. For example, the degree of leverage could affect our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, development or other general corporate purposes, making us more vulnerable to a downturn in business or the economy in general. Our consolidated debt-to-total market capitalization ratio was 38.4% as of December 31, 2010. In addition, our most restrictive unsecured public debt covenants are as follows:

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  December 31,  December 31, 
  2010  2009 
Total Debt to Adjusted Total Assets (not to exceed 60%)  48.5%  48.8%
         
Secured Debt to Adjusted Total Assets (not to exceed 40%)  23.2%  24.9%
         
Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1)  2.46   2.44 
         
Total Unsecured Assets to Unsecured Debt (must be at least 150%)  256.0%  256.5%
Rising Interest Rates Could Adversely Affect Cash Flow

Advances under our credit facilities bear interest at variable rates based upon LIBOR at various interest periods, plus a spread dependent upon the Operating Partnership’s credit rating, or based upon bids received from the

lending group. Certain public issuances of our senior unsecured debt instruments may also, from time to time, bear interest at floating rates. We may also borrow additional money with variable interest rates in the future. Increases in interest rates would increase our interest expense under these debt instruments and would increase the costs of refinancing existing debt and of issuing new debt. Accordingly, higher interest rates could adversely affect cash flow and our ability to service our debt and to make distributions to security holders. We

Derivatives and Hedging Activity Could Adversely Affect Cash Flow
          In the normal course of business, we use interest rate hedging arrangementsderivatives to manage our exposure to interest rate volatility but these arrangementson debt instruments, including hedging for future debt issuances. At other times we may expose usutilize derivatives to additional risks, and no strategy can completely insulate us from risks associated withincrease our exposure to floating interest rate fluctuations.rates. There can be no assurance that ourthese hedging arrangements will have the desired beneficial impactimpact. These arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or breakage costs, if we terminate them.

No strategy can completely insulate us from the risks associated with interest rate fluctuations.

We Depend on Our Key Personnel

We depend on the efforts of the Chairman of EQR’s Board of Trustees, Samuel Zell, and EQR’s executive officers, particularly David J. Neithercut, EQR’s President and Chief Executive Officer.Officer (“CEO”). If they resign or otherwise cease to be employed by us, our operations could be temporarily adversely affected. Mr. Zell has entered into retirement benefit and noncompetition agreements with the Company.

In the event EQR’s Chairman of the Board and/or CEO are unable to serve, (i) the Lead Trustee will automatically be appointed to serve as the interim successor to the Chairman, (ii) the Chairman will automatically be appointed to serve as the interim successor to the CEO and (iii) the Chair of the Compensation Committee of the Board will immediately call a meeting of the Committee to recommend to the full Board the selection of a permanent replacement for either or both positions, as necessary.

Control and Influence by Significant OP Unit Holders Could Be Exercised in a Manner Adverse to Other OP Unit Holders

The consent of certain affiliates of Mr. Zell is required for certain amendments to ERPOP’s FifthSixth Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”). As a result of their security ownership and rights concerning amendments to the Partnership Agreement, the Zell affiliates may have influence over ERPOP. Although to ERPOP’s knowledge these OP Unit holders have not agreed to act together on any matter, they would be in a position to exercise even more influence over ERPOP’s affairs if they were to act together in the future. This influence mightcould conceivably be exercised in a manner that is inconsistent with the interests of other OP Unit holders. For additional information regarding the security ownership of Mr. Zell and EQR’s executive officers, and trustees, see EQR’s definitive proxy statement.

Our Success isIs Dependent on our General Partner’s Compliance with Federal Income Tax Requirements

We rely to a significant extent upon onour general partner, EQR, as our source of equity capital. EQR is required to satisfy numerous technical requirements to remain qualified as a REIT for federal income tax purposes. EQR’s failure to qualify as a REIT could have a material adverse impact upon its, and consequently our, ability to raise equity capital. Please see the “Risk Factors – Our“Our Success as a REIT Is Dependent on Compliance with Federal Income Tax Requirements”, “Compliance with REIT Distribution Requirements May Affect Our Financial Condition” and “Federal Income Tax Considerations” sections ofincluded in Risk Factors in EQR’s Annual Report on Form 10-K for a discussion of these federal income tax considerations.

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Our General Partner’s Compliance with REIT Distribution Requirements May Affect Our Financial Condition


Distribution Requirements May Increase the Indebtedness of the Operating Partnership

We may be required from time to time, under certain circumstances, to accrue as income for tax purposes interest and rent earned but not yet received. In such event, or upon our repayment of principal on debt, we could have taxable income without sufficient cash to enable us to meet the distribution requirements of a REIT. Accordingly, we could be required to borrow funds or liquidate investments on adverse terms in order to meet these distribution requirements.

Tax Elections Regarding Distributions May Impact Future Liquidity of the Operating Partnership

During 2008, we did make, and under certain circumstances may consider making again in the future, a tax election to treat future distributions to shareholders as distributions in the current year. This election, which is provided for in the REIT tax code, may allow us to avoid increasing our dividends or paying additional income taxes in the current year. However, this could result in a constraint on our ability to decrease our dividends in future years without creating risk of either violating the REIT distribution requirements or generating additional income tax

liability.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of December 31, 2008,2010, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 548451 properties located in 2317 states and the District of Columbia consisting of 147,244129,604 apartment units. The Operating Partnership’s properties are summarized by building type in the following table:

Type

        Properties            Units            Average    
Units

Garden

    471    124,850    265

Mid/High-Rise

    75    17,685    236

Military Housing

    2    4,709    2,355
              

Total

                548          147,244    
              

             
          Average 
Type Properties  Apartment Units  Apartment Units 
Garden  354   100,551   284 
Mid/High-Rise  95   24,315   256 
Military Housing  2   4,738   2,369 
           
             
Total  451   129,604     
           
The Operating Partnership’s properties are summarized by ownership type in the following table:

         Properties            Units    

Wholly Owned Properties

    477    127,002

Partially Owned Properties:

        

Consolidated

    28    5,757

Unconsolidated

    41    9,776

Military Housing (Fee Managed)

    2    4,709
          
              548          147,244
          

         
  Properties  Apartment Units 
Wholly Owned Properties  425   119,634 
Partially Owned Properties — Consolidated  24   5,232 
Military Housing  2   4,738 
       
         
   451   129,604 
       
The following table sets forth certain information by market relating to the Operating Partnership’s properties at December 31, 2008:

2010:

PORTFOLIO SUMMARY
                     
              % of  Average 
          % of Total  Stabilized  Rental 
Markets Properties  Apartment Units  Apartment Units  NOI  Rate (1) 
1 New York Metro Area  28   8,290   6.4%  12.7% $2,843 
2 DC Northern Virginia  31   10,393   8.0%  12.1%  1,869 
3 South Florida  38   12,869   9.9%  9.1%  1,313 
4 Los Angeles  39   8,311   6.4%  8.1%  1,717 
5 Boston  28   5,711   4.4%  7.1%  2,204 
6 Seattle/Tacoma  43   9,748   7.5%  6.7%  1,293 
7 San Francisco Bay Area  35   6,606   5.1%  6.0%  1,683 
8 San Diego  14   4,963   3.8%  5.2%  1,789 
9 Phoenix  36   10,769   8.3%  4.8%  848 
10 Denver  23   7,967   6.2%  4.7%  1,044 
11 Suburban Maryland  21   5,782   4.5%  4.5%  1,346 
12 Orlando  26   8,042   6.2%  4.2%  961 
13 Orange County, CA  11   3,490   2.7%  3.2%  1,518 
14 Atlanta  20   6,183   4.8%  3.0%  961 
15 Inland Empire, CA  11   3,639   2.8%  2.8%  1,352 
16 All Other Markets (2)  45   12,103   9.3%  5.8%  975 
                
                     
Total
  449   124,866   96.3%  100.0%  1,444 
                     
Military Housing  2   4,738   3.7%      
                
                     
Grand Total
  451   129,604   100.0%  100.0% $1,444 
                
(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the month

15


  

Markets

      Properties          Units      % of
    Total Units    
      % of 2009    
Stabilized
NOI
      Average    
Rental
Rate (1)

1

 

New York Metro Area

  22  6,246  4.2%  10.0%  $2,748

2

 

DC Northern Virginia

  26  8,781  6.0%  8.8%   1,637

3

 

South Florida

  39  12,897  8.8%  8.4%   1,270

4

 

Los Angeles

  38  7,749  5.3%  7.8%   1,777

5

 

Seattle/Tacoma

  49  11,138  7.6%  7.5%   1,330

6

 

San Francisco Bay Area

  34  6,731  4.6%  6.5%   1,709

7

 

Boston

  37  6,217  4.2%  6.4%   1,962

8

 

Phoenix

  42  12,084  8.2%  5.3%   902

9

 

Denver

  25  8,606  5.8%  5.0%   1,019

10

 

San Diego

  14  4,491  3.1%  4.4%   1,655

11

 

Orlando

  26  8,042  5.5%  4.3%   1,021

12

 

Atlanta

  29  8,882  6.0%  3.9%   944

13

 

Inland Empire, CA

  15  4,655  3.2%  3.7%   1,362

14

 

Suburban Maryland

  21  5,559  3.8%  3.4%   1,180

15

 

Orange County, CA

  10  3,307  2.2%  3.3%   1,597

16

 

New England (excluding Boston)

  32  4,769  3.2%  2.5%   1,106

17

 

Portland, OR

  11  3,713  2.5%  1.9%   959

18

 

Jacksonville

  12  3,951  2.7%  1.7%   868

19

 

Dallas/Ft. Worth

  14  3,427  2.3%  1.4%   936

20

 

Tampa

  11  3,414  2.3%  1.3%   909
                 
 

Top 20 Total

  507  134,659  91.5%  97.5%   1,344

21

 

Raleigh/Durham

  12  3,058  2.1%  1.3%   818

22

 

Central Valley, CA

  8  1,343  0.9%  0.6%   1,090

23

 

Other EQR

  15  3,318  2.2%  0.6%   907
                 
 

Total

  542  142,378  96.7%  100.0%   1,320
 

Condominium Conversion

  4  157  0.1%  -   -
 

Military Housing

  2  4,709  3.2%  -   -
                 
 

Grand Total

  548  147,244  100.0%  100.0%  $1,320
                 

(1) Average rental rate is defined as total rental revenues divided by

of December 2010.
(2)All Other Markets — Each individual market is less than 2.0% of stabilized NOI.
Note: Projects under development are not included in the weighted average occupied units forPortfolio Summary until construction has been completed, at which time the month of December 2008.

projects are included at their stabilized NOI. Projects under lease-up are included at their stabilized NOI.

The Operating Partnership’s properties had an average occupancy of approximately 93.2%94.1% (94.5% on a same store basis) at December 31, 2008.2010. Certain of the Operating Partnership’s properties are encumbered by mortgages and additional detail can be found on Schedule III — Real Estate and Accumulated Depreciation. Resident leases are generally for twelve months in length and oftencan require security deposits. The garden-style properties are generally defined as properties with two and/or three story buildings while the mid-rise/high-rise are defined as properties with greater than three story buildings. These two property types typically provide residents with amenities, which may include a clubhouse, swimming pool, laundry facilities and cable television access. Certain of these properties offer additional amenities such as saunas, whirlpools, spas, sports courts and exercise rooms or other amenities. In addition, many of our urban properties have parking garage and/or retail components. The military housing properties are defined as those properties located on military bases.

The distribution of the properties throughout the United States reflects the Operating Partnership’s belief that geographic diversification helps insulate the portfolio from regional and economic influences. At the same time, the Operating Partnership has sought to create clusters of properties within each of its primary markets in order to achieve economies of scale in management and operation. The Operating Partnership may nevertheless acquire additional multifamily properties located anywhere in the United States.

The properties currently in various stages of development and lease-up at December 31, 20082010 are included in the following table:

Consolidated Development and Lease-Up Projects as of December 31, 2008

2010

(Amounts in thousands except for project and apartment unit amounts)

Projects

 

  Location          

   No. of  
Units
 Total   Capital  
Cost (1)
 Total
  Book Value  
to Date
    Total Book  
Value Not
Placed in
Service
   Total   Debt    Percentage  
Completed
   Percentage  
Leased
   Percentage  
Occupied
 Estimated
  Completion  
Date
 Estimated
  Stabilization  
Date

Projects Under Development – Wholly Owned:

         

Mosaic at Metro

 

Hyattsville, MD

 260   $61,483   $53,329    $53,329   $38,425  94% 21% 14% Q1 2009 Q1 2010

70 Greene (a.k.a. 77 Hudson)

 

Jersey City, NJ

 480  269,958  196,126   196,126  -  79% - - Q4 2009 Q1 2011

Reserve at Town Center II

 

Mill Creek, WA

 100  24,464  9,324   9,324  -  27% - - Q1 2010 Q3 2010

Redmond Way

 

Redmond, WA

 250  84,382  22,434   22,434  -  7% - - Q1 2011 Q1 2012
                      

Projects Under Development – Wholly Owned

 1,090  440,287  281,213   281,213  38,425      

Projects Under Development –
Partially Owned:

          

Third Square (a.k.a. 303 Third St.)

 

Cambridge, MA

 482  254,523  250,629   126,437  158,515  98% 36% 29% Q1 2009 Q2 2010

Veridian (a.k.a. Silver Spring)

 

Silver Spring, MD

 457  148,705  139,904   139,904  98,674  95% 22% 5% Q1 2009 Q3 2010

Montclair Metro

 

Montclair, NJ

 163  48,730  29,326   29,326  14,540  64% - - Q3 2009 Q1 2010

Red Road Commons

 

South Miami, FL

 404  128,816  96,600   96,600  39,028  71% - - Q1 2010 Q3 2011

111 Lawrence Street

 

Brooklyn, NY

 492  283,968  108,727   108,727  -  32% - - Q2 2010 Q3 2011

Westgate

 

Pasadena, CA

 480  170,558  73,266   73,266  163,160(2) 24% - - Q2 2011 Q2 2012
                      

Projects Under Development – Partially Owned

 2,478  1,035,300  698,452   574,260  473,917      
                      

Projects Under Development

 3,568  1,475,587  979,665   855,473  512,342(3)     
                      

Land Held for Development

 N/A  -  254,873(5)  254,873  43,626      
                      

Land/Projects Held for and/or Under
Development

 3,568  1,475,587  1,234,538   1,110,346  555,968      
                      

Completed Not Stabilized – Wholly Owned (4):

          

Key Isle at Windermere II

 

Orlando, FL

 165  27,955  27,825   -  -   93% 89% Completed Q1 2009

West End Apartments
(a.k.a. Emerson/ CRP II)

 

Boston, MA

 310  164,981  163,145   -  -   92% 86% Completed Q2 2009

Highland Glen II

 

Westwood, MA

 102  19,888  19,868   -  -   86% 86% Completed Q2 2009

Crowntree Lakes

 

Orlando, FL

 352  57,376  56,680   -  -   81% 69% Completed Q4 2009

Reunion at Redmond Ridge

 

Redmond, WA

 321  54,418  52,909   -  -   31% 28% Completed Q3 2010
                      

Projects Completed Not Stabilized – Wholly Owned

 1,250  324,618  320,427   -  -      

Completed Not Stabilized – Partially Owned (4):

          

Alta Pacific

 

Irvine, CA

 132  45,342  45,317   -  28,260   95% 89% Completed Q1 2009

1401 S. State (a.k.a. City Lofts)

 

Chicago, IL

 278  69,952  68,247   -  48,448   63% 53% Completed Q3 2009
                      

Projects Completed Not Stabilized – Partially Owned

 410  115,294  113,564   -  76,708      
                      

Projects Completed Not Stabilized

 1,660  439,912  433,991   -  76,708      
                      

Total Projects

  5,228 $1,915,499 $1,668,529  $1,110,346 $632,676      
                      

                                             
      No. of  Total  Total  Total Book
Value Not
                  Estimated  Estimated 
      Apartment  Capital  Book Value  Placed in  Total  Percentage  Percentage  Percentage  Completion  Stabilization 
Projects  Location Units  Cost (1)  to Date  Service  Debt  Completed  Leased  Occupied  Date  Date 
Projects Under Development — Wholly Owned:                                        
                                             
Red 160 (formerly Redmond Way) Redmond, WA  250  $84,382  $76,964  $76,964  $   97%  86%  68%  Q1 2011   Q1 2012 
                                             
500 West 23rd Street (formerly 10 Chelsea) (2) New York, NY  111   55,555   27,382   27,382      33%        Q4 2011   Q4 2012 
                                             
Savoy III Aurora, CO  168   23,856   5,409   5,409      7%        Q3 2012   Q2 2013 
                                             
2201 Pershing Drive Arlington, VA  188   64,242   14,707   14,707      1%        Q3 2012   Q3 2013 
                                        
                                             
Projects Under Development — Wholly Owned  717   228,035   124,462   124,462                        
                                        
                                             
Projects Under Development    717   228,035   124,462   124,462                        
                                        
                                             
Completed Not Stabilized — Wholly Owned (3):                                        
                                             
Reunion at Redmond Ridge Redmond, WA  321   53,175   53,151             94%  93% Completed  Q1 2011 
                                             
Westgate Pasadena, CA  480   165,558   154,886      135,000(4)      80%  76% Completed  Q3 2011 
                                             
425 Mass (5) Washington, D.C.  559   166,750   166,750             61%  58% Completed  Q1 2012 
                                             
Vantage Pointe (5) San Diego, CA  679   200,000   200,000             42%  41% Completed  Q3 2012 
                                        
                                             
Projects Completed Not Stabilized — Wholly Owned  2,039   585,483   574,787      135,000                     
                                             
Completed Not Stabilized — Partially Owned (3):                                        
                                             
The Brooklyner (formerly 111 Lawrence) Brooklyn, NY  490   272,368   257,748      141,741       93%  89% Completed  Q2 2011 
                                        
                                             
Projects Completed Not Stabilized — Partially Owned  490   272,368   257,748      141,741                     
                                        
Projects Completed Not Stabilized
 2,529   857,851   832,535      276,741                     
                                        
                                             
Completed and Stabilized During the Quarter — Wholly Owned:
                              
                                             
70 Greene (formerly 77 Hudson) Jersey City, NJ  480   268,458   267,403             93%  91% Completed Stabilized
                                             
Third Square (formerly 303 Third) Cambridge, MA  482   257,457   256,546             94%  92% Completed Stabilized
                                        
                                             
Projects Completed and Stabilized During the Quarter — Wholly Owned  962   525,915   523,949                           
                                        
                                             
Projects Completed and Stabilized During the Quarter
  962   525,915   523,949                           
                                        
                                             
Total Projects    4,208  $1,611,801  $1,480,946  $124,462(6)  $276,741                     
                                        
                                             
Land Held for Development    N/A   N/A  $235,247  $235,247  $18,342                     
                                        

(1)  

(1)Total capital cost represents estimated development cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.

(2)500 West 23rd Street — The land under this development is subject to a long-term ground lease.

16


(2)  

(3)Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing.
(4)Debt is primarily tax-exempt bonds that are entirely outstanding, with $94.1$16.8 million held in escrow by the lender and released as draw requests are made. This escrowed amount is classified as “Deposits restricted” in the consolidated balance sheets at December 31, 2008.

2010. The Operating Partnership paid off the $28.2 million in taxable bonds during the fourth quarter of 2010.

(3)  

(5)

Of the approximately $495.9 million of capital cost remaining

The Operating Partnership acquired these completed development projects prior to be funded at December 31, 2008 for projects under development, $341.4 million will be funded by fully committed third party bank loansstabilization and the remaining $154.5 million will be funded by cash on hand.

has begun/continued lease-up activities.

(4)  

(6)

Properties included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.

(5)  

Total book value not placed in service excludes $5.9 million of construction-in-progress related to date of land held for development declined significantly since December 31, 2007 primarily as a resultthe reconstruction of the $116.4 million impairment charge that the Operating Partnership announced on January 9, 2009.

Prospect Towers garage.

Item 3. Legal Proceedings

The Operating Partnership is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Operating Partnership designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys’ fees. The Operating Partnership believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Operating Partnership. Accordingly, the Operating Partnership is defending the suit vigorously. Due to the pendency of the Operating Partnership’s defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit and asor a result,possible loss or a range of loss, and no amounts have been accrued at December 31, 2008.2010. While no assurances can be given, the Operating Partnership does not believe that the suit, if adversely determined, would have a material adverse effect on the Operating Partnership.

The Operating Partnership does not believe there is any other litigation pending or threatened against it that, individually or in the aggregate, may reasonably may be expected to have a material adverse effect on the Operating Partnership.

Item 4. Submission of Matters to a Vote of Security HoldersReserved

17

None.


PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

OP Unit Dividends

There is no established public market for the OP Units.

The following table sets forth, for the years indicated, the distributions declared on the Operating Partnership’s OP Units:

   Distributions
     2008      2007  

Fourth Quarter Ended December 31,

  $    0.4825  $    0.4825

Third Quarter Ended September 30,

  $0.4825  $0.4625

Second Quarter Ended June 30,

  $0.4825  $0.4625

First Quarter Ended March 31,

  $0.4825  $0.4625

Units.

         
  Distributions 
  2010  2009 
Fourth Quarter Ended December 31, $0.4575  $0.3375 
Third Quarter Ended September 30, $0.3375  $0.3375 
Second Quarter Ended June 30, $0.3375  $0.4825 
First Quarter Ended March 31, $0.3375  $0.4825 
The number of record holders of OP Units and Junior Convertible PreferenceLong-Term Incentive Plan (“LTIP”) Units in the Operating Partnership at January 31, 2009February 16, 2011 were 585528 and 1,18, respectively. The number of outstanding OP Units and Junior Convertible PreferenceLTIP Units as of January 31, 2009February 16, 2011 were 289,470,262307,338,881 and 7,367,401,971, respectively.

Unregistered OP Units RepurchasedIssued in the Quarter Ended December 31, 20082010

The Operating Partnership repurchased the following OP Units during

     During the quarter ended December 31, 2008:

Period

  Total Number
of OP Units
Purchased (1)
  Average Price
Paid Per
Unit (1)
  Total Number of
OP Units
Purchased as Part of
Publicly Announced
Plans or Programs (1)
  Dollar Value of
OP Units
that May Yet Be
Purchased Under
the Plans or
Programs (1)

October 2008

  -  $-  -  $469,273,467

November 2008

  48,924  $32.97  48,924  $467,660,443

December 2008

  -  $-  -  $467,660,443
              

Fourth Quarter 2008

  48,924  $        32.97              48,924  

(1)  

The OP Units repurchased during the quarter ended December 31, 2008 represent OP Units redeemed in response to repurchases of Common Shares under the Company’s publicly announced share repurchase program approved by its Board of Trustees. All 48,924 shares were repurchased from a Trustee at a price of $32.97 per share (the then current market price) to cover the minimum statutory tax withholding obligation related to the vesting of the Trustee’s restricted shares. On December 3, 2007, EQR’s Board of Trustees approved a $500.0 million share repurchase program, of which $467.7 million remains available for repurchase as of December 31, 2008.

2010, the Operating Partnership issued 15,948 OP Units having a value of $0.8 million. OP Units are generally exchangeable into Common Shares of EQR on a one-for-one basis or, at the option of the Operating Partnership, the cash equivalent thereof, at any time one year after the date of issuance. These OP Units were issued in exchange for direct or indirect interest in multifamily properties in private placement transactions under Section 4(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as these were transactions by an issuer not involving a public offering. In light of the manner of the sale and information obtained by the Operating Partnership from the limited partners in connection with these transactions, the Operating Partnership believes it may rely on these exemptions.

Equity Compensation Plan Information

The following table provides information as of December 31, 20082010 with respect to EQR’s Common Shares that may be issued under its existing equity compensation plans.

Plan Category

  Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
  Weighted average
exercise price of
outstanding
options, warrants
and rights
  Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
in column (a))
  (a) (1)  (b) (1)  (c) (2)

Equity compensation plans
approved by shareholders

  9,473,259  $33.94  12,628,543

Equity compensation plans not
approved by shareholders

  N/A  N/A  N/A

             
          Number of securities
          remaining available
  Number of securities Weighted average for future issuance
  to be issued upon exercise price of under equity
  exercise of outstanding compensation plans
  outstanding options, options, warrants (excluding securities
Plan Category warrants and rights and rights in column (a))
  (a) (1) (b) (1) (c) (2)
Equity compensation plans approved by shareholders  10,106,488  $33.00   8,799,709 
             
Equity compensation plans not approved by shareholders  N/A   N/A   N/A 
(1) 

(1)  

The amounts shown in columns (a) and (b) of the above table do not include 996,011911,950 outstanding EQR Common Shares (all of which are restricted and subject to vesting requirements) that were granted under EQR’s Amended and Restated 1993 Share Option and Share Award Plan, as amended (the “1993 Plan”) and EQR’s 2002 Share Incentive Plan, as restated (the “2002 Plan”) and outstanding EQR Common Shares that have been purchased by employees and trustees under EQR’sEQR’S ESPP.

 

(2)

Includes 8,742,8165,395,739 EQR Common Shares that may be issued under the 2002 Plan, of which only 25% may

18


be in the form of restricted shares, and 3,885,7273,403,970 EQR Common Shares that may be sold to employees and trustees under the ESPP.

The aggregate number of securities available for issuance (inclusive of restricted shares previously granted and outstanding and shares underlying outstanding options) under the 2002 Plan equals 7.5% of EQR’s outstanding Common Shares, calculated on a fully diluted basis, determined annually on the first day of each calendar year. On January 1, 2009,2011, this amount equaled 21,740,453,22,785,696, of which 8,742,8165,395,739 shares were available for future issuance.

No awards may be granted under the 2002 Plan after February 20, 2012.

Any EQR Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

OP Units Issued in the Quarter Ended December 31, 2008

The Operating Partnership did not issue OP Units to its limited partners during the fourth quarter ended December 31, 2008.

OP Units are generally exchangeable into Common Shares of EQR on a one-for-one basis or, at the option of EQR and the Operating Partnership, the cash equivalent thereof, at any time one year after the date of issuance. Information with respect to unregistered OP Unit sales, if any, for the first three quarters of 2008 is contained in the Operating Partnership’s quarterly reports on Form 10-Q relating to such quarters.

Item 6. Selected Financial Data

The following table sets forth selected financial and operating information on a historical basis for the Operating Partnership. The following information should be read in conjunction with all of the financial statements and notes thereto included elsewhere in this Form 10-K. The historical operating and balance sheet data have been derived from the historical financial statements of the Operating Partnership. All amounts have also been restated in accordance with the guidance on discontinued operations provisions of SFAS No. 144.operations. Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

19


CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

(Financial information in thousands except for per OP Unit and property data)

   Year Ended December 31, 
   2008  2007  2006  2005  2004 

OPERATING DATA:

      

Total revenues from continuing operations

  $      2,103,204  $      1,947,057  $      1,702,541  $      1,413,877  $      1,229,707 
                     

Interest and other income

  $33,540  $20,144  $30,880  $68,315  $8,685 
                     

Income from continuing operations

  $42,659  $70,933  $32,241  $101,928  $42,935 
                     

Discontinued operations, net

  $404,376  $984,295  $1,115,863  $830,119  $481,229 
                     

Net income

  $447,035  $1,055,228  $1,148,104  $932,047  $524,164 
                     

Net income available to OP Units

  $432,513  $1,025,841  $1,104,340  $866,306  $449,811 
                     

Earnings per OP Unit – basic:

      

Income (loss) from continuing operations available to OP Units

  $0.10  $0.14  $(0.04) $0.12  $(0.10)
                     

Net income available to OP Units

  $1.50  $3.44  $3.56  $2.83  $1.50 
                     

Weighted average OP Units outstanding

   287,631   298,392   310,452   306,579   300,683 
                     

Earnings per OP Unit – diluted:

      

Income (loss) from continuing operations available to OP Units

  $0.10  $0.14  $(0.04) $0.12  $(0.10)
                     

Net income available to OP Units

  $1.49  $3.39  $3.56  $2.79  $1.50 
                     

Weighted average OP Units outstanding

   290,060   302,235   310,452   310,785   300,683 
                     

Distributions declared per OP Unit outstanding

  $1.93  $1.87  $1.79  $1.74  $1.73 
                     

BALANCE SHEET DATA (at end of period):

      

Real estate, before accumulated depreciation

  $18,690,239  $18,333,350  $17,235,175  $16,590,370  $14,852,621 

Real estate, after accumulated depreciation

  $15,128,939  $15,163,225  $14,212,695  $13,702,230  $12,252,794 

Total assets

  $16,535,110  $15,689,777  $15,062,219  $14,108,751  $12,656,306 

Total debt

  $10,501,246  $9,508,733  $8,057,656  $7,591,073  $6,459,806 

Minority Interests

  $25,520  $26,236  $26,814  $16,965  $9,557 

Partners’ capital

  $5,290,275  $5,394,328  $6,268,867  $5,800,558  $5,598,553 

OTHER DATA:

      

Total properties (at end of period)

   548   579   617   926   939 

Total apartment units (at end of period)

   147,244   152,821   165,716   197,404   200,149 

Funds from operations available to OP Units – basic (1) (2)

  $631,644  $723,484  $716,143  $784,625  $651,741 

Cash flow provided by (used for):

      

Operating activities

  $755,027  $793,128  $755,466  $698,531  $707,061 

Investing activities

  $(343,803) $(200,645) $(259,472) $(592,201) $(555,279)

Financing activities

  $428,739  $(801,929) $(324,545) $(101,007) $(117,856)

                     
  Year Ended December 31, 
  2010  2009  2008  2007  2006 
OPERATING DATA:
                    
                     
Total revenues from continuing operations $1,995,519  $1,856,503  $1,886,988  $1,739,444  $1,503,666 
                
                     
Interest and other income $5,469  $16,585  $33,337  $19,660  $30,430 
                
                     
(Loss) income from continuing operations $(19,844) $2,931  $(40,054) $(4,982) $(29,983)
                
                     
Discontinued operations, net $315,827  $379,098  $476,467  $1,052,338  $1,177,600 
                
                     
Net income $295,983  $382,029  $436,413  $1,047,356  $1,147,617 
                
                     
Net income available to Units $282,341  $368,099  $419,241  $1,015,769  $1,100,721 
                
                     
Earnings per Unit — basic:                    
(Loss) from continuing operations available to Units $(0.11) $(0.04) $(0.20) $(0.12) $(0.25)
                
Net income available to Units $0.95  $1.27  $1.46  $3.40  $3.55 
                
Weighted average Units outstanding  296,527   289,167   287,631   298,392   310,452 
                
                     
Earnings per Unit — diluted:                    
(Loss) from continuing operations available to Units $(0.11) $(0.04) $(0.20) $(0.12) $(0.25)
                
Net income available to Units $0.95  $1.27  $1.46  $3.40  $3.55 
                
Weighted average Units outstanding  296,527   289,167   287,631   298,392   310,452 
                
                     
Distributions declared per Unit outstanding $1.47  $1.64  $1.93  $1.87  $1.79 
                
                     
BALANCE SHEET DATA(at end of period):
                    
Real estate, before accumulated depreciation $19,702,371  $18,465,144  $18,690,239  $18,333,350  $17,235,175 
Real estate, after accumulated depreciation $15,365,014  $14,587,580  $15,128,939  $15,163,225  $14,212,695 
Total assets $16,184,194  $15,417,515  $16,535,110  $15,689,777  $15,062,219 
Total debt $9,948,076  $9,392,570  $10,483,942  $9,478,157  $8,017,008 
Redeemable Limited Partners $383,540  $258,280  $264,394  $345,165  $509,310 
Noncontrolling Interests — Partially Owned Properties $7,991  $11,054  $25,520  $26,236  $26,814 
Total partners’ capital $5,200,585  $5,163,459  $5,043,185  $5,079,739  $5,800,205 
                     
OTHER DATA:
                    
Total properties (at end of period)  451   495   548   579   617 
Total apartment units (at end of period)  129,604   137,007   147,244   152,821   165,716 
                     
Funds from operations available to
Units — basic (1) (3) (4)
 $622,786  $615,505  $618,372  $713,412  $712,524 
Normalized funds from operations available to
Units — basic (2) (3) (4)
 $682,422  $661,542  $735,062  $699,029  $699,276 
                     
Cash flow provided by (used for):                    
Operating activities $732,693  $672,462  $755,252  $793,232  $755,774 
Investing activities $(646,114) $103,579  $(344,028) $(200,749) $(259,780)
Financing activities $151,541  $(1,473,547) $428,739  $(801,929) $(324,545)
(1) 

(1)  

The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or

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loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Operating Partnership commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to OP Units is calculated on a basis consistent
(2)Normalized funds from operations (“Normalized FFO”) begins with net income available to OP Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preference units/interests in accordance with accounting principles generally accepted in the United States. See Item 7 for a reconciliation of net income to FFO and FFO available to OP Units.excludes:

 

(2)  

the impact of any expenses relating to asset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses);
gains and losses from early debt extinguishment, including prepayment penalties, preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
other miscellaneous non-comparable items.
(3)The Operating Partnership believes that FFO and FFO available to OP Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the

real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to OP Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Operating Partnership also believes that Normalized FFO and Normalized FFO available to OPUnits are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Operating Partnership’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Operating Partnership’s actual operating results. FFO, FFO available to Units, Normalized FFO and Normalized FFO available to Units do not represent net income, net income available to OP Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, and FFO available to OPUnits, Normalized FFO and Normalized FFO available to Units should not be exclusively considered as alternatives to net income, net income available to OP Units or net cash flows from operating activities as determined by GAAP or as measuresa measure of liquidity. The Operating Partnership’s calculation of FFO, and FFO available to OPUnits, Normalized FFO and Normalized FFO available to Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(4)FFO available to Units and Normalized FFO available to Units are calculated on a basis consistent with net income available to Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preference units in accordance with accounting principles generally accepted in the United States.
Note: See Item 7 for a reconciliation of net income to FFO, FFO available to Units, Normalized FFO and Normalized FFO available to Units.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition of the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Operating Partnership’s ability to control its subsidiaries, other than entities owning interests in the Partially Owned Properties – Unconsolidated and certain other entities in which it has investments, each such subsidiary entity has been consolidated with the Operating Partnership for financial reporting purposes.purposes, except for an unconsolidated development land parcel and our military housing properties. Capitalized terms used herein and not defined are as defined elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2008.

2010.

Forward-Looking Statements

Forward-looking statements in this Item 7 as well as elsewhere in this Annual Report on Form 10-K are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Operating Partnership’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Operating Partnership to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Operating Partnership undertakes no obligation to update or supplement these forward-looking statements. Factors that might cause such differences include, but are not limited to the following:

We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate. The Operating Partnership does not currently intend to begin the development of any new wholly-owned projects but has a substantial number of properties under development now and may commence new development activities if conditions warrant. We may underestimatealso acquire multifamily properties that are unoccupied or in the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development efforts. This competition may increase prices for multifamily properties.early stages of lease up. We may not be unable to lease up these apartment properties on schedule, resulting in a position decreases in expected rental revenues and/or have the opportunity in the futurelower yields due to make suitable property acquisitions on favorable terms. To the extent that we do develop more properties if conditions warrant, we expect to do so ourselves in addition to co-investing with our development partners. The total number of development units, cost of developmentlower occupancy and estimated completion dates are subject to uncertainties arising from changing economic conditions (suchrates as the cost of labor and construction materials), competition and local government regulation;well as higher than expected

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Sources of capital to the Operating Partnership or labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;

concessions. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. The total number of development units, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;

Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers and the potential for geopolitical instability, all of which are beyond the Operating Partnership’s control; and

Debt financing and other capital required by the Operating Partnership may not be available or may only be available on adverse terms;
Labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;
Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily housing and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers and the potential for geopolitical instability, all of which are beyond the Operating Partnership’s control; and
Additional factors as discussed in Part I of this Annual Report on Form 10-K, particularly those under “Item 1A.Risk Factors”.

Additional factors as discussed in Part I of this Annual Report on Form 10-K, particularly those under “Item 1A. Risk Factors”.

Forward-looking statements and related uncertainties are also included in Notes 2, 5, 11 and 18 in the Notes to Consolidated Financial Statements in this report.

Overview

ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”). EQR, a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. EQR has elected to be taxed as a REIT.

EQR is one of the largest publicly traded real estate companies and is the largest publicly traded owner of multifamily properties in the United States (based on the aggregate market value of its outstanding Common Shares, the number of apartment units wholly owned and total revenues earned). The Operating Partnership’s corporate headquarters are located in Chicago, Illinois and the Operating Partnership also operates property management offices throughout the United States.in each of its markets. As of February 5, 2009,December 31, 2010, the Operating Partnership hashad approximately 4,7004,000 employees who provideprovided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

EQR is the general partner of, and as of December 31, 20082010 owned an approximate 94.2%95.5% ownership interest in ERPOP. EQR is structured as an umbrella partnership REIT (“UPREIT”) under which allAll of EQR’s property ownership, development and related business operations are conducted through ERPOP and its subsidiaries. References to the “Operating Partnership” include ERPOP and those entities owned or controlled by it. References to the “Company” mean EQR and the Operating Partnership.

Business Objectives and Operating and Investing Strategies

The Operating Partnership seeks to maximize current income, capital appreciation of each property and the total return for its partners. The Operating Partnership’s strategy for accomplishing these objectives includes:

Leveraging our size and scale in four critical ways:

Investinginvests in apartment communities located in strategically targeted markets with the goal of maximizing our risk adjusted total return (operating income plus capital appreciation) on invested capital.

     Our operating focus is on balancing occupancy and rental rates to maximize our totalrevenue while exercising tight cost control to generate the highest possible return on an enterprise level;

to our shareholders. Revenue is maximized by driving qualified resident prospects to our properties, converting this traffic cost-effectively into new leases at the highest rent possible, keeping our residents satisfied and renewing their leases at yet higher rents. While we believe that it is our high-quality, well-located assets that bring our customers to us, it is our customer service that keeps them renting with us and recommending us to their friends.

Meeting     We use technology to engage our customers in the needsway that they want to be engaged. Many of our residents by offering a wide arrayutilize our web-based resident portal which allows them to review their account and make payments, provide feedback and make service requests on-line.

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     We seek to maximize capital appreciation of product choices and a commitment to service;

Engaging, retaining and attracting the best employees by providing them with the education, resources and opportunities to succeed; and

Sharing resources, customers and best practices in property management and across the enterprise.

Owning a highly diversified portfolioour properties by investing in target markets definedthat are characterized by a combinationconditions favorable to multifamily property appreciation. These markets generally feature one or more of the following criteria:

High barrier-to-entry (low supply);

following:

Strong economic predictors (high demand); and

High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties leading to low supply;
High single family home prices making our apartments a more economical housing choice;
Strong economic growth leading to household formation and job growth, which in turn leads to high demand for our apartments; and
An attractive quality of life leading to high demand and retention and allowing us to more readily increase rents.

Attractive quality of life (high demand and retention).

Giving residents reasons to stay with the Operating Partnership by providing a range of product options available in our diversified portfolio and by enhancing their experience through our employees and our services.

Being open and responsive to market realities to take advantage of investment opportunities that align with our long-term vision.

Acquisition, Development and Disposition Strategies

The Operating Partnership anticipates that future property acquisitions, developments and dispositions will occur within the United States.     Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt securities, sales of properties, joint venture agreements and collateralized and uncollateralized borrowings. In addition, the Operating Partnership may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“OP Units”) as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in

whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. ERPOP may also acquire land parcels to hold and/or sell based on market opportunities.

When evaluating potential The Operating Partnership may also seek to acquire properties by purchasing defaulted or distressed debt that encumbers desirable properties in the hope of obtaining title to property through foreclosure or deed-in-lieu of foreclosure proceedings. The Operating Partnership has also, in the past, converted some of its properties and sold them as condominiums but is not currently active in this line of business.

     The Operating Partnership primarily sources the funds for its new property acquisitions developments and dispositions,in its core markets with the sales proceeds from selling assets that are older or located in non-core markets. During the last five years, the Operating Partnership generally considershas sold over 97,000 apartment units for an aggregate sales price of $7.2 billion and acquired nearly 25,000 apartment units in its core markets for approximately $5.5 billion. We are currently acquiring and developing assets primarily in the following factors:

strategically targeted markets;

metropolitan areas: Boston, New York, Washington DC, South Florida, Southern California, San Francisco, Seattle and to a lesser extent Denver. We also have investments (in the aggregate about 18% of our NOI) in other markets including Atlanta, Phoenix, Portland, Oregon, New England excluding Boston, Tampa, Orlando and Jacksonville but do not intend to acquire or develop assets in these markets.

income levels and employment growth trends in the relevant market;

employment and household growth and net migration     As part of the relevant market’s population;

barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction costs, among other factors);

the location, construction quality, condition and design of the property;

the current and projected cash flow of the property and the ability to increase cash flow;

the potential for capital appreciation of the property;

the terms of resident leases, including the potential for rent increases;

the potential for economic growth and the tax and regulatory environment of the community in which the property is located;

the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);

the prospects for liquidity through sale, financing or refinancing of the property;

the benefits of integration into existing operations;

purchase prices and yields of available existing stabilized properties, if any;

competition from existing multifamily properties, comparably priced single family homes or rentals, residential properties under development and the potential for the construction of new multifamily properties in the area; and

opportunistic selling based on demand and price of high quality assets, including condominium conversions.

The Operating Partnership generally reinvests the proceeds received from property dispositions primarily to achieve its acquisition, development and rehab strategies and at times to fund its debt and EQR’s equity repurchase activities. In addition, when feasible,strategy, the Operating Partnership purchases completed and fully occupied apartment properties, partially completed or partially unoccupied properties or land on which apartment properties can be constructed. We intend to hold a diversified portfolio of assets across our target markets. Currently, no single metropolitan area accounts for more than 17% of our NOI, though no guarantee can be made that NOI concentration may structure these transactionsnot increase in the future.

     We endeavor to attract and retain the best employees by providing them with the education, resources and opportunities to succeed. We provide many classroom and on-line training courses to assist our employees in interacting with prospects and residents as tax-deferred exchanges.

well as extensively train our customer service specialists in maintaining the equipment and appliances on our property sites. We actively promote from within and many senior corporate and property leaders have risen from entry level or junior positions. We monitor our employees’ engagement by surveying them annually and have consistently received high engagement scores.

     We have a commitment to sustainability and consider the environmental impacts of our business activities. With its high density, multifamily housing is, by its nature, an environmentally friendly property type. Our recent acquisition and development activities have been primarily concentrated in pedestrian-friendly urban locations near public transportation. When developing and renovating our properties, we strive to reduce energy and water usage by investing in energy saving technology while positively impacting the experience of our residents and the value of our assets. We continue to implement a combination of irrigation, lighting and HVAC improvements at our properties that will reduce energy and water consumption.
Current Environment

The slowdown in the economy, which accelerated in the fourth quarter

     Through much of 2008, coupled with continued job losses and/or lack of job growth leads us to be cautious regarding expected performance for 2009. Since the fourth quarter of 2008, our revenue has declined in most of our major markets as the economic slowdown continues to impact existing and prospective residents. Markets with little employment loss should perform better than markets with employment issues, although most of our markets are now experiencing job losses. Should the current credit crisis and general economic recession continue,2009, the Operating Partnership may continueassumed a highly cautious outlook given uncertainty in the general economy and the capital markets and expected reduction in our property operations. In late 2009, the Operating Partnership saw that occupancy was firming. This was an especially encouraging sign as it came during the Operating

23


Partnership’s seasonally slower fourth quarter. At the same time, the Operating Partnership also saw marked improvement in the capital markets. In response, the Operating Partnership began acquiring assets and increasing rents for both new and renewing residents, which led to experiencebetter operating and investment performance for the Operating Partnership. 2010 was characterized by higher occupancy and rent levels than 2009. The Operating Partnership increased rents to a periodgreater extent in markets like the Northeast, where the economy was stronger and multifamily operating conditions were better. In 2010, the Operating Partnership ceased to hold the large cash balances (often $1.0 billion or more) that it held in 2009 in anticipation of declining revenues, which would adversely impactdebt maturities in an unsure capital markets climate. This had the result of increasing the Operating Partnership’s results of operations. The vast majority of our leases are for terms of 12 months or less. As a result, we quickly feel the impact of an economic downturn which limits our ability to raise rents or causes us to lower rents on turnover units and lease renewals. Since the second half of 2008, continued job losses and a lack of household formation have hampered our ability to increase rents or caused us to lower rents for new residents. Additionally, in recent months it has become increasingly difficult to maintain rents with our renewing residents.

After two consecutive years of modest expense growth (same store expenses grew 2.2% between 2008 and 2007 and 2.1% between 2007 and 2006),earnings by decreasing debt prefunding costs. Finally, the Operating Partnership anticipateswas aggressive in acquiring $1.5 billion of assets in its target markets in 2010. Improvement materialized throughout 2010 and as we enter 2011, we expect strong growth in same store revenue (anticipated increases ranging from 4.0% to 5.0%) and NOI (anticipated increases ranging from 5.0% to 7.5%) and are optimistic that 2009 expensesthe improvement realized in 2010 will increase at a higher rate primarily due to cost pressures from non-controllable areas such as utilities and real estate taxes. The combination of expected declines in revenues and higher overall expense levels will have a negative impact on the Operating Partnership’s results of operations for 2009.

The continued credit crisis has negatively impacted the availability and pricing of debt capital. During this time, the multifamily residential sector has benefited from the continued liquidity provided by Fannie Mae and Freddie Mac. A vast majority of the properties we sold this year were financedbe sustained for the purchaser by one of these agencies. Furthermore, Fannie Mae and Freddie Mac provided us with approximately $1.6 billion of secured mortgage financing in 2008 at attractive rates when comparedforeseeable future.

     We currently have access to othermultiple sources of credit. Whilecapital including the equity markets as well as both the secured and unsecured debt markets. In July 2010, the Operating Partnership believes these agencies will continuecompleted a $600.0 million unsecured ten year notes offering with a coupon of 4.75% and an all-in effective interest rate of 5.09%. The all-in rate combined with its accretive nature compared to provide liquiditymaturing 2011 fixed rate debt led the Operating Partnership to pursue this transaction. EQR also raised $291.9 million in equity under its ATM Common Share offering program in 2010 and has raised an additional $154.5 million under this program thus far in 2011.
     Given the strong market for many of our sector, should they discontinue doing so, have their mandates changed or reduced or be disbanded by the government, it would significantly reducedisposition assets and increased competition for assets in our access to debt capital and/or

increase borrowing costs and would significantly reduce our sales of assets.

In response to the recession and liquidity issues prevalent in the debttarget markets, we took a number of steps to better position ourselves. In early 2008, we began pre-funding our maturing debt obligations with approximately $1.6 billion in secured mortgage financing obtained from Fannie Mae and Freddie Mac. We also significantly reduced our acquisition activity. During the second half of 2008, we only acquired one property while we continued selling non-core assets. We expect to continue to be a net seller of assets in 2011 in contrast to being a net buyer of assets in 2010. The Operating Partnership acquired 16 consolidated properties consisting of 4,445 apartment units for $1.5 billion and six land parcels for $68.9 million during 2009 should current conditions continue. Additionally,the year ended December 31, 2010. While competition for the properties we significantly reducedwere interested in acquiring increased as 2010 progressed due to the overall improvement in market fundamentals, we were able to close several, of what we believe are, long-term, value added acquisition opportunities. Our acquisition pipeline has moderated and we expect a greater concentration of our development activities, starting only two new projects2011 acquisitions to occur in the first half of 2008 and none in the secondlatter half of the year. We also reducedbelieve our access to capital, our ability to execute large, complex transactions and our ability to efficiently stabilize large scale lease up properties provide us with a competitive advantage. During the numberyear ended December 31, 2010, the Operating Partnership sold 35 consolidated properties consisting of planned development projects we will undertake in7,171 apartment units for $718.4 million and 27 unconsolidated properties consisting of 6,275 apartment units generating cash proceeds to the futureOperating Partnership of $26.9 million, as well as 2 condominium units for $0.4 million and took a $116.4 million impairment charge to reduce the value of five assets that we no longer plan on pursuing.one land parcel for $4.0 million. We do not currently anticipate starting any new wholly-owned development projects during 2009 unless market conditions improve significantly. Finally, during 2009 we also expect to continue strategic dispositions and see an increase in dispositions in 2011 as we believe there is currently a robust market and favorable pricing for certain of our focus on our expense control initiatives.

non-strategic assets. Our specific current expectations regarding our results for 2009 and certain items that will affect them are set forth underdispositions in 2010 were at higher capitalization (“cap”) rates (see definition in Results of Operations below.

Operations) than the acquisitions we completed. We expect this to continue in 2011 and expect to experience dilution from past and future transactions.

We believe that cash and cash equivalents, federally insured investment deposits andsecurities readily convertible to cash, current availability on our revolving credit facility and disposition proceeds for 2011 will provide sufficient liquidity to meet our funding obligations relating to asset acquisitions, debt retirementmaturities and existing development projects intothrough 2011. We expect that our remaining longer-term funding obligations for 2011 and subsequent periodsrequirements will be met through some combination of new borrowings, equity issuances (including EQR’s ATM share offering program), property dispositions, joint ventures and cash generated from operations.

Despite There is significant uncertainty surrounding the challenging conditions noted above,futures of Fannie Mae and Freddie Mac. Any changes to their mandates could have a significant impact on the Operating Partnership and may, among other things, lead to lower values for our disposition assets and higher interest rates on our borrowings. Such changes may also provide an advantage to us by making the cost of financing single family home ownership more expensive and provide us a competitive advantage given the size of our balance sheet and the multiple sources of capital to which we have access.

     We believe that the Operating Partnership is well-positioned to withstand the continuing economic downturn. Ouras of December 31, 2010 (our properties are geographically diverse and were approximately 93%94.1% occupied as of December 31, 2008,(94.5% on a same store basis)), little new multifamily rental supply has beenwill be added to most of our markets over the national single family home ownership rate continues to declinenext several years and the long-term demographic picture is positive.

We believe we are well-positioned with aour strong balance sheet and sufficientample liquidity will allow us to coverfund our debt maturities and development fundings in the near term, whichand should also allow us to take advantage of investment opportunities should distressed assets become available at significant discounts. Whenin the future. As economic conditions continue to improve, the short-term nature of our leases and the limited supply of new rental housing being constructed should allow us to quickly realize revenue growth and improvement in our operating results.

     The Operating Partnership anticipates that 2011 same store expenses will only increase 1.0% to 2.0% primarily due to modest increases in payroll expenses, real estate tax rates and utility cost growth (same store expenses increased 0.9% for 2010 when compared with the same period in the prior year). This follows three consecutive years of excellent expense control (same store expenses declined 0.1% between 2009 and 2008 and grew 2.2% between 2008 and 2007 and 2.1% between 2007 and 2006).

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          The current environment information presented above is based on current expectations and is forward-looking.
Results of Operations

In conjunction with our business objectives and operating strategy, the Operating Partnership continued to invest or recycle its capital investment in apartment properties located in strategically targeted markets during the years ended December 31, 20082010 and December 31, 2007.2009. In summary, we:

Year Ended December 31, 2008:

2010:

Acquired $380.7 million of apartment properties consisting of 7 properties and 2,141 units and an uncompleted development property for $31.7 million and invested $2.4 million to obtain the management contract rights and towards the redevelopment of a military housing project consisting of 978 units, all of which we deem to be in our strategic targeted markets; and

Acquired $1.1 billion of apartment properties consisting of 14 consolidated properties and 3,207 apartment units at a weighted average cap rate (see definition below) of 5.4% and six land parcels for $68.9 million, all of which we deem to be in our strategic targeted markets;
Acquired one unoccupied property in the second quarter of 2010 (425 Mass in Washington, D.C.) for $166.8 million consisting of 559 apartment units that is expected to stabilize in its third year of ownership at an 8.5% yield on cost and one property in the third quarter of 2010 (Vantage Pointe in San Diego, CA) for $200.0 million consisting of 679 apartment units that was in the early stages of lease up and is expected to stabilize in its third year of ownership at a 7.0% yield on cost;
Acquired the 75% equity interest it did not own in seven previously unconsolidated properties consisting of 1,811 apartment units at an implied cap rate of 8.4% in exchange for an approximate $30.0 million payment to its joint venture partner;
Sold $718.4 million of consolidated apartment properties consisting of 35 properties and 7,171 apartment units at a weighted average cap rate of 6.7%, 2 condominium units for $0.4 million and one land parcel for $4.0 million, the majority of which was in exit or less desirable markets; and
Sold the last of its 25% equity interests in an institutional joint venture consisting of 27 unconsolidated properties containing 6,275 apartment units. These properties were valued in their entirety at $417.8 million which results in an implied weighted average cap rate of 7.5% (generating cash to the Operating Partnership, net of debt repayments, of $26.9 million).

Sold $896.7 million of apartment properties consisting of 41 properties and 10,127 units, as well as 130 condominium units for $26.1 million and a land parcel for $3.3 million.

Year Ended December 31, 2007:

2009:

Acquired $1.7 billion of apartment properties consisting of 36 properties and 8,167 units and $212.8 million of land parcels, all of which we deem to be in our strategic targeted markets; and

Acquired $145.0 million of apartment properties consisting of two properties and 566 apartment units (excluding the Operating Partnership’s buyout of its partner’s interest in one previously unconsolidated property) and a long-term leasehold interest in a land parcel for $11.5 million, all of which we deem to be in our strategic targeted markets; and
Sold $1.0 billion of apartment properties consisting of 60 properties and 12,489 apartment units (excluding the Operating Partnership’s buyout of its partner’s interest in one previously unconsolidated property), as well as 62 condominium units for $12.0 million, the majority of which was in exit or less desirable markets.

Sold $1.9 billion of apartment properties consisting of 73 properties and 21,563 units, as well as 617 condominium units for $164.2 million and $50.0 million of land parcels.

The Operating Partnership’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense and property management expense. The Operating Partnership believes that NOI is helpful to

investors as a supplemental measure of theits operating performance of a real estate company because it is a direct measure of the actual operating results of the Operating Partnership’s apartment communities.

The cap rate is generally the first year NOI yield (net of replacements) on the Operating Partnership’s investment.

Properties that the Operating Partnership owned for all of both 20082010 and 20072009 (the “2008“2010 Same Store Properties”), which represented 115,051112,042 apartment units, impacted the Operating Partnership’s results of operations. Properties that the Operating Partnership owned for all of both 20072009 and 20062008 (the “2007“2009 Same Store Properties”), which represented 115,857113,598 apartment units, also impacted the Operating Partnership’s results of operations. Both the 20082010 Same Store Properties and 20072009 Same Store Properties are discussed in the following paragraphs.

The Operating Partnership’s acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 20082010 and 2007.2009. Dilution, as a result of the Operating

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Partnership’s net asset sales in 2009, partially offset by net asset acquisitions and lease up activity in 2010, negatively impacts property net operating income. The impacts of these activities are also discussed in greater detail in the following paragraphs.

Comparison of the year ended December 31, 20082010 to the year ended December 31, 20072009

For the year ended December 31, 2008, income2010, the Operating Partnership reported diluted earnings per Unit of $0.95 compared to $1.27 per Unit for the year ended December 31, 2009. The difference is primarily due to $37.3 million in lower gains from property sales in 2010 vs. 2009 and $34.3 million in higher impairment losses in 2010 vs. 2009.
          For the year ended December 31, 2010, loss from continuing operations decreased byincreased approximately $28.3$22.8 million or 39.9% when compared to the year ended December 31, 2007.2009. The decrease in continuing operations is discussed below.

Revenues from the 20082010 Same Store Properties increased $53.8decreased $2.1 million primarily as a result of highera decrease in average rental rates charged to residents.residents, partially offset by an increase in occupancy. Expenses from the 20082010 Same Store Properties increased $13.5$6.2 million primarily due to increases in repairs and maintenance expenses (mostly due to greater storm-related costs such as snow removal and roof repairs incurred during the first quarter of 2010), higher property management costs and increases in utility costs, partially offset by lower real estate taxes utility costs and payroll.leasing and advertising expenses. The following tables provide comparative same store results and statistics for the 20082010 Same Store Properties:

2008

2010 vs. 2007

Year over Year 2009
Same Store Results/Statistics


$ in thousands (except for Average Rental Rate) – 115,051— 112,042 Same Store Units

   Results  Statistics 

Description

  Revenues  Expenses  NOI  Average
Rental
Rate (1)
  Occupancy  Turnover 

2008

  $1,739,004  $632,366  $1,106,638  $1,334  94.5% 63.5%

2007

  $1,685,196  $618,882  $1,066,314  $1,292  94.6% 63.6%
                       

Change

  $53,808  $13,484  $40,324  $42  (0.1%) (0.1%)
                       

Change

   3.2%  2.2%  3.8%  3.3%  

                         
  Results  Statistics 
              Average       
              Rental       
Description Revenues  Expenses  NOI  Rate (1)  Occupancy  Turnover 
2010 $1,728,268  $654,663  $1,073,605  $1,358   94.8%  56.7%
2009 $1,730,335  $648,508  $1,081,827  $1,375   93.7%  61.5%
                   
Change $(2,067) $6,155  $(8,222) $(17)  1.1%  (4.8%)
                   
Change  (0.1%)  0.9%  (0.8%)  (1.2%)        

(1)  

(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.

          The following table provides comparative same store operating expenses for the 2010 Same Store Properties:
2010 vs. 2009
Same Store Operating Expenses
$ in thousands — 112,042 Same Store Units
                     
                  % of Actual 
                  2010 
  Actual  Actual  $  %  Operating 
  2010  2009  Change  Change  Expenses 
Real estate taxes $174,131  $177,180  $(3,049)  (1.7%)  26.6%
On-site payroll (1)  156,668   156,446   222   0.1%  23.9%
Utilities (2)  102,553   100,441   2,112   2.1%  15.7%
Repairs and maintenance (3)  97,166   94,223   2,943   3.1%  14.8%
Property management costs (4)  69,995   64,022   5,973   9.3%  10.7%
Insurance  21,545   21,525   20   0.1%  3.3%
Leasing and advertising  14,892   16,029   (1,137)  (7.1%)  2.3%
Other on-site operating expenses (5)  17,713   18,642   (929)  (5.0%)  2.7%
                
Same store operating expenses $654,663  $648,508  $6,155   0.9%  100.0%
                
(1)On-site payroll — Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
(2)Utilities — Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
(3)Repairs and maintenance — Includes general maintenance costs, unit turnover costs including interior painting, routine landscaping,

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security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
(4)Property management costs — Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
(5)Other on-site operating expenses — Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees.
The following table presents a reconciliation of operating income per the consolidated statements of operations to NOI for the 20082010 Same Store Properties.

   Year Ended December 31, 
   2008  2007 
   (Amounts in thousands) 

Operating income

  $500,112  $539,128 

Adjustments:

   

Non-same store operating results

   (148,956)  (82,826)

Fee and asset management revenue

   (10,715)  (9,183)

Fee and asset management expense

   7,981   8,412 

Depreciation

   591,162   562,290 

General and administrative

   44,951   46,767 

Impairment

   122,103   1,726 
         

Same store NOI

  $1,106,638  $1,066,314 
         

         
  Year Ended December 31, 
  2010  2009 
  (Amounts in thousands) 
Operating income $442,001  $496,601 
Adjustments:        
Non-same store operating results  (105,960)  (21,336)
Fee and asset management revenue  (9,476)  (10,346)
Fee and asset management expense  5,140   7,519 
Depreciation  656,633   559,271 
General and administrative  39,887   38,994 
Impairment  45,380   11,124 
       
         
Same store NOI $1,073,605  $1,081,827 
       
For properties that the Operating Partnership acquired prior to January 1, 20082010 and expects to continue to own through December 31, 2009,2011, the Operating Partnership anticipates the following same store results for the full year ending December 31, 2009:

2011:

20092011 Same Store Assumptions

Physical occupancy

 93.5%95.0%

Revenue change

 (4.50%)4.0% to (1.50%)5.0%

Expense change

 2.50%1.0% to 3.50%2.0%

NOI change

 (9.25%)5.0% to (3.75%)7.5%

          The Operating Partnership anticipates consolidated rental acquisitions of $1.0 billion and consolidated rental dispositions of $1.25 billion and expects that acquisitions will have a 1.25% lower cap rate than dispositions for the full year ending December 31, 2011.
These 20092011 assumptions are based on current expectations and are forward-looking.

Non-same store operating results increased approximately $66.1$84.6 million or 79.8% and consist primarily of properties acquired in calendar years 20082009 and 2007,2010, as well as operations from the Operating Partnership’s completed development properties and our corporate housing business.

While the operations of the non-same store assets have been negatively impacted during the year ended December 31, 2010 similar to the same store assets, the non-same store assets have contributed a greater percentage of total NOI to the Operating Partnership’s overall operating results primarily due to increasing occupancy for properties in lease-up and a longer ownership period in 2010 than 2009. This increase primarily resulted from:

Development and other miscellaneous properties in lease-up of $32.4 million;
Newly stabilized development and other miscellaneous properties of $0.2 million;
Properties acquired in 2009 and 2010 of $56.2 million; and
Partially offset by an allocation of property management costs not included in same store results and operating activities from other miscellaneous operations, such as the Operating Partnership’s corporate housing business.
See also Note 2019 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s segment disclosures.

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Fee and asset management revenues, net of fee and asset management expenses, increased approximately $2.0$1.5 million or 53.4% primarily due to an increase in revenue earned on the management of ourthe Operating Partnership’s military housing ventureventures at Fort Lewis alongand McChord Air Force Base, as well as a decrease in asset management expenses, partially offset by the unwinding of the Operating Partnership’s institutional joint ventures during 2010 (see Note 6 in the Notes to Consolidated Financial Statements for further discussion).
          Property management expenses from continuing operations include off-site expenses associated with the self-management of the Operating Partnership’s properties as well as management fees paid to any third party management companies. These expenses increased approximately $9.2 million or 12.8%. This increase is primarily attributable to an increase in payroll-related costs (due primarily to higher health insurance and bonus costs, acceleration of long-term compensation expense for retirement eligible employees and the creation of the Operating Partnership’s central business group, which moved administrative functions off-site), legal and professional fees, education/conference expenses, real estate tax consulting fees and travel expenses.
          Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $97.4 million or 17.4% primarily as a result of additional depreciation expense on properties acquired in 2009 and 2010, development properties placed in service and capital expenditures for all properties owned.
          General and administrative expenses from continuing operations, which include corporate operating expenses, increased approximately $0.9 million or 2.3% primarily due to higher overall payroll-related costs (due primarily to higher bonus costs), partially offset by lower tax compliance fees and office rents. The Operating Partnership anticipates that general and administrative expenses will approximate $40.0 million to $42.0 million for the year ending December 31, 2011. The above assumption is based on current expectations and is forward-looking.
          Impairment from continuing operations increased approximately $34.3 million due to a $45.4 million impairment charge taken during the fourth quarter of 2010 on land held for development related to two potential development projects compared to an $11.1 million impairment charge taken during 2009 on land held for development. See Note 20 in the Notes to Consolidated Financial Statements for further discussion.
          Interest and other income from continuing operations decreased approximately $11.1 million or 67.0% primarily as a result of a decrease in interest earned on cash and cash equivalents and investment securities due to lower interest rates during the year ended December 31, 2010 and lower overall balances as well as gains on debt extinguishment and the sale of investment securities recognized during the year ended December 31, 2009 that did not reoccur in 2010, partially offset by an increase in insurance/litigation settlement proceeds. The Operating Partnership anticipates that interest and other income will approximate $2.0 million to $3.0 million for the year ending December 31, 2011. The above assumption is based on current expectations and is forward-looking.
          Other expenses from continuing operations increased approximately $5.4 million or 83.9% primarily due to an increase in the expensing of overhead (pursuit cost write-offs) as a result of the Operating Partnership’s decision to reduce its development activities in prior periods as well as an increase in property acquisition costs incurred in conjunction with the Operating Partnership’s significantly higher acquisition volume in 2010.
          Interest expense from continuing operations, including amortization of deferred financing costs, decreased approximately $27.8 million or 5.5% primarily as a result of lower overall debt balances and higher debt extinguishment costs due to the significant debt repurchases in 2009 and lower rates in 2010, partially offset by interest expense on the $500.0 million mortgage pool that closed in 2009, the $600.0 million of unsecured notes that closed in July 2010 and lower capitalized interest. During the year ended December 31, 2010, the Operating Partnership capitalized interest costs of approximately $13.0 million as compared to $34.9 million for the year ended December 31, 2009. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2010 was 5.14% as compared to 5.62% for the year ended December 31, 2009. The Operating Partnership anticipates that interest expense (excluding debt extinguishment costs and convertible debt discounts) will approximate $470.0 million to $480.0 million for the year ending December 31, 2011. The above assumption is based on current expectations and is forward-looking.
          Income and other tax expense from continuing operations decreased approximately $2.5 million or 88.1% primarily due to a decrease in franchise taxes for Texas and a decrease in business taxes for Washington, D.C. The Operating Partnership anticipates that income and other tax expense will approximate $0.5 million to $1.5 million for the year ending December 31, 2011. The above assumption is based on current expectations and is forward-looking.
          Loss from investments in unconsolidated entities decreased approximately $2.1 million or 73.9% as compared to the year ended December 31, 2009 primarily due to the Operating Partnership’s $1.8 million share of

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defeasance costs incurred in conjunction with the extinguishment of cross-collateralized mortgage debt on one of the Operating Partnership’s partially owned unconsolidated joint ventures taken during the year ended December 31, 2009 that did not reoccur in 2010.
          Net gain on sales of unconsolidated entities increased approximately $17.4 million primarily due to larger gains on sale and revaluation of seven previously unconsolidated properties that were acquired from the Operating Partnership’s joint venture partner and the gain on sale for 27 properties sold during the year ended December 31, 2010 compared with unconsolidated properties sold in the same period in 2009.
          Net loss on sales of land parcels increased approximately $1.4 million primarily due to the loss on sale of one land parcel during the year ended December 31, 2010.
          Discontinued operations, net decreased approximately $63.3 million or 16.7% between the periods under comparison. This decrease is primarily due to lower gains from property sales during the year ended December 31, 2010 compared to the same period in 2009 and the operations of those properties. In addition, properties sold in 2010 reflect operations for none of or a partial period in 2010 in contrast to a full or partial period in 2009. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.
Comparison of the year ended December 31, 2009 to the year ended December 31, 2008
          For the year ended December 31, 2009, the Operating Partnership reported diluted earnings per Unit of $1.27 compared to $1.46 per Unit for the year ended December 31, 2008. The difference is primarily due to the following:
$57.6 million in lower net gains on sales of discontinued operations in 2009 vs. 2008;
$84.0 million in lower property NOI in 2009 vs. 2008, primarily driven by $51.6 million in lower same store NOI and dilution from transaction activities, partially offset by higher NOI contributions from lease-up properties; and
Partially offset by $105.3 million in lower impairment losses in 2009 vs. 2008.
          For the year ended December 31, 2009, income from continuing operations increased approximately $43.0 million when compared to the year ended December 31, 2008. The increase in continuing operations is discussed below.
          Revenues from the 2009 Same Store Properties decreased $52.4 million primarily as a result of a decrease in average rental rates charged to residents and a decrease in occupancy. Expenses from the 2009 Same Store Properties decreased $0.8 million primarily due to lower property management costs, partially offset by higher real estate taxes and utility costs. The following tables provide comparative same store results and statistics for the 2009 Same Store Properties:
2009 vs. 2008
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) — 113,598 Same Store Units
                         
  Results  Statistics 
              Average       
              Rental       
Description Revenues  Expenses  NOI  Rate (1)  Occupancy  Turnover 
2009 $1,725,774  $644,294  $1,081,480  $1,352   93.8%  61.0%
2008 $1,778,183  $645,123  $1,133,060  $1,383   94.5%  63.7%
                   
Change $(52,409) $(829) $(51,580) $(31)  (0.7%)  (2.7%)
                   
Change  (2.9%)  (0.1%)  (4.6%)  (2.2%)        
(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.
          The following table provides comparative same store operating expenses for the 2009 Same Store Properties:

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2009 vs. 2008
Same Store Operating Expenses
$ in thousands — 113,598 Same Store Units
                     
                  % of Actual 
                  2009 
  Actual  Actual  $  %  Operating 
  2009  2008  Change  Change  Expenses 
Real estate taxes $173,113  $171,234  $1,879   1.1%  26.9%
On-site payroll (1)  155,912   156,601   (689)  (0.4%)  24.2%
Utilities (2)  100,184   99,045   1,139   1.1%  15.5%
Repairs and maintenance (3)  94,556   95,142   (586)  (0.6%)  14.7%
Property management costs (4)  63,854   67,126   (3,272)  (4.9%)  9.9%
Insurance  21,689   20,890   799   3.8%  3.4%
Leasing and advertising  15,664   15,043   621   4.1%  2.4%
Other on-site operating expenses (5)  19,322   20,042   (720)  (3.6%)  3.0%
                
Same store operating expenses $644,294  $645,123  $(829)  (0.1%)  100.0%
                
(1)On-site payroll — Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
(2)Utilities — Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
(3)Repairs and maintenance — Includes general maintenance costs, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
(4)Property management costs — Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
(5)Other on-site operating expenses — Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees.
          Non-same store operating results increased approximately $34.3 million or 79.4% and consist primarily of properties acquired in calendar years 2008 and 2009, as well as operations from the Operating Partnership’s completed development properties and our corporate housing business. While the operations of the non-same store assets have been negatively impacted during the year ended December 31, 2009 similar to the same store assets, the non-same store assets have contributed a greater percentage of total NOI to the Operating Partnership’s overall operating results primarily due to increasing occupancy for properties in lease-up and a longer ownership period in 2009 than 2008. This increase primarily resulted from:
Development and other miscellaneous properties in lease-up of $22.4 million;
Newly stabilized development and other miscellaneous properties of $1.6 million;
Properties acquired in 2008 and 2009 of $11.9 million; and
Partially offset by operating activities from other miscellaneous operations.
          See also Note 19 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s segment disclosures.
          Fee and asset management revenues, net of fee and asset management expenses, increased approximately $0.1 million or 3.4% primarily due to an increase in revenue earned on management of the Operating Partnership’s military housing ventures at Fort Lewis and McChord Air Force Base, as well as a decrease in asset management expenses. As of December 31, 20082009 and 2007,2008, the Operating Partnership managed 14,48512,681 apartment units and 14,47214,485 apartment units, respectively, primarily for unconsolidated entities and ourits military housing ventures at Fort Lewis and McChord Air Force Base.

McChord.

Property management expenses from continuing operations include off-site expenses associated with the self-management of the Operating Partnership’s properties as well as management fees paid to any third party management companies. These expenses decreased by approximately $10.4$5.1 million or 11.9%6.7%. This decrease is primarily attributable to lower overall payroll-related costs as a result of a decrease in the number of properties in the Operating Partnership’s portfolio, as well as a decreasedecreases in legaltemporary help/contractors, telecommunications and professional fees.

travel expenses.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $28.9$23.0 million or 5.1%4.3% primarily as a result of additional depreciation expense on properties acquired in 20072008 and 20082009, development properties placed in service and capital expenditures for all properties owned.

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General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $1.8$6.0 million or 3.9%13.3% primarily due to lower overall payroll-related costs as a result of a $2.2decrease in the number of properties in the Operating Partnership’s portfolio, as well as a $2.9 million decrease in profit sharing expenseseverance related costs in 2009 and lower overall payroll-related costs, partially offset by an increasea decrease in legal and professional fees due to a $1.7 million expense recovery recorded for the year ended December 31, 2007 related to a certain lawsuit in Florida (see Note 21). The Operating Partnership anticipates that general and administrative expenses will approximate $40.0 million to $42.0 million for the year ending December 31, 2009. The above assumption is based on current expectations and is forward-looking.

tax consulting costs.

Impairment from continuing operations increaseddecreased approximately $120.4$105.3 million primarily due to an $11.1 million impairment charge taken during 2009 on a land parcel held for development ofcompared to a $116.4 million impairment charge taken in the fourth quarter of 2008 on land held for development related to five potential development projects that willare no longer bebeing pursued. In addition, the Operating Partnership wrote-off an additional $4.0 million of various pursuit and out-of-pocket costs for terminated development transactions and halted condominium conversion properties during 2008 compared to the year ended December 31, 2007. See Note 1920 in the Notes to Consolidated Financial Statements for further discussion.

Interest and other income from continuing operations increaseddecreased approximately $13.4$16.8 million or 66.5%50.3% primarily as a result of an $18.7 million gain recognized during the year ended December 31, 2008 related to the partial debt extinguishment of the Operating Partnership’s Junenotes compared to a $4.5 million gain recognized in 2009 and August 2026 public notes (see Note 9), as well as an increase. In addition, interest earned on cash and cash equivalents decreased due to a decrease in short-term investments. This wasinterest rates and because the Operating Partnership received less insurance/litigation settlement proceeds and forfeited deposits in 2009, partially offset by a $7.3$4.9 million decreasegain on the sale of investment securities realized in interest earned on 1031 exchange and earnest money deposits2009.
          Other expenses from continuing operations increased approximately $0.7 million or 12.6% primarily due primarily to the declinean increase in transaction costs incurred in conjunction with the Operating Partnership’s acquisition of two properties consisting of 566 apartment units from unaffiliated parties, as well as expensing transaction activities. Thecosts associated with the Operating Partnership anticipates that interest and other income will approximate $9.0 million to $12.0 million for the year ending December 31,Partnership’s acquisition of all of its partners’ interests in five previously partially owned properties consisting of 1,587 apartment units in 2009. The above assumption is based on current expectations and is forward-looking.

Interest expense from continuing operations, including amortization of deferred financing costs, decreasedincreased approximately $4.1$16.9 million or 0.8%3.4% primarily as a result of lower overall effective interest rates and a reductionan increase in debt extinguishment costs partially offset by higher overall debt levels outstanding due to the Company’s 2007 share repurchase activity and the Operating Partnership’s pre-funding of its 2008 and 2009 debt maturities.lower capitalized interest. During the year

ended December 31, 2008,2009, the Operating Partnership capitalized interest costs of approximately $60.1$34.9 million as compared to $45.1$60.1 million for the year ended December 31, 2007.2008. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 20082009 was 5.56%5.62% as compared to 5.96%5.56% for the year ended December 31, 2007. The Operating Partnership anticipates that interest expense will approximate $475.0 million to $495.0 million for the year ending December 31, 2009. The above assumption is based on current expectations and is forward-looking.

2008.

Income and other tax expense from continuing operations increaseddecreased approximately $2.8$2.5 million or 46.9% primarily due to a change in the estimate for Texas state taxes and lower overall state income taxes, partially offset by an increase in franchise taxes. The Operating Partnership anticipates that income and other tax expense will approximate $1.0 million to $2.0 millionbusiness taxes for the year ending December 31, 2009. The above assumption is based on current expectations and is forward-looking.

Washington, D.C.

Loss from investments in unconsolidated entities increased approximately $0.4$2.7 million betweenas compared to the periods under comparison. This increase isyear ended December 31, 2008 primarily due to income receivedthe Operating Partnership’s $1.8 million share of defeasance costs incurred in 2007 fromconjunction with the saleextinguishment of cross-collateralized mortgage debt on one of the Operating Partnership’s 7.075% ownership interestpartially owned unconsolidated joint ventures as well as a decline in Wellsford Park Highlands Corporation, an entity which owns a condominium development in Denver, Colorado.

the operating performance of these properties.

Net gain on sales of unconsolidated entities increased approximately $0.2$7.8 million primarily dueas the Operating Partnership sold seven unconsolidated properties in 2009 (inclusive of the one property where the Operating Partnership acquired its partners’ interest) compared to a $2.9 million gain on the sale of three unconsolidated institutional joint venture properties realized in 2008 compared to a gain of $2.6 million realized in 2007 on the sale of one property.

2008.

Net gain on sales of land parcels decreased approximately $3.4$3.0 million primarily as a result of higher net gains realized in 2007 ondue to the sale of twovacant land parcels compared tolocated in Florida during the net gain realizedyear ended December 31, 2008 versus no land sales in 2008 on the sale of one land parcel.

2009.

Discontinued operations, net decreased approximately $579.9$97.4 million or 20.4% between the periods under comparison. This decrease is primarily due to a significant decrease in the number of properties soldlower gains from property sales during the year ended December 31, 20082009 compared to the same period in 2007, as well as2008 and the mixoperations of those properties. In addition, properties sold in each year.2009 reflect operations for a partial period in 2009 in contrast to a full period in 2008. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Comparison of the year ended December 31, 2007 to the year ended December 31, 2006

For the year ended December 31, 2007, income from continuing operations increased by approximately $38.7 million when compared to the year ended December 31, 2006. The increase in continuing operations is discussed below.

Revenues from the 2007 Same Store Properties increased $67.2 million primarily as a result of higher rental rates charged to residents. Expenses from the 2007 Same Store Properties increased $12.6 million primarily due to higher payroll, building, utility costs, insurance and real estate taxes. The following tables provide comparative same store results and statistics for the 2007 Same Store Properties:

2007 vs. 2006

Year over Year Same Store Results/Statistics

$ in thousands (except for Average Rental Rate) – 115,857 Same Store Units

   Results  Statistics 

Description

  Revenues  Expenses  NOI  Average
Rental
Rate (1)
  Occupancy  Turnover 

2007

  $1,643,513  $607,691  $1,035,822  $1,250  94.7% 63.3%

2006

  $1,576,322  $595,074  $981,248  $1,199  94.7% 64.9%
                       

Change

  $67,191  $12,617  $54,574  $51  0.0% (1.6%)
                       

Change

   4.3%  2.1%  5.6%  4.3%  

(1)  

Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.

Non-same store operating results increased $106.1 million and consist primarily of properties acquired in calendar years 2007 and 2006 as well as operations from completed development properties and our corporate housing business.

See also Note 20 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s segment disclosures.

Fee and asset management revenues, net of fee and asset management expenses, increased $0.6 million primarily as a result of an increase in property management fees from unconsolidated entities along with a decrease in asset management expenses from managing fewer properties for third parties and unconsolidated entities. As of December 31, 2007 and 2006, the Operating Partnership managed 14,472 units and 15,020 units, respectively, primarily for unconsolidated entities and our military housing venture at Fort Lewis.

Property management expenses from continuing operations include off-site expenses associated with the self-management of the Operating Partnership’s properties as well as management fees paid to any third party management companies. These expenses decreased by approximately $8.7 million or 9.0%. This decrease is primarily attributable to lower overall payroll costs, various reserve adjustments for workers compensation and medical costs and lower training costs associated with the completion of a majority of the rollout of a new property management system, partially offset by higher legal and professional fees.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased $79.6 million primarily as a result of additional depreciation expense on newly acquired properties and capital expenditures for all properties owned.

General and administrative expenses from continuing operations, which include corporate operating expenses, increased approximately $2.6 million between the periods under comparison. This increase was primarily due to an increase in restricted share expense and severance costs associated with the resignation of two of EQR’s executives as well as less expense recovery related to a certain lawsuit in Florida (see Note 21), partially offset by a decrease in profit sharing.

Impairment from continuing operations decreased $32.3 million primarily due to an impairment charge on goodwill of $30.0 million taken in 2006 related to the corporate housing business. In addition, in 2006 the Operating Partnership wrote-off $2.0 million of various deferred sales costs following the decision to halt the condominium conversion and sale process at five assets.

Interest and other income from continuing operations decreased approximately $10.7 million primarily as a result of $14.7 million of forfeited deposits for various terminated transactions along with $3.7 million in proceeds from eBay’s acquisition of Rent.com received during the year ended December 31, 2006. This was partially offset by $4.1 million received in 2007 for insurance litigation settlement proceeds, a $2.7 million increase in interest earned on 1031 exchange and earnest money deposits and a $0.7 million increase in interest earned on short-term investments.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $67.3 million primarily as a result of higher overall debt levels outstanding due to the Company’s share repurchase activity as well as the timing of acquisitions and dispositions, partially offset by lower overall effective interest rates. During the year ended December 31, 2007, the Operating Partnership capitalized interest costs of approximately $45.1 million as compared to $20.7 million for the year ended December 31, 2006. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2007 was 5.96% as compared to 6.21% for the year ended December 31, 2006.

Income and other tax expense from continuing operations decreased approximately $1.8 million primarily due to a taxable gain incurred in 2006 on a partially owned land parcel, partially offset by refunds received in 2006 as a result of a change in tax status of a portfolio of partially owned consolidated properties.

Income from investments in unconsolidated entities increased approximately $1.0 million between the periods under comparison. This increase is primarily due to the sale of the Operating Partnership’s 7.075% ownership interest in Wellsford Park Highlands Corporation, an entity which owns a condominium development in Denver, Colorado and profit participation received from the sale of condominium units at a development project that was sold in 2003.

Net gain on sales of unconsolidated entities increased $2.3 million primarily as a result of a $2.6 million gain on the sale of an unconsolidated institutional joint venture property during the year ended December 31, 2007.

Net gain on sales of land parcels increased $3.6 million primarily as a result of higher net gains realized in 2007 on the sales of land parcels compared to the net gains realized in 2006.

Discontinued operations, net decreased approximately $131.6 million between the periods under comparison. This decrease is primarily due to a significant decrease in the number of properties sold during the year ended December 31, 2007 compared to the same period in 2006, as well as the mix of properties sold in each year. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Liquidity and Capital Resources

For the Year Ended December 31, 20082010

As of January 1, 2008,2010, the Operating Partnership had approximately $50.8$193.3 million of cash and cash equivalents, its restricted 1031 exchange proceeds totaled $244.3 million and $1.28it had $1.37 billion available under its

31


revolving credit facility (net of $80.8$56.7 million which was restricted/dedicated to support letters of credit and $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing and net of the $139.0 million balance outstanding)borrowing). After taking into effect the various transactions discussed in the following paragraphs and the net cash provided by operating activities, the Operating Partnership’s cash and cash equivalents balance at December 31, 20082010 was approximately $890.8$431.4 million, its restricted 1031 exchange proceeds totaled $103.9 million and the amount available on the Operating Partnership’s revolving credit facility was $1.29$1.28 billion (net of $130.0$147.3 million which was restricted/dedicated to support letters of credit and net of the $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing)discussed above). The significant increase in the Operating Partnership’s cash and cash equivalents balance since December 31, 2007 is a direct result of its decision to pre-fund its 2008 and 2009 debt maturities with the closing of three secured mortgage loan pools in 2008: $500.0 million in March 2008, $550.0 million in August 2008 and $543.0 million in December 2008. See Notes 8 and 10 in the Notes to Consolidated Financial Statements for further discussion.

During the year ended December 31, 2008,2010, the Operating Partnership generated proceeds from various transactions, which included the following:

Disposed of 35 consolidated properties, 27 unconsolidated properties, 2 condominium units and one land parcel, receiving net proceeds of approximately $699.6 million;
Obtained $173.6 million in new mortgage financing;
Issued $600.0 million of unsecured notes receiving net proceeds of $595.4 million before underwriting fees and other expenses; and
Issued approximately 8.8 million Units (including EQR Common Shares issued under EQR’s ATM program — see further discussion below) and received net proceeds of $406.2 million.
During the year ended December 31, 2010, the above proceeds were primarily utilized to:
Acquire 16 rental properties and six land parcels for approximately $1.2 billion;
Acquire the 75% equity interest it did not own in seven previously unconsolidated properties consisting of 1,811 apartment units in exchange for an approximate $26.9 million payment to its joint venture partner (net of $3.1 million in cash acquired);
Invest $131.3 million primarily in development projects;
Repurchase 58,130 OP Units, utilizing cash of $1.9 million (see Note 3);
Repay $652.1 million of mortgage loans; and
Settle a forward starting swap, utilizing cash of $10.0 million.

          In September 2009, EQR announced the establishment of 45 properties and various individual condominium units, receivingan At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 million Common Shares from time to time over the next three years into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of approximately $887.6 million;

Obtained $1.6 billion in new mortgage financing and terminated nine forward starting swaps designatedfrom all equity offerings to hedge $450.0 millionthe capital of the total loan issuances, making payments of $26.7 million;

Obtained anOperating Partnership in exchange for additional $248.5 million of new mortgage loans primarily on development properties; and

Issued approximately 1.2 million OP Units (on a one-for-one Common Share per OP Unit basis). EQR may, but shall have no obligation to, sell Common Shares through the ATM share offering program in amounts and received net proceedsat times to be determined by EQR. Actual sales will depend on a variety of $30.8 million.

factors to be determined by EQR from time to time, including (among others) market conditions, the trading price of EQR’s Common Shares and determinations of the appropriate sources of funding for EQR. During the year ended December 31, 2008,2010, EQR issued approximately 6.2 million Common Shares at an average price of $47.45 per share for total consideration of approximately $291.9 million through the above proceeds were primarily utilized to:

Invest $521.5ATM share offering program. During the year ended December 31, 2009, EQR issued approximately 3.5 million primarily in development projects;

Common Shares at an average price of $35.38 per share for total consideration of approximately $123.7 million through the ATM share offering program. In addition, during the first quarter of 2011 through January 13, 2011, EQR has issued approximately 3.0 million Common Shares at an average price of $50.84 per share for total consideration of approximately $154.5 million. EQR has not issued any shares under this program since January 13, 2011. Through February 16, 2011, EQR has cumulatively issued approximately 12.7 million Common Shares at an average price of $44.94 per share for total consideration of approximately $570.1 million. Including its recently filed prospectus supplement which added 5,687,478 Common Shares, EQR has 10.0 million Common Shares remaining available for issuance under the ATM program.

Acquire seven rental properties and one uncompleted development property, utilizing cash of $388.1 million;

Invest $2.4 million in a military housing project located in the state of Washington;

Repurchase 0.2 million OP Units and settle 0.1 million OP Units, utilizing cash of $12.5 million (see Note 3);

Repay $130.0 million of fixed rate private notes;

Repurchase $174.0 million of fixed rate public notes; and

Repay $435.4 million of mortgage loans.

Depending on its analysis of market prices, economic conditions and other opportunities for the investment of available capital, the CompanyEQR may repurchase its Common Shares pursuant to its existing share repurchase program authorized by the Board of Trustees. EQR repurchased $7.9$1.9 million (220,085(58,130 shares at an average price per share of $35.93)$32.46) of its Common Shares (all related to the vesting of employee restricted shares) during the year ended December 31, 2008.2010. Concurrent with these transactions, the Operating Partnership repurchased and retired 220,08558,130 OP Units previously issued to EQR. As of December 31, 2008,2010, EQR had authorization to repurchase an additional $467.7$464.6 million of its shares. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

          Depending on its analysis of prevailing market conditions, liquidity requirements, contractual restrictions and other factors, the Operating Partnership may from time to time seek to repurchase and retire its outstanding debt in open market or privately negotiated transactions.

32


The Operating Partnership’s total debt summary and debt maturity schedules as of December 31, 20082010 are as follows:

Debt Summary as of December 31, 2008

2010
(Amounts in thousands)

   Amounts (1)  % of Total  Weighted
Average
Rates (1)
  Weighted
Average
Maturities
(years)

Secured

  $5,036,930  48.0% 5.18% 8.3

Unsecured

   5,464,316  52.0% 5.46% 5.5
             

Total

  $10,501,246  100.0% 5.34% 6.9
             

Fixed Rate Debt:

      

Secured – Conventional

  $3,805,652  36.2% 6.00% 7.2

Unsecured – Public/Private

   4,701,372  44.8% 5.69% 5.7

Unsecured – Tax Exempt

   75,790  0.7% 5.07% 20.5
             

Fixed Rate Debt

   8,582,814  81.7% 5.80% 6.5
             

Floating Rate Debt:

      

Secured – Conventional

   595,388  5.7% 3.78% 2.4

Secured – Tax Exempt

   635,890  6.1% 2.50% 21.6

Unsecured – Public/Private

   651,554  6.2% 3.89% 1.5

Unsecured – Tax Exempt

   35,600  0.3% 1.05% 20.0

Unsecured – Revolving Credit Facility

   -  -  4.31% 3.1
             

Floating Rate Debt

   1,918,432  18.3% 3.39% 8.5
             

Total

  $10,501,246  100.0% 5.34% 6.9
             

                 
              Weighted 
          Weighted  Average 
          Average  Maturities 
  Amounts (1)  % of Total  Rates (1)  (years) 
Secured $4,762,896   47.9%  4.79%  8.1 
Unsecured  5,185,180   52.1%  4.96%  4.5 
             
Total $9,948,076   100.0%  4.88%  6.2 
             
                 
Fixed Rate Debt:                
Secured — Conventional $3,831,393   38.5%  5.68%  6.9 
Unsecured — Public/Private  4,375,860   44.0%  5.78%  5.1 
             
Fixed Rate Debt  8,207,253   82.5%  5.73%  5.9 
             
                 
Floating Rate Debt:                
Secured — Conventional  326,009   3.3%  2.56%  0.7 
Secured — Tax Exempt  605,494   6.1%  0.48%  20.4 
Unsecured — Public/Private  809,320   8.1%  1.72%  1.3 
Unsecured — Revolving Credit Facility        0.66%  1.2 
             
Floating Rate Debt  1,740,823   17.5%  1.39%  7.5 
             
                 
Total $9,948,076   100.0%  4.88%  6.2 
             

(1)  

(1)Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2008.

2010.

Note: The Operating Partnership capitalized interest of approximately $60.1$13.0 million and $45.1$34.9 million during the years ended December 31, 20082010 and 2007,2009, respectively.

Debt Maturity Schedule as of December 31, 2008

2010
(Amounts in thousands)

Year

  Fixed
Rate (1)
  Floating
Rate (1)
  Total  % of Total  Weighted Average
Rates on Fixed
Rate Debt (1)
  Weighted Average
Rates on

Total Debt (1)
 

2009 (2)

  $350,974  $512,424  $863,398  8.2% 6.79% 4.62%

2010 (3)

   294,968   658,515   953,483  9.1% 7.01% 4.42%

2011 (2) (4)

   1,451,164   63,178   1,514,342  14.4% 5.71% 5.57%

2012

   908,196   3,658   911,854  8.7% 6.08% 6.08%

2013

   566,333   -   566,333  5.4% 5.93% 5.93%

2014

   517,470   -   517,470  4.9% 5.28% 5.28%

2015

   355,620   -   355,620  3.4% 6.41% 6.41%

2016

   1,089,317   -   1,089,317  10.4% 5.32% 5.32%

2017

   1,346,649   456   1,347,105  12.8% 5.87% 5.87%

2018

   335,496   44,677   380,173  3.6% 5.96% 5.63%

2019+

   1,366,627   635,524   2,002,151  19.1% 5.85% 4.98%
                      

Total

  $8,582,814  $1,918,432  $10,501,246  100.0% 5.86% 5.37%
                      

                         
                  Weighted Average  Weighted Average 
  Fixed  Floating          Rates on Fixed  Rates on 
Year Rate (1)  Rate (1)  Total  % of Total  Rate Debt (1)  Total Debt (1) 
2011 $906,266(2) $759,725(3) $1,665,991   16.8%  5.28%  3.49%
2012  778,181   38,128   816,309   8.2%  5.65%  5.57%
2013  269,159   309,828   578,987   5.8%  6.72%  4.89%
2014  562,583   22,034   584,617   5.9%  5.31%  5.24%
2015  357,713      357,713   3.6%  6.40%  6.40%
2016  1,167,662      1,167,662   11.7%  5.33%  5.33%
2017  1,355,830   456   1,356,286   13.6%  5.87%  5.87%
2018  80,763   44,677   125,440   1.3%  5.72%  4.28%
2019  801,754   20,766   822,520   8.3%  5.49%  5.36%
2020  1,671,836   809   1,672,645   16.8%  5.50%  5.50%
2021+  255,506   544,400   799,906   8.0%  6.62%  2.67%
                   
Total $8,207,253  $1,740,823  $9,948,076   100.0%  5.63%  4.93%
                   
(1) 

(1)  

Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 2008.

2010.
 

(2)

On January 27, 2009, the Operating Partnership repurchased at par $105.2 million of its 4.75% unsecured notes due June 15, 2009 and $185.2 million of its 6.95% unsecured notes due March 2, 2011 pursuant to a cash tender offer announced on January 16, 2009.

 

(3)  

Includes the Operating Partnership’s $500.0 million floating rate term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Operating Partnership.

(4)  

Includes $548.6$482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026. The notes are callable by the Operating Partnership on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021.

(3)Includes the Operating Partnership’s $500.0 million term loan facility, which originally matured on October 5, 2010. Effective April 12, 2010, the Operating Partnership exercised the first of its two one-year extension options. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Operating Partnership.

The following table provides a summary of the Operating Partnership’s unsecured debt as of December 31, 2008:

33


2010:
Unsecured Debt Summary as of December 31, 2008

2010
(Amounts in thousands)

   Coupon
Rate
 Due Date  Face
Amount
  Unamortized
Premium/
(Discount)
  Net
Balance
 

Fixed Rate Notes:

      
  4.750% 06/15/09 (1) $227,400  $(98) $227,302 
  6.950% 03/02/11 (2)  300,000   2,047   302,047 
  6.625% 03/15/12   400,000   (942)  399,058 
  5.500% 10/01/12   350,000   (1,295)  348,705 
  5.200% 04/01/13   400,000   (503)  399,497 
  5.250% 09/15/14   500,000   (351)  499,649 
  6.584% 04/13/15   300,000   (700)  299,300 
  5.125% 03/15/16   500,000   (386)  499,614 
  5.375% 08/01/16   400,000   (1,407)  398,593 
  5.750% 06/15/17   650,000   (4,323)  645,677 
  7.125% 10/15/17   150,000   (570)  149,430 
  7.570% 08/15/26   140,000   -   140,000 
  3.850% 08/15/26 (3)  548,557   (6,057)  542,500 

Floating Rate Adjustments

    (1)  (150,000)  -   (150,000)
               
     4,715,957   (14,585)  4,701,372 
               

Fixed Rate Tax Exempt Notes:

      
  5.200% 06/15/29 (4)  75,790   -   75,790 
               

Floating Rate Tax Exempt Notes:

      
  7-Day SIFMA 12/15/28 (4)  35,600   -   35,600 
               

Floating Rate Notes:

      
   06/15/09 (1)  150,000   -   150,000 

FAS 133 Adjustments – net

    (1)  1,554   -   1,554 

Term Loan Facility

  LIBOR+0.50% 10/05/10 (4) (5)  500,000   -   500,000 
               
     651,554   -   651,554 
               

Revolving Credit Facility:

  LIBOR+0.50% 02/28/12 (6)  -   -   - 
               

Total Unsecured Debt

    $5,478,901  $(14,585) $5,464,316 
               

                     
              Unamortized    
  Coupon  Due  Face  Premium/  Net 
  Rate  Date  Amount  (Discount)  Balance 
Fixed Rate Notes:
                    
   6.950%  03/02/11  $93,096  $205  $93,301 
   6.625%  03/15/12   253,858   (229)  253,629 
   5.500%  10/01/12   222,133   (383)  221,750 
   5.200%  04/01/13(1)  400,000   (266)  399,734 
Fair Value Derivative Adjustments      (1)  (300,000)     (300,000)
   5.250%  09/15/14   500,000   (228)  499,772 
   6.584%  04/13/15   300,000   (469)  299,531 
   5.125%  03/15/16   500,000   (278)  499,722 
   5.375%  08/01/16   400,000   (1,036)  398,964 
   5.750%  06/15/17   650,000   (3,306)  646,694 
   7.125%  10/15/17   150,000   (441)  149,559 
   4.750%  07/15/20   600,000   (4,349)  595,651 
   7.570%  08/15/26   140,000      140,000 
   3.850%  08/15/26(2)  482,545   (4,992)  477,553 
                  
           4,391,632   (15,772)  4,375,860 
                  
                     
Floating Rate Notes:
                    
       04/01/13(1)  300,000      300,000 
Fair Value Derivative Adjustments       (1) 9,320      9,320 
Term Loan Facility LIBOR+0.50%  10/05/11(3) (4)  500,000      500,000 
                  
           809,320      809,320 
                     
Revolving Credit Facility:
 LIBOR+0.50%  02/28/12(3) (5)         
                  
                     
Total Unsecured Debt
         $5,200,952  $(15,772) $5,185,180 
                  
(1) 

Note:

SIFMA stands for the Securities Industry and Financial Markets Association and is the tax-exempt index equivalent of LIBOR.

(1)  

$150.0300.0 million in fair value interest rate swaps converts a portion of the 4.750%5.200% notes due June 15, 2009April 1, 2013 to a floating interest rate. During the year ended December 31, 2008, the Operating Partnership repurchased $72.6 million of these notes at a discount to par of approximately 1.0% and recognized a gain on early debt extinguishment of $0.7 million. On January 27, 2009, the Operating Partnership repurchased $105.2 million of these notes at par pursuant to a cash tender offer announced on January 16, 2009.

 

(2)

On January 27, 2009, the Operating Partnership repurchased $185.2 million of these notes at par pursuant to a cash tender offer announced on January 16, 2009.

 

(3)  

Convertible notes mature on August 15, 2026. The notes are callable by the Operating Partnership on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021. During the year ended December 31, 2008, the Operating Partnership repurchased $101.4 million of these notes at a discount to par of approximately 17.7% and recognized a gain on early debt extinguishment of $18.0 million.

 

(4)  

(3)

Notes

Facilities are private. All other unsecured debt is public.

 

(5)  

(4)

Represents the Operating Partnership’s $500.0 million term loan facility, which maturesoriginally matured on October 5, 2010. Effective April 12, 2010, subject tothe Operating Partnership exercised the first of its two one-year extension optionsoptions. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Operating Partnership.

 

(6)  

(5)

As of December 31, 2008,2010, there was no amount outstanding and approximately $1.29$1.28 billion available on the Operating Partnership’s unsecured revolving credit facility.

As of February 26, 2009, an

          An unlimited amount of equity and debt securities remains available for issuance by EQR and the Operating Partnership under effective shelf registration statements filed with the SEC. Most recently, EQR and the Operating Partnership filed a universal shelf registration statement for an unlimited amount of equity and debt securities that became automatically effective upon filing with the SEC in December 2008October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on December

21, 2011October 14, 2013 and does not contain a maximum issuance amount). AsHowever, as of February 26, 2009, an unlimited amount of equity securities remains available for issuance by EQR16, 2011, issuances under a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not contain a maximum issuance amount).ATM share offering program are limited to 10.0 million additional shares. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 20082010 is presented in the following table. The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding OP Units at the equivalent market value of the closing price of EQR’s Common Shares on the New York Stock Exchange;Exchange and (ii) the “OP Unit Equivalent” of all convertible preference units/interests; and (iii) the liquidation value of all perpetual preference units outstanding.

34


Capital Structure as of December 31, 2008

2010
(Amounts in thousands except for unit and per unit amounts)

Secured Debt

    $5,036,930  48.0% 

Unsecured Debt

     5,464,316  52.0% 
           

Total Debt

     10,501,246  100.0% 54.3%

OP Units

   289,466,537     

OP Unit Equivalents (see below)

   406,167     
         

Total outstanding at quarter-end

   289,872,704     

EQR Common Share Price at December 31, 2008

  $29.82     
         
     8,644,004  97.7% 

Perpetual Preference Units (see below)

     200,000  2.3% 
           

Total Equity

     8,844,004  100.0% 45.7%

Total Market Capitalization

    $19,345,250   100.0%

Convertible

                 
Secured Debt     $4,762,896   47.9%    
Unsecured Debt      5,185,180   52.1%    
               
Total Debt
      9,948,076   100.0%  38.4%
                 
Total outstanding Units  303,809,279             
EQR Common Share Price at December 31, 2010 $51.95             
                
       15,782,892   98.7%    
Perpetual Preference Units (see below)      200,000   1.3%    
               
Total Equity
      15,982,892   100.0%  61.6%
                 
Total Market Capitalization
     $25,930,968       100.0%
Perpetual Preference Units as of December 31, 2008

2010
(Amounts in thousands except for unit and per unit amounts)

Series

  Redemption
Date
  Outstanding
Units
  Liquidation
Value
  Annual
Dividend
Per Unit
  Annual
Dividend
Amount
  Weighted
Average
Rate
  Conversion
Ratio
  OP Unit
Equivalents

Preference Units:

               

7.00% Series E

  11/1/98  329,016  $8,225  $1.75  $576   1.1128  366,129

7.00% Series H

  6/30/98  22,459   561   1.75   39   1.4480  32,521

Junior Preference Units:

               

8.00% Series B

  7/29/09  7,367   184   2.00   15   1.020408  7,517
                     

Total Convertible Preference Units

    358,842  $8,970    $630  7.02%   406,167

Perpetual

                         
              Annual  Annual  Weighted 
  Redemption  Outstanding  Liquidation  Dividend  Dividend  Average 
Series Date  Units  Value  Per Unit  Amount  Rate 
Preference Units:                        
8.29% Series K  12/10/26   1,000,000  $50,000  $4.145  $4,145     
6.48% Series N  6/19/08   600,000   150,000   16.20   9,720     
                      
Total Perpetual Preference Units      1,600,000  $200,000      $13,865   6.93%
          On November 1, 2010, the Operating Partnership redeemed its Series E and Series H Cumulative Convertible Preference Units asfor cash consideration of December 31, 2008

(Amounts in thousands except for unit$0.8 million and per unit amounts)

Series

  Redemption
Date
  Outstanding
Units
  Liquidation
Value
  Annual
Dividend
Per Unit
  Annual
Dividend
Amount
  Weighted
Average
Rate
 

Preference Units:

            

8.29% Series K

  12/10/26  1,000,000  $50,000  $4.145  $4,145  

6.48% Series N

  6/19/08  600,000   150,000   16.20   9,720  
                 

Total Perpetual Preference Units

    1,600,000  $200,000    $13,865  6.93%

355,539 Units.

The Operating Partnership generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and certain scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under its revolving

credit facility. Under normal operating conditions, the Operating Partnership considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions. However, there may be times when the Operating Partnership experiences shortfalls in its coverage of distributions, which may cause the Operating Partnership to consider reducing its distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, the Operating Partnership’s financial condition may be adversely affected and it may not be able to maintain its current distribution levels. The Operating Partnership reduced its quarterly OP Unit dividend beginning with the dividend for the third quarter of 2009, from $0.4825 per Unit to $0.3375 per Unit.

          During the fourth quarter of 2010, EQR announced a new dividend policy which it believes will generate payouts more closely aligned with the actual annual operating results of the Operating Partnership’s core business and provide transparency to investors. EQR and the Operating Partnership intend to pay an annual cash dividend equal to approximately 65% of Normalized FFO. During the year ended December 31, 2010, the Operating Partnership paid $0.3375 per Unit for each of the first three quarters and $0.4575 per Unit for the fourth quarter to bring the total payment for the year (an annual rate of $1.47 per Unit) to approximately 65% of Normalized FFO. The Operating Partnership anticipates the expected dividend payout will be $1.56 to $1.62 per Unit ($0.3375 per Unit for each of the first three quarters with the balance for the fourth quarter) for the year ending December 31, 2011. The above assumption is based on current expectations and is forward-looking. While the new dividend policy makes it less likely that the Operating Partnership will over distribute, it will also lead to a dividend reduction more quickly than in the past should operating results deteriorate. The Operating Partnership believes that its expected 2011 operating cash flow will be sufficient to cover capital expenditures and distributions.
          The Operating Partnership also expects to meet its long-term liquidity requirements, such as scheduled unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of secured and unsecured notesdebt and equity securities, including additional OP Units, and proceeds received from the disposition of certain properties as well as joint

35


ventures. In addition, the Operating Partnership has significant unencumbered properties available to secure additional mortgage borrowings in the event that the public capital markets are unavailable or the cost of alternative sources of capital is too high. The fair value of and cash flow from these unencumbered properties are in excess of the requirements the Operating Partnership must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $18.7$19.7 billion in investment in real estate on the Operating Partnership’s balance sheet at December 31, 2008, $10.92010, $12.6 billion or 58.1%63.9%, was unencumbered.

As However, there can be no assurances that these sources of February 5, 2009,capital will be available to the Operating Partnership in the future on acceptable terms or otherwise.

          The Operating Partnership’s senior debtcredit ratings from Standard & PoorsPoor’s (“S&P”), Moody’s and Fitch for its outstanding senior debt are BBB+, Baal and A-BBB+, respectively. As of February 5, 2009, EQR’s preferred equity ratings from S&P, Moody’s and Fitch for its outstanding preferred equity are BBB-BBB+, Baa2 and BBB+BBB-, respectively.

During the fourth quarter of 2010, Fitch downgraded the Operating Partnership’s credit rating from A- to BBB+ and EQR’s equity rating from BBB+ to BBB-, which does not have an effect on the Operating Partnership’s cost of funds. During the first quarter of 2011, Moody’s raised its outlook for both EQR and the Operating Partnership from negative outlook to stable outlook.

The Operating Partnership has a $1.425 billion (net of $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing) long-term revolving credit facility with available borrowings as of February 5, 200916, 2011 of $1.30$1.34 billion (net of $83.8 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above) that matures in February 2012 (See Note 10 in the Notes to Consolidated Financial Statements for further discussion). This facility may, among other potential uses, be used to fund property acquisitions, costs for certain properties under development and short-term liquidity requirements. As
          On July 16, 2010, a portion of February 5, 2009, no amountsthe parking garage collapsed at one of the Operating Partnership’s rental properties (Prospect Towers in Hackensack, New Jersey). The Operating Partnership estimates that the costs related to such collapse (both expensed and capitalized), including providing for residents’ interim needs, lost revenue and garage reconstruction, will be approximately $12.0 million, after insurance reimbursements of $8.0 million. Costs to rebuild the garage will be capitalized as incurred. Other costs, like those to accommodate displaced residents, lost revenue due to a portion of the property being temporarily unavailable for occupancy and legal costs, will reduce earnings as they are incurred. Generally, insurance proceeds will be recorded as increases to earnings as they are received. An impairment charge of $1.3 million was recognized to write-off the net book value of the collapsed garage. During the year ended December 31, 2010, the Operating Partnership received approximately $4.0 million in insurance proceeds which fully offset the impairment charge and partially offset expenses of $5.5 million that were outstanding underrecorded relating to this facility.

loss and are included in real estate taxes and insurance on the consolidated statements of operations. In addition, the Operating Partnership estimates that its lost revenues approximated $1.6 million during the year ended December 31, 2010 as a result of the high-rise tower being unoccupied following the garage collapse.

See Note 2120 in the Notes to Consolidated Financial Statements for discussion of the events which occurred subsequent to December 31, 2008.

2010.

Capitalization of Fixed Assets and Improvements to Real Estate

Our policy with respect to capital expenditures is generally to capitalize expenditures that improve the value of the property or extend the useful life of the component asset of the property. We track improvements to real estate in two major categories and several subcategories:

 

 

Replacements(inside the unit). These include:

flooring such as carpets, hardwood, vinyl, linoleum or tile;

appliances;

flooring such as carpets, hardwood, vinyl, linoleum or tile;
appliances;
mechanical equipment such as individual furnace/air units, hot water heaters, etc;
furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and
blinds/shades.

mechanical equipment such as individual furnace/air units, hot water heaters, etc;

furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and

blinds/shades.

All replacements are depreciated over a five-year estimated useful life. We expense as incurred all make-ready maintenance and turnover costs such as cleaning, interior painting of individual apartment units and the repair of any replacement item noted above.

 

 

Building improvements(outside the unit). These include:

roof replacement and major repairs;
paving or major resurfacing of parking lots, curbs and sidewalks;
amenities and common areas such as pools, exterior sports and playground equipment, lobbies,

36


paving or major resurfacing of parking lots, curbs and sidewalks;

clubhouses, laundry rooms, alarm and security systems and offices;
major building mechanical equipment systems;
interior and exterior structural repair and exterior painting and siding;
major landscaping and grounds improvement; and
vehicles and office and maintenance equipment.

amenities and common areas such as pools, exterior sports and playground equipment, lobbies, clubhouses, laundry rooms, alarm and security systems and offices;

major building mechanical equipment systems;

interior and exterior structural repair and exterior painting and siding;

major landscaping and grounds improvement; and

vehicles and office and maintenance equipment.

All building improvements are depreciated over a five to ten-year estimated useful life. We capitalize building improvements and upgrades only if the item: (i) exceeds $2,500 (selected projects must exceed $10,000); (ii)

extends the useful life of the asset; and (iii) improves the value of the asset.

For the year ended December 31, 2008,2010, our actual improvements to real estate totaled approximately $169.8$138.2 million. This includes the following (amounts in thousands except for apartment unit and per apartment unit amounts):

Capitalized Improvements

Capital Expenditures to Real Estate


For the Year Ended December 31, 2008

   Total
Units (1)
  Replacements  Avg.
Per Unit
  Building
Improvements
  Avg.
Per Unit
  Total  Avg.
Per Unit

Established Properties (2)

  105,607  $38,003  $360  $53,195  $504  $91,198  $864

New Acquisition Properties (3)

  20,665   5,409   285   18,243   961   23,652   1,246

Other (4)

  6,487   43,497     11,491     54,988  
                     

Total

  132,759  $86,909    $82,929    $169,838  
                     

2010
                             
  Total      Avg. Per      Avg. Per      Avg. Per 
  Apartment      Apartment  Building  Apartment      Apartment 
  Units (1)  Replacements (2)  Unit  Improvements  Unit  Total  Unit 
Same Store Properties (3)  112,042  $70,620  $630  $54,118  $483  $124,738  $1,113 
                             
Non-Same Store Properties (4)  12,824   4,180   457   5,547   607   9,727   1,064 
                             
Other (5)     1,509       2,234       3,743     
                         
                             
Total  124,866  $76,309      $61,899      $138,208     
                         
(1) 

(1)  

Total units –Apartment Units — Excludes 9,776 unconsolidated units and 4,7094,738 military housing (fee managed)apartment units for which capitalized improvementsrepairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Operating Partnership’s results.

 

(2)

Established

Replacements — Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $31.7 million spent in 2010 on apartment unit renovations/rehabs (primarily kitchens and baths) on 4,331 apartment units (equating to about $7,300 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets.
(3)Same Store Properties – Wholly Owned Properties— Primarily includes all properties acquired or completed and stabilized prior to January 1, 2006.

2009, less properties subsequently sold.
 

(3)  

(4)

New Acquisition

Non-Same Store Properties – Wholly Owned Properties— Primarily includes all properties acquired during 2006, 20072009 and 2008.2010, plus any properties in lease-up and not stabilized as of January 1, 2009. Per unit amounts are based on a weighted average of 18,9839,141 apartment units.

 

(4)  

(5)

Other – Includes— Primarily includes expenditures for properties either partially owned or sold during the period, commercial space, corporate housing and condominium conversions. Also includes $34.2 million included in replacements spent on various assets related to major renovations and repositioning of these assets.

period.

For the year ended December 31, 2007,2009, our actual improvements to real estate totaled approximately $252.7$123.9 million. This includes the following (amounts in thousands except for apartment unit and per apartment unit amounts):

Capitalized Improvements

Capital Expenditures to Real Estate


For the Year Ended December 31, 2007

   Total
Units (1)
  Replacements  Avg.
Per Unit
  Building
Improvements
  Avg.
Per Unit
  Total  Avg.
Per Unit

Established Properties (2)

  103,560  $37,695  $364  $77,109  $745  $114,804  $1,109

New Acquisition Properties (3)

  27,696   9,433   371   66,182   2,605   75,615   2,976

Other (4)

  7,388   16,398     45,858     62,256  
                     

Total

  138,644  $63,526    $189,149    $252,675  
                     

2009
                             
  Total      Avg. Per      Avg. Per      Avg. Per 
  Apartment      Apartment  Building  Apartment      Apartment 
  Units (1)  Replacements (2)  Unit  Improvements  Unit  Total  Unit 
Same Store Properties (3)  113,598  $69,808  $614  $44,611  $393  $114,419  $1,007 
                             
Non-Same Store Properties (4)  10,728   2,361   240   3,675   374   6,036   614 
                             
Other (5)     2,130       1,352       3,482     
                         
                             
Total  124,326  $74,299      $49,638      $123,937     
                         
(1) 

(1)  

Total units –Apartment Units — Excludes 10,4468,086 unconsolidated apartment units and 3,7314,595 military housing (fee managed)apartment units, for which capitalized improvementscapital expenditures to real estate are self-funded and do not consolidate into the Operating Partnership’s results.

 

(2)

Established

Replacements — For same store properties includes $28.0 million spent on various assets related to unit renovations/rehabs (primarily kitchens and baths) designed to reposition these assets for higher rental levels in their respective markets.
(3)Same Store Properties – Wholly Owned Properties— Primarily includes all properties acquired or completed and stabilized prior to January 1, 2005.

2008, less properties subsequently sold.
 

(3)  

(4)

New Acquisition

Non-Same Store Properties – Wholly Owned Properties— Primarily includes all properties acquired during 2005, 20062008 and 2007.2009, plus any properties in lease-up and not stabilized as of January 1, 2008. Per unit amounts are based on a weighted average of 25,4069,823 apartment units.

 

(4)  

(5)

Other – Includes— Primarily includes expenditures for properties either partially owned or sold during the period, commercial space, corporate housing and condominium conversions. Also includes $22.2 million included in building improvements spent on 26 specific assets related to major renovations and repositioning of these assets.

period.

The Operating Partnership incurred less in capitalized improvements per unit and overall in 2008 primarily due to enhanced efforts to limit the scope of projects and greater cost controls on vendors.37


     For 2009,2011, the Operating Partnership estimates an annual stabilized run rate ofthat it will spend approximately $925$1,200 per apartment unit of capital expenditures for its established properties.same store properties inclusive of unit renovation/rehab costs, or $850 per apartment unit excluding unit renovation/rehab costs. For 2011, the Operating Partnership estimates that it will spend $41.0 million rehabbing 5,500 apartment units (equating to about $7,500 per apartment unit rehabbed). The above assumption isassumptions are based on current expectations and isare forward-looking.

During the year ended December 31, 2008,2010, the Operating Partnership’s total non-real estate capital additions, such as computer software, computer equipment, and furniture and fixtures and leasehold improvements to the Operating Partnership’s property management offices and its corporate offices, were approximately $2.3$3.0 million. The Operating Partnership expects to fund approximately $2.0$8.5 million in total additions to non-real estate property in 2009.2011. The above assumption is based on current expectations and is forward-looking.

Improvements to real estate and additions to non-real estate property are generally funded from net cash provided by operating activities and from investment cash flow.

Derivative Instruments

In the normal course of business, the Operating Partnership is exposed to the effect of interest rate changes. The Operating Partnership seeks to limitmanage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

The Operating Partnership has a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Operating Partnership has not sustained a material loss from thosethese instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives it currently has in place.

See Note 11 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 2008.

2010.

Other

Total distributions paid in January 20092011 amounted to $142.2$141.3 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 2008.

2010.

Off-Balance Sheet Arrangements and Contractual Obligations

The Operating Partnership hashad co-invested in various properties that arewere unconsolidated and accounted for under the equity method of accounting. Management does not believe these investments havehad a materially different impact upon the Operating Partnership’s liquidity, cash flows, capital resources, credit or market risk than its other property management and ownership activities. During 2000 and 2001, the Operating Partnership entered into institutional ventures with an unaffiliated partner. At the respective closing dates, the Operating Partnership sold and/or contributed 45 properties containing 10,846 apartment units to these ventures and retained a 25% ownership interest in the ventures. The Operating Partnership’s joint venture partner contributed cash equal to 75% of the agreed-upon equity value of the properties comprising the ventures, which was then distributed to the Operating Partnership. The Operating Partnership’s strategy with respect to these ventures was to reduce its concentration of properties in a variety of markets. The Operating Partnership sold three properties consisting of 670 units and one property consisting of 400 units during the years ended December 31, 2008 and 2007, respectively. The Operating Partnership and its joint venture partner currently intend to wind up these investments over the next few years by selling the related assets. The Operating Partnership cannot estimate what, if any, profit it will receive from these dispositions or if the Operating Partnership will in fact receive its equity back.

As of December 31, 2008,2010, the Operating Partnership had sold its interest in these unconsolidated ventures with the exception of eight properties consisting of 2,061 apartment units which were acquired by the Operating Partnership. All of the related debt encumbering these ventures was extinguished.

     As of December 31, 2010, the Operating Partnership has 10four projects totaling 3,568717 apartment units in various stages of development with estimated completion dates ranging through JuneSeptember 30, 2011.2012, as well as other completed development projects that are in various stages of lease up or are stabilized. The development agreements currently in place are discussed in detail in Note 18 of the Operating Partnership’s Consolidated Financial Statements.

See also Notes 2 and 6 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s investments in partially owned entities.

The following table summarizes the Operating Partnership’s contractual obligations for the next five years and thereafter as of December 31, 2008:2010:

38

Payments Due by Year (in thousands)


Contractual Obligations

  2009  2010  2011  2012  2013  Thereafter  Total

Debt:

              

Principal (a)

  $863,398  $953,483  $1,514,342  $911,854  $566,333  $5,691,836  $10,501,246

Interest (b)

   539,674   501,815   429,789   364,376   318,714   1,645,206   3,799,574

Operating Leases:

              

Minimum Rent Payments (c)

   6,047   5,530   3,582   1,273   1,101   58,553   76,086

Other Long-Term Liabilities:

              

Deferred Compensation (d)

   1,456   1,457   2,062   2,062   1,464   11,376   19,877
                            

Total

  $1,410,575  $1,462,285  $1,949,775  $1,279,565  $887,612  $7,406,971  $14,396,783
                            

                             
Payments Due by Year (in thousands) 
Contractual Obligations 2011  2012  2013  2014  2015  Thereafter  Total 
Debt:                            
Principal (a) $1,665,991  $816,309  $578,987  $584,617  $357,713  $5,944,459  $9,948,076 
Interest (b)  460,045   407,793   367,642   344,599   309,043   1,016,041   2,905,163 
Operating Leases:                            
Minimum Rent Payments (c)  5,478   4,285   4,431   4,736   4,729   320,928   344,587 
Other Long-Term Liabilities:                            
Deferred Compensation (d)  1,457   1,770   1,485   1,677   1,677   9,182   17,248 
                      
                             
Total $2,132,971  $1,230,157  $952,545  $935,629  $673,162  $7,290,610  $13,215,074 
                      

(a)  

(a)Amounts include aggregate principal payments only.

only and includes in 2011 a $500.0 million term loan that the Operating Partnership has the right to extend to 2012.

(b)

Amounts include interest expected to be incurred on the Operating Partnership’s secured and unsecured debt based on obligations outstanding at December 31, 20082010 and inclusive of capitalized interest. For floating rate debt, the current rate in effect atfor the most recent payment through December 31, 20082010 is assumed to be in effect through the respective maturity date of each instrument.

(c)

Minimum basic rent due for various office space the Operating Partnership leases and fixed base rent due on ground leases for three properties.

four properties/parcels.

(d)

Estimated payments to EQR’s Chairman, Vice Chairman and two former CEO’s and its former chief operating officer based on planned retirement dates.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or different presentation of our financial statements.

The Operating Partnership’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 20082010 and are consistent with the year ended December 31, 2007.

2009.

The Operating Partnership has identified sixfive significant accounting policies as critical accounting policies. These critical accounting policies are those that have the most impact on the reporting of our financial condition and those requiring significant judgments and estimates. With respect to these critical accounting policies, management believes that the application of judgments and estimates is consistently applied and produces financial information that fairly presents the results of operations for all periods presented. The sixfive critical accounting policies are:

Acquisition of Investment Properties
     The Operating Partnership allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Operating Partnership utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The Operating Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.
Impairment of Long-Lived Assets Including Goodwill

The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate, and goodwill, for indicators of permanent impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Operating Partnership’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Operating Partnership to conclude that impairment indicators exist and an impairment loss is warranted.

Depreciation of Investment in Real Estate

The Operating Partnership depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to 10-year estimated useful life and both the furniture,

39


fixtures and equipment and replacements components over a 5-year estimated useful life, all of which are judgmental determinations.

Cost Capitalization

See theCapitalization of Fixed Assets and Improvements to Real Estatesection for a discussion of the Operating Partnership’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Operating Partnership capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend all of their

time on the supervision of major capital and/or renovation projects. These costs are reflected on the balance sheet as an increase to depreciable property.

The Operating Partnership follows the guidance in SFAS No. 67,Accounting for Costs and Initial Rental Operations of Real Estate Projects, for

     For all development projects, andthe Operating Partnership uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Operating Partnership capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend all of their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheet as construction-in-progress for each specific property. The Operating Partnership expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovations at selected properties when additional incremental employees are hired.

Fair Value of Financial Instruments, Including Derivative Instruments

The Operating Partnership follows the guidance under SFAS No. 157 when valuing its financial instruments.

     The valuation of financial instruments under SFAS No. 107 and SFAS No. 133, as amended, requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments. The Operating Partnership, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Operating Partnership bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

Revenue Recognition

Rental income attributable to residential leases is recorded on a straight-line basis, which is not materially different than if it were recorded when due from residents and recognized monthly as it is earned. Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis. Fee and asset management revenue and interest income are recorded on an accrual basis.

Share-Based Compensation

The Company accounts for its share-based compensation in accordance with SFAS No. 123(R),Share-Based Payment, effective January 1, 2006, which results in compensation expense being recorded based on the fair value of the share compensation granted.

Any EQR Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model is only one method of valuing options and the Company’s use of this model should not be interpreted as an endorsement of its accuracy. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options and the actual value of the options may be significantly different.

Funds From Operations

and Normalized Funds From Operations

For the year ended December 31, 2008,2010, Funds From Operations (“FFO”) available to OP Units decreased $91.8and Normalized FFO available to Units increased $7.3 million, or 12.7%1.2%, and $20.9 million, or 3.2%, respectively, as compared to the year ended December 31, 2007.2009. For the year ended December 31, 2007,2009, FFO available to OP Units increased $7.3and Normalized FFO available to Units decreased $2.9 million, or 1.0%0.5%, and $73.5 million, or 10.0%, respectively, as compared to the year ended December 31, 2006.

2008.

The following is a reconciliation of net income to FFO available to OPUnits and Normalized FFO available to Units for each of the five years ended December 31, 2008:2010:

40


Funds From Operations

and Normalized Funds From Operations
(Amounts in thousands)

   Year Ended December 31, 
   2008   2007   2006   2005   2004 
                     

Net income

  $447,035  $1,055,228  $1,148,104  $932,047  $524,164 

Adjustments:

      

Depreciation

   591,162   562,290   482,683   365,329   309,180 

Depreciation – Non-real estate additions

   (8,269)  (8,279)  (7,840)  (5,541)  (5,303)

Depreciation – Partially Owned and Unconsolidated
Properties

   4,157   4,379   4,338   2,487   1,903 

Net gain on sales of unconsolidated entities

   (2,876)  (2,629)  (370)  (1,330)  (4,593)

Discontinued operations:

      

Depreciation

   11,746   54,124   109,834   163,418   187,132 

Net (gain) on sales of discontinued operations

   (392,857)  (933,013)  (1,025,803)  (706,405)  (319,071)

Net incremental (loss) gain on sales of condominium units

   (3,932)  20,771   48,961   100,361   32,682 
                     

FFO (1) (2)

   646,166   752,871   759,907   850,366   726,094 

Preferred distributions

   (14,522)  (23,233)  (39,115)  (57,248)  (73,236)

Premium on redemption of preference units/interests

   -   (6,154)  (4,649)  (8,493)  (1,117)
                     

FFO available to OP Units (1) (2)

  $631,644  $723,484  $716,143  $784,625  $651,741 
                     

                     
  Year Ended December 31, 
  2010  2009  2008  2007  2006 
Net income $295,983  $382,029  $436,413  $1,047,356  $1,147,617 
Adjustments:                    
Net (income) loss attributable to Noncontrolling Interests — Partially Owned Properties  726   558   (2,650)  (2,200)  (3,132)
Depreciation  656,633   559,271   536,283   509,358   429,737 
Depreciation — Non-real estate additions  (6,788)  (7,355)  (8,269)  (8,279)  (7,840)
Depreciation — Partially Owned and Unconsolidated Properties  (1,619)  759   4,157   4,379   4,338 
Net (gain) on sales of unconsolidated entities  (28,101)  (10,689)  (2,876)  (2,629)  (370)
Discontinued operations:                    
Depreciation  16,770   41,104   66,625   107,056   162,780 
Net (gain) on sales of discontinued operations  (297,956)  (335,299)  (392,857)  (933,013)  (1,025,803)
Net incremental gain (loss) on sales of condominium units  1,506   (385)  (3,932)  20,771   48,961 
                
                     
FFO (1) (3)  637,154   629,993   632,894   742,799   756,288 
                     
Adjustments:                    
Asset impairment and valuation allowances  45,380   11,124   116,418      30,000 
Property acquisition costs and write-off of pursuit costs (other expenses)  11,928   6,488   5,760   1,830   4,661 
Debt extinguishment (gains) losses, including prepayment penalties, preference unit redemptions and non-cash convertible debt discounts  8,594   34,333   (2,784)  24,004   21,563 
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit)  (80)  (5,737)  (979)  (34,450)  (48,592)
Other miscellaneous non-comparable items  (6,186)  (171)  (1,725)  (5,767)  (20,880)
                
                     
Normalized FFO (2) (3) $696,790  $676,030  $749,584  $728,416  $743,040 
                
                     
FFO (1) (3) $637,154  $629,993  $632,894  $742,799  $756,288 
Preferred distributions  (14,368)  (14,488)  (14,522)  (23,233)  (39,115)
Premium on redemption of preference units           (6,154)  (4,649)
                
                     
FFO available to Units (1) (3) (4) $622,786  $615,505  $618,372  $713,412  $712,524 
                
                     
Normalized FFO (2) (3) $696,790  $676,030  $749,584  $728,416  $743,040 
Preferred distributions  (14,368)  (14,488)  (14,522)  (23,233)  (39,115)
Premium on redemption of preference units           (6,154)  (4,649)
                
                     
Normalized FFO available to Units (2) (3) (4) $682,422  $661,542  $735,062  $699,029  $699,276 
                

(1)

The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Operating Partnership commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.
(2)Normalized funds from operations (“Normalized FFO”) begins with FFO availableand excludes:
the impact of any expenses relating to OP Units is calculatedasset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses);
gains and losses from early debt extinguishment, including prepayment penalties, preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on a basis consistent withthe sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income available to OP Unitstax benefits or expenses; and reflects adjustments to net income for preferred distributions and premiums on redemption of preference units/interests in accordance with accounting principles generally accepted in the United States.

other miscellaneous non-comparable items.

41


(2)  

(3)The Operating Partnership believes that FFO and FFO available to OP Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to OP Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Operating Partnership also believes that Normalized FFO and Normalized FFO available to OPUnits are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Operating Partnership’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Operating Partnership’s actual operating results. FFO, FFO available to Units, Normalized FFO and Normalized FFO available to Units do not represent net income, net income available to OP Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, and FFO available to OPUnits, Normalized FFO and Normalized FFO available to Units should not be exclusively considered as alternatives to net income, net income available to OP Units or net cash flows from operating activities as determined by GAAP or as measuresa measure of liquidity. The Operating Partnership’s calculation of FFO, and FFO available to OPUnits, Normalized FFO and Normalized FFO available to Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(4)FFO available to Units and Normalized FFO available to Units are calculated on a basis consistent with net income available to Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preference units in accordance with accounting principles generally accepted in the United States.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Market risks relating to the Operating Partnership’s financial instruments result primarily from changes in short-term LIBOR interest rates and changes in the SIFMA index for tax-exempt debt. The Operating Partnership does not have any direct foreign exchange or other significant market risk.

The Operating Partnership’s exposure to market risk for changes in interest rates relates primarily to the unsecured revolving and term credit facilities as well as floating rate tax-exempt debt. The Operating Partnership typically incurs fixed rate debt obligations to finance acquisitions while it typically incurs floating rate debt obligations to finance working capital needs and as a temporary measure in advance of securing long-term fixed rate financing. The Operating Partnership continuously evaluates its level of floating rate debt with respect to total debt and other factors, including its assessment of the current and future economic environment. To the extent the Operating Partnership carries as it did at December 31, 2008, substantial cash balances, this will tend to partially counterbalance any increase or decrease in interest rates.

The Operating Partnership also utilizes certain derivative financial instruments to limitmanage market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice versa.versa as well as to partially lock in rates on future debt issuances. Derivatives are used for hedging purposes rather than speculation. The Operating Partnership does not enter into financial instruments for trading purposes. See also Note 11 to the Notes to Consolidated Financial Statements for additional discussion of derivative instruments.

The fair values of the Operating Partnership’s financial instruments (including such items in the financial statement captions as cash and cash equivalents, other assets, lines of credit, accounts payable and accrued expenses and other liabilities) approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates. The fair value of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $5.0$4.7 billion and $4.7$5.5 billion, respectively, at December 31, 2008.

2010.

At December 31, 2008,2010, the Operating Partnership had total outstanding floating rate debt of approximately $1.9$1.7 billion, or 18.3%17.5% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 3414 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the increase in interest expense on the floating rate debt would decrease future earnings and cash flows by approximately $6.5$2.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 3414 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the decrease in interest expense on the floating rate debt would increase future earnings and cash flows by approximately $6.5$2.4 million.

At December 31, 2008,2010, the Operating Partnership had total outstanding fixed rate debt of approximately $8.6$8.2 billion, or 81.7%82.5% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5857 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $7.8$7.5 billion. If market rates of interest permanently decreased by 5857 basis points (a 10% decrease from the Operating Partnership’s existing weighted

42


average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $9.5$9.1 billion.

At December 31, 2008,2010, the Operating Partnership’s derivative instruments had a net liability fair value of approximately $19,000.$23.3 million. If market rates of interest permanently increased by 1512 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the net assetliability fair value of the Operating Partnership’s derivative instruments would be approximately $1.7$9.8 million. If market rates of interest permanently decreased by 1512 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the net liability fair value of the Operating Partnership’s derivative instruments would be approximately $1.8$37.0 million.

At December 31, 2007,2009, the Operating Partnership had total outstanding floating rate debt of approximately $1.9$1.8 billion, or 20.2%19.7% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 5313 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the increase in interest expense on the floating rate debt would decrease future earnings and cash flows by approximately $10.2$2.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 5313 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the decrease in interest expense on the floating rate debt would increase future earnings and cash flows by approximately $10.2$2.4 million.

At December 31, 2007,2009, the Operating Partnership had total outstanding fixed rate debt of approximately $7.6$7.5 billion, or 79.8%80.3% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5859 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $6.9 billion. If market rates of interest permanently decreased by 5859 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $8.4 billion.

At December 31, 2007,2009, the Operating Partnership’s derivative instruments had a net liabilityasset fair value of approximately $10.6$25.2 million. If market rates of interest permanently increased by 4720 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the net liabilityasset fair value of the Operating Partnership’s derivative instruments would be approximately $6.5$35.5 million. If market rates of interest permanently decreased by 4720 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the net liabilityasset fair value of the Operating Partnership’s derivative instruments would be approximately $15.0$15.9 million.

These amounts were determined by considering the impact of hypothetical interest rates on the Operating Partnership’s financial instruments. The foregoing assumptions apply to the entire amount of the Operating Partnership’s debt and derivative instruments and do not differentiate among maturities. These analyses do not consider the effects of the changes in overall economic activity that could exist in such an environment. Further, in the event of changes of such magnitude, management would likely take actions to further mitigate its exposure to the changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Operating Partnership’s financial structure or results.

The Operating Partnership cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long-term debt will be available at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above.

Item 8. Financial Statements and Supplementary Data

See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures:

Effective as of December 31, 2008,2010, the Operating Partnership carried out an evaluation, under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of EQR, of the effectiveness of the Operating Partnership’s disclosure controls

43


and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b) Management’s Report on Internal Control over Financial Reporting:

ERP Operating Limited Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership’s general partner, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Operating Partnership’s evaluation under the framework in Internal Control Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2008.2010. Our internal control over financial reporting has been audited as of December 31, 20082010 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c) Changes in Internal Control over Financial Reporting:

There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership’s evaluation referred to above that occurred during the fourth quarter of 20082010 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Item 9B. Other Information
     None.

44

None.


PART III

Items 10, 11, 12, 13 and 14.

Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accounting Fees and Services.

The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated by reference to, and will be contained in, EQR’s definitive proxy statement,Proxy Statement, which EQR anticipates will be filedintends to file no later than April 16, 2009.120 days after the end of its fiscal year ended December 31, 2010. EQR is the general partner of and owns an approximate 94.2%95.5% ownership interest in ERPOP.

45


PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)

The following documents are filed as part of this Report:

 

(1)

Financial Statements: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.

 

(2)

Exhibits: See the Exhibit Index.

 

(3)

Financial Statement Schedules: See Index to Consolidated Financial Statements and Schedule on page F-1 of this
Form 10-K.

46

SIGNATURES


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

ERP OPERATING LIMITED PARTNERSHIP



BY:

EQUITY RESIDENTIAL


ITS GENERAL PARTNER


By:

/s/ David J. Neithercut

 

David J. Neithercut, President and

 

President and Chief Executive Officer

Date:

February 24, 2011
 

February 26, 2009


EQUITY RESIDENTIAL


ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY

KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints David J. Neithercut, Mark J. Parrell and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2008,2010, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.

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 registrant and in the capacities set forth below and on the dates indicated:

Name

 

Title

 

Date

NameTitleDate

/s/ David J. Neithercut

David J. Neithercut

 

President, Chief Executive Officer and Trustee

 

February 26, 2009    

24, 2011

David J. Neithercut

/s/ Mark J. Parrell

Mark J. Parrell

 

Executive Vice President and Chief Financial Officer

 

February 26, 2009

24, 2011
Mark J. Parrell

/s/ Ian S. Kaufman

Ian S. Kaufman

 

FirstSenior Vice President and Chief Accounting Officer

 

February 26, 2009

24, 2011
Ian S. Kaufman

/s/ John W. Alexander

TrusteeFebruary 24, 2011
John W. Alexander

 

Trustee

 

February 26, 2009

/s/ Charles L. Atwood

TrusteeFebruary 24, 2011
Charles L. Atwood

 

Trustee

 

February 26, 2009

/s/ Stephen O. Evans

Stephen O. Evans

 

Trustee

 

February 26, 2009

/s/ Boone A. Knox

Boone A. Knox

Linda Walker Bynoe
 

Trustee

 

February 26, 2009

24, 2011

Linda Walker Bynoe

/s/ John E. Neal

Trustee February 24, 2011
John E. Neal

 

Trustee

 

February 26, 2009

/s/ Sheli Z. Rosenberg

Sheli Z. Rosenberg

 

Trustee

 

February 26, 2009

/s/ Mark S. ShapiroTrusteeFebruary 24, 2011

Mark S. Shapiro
/s/ B. Joseph White

TrusteeFebruary 24, 2011
B. Joseph White

 

Trustee

 

February 26, 2009

/s/ Gerald A. Spector

Gerald A. Spector

 

Vice Chairman of the Board of Trustees

 

February 26, 2009

24, 2011

Gerald A. Spector

/s/ Samuel Zell

Samuel Zell

 

Chairman of the Board of Trustees

 

February 26, 2009

24, 2011
Samuel Zell


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

ERP OPERATING LIMITED PARTNERSHIP

All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners


ERP Operating Limited Partnership

We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the “Operating Partnership”) as of December 31, 20082010 and 20072009 and the related consolidated statements of operations, changes in partners’ capital and cash flows for each of the three years in the period ended December 31, 2008.2010. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated financial statements and schedule. These financial statements and schedule are the responsibility of the Operating 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 the standards of the Public Company Accounting Oversight Board (United States). 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 ERP Operating Limited Partnership at December 31, 20082010 and 20072009 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008,2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ERP Operating Limited Partnership’s internal control over financial reporting as of December 31, 2008,2010, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 200924, 2011 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

ERNST & YOUNG LLP

Chicago, Illinois
February 24, 2011

F-2

February 20, 2009


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Partners


ERP Operating Limited Partnership

We have audited ERP Operating Limited Partnership’s (the “Operating Partnership”) internal control over financial reporting as of December 31, 2008,2010, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Criteria”). ERP Operating Limited Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, ERP Operating Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008,2010, based on the COSO Criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ERP Operating Limited Partnership as of December 31, 20082010 and 20072009 and the related consolidated statements of operations, changes in partners’ capital and cash flows for each of the three years in the period ended December 31, 20082010 of ERP Operating Limited Partnership and our report dated February 20, 2009,24, 2011, expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

ERNST & YOUNG LLP

Chicago, Illinois
February 24, 2011

F-3

February 20, 2009


ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

   December 31,
2008
  December 31,
2007
 

ASSETS

   

Investment in real estate

   

Land

    $3,671,299    $3,607,305 

Depreciable property

   13,908,594   13,556,681 

Projects under development

   855,473   828,530 

Land held for development

   254,873   340,834 
         

Investment in real estate

   18,690,239   18,333,350 

Accumulated depreciation

   (3,561,300)  (3,170,125)
         

Investment in real estate, net

   15,128,939   15,163,225 

Cash and cash equivalents

   890,794   50,831 

Investments in unconsolidated entities

   5,795   3,547 

Deposits – restricted

   152,372   253,276 

Escrow deposits – mortgage

   19,729   20,174 

Deferred financing costs, net

   53,817   56,271 

Other assets

   283,664   142,453 
         

Total assets

    $16,535,110    $15,689,777 
         

LIABILITIES AND PARTNERS’ CAPITAL

   

Liabilities:

   

Mortgage notes payable

    $5,036,930    $3,605,971 

Notes, net

   5,464,316   5,763,762 

Lines of credit

   -   139,000 

Accounts payable and accrued expenses

   108,463   109,385 

Accrued interest payable

   113,846   124,717 

Other liabilities

   289,562   322,975 

Security deposits

   64,355   62,159 

Distributions payable

   141,843   141,244 
         

Total liabilities

   11,219,315   10,269,213 
         

Commitments and contingencies

   

Minority Interests – Partially Owned Properties

   25,520   26,236 
         

Partners’ capital:

   

Preference Units

   208,786   209,662 

Preference Interests and Junior Preference Units

   184   184 

General Partner

   4,824,307   4,868,738 

Limited Partners

   292,797   331,626 

Accumulated other comprehensive loss

   (35,799)  (15,882)
         

Total partners’ capital

   5,290,275   5,394,328 
         

Total liabilities and partners’ capital

    $  16,535,110    $  15,689,777 
         

         
  December 31,  December 31, 
  2010  2009 
ASSETS
        
Investment in real estate        
Land $4,110,275  $3,650,324 
Depreciable property  15,226,512   13,893,521 
Projects under development  130,337   668,979 
Land held for development  235,247   252,320 
       
Investment in real estate  19,702,371   18,465,144 
Accumulated depreciation  (4,337,357)  (3,877,564)
       
Investment in real estate, net  15,365,014   14,587,580 
         
Cash and cash equivalents  431,408   193,288 
Investments in unconsolidated entities  3,167   6,995 
Deposits — restricted  180,987   352,008 
Escrow deposits — mortgage  12,593   17,292 
Deferred financing costs, net  42,033   46,396 
Other assets  148,992   213,956 
       
Total assets
 $16,184,194  $15,417,515 
       
         
LIABILITIES AND CAPITAL
        
Liabilities:        
Mortgage notes payable $4,762,896  $4,783,446 
Notes, net  5,185,180   4,609,124 
Lines of credit      
Accounts payable and accrued expenses  39,452   58,537 
Accrued interest payable  98,631   101,849 
Other liabilities  304,202   272,236 
Security deposits  60,812   59,264 
Distributions payable  140,905   100,266 
       
Total liabilities
  10,592,078   9,984,722 
       
         
Commitments and contingencies
        
         
Redeemable Limited Partners
  383,540   258,280 
       
         
Capital:        
Partners’ capital:        
Preference Units  200,000   208,773 
General Partner  4,948,004   4,833,885 
Limited Partners  110,399   116,120 
Accumulated other comprehensive (loss) income  (57,818)  4,681 
       
Total partners’ capital  5,200,585   5,163,459 
Noncontrolling Interests — Partially Owned Properties  7,991   11,054 
       
Total capital
  5,208,576   5,174,513 
       
Total liabilities and capital
 $16,184,194  $15,417,515 
       
See accompanying notes

F-4


ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands except per OP Unit data)

   Year Ended December 31, 
   2008  2007  2006 

REVENUES

    

Rental income

    $  2,092,489  $  1,937,874  $  1,693,440 

Fee and asset management

   10,715   9,183   9,101 
             

Total revenues

   2,103,204   1,947,057   1,702,541 
             

EXPENSES

    

Property and maintenance

   542,371   505,899   444,290 

Real estate taxes and insurance

   217,461   195,359   160,299 

Property management

   77,063   87,476   96,178 

Fee and asset management

   7,981   8,412   8,934 

Depreciation

   591,162   562,290   482,683 

General and administrative

   44,951   46,767   44,194 

Impairment

   122,103   1,726   34,002 
             

Total expenses

   1,603,092   1,407,929   1,270,580 
             

Operating income

   500,112   539,128   431,961 

Interest and other income

   33,540   20,144   30,880 

Interest:

    

Expense incurred, net

   (479,101)  (482,819)  (417,576)

Amortization of deferred financing costs

   (9,701)  (10,121)  (8,077)
             

Income before income and other taxes, allocation to Minority Interests,
(loss) income from investments in unconsolidated entities, net gain on
sales of unconsolidated entities and land parcels and discontinued operations

   44,850   66,332   37,188 

Income and other tax (expense) benefit

   (5,286)  (2,520)  (4,346)

Allocation to Minority Interests – Partially Owned Properties

   (2,650)  (2,200)  (3,132)

(Loss) income from investments in unconsolidated entities

   (107)  332   (631)

Net gain on sales of unconsolidated entities

   2,876   2,629   370 

Net gain on sales of land parcels

   2,976   6,360   2,792 
             

Income from continuing operations

   42,659   70,933   32,241 

Discontinued operations, net

   404,376   984,295   1,115,863 
             

Net income

    $447,035    $1,055,228    $1,148,104 
             

ALLOCATION OF NET INCOME:

    

Preference Units

    $14,507    $22,792    $37,113 
             

Preference Interests and Junior Preference Units

    $15    $441    $2,002 
             

Premium on redemption of Preference Units

    $-    $6,154    $3,965 
             

Premium on redemption of Preference Interests

    $-    $-    $684 
             

General Partner

    $405,585    $960,676    $1,031,766 

Limited Partners

   26,928   65,165   72,574 
             

Net income available to OP Units

    $432,513    $1,025,841    $1,104,340 
             

Earnings per OP Unit – basic:

    

Income (loss) from continuing operations available to OP Units

    $0.10    $0.14    $(0.04)
             

Net income available to OP Units

    $1.50    $3.44    $3.56 
             

Weighted average OP Units outstanding

   287,631   298,392   310,452 
             

Earnings per OP Unit – diluted:

    

Income (loss) from continuing operations available to OP Units

    $0.10    $0.14    $(0.04)
             

Net income available to OP Units

    $1.49    $3.39    $3.56 
             

Weighted average OP Units outstanding

   290,060   302,235   310,452 
             

Distributions declared per OP Unit outstanding

    $1.93    $1.87    $1.79 
             

             
  Year Ended December 31, 
  2010  2009  2008 
REVENUES
            
Rental income $1,986,043  $1,846,157  $1,876,273 
Fee and asset management  9,476   10,346   10,715 
          
Total revenues  1,995,519   1,856,503   1,886,988 
          
             
EXPENSES
            
Property and maintenance  498,634   464,809   485,754 
Real estate taxes and insurance  226,718   206,247   194,671 
Property management  81,126   71,938   77,063 
Fee and asset management  5,140   7,519   7,981 
Depreciation  656,633   559,271   536,283 
General and administrative  39,887   38,994   44,951 
Impairment  45,380   11,124   116,418 
          
Total expenses  1,553,518   1,359,902   1,463,121 
          
             
Operating income  442,001   496,601   423,867 
             
Interest and other income  5,469   16,585   33,337 
Other expenses  (11,928)  (6,487)  (5,760)
Interest:            
Expense incurred, net  (470,654)  (496,272)  (482,317)
Amortization of deferred financing costs  (10,369)  (12,566)  (9,647)
          
             
(Loss) before income and other taxes, (loss) from investments in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and land parcels and discontinued operations  (45,481)  (2,139)  (40,520)
Income and other tax (expense) benefit  (334)  (2,804)  (5,279)
(Loss) from investments in unconsolidated entities  (735)  (2,815)  (107)
Net gain on sales of unconsolidated entities  28,101   10,689   2,876 
Net (loss) gain on sales of land parcels  (1,395)     2,976 
          
(Loss) income from continuing operations  (19,844)  2,931   (40,054)
Discontinued operations, net  315,827   379,098   476,467 
          
Net income  295,983   382,029   436,413 
Net (income) loss attributable to Noncontrolling Interests — Partially Owned Properties  726   558   (2,650)
          
Net income attributable to controlling interests $296,709  $382,587  $433,763 
          
             
ALLOCATION OF NET INCOME
            
Preference Units $14,368  $14,479  $14,507 
          
Preference Interests and Junior Preference Units $  $9  $15 
          
             
General Partner $269,242  $347,794  $393,115 
Limited Partners  13,099   20,305   26,126 
          
Net income available to Units $282,341  $368,099  $419,241 
          
             
Earnings per Unit — basic:
            
(Loss) from continuing operations available to Units $(0.11) $(0.04) $(0.20)
          
Net income available to Units $0.95  $1.27  $1.46 
          
Weighted average Units outstanding  296,527   289,167   287,631 
          
             
Earnings per Unit — diluted:
            
(Loss) from continuing operations available to Untis $(0.11) $(0.04) $(0.20)
          
Net income available to Units $0.95  $1.27  $1.46 
          
Weighted average Units outstanding  296,527   289,167   287,631 
          
See accompanying notes

F-5


ERP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)


(Amounts in thousands except per OP Unit data)

   Year Ended December 31, 
   2008  2007  2006 

Comprehensive income:

    

Net income

    $  447,035    $  1,055,228    $  1,148,104 

Other comprehensive (loss) – derivative instruments:

    

Unrealized holding (losses) arising during the year

   (23,815)  (3,853)  (2,043)

Losses reclassified into earnings from other comprehensive income

   2,696   1,954   2,247 

Other comprehensive income – other instruments:

    

Unrealized holding gains arising during the year

   1,202   27   258 
             

Comprehensive income

    $427,118    $1,053,356    $1,148,566 
             

             
  Year Ended December 31, 
  2010  2009  2008 
Comprehensive income:            
             
Net income $295,983  $382,029  $436,413 
Other comprehensive (loss) income — derivative instruments:            
Unrealized holding (losses) gains arising during the year  (65,894)  37,676   (23,815)
Losses reclassified into earnings from other comprehensive income  3,338   3,724   2,696 
Other     449    
Other comprehensive income (loss) — other instruments:            
Unrealized holding gains arising during the year  57   3,574   1,202 
(Gains) realized during the year     (4,943)   
          
Comprehensive income  233,484   422,509   416,496 
Comprehensive (income) attributable to Noncontrolling Interests — Partially Owned Properties  726   558   (2,650)
          
Comprehensive income attributable to controlling interests $234,210  $423,067  $413,846 
          
See accompanying notes

F-6


ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

   Year Ended December 31, 
   2008  2007  2006 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income

    $  447,035    $  1,055,228    $  1,148,104 

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

    

Allocation to Minority Interests – Partially Owned Properties

   2,650   2,200   3,132 

Depreciation

   602,908   616,414   592,637 

Amortization of deferred financing costs

   9,701   11,849   9,134 

Amortization of discounts and premiums on debt

   (3,542)  (4,990)  (6,506)

Amortization of discounts on corporate notes

   (365)  -   - 

Amortization of deferred settlements on derivative instruments

   1,317   575   841 

Impairment

   122,103   1,726   34,353 

(Income) from technology investments

   -   -   (4,021)

Loss (income) from investments in unconsolidated entities

   107   (332)  631 

Distributions from unconsolidated entities – return on capital

   116   102   171 

Net (gain) on sales of unconsolidated entities

   (2,876)  (2,629)  (370)

Net (gain) on sales of land parcels

   (2,976)  (6,360)  (2,792)

Net (gain) on sales of discontinued operations

   (392,857)  (933,013)  (1,019,603)

(Gain) loss on debt extinguishments

   (18,656)  3,339   12,171 

Unrealized loss (gain) on derivative instruments

   500   (1)  7 

Compensation paid with Company Common Shares

   22,311   21,631   22,080 

Other operating activities, net

   -   (19)  555 

Changes in assets and liabilities:

    

(Increase) decrease in deposits – restricted

   (2,003)  3,406   2,225 

(Increase) decrease in other assets

   (1,538)  (5,352)  975 

(Decrease) in accounts payable and accrued expenses

   (821)  (9,760)  (7,637)

(Decrease) increase in accrued interest payable

   (10,871)  33,545   17,192 

(Decrease) increase in other liabilities

   (19,412)  1,482   (50,727)

Increase in security deposits

   2,196   4,087   2,914 
             

Net cash provided by operating activities

   755,027   793,128   755,466 
             

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Investment in real estate – acquisitions

   (388,083)  (1,680,074)  (1,718,105)

Investment in real estate – development/other

   (521,546)  (480,184)  (291,338)

Improvements to real estate

   (169,838)  (252,675)  (255,180)

Additions to non-real estate property

   (2,327)  (7,696)  (10,652)

Interest capitalized for real estate under development

   (60,072)  (45,107)  (20,734)

Proceeds from disposition of real estate, net

   887,576   2,012,939   2,318,247 

Proceeds from disposition of unconsolidated entities

   2,629   -   373 

Proceeds from technology investments

   -   -   4,021 

Investments in unconsolidated entities

   -   (191)  (1,072)

Distributions from unconsolidated entities – return of capital

   405   122   92 

Investment in corporate notes/other

   (158,367)  -   - 

Decrease (increase) in deposits on real estate acquisitions, net

   65,395   245,667   (296,589)

Decrease in mortgage deposits

   445   5,354   10,098 

             
  Year Ended December 31, 
  2010  2009  2008 
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income $295,983  $382,029  $436,413 
Adjustments to reconcile net income to net cash provided by operating activities:
            
Depreciation  673,403   600,375   602,908 
Amortization of deferred financing costs  10,406   13,127   9,701 
Amortization of discounts on investment securities     (1,661)  (365)
Amortization of discounts and premiums on debt  (471)  5,857   9,730 
Amortization of deferred settlements on derivative instruments  2,804   2,228   1,317 
Impairment  45,380   11,124   116,418 
Write-off of pursuit costs  5,272   4,838   5,535 
Property acquisition costs  6,656   1,650   225 
Loss from investments in unconsolidated entities  735   2,815   107 
Distributions from unconsolidated entities — return on capital  61   153   116 
Net (gain) on sales of investment securities     (4,943)   
Net (gain) on sales of unconsolidated entities  (28,101)  (10,689)  (2,876)
Net loss (gain) on sales of land parcels  1,395      (2,976)
Net (gain) on sales of discontinued operations  (297,956)  (335,299)  (392,857)
Loss (gain) on debt extinguishments  2,457   17,525   (18,656)
Unrealized loss (gain) on derivative instruments  1   (3)  500 
Compensation paid with Company Common Shares  18,875   17,843   22,311 
             
Changes in assets and liabilities:
            
Decrease (increase) in deposits — restricted  3,316   3,117   (1,903)
(Increase) decrease in other assets  (9,048)  11,768   (1,488)
(Decrease) in accounts payable and accrued expenses  (5,454)  (34,524)  (821)
(Decrease) in accrued interest payable  (4,000)  (11,997)  (10,871)
Increase (decrease) in other liabilities  9,972   2,220   (19,412)
Increase (decrease) in security deposits  1,007   (5,091)  2,196 
          
Net cash provided by operating activities  732,693   672,462   755,252 
          
             
CASH FLOWS FROM INVESTING ACTIVITIES:
            
Investment in real estate — acquisitions  (1,189,210)  (175,531)  (388,083)
Investment in real estate — development/other  (131,301)  (330,623)  (521,546)
Improvements to real estate  (138,208)  (123,937)  (169,838)
Additions to non-real estate property  (2,991)  (2,028)  (2,327)
Interest capitalized for real estate under development  (13,008)  (34,859)  (60,072)
Proceeds from disposition of real estate, net  672,700   887,055   887,576 
Distributions from unconsolidated entities — return of capital  26,924   6,521   3,034 
Purchase of investment securities     (77,822)  (158,367)
Proceeds from sale of investment securities  25,000   215,753    
Property acquisition costs  (6,656)  (1,650)  (225)
Decrease (increase) in deposits on real estate acquisitions, net  137,106   (250,257)  65,395 
Decrease in mortgage deposits  4,699   2,437   445 
Consolidation of previously unconsolidated properties  (26,854)      
Deconsolidation of previously consolidated properties  11,708       
Acquisition of Noncontrolling Interests — Partially Owned Properties  (16,023)  (11,480)  (20)
          
Net cash (used for) provided by investing activities  (646,114)  103,579   (344,028)
          
See accompanying notes

F-7


ERP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


(Amounts in thousands)

   Year Ended December 31, 
   2008  2007  2006 

CASH FLOWS FROM INVESTING ACTIVITIES (continued):

    

Consolidation of previously Unconsolidated Properties:

    

Via EITF 04-5 (cash consolidated)

    $-    $-    $1,436 

Acquisition of Minority Interests – Partially Owned Properties

   (20)  -   (71)

Other investing activities, net

   -   1,200   2 
             

Net cash (used for) investing activities

   (343,803)  (200,645)  (259,472)
             

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Loan and bond acquisition costs

   (9,233)  (26,257)  (11,662)

Mortgage notes payable:

    

Proceeds

   1,841,453   827,831   267,045 

Restricted cash

   37,262   (113,318)  (20,193)

Lump sum payoffs

   (411,391)  (523,299)  (466,035)

Scheduled principal repayments

   (24,034)  (24,732)  (26,967)

Prepayment premiums/fees

   (81)  (3,339)  (12,171)

Notes, net:

    

Proceeds

   -   1,493,030   1,039,927 

Lump sum payoffs

   (304,043)  (150,000)  (60,000)

Scheduled principal repayments

   -   (4,286)  (4,286)

Gain on debt extinguishments

   18,737   -   - 

Lines of credit:

    

Proceeds

   841,000   17,536,000   6,417,500 

Repayments

   (980,000)  (17,857,000)  (6,726,500)

(Payments on) proceeds from settlement of derivative instruments

   (26,781)  2,370   10,722 

Proceeds from sale of OP Units

   6,170   7,165   7,972 

Proceeds from exercise of EQR options

   24,634   28,760   69,726 

OP Units repurchased and retired

   (12,548)  (1,221,680)  (83,230)

Redemption of Preference Units

   -   (175,000)  (115,000)

Redemption of Preference Interests

   -   -   (25,500)

Premium on redemption of Preference Units

   -   (24)  (27)

Premium on redemption of Preference Interests

   -   -   (10)

Payment of offering costs

   (102)  (175)  (125)

Other financing activities, net

   (16)  (14)  - 

Contributions – Minority Interests – Partially Owned Properties

   2,083   10,267   9,582 

Distributions:

    

OP Units – General Partner

   (522,195)  (526,281)  (514,055)

Preference Units

   (14,521)  (27,008)  (39,344)

Preference Interests and Junior Preference Units

   (15)  (453)  (2,054)

OP Units – Limited Partners

   (34,584)  (35,543)  (36,202)

Minority Interests – Partially Owned Properties

   (3,056)  (18,943)  (3,658)
             

Net cash provided by (used for) financing activities

   428,739   (801,929)  (324,545)
             

Net increase (decrease) in cash and cash equivalents

   839,963   (209,446)  171,449 

Cash and cash equivalents, beginning of year

   50,831   260,277   88,828 
             

Cash and cash equivalents, end of year

    $  890,794    $  50,831    $  260,277 
             

             
  Year Ended December 31, 
  2010  2009  2008 
CASH FLOWS FROM FINANCING ACTIVITIES:
            
Loan and bond acquisition costs $(8,811) $(9,291) $(9,233)
Mortgage notes payable:
            
Proceeds  173,561   738,798   1,841,453 
Restricted cash  73,232   46,664   37,262 
Lump sum payoffs  (635,285)  (939,022)  (411,391)
Scheduled principal repayments  (16,769)  (17,763)  (24,034)
(Loss) gain on debt extinguishments  (2,457)  2,400   (81)
Notes, net:
            
Proceeds  595,422       
Lump sum payoffs     (850,115)  (304,043)
(Loss) gain on debt extinguishments     (19,925)  18,737 
Lines of credit:
            
Proceeds  5,513,125      841,000 
Repayments  (5,513,125)     (980,000)
(Payments on) proceeds from settlement of derivative instruments  (10,040)  11,253   (26,781)
Proceeds from sale of OP Units  329,452   86,184    
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)  5,112   5,292   6,170 
Proceeds from exercise of EQR options  71,596   9,136   24,634 
OP Units repurchased and retired  (1,887)  (1,124)  (12,548)
Redemption of Preference Units  (877)      
Payment of offering costs  (4,657)  (2,536)  (102)
Other financing activities, net  (48)  (16)  (16)
Contributions — Noncontrolling Interests — Partially Owned Properties  222   893   2,083 
Contributions — Limited Partners     78    
Distributions:
            
OP Units — General Partner  (379,969)  (488,604)  (522,195)
Preference Units  (14,471)  (14,479)  (14,521)
Preference Interests and Junior Preference Units     (12)  (15)
OP Units — Limited Partners  (18,867)  (28,935)  (34,584)
Noncontrolling Interests — Partially Owned Properties  (2,918)  (2,423)  (3,056)
          
Net cash provided by (used for) financing activities  151,541   (1,473,547)  428,739 
          
Net increase (decrease) in cash and cash equivalents  238,120   (697,506)  839,963 
Cash and cash equivalents, beginning of year  193,288   890,794   50,831 
          
Cash and cash equivalents, end of year $431,408  $193,288  $890,794 
          
See accompanying notes

F-8


ERP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


(Amounts in thousands)

   Year Ended December 31, 
   2008  2007  2006 

SUPPLEMENTAL INFORMATION:

    

Cash paid for interest, net of amounts capitalized

    $  491,803    $  457,700    $  444,654 
             

Net cash (received) paid for income and other taxes

    $(1,252)   $(1,587)   $11,750 
             

Real estate acquisitions/dispositions/other:

    

Mortgage loans assumed

    $24,946    $226,196    $126,988 
             

Valuation of OP Units issued

    $849    $-    $49,591 
             

Mortgage loans (assumed) by purchaser

    $-    $(76,744)   $(117,949)
             

Consolidation of previously Unconsolidated Properties – Via EITF 04-5:

    

Investment in real estate, net

    $-    $-    $(24,637)
             

Mortgage loans consolidated

    $-    $-    $22,545 
             

Deferred financing costs, net

    $-    $-    $(265)
             

Investments in unconsolidated entities

    $-    $-    $2,602 
             

Net other liabilities recorded

    $-    $-    $1,191 
             

Amortization of deferred financing costs:

    

Investment in real estate, net

    $(1,986)   $(1,521)   $(45)
             

Deferred financing costs, net

    $11,687    $13,370    $9,179 
             

Amortization of discounts and premiums on debt:

    

Investment in real estate, net

    $(6)   $-    $- 
             

Mortgage notes payable

    $(6,287)   $(6,252)   $(6,963)
             

Notes, net

    $2,751    $1,262    $457 
             

Amortization of deferred settlements on derivative instruments:

    

Other liabilities

    $(1,379)   $(1,379)   $(1,406)
             

Accumulated other comprehensive loss

    $2,696    $1,954    $2,247 
             

Unrealized loss (gain) on derivative instruments:

    

Other assets

    $(6,680)   $(2,347)   $(1,079)
             

Mortgage notes payable

    $6,272    $7,492    $2,049 
             

Notes, net

    $1,846    $4,323    $551 
             

Other liabilities

    $22,877    $(5,616)   $529 
             

Accumulated other comprehensive loss

    $(23,815)   $(3,853)   $(2,043)
             

(Payments on) proceeds from settlement of derivative instruments:

    

Other assets

    $(98)   $2,375    $10,729 
             

Other liabilities

    $(26,683)   $(5)   $(7)
             

             
  Year Ended December 31, 
  2010  2009  2008 
SUPPLEMENTAL INFORMATION:
            
Cash paid for interest, net of amounts capitalized $475,374  $508,847  $491,803 
          
Net cash (received) paid for income and other taxes $(2,740) $3,968  $(1,252)
          
             
Real estate acquisitions/dispositions/other:
            
Mortgage loans assumed $359,082  $  $24,946 
          
Valuation of OP Units issued $8,245  $1,034  $849 
          
Mortgage loans (assumed) by purchaser $(39,999) $(17,313) $ 
          
             
Amortization of deferred financing costs:
            
Investment in real estate, net $(2,768) $(3,585) $(1,986)
          
Deferred financing costs, net $13,174  $16,712  $11,687 
          
             
Amortization of discounts and premiums on debt:
            
Investment in real estate, net $  $(3) $(6)
          
Mortgage notes payable $(9,208) $(6,097) $(6,287)
          
Notes, net $8,737  $11,957  $16,023 
          
             
Amortization of deferred settlements on derivative instruments:
            
Other liabilities $(534) $(1,496) $(1,379)
          
Accumulated other comprehensive income $3,338  $3,724  $2,696 
          
             
Unrealized loss (gain) on derivative instruments:
            
Other assets $13,019  $(33,261) $(6,680)
          
Mortgage notes payable $(163) $(1,887) $6,272 
          
Notes, net $7,497  $719  $1,846 
          
Other liabilities $45,542  $(3,250) $22,877 
          
Accumulated other comprehensive (loss) income $(65,894) $37,676  $(23,815)
          
             
(Payments on) proceeds from settlement of derivative instruments:
            
Other assets $  $11,253  $(98)
          
Other liabilities $(10,040) $  $(26,683)
          
             
Consolidation of previously unconsolidated properties:
            
Investment in real estate, net $(105,065) $  $ 
          
Investments in unconsolidated entities $7,376  $  $ 
          
Deposits — restricted $(42,633) $  $ 
          
Mortgage notes payable $112,631  $  $ 
          
Net other assets recorded $837  $  $ 
          
             
Deconsolidation of previously consolidated properties:
            
Investment in real estate, net $14,875  $  $ 
          
Investments in unconsolidated entities $(3,167) $  $ 
          
Other
            
Receivable on sale of OP Units $37,550  $  $ 
          
Transfer from notes, net to mortgage notes payable $35,600  $  $ 
          
See accompanying notes

F-9


ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Amounts in thousands)

   Year Ended December 31, 
   2008  2007  2006 

PREFERENCE UNITS

    

Balance, beginning of year

    $209,662    $386,574    $504,096 

Redemption of 9 1/8% Series C Cumulative Redeemable

   -   -   (115,000)

Redemption of 8.60% Series D Cumulative Redeemable

   -   (175,000)  - 

Conversion of 7.00% Series E Cumulative Convertible

   (828)  (1,818)  (2,357)

Conversion of 7.00% Series H Cumulative Convertible

   (48)  (94)  (165)
             

Balance, end of year

    $208,786    $209,662    $386,574 
             

PREFERENCE INTERESTS AND JUNIOR PREFERENCE UNITS

    

Balance, beginning of year

    $184    $11,684    $60,184 

Redemption of Series G Preference Interests

   -   -   (25,500)

Conversion of Series H-J Preference Interests into OP Units held by
General Partner

   -   (11,500)  (23,000)
             

Balance, end of year

    $184    $184    $11,684 
             

GENERAL PARTNER

    

Balance, beginning of year

    $4,868,738    $5,511,658    $  4,905,716 

OP Unit Issuance:

    

Conversion of Preference Units into OP Units held by General Partner

   876   1,912   2,522 

Conversion of Preference Interests into OP Units held by General
Partner

   -   11,500   23,000 

Conversion of OP Units held by Limited Partners into OP Units held
by General Partner

   49,901   32,445   27,882 

Exercise of EQR share options

   24,634   28,760   69,726 

EQR’s Employee Share Purchase Plan (ESPP)

   6,170   7,165   7,972 

Share-based employee compensation expense:

    

EQR performance shares

   (8)  1,278   1,795 

EQR restricted shares

   17,278   15,230   14,944 

EQR share options

   5,846   5,345   5,198 

EQR ESPP discount

   1,289   1,701   1,578 

OP Units repurchased and retired

   (7,908)  (1,226,320)  (83,230)

Offering costs

   (102)  (175)  (125)

Net income available to OP Units – General Partner

   405,585   960,676   1,031,766 

Premium on redemption of Preference Units – original issuance costs

   -   6,130   3,938 

Premium on redemption of Preference Interests – original issuance costs

   -   -   674 

OP Units – General Partner distributions

   (523,648)  (520,700)  (521,871)

Supplemental Executive Retirement Plan (SERP)

   (7,304)  (6,709)  (9,947)

Adjustment for Limited Partners ownership in Operating Partnership

   (17,040)  38,842   30,120 
             

Balance, end of year

    $  4,824,307    $  4,868,738    $5,511,658 
             

             
  Year Ended December 31, 
PARTNERS’ CAPITAL 2010  2009  2008 
PREFERENCE UNITS
            
Balance, beginning of year $208,773  $208,786  $209,662 
Redemption of 7.00% Series E Cumulative Convertible  (834)      
Conversion of 7.00% Series E Cumulative Convertible  (7,378)  (13)  (828)
Conversion of 7.00% Series H Cumulative Convertible  (561)     (48)
          
Balance, end of year $200,000  $208,773  $208,786 
          
             
PREFERENCE INTERESTS AND JUNIOR PREFERENCE UNITS
            
Balance, beginning of year $  $184  $184 
Conversion of Series B Junior Preference Units     (184)   
          
Balance, end of year $  $  $184 
          
             
GENERAL PARTNER
            
Balance, beginning of year $4,833,885  $4,732,369  $4,723,590 
OP Unit Issuance:            
Conversion of Preference Units into OP Units held by General Partner  7,939   13   876 
Conversion of OP Units held by Limited Partners into OP Units held by General Partner  19,722   48,803   49,901 
Issuance of OP Units  291,902   123,734    
Exercise of EQR share options  71,596   9,136   24,634 
EQR’s Employee Share Purchase Plan (ESPP)  5,112   5,292   6,170 
Share-based employee compensation expense:            
EQR performance shares     179   (8)
EQR restricted shares  9,781   11,132   17,278 
EQR share options  7,421   5,996   5,846 
EQR ESPP discount  1,290   1,303   1,289 
OP Units repurchased and retired  (1,887)  (1,124)  (7,908)
Offering costs  (4,657)  (2,536)  (102)
Net income available to Units — General Partner  269,242   347,794   393,115 
OP Units — General Partner distributions  (419,320)  (450,287)  (523,648)
Supplemental Executive Retirement Plan (SERP)  8,559   27,809   (7,304)
Acquisition of Noncontrolling Interests — Partially Owned Properties  (16,888)  (1,496)   
Change in market value of Redeemable Limited Partners  (129,918)  (14,544)  65,524 
Adjustment for Limited Partners ownership in Operating Partnership  (5,775)  (9,688)  (16,884)
          
Balance, end of year $4,948,004  $4,833,885  $4,732,369 
          
             
LIMITED PARTNERS
            
Balance, beginning of year $116,120  $137,645  $162,185 
Issuance of OP Units  8,245   1,034   849 
Issuance of LTIP Units     78    
Conversion of OP Units held by Limited Partners into OP Units held by General Partner  (19,722)  (48,803)  (49,901)
Equity compensation associated with Units — Limited Partners  2,524   1,194    
Net income available to Units — Limited Partners  13,099   20,305   26,126 
Units — Limited Partners distributions  (20,300)  (25,679)  (33,745)
Change in carrying value of Redeemable Limited Partners  4,658   20,658   15,247 
Adjustment for Limited Partners ownership in Operating Partnership  5,775   9,688   16,884 
          
Balance, end of year $110,399  $116,120  $137,645 
          
See accompanying notes

F-10


ERP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (Continued)


(Amounts in thousands)

   Year Ended December 31, 
   2008  2007  2006 

LIMITED PARTNERS

    

Balance, beginning of year

    $331,626    $  372,961    $  345,034 

OP Unit Issuance:

    

Acquisitions/consolidations

   849   -   49,591 

Conversion of OP Units held by Limited Partners into OP Units held by
General Partner

   (49,901)  (32,445)  (27,882)

Net income available to OP Units – Limited Partners

   26,928   65,165   72,574 

OP Units – Limited Partners distributions

   (33,745)  (35,213)  (36,236)

Adjustment for Limited Partners ownership in Operating Partnership

   17,040   (38,842)  (30,120)
             

Balance, end of year

    $  292,797    $331,626    $372,961 
             

ACCUMULATED OTHER COMPREHENSIVE LOSS

    

Balance, beginning of year

    $(15,882)   $(14,010)   $(14,472)

Accumulated other comprehensive (loss) – derivative instruments:

    

Unrealized holding (losses) arising during the year

   (23,815)  (3,853)  (2,043)

Losses reclassified into earnings from other comprehensive income

   2,696   1,954   2,247 

Accumulated other comprehensive income – other instruments:

    

Unrealized holding gains arising during the year

   1,202   27   258 
             

Balance, end of year

    $(35,799)   $(15,882)   $(14,010)
             

             
  Year Ended December 31, 
PARTNERS’ CAPITAL (continued) 2010  2009  2008 
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
            
Balance, beginning of year $4,681  $(35,799) $(15,882)
Accumulated other comprehensive (loss) income — derivative instruments:            
Unrealized holding (losses) gains arising during the year  (65,894)  37,676   (23,815)
Losses reclassified into earnings from other comprehensive income  3,338   3,724   2,696 
Other     449    
Accumulated other comprehensive income (loss) — other instruments:            
Unrealized holding gains arising during the year  57   3,574   1,202 
(Gains) realized during the year     (4,943)   
          
Balance, end of year $(57,818) $4,681  $(35,799)
          
             
NONCONTROLLING INTERESTS
            
             
NONCONTROLLING INTERESTS — PARTIALLY OWNED PROPERTIES
            
Balance, beginning of year $11,054  $25,520  $26,236 
Net (loss) income attributable to Noncontrolling Interests  (726)  (558)  2,650 
Contributions by Noncontrolling Interests  222   893   2,083 
Distributions to Noncontrolling Interests  (2,952)  (2,439)  (3,072)
Acquisition of Noncontrolling Interests — Partially Owned Properties  175   (11,705)  (1,877)
Other  218   (657)  (500)
          
Balance, end of year $7,991  $11,054  $25,520 
          
See accompanying notes

F-11


ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.

Business

1. Business
ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”). EQR, a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. EQR has elected to be taxed as a REIT.

EQR is the general partner of, and as of December 31, 20082010 owned an approximate 94.2%95.5% ownership interest in ERPOP. EQR is structured as an umbrella partnership REIT (“UPREIT”) under which all property ownership and related business operations are conducted through ERPOP and its subsidiaries. References to the “Operating Partnership” include ERPOP and those entities owned or controlled by it. References to the “Company” mean EQR and the Operating Partnership.

As of December 31, 2008,2010, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 548451 properties located in 2317 states and the District of Columbia consisting of 147,244129,604 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

       Properties              Units        

Wholly Owned Properties

  477  127,002

Partially Owned Properties:

    

Consolidated

  28  5,757

Unconsolidated

  41  9,776

Military Housing (Fee Managed)

  2  4,709
      
  548  147,244

         
  Properties  Apartment Units 
Wholly Owned Properties  425   119,634 
Partially Owned Properties — Consolidated  24   5,232 
Military Housing  2   4,738 
       
   451   129,604 
The “Wholly Owned Properties” are accounted for under the consolidation method of accounting. The Operating Partnership beneficially owns 100% fee simple title to 475422 of the 477425 Wholly Owned Properties and all but one of its wholly owned development properties.properties and land parcels. The Operating Partnership owns the building and improvements and leases the land underlying the improvements under long-term ground leases that expire in 2026, for one property, 2077 for another property and 2101 for the development property.three operating properties, respectively, and 2104 for one land parcel. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 13,Accounting for Leases.

leases.

The “Partially Owned Properties Consolidated” are controlled by the Operating Partnership but have partners with minoritynoncontrolling interests and are accounted for under the consolidation method of accounting. The “Partially Owned Properties – Unconsolidated” are partially owned but not controlled by the Operating Partnership and consist of investments in partnership interests and/or subordinated mortgages that are accounted for under the equity method of accounting. The “Military Housing (Fee Managed)”Housing” properties consist of investments in limited liability companies that, as a result of the terms of the operating agreements, are accounted for as management contract rights with all fees recognized as fee and asset management revenue.

2.

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies
Basis of Presentation

Due to the Operating Partnership’s ability as general partner to control either through ownership or by contract its subsidiaries, other than entities that own controlling interests in the Partially Owned Properties – Unconsolidated and certain other entities in which the Operating Partnership has investments, each such subsidiary has been consolidated with the Operating Partnership for financial reporting purposes. Effective March 31, 2004, thepurposes, except for an unconsolidated development land parcel and our military housing properties. The consolidated financial statements also include all variable interest entities for which the Operating Partnership is the primary beneficiary.

Minority

          Noncontrolling interests represented by EQR’s indirect 1% interest in various entities are immaterial and have not been accounted for in the Consolidated Financial Statements. In addition, certain amounts due from EQR for its 1% interests in various entities have not been reflected in the Consolidated Balance Sheets since such amounts are immaterial.

The Operating Partnership’s mergers and acquisitions were accounted for as purchases in accordance with either Accounting Principles Board (“APB”) Opinion No. 16,Business Combinations, or SFAS No. 141,Business Combinations. SFAS No. 141 requires all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The fair value of the consideration given by the Operating Partnership in the mergers was used as the valuation basis for each of the combinations. The accompanying consolidated statements of operations and cash flows include the results of the properties purchased through the mergers and through acquisitions from their respective closing dates.

Real Estate Assets and Depreciation of Investment in Real Estate

          Effective for business combinations on or after January 1, 2009, an acquiring entity is required to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. In addition, an acquiring entity is required to expense acquisition-related costs as incurred (amounts are included in the other expenses line item in the consolidated statements of operations), value noncontrolling interests at fair value at the acquisition date and expense restructuring costs associated with an acquired business.
The Operating Partnership allocates the purchase price of properties to net tangible and identified intangible assets

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acquired based on their fair values in accordance with the provisions of SFAS No. 141.values. In making estimates of fair values for purposes of allocating purchase price, the Operating Partnership utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The Operating Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Operating Partnership allocates the purchase price of acquired real estate to various components as follows:

Land – Based on actual purchase price if acquired separately or market research/comparables if acquired with an operating property.

Furniture, Fixtures and Equipment – Ranges between $8,000 and $13,000 per apartment unit acquired as an estimate of the fair value of the appliances and fixtures inside a unit. The per-unit amount applied depends on the type of apartment building acquired. Depreciation is calculated on the straight-line method over an estimated useful life of five years.

Land — Based on actual purchase price if acquired separately or market research/comparables if acquired with an operating property.
Furniture, Fixtures and Equipment — Ranges between $8,000 and $13,000 per apartment unit acquired as an estimate of the fair value of the appliances and fixtures inside an apartment unit. The per-apartment unit amount applied depends on the type of apartment building acquired. Depreciation is calculated on the straight-line method over an estimated useful life of five years.
In-Place Leases — The Operating Partnership considers the value of acquired in-place leases and the amortization period is the average remaining term of each respective in-place acquired lease.
Other Intangible Assets — The Operating Partnership considers whether it has acquired other intangible assets, including any customer relationship intangibles and the amortization period is the estimated useful life of the acquired intangible asset.
Building — Based on the fair value determined on an “as-if vacant” basis. Depreciation is calculated on the straight-line method over an estimated useful life of thirty years.

In-Place Leases – The Operating Partnership considers the value of acquired in-place leases that meet the definition outlined in SFAS No. 141, paragraph 37. The amortization period is the average remaining term of each respective in-place acquired lease.

Other Intangible Assets – The Operating Partnership considers whether it has acquired other intangible assets that meet the definition outlined in SFAS No. 141, paragraph 39, including any customer relationship intangibles. The amortization period is the estimated useful life of the acquired intangible asset.

Building – Based on the fair value determined on an “as-if vacant” basis. Depreciation is calculated on the straight-line method over an estimated useful life of thirty years.

Replacements inside aan apartment unit such as appliances and carpeting are depreciated over a five-year estimated useful life. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to ten years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms. Property sales or dispositions are recorded when title transfers to unrelated third parties, contingencies have been removed and sufficient cash consideration has been received by the Operating Partnership. Upon disposition, the related costs and accumulated depreciation are removed from the respective accounts. Any gain or loss on sale is recognized in accordance with accounting principles generally accepted in the United States.

The Operating Partnership classifies real estate assets as real estate held for disposition when it is certain a property will be disposed of in accordance with SFAS No. 144 (see further discussion below).

The Operating Partnership classifies properties under development and/or expansion and properties in the lease-up phase (including land) as construction-in-progress until construction has been completed and all certificates of occupancy permits have been obtained.

Impairment of Long-Lived Assets Including Goodwill

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142,Goodwill and Other Intangible Assets. SFAS No. 142 prohibits the amortization of goodwill and requires that goodwill be reviewed for impairment at least annually. In August 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS Nos. 142 and 144 were effective for fiscal years beginning after December 15, 2001. The Operating Partnership adopted these standards effective January 1, 2002. See Notes 13 and 19 for further discussion.

The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate, and goodwill, for indicators of permanent impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Operating Partnership’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Operating Partnership to conclude that impairment indicators exist and an impairment loss is warranted.

For long-lived assets to be held and used, the Operating Partnership compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, the Operating Partnership further analyzes each individual asset for other temporary or permanent indicators of impairment. Anwould record an impairment loss would be recorded for the difference between the estimated fair value and the carrying amount of the asset if the Operating Partnership deems this difference to be permanent.

asset.

For long-lived assets to be disposed of, an impairment loss is recognized when the estimated fair value of the asset, less the estimated cost to sell, is less than the carrying amount of the asset measured at the time that the Operating Partnership has determined it will sell the asset. Long-lived assets held for disposition and the related liabilities are separately reported, with the long-lived assets reported at the lower of their carrying amounts or their estimated fair values, less their costs to sell, and are not depreciated after reclassification to real estate held for disposition.

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Cost Capitalization

See theReal Estate Assets and Depreciation of Investment in Real Estatesection for a discussion of the Operating Partnership’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Operating Partnership capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend all of their time on the supervision of major capital and/or renovation projects. These costs are reflected on the balance sheet as an increase to depreciable property.

The Operating Partnership follows the guidance in SFAS No. 67,Accounting for Costs and Initial Rental Operations of Real Estate Projects, for

          For all development projects, andthe Operating Partnership uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Operating Partnership capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend all of their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheet as construction-in-progress for each specific property. The Operating Partnership expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovationrenovations at selected properties when additional incremental employees are hired.

Cash and Cash Equivalents

The Operating Partnership considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less at the date of purchase to be cash equivalents. The Operating Partnership maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions typically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Operating Partnership believes that the risk is not significant, as the Operating Partnership does not anticipate the financial institutions’ non-performance.

Investment Securities

Investment securities are accounted for in accordance with SFAS No. 115,Accounting for Certain Investments in Debt and Equity Securities, and included in other assets in the consolidated balance sheets. These securities are classified as held-to-maturity and carried at amortized cost if management has the positive intent and ability to hold the securities to maturity. Otherwise, the securities are classified as available-for-sale and carried at estimated fair value with unrealized gains and losses included in accumulated other comprehensive (loss) income, (loss), a separate component of partners’ capital.

Deferred Financing Costs

Deferred financing costs include fees and costs incurred to obtain the Operating Partnership’s lines of credit and long-term financings. These costs are amortized over the terms of the related debt. Unamortized financing costs are written off when debt is retired before the maturity date. The accumulated amortization of such deferred financing costs was $31.4$43.9 million and $28.0$34.6 million at December 31, 20082010 and 2007,2009, respectively.

Fair Value of Financial Instruments, Including Derivative Instruments

The Operating Partnership follows the guidance under SFAS No. 157,Fair Value Measurements, when valuing its financial instruments.

          The valuation of financial instruments under SFAS No. 107,Disclosures about Fair Value of Financial Instruments, and SFAS No. 133 and its amendments (SFAS Nos. 137/138/149),Accounting for Derivative Instruments and Hedging Activities, requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments. The Operating Partnership, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Operating Partnership bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Operating Partnership is exposed to the effect of interest rate changes. The Operating Partnership limitsseeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

The Operating Partnership has a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Operating Partnership has not sustained a material loss from thosethese instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.

On January 1, 2001, the

          The Operating Partnership adopted SFAS No. 133 and its amendments (SFAS Nos. 137/138/149), which requires an entity to recognizerecognizes all derivatives as either assets or liabilities in the statement of financial positionconsolidated balance sheets and to measuremeasures those instruments at fair value. Additionally, theIn addition, fair value adjustments will affect either partners’ capital

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or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures. Any derivative instrument used for risk management that does not meet the hedging criteria of SFAS No. 133 is marked-to-market each period. The Operating Partnership does not use derivatives for trading or speculative purposes.

The fair value of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $5.0 billion and $4.7 billion, respectively, at December 31, 2008. The fair values of the Operating Partnership’s financial instruments, other than mortgage notes payable, unsecured notes and derivative instruments, including cash and cash equivalents, lines of credit and other financial instruments, approximate their carrying or contract values. See Note 11 for further discussion of derivative and other fair value instruments.

Revenue Recognition

Rental income attributable to residential leases is recorded on a straight-line basis, which is not materially different than if it were recorded when due from residents and recognized monthly as it was earned. Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis. Fee and asset management revenue and interest income are recorded on an accrual basis.

Share-Based Compensation

The Company adopted SFAS No. 123(R),Share-Based Payment,as required effective January 1, 2006. SFAS No. 123(R) requires all companies to expenseexpenses share-based compensation (suchsuch as restricted shares and share options), as well as making other revisions to SFAS No. 123. As the Company began expensing all share-based compensation effective January 1, 2003, the adoption of SFAS No. 123(R) did not have a material effect on its consolidated statements of operations or financial position.

options. Any EQR common share of beneficial interest, $0.01 par value per share (the “Common Shares”) issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing units of limited partnership interest (“OP Units”) to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

The cost related to share-based employee compensation included in the determination of net income for the years ended December 31, 2008, 2007 and 2006 is equal to that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123(R).

The fair value of the option grants as computed under SFAS No. 123(R) would beare recognized over the vesting period of the options. The fair value for the Company’s share options was estimated at the time the share options were granted using the Black-Scholes option pricing model with the following weighted-averageweighted average assumptions:

           2008                 2007                 2006        

Expected volatility (1)

  20.3% 18.9% 19.1%

Expected life (2)

  5 years 5 years 6 years

Expected dividend yield (3)

  4.95% 5.41% 6.04%

Risk-free interest rate (4)

  2.67% 4.74% 4.52%

Option valuation per share

  $4.08 $6.26 $4.22

             
  2010  2009  2008 
Expected volatility (1)  32.4%  26.8%  20.3%
             
Expected life (2) 5 years 5 years 5 years
             
Expected dividend yield (3)  4.85%  4.68%  4.95%
             
Risk-free interest rate (4)  2.29%  1.89%  2.67%
             
Option valuation per share $6.18  $3.38  $4.08 
(1) 

(1)

Expected volatility Estimated based on the historical volatility of EQR’s share price, on a monthly basis, for a period matching the expected life of each grant.

 

(2)

Expected life Approximates the actual weighted average life of all share options granted since the Company went public in 1993.

 

(3)

Expected dividend yield Calculated by averaging the historical annual yield on EQR shares for a period matching the expected life of each grant, with the annual yield calculated by dividing actual dividends by the average price of EQR’s shares in a given year.

 

(4)

Risk-free interest rate The most current U.S. Treasury rate available prior to the grant date for a period matching the expected life of each grant.

The valuation method and assumptions are the same as those the Company used in accounting for option expense in its consolidated financial statements. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model is only one method of valuing options and the Company’s use of this model should not be interpreted as an endorsement of its accuracy. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options and the actual value of the options may be significantly different.

Income and Other Taxes

The Operating Partnership generally is not liable for federal income taxes as the partners recognize their proportionate share of the Operating Partnership’s income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Operating Partnership has generally only incurred certain state and local income, excise and franchise taxes. The Operating Partnership has elected Taxable REIT Subsidiary (“TRS”) status for certain of its corporate subsidiaries, primarily those entities engaged in condominium conversion and corporate

F-15


housing activities and as a result, these entities will incur both federal and state income taxes on any taxable income of such entities.

entities after consideration of any net operating losses.

Deferred tax assets and liabilities are recognized for future tax consequences attributedattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates for which the temporary differences are expected to be recovered or settled. The effecteffects of changes in tax rates on deferred tax assets and liabilities are recognized in earnings in the period enacted. The Operating Partnership’s deferred tax assets are generally the result of tax affected amortization of goodwill, differing depreciable lives on capitalized assets and the timing of expense recognition for certain accrued liabilities. As of December 31, 2008,2010, the Operating Partnership has recorded a deferred tax asset of approximately $38.5$38.7 million, which wasis fully offset by a valuation allowance due to the uncertainty in forecasting future TRS taxable income.

The Operating Partnership provided for income, franchise and excise taxes allocated as follows in the consolidated statements of operations for the years ended December 31, 2008, 20072010, 2009 and 20062008 (amounts in thousands):

   Year Ended December 31,
       2008          2007          2006    

Income and other tax expense (benefit) (1)

    $  5,286    $2,520    $  4,346

Discontinued operations, net (2)

   (1,848)  (7,309)  3,547
            

Provision for income, franchise and excise taxes (3)

    $3,438    $(4,789)   $  7,893
            

             
  Year Ended December 31, 
  2010  2009  2008 
Income and other tax expense (benefit) (1) $334  $2,804  $5,279 
Discontinued operations, net (2)  44   (1,161)  (1,841)
          
Provision for income, franchise and excise taxes (3) $378  $1,643  $3,438 
          
(1) 

(1)

Primarily includes state and local income, excise and franchise taxes. In 2006, also includes $2.9 million of federal income taxes related to a forfeited deposit on a terminated sale transaction and included in income from continuing operations.

 

(2)

Primarily represents federal income taxes (recovered) incurred on the gains on sales of condominium units owned by a TRS and included in discontinued operations. Also represents state and local income, excise and franchise taxes on operating properties sold and included in discontinued operations.

 

(3)

All provisionprovisions for income tax amounts are current and none are deferred.

The Operating PartnershipPartnership’s TRSs carried back approximately $7.3 million and $13.9 million of 2008 net operating losses (“NOL”) during the years ended December 31, 2008 and 2007, respectively, and none were carried back into 2006. The remaining NOL from the 2008 tax year, as well as the NOLs generated in 2009 and 2010, are available for carryforward to future tax years. The Operating Partnership has $13.7Partnership’s TRSs have approximately $59.3 million of NOL carryforwards available as of January 1, 2009 which2011 that will expire in 2028.

2028, 2029 and 2030.

During the years ended December 31, 2008, 20072010, 2009 and 2006,2008, the Operating Partnership’s tax treatment of dividends and distributions were as follows:

   Year Ended December 31,
       2008          2007          2006    

Tax treatment of dividends and distributions:

      

Ordinary dividends

    $  0.699    $-    $  1.276

Qualified dividends

   -   -   0.090

Long-term capital gain

   0.755   1.426   0.330

Unrecaptured section 1250 gain

   0.476   0.444   0.094
            

Dividends and distributions declared per OP Unit outstanding

    $1.930    $  1.870    $1.790
            

             
  Year Ended December 31, 
  2010  2009  2008 
Tax treatment of dividends and distributions:            
Ordinary dividends $0.607  $0.807  $0.699 
Long-term capital gain  0.622   0.558   0.755 
Unrecaptured section 1250 gain  0.241   0.275   0.476 
          
Dividends and distributions declared per Unit outstanding $1.470  $1.640  $1.930 
          
The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes as of December 31, 20082010 and 20072009 was approximately $10.7$11.1 billion and $9.7$10.4 billion, respectively.

Partners’ Capital

The “Limited Partners” of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for OP Units. The “General Partner” of ERPOP is EQR. Net income is allocated to the Limited Partners based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the Limited Partners by the total OP Units held by the Limited Partners and the General Partner. Issuance of additional Common Shares and OP Units changes the ownership interests of both the Limited Partners and EQR. Such transactions and the related proceeds are treated as capital transactions.
Redeemable Limited Partners
          The Operating Partnership classifies “Redeemable Limited Partners” in the mezzanine section of the consolidated

F-16


balance sheets for the portion of OP Units that EQR is required, either by contract or securities law, to deliver registered EQR Common Shares to the exchanging OP Unit holder. The redeemable limited partner units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period.
MinorityNoncontrolling Interests

          A noncontrolling interest in a subsidiary (minority interest) is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the Consolidated Statements of Operations. See Note 3 for further discussion.
          Partially Owned Properties: The Operating Partnership reflects minoritynoncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Operating Partnership that are not wholly owned by the Operating Partnership. The earnings or losses from those properties attributable to the minoritynoncontrolling interests are reflected as minoritynoncontrolling interests in partially owned properties in the consolidated statements of operations.

Use of Estimates

In preparation of the Operating Partnership’s financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as

the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Certain reclassifications considered necessary for a fair presentation have been made to the prior period financial statements in order to conform to the current year presentation. These reclassifications have not changed the results of operations or partners’ capital.

Other

          In June 2009, the Financial Accounting Standards Board (“FASB”) issuedThe FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, which superseded all then-existing non-SEC accounting and reporting standards and became the source of authoritative U.S. generally accepted accounting principles recognized by the FASB to be applied by non-governmental entities. The Operating Partnership adopted FASB Interpretation (“FIN”) No. 46,Consolidation of Variable Interest Entities,the codification as required, effective March 31, 2004. The adoption required the consolidation of all previously unconsolidated development projects. The Operating Partnership does not have any unconsolidated FIN No. 46 assets. FIN No. 46 requires the Operating Partnership to consolidate the assets, liabilities and results of operations of the activities of a variable interest entity, which for the Operating Partnership includes only its development partnerships, if the Operating Partnership is entitled to receive a majority of the entity’s residual returns and/or is subject to a majority of the risk of loss from such entity’s activities. The Operating Partnership provides substantially all of the capital for its development partnerships (other than third party mortgage debt, if any) and as such is clearly the primary beneficiary of the risks and rewards of ownership.quarter ended September 30, 2009. The adoption of FIN No. 46 did not have any effect on net income as the aggregate results of operations of these development properties were previously included in income (loss) from investments in unconsolidated entities.

In December 2008, the FASB issued FASB Staff Position (“FSP”) FAS 140-4 and FIN 46(R)-8,Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities (“FAS 140-4 and FIN 46(R)-8”). FAS 140-4 and FIN 46(R)-8 amends SFAS No. 140,Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to require public companies to provide additional disclosures about transfers of financial assets. It also amends FIN No. 46(R) to require public enterprises, including sponsors that have a variable interest in a VIE, to provide additional disclosures about their involvement with VIEs. FAS 140-4 and FIN 46(R)-8 are effective for the Operating Partnership for the year ended December 31, 2008 and affects disclosures only. The adoption of this standardcodification has no impact on the Operating Partnership’s consolidated results of operations or financial position but changed the way we refer to accounting literature in our reports.

          Effective January 1, 2010, in an effort to improve financial standards for transfers of financial assets, more stringent conditions for reporting a transfer of a portion of a financial asset as a sale (e.g. loan participations) are required, the concept of a “qualifying special-purpose entity” and special guidance for guaranteed mortgage securitizations are eliminated, other sale-accounting criteria is clarified and the initial measurement of a transferor’s interest in transferred financial assets is changed. This does not have a material effect on the Operating Partnership’s consolidated results of operations or financial position.

          Effective January 1, 2010, the analysis for identifying the primary beneficiary of a Variable Interest Entity (“VIE”) has been simplified by replacing the previous quantitative-based analysis with a framework that is based more on qualitative judgments. The analysis requires the primary beneficiary of a VIE to be identified as the party that both (a) has the power to direct the activities of a VIE that most significantly impact its economic performance and (b) has an obligation to absorb losses or a right to receive benefits that could potentially be significant to the VIE. For the Operating Partnership, this includes its consolidated development partnerships as the Operating Partnership provides substantially all of the capital for these ventures (other than third party mortgage debt, if any). For the Operating Partnership, these requirements affected only disclosures and had no impact on the Operating Partnership’s consolidated results of operations or financial position. See Note 6 for further discussion.
The Operating Partnership adopted the disclosure provisions of SFAS No. 150 and FSP No. FAS 150-3,Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, effective December 31, 2003. SFAS No. 150 and FSP No. FAS 150-3 require the Operating Partnershipis required to make certain disclosures regarding noncontrolling interests that are classified as equity in the financial statements of a subsidiary but would be classified as a liability in the parent’s financial statements under SFAS No. 150 (e.g., minority interests in consolidated limited-life subsidiaries).subsidiaries. The Operating Partnership is presently the controlling partner in various consolidated partnerships consisting of 28owning 24 properties and 5,7575,232 apartment units and various completed and uncompleted development

F-17


properties having a minoritynoncontrolling interest book value of $25.5$8.0 million at December 31, 2008.2010. Some of these partnershipspartnership agreements contain provisions that require the partnerships to be liquidated through the sale of itstheir assets upon reaching a date specified in each respective partnership agreement. The Operating Partnership, as controlling partner, has an obligation to cause the property owning partnerships to distribute the proceeds of liquidation to the MinorityNoncontrolling Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of itstheir assets warrant a distribution based on the partnership agreements. As of December 31, 2008,2010, the Operating Partnership estimates the value of MinorityNoncontrolling Interest distributions would have been approximately $71.6$53.0 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 20082010 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the MinorityNoncontrolling Interests in the Operating Partnership’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Operating Partnership has no obligation to remit any consideration to the MinorityNoncontrolling Interests in these Partially Owned Properties.

In July 2006,

          Effective beginning the FASB ratified the consensus in FIN No. 48,Accounting for Uncertainty in Income Taxes. FIN No. 48 creates a single model to address uncertainty in income tax positions and prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition and clearly scopes income taxes out of SFAS No. 5,Accounting for Contingencies.

The Operating Partnership adopted FIN No. 48 as required effective January 1, 2007. The adoption of FIN No. 48 did not have a material effect on the consolidated results of operations or financial position.

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosurequarter ended June 30, 2009, disclosures about fair value measurements. The Operating Partnership adopted SFAS No. 157of financial instruments are required for interim reporting periods in summarized financial information for publicly traded companies as required effective January 1, 2008. The adoption of SFAS No. 157 did not have a material effect on the consolidated results of operations orwell as in annual financial position. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.

In February 2008, the FASB issued FSP No. FAS 157-2,Effective Date of FASB Statement No. 157 (“FAS 157-2”), which delays the effective date of SFAS No. 157 for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FAS 157-2 partially defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 and as a result is effective for the Operating Partnership beginning January 1, 2009. The Operating Partnershipstatements. This does not expect the adoption of this FSP to have a material effect on the consolidated results of operations or financial position.

In October 2008, the FASB issued FSP No. FAS 157-3,Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (“FAS 157-3”). FAS 157-3 clarifies the application of SFAS No. 157 in a market that is not active and became effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FAS 157-3 did not have a material effect on the Operating Partnership’s consolidated results of operations or financial position.

In February 2007, See Note 11 for further discussion.

          Effective January 1, 2010, companies are required to separately disclose the FASB issued SFAS No. 159,The Fair Value Option for Financial Assetsamounts of significant transfers of assets and Financial Liabilities. SFAS No. 159 provides a “Fair Value Option” under which a company may irrevocably electliabilities into and out of Level 1, Level 2 and Level 3 of the fair value ashierarchy and the initialreasons for those transfers. Companies must also develop and subsequent measurement attributedisclose their policy for certain financial instruments. The Fair Value Option will be available on a contract-by-contract basis with changes indetermining when transfers between levels are recognized. In addition, companies are required to provide fair value recognized in earnings as those changes occur. SFAS No. 159 is effective beginning January 1, 2008, but the Operating Partnership has decided not to adopt this optional standard.

In December 2007, the FASB issued SFAS No. 141(R),Business Combinations.SFAS No. 141(R) will significantly change the accountingdisclosures for business combinations. Under SFAS No. 141(R)each class rather than each major category of assets and liabilities. For fair value measurements using significant other observable inputs (Level 2) or significant unobservable inputs (Level 3), an acquiring entity will becompanies are required to recognize alldisclose the assets acquiredvaluation technique and liabilities assumedthe inputs used in a transaction at the acquisition-datedetermining fair value with limited exceptions. SFAS No. 141(R) will change the accounting treatment for certain specific acquisition related items including: (1) expensing acquisition related costs as incurred; (2) valuing noncontrolling interests at fair value at the acquisition date;each class of assets and (3) expensing restructuring costs associated with an acquired business. SFAS No. 141(R) also includes a substantial number of new disclosure requirements. SFAS No. 141(R) is to be applied prospectively to business combinations for which the acquisition date is on or after January 1, 2009. Due to the current decline in the Operating Partnership’s acquisition activities, the initial adoption of SFAS No. 141(R) isliabilities. This does not expected to have a material effect on the Operating Partnership’s consolidated results of operations or financial position.

In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements.SFAS No. 160 establishes new accounting See Note 11 for further discussion.

          Effective January 1, 2011, companies will be required to separately disclose purchases, sales, issuances and reporting standards for the noncontrolling interest insettlements on a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary (minority interest) is an ownership interestgross basis in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the facereconciliation of the Consolidated Statements of Operations, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. This statement is effective for therecurring Level 3 fair value measurements. The Operating Partnership on January 1, 2009. Other than the presentation changes required to the consolidated financial statements, the initial adoption of SFAS No. 160 isdoes not expected toexpect this will have a material effect on theits consolidated results of operations or financial position.

In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities –

          Effective January 1, 2009, in an amendment of FASB Statement No. 133. SFAS No. 161 is intendedeffort to improve financial standards for derivative instruments and hedging activities, by requiring enhancedcompanies are required to enhance disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. Among other requirements, entities are required to provide enhanced disclosures about: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations;for; and (3) how derivative instruments and related hedged items affect an entity’s financial

position, financial performance and cash flows. SFAS No. 161 is effective for the Operating Partnership on January 1, 2009. Other than the enhanced disclosure requirements, the adoption of SFAS No. 161 isthis does not expected to have a material effect on the Operating Partnership’s consolidated financial statements.

In May 2008, the FASB issued FSP No. APB 14-1,Accounting See Note 11 for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“APB 14-1”). APB 14-1 requires the issuerfurther discussion.

          Effective January 1, 2009, issuers of certain convertible debt instruments that may be settled in cash on conversion were required to separately account for the liability and equity components of the instrument in a manner that reflects theeach issuer’s nonconvertible debt borrowing rate. APB 14-1, which is applied retrospectively, is effective forAs the Operating Partnership beginning January 1, 2009. The adoption of APB 14-1 will affectis required to apply this retrospectively, the accounting for the Operating Partnership’s $650.0 million ($548.6482.5 million outstanding at December 31, 2008)2010) 3.85% convertible unsecured notes with a maturity date ofthat were issued in August 2026.2006 and mature in August 2026 was affected. The Operating Partnership believes that APB 14-1 willrecognized $18.6 million, $20.6 million and $24.4 million in interest expense related to the stated coupon rate of 3.85% for the years ended December 31, 2010, 2009 and 2008, respectively. The amount of the conversion option as of the date of issuance calculated by the Operating Partnership using a 5.80% effective interest rate was $44.3 million and is being amortized to interest expense over the expected life of the convertible notes (through the first put date on August 18, 2011). Total amortization of the cash discount and conversion option discount on the unsecured notes resulted in a reduction to earnings of approximately $7.8 million and $10.6 million, respectively, or $0.03 per Unit and $0.04 per Unit, respectively, for the years ended December 31, 2010 and 2009, and is anticipated to result in a reduction to earnings of approximately $9.0$5.0 million or $0.02 per Unit for the year ended December 31, 2011. In addition, the Operating Partnership decreased the January 1, 2009 balance of retained earnings (included in general partner’s capital) by $27.0 million, decreased the January 1, 2009 assumingbalance of notes by $17.3 million and increased the January 1, 2009 balance of paid in capital (included in general partner’s capital) by $44.3 million. Due to the required retrospective application, it does not repurchase any additional amountsresulted in a reduction to earnings of this debt.approximately $13.3 million or $0.05 per Unit for the year ended December 31, 2008. The carrying amount of the conversion option remaining in paid in capital (included in

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3.

Partners’ Capital

general partner’s capital) was $44.3 million at both December 31, 2010 and 2009. The unamortized cash and conversion option discounts totaled $5.0 million and $12.8 million at December 31, 2010 and 2009, respectively.
3. Capital and Redeemable Limited Partners
The following tables present the changes in the Operating Partnership’s issued and outstanding “Units” (which includes OP Units and Long-Term Incentive Plan (“LTIP”) Units) and in the limited partners’ OP Units for the years ended December 31, 2008, 20072010, 2009 and 2006:

           2008                  2007                  2006         

General and Limited Partner OP Units

    

General and Limited Partner OP Units outstanding at January 1,

  287,974,981  313,466,216  309,960,589 

Issued to General Partner:

    

Conversion of Series E Preference Units

  36,830  80,895  104,904 

Conversion of Series H Preference Units

  2,750  5,463  9,554 

Conversion of Preference Interests

  -  324,484  679,686 

Exercise of EQR options

  995,129  1,040,765  2,647,776 

Employee Share Purchase Plan

  195,961  189,071  213,427 

Dividend Reinvestment – DRIP Plan

  -  -  169 

Restricted EQR share grants, net

  461,954  352,433  603,697 

Issued to Limited Partners:

    

Issuances – Acquisitions/consolidations

  19,017  -  1,144,326 

OP Units Other:

    

Repurchased and retired

  (220,085) (27,484,346) (1,897,912)
          

General and Limited Partner OP Units outstanding at
December 31,

  289,466,537  287,974,981  313,466,216 
          

Limited Partner OP Units

    

Limited Partner OP Units outstanding at January 1,

  18,420,320  19,914,583  20,424,245 

Limited Partner OP Units issued through acquisitions/consolidations

  19,017  -  1,144,326 

Conversion of Limited Partner OP Units to EQR Common Shares

  (1,759,560) (1,494,263) (1,653,988)
          

Limited Partner OP Units Outstanding at December 31,

  16,679,777  18,420,320  19,914,583 
          

Limited Partner OP Units Ownership Interest in Operating
Partnership

  5.8% 6.4% 6.4%

Limited Partner OP Units Issued:

    

Consolidations – per unit

  $44.64  -  $43.34 

Consolidations – valuation

  $0.8 million  -  $49.6 million 

As of February 5, 2009, an2008:

             
  2010  2009  2008 
General and Limited Partner Units
            
General and Limited Partner Units outstanding at January 1,  294,157,017   289,466,537   287,974,981 
             
Issued to General Partner:            
Conversion of Series E Preference Units  328,363   612   36,830 
Conversion of Series H Preference Units  32,516      2,750 
Issuance of OP Units  6,151,198   3,497,300    
Exercise of EQR share options  2,506,645   422,713   995,129 
Employee Share Purchase Plan (ESPP)  157,363   324,394   195,961 
Restricted EQR share grants, net  235,767   298,717   461,954 
             
Issued to Limited Partners:            
LTIP Units, net  92,892   154,616    
OP Units issued through acquisitions/consolidations  205,648   32,061   19,017 
Conversion of Series B Junior Preference Units     7,517    
             
OP Units Other:            
Repurchased and retired  (58,130)  (47,450)  (220,085)
          
General and Limited Partner Units outstanding at December 31,
  303,809,279   294,157,017   289,466,537 
          
             
Limited Partner Units
            
Limited Partner Units outstanding at January 1,  14,197,969   16,679,777   18,420,320 
Limited Partner LTIP Units, net  92,892   154,616    
Limited Partner OP Units issued through acquisitions/consolidations  205,648   32,061   19,017 
Conversion of Series B Junior Preference Units     7,517    
Conversion of Limited Partner OP Units to EQR Common Shares  (884,472)  (2,676,002)  (1,759,560)
          
Limited Partner Units outstanding at December 31,
  13,612,037   14,197,969   16,679,777 
          
Limited Partner Units Ownership Interest in Operating Partnership  4.5%  4.8%  5.8%
             
Limited Partner LTIP Units Issued:            
Issuance — per unit    $0.50    
Issuance — contribution valuation    $0.1 million    
             
Limited Partner OP Units Issued:            
Acquisitions/consolidations — per unit $40.09  $26.50  $44.64 
Acquisitions/consolidations — valuation $8.2 million  $0.8 million  $0.8 million 
             
Conversion of Series B Junior Preference Units — per unit    $24.50    
Conversion of Series B Junior Preference Units — valuation    $0.2 million    
          An unlimited amount of equity and debt securities remains available for issuance by EQR and the Operating Partnership under effective shelf registration statements filed with the SEC. Most recently, EQR and the Operating Partnership filed a universal shelf registration statement for an unlimited amount of equity and debt securities that became automatically effective upon filing with the SEC in December 2008October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011October 14, 2013 and does not contain a maximum issuance amount). Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one common share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).
          In September 2009, EQR announced the establishment of an At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 million Common Shares from time to time over the next three years into the

F-19

On April 27, May 24


existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). During the year ended December 31, 2010, EQR issued approximately 6.2 million Common Shares at an average price of $47.45 per share for total consideration of approximately $291.9 million through the ATM program. Concurrent with these transactions, the Operating Partnership issued approximately 6.2 million OP Units to EQR. During the year ended December 31, 2009, EQR issued approximately 3.5 million Common Shares at an average price of $35.38 per share for total consideration of approximately $123.7 million through the ATM program. Concurrent with these transactions, the Operating Partnership issued approximately 3.5 million OP Units to EQR. As of December 31, 2009, transactions to issue approximately 1.1 million of the 3.5 million Common Shares had not yet settled. As of December 31, 2009, the Company increased the number of Common Shares issued and December 3, 2007,outstanding by this amount and recorded a receivable of approximately $37.6 million included in other assets on the consolidated balance sheets. See Note 20 for further discussion on shares available under this program.
          EQR has a share repurchase program authorized by the Board of Trustees approved an increase of $200.1 million, an additional $500.0 million and an additional $500.0 million, respectively, to the Company’s authorized share repurchase program.Trustees. Considering the above additional authorizations and the repurchase activity for the year ended

December 31, 2008,2010, EQR has remaining authorization to repurchase an additional $467.7$464.6 million of its shares as of December 31, 2008.

2010.

          During the year ended December 31, 2010, EQR repurchased 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 58,130 OP Units previously issued to EQR. All of the shares repurchased during the year ended December 31, 2010 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares.
          During the year ended December 31, 2009, EQR repurchased 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 47,450 OP Units previously issued to EQR. All of the shares repurchased during the year ended December 31, 2009 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares.
During the year ended December 31, 2008, the CompanyEQR repurchased 220,085 of its Common Shares at an average price of $35.93 per share for total consideration of $7.9 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 220,085 OP Units previously issued to EQR. Of the total shares repurchased, 120,085 shares were repurchased from employees at an average price of $36.10 per share (the average of the then current market prices) to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares. The remaining 100,000 shares were repurchased in the open market at an average price of $35.74 per share.
          The Company also funded $4.6 million in January 2008 for the settlement of 125,000 Common Shares that were repurchased in December 2007 and recorded as other liabilities at December 31, 2007.

During the year ended December 31, 2007, the Company repurchased 27,484,346 of its Common Shares at an average price of $44.62 per share for total consideration of $1.2 billion. These shares were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 27,484,346 OP Units previously issued to EQR. Of the total shares repurchased, 84,046 shares were repurchased from employees at an average price of $53.85 per share (the average of the then current market prices) to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares. The remaining 27,400,300 shares were repurchased in the open market at an average price of $44.59 per share. As of December 31, 2007, transactions to repurchase 125,000 of the 27,484,346 Common Shares had not yet settled. As of December 31, 2007, the Company has reduced the number of Common Shares issued and outstanding by this amount and recorded a liability of $4.6 million included in other liabilities on the consolidated balance sheets.

During the year ended December 31, 2006, the Company repurchased 1,897,912 of its Common Shares in the open market at an average price of $43.85 per share. The Company paid approximately $83.2 million for these shares, which were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 1,897,912 OP Units previously issued to EQR.

The limited partnersLimited Partners of the Operating Partnership as of December 31, 20082010 include various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of LTIP Units. Subject to certain restrictions,exceptions (including the “book-up” requirements of LTIP Units), Limited Partners may exchange their OP Units with EQR for EQR Common Shares on a one-for-one basis. The carrying value of the Limited Partner Units (including redeemable interests) is allocated based on the number of Limited Partner Units in total in proportion to the number of Limited Partner Units in total plus the number of General Partner Units. Net income is allocated to the Limited Partner Units based on the weighted average ownership percentage during the period.

          The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing EQR Common Shares to any and all holders of Limited Partner Units requesting an exchange of their OP Units with EQR. Once the Operating Partnership elects not to redeem the Limited Partner Units for cash, EQR is obligated to deliver EQR Common Shares to the exchanging limited partner.
          The Limited Partner Units are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered EQR Common Shares, Limited Partner Units are differentiated and referred to as “Redeemable Limited Partner Units”. Instruments that require settlement in registered shares can not be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Limited Partner Units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each

F-20


respective reporting period. EQR has the ability to deliver unregistered EQR Common Shares for the remaining portion of the Limited Partner Units that are classified in permanent equity at December 31, 2010 and 2009.
          The carrying value of the Redeemable Limited Partner Units is allocated based on the number of Redeemable Limited Partner Units in proportion to the number of Limited Partner Units in total. Such percentage of the total carrying value of Limited Partner Units which is ascribed to the Redeemable Limited Partner Units is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 2010, the Redeemable Limited Partner Units have a redemption value of approximately $383.5 million, which represents the value of EQR Common Shares that would be issued in exchange with the Redeemable Limited Partner Units.
          The following table presents the changes in the redemption value of the Redeemable Limited Partners for the years for the years ended December 31, 2010, 2009 and 2008, respectively (amounts in thousands):
             
  2010  2009  2008 
Balance at January 1, $258,280  $264,394  $345,165 
Change in market value  129,918   14,544   (65,524)
Change in carrying value  (4,658)  (20,658)  (15,247)
          
Balance at December 31, $383,540  $258,280  $264,394 
          
EQR contributes all net proceeds from its various equity offerings (including proceeds from exercise of options for EQR Common Shares) to the Operating Partnership. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the preferred shares issued in the equity offering).

The following table presents the Operating Partnership’s issued and outstanding “Preference Units” as of December 31, 20082010 and 2007:

            Amounts in thousands
   Redemption
Date (1) (2)
  Conversion
Rate (2)
  Annual
Dividend per
Unit (3)
  December 31,
2008
  December 31,
2007

Preference Units:

          

7.00% Series E Cumulative Convertible Preference Units; liquidation value $25 per unit; 329,016 and 362,116 units issued and outstanding at December 31, 2008 and December 31, 2007, respectively

  11/1/98  1.1128  $1.75  $8,225  $9,053

7.00% Series H Cumulative Convertible Preference Units; liquidation value $25 per unit; 22,459 and 24,359 units issued and outstanding at December 31, 2008 and December 31, 2007, respectively

  6/30/98  1.4480  $1.75   561   609

8.29% Series K Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,000,000 units issued and outstanding at December 31, 2008 and December 31, 2007

  12/10/26  N/A  $4.145   50,000   50,000

6.48% Series N Cumulative Redeemable Preference Units; liquidation value $250 per unit; 600,000 units issued and outstanding at December 31, 2008 and December 31, 2007 (4)

  6/19/08  N/A  $16.20   150,000   150,000
              
        $208,786  $209,662
              

2009:
                     
          Annual  Amounts in thousands 
  Redemption  Conversion  Dividend per  December 31,  December 31, 
  Date (1) (2)  Rate (2)  Unit (3)  2010  2009 
Preference Units:                    
                     
7.00% Series E Cumulative Convertible Preference Units; liquidation value $25 per unit; 0 and 328,466 units issued and outstanding at December 31, 2010 and December 31, 2009, respectively  11/1/98   1.1128  $1.75  $  $8,212 
                     
7.00% Series H Cumulative Convertible Preference Units; liquidation value $25 per unit 0 and 22,459 units issued and outstanding at December 31, 2010 and December 31, 2009, respectively  6/30/98   1.4480  $1.75      561 
                     
8.29% Series K Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,000,000 units issued and outstanding at December 31, 2010 and December 31, 2009  12/10/26   N/A  $4.145   50,000   50,000 
                     
6.48% Series N Cumulative Redeemable Preference Units; liquidation value $250 per unit; 600,000 units issued and outstanding at December 31, 2010 and December 31, 2009 (4)  6/19/08   N/A  $16.20   150,000   150,000 
                     
                   
              $200,000  $208,773 
                   

(1)  

(1)On or after the redemption date, redeemable preference units (Series K and N) may be redeemed for cash at the option of the Operating Partnership, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption of the corresponding EQR Preferred Shares.

(2)

On or after the redemption date, convertible preference units (Series E &and H) may be redeemed under certain circumstances at the option of the Operating Partnership for cash (in the case of Series E) or OP Units (in the case of Series H), in whole or in part, at various redemption prices per unit based upon the contractual conversion rate, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption/conversion of the corresponding EQR Preferred Shares.

On November 1,

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(3)  

2010, the Operating Partnership redeemed its Series E and Series H Cumulative Convertible Preference Units for cash consideration of $0.8 million and 355,539 OP Units.
(3)Dividends on all series of Preference Units are payable quarterly at various pay dates. The dividend listed for Series N is a Preference Unit rate and the equivalent depositary unit annual dividend is $1.62 per unit.

(4)

The Series N Preference Units have a corresponding depositary unit that consists of ten times the number of units and one-tenth the liquidation value and dividend per unit.

          On July 30, 2009, the Operating Partnership elected to convert all 7,367 Series B Junior Convertible Preference Units into 7,517 OP Units. The actual preference unit dividends declared for the period outstanding in 2009 was $1.17 per unit.
          On March 31, 2010, the Operating Partnership issued 188,571 OP Units at a price of $39.15 per OP Unit for total valuation of $7.4 million as partial consideration for the acquisition of one rental property. As the value of the OP Units issued was agreed by contract to be $35.00 per OP Unit, the difference between the contracted value and fair value (the closing price of EQR Common Shares on the closing date) was recorded as an increase to the purchase price.
During the year ended December 31, 2007,2010, the Operating Partnership redeemed for cashacquired all 700,000 units of its 8.60% Series D Preferencepartner’s interest in two consolidated partially owned properties consisting of 432 apartment units, one consolidated partially owned development project and one consolidated partially owned land parcel for $0.7 million. One of these partially owned property buyouts was funded through the issuance of 1,129 OP Units with a liquidation valuevalued at $50,000. The Operating Partnership also increased its ownership in three consolidated partially owned properties through the buyout of $175.0certain equity interests which were funded through the issuance of 15,948 OP Units valued at $0.8 million inand cash payments of $15.3 million. In conjunction with the concurrent redemption of the corresponding EQR Preferred Shares. Additionally,these transactions, the Operating Partnership recorded the write-off of approximately $6.1reduced paid in capital (included in general partner’s capital) by $16.9 million in original issuance costs as a premium on redemption of Preference Units in the accompanying consolidated statements of operations.

and other liabilities by $0.2 million and increased Noncontrolling Interests — Partially Owned Properties by $0.2 million.

During the year ended December 31, 2006,2009, the Operating Partnership redeemed for cashacquired all 460,000 units of its 9.125% Series C Preference Units with a liquidation valuepartners’ interests in five consolidated partially owned properties consisting of $115.0 million in conjunction with the concurrent redemption of the corresponding EQR Preferred Shares. Additionally,1,587 apartment units for $9.2 million. In addition, the Operating Partnership recordedalso acquired a portion of the write-offoutside partner interests in two consolidated partially owned properties, one funded using cash of approximately $4.0$2.1 million in originaland the other funded through the issuance costs as a premium on redemption of Preference32,061 OP Units in the accompanying consolidated statements of operations.

During the year ended December 31, 2007,valued at $0.8 million. In conjunction with these transactions, the Operating Partnership issued an irrevocable notice to redeem for cash all 230,000 units of its 7.625% Series J Preferencereduced paid in capital (included in general partner’s capital) by $1.5 million and Noncontrolling Interests with a liquidation value of $11.5— Partially Owned Properties by $11.7 million. This notice triggered the holder’s accelerated conversion right, which they exercised. As a result, the 230,000 units were converted into 324,484 EQR Common Shares.

During the year ended December 31, 2006, the Operating Partnership redeemed for cash all of its 7.875% Series G Preference Interests with a liquidation value of $25.5 million. The Operating Partnership recorded approximately $0.7 million as a premium on redemption of Preference Interests in the accompanying consolidated statements of operations.

During the year ended December 31, 2006, the Operating Partnership issued irrevocable notices to redeem for cash all 460,000 units of its 7.625% Series H and I Preference Interests with a liquidation value of $23.0 million.

This notice triggered the respective holders’ accelerated conversion rights, which they exercised. As a result, the 460,000 units were converted into 679,686 EQR Common Shares.

The following table presents the Operating Partnership’s issued and outstanding Junior Convertible Preference Units (the “Junior Preference Units”) as of December 31, 2008 and 2007:

         Amounts in thousands
       Redemption    
Date (2)
     Conversion    
Rate (2)
 Annual
Dividend
    per Unit (1)    
     December 31,    
2008
     December 31,    
2007

Junior Preference Units:

      

Series B Junior Convertible Preference Units; liquidation
value $25 per unit; 7,367 units
issued and outstanding at
December 31, 2008 and December 31, 2007

  7/29/09 1.020408 $2.00   $ 184   $184
          
       $184   $184
          

(1)  

Dividends on the Junior Preference Units are payable quarterly at various pay dates.

(2)  

On or after the tenth anniversary of the issuance (the “Redemption Date”), the Series B Junior Preference Units may be converted into OP Units at the option of the Operating Partnership based on the contractual conversion rate. Prior to the Redemption Date, the holders may elect to convert the Series B Junior Preference Units to OP Units under certain circumstances based on the contractual conversion rate. The contractual rate is based upon a ratio dependent upon the closing price of EQR’s Common Shares.

4.

Real Estate

The following table summarizes the carrying amounts for investment in real estate (at cost) as of December 31, 2008 and 2007 (amounts in thousands):

   2008  2007 

Land

    $3,671,299    $3,607,305 

Depreciable property:

   

Buildings and improvements

   12,836,310   12,665,706 

Furniture, fixtures and equipment

   1,072,284   890,975 

Projects under development:

   

Land

   175,355   225,960 

Construction-in-progress

   680,118   602,570 

Land held for development:

   

Land

   205,757   296,129 

Construction-in-progress

   49,116   44,705 
         

Investment in real estate

   18,690,239   18,333,350 

Accumulated depreciation

   (3,561,300)  (3,170,125)
         

Investment in real estate, net

    $    15,128,939    $    15,163,225 
         

During the year ended December 31, 2008, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

       Properties          Units      Purchase
Price

Rental Properties

  7  2,141    $380,683

Uncompleted Developments

  -  -   31,705

Military Housing (Fee Managed) (1)

  1  978   -
          

Total

              8              3,119    $        412,388
          

(1)    

The Operating Partnership assumed management of 978 housing units at McChord Air Force Base in Washington state and invested $2.4 million towards its redevelopment. McChord AFB adjoins Ft. Lewis, a U.S. Army base at which the Operating Partnership already manages 3,731 units.

The Operating Partnership also acquired all of its partners’ interests in one consolidated partially owned property containingconsisting of 144 apartment units for $5.9 million and three consolidated partially owned land parcels for $1.6 million. In addition, the Operating Partnership made an additional payment of $1.3 million related to an April 2006 acquisition of a partner’s interest in a now wholly-ownedwholly owned property, partially funded through the issuance of 19,017 OP Units valued at $0.8 million.

4. Real Estate
          The following table summarizes the carrying amounts for the Operating Partnership’s investment in real estate (at cost) as of December 31, 2010 and 2009 (amounts in thousands):
         
  2010  2009 
Land $4,110,275  $3,650,324 
Depreciable property:        
Buildings and improvements  13,995,121   12,781,543 
Furniture, fixtures and equipment  1,231,391   1,111,978 
Projects under development:        
Land  28,260   106,716 
Construction-in-progress  102,077   562,263 
Land held for development:        
Land  198,465   181,430 
Construction-in-progress  36,782   70,890 
       
Investment in real estate  19,702,371   18,465,144 
Accumulated depreciation  (4,337,357)  (3,877,564)
       
Investment in real estate, net $15,365,014  $14,587,580 
       
During the year ended December 31, 2007,2010, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

F-22


       Properties         Units     Purchase
Price

Rental Properties

  36 8,167   $1,686,435

Land Parcels (eight)

  - -  212,841
        

Total

          36                 8,167   $    1,899,276
        

             
          Purchase 
  Properties  Apartment Units  Price 
Rental Properties  16   4,445  $1,485,701 
Land Parcels (six)        68,869 
          
Total  16   4,445  $1,554,570 
          
          In addition to the properties discussed above, the Operating Partnership acquired the 75% equity interest it did not own in seven previously unconsolidated properties containing 1,811 apartment units with a real estate value of $105.1 million.
During the year ended December 31, 2008,2009, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):
             
          Purchase 
  Properties  Apartment Units  Price 
Rental Properties  2   566  $145,036 
Land Parcel (one)        11,500 
          
Total  2   566  $156,536 
          
          The Operating Partnership also acquired the 75% equity interest in one previously unconsolidated property it did not already own consisting of 250 apartment units for a gross sales price of $18.5 million from its institutional joint venture partner.
          During the year ended December 31, 2010, the Operating Partnership disposed of the following to unaffiliated parties (sales price in thousands):

       Properties         Units     Sales Price

Rental Properties:

    

Wholly Owned

  38 9,457   $        862,099

Partially Owned – Unconsolidated (1)

  3 670  34,600

Condominium Conversion Properties

  4 130  26,101

Land Parcel (one)

  - -  3,300
        

Total

  45         10,257   $926,100
        

             
  Properties  Apartment Units  Sales Price 
Rental Properties:            
Consolidated  35   7,171  $718,352 
Unconsolidated (1)  27   6,275   417,779 
Land Parcel (one)        4,000 
Condominium Conversion Properties  1   2   360 
          
Total  63   13,448  $1,140,491 
          
(1) 

(1)    

The Operating Partnership owned a 25% interest in these unconsolidated rental properties. Sales price listed is the gross sales price.

The Operating Partnership recognized a net gain on sales of discontinued operations of approximately $392.9$298.0 million, a net gain on sales of unconsolidated entities of approximately $2.9$28.1 million and a net gainloss on sales of land parcels of approximately $3.0$1.4 million on the above sales.

During the year ended December 31, 2007,2009, the Operating Partnership disposed of the following to unaffiliated parties (sales price in thousands):

      Properties         Units     Sales Price

Rental Properties:

   

Wholly Owned

 72 21,163   $    1,918,673

Partially Owned – Unconsolidated (1)

 1 400  21,000

Condominium Conversion Properties

 5 617  164,226

Land Parcels (two)

 - -  49,959
       

Total

 78         22,180   $2,153,858
       

             
  Properties  Apartment Units  Sales Price 
Rental Properties:            
Consolidated  54   11,055  $905,219 
Unconsolidated (1)  6   1,434   96,018 
Condominium Conversion Properties  1   62   12,021 
          
Total  61   12,551  $1,013,258 
          
(1) 

(1)    

The Operating Partnership owned a 25% interest in thisthese unconsolidated rental property.properties. Sales price listed is the gross sales price.

The Operating Partnership’s buyout of its partner’s interest in one previously unconsolidated property is not included in the above totals.

F-23


The Operating Partnership recognized a net gain on sales of discontinued operations of approximately $933.0$335.3 million and a net gain on sales of unconsolidated entities of approximately $2.6 million and a net gain on sales of land parcels of approximately $6.4$10.7 million on the above sales.

5.

5. Commitments to Acquire/Dispose of Real Estate

As of February 5, 2009,Real Estate

          In addition to the properties that were subsequently acquired as discussed in Note 20, the Operating Partnership had entered into an agreementseparate agreements to acquire one land parcel for $23.5 million.

As of February 5, 2009,the following (purchase price in thousands):

             
  Properties  Apartment Units  Purchase Price 
Rental Properties  2   683  $125,250 
          
Total  2   683  $125,250 
          
          In addition to the three properties that were subsequently disposed of as discussed in Note 21,20, the Operating Partnership had entered into separate agreements to dispose of the following (sales price in

thousands):

      Properties     Units     Sales Price  

Rental Properties:

   

Wholly Owned

 9 1,232   $    128,600

Partially Owned – Unconsolidated

 1 216  21,700
       

Total

 10         1,448   $150,300
       

             
  Properties  Apartment Units  Sales Price 
Rental Properties  15   4,152  $378,650 
          
Total  15   4,152  $378,650 
          
The closings of these pending transactions are subject to certain conditions and restrictions, therefore, there can be no assurance that these transactions will be consummated or that the final terms will not differ in material respects from those summarized in the preceding paragraphs.

6.

Investments in Partially Owned Entities

6. Investments in Partially Owned Entities
The Operating Partnership has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following table summarizestables and information summarize the Operating Partnership’s investments in partially owned entities as of December 31, 20082010 (amounts in thousands except for project and apartment unit amounts):

F-24


  Consolidated     Unconsolidated    
  Development Projects     Institutional
Joint
Ventures (5)
  Held for
and/or Under
  Development  
 Completed,
Not
    Stabilized (4)    
 Completed
and
    Stabilized    
 Other Total 

Total projects (1)

  -  2  5  21  28  41
                  

Total units (1)

  -  410  1,405  3,942  5,757  9,776
                  

Debt – Secured (2):

      

EQR Ownership (3)

   $    517,543   $    76,708   $141,206   $287,986   $    1,023,443   $    121,200

Minority Ownership

  -  -  -  14,228  14,228  363,600
                  

Total (at 100%)

   $517,543   $76,708   $141,206   $    302,214   $1,037,671   $    484,800
                  

                     
  Consolidated 
  Development Projects (VIEs)       
  Held for  Completed,  Completed       
  and/or Under  Not  and       
  Development  Stabilized (4)  Stabilized  Other  Total 
Total projects (1)     1   4   19   24 
                
                     
Total apartment units (1)     490   1,302   3,440   5,232 
                
                     
Balance sheet information at 12/31/10 (at 100%):                    
ASSETS                    
Investment in real estate $44,006  $257,747  $390,465  $438,329  $1,130,547 
Accumulated depreciation        (18,471)  (124,347)  (142,818)
                
Investment in real estate, net  44,006   257,747   371,994   313,982   987,729 
Cash and cash equivalents  877   1,288   7,384   11,581   21,130 
Deposits — restricted  1,115   922   3,205   8   5,250 
Escrow deposits — mortgage        222   2,321   2,543 
Deferred financing costs, net     2,800   412   505   3,717 
Other assets  339   268   308   143   1,058 
                
Total assets $46,337  $263,025  $383,525  $328,540  $1,021,427 
                
                     
LIABILITIES AND CAPITAL                    
Mortgage notes payable $18,342  $141,741  $275,348  $314,535  $749,966 
Accounts payable & accrued expenses  346   2,215   1,070   1,259   4,890 
Accrued interest payable  1,294   521   605   1,531   3,951 
Other liabilities  1,617   1,568   910   1,001   5,096 
Security deposits     1,021   955   1,392   3,368 
                
Total liabilities  21,599   147,066   278,888   319,718   767,271 
                
                     
Noncontrolling Interests — Partially Owned Properties  3,418   5,025   4,278   (4,730)  7,991 
Accumulated other comprehensive (loss)     (1,322)        (1,322)
General and Limited Partners’ Capital  21,320   112,256   100,359   13,552   247,487 
                
Total capital  24,738   115,959   104,637   8,822   254,156 
                
Total liabilities and capital $46,337  $263,025  $383,525  $328,540  $1,021,427 
                
                     
Debt — Secured (2):                    
EQR Ownership (3) $18,342  $141,741  $275,348  $252,857  $688,288 
Noncontrolling Ownership           61,678   61,678 
                
Total (at 100%) $18,342  $141,741  $275,348  $314,535  $749,966 
                

F-25


                     
  Consolidated 
  Development Projects (VIEs)       
  Held for             
  and/or Under  Completed,  Completed       
  Development  Not Stabilized (4)  and Stabilized  Other  Total 
Operating information for the year ended 12/31/10 (at 100%):                    
Operating revenue $4  $6,344  $25,607  $55,928  $87,883 
Operating expenses  758   3,458   9,370   19,906   33,492 
                
                     
Net operating (loss) income  (754)  2,886   16,237   36,022   54,391 
Depreciation        12,239   14,882   27,121 
General and administrative/other  51      127   92   270 
Impairment  8,959            8,959 
                
                     
Operating (loss) income  (9,764)  2,886   3,871   21,048   18,041 
Interest and other income  23      10   30   63 
Other expenses  (493)        (548)  (1,041)
Interest:                    
Expense incurred, net  (925)  (2,872)  (6,596)  (20,576)  (30,969)
Amortization of deferred financing costs        (753)  (238)  (991)
                
                     
(Loss) income before income and other taxes and discontinued operations  (11,159)  14   (3,468)  (284)  (14,897)
Income and other tax (expense) benefit  (31)        (5)  (36)
Net loss on sales of land parcels  (234)           (234)
Net gain on sales of discontinued operations  711         34,842   35,553 
                
                     
Net (loss) income $(10,713) $14  $(3,468) $34,553  $20,386 
                
(1)  

(1)    

Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed.

 

(2) 

All debt is non-recourse to the Operating Partnership with the exception of $111.8$14.0 million in mortgage debt on variousone development projects.

project.
 

(3) 

Represents the Operating Partnership’s current economic ownership interest.

 

(4) 

Projects included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing.

(5)    

Mortgage debt is also partially collateralized by $33.4 million in unconsolidated restricted cash set aside from the net proceeds of property sales.

     During the year ended December 31, 2010, the Operating Partnership acquired the 75% equity interest it did not own in seven previously unconsolidated properties containing 1,811 apartment units in exchange for an approximate $30.0 million payment to its partner. In addition, the Operating Partnership repaid the net $70.0 million mortgage loan, which was to mature on May 1, 2010, concurrent with closing using proceeds drawn from the Operating Partnership’s line of credit. The Operating Partnership also sold its 25% equity interest in the remaining 24 unconsolidated properties containing 5,635 apartment units in exchange for an approximate $25.4 million payment from its partner and the related $264.8 million in non-recourse mortgage debt was extinguished by the partner at closing.
     On December 29, 2010, the Operating Partnership admitted an 80% institutional partner to an entity owning a developable land parcel in Florida in exchange for $11.7 million in cash and retained a 20% equity interest. This land parcel is now unconsolidated. Total project cost is approximately $76.1 million and construction is expected to start in the first quarter of 2011. The Operating Partnership is responsible for constructing the project and has given certain construction cost overun guarantees.
     The Operating Partnership is the controlling partner in various consolidated partnership properties and development properties having a noncontrolling interest book value of $8.0 million at December 31, 2010. The Operating Partnership has identified its development partnerships as VIEs as the Operating Partnership provides substantially all of the capital for these ventures (other than third party mortgage debt, if any) despite the fact that each partner legally owns 50% of each venture. The Operating Partnership is the primary beneficiary as it exerts the most significant power over the ventures, absorbs the majority of the expected losses and has the right to receive a majority of the expected residual returns. The assets net of liabilities of the Operating Partnership’s VIEs are restricted in their use to the specific VIE to which they relate and are not available for general corporate use. The Operating Partnership does not have any unconsolidated VIEs.

F-26

7.

Deposits – Restricted


7. Deposits — Restricted
The following table presents the Operating Partnership’s restricted deposits as of December 31, 20082010 and 20072009 (amounts in thousands):

      December 31,    
2008
     December 31,    
2007

Tax–deferred (1031) exchange proceeds

   $-   $63,795

Earnest money on pending acquisitions

  1,200  3,050

Restricted deposits on debt (1)

  96,229  133,491

Resident security and utility deposits

  41,478  39,889

Other

  13,465  13,051
      

Totals

   $    152,372   $    253,276
      

         
  December 31,  December 31, 
  2010  2009 
Tax—deferred (1031) exchange proceeds $103,887  $244,257 
Earnest money on pending acquisitions  9,264   6,000 
Restricted deposits on debt (1)  18,966   49,565 
Resident security and utility deposits  40,745   39,361 
Other  8,125   12,825 
       
         
Totals $180,987  $352,008 
       
         
(1)  

(1)    

Primarily represents amounts held in escrow by the lender and released as draw requests are made on fully funded development mortgage loans.

8.

Mortgage Notes Payable

8. Mortgage Notes Payable
As of December 31, 2008,2010, the Operating Partnership had outstanding mortgage debt of approximately $5.0$4.8 billion.

During the year ended December 31, 2008,2010, the Operating Partnership:

Repaid $435.4 million of mortgage loans;

Assumed $24.9 million of mortgage debt on an uncompleted development property in connection with its acquisition;

Repaid $652.1 million of mortgage loans;
Obtained $173.6 million of new mortgage loan proceeds;
Assumed $359.1 million of mortgage debt on seven acquired properties;
Was released from $40.0 million of mortgage debt assumed by the purchaser on two disposed properties; and
Assumed $112.6 million of mortgage debt on seven previously unconsolidated properties and repaid the net $70.0 million mortgage loan (net of $42.6 million of cash collateral held by the lender) concurrent with closing using proceeds drawn from the Operating Partnership’s line of credit.

Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties;

Obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties;

Obtained $543.0 million of mortgage loan proceeds through the issuance of an 8 year cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties; and

Obtained an additional $248.5 million of new mortgage loans primarily on development properties.

The Operating Partnership recorded approximately $81,000$2.5 million and $131,000$1.0 million of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, as additional interest related to debt extinguishment of mortgages during the year ended December 31, 2008.

2010 as additional interest expense related to debt extinguishment of mortgages.

As of December 31, 2008,2010, the Operating Partnership had $543.4 million of secured debt subject to third party credit enhancement.
     As of December 31, 2010, scheduled maturities for the Operating Partnership’s outstanding mortgage indebtedness were at various dates through September 1, 2048. At December 31, 2008,2010, the interest rate range on the Operating Partnership’s mortgage debt was 0.60%0.21% to 12.465%11.25%. During the year ended December 31, 2008,2010, the weighted average interest rate on the Operating Partnership’s mortgage debt was 5.18%4.79%.

The historical cost, net of accumulated depreciation, of encumbered properties was $6.5$5.6 billion and $5.3$5.8 billion at December 31, 20082010 and 2007,2009, respectively.

Aggregate payments of principal on mortgage notes payable for each of the next five years and thereafter are as follows (amounts in thousands):

        Year        

          Total        

2009

    $635,818

2010

   454,701

2011

   672,526

2012

   163,276

2013

   167,347

Thereafter

   2,943,262
    

Total

    $    5,036,930
    

      
Year  Total 
2011  $597,100 
2012   342,088 
2013   171,138 
2014   86,041 
2015   59,013 
Thereafter   3,507,516 
     
Total  $4,762,896 
     
As of December 31, 2007,2009, the Operating Partnership had outstanding mortgage debt of approximately $3.6$4.8 billion.

F-27


During the year ended December 31, 2007,2009, the Operating Partnership:

Repaid $548.0 million of mortgage loans;

Assumed $226.2 million of mortgage debt on certain properties in connection with their acquisitions;

Repaid $956.8 million of mortgage loans;
Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11-year cross-collateralized loan with an all-in fixed interest rate for 10 years at approximately 5.6% secured by 13 properties;
Obtained $40.0 million of new mortgage loans to accommodate the delayed sale of two properties that closed in January 2010;
Obtained $198.8 million of new mortgage loans on development properties;
Recognized a gain on early debt extinguishment of $2.4 million and wrote-off approximately $1.1 million of unamortized deferred financing costs; and
Was released from $17.3 million of mortgage debt assumed by the purchaser on two disposed properties.

Obtained $827.8 million of new mortgage loans on certain properties; and

Was released from $76.7 million of mortgage debt assumed by the purchaser on disposed properties.

The Operating Partnership recorded approximately $3.3 million and $3.6 million of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, as additional interest related to debt extinguishment of mortgages during the year ended December 31, 2007.

As of December 31, 2007,2009, scheduled maturities for the Operating Partnership’s outstanding mortgage indebtedness were at various dates through September 1, 2045.2048. At December 31, 2007,2009, the interest rate range on the Operating Partnership’s mortgage debt was 3.00%0.20% to 12.465%. During the year ended December 31, 2007,2009, the

weighted average interest rate on the Operating Partnership’s mortgage debt was 5.74%4.89%.

9.

Notes

9. Notes
The following tables summarize the Operating Partnership’s unsecured note balances and certain interest rate and maturity date information as of and for the years ended December 31, 20082010 and 2007,2009, respectively:

December 31, 2008

(Amounts are in thousands)

  Net
Principal
Balance
  Interest
Rate
Ranges
  Weighted
Average
    Interest Rate    
 Maturity
Date
Ranges

Fixed Rate Public/Private Notes (1)

    $4,701,372  3.85% - 7.57%  5.69% 2009 - 2026

Floating Rate Public/Private Notes (1)

   651,554  (1)  3.89% 2009 - 2010

Fixed Rate Tax-Exempt Bonds

   75,790  5.20%  5.07% 2029

Floating Rate Tax-Exempt Bonds

   35,600  (2)  1.05% 2028
         

Totals

    $    5,464,316     
         

December 31, 2007

(Amounts are in thousands)

  Net
Principal
Balance
  Interest
Rate
Ranges
  Weighted
Average

Interest Rate
 Maturity
Date
Ranges

Fixed Rate Public/Private Notes (1)

  $5,002,664  3.85% - 7.57%  5.65% 2008 - 2026

Floating Rate Public/Private Notes (1)

   649,708  (1)  6.15% 2009 - 2010

Fixed Rate Tax-Exempt Bonds

   111,390  4.75% - 5.20%  5.05% 2028 - 2029
         

Totals

  $5,763,762     
         

           
  Net  Interest Weighted Maturity
December 31, 2010 Principal  Rate Average Date
(Amounts are in thousands) Balance  Ranges Interest Rate Ranges
Fixed Rate Public/Private Notes (1) $4,375,860  3.85% - 7.57% 5.78% 2011 - 2026
Floating Rate Public/Private Notes (1)  809,320  (1) 1.72% 2011 - 2013
          
           
Totals $5,185,180       
          
           
  Net  Interest Weighted Maturity
December 31, 2009 Principal  Rate Average Date
(Amounts are in thousands) Balance  Ranges Interest Rate Ranges
Fixed Rate Public/Private Notes (1) $3,771,700  3.85% - 7.57% 5.93% 2011 - 2026
Floating Rate Public/Private Notes (1)  801,824  (1) 1.37% 2010 - 2013
Floating Rate Tax-Exempt Bonds  35,600  (2) 0.37% 2028
          
           
Totals $4,609,124       
          
(1) 

(1)    

At December 31, 2008, $150.02010 and 2009, $300.0 million in fair value interest rate swaps converts a portion of the $227.4$400.0 million face value 4.750%5.200% notes due June 15, 2009April 1, 2013 to a floating interest rate. At December 31, 2007, $150.0 million in fair value interest rate swaps converts 50% of the $300.0 million face value 4.750% notes due June 15, 2009 to a floating interest rate.

 

(2)

The floating interest rate is based on the 7-Day Securities Industry and Financial Markets Association (“SIFMA”) rate, which is the tax-exempt index equivalent of LIBOR. At December 31, 2008, theThe interest rate is 0.75%.

0.27% at December 31, 2009.

The Operating Partnership’s unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Operating Partnership was in compliance with its unsecured public debt covenants for both the years ended December 31, 20082010 and 2007.

As of February 5, 2009, an2009.

          An unlimited amount of equity and debt securities remains available for issuance by EQR and the Operating Partnership under effective shelf registration statements filed with the SEC. Most recently, EQR and the Operating Partnership filed a universal shelf registration statement for an unlimited amount of equity and debt securities that became automatically effective upon filing with the SEC in December 2008October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 21, 2011October 14, 2013 and does not contain a maximum issuance amount).

Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

During the year ended December 31, 2008,2010, the Operating Partnership:

Repurchased $72.6

Issued $600.0 million of itsten-year 4.75% fixed rate public notes due June 15, 2009in a public offering at a discount to paran all-in effective interest rate of approximately 1.0%5.09%, receiving net proceeds of $595.4 million before underwriting fees and recognized debt extinguishment gains of $0.7 million and wrote-off approximately $0.1 million of unamortized deferred financing costs;

other expenses.

Repurchased $101.4 million of its 3.85% convertible fixed rate public notes due August 15, 2026 at a discount to par of approximately 17.7% and recognized debt extinguishment gains of $18.0 million and wrote-off approximately $0.8 million of unamortized deferred financing costs; and

Repaid $130.0 million of fixed rate private notes at maturity.

During the year ended December 31, 2007,2009, the Operating Partnership:

Issued $350.0 million of five-year 5.50% fixed rate public notes, receiving net proceeds of $346.1 million;

Issued $650.0 million of ten-year 5.75% fixed rate public notes, receiving net proceeds of $640.6 million;

Obtained a three-year $500.0 million floating rate term loan (see below);

Repaid $150.0 million of fixed-rate public notes at maturity; andF-28


Repaid $4.3 million of other unsecured notes.

Repurchased at par $105.2 million of its 4.75% fixed rate public notes due June 15, 2009 pursuant to a cash tender offer announced on January 16, 2009 and wrote-off approximately $79,000 of unamortized deferred financing costs and approximately $46,000 of unamortized discounts on notes payable;
Repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity;
Repurchased at par $185.2 million of its 6.95% fixed rate public notes due March 2, 2011 pursuant to a cash tender offer announced on January 16, 2009 and wrote-off approximately $0.4 million of unamortized deferred financing costs and approximately $1.0 million of unamortized discounts on notes payable;
Repurchased $21.7 million of its 6.95% fixed rate public notes due March 2, 2011 at a price of 106% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $1.3 million and wrote-off approximately $0.2 million of unamortized net premiums on notes payable;
Repurchased $146.1 million of its 6.625% fixed rate public notes due March 15, 2012 at a price of 108% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $11.7 million and wrote-off approximately $0.3 million of unamortized deferred financing costs and approximately $0.2 million of unamortized net discounts on notes payable;
Repurchased $127.9 million of its 5.50% fixed rate public notes due October 1, 2012 at a price of 107% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $9.0 million and wrote-off approximately $0.5 million of unamortized deferred financing costs and approximately $0.4 million of unamortized discounts on notes payable;
Repurchased $75.8 million of its 5.20% fixed rate tax-exempt notes and wrote-off approximately $0.7 million of unamortized deferred financing costs;
Repurchased $17.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 at a price of 88.4% of par and recognized a gain on early debt extinguishment of $2.0 million and wrote-off approximately $0.1 million of unamortized deferred financing costs and approximately $0.8 million of unamortized discounts on notes payable; and
Repurchased at par $48.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 pursuant to a cash tender offer announced on December 2, 2009 and wrote-off approximately $0.3 million of unamortized deferred financing costs and approximately $1.5 million of unamortized discounts on notes payable.

On October 11, 2007, the Operating Partnership closed on a $500.0 million senior unsecured term loan. The loan matures on October 5,Effective April 12, 2010, subject tothe Operating Partnership exercised the first of its two one-year extension optionsoptions. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Operating Partnership. The Operating Partnership has the ability to increase available borrowings by an additional $250.0 million under certain circumstances. Advances under theThe loan bearbears interest at variable rates based upon LIBOR plus a spread (currently 0.50%) dependent upon the current credit rating on the Operating Partnership’s long-term senior unsecured debt. EQR has guaranteed the Operating Partnership’s term loan up to the maximum amount and for the full term of the loan.

On August 23, 2006, the Operating Partnership issued $650.0 million of exchangeable senior notes that mature on August 15, 2026. Following the repurchases discussed above, theThe notes hadhave a current face value of $548.6$482.5 million at December 31, 2008. The notes2010 and bear interest at a fixed rate of 3.85%. The notes are exchangeable into EQR Common Shares, at the option of the holders, under specific circumstances or on or after August 15, 2025, at an initial and current exchange rate of 16.3934 shares per $1,000 principal amount of notes (equivalent to an initial and current exchange price of $61.00 per share). The initial exchange rate is subject to adjustment in certain circumstances, including upon an increase in EQR’s dividend rate.rate at the time of issuance. Upon an exchange of the notes, the Operating Partnership will settle any amounts up to the principal amount of the notes in cash and the remaining exchange value, if any, will be settled, at the Operating Partnership’s option, in cash, EQR Common Shares or a combination of both.

See Note 2 for more information on the change in the recognition of interest expense for the exchangeable senior notes.

On or after August 18, 2011, the Operating Partnership may redeem the notes at a redemption price equal to the principal amount of the notes plus any accrued and unpaid interest thereon. Upon notice of redemption by the Operating Partnership, the holders may elect to exercise their exchange rights. In addition, on August 18, 2011, August 15, 2016 and August 15, 2021 or following the occurrence of certain change in control transactions prior to August 18, 2011, note holders may require the Operating Partnership to repurchase the notes for an amount equal to the principal amount of the notes plus any accrued and unpaid interest thereon.

Note holders may also require an exchange of the notes should the closing sale price of EQR Common Shares exceed 130% of the exchange price for a certain period of time or should the trading price on the notes be less than 98% of the product of the closing sales price of EQR Common Shares multiplied by the applicable exchange rate for a certain period of time.

Aggregate payments of principal on unsecured notes payable for each of the next five years and thereafter are as follows (amounts in thousands):

F-29


        Year        

      Total (1)    
2009    $227,580
            2010        (2)   498,782
            2011        (3)   841,816
2012   748,578
2013   398,986
Thereafter   2,748,574
    
Total    $    5,464,316
    

       
Year   Total (1) 
2011 (2) (3)  $1,068,891 
2012    474,221 
2013    407,849 
2014    498,576 
2015    298,700 
Thereafter    2,436,943 
      
Total   $5,185,180 
      
(1) 

(1)    

Principal payments on unsecured notes include amortization of any discounts or premiums related to the notes. Premiums and discounts are amortized over the life of the unsecured notes.

 

(2) ��  

Includes the Operating Partnership’s $500.0 million term loan facility, which maturesoriginally matured on October 5, 2010. Effective April 12, 2010, subject tothe Operating Partnership exercised the first of its two one-year extension optionsoptions. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Operating Partnership.

 

(3)

Includes $548.6$482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026.

10.

Lines of Credit

10. Lines of Credit
The Operating Partnership has a $1.5$1.425 billion (net of $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing) unsecured revolving credit facility maturing on February 28, 2012, with the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods plus a spread (currently 0.50%) dependent upon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR has guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility.

During the year ended December 31, 2008, one of the providers of the Operating Partnership’s unsecured revolving credit facility declared bankruptcy. Under the existing terms of the credit facility, the provider’s share is up to $75.0 million of potential borrowings. As a result, the Operating Partnership’s borrowing capacity under the unsecured revolving credit facility has in essence been permanently reduced to $1.425 billion of potential borrowings. The obligation to fund by all of the other providers has not changed.

On April 1, 2005, the Operating Partnership obtained a three-year $1.0 billion unsecured revolving credit facility maturing on May 29, 2008. Advances under the credit facility bore interest at variable rates based upon LIBOR at various interest periods plus a spread dependent upon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility. This credit facility was repaid in full and terminated on February 28, 2007. The Operating Partnership recorded $0.4 million of write-offs of unamortized deferred financing costs as additional interest in connection with this termination.

On May 7, 2007, the Operating Partnership obtained a one-year $500.0 million unsecured revolving credit facility maturing on May 5, 2008. Advances under this facility bore interest at variable rates based on LIBOR at various interest periods plus a spread dependent upon the Operating Partnership’s credit rating. EQR guaranteed this credit facility up to the maximum amount and for its full term. This credit facility was repaid in full and terminated on June 4, 2007.

As of December 31, 2008,2010, the amount available on the credit facility was $1.29$1.28 billion (net of $130.0$147.3 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above) and there was no amount outstanding. During the year ended December 31, 2010, the weighted average interest rate was 0.66%. As of December 31, 2009, the amount available on the credit facility was $1.37 billion (net of $56.7 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). As of December 31, 2007, $139.0 million wasThe Operating Partnership did not draw and had no balance outstanding and $80.8 million was restricted/dedicated to support letters ofon its revolving credit and not available for borrowing onfacility at any time during the credit facilities. During the yearsyear ended December 31, 20082009.
11. Derivative and 2007,Other Fair Value Instruments
          The valuation of financial instruments requires the weighted averageOperating Partnership to make estimates and judgments that affect the fair value of the instruments. The Operating Partnership, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Operating Partnership bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.
          The carrying values of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $4.8 billion and $5.2 billion, respectively, at December 31, 2010. The fair values of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $4.7 billion and $5.5 billion, respectively, at December 31, 2010. The carrying values of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $4.8 billion and $4.6 billion, respectively, at December 31, 2009. The fair values of the Operating Partnership’s mortgage notes payable and unsecured notes were approximately $4.6 billion and $4.7 billion, respectively, at December 31, 2009. The fair values of the Operating Partnership’s financial instruments (other than mortgage notes payable, unsecured notes, derivative instruments and investment securities) including cash and cash equivalents and other financial instruments, approximate their carrying or contract values.
          In the normal course of business, the Operating Partnership is exposed to the effect of interest rates were 4.31%rate changes. The Operating Partnership seeks to manage these risks by following established risk management policies and 5.68%, respectively.

11.

Derivative and Other Fair Value Instruments

procedures including the use of derivatives to hedge interest rate risk on debt instruments.

The following table summarizes the Operating Partnership’s consolidated derivative instruments at December 31, 20082010 (dollar amounts are in thousands):

F-30


  Fair Value
   Hedges (1)  
      Development    
Cash Flow
Hedges (2)
 

Current Notional Balance

   $        385,693    $    262,912 

Lowest Possible Notional

   $385,693    $48,126 

Highest Possible Notional

   $387,694    $375,008 

Lowest Interest Rate

  3.245%  4.059%

Highest Interest Rate

  4.800%  6.000%

Earliest Maturity Date

  2009   2009 

Latest Maturity Date

  2012   2011 

Estimated Asset (Liability) Fair Value

   $6,802    $(6,821)

             
      Forward  Development 
  Fair Value  Starting  Cash Flow 
  Hedges (1)  Swaps (2)  Hedges (3) 
Current Notional Balance $315,693  $950,000  $87,422 
Lowest Possible Notional $315,693  $950,000  $3,020 
Highest Possible Notional $317,694  $950,000  $91,343 
Lowest Interest Rate  2.009%  3.478%  4.059%
Highest Interest Rate  4.800%  4.695%  4.059%
Earliest Maturity Date  2012   2021   2011 
Latest Maturity Date  2013   2023   2011 
(1) 

(1)  

Fair Value Hedges Converts outstanding fixed rate debt to a floating interest rate.

 

(2)

Forward Starting Swaps — Designed to partially fix the interest rate in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations from 2012 through 2014, and $350.0 million, $400.0 million and $200.0 million are designated for 2011, 2012 and 2013 maturities, respectively.
(3)Development Cash Flow Hedges Converts outstanding floating rate debt to a fixed interest rate.

On

          The following tables provide the location of the Operating Partnership’s derivative instruments within the accompanying Consolidated Balance Sheets and their fair market values as of December 31, 2008,2010 and 2009, respectively (amounts in thousands):
             
  Asset Derivatives  Liability Derivatives 
  Balance Sheet     Balance Sheet   
December 31, 2010 Location Fair Value  Location Fair Value 
Derivatives designated as hedging instruments:            
Interest Rate Contracts:            
Fair Value Hedges Other assets $12,521  Other liabilities $ 
Forward Starting Swaps Other assets  3,276  Other liabilities  (37,756)
Development Cash Flow Hedges Other assets    Other liabilities  (1,322)
           
Total   $15,797    $(39,078)
           
             
  Asset Derivatives  Liability Derivatives 
  Balance Sheet     Balance Sheet   
December 31, 2009 Location Fair Value  Location Fair Value 
Derivatives designated as hedging instruments:            
Interest Rate Contracts:            
Fair Value Hedges Other assets $5,186  Other liabilities $ 
Forward Starting Swaps Other assets  23,630  Other liabilities   
Development Cash Flow Hedges Other assets    Other liabilities  (3,577)
           
Total   $28,816    $(3,577)
           
          The following tables provide a summary of the net derivative instruments were reported at theireffect of fair value as other liabilitieshedges on the Operating Partnership’s accompanying Consolidated Statements of approximately $6.8 millionOperations for the years ended December 31, 2010 and other assets2009, respectively (amounts in thousands):
               
  Location of Gain/(Loss) Amount of Gain/(Loss)    Income Statement Amount of Gain/(Loss) 
December 31, 2010 Recognized in Income Recognized in Income    Location of Hedged Recognized in Income 
Type of Fair Value Hedge on Derivative on Derivative  Hedged Item Item Gain/(Loss) on Hedged Item 
Derivatives designated as hedging instruments:              
Interest Rate Contracts:              
Interest Rate Swaps Interest expense $7,335  Fixed rate debt Interest expense $(7,335)
             
Total   $7,335      $(7,335)
             

F-31


               
  Location of Gain/(Loss) Amount of Gain/(Loss)    Income Statement Amount of Gain/(Loss) 
December 31, 2009 Recognized in Income Recognized in Income    Location of Hedged Recognized in Income 
Type of Fair Value Hedge on Derivative on Derivative  Hedged Item Item Gain/(Loss) on Hedged Item 
Derivatives designated as hedging instruments:              
Interest Rate Contracts:              
Interest Rate Swaps Interest expense $(1,167) Fixed rate debt Interest expense $1,167 
             
Total   $(1,167)     $1,167 
             
          The following tables provide a summary of $6.8 million.the effect of cash flow hedges on the Operating Partnership’s accompanying Consolidated Statements of Operations for the years ended December 31, 2010 and 2009, respectively (amounts in thousands):
                 
  Effective Portion  Ineffective Portion 
  Amount of  Location of Gain/(Loss) Amount of Gain/(Loss)  Location of Amount of Gain/(Loss) 
  Gain/(Loss)  Reclassified from Reclassified from  Gain/(Loss) Reclassified from 
December 31, 2010 Recognized in OCI  Accumulated OCI Accumulated OCI  Recognized in Income Accumulated OCI 
Type of Cash Flow Hedge on Derivative  into Income into Income  on Derivative into Income 
Derivatives designated as hedging instruments:                
Interest Rate Contracts:                
Forward Starting Swaps/Treasury Locks $(68,149) Interest expense $(3,338) N/A $ 
Development Interest Rate Swaps/Caps  2,255  Interest expense    N/A   
              
Total $(65,894)   $(3,338)   $ 
              
                 
  Effective Portion  Ineffective Portion 
  Amount of  Location of Gain/(Loss) Amount of Gain/(Loss)  Location of Amount of Gain/(Loss) 
  Gain/(Loss)  Reclassified from Reclassified from  Gain/(Loss) Reclassified from 
December 31, 2009 Recognized in OCI  Accumulated OCI Accumulated OCI  Recognized in Income Accumulated OCI 
Type of Cash Flow Hedge on Derivative  into Income into Income  on Derivative into Income 
Derivatives designated as hedging instruments:                
Interest Rate Contracts:                
Forward Starting Swaps/Treasury Locks $34,432  Interest expense $(3,724) N/A $ 
Development Interest Rate Swaps/Caps  3,244  Interest expense    N/A   
              
Total $37,676    $(3,724)   $ 
              
          As of December 31, 2008,2010 and 2009, there were approximately $37.6$58.3 million in deferred losses, net, included in accumulated other comprehensive loss.(loss) and $4.2 million in deferred gains, net, included in accumulated other comprehensive income, respectively, related to derivative instruments. Based on the estimated fair values of the net derivative instruments at December 31, 2008,2010, the Operating Partnership may recognize an estimated $9.5$5.6 million of accumulated other comprehensive loss(loss) as additional interest expense during the year ending December 31, 2009.

2011.

In February 2008,July 2010, the Operating Partnership paid approximately $13.2$10.0 million to terminate threesettle a forward starting swapsswap in conjunction with the issuance of a $500.0$600.0 million 11.5-year mortgage loan.of ten-year fixed rate public notes. The entire amount has beenwas deferred as a component of accumulated other comprehensive loss and will beis being recognized as an increase to interest expense over the term of the notes.
          In January 2009, the Operating Partnership received approximately $0.4 million to terminate a fair value hedge of interest rates in conjunction with the public tender of the Operating Partnership’s 4.75% fixed rate public notes due June 15, 2009. Approximately $0.2 million of the settlement received was deferred and recognized as a reduction of interest expense through the maturity on June 15, 2009.
          In April and May 2009, the Operating Partnership received approximately $10.8 million to terminate six treasury locks in conjunction with the issuance of a $500.0 million 11-year mortgage loan. The entire amount was deferred as a component of accumulated other comprehensive income and is recognized as a reduction of interest expense over the first ten years of the mortgage loan.

In November 2008, the Operating Partnership paid approximately $13.5 million to terminate six forward starting swaps in conjunction with the issuance of a $543.0 million 8-year mortgage loan. Approximately $13.1 million of the settlement payment has been deferred as a component of accumulated other comprehensive loss and will be recognized as an increase to interest expense over the life of the underlying hedged item.

In June 2007, the Operating Partnership received approximately $2.4 million to terminate five forward starting swaps in conjunction with the issuance of $650.0 million of ten-year unsecured notes. The majority of the $2.4 million has been deferred as a component of accumulated other comprehensive loss and will be recognized as a reduction of interest expense over the life of the unsecured notes.

During the year ended December 31, 2008,2009, the Operating Partnership invested in varioussold a majority of its investment securities, receiving proceeds of approximately $215.8 million, and recorded a $4.9 million realized gain on sale (specific identification) which is included in an effort to increase the amounts earned on the significant amount of unrestricted cash on hand throughout 2008.interest and other income. The following table setstables set forth the maturity, amortized cost, gross unrealized gains and losses, book/fair value and interest and other income of the various investment securities held as of December 31, 20082010 and 2009, respectively (amounts in thousands):

F-32


Security

  

Maturity

      Amortized    
Cost
      Unrealized    
Gains
  Book/
    Fair Value    
  Interest and
    Other Income    

Held-to-Maturity

          

FDIC-insured promissory notes

  

Less than one year

  $75,000  $-  $75,000  $21
                  

Total Held-to-Maturity

     75,000   -   75,000   21

Available-for-Sale

          

FDIC-insured certificates of deposit

  

Less than one year

   54,000   301   54,301   305

Other

  

Between one and five years or N/A

   28,001   1,531   29,532   638
                  

Total Available-for-Sale

     82,001   1,832   83,833   943
                  

Grand Total

      $    157,001    $    1,832  $158,833  $964
                  

SFAS No. 157 establishes a

                       
    Other Assets    
December 31, 2010   Amortized  Unrealized  Unrealized  Book/  Interest and 
Security Maturity Cost  Gains  Losses  Fair Value  Other Income 
Available-for-Sale                      
FDIC-insured certificates of deposit Less than one year $  $  $  $  $61 
Other N/A  675   519      1,194    
                  
                       
Total Available-for-Sale and Grand Total   $675  $519  $  $1,194  $61 
                  
                       
    Other Assets    
December 31, 2009   Amortized  Unrealized  Unrealized  Book/  Interest and 
Security Maturity Cost  Gains  Losses  Fair Value  Other Income 
Held-to-Maturity                      
FDIC-insured promissory notes Less than one year $  $  $  $  $458 
                  
                       
Total Held-to-Maturity                458 
                       
Available-for-Sale                      
FDIC-insured certificates of deposit Less than one year  25,000   93      25,093   491 
Other Between one and five years or N/A  675   370      1,045   7,754 
                  
                       
Total Available-for-Sale    25,675   463      26,138   8,245 
                       
                  
Grand Total   $25,675  $463  $  $26,138  $8,703 
                  
          A three-level valuation hierarchy exists for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 1 — Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 — Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Operating Partnership’s derivative positions are valued using models developed by the respective counterparty as well as models developed internally by the Operating Partnership that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data) and are classified within Level 2 of the valuation hierarchy. In addition, employee holdings other than EQR Common Shares within the supplemental executive retirement plan (the “SERP”) have a fair value of $44.3$58.1 million as of December 31, 20082010 and are included in other assets and other liabilities on the consolidated balance sheet. These SERP investments are valued using quoted market prices for identical assets and are classified within Level 1 of the valuation hierarchy.

The Operating Partnership’s investment securities are valued using quoted market prices or readily available market interest rate data. The quoted market prices are classified within Level 1 of the valuation hierarchy and the market interest rate data are classified within Level 2 of the valuation hierarchy. Redeemable Limited Partners are valued using the quoted market price of EQR Common Shares and are classified within Level 2 of the valuation hierarchy.
          The Operating Partnership’s real estate asset impairment charges were the result of an analysis of the parcels’ estimated fair value (determined using internally developed models that were based on market assumptions and comparable sales data) (Level 3) compared to their current capitalized carrying value. The market assumptions used as inputs to the Operating Partnership’s fair value model include construction costs, leasing assumptions, growth rates, discount rates, terminal capitalization rates and development yields, along with the Operating Partnership’s current plans for each individual asset. The Operating Partnership uses data on its existing portfolio of properties and its recent acquisition and development properties, as well as similar market data from third party sources, when available, in determining these inputs. The valuation techniques used to measure fair value is consistent with how similar assets were

F-33

12.


Earnings Per OP Unit

measured in prior periods. See Note 20 for further discussion.
12. Earnings Per Unit
The following tables set forth the computation of net income per OP Unit basic and net income OPper Unit diluted (amounts in thousands except per OP Unit amounts):

   Year Ended December 31, 
   2008  2007  2006 

Numerator for net income per OP Unit – basic and diluted:

    

Income from continuing operations

  $42,659  $70,933  $32,241 

Allocation to Preference Units

   (14,507)  (22,792)  (37,113)

Allocation to Preference Interests and Junior Preference Units

   (15)  (441)  (2,002)

Allocation to premium on redemption of Preference Units

   -   (6,154)  (3,965)

Allocation to premium on redemption of Preference Interests

   -   -   (684)
             

Income (loss) from continuing operations available to OP Units

   28,137   41,546   (11,523)

Discontinued operations, net

   404,376   984,295   1,115,863 
             

Numerator for net income per OP Unit – basic and diluted

  $  432,513  $  1,025,841  $  1,104,340 
             

Denominator for net income per OP Unit – basic and diluted:

    

Denominator for net income per OP Unit – basic

   287,631   298,392   310,452 

Effect of dilutive securities:

    

Dilution for OP Units issuable opon assumed exercise/vesting of EQR’s share options/restricted shares

   2,429   3,843   - 
             

Denominator for net income per OP Unit – diluted

   290,060   302,235   310,452 
             

Net income per OP Unit – basic

  $1.50  $3.44  $3.56 
             

Net income per OP Unit – diluted

  $1.49  $3.39  $3.56 
             

Net income per OP Unit – basic:

    

Income (loss) from continuing operations available to OP Units

  $0.098  $0.139  $(0.037)

Discontinued operations, net

   1.404   3.299   3.595 
             

Net income per OP Unit – basic

  $1.502  $3.438  $3.558 
             

Net income per OP Unit – diluted:

    

Income (loss) from continuing operations available to OP Units

  $0.097  $0.137  $(0.037)

Discontinued operations, net

   1.394   3.257   3.595 
             

Net income per OP Unit – diluted

  $1.491  $3.394  $3.558 
             

In accordance with SFAS No. 128, Earnings per Share, potential common shares issuable from the assumed exercise of EQR share options and the vesting of EQR restricted shares are automatically anti-dilutive and therefore excluded from the diluted earnings per OP Unit calculation as the Operating Partnership had a loss from continuing operations for the year ended December 31, 2006.

             
  Year Ended December 31, 
  2010  2009  2008 
Numerator for net income per Unit — basic and diluted (1):
            
(Loss) income from continuing operations $(19,844) $2,931  $(40,054)
Net loss (income) attributable to Noncontrolling Interests — Partially Owned Properties  726   558   (2,650)
Allocation to Preference Units  (14,368)  (14,479)  (14,507)
Allocation to Preference Interests and Junior Preference Units     (9)  (15)
          
             
(Loss) from continuing operations available to Units  (33,486)  (10,999)  (57,226)
Discontinued operations, net  315,827   379,098   476,467 
          
             
Numerator for net income per Unit — basic and diluted (1) $282,341  $368,099  $419,241 
          
             
Denominator for net income per Unit — basic and diluted (1)  296,527   289,167   287,631 
          
             
Net income per Unit — basic $0.95  $1.27  $1.46 
          
             
Net income per Unit — diluted $0.95  $1.27  $1.46 
          
             
Net income per Unit — basic:
            
(Loss) from continuing operations available to Units $(0.113) $(0.038) $(0.199)
Discontinued operations, net  1.065   1.309   1.655 
          
             
Net income per Unit — basic $0.952  $1.271  $1.456 
          
             
Net income per Unit — diluted (1):
            
(Loss) from continuing operations available to Units $(0.113) $(0.038) $(0.199)
Discontinued operations, net  1.065   1.309   1.655 
          
             
Net income per Unit — diluted $0.952  $1.271  $1.456 
          
             
Distributions declared per Unit outstanding $1.47  $1.64  $1.93 
          
(1)Potential Units issuable from the assumed exercise/vesting of EQR long-term compensation award shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a loss from continuing operations for the years ended December 31, 2010, 2009 and 2008, respectively.
Convertible preference interests/units that could be converted into 427,090, 652,534325,103, 402,501 and 1,163,908427,090 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the years ended December 31, 2008, 20072010, 2009 and 2006,2008, respectively, were outstanding but were not included in the computation of diluted earnings per OP Unit because the effects would be anti-dilutive. In addition, the effect of the Common Shares/OP Units that could ultimately be issued upon the conversion/exchange of the Operating Partnership’s $650.0 million ($548.6482.5 million outstanding at December 31, 2008)2010) exchangeable senior notes was not included in the computation of diluted earnings per OP Unit because the effects would be anti-dilutive.

For additional disclosures regarding the employee share options and restricted shares, see Notes 2 and 14.

13.

Discontinued Operations

13. Discontinued Operations
The Operating Partnership has presented separately as discontinued operations in all periods the results of operations for all consolidated assets disposed of on or after January 1, 2002 (the date of adoption of SFAS No. 144), all operations related to active condominium conversion properties effective upon their respective transfer into a TRS and all properties held for sale, if any.

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Operating Partnership owned such assets during each of the years ended December 31, 2008, 2007,2010, 2009 and 20062008 (amounts in thousands).

F-34


   Year Ended December 31, 
   2008  2007  2006 

REVENUES

    

Rental income

  $45,708  $200,131  $461,802 
             

Total revenues

   45,708   200,131   461,802 
             

EXPENSES (1)

    

Property and maintenance

   18,537   69,391   148,735 

Real estate taxes and insurance

   5,974   26,845   59,311 

Property management

   (62)  266   8,934 

Depreciation

   11,746   54,124   109,954 

General and administrative

   29   15   117 

Impairment

   -   -   351 
             

Total expenses

   36,224   150,641   327,402 
             

Discontinued operating income

   9,484   49,490   134,400 

Interest and other income

   224   221   1,758 

Interest (2):

    

Expense incurred, net

   (37)  (4,010)  (35,294)

Amortization of deferred financing costs

   -   (1,728)  (1,057)

Income and other tax benefit (expense)

   1,848   7,309   (3,547)
             

Discontinued operations

   11,519   51,282   96,260 

Net gain on sales of discontinued operations

   392,857   933,013   1,019,603 
             

Discontinued operations, net

    $    404,376    $    984,295    $    1,115,863 
             

             
  Year Ended December 31, 
  2010  2009  2008 
REVENUES
            
Rental income $67,670  $160,031  $261,924 
          
Total revenues  67,670   160,031   261,924 
          
             
EXPENSES (1)
            
Property and maintenance  18,659   49,088   75,079 
Real estate taxes and insurance  7,028   18,065   28,764 
Property management        (62)
Depreciation  16,770   41,104   66,625 
General and administrative  36   34   29 
          
Total expenses  42,493   108,291   170,435 
          
             
Discontinued operating income  25,177   51,740   91,489 
             
Interest and other income  497   120   427 
Other expenses     (1)   
Interest (2):            
Expense incurred, net  (7,722)  (8,660)  (10,093)
Amortization of deferred financing costs  (37)  (561)  (54)
Income and other tax (expense) benefit  (44)  1,161   1,841 
          
             
Discontinued operations  17,871   43,799   83,610 
Net gain on sales of discontinued operations  297,956   335,299   392,857 
          
             
Discontinued operations, net $315,827  $379,098  $476,467 
          
(1) 

(1)    

Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Operating Partnership’s period of ownership.

 

(2)

Includes only interest expense specific to secured mortgage notes payable for properties sold and/or held for sale.

For the properties sold during 2008 (excluding condominium conversion properties),2010, the investment in real estate, net of accumulated depreciation, balanceand the mortgage notes payable balances at December 31, 2007 was $470.8 million.

The net real estate basis of the Operating Partnership’s active condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Operating Partnership’s halted conversions as they are now held for use), which2009 were included in investment in real estate, net in the consolidated balance sheets, was $12.6$430.5 million and $24.1$89.4 million, at December 31, 2008 and 2007, respectively.

14.

Share Incentive Plans

14. Share Incentive Plans
Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Unitsunits to EQR on a one-for-one basis with the Operating Partnership receiving the net cash proceeds of such issuances.

On May 15, 2002, the shareholders of EQR approved the Company’s 2002 Share Incentive Plan. The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5% of the Company’s outstanding Common Shares calculated on a “fully diluted” basis and determined annually on the first day of each calendar year. As of January 1, 2009,2011, this amount equaled 21,740,453,22,785,696, of which 8,742,8165,395,739 shares were available for future issuance. No awards may be granted under the 2002 Share Incentive Plan, as restated, after February 20, 2012.

Pursuant to the 2002 Share Incentive Plan, as restated, and the Amended and Restated 1993 Share Option and Share Award Plan, as amended (collectively the “Share Incentive Plans”), officers, trustees and key employees of the Company may be granted share options to acquire Common Shares (“Options”) including non-qualified share options (“NQSOs”), incentive share options (“ISOs”) and share appreciation rights (“SARs”), or may be granted restricted or non-restricted shares, subject to conditions and restrictions as described in the Share Incentive Plans. Finally,In addition, each year prior to 2007, certain executive officers of the Company participateparticipated in the Company’s performance-based restricted share plan. Effective January 1, 2007, the Company elected to discontinue the award of performance-based award grants. Options,

SARs, restricted shares, and performance shares and LTIP Units (see discussion below) are sometimes collectively referred to herein as “Awards”.

The Options are generally granted at the fair market value of the Company’s Common Shares at the date of grant, vest in three equal installments over a three-year period, are exercisable upon vesting and expire ten years from the date of grant. The exercise price for all Options under the Share Incentive Plans is equal to the fair market value of the underlying Common Shares at the time the Option is granted. Options exercised result in new Common Shares being issued on the open market. The Amended and Restated 1993 Share Option and Share Award Plan, as amended, will terminate at such time as all

F-35


outstanding Awards have expired or have been exercised/vested. The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted. Any Options which had vested prior to such a termination would remain exercisable by the holder.

As to the restricted

          Restricted shares that have been awarded through December 31, 2008, these shares2010 generally vest three years from the award date. In addition, the Company’s unvested restricted shareholders have the same voting rights as any other Common Share holder. During the three-year period of restriction, the Company’s unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. As a result, dividends paid on unvested restricted shares are included as a component of retained earnings (deficit)(included in general partner’s capital) and have not been considered in reducing net income available to OP Units in a manner similar to the Operating Partnership’s preference unit dividends for the earnings per OP Unit calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.

In addition, each year priorDecember 2008, the Company’s 2002 Share Incentive Plan was amended to 2007, selected executiveallow for the issuance of long-term incentive plan units (“LTIP Units”) to officers of the Company received performance-based awards. Effective January 1, 2007,as an alternative to the Company’s restricted shares. LTIP Units are a class of partnership interests that under certain conditions, including vesting, are convertible by the holder into an equal number of OP Units, which are redeemable by the holder for EQR Common Shares on a one-for-one basis or the cash value of such shares at the option of the Operating Partnership. In connection with the February 2009 grant of long-term incentive compensation for services provided during 2008, officers of the Company has electedwere allowed to discontinuechoose, on a one-for-one basis, between restricted shares and LTIP Units. Similar to restricted shares, LTIP Units generally vest three years from the award date. In addition, LTIP Unit holders receive quarterly dividend payments on their LTIP Units at the same rate and on the same date as any other OP Unit holder. As a result, dividends paid on LTIP Units are included as a component of new performance-based award grants. The executive officersLimited Partners capital and have not been considered in reducing net income available to Units in a manner similar to the opportunity to earn in Common Shares an amount as little as 0% to as much as 225% of the target number of performance-based awards. The owners of performance-based awards have no right to vote, receiveOperating Partnership’s preference unit dividends or transfer the awards until Common Shares are issued in exchange for the awards. The number of Common Sharesearnings per Unit calculation. If employment is terminated prior to vesting, the executive officer actually receives onLTIP Units are generally canceled. An LTIP Unit will automatically convert to an OP Unit when the third anniversary of the grant date will depend on the excess, if any, by which the Company’s Average Annual Return (i.e., the average of the Common Share dividends declared during each year as a percentage of the Common Share price as of the first business day of the first performance year and the average percentage increase in funds from operations (“FFO”) for each calendar year on a per share basis over the prior year) for the three performance years exceeds the average of the 10-year Treasury Note interest rate as of the first business day in Januarycapital account of each performance year (the “T-Note Rate”LTIP Unit increases (“books-up”).

If the Company’s Average

  Less       Greater

Annual Return exceeds

  than       than

the T-Note Rate by:

  0.99% 1-1.99% 2% 3% 4% 5% 6% 7%

Then the executive officer will receive

         

Common Shares equal to

thetarget number of awards times

the following %:

  0% 50% 100% 115% 135% 165% 190% 225%

to a specified target. If the Company’s Average Annual Return exceedscapital target is not attained within ten years following the T-Note Rate by an amount which falls between anydate of issuance, the percentages in excess of the 2% threshold, the performance-based awardLTIP Unit will automatically be canceled and no compensation will be determined by extrapolation between the two percentages. Fifty percent of the Common Shares to which an executive officer may be entitled under the performance share grants will vest, subjectpayable to the executive’s continued employment with the Company, on the third anniversaryholder of the award (which will be the date the Common Shares are issued); twenty-five percent will vest on the fourth anniversary and the remaining twenty-five percent will vest on the fifth anniversary. The Common Shares will also fully vest upon the executive’s death, meeting of retirement criteria (see below for further discussion), disability or upon a change in control of the Company.

such canceled LTIP Unit.

EQR’s Share Incentive Plans provide for certain benefits upon retirement at or after age 62. As of November 4, 2008, but effective as of January 1, 2009, EQR changed the definition of retirement for employees (including all officers but not non-employee members of EQR’s Board of Trustees) under its Share Incentive Plans. For employees hired prior to January 1, 2009, retirement generally will mean the termination of employment (other than for cause): (i) on or after age 62; or (ii) prior to age 62 after meeting the requirements of the Rule of 70 (described below). For employees hired after January 1, 2009, retirement generally will mean the termination of employment (other than for cause) after meeting the requirements of the Rule of 70.

The Rule of 70 is met when an employee’s years of service with EQR (which must be at least 15 years) plus his or her age (which must be at least 55 years) on the date of termination equals or exceeds 70 years. In addition, the employee must give EQR at least 6 months’ advance written notice of his or her intention to retire and sign a release upon termination of employment, releasing EQR from customary claims and agreeing to ongoing non-competition and employee non-solicitation provisions. The following executive officers of EQR will become
          John Powers, Executive Vice President — Human Resources, became eligible for retirement in 2009 as he turned 62. Frederick C. Tuomi, President — Property Management, became eligible for retirement under the new definitionRule of retirement of employees70 in the next three years: Frederick C. Tuomi, President - Property Management – 2009;2009. Bruce C. Strohm, Executive Vice President and General Counsel, – 2010; andbecame eligible for retirement under the Rule of 70 in 2010. David J. Neithercut, Chief Executive Officer and President, will become eligible for retirement under the Rule of 70 in 2011.

For employees hired prior to January 1, 2009, who retire at or after age 62, such employee’s unvested restricted shares, LTIP Units and share options would immediately vest, and share options would continue to be exercisable for the balance of the applicable ten-year option period, as was provided under the Share Incentive Plans prior to the adoption of the Rule of 70. For all other employees (those hired after January 1, 2009 and those hired before such date who choose to retire prior to age 62), upon such retirement under the new Rule of 70 definition of retirement of employees, such employee’s unvested restricted shares, LTIP Units and share options would continue to vest per the original vesting schedule (subject to immediate vesting upon the occurrence of a subsequent change in control of EQR or the employee’s death), and options would continue to be exercisable for the balance of the applicable ten-year option period, subject to the employee’s compliance with the non-competition and employee non-solicitation provisions. If an employee violates these provisions after such retirement, all unvested restricted shares, unvested LTIP Units and unvested and vested share options at the time of the violation would be void, unless otherwise determined by the Compensation Committee of theEQR’s Board of Trustees of EQR.Trustees.

F-36


The following tables summarize compensation information regarding the performance shares, restricted shares, LTIP Units, share options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 2008, 20072010, 2009 and 20062008 (amounts in thousands):

   Year Ended December 31, 2008
   Compensation
Expense
  Compensation
Capitalized
  Compensation
Equity
  Dividends
Incurred

Performance shares

    $(8)   $-    $(8)   $-

Restricted shares

   15,761   1,517   17,278   2,175

Share options

   5,361   485   5,846   -

ESPP discount

   1,197   92   1,289   -
                

Total

    $                22,311    $                2,094    $                24,405    $                2,175
                
   Year Ended December 31, 2007
   Compensation
Expense
  Compensation
Capitalized
  Compensation
Equity
  Dividends
Incurred

Performance shares

    $1,278    $-    $1,278    $-

Restricted shares

   13,816   1,414   15,230   2,296

Share options

   4,922   423   5,345   -

ESPP discount

   1,615   86   1,701   -
                

Total

    $21,631    $1,923    $23,554    $2,296
                
   Year Ended December 31, 2006
   Compensation
Expense
  Compensation
Capitalized
  Compensation
Equity
  Dividends
Incurred

Performance shares

    $1,795    $-    $1,795    $-

Restricted shares

   13,923   1,021   14,944   2,437

Share options

   4,868   330   5,198   -

ESPP discount

   1,494   84   1,578   -
                

Total

    $22,080    $1,435    $23,515    $2,437
                

                 
  Year Ended December 31, 2010 
  Compensation  Compensation  Compensation  Dividends 
  Expense  Capitalized  Equity  Incurred 
Restricted shares $8,603  $1,178  $9,781  $1,334 
LTIP Units  2,334   190   2,524   138 
Share options  6,707   714   7,421    
ESPP discount  1,231   59   1,290    
             
Total $18,875  $2,141  $21,016  $1,472 
             
                 
  Year Ended December 31, 2009 
  Compensation  Compensation  Compensation  Dividends 
  Expense  Capitalized  Equity  Incurred 
Performance shares $103  $76  $179  $ 
Restricted shares  10,065   1,067   11,132   1,627 
LTIP Units  1,036   158   1,194   254 
Share options  5,458   538   5,996    
ESPP discount  1,181   122   1,303    
             
Total $17,843  $1,961  $19,804  $1,881 
             
                 
  Year Ended December 31, 2008 
  Compensation  Compensation  Compensation  Dividends 
  Expense  Capitalized  Equity  Incurred 
Performance shares $(8) $  $(8) $ 
Restricted shares  15,761   1,517   17,278   2,175 
Share options  5,361   485   5,846    
ESPP discount  1,197   92   1,289    
             
Total $22,311  $2,094  $24,405  $2,175 
             
Compensation expense is generally recognized for Awards as follows:

Restricted shares and share options – Straight-line method over the vesting period of the options or shares regardless of cliff or ratable vesting distinctions.

Performance shares – Accelerated method with each vesting tranche valued as a separate award, with a separate vesting date, consistent with the estimated value of the award at each period end.

Restricted shares, LTIP Units and share options — Straight-line method over the vesting period of the options or shares regardless of cliff or ratable vesting distinctions.
Performance shares — Accelerated method with each vesting tranche valued as a separate award, with a separate vesting date, consistent with the estimated value of the award at each period end.
ESPP discount — Immediately upon the purchase of common shares each quarter.

ESPP discount – Immediately upon the purchase of common shares each quarter.

In accordance with the applicable provisions of SFAS No. 123(R), the          The Company accelerates the recognition of compensation expense for all Awards for those individuals approaching or meeting the retirement age criteria discussed above. The total compensation expense related to Awards not yet vested at December 31, 20082010 is $19.6$19.5 million, which is expected to be recognized over a weighted average term of 1.31.5 years.

See Note 2 for additional information regarding the Company’s share-based compensation.

The table below summarizes the Award activity of the Share Incentive Plans for the three years ended December 31, 2008, 20072010, 2009 and 2006:2008:

F-37


   Common
Shares Subject
to Options
  Weighted
Average
Exercise Price
per Option
  Restricted
Shares
  Weighted
Average Fair
Value per
Restricted Share

Balance at December 31, 2005

            10,572,743                  $27.02            1,369,828                  $28.42

Awards granted (1)

  1,671,122                  $42.32            684,998                  $34.65

Awards exercised/vested (2) (3)

  (2,647,776)                 $26.58  (670,768)                 $21.63

Awards forfeited

  (162,760)                 $35.57  (81,301)                 $34.71

Awards expired

  (17,542)                 $26.09  -   -
              

Balance at December 31, 2006

  9,415,787                  $29.71            1,302,757                  $34.85

Awards granted (1)

  1,030,935                  $53.46            453,580                  $52.56

Awards exercised/vested (2) (3)

  (1,040,765)                 $27.00  (477,002)                 $31.78

Awards forfeited

  (166,585)                 $44.88  (101,147)                 $41.92

Awards expired

  (54,231)                 $36.45  -   -
              

Balance at December 31, 2007

  9,185,141                  $32.37            1,178,188                  $42.30

Awards granted (1)

  1,436,574                  $38.46            524,983                  $38.29

Awards exercised/vested (2) (3)

  (995,129)                 $24.75  (644,131)                 $35.99

Awards forfeited

  (113,786)                 $43.95  (63,029)                 $44.87

Awards expired

  (39,541)                 $35.91  -   -
              

Balance at December 31, 2008

  9,473,259                  $33.94            996,011                  $44.16
              

                         
      Weighted      Weighted      Weighted 
  Common  Average      Average Fair      Average Fair 
  Shares Subject  Exercise Price  Restricted  Value per  LTIP  Value per 
  to Options  per Option  Shares  Restricted Share  Units  LTIP Unit 
Balance at December 31, 2007  9,185,141  $32.37   1,178,188  $42.30         
Awards granted (1)  1,436,574  $38.46   524,983  $38.29         
Awards exercised/vested (2) (3)  (995,129) $24.75   (644,131) $35.99         
Awards forfeited  (113,786) $43.95   (63,029) $44.87         
Awards expired  (39,541) $35.91               
                     
                         
Balance at December 31, 2008  9,473,259  $33.94   996,011�� $44.16       
                         
Awards granted (1)  2,541,005  $23.08   362,997  $22.62   155,189  $21.11 
Awards exercised/vested (2) (3)  (422,713) $21.62   (340,362) $42.67       
Awards forfeited  (146,151) $30.07   (64,280) $35.28   (573) $21.11 
Awards expired  (95,650) $32.21             
                   
                         
Balance at December 31, 2009  11,349,750  $32.03   954,366  $37.10   154,616  $21.11 
                         
Awards granted (1)  1,436,115  $33.59   270,805  $34.85   94,096  $32.97 
Awards exercised/vested (2) (3)  (2,506,645) $28.68   (278,183) $52.25       
Awards forfeited  (76,275) $29.43   (35,038) $30.84   (1,204) $21.11 
Awards expired  (96,457) $42.69             
                   
Balance at December 31, 2010  10,106,488  $33.00   911,950  $32.05   247,508  $25.62 
                   
(1) 

(1)

The weighted average grant date fair value for Options granted during the years ended December 31, 2010, 2009 and 2008 2007was $6.18 per share, $3.38 per share and 2006 was $4.08 per share, $6.26 per share and $4.22 per share, respectively.

 

(2)

The aggregate intrinsic value of options exercised during the years ended December 31, 2010, 2009 and 2008 2007 and 2006 was $15.6$39.6 million, $13.7$2.8 million and $58.0$15.6 million, respectively. These values were calculated as the difference between the strike price of the underlying awards and the per share price at which each respective award was exercised.

 

(3)

The fair value of restricted shares vested during the years ended December 31, 2010, 2009 and 2008 2007was $9.1 million, $8.0 million and 2006 was $23.9 million, $25.5 million and $28.7 million, respectively.

The following table summarizes information regarding options outstanding and exercisable at December 31, 2008:

   Options Outstanding (1)  Options Exercisable (2)

Range of Exercise Prices

  Options  Weighted
Average
Remaining
Contractual
    Life in Years    
      Weighted    
Average
Exercise

Price
  Options  Weighted
Average
Exercise
Price

$16.05 to $21.40

  379,299  1.05  $21.05  379,299  $21.05

$21.41 to $26.75

  1,351,459  3.23  $24.24  1,351,459  $24.24

$26.76 to $32.10

  4,023,395  4.64  $29.55  4,023,395  $29.55

$32.11 to $37.45

  26,802  5.73  $32.57  25,573  $32.46

$37.46 to $42.80

  2,786,492  7.79  $40.39  1,332,138  $41.40

$42.81 to $48.15

  4,308  7.64  $45.21  3,992  $45.33

$48.16 to $53.50

  901,504  7.85  $53.50  406,488  $53.50
               

$16.05 to $53.50

  9,473,259  5.53  $33.94          7,522,344          $31.58
               

Vested and expected to vest as of December 31, 2008

          9,153,483          5.58          $33.68    
             

2010:
                     
  Options Outstanding (1)  Options Exercisable (2) 
      Weighted           
      Average  Weighted      Weighted 
      Remaining  Average      Average 
      Contractual  Exercise      Exercise 
Range of Exercise Prices Options  Life in Years  Price  Options  Price 
$21.40 to $26.75  2,974,937   6.18  $23.42   1,403,771  $23.82 
$26.76 to $32.10  2,478,594   3.09  $29.99   2,478,594  $29.99 
$32.11 to $37.45  1,374,888   9.01  $32.96   23,546  $32.23 
$37.46 to $42.80  2,363,450   5.87  $40.44   2,023,316  $40.75 
$42.81 to $48.15  4,202   5.32  $45.25   4,202  $45.25 
$48.16 to $53.50  910,417   6.09  $53.19   853,222  $53.50 
                
$21.40 to $53.50  10,106,488   5.73  $33.00   6,786,651  $34.89 
                
 
Vested and expected to vest as of December 31, 2010  9,718,763   5.69  $33.12         
                  
(1) 

(1)

The aggregate intrinsic value of both options outstanding and optionsthat are vested and expected to vest as of December 31, 20082010 is $14.9$184.3 million.

 

(2)

The aggregate intrinsic value and weighted average remaining contractual life in years of options exercisable as of December 31, 20082010 is $14.9$117.1 million and 4.84.4 years, respectively.

Note: The aggregate intrinsic values in Notes (1) and (2) above were both calculated as the excess, if any, between the Company’s closing share price of $29.82$51.95 per share on December 31, 20082010 and the strike price of the underlying awards.

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As of December 31, 20072009 and 2006, 7,000,2222008, 7,974,815 Options (with a weighted average exercise price of $28.45)$33.55) and 6,567,8687,522,344 Options (with a weighted average exercise price of $26.87)$31.58) were exercisable, respectively.

15.

Employee Plans

15.Employee Plans
The Company established an Employee Share Purchase Plan to provide each employee and EQR trustee the ability to annually acquire up to $100,000 of Common Shares of EQR. In 2003, EQR’s shareholders approved an increase in the aggregate number of Common Shares available under the ESPP to 7,000,000 (from 2,000,000). The Company has 3,885,7273,403,970 Common Shares available for purchase under the ESPP at December 31, 2008.2010. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter. The following table summarizes information regarding the Common Shares issued under the ESPP (the net proceeds noted below were contributed to the Operating Partnership in exchange for OP Units):

   Year Ended December 31,
   2008  2007  2006
   (Amounts in thousands except share and per share amounts)

Shares issued

  195,961  189,071  213,427

Issuance price ranges

  $23.51 – $37.61  $31.38 – $43.17  $35.43 – $43.30

Issuance proceeds

  $6,170  $7,165  $7,972

             
  Year Ended December 31, 
  2010  2009  2008 
  (Amounts in thousands except share and per share amounts) 
Shares issued  157,363   324,394   195,961 
Issuance price ranges $28.26 - $41.16  $14.21 – $24.84  $23.51 – $37.61 
Issuance proceeds $5,112  $5,292  $6,170 
The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria. The Operating Partnership, on behalf of the Company, matches dollar for dollar up to the first 3% of eligible compensation that a participant contributes to the 401(k) Plan. Participants are vested in the Company’s contributions over five years. The Operating Partnership recognized an expense in the amount of $3.8$4.0 million, $4.2$3.5 million and $2.3$3.8 million for the years ended December 31, 2010, 2009 and 2008, 2007 and 2006, respectively.

The Operating Partnership, on behalf of the Company, may also elect to make an annual discretionary profit-sharing contribution as a percentage of each individual employee’s eligible compensation under the 401(k) Plan. The Operating Partnership did not make a contribution for the yearyears ended December 31, 2010, 2009 and 2008 and as such, no expense was recognized. The Operating Partnership recognized an expense of approximately $1.5 million and $3.3 million for the years ended December 31, 2007 and 2006, respectively.

in these years.

The Company established a supplemental executive retirement plan (the “SERP”) to provide certain officers and EQR trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in EQR Common Shares, certain marketable securities that have been specifically approved and cash equivalents. The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Operating Partnership and carried on the Operating Partnership’s balance sheet, and the Company’s Common Shares held in the SERP are accounted for as a reduction to General Partner’s capital.

16.

         Distribution Reinvestment and Share Purchase Plan

16.Distribution Reinvestment and Share Purchase Plan
On November 3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 14,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the “DRIP Plan”). The registration statement was declared effective on November 25, 1997. The remaining shares available for issuance under the 1997 registration lapsed in December 2008.

On December 16, 2008, the Company filed with the SEC a Form S-3 Registration Statement to register 5,000,000 Common Shares under the DRIP Plan. The registration statement was automatically declared effective the same day and expires at the earlier of the date in which all 5,000,000 shares have been issued or December 15, 2011. The Company has 4,999,2544,905,736 Common Shares available for issuance under the DRIP Plan at December 31, 2008.

2010.

The DRIP Plan provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of investing cash distributions in additional Common Shares (which is referred to herein as the “Dividend Reinvestment – DRIP Plan”). Common Shares may also be purchased on a monthly basis with optional cash payments made by participants in the DRIP Plan and interested new investors, not currently shareholders of EQR, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the “Share Purchase – DRIP Plan”). Common Shares purchased under the DRIP Plan may, at the option of EQR, be directly issued by EQR or purchased by EQR’s transfer agent in the open market using participants’ funds. The net proceeds from any Common Share issuances are contributed to the Operating Partnership in exchange for OP Units.

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17.

         Transactions with Related Parties

17.Transactions with Related Parties
Pursuant to the terms of the partnership agreement for the Operating Partnership, the Operating Partnership is required to reimburse EQR for all expenses incurred by EQR in excess of income earned by EQR through its indirect 1% ownership of various entities. Amounts paid on behalf of EQR are reflected in the consolidated statements of operations as general and administrative expenses.

The Operating Partnership provided asset and property management services to certain related entities for properties not owned by the Operating Partnership.Partnership, which terminated in December 2008. Fees received for providing such services were approximately $0.3 million $0.3 million and $0.3 million for the yearsyear ended December 31, 2008, 2007 and 2006, respectively.

2008.

The Operating Partnership leases its corporate headquarters from an entity controlled by EQR’s Chairman of the Board of Trustees. The lease terminates on July 31, 2011.2021. Amounts incurred for such office space for the years ended December 31, 2008, 20072010, 2009 and 2006,2008, respectively, were approximately $2.9$2.7 million, $2.9$3.0 million and $2.8$2.9 million. The Operating Partnership believes these amounts equal market rates for such rental space.

18.

         Commitments and Contingencies

18.Commitments and Contingencies
The Operating Partnership, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Operating Partnership with existing laws has not had a material adverse effect on the Operating Partnership. However, the Operating Partnership cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future.

The Operating Partnership is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Operating Partnership designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys’ fees. The Operating Partnership believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Operating Partnership. Accordingly, the Operating Partnership is defending the suit vigorously. Due to the pendency of the Operating Partnership’s defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit and asor a result,possible loss or a range of loss, and no amounts have been accrued at December 31, 2008.2010. While no assurances can be given, the Operating Partnership does not believe that the suit, if adversely determined, would have a material adverse effect on the Operating Partnership.

The Operating Partnership does not believe there is any other litigation pending or threatened against it that, individually or in the aggregate, may reasonably may be expected to have a material adverse effect on the Operating Partnership.

The Operating Partnership has established a reserve and recorded a corresponding reduction to its net gain on sales of discontinued operations related to potential liabilities associated with its condominium conversion activities. The reserve covers potential product liability related to each conversion. The Operating Partnership periodically assesses the adequacy of the reserve and makes adjustments as necessary. During the year ended December 31, 2008,2010, the Operating Partnership recorded additional reserves of approximately $0.3$0.7 million, for current projects and $3.2 million for various projects sold prior to 2008 and paid approximately $0.6$2.9 million in settlements.claims, settlements and legal fees and released approximately $1.2 million of remaining reserves for settled claims. As a result, the Operating Partnership had total reserves of approximately $10.3$3.3 million at December 31, 2008.2010. While no assurances can be given, the Operating Partnership does not believe that the ultimate resolution of these potential liabilities, if adversely determined, would have a material adverse effect on the Operating Partnership.

As of December 31, 2008,2010, the Operating Partnership has 10four projects totaling 3,568717 apartment units in various stages of development with estimated completion dates ranging through JuneSeptember 30, 2011.2012, as well as other completed development projects that are in various stages of lease up or are stabilized. Some of the projects are developed solely by the Operating Partnership, while others arewere co-developed with various third party development partners. The development venture agreements with partners are primarily deal-specific, with differing terms regarding profit-sharing, equity contributions, returns on investment, buy-sell agreements and other customary provisions. The partner is most often the “general” or “managing” partner of the development venture. The typical buy-sell arrangements contain appraisal rights and provisions that provide the right, but not the obligation, for the Operating Partnership to acquire the partner’s interest in the project at fair market value upon the expiration of a negotiated time period (typically two to five years after substantial completion of the project). However, the buy-sell provisions with one partner covering three projects does require the Operating Partnership to purchase the partner’s interest in the projects at fair market value five years following the receipt of the final certificate of occupancy on the last developed property (in Q1 2009). The ultimate payment to the partner is estimated to approximate $3.0 million.

During the years ended December 31, 2008, 20072010, 2009 and 2006,2008, total operating lease payments incurred for office

F-40


space, including a portion of real estate taxes, insurance, repairs and utilities, and including rent due under twothree ground leases, aggregated $7.6 million, $8.4 million and $8.3 million, $7.6 million and $6.9 million, respectively.

The Company has entered into a retirement benefits agreement with its Chairman of the Board of Trustees and deferred compensation agreements with its former chief operating officerVice Chairman and two former chief executive officers. During the years ended December 31, 2010 and 2009, the Operating Partnership recognized compensation expense of $0.9 million and $1.2 million, respectively, related to these agreements. During the year ended December 31, 2008, the Operating Partnership reduced compensation expense by $0.4 million related to these agreements. During the years ended December 31, 2007 and 2006, the Operating Partnership recognized compensation expense of $0.7 million and $1.1 million, respectively, related to these agreements.

The following table summarizes the Operating Partnership’s contractual obligations for minimum rent payments under operating leases and deferred compensation for the next five years and thereafter as of December 31, 2008:

Payments Due by Year (in thousands)

       2009          2010          2011          2012          2013          Thereafter          Total    

Operating Leases:

              

Minimum Rent Payments (a)

  $6,047  $5,530  $3,582  $1,273  $1,101  $58,553  $76,086

Other Long-Term Liabilities:

              

Deferred Compensation (b)

   1,456   1,457   2,062   2,062   1,464   11,376   19,877

2010:
                             
  Payments Due by Year (in thousands)
  2011 2012 2013 2014 2015 Thereafter Total
Operating Leases:                            
Minimum Rent Payments (a) $5,478  $4,285  $4,431  $4,736  $4,729  $320,928  $344,587 
Other Long-Term Liabilities:                            
Deferred Compensation (b)  1,457   1,770   1,485   1,677   1,677   9,182   17,248 
(a) 

(a)  

Minimum basic rent due for various office space the Operating Partnership leases and fixed base rent due on ground leases for three properties.

four properties/parcels.
 

(b)

Estimated payments to EQR’s Chairman, Vice Chairman and two former CEO’s and its former chief operating officer based on planned retirement dates.

19.

        Impairment

During the year ended December 31, 2008, the Operating Partnership recorded approximately $116.4 million of asset impairment charges on land held for development related to five potential development projects that will no longer be pursued. Following the guidance in SFAS No. 144, this charge was the result of an analysis of each parcel’s estimated fair value (determined using internally developed models based on market assumptions and comparable sales data) compared to its current capitalized carrying value, including pursuit costs and management’s decision to reduce the number of planned development projects the Operating Partnership will undertake. In addition, the Operating Partnership incurred impairment losses of $5.7 million, $1.7 million and $4.4 million for the years ended December 31, 2008, 2007 and 2006, respectively, related to the write-off of various pursuit and out-of-pocket costs for terminated acquisition, disposition (including halted condominium conversions) and development transactions.

During the year ended December 31, 2006, the Operating Partnership recorded approximately $30.0 million of asset impairment charges related to its write-down of the entire carrying value of the goodwill on its corporate housing business. Following the guidance in SFAS No. 142, this charge was the result of the continued poor operating performance of the corporate housing business and management’s expectations for future performance.

20.

        Reportable Segments

19.Reportable Segments
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by senior management. Senior management decides how resources are allocated and assesses performance on a monthly basis.

The Operating Partnership’s primary business is owning, managingthe acquisition, development and operatingmanagement of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. Senior management evaluates the performance of each of our apartment communities individually and geographically, and both on a same store and non-same store basis; however, each of our apartment communities generally has similar economic characteristics, residents, products and services. The Operating Partnership’s operating segments have been aggregated by geography in a manner identical to that which is provided to its chief operating decision maker.

The Operating Partnership’s fee and asset management, development (including FIN No. 46its partially owned properties), condominium conversion and corporate housing (Equity Corporate Housing or “ECH”) activities are immaterial and do not individually meet the threshold requirements of a reportable segment as provided for in SFAS No. 131 and as such, have been aggregated in the “Other” segment in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Operating Partnership’s total revenues during the three years ended December 31, 2008, 2007,2010, 2009 or 2006.

2008.

The primary financial measure for the Operating Partnership’s rental real estate propertiessegment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense; 2) real estate taxes and insurance expense; and 3) property management expense (all as reflected in the accompanying consolidated statements of operations). The Operating Partnership believes that NOI is helpful to investors as a supplemental measure of theits operating performance of a real estate company because it is a direct measure of the actual operating results of the Operating Partnership’s apartment communities. Current year NOI is compared to prior year NOI and current year budgeted NOI as a measure of financial performance. The following tables present NOI for each segment from our

rental real estate specific to continuing operations for the years ended December 31, 2008, 20072010, 2009 and 2006,2008, respectively, as well as total assets for the years ended December 31, 20082010 and 2007,2009, respectively (amounts in thousands):

F-41


     Year Ended December 31, 2008
         Northeast            Northwest            Southeast            Southwest            Other (3)            Total    

Rental income:

                        

Same store (1)

    $521,817    $376,141    $379,999    $461,047    $-    $1,739,004

Non-same store/other (2) (3)

     91,644     29,891     65,562     52,407     113,981     353,485
                                    

Total rental income

     613,461     406,032     445,561     513,454     113,981     2,092,489

Operating expenses:

                        

Same store (1)

     189,078     129,262     155,625     158,401     -     632,366

Non-same store/other (2) (3)

     36,890     12,698     26,847     27,418     100,676     204,529
                                    

Total operating expenses

     225,968     141,960     182,472     185,819     100,676     836,895

NOI:

                        

Same store (1)

     332,739     246,879     224,374     302,646     -     1,106,638

Non-same store/other (2) (3)

     54,754     17,193     38,715     24,989     13,305     148,956
                                    

Total NOI

    $387,493    $264,072    $263,089    $327,635    $13,305    $1,255,594
                                    

Total assets

    $4,852,278    $2,632,577    $3,028,737    $3,187,144    $2,834,374    $16,535,110
                                    

                         
  Year Ended December 31, 2010 
  Northeast  Northwest  Southeast  Southwest  Other (3)  Total 
Rental income:                        
Same store (1) $574,147  $353,123  $383,475  $417,523  $  $1,728,268 
Non-same store/other (2) (3)  112,747   18,042   9,271   33,456   84,259   257,775 
                   
Total rental income  686,894   371,165   392,746   450,979   84,259   1,986,043 
                         
Operating expenses:                        
Same store (1)  215,365   132,331   157,518   149,449      654,663 
Non-same store/other (2) (3)  54,780   7,950   4,126   15,136   69,823   151,815 
                   
Total operating expenses  270,145   140,281   161,644   164,585   69,823   806,478 
                         
NOI:                        
Same store (1)  358,782   220,792   225,957   268,074      1,073,605 
Non-same store/other (2) (3)  57,967   10,092   5,145   18,320   14,436   105,960 
                   
Total NOI $416,749  $230,884  $231,102  $286,394  $14,436  $1,179,565 
                   
                         
Total assets $6,211,534  $2,665,707  $2,602,318  $3,240,170  $1,464,465  $16,184,194 
                   
(1)Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold, which represented 112,042 apartment units.
 

(1) 

(2)

Same store includes properties owned for all of both 2008 and 2007 which represented 115,051 units.

 

(2) 

Non-same store primarily includes properties acquired after January 1, 2007.

2009, plus any properties in lease-up and not stabilized as of January 1, 2009.
 

(3)

Other includes ECH, development, condominium conversion overhead of $0.6 million and other corporate operations. Also reflects a $10.5 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.
                         
  Year Ended December 31, 2009 
  Northeast  Northwest  Southeast  Southwest  Other (3)  Total 
Rental income:                        
Same store (1) $566,518  $357,502  $383,239  $423,076  $  $1,730,335 
Non-same store/other (2) (3)  23,195   2,010   4,268   16,985   69,364   115,822 
                   
Total rental income  589,713   359,512   387,507   440,061   69,364   1,846,157 
                         
Operating expenses:                        
Same store (1)  211,352   129,696   158,977   148,483      648,508 
Non-same store/other (2) (3)  12,798   1,851   1,727   9,418   68,692   94,486 
                   
Total operating expenses  224,150   131,547   160,704   157,901   68,692   742,994 
                         
NOI:                        
Same store (1)  355,166   227,806   224,262   274,593      1,081,827 
Non-same store/other (2) (3)  10,397   159   2,541   7,567   672   21,336 
                   
Total NOI $365,563  $227,965  $226,803  $282,160  $672  $1,103,163 
                   
                         
Total assets $5,435,072  $2,474,775  $2,674,499  $2,971,396  $1,861,773  $15,417,515 
                   
(1)Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold, which represented 112,042 apartment units.
(2)Non-same store primarily includes properties acquired after January 1, 2009, plus any properties in lease-up and not stabilized as of January 1, 2009.
(3)Other includes ECH, development, condominium conversion overhead of $1.4 million and other corporate operations. Also reflects a $9.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

F-42


                         
  Year Ended December 31, 2008 
  Northeast  Northwest  Southeast  Southwest  Other (3)  Total 
Rental income:                        
Same store (1) $553,712  $372,197  $407,871  $444,403  $  $1,778,183 
Non-same store/other (2) (3)  37,000   18,347   6,090   23,400   101,934   186,771 
Properties sold in 2010 (4)              (88,681)  (88,681)
                   
Total rental income  590,712   390,544   413,961   467,803   13,253   1,876,273 
                         
Operating expenses:                        
Same store (1)  199,673   128,448   166,022   150,980      645,123 
Non-same store/other (2) (3)  16,806   7,664   2,995   14,363   101,742   143,570 
Properties sold in 2010 (4)              (31,205)  (31,205)
                   
Total operating expenses  216,479   136,112   169,017   165,343   70,537   757,488 
                         
NOI:                        
Same store (1)  354,039   243,749   241,849   293,423      1,133,060 
Non-same store/other (2) (3)  20,194   10,683   3,095   9,037   192   43,201 
Properties sold in 2010 (4)              (57,476)  (57,476)
                   
Total NOI $374,233  $254,432  $244,944  $302,460  $(57,284) $1,118,785 
                   
(1)Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2008, less properties subsequently sold, which represented 113,598 apartment units.
(2)Non-same store primarily includes properties acquired after January 1, 2008, plus any properties in lease-up and not stabilized as of January 1, 2008.
(3)Other includes ECH, development, condominium conversion overhead of $2.8 million and other corporate operations. Also reflects a $13.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

     Year Ended December 31, 2007
         Northeast            Northwest            Southeast            Southwest            Other (3)            Total    

Rental income:

                        

Same store (1)

    $502,221    $351,925    $379,978    $451,072    $-    $1,685,196

Non-same store/other (2) (3)

     46,641     17,380     48,840     35,448     104,369     252,678
                                    

Total rental income

     548,862     369,305     428,818     486,520     104,369     1,937,874

Operating expenses:

                        

Same store (1)

     184,287     126,161     153,734     154,700     -     618,882

Non-same store/other (2) (3)

     22,656     7,222     19,133     19,730     101,111     169,852
                                    

Total operating expenses

     206,943     133,383     172,867     174,430     101,111     788,734

NOI:

                        

Same store (1)

     317,934     225,764     226,244     296,372     -     1,066,314

Non-same store/other (2) (3)

     23,985     10,158     29,707     15,718     3,258     82,826
                                    

Total NOI

    $341,919    $235,922    $255,951    $312,090    $3,258    $1,149,140
                                    

Total assets

    $4,745,316    $2,703,533    $3,046,598    $3,213,709    $1,980,621    $15,689,777
                                    

 

(1) 

(4)

Same store includes properties owned for all of both 2008 and 2007 which represented 115,051 units.

 

(2) 

Non-same store includes properties acquired after January 1, 2007.

(3) 

Other includes ECH, development, condominium conversion overhead of $4.8 million and other corporate operations. Also reflects a $16.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

   Year Ended December 31, 2006 
       Northeast            Northwest            Southeast            Southwest            Other (3)           Total     

Rental income:

                    

Same store (1)

  $449,608    $325,512    $354,441    $446,761    $-   $1,576,322 

Non-same store/other (2) (3)

   51,017     12,421     27,034     27,893     86,144    204,509 

Properties sold in 2008 (4)

   -     -     -     -     (87,391)   (87,391)
                                  

Total rental income

   500,625     337,933     381,475     474,654     (1,247)   1,693,440 

Operating expenses:

                    

Same store (1)

 �� 167,452     122,488     141,590     163,544     -    595,074 

Non-same store/other (2) (3)

   22,127     4,616     10,777     13,002     92,467    142,989 

Properties sold in 2008 (4)

   -     -     -     -     (37,296)   (37,296)
                                  

Total operating expenses

   189,579     127,104     152,367     176,546     55,171    700,767 

NOI:

                    

Same store (1)

   282,156     203,024     212,851     283,217     -    981,248 

Non-same store/other (2) (3)

   28,890     7,805     16,257     14,891     (6,323)   61,520 

Properties sold in 2008 (4)

   -     -     -     -     (50,095)   (50,095)
                                  

Total NOI

  $311,046    $210,829    $229,108    $298,108    $(56,418)  $992,673 
                                  

(1)  

Same store includes properties owned for all of both 2007 and 2006 which represented 115,857 units.

(2)  

Non-same store includes properties acquired after January 1, 2006.

(3)  

Other includes ECH, development, condominium conversion overhead of $5.9 million and other corporate operations. Also reflects a $15.8 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

(4)  

Reflects discontinued operations for properties sold during 2008.

2010.

Note: Markets included in the above geographic segments are as follows:

(a)

Northeast – New England (excluding Boston), Boston, New York Metro, DC Northern Virginia and Suburban Maryland.

(b)

Northwest – Central Valley, Denver, Portland, San Francisco Bay Area and Seattle/Tacoma.

(c)

Southeast – Atlanta, Jacksonville, Orlando, Raleigh/Durham, South Florida and Tampa.

(d)

Southwest – Albuquerque, Dallas/Ft. Worth, Inland Empire, Los Angeles, Minneapolis/St. Paul, Orange County, Phoenix and San Diego and Tulsa.

Diego.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the years ended December 31, 2010, 2009 and 2008, 2007 and 2006, respectively:

   Year Ended December 31, 
           2008                  2007                  2006         
   (Amounts in thousands) 

Rental income

  $2,092,489  $1,937,874  $1,693,440 

Property and maintenance expense

   (542,371)  (505,899)  (444,290)

Real estate taxes and insurance expense

   (217,461)  (195,359)  (160,299)

Property management expense

   (77,063)  (87,476)  (96,178)
             

Total operating expenses

   (836,895)  (788,734)  (700,767)
             

Net operating income

  $1,255,594  $1,149,140  $992,673 
             

respectively (amounts in thousands):
             
  Year Ended December 31, 
  2010  2009  2008 
Rental income $1,986,043  $1,846,157  $1,876,273 
Property and maintenance expense  (498,634)  (464,809)  (485,754)
Real estate taxes and insurance expense  (226,718)  (206,247)  (194,671)
Property management expense  (81,126)  (71,938)  (77,063)
          
Total operating expenses  (806,478)  (742,994)  (757,488)
          
Net operating income $1,179,565  $1,103,163  $1,118,785 
          
20.Subsequent Events/Other

21.

Subsequent Events/Other

Events
Subsequent to December 31, 2010, the Operating Partnership:
Acquired two apartment properties consisting of 521 apartment units for $137.1 million;
Sold two consolidated apartment properties consisting of 600 apartment units for $32.7 million;
Repaid $173.0 million in mortgage loans;
Issued 3.0 million Common Shares at an average price of $50.84 per share for total consideration of $154.5 million under EQR’s ATM share offering program; and
Increased its availability for issuance under EQR’s ATM share offering program to 10,000,000 

Subsequent EventsF-43

Subsequent


Common Shares.
Other
     During the year ended December 31, 2010, the Operating Partnership recorded a $45.4 million non-cash asset impairment charge on two parcels of land held for development as a result of changes in the Operating Partnership’s future plans for those parcels. The Operating Partnership now intends to sell one parcel in the near term and contemplates a joint venture structure for the other, necessitating this impairment charge. During the year ended December 31, 2009, the Operating Partnership recorded an $11.1 million non-cash asset impairment charge on a parcel of land held for development. During the year ended December 31, 2008, and through February 5, 2009, the Operating Partnership:

Sold three apartment properties consisting of 468 units for $31.9 million (excluding condominium units);

Repaid $37.0Partnership recorded $116.4 million of mortgage loans;non-cash asset impairment charges on land held for development related to five potential development projects that will no longer be pursued. These charges were the result of an analysis of each parcel’s estimated fair value (determined using internally developed models that were based on market assumptions and

comparable sales data) compared to its current capitalized carrying value. The market assumptions used as inputs to the Operating Partnership’s fair value model include construction costs, leasing assumptions, growth rates, discount rates, terminal capitalization rates and development yields, along with the Operating Partnership’s current plans for each individual asset. The Operating Partnership uses data on its existing portfolio of properties and its recent acquisition and development properties, as well as similar market data from third party sources, when available, in determining these inputs.

Completed a cash tender offer, accepting for repurchase $105.2 million principal amount of its 4.75% public notes due June 15, 2009 and $185.2 million principal amount of its 6.95% public notes due March 2, 2011.

Other

During the years ended December 31, 2010, 2009 and 2008, 2007the Operating Partnership incurred charges of $6.6 million, $1.7 million and 2006,$0.2 million, respectively, related to property acquisition costs, such as survey, title and legal fees, on the acquisition of operating properties and $5.3 million, $4.8 million and $5.6 million, respectively, related to the write-off of various pursuit and out-of-pocket costs for terminated acquisition, disposition and development transactions. These costs, totaling $11.9 million, $6.5 million and $5.8 million, respectively, are included in other expenses in the accompanying consolidated statements of operations.

     During the year ended December 31, 2008, the Operating Partnership recognized $0.7 million $0.3 million and $14.7 million, respectively, of forfeited deposits for various terminated transactions, which are included in interest and other income. During the year ended December 31, 2010, an arbitration panel awarded commissions, interest and costs in the amount of $1.7 million to the listing and marketing agent related to 38 potential condo sales at one of the Operating Partnership’s properties. In addition, during 20082010, 2009 and 2007,2008, the Operating Partnership received $1.7$5.2 million, $0.2 million and $4.1$1.7 million, respectively, for the settlement of litigation/insurance claims, which are included in interest and other income in the accompanying consolidated statements of operations.

During

     On July 16, 2010, a portion of the years ended December 31, 2008 and 2007, in addition to the amounts discussed below for EQR’s former Chief Financial Officer (“CFO”) andparking garage collapsed at one other former EQR executive vice president,of the Operating Partnership’s rental properties (Prospect Towers in Hackensack, New Jersey). The Operating Partnership estimates that the costs related to such collapse (both expensed and capitalized), including providing for residents’ interim needs, lost revenue and garage reconstruction, will be approximately $12.0 million, after insurance reimbursements of $8.0 million. Costs to rebuild the garage will be capitalized as incurred. Other costs, like those to accommodate displaced residents, lost revenue due to a portion of the property being temporarily unavailable for occupancy and legal costs, will reduce earnings as they are incurred. Generally, insurance proceeds will be recorded approximately $4.3as increases to earnings as they are received. An impairment charge of $1.3 million and $0.5 millionwas recognized to write-off the net book value of additional general and administrative expense, respectively, and $0.8 million and $1.6 million of additional property management expense, respectively, related primarily to cash severance for various employees.

the collapsed garage. During the year ended December 31, 2007, the Operating Partnership entered into resignation/release agreements with EQR’s former CFO and one other former EQR executive vice president. The Operating Partnership recorded approximately $3.4 million of additional general and administrative expense during the year ended December 31, 2007 related to cash severance and accelerated vesting of share options and restricted/performance shares.

The Operating Partnership recorded a reduction to general and administrative expense of approximately $1.7 million during the year ended December 31, 2007 due to the successful resolution of a certain lawsuit in Florida, resulting in the reversal of the majority of a previously established litigation reserve. The Operating Partnership had previously recorded a reduction to general and administrative expense of approximately $2.8 million during the year ended December 31, 2006 due to the recovery of insurance proceeds related to the same lawsuit.

During the year ended December 31, 2007,2010, the Operating Partnership received $1.2 million related to its 7.075% ownership interest in Wellsford Park Highlands Corporation (“WPHC”), an entity which owns a condominium development in Denver, Colorado. The Operating Partnership recorded a gain of approximately $0.7 million as income from investments in unconsolidated entities and has no further ownership interest in WPHC.

During the year ended December 31, 2006, the Operating Partnership received proceeds from technology and other investments of $4.0 million fromin insurance proceeds which fully offset the following, bothimpairment charge and partially offset expenses of which$5.5 million that were recorded as interestrelating to this loss and other incomeare included in real estate taxes and insurance on the accompanying consolidated statements of operations:

$3.7 million for its ownership interest in Rent.com in connection with the acquisition of Rent.com by eBay, Inc. and

operations.

$0.3 million as a partial distribution for its ownership interest in Constellation Real Technologies, LLC.

21.Quarterly Financial Data (Unaudited)

22.

        Quarterly Financial Data (Unaudited)

The following unaudited quarterly data has been prepared on the basis of a December 31 year-end. All amounts have also been restated in accordance with the guidance on discontinued operations provisions of SFAS No. 144 and reflect dispositions and/or properties held for sale through December 31, 2008.2010. Amounts are in thousands, except for per OP Unit amounts.

F-44

2008

  First
    Quarter    
3/31
     Second
    Quarter    
6/30
     Third
    Quarter    
9/30
     Fourth
    Quarter    
12/31
 

Total revenues (1)

  $507,405    $525,601    $536,853    $533,345 

Operating income (1)

   140,957     162,274     155,825     41,056 

Income (loss) from continuing operations (1)

   21,560     44,310     37,790     (61,001)

Discontinued operations, net (1)

   128,218     96,810     151,747     27,601 

Net income (loss) *

   149,778     141,120     189,537     (33,400)

Net income (loss) available to OP Units

   146,141     137,491     185,905     (37,024)

Earnings per OP Unit – basic:

              

Net income (loss) available to OP Units

  $0.51    $0.48    $0.65    $(0.13)

Weighted average OP Units outstanding

   287,079     287,440     287,743     288,251 

Earnings per OP Unit – diluted:

              

Net income (loss) available to OP Units

  $0.51    $0.47    $0.64    $(0.13)

Weighted average OP Units outstanding

   289,317     290,445     290,795     288,251 


                 
  First  Second  Third  Fourth 
  Quarter  Quarter  Quarter  Quarter 
2010 3/31  6/30  9/30  12/31 
Total revenues (1) $472,082  $494,541  $511,772  $517,124 
Operating income (1)  112,382   115,247   121,047   93,325 
(Loss) income from continuing operations (1)  (7,267)  4,714   14,930   (32,221)
Discontinued operations, net (1)  65,123   5,375   14,896   230,433 
Net income *  57,856   10,089   29,826   198,212 
Net income available to Units  54,486   6,656   26,397   194,802 
Earnings per Unit — basic:                
Net income available to Units $0.18  $0.02  $0.09  $0.65 
Weighted average Units outstanding  294,450   295,898   296,348   299,363 
Earnings per Unit — diluted:                
Net income available to Units $0.18  $0.02  $0.09  $0.65 
Weighted average Units outstanding  294,450   299,642   300,379   299,363 

(1)

(1)The amounts presented for the first three quarters of 20082010 are not equal to the same amounts previously reported in the respective Form 10-Q’s filed with the SEC for each period as a result of changes in discontinued operations due to additional property sales which occurred throughout 2008.2010. Below is a reconciliation to the amounts previously reported:

             
  First  Second  Third 
  Quarter  Quarter  Quarter 
2010 3/31  6/30  9/30 
Total revenues previously reported in Form 10-Q $488,690  $510,937  $527,356 
Total revenues subsequently reclassified to discontinued operations  (16,608)  (16,396)  (15,584)
          
Total revenues disclosed in Form 10-K $472,082  $494,541  $511,772 
          
             
Operating income previously reported in Form 10-Q $118,596  $121,529  $127,196 
Operating income subsequently reclassified to discontinued operations  (6,214)  (6,282)  (6,149)
          
Operating income disclosed in Form 10-K $112,382  $115,247  $121,047 
          
             
(Loss) income from continuing operations previously reported in Form 10-Q $(2,208) $9,406  $19,884 
Income from continuing operations subsequently reclassified to discontinued operations  (5,059)  (4,692)  (4,954)
          
(Loss) income from continuing operations disclosed in Form 10-K $(7,267) $4,714  $14,930 
          
             
Discontinued operations, net previously reported in Form 10-Q $60,064  $683  $9,942 
Discontinued operations, net from properties sold subsequent to the respective reporting period  5,059   4,692   4,954 
          
Discontinued operations, net disclosed in Form 10-K $65,123  $5,375  $14,896 
          
                 
  First  Second  Third  Fourth 
  Quarter  Quarter  Quarter  Quarter 
2009 3/31  6/30  9/30  12/31 
Total revenues (2) $466,177  $464,225  $464,827  $461,274 
Operating income (2)  126,283   120,661   122,703   126,954 
Income (loss) from continuing operations (2)  7,858   7,813   4,256   (16,996)
Discontinued operations, net (2)  77,563   98,119   139,109   64,307 
Net income *  85,421   105,932   143,365   47,311 
Net income available to Units  81,866   102,314   140,061   43,858 
Earnings per Unit — basic:                
Net income available to Units $0.28  $0.35  $0.48  $0.15 
Weighted average Units outstanding  288,710   288,990   289,262   289,693 
Earnings per Unit — diluted:                
Net income available to Units $0.28  $0.35  $0.48  $0.15 
Weighted average Units outstanding  288,853   289,338   290,215   289,693 

F-45

2008

  First
Quarter
3/31
     Second
Quarter
6/30
     Third
Quarter
9/30
 

Total revenues previously reported in Form 10-Q

  $522,812    $535,525    $538,319 

Total revenues subsequently reclassified to discontinued operations

   (15,407)    (9,924)    (1,466)
                 

Total revenues disclosed in Form 10-K

  $507,405    $525,601    $536,853 
                 

Operating income previously reported in Form 10-Q

  $146,847    $165,859    $156,570 

Operating income subsequently reclassified to discontinued operations

   (5,890)    (3,585)    (745)
                 

Operating income disclosed in Form 10-K

  $140,957    $162,274    $155,825 
                 

Income from continuing operations previously reported in Form 10-Q

  $27,546    $47,895    $38,496 

Income from continuing operations subsequently reclassified to discontinued operations

   (5,986)    (3,585)    (706)
                 

Income from continuing operations disclosed in Form 10-K

  $21,560    $44,310    $37,790 
                 

Discontinued operations, net previously reported in Form 10-Q

  $122,232    $93,225    $151,041 

Discontinued operations, net from properties sold subsequent to the respective reporting period

   5,986     3,585     706 
                 

Discontinued operations, net disclosed in Form 10-K

  $128,218    $96,810    $151,747 
                 


2007

  First
Quarter
3/31
     Second
Quarter
6/30
     Third
Quarter
9/30
     Fourth
Quarter
12/31

Total revenues (2)

  $460,763    $481,619    $499,658    $505,017

Operating income (2)

   116,318     132,946     137,949     151,915

Income from continuing operations (2)

   4,690     15,644     16,728     33,871

Discontinued operations, net (2)

   129,656     285,187     471,851     97,601

Net income *

   134,346     300,831     488,579     131,472

Net income available to OP Units

   126,699     293,204     478,115     127,823

Earnings per OP Unit – basic:

              

Net income available to OP Units

  $0.41    $0.97    $1.64    $0.44

Weighted average OP Units outstanding

   311,697     303,511     290,977     287,728

Earnings per OP Unit – diluted:

              

Net income available to OP Units

  $0.41    $0.95    $1.62    $0.44

Weighted average OP Units outstanding

   311,697     307,631     294,331     290,658

(2)

(2)The amounts presented for the four quarters of 20072009 are not equal to the same amounts previously reported in either the Form 8-K filed with the SEC on December 15, 2008 for each periodSeptember 14, 2010 (for the first, second and fourth quarters of 2009) or in the third quarter 2010 Form 10-Q filed with the SEC on November 4, 2010 (for the third quarter of 2009) primarily as a result of changes in discontinued operations due to additional property sales which occurred during the fourth quarter of 2008.throughout 2010. Below is a reconciliation to the amounts previously reported:

                 
  First  Second  Third  Fourth 
  Quarter  Quarter  Quarter  Quarter 
2009 3/31  6/30  9/30  12/31 
Total revenues previously reported in September 2010 Form 8-K/Form 10-Q $482,475  $480,333  $480,241  $477,365 
Total revenues subsequently reclassified to discontinued operations  (16,298)  (16,108)  (15,414)  (16,091)
             
Total revenues disclosed in Form 10-K $466,177  $464,225  $464,827  $461,274 
             
                 
Operating income previously reported in September 2010 Form 8-K/Form 10-Q $132,245  $126,944  $128,655  $133,239 
Operating income subsequently reclassified to discontinued operations  (5,962)  (6,283)  (5,952)  (6,285)
             
Operating income disclosed in Form 10-K $126,283  $120,661  $122,703  $126,954 
             
                 
Income (loss) from continuing operations previously reported in September 2010 Form 8-K/Form 10-Q $11,948  $12,339  $9,029  $(13,146)
Income from continuing operations subsequently reclassified to discontinued operations  (4,090)  (4,526)  (4,773)  (3,850)
             
Income (loss) from continuing operations disclosed in Form 10-K $7,858  $7,813  $4,256  $(16,996)
             
                 
Discontinued operations, net previously reported in September 2010 Form 8-K/Form 10-Q $73,473  $93,593  $134,336  $60,457 
Discontinued operations, net from properties sold subsequent to the respective reporting period  4,090   4,526   4,773   3,850 
             
Discontinued operations, net disclosed in Form 10-K $77,563  $98,119  $139,109  $64,307 
             
*The Operating Partnership did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2010 and 2009. Therefore, income before extraordinary items and cumulative effect of change in accounting principle is not shown as it was equal to the net income amounts disclosed above.

F-46

2007

  First
Quarter
3/31
  Second
Quarter
6/30
  Third
Quarter
9/30
  Fourth
Quarter
12/31
 

Total revenues previously reported in December 2008 Form 8-K

  $    462,557  $    483,319  $    501,102  $    506,460 

Total revenues subsequently reclassified to discontinued operations

   (1,794)  (1,700)  (1,444)  (1,443)
                 

Total revenues disclosed in Form 10-K

  $460,763  $481,619  $499,658  $505,017 
                 

Operating income previously reported in December 2008 Form 8-K

  $116,289  $133,373  $137,628  $151,959 

Operating income subsequently reclassified to discontinued operations

   (569)  (530)  (467)  (1,000)

Other

   598   103   788   956 
                 

Operating income disclosed in Form 10-K

  $116,318  $132,946  $137,949  $151,915 
                 

Income from continuing operations previously reported in December 2008 Form 8-K

  $5,260  $16,177  $17,175  $34,968 

Income from continuing operations subsequently reclassified to discontinued operations

   (570)  (533)  (447)  (1,097)
                 

Income from continuing operations disclosed in Form 10-K

  $4,690  $15,644  $16,728  $33,871 
                 

Discontinued operations, net previously reported in December 2008 Form 8-K

  $129,086  $284,654  $471,404  $96,504 

Discontinued operations, net from properties sold subsequent to the respective reporting period

   570   533   447   1,097 
                 

Discontinued operations, net disclosed in Form 10-K

  $129,656  $285,187  $471,851  $97,601 
                 

* The Operating Partnership did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2008 and 2007. Therefore, income before extraordinary items and cumulative effect of change in accounting principle is not shown as it was equal to the net income amounts disclosed above.


ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

Overall Summary


December 31, 2008
2010

                         
          Investment in Real  Accumulated  Investment in Real    
  Properties (H)  Units (H)  Estate, Gross  Depreciation  Estate, Net  Encumbrances 
 
Wholly Owned Unencumbered  288   80,239  $12,555,402,637  $(2,847,912,228) $9,707,490,409  $ 
Wholly Owned Encumbered  137   39,395   6,016,421,350   (1,346,626,508)  4,669,794,842   2,595,245,052 
Portfolio/Entity Encumbrances (1)                 1,417,683,780 
                   
Wholly Owned Properties
  425   119,634   18,571,823,987   (4,194,538,736)  14,377,285,251   4,012,928,832 
                         
Partially Owned Unencumbered        25,130,204      25,130,204    
Partially Owned Encumbered  24   5,232   1,105,416,801   (142,817,905)  962,598,896   749,967,053 
                   
Partially Owned Properties
  24   5,232   1,130,547,005   (142,817,905)  987,729,100   749,967,053 
                         
Total Unencumbered Properties  288   80,239   12,580,532,841   (2,847,912,228)  9,732,620,613    
Total Encumbered Properties  161   44,627   7,121,838,151   (1,489,444,413)  5,632,393,738   4,762,895,885 
                   
Total Consolidated Investment in Real Estate
  449   124,866  $19,702,370,992  $(4,337,356,641) $15,365,014,351  $4,762,895,885 
                   
(1)See attached Encumbrances Reconciliation.

S-1

       
   Properties
(H)
 Units (H) Investment in Real
Estate, Gross
 Accumulated
Depreciation
  Investment in Real
Estate, Net
 Encumbrances

Wholly Owned Unencumbered

 303 78,813 $10,680,108,067 $    (2,211,404,675) $8,468,703,392 $-    

Wholly Owned Encumbered

 174 48,189  6,316,596,571  (1,223,300,257)  5,093,296,314  2,114,902,657

Portfolio/Entity Encumbrances (1)

 -     -      -      -       -      1,884,355,798
                 

Wholly Owned Properties

 477 127,002  16,996,704,638  (3,434,704,932)  13,561,999,706  3,999,258,455

Partially Owned Unencumbered

 1 339  179,608,076  (9,342,384)  170,265,692  -    

Partially Owned Encumbered

 27 5,418  1,513,926,137  (117,252,852)  1,396,673,285  1,037,671,184
                 

Partially Owned Properties

 28 5,757  1,693,534,213  (126,595,236)  1,566,938,977  1,037,671,184

Total Unencumbered Properties

 304 79,152  10,859,716,143  (2,220,747,059)  8,638,969,084  -    

Total Encumbered Properties

 201 53,607  7,830,522,708  (1,340,553,109)  6,489,969,599  5,036,929,639
                 

Total Consolidated Investment in Real Estate

 505 132,759 $18,690,238,851 $    (3,561,300,168) $15,128,938,683 $    5,036,929,639
                 

(1) See attached Encumbrances Reconciliation.


ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


Encumbrances Reconciliation


December 31, 2008
2010

             
  Number of       
  Properties  See Properties    
Portfolio/Entity Encumbrances Encumbered by  With Note:  Amount 
EQR-Bond Partnership  6   I  $51,670,000 
EQR-Fanwell 2007 LP  7   J   223,138,000 
EQR-Wellfan 2008 LP (R)  15   K   550,000,000 
EQR-SOMBRA 2008 LP  18   L   543,000,000(1)
Other        49,875,780(1)
            
 
Portfolio/Entity Encumbrances
  46       1,417,683,780 
 
Individual Property Encumbrances
          3,345,212,105 
            
 
Total Encumbrances per Financial Statements
         $4,762,895,885 
            
(1)Temporary letters of credit supported by the Operating Partnership’s revolving credit facility and/or a temporary guaranty from the Operating Partnership were posted as collateral in place of sold properties. Property substitutions closed in January 2011 and the letters of credit and guaranty were terminated.

S-2

Portfolio/Entity Encumbrances

  Number of
Properties
        Encumbered by        
         See Properties        
With Note:
          Amount        

EQR-Bond Partnership

  10 I  $88,189,000

EQR-Codelle, LP

  8* J   110,106,335

EQR-FANCAP 2000A LP

  8* K   148,333,000

EQR-Fankey 2004 Ltd. Pship

  4 L   221,589,463

EQR-Fanwell 2007 LP

  7 M   223,138,000

EQR-Wellfan 2008 LP

  15 N   550,000,000

EQR-SOMBRA 2008 LP

  18* O   543,000,000
       

Portfolio/Entity Encumbrances

  70    1,884,355,798

Individual Property
Encumbrances

      3,152,573,841
       

Total Encumbrances per
Financial Statements

     $5,036,929,639
       

* Collateral also includes letters of credit supported by the Company’s revolving credit facility.


ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


(Amounts in thousands)

The changes in total real estate for the years ended December 31, 2008, 20072010, 2009 and 20062008 are as follows:
             
  2010  2009  2008 
Balance, beginning of year $18,465,144  $18,690,239  $18,333,350 
Acquisitions and development  1,789,948   512,977   995,026 
Improvements  141,199   125,965   172,165 
Dispositions and other  (693,920)  (864,037)  (810,302)
          
Balance, end of year $19,702,371  $18,465,144  $18,690,239 
          
The changes in accumulated depreciation for the years ended December 31, 2010, 2009 and 2008 are as follows:
             
  2010  2009  2008 
Balance, beginning of year $3,877,564  $3,561,300  $3,170,125 
Depreciation  673,403   600,375   602,908 
Dispositions and other  (213,610)  (284,111)  (211,733)
          
Balance, end of year $4,337,357  $3,877,564  $3,561,300 
          

S-3

   2008  2007  2006 

Balance, beginning of year

  $    18,333,350  $    17,235,175  $    16,590,370 

Acquisitions and development

   995,026   2,456,495   2,252,039 

Improvements

   172,165   260,371   265,832 

Dispositions and other

   (810,302)  (1,618,691)  (1,873,066)
             

Balance, end of year

  $    18,690,239  $  18,333,350  $    17,235,175 
             

 

The changes in accumulated depreciation for the years ended December 31, 2008, 2007, and 2006 are as follows:

 

  

   2008  2007  2006 

Balance, beginning of year

  $3,170,125  $3,022,480  $2,888,140 

Depreciation

   602,908   616,414   592,637 

Dispositions and other

   (211,733)  (468,769)  (458,297)
             

Balance, end of year

  $3,561,300  $3,170,125  $3,022,480 
             

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
ERPOP Wholly Owned Unencumbered:
                                                
500 West 23rd Street (fka 10 Chelsea) New York, NY (F)    $  $27,382,360  $  $  $  $27,382,360  $27,382,360  $  $27,382,360  $ 
1210 Mass Washington, D.C. (G) 2004  144   9,213,512   36,559,189      285,543   9,213,512   36,844,732   46,058,244   (7,702,999)  38,355,245    
1401 Joyce on Pentagon Row Arlington, VA 2004  326   9,780,000   89,680,000      163,567   9,780,000   89,843,567   99,623,567   (7,954,463)  91,669,104    
1660 Peachtree Atlanta, GA 1999  355   7,924,126   23,602,563      2,032,029   7,924,126   25,634,592   33,558,718   (7,213,204)  26,345,514    
2201 Pershing Drive Arlington, VA (F)     12,054,081   2,652,636         12,054,081   2,652,636   14,706,717      14,706,717    
2400 M St Washington, D.C. (G) 2006  359   30,006,593   114,013,785      732,059   30,006,593   114,745,844   144,752,437   (21,822,792)  122,929,645    
420 East 80th Street New York, NY 1961  155   39,277,000   23,026,984      2,501,381   39,277,000   25,528,365   64,805,365   (5,980,711)  58,824,654    
425 Mass Washington, D.C. (G) 2009  559   28,150,000   138,600,000      1,953,014   28,150,000   140,553,014   168,703,014   (4,494,218)  164,208,796    
600 Washington New York, NY (G) 2004  135   32,852,000   43,140,551      195,058   32,852,000   43,335,609   76,187,609   (9,485,348)  66,702,261    
70 Greene Jersey City, NJ (G) 2010  480   28,170,659   239,232,094      103,450   28,170,659   239,335,544   267,506,203   (6,599,249)  260,906,954    
71 Broadway New York, NY (G) 1997  238   22,611,600   77,492,171      2,960,860   22,611,600   80,453,031   103,064,631   (17,989,358)  85,075,273    
777 Sixth New York, NY (G) 2002  294   65,352,706   65,747,294      282,143   65,352,706   66,029,437   131,382,143   (8,432,644)  122,949,499    
Abington Glen Abington, MA 1968  90   553,105   3,697,396      2,359,072   553,105   6,056,468   6,609,573   (2,794,784)  3,814,789    
Acacia Creek Scottsdale, AZ 1988-1994  304   3,663,473   21,172,386      2,814,423   3,663,473   23,986,809   27,650,282   (11,190,829)  16,459,453    
Arden Villas Orlando, FL 1999  336   5,500,000   28,600,796      3,182,624   5,500,000   31,783,420   37,283,420   (8,171,582)  29,111,838    
Arlington at Perimeter Center Atlanta, GA 1980  204   2,448,000   8,099,110      114,675   2,448,000   8,213,785   10,661,785   (1,300,791)  9,360,994    
Ashton, The Corona Hills, CA 1986  492   2,594,264   33,042,398      5,966,954   2,594,264   39,009,352   41,603,616   (18,806,334)  22,797,282    
Audubon Village Tampa, FL 1990  447   3,576,000   26,121,909      4,114,611   3,576,000   30,236,520   33,812,520   (13,268,213)  20,544,307    
Auvers Village Orlando, FL 1991  480   3,808,823   29,322,243      6,216,049   3,808,823   35,538,292   39,347,115   (15,974,356)  23,372,759    
Avenue Royale Jacksonville, FL 2001  200   5,000,000   17,785,388      917,456   5,000,000   18,702,844   23,702,844   (4,583,891)  19,118,953    
Avon Place, LLC Avon, CT 1973  163   1,788,943   12,440,003      1,531,391   1,788,943   13,971,394   15,760,337   (4,990,349)  10,769,988    
Ball Park Lofts Denver, CO (G) 2003  343   5,481,556   51,658,740      2,708,015   5,481,556   54,366,755   59,848,311   (12,931,360)  46,916,951    
Barrington Place Oviedo, FL 1998  233   6,990,000   15,740,825      2,533,678   6,990,000   18,274,503   25,264,503   (6,000,104)  19,264,399    
Bay Hill Long Beach, CA 2002  160   7,600,000   27,437,239      740,325   7,600,000   28,177,564   35,777,564   (7,029,980)  28,747,584    
Bella Terra I Mukilteo, WA (G) 2002  235   5,686,861   26,070,540      667,419   5,686,861   26,737,959   32,424,820   (7,277,028)  25,147,792    
Bella Vista Phoenix, AZ 1995  248   2,978,879   20,641,333      3,393,449   2,978,879   24,034,782   27,013,661   (11,641,771)  15,371,890    
Bella Vista I, II, III Combined Woodland Hills, CA 2003-2007  579   31,682,754   121,095,785      1,390,256   31,682,754   122,486,041   154,168,795   (23,933,139)  130,235,656    
Belle Arts Condominium Homes, LLC Bellevue, WA 2000  1   63,158   248,929      (5,320)  63,158   243,609   306,767      306,767    
Beneva Place Sarasota, FL 1986  192   1,344,000   9,665,447      1,728,604   1,344,000   11,394,051   12,738,051   (5,284,608)  7,453,443    
Berkeley Land Berkeley, CA (F)     13,908,910   801,101         13,908,910   801,101   14,710,011      14,710,011    
Bermuda Cove Jacksonville, FL 1989  350   1,503,000   19,561,896      4,556,127   1,503,000   24,118,023   25,621,023   (11,324,915)  14,296,108    
Bishop Park Winter Park, FL 1991  324   2,592,000   17,990,436      3,646,274   2,592,000   21,636,710   24,228,710   (10,340,427)  13,888,283    
Bradford Apartments Newington, CT 1964  64   401,091   2,681,210      579,531   401,091   3,260,741   3,661,832   (1,301,744)  2,360,088    
Briar Knoll Apts Vernon, CT 1986  150   928,972   6,209,988      1,274,495   928,972   7,484,483   8,413,455   (3,030,004)  5,383,451    
Bridford Lakes II Greensboro, NC (F)     1,100,564   792,509         1,100,564   792,509   1,893,073      1,893,073    
Bridgewater at Wells Crossing Orange Park, FL 1986  288   2,160,000   13,347,549      2,010,434   2,160,000   15,357,983   17,517,983   (6,560,719)  10,957,264    
Brookside (MD) Frederick, MD 1993  228   2,736,000   7,934,069      2,157,009   2,736,000   10,091,078   12,827,078   (4,847,243)  7,979,835    
Brookside II (MD) Frederick, MD 1979  204   2,450,800   6,913,202      2,622,214   2,450,800   9,535,416   11,986,216   (4,965,160)  7,021,056    
Camellero Scottsdale, AZ 1979  348   1,924,900   17,324,593      5,445,971   1,924,900   22,770,564   24,695,464   (13,879,083)  10,816,381    
Carlyle Mill Alexandria, VA 2002  317   10,000,000   51,367,913      3,585,927   10,000,000   54,953,840   64,953,840   (15,384,028)  49,569,812    
Center Pointe Beaverton, OR 1996  264   3,421,535   15,708,853      2,605,275   3,421,535   18,314,128   21,735,663   (7,023,656)  14,712,007    
Centre Club Ontario, CA 1994  312   5,616,000   23,485,891      2,576,818   5,616,000   26,062,709   31,678,709   (9,857,007)  21,821,702    
Centre Club II Ontario, CA 2002  100   1,820,000   9,528,898      539,590   1,820,000   10,068,488   11,888,488   (3,186,170)  8,702,318    
Chandler Court Chandler, AZ 1987  316   1,353,100   12,175,173      4,308,670   1,353,100   16,483,843   17,836,943   (9,303,425)  8,533,518    
Chandlers Bay Kent, WA 1989  293   3,700,000   18,962,585      69,473   3,700,000   19,032,058   22,732,058   (2,175,442)  20,556,616    
Chatelaine Park Duluth, GA 1995  303   1,818,000   24,489,671      1,974,089   1,818,000   26,463,760   28,281,760   (11,447,801)  16,833,959    
Chesapeake Glen Apts (fka Greentree I, II & III) Glen Burnie, MD 1973  796   8,993,411   27,301,052      20,936,090   8,993,411   48,237,142   57,230,553   (22,479,872)  34,750,681    
Chestnut Hills Puyallup, WA 1991  157   756,300   6,806,635      1,360,272   756,300   8,166,907   8,923,207   (4,244,605)  4,678,602    
Chickasaw Crossing Orlando, FL 1986  292   2,044,000   12,366,832      1,786,050   2,044,000   14,152,882   16,196,882   (6,515,656)  9,681,226    
Chinatown Gateway Los Angeles, CA (F)     14,791,831   11,026,473         14,791,831   11,026,473   25,818,304      25,818,304    
Citrus Falls Tampa, FL 2003  273   8,190,000   28,894,280      381,158   8,190,000   29,275,438   37,465,438   (5,939,746)  31,525,692    
City View (GA) Atlanta, GA (G) 2003  202   6,440,800   19,993,460      1,256,448   6,440,800   21,249,908   27,690,708   (5,161,465)  22,529,243    
Clarys Crossing Columbia, MD 1984  198   891,000   15,489,721      1,986,718   891,000   17,476,439   18,367,439   (8,016,743)  10,350,696    
Cleo, The Los Angeles, CA 1989  92   6,615,467   14,829,335      3,663,066   6,615,467   18,492,401   25,107,868   (3,530,065)  21,577,803    
Club at Tanasbourne Hillsboro, OR 1990  352   3,521,300   16,257,934      3,046,161   3,521,300   19,304,095   22,825,395   (9,895,369)  12,930,026    
Club at the Green Beaverton, OR 1991  254   2,030,950   12,616,747      2,526,289   2,030,950   15,143,036   17,173,986   (7,815,215)  9,358,771    
Coconut Palm Club Coconut Creek, GA 1992  300   3,001,700   17,678,928      2,525,679   3,001,700   20,204,607   23,206,307   (9,321,082)  13,885,225    
Cortona at Dana Park Mesa, AZ 1986  222   2,028,939   12,466,128      2,413,182   2,028,939   14,879,310   16,908,249   (7,286,220)  9,622,029    
Country Gables Beaverton, OR 1991  288   1,580,500   14,215,444      3,412,313   1,580,500   17,627,757   19,208,257   (9,537,809)  9,670,448    
Cove at Boynton Beach I Boynton Beach, FL 1996  252   12,600,000   31,469,651      2,779,931   12,600,000   34,249,582   46,849,582   (9,526,032)  37,323,550    
Cove at Boynton Beach II Boynton Beach, FL 1998  296   14,800,000   37,874,719         14,800,000   37,874,719   52,674,719   (10,138,327)  42,536,392    
Cove at Fishers Landing Vancouver, WA 1993  253   2,277,000   15,656,887      1,152,551   2,277,000   16,809,438   19,086,438   (5,710,162)  13,376,276    
Creekside Village Mountlake Terrace, WA 1987  512   2,807,600   25,270,594      4,629,268   2,807,600   29,899,862   32,707,462   (17,364,294)  15,343,168    
Crosswinds St. Petersburg, FL 1986  208   1,561,200   5,756,822      2,155,601   1,561,200   7,912,423   9,473,623   (4,270,769)  5,202,854    
Crown Court Scottsdale, AZ 1987  416   3,156,600   28,414,599      7,093,468   3,156,600   35,508,067   38,664,667   (17,536,796)  21,127,871    
Crowntree Lakes Orlando, FL 2008  352   12,009,630   44,407,977      128,840   12,009,630   44,536,817   56,546,447   (5,032,304)  51,514,143    
Cypress Lake at Waterford Orlando, FL 2001  316   7,000,000   27,654,816      1,474,998   7,000,000   29,129,814   36,129,814   (7,889,517)  28,240,297    
Dartmouth Woods Lakewood, CO 1990  201   1,609,800   10,832,754      1,964,282   1,609,800   12,797,036   14,406,836   (6,455,552)  7,951,284    
Dean Estates Taunton, MA 1984  58   498,080   3,329,560      622,827   498,080   3,952,387   4,450,467   (1,678,930)  2,771,537    
Deerwood (Corona) Corona, CA 1992  316   4,742,200   20,272,892      3,818,931   4,742,200   24,091,823   28,834,023   (11,726,867)  17,107,156    
Defoor Village Atlanta, GA 1997  156   2,966,400   10,570,210      1,990,444   2,966,400   12,560,654   15,527,054   (5,858,484)  9,668,570    

S-4

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
               

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances

ERPOP Wholly Owned Unencumbered:

 

          

1210 Mass

  

Washington, D.C.
(G)

 2004 144  $9,213,512  $36,559,189  $-  $153,329  $9,213,512  $36,712,518  $45,926,030  $(5,067,866) $40,858,165  $-

1660 Peachtree

  

Atlanta, GA

 1999 355   7,924,126   23,602,563   -   1,712,518   7,924,126   25,315,081   33,239,207   (5,129,965)  28,109,242   -

2300 Elliott

  

Seattle, WA

 1992 92   796,800   7,173,725   -   4,937,617   796,800   12,111,342   12,908,142   (6,946,085)  5,962,057   -

2400 M St

  

Washington, D.C.
(G)

 2006 359   30,006,593   113,763,785   -   508,240   30,006,593   114,272,025   144,278,618   (12,469,372)  131,809,247   -

420 East 80th
Street

  

New York, NY

 1961 155   39,277,000   23,026,984   -   1,651,277   39,277,000   24,678,261   63,955,261   (3,295,856)  60,659,405   -

600 Washington

  

New York, NY
(G)

 2004 135   32,852,000   43,140,551   -   118,083   32,852,000   43,258,634   76,110,634   (6,046,770)  70,063,863   -

70 Greene

  

Jersey City, NJ

 (F) -   28,170,659   167,955,344   -   -       28,170,659   167,955,344   196,126,003   -       196,126,003   -

71 Broadway

  

New York, NY
(G)

 1997 238   22,611,600   77,492,171   -   1,207,324   22,611,600   78,699,495   101,311,095   (12,305,450)  89,005,645   -

Abington Glen

  

Abington, MA

 1968 90   553,105   3,697,396   -   2,195,843   553,105   5,893,239   6,446,344   (2,043,182)  4,403,163   -

Acacia Creek

  

Scottsdale, AZ

 1988-1994 304   3,663,473   21,172,386   -   2,280,640   3,663,473   23,453,026   27,116,499   (9,338,430)  17,778,069   -

Agliano

  

Tampa, FL

 (F) -   5,000,000   -   -   -       5,000,000   -       5,000,000   -       5,000,000   -

Arrington Place
Condominium
Homes, LLC

  

Issaquah, WA

 1988 63   2,858,404   7,055,079   -   2,297,065   2,858,404   9,352,144   12,210,548   -       12,210,548   -

Ashley Park at
Brier Creek

  

Raleigh, NC

 2002 374   5,610,000   31,467,489   -   2,062,154   5,610,000   33,529,643   39,139,643   (5,693,533)  33,446,110   -

Ashton, The

  

Corona Hills, CA

 1986 492   2,594,264   33,042,398   -   5,355,182   2,594,264   38,397,579   40,991,843   (15,506,897)  25,484,946   -

Aspen Crossing

  

Silver Spring,
MD

 1979 192   2,880,000   8,551,377   -   2,978,084   2,880,000   11,529,462   14,409,462   (4,897,777)  9,511,684   -

Audubon Village

  

Tampa, FL

 1990 447   3,576,000   26,121,909   -   2,920,077   3,576,000   29,041,985   32,617,985   (10,788,907)  21,829,079   -

Autumn River

  

Raleigh, NC

 2002 284   3,408,000   20,890,457   -   866,640   3,408,000   21,757,096   25,165,096   (4,551,675)  20,613,422   -

Auvers Village

  

Orlando, FL

 1991 480   3,838,927   29,322,243   -   5,499,427   3,838,927   34,821,670   38,660,597   (12,822,706)  25,837,891   -

Avenue Royale

  

Jacksonville, FL

 2001 200   5,000,000   17,785,388   -   618,454   5,000,000   18,403,842   23,403,842   (3,030,994)  20,372,847   -

Avon Place

  

Avon, CT

 1973 163   1,788,943   12,440,003   -   1,390,965   1,788,943   13,830,968   15,619,911   (4,090,688)  11,529,223   -

Azure Creek

  

Phoenix, AZ

 2001 160   8,778,000   17,840,790   -   594,260   8,778,000   18,435,051   27,213,051   (2,761,366)  24,451,685   -

Barrington Place

  

Oviedo, FL

 1998 233   6,990,000   15,740,825   -   2,344,835   6,990,000   18,085,660   25,075,660   (3,368,801)  21,706,859   -

Bay Ridge

  

San Pedro, CA

 1987 60   2,401,300   2,176,963   -   705,068   2,401,300   2,882,032   5,283,332   (1,329,734)  3,953,598   -

Bayside at the
Islands

  

Gilbert, AZ

 1989 272   3,306,484   15,573,006   -   2,504,474   3,306,484   18,077,480   21,383,964   (7,536,121)  13,847,843   -

Bella Vista

  

Phoenix, AZ

 1995 248   2,978,879   20,641,333   -   3,207,452   2,978,879   23,848,785   26,827,664   (9,313,554)  17,514,110   -

Bella Vista
Apartments at
Boca del Mar

  

Boca Raton, FL

 1985 392   11,760,000   20,190,252   -   8,219,963   11,760,000   28,410,215   40,170,215   (9,753,092)  30,417,124   -

Bella Vista I, II, III
Combined

  

Woodland Hills,
CA

 2003-2007 579   31,682,754   121,068,370   -   987,809   31,682,754   122,056,179   153,738,933   (15,009,651)  138,729,282   -

Belle Arts
Condominium
Homes, LLC

  

Bellevue, WA

 2000 1   63,158   248,929   -   (5,541)  63,158   243,387   306,545   -   306,545   -

Bellevue Meadows

  

Bellevue, WA

 1983 180   4,507,100   12,574,814   -   3,833,002   4,507,100   16,407,816   20,914,916   (5,737,411)  15,177,505   -

Beneva Place

  

Sarasota, FL

 1986 192   1,344,000   9,665,447   -   1,523,021   1,344,000   11,188,468   12,532,468   (4,306,341)  8,226,127   -

Bermuda Cove

  

Jacksonville, FL

 1989 350   1,503,000   19,561,896   -   4,076,735   1,503,000   23,638,631   25,141,631   (9,157,733)  15,983,898   -

Bishop Park

  

Winter Park, FL

 1991 324   2,592,000   17,990,436   -   3,190,324   2,592,000   21,180,760   23,772,760   (8,625,382)  15,147,378   -

Bradford Apartments

  

Newington, CT

 1964 64   401,091   2,681,210   -   457,064   401,091   3,138,274   3,539,365   (1,017,170)  2,522,195   -

Brentwood

  

Vancouver, WA

 1990 296   1,357,221   12,202,521   -   2,420,695   1,357,221   14,623,216   15,980,438   (7,424,760)  8,555,678   -

Bridford Lakes II

  

Greensboro, NC

 (F) -   1,100,564   792,509   -   -       1,100,564   792,509   1,893,073   -   1,893,073   -

Bridgewater at
Wells Crossing

  

Orange Park, FL

 1986 288   2,160,000   13,347,549   -   1,678,270   2,160,000   15,025,818   17,185,818   (5,269,173)  11,916,646   -

Brookside (CO)

  

Boulder, CO

 1993 144   3,600,400   10,211,159   -   785,665   3,600,400   10,996,824   14,597,224   (4,199,023)  10,398,201   -

Brookside II (MD)

  

Frederick, MD

 1979 204   2,450,800   6,913,202   -   2,286,724   2,450,800   9,199,927   11,650,727   (4,035,109)  7,615,618   -

Brooksyde Apts

  

West Hartford,
CT

 1945 80   594,711   3,975,523   -   574,724   594,711   4,550,246   5,144,957   (1,460,762)  3,684,195   -

Cambridge Estates

  

Norwich, CT

 1977 92   588,206   3,945,265   -   556,023   588,206   4,501,287   5,089,493   (1,442,358)  3,647,135   -

Camellero

  

Scottsdale, AZ

 1979 348   1,924,900   17,324,593   -   5,116,214   1,924,900   22,440,807   24,365,707   (12,225,789)  12,139,918   -

Canyon Crest

  

Santa Clarita, CA

 1993 158   2,370,000   10,141,878   -   2,042,078   2,370,000   12,183,956   14,553,956   (4,425,890)  10,128,067   -

Canyon Ridge

  

San Diego, CA

 1989 162   4,869,448   11,955,064   -   1,553,475   4,869,448   13,508,539   18,377,987   (5,430,932)  12,947,055   -

Carlyle

  

Dallas, TX

 1993 180   1,890,000   14,155,000   -   922,841   1,890,000   15,077,841   16,967,841   (3,507,110)  13,460,731   -

Carlyle Mill

  

Alexandria, VA

 2002 317   10,000,000   51,367,913   -   3,324,534   10,000,000   54,692,448   64,692,448   (11,248,531)  53,443,917   -

Casa Capricorn

  

San Diego, CA

 1981 192   1,262,700   11,365,093   -   3,158,945   1,262,700   14,524,038   15,786,738   (6,635,341)  9,151,397   -

Casa Ruiz

  

San Diego, CA

 1976-1986 196   3,922,400   9,389,153   -   3,094,434   3,922,400   12,483,588   16,405,988   (5,459,641)  10,946,346   -

Cascade at
Landmark

  

Alexandria, VA

 1990 277   3,603,400   19,657,554   -   4,916,100   3,603,400   24,573,654   28,177,054   (10,403,738)  17,773,316   -

Center Pointe

  

Beaverton, OR

 1996 264   3,421,535   15,708,853   -   2,387,768   3,421,535   18,096,621   21,518,156   (5,479,396)  16,038,759   -

Centre Club

  

Ontario, CA

 1994 312   5,616,000   23,485,891   -   2,123,845   5,616,000   25,609,736   31,225,736   (7,815,929)  23,409,807   -

Centre Club II

  

Ontario, CA

 2002 100   1,820,000   9,528,898   -   402,209   1,820,000   9,931,106   11,751,106   (2,430,671)  9,320,435   -

Chandler Court

  

Chandler, AZ

 1987 316   1,353,100   12,175,173   -   3,938,495   1,353,100   16,113,668   17,466,768   (7,984,448)  9,482,319   -

Chatelaine Park

  

Duluth, GA

 1995 303   1,818,000   24,489,671   -   1,586,741   1,818,000   26,076,412   27,894,412   (9,450,923)  18,443,489   -

Chesapeake Glen
Apts (fka
Greentree I,
II & III)

  

Glen Burnie, MD

 1973 796   8,993,411   27,301,052   -   19,583,304   8,993,411   46,884,356   55,877,767   (16,477,188)  39,400,579   -

Chestnut Hills

  

Puyallup, WA

 1991 157   756,300   6,806,635   -   1,182,619   756,300   7,989,254   8,745,554   (3,577,172)  5,168,382   -

Chickasaw Crossing

  

Orlando, FL

 1986 292   2,044,000   12,366,832   -   1,490,455   2,044,000   13,857,287   15,901,287   (5,385,880)  10,515,407   -

Chinatown Gateway

  

Los Angeles, CA

 (F) -   14,791,831   9,684,936   -   -       14,791,831   9,684,936   24,476,767   -       24,476,767   -

Citrus Falls

  

Tampa, FL

 2003 273   8,190,000   28,894,280   -   211,240   8,190,000   29,105,520   37,295,520   (2,760,260)  34,535,259   -

City View (GA)

  

Atlanta, GA (G)

 2003 202   6,440,800   19,992,718   -   987,157   6,440,800   20,979,875   27,420,675   (3,423,445)  23,997,230   -

Clarion

  

Decatur, GA

 1990 217   1,504,300   13,537,919   -   1,808,154   1,504,300   15,346,074   16,850,374   (6,301,194)  10,549,179   -

Clarys Crossing

  

Columbia, MD

 1984 198   891,000   15,489,721   -   1,820,082   891,000   17,309,803   18,200,803   (6,663,776)  11,537,027   -

Cleo, The

  

Los Angeles, CA

 1989 92   6,615,467   14,825,495   -   3,428,877   6,615,467   18,254,372   24,869,839   (1,221,812)  23,648,028   -

Club at the Green

  

Beaverton, OR

 1991 254   2,030,950   12,616,747   -   2,166,457   2,030,950   14,783,204   16,814,154   (6,660,636)  10,153,518   -

Coachlight Village

  

Agawam, MA

 1967 88   501,726   3,353,933   -   317,416   501,726   3,671,349   4,173,075   (1,182,613)  2,990,462   -

Coconut Palm Club

  

Coconut Creek,
GA

 1992 300   3,001,700   17,678,928   -   2,019,630   3,001,700   19,698,558   22,700,258   (7,690,873)  15,009,386   -

Colonial Village

  

Plainville, CT

 1968 104   693,575   4,636,410   -   786,805   693,575   5,423,215   6,116,790   (1,805,630)  4,311,160   -

Cortona at Dana
Park

  

Mesa, AZ

 1986 222   2,028,939   12,466,128   -   2,050,545   2,028,939   14,516,673   16,545,612   (6,090,460)  10,455,152   -

Country Gables

  

Beaverton, OR

 1991 288   1,580,500   14,215,444   -   3,156,104   1,580,500   17,371,548   18,952,048   (7,996,586)  10,955,461   -

Cove at Boynton
Beach I

  

Boynton Beach,
FL

 1996 252   12,600,000   31,590,391   -   1,641,016   12,600,000   33,231,407   45,831,407   (5,715,223)  40,116,184   -

Cove at Boynton
Beach II

  

Boynton Beach,
FL

 1998 296   14,800,000   37,874,719   -   -       14,800,000   37,874,719   52,674,719   (6,392,520)  46,282,198   -

Cove at Fishers
Landing

  

Vancouver, WA

 1993 253   2,277,000   15,656,887   -   959,161   2,277,000   16,616,048   18,893,048   (4,472,049)  14,420,999   -

Creekside Village

  

Mountlake
Terrace, WA

 1987 512   2,807,600   25,270,594   -   4,024,584   2,807,600   29,295,178   32,102,778   (15,078,709)  17,024,070   -

Crosswinds

  

St. Petersburg,
FL

 1986 208   1,561,200   5,756,822   -   1,832,347   1,561,200   7,589,169   9,150,369   (3,551,498)  5,598,871   -

Crowntree Lakes

  

Orlando, FL

 2008 352   12,009,630   44,670,029   -   15,829   12,009,630   44,685,857   56,695,487   (996,404)  55,699,083   -

Crystal Village

  

Attleboro, MA

 1974 91   1,369,000   4,989,028   -   2,480,460   1,369,000   7,469,488   8,838,488   (3,343,589)  5,494,899   -

Cypress Lake at
Waterford

  

Orlando, FL

 2001 316   7,000,000   27,654,816   -   1,075,057   7,000,000   28,729,873   35,729,873   (5,679,621)  30,050,252   -

Dartmouth Woods

  

Lakewood, CO

 1990 201   1,609,800   10,832,754   -   1,517,738   1,609,800   12,350,492   13,960,292   (5,457,099)  8,503,193   -

Dean Estates

  

Taunton, MA

 1984 58   498,080   3,329,560   -   585,906   498,080   3,915,466   4,413,546   (1,312,622)  3,100,924   -

Defoor Village

  

Atlanta, GA

 1997 156   2,966,400   10,570,210   -   1,864,856   2,966,400   12,435,067   15,401,467   (4,785,594)  10,615,873   -

Desert Homes

  

Phoenix, AZ

 1982 412   1,481,050   13,390,249   -   4,099,871   1,481,050   17,490,120   18,971,170   (8,730,173)  10,240,997   -

Eagle Canyon

  

Chino Hills, CA

 1985 252   1,808,900   16,274,361   -   4,204,489   1,808,900   20,478,850   22,287,750   (8,547,706)  13,740,044   -

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Del Mar Ridge San Diego, CA 1998  181   7,801,824   36,948,176      2,298,593   7,801,824   39,246,769   47,048,593   (3,116,754)  43,931,839    
Desert Homes Phoenix, AZ 1982  412   1,481,050   13,390,249      4,652,484   1,481,050   18,042,733   19,523,783   (10,220,322)  9,303,461    
Eagle Canyon Chino Hills, CA 1985  252   1,808,900   16,274,361      4,994,045   1,808,900   21,268,406   23,077,306   (10,622,403)  12,454,903    
Ellipse at Government Center Fairfax, VA 1989  404   19,433,000   56,816,266      2,245,450   19,433,000   59,061,716   78,494,716   (7,973,317)  70,521,399    
Emerson Place Boston, MA (G) 1962  444   14,855,000   57,566,636      15,120,573   14,855,000   72,687,209   87,542,209   (36,608,983)  50,933,226    
Enclave at Lake Underhill Orlando, FL 1989  312   9,359,750   29,539,650      1,690,403   9,359,750   31,230,053   40,589,803   (7,327,341)  33,262,462    
Enclave at Waterways Deerfield Beach, FL 1998  300   15,000,000   33,194,576      843,037   15,000,000   34,037,613   49,037,613   (8,268,775)  40,768,838    
Enclave at Winston Park Coconut Creek, FL 1995  278   5,560,000   19,939,324      2,101,199   5,560,000   22,040,523   27,600,523   (7,511,989)  20,088,534    
Enclave, The Tempe, AZ 1994  204   1,500,192   19,281,399      1,333,483   1,500,192   20,614,882   22,115,074   (9,498,305)  12,616,769    
Estates at Phipps Atlanta, GA 1996  234   9,360,000   29,705,236      3,780,696   9,360,000   33,485,932   42,845,932   (9,625,684)  33,220,248    
Estates at Wellington Green Wellington, FL 2003  400   20,000,000   64,790,850      1,719,926   20,000,000   66,510,776   86,510,776   (15,486,015)  71,024,761    
Fairland Gardens Silver Spring, MD 1981  400   6,000,000   19,972,183      5,994,235   6,000,000   25,966,418   31,966,418   (12,839,143)  19,127,275    
Four Winds Fall River, MA 1987  168   1,370,843   9,163,804      1,961,290   1,370,843   11,125,094   12,495,937   (4,317,329)  8,178,608    
Fox Hill Apartments Enfield, CT 1974  168   1,129,018   7,547,256      1,410,030   1,129,018   8,957,286   10,086,304   (3,473,400)  6,612,904    
Fox Run (WA) Federal Way, WA 1988  144   626,637   5,765,018      1,644,476   626,637   7,409,494   8,036,131   (4,492,269)  3,543,862    
Fox Run II (WA) Federal Way, WA 1988  18   80,000   1,286,139      53,086   80,000   1,339,225   1,419,225   (389,957)  1,029,268    
Gables Grand Plaza Coral Gables, FL (G) 1998  195      44,601,000      3,174,122      47,775,122   47,775,122   (12,598,590)  35,176,532    
Gallery, The Hermosa Beach, CA 1971  168   18,144,000   46,567,941      1,719,605   18,144,000   48,287,546   66,431,546   (9,535,678)  56,895,868    
Gatehouse at Pine Lake Pembroke Pines, FL 1990  296   1,896,600   17,070,795      3,174,037   1,896,600   20,244,832   22,141,432   (10,411,240)  11,730,192    
Gatehouse on the Green Plantation, FL 1990  312   2,228,200   20,056,270      6,485,962   2,228,200   26,542,232   28,770,432   (12,580,475)  16,189,957    
Gates of Redmond Redmond, WA 1979  180   2,306,100   12,064,015      4,624,741   2,306,100   16,688,756   18,994,856   (7,467,775)  11,527,081    
Gatewood Pleasanton, CA 1985  200   6,796,511   20,249,392      3,558,873   6,796,511   23,808,265   30,604,776   (6,922,485)  23,682,291    
Governors Green Bowie, MD 1999  478   19,845,000   73,335,916      513,833   19,845,000   73,849,749   93,694,749   (10,600,450)  83,094,299    
Greenfield Village Rocky Hill , CT 1965  151   911,534   6,093,418      623,523   911,534   6,716,941   7,628,475   (2,669,219)  4,959,256    
Greenhouse — Roswell Roswell, GA 1985  236   1,220,000   10,974,727      2,862,866   1,220,000   13,837,593   15,057,593   (8,334,268)  6,723,325    
Hamilton Villas Beverly Hills, CA 1990  35   7,772,000   16,864,269      1,197,789   7,772,000   18,062,058   25,834,058   (2,088,921)  23,745,137    
Hammocks Place Miami, FL 1986  296   319,180   12,513,467      3,361,988   319,180   15,875,455   16,194,635   (9,682,288)  6,512,347    
Hampshire Place Los Angeles, CA 1989  259   10,806,000   30,335,330      1,855,750   10,806,000   32,191,080   42,997,080   (8,142,603)  34,854,477    
Hamptons Puyallup, WA 1991  230   1,119,200   10,075,844      1,812,434   1,119,200   11,888,278   13,007,478   (6,014,780)  6,992,698    
Heritage Ridge Lynwood, WA 1999  197   6,895,000   18,983,597      492,899   6,895,000   19,476,496   26,371,496   (5,168,705)  21,202,791    
Heritage, The Phoenix, AZ 1995  204   1,209,705   13,136,903      1,360,019   1,209,705   14,496,922   15,706,627   (6,803,317)  8,903,310    
Heron Pointe Boynton Beach, FL 1989  192   1,546,700   7,774,676      1,923,892   1,546,700   9,698,568   11,245,268   (5,039,618)  6,205,650    
High Meadow Ellington, CT 1975  100   583,679   3,901,774      756,263   583,679   4,658,037   5,241,716   (1,793,920)  3,447,796    
Highland Glen Westwood, MA 1979  180   2,229,095   16,828,153      2,239,543   2,229,095   19,067,696   21,296,791   (7,067,157)  14,229,634    
Highland Glen II Westwood, MA 2007  102      19,875,857      80,545      19,956,402   19,956,402   (2,819,615)  17,136,787    
Highlands at South Plainfield South Plainfield, NJ 2000  252   10,080,000   37,526,912      733,896   10,080,000   38,260,808   48,340,808   (7,925,678)  40,415,130    
Highlands, The Scottsdale, AZ 1990  272   11,823,840   31,990,970      2,805,757   11,823,840   34,796,727   46,620,567   (7,688,227)  38,932,340    
Hudson Crossing New York, NY (G) 2003  259   23,420,000   70,086,976      748,402   23,420,000   70,835,378   94,255,378   (16,184,367)  78,071,011    
Hudson Pointe Jersey City, NJ 2003  182   5,148,500   41,149,117      1,048,724   5,148,500   42,197,841   47,346,341   (10,223,470)  37,122,871    
Hunt Club II Charlotte, NC (F)     100,000            100,000      100,000      100,000    
Huntington Park Everett, WA 1991  381   1,597,500   14,367,864      3,620,694   1,597,500   17,988,558   19,586,058   (10,893,191)  8,692,867    
Indian Bend Scottsdale, AZ 1973  278   1,075,700   9,800,330      3,042,609   1,075,700   12,842,939   13,918,639   (8,082,539)  5,836,100    
Iron Horse Park Pleasant Hill, CA 1973  252   15,000,000   24,335,549      7,755,418   15,000,000   32,090,967   47,090,967   (8,103,335)  38,987,632    
Isle at Arrowhead Ranch Glendale, AZ 1996  256   1,650,237   19,593,123      1,660,272   1,650,237   21,253,395   22,903,632   (9,860,515)  13,043,117    
Kempton Downs Gresham, OR 1990  278   1,217,349   10,943,372      2,838,147   1,217,349   13,781,519   14,998,868   (7,994,662)  7,004,206    
Kenwood Mews Burbank, CA 1991  141   14,100,000   24,662,883      1,627,860   14,100,000   26,290,743   40,390,743   (5,165,397)  35,225,346    
Key Isle at Windermere Ocoee, FL 2000  282   8,460,000   31,761,470      1,197,975   8,460,000   32,959,445   41,419,445   (7,409,728)  34,009,717    
Key Isle at Windermere II Ocoee, FL 2008  165   3,306,286   24,519,643      21,547   3,306,286   24,541,190   27,847,476   (2,038,084)  25,809,392    
Kings Colony (FL) Miami, FL 1986  480   19,200,000   48,379,586      2,692,770   19,200,000   51,072,356   70,272,356   (12,387,179)  57,885,177    
La Mirage San Diego, CA 1988/1992  1,070   28,895,200   95,567,943      13,968,700   28,895,200   109,536,643   138,431,843   (51,916,782)  86,515,061    
La Mirage IV San Diego, CA 2001  340   6,000,000   47,449,353      2,944,380   6,000,000   50,393,733   56,393,733   (16,239,415)  40,154,318    
Laguna Clara Santa Clara, CA 1972  264   13,642,420   29,707,475      3,329,323   13,642,420   33,036,798   46,679,218   (9,100,501)  37,578,717    
Lake Buena Vista Combined Orlando, FL 2000/2002  672   23,520,000   75,068,206      3,594,116   23,520,000   78,662,322   102,182,322   (17,301,402)  84,880,920    
Landings at Pembroke Lakes Pembroke Pines, FL 1989  358   17,900,000   24,460,989      4,881,752   17,900,000   29,342,741   47,242,741   (7,519,945)  39,722,796    
Landings at Port Imperial W. New York, NJ 1999  276   27,246,045   37,741,050      6,567,661   27,246,045   44,308,711   71,554,756   (15,348,539)  56,206,217    
Las Colinas at Black Canyon Phoenix, AZ 2008  304   9,000,000   35,917,811      115,519   9,000,000   36,033,330   45,033,330   (4,435,319)  40,598,011    
Legacy at Highlands Ranch Highlands Ranch, CO 1999  422   6,330,000   37,557,013      1,466,728   6,330,000   39,023,741   45,353,741   (9,805,338)  35,548,403    
Legacy Park Central Concord, CA 2003  259   6,469,230   46,745,854      295,479   6,469,230   47,041,333   53,510,563   (10,789,289)  42,721,274    
Lexington Farm Alpharetta, GA 1995  352   3,521,900   22,888,305      2,476,212   3,521,900   25,364,517   28,886,417   (11,200,145)  17,686,272    
Lexington Park Orlando, FL 1988  252   2,016,000   12,346,726      2,450,467   2,016,000   14,797,193   16,813,193   (7,062,512)  9,750,681    
Little Cottonwoods Tempe, AZ 1984  379   3,050,133   26,991,689      3,737,391   3,050,133   30,729,080   33,779,213   (14,499,829)  19,279,384    
Longacre House New York, NY (G) 2000  293   73,170,045   53,962,510      125,953   73,170,045   54,088,463   127,258,508   (7,505,448)  119,753,060    
Longfellow Place Boston, MA (G) 1975  710   53,164,160   183,940,619      47,318,604   53,164,160   231,259,223   284,423,383   (97,449,615)  186,973,768    
Longwood Decatur, GA 1992  268   1,454,048   13,087,393      2,002,602   1,454,048   15,089,995   16,544,043   (8,825,354)  7,718,689    
Madison, The Alexandria, VA (F)     15,261,108   1,080,330         15,261,108   1,080,330   16,341,438      16,341,438    
Marbrisa Tampa, FL 1984  224   2,240,000   7,183,561      79,738   2,240,000   7,263,299   9,503,299   (1,234,564)  8,268,735    
Mariners Wharf Orange Park, FL 1989  272   1,861,200   16,744,951      3,244,046   1,861,200   19,988,997   21,850,197   (9,702,938)  12,147,259    
Market Street Landing Seattle, WA (F)     12,542,418   297,637         12,542,418   297,637   12,840,055      12,840,055    
Marquessa Corona Hills, CA 1992  336   6,888,500   21,604,584      2,726,408   6,888,500   24,330,992   31,219,492   (11,834,160)  19,385,332    
Martha Lake Lynnwood, WA 1991  155   821,200   7,405,070      1,985,277   821,200   9,390,347   10,211,547   (4,980,064)  5,231,483    
Martine, The Bellevue, WA 1984  67   3,200,000   9,616,264      2,642,670   3,200,000   12,258,934   15,458,934   (1,957,800)  13,501,134    
Merritt at Satellite Place Duluth, GA 1999  424   3,400,000   30,115,674      2,440,228   3,400,000   32,555,902   35,955,902   (13,072,220)  22,883,682    
Mill Pond Millersville, MD 1984  240   2,880,000   8,468,014      2,718,776   2,880,000   11,186,790   14,066,790   (5,505,405)  8,561,385    
Mira Flores Palm Beach Gardens, FL 1996  352   7,039,313   22,515,299      2,298,916   7,039,313   24,814,215   31,853,528   (8,485,263)  23,368,265    

S-5

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
               

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances

Ellipse at Government
Center

  

Fairfax, VA

 1989 404  19,433,000  56,816,266  -  946,154  19,433,000  57,762,420  77,195,420  (2,741,397) 74,454,023  -

Emerson Place

  

Boston, MA
(G)

 1962 444  14,855,000  57,566,636  -  13,880,196  14,855,000  71,446,832  86,301,832  (30,704,352) 55,597,480  -

Enclave at Lake Underhill

  

Orlando, FL

 1989 312  9,359,750  29,539,650  -  1,090,893  9,359,750  30,630,543  39,990,293  (3,978,304) 36,011,988  -

Enclave at Waterways

  

Deerfield
Beach, FL

 1998 300  15,000,000  33,194,576  -  707,033  15,000,000  33,901,609  48,901,609  (4,583,694) 44,317,915  -

Enclave at Winston Park

  

Coconut
Creek, FL

 1995 278  5,560,000  19,939,324  -  1,529,034  5,560,000  21,468,358  27,028,358  (5,758,816) 21,269,542  -

Enclave, The

  

Tempe, AZ

 1994 204  1,500,192  19,281,399  -  1,190,860  1,500,192  20,472,258  21,972,450  (7,972,785) 13,999,665  -

Estates at Phipps

  

Atlanta, GA

 1996 234  9,360,000  29,705,236  -  3,376,190  9,360,000  33,081,426  42,441,426  (5,857,411) 36,584,015  -

Estates at Wellington
Green

  

Wellington,
FL

 2003 400  20,000,000  64,790,850  -  962,255  20,000,000  65,753,105  85,753,105  (9,092,626) 76,660,479  -

Fairfield

  

Stamford,
CT (G)

 1996 263  6,510,200  39,690,120  -  4,492,852  6,510,200  44,182,972  50,693,172  (16,234,319) 34,458,854  -

Fairland Gardens

  

Silver
Spring, MD

 1981 400  6,000,000  19,972,183  -  5,427,590  6,000,000  25,399,773  31,399,773  (10,104,346) 21,295,428  -

Four Winds

  

Fall River,
MA

 1987 168  1,370,843  9,163,804  -  1,591,671  1,370,843  10,755,475  12,126,318  (3,298,996) 8,827,322  -

Fox Hill Apartments

  

Enfield, CT

 1974 168  1,129,018  7,547,256  -  1,061,074  1,129,018  8,608,330  9,737,348  (2,688,901) 7,048,447  -

Fox Run (WA)

  

Federal
Way, WA

 1988 144  639,700  5,765,018  -  1,509,614  639,700  7,274,632  7,914,332  (3,871,952) 4,042,379  -

Fox Run II (WA)

  

Federal
Way, WA

 1988 18  80,000  1,286,139  -  53,086  80,000  1,339,225  1,419,225  (298,159) 1,121,067  -

Gables Grand Plaza

  

Coral
Gables, FL
(G)

 1998 195  -  44,601,000  -  2,145,244  -      46,746,244  46,746,244  (8,898,994) 37,847,249  -

Gallery, The

  

Hermosa
Beach,CA

 1971 168  18,144,000  46,565,936  -  1,557,382  18,144,000  48,123,318  66,267,318  (5,336,507) 60,930,810  -

Gatehouse at Pine Lake

  

Pembroke
Pines, FL

 1990 296  1,896,600  17,070,795  -  2,813,255  1,896,600  19,884,049  21,780,649  (8,718,891) 13,061,759  -

Gatehouse on the Green

  

Plantation,
FL

 1990 312  2,228,200  20,056,270  -  3,574,818  2,228,200  23,631,088  25,859,288  (10,278,674) 15,580,614  -

Gates of Redmond

  

Redmond,
WA

 1979 180  2,306,100  12,064,015  -  4,004,123  2,306,100  16,068,138  18,374,238  (5,845,429) 12,528,809  -

Gatewood

  

Pleasanton,
CA

 1985 200  6,796,511  20,249,392  -  2,342,791  6,796,511  22,592,183  29,388,694  (4,965,724) 24,422,970  -

Glastonbury Center

  

Glastonbury,
CT

 1962 105  852,606  5,699,497  -  618,634  852,606  6,318,131  7,170,737  (2,030,196) 5,140,541  -

Governors Green

  

Bowie, MD

 1999 478  19,845,000  73,335,916  -  142,032  19,845,000  73,477,948  93,322,948  (3,653,338) 89,669,610  -

Greenfield Village

  

Rocky Hill,
CT

 1965 151  911,534  6,093,418  -  565,622  911,534  6,659,041  7,570,575  (2,122,675) 5,447,900  -

Hamilton Villas

  

Beverly
Hills, CA

 1990 35  7,772,000  16,864,269  -  859,091  7,772,000  17,723,361  25,495,361  (554,827) 24,940,534  -

Hammocks Place

  

Miami, FL

 1986 296  319,180  12,513,467  -  2,684,422  319,180  15,197,889  15,517,069  (8,318,371) 7,198,698  -

Hamptons

  

Puyallup,
WA

 1991 230  1,119,200  10,075,844  -  1,468,167  1,119,200  11,544,011  12,663,211  (5,056,450) 7,606,762  -

Harborview

  

San Pedro,
CA

 1985 160  6,402,500  12,627,347  -  1,841,855  6,402,500  14,469,202  20,871,702  (6,333,885) 14,537,816  -

Hathaway

  

Long Beach,
CA

 1987 385  2,512,500  22,611,912  -  5,771,097  2,512,500  28,383,009  30,895,509  (13,202,113) 17,693,396  -

Heritage Ridge

  

Lynwood,
WA

 1999 197  6,895,000  18,983,597  -  310,857  6,895,000  19,294,454  26,189,454  (2,957,954) 23,231,500  -

Heritage, The

  

Phoenix, AZ

 1995 204  1,209,705  13,136,903  -  1,126,835  1,209,705  14,263,738  15,473,443  (5,697,485) 9,775,959  -

Heron Pointe

  

Boynton
Beach, FL

 1989 192  1,546,700  7,774,676  -  1,678,985  1,546,700  9,453,661  11,000,361  (4,239,127) 6,761,234  -

Hidden Oaks

  

Cary, NC

 1988 216  1,178,600  10,614,135  -  2,314,877  1,178,600  12,929,012  14,107,612  (5,770,894) 8,336,718  -

Hidden Palms

  

Tampa, FL

 1986 256  2,049,600  6,345,885  -  2,134,318  2,049,600  8,480,203  10,529,803  (4,085,678) 6,444,124  -

Highland Glen

  

Westwood,
MA

 1979 180  2,229,095  16,828,153  -  1,933,142  2,229,095  18,761,295  20,990,390  (5,399,950) 15,590,440  -

Highland Glen II

  

Westwood,
MA

 2007 102  -  19,867,994  -  38,332  -  19,906,326  19,906,326  (1,169,727) 18,736,599  -

Highlands, The

  

Scottsdale,
AZ

 1990 272  11,823,840  31,990,970  -  2,555,577  11,823,840  34,546,547  46,370,387  (4,422,583) 41,947,803  -

Hudson Crossing

  

New York,
NY (G)

 2003 259  23,420,000  70,086,976  -  645,309  23,420,000  70,732,284  94,152,284  (11,243,156) 82,909,128  -

Hudson Pointe

  

Jersey City,
NJ

 2003 182  5,148,500  41,143,042  -  462,448  5,148,500  41,605,490  46,753,990  (7,304,690) 39,449,300  -

Hunt Club II

  

Charlotte,
NC

 (F) -  100,000  -  -  -      100,000      -  100,000  -      100,000  -

Huntington Park

  

Everett, WA

 1991 381  1,597,500  14,367,864  -  3,162,525  1,597,500  17,530,389  19,127,889  (9,320,189) 9,807,699  -

Indian Bend

  

Scottsdale,
AZ

 1973 277  1,075,700  9,800,330  -  2,845,483  1,075,700  12,645,813  13,721,513  (7,092,138) 6,629,375  -

Iron Horse Park

  

Pleasant
Hill, CA

 1973 252  15,000,000  24,335,549  -  6,794,454  15,000,000  31,130,002  46,130,002  (4,198,432) 41,931,571  -

Ivy Place

  

Atlanta, GA

 1978 122  802,950  7,228,257  -  1,958,504  802,950  9,186,761  9,989,711  (4,378,068) 5,611,643  -

Kempton Downs

  

Gresham,
OR

 1990 278  1,217,349  10,943,372  -  2,492,331  1,217,349  13,435,703  14,653,052  (6,964,228) 7,688,824  -

Kenwood Mews

  

Burbank,
CA

 1991 141  14,100,000  24,662,883  -  548,795  14,100,000  25,211,678  39,311,678  (2,898,702) 36,412,977  -

Key Isle at Windermere

  

Ocoee, FL

 2000 282  8,460,000  31,761,470  -  895,702  8,460,000  32,657,172  41,117,172  (3,796,924) 37,320,249  -

Key Isle at Windermere II

  

Ocoee, FL

 2008 165  3,306,286  24,518,756  -  8,817  3,306,286  24,527,573  27,833,859  (224,734) 27,609,125  -

Kings Colony (FL)

  

Miami, FL

 1986 480  19,200,000  48,379,586  -  1,786,380  19,200,000  50,165,966  69,365,966  (7,229,691) 62,136,275  -

La Mirage

  

San Diego,
CA

 1988/1992 1,070  28,895,200  95,567,943  -  10,493,222  28,895,200  106,061,165  134,956,365  (43,193,153) 91,763,212  -

La Mirage IV

  

San Diego,
CA

 2001 340  6,000,000  47,449,353  -  1,896,913  6,000,000  49,346,266  55,346,266  (12,469,214) 42,877,052  -

Laguna Clara

  

Santa Clara,
CA

 1972 264  13,642,420  29,707,475  -  2,565,383  13,642,420  32,272,857  45,915,277  (6,399,603) 39,515,674  -

Lake Buena Vista
Combined

  

Orlando, FL

 2000/2002 672  23,520,000  75,068,206  -  3,127,959  23,520,000  78,196,165  101,716,165  (10,851,645) 90,864,520  -

Lakes at Vinings

  

Atlanta, GA

 1972/1975 464  6,498,000  21,832,252  -  3,576,176  6,498,000  25,408,428  31,906,428  (10,210,483) 21,695,945  -

Lakeville Resort

  

Petaluma,
CA

 1984 492  2,736,500  24,610,651  -  5,013,485  2,736,500  29,624,136  32,360,636  (13,619,118) 18,741,518  -

Landings at Pembroke
Lakes

  

Pembroke
Pines, FL

 1989 358  17,900,000  24,531,094  -  4,164,768  17,900,000  28,695,862  46,595,862  (3,958,551) 42,637,310  -

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Mission Bay Orlando, FL 1991  304   2,432,000   21,623,560      2,717,235   2,432,000   24,340,795   26,772,795   (10,820,242)  15,952,553    
Mission Verde, LLC San Jose, CA 1986  108   5,190,700   9,679,109      3,151,242   5,190,700   12,830,351   18,021,051   (5,623,277)  12,397,774    
Morningside Scottsdale, AZ 1989  160   670,470   12,607,976      1,697,299   670,470   14,305,275   14,975,745   (6,740,861)  8,234,884    
Mosaic at Largo Station Hyattsville, MD 2008  242   4,120,800   42,477,297      237,451   4,120,800   42,714,748   46,835,548   (4,141,764)  42,693,784    
Mozaic at Union Station Los Angeles, CA 2007  272   8,500,000   52,583,270      668,419   8,500,000   53,251,689   61,751,689   (8,972,618)  52,779,071    
New River Cove Davie, FL 1999  316   15,800,000   46,142,895      1,049,654   15,800,000   47,192,549   62,992,549   (10,341,684)  52,650,865    
Northampton 1 Largo, MD 1977  344   1,843,200   17,528,381      5,798,143   1,843,200   23,326,524   25,169,724   (14,229,754)  10,939,970    
Northampton 2 Largo, MD 1988  276   1,513,500   14,246,990      3,654,124   1,513,500   17,901,114   19,414,614   (10,571,731)  8,842,883    
Northglen Valencia, CA 1988  234   9,360,000   20,778,553      1,728,818   9,360,000   22,507,371   31,867,371   (8,256,285)  23,611,086    
Northlake (MD) Germantown, MD 1985  304   15,000,000   23,142,302      9,754,730   15,000,000   32,897,032   47,897,032   (9,909,101)  37,987,931    
Northridge Pleasant Hill, CA 1974  221   5,527,800   14,691,705      8,471,887   5,527,800   23,163,592   28,691,392   (9,697,063)  18,994,329    
Oak Park North Agoura Hills, CA 1990  220   1,706,900   15,362,666      2,806,978   1,706,900   18,169,644   19,876,544   (9,627,790)  10,248,754    
Oak Park South Agoura Hills, CA 1989  224   1,683,800   15,154,608      2,923,629   1,683,800   18,078,237   19,762,037   (9,624,230)  10,137,807    
Oaks at Falls Church Falls Church, VA 1966  176   20,240,000   20,152,616      3,552,434   20,240,000   23,705,050   43,945,050   (5,665,262)  38,279,788    
Ocean Crest Solana Beach, CA 1986  146   5,111,200   11,910,438      2,058,043   5,111,200   13,968,481   19,079,681   (6,514,987)  12,564,694    
Ocean Walk Key West, FL 1990  297   2,838,749   25,545,009      3,233,758   2,838,749   28,778,767   31,617,516   (13,599,381)  18,018,135    
Olympus Towers Seattle, WA (G) 2000  328   14,752,034   73,335,425      2,226,097   14,752,034   75,561,522   90,313,556   (19,377,834)  70,935,722    
Orchard Ridge Lynnwood, WA 1988  104   480,600   4,372,033      1,127,901   480,600   5,499,934   5,980,534   (3,295,398)  2,685,136    
Overlook Manor Frederick, MD 1980/1985  108   1,299,100   3,930,931      2,142,057   1,299,100   6,072,988   7,372,088   (3,277,788)  4,094,300    
Overlook Manor II Frederick, MD 1980/1985  182   2,186,300   6,262,597      1,253,022   2,186,300   7,515,619   9,701,919   (3,549,205)  6,152,714    
Paces Station Atlanta, GA 1984-1989  610   4,801,500   32,548,053      8,202,985   4,801,500   40,751,038   45,552,538   (20,808,476)  24,744,062    
Palm Trace Landings Davie, FL 1995  768   38,400,000   105,693,432      2,605,905   38,400,000   108,299,337   146,699,337   (23,469,327)  123,230,010    
Panther Ridge Federal Way, WA 1980  260   1,055,800   9,506,117      1,846,801   1,055,800   11,352,918   12,408,718   (5,866,485)  6,542,233    
Parc 77 New York, NY (G) 1903  137   40,504,000   18,025,679      4,115,467   40,504,000   22,141,146   62,645,146   (4,773,963)  57,871,183    
Parc Cameron New York, NY (G) 1927  166   37,600,000   9,855,597      5,120,583   37,600,000   14,976,180   52,576,180   (3,867,865)  48,708,315    
Parc Coliseum New York, NY (G) 1910  177   52,654,000   23,045,751      6,947,750   52,654,000   29,993,501   82,647,501   (6,372,704)  76,274,797    
Park at Turtle Run, The Coral Springs, FL 2001  257   15,420,000   36,064,629      898,823   15,420,000   36,963,452   52,383,452   (9,407,101)  42,976,351    
Park West (CA) Los Angeles, CA 1987/1990  444   3,033,500   27,302,383      5,418,219   3,033,500   32,720,602   35,754,102   (17,933,416)  17,820,686    
Parkside Union City, CA 1979  208   6,246,700   11,827,453      3,310,231   6,246,700   15,137,684   21,384,384   (7,795,045)  13,589,339    
Parkview Terrace Redlands, CA 1986  558   4,969,200   35,653,777      11,282,338   4,969,200   46,936,115   51,905,315   (22,196,279)  29,709,036    
Phillips Park Wellesley, MA 1988  49   816,922   5,460,955      936,091   816,922   6,397,046   7,213,968   (2,475,515)  4,738,453    
Pine Harbour Orlando, FL 1991  366   1,664,300   14,970,915      3,529,258   1,664,300   18,500,173   20,164,473   (11,225,249)  8,939,224    
Playa Pacifica Hermosa Beach,CA 1972  285   35,100,000   33,473,822      7,145,521   35,100,000   40,619,343   75,719,343   (10,641,111)  65,078,232    
Pointe at South Mountain Phoenix, AZ 1988  364   2,228,800   20,059,311      3,210,958   2,228,800   23,270,269   25,499,069   (11,847,168)  13,651,901    
Polos East Orlando, FL 1991  308   1,386,000   19,058,620      2,188,231   1,386,000   21,246,851   22,632,851   (9,567,266)  13,065,585    
Port Royale Ft. Lauderdale, FL (G) 1988  252   1,754,200   15,789,873      7,514,240   1,754,200   23,304,113   25,058,313   (12,612,882)  12,445,431    
Port Royale II Ft. Lauderdale, FL (G) 1988  161   1,022,200   9,203,166      4,702,265   1,022,200   13,905,431   14,927,631   (7,140,443)  7,787,188    
Port Royale III Ft. Lauderdale, FL (G) 1988  324   7,454,900   14,725,802      8,935,675   7,454,900   23,661,477   31,116,377   (11,497,857)  19,618,520    
Port Royale IV Ft. Lauderdale, FL (F)        387,471            387,471   387,471      387,471    
Portofino Chino Hills, CA 1989  176   3,572,400   14,660,994      2,150,998   3,572,400   16,811,992   20,384,392   (7,854,366)  12,530,026    
Portofino (Val) Valencia, CA 1989  216   8,640,000   21,487,126      2,302,820   8,640,000   23,789,946   32,429,946   (8,794,584)  23,635,362    
Portside Towers Jersey City, NJ (G) 1992-1997  527   22,487,006   96,842,913      14,773,378   22,487,006   111,616,291   134,103,297   (47,349,520)  86,753,777    
Preserve at Deer Creek Deerfield Beach, FL 1997  540   13,500,000   60,011,208      3,069,187   13,500,000   63,080,395   76,580,395   (16,723,806)  59,856,589    
Prime, The Arlington, VA 2002  256   32,000,000   64,436,539      587,595   32,000,000   65,024,134   97,024,134   (12,202,034)  84,822,100    
Promenade at Aventura Aventura, FL 1995  296   13,320,000   30,353,748      4,740,072   13,320,000   35,093,820   48,413,820   (12,325,089)  36,088,731    
Promenade at Town Center I Valencia, CA 2001  294   14,700,000   35,390,279      2,762,304   14,700,000   38,152,583   52,852,583   (10,327,370)  42,525,213    
Promenade at Wyndham Lakes Coral Springs, FL 1998  332   6,640,000   26,743,760      3,364,705   6,640,000   30,108,465   36,748,465   (10,964,932)  25,783,533    
Promenade Terrace Corona, CA 1990  330   2,272,800   20,546,289      4,744,546   2,272,800   25,290,835   27,563,635   (13,575,380)  13,988,255    
Promontory Pointe I & II Phoenix, AZ 1984/1996  424   2,355,509   30,421,840      3,698,629   2,355,509   34,120,469   36,475,978   (16,314,043)  20,161,935    
Prospect Towers Hackensack, NJ 1995  157   3,926,600   31,738,452      2,938,287   3,926,600   34,676,739   38,603,339   (13,635,911)  24,967,428    
Prospect Towers II Hackensack, NJ 2002  203   4,500,000   33,104,733      2,070,180   4,500,000   35,174,913   39,674,913   (10,813,863)  28,861,050    
Ravens Crest Plainsboro, NJ 1984  704   4,670,850   42,080,642      11,945,748   4,670,850   54,026,390   58,697,240   (31,532,339)  27,164,901    
Redmond Ridge Redmond, WA 2008  321   6,975,705   46,175,001      73,615   6,975,705   46,248,616   53,224,321   (4,628,114)  48,596,207    
Red 160 (fka Redmond Way) Redmond, WA (G) (F)     15,546,376   61,417,903      9,488   15,546,376   61,427,391   76,973,767   (339)  76,973,428    
Regency Palms Huntington Beach, CA 1969  310   1,857,400   16,713,254      4,433,614   1,857,400   21,146,868   23,004,268   (11,462,162)  11,542,106    
Regency Park Centreville, VA 1989  252   2,521,500   16,200,666      7,802,524   2,521,500   24,003,190   26,524,690   (11,693,111)  14,831,579    
Registry Northglenn, CO 1986  208   2,000,000   10,926,759      48,337   2,000,000   10,975,096   12,975,096   (1,278,875)  11,696,221    
Remington Place Phoenix, AZ 1983  412   1,492,750   13,377,478      4,637,494   1,492,750   18,014,972   19,507,722   (10,299,256)  9,208,466    
Renaissance Villas Berkeley, CA (G) 1998  34   2,458,000   4,542,000      5,418   2,458,000   4,547,418   7,005,418   (332,879)  6,672,539    
Reserve at Ashley Lake Boynton Beach, FL 1990  440   3,520,400   23,332,494      4,721,183   3,520,400   28,053,677   31,574,077   (13,452,026)  18,122,051    
Reserve at Town Center Loudon, VA 2002  290   3,144,056   27,669,121      712,324   3,144,056   28,381,445   31,525,501   (7,401,808)  24,123,693    
Reserve at Town Center II (WA) Mill Creek, WA 2009  100   4,310,417   17,172,642      7,133   4,310,417   17,179,775   21,490,192   (614,973)  20,875,219    
Reserve at Town Center III Mill Creek, WA (F)     2,089,388   220,235         2,089,388   220,235   2,309,623      2,309,623    
Retreat, The Phoenix, AZ 1999  480   3,475,114   27,265,252      2,380,882   3,475,114   29,646,134   33,121,248   (12,339,194)  20,782,054    
Rianna I Seattle, WA (G) 2000  78   2,268,160   14,864,482      84,986   2,268,160   14,949,468   17,217,628   (1,125,268)  16,092,360    
Ridgewood Village I&II San Diego, CA 1997  408   11,809,500   34,004,048      2,195,996   11,809,500   36,200,044   48,009,544   (14,118,993)  33,890,551    
River Pointe at Den Rock Park Lawrence, MA 2000  174   4,615,702   18,440,147      1,212,909   4,615,702   19,653,056   24,268,758   (6,078,818)  18,189,940    
River Tower New York, NY (G) 1982  323   118,669,441   98,880,559      401,052   118,669,441   99,281,611   217,951,052   (12,970,964)  204,980,088    
Rivers Bend (CT) Windsor, CT 1973  373   3,325,517   22,573,826      2,724,959   3,325,517   25,298,785   28,624,302   (9,670,355)  18,953,947    
Riverview Condominiums Norwalk, CT 1991  92   2,300,000   7,406,730      1,806,846   2,300,000   9,213,576   11,513,576   (4,117,696)  7,395,880    
Royal Oaks (FL) Jacksonville, FL 1991  284   1,988,000   13,645,117      3,882,711   1,988,000   17,527,828   19,515,828   (7,780,869)  11,734,959    
Sabal Palm at Carrollwood Place Tampa, FL 1995  432   3,888,000   26,911,542      2,533,589   3,888,000   29,445,131   33,333,131   (12,979,307)  20,353,824    
Sabal Palm at Lake Buena Vista Orlando, FL 1988  400   2,800,000   23,687,893      3,982,057   2,800,000   27,669,950   30,469,950   (12,197,653)  18,272,297    
Sabal Palm at Metrowest Orlando, FL 1998  411   4,110,000   38,394,865      3,876,633   4,110,000   42,271,498   46,381,498   (18,443,292)  27,938,206    

S-6

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
               

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances

Landings at Port
Imperial

  

W. New York,
NJ

 1999 276  27,246,045  37,741,050  -  5,915,044  27,246,045  43,656,093  70,902,138  (11,540,765) 59,361,374  -

Las Colinas at Black
Canyon

  

Phoenix, AZ

 2008 304  9,000,000  35,916,739  -  1,561  9,000,000  35,918,299  44,918,299  (154,546) 44,763,753  -

Laurel Ridge

  

Chapel Hill,
NC

 1975 160  160,000  3,206,076  -  4,091,065  160,000  7,297,141  7,457,141  (5,511,865) 1,945,277  -

Laurel Ridge II

  

Chapel Hill,
NC

 (F) -  22,551  -  -  -      22,551  -      22,551  -      22,551  -

Legends at Preston

  

Morrisville,
NC

 2000 382  3,055,906  27,150,092  -  1,080,148  3,055,906  28,230,241  31,286,147  (8,485,769) 22,800,378  -

Lexington Farm

  

Alpharetta,
GA

 1995 352  3,521,900  22,888,305  -  2,176,406  3,521,900  25,064,711  28,586,611  (9,193,367) 19,393,245  -

Lexington Park

  

Orlando, FL

 1988 252  2,016,000  12,346,726  -  2,205,556  2,016,000  14,552,282  16,568,282  (5,838,903) 10,729,379  -

Liberty Park

  

Brain Tree,
MA

 2000 202  5,977,504  26,749,111  -  1,544,321  5,977,504  28,293,431  34,270,935  (6,313,350) 27,957,585  -

Little Cottonwoods

  

Tempe, AZ

 1984 379  3,050,133  26,991,689  -  3,064,410  3,050,133  30,056,100  33,106,233  (12,148,158) 20,958,075  -

Lofton Place

  

Tampa, FL

 1988 280  2,240,000  16,679,214  -  2,646,895  2,240,000  19,326,109  21,566,109  (7,509,246) 14,056,862  -

Longfellow Place

  

Boston, MA
(G)

 1975 710  53,164,160  183,940,619  -  36,399,079  53,164,160  220,339,697  273,503,857  (78,881,773) 194,622,084  -

Loomis Manor

  

West
Hartford, CT

 1948 43  422,350  2,823,326  -  375,223  422,350  3,198,549  3,620,899  (1,043,093) 2,577,806  -

Madison at Cedar
Springs

  

Dallas, TX

 1995 380  2,470,000  33,194,620  -  3,423,060  2,470,000  36,617,680  39,087,680  (12,884,379) 26,203,301  -

Madison at Chase Oaks

  

Plano, TX

 1995 470  3,055,000  28,932,885  -  2,242,678  3,055,000  31,175,563  34,230,563  (11,588,152) 22,642,411  -

Madison on Melrose

  

Richardson,
TX

 1995 200  1,300,000  15,096,551  -  981,925  1,300,000  16,078,476  17,378,476  (5,900,043) 11,478,433  -

Magnolia at Whitlock

  

Marietta, GA

 1971 152  132,979  1,526,005  -  3,900,098  132,979  5,426,103  5,559,082  (4,233,767) 1,325,315  -

Mariners Wharf

  

Orange Park,
FL

 1989 272  1,861,200  16,744,951  -  2,941,744  1,861,200  19,686,695  21,547,895  (7,955,327) 13,592,568  -

Marquessa

  

Corona Hills,
CA

 1992 336  6,888,500  21,604,584  -  2,465,423  6,888,500  24,070,007  30,958,507  (10,019,811) 20,938,695  -

Martha Lake

  

Lynnwood,
WA

 1991 155  821,200  7,405,070  -  1,702,708  821,200  9,107,779  9,928,979  (4,150,837) 5,778,142  -

Martine, The

  

Bellevue, WA

 1984 67  3,200,000  9,616,264  -  1,715,528  3,200,000  11,331,792  14,531,792  (503,508) 14,028,284  -

Meadow Ridge

  

Norwich, CT

 1987 120  747,957  4,999,937  -  658,425  747,957  5,658,362  6,406,319  (1,760,359) 4,645,959  -

Merrill Creek

  

Lakewood,
WA

 1994 149  814,200  7,330,606  -  933,970  814,200  8,264,575  9,078,775  (3,508,071) 5,570,704  -

Mill Creek

  

Milpitas, CA

 1991 516  12,858,693  57,168,503  -  1,763,176  12,858,693  58,931,679  71,790,372  (12,911,817) 58,878,555  -

Mira Flores

  

Palm Beach
Gardens, FL

 1996 352  7,039,313  22,515,299  -  1,514,605  7,039,313  24,029,904  31,069,217  (6,535,956) 24,533,261  -

Miramar Lakes

  

Miramar, FL

 2003 344  17,200,000  51,487,235  -  918,987  17,200,000  52,406,222  69,606,222  (6,189,253) 63,416,969  -

Mission Bay

  

Orlando, FL

 1991 304  2,432,000  21,623,560  -  2,233,969  2,432,000  23,857,529  26,289,529  (8,926,315) 17,363,215  -

Mission Verde, LLC

  

San Jose, CA

 1986 108  5,190,700  9,679,109  -  2,918,055  5,190,700  12,597,163  17,787,863  (4,128,005) 13,659,859  -

Monterra in Mill Creek

  

Mill Creek,
WA

 2003 139  2,800,000  13,255,123  -  167,335  2,800,000  13,422,458  16,222,458  (2,227,664) 13,994,794  -

Morningside

  

Scottsdale,
AZ

 1989 160  670,470  12,607,976  -  1,429,896  670,470  14,037,872  14,708,342  (5,637,856) 9,070,487  -

Mountain Terrace

  

Stevenson
Ranch, CA

 1992 510  3,966,500  35,814,995  -  7,280,336  3,966,500  43,095,331  47,061,831  (16,962,856) 30,098,975  -

New River Cove

  

Davie, FL

 1999 316  15,800,000  46,142,895  -  572,012  15,800,000  46,714,907  62,514,907  (5,693,865) 56,821,042  -

Northampton 2

  

Largo, MD

 1988 276  1,513,500  14,246,990  -  3,165,558  1,513,500  17,412,548  18,926,048  (9,046,964) 9,879,084  -

Northlake (MD)

  

Germantown,
MD

 1985 304  15,000,000  23,142,302  -  9,658,581  15,000,000  32,800,883  47,800,883  (5,820,861) 41,980,022  -

Northridge

  

Pleasant Hill,
CA

 1974 221  5,527,800  14,691,705  -  5,887,075  5,527,800  20,578,779  26,106,579  (7,292,900) 18,813,679  -

Northwoods Village

  

Cary, NC

 1986 228  1,369,700  11,460,337  -  2,446,290  1,369,700  13,906,627  15,276,327  (6,178,357) 9,097,969  -

Oaks at Falls Church

  

Falls Church,
VA

 1966 176  20,240,000  20,152,616  -  2,841,836  20,240,000  22,994,452  43,234,452  (3,168,456) 40,065,996  -

Ocean Crest

  

Solana Beach,
CA

 1986 146  5,111,200  11,910,438  -  1,783,735  5,111,200  13,694,173  18,805,373  (5,281,964) 13,523,409  -

Ocean Walk

  

Key West, FL

 1990 297  2,838,749  25,545,009  -  2,949,241  2,838,749  28,494,249  31,332,998  (11,254,710) 20,078,288  -

Olympus Towers

  

Seattle, WA
(G)

 2000 328  14,752,034  73,376,841  -  1,742,451  14,752,034  75,119,292  89,871,326  (14,120,591) 75,750,735  -

Orchard Ridge

  

Lynnwood,
WA

 1988 104  480,600  4,372,033  -  967,317  480,600  5,339,350  5,819,950  (2,859,809) 2,960,140  -

Overlook Manor

  

Frederick,
MD

 1980/1985 108  1,299,100  3,930,931  -  1,896,555  1,299,100  5,827,486  7,126,586  (2,630,819) 4,495,767  -

Overlook Manor II

  

Frederick,
MD

 1980/1985 182  2,186,300  6,262,597  -  925,108  2,186,300  7,187,705  9,374,005  (2,842,274) 6,531,731  -

Paces Station

  

Atlanta, GA

 1984-1989 610  4,801,500  32,548,053  -  7,211,810  4,801,500  39,759,862  44,561,362  (17,469,546) 27,091,816  -

Palladia

  

Hillsboro, OR

 2000 497  6,461,000  44,888,156  -  1,010,712  6,461,000  45,898,868  52,359,868  (12,513,923) 39,845,945  -

Palm Trace Landings

  

Davie, FL

 1995 768  38,400,000  105,793,432  -  1,503,979  38,400,000  107,297,411  145,697,411  (12,958,097) 132,739,314  -

Panther Ridge

  

Federal Way,
WA

 1980 260  1,055,800  9,506,117  -  1,663,857  1,055,800  11,169,974  12,225,774  (5,007,541) 7,218,233  -

Parc 77

  

New York,
NY (G)

 1903 137  40,504,000  18,025,679  -  2,950,422  40,504,000  20,976,101  61,480,101  (2,291,575) 59,188,526  -

Parc Cameron

  

New York,
NY (G)

 1927 166  37,600,000  9,856,337  -  3,136,926  37,600,000  12,993,263  50,593,263  (1,664,239) 48,929,024  -

Parc Coliseum

  

New York,
NY (G)

 1910 176  52,654,000  23,046,491  -  4,872,460  52,654,000  27,918,951  80,572,951  (2,861,468) 77,711,483  -

Park at Turtle Run, The

  

Coral Springs,
FL

 2001 257  15,420,000  36,064,629  -  759,832  15,420,000  36,824,461  52,244,461  (5,702,550) 46,541,911  -

Park Bloomingdale
Condominium
Homes

  

Bloomingdale,
IL

 1989 1  16,824  84,873  -  (5,998) 16,824  78,876  95,700  (30,281) 65,418  -

Park West (CA)

  

Los Angeles,
CA

 1987/1990 444  3,033,500  27,302,383  -  5,035,591  3,033,500  32,337,973  35,371,473  (15,297,564) 20,073,909  -

Parkside

  

Union City,
CA

 1979 208  6,246,700  11,827,453  -  2,995,961  6,246,700  14,823,414  21,070,114  (6,507,886) 14,562,228  -

Parkview Terrace

  

Redlands, CA

 1986 558  4,969,200  35,653,777  -  10,891,594  4,969,200  46,545,371  51,514,571  (17,785,589) 33,728,983  -

Parkwood (CT)

  

East Haven,
CT

 1975 102  531,365  3,552,064  -  598,636  531,365  4,150,700  4,682,065  (1,354,495) 3,327,570  -

Phillips Park

  

Wellesley,
MA

 1988 49  816,922  5,460,955  -  897,230  816,922  6,358,185  7,175,107  (1,894,250) 5,280,857  -

Pine Harbour

  

Orlando, FL

 1991 366  1,664,300  14,970,915  -  3,094,321  1,664,300  18,065,236  19,729,536  (9,773,709) 9,955,827  -

Playa Pacifica

  

Hermosa
Beach,CA

 1972 285  35,100,000  33,473,822  -  6,909,421  35,100,000  40,383,243  75,483,243  (5,967,484) 69,515,760  -

Pointe at South
Mountain

  

Phoenix, AZ

 1988 364  2,228,800  20,059,311  -  2,853,508  2,228,800  22,912,819  25,141,619  (10,000,243) 15,141,375  -

Polos East

  

Orlando, FL

 1991 308  1,386,000  19,058,620  -  1,849,288  1,386,000  20,907,908  22,293,908  (7,927,391) 14,366,517  -

Port Royale

  

Ft.
Lauderdale,
FL (G)

 1988 252  1,754,200  15,789,873  -  5,848,428  1,754,200  21,638,301  23,392,501  (10,350,615) 13,041,886  -

Port Royale II

  

Ft.
Lauderdale,
FL (G)

 1988 161  1,022,200  9,203,166  -  3,710,685  1,022,200  12,913,851  13,936,051  (5,770,701) 8,165,350  -

Port Royale III

  

Ft.
Lauderdale,
FL (G)

 1988 324  7,454,900  14,725,802  -  6,940,198  7,454,900  21,666,000  29,120,900  (8,994,903) 20,125,997  -

Portofino

  

Chino Hills,
CA

 1989 176  3,572,400  14,660,994  -  1,580,115  3,572,400  16,241,109  19,813,509  (6,552,370) 13,261,139  -

Portside Towers

  

Jersey City,
NJ (G)

 1992-1997 527  22,487,006  96,842,913  -  9,156,163  22,487,006  105,999,076  128,486,083  (38,807,012) 89,679,071  -

Preserve at Deer Creek

  

Deerfield
Beach, FL

 1997 540  13,500,000  60,011,208  -  2,135,641  13,500,000  62,146,849  75,646,849  (12,044,500) 63,602,349  -

Prime, The

  

Arlington, VA

 2002 256  32,000,000  64,451,521  -  493,169  32,000,000  64,944,690  96,944,690  (6,621,385) 90,323,305  -

Promenade (FL)

  

St. Petersburg,
FL

 1994 334  2,124,193  25,804,037  -  3,555,540  2,124,193  29,359,577  31,483,770  (11,252,866) 20,230,904  -

Promenade at Aventura

  

Aventura, FL

 1995 296  13,320,000  30,353,748  -  2,603,391  13,320,000  32,957,139  46,277,139  (9,521,390) 36,755,749  -

Promenade at Town
Center I

  

Valencia, CA

 2001 294  14,700,000  35,390,279  -  1,120,868  14,700,000  36,511,146  51,211,146  (7,360,800) 43,850,347  -

Promenade at
Wyndham Lakes

  

Coral Springs,
FL

 1998 332  6,640,000  26,743,760  -  1,631,879  6,640,000  28,375,639  35,015,639  (8,686,258) 26,329,381  -

Promontory Pointe I &
II

  

Phoenix, AZ

 1984/1996 424  2,355,509  30,421,840  -  3,406,130  2,355,509  33,827,970  36,183,479  (13,684,094) 22,499,385  -

Prospect Towers

  

Hackensack,
NJ

 1995 157  3,926,600  27,966,416  -  2,635,344  3,926,600  30,601,760  34,528,360  (12,389,125) 22,139,235  -

Prospect Towers II

  

Hackensack,
NJ

 2002 203  4,500,000  33,104,733  -  1,295,293  4,500,000  34,400,026  38,900,026  (8,252,384) 30,647,642  -

Ravens Crest

  

Plainsboro, NJ

 1984 704  4,670,850  42,080,642  -  11,034,409  4,670,850  53,115,051  57,785,901  (26,828,342) 30,957,559  -

Redlands Lawn and
Tennis

  

Redlands, CA

 1986 496  4,822,320  26,359,328  -  3,964,585  4,822,320  30,323,913  35,146,233  (12,404,888) 22,741,346  -

Redmond Ridge

  

Redmond,
WA

 2008 321  6,975,705  45,932,828  -  17,148  6,975,705  45,949,976  52,925,681  (1,067,063) 51,858,618  -

Redmond Way

  

Redmond ,
WA

 (F) -  15,546,376  6,887,326  -  -      15,546,376  6,887,326  22,433,702  -      22,433,702  -

Regency Palms

  

Huntington
Beach, CA

 1969 310  1,857,400  16,713,254  -  3,400,718  1,857,400  20,113,972  21,971,372  (9,788,393) 12,182,979  -

Regency Park

  

Centreville,
VA

 1989 252  2,521,500  16,200,666  -  7,541,759  2,521,500  23,742,424  26,263,924  (8,989,214) 17,274,710  -

Remington Place

  

Phoenix, AZ

 1983 412  1,492,750  13,377,478  -  4,040,994  1,492,750  17,418,472  18,911,222  (8,833,505) 10,077,717  -

Reserve at Town Center

  

Loudon, VA

 2002 290  3,144,056  27,669,121  -  564,594  3,144,056  28,233,715  31,377,770  (5,399,555) 25,978,215  -

Reserve at Town Center II
(WA)

  

Mill Creek,
WA

 (F) -  4,310,417  5,013,621  -  -      4,310,417  5,013,621  9,324,039  -      9,324,039  -

Residences at Little
River

  

Haverhill, MA

 2003 174  6,905,138  19,172,747  -  384,973  6,905,138  19,557,720  26,462,858  (4,024,922) 22,437,936  -

Ribbon Mill

  

Manchester,
CT

 1908 104  787,929  5,267,144  -  556,668  787,929  5,823,812  6,611,741  (1,850,563) 4,761,178  -

Ridgewood Village
I&II

  

San Diego,
CA

 1997 408  11,809,500  34,004,048  -  1,409,420  11,809,500  35,413,468  47,222,968  (11,457,452) 35,765,515  -

Rivers Bend (CT)

  

Windsor, CT

 1973 373  3,325,517  22,573,826  -  2,290,978  3,325,517  24,864,804  28,190,320  (7,573,864) 20,616,457  -

Riverview Condominiums

  

Norwalk, CT

 1991 92  2,300,000  7,406,730  -  1,630,134  2,300,000  9,036,864  11,336,864  (3,425,839) 7,911,026  -

Rock Creek

  

Carrboro, NC

 1986 188  895,700  8,062,543  -  2,028,944  895,700  10,091,486  10,987,186  (4,802,339) 6,184,847  -

Rosecliff

  

Quincy, MA

 1990 156  5,460,000  15,721,570  -  798,043  5,460,000  16,519,613  21,979,613  (5,395,975) 16,583,638  -

Royal Oaks (FL)

  

Jacksonville,
FL

 1991 284  1,988,000  13,645,117  -  2,673,120  1,988,000  16,318,238  18,306,238  (6,191,023) 12,115,215  -

Sabal Palm at Boot
Ranch

  

Palm Harbor,
FL

 1996 432  3,888,000  28,923,692  -  2,735,717  3,888,000  31,659,409  35,547,409  (11,768,078) 23,779,331  -

Sabal Palm at
Carrollwood Place

  

Tampa, FL

 1995 432  3,888,000  26,911,542  -  2,232,195  3,888,000  29,143,738  33,031,738  (10,668,948) 22,362,790  -

Sabal Palm at Lake
Buena Vista

  

Orlando, FL

 1988 400  2,800,000  23,687,893  -  2,710,931  2,800,000  26,398,824  29,198,824  (10,017,094) 19,181,730  -

Sabal Palm at
Metrowest

  

Orlando, FL

 1998 411  4,110,000  38,394,865  -  3,150,584  4,110,000  41,545,449  45,655,449  (15,215,912) 30,439,537  -

Sabal Palm at
Metrowest II

  

Orlando, FL

 1997 456  4,560,000  33,907,283  -  2,154,784  4,560,000  36,062,067  40,622,067  (13,073,389) 27,548,678  -

Sabal Pointe

  

Coral Springs,
FL

 1995 275  1,951,600  17,570,508  -  3,384,553  1,951,600  20,955,061  22,906,661  (9,685,458) 13,221,203  -

Saddle Ridge

  

Ashburn, VA

 1989 216  1,364,800  12,283,616  -  1,873,416  1,364,800  14,157,033  15,521,833  (6,790,014) 8,731,819  -

Sage Condominium
Homes, LLC

  

Everett, WA

 2002 123  2,500,000  12,021,256  -  328,641  2,500,000  12,349,897  14,849,897  (1,114,232) 13,735,665  -

Savannah at Park Place

  

Atlanta, GA

 2001 416  7,696,095  34,114,542  -  2,438,417  7,696,095  36,552,960  44,249,054  (7,216,220) 37,032,834  -

Savoy III

  

Aurora, CO

 (F) -  659,165  1,880,695  -  -      659,165  1,880,695  2,539,861  -      2,539,861  -

Security Manor

  

Westfield,
MA

 1971 63  355,456  2,376,152  -  333,201  355,456  2,709,353  3,064,809  (809,621) 2,255,188  -

Seeley Lake

  

Lakewood,
WA

 1990 522  2,760,400  24,845,286  -  3,378,196  2,760,400  28,223,482  30,983,882  (12,099,508) 18,884,374  -

Seventh & James

  

Seattle, WA

 1992 96  663,800  5,974,803  -  2,245,556  663,800  8,220,359  8,884,159  (4,038,426) 4,845,733  -

Shadow Creek

  

Winter
Springs, FL

 2000 280  6,000,000  21,719,768  -  1,049,360  6,000,000  22,769,128  28,769,128  (4,522,360) 24,246,768  -

Sheridan Lake Club

  

Dania Beach,
FL

 2001 240  12,000,000  23,170,580  -  638,868  12,000,000  23,809,449  35,809,449  (2,256,221) 33,553,228  -

Sheridan Ocean Club
combined

  

Dania Beach,
FL

 1991 648  18,313,414  47,090,930  -  9,139,062  18,313,414  56,229,993  74,543,407  (14,891,767) 59,651,639  -

Silver Springs (FL)

  

Jacksonville,
FL

 1985 432  1,831,100  16,474,735  -  5,180,516  1,831,100  21,655,251  23,486,351  (10,366,665) 13,119,686  -

Skylark

  

Union City,
CA

 1986 174  1,781,600  16,731,916  -  1,341,922  1,781,600  18,073,838  19,855,438  (6,794,474) 13,060,964  -

Sonoran

  

Phoenix, AZ

 1995 429  2,361,922  31,841,724  -  2,353,560  2,361,922  34,195,283  36,557,205  (13,468,766) 23,088,439  -

Southwood

  

Palo Alto, CA

 1985 100  6,936,600  14,324,069  -  1,731,565  6,936,600  16,055,634  22,992,234  (6,275,927) 16,716,307  -

Spring Hill Commons

  

Acton, MA

 1973 105  1,107,436  7,402,980  -  4,578,320  1,107,436  11,981,300  13,088,735  (2,936,496) 10,152,239  -

Springbrook Estates

  

Riverside, CA

 (F) -  18,200,000  -      -  -      18,200,000  -      18,200,000  -      18,200,000  -

St. Andrews at Winston
Park

  

Coconut
Creek, FL

 1997 284  5,680,000  19,812,090  -  1,552,357  5,680,000  21,364,448  27,044,448  (5,766,647) 21,277,800  -

Stoney Creek

  

Lakewood,
WA

 1990 231  1,215,200  10,938,134  -  1,992,699  1,215,200  12,930,833  14,146,033  (5,561,951) 8,584,082  -

Sturbridge Meadows

  

Sturbridge,
MA

 1985 104  702,447  4,695,714  -  807,772  702,447  5,503,486  6,205,933  (1,706,453) 4,499,480  -

Summer Ridge

  

Riverside, CA

 1985 136  602,400  5,422,807  -  1,912,238  602,400  7,335,045  7,937,445  (3,466,532) 4,470,913  -

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Sabal Palm at Metrowest II Orlando, FL 1997  456   4,560,000   33,907,283      2,691,106   4,560,000   36,598,389   41,158,389   (15,830,427)  25,327,962    
Sabal Pointe Coral Springs, FL 1995  275   1,951,600   17,570,508      3,961,145   1,951,600   21,531,653   23,483,253   (11,635,146)  11,848,107    
Saddle Ridge Ashburn, VA 1989  216   1,364,800   12,283,616      2,201,030   1,364,800   14,484,646   15,849,446   (7,934,560)  7,914,886    
Sage Everett, WA 2002  123   2,500,000   12,021,256      412,814   2,500,000   12,434,070   14,934,070   (2,576,867)  12,357,203    
Savannah at Park Place Atlanta, GA 2001  416   7,696,095   34,114,542      2,628,399   7,696,095   36,742,941   44,439,036   (10,138,404)  34,300,632    
Savoy III Aurora, CO (F)     659,165   4,749,723         659,165   4,749,723   5,408,888      5,408,888    
Sawgrass Cove Bradenton, FL 1991  336   3,360,000   12,587,189      80,974   3,360,000   12,668,163   16,028,163   (1,947,404)  14,080,759    
Scarborough Square Rockville, MD 1967  121   1,815,000   7,608,126      2,394,761   1,815,000   10,002,887   11,817,887   (4,923,278)  6,894,609    
Sedona Ridge Phoenix, AZ 1989  250   3,750,000   14,750,000      254,926   3,750,000   15,004,926   18,754,926   (2,039,282)  16,715,644    
Seeley Lake Lakewood, WA 1990  522   2,760,400   24,845,286      4,006,480   2,760,400   28,851,766   31,612,166   (14,437,537)  17,174,629    
Seventh & James Seattle, WA 1992  96   663,800   5,974,803      2,878,988   663,800   8,853,791   9,517,591   (4,849,519)  4,668,072    
Shadow Creek Winter Springs, FL 2000  280   6,000,000   21,719,768      1,434,843   6,000,000   23,154,611   29,154,611   (6,340,966)  22,813,645    
Sheridan Lake Club Dania Beach, FL 2001  240   12,000,000   23,170,580      1,252,843   12,000,000   24,423,423   36,423,423   (5,113,176)  31,310,247    
Sheridan Ocean Club combined Dania Beach, FL 1991  648   18,313,414   47,091,593      14,017,392   18,313,414   61,108,985   79,422,399   (21,027,176)  58,395,223    
Siena Terrace Lake Forest, CA 1988  356   8,900,000   24,083,024      2,738,600   8,900,000   26,821,624   35,721,624   (11,637,233)  24,084,391    
Silver Springs (FL) Jacksonville, FL 1985  432   1,831,100   16,474,735      5,779,723   1,831,100   22,254,458   24,085,558   (12,404,671)  11,680,887    
Skycrest Valencia, CA 1999  264   10,560,000   25,574,457      1,870,144   10,560,000   27,444,601   38,004,601   (10,001,263)  28,003,338    
Skylark Union City, CA 1986  174   1,781,600   16,731,916      1,608,125   1,781,600   18,340,041   20,121,641   (8,137,578)  11,984,063    
Skyline Terrace Burlingame, CA 1967/1987  138   16,836,000   35,414,000      469   16,836,000   35,414,469   52,250,469   (227,411)  52,023,058    
Skyline Towers Falls Church, VA (G) 1971  939   78,278,200   91,485,591      27,969,652   78,278,200   119,455,243   197,733,443   (30,881,457)  166,851,986    
Skyview Rancho Santa Margarita, CA 1999  260   3,380,000   21,952,863      1,667,929   3,380,000   23,620,792   27,000,792   (9,657,421)  17,343,371    
Sonoran Phoenix, AZ 1995  429   2,361,922   31,841,724      2,900,306   2,361,922   34,742,030   37,103,952   (16,082,432)  21,021,520    
Southwood Palo Alto, CA 1985  100   6,936,600   14,324,069      2,065,301   6,936,600   16,389,370   23,325,970   (7,489,798)  15,836,172    
Springbrook Estates Riverside, CA (F)     18,200,000            18,200,000      18,200,000      18,200,000    
St. Andrews at Winston Park Coconut Creek, FL 1997  284   5,680,000   19,812,090      2,144,175   5,680,000   21,956,265   27,636,265   (7,512,645)  20,123,620    
Stoney Creek Lakewood, WA 1990  231   1,215,200   10,938,134      2,267,480   1,215,200   13,205,614   14,420,814   (6,703,659)  7,717,155    
Summerwood Hayward, CA 1982  162   4,810,644   6,942,743      2,132,610   4,810,644   9,075,353   13,885,997   (4,231,400)  9,654,597    
Summit & Birch Hill Farmington, CT 1967  186   1,757,438   11,748,112      2,916,135   1,757,438   14,664,247   16,421,685   (5,733,897)  10,687,788    
Summit at Lake Union Seattle, WA 1995 -1997  150   1,424,700   12,852,461      3,097,192   1,424,700   15,949,653   17,374,353   (7,701,759)  9,672,594    
Surprise Lake Village Milton, WA 1986  338   4,162,543   21,995,958      167,483   4,162,543   22,163,441   26,325,984   (2,484,576)  23,841,408    
Sycamore Creek Scottsdale, AZ 1984  350   3,152,000   19,083,727      3,055,695   3,152,000   22,139,422   25,291,422   (10,946,251)  14,345,171    
Tanasbourne Terrace Hillsboro, OR 1986-1989  373   1,876,700   16,891,205      3,764,711   1,876,700   20,655,916   22,532,616   (12,425,399)  10,107,217    
Third Square Cambridge, MA (G) 2008/2009  482   27,812,384   228,734,105      567,932   27,812,384   229,302,037   257,114,421   (15,770,134)  241,344,287    
Tortuga Bay Orlando, FL 2004  314   6,280,000   32,121,779      985,669   6,280,000   33,107,448   39,387,448   (7,923,623)  31,463,825    
Toscana Irvine, CA 1991/1993  563   39,410,000   50,806,072      6,395,983   39,410,000   57,202,055   96,612,055   (21,654,115)  74,957,940    
Townes at Herndon Herndon, VA 2002  218   10,900,000   49,216,125      576,648   10,900,000   49,792,773   60,692,773   (10,492,949)  50,199,824    
Trump Place, 140 Riverside New York, NY (G) 2003  354   103,539,100   94,082,725      1,245,121   103,539,100   95,327,846   198,866,946   (20,098,341)  178,768,605    
Trump Place, 160 Riverside New York, NY (G) 2001  455   139,933,500   190,964,745      4,193,547   139,933,500   195,158,292   335,091,792   (39,008,991)  296,082,801    
Trump Place, 180 Riverside New York, NY (G) 1998  516   144,968,250   138,346,681      5,245,129   144,968,250   143,591,810   288,560,060   (30,420,203)  258,139,857    
Uwajimaya Village Seattle, WA 2002  176   8,800,000   22,188,288      231,285   8,800,000   22,419,573   31,219,573   (5,828,856)  25,390,717    
Valencia Plantation Orlando, FL 1990  194   873,000   12,819,377      2,124,405   873,000   14,943,782   15,816,782   (6,429,174)  9,387,608    
Vantage Pointe San Diego, CA (G) 2009  679   9,403,960   190,596,040      878,314   9,403,960   191,474,354   200,878,314   (2,779,752)  198,098,562    
Versailles (K-Town) Los Angeles, CA 2008  225   10,590,975   44,409,025      17,858   10,590,975   44,426,883   55,017,858   (2,028,003)  52,989,855    
Victor on Venice Los Angeles, CA (G) 2006  115   10,350,000   35,433,437      105,588   10,350,000   35,539,025   45,889,025   (6,273,594)  39,615,431    
Villa Encanto Phoenix, AZ 1983  385   2,884,447   22,197,363      3,530,421   2,884,447   25,727,784   28,612,231   (12,649,439)  15,962,792    
Villa Solana Laguna Hills, CA 1984  272   1,665,100   14,985,678      6,271,253   1,665,100   21,256,931   22,922,031   (12,286,928)  10,635,103    
Village at Bear Creek Lakewood, CO 1987  472   4,519,700   40,676,390      4,115,836   4,519,700   44,792,226   49,311,926   (21,310,226)  28,001,700    
Vista Del Largo Mission Viejo, CA 1986-1988  608   4,525,800   40,736,293      10,948,915   4,525,800   51,685,208   56,211,008   (30,191,450)  26,019,558    
Vista Grove Mesa, AZ 1997/1998  224   1,341,796   12,157,045      1,295,291   1,341,796   13,452,336   14,794,132   (6,225,002)  8,569,130    
Vista Montana — Residential & Townhomes San Jose, CA (F)     51,000,000            51,000,000      51,000,000      51,000,000    
Vista on Courthouse Arlington, VA 2008  220   15,550,260   69,449,740      86,777   15,550,260   69,536,517   85,086,777   (5,267,387)  79,819,390    
Waterford at Deerwood Jacksonville, FL 1985  248   1,496,913   10,659,702      3,584,784   1,496,913   14,244,486   15,741,399   (6,711,046)  9,030,353    
Waterford at Orange Park Orange Park, FL 1986  280   1,960,000   12,098,784      2,967,016   1,960,000   15,065,800   17,025,800   (7,417,680)  9,608,120    
Waterford Place (CO) Thornton, CO 1998  336   5,040,000   29,946,419      1,310,833   5,040,000   31,257,252   36,297,252   (9,793,049)  26,504,203    
Waterside Reston, VA 1984  276   20,700,000   27,474,388      7,638,031   20,700,000   35,112,419   55,812,419   (9,030,796)  46,781,623    
Webster Green Needham, MA 1985  77   1,418,893   9,485,006      1,000,811   1,418,893   10,485,817   11,904,710   (3,879,487)  8,025,223    
Welleby Lake Club Sunrise, FL 1991  304   3,648,000   17,620,879      3,744,103   3,648,000   21,364,982   25,012,982   (9,435,056)  15,577,926    
West End Apartments (fka Emerson Place/CRP II) Boston, MA (G) 2008  310   469,546   163,123,022      358,369   469,546   163,481,391   163,950,937   (15,522,448)  148,428,489    
Westerly at Worldgate Herndon, VA 1995  320   14,568,000   43,620,057      1,062,632   14,568,000   44,682,689   59,250,689   (6,046,012)  53,204,677    
Westfield Village Centerville, VA 1988  228   7,000,000   23,245,834      4,574,728   7,000,000   27,820,562   34,820,562   (8,289,817)  26,530,745    
Westridge Tacoma, WA 1987 -1991  714   3,501,900   31,506,082      6,551,697   3,501,900   38,057,779   41,559,679   (19,228,990)  22,330,689    
Westgate Pasadena Condos Pasadena, CA (F)     29,977,725   16,130,079         29,977,725   16,130,079   46,107,804      46,107,804    
Westgate Pasadena and Green Pasadena, CA (F)        390,813            390,813   390,813      390,813    
Westside Villas I Los Angeles, CA 1999  21   1,785,000   3,233,254      256,198   1,785,000   3,489,452   5,274,452   (1,324,557)  3,949,895    
Westside Villas II Los Angeles, CA 1999  23   1,955,000   3,541,435      139,793   1,955,000   3,681,228   5,636,228   (1,307,577)  4,328,651    
Westside Villas III Los Angeles, CA 1999  36   3,060,000   5,538,871      203,576   3,060,000   5,742,447   8,802,447   (2,045,237)  6,757,210    
Westside Villas IV Los Angeles, CA 1999  36   3,060,000   5,539,390      212,024   3,060,000   5,751,414   8,811,414   (2,039,061)  6,772,353    
Westside Villas V Los Angeles, CA 1999  60   5,100,000   9,224,485      368,292   5,100,000   9,592,777   14,692,777   (3,414,998)  11,277,779    
Westside Villas VI Los Angeles, CA 1989  18   1,530,000   3,023,523      231,964   1,530,000   3,255,487   4,785,487   (1,182,625)  3,602,862    
Westside Villas VII Los Angeles, CA 2001  53   4,505,000   10,758,900      361,135   4,505,000   11,120,035   15,625,035   (3,377,984)  12,247,051    
Wimberly at Deerwood Jacksonville, FL 2000  322   8,000,000   30,057,214      1,524,972   8,000,000   31,582,186   39,582,186   (7,060,939)  32,521,247    
Winchester Park Riverside, RI 1972  416   2,822,618   18,868,626      6,221,418   2,822,618   25,090,044   27,912,662   (10,446,769)  17,465,893    
Winchester Wood Riverside, RI 1989  62   683,215   4,567,154      798,960   683,215   5,366,114   6,049,329   (2,013,478)  4,035,851    
Windsor at Fair Lakes Fairfax, VA 1988  250   10,000,000   28,587,109      5,870,235   10,000,000   34,457,344   44,457,344   (9,463,894)  34,993,450    

S-7

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
                

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances 

Summerset Village II

  

Chatsworth,
CA

 (F) -  260,646  -  -  -      260,646  -      260,646  -  260,646  - 

Summerwood

  

Hayward,
CA

��1982 162  4,866,600  6,942,743  -  1,705,627  4,866,600  8,648,370  13,514,970  (3,405,169) 10,109,800  - 

Summit & Birch Hill

  

Farmington,
CT

 1967 186  1,757,438  11,748,112  -  2,516,753  1,757,438  14,264,866  16,022,303  (4,297,762) 11,724,541  - 

Summit at Lake Union

  

Seattle, WA

 1995 -1997 150  1,424,700  12,852,461  -  2,470,657  1,424,700  15,323,118  16,747,818  (6,377,940) 10,369,878  - 

Surrey Downs

  

Bellevue,
WA

 1986 122  3,057,100  7,848,618  -  1,090,834  3,057,100  8,939,452  11,996,552  (3,510,691) 8,485,861  - 

Sycamore Creek

  

Scottsdale,
AZ

 1984 350  3,152,000  19,083,727  -  2,696,569  3,152,000  21,780,296  24,932,296  (9,188,202) 15,744,095  - 

Timber Hollow

  

Chapel Hill,
NC

 1986 198  800,000  11,219,537  -  1,597,627  800,000  12,817,164  13,617,164  (4,956,952) 8,660,212  - 

Tortuga Bay

  

Orlando, FL

 2004 314  6,280,000  32,121,779  -  784,818  6,280,000  32,906,597  39,186,597  (5,355,572) 33,831,024  - 

Toscana

  

Irvine, CA

 1991/1993 563  39,410,000  50,806,072  -  5,490,188  39,410,000  56,296,260  95,706,260  (17,082,414) 78,623,846  - 

Townes at Herndon

  

Herndon, VA

 2002 218  10,900,000  49,216,125  -  415,796  10,900,000  49,631,921  60,531,921  (6,150,653) 54,381,268  - 

Trump Place, 140
Riverside

  

New York,
NY (G)

 2003 354  103,539,100  94,082,725  -  792,105  103,539,100  94,874,830  198,413,930  (13,387,944) 185,025,986  - 

Trump Place, 160
Riverside

  

New York,
NY (G)

 2001 455  139,933,500  190,964,745  -  1,917,710  139,933,500  192,882,455  332,815,955  (25,449,168) 307,366,787  - 

Trump Place, 180
Riverside

  

New York,
NY (G)

 1998 516  144,968,250  138,346,681  -  2,810,666  144,968,250  141,157,347  286,125,597  (19,848,260) 266,277,338  - 

Turnberry Isle

  

Dallas, TX

 1994 187  2,992,000  15,287,285  -  785,320  2,992,000  16,072,605  19,064,605  (3,032,799) 16,031,806  - 

Valencia Plantation

  

Orlando, FL

 1990 194  873,000  12,819,377  -  1,276,090  873,000  14,095,468  14,968,468  (5,175,393) 9,793,074  - 

Van Deene Manor

  

West
Springfield,
MA

 1970 111  744,491  4,976,771  -  463,363  744,491  5,440,133  6,184,624  (1,747,130) 4,437,495  - 

Versailles

  

Woodland
Hills, CA

 1991 253  12,650,000  33,656,292  -  3,247,607  12,650,000  36,903,899  49,553,899  (8,106,434) 41,447,465  - 

Victor on Venice

  

Los Angeles,
CA (G)

 2006 115  10,350,000  35,430,461  -  71,040  10,350,000  35,501,501  45,851,501  (3,415,581) 42,435,920  - 

View Pointe

  

Riverside,
CA

 1998 208  10,400,000  26,315,150  -  1,111,852  10,400,000  27,427,002  37,827,002  (3,857,291) 33,969,711  - 

Villa Solana

  

Laguna Hills,
CA

 1984 272  1,665,100  14,985,678  -  4,376,657  1,665,100  19,362,334  21,027,434  (10,654,835) 10,372,600  - 

Village at Bear Creek

  

Lakewood,
CO

 1987 472  4,519,700  40,676,390  -  3,171,117  4,519,700  43,847,507  48,367,207  (17,943,180) 30,424,027  - 

Village of Newport

  

Kent, WA

 1987 100  416,300  3,756,582  -  716,348  416,300  4,472,930  4,889,230  (2,388,644) 2,500,586  - 

Virgil Square

  

Los Angeles,
CA

 1979 142  5,500,000  15,216,613  -  891,718  5,500,000  16,108,331  21,608,331  (2,536,834) 19,071,497  - 

Vista Del Lago

  

Mission
Viejo, CA

 1986-1988 608  4,525,800  40,736,293  -  8,584,246  4,525,800  49,320,539  53,846,339  (26,131,688) 27,714,651  - 

Vista Grove

  

Mesa, AZ

 1997/1998 224  1,341,796  12,157,045  -  1,100,139  1,341,796  13,257,185  14,598,981  (5,211,612) 9,387,369  - 

Waterford (Jax) II

  

Jacksonville,
FL

 (F) -  566,923  62,373  -  -  566,923  62,373  629,296  -  629,296  - 

Waterford at Deerwood

  

Jacksonville,
FL

 1985 248  1,496,913  10,659,702  -  2,631,552  1,496,913  13,291,254  14,788,167  (5,408,393) 9,379,773  - 

Waterford at Orange
Park

  

Orange Park,
FL

 1986 280  1,960,000  12,098,784  -  2,586,956  1,960,000  14,685,741  16,645,741  (6,209,873) 10,435,867  - 

Waterford at the Lakes

  

Kent, WA

 1990 344  3,100,200  16,140,924  -  2,117,935  3,100,200  18,258,859  21,359,059  (8,117,787) 13,241,272  - 

Waterside

  

Reston, VA

 1984 276  20,700,000  27,474,388  -  5,802,530  20,700,000  33,276,917  53,976,917  (5,198,854) 48,778,063  - 

Webster Green

  

Needham,
MA

 1985 77  1,418,893  9,485,006  -  753,992  1,418,893  10,238,998  11,657,891  (3,029,786) 8,628,105  - 

Welleby Lake Club

  

Sunrise, FL

 1991 304  3,648,000  17,620,879  -  2,395,273  3,648,000  20,016,153  23,664,153  (7,544,345) 16,119,808  - 

West End Apartments
(fka Emerson
Place/CRP II)

  

Boston, MA
(G)

 2008 310  469,546  162,675,247  -  150,517  469,546  162,825,764  163,295,310  (3,432,867) 159,862,443  - 

Westerly at Worldgate

  

Herndon, VA

 1995 320  14,568,000  43,620,057  -  506,338  14,568,000  44,126,395  58,694,395  (2,125,843) 56,568,552  - 

Westfield Village

  

Centerville,
VA

 1988 228  7,000,000  23,245,834  -  4,334,790  7,000,000  27,580,624  34,580,624  (5,618,188) 28,962,435  - 

Westridge

  

Tacoma, WA

 1987 -1991 714  3,501,900  31,506,082  -  5,550,220  3,501,900  37,056,302  40,558,202  (16,042,016) 24,516,186  - 

Westside Villas I

  

Los Angeles,
CA

 1999 21  1,785,000  3,233,254  -  215,322  1,785,000  3,448,576  5,233,576  (1,087,925) 4,145,652  - 

Westside Villas II

  

Los Angeles,
CA

 1999 23  1,955,000  3,541,435  -  110,759  1,955,000  3,652,193  5,607,193  (1,038,765) 4,568,428  - 

Westside Villas III

  

Los Angeles,
CA

 1999 36  3,060,000  5,538,871  -  159,184  3,060,000  5,698,055  8,758,055  (1,635,012) 7,123,044  - 

Westside Villas IV

  

Los Angeles,
CA

 1999 36  3,060,000  5,539,390  -  166,944  3,060,000  5,706,334  8,766,334  (1,621,210) 7,145,125  - 

Westside Villas V

  

Los Angeles,
CA

 1999 60  5,100,000  9,224,485  -  293,063  5,100,000  9,517,549  14,617,549  (2,715,891) 11,901,657  - 

Westside Villas VI

  

Los Angeles,
CA

 1989 18  1,530,000  3,023,523  -  208,625  1,530,000  3,232,148  4,762,148  (937,683) 3,824,465  - 

Westside Villas VII

  

Los Angeles,
CA

 2001 53  4,505,000  10,758,900  -  295,141  4,505,000  11,054,040  15,559,040  (2,584,070) 12,974,970  - 

Whispering Oaks

  

Walnut
Creek, CA

 1974 316  2,170,800  19,539,586  -  3,710,991  2,170,800  23,250,577  25,421,377  (10,728,477) 14,692,901  - 

Wimberly at Deerwood

  

Jacksonville,
FL

 2000 322  8,000,000  30,057,214  -  1,200,755  8,000,000  31,257,969  39,257,969  (4,444,345) 34,813,624  - 

Winchester Park

  

Riverside, RI

 1972 416  2,822,618  18,868,626  -  4,044,490  2,822,618  22,913,116  25,735,734  (8,072,828) 17,662,906  - 

Winchester Wood

  

Riverside, RI

 1989 62  683,215  4,567,154  -  652,801  683,215  5,219,955  5,903,171  (1,544,324) 4,358,846  - 

Windmont

  

Atlanta, GA

 1988 178  3,204,000  7,128,448  -  1,167,004  3,204,000  8,295,453  11,499,453  (2,873,715) 8,625,738  - 

Windsor at Fair Lakes

  

Fairfax, VA

 1988 250  10,000,000  28,587,109  -  4,391,868  10,000,000  32,978,976  42,978,976  (6,384,022) 36,594,954  - 

Winston, The (FL)

  

Pembroke
Pines, FL

 2001/2003 464  18,561,000  49,527,569  -  598,991  18,561,000  50,126,560  68,687,560  (2,862,088) 65,825,472  - 

Wood Creek (CA)

  

Pleasant Hill,
CA

 1987 256  9,729,900  23,009,768  -  2,683,456  9,729,900  25,693,224  35,423,124  (10,554,587) 24,868,537  - 

Woodbridge

  

Cary, GA

 1993-1995 128  737,400  6,636,870  -  1,256,261  737,400  7,893,130  8,630,530  (3,742,944) 4,887,586  - 

Woodbridge (CT)

  

Newington,
CT

 1968 73  498,377  3,331,548  -  696,573  498,377  4,028,121  4,526,498  (1,249,601) 3,276,897  - 

Woodbridge II

  

Cary, GA

 1993 -1995 216  1,244,600  11,243,364  -  1,769,616  1,244,600  13,012,980  14,257,580  (5,996,407) 8,261,172  - 

Woodleaf

  

Campbell,
CA

 1984 178  8,550,600  16,988,183  -  1,299,902  8,550,600  18,288,085  26,838,685  (6,785,704) 20,052,981  - 

Woodside

  

Lorton, VA

 1987 252  1,326,000  12,510,903  -  5,576,996  1,326,000  18,087,898  19,413,898  (8,752,563) 10,661,335  - 

Management Business

  

Chicago, IL

 (D) -  -  -  -  76,941,326  -  76,941,326  76,941,326  (48,005,088) 28,936,238  - 

Operating Partnership

  

Chicago, IL

 (F) -  -  800,716  -  -  -  800,716  800,716  -  800,716  - 
                                    

ERPOP Wholly
Owned
Unencumbered

    78,813  2,377,679,457  7,467,312,964  -  835,115,646  2,377,679,457  8,302,428,610�� 10,680,108,067  (2,211,404,675) 8,468,703,392  - 
                                    

ERPOP Wholly
Owned
Encumbered:

                       

740 River Drive

  

St. Paul, MN

 1962 163  1,626,700  11,234,943  -  3,814,496  1,626,700  15,049,439  16,676,139  (7,016,877) 9,659,262  4,443,675 

929 House

  

Cambridge,
MA (G)

 1975 127  3,252,993  21,745,595  -  2,203,875  3,252,993  23,949,470  27,202,463  (7,111,703) 20,090,759  3,579,583 

Academy Village

  

North
Hollywood,
CA

 1989 248  25,000,000  23,593,194  -  5,060,244  25,000,000  28,653,438  53,653,438  (5,050,444) 48,602,994  20,000,000 

Acton Courtyard

  

Berkeley,
CA (G)

 2003 71  5,550,000  15,785,509  -  20,826  5,550,000  15,806,335  21,356,335  (1,445,857) 19,910,478  9,920,000 

Alborada

  

Fremont, CA

 1999 442  24,310,000  59,214,129  -  1,938,453  24,310,000  61,152,582  85,462,582  (18,810,619) 66,651,963  (M)

Alexander on Ponce

  

Atlanta, GA

 2003 330  9,900,000  35,819,022  -  1,150,190  9,900,000  36,969,212  46,869,212  (5,159,227) 41,709,985  28,880,000 

Amberton

  

Manassas,
VA

 1986 190  900,600  11,921,815  -  2,240,783  900,600  14,162,597  15,063,197  (6,180,920) 8,882,278  10,705,000 

Arbor Terrace

  

Sunnyvale,
CA

 1979 174  9,057,300  18,483,642  -  1,899,788  9,057,300  20,383,430  29,440,730  (7,581,207) 21,859,524  (O)

Arboretum (MA)

  

Canton, MA

 1989 156  4,685,900  10,992,751  -  1,562,523  4,685,900  12,555,274  17,241,174  (4,959,265) 12,281,909  (I)

Arden Villas

  

Orlando, FL

 1999 336  5,500,000  28,600,796  -  2,801,482  5,500,000  31,402,278  36,902,278  (5,081,696) 31,820,581  23,009,902 

Artech Building

  

Berkeley,
CA (G)

 2002 21  1,642,000  9,152,518  -  20,518  1,642,000  9,173,036  10,815,036  (733,239) 10,081,798  3,200,000 

Artisan Square

  

Northridge,
CA

 2002 140  7,000,000  20,537,359  -  588,909  7,000,000  21,126,268  28,126,268  (4,720,000) 23,406,268  (L)

Avanti

  

Anaheim,
CA

 1987 162  12,960,000  18,495,974  -  705,205  12,960,000  19,201,179  32,161,179  (2,239,088) 29,922,092  19,850,000 

Bachenheimer Building

  

Berkeley,
CA (G)

 2004 44  3,439,000  13,866,379  -  15,148  3,439,000  13,881,527  17,320,527  (1,176,425) 16,144,102  8,585,000 

Bay Hill

  

Long Beach,
CA

 2002 160  7,600,000  27,437,239  -  605,091  7,600,000  28,042,330  35,642,330  (5,019,465) 30,622,865  13,994,000 

Bellagio Apartment
Homes

  

Scottsdale,
AZ

 1995 202  2,626,000  16,025,041  -  765,530  2,626,000  16,790,571  19,416,571  (3,165,368) 16,251,202  (O)

Berkeleyan

  

Berkeley,
CA (G)

 1998 56  4,377,000  16,022,110  -  178,584  4,377,000  16,200,694  20,577,694  (1,387,160) 19,190,534  8,433,787 

Bradley Park

  

Puyallup,
WA

 1999 155  3,813,000  18,313,645  -  265,475  3,813,000  18,579,119  22,392,119  (3,025,433) 19,366,686  11,822,178 

Briar Knoll Apts

  

Vernon, CT

 1986 150  928,972  6,209,988  -  1,099,911  928,972  7,309,899  8,238,871  (2,365,246) 5,873,625  5,389,711 

Briarwood (CA)

  

Sunnyvale,
CA

 1985 192  9,991,500  22,247,278  -  1,199,469  9,991,500  23,446,747  33,438,247  (8,558,070) 24,880,177  12,800,000 

Brookside (MD)

  

Frederick,
MD

 1993 228  2,736,000  7,934,069  -  1,865,601  2,736,000  9,799,670  12,535,670  (3,888,020) 8,647,650  8,170,000 

Canterbury

  

Germantown,
MD

 1986 544  2,781,300  32,942,531  -  13,270,979  2,781,300  46,213,510  48,994,810  (19,678,507) 29,316,302  31,680,000 

Cape House I

  

Jacksonville,
FL

 1998 240  4,800,000  22,484,240  -  139,879  4,800,000  22,624,118  27,424,118  (1,896,922) 25,527,196  14,126,543 

Cape House II

  

Jacksonville,
FL

 1998 240  4,800,000  22,229,836  -  1,138,404  4,800,000  23,368,240  28,168,240  (1,944,259) 26,223,980  13,845,257 

Carmel Terrace

  

San Diego,
CA

 1988-1989 384  2,288,300  20,596,281  -  9,451,926  2,288,300  30,048,206  32,336,506  (13,123,742) 19,212,764  (N)

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Winston, The (FL) Pembroke Pines, FL 2001/2003  464   18,561,000   49,527,569      1,617,923   18,561,000   51,145,492   69,706,492   (8,441,759)  61,264,733    
Wood Creek (CA) Pleasant Hill, CA 1987  256   9,729,900   23,009,768      4,472,213   9,729,900   27,481,981   37,211,881   (12,645,672)  24,566,209    
Woodbridge (CT) Newington, CT 1968  73   498,377   3,331,548      862,784   498,377   4,194,332   4,692,709   (1,635,504)  3,057,205    
Woodleaf Campbell, CA 1984  178   8,550,600   16,988,183      1,418,889   8,550,600   18,407,072   26,957,672   (8,148,131)  18,809,541    
Woodside Lorton, VA 1987  252   1,326,000   12,510,903      5,846,332   1,326,000   18,357,235   19,683,235   (10,821,201)  8,862,034    
Management Business Chicago, IL (D)              79,865,530      79,865,530   79,865,530   (61,109,987)  18,755,543    
Operating Partnership Chicago, IL (F)        804,852            804,852   804,852      804,852    
       
ERPOP Wholly Owned Unencumbered
      80,239   2,929,343,369   8,675,464,206      950,595,062   2,929,343,369   9,626,059,268   12,555,402,637   (2,847,912,228)  9,707,490,409    
       
                                                 
ERPOP Wholly Owned Encumbered:
                                                
929 House Cambridge, MA (G) 1975  127   3,252,993   21,745,595      4,361,591   3,252,993   26,107,186   29,360,179   (9,147,568)  20,212,611   3,059,026 
Academy Village North Hollywood, CA 1989  248   25,000,000   23,593,194      5,642,404   25,000,000   29,235,598   54,235,598   (8,614,636)  45,620,962   20,000,000 
Acappella Pasadena, CA 2002  143   5,839,548   29,360,452         5,839,548   29,360,452   35,200,000      35,200,000   20,886,508 
Acton Courtyard Berkeley, CA (G) 2003  71   5,550,000   15,785,509      58,895   5,550,000   15,844,404   21,394,404   (2,806,816)  18,587,588   9,920,000 
Alborada Fremont, CA 1999  442   24,310,000   59,214,129      2,251,542   24,310,000   61,465,671   85,775,671   (23,124,504)  62,651,167   (J)
Alexander on Ponce Atlanta, GA 2003  330   9,900,000   35,819,022      1,541,765   9,900,000   37,360,787   47,260,787   (8,232,441)  39,028,346   28,880,000 
Amberton Manassas, VA 1986  190   900,600   11,921,815      2,406,495   900,600   14,328,310   15,228,910   (7,347,971)  7,880,939   10,705,000 
Arbor Terrace Sunnyvale, CA 1979  175   9,057,300   18,483,642      2,226,056   9,057,300   20,709,698   29,766,998   (9,184,819)  20,582,179   (L)
Arboretum (MA) Canton, MA 1989  156   4,685,900   10,992,751      1,798,509   4,685,900   12,791,260   17,477,160   (6,000,939)  11,476,221   (I)
Artech Building Berkeley, CA (G) 2002  21   1,642,000   9,152,518      85,975   1,642,000   9,238,493   10,880,493   (1,437,190)  9,443,303   3,200,000 
Artisan Square Northridge, CA 2002  140   7,000,000   20,537,359      687,091   7,000,000   21,224,450   28,224,450   (6,239,094)  21,985,356   22,779,715 
Avanti Anaheim, CA 1987  162   12,960,000   18,497,683      1,018,387   12,960,000   19,516,070   32,476,070   (4,132,155)  28,343,915   19,850,000 
Bachenheimer Building Berkeley, CA (G) 2004  44   3,439,000   13,866,379      42,240   3,439,000   13,908,619   17,347,619   (2,287,866)  15,059,753   8,585,000 
Bella Vista Apartments at Boca Del Mar Boca Raton, FL 1985  392   11,760,000   20,190,252      13,328,327   11,760,000   33,518,579   45,278,579   (13,414,974)  31,863,605   26,134,010 
Bellagio Apartment Homes Scottsdale, AZ 1995  202   2,626,000   16,025,041      953,738   2,626,000   16,978,779   19,604,779   (4,541,961)  15,062,818   (L)
Berkeleyan Berkeley, CA (G) 1998  56   4,377,000   16,022,110      264,145   4,377,000   16,286,255   20,663,255   (2,735,637)  17,927,618   8,290,000 
Bradley Park Puyallup, WA 1999  155   3,813,000   18,313,645      388,646   3,813,000   18,702,291   22,515,291   (4,995,318)  17,519,973   11,143,586 
Briarwood (CA) Sunnyvale, CA 1985  192   9,991,500   22,247,278      1,434,998   9,991,500   23,682,276   33,673,776   (10,266,159)  23,407,617   12,800,000 
Brookside (CO) Boulder, CO 1993  144   3,600,400   10,211,159      1,520,927   3,600,400   11,732,086   15,332,486   (5,075,082)  10,257,404   (L)
Canterbury Germantown, MD (I) 1986  544   2,781,300   32,942,531      13,914,331   2,781,300   46,856,862   49,638,162   (24,687,359)  24,950,803   31,680,000 
Cape House I Jacksonville, FL 1998  240   4,800,000   22,484,240      426,982   4,800,000   22,911,222   27,711,222   (4,507,742)  23,203,480   13,748,202 
Cape House II Jacksonville, FL 1998  240   4,800,000   22,229,836      1,689,141   4,800,000   23,918,977   28,718,977   (4,773,188)  23,945,789   13,302,929 
Carmel Terrace San Diego, CA 1988-1989  384   2,288,300   20,596,281      9,979,210   2,288,300   30,575,491   32,863,791   (16,480,043)  16,383,748   (K)
Cascade at Landmark Alexandria, VA 1990  277   3,603,400   19,657,554      6,814,326   3,603,400   26,471,880   30,075,280   (12,856,433)  17,218,847   31,921,089 
Centennial Court Seattle, WA (G) 2001  187   3,800,000   21,280,039      362,829   3,800,000   21,642,868   25,442,868   (5,029,405)  20,413,463   15,557,428 
Centennial Tower Seattle, WA (G) 1991  221   5,900,000   48,800,339      2,046,434   5,900,000   50,846,773   56,746,773   (11,438,821)  45,307,952   25,300,790 
Chelsea Square Redmond, WA 1991  113   3,397,100   9,289,074      1,388,566   3,397,100   10,677,640   14,074,740   (4,562,296)  9,512,444   (L)
Church Corner Cambridge, MA (G) 1987  85   5,220,000   16,744,643      1,179,544   5,220,000   17,924,187   23,144,187   (4,248,578)  18,895,609   12,000,000 
Cierra Crest Denver, CO 1996  480   4,803,100   34,894,898      4,402,011   4,803,100   39,296,909   44,100,009   (18,210,852)  25,889,157   (L)
City Pointe Fullerton, CA (G) 2004  183   6,863,792   36,476,207      83,706   6,863,792   36,559,913   43,423,705   (2,707,002)  40,716,703   23,503,206 
Colorado Pointe Denver, CO 2006  193   5,790,000   28,815,766      408,628   5,790,000   29,224,394   35,014,394   (6,452,888)  28,561,506   (K)
Conway Court Roslindale, MA 1920  28   101,451   710,524      229,420   101,451   939,944   1,041,395   (395,244)  646,151   260,117 
Copper Canyon Highlands Ranch, CO 1999  222   1,442,212   16,251,114      1,150,650   1,442,212   17,401,764   18,843,976   (7,322,122)  11,521,854   (K)
Country Brook Chandler, AZ 1986-1996  396   1,505,219   29,542,535      3,653,889   1,505,219   33,196,424   34,701,643   (15,485,956)  19,215,687   (K)
Country Club Lakes Jacksonville, FL 1997  555   15,000,000   41,055,786      4,105,750   15,000,000   45,161,536   60,161,536   (11,315,474)  48,846,062   32,097,598 
Creekside (San Mateo) San Mateo, CA 1985  192   9,606,600   21,193,232      2,040,890   9,606,600   23,234,122   32,840,722   (9,971,049)  22,869,673   (L)
Crescent at Cherry Creek Denver, CO 1994  216   2,594,000   15,149,470      2,620,271   2,594,000   17,769,741   20,363,741   (8,074,935)  12,288,806   (K)
Deerwood (SD) San Diego, CA 1990  316   2,082,095   18,739,815      13,007,845   2,082,095   31,747,660   33,829,755   (17,756,307)  16,073,448   (K)
Estates at Maitland Summit Orlando, FL 1998  272   9,520,000   28,352,160      678,371   9,520,000   29,030,531   38,550,531   (7,308,841)  31,241,690   (L)
Estates at Tanglewood Westminster, CO 2003  504   7,560,000   51,256,538      1,850,357   7,560,000   53,106,895   60,666,895   (12,304,895)  48,362,000   (J)
Fairfield Stamford, CT (G) 1996  263   6,510,200   39,690,120      5,118,992   6,510,200   44,809,112   51,319,312   (19,894,444)  31,424,868   34,595,000 
Fine Arts Building Berkeley, CA (G) 2004  100   7,817,000   26,462,772      58,091   7,817,000   26,520,863   34,337,863   (4,506,280)  29,831,583   16,215,000 
Gaia Building Berkeley, CA (G) 2000  91   7,113,000   25,623,826      117,077   7,113,000   25,740,903   32,853,903   (4,345,971)  28,507,932   14,630,000 
Gateway at Malden Center Malden, MA (G) 1988  203   9,209,780   25,722,666      7,947,656   9,209,780   33,670,322   42,880,102   (10,662,848)  32,217,254   14,970,000 
Geary Court Yard San Francisco, CA 1990  164   1,722,400   15,471,429      2,040,242   1,722,400   17,511,671   19,234,071   (8,300,938)  10,933,133   18,893,440 
Glen Meadow Franklin, MA 1971  288   2,339,330   16,133,588      3,534,410   2,339,330   19,667,998   22,007,328   (8,107,522)  13,899,806   619,538 
Grandeville at River Place Oviedo, FL 2002  280   6,000,000   23,114,693      1,520,490   6,000,000   24,635,183   30,635,183   (6,872,649)  23,762,534   28,890,000 
Greenhaven Union City, CA 1983  250   7,507,000   15,210,399      2,970,066   7,507,000   18,180,465   25,687,465   (8,456,557)  17,230,908   10,975,000 
Greenhouse — Frey Road Kennesaw, GA 1985  489   2,467,200   22,187,443      4,922,373   2,467,200   27,109,816   29,577,016   (16,164,084)  13,412,932   19,700,000 
Greenwood Park Centennial, CO 1994  291   4,365,000   38,372,440      1,136,402   4,365,000   39,508,842   43,873,842   (6,846,735)  37,027,107   (L)
Greenwood Plaza Centennial, CO 1996  266   3,990,000   35,846,708      1,658,135   3,990,000   37,504,843   41,494,843   (6,529,493)  34,965,350   (L)
Harbor Steps Seattle, WA (G) 2000  730   59,900,000   158,829,432      5,787,753   59,900,000   164,617,185   224,517,185   (34,944,472)  189,572,713   125,926,373 
Hathaway Long Beach, CA 1987  385   2,512,500   22,611,912      6,365,675   2,512,500   28,977,587   31,490,087   (15,770,720)  15,719,367   46,517,800 
Heights on Capitol Hill Seattle, WA (G) 2006  104   5,425,000   21,138,028      55,704   5,425,000   21,193,732   26,618,732   (3,965,879)  22,652,853   19,320,000 
Heritage at Stone Ridge Burlington, MA 2005  180   10,800,000   31,808,335      607,280   10,800,000   32,415,615   43,215,615   (7,307,875)  35,907,740   28,150,164 
Heronfield Kirkland, WA 1990  202   9,245,000   27,018,110      1,212,853   9,245,000   28,230,963   37,475,963   (5,306,819)  32,169,144   (K)
Highlands at Cherry Hill Cherry Hills, NJ 2002  170   6,800,000   21,459,108      582,660   6,800,000   22,041,768   28,841,768   (4,883,071)  23,958,697   14,947,792 
Ivory Wood Bothell, WA 2000  144   2,732,800   13,888,282      543,271   2,732,800   14,431,553   17,164,353   (3,798,957)  13,365,396   8,020,000 
Jaclen Towers Beverly, MA 1976  100   437,072   2,921,735      1,125,390   437,072   4,047,125   4,484,197   (1,826,858)  2,657,339   1,208,416 
Kelvin Court (fka Alta Pacific) Irvine, CA 2008  132   10,752,145   34,628,114      11,381   10,752,145   34,639,495   45,391,640   (3,455,525)  41,936,115   28,260,000 
La Terrazza at Colma Station Colma, CA (G) 2005  153      41,251,043      458,671      41,709,714   41,709,714   (6,759,707)  34,950,007   25,940,000 
LaSalle Beaverton, OR (G) 1998  554   7,202,000   35,877,612      2,584,539   7,202,000   38,462,151   45,664,151   (12,221,817)  33,442,334   28,342,496 
Liberty Park Brain Tree, MA 2000  202   5,977,504   26,749,111      1,935,923   5,977,504   28,685,034   34,662,538   (8,587,844)  26,074,694   24,980,280 
Liberty Tower Arlington, VA (G) 2008  235   16,382,822   83,817,078      98,458   16,382,822   83,915,536   100,298,358   (2,774,628)  97,523,730   49,160,870 

S-8

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
                

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances 

Cedar Glen

  

Reading, MA

 1980 114  1,248,505  8,346,003  -  1,187,654  1,248,505  9,533,658  10,782,163  (2,908,800) 7,873,363  565,826 

Centennial Court

  

Seattle, WA
(G)

 2001 187  3,800,000  21,280,039  -  231,875  3,800,000  21,511,914  25,311,914  (3,429,919) 21,881,995  16,650,973 

Centennial Tower

  

Seattle, WA
(G)

 1991 221  5,900,000  48,800,339  -  1,329,414  5,900,000  50,129,754  56,029,754  (7,615,172) 48,414,582  26,654,187 

Chelsea Square

  

Redmond,
WA

 1991 113  3,397,100  9,289,074  -  675,988  3,397,100  9,965,062  13,362,162  (3,758,639) 9,603,523  (O)

Chestnut Glen

  

Abington, MA

 1983 130  1,178,965  7,881,139  -  772,743  1,178,965  8,653,882  9,832,847  (2,687,565) 7,145,282  2,070,522 

Church Corner

  

Cambridge,
MA (G)

 1987 85  5,220,000  16,744,643  -  660,565  5,220,000  17,405,209  22,625,209  (2,843,742) 19,781,467  12,000,000 

Cierra Crest

  

Denver, CO

 1996 480  4,803,100  34,894,898  -  3,764,371  4,803,100  38,659,269  43,462,369  (15,036,193) 28,426,176  (O)

Club at Tanasbourne

  

Hillsboro, OR

 1990 352  3,521,300  16,257,934  -�� 2,794,973  3,521,300  19,052,908  22,574,208  (8,415,876) 14,158,332  (J)

Colorado Pointe

  

Denver, CO

 2006 193  5,790,000  28,815,766  -  181,234  5,790,000  28,997,000  34,787,000  (3,611,292) 31,175,708  (N)

Conway Court

  

Roslindale,
MA

 1920 28  101,451  710,524  -  189,868  101,451  900,392  1,001,843  (302,174) 699,670  320,510 

Copper Canyon

  

Highlands
Ranch, CO

 1999 222  1,442,212  16,251,114  -  956,998  1,442,212  17,208,112  18,650,323  (6,010,065) 12,640,258  (N)

Country Brook

  

Chandler, AZ

 1986-1996 396  1,505,219  29,542,535  -  3,011,345  1,505,219  32,553,880  34,059,099  (12,913,064) 21,146,034  (N)

Country Club Lakes

  

Jacksonville,
FL

 1997 555  15,000,000  41,055,786  -  2,799,686  15,000,000  43,855,472  58,855,472  (7,138,928) 51,716,544  33,175,246 

Creekside (San Mateo)

  

San Mateo,
CA

 1985 192  9,606,600  21,193,232  -  1,216,508  9,606,600  22,409,740  32,016,340  (8,326,697) 23,689,643  (O)

Crescent at Cherry
Creek

  

Denver, CO

 1994 216  2,594,000  15,149,470  -  1,479,658  2,594,000  16,629,128  19,223,128  (6,700,229) 12,522,899  (N)

Crown Court

  

Scottsdale, AZ

 1987 416  3,156,600  28,414,599  -  5,992,849  3,156,600  34,407,448  37,564,048  (14,449,672) 23,114,375  (K)

Deerwood (Corona)

  

Corona, CA

 1992 316  4,742,200  20,272,892  -  2,993,969  4,742,200  23,266,861  28,009,061  (9,789,446) 18,219,615  (L)

Deerwood (SD)

  

San Diego,
CA

 1990 316  2,082,095  18,739,815  -  11,056,580  2,082,095  29,796,395  31,878,490  (14,661,895) 17,216,595  (N)

Eastbridge

  

Dallas, TX

 1998 169  3,380,000  11,860,382  -  784,905  3,380,000  12,645,287  16,025,287  (3,692,104) 12,333,184  7,435,675 

Estates at Maitland
Summit

  

Orlando, FL

 1998 272  9,520,000  28,352,160  -  431,179  9,520,000  28,783,338  38,303,338  (4,079,299) 34,224,039  (O)

Estates at Tanglewood

  

Westminster,
CO

 2003 504  7,560,000  51,256,538  -  1,325,283  7,560,000  52,581,821  60,141,821  (8,147,350) 51,994,472  (M)

Fine Arts Building

  

Berkeley, CA
(G)

 2004 100  7,817,000  26,462,772  -  25,598  7,817,000  26,488,370  34,305,370  (2,318,833) 31,986,537  16,215,000 

Fireside Park

  

Rockville,
MD

 1961 236  4,248,000  9,977,101  -  2,837,378  4,248,000  12,814,479  17,062,479  (5,097,298) 11,965,180  8,095,000 

Gaia Building

  

Berkeley, CA
(G)

 2000 91  7,113,000  25,623,826  -  44,661  7,113,000  25,668,487  32,781,487  (2,237,949) 30,543,538  14,630,000 

Gateway at Malden
Center

  

Malden, MA
(G)

 1988 203  9,209,780  25,722,666  -  5,867,208  9,209,780  31,589,874  40,799,654  (7,320,861) 33,478,793  14,970,000 

Geary Court Yard

  

San Francisco,
CA

 1990 164  1,722,400  15,471,429  -  1,703,029  1,722,400  17,174,458  18,896,858  (6,841,228) 12,055,630  19,350,778 

Glen Grove

  

Wellesley,
MA

 1979 125  1,344,601  8,988,383  -  980,913  1,344,601  9,969,295  11,313,896  (3,046,409) 8,267,488  287,311 

Glen Meadow

  

Franklin, MA

 1971 288  2,339,330  17,796,431  -  2,555,165  2,339,330  20,351,596  22,690,927  (6,295,888) 16,395,039  1,108,838 

Gosnold Grove

  

East
Falmouth, MA

 1978 33  124,296  830,891  -  264,497  124,296  1,095,388  1,219,684  (390,911) 828,773  452,412 

Grandeville at River
Place

  

Oviedo, FL

 2002 280  6,000,000  23,114,693  -  1,302,075  6,000,000  24,416,767  30,416,767  (5,049,745) 25,367,022  28,890,000 

Greenhaven

  

Union City,
CA

 1983 250  7,507,000  15,210,399  -  2,553,468  7,507,000  17,763,867  25,270,867  (6,873,909) 18,396,958  10,975,000 

Greenhouse - Frey
Road

  

Kennesaw,
GA

 1985 489  2,467,200  22,187,443  -  4,541,691  2,467,200  26,729,135  29,196,335  (14,058,854) 15,137,480  (I)

Greenhouse - Roswell

  

Roswell, GA

 1985 236  1,220,000  10,974,727  -  2,474,388  1,220,000  13,449,116  14,669,116  (7,284,050) 7,385,065  (I)

Greenwood Park

  

Centennial,
CO

 1994 291  4,365,000  38,372,440  -  728,205  4,365,000  39,100,645  43,465,645  (3,203,000) 40,262,646  (O)

Greenwood Plaza

  

Centennial,
CO

 1996 266  3,990,000  35,846,708  -  1,158,614  3,990,000  37,005,322  40,995,322  (3,001,215) 37,994,107  (O)

Hampshire Place

  

Los Angeles,
CA

 1989 259  10,806,000  30,335,330  -  1,385,399  10,806,000  31,720,728  42,526,728  (5,560,736) 36,965,993  17,325,409 

Harbor Steps

  

Seattle, WA
(G)

 2000 730  59,900,000  158,829,432  -  3,461,814  59,900,000  162,291,246  222,191,246  (22,241,915) 199,949,331  134,763,997 

Heights on Capitol Hill

  

Seattle, WA
(G)

 2006 104  5,425,000  21,138,028  -  71,212  5,425,000  21,209,240  26,634,240  (2,096,940) 24,537,299  19,320,000 

Heritage at Stone Ridge

  

Burlington,
MA

 2005 180  10,800,000  31,808,335  -  483,316  10,800,000  32,291,651  43,091,651  (4,301,122) 38,790,529  28,692,174 

Heritage Green

  

Sturbridge,
MA

 1974 130  835,313  5,583,898  -  1,031,540  835,313  6,615,438  7,450,752  (2,232,291) 5,218,461  1,066,575 

Heronfield

  

Kirkland, WA

 1990 202  9,245,000  27,018,110  -  725,229  9,245,000  27,743,339  36,988,339  (2,753,359) 34,234,980  (N)

High Meadow

  

Ellington, CT

 1975 100  583,679  3,901,774  -  637,530  583,679  4,539,304  5,122,983  (1,381,600) 3,741,383  3,852,318 

Highland Point

  

Aurora, CO

 1984 319  1,631,900  14,684,439  -  2,057,315  1,631,900  16,741,754  18,373,654  (7,463,596) 10,910,058  (J)

Highlands at Cherry
Hill

  

Cherry Hills,
NJ

 2002 170  6,800,000  21,459,108  -  471,177  6,800,000  21,930,285  28,730,285  (3,205,894) 25,524,392  16,001,272 

Highlands at South
Plainfield

  

South
Plainfield, NJ

 2000 252  10,080,000  37,526,912  -  576,777  10,080,000  38,103,688  48,183,688  (5,033,758) 43,149,930  21,552,742 

Isle at Arrowhead
Ranch

  

Glendale, AZ

 1996 256  1,650,237  19,593,123  -  1,347,078  1,650,237  20,940,201  22,590,438  (8,244,538) 14,345,900  (J)

Ivory Wood

  

Bothell, WA

 2000 144  2,732,800  13,888,282  -  442,613  2,732,800  14,330,895  17,063,695  (2,723,630) 14,340,066  8,020,000 

Jaclen Towers

  

Beverly, MA

 1976 100  437,072  2,921,735  -  935,595  437,072  3,857,330  4,294,402  (1,455,086) 2,839,317  1,450,692 

La Terrazza at Colma
Station

  

Colma, CA
(G)

 2005 153  -  41,249,346  -  323,559  -      41,572,905  41,572,905  (3,230,571) 38,342,334  25,940,000 

LaSalle

  

Beaverton,
OR (G)

 1998 554  7,202,000  35,877,612  -  1,930,273  7,202,000  37,807,885  45,009,885  (9,409,696) 35,600,188  30,482,125 

Legacy at Highlands
Ranch

  

Highlands
Ranch, CO

 1999 422  6,330,000  37,557,013  -  1,069,288  6,330,000  38,626,301  44,956,301  (6,831,178) 38,125,123  21,641,428 

Lenox at Patterson
Place

  

Durham, NC

 1999 292  4,380,000  18,974,425  -  446,705  4,380,000  19,421,129  23,801,129  (4,359,972) 19,441,158  13,004,529 

Lincoln Heights

  

Quincy, MA

 1991 336  5,928,400  33,595,262  -  9,764,734  5,928,400  43,359,996  49,288,396  (15,065,223) 34,223,173  (O)

Longfellow Glen

  

Sudbury, MA

 1984 120  1,094,273  7,314,994  -  2,266,380  1,094,273  9,581,374  10,675,648  (3,374,266) 7,301,381  2,935,624 

Longview Place

  

Waltham, MA

 2004 348  20,880,000  90,255,509  -  430,131  20,880,000  90,685,639  111,565,639  (11,891,022) 99,674,617  57,029,000 

Longwood

  

Decatur, GA

 1992 268  1,454,048  13,087,393  -  1,639,126  1,454,048  14,726,519  16,180,567  (7,680,589) 8,499,978  (K)

Madison at River
Sound

  

Lawrenceville,
GA

 1996 586  3,666,999  47,387,106  -  2,025,976  3,666,999  49,413,083  53,080,082  (17,829,057) 35,251,025  (L)

Market Street Village

  

San Diego,
CA

 2006 229  13,740,000  40,757,084  -  296,103  13,740,000  41,053,187  54,793,187  (3,821,843) 50,971,344  (N)

Marks

  

Englewood,
CO (G)

 1987 616  4,928,500  44,622,314  -  5,080,912  4,928,500  49,703,226  54,631,726  (20,837,546) 33,794,180  19,195,000 

Merritt at Satellite
Place

  

Duluth, GA

 1999 424  3,400,000  30,115,674  -  2,305,990  3,400,000  32,421,665  35,821,665  (10,461,672) 25,359,993  (K)

Metro on First

  

Seattle, WA
(G)

 2002 102  8,540,000  12,209,981  -  176,601  8,540,000  12,386,582  20,926,582  (1,815,108) 19,111,474  16,650,000 

Mill Pond

  

Millersville,
MD

 1984 240  2,880,000  8,468,014  -  2,196,463  2,880,000  10,664,477  13,544,477  (4,413,551) 9,130,927  7,300,000 

Millbrook Apartments
Phase I

  

Alexandria,
VA

 1996 406  24,360,000  86,178,714  -  2,077,505  24,360,000  88,256,219  112,616,219  (11,557,379) 101,058,840  64,680,000 

Missions at Sunbow

  

Chula Vista,
CA

 2003 336  28,560,000  59,287,595  -  903,705  28,560,000  60,191,300  88,751,300  (9,205,716) 79,545,584  55,091,000 

Monte Viejo

  

Phoneix, AZ

 2004 480  12,700,000  45,926,784  -  679,442  12,700,000  46,606,226  59,306,226  (5,975,021) 53,331,205  40,855,115 

Montecito

  

Valencia, CA

 1999 210  8,400,000  24,709,146  -  1,460,326  8,400,000  26,169,471  34,569,471  (7,519,933) 27,049,539  (N)

Montierra

  

Scottsdale, AZ

 1999 249  3,455,000  17,266,787  -  1,155,570  3,455,000  18,422,357  21,877,357  (6,425,645) 15,451,712  (J)

Montierra (CA)

  

San Diego,
CA

 1990 272  8,160,000  29,360,938  -  5,987,491  8,160,000  35,348,429  43,508,429  (10,833,892) 32,674,538  (N)

Mosaic at Metro

  

Hyattsville,
MD

 (F) -  -  53,329,225  -  4,955  -  53,334,180  53,334,180  (19) 53,334,161  38,424,735 

Mountain Park Ranch

  

Phoenix, AZ

 1994 240  1,662,332  18,260,276  -  1,516,659  1,662,332  19,776,935  21,439,267  (7,950,908) 13,488,359  (M)

Nehoiden Glen

  

Needham, MA

 1978 61  634,538  4,241,755  -  746,816  634,538  4,988,571  5,623,109  (1,541,213) 4,081,896  40,962 

Noonan Glen

  

Winchester,
MA

 1983 18  151,344  1,011,700  -  372,839  151,344  1,384,539  1,535,883  (464,396) 1,071,487  252,792 

North Pier at
Harborside

  

Jersey City,
NJ (M)

 2003 297  4,000,159  94,348,092  -  864,798  4,000,159  95,212,889  99,213,048  (15,724,051) 83,488,998  76,862,000 

Northampton 1

  

Largo, MD

 1977 344  1,843,200  17,528,381  -  5,176,972  1,843,200  22,705,353  24,548,553  (12,342,531) 12,206,022  17,790,084 

Northglen

  

Valencia, CA

 1988 234  9,360,000  20,778,553  -  1,470,232  9,360,000  22,248,785  31,608,785  (6,532,694) 25,076,090  13,406,659 

Norton Glen

  

Norton, MA

 1983 150  1,012,556  6,768,727  -  3,441,554  1,012,556  10,210,281  11,222,836  (3,467,457) 7,755,379  2,655,183 

Oak Mill I

  

Germantown,
MD

 1984 208  10,000,000  13,155,522  -  6,931,485  10,000,000  20,087,006  30,087,006  (3,499,696) 26,587,310  13,282,265 

Oak Mill II

  

Germantown,
MD

 1985 192  854,133  10,233,947  -  5,075,011  854,133  15,308,959  16,163,091  (6,602,634) 9,560,458  9,600,000 

Oak Park North

  

Agoura Hills,
CA

 1990 220  1,706,900  15,362,666  -  2,079,058  1,706,900  17,441,724  19,148,624  (8,088,992) 11,059,632  (I)

Oak Park South

  

Agoura Hills,
CA

 1989 224  1,683,800  15,154,608  -  2,181,159  1,683,800  17,335,767  19,019,567  (8,087,692) 10,931,875  (I)

Oaks

  

Santa Clarita,
CA

 2000 520  23,400,000  61,020,438  -  2,149,121  23,400,000  63,169,558  86,569,558  (13,374,454) 73,195,104  42,757,744 

Old Mill Glen

  

Maynard, MA

 1983 50  396,756  2,652,233  -  498,354  396,756  3,150,587  3,547,343  (1,014,022) 2,533,321  1,154,000 

Olde Redmond Place

  

Redmond,
WA

 1986 192  4,807,100  14,126,038  -  3,723,190  4,807,100  17,849,228  22,656,328  (6,869,411) 15,786,917  (O)

Parc East Towers

  

New York,
NY (G)

 1977 324  102,163,000  109,013,628  -  4,184,672  102,163,000  113,198,300  215,361,300  (8,902,329) 206,458,972  18,195,256 

Park Meadow

  

Gilbert, AZ

 1986 225  835,217  15,120,769  -  2,063,910  835,217  17,184,678  18,019,895  (6,981,098) 11,038,797  (O)

Parkfield

  

Denver, CO

 2000 476  8,330,000  28,667,618  -  1,702,048  8,330,000  30,369,665  38,699,665  (8,887,331) 29,812,334  23,275,000 

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008
2010

                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Lincoln Heights Quincy, MA 1991  336   5,928,400   33,595,262      10,549,292   5,928,400   44,144,554   50,072,954   (19,375,802)  30,697,152   (L)
Longview Place Waltham, MA 2004  348   20,880,000   90,255,509      1,460,656   20,880,000   91,716,165   112,596,165   (18,368,568)  94,227,597   57,029,000 
Market Street Village San Diego, CA 2006  229   13,740,000   40,757,300      345,628   13,740,000   41,102,928   54,842,928   (7,630,442)  47,212,486   (K)
Marks Englewood, CO (G) 1987  616   4,928,500   44,622,314      8,060,048   4,928,500   52,682,362   57,610,862   (24,944,534)  32,666,328   19,195,000 
Metro on First Seattle, WA (G) 2002  102   8,540,000   12,209,981      254,915   8,540,000   12,464,896   21,004,896   (2,757,191)  18,247,705   16,650,000 
Mill Creek Milpitas, CA 1991  516   12,858,693   57,168,503      2,403,984   12,858,693   59,572,487   72,431,180   (17,116,835)  55,314,345   69,312,259 
Miramar Lakes Miramar, FL 2003  344   17,200,000   51,487,235      1,343,639   17,200,000   52,830,874   70,030,874   (11,391,642)  58,639,232   (M)
Missions at Sunbow Chula Vista, CA 2003  336   28,560,000   59,287,595      1,148,849   28,560,000   60,436,444   88,996,444   (14,871,085)  74,125,359   55,091,000 
Monte Viejo Phoneix, AZ 2004  480   12,700,000   45,926,784      976,950   12,700,000   46,903,734   59,603,734   (11,299,701)  48,304,033   40,960,036 
Montecito Valencia, CA 1999  210   8,400,000   24,709,146      1,732,020   8,400,000   26,441,166   34,841,166   (9,562,693)  25,278,473   (K)
Montierra Scottsdale, AZ 1999  249   3,455,000   17,266,787      1,458,706   3,455,000   18,725,493   22,180,493   (7,870,337)  14,310,156   17,858,854 
Montierra (CA) San Diego, CA 1990  272   8,160,000   29,360,938      6,457,847   8,160,000   35,818,785   43,978,785   (13,974,022)  30,004,763   (K)
Mosaic at Metro Hyattsville, MD 2008  260      59,653,038      49,368      59,702,406   59,702,406   (4,118,730)  55,583,676   45,046,469 
Mountain Park Ranch Phoenix, AZ 1994  240   1,662,332   18,260,276      1,748,558   1,662,332   20,008,834   21,671,166   (9,432,301)  12,238,865   (J)
Mountain Terrace Stevenson Ranch, CA 1992  510   3,966,500   35,814,995      11,502,806   3,966,500   47,317,801   51,284,301   (21,425,003)  29,859,298   57,428,472 
Northpark Burlingame, CA 1972  510   38,607,000   77,493,000      39,582   38,607,000   77,532,582   116,139,582   (3,084,091)  113,055,491   70,668,409 
North Pier at Harborside Jersey City, NJ (J) 2003  297   4,000,159   94,348,092      1,739,535   4,000,159   96,087,627   100,087,786   (22,321,947)  77,765,839   76,862,000 
Oak Mill I Germantown, MD 1984  208   10,000,000   13,155,522      7,235,088   10,000,000   20,390,610   30,390,610   (6,289,524)  24,101,086   12,487,301 
Oak Mill II Germantown, MD 1985  192   854,133   10,233,947      5,864,959   854,133   16,098,906   16,953,039   (8,498,045)  8,454,994   9,600,000 
Oaks Santa Clarita, CA 2000  520   23,400,000   61,020,438      2,652,544   23,400,000   63,672,982   87,072,982   (17,959,221)  69,113,761   41,154,036 
Olde Redmond Place Redmond, WA 1986  192   4,807,100   14,126,038      4,122,122   4,807,100   18,248,160   23,055,260   (8,527,802)  14,527,458   (L)
Parc East Towers New York, NY (G) 1977  324   102,163,000   109,013,628      5,654,774   102,163,000   114,668,402   216,831,402   (18,284,019)  198,547,383   17,473,846 
Park Meadow Gilbert, AZ 1986  225   835,217   15,120,769      2,267,564   835,217   17,388,333   18,223,550   (8,395,148)  9,828,402   (L)
Parkfield Denver, CO 2000  476   8,330,000   28,667,618      2,155,451   8,330,000   30,823,069   39,153,069   (11,251,895)  27,901,174   23,275,000 
Promenade at Peachtree Chamblee, GA 2001  406   10,150,000   31,219,739      1,645,577   10,150,000   32,865,316   43,015,316   (8,729,820)  34,285,496   (K)
Promenade at Town Center II Valencia, CA 2001  270   13,500,000   34,405,636      391,668   13,500,000   34,797,304   48,297,304   (9,307,693)  38,989,611   32,785,701 
Providence Bothell, WA 2000  200   3,573,621   19,055,505      541,320   3,573,621   19,596,825   23,170,446   (5,354,911)  17,815,535   (J)
Reserve at Clarendon Centre, The Arlington, VA (G) 2003  252   10,500,000   52,812,935      1,777,312   10,500,000   54,590,247   65,090,247   (14,249,748)  50,840,499   (K)
Reserve at Eisenhower, The Alexandria, VA 2002  226   6,500,000   34,585,060      702,144   6,500,000   35,287,204   41,787,204   (10,058,015)  31,729,189   (K)
Reserve at Empire Lakes Rancho Cucamonga, CA 2005  467   16,345,000   73,080,670      1,396,394   16,345,000   74,477,064   90,822,064   (15,486,334)  75,335,730   (J)
Reserve at Fairfax Corners Fairfax, VA 2001  652   15,804,057   63,129,051      2,563,175   15,804,057   65,692,226   81,496,283   (19,948,034)  61,548,249   84,778,876 
Reserve at Potomac Yard Alexandria, VA 2002  588   11,918,917   68,976,484      3,376,272   11,918,917   72,352,756   84,271,673   (17,772,440)  66,499,233   66,470,000 
Reserve at Town Center (WA) Mill Creek, WA 2001  389   10,369,400   41,172,081      1,414,773   10,369,400   42,586,854   52,956,254   (10,871,457)  42,084,797   29,160,000 
Rianna II Seattle, WA (G) 2002  78   2,161,840   14,433,614      16,614   2,161,840   14,450,228   16,612,068   (1,072,947)  15,539,121   10,499,494 
Rockingham Glen West Roxbury, MA 1974  143   1,124,217   7,515,160      1,533,725   1,124,217   9,048,885   10,173,102   (3,757,339)  6,415,763   1,440,865 
Rolling Green (Amherst) Amherst, MA 1970  204   1,340,702   8,962,317      3,313,332   1,340,702   12,275,649   13,616,351   (5,297,121)  8,319,230   2,217,176 
Rolling Green (Milford) Milford, MA 1970  304   2,012,350   13,452,150      3,986,562   2,012,350   17,438,712   19,451,062   (7,305,093)  12,145,969   4,645,763 
San Marcos Apartments Scottsdale, AZ 1995  320   20,000,000   31,261,609      1,384,451   20,000,000   32,646,060   52,646,060   (7,272,584)  45,373,476   32,900,000 
Savannah Lakes Boynton Beach, FL 1991  466   7,000,000   30,263,310      4,429,051   7,000,000   34,692,361   41,692,361   (11,606,796)  30,085,565   36,610,000 
Savannah Midtown Atlanta, GA 2000  322   7,209,873   29,433,507      2,603,453   7,209,873   32,036,960   39,246,833   (8,514,514)  30,732,319   17,800,000 
Savoy I Aurora, CO 2001  444   5,450,295   38,765,670      1,964,604   5,450,295   40,730,274   46,180,569   (11,009,808)  35,170,761   (L)
Sheffield Court Arlington, VA 1986  597   3,342,381   31,337,332      7,927,865   3,342,381   39,265,197   42,607,578   (21,583,314)  21,024,264   (L)
Sonata at Cherry Creek Denver, CO 1999  183   5,490,000   18,130,479      1,162,983   5,490,000   19,293,462   24,783,462   (6,957,885)  17,825,577   19,190,000 
Sonterra at Foothill Ranch Foothill Ranch, CA 1997  300   7,503,400   24,048,507      1,500,506   7,503,400   25,549,013   33,052,413   (11,490,634)  21,561,779   (L)
South Winds Fall River, MA 1971  404   2,481,821   16,780,359      3,712,343   2,481,821   20,492,702   22,974,523   (8,697,220)  14,277,303   4,437,567 
Springs Colony Altamonte Springs, FL 1986  188   630,411   5,852,157      2,363,300   630,411   8,215,457   8,845,868   (5,129,095)  3,716,773   (I)
Stonegate (CO) Broomfield, CO 2003  350   8,750,000   32,998,775      2,700,719   8,750,000   35,699,494   44,449,494   (8,900,049)  35,549,445   (J)
Stoneleigh at Deerfield Alpharetta, GA 2003  370   4,810,000   29,999,596      871,524   4,810,000   30,871,120   35,681,120   (7,656,545)  28,024,575   16,800,000 
Stoney Ridge Dale City, VA 1985  264   8,000,000   24,147,091      5,287,141   8,000,000   29,434,232   37,434,232   (7,934,618)  29,499,614   15,138,399 
Stonybrook Boynton Beach, FL 2001  264   10,500,000   24,967,638      951,679   10,500,000   25,919,317   36,419,317   (6,210,078)  30,209,239   20,971,587 
Summerhill Glen Maynard, MA 1980  120   415,812   3,000,816      766,088   415,812   3,766,904   4,182,716   (1,622,076)  2,560,640   1,174,207 
Summerset Village Chatsworth, CA 1985  280   2,890,450   23,670,889      3,797,264   2,890,450   27,468,153   30,358,603   (13,674,820)  16,683,783   38,039,912 
Sunforest Davie, FL 1989  494   10,000,000   32,124,850      4,030,481   10,000,000   36,155,331   46,155,331   (11,194,003)  34,961,328   (L)
Sunforest II Davie, FL (F)        337,751            337,751   337,751      337,751   (L)
Talleyrand Tarrytown, NY (I) 1997-1998  300   12,000,000   49,838,160      3,696,522   12,000,000   53,534,682   65,534,682   (17,861,336)  47,673,346   35,000,000 
Tanglewood (VA) Manassas, VA 1987  432   2,108,295   24,619,495      8,462,243   2,108,295   33,081,738   35,190,033   (18,128,350)  17,061,683   25,110,000 
Teresina Chula Vista, CA 2000  440   28,600,000   61,916,670      1,767,940   28,600,000   63,684,610   92,284,610   (13,155,998)  79,128,612   44,095,588 
Touriel Building Berkeley, CA (G) 2004  35   2,736,000   7,810,027      33,587   2,736,000   7,843,614   10,579,614   (1,392,156)  9,187,458   5,050,000 
Town Square at Mark Center I (fka Millbrook I) Alexandria, VA 1996  406   24,360,000   86,178,714      2,422,299   24,360,000   88,601,013   112,961,013   (19,521,198)  93,439,815   64,680,000 
Town Square at Mark Center Phase II Alexandria, VA 2001  272   15,568,464   55,031,536      34,830   15,568,464   55,066,366   70,634,830   (1,956,133)  68,678,697   47,669,865 
Tradition at Alafaya Oviedo, FL 2006  253   7,590,000   31,881,505      238,496   7,590,000   32,120,001   39,710,001   (7,731,307)  31,978,694   (K)
Tuscany at Lindbergh Atlanta, GA 2001  324   9,720,000   40,874,023      1,753,394   9,720,000   42,627,417   52,347,417   (11,365,288)  40,982,129   32,360,000 
Uptown Square Denver, CO (G) 1999/2001  696   17,492,000   100,696,541      2,232,071   17,492,000   102,928,612   120,420,612   (24,014,273)  96,406,339   88,550,000 
Versailles Woodland Hills, CA 1991  253   12,650,000   33,656,292      3,630,019   12,650,000   37,286,311   49,936,311   (11,205,924)  38,730,387   30,372,953 
Via Ventura Scottsdale, AZ 1980  328   1,351,785   13,382,006      7,962,802   1,351,785   21,344,808   22,696,593   (14,368,306)  8,328,287   (K)
Village at Lakewood Phoenix, AZ 1988  240   3,166,411   13,859,090      2,013,344   3,166,411   15,872,434   19,038,845   (7,739,644)  11,299,201   (L)
Vintage Ontario, CA 2005-2007  300   7,059,230   47,677,762      176,250   7,059,230   47,854,012   54,913,242   (8,609,805)  46,303,437   33,000,000 
Warwick Station Westminster, CO 1986  332   2,274,121   21,113,974      3,015,763   2,274,121   24,129,737   26,403,858   (11,495,261)  14,908,597   8,355,000 
Wellington Hill Manchester, NH 1987  390   1,890,200   17,120,662      7,628,748   1,890,200   24,749,410   26,639,610   (15,003,057)  11,636,553   (I)
Westgate Pasadena Apartments Pasadena, CA 2010  480   22,898,848   131,986,739      (263)  22,898,848   131,986,476   154,885,324   (185)  154,885,139   135,000,000 
Westwood Glen Westwood, MA 1972  156   1,616,505   10,806,004      1,495,929   1,616,505   12,301,933   13,918,438   (4,379,593)  9,538,845   392,294 
Whisper Creek Denver, CO 2002  272   5,310,000   22,998,558      843,388   5,310,000   23,841,946   29,151,946   (6,016,094)  23,135,852   13,580,000 
Wilkins Glen Medfield, MA 1975  103   538,483   3,629,943      1,484,323   538,483   5,114,266   5,652,749   (2,071,249)  3,581,500   1,011,750 
Windridge (CA) Laguna Niguel, CA 1989  344   2,662,900   23,985,497      5,111,877   2,662,900   29,097,374   31,760,274   (16,423,796)  15,336,478   (I)

S-9

Description      Initial
Cost to
Company
     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)
     Gross
Amount
Carried at
Close of
Period
12/31/08
                

Apartment
Name

  Location Date of
Construction
 Units
(H)
  Land  Building
&
Fixtures
  Land  Building
&
Fixtures
  Land  Building &
Fixtures (A)
  Total (B)  Accumulated
Depreciation
(C)
  Investment
in Real
Estate, Net
at 12/31/08
  Encumbrances 

Portofino (Val)

  

Valencia,
CA

 1989 216  8,640,000  21,487,126  -  2,045,330  8,640,000  23,532,456  32,172,456  (6,820,399) 25,352,057  13,023,712 

Prairie Creek I & II

  

Richardson,
TX

 1998-
1999
 464  4,067,292  38,986,022  -  2,180,726  4,067,292  41,166,749  45,234,041  (14,417,796) 30,816,245  (J)

Preston Bend

  

Dallas, TX

 1986 255  1,075,200  9,532,056  -  2,071,217  1,075,200  11,603,273  12,678,473  (5,114,507) 7,563,965  (I)

Promenade at Peachtree

  

Chamblee,
GA

 2001 406  10,150,000  31,219,739  -  1,395,542  10,150,000  32,615,282  42,765,282  (6,199,984) 36,565,298  (N)

Promenade at Town
Center II

  

Valencia,
CA

 2001 270  13,500,000  34,405,636  -  1,324,718  13,500,000  35,730,354  49,230,354  (7,004,901) 42,225,453  34,158,307 

Promenade Terrace

  

Corona, CA

 1990 330  2,272,800  20,546,289  -  4,037,899  2,272,800  24,584,188  26,856,988  (11,344,582) 15,512,406  16,228,027 

Providence

  

Bothell, WA

 2000 200  3,573,621  19,055,505  -  464,180  3,573,621  19,519,686  23,093,307  (3,977,751) 19,115,556  (M)

Reserve at Ashley Lake

  

Boynton
Beach, FL

 1990 440  3,520,400  23,332,494  -  4,048,999  3,520,400  27,381,492  30,901,892  (11,040,984) 19,860,908  24,150,000 

Reserve at Clarendon
Centre, The

  

Arlington,
VA (G)

 2003 252  10,500,000  52,812,935  -  1,394,476  10,500,000  54,207,411  64,707,411  (10,393,438) 54,313,973  (N)

Reserve at Eisenhower,
The

  

Alexandria,
VA

 2002 226  6,500,000  34,585,060  -  489,635  6,500,000  35,074,695  41,574,695  (7,600,416) 33,974,278  (N)

Reserve at Empire Lakes

  

Rancho
Cucamonga,
CA

 2005 467  16,345,000  73,080,670  -  712,794  16,345,000  73,793,464  90,138,464  (9,990,443) 80,148,022  (M)

Reserve at Fairfax
Corners

  

Fairfax, VA

 2001 652  15,804,057  63,129,051  -  2,001,242  15,804,057  65,130,293  80,934,350  (15,238,664) 65,695,686  (L)

Reserve at Moreno Valley
Ranch

  

Moreno
Valley, CA

 2005 176  8,800,000  26,151,298  -  313,644  8,800,000  26,464,942  35,264,942  (3,150,420) 32,114,523  (O)

Reserve at Potomac Yard

  

Alexandria,
VA

 2002 588  11,918,917  68,976,484  -  1,604,768  11,918,917  70,581,252  82,500,169  (12,701,707) 69,798,462  66,470,000 

Reserve at Town Center
(WA)

  

Mill Creek,
WA

 2001 389  10,369,400  41,172,081  -  989,579  10,369,400  42,161,661  52,531,061  (7,732,175) 44,798,886  29,160,000 

Retreat, The

  

Phoenix, AZ

 1999 480  3,475,114  27,265,252  -  1,856,226  3,475,114  29,121,478  32,596,592  (10,037,761) 22,558,831  (K)

River Pointe at Den Rock
Park

  

Lawrence,
MA

 2000 174  4,615,702  18,440,147  -  919,721  4,615,702  19,359,868  23,975,570  (4,612,178) 19,363,392  18,100,000 

Rockingham Glen

  

West
Roxbury,
MA

 1974 143  1,124,217  7,515,160  -  1,257,070  1,124,217  8,772,230  9,896,447  (2,910,340) 6,986,107  1,729,745 

Rolling Green (Amherst)

  

Amherst,
MA

 1970 204  1,340,702  8,962,317  -  2,814,267  1,340,702  11,776,585  13,117,286  (4,101,096) 9,016,190  2,726,415 

Rolling Green (Milford)

  

Milford, MA

 1970 304  2,012,350  13,452,150  -  3,030,631  2,012,350  16,482,781  18,495,131  (5,730,853) 12,764,278  5,583,658 

San Marcos Apartments

  

Scottsdale,
AZ

 1995 320  20,000,000  31,261,609  -  690,179  20,000,000  31,951,789  51,951,789  (4,098,674) 47,853,115  32,900,000 

Savannah Lakes

  

Boynton
Beach, FL

 1991 466  7,000,000  30,422,607  -  2,574,674  7,000,000  32,997,281  39,997,281  (8,885,720) 31,111,561  36,610,000 

Savannah Midtown

  

Atlanta, GA

 2000 322  7,209,873  29,433,507  -  2,157,986  7,209,873  31,591,494  38,801,367  (6,019,634) 32,781,733  17,800,000 

Savoy I

  

Aurora, CO

 2001 444  5,450,295  38,765,670  -  1,489,075  5,450,295  40,254,746  45,705,041  (7,949,958) 37,755,083  (O)

Scarborough Square

  

Rockville,
MD

 1967 121  1,815,000  7,608,126  -  2,133,815  1,815,000  9,741,940  11,556,940  (3,967,334) 7,589,606  4,469,216 

Sheffield Court

  

Arlington,
VA

 1986 597  3,342,381  31,337,332  -  6,398,333  3,342,381  37,735,665  41,078,046  (18,285,259) 22,792,787  (O)

Siena Terrace

  

Lake Forest,
CA

 1988 356  8,900,000  24,083,024  -  2,272,417  8,900,000  26,355,441  35,255,441  (9,545,546) 25,709,895  16,084,838 

Skycrest

  

Valencia,
CA

 1999 264  10,560,000  25,574,457  -  1,526,460  10,560,000  27,100,917  37,660,917  (7,898,964) 29,761,954  16,224,620 

Skyline Towers

  

Falls
Church, VA
(G)

 1971 939  78,278,200  91,485,591  -  24,992,150  78,278,200  116,477,741  194,755,941  (17,585,702) 177,170,239  90,210,478 

Skyview

  

Rancho
Santa
Margarita,
CA

 1999 260  3,380,000  21,952,863  -  1,316,319  3,380,000  23,269,182  26,649,182  (7,822,780) 18,826,402  (K)

Sonata at Cherry Creek

  

Denver, CO

 1999 183  5,490,000  18,130,479  -  915,045  5,490,000  19,045,524  24,535,524  (5,511,085) 19,024,439  19,190,000 

Sonterra at Foothill
Ranch

  

Foothill
Ranch, CA

 1997 300  7,503,400  24,048,507  -  1,263,634  7,503,400  25,312,141  32,815,541  (9,665,998) 23,149,544  (O)

South Winds

  

Fall River,
MA

 1971 404  2,481,821  16,780,359  -  3,032,954  2,481,821  19,813,313  22,295,134  (6,856,334) 15,438,800  5,437,507 

Springs Colony

  

Altamonte
Springs, FL

 1986 188  630,411  5,852,157  -  2,129,296  630,411  7,981,453  8,611,864  (4,429,561) 4,182,303  (I)

Stonegate (CO)

  

Broomfield,
CO

 2003 350  8,750,000  32,998,775  -  2,121,287  8,750,000  35,120,062  43,870,062  (5,593,937) 38,276,124  (M)

Stoneleigh at Deerfield

  

Alpharetta,
GA

 2003 370  4,810,000  29,999,596  -  518,100  4,810,000  30,517,695  35,327,695  (5,325,715) 30,001,980  16,800,000 

Stoney Ridge

  

Dale City,
VA

 1985 264  8,000,000  24,147,091  -  5,045,818  8,000,000  29,192,909  37,192,909  (4,617,964) 32,574,945  15,854,019 

Stonybrook

  

Boynton
Beach, FL

 2001 264  10,500,000  24,967,638  -  760,645  10,500,000  25,728,283  36,228,283  (4,123,771) 32,104,512  22,092,813 

Summerhill Glen

  

Maynard,
MA

 1980 120  415,812  3,000,816  -  674,965  415,812  3,675,781  4,091,593  (1,285,685) 2,805,908  1,409,625 

Summerset Village

  

Chatsworth,
CA

 1985 280  2,629,804  23,670,889  -  3,054,891  2,629,804  26,725,781  29,355,585  (11,404,108) 17,951,477  (J)

Sunforest

  

Davie, FL

 1989 494  10,000,000  32,124,850  -  2,880,576  10,000,000  35,005,426  45,005,426  (8,145,664) 36,859,762  (O)

Talleyrand

  

Tarrytown,
NY (I)

 1997-
1998
 300  12,000,000  49,838,160  -  3,496,456  12,000,000  53,334,616  65,334,616  (13,820,073) 51,514,543  35,000,000 

Tanasbourne Terrace

  

Hillsboro,
OR

 1986-
1989
 373  1,876,700  16,891,205  -  3,519,551  1,876,700  20,410,756  22,287,456  (10,845,256) 11,442,200  (J)

Tanglewood (RI)

  

West
Warwick, RI

 1973 176  1,141,415  7,630,129  -  1,077,803  1,141,415  8,707,932  9,849,347  (2,663,070) 7,186,277  5,902,175 

Tanglewood (VA)

  

Manassas,
VA

 1987 432  2,108,295  24,619,495  -  7,910,091  2,108,295  32,529,586  34,637,881  (14,781,448) 19,856,433  25,110,000 

Teresina

  

Chula Vista,
CA

 2000 440  28,600,000  61,916,670  -  1,295,495  28,600,000  63,212,165  91,812,165  (6,755,051) 85,057,115  45,325,406 

Touriel Building

  

Berkeley,
CA (G)

 2004 35  2,736,000  7,810,027  -  14,530  2,736,000  7,824,557  10,560,557  (721,689) 9,838,867  5,050,000 

Tradition at Alafaya

  

Oviedo, FL

 2006 253  7,590,000  32,014,299  -  202,785  7,590,000  32,217,084  39,807,084  (4,474,042) 35,333,042  (N)

Turf Club

  

Littleton,
CO

 1986 324  2,107,300  15,478,040  -  2,663,270  2,107,300  18,141,310  20,248,610  (7,801,953) 12,446,657  (K)

Tuscany at Lindbergh

  

Atlanta, GA

 2001 324  9,720,000  40,874,023  -  1,416,320  9,720,000  42,290,343  52,010,343  (6,877,629) 45,132,714  32,360,000 

Uptown Square

  

Denver, CO
(G)

 1999/2001 696  17,492,000  100,705,311  -  1,631,393  17,492,000  102,336,704  119,828,704  (13,832,427) 105,996,277  88,550,000 

Uwajimaya Village

  

Seattle, WA

 2002 176  8,800,000  22,188,288  -  82,852  8,800,000  22,271,140  31,071,140  (3,587,548) 27,483,591  16,484,934 

Via Ventura

  

Scottsdale,
AZ

 1980 328  1,351,785  13,382,006  -  7,670,117  1,351,785  21,052,122  22,403,908  (12,953,168) 9,450,740  (N)

Villa Encanto

  

Phoenix, AZ

 1983 385  2,884,447  22,197,363  -  3,141,107  2,884,447  25,338,470  28,222,917  (10,680,949) 17,541,967  (K)

Village at Lakewood

  

Phoenix, AZ

 1988 240  3,166,411  13,859,090  -  1,761,379  3,166,411  15,620,469  18,786,880  (6,548,296) 12,238,584  (O)

Vista Del Lago (TX)

  

Dallas, TX

 1992 296  3,552,000  20,066,912  -  1,553,019  3,552,000  21,619,931  25,171,931  (6,426,287) 18,745,644  (J)

Warwick Station

  

Westminster,
CO

 1986 332  2,274,121  21,113,974  -  2,620,710  2,274,121  23,734,684  26,008,805  (9,555,151) 16,453,653  8,355,000 

Waterford Place (CO)

  

Thornton,
CO

 1998 336  5,040,000  29,733,022  -  1,033,715  5,040,000  30,766,737  35,806,737  (5,984,761) 29,821,976  (K)

Wellington Hill

  

Manchester,
NH

 1987 390  1,890,200  17,120,662  -  6,378,825  1,890,200  23,499,487  25,389,687  (12,579,923) 12,809,764  (I)

Westwood Glen

  

Westwood,
MA

 1972 156  1,616,505  10,806,004  -  699,189  1,616,505  11,505,193  13,121,698  (3,413,301) 9,708,396  703,056 

Whisper Creek

  

Denver, CO

 2002 272  5,310,000  22,998,558  -  601,945  5,310,000  23,600,504  28,910,504  (4,186,540) 24,723,963  13,580,000 

Wilkins Glen

  

Medfield,
MA

 1975 103  538,483  3,629,943  -  1,103,055  538,483  4,732,998  5,271,481  (1,563,292) 3,708,189  1,241,514 

Windridge (CA)

  

Laguna
Niguel, CA

 1989 344  2,662,900  23,985,497  -  3,897,385  2,662,900  27,882,881  30,545,781  (14,182,946) 16,362,835  (I)

Woodlake (WA)

  

Kirkland,
WA

 1984 288  6,631,400  16,735,484  -  2,181,634  6,631,400  18,917,118  25,548,518  (7,504,369) 18,044,149  (O)
                                    

ERPOP Wholly Owned
Encumbered

    48,189  1,258,252,506  4,674,586,623  -  383,757,442  1,258,252,506  5,058,344,065  6,316,596,571  (1,223,300,257) 5,093,296,314  2,114,902,657 
                                    

ERPOP Partially
Owned
Unencumbered:

                       

Ball Park Lofts

  

Denver, CO
(G)

 2003 339  5,481,556  53,308,741  -  866,766  5,481,556  54,175,507  59,657,063  (8,972,384) 50,684,679  - 

Butterfield Ranch

  

Chino Hills,
CA

 (F) -  15,617,708  3,581,933  -  -      15,617,708  3,581,933  19,199,641  -      19,199,641  - 

Hudson Crossing II

  

New York,
NY

 (F) -  11,923,324  1,796,166  -  -      11,923,324  1,796,166  13,719,490  -      13,719,490  - 

Vista Montana
- Residential

  

San Jose,
CA

 (F) -  31,468,209  7,047,293  -  -      31,468,209  7,047,293  38,515,502  -      38,515,502  - 

Vista Montana
- Townhomes

  

San Jose,
CA

 (F) -  33,432,829  10,793,614  -  -      33,432,829  10,793,614  44,226,443  (370,000) 43,856,443  - 

Westgate

  

Pasadena,
CA

 (F) -  -  3,899,124  -  -      -      3,899,124  3,899,124  -      3,899,124  - 

Westgate Pasadena and
Green

  

Pasadena,
CA

 (F) -  -  390,813  -  -      -      390,813  390,813  -      390,813  - 
                                    

ERPOP Partially
Owned
Unencumbered

    339  97,923,626  80,817,684  -  866,766  97,923,626  81,684,450  179,608,076  (9,342,384) 170,265,692  - 
                                    

ERPOP Partially
Owned
Encumbered:

                       

111 Lawrence Street

  

Brooklyn,
NY

 (F) -  40,099,922  68,626,760  -  -      40,099,922  68,626,760  108,726,683  -      108,726,683  (P)

Alta Pacific

  

Irvine, CA

 2008 132  10,752,145  34,564,980  -  30,391  10,752,145  34,595,371  45,347,516  (936,915) 44,410,601  28,260,000 

Bella Terra I

  

Mukilteo,
WA

 2002 235  5,686,861  26,070,540  -  411,915  5,686,861  26,482,455  32,169,317  (5,429,277) 26,740,040  23,350,000 

Brookside Crossing I

  

Stockton,
CA

 1981 90  625,000  4,663,298  -  1,574,196  625,000  6,237,493  6,862,493  (2,325,246) 4,537,248  4,658,000 

Brookside Crossing II

  

Stockton,
CA

 1981 128  770,000  5,967,676  -  1,496,341  770,000  7,464,016  8,234,016  (2,533,730) 5,700,286  4,867,000 

Canyon Creek (CA)

  

San Ramon,
CA

 1984 268  5,425,000  18,812,121  -  2,727,291  5,425,000  21,539,412  26,964,412  (6,152,751) 20,811,661  28,000,000 

City Lofts

  

Chicago, IL

 2008 278  6,882,467  61,364,586  -  7,638  6,882,467  61,372,224  68,254,691  (1,128,784) 67,125,907  48,448,206 

Copper Creek

  

Tempe, AZ

 1984 144  1,017,400  9,158,260  -  1,631,029  1,017,400  10,789,288  11,806,688  (4,684,702) 7,121,986  5,112,000 

Country Oaks

  

Agoura
Hills, CA

 1985 256  6,105,000  29,561,865  -  2,779,840  6,105,000  32,341,705  38,446,705  (8,039,145) 30,407,559  29,412,000 

ERP OPERATING LIMITED PARTNERSHIP


Schedule III - Real Estate and Accumulated Depreciation


December 31, 2008

Description     

Initial
Cost to

Company

   Cost
Capitalized
Subsequent
to
Acquisition
(Improve-
ments, net)
(E)
   

Gross

Amount
Carried
at Close
of Period
12/31/08

           

Apartment

Name

 Location Date of
Construction
 Units
(H)
 Land Building
&
Fixtures
 Land Building
&
Fixtures
 Land Building
&
Fixtures (A)
 Total (B) Accumulated
Depreciation
(C)
  

Investment

in Real

Estate, Net

at
12/31/08

 Encum-
brances

Dublin West

 

Dublin, CA

 (F) -  12,635,839  -      -  -      12,635,839  -      12,635,839  -       12,635,839  10,200,000

Edgewater

 

Bakersfield,
CA

 1984 258  580,000  17,710,063  -  2,049,489  580,000  19,759,551  20,339,551  (5,297,462)  15,042,090  11,988,000

EDS Dulles

 

Herndon,
VA

 (F) -  30,000,000  -      -  -      30,000,000  -      30,000,000  -       30,000,000  17,435,166

Fox Ridge

 

Englewood,
CO

 1984 300  2,490,000  17,522,114  -  2,852,550  2,490,000  20,374,664  22,864,664  (6,407,675)  16,456,989  20,300,000

Hidden

    Lake

 

Sacramento,
CA

 1985 272  1,715,000  16,413,154  -  1,940,915  1,715,000  18,354,069  20,069,069  (5,380,535)  14,688,534  15,165,000

Lakeview

 

Lodi, CA

 1983 138  950,000  7,383,862  -  1,329,292  950,000  8,713,154  9,663,154  (2,671,748)  6,991,406  7,286,000

Lakewood

 

Tulsa, OK

 1985 152  855,000  6,480,774  -  1,195,513  855,000  7,676,287  8,531,287  (2,645,644)  5,885,643  5,600,000

Lantern Cove

 

Foster City,
CA

 1985 232  6,945,000  23,332,206  -  1,922,369  6,945,000  25,254,575  32,199,575  (7,018,278)  25,181,297  36,403,000

Legacy Park

    Central

 

Concord,
CA

 2003 259  6,469,230  46,745,854  -  171,754  6,469,230  46,917,608  53,386,838  (7,593,609)  45,793,229  37,650,000

Mesa Del Oso

 

Albuquerque,
NM

 1983 221  4,305,000  12,160,419  -  1,124,166  4,305,000  13,284,585  17,589,585  (4,156,242)  13,433,343  9,923,737

Montclair

    Metro

 

Montclair,
NJ

 (F) -  2,208,343  27,117,930  -  -      2,208,343  27,117,930  29,326,273  -       29,326,273  14,539,923

Mozaic

 

Los
Angeles,
CA

 2007 272  8,500,000  59,048,104  -  150,850  8,500,000  59,198,955  67,698,955  (4,430,123)  63,268,832  47,205,878

Preserve at

    Briarcliff

 

Atlanta,
GA

 1994 182  6,370,000  17,766,322  -  380,918  6,370,000  18,147,240  24,517,240  (1,985,310)  22,531,930  6,000,000

Red Road

    Commons

 

Miami, FL

 (F) -  27,383,547  69,216,843  -  -      27,383,547  69,216,843  96,600,390  -       96,600,390  39,027,806

Schooner Bay I

 

Foster
City, CA

 1985 168  5,345,000  20,509,239  -  1,754,561  5,345,000  22,263,800  27,608,800  (5,908,871)  21,699,929  27,000,000

Schooner

    Bay II

 

Foster
City, CA

 1985 144  4,550,000  18,142,163  -  1,995,009  4,550,000  20,137,173  24,687,173  (5,266,511)  19,420,661  23,760,000

Scottsdale

    Meadows

 

Scottsdale,
AZ

 1984 168  1,512,000  11,423,349  -  1,333,647  1,512,000  12,756,996  14,268,996  (5,224,101)  9,044,895  9,100,000

Silver Spring

 

Silver
Spring,
MD

 (F) -  18,539,817  121,364,121  -  -      18,539,817  121,364,121  139,903,938  -       139,903,938  98,674,159

South Shore

 

Stockton,
CA

 1979 129  840,000  9,380,786  -  1,451,837  840,000  10,832,623  11,672,623  (3,078,712)  8,593,911  6,833,000

Strayhorse at

    Arrowhead

    Ranch

 

Glendale,
AZ

 1998 136  4,400,000  12,968,002  -  78,787  4,400,000  13,046,788  17,446,788  (943,498)  16,503,291  8,288,385

Third Square

 

Cambridge,
MA

 (F) -  27,812,384  222,817,028  -  8,840  27,812,384  222,825,869  250,638,252  (152)  250,638,100  158,515,054

Vintage

 

Ontario,
CA

 2005-

2007

 300  7,059,230  47,677,762  -  52,736  7,059,230  47,730,498  54,789,728  (3,974,134)  50,815,594  33,000,000

Waterfield

    Square I

 

Stockton,
CA

 1984 170  950,000  9,300,249  -  2,020,111  950,000  11,320,361  12,270,361  (3,588,853)  8,681,508  6,923,000

Waterfield

    Square II

 

Stockton,
CA

 1984 158  845,000  8,657,988  -  1,583,787  845,000  10,241,775  11,086,775  (3,048,347)  8,038,428  6,595,000

Westgate

    Pasadena

    Apartments

 

Pasadena,
CA

 (F) -  22,898,848  46,467,688  -  -      22,898,848  46,467,688  69,366,536  -       69,366,536  163,160,000

Westgate

    Pasadena

    Condos

 

Pasadena,
CA

 (F) -  29,977,725  13,024,529  -  -      29,977,725  13,024,529  43,002,254  -       43,002,254  15,990,869

Willow Brook

    (CA)

 

Pleasant
Hill, CA

 1985 228  5,055,000  38,388,672  -  1,505,300  5,055,000  39,893,972  44,948,972  (7,402,498)  37,546,474  29,000,000
                                   

ERPOP

    Partially

    Owned

    Encumbered

   5,418  318,555,758  1,159,809,303  -  35,561,075  318,555,758  1,195,370,378  1,513,926,137  (117,252,852)  1,396,673,285  1,037,671,184
                                   

Portfolio/Entity

    Encumbrances

    (1)

              1,884,355,798

Total

    Consolidated

    Investment

    in Real Estate

   132,759 $4,052,411,347 $13,382,526,574 $- $1,255,300,930 $4,052,411,347 $14,637,827,504 $18,690,238,851 $(3,561,300,168) $15,128,938,683 $5,036,929,639
                                   

(1) See attached Encumbrances Reconciliation

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2008

NOTES:

2010
                                                 
                  Cost Capitalized                        
                  Subsequent to      Gross Amount Carried                 
          Initial Cost to      Acquisition      at Close of                 
Description       Company      (Improvements, net) (E)      Period 12/31/10                 
    Date of         Building &      Building &      Building &      Accumulated  Investment in Real    
Apartment Name Location Construction Units (H)  Land  Fixtures  Land  Fixtures  Land  Fixtures (A)  Total (B)  Depreciation (C)  Estate, Net at 12/31/10 (B)  Encumbrances 
Woodlake (WA) Kirkland, WA 1984  288   6,631,400   16,735,484      2,745,189   6,631,400   19,480,673   26,112,073   (9,005,733)  17,106,340   (L)
       
ERPOP Wholly Owned Encumbered
      39,395   1,192,346,786   4,453,550,234      370,524,330   1,192,346,786   4,824,074,564   6,016,421,350   (1,346,626,508)  4,669,794,842   2,595,245,052 
       
                                                 
ERPOP Partially Owned Unencumbered:
                                                
Butterfield Ranch Chino Hills, CA (F)     15,617,709   4,512,495         15,617,709   4,512,495   20,130,204      20,130,204    
Hudson Crossing II New York, NY (F)     5,000,000            5,000,000      5,000,000      5,000,000    
       
ERPOP Partially Owned Unencumbered
         20,617,709   4,512,495         20,617,709   4,512,495   25,130,204      25,130,204    
       
                                                 
ERPOP Partially Owned Encumbered:
                                                
Brooklyner (fka 111 Lawrence) Brooklyn, NY (G) 2010  490   40,099,922   217,648,526      (1,947)  40,099,922   217,646,579   257,746,501      257,746,501   141,741,076 
1401 South State (fka City Lofts) Chicago, IL 2008  278   6,882,467   61,575,245      53,017   6,882,467   61,628,262   68,510,729   (5,846,831)  62,663,898   51,014,150 
2300 Elliott Seattle, WA 1992  92   796,800   7,173,725      5,462,325   796,800   12,636,050   13,432,850   (7,894,112)  5,538,738   6,833,000 
Bellevue Meadows Bellevue, WA 1983  180   4,507,100   12,574,814      4,122,712   4,507,100   16,697,526   21,204,626   (7,309,912)  13,894,714   16,538,000 
Canyon Creek (CA) San Ramon, CA 1984  268   5,425,000   18,812,121      4,809,646   5,425,000   23,621,767   29,046,767   (8,225,808)  20,820,959   28,000,000 
Canyon Ridge San Diego, CA 1989  162   4,869,448   11,955,064      1,757,641   4,869,448   13,712,705   18,582,153   (6,531,026)  12,051,127   15,165,000 
Copper Creek Tempe, AZ 1984  144   1,017,400   9,158,260      1,846,036   1,017,400   11,004,296   12,021,696   (5,587,555)  6,434,141   5,112,000 
Country Oaks Agoura Hills, CA 1985  256   6,105,000   29,561,865      3,142,792   6,105,000   32,704,657   38,809,657   (10,694,009)  28,115,648   29,412,000 
EDS Dulles Herndon, VA (F)     18,875,631            18,875,631      18,875,631      18,875,631   18,342,242 
Fox Ridge Englewood, CO 1984  300   2,490,000   17,522,114      3,394,463   2,490,000   20,916,577   23,406,577   (8,158,317)  15,248,260   20,300,000 
Lantern Cove Foster City, CA 1985  232   6,945,000   23,332,206      2,722,185   6,945,000   26,054,391   32,999,391   (8,961,365)  24,038,026   36,403,000 
Mesa Del Oso Albuquerque, NM 1983  221   4,305,000   12,160,419      1,556,306   4,305,000   13,716,725   18,021,725   (5,210,415)  12,811,310   9,525,810 
Montclair Metro Montclair, NJ 2009  163   2,400,887   43,570,641      2,092   2,400,887   43,572,733   45,973,620   (2,218,030)  43,755,590   34,439,480 
Monterra in Mill Creek Mill Creek, WA 2003  139   2,800,000   13,255,123      236,867   2,800,000   13,491,990   16,291,990   (3,232,493)  13,059,497   7,286,000 
Preserve at Briarcliff Atlanta, GA 1994  182   6,370,000   17,766,322      646,793   6,370,000   18,413,115   24,783,115   (3,777,603)  21,005,512   6,000,000 
Red Road Commons Miami, FL (G) 2009  404   27,383,547   99,555,530      (2,216)  27,383,547   99,553,314   126,936,861   (3,497,205)  123,439,656   74,150,144 
Rosecliff Quincy, MA 1990  156   5,460,000   15,721,570      1,453,717   5,460,000   17,175,287   22,635,287   (6,797,434)  15,837,853   17,400,000 
Schooner Bay I Foster City, CA 1985  168   5,345,000   20,509,239      3,191,061   5,345,000   23,700,300   29,045,300   (7,741,356)  21,303,944   27,000,000 
Schooner Bay II Foster City, CA 1985  144   4,550,000   18,142,163      2,985,085   4,550,000   21,127,248   25,677,248   (6,970,045)  18,707,203   23,760,000 
Scottsdale Meadows Scottsdale, AZ 1984  168   1,512,000   11,423,349      1,629,554   1,512,000   13,052,903   14,564,903   (6,274,752)  8,290,151   9,100,000 
Strayhorse at Arrowhead Ranch Glendale, AZ 1998  136   4,400,000   12,968,002      186,009   4,400,000   13,154,011   17,554,011   (2,422,470)  15,131,541   7,971,429 
Surrey Downs Bellevue, WA 1986  122   3,057,100   7,848,618      1,993,876   3,057,100   9,842,494   12,899,594   (4,301,654)  8,597,940   9,829,000 
Veridian (fka Silver Spring) Silver Spring, MD (G) 2009  457   18,539,817   130,485,284      18,886   18,539,817   130,504,170   149,043,987   (6,908,776)  142,135,211   115,744,722 
Virgil Square Los Angeles, CA 1979  142   5,500,000   15,216,613      1,334,954   5,500,000   16,551,567   22,051,567   (3,992,519)  18,059,048   9,900,000 
Willow Brook (CA) Pleasant Hill, CA 1985  228   5,055,000   38,388,672      1,857,343   5,055,000   40,246,015   45,301,015   (10,264,218)  35,036,797   29,000,000 
       
ERPOP Partially Owned Encumbered
      5,232   194,692,119   866,325,485      44,399,197   194,692,119   910,724,682   1,105,416,801   (142,817,905)  962,598,896   749,967,053 
       
                                                 
Portfolio/Entity Encumbrances (1)                                              1,417,683,780 
Total Consolidated Investment in Real Estate
      124,866  $4,336,999,983  $13,999,852,420  $  $1,365,518,589  $4,336,999,983  $15,365,371,009  $19,702,370,992  $(4,337,356,641) $15,365,014,351  $4,762,895,885 
       

(A)

(1)
 See attached Encumbrances Reconciliation

S-10


ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2010
NOTES:
(A)The balance of furniture & fixtures included in the total investment in real estate amount was $1,072,283,499$1,231,391,664 as of December 31, 2008.

2010.

(B)

 

The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 20082010 was approximately $10.7$11.1 billion.

(C)

 

The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 10 years, for furniture & fixtures and replacements is 5 years, and for in-place leases is the average remaining term of each respective lease.

(D)

 

This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment, leasehold improvements and capitalized software costs owned by the Management Business, which are generally depreciated over periods ranging from 3 to 7 years.

(E)

 

Primarily represents capital expenditures for major maintenance and replacements incurred subsequent to each property’s acquisition date.

(F)

 

Represents land construction-in-progress and/or miscellaneous pursuit costsconstruction-in-progress on projects either held for future development or projects currently under development.

(G)

 

A portion or all of these properties includes commercial space (retail, parking and/or office space).

(H)

 

Total properties and units exclude both the Partially Owned Properties - Unconsolidated consisting of 41 properties and 9,776 units, and the Military Housing (Fee Managed) consisting of two properties and 4,7094,738 units.

(I)

through (O)(L) See Encumbrances Reconciliation schedule.

(P)

(M)
 

This asset has a new construction loan outstanding but no amounts had yet been drawn as of December 31, 2008.

Boot property for Freddie Mac tax-exempt bond pool.

S-11


EXHIBIT INDEX

The exhibits listed below are filed as part of this report. References to exhibits ofor other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file number for our Exchange Act filings referenced below is 0-24920.

    Exhibit  

Description

 

ExhibitDescriptionLocation

3.1 

FifthSixth Amended and Restated Agreement of Limited Partnership offor ERP Operating Limited Partnership.

Partnership dated as of March 12, 2009.
 

Included as Exhibit 4.210.1 to the Operating Partnership’s Form 8-K/A8-K dated July 23, 1998,March 12, 2009, filed on AugustMarch 18, 1998.

2009.
4.1 

Indenture, dated October 1, 1994, between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as successor trustee (“Indenture”).

 

Included as Exhibit 4(a) to the Operating Partnership’s Form S-3 filed on October 7, 1994.

4.2 

First Supplemental Indenture to Indenture, dated as of September 9, 2004.

 

Included as Exhibit 4.2 to the Operating Partnership’s Form 8-K, filed on September 10, 2004.

4.3 

Second Supplemental Indenture to Indenture, dated as of August 23, 2006.

 

Included as Exhibit 4.1 to the Operating Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.

4.4 

Third Supplemental Indenture to Indenture, dated as of June 4, 2007.

 

Included as Exhibit 4.1 to the Operating Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.

4.5 

Form of 4.75% Note due June 15, 2009.

Included as Exhibit 4 to the Operating Partnership’s Form 8-K, filed on June 4, 2004.

4.6

Terms Agreement regarding 6.95% Notes due March 2, 2011.

 

Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on March 2, 2001.

4.7 

4.6Terms Agreement regarding 6.625% Notes due March 15, 2012.

 

Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on March 14, 2002.

4.84.7 

Form of 5.50% Note due October 1, 2012.

 

Included as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.

4.9 

4.8Form of 5.2% Note due April 1, 2013.

 

Included as Exhibit 4 to the Operating Partnership’s Form 8-K, filed on March 19, 2003.

 4.10 

4.9Form of 5.25% Note due September 15, 2014.

 

Included as Exhibit 4.1 to the Operating Partnership’s Form 8-K, filed on September 10, 2004.

 4.11 

4.10Terms Agreement regarding 6.63% (subsequently remarketed to a 6.584% fixed rate) Notes due April 13, 2015.

 

Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on April 13, 1998.

 4.12 

4.11Terms Agreement regarding 5.125% Notes due March 15, 2016.

 

Included as Exhibit 1.1 to the Operating Partnership’s Form 8-K, filed on September 13, 2005.

 4.13 

4.12Form of 5.375% Note due August 1, 2016.

 

Included as Exhibit 4.1 to the Operating Partnership’s Form 8-K dated January 11, 2006, filed on January 18, 2006.


 Exhibit     

Description

 

Location

4.144.13 

Form of 5.75% Note due June 15, 2017.

 

Included as Exhibit 4.3 to the Operating Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.


4.15 

ExhibitDescriptionLocation
4.14Terms Agreement regarding 7 1/8% Notes due October 15, 2017.

 

Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on October 9, 1997.

4.15Form of 4.75% Note due July 15, 2020.Included as Exhibit 4.1 to the Operating Partnership’s Form 8-K dated July 12, 2010, filed on July 15, 2010.
4.16 

Terms Agreement regarding 7.57% Notes due August 15, 2026.

 

Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on August 13, 1996.

4.17 

Form of 3.85% Exchangeable Senior NoteNotes due August 15, 2026.

 

Included as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.

10.1  

Master Amendment to Other Securities Term Sheets and Joinders to Operating Partnership Agreement of ERP Operating Limited Partnership dated December 19, 2003.

 

Included as Exhibit 10.2 to Equity Residential’s Form 10-K for the year ended December 31, 2003.

10.2  10.1* 

Assignment and Assumption Agreement between Equity Residential and ERP Operating Limited Partnership dated December 19, 2003.

Included as Exhibit 10.3 to Equity Residential’s Form 10-K for the year ended December 31, 2003.

 10.3*

Noncompetition Agreement (Zell).

 

Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

 10.4* 

10.2*Noncompetition Agreement (Spector).

 

Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

 10.5* 

10.3*Form of Noncompetition Agreement (other officers).

 

Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

10.6  

Amended and Restated Master Reimbursement Agreement, dated as of November 1, 1996 by and between Federal National Mortgage Association and EQR-Bond Partnership.

 

Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

10.7  10.4 

Revolving Credit Agreement dated as of February 28, 2007 among ERP Operating Limited Partnership, Bank of America, N.A., as administrative agent, JP Morgan Chase Bank, N.A., as syndication agent, Banc of America Securities LLC and J.P. Morgan Securities Inc., as joint lead arrangers and joint book runners, SuntrustSunTrust Bank, Wachovia Bank, National Association, Wells Fargo Bank, N.A., LaSalle Bank National Association, The Royal Bank of Scotland plc, and US Bank National Association, as co-documentation agents, and a syndicate of other banks (the “Credit Agreement”).

 

Included as Exhibit 10.110.5 to Equity Residential’s Form 10-K for the Operating Partnership’s Form 8-K dated February 28, 2007, filed on March 5, 2007.

year ended December 31, 2010.
10.8  

10.5Guaranty of Payment made as of February 28, 2007 between Equity Residential and Bank of America, N.A., as adminstrativeadministrative agent for the banks party to the Credit Agreement.

 

Included as Exhibit 10.2 to the Operating Partnership’s Form 8-K dated February 28, 2007, filed on March 5, 2007.

10.9  

10.6Amendment to Revolving Credit Agreement.

 

Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended March 31, 2007.


 Exhibit     

Description

 

Location

10.1010.7 

Credit Agreement dated as of October 5, 2007 among ERP Operating Limited Partnership, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, Banc of America Securities LLC, as joint lead arranger and joint book runner, J.P. Morgan Securities Inc., as joint lead arranger and joint book runner, Citicorp North America Inc., Deutsche Bank Securities Inc., Regions Bank, The Royal Bank of Scotland plc, and U.S. Bank National Association, as documentation agents, and a syndicate of other banks (the “Term Loan Agreement”).

 

Included as Exhibit 10.110.8 to Equity Residential’s Form 10-K for the Operating Partnership’s Form 8-K dated October 5, 2007, filed on October 11, 2007.

year ended December 31, 2010.
10.11 

10.8Guaranty of Payment made as of October 5, 2007 between Equity Residential and Bank of America, N.A., as adminstrativeadministrative agent for the lenders party to the Term Loan Agreement.

 

Included as Exhibit 10.2 to the Operating Partnership’s Form 8-K dated October 5, 2007, filed on October 11, 2007.


10.12 

ExhibitDescriptionLocation
10.9Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P.

 

Included as Exhibit 10.16 to Equity Residential’s Form 10-K for the year ended December 31, 1999.

 10.13* 

Second Amendment to Equity Residential Restated 2002 Share Incentive Plan dated December 10, 2008.

 

Included as Exhibit 10.14 to Equity Residential’s Form 10-K for the year ended December 31, 2008.

  10.14*10.10* 

Equity Residential Second Restated 2002 Share Incentive Plan dated December 10, 2008.

 

Included as Exhibit 10.15 to Equity Residential’s Form 10-K for the year ended December 31, 2008.

 10.15* 

10.11*First Amendment to Second Restated 2002 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended September 30, 2010.
10.12*Equity Residential Amended and Restated 1993 Share Option and Share Award Plan.

 

Included as Exhibit 10.11 to Equity Residential’s Form 10-K for the year ended December 31, 2001.

 10.16* 

10.13*First Amendment to Equity Residential 1993 Share Option and Share Award Plan.

 

Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended June 30, 2003.

 10.17* 

10.14*Second Amendment to Equity Residential 1993 Share Option and Share Award Plan.

 

Included as Exhibit 10.20 to Equity Residential’s Form 10-K for the year ended December 31, 2006.

 10.18* 

10.15*Third Amendment to Equity Residential 1993 Share Option and Share Award Plan.

 

Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended June 30, 2007.

 10.19* 

10.16*Fourth Amendment to Equity Residential 1993 Share Option and Share Award Plan.

 

Included as Exhibit 10.2 to Equity Residential’s Form 10-Q for the quarterly period ended September 30, 2008.

 10.20* 

10.17*Fifth Amendment to Equity Residential 1993 Share Option and Share Award Plan dated December 10, 2008.

 

Included as Exhibit 10.21 to Equity Residential’s Form 10-K for the year ended December 31, 2008.

 10.21* 

Form of Equity Residential Performance Based Unit Award Grant Agreement.

 

Included as Exhibit 10.18 to Equity Residential’s Form 10-K for the year ended December 31, 2004.

  10.22*10.18* 

Form of Change in Control Agreement between Equity Residential and other executive officers.

 

Included as Exhibit 10.13 to Equity Residential’s Form 10-K for the year ended December 31, 2001.


 Exhibit     

Description

 

Location

10.19*Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer.Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended March 31, 2009.
 10.23* 

10.20*Form of Indemnification Agreement between Equity Residential and each trustee and executive officer.

 

Included as Exhibit 10.18 to Equity Residential’s Form 10-K for the year ended December 31, 2003.

 10.24* 

10.21*Form of Letter Agreement between Equity Residential and each of David J. Neithercut, Frederick C. Tuomi, Alan W. George and Bruce C. Strohm.

 

Included as Exhibit 10.3 to Equity Residential’s Form 10-Q for the quarterly period ended September 30, 2008.

 10.25* 

10.22*Form of Executive Retirement Benefits Agreement.

 

Included as Exhibit 10.24 to Equity Residential’s Form 10-K for the year ended December 31, 2006.

 10.26* 

10.23*Retirement Benefits Agreement between Samuel Zell and Equity Residential dated October 18, 2001.

 

Included as Exhibit 10.18 to Equity Residential’s Form 10-K for the year ended December 31, 2001.

 10.27* 

10.24*Amended and Restated Deferred Compensation Agreement between Equity Residential and Gerald A. Spector dated January 1, 2002.

 

Included as Exhibit 10.17 to Equity Residential’s Form 10-K for the year ended December 31, 2001.

 10.28* 

Retirement

10.25*Change in Control Agreement dated October 30, 2007as of March 13, 2009 by and between Equity Residential and Gerald A. Spector.

Mark J. Parrell, Executive Vice President and Chief Financial Officer.
 

Included as Exhibit 99.110.2 to the Operating Partnership’s Form 8-K dated October 30, 2007,March 12, 2009, filed on October 31, 2007.

March 18, 2009.
 10.29* 

10.26*Summary of Changes to Trustee Compensation.

 

Included as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated September 21, 2005, filed on September 27, 2005.


 10.30* 

ExhibitDescriptionLocation
10.27*The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective November 1, 2008.

 

Included as Exhibit 10.4 to Equity Residential’s Form 10-Q for the quarterly period ended September 30, 2008.

 10.31* 

10.28*Amendment to the Equity Residential Supplemental Executive Retirement Plan.Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended June 30, 2010.
10.29*The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005.

 

Included as Exhibit 10.2 to Equity Residential’s Form 10-Q for the quarterly period ended March 31, 2008.

10.30Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011, among the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated.Included as Exhibit 1.1 to the Operating Partnership’s Form 8-K dated and filed on February 3, 2011.
10.31Sales Agency Financing Agreement, dated February 3, 2011, among the Company, the Operating Partnership and BNY Mellon Capital Markets, LLC.Included as Exhibit 1.2 to the Operating Partnership’s Form 8-K dated and filed on February 3, 2011.
10.32Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011, among the Company, the Operating Partnership and J.P. Morgan Securities LLC.Included as Exhibit 1.3 to the Operating Partnership’s Form 8-K dated and filed on February 3, 2011.
10.33Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011, among the Company, the Operating Partnership and Morgan Stanley & Co. Incorporated.Included as Exhibit 1.4 to the Operating Partnership’s Form 8-K dated and filed on February 3, 2011.
12 

Computation of Ratio of Earnings to Combined Fixed Charges.

 

Attached herein.

21 

List of Subsidiaries of ERP Operating Limited Partnership.

 

Attached herein.

 
23.1 

Consent of Ernst & Young LLP.

 

Attached herein.

24 

Power of Attorney.

 

See the signature page to this report.

 
31.1 

Certification of David J. Neithercut, Chief Executive Officer of Registrant’s General Partner.

 

Attached herein.

 
31.2 

Certification of Mark J. Parrell, Chief Financial Officer of Registrant’s General Partner.

 

Attached herein.

 
32.1 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of Registrant’s General Partner.

 

Attached herein.

 
32.2 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Financial Officer of Registrant’s General Partner.

 

Attached herein.

*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.

* Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.