Home Properties 8K Results of Operations and Financial Condition | SEC 2 Nov 12

EXHIBIT 99

HOME PROPERTIES, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

THIRD QUARTER 2012

TABLE OF CONTENTS

	3Q 2012 Supplemental Reports	Page
1.	Earnings Release	1-8
2.	Owned Community Results, Quarterly and Year-to-Date	9-12
3.	Physical Occupancy Comparison by Region	13
4.	Net Operating Results	14
5.	New Lease and Renewal Lease Rents vs. Expiring Lease Rents	15
6.	Resident Statistics	16
7.	Net Operating Income Detail and Seasonality Factor for NAV Calculation	17
8.	Operating Expense Detail	18
9.	Discontinued Operations	19
10.	Summary of Recent Acquisitions	20
11.	Summary of Recent Sales	21
12.	Breakdown of Owned Units by Market	22
13.	Debt Summary Schedule	23-25
14.	Recurring Capital Expenditure and Adjusted NOI Summary	26-28
15.	Development Communities	29
16.	2012 Earnings Guidance	30

-i-

FOR IMMEDIATE RELEASE

Home Properties Reports Third Quarter 2012 Results

FFO Per Share Exceeds Wall Street's Mean Estimate by 4 Cents

ROCHESTER, N.Y., November 1, 2012 – Home Properties, Inc. (NYSE: HME) today released financial results for the third quarter ended September 30, 2012. All results are reported on a diluted basis.

“Home Properties benefited from positive fundamentals in the multifamily real estate sector during the third quarter of 2012, producing same-store net operating income growth of 8.3% compared to the prior year third quarter, which is the largest year-over-year third quarter increase since 2001,” said Edward J. Pettinella, Home Properties President and CEO. “Increased rent growth, continued high occupancy, favorable expense control and strong results from recent acquisitions and new construction have contributed to excellent quarterly results.”

Earnings per share ("EPS") for the quarter ended September 30, 2012 was $0.71, compared to $0.20 for the quarter ended September 30, 2011. The $0.51 increase in EPS is primarily attributable to a $19.7 million gain on disposition of property combined with a $13.5 million increase in income from continuing operations from both the properties owned throughout 2011 and 2012 (the “Core” properties) and those acquired, developed, or redeveloped subsequent to January 1, 2011 (the “Non-Core” properties).

For the quarter ended September 30, 2012, Funds From Operations ("FFO") was $67.3 million, or $1.09 per share, compared to $46.4 million, or $0.87 per share, for the quarter ended September 30, 2011, which equates to a 26.3% increase on a per-share basis. Third quarter 2012 FFO of $1.09 per share was $0.04 above the midpoint of the guidance range provided by management and the analysts' mean estimate, as reported by Thomson. A reconciliation of GAAP net income to FFO is included in the financial data accompanying this news release.

Third Quarter Operating Results

For the third quarter of 2012, same-property comparisons (for 111 Core properties containing 37,386 apartment units owned since January 1, 2011) reflected an increase in rental income of 4.2% and a 4.3% increase in total revenues compared to the same quarter a year ago. Net operating income (“NOI”) increased by 8.3% from the third quarter of 2011. Property level operating expenses decreased by 2.1% compared to the prior year quarter, primarily due to decreases in repairs and maintenance, personnel costs and property management general and administrative costs, which were partially offset by an increase in real estate taxes.

Average physical occupancy for the Core properties was 95.5% during the third quarter in both 2012 and 2011. Average monthly rental rates of $1,240 in the 2012 third quarter represent a 3.9% increase compared to the year-ago period.

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

Page 2 of 8

On a sequential basis, compared to the 2012 second quarter results for Core properties, average monthly rental rates were up 1.4% in the third quarter of 2012. This increase was offset by a 0.9% seasonal decline in economic occupancy resulting in a 0.5% increase in rental income and total revenues. Expenses decreased 0.7% producing an NOI increase of 1.1%. Average physical occupancy decreased 0.7% to 95.5%.

Physical occupancy for the 6,421 apartment units acquired/developed/redeveloped between January 1, 2011 and September 30, 2012 averaged 92.0% during the third quarter of 2012, at average monthly rents of $1,370.

Year-to-Date Operating Results

For the nine months ended September 30, 2012, same-property comparisons for the Core properties reflected an increase in total revenues of 4.6% and a decrease in total expense of 1.8% resulting in an 8.8% increase in NOI compared to the first nine months of 2011. Property level operating expenses in 2012 decreased, primarily due to lower electricity, natural gas heating costs, personnel and snow removal costs. These decreases were partially offset by increases in property insurance and real estate taxes.

Average physical occupancy for the Core properties was 95.7% during the first nine months of 2012, up from 95.6% a year ago, with average monthly rental rates of $1,224, an increase of 4.4% over the prior year period.

Acquisitions/Dispositions/Development

There were no acquisitions of apartment communities in the third quarter of 2012.

During the third quarter of 2012, the Company closed on two separate sale transactions, with a total of 424 units, for $41.2 million, producing approximately $40.1 million in net proceeds after closing costs. A gain on sale of approximately $19.7 million was recorded in the third quarter related to these sales. The two apartment communities sold were located in the Philadelphia and Baltimore regions.

Subsequent to the end of the quarter, on October 11, 2012, the Company sold one property with 318 units in the Philadelphia region for $29.8 million, producing approximately $4.7 million in net proceeds after mortgage payoffs and closing costs. A gain on sale of approximately $15.9 million will be recorded in the fourth quarter of 2012 related to this sale.

The weighted average historical cap rate for these three dispositions was 6.3%.

During the third quarter, the Company fully completed the development of The Apartments at Cobblestone Square, located in Fredericksburg, Va. The property averaged 84.1% occupancy during the third quarter of 2012; and, as of October 31, 97.1% of the 314 units were occupied with 98.4% of the units leased.

Capital Markets Activities

As of September 30, 2012, the Company’s ratio of debt-to-total market capitalization was 43.3% (based on a September 28, 2012 stock price of $61.27 used to determine equity value), with

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

Page 3 of 8

$128 million outstanding on its $275 million revolving credit facility and $8.2 million of unrestricted cash on hand. Total debt of $2.9 billion was outstanding, at interest rates averaging 4.5% and with staggered maturities averaging five years. Approximately 85% of total indebtedness is at fixed rates. Interest coverage for the quarter was 3.1 times and the fixed charge ratio was 3.0 times.

On May 14, 2012, the Company extended its At-The-Market (ATM) equity offering program, with authorization to sell up to 4.4 million common shares. During the third quarter, 1,272,225 shares were sold (including 10,100 shares with a settlement date in early October) at an average price of $63.61 generating gross proceeds of $80.9 million and net proceeds of $79.3 million. Year to date, the Company issued 1,970,824 shares at an average price of $62.64 generating gross proceeds of $123.5 million and net proceeds of $120.9 million. There are approximately 2.4 million common shares remaining under this program.

Outlook

Based on higher third quarter results than expected and higher results anticipated for the balance of the year, the Company has increased the midpoint of its prior FFO guidance by seven cents to $4.07 and the range of FFO per share to $4.05 to $4.09 from $3.96 to $4.04. This guidance range reflects management’s current assessment of economic and market conditions, including a net one-half cent charge from the effect of Hurricane Sandy. Operating FFO has been increased by six cents to $4.11 at the midpoint with a range of $4.09 to $4.13. The difference between FFO and OFFO is due solely to expensed acquisition costs. Because projected acquisition costs are minimal, the guidance for the fourth quarter of 2012 for FFO and OFFO per share results is identical at a range from $1.02 to $1.06, which also includes the one-half cent reserve for Hurricane Sandy after taking into account various insurance coverages and deductibles.

Dividend Declared

The Company announced a regular cash dividend on the Company’s common shares of $0.66 per share for the quarter ended September 30, 2012. The dividend is payable on November 27, 2012 to shareholders of record on November 15, 2012 and is equivalent to an annualized rate of $2.64 per share. The current annual dividend represents a 4.42% yield based on the October 26, 2012 closing price of $59.70. Home Properties’ common stock will begin trading ex-dividend on November 13, 2012.

Supplemental Information

The Company produces supplemental information that includes details regarding property operations, other income, acquisitions, sales, geographic market breakdown, debt and new development. The supplemental information is available via the Company's website through the "Investors" section or e-mail upon request.

Third Quarter 2012 Earnings Conference Call

The Company will conduct a conference call and simultaneous webcast tomorrow at 11:00 AM ET to review and comment on the information reported in this release. The webcast, which includes audio and a slide presentation, will be available, live at 11:00 AM and archived by 1:00 PM, through the "Investors" section home page of the website www.homeproperties.com. For live audio-only participation, please dial 800-913-1647 (International 212-231-2900).

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

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Fourth Quarter 2012 Earnings Release and Conference Call

The Company’s fourth quarter 2012 financial results are scheduled to be released after the stock market closes on Thursday, February 7, 2013. A conference call, which will be simultaneously webcast, is scheduled for Friday, February 8, 2013 at 11:00 AM ET and will be accessible following the instructions for the current quarter's conference call.

Fourth Quarter 2012 Conference/Event Schedule

Home Properties’ President and CEO, Edward J. Pettinella, is scheduled to participate in REITWorld®: NAREIT's Annual Convention for All Things REIT® in San Diego November 13-15. Any presentation and related materials will be available in the “Investors” section of www.homeproperties.com.

This release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that may cause actual results to differ include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning and new development activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth.

Home Properties is a publicly traded multifamily real estate investment trust (REIT) that owns, operates, develops, acquires and rehabilitates apartment communities primarily in selected Northeast and Mid-Atlantic markets. An S&P 400 Company, Home Properties owns and operates 124 communities containing 43,489 apartment units. For more information, visit Home Properties’ website at www.homeproperties.com.

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

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HOME PROPERTIES, INC.

SUMMARY OF OCCUPANCY AND PROPERTY OPERATING RESULTS

	Avg. Physical
Third Quarter Results:	Occupancy(a)							3Q 2012	3Q 2012 vs. 3Q 2011 % Growth
							Average
							Monthly		Base
							Rent/		Rental			Total			Total
		3Q 2012			3Q 2011		Occ Unit		Rates			Revenue			Expense			NOI
Core Properties(b)		95.5	%		95.5	%	$	1,240		3.9	%		4.3	%		(2.1	%)		8.3	%
Non-Core Properties(c)		92.0	%	NA			$	1,370	NA			NA			NA			NA
TOTAL PORTFOLIO		94.9	%	NA			$	1,259	NA			NA			NA			NA

	Avg. Physical
Year-To-Date Results:	Occupancy(a)						YTD 2012		YTD 2012 vs. YTD 2011 % Growth
							Average
							Monthly		Base
	YTD			YTD			Rent /		Rental			Total			Total
		2012			2011		Occ Unit		Rates			Revenue			Expense			NOI
Core Properties(b)		95.7	%		95.6	%	$	1,224		4.4	%		4.6	%		(1.8	%)		8.8	%
Non-Core Properties(c)		90.4	%	NA			$	1,404	NA			NA			NA			NA
TOTAL PORTFOLIO		95.0	%	NA			$	1,246	NA			NA			NA			NA

(a)	Average physical occupancy is defined as total possible rental income, net of vacancy expense, as a percentage of total possible rental income. Total possible rental income is determined by valuing occupied units at contract rates and vacant units at market rents.

(b)	Core Properties consist of 111 properties with 37,386 apartment units owned throughout 2011 and 2012.

(c)

Non-Core Properties consist of 14 properties with 6,421 apartment units acquired, developed, or redeveloped subsequent to January 1, 2011, such that full year comparable operating results are not available. Non-Core Properties excludes properties still under development where construction is not 100% complete.

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data – Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012			2011
Rental income	$	155,335		$	132,902		$	448,331		$	387,952
Property other income		12,654			10,517			39,785			35,017
Other income		32			25			63			94
Total revenues		168,021			143,444			488,179			423,063
Operating and maintenance		59,975			54,838			178,945			165,785
General and administrative		8,018			7,803			27,367			22,865
Interest		32,871			32,696			95,843			98,403
Depreciation and amortization		43,186			35,996			124,602			104,564
Other expenses		15			1,630			2,726			1,739
Total expenses		144,065			132,963			429,483			393,356
Income from continuing operations		23,956			10,481			58,696			29,707
Discontinued operations
Income from discontinued operations		466			277			1,216			920
Gain on disposition of property		19,667			-			19,667			-
Discontinued operations		20,133			277			20,883			920

Net income		44,089			10,758			79,579			30,627

Net income attributable to noncontrolling interest		(7,676	)		(2,250	)		(14,051	)		(6,700	)
Net income attributable to common stockholders	$	36,413		$	8,508		$	65,528		$	23,927
Reconciliation from net income attributable to common stockholders to Funds From Operations:
Net income available to common stockholders	$	36,413		$	8,508		$	65,528		$	23,927
Real property depreciation and amortization		42,863			35,625			123,442			103,493
Noncontrolling interest		7,676			2,250			14,051			6,700
Gain on disposition of property		(19,667	)		-			(19,667	)		-
FFO - basic and diluted (1)	$	67,285		$	46,383		$	183,354		$	134,120

(1)

Pursuant to the updated guidance for Funds From Operations provided by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), FFO is defined as net income (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP")) excluding gains or losses from disposition of property, impairment write-downs of depreciable real estate, noncontrolling interest and extraordinary items plus depreciation from real property. The Company believes all adjustments not specifically provided for are consistent with the definition. Other similarly titled measures may not be calculated in the same manner.

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data – Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012			2011
FFO – basic and diluted	$	67,285		$	46,383		$	183,354		$	134,120
FFO – basic and diluted	$	67,285		$	46,383		$	183,354		$	134,120
Acquisition costs of closed deals included in other expenses		15			1,630			2,726			1,739
Operating FFO (2)	$	67,300		$	48,013		$	186,080		$	135,859
FFO – basic and diluted	$	67,285		$	46,383		$	183,354		$	134,120
Recurring non-revenue generating capital expenses		(9,363	)		(7,973	)		(27,285	)		(23,550	)
Addback of non-cash interest expense		-			553			-			1,639
AFFO (3)	$	57,922		$	38,963		$	156,069		$	112,209
Operating FFO	$	67,300		$	48,013		$	186,080		$	135,859
Recurring non-revenue generating capital expenses		(9,363	)		(7,973	)		(27,285	)		(23,550	)
Addback of non-cash interest expense		-			553			-			1,639
Operating AFFO (2) (3)	$	57,937		$	40,593		$	158,795		$	113,948
Weighted average shares/units outstanding:
Shares – basic		50,255.2			41,707.7			49,218.7			39,743.3
Shares – diluted		50,934.2			42,531.0			49,848.4			40,462.5
Shares/units – basic (4)		60,868.0			52,767.7			59,873.9			50,910.7
Shares/units – diluted (4)		61,547.0			53,591.1			60,503.6			51,630.0
Per share/unit:
Net income – basic	$	0.72		$	0.20		$	1.33		$	0.60
Net income – diluted	$	0.71		$	0.20		$	1.31		$	0.59
FFO – basic	$	1.11		$	0.88		$	3.06		$	2.63
FFO – diluted	$	1.09		$	0.87		$	3.03		$	2.60
Operating FFO (2)	$	1.09		$	0.90		$	3.08		$	2.63
AFFO (3)	$	0.94		$	0.73		$	2.58		$	2.17
Operating AFFO (2) (3)	$	0.94		$	0.76		$	2.62		$	2.21
Common Dividend paid	$	0.66		$	0.62		$	1.98		$	1.86

(2)	Operating FFO is defined as FFO as computed in accordance with NAREIT definition, adjusted for the add back of acquisition costs on closed deals.

(3)

Adjusted Funds From Operations ("AFFO") is defined as gross FFO less an annual reserve for anticipated recurring, non-revenue generating capitalized costs of $848 and $800 per apartment unit in 2012 and 2011, respectively. Non-cash interest expense of the exchangeable senior notes in accordance with ASC 470-20 (formerly APB14-1) has been added back for 2011. The resulting sum is divided by the weighted average shares/units on a diluted basis to arrive at AFFO per share/unit.

(4)	Basic includes common stock outstanding plus operating partnership units in Home Properties, L.P., which can be converted into shares of common stock. Diluted includes additional common stock equivalents.

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Home Properties Reports Third Quarter 2012 Results

For Immediate Release: November 1, 2012

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands - Unaudited)

	September 30, 2012			December 31, 2011
Land	$	799,272		$	721,542
Construction in progress		64,655			64,201
Buildings, improvements and equipment		4,606,058			4,256,581
		5,469,985			5,042,324
Accumulated depreciation		(1,094,705	)		(983,759	)
Real estate, net		4,375,280			4,058,565

Cash and cash equivalents		8,195			8,297
Cash in escrows		74,207			32,604
Accounts receivable		10,288			12,142
Prepaid expenses		23,490			15,994
Deferred charges		14,230			16,322
Other assets		12,058			9,282
Total assets	$	4,517,748		$	4,153,206
Mortgage notes payable	$	2,208,427		$	2,260,836
Unsecured notes payable		550,000			400,000
Unsecured line of credit		128,000			2,500
Accounts payable		29,829			20,953
Accrued interest payable		12,239			10,286
Accrued expenses and other liabilities		32,273			29,474
Security deposits		19,789			19,513
Total liabilities		2,980,557			2,743,562

Common stockholders’ equity		1,274,554			1,153,668
Noncontrolling interest		262,637			255,976
Total equity		1,537,191			1,409,644
Total liabilities and equity	$	4,517,748		$	4,153,206

Total shares/units outstanding:
Common stock		51,234.4			48,321.3
Operating partnership units		10,591.1			10,739.8
		61,825.5			59,061.1

For further information:

David P. Gardner, Executive Vice President and Chief Financial Officer, (585) 246-4113

Charis W. Warshof, Vice President, Investor Relations, (585) 295-4237

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OWNED COMMUNITY RESULTS

Third Quarter 2012												3Q '12 versus 3Q '11
												% Growth
	# of		Date	3Q '12		3Q '12			3Q '11			Rental			Total			Total			Total			3Q '12
	Units		Acquired	Rent/Mo.		Occup.			Occup.			Rates(1)			Revenue			Expense			NOI			% Co. NOI
Baltimore Region
Annapolis Roads		282	6/17/2010	$	1,297		91.1	%		89.2	%		1.5	%		6.4	%		(2.2	%)		11.7	%
Bonnie Ridge		960	7/1/1999	$	1,154		95.0	%		94.7	%		3.0	%		5.5	%		(3.4	%)		10.3	%
Canterbury Apartments		618	7/15/1999	$	1,014		94.9	%		95.9	%		3.2	%		1.9	%		(0.6	%)		3.2	%
Charleston Place		858	9/30/2010	$	1,184		96.7	%		96.0	%		3.7	%		5.8	%		(7.6	%)		12.8	%
Country Village		344	4/30/1998	$	1,058		94.7	%		96.9	%		4.7	%		2.5	%		(4.1	%)		6.4	%
Dunfield Townhomes		312	11/1/2007	$	1,205		94.3	%		94.7	%		3.8	%		2.5	%		4.1	%		1.8	%
Falcon Crest		396	7/15/1999	$	1,038		94.9	%		95.0	%		3.3	%		4.7	%		(4.2	%)		9.0	%
Fox Hall Apartments		720	3/28/2007	$	898		89.8	%		91.0	%		2.0	%		(1.0	%)		(8.5	%)		4.7	%
Gateway Village		132	7/15/1999	$	1,365		97.8	%		96.1	%		1.8	%		3.6	%		(1.3	%)		6.3	%
Heritage Woods		164	10/4/2006	$	1,212		96.1	%		95.9	%		5.1	%		4.0	%		0.6	%		6.0	%
Howard Crossing		1,350	6/28/2012	$	1,117		91.1	%		n/a			n/a			n/a			n/a			n/a
Middlebrooke Apartments		208	4/1/2010	$	995		94.6	%		94.1	%		4.3	%		7.0	%		(8.3	%)		16.4	%
Mill Towne Village Apts		384	5/31/2001	$	931		94.4	%		93.2	%		2.1	%		3.0	%		0.5	%		4.6	%
Morningside Heights		1,050	4/30/1998	$	934		92.0	%		92.3	%		3.6	%		3.9	%		(4.9	%)		8.9	%
Owings Run		504	7/15/1999	$	1,280		95.1	%		96.1	%		1.4	%		(1.0	%)		(11.3	%)		4.1	%
Ridgeview at Wakefield Valley		204	1/13/2005	$	1,230		96.1	%		96.7	%		0.7	%		(0.1	%)		(2.7	%)		1.3	%
Saddle Brooke Apartments		468	10/29/2008	$	1,111		94.3	%		92.6	%		5.9	%		8.4	%		(7.7	%)		18.1	%
Selford Townhomes		102	7/15/1999	$	1,413		95.1	%		95.7	%		2.3	%		3.0	%		0.9	%		4.0	%
The Apts at Cambridge Court		544	8/23/2011	$	1,362		92.6	%		n/a			n/a			n/a			n/a			n/a
The Coves at Chesapeake		469	11/20/2006	$	1,292		94.8	%		93.1	%		4.0	%		8.6	%		(11.2	%)		19.6	%
The Greens at Columbia		168	7/29/2010	$	1,443		91.7	%		95.2	%		4.9	%		1.7	%		(4.8	%)		4.7	%
Timbercroft Townhomes		284	7/15/1999	$	957		99.2	%		99.7	%		0.2	%		0.3	%		(11.3	%)		7.5	%
Top Field		156	10/4/2006	$	1,329		94.0	%		96.7	%		3.1	%		(0.2	%)		(2.3	%)		0.8	%
Village Square Townhomes		370	7/15/1999	$	1,198		95.8	%		95.9	%		1.9	%		3.1	%		16.8	%		(2.3	%)
Westbrooke Apartments		110	4/1/2010	$	870		95.2	%		96.4	%		4.8	%		6.9	%		(10.5	%)		20.9	%
Total Baltimore Region		11,157		$	1,108		94.4	%		94.5	%		3.1	%		3.7	%		(4.4	%)		8.1	%		23.3	%

Boston Region
Gardencrest		695	6/28/2002	$	1,656		98.0	%		97.4	%		5.9	%		7.1	%		1.3	%		9.6	%
Highland House		172	5/31/2006	$	1,257		96.4	%		96.9	%		6.3	%		5.8	%		(4.0	%)		13.4	%
Liberty Commons		120	8/30/2006	$	1,330		98.4	%		95.6	%		2.6	%		7.0	%		(8.9	%)		15.1	%
Liberty Place		107	6/6/2006	$	1,526		96.4	%		96.4	%		4.7	%		3.8	%		(5.6	%)		9.6	%
Redbank Village		500	7/8/1998	$	952		95.0	%		95.7	%		2.8	%		4.7	%		(7.0	%)		14.1	%
Stone Ends		280	2/12/2003	$	1,316		96.3	%		94.5	%		4.2	%		7.2	%		(3.3	%)		13.0	%
The Commons at Haynes Farm		302	7/15/2011	$	1,299		95.5	%		n/a			n/a			n/a			n/a			n/a
The Heights at Marlborough		348	9/7/2006	$	1,267		95.4	%		95.0	%		3.7	%		9.4	%		(10.0	%)		22.7	%
The Meadows at Marlborough		264	9/7/2006	$	1,211		95.0	%		93.9	%		4.1	%		5.9	%		4.7	%		6.8	%
The Townhomes of Beverly		204	2/15/2007	$	1,560		97.1	%		98.5	%		4.7	%		6.8	%		(3.0	%)		12.0	%
The Village at Marshfield		276	3/17/2004	$	1,212		96.1	%		95.7	%		3.9	%		4.8	%		(5.2	%)		10.6	%
Westwoods		35	4/30/2007	$	1,315		97.3	%		95.4	%		6.6	%		15.2	%		(55.1	%)		227.8	%
Total Boston Region		3,303		$	1,331		96.6	%		96.2	%		4.6	%		6.6	%		(4.5	%)		13.1	%		8.1	%

Chicago Region
Blackhawk		371	10/20/2000	$	902		96.5	%		95.2	%		2.5	%		5.0	%		(30.4	%)		26.8	%
Courtyards Village		224	8/29/2001	$	904		96.7	%		98.0	%		5.7	%		5.1	%		(1.4	%)		11.4	%
Cypress Place		192	12/27/2000	$	1,017		97.6	%		97.1	%		6.7	%		8.6	%		(45.3	%)		62.8	%
Lakeview Townhomes		120	10/18/2010	$	1,243		95.7	%		93.8	%		6.7	%		10.2	%		19.1	%		3.9	%
The Colony		783	9/1/1999	$	905		96.6	%		97.5	%		3.5	%		2.9	%		(43.7	%)		30.7	%
The Gates of Deer Grove		204	12/15/2011	$	1,043		95.7	%		n/a			n/a			n/a			n/a			n/a
The New Colonies		672	6/23/1998	$	774		94.6	%		94.8	%		0.6	%		1.5	%		(5.3	%)		9.0	%
Total Chicago Region		2,566		$	893		96.1	%		96.2	%		3.3	%		4.1	%		(22.2	%)		24.5	%		4.5	%

Florida Region
The Hamptons		668	7/7/2004	$	1,009		95.4	%		94.5	%		2.6	%		3.6	%		(5.6	%)		13.9	%
Vinings at Hampton Village		168	7/7/2004	$	1,127		94.8	%		96.8	%		1.3	%		0.6	%		(12.0	%)		15.3	%
Total Florida Region		836		$	1,033		95.3	%		95.0	%		2.3	%		2.9	%		(7.1	%)		14.2	%		1.3	%

Long Island, NY Region
Bayview / Colonial		160	11/1/2000	$	1,323		97.7	%		99.1	%		4.1	%		3.3	%		(7.5	%)		11.3	%
Cambridge Village		82	3/1/2002	$	1,878		97.2	%		98.4	%		3.6	%		2.1	%		1.5	%		2.5	%
Crescent Club Apartments		257	9/30/2010	$	1,355		97.4	%		97.1	%		5.8	%		5.6	%		(0.8	%)		9.9	%
Devonshire Hills		656	7/16/2001	$	1,655		96.1	%		97.6	%		3.6	%		3.4	%		1.5	%		4.5	%
Hawthorne Court		434	4/4/2002	$	1,484		96.6	%		96.8	%		2.2	%		3.0	%		3.7	%		2.5	%
Heritage Square		80	4/4/2002	$	1,871		96.5	%		97.8	%		6.8	%		5.8	%		1.8	%		9.0	%
Holiday Square		144	5/31/2002	$	1,279		99.2	%		96.9	%		3.8	%		7.6	%		132.5	%		(19.5	%)
Lake Grove Apartments		368	2/3/1997	$	1,524		95.2	%		95.6	%		4.7	%		4.6	%		(0.3	%)		7.6	%
Mid-Island Estates		232	7/1/1997	$	1,474		98.2	%		98.2	%		4.2	%		4.3	%		(8.2	%)		12.1	%
Sayville Commons		342	7/15/2005	$	1,637		96.0	%		97.7	%		2.5	%		0.3	%		10.6	%		(7.4	%)
South Bay Manor		61	9/11/2000	$	1,692		97.3	%		96.0	%		2.5	%		0.7	%		509.9	%		(43.5	%)
Southern Meadows		452	6/29/2001	$	1,470		96.0	%		97.2	%		3.6	%		2.3	%		1.0	%		3.2	%
Westwood Village Apts		242	3/1/2002	$	2,514		97.1	%		97.7	%		4.7	%		5.3	%		7.7	%		3.8	%
Woodmont Village Apts		97	3/1/2002	$	1,379		95.3	%		97.1	%		3.8	%		4.8	%		11.7	%		1.6	%
Yorkshire Village Apts		40	3/1/2002	$	1,926		96.2	%		97.5	%		4.5	%		2.7	%		(4.0	%)		8.9	%
Total Long Island Region		3,647		$	1,598		96.6	%		97.3	%		3.8	%		3.5	%		6.4	%		1.8	%		10.0	%

Page 9

Table of Contents

OWNED COMMUNITY RESULTS

Third Quarter 2012												3Q '12 versus 3Q '11
												% Growth
	# of		Date	3Q '12		3Q '12			3Q '11			Rental			Total			Total			Total			3Q '12
	Units		Acquired	Rent/Mo.		Occup.			Occup.			Rates(1)			Revenue			Expense			NOI			% Co. NOI
New Jersey Region
Barrington Gardens		148	3/1/2005	$	1,302		97.2	%		96.1	%		7.7	%		9.0	%		52.8	%		(6.4	%)
Chatham Hill Apartments		308	1/30/2004	$	1,903		97.2	%		94.5	%		6.2	%		8.5	%		3.5	%		10.6	%
East Hill Gardens		33	7/8/1998	$	1,624		96.6	%		95.3	%		4.8	%		10.5	%		(11.1	%)		23.8	%
Hackensack Gardens		198	3/1/2005	$	1,187		97.7	%		97.7	%		5.3	%		7.6	%		(5.6	%)		17.8	%
Jacob Ford Village		270	2/15/2007	$	1,337		98.6	%		97.0	%		5.9	%		7.6	%		(12.0	%)		17.1	%
Lakeview		106	7/8/1998	$	1,438		97.5	%		95.2	%		4.0	%		7.0	%		6.0	%		7.7	%
Northwood Apartments		134	1/30/2004	$	1,385		97.0	%		96.6	%		2.5	%		6.2	%		(7.6	%)		18.1	%
Oak Manor		77	7/8/1998	$	1,906		98.9	%		94.5	%		4.1	%		8.6	%		3.8	%		10.9	%
Pleasant View		1,142	7/8/1998	$	1,195		95.6	%		96.5	%		3.5	%		2.9	%		(8.5	%)		10.0	%
Pleasure Bay		270	7/8/1998	$	1,094		96.3	%		95.6	%		4.1	%		5.1	%		(2.1	%)		10.9	%
Royal Gardens Apartments		550	5/28/1997	$	1,306		96.4	%		97.6	%		4.4	%		3.5	%		(3.9	%)		7.6	%
Wayne Village		275	7/8/1998	$	1,451		96.4	%		97.0	%		2.7	%		1.2	%		(9.1	%)		6.9	%
�� Windsor Realty		67	7/8/1998	$	1,327		93.9	%		96.4	%		2.4	%		(1.1	%)		2.7	%		(3.5	%)
Total New Jersey Region		3,578		$	1,336		96.6	%		96.4	%		4.4	%		4.9	%		(3.5	%)		9.8	%		9.1	%

Philadelphia Region
Castle Club		158	3/15/2000	$	1,017		93.1	%		92.4	%		2.9	%		(1.9	%)		(2.9	%)		(0.9	%)
Curren Terrace		318	9/23/1997	$	914		95.8	%		96.0	%		4.1	%		2.9	%		(7.2	%)		13.0	%
Glen Brook		174	7/28/1999	$	864		94.6	%		96.4	%		4.1	%		0.7	%		(0.6	%)		2.2	%
Glen Manor		174	9/23/1997	$	817		95.6	%		94.9	%		(0.3	%)		(0.7	%)		(12.2	%)		12.5	%
Golf Club		399	3/15/2000	$	1,150		93.2	%		93.1	%		3.4	%		1.8	%		(8.6	%)		8.4	%
Hill Brook Place		274	7/28/1999	$	950		96.0	%		94.2	%		3.3	%		5.9	%		1.0	%		10.6	%
Home Properties of Bryn Mawr		316	3/15/2000	$	1,463		90.2	%		93.6	%		9.0	%		4.2	%		3.0	%		4.9	%
Home Properties of Devon		631	3/15/2000	$	1,250		93.7	%		92.6	%		7.0	%		6.8	%		(8.7	%)		16.2	%
New Orleans Park		442	7/28/1999	$	901		95.0	%		94.3	%		2.7	%		5.4	%		(3.6	%)		14.7	%
Racquet Club		466	7/7/1998	$	1,119		95.1	%		93.8	%		4.1	%		5.6	%		(0.5	%)		9.9	%
Racquet Club South		103	5/27/1999	$	949		95.1	%		95.6	%		3.1	%		3.6	%		(0.1	%)		7.1	%
Ridley Brook		244	7/28/1999	$	971		94.8	%		92.8	%		2.2	%		3.6	%		(4.9	%)		12.3	%
Sherry Lake		298	7/23/1998	$	1,285		95.9	%		96.4	%		5.9	%		5.4	%		(5.0	%)		11.1	%
The Brooke at Peachtree Village		146	8/15/2005	$	1,203		96.0	%		93.9	%		4.2	%		7.2	%		(8.4	%)		19.0	%
The Landings		384	11/22/1996	$	1,081		95.7	%		95.4	%		5.0	%		5.5	%		(9.5	%)		16.5	%
Trexler Park		250	3/15/2000	$	1,125		94.2	%		92.0	%		3.9	%		5.8	%		(2.1	%)		11.6	%
Trexler Park West		216	8/15/2008	$	1,404		93.4	%		95.4	%		5.7	%		2.1	%		(6.5	%)		7.0	%
Waterview Apts		203	7/14/2011	$	1,065		94.1	%		n/a			n/a			n/a			n/a			n/a
William Henry		363	3/15/2000	$	1,197		94.9	%		94.1	%		4.0	%		7.8	%		(14.0	%)		23.8	%
Total Philadelphia Region		5,559		$	1,113		94.4	%		94.1	%		4.7	%		4.6	%		(5.4	%)		12.0	%		11.0	%

Washington, D.C. Region
1200 East West		247	5/11/2010	$	1,890		95.6	%		96.2	%		8.1	%		6.8	%		22.9	%		(3.1	%)
Arbor Park of Alexandria		851	Redevelopment	$	1,470		81.7	%		82.2	%		7.8	%		5.9	%		(3.0	%)		11.9	%
Braddock Lee		255	3/13/1998	$	1,407		97.6	%		96.8	%		4.0	%		4.3	%		3.4	%		4.9	%
Cider Mill		864	9/27/2002	$	1,199		96.6	%		95.8	%		3.6	%		4.2	%		0.6	%		7.2	%
Cinnamon Run		511	12/28/2005	$	1,288		94.1	%		96.0	%		3.2	%		1.5	%		12.3	%		(3.2	%)
Courts at Huntington Station		421	Lease Up	$	1,973		93.9	%		56.4	%		(3.7	%)		63.8	%		17.8	%		113.6	%
East Meadow		150	8/1/2000	$	1,426		96.3	%		98.4	%		3.9	%		1.3	%		4.5	%		(0.6	%)
Elmwood Terrace		504	6/30/2000	$	980		94.6	%		95.4	%		5.2	%		4.5	%		(2.1	%)		10.3	%
Falkland Chase		450	9/10/2003	$	1,454		94.7	%		95.5	%		2.2	%		1.2	%		(1.2	%)		2.4	%
Hunters Glen		108	4/19/2011	$	985		95.5	%		96.7	%		5.6	%		9.7	%		(6.5	%)		22.8	%
Mount Vernon Square		1,387	12/27/2006	$	1,299		95.0	%		93.7	%		2.6	%		4.8	%		12.2	%		0.9	%
Newport Village		937	10/17/2011	$	1,556		95.8	%		n/a			n/a			n/a			n/a			n/a
Park Shirlington		294	3/13/1998	$	1,387		96.2	%		97.3	%		4.6	%		3.0	%		3.9	%		2.5	%
Peppertree Farm		879	12/28/2005	$	1,253		94.1	%		94.6	%		3.2	%		3.3	%		3.8	%		2.9	%
Seminary Hill		296	7/1/1999	$	1,385		97.0	%		97.8	%		5.8	%		4.8	%		(0.1	%)		8.5	%
Seminary Towers		544	7/1/1999	$	1,455		96.0	%		96.5	%		5.4	%		6.3	%		1.5	%		9.6	%
Somerset Park		108	10/11/2011	$	1,458		97.2	%		n/a			n/a			n/a			n/a			n/a
Tamarron Apartments		132	7/15/1999	$	1,595		94.6	%		95.8	%		3.3	%		3.4	%		(11.2	%)		10.0	%
The Apts at Cobblestone Square		314	Lease Up	$	1,271		84.1	%		n/a			n/a			n/a			n/a			n/a
The Apts at Wellington Trace		240	3/2/2004	$	1,408		95.9	%		97.3	%		4.7	%		4.1	%		(1.8	%)		7.0	%
The Courts at Dulles		411	11/30/2011	$	1,555		95.3	%		n/a			n/a			n/a			n/a			n/a
The Courts at Fair Oaks		364	9/30/2010	$	1,516		95.6	%		96.9	%		4.5	%		4.0	%		5.7	%		3.3	%
The Manor - MD		435	8/31/2001	$	1,329		96.5	%		93.7	%		2.7	%		6.0	%		(7.1	%)		13.0	%
The Manor - VA		198	2/19/1999	$	1,115		96.4	%		97.3	%		5.7	%		2.4	%		(7.9	%)		9.1	%
The Manor East		164	5/11/2012	$	1,080		95.6	%		n/a			n/a			n/a			n/a			n/a
The Sycamores		185	12/16/2002	$	1,466		96.3	%		95.6	%		5.8	%		4.9	%		14.3	%		(0.4	%)
Village at Potomac Falls		247	8/5/2010	$	1,404		97.2	%		95.3	%		9.2	%		13.0	%		(2.9	%)		24.4	%
Virginia Village		344	5/31/2001	$	1,419		97.0	%		97.5	%		4.7	%		2.8	%		(6.0	%)		8.6	%
West Springfield		244	11/18/2002	$	1,568		95.8	%		95.7	%		4.5	%		5.1	%		7.1	%		4.1	%
Westchester West		345	12/30/2008	$	1,356		94.7	%		95.3	%		4.0	%		5.5	%		(1.6	%)		9.4	%
Woodleaf Apartments		228	3/19/2004	$	1,284		96.1	%		94.8	%		2.0	%		2.9	%		(7.0	%)		7.8	%
Woodway at Trinity Centre		504	5/17/2012	$	1,402		96.1	%		n/a			n/a			n/a			n/a			n/a
Total Washington, D.C. Region		13,161		$	1,342		95.6	%		95.6	%		4.1	%		4.3	%		3.2	%		5.0	%		32.7	%

TOTAL OWNED PORTFOLIO		43,807		$	1,259		94.9	%		n/a			n/a			n/a			n/a			n/a			100.0	%
TOTAL CORE PORTFOLIO		37,386		$	1,240		95.5	%		95.5	%		3.9	%		4.3	%		(2.1	%)		8.3	%

(1)	Reflects net change in base rental rates before utility reimbursements and economic occupancy changes.

Page 10

Table of Contents

OWNED COMMUNITY RESULTS

September YTD												YTD '12 versus YTD '11
												% Growth
	# of		Date	YTD '12		YTD '12			YTD '11			Rental			Total			Total			Total			YTD '12
	Units		Acquired	Rent/Mo.		Occup.			Occup.			Rates(1)			Revenue			Expense			NOI			% Co. NOI
Baltimore Region
Annapolis Roads		282	6/17/2010	$	1,273		93.0	%		90.8	%		1.4	%		7.6	%		(5.0	%)		15.9	%
Bonnie Ridge		960	7/1/1999	$	1,137		95.7	%		94.7	%		3.3	%		3.8	%		(6.5	%)		9.3	%
Canterbury Apartments		618	7/15/1999	$	1,002		95.3	%		94.8	%		3.6	%		3.6	%		(2.2	%)		7.1	%
Charleston Place		858	9/30/2010	$	1,171		96.6	%		96.6	%		4.2	%		6.3	%		(5.8	%)		12.4	%
Country Village		344	4/30/1998	$	1,043		95.5	%		97.1	%		6.2	%		3.1	%		(3.5	%)		7.0	%
Dunfield Townhomes		312	11/1/2007	$	1,195		95.2	%		95.5	%		4.2	%		3.4	%		1.5	%		4.4	%
Falcon Crest		396	7/15/1999	$	1,027		96.0	%		95.7	%		3.4	%		4.5	%		(5.6	%)		9.5	%
Fox Hall Apartments		720	3/28/2007	$	893		92.5	%		92.0	%		3.1	%		2.9	%		(2.6	%)		7.1	%
Gateway Village		132	7/15/1999	$	1,365		96.5	%		95.9	%		3.0	%		3.8	%		(2.4	%)		7.1	%
Heritage Woods		164	10/4/2006	$	1,196		96.0	%		97.3	%		7.0	%		5.7	%		(2.0	%)		9.9	%
Howard Crossing		1,350	6/28/2012	$	1,091		91.2	%		n/a			n/a			n/a			n/a			n/a
Middlebrooke Apartments		208	4/1/2010	$	987		94.4	%		94.8	%		6.0	%		7.7	%		(2.9	%)		14.5	%
Mill Towne Village Apts		384	5/31/2001	$	921		95.4	%		93.6	%		2.2	%		3.0	%		(0.7	%)		5.4	%
Morningside Heights		1,050	4/30/1998	$	924		92.2	%		93.0	%		3.9	%		2.1	%		0.5	%		2.9	%
Owings Run		504	7/15/1999	$	1,264		95.3	%		96.2	%		2.2	%		0.6	%		(7.0	%)		4.2	%
Ridgeview at Wakefield Valley		204	1/13/2005	$	1,217		96.7	%		95.6	%		1.1	%		2.2	%		(2.2	%)		4.8	%
Saddle Brooke Apartments		468	10/29/2008	$	1,089		94.8	%		93.7	%		6.2	%		8.5	%		(7.7	%)		19.0	%
Selford Townhomes		102	7/15/1999	$	1,402		96.6	%		94.6	%		3.4	%		8.5	%		0.7	%		12.1	%
The Apts at Cambridge Court		544	8/23/2011	$	1,338		92.7	%		n/a			n/a			n/a			n/a			n/a
The Coves at Chesapeake		469	11/20/2006	$	1,278		94.0	%		91.9	%		4.1	%		7.8	%		(8.6	%)		17.2	%
The Greens at Columbia		168	7/29/2010	$	1,419		93.6	%		95.9	%		4.8	%		3.0	%		(2.4	%)		5.3	%
Timbercroft Townhomes		284	7/15/1999	$	957		99.8	%		99.2	%		2.6	%		3.7	%		(5.0	%)		8.7	%
Top Field		156	10/4/2006	$	1,314		95.1	%		97.4	%		4.5	%		2.0	%		(6.9	%)		6.1	%
Village Square Townhomes		370	7/15/1999	$	1,190		96.0	%		96.5	%		2.8	%		4.2	%		3.9	%		4.3	%
Westbrooke Apartments		110	4/1/2010	$	856		95.3	%		94.2	%		5.1	%		7.5	%		(8.1	%)		22.9	%
Total Baltimore Region		11,157		$	1,096		95.0	%		94.8	%		3.7	%		4.3	%		(3.8	%)		8.8	%		22.6	%

Boston Region
Gardencrest		695	6/28/2002	$	1,628		96.9	%		96.3	%		5.9	%		6.6	%		(4.6	%)		12.4	%
Highland House		172	5/31/2006	$	1,237		96.9	%		96.4	%		6.5	%		7.5	%		(1.3	%)		14.7	%
Liberty Commons		120	8/30/2006	$	1,303		97.0	%		96.8	%		3.6	%		4.1	%		(1.7	%)		6.7	%
Liberty Place		107	6/6/2006	$	1,501		96.4	%		95.9	%		4.2	%		4.9	%		0.1	%		8.1	%
Redbank Village		500	7/8/1998	$	938		96.6	%		96.5	%		4.5	%		6.2	%		(0.6	%)		11.1	%
Stone Ends		280	2/12/2003	$	1,305		95.5	%		95.2	%		5.2	%		6.1	%		4.5	%		7.1	%
The Commons at Haynes Farm		302	7/15/2011	$	1,277		96.2	%		n/a			n/a			n/a			n/a			n/a
The Heights at Marlborough		348	9/7/2006	$	1,240		94.7	%		94.7	%		4.7	%		6.7	%		(2.4	%)		13.5	%
The Meadows at Marlborough		264	9/7/2006	$	1,192		94.6	%		95.5	%		5.0	%		3.7	%		(3.0	%)		9.2	%
The Townhomes of Beverly		204	2/15/2007	$	1,533		96.7	%		96.8	%		4.0	%		5.4	%		(8.7	%)		14.4	%
The Village at Marshfield		276	3/17/2004	$	1,193		96.1	%		96.3	%		3.7	%		4.3	%		4.9	%		4.0	%
Westwoods		35	4/30/2007	$	1,301		97.3	%		96.1	%		6.4	%		13.5	%		(17.7	%)		54.7	%
Total Boston Region		3,303		$	1,309		96.2	%		96.0	%		5.0	%		5.9	%		(2.1	%)		11.0	%		8.1	%

Chicago Region
Blackhawk		371	10/20/2000	$	893		95.9	%		95.5	%		3.1	%		3.7	%		(10.4	%)		17.4	%
Courtyards Village		224	8/29/2001	$	888		97.1	%		97.6	%		6.3	%		7.0	%		5.5	%		8.5	%
Cypress Place		192	12/27/2000	$	1,002		97.4	%		97.5	%		7.2	%		7.3	%		(19.7	%)		35.1	%
Lakeview Townhomes		120	10/18/2010	$	1,220		95.5	%		93.9	%		6.5	%		12.9	%		2.0	%		22.8	%
The Colony		783	9/1/1999	$	893		96.7	%		97.0	%		3.6	%		3.6	%		(12.4	%)		16.4	%
The Gates of Deer Grove		204	12/15/2011	$	1,045		93.8	%		n/a			n/a			n/a			n/a			n/a
The New Colonies		672	6/23/1998	$	773		95.2	%		95.5	%		2.8	%		3.0	%		0.1	%		5.6	%
Total Chicago Region		2,566		$	884		96.2	%		96.3	%		4.1	%		4.7	%		(6.9	%)		15.2	%		4.0	%

Florida Region
The Hamptons		668	7/7/2004	$	1,001		95.2	%		94.9	%		2.5	%		3.2	%		(0.1	%)		6.6	%
Vinings at Hampton Village		168	7/7/2004	$	1,118		95.8	%		96.8	%		1.5	%		0.9	%		(3.2	%)		5.2	%
Total Florida Region		836		$	1,025		95.3	%		95.4	%		2.3	%		2.6	%		(0.8	%)		6.3	%		1.3	%

Long Island, NY Region
Bayview / Colonial		160	11/1/2000	$	1,305		98.6	%		98.6	%		4.4	%		4.8	%		(11.3	%)		19.0	%
Cambridge Village		82	3/1/2002	$	1,864		97.4	%		98.3	%		5.5	%		3.0	%		0.5	%		4.9	%
Crescent Club Apartments		257	9/30/2010	$	1,338		95.8	%		97.2	%		5.7	%		4.8	%		(6.9	%)		14.0	%
Devonshire Hills		656	7/16/2001	$	1,635		96.6	%		96.7	%		3.8	%		4.1	%		(1.7	%)		7.6	%
Hawthorne Court		434	4/4/2002	$	1,474		97.1	%		97.3	%		3.0	%		3.0	%		3.0	%		2.9	%
Heritage Square		80	4/4/2002	$	1,828		97.9	%		97.5	%		5.7	%		6.0	%		1.6	%		9.7	%
Holiday Square		144	5/31/2002	$	1,265		98.8	%		96.5	%		4.0	%		7.5	%		24.5	%		(1.4	%)
Lake Grove Apartments		368	2/3/1997	$	1,495		96.4	%		95.4	%		4.4	%		5.1	%		(1.3	%)		9.3	%
Mid-Island Estates		232	7/1/1997	$	1,457		98.5	%		97.5	%		4.8	%		6.4	%		(4.3	%)		13.5	%
Sayville Commons		342	7/15/2005	$	1,624		96.4	%		96.9	%		2.5	%		1.6	%		7.2	%		(2.7	%)
South Bay Manor		61	9/11/2000	$	1,676		97.2	%		95.4	%		2.6	%		4.7	%		50.4	%		(13.8	%)
Southern Meadows		452	6/29/2001	$	1,456		96.3	%		96.3	%		3.7	%		2.6	%		(1.5	%)		5.6	%
Westwood Village Apts		242	3/1/2002	$	2,470		96.9	%		96.4	%		4.3	%		6.3	%		4.3	%		7.7	%
Woodmont Village Apts		97	3/1/2002	$	1,367		96.4	%		96.8	%		3.5	%		4.1	%		0.3	%		6.1	%
Yorkshire Village Apts		40	3/1/2002	$	1,894		97.0	%		97.7	%		3.8	%		2.8	%		(3.0	%)		9.1	%
Total Long Island Region		3,647		$	1,578		96.9	%		96.8	%		3.9	%		4.2	%		1.1	%		6.4	%		10.3	%

Page 11

Table of Contents

OWNED COMMUNITY RESULTS

September YTD												YTD '12 versus YTD '11
												% Growth
	# of		Date	YTD '12		YTD '12			YTD '11			Rental			Total			Total			Total			YTD '12
	Units		Acquired	Rent/Mo.		Occup.			Occup.			Rates(1)			Revenue			Expense			NOI			% Co. NOI
New Jersey Region
Barrington Gardens		148	3/1/2005	$	1,277		96.8	%		96.5	%		7.6	%		8.7	%		8.8	%		8.7	%
Chatham Hill Apartments		308	1/30/2004	$	1,865		95.3	%		94.7	%		6.7	%		6.8	%		(1.0	%)		10.5	%
East Hill Gardens		33	7/8/1998	$	1,609		97.2	%		93.7	%		4.1	%		10.5	%		1.6	%		15.9	%
Hackensack Gardens		198	3/1/2005	$	1,170		97.4	%		98.2	%		5.3	%		5.3	%		1.1	%		8.6	%
Jacob Ford Village		270	2/15/2007	$	1,316		98.7	%		96.4	%		6.5	%		9.3	%		(11.0	%)		21.1	%
Lakeview		106	7/8/1998	$	1,424		97.4	%		96.1	%		3.9	%		4.4	%		(2.9	%)		9.9	%
Northwood Apartments		134	1/30/2004	$	1,381		96.8	%		96.7	%		3.7	%		5.9	%		8.3	%		4.3	%
Oak Manor		77	7/8/1998	$	1,874		98.1	%		95.4	%		5.3	%		7.0	%		0.8	%		10.2	%
Pleasant View		1,142	7/8/1998	$	1,187		95.4	%		95.9	%		3.7	%		3.2	%		(2.9	%)		7.3	%
Pleasure Bay		270	7/8/1998	$	1,077		96.1	%		95.2	%		3.9	%		4.8	%		(5.6	%)		14.9	%
Royal Gardens Apartments		550	5/28/1997	$	1,290		96.7	%		96.4	%		4.0	%		4.2	%		(6.9	%)		11.9	%
Wayne Village		275	7/8/1998	$	1,439		97.0	%		96.3	%		3.0	%		3.6	%		(4.6	%)		8.3	%
Windsor Realty		67	7/8/1998	$	1,316		94.6	%		96.6	%		2.7	%		1.8	%		(1.8	%)		4.7	%
Total New Jersey Region		3,578		$	1,320		96.4	%		96.0	%		4.5	%		5.0	%		(2.9	%)		10.2	%		9.0	%

Philadelphia Region
Castle Club		158	3/15/2000	$	1,011		95.1	%		93.8	%		4.1	%		3.1	%		0.3	%		5.5	%
Curren Terrace		318	9/23/1997	$	904		95.7	%		95.1	%		4.8	%		5.0	%		(4.3	%)		14.6	%
Glen Brook		174	7/28/1999	$	859		94.0	%		93.7	%		3.9	%		3.3	%		(5.3	%)		15.6	%
Glen Manor		174	9/23/1997	$	820		94.5	%		95.4	%		1.1	%		(2.4	%)		(4.7	%)		0.2	%
Golf Club		399	3/15/2000	$	1,131		94.5	%		94.3	%		3.9	%		2.0	%		(6.7	%)		7.5	%
Hill Brook Place		274	7/28/1999	$	937		96.1	%		95.1	%		4.4	%		3.4	%		(3.1	%)		9.8	%
Home Properties of Bryn Mawr		316	3/15/2000	$	1,422		93.6	%		93.0	%		12.1	%		9.9	%		(9.6	%)		22.8	%
Home Properties of Devon		631	3/15/2000	$	1,223		93.6	%		93.5	%		7.9	%		5.9	%		(4.4	%)		12.4	%
New Orleans Park		442	7/28/1999	$	894		94.9	%		94.8	%		3.5	%		2.1	%		(2.7	%)		7.2	%
Racquet Club		466	7/7/1998	$	1,109		95.4	%		95.1	%		5.3	%		4.1	%		(2.6	%)		8.9	%
Racquet Club South		103	5/27/1999	$	942		95.1	%		96.3	%		4.6	%		1.5	%		(2.2	%)		5.1	%
Ridley Brook		244	7/28/1999	$	963		95.6	%		93.6	%		3.0	%		3.7	%		(3.2	%)		10.6	%
Sherry Lake		298	7/23/1998	$	1,259		96.8	%		96.3	%		5.5	%		4.2	%		(2.5	%)		8.0	%
The Brooke at Peachtree Village		146	8/15/2005	$	1,178		97.3	%		96.6	%		4.3	%		4.9	%		(2.4	%)		9.8	%
The Landings		384	11/22/1996	$	1,059		96.2	%		96.3	%		5.7	%		5.0	%		0.1	%		8.4	%
Trexler Park		250	3/15/2000	$	1,111		94.4	%		95.0	%		5.1	%		3.8	%		(5.1	%)		10.3	%
Trexler Park West		216	8/15/2008	$	1,365		95.1	%		96.6	%		5.9	%		5.4	%		0.3	%		8.3	%
Waterview Apts		203	7/14/2011	$	1,056		93.2	%		n/a			n/a			n/a			n/a			n/a
William Henry		363	3/15/2000	$	1,188		94.6	%		94.1	%		6.4	%		8.2	%		(8.9	%)		22.0	%
Total Philadelphia Region		5,559		$	1,096		95.0	%		94.8	%		5.7	%		4.6	%		(4.1	%)		11.3	%		11.5	%

Washington, D.C. Region
1200 East West		247	5/11/2010	$	1,883		96.3	%		95.8	%		9.1	%		11.1	%		3.9	%		15.1	%
Arbor Park of Alexandria		851	Redevelopment	$	1,444		80.8	%		88.7	%		8.6	%		(0.7	%)		(4.1	%)		1.5	%
Braddock Lee		255	3/13/1998	$	1,382		98.0	%		97.7	%		4.2	%		3.1	%		1.8	%		3.9	%
Cider Mill		864	9/27/2002	$	1,186		96.0	%		94.9	%		3.7	%		4.7	%		2.6	%		6.2	%
Cinnamon Run		511	12/28/2005	$	1,275		93.4	%		95.2	%		3.1	%		2.1	%		5.8	%		0.4	%
Courts at Huntington Station		421	Lease Up	$	1,996		86.1	%		n/a			n/a			n/a			n/a			n/a
East Meadow		150	8/1/2000	$	1,403		97.4	%		98.4	%		4.4	%		2.1	%		(2.4	%)		4.7	%
Elmwood Terrace		504	6/30/2000	$	963		95.4	%		95.2	%		4.5	%		5.2	%		(2.0	%)		11.3	%
Falkland Chase		450	9/10/2003	$	1,439		95.4	%		95.0	%		3.1	%		3.4	%		2.7	%		3.8	%
Hunters Glen		108	4/19/2011	$	970		96.0	%		n/a			n/a			n/a			n/a			n/a
Mount Vernon Square		1,387	12/27/2006	$	1,282		94.6	%		95.0	%		3.7	%		3.7	%		2.8	%		4.2	%
Newport Village		937	10/17/2011	$	1,551		94.8	%		n/a			n/a			n/a			n/a			n/a
Park Shirlington		294	3/13/1998	$	1,371		97.2	%		97.5	%		4.7	%		3.5	%		1.9	%		4.5	%
Peppertree Farm		879	12/28/2005	$	1,243		94.3	%		93.0	%		3.1	%		4.4	%		2.2	%		5.6	%
Seminary Hill		296	7/1/1999	$	1,362		97.6	%		97.8	%		5.6	%		4.7	%		0.3	%		7.8	%
Seminary Towers		544	7/1/1999	$	1,432		95.7	%		95.9	%		6.3	%		5.5	%		1.3	%		8.4	%
Somerset Park		108	10/11/2011	$	1,436		97.5	%		n/a			n/a			n/a			n/a			n/a
Tamarron Apartments		132	7/15/1999	$	1,572		95.7	%		96.7	%		3.1	%		2.0	%		(8.3	%)		6.6	%
The Apts at Cobblestone Square		314	Lease Up	$	1,266		76.9	%		n/a			n/a			n/a			n/a			n/a
The Apts at Wellington Trace		240	3/2/2004	$	1,387		96.7	%		97.9	%		5.8	%		4.9	%		(0.2	%)		7.3	%
The Courts at Dulles		411	11/30/2011	$	1,542		94.5	%		n/a			n/a			n/a			n/a			n/a
The Courts at Fair Oaks		364	9/30/2010	$	1,491		96.1	%		95.9	%		4.3	%		5.6	%		4.9	%		5.9	%
The Manor - MD		435	8/31/2001	$	1,317		95.6	%		94.1	%		3.2	%		5.5	%		(6.7	%)		12.4	%
The Manor - VA		198	2/19/1999	$	1,098		97.3	%		97.9	%		7.1	%		5.0	%		(2.9	%)		10.5	%
The Manor East		164	5/11/2012	$	1,049		95.9	%		n/a			n/a			n/a			n/a			n/a
The Sycamores		185	12/16/2002	$	1,440		96.8	%		96.3	%		5.8	%		6.0	%		4.5	%		6.7	%
Village at Potomac Falls		247	8/5/2010	$	1,378		97.0	%		96.5	%		8.2	%		9.4	%		(0.2	%)		15.6	%
Virginia Village		344	5/31/2001	$	1,405		96.9	%		98.3	%		6.5	%		2.8	%		(6.4	%)		8.3	%
West Springfield		244	11/18/2002	$	1,549		95.9	%		97.4	%		6.3	%		6.1	%		5.2	%		6.6	%
Westchester West		345	12/30/2008	$	1,329		94.1	%		93.2	%		2.8	%		5.1	%		2.4	%		6.6	%
Woodleaf Apartments		228	3/19/2004	$	1,284		95.8	%		93.7	%		3.5	%		5.5	%		(0.2	%)		8.3	%
Woodway at Trinity Centre		504	5/17/2012	$	1,371		95.7	%		n/a			n/a			n/a			n/a			n/a
Total Washington, D.C. Region		13,161		$	1,326		95.6	%		95.6	%		4.5	%		4.7	%		1.2	%		6.7	%		33.2	%

TOTAL OWNED PORTFOLIO		43,807		$	1,246		95.0	%		n/a			n/a			n/a			n/a			n/a			100.0	%
TOTAL CORE PORTFOLIO		37,386		$	1,224		95.7	%		95.6	%		4.4	%		4.6	%		(1.8	%)		8.8	%

(1)	Reflects net change in base rental rates before utility reimbursements and economic occupancy changes.

Page 12

Table of Contents

Physical Occupancy Comparison By Region - Core Properties

Sequential Comparison
Third Quarter 2012 vs. Second Quarter 2012

Region	% Units			3Q '12			2Q '12			Variance

Washington, D.C.		25.0	%		95.6	%		96.0	%		(0.4	%)
Baltimore		24.8	%		94.4	%		95.7	%		(1.3	%)
New Jersey, Long Island		19.3	%		96.6	%		97.2	%		(0.6	%)
Philadelphia		14.3	%		94.4	%		95.3	%		(0.9	%)
Boston		8.0	%		96.6	%		96.3	%		0.3	%
Chicago		6.3	%		96.1	%		96.5	%		(0.4	%)
Florida		2.3	%		95.3	%		96.6	%		(1.3	%)

Total Core		100.0	%		95.5	%		96.2	%		(0.7	%)



Year over Year Comparison
Third Quarter 2012 vs. Third Quarter 2011

Region	% Units			3Q '12			3Q '11			Variance

Washington, D.C.		25.0	%		95.6	%		95.6	%		0.0	%
Baltimore		24.8	%		94.4	%		94.5	%		(0.1	%)
New Jersey, Long Island		19.3	%		96.6	%		96.9	%		(0.3	%)
Philadelphia		14.3	%		94.4	%		94.1	%		0.3	%
Boston		8.0	%		96.6	%		96.2	%		0.4	%
Chicago		6.3	%		96.1	%		96.2	%		(0.1	%)
Florida		2.3	%		95.3	%		95.0	%		0.3	%

Total Core		100.0	%		95.5	%		95.5	%		0.0	%



September vs. Quarter Comparison

Region	% Units			Sep '12			3Q '12			Variance

Washington, D.C.		25.0	%		95.4	%		95.6	%		(0.2	%)
Baltimore		24.8	%		94.3	%		94.4	%		(0.1	%)
New Jersey, Long Island		19.3	%		96.3	%		96.6	%		(0.3	%)
Philadelphia		14.3	%		94.3	%		94.4	%		(0.1	%)
Boston		8.0	%		96.2	%		96.6	%		(0.4	%)
Chicago		6.3	%		95.8	%		96.1	%		(0.3	%)
Florida		2.3	%		95.3	%		95.3	%		0.0	%

Total Core		100.0	%		95.3	%		95.5	%		(0.2	%)

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Net Operating Results - Core Properties

Sequential Results
Third Quarter 2012 vs. Second Quarter 2012
				Base Rental			Total
Region	% Units			Revenues(1)(2)			Revenues			Expenses			NOI

Washington, D.C.		25.0	%		0.7	%		0.7	%		7.8	%		(2.9	%)
Baltimore		24.8	%		(0.2	%)		(0.2	%)		(0.3	%)		(0.2	%)
New Jersey, Long Island		19.3	%		0.6	%		1.0	%		(0.3	%)		1.7	%
Philadelphia		14.3	%		0.4	%		(0.6	%)		(2.9	%)		0.9	%
Boston		8.0	%		1.9	%		2.2	%		(1.5	%)		4.1	%
Chicago		6.3	%		0.4	%		(0.2	%)		(32.5	%)		30.1	%
Florida		2.3	%		0.0	%		(0.5	%)		0.8	%		(1.6	%)

Total Core		100.0	%		0.5	%		0.5	%		(0.7	%)		1.1	%

(1)	On a sequential basis, compared to the 2012 second quarter results for Core properties, average monthly rental rates were up 1.4% in the third quarter of 2012. This increase was offset by a 0.9% seasonal decline in economic occupancy resulting in a 0.5% increase in base rental revenue.

Year Over Year Results
Third Quarter 2012 vs. Third Quarter 2011
				Base Rental			Total
Region	% Units			Revenues(2)			Revenues			Expenses			NOI

Washington, D.C.		25.0	%		4.3	%		4.3	%		3.2	%		5.0	%
Baltimore		24.8	%		3.2	%		3.7	%		(4.4	%)		8.1	%
New Jersey, Long Island		19.3	%		3.7	%		4.2	%		2.0	%		5.4	%
Philadelphia		14.3	%		4.9	%		4.6	%		(5.4	%)		12.0	%
Boston		8.0	%		6.3	%		6.6	%		(4.5	%)		13.1	%
Chicago		6.3	%		3.7	%		4.1	%		(22.2	%)		24.5	%
Florida		2.3	%		4.8	%		2.9	%		(7.1	%)		14.2	%

Total Core		100.0	%		4.2	%		4.3	%		(2.1	%)		8.3	%

(2)	Reflects net change in base rental revenues before utility reimbursements and economic occupancy changes.

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Percentage Change in New Lease and Renewal Lease Rents Compared to
Expiring Lease Rents - Core Properties

	1Q '11						2Q '11						3Q '11						4Q '11						YTD '11
Region	New			Renewal			New			Renewal			New			Renewal			New			Renewal			New			Renewal
Baltimore		1.9	%		3.5	%		5.2	%		4.3	%		3.5	%		4.1	%		0.0	%		3.8	%		3.0	%		4.0	%

Boston		2.0	%		3.5	%		6.8	%		4.3	%		5.0	%		4.2	%		2.6	%		4.3	%		4.6	%		4.2	%

Chicago		3.7	%		4.0	%		5.0	%		4.6	%		4.3	%		5.0	%		1.1	%		4.8	%		3.9	%		4.8	%

Florida		(1.8	%)		1.5	%		1.9	%		2.4	%		(0.8	%)		3.5	%		(0.1	%)		3.7	%		(0.3	%)		2.9	%

New Jersey, Long Island		0.3	%		3.2	%		4.6	%		3.4	%		5.7	%		3.8	%		3.3	%		3.9	%		4.2	%		3.7	%

Philadelphia		4.0	%		3.4	%		9.9	%		5.1	%		7.6	%		4.8	%		4.2	%		3.5	%		7.2	%		4.3	%

Washington, D.C.		2.7	%		4.4	%		4.8	%		4.7	%		5.2	%		4.4	%		3.6	%		4.3	%		4.4	%		4.5	%

Total Core		1.9	%		3.6	%		5.7	%		4.3	%		5.1	%		4.2	%		2.5	%		4.0	%		4.3	%		4.1	%

Spread (1)		1.7%						(1.4%)						(0.9%)						1.5%						(0.2%)

	1Q '12						2Q '12						3Q '12
Region	New			Renewal			New			Renewal			New			Renewal
Baltimore		0.1	%		3.6	%		1.9	%		3.4	%		2.3	%		4.0	%

Boston		3.8	%		4.1	%		6.6	%		3.6	%		5.4	%		4.5	%

Chicago		0.1	%		3.8	%		1.5	%		3.4	%		3.1	%		3.4	%

Florida		1.1	%		2.4	%		5.9	%		2.5	%		4.9	%		4.3	%

New Jersey, Long Island		1.9	%		4.0	%		4.0	%		3.3	%		3.1	%		3.4	%

Philadelphia		6.0	%		3.0	%		6.7	%		3.4	%		4.6	%		4.5	%

Washington, D.C.		1.3	%		4.1	%		3.4	%		3.9	%		3.5	%		4.3	%

Total Core		1.8	%		3.8	%		3.8	%		3.5	%		3.4	%		4.0	%

Spread (1)		2.0%						(0.3%)						0.6%

(1)	Spread is the difference between the percentage change in rents on renewed leases compared to new leases.

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Resident Statistics


Top Six Reasons for Moveouts - Owned Communities
	3Q '12			2Q '12			1Q '12			4Q '11			3Q '11			2Q '11			1Q '11			Year '11			Year '10			Year '09

Location convenience/
apartment size		13.0	%		13.5	%		11.7	%		12.8	%		14.1	%		13.0	%		12.6	%		13.1	%		12.1	%		10.1	%

Eviction/skip		12.7	%		12.8	%		16.9	%		16.2	%		14.4	%		14.8	%		20.4	%		16.4	%		15.6	%		14.0	%

Transfer w/in HME		12.5	%		11.5	%		15.0	%		13.7	%		11.0	%		10.6	%		11.2	%		11.6	%		12.3	%		12.9	%

Employment related		12.5	%		13.4	%		12.6	%		12.3	%		12.9	%		13.6	%		15.0	%		13.4	%		13.9	%		15.7	%

Home purchase		11.2	%		11.2	%		9.6	%		11.4	%		10.8	%		9.9	%		9.5	%		10.4	%		11.0	%		12.3	%

Domestic situation		11.2	%		12.7	%		8.3	%		7.7	%		10.5	%		13.1	%		6.9	%		9.6	%		9.8	%		8.7	%


Traffic - Core														Turnover - Core
							Signed			Signed
	Traffic			Traffic			Leases			Leases
	3Q '12			YTD '12			3Q '12			YTD '12
	vs.			vs.			vs.			vs.
	3Q '11			YTD '11			3Q '11			YTD '11			3Q '12			3Q '11			YTD '12			YTD '11

Region
Baltimore		2.3	%		1.0	%		(0.8	%)		0.6	%		12.4	%		12.7	%		30.5	%		29.7	%
Boston		(5.0	%)		(2.4	%)		3.8	%		(5.6	%)		11.5	%		12.5	%		29.6	%		30.5	%
Chicago		(9.7	%)		(7.1	%)		(22.7	%)		(8.6	%)		14.4	%		16.3	%		38.9	%		37.5	%
Florida		6.8	%		(0.7	%)		(3.0	%)		(0.4	%)		10.8	%		12.9	%		33.0	%		35.5	%
Long Island		(4.0	%)		(7.7	%)		0.0	%		(9.4	%)		10.5	%		9.3	%		25.8	%		24.2	%
New Jersey		(8.6	%)		(3.1	%)		2.2	%		(0.3	%)		9.7	%		10.6	%		27.1	%		27.6	%
Philadelphia		(10.6	%)		(8.3	%)		(11.8	%)		(1.1	%)		13.4	%		13.9	%		33.6	%		33.1	%
Washington, D.C.		(12.9	%)		(10.4	%)		(6.6	%)		3.1	%		10.8	%		10.7	%		27.6	%		26.5	%

Total Core		(6.3	%)		(5.3	%)		(5.4	%)		(1.2	%)		11.7	%		12.1	%		29.9	%		29.3	%


Bad Debt as % of Rent and Utility Recovery - Core

	3Q '12			3Q '11			YTD '12			YTD '11
		1.13	%		1.38	%		1.00	%		1.18	%

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Net Operating Income Detail
($ in thousands, except per unit data)


Core Properties
								Qtr			%									YTD			%
	3Q '12			3Q '11				Variance			Variance			YTD '12			YTD '11			Variance			Variance

Rent	$	131,242		$	126,012			$	5,230			4.2	%	$	390,075		$	372,352		$	17,723			4.8	%
Utility recovery		4,255			3,947				308			7.8	%		15,427			16,230			(803	)		(4.9	%)
Rent including recoveries		135,497			129,959				5,538			4.3	%		405,502			388,582			16,920			4.4	%
Other income		6,333			5,975				358			6.0	%		19,230			17,398			1,832			10.5	%

Total income		141,830			135,934				5,896			4.3	%		424,732			405,980			18,752			4.6	%
Operating & maintenance		(50,743	)		(51,845	)			1,102			2.1	%		(156,214	)		(159,081	)		2,867			1.8	%

Core Properties NOI	$	91,087		$	84,089			$	6,998			8.3	%	$	268,518		$	246,899		$	21,619			8.8	%


Physical Occupancy %		95.5	%		95.5	%	��		0.0	%					95.7	%		95.6	%		0.1	%

Weighted Avg Rent per Unit	$	1,240		$	1,193			$	47			3.9	%	$	1,224		$	1,173		$	51			4.4	%

Acquired Properties (1)							Redevelopment Properties (2)
	3Q '12			YTD '12				3Q '12			YTD '12

Rent	$	17,710		$	41,077		Rent	$	3,047		$	8,881
Utility recovery		848			1,984		Utility recovery		114			355
Rent including recoveries		18,558			43,061		Rent including recoveries		3,161			9,236
Other income		646			1,544		Other income		143			451

Total income		19,204			44,605		Total income		3,304			9,687
Operating & maintenance		(6,676	)		(15,686	)	Operating & maintenance		(1,209	)		(3,581	)

Acquired Properties NOI	$	12,528		$	28,919		Developed Properties NOI	$	2,095		$	6,106


Physical Occupancy %		94.2	%		94.2	%	Physical Occupancy %		81.7	%		80.8	%

Weighted Avg Rent per Unit	$	1,306		$	1,334		Weighted Avg Rent per Unit	$	1,470		$	1,444

Development Properties (3)
	3Q '12			YTD '12

Rent	$	3,336		$	8,298
Utility recovery		62			123
Rent including recoveries		3,398			8,421
Other income		253			671

Total income		3,651			9,092
Operating & maintenance		(1,347	)		(3,464	)

Development Properties NOI	$	2,304		$	5,628

Physical Occupancy %	(see development pipeline schedule)

Weighted Avg Rent per Unit	$	1,673		$	1,756

(1)	Acquired Properties consists of properties acquired subsequent to January 1, 2011, such that full year operating results are not available.

(2)	Redevelopment Properties consists of one property, Arbor Park of Alexandria, where 851 units in fifty-two buildings are being extensively renovated on a building by building basis.

(3)	Development Properties consists of two properties, Courts at Huntington Station where construction was completed in 2011 and is currently in Lease up; and The Apts at Cobblestone Square where construction was completed in 3Q'12 and is currently in Lease-up.

Seasonality Factor for NAV Calculation

To annualize net operating income in order to calculate a net asset value, the seasonality factor to apply to the current quarter's effective NOI run rate is 25.3%. This will adjust for the typical seasonal variability in NOI for each quarter.

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Operating Expense Detail - Core Properties
($ in thousands)

						Qtr			%							YTD			%
	3Q '12		3Q '11			Variance			Variance			YTD '12		YTD '11		Variance			Variance

Electricity	$	2,122	$	2,290		$	(168	)		(7.3	%)	$	5,683	$	6,212	$	(529	)		(8.5	%)

Gas		1,313		1,391			(78	)		(5.6	%)		9,319		11,673		(2,354	)		(20.2	%)

Water & sewer		4,517		4,388			129			2.9	%		12,921		12,592		329			2.6	%

Repairs & maintenance		9,012		9,419			(407	)		(4.3	%)		23,568		23,860		(292	)		(1.2	%)

Personnel expense		11,497		12,341			(844	)		(6.8	%)		35,909		37,121		(1,212	)		(3.3	%)

Advertising		1,188		1,117			71			6.4	%		3,387		3,298		89			2.7	%

Legal & professional		408		656			(248	)		(37.8	%)		1,406		1,477		(71	)		(4.8	%)

Office & telephone		1,476		1,557			(81	)		(5.2	%)		4,717		4,497		220			4.9	%

Property insurance		1,530		1,658			(128	)		(7.7	%)		5,239		4,478		761			17.0	%

Real estate taxes		13,346		12,113			1,233			10.2	%		40,002		37,853		2,149			5.7	%

Snow		-		(4	)		4			(100.0	%)		256		1,483		(1,227	)		(82.7	%)

Trash		744		793			(49	)		(6.2	%)		2,317		2,338		(21	)		(0.9	%)

Property management G & A		3,590		4,126			(536	)		(13.0	%)		11,490		12,199		(709	)		(5.8	%)

Total Core	$	50,743	$	51,845		$	(1,102	)		(2.1	%)	$	156,214	$	159,081	$	(2,867	)		(1.8	%)

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Discontinued Operations (1)

($ in thousands)

The operating results of discontinued operations are summarized as follows for the three and nine months ended September 30, 2012 and 2011:

	3Q '12		3Q '11		YTD '12		YTD '11
Revenues:
Rental income	$	952	$	1,058	$	3,176	$	3,194
Property other income		207		119		503		448
Total revenues		1,159		1,177		3,679		3,642
Expenses:
Operating and maintenance		472		514		1,501		1,567
Interest expense		-		62		81		186
Depreciation and amortization		221		324		881		969
Total expenses		693		900		2,463		2,722
Income from discontinued operations	$	466	$	277	$	1,216	$	920

(1)	Discontinued operations consists of two properties (424 units) disposed in 3Q '12, Chesterfield Apartments on 9/13/12 and Woodholme Manor on 9/20/12.

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Summary Of Recent Acquisitions
($ in millions, except unit and per unit data)

											Wtd. Avg.
			Purchase	# of		CAP			Purchase		Price Per
Community	Market	State	Date	Units		Rate (1)			Price		Unit
2012 Acquisitions

The Manor East	Suburban D.C.	VA	5/11/2012		164		7.0	%	$	16.2	$	98,780
Woodway at Trinity Centre	Suburban D.C.	VA	5/17/2012		504		5.7	%		96.0		190,476
Howard Crossing	Baltimore	MD	6/28/2012		1,350		5.9	%		186.0		137,778
			Total 2012		2,018		5.9	%	$	298.2	$	147,770

2011 Acquisitions

Hunters Glen	Suburban D.C.	MD	4/19/2011		108		7.2	%	$	7.0	$	64,815
Waterview Apartments	Philadelphia	PA	7/14/2011		203		5.7	%		24.6		121,182
The Commons at Haynes Farm	Boston	MA	7/15/2011		302		5.9	%		40.5		134,106
The Apartments at Cambridge Court	Baltimore	MD	8/23/2011		544		5.4	%		90.4		166,176
Somerset Park	Suburban D.C.	VA	10/11/2011		108		5.2	%		20.3		187,500
Newport Village	Suburban D.C.	VA	10/17/2011		937		5.4	%		205.0		218,783
The Courts at Dulles	Suburban D.C.	VA	11/30/2011		411		5.2	%		92.8		225,669
The Gates of Deer Grove	Chicago	IL	12/15/2011		204		6.2	%		20.2		99,020
			Total 2011		2,817		5.5	%	$	500.7	$	177,742

		Total 2012 and 2011 Acquisitions			4,835		5.6	%	$	798.9	$	165,233

(1)	CAP rate based on projected NOI at the time of acquisition after an allowance for a 2.7% management fee but before capital expenditures.

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Summary Of Recent Sales
($ in millions, except unit and per unit data)
											Wtd. Avg.
			Sale	# of		CAP			Sales		Price Per
Community	Market	State	Date	Units		Rate (1)			Price		Unit
2012 Sales
Chesterfield Apartments	Philadelphia	PA	9/13/2012		247		6.1	%	$	25.2	$	101,842
Woodholme Manor	Baltimore	MD	9/20/2012		177		7.0	%		16.0		90,395
			Subtotal		424		6.5	%	$	41.2	$	97,064
Sold after the close of the 3rd quarter
Curren Terrace	Philadelphia	PA	10/11/2012		318		6.0	%		29.8		93,689
			Total 2012		742		6.3	%	$	70.9	$	95,617

2011 Sales
			Total 2011		-				$	-

		Total 2012 and 2011 Sales			742		6.3	%	$	70.9	$	95,617

(1)	CAP rate based on historical NOI after an allowance for a 2.7% management fee but before capital expenditures.

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Table of Contents

Breakdown Of Owned Units By Market

				Net							Net
				Acquired/							Acquired/
		As of		Developed		As of		12/31/2011			Developed			As of		Current
Market	State	12/31/2010		in 2011		12/31/2011		% of Units			in 2012			9/30/2012		% of Units
Suburban Washington, D.C.	MD/VA		10,393		1,837		12,230		29.2	%		931			13,161		30.0	%
Baltimore	MD		9,440		544		9,984		23.8	%		1,173			11,157		25.5	%
Suburban New York City	NY/NJ		7,225		-		7,225		17.2	%		-			7,225		16.5	%
Philadelphia	PA		5,603		203		5,806		13.8	%		(247	)		5,559		12.7	%
Boston	MA		3,002		302		3,304		7.9	%		(1	)		3,303		7.5	%
Chicago	IL		2,362		204		2,566		6.1	%		-			2,566		5.9	%
Florida	FL		836		-		836		2.0	%		-			836		1.9	%

Total			38,861		3,090		41,951		100.0	%		1,856			43,807		100.0	%

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Debt Summary Schedule
		INTEREST		09/30/12		MATURITY	YEARS TO
PROPERTY	LENDER	RATE		BALANCE		DATE	MATURITY

FIXED RATE SECURED

Liberty Place	CW Capital - Fannie Mae		5.710		5,586,723	11/01/12		0.09
Hackensack Gardens - 1st	JPMorgan Chase - Fannie Mae		5.260		4,201,860	03/01/13		0.42
Hackensack Gardens - 2nd	JPMorgan Chase - Fannie Mae		5.440		4,122,091	03/01/13		0.42
Barrington Gardens	Wachovia - Freddie Mac		4.960		10,649,212	04/01/13		0.50
Canterbury Apartments - 1st	M&T Realty-Fannie Mae		5.020		25,546,193	05/01/13		0.58
Canterbury Apartments - 2nd	M&T Realty-Fannie Mae		6.460		16,230,286	05/01/13		0.58
Multi-Property Facility	Prudential - Fannie Mae		6.475		100,000,000	08/31/13		0.92
Saddle Brook Apts. - 1st	Wells Fargo - Fannie Mae		5.840		26,429,034	11/01/13		1.09
Saddle Brook Apts. - 2nd	Wells Fargo - Fannie Mae		6.290		3,103,296	11/01/13		1.09
Falkland Chase	Centerline (CIII) - Fannie Mae		5.480		10,115,365	04/01/14		1.50
The Apts. At Wellington Trace	M&T Realty - Freddie Mac		5.520		23,066,649	04/01/14		1.50
Hawthorne Court	Centerline (CIII) - Fannie Mae		5.270		33,175,002	07/01/14		1.75
The Greens at Columbia	M&T Realty-Fannie Mae		3.930		9,343,994	08/01/14		1.84
Curren Terrace - 1st	M&T Realty - Freddie Mac		5.360		12,901,577	10/01/14		2.00
Curren Terrace - 2nd	M&T Realty - Freddie Mac		5.090		9,486,195	10/01/14		2.00
Westchester West - 1st	Berkeley Point Capital - Freddie		6.150		26,278,788	03/01/15		2.42
Westchester West - 2nd	Berkeley Point Capital - Freddie		6.640		7,317,156	03/01/15		2.42
Stratford Greens	Capital One Bank		5.750		29,966,303	07/01/15		2.75
Sayville Commons	M&T Realty - Freddie Mac		5.000		38,269,739	08/01/15		2.84
Charleston Place	Wells Fargo - Freddie Mac		3.770		32,274,298	09/01/15		2.92
Charleston Place	Wells Fargo - Freddie Mac		3.770		22,228,994	09/02/15		2.92
Charleston Place	Wells Fargo - Freddie Mac		3.770		19,375,879	09/03/15		2.93
Cypress Place Apartments	Prudential - Fannie Mae		6.555		9,962,729	11/01/15		3.09
Golf Club Apartments	Prudential - Fannie Mae		6.380		32,103,623	11/01/15		3.09
Northwood Apartments	M&T Realty - Freddie Mac		5.500		10,259,752	12/01/15		3.17
Cinnamon Run - 1st	M&T Realty - Freddie Mac		5.250		48,502,613	01/01/16		3.25
Cinnamon Run - 2nd	M&T Realty - Freddie Mac		5.550		5,035,504	01/01/16		3.25
Peppertree Farm - 1st	M&T Realty - Freddie Mac		5.250		74,655,074	01/01/16		3.25
Peppertree Farm - 2nd	M&T Realty - Freddie Mac		5.550		1,831,089	01/01/16		3.25
The Hamptons/Vinings at Hamptons	Prudential - Fannie Mae		5.565		49,167,290	02/01/16		3.34
Devonshire - 1st	Wachovia - Fannie Mae		5.600		36,002,145	04/01/16		3.50
Devonshire - 2nd	Wachovia - Fannie Mae		6.235		8,154,766	04/01/16		3.50
Mid-Island	Prudential - Fannie Mae		5.480		18,928,992	04/01/16		3.50
Owings Run 1 & 2	Prudential - Fannie Mae		5.590		40,991,860	04/01/16		3.50
The Manor East	KeyBank - Freddie Mac		3.250		7,199,580	04/01/16		3.50
Country Village	Centerline (CIII) - Fannie Mae		5.520		18,067,367	06/01/16		3.67
Fox Hall Apartments	Columbia Nat'l - Freddie Mac		5.610		47,000,000	06/01/17		4.67
Mill Towne Village	Prudential - Fannie Mae		5.990		24,239,000	09/01/17		4.92
Royal Gardens Apts.	M&T Realty - Freddie Mac		5.830		47,000,000	11/01/17		5.09
Village Square 1, 2 & 3	Prudential - Fannie Mae		5.810		39,285,000	12/01/17		5.17
Chatham Hill	M&T Realty - Freddie Mac		5.590		43,333,056	01/01/18		5.26
William Henry Apartments	PNC - Fannie Mae		4.850		27,949,677	01/01/18		5.26
Seminary Towers Apartments	Prudential - Fannie Mae		5.485		53,515,000	07/01/18		5.75
The Manor (MD)	Prudential - Fannie Mae		4.230		45,282,220	11/01/18		6.09
Bonnie Ridge - 1st	Prudential Life		6.600		9,216,002	12/15/18		6.21
Bonnie Ridge - 2nd	Prudential Life		6.160		17,087,175	12/15/18		6.21
Bonnie Ridge - 3rd	Prudential Life		6.070		24,180,401	12/15/18		6.21
Annapolis Roads	Amerisphere - Fannie Mae		5.120		23,434,025	01/01/19		6.26
Ridgeview at Wakefield Valley	M&T Realty - Freddie Mac		5.750		17,822,125	01/01/19		6.26
The Sycamores	M&T Realty - Freddie Mac		5.710		20,775,317	01/01/19		6.26
Top Field Apartments	M&T Realty - Fannie Mae		4.840		16,217,821	01/01/19		6.26
Westwood Village	M&T Realty - Freddie Mac		5.680		45,517,529	01/01/19		6.26
Timbercroft III - 2nd	M & T Realty - HUD		8.375		1,863,058	06/01/19		6.67
Timbercroft Townhomes 1 - 2nd	M & T Realty - HUD		8.375		1,264,876	06/01/19		6.67
The Brooke at Peachtree	Wells Fargo - Fannie Mae		5.470		12,025,986	07/01/19		6.75
Glen Manor	Prudential - Fannie Mae		5.830		7,743,796	08/01/19		6.84
Ridley Brook	Prudential - Fannie Mae		5.830		12,855,373	08/01/19		6.84
The Courts at Fair Oaks	CW Capital - Freddie Mac CME		4.500		48,411,511	08/01/19		6.84
Southern Meadows	Red Mortgage - Fannie Mae		5.360		39,817,628	10/01/19		7.01
Elmwood Terrace	M & T Realty - Fannie Mae		5.560		26,151,138	11/01/19		7.09
Lakeview	Greystone - Fannie Mae		5.310		8,875,463	12/01/19		7.17
The Landings	Prudential - Fannie Mae		5.600		25,568,228	01/01/20		7.26
East Meadow Apartments	M&T Realty - Freddie Mac		5.400		14,392,724	05/01/20		7.59
Selford Townhomes	M&T Realty - Freddie Mac		5.400		8,701,183	05/01/20		7.59
South Bay Manor	M&T Realty - Freddie Mac		5.400		6,598,397	05/01/20		7.59
Stone Ends Apts.	M&T Realty - Freddie Mac		5.400		24,508,332	05/01/20		7.59
Tamarron Apartments	M&T Realty - Freddie Mac		5.400		14,400,458	05/01/20		7.59
The Manor (VA)	M&T Realty - Freddie Mac		5.400		13,515,838	05/01/20		7.59
Woodmont Village	M&T Realty - Freddie Mac		5.400		9,752,093	05/01/20		7.59
Trexler Park	Greystone - Fannie Mae		4.340		37,584,587	08/01/20		7.84
Arbor Park of Alexandria	Prudential - Fannie Mae		4.350		94,763,177	11/01/20		8.09

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Debt Summary Schedule (continued)
				INTEREST		09/30/12		MATURITY	YEARS TO
PROPERTY			LENDER	RATE		BALANCE		DATE	MATURITY

FIXED RATE SECURED

New Orleans Park			M & T Realty - Fannie Mae		4.580		23,040,766	11/01/20		8.09
Racquet Club East			PNC - Fannie Mae		4.740		36,882,797	12/01/20		8.18
Heritage Woods Apts			Greystone - Fannie Mae		5.390		14,181,711	01/01/21		8.26
The Meadows at Marlborough			Prudential - Fannie Mae		5.500		20,715,592	01/01/21		8.26
Home Properties of Devon			M & T Realty - Fannie Mae		4.850		59,464,073	08/01/21		8.84
Pleasant View Gardens			Prudential - Fannie Mae		4.510		93,777,745	11/01/21		9.09
Dunfield Townhomes			Midland Mortgage - HUD		5.250		11,119,630	09/01/28		15.93
Highland House			Arbor Comml - Fannie Mae		6.320		5,597,492	01/01/29		16.27
Westwoods			Midland Loan Services - HUD		5.940		3,417,663	06/01/34		21.68

WTD AVG - FIXED SECURED					5.302		2,009,376,681			5.17

VARIABLE RATE SECURED
Virginia Village			Wachovia - Freddie Mac		2.089		28,486,181	07/01/15		2.75
Hill Brook Apts			M&T Realty - Freddie Mac		3.350		12,360,445	09/01/16		3.92
Wayne Village			M&T Realty - Freddie Mac		3.497		25,182,582	09/01/16		3.92
Cider Mill Apts			M&T Realty - Freddie Mac		3.401		60,483,130	01/01/17		4.26
The Heights at Marlborough			PNC Real Estate		3.601		22,763,898	01/01/17		4.26
Sherry Lake			M&T Realty - Freddie Mac		3.127		25,079,450	04/01/17		4.50
Falkland Chase			Montgomery Cty HOC-Fannie		1.252		24,695,000	10/01/30		18.01

WTD AVG - VARIABLE SECURED					2.944		199,050,686			5.72

WTD AVG - TOTAL SECURED DEBT					5.089		2,208,427,367			5.22

FIXED RATE UNSECURED
Private Placement Senior Notes - Series A			Various Investors		4.460		90,000,000	12/19/18		6.22
Private Placement Senior Notes - Series B			Various Investors		5.000		60,000,000	12/19/21		9.22
Senior Notes			Prudential Life Insurance		4.160		50,000,000	06/27/19		6.74
Bank Term Loan w/ Interest Rate Swap			M and T Bank et. al.		1.985		250,000,000	12/08/16		4.19

VARIABLE RATE UNSECURED
Bank Demand Loan			M and T Bank		1.550		100,000,000	Demand
Revolving Line of Credit			M and T Bank et. al.		1.550		128,000,000	12/08/15		3.19

WTD AVG - TOTAL UNSECURED DEBT					2.594		678,000,000			5.03

TOTAL COMBINED DEBT					4.503		2,886,427,367			5.18

% OF PORTFOLIO - FIXED	85.2	%
% OF PORTFOLIO - VARIABLE	14.8	%
WTG AVG - TOTAL FIXED RATE DEBT					4.903					5.24
WTD AVG - TOTAL VARIABLE RATE DEBT					2.200					4.73
WTG AVG - COMBINED DEBT					4.503					5.18

TOTAL DEBT MATURITY SCHEDULE Exclusive of Revolving Line of Credit
YEAR OF MATURITY	FIXED RATE				VARIABLE RATE				TOTAL
	WTD AVG				WTD AVG						% OF
	RATE		DEBT		RATE		DEBT		DEBT		TOTAL
2012		5.71		5,586,723		-		-		5,586,723		0.20	%
2013		6.05		190,281,972		-		-		190,281,972		6.90	%
2014		5.22		98,088,782		-		-		98,088,782		3.56	%
2015		5.17		228,037,260		2.09		28,486,181		256,523,441		9.30	%
2016		3.87		558,536,280		3.45		37,543,027		596,079,308		21.61	%
2017		5.78		157,524,000		3.38		108,326,477		265,850,477		9.64	%
2018		5.08		310,563,531		-		-		310,563,531		11.26	%
2019		5.17		332,775,647		-		-		332,775,647		12.06	%
2020		4.83		309,708,580		-		-		309,708,580		11.23	%
2021 - 2034		4.90		268,273,906		1.25		24,695,000		292,968,906		10.62	%
On Demand		-		-		1.55		100,000,000		100,000,000		3.63	%
TOTAL		4.903	$	2,459,376,681		2.478	$	299,050,686	$	2,758,427,367		100.00	%

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Unencumbered Properties
As of 9/30/2012
Property	# Units		Market	State

Gateway Village		132	Baltimore	MD
Falcon Crest *		396	Baltimore	MD
Middlebrooke Apartments		208	Baltimore	MD
Morningside Heights		1,050	Baltimore	MD
The Coves at Chesapeake		469	Baltimore	MD
Westbrooke Apartments		110	Baltimore	MD
Cambridge Court		544	Baltimore	MD
Howard Crossing		1,350	Baltimore	MD
Gardencrest		695	Boston	MA
The Commons at Haynes Farm		302	Boston	MA
The Townhomes of Beverly		204	Boston	MA
The Village at Marshfield		276	Boston	MA
Blackhawk Apartments		371	Chicago	IL
Courtyards Village		224	Chicago	IL
Lakeview Townhomes		120	Chicago	IL
The Colony		783	Chicago	IL
The Gates of Deer Grove		204	Chicago	IL
The New Colonies		672	Chicago	IL
Bayview & Colonial		160	Long Island	NY
Cambridge Village		82	Long Island	NY
Crescent Club		257	Long Island	NY
Heritage Square		80	Long Island	NY
Holiday Square		144	Long Island	NY
Lake Grove Apartments		368	Long Island	NY
Yorkshire Village		40	Long Island	NY
Liberty Commons		120	Portland	ME
East Hill Gardens		33	Northern NJ	NJ
Jacob Ford Village		270	Northern NJ	NJ
Pleasure Bay		270	Northern NJ	NJ
Windsor Realty		67	Northern NJ	NJ
Castle Club		158	Philadelphia	PA
Glen Brook		174	Philadelphia	PA
Racquet Club South		103	Philadelphia	PA
Waterview		203	Philadelphia	PA
1200 East West Highway		247	Suburban Washington, DC	MD
Hunter's Glen		108	Suburban Washington, DC	MD
Seminary Hill		296	Suburban Washington, DC	MD
The Courts at Huntington Station		421	Suburban Washington, DC	MD
Woodleaf Apartments		228	Suburban Washington, DC	MD
Braddock Lee		255	Suburban Washington, DC	VA
Mt. Vernon Square		1,387	Suburban Washington, DC	VA
Newport Village		937	Suburban Washington, DC	VA
Somerset Park		108	Suburban Washington, DC	VA
The Courts at Dulles		411	Suburban Washington, DC	VA
The Apts at Cobblestone Square		314	Suburban Washington, DC	VA
Village at Potomac Falls		247	Suburban Washington, DC	VA
Woodway at Trinity Centre		504	Suburban Washington, DC	VA

Total Number of Units:		16,102
Total Number of Properties:		47

* Property added to unencumbered pool during quarter ending 9/30/2012.

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Recurring Capital Expenditure Summary

Effective January 1, 2012, the Company updated its estimate of the amount of recurring, non-revenue enhancing capital expenditures incurred on an annual basis for a standard garden style apartment. The Company now estimates that the annual amount is $848 per apartment unit compared to $800 in the prior year. This new amount better reflects current actual costs and the effects of inflation since the last update.

The Company's policy is to capitalize costs related to the acquisition, development, rehabilitation, construction and improvement of properties. Capital improvements are costs that increase the value and extend the useful life of an asset. Ordinary repair and maintenance costs that do not extend the useful life of the asset are expensed as incurred. Costs incurred on a lease turnover due to normal wear and tear by the resident are expensed on the turn. Recurring capital improvements typically include appliances, carpeting and flooring, HVAC equipment, kitchen and bath cabinets, new roofs, site improvements and various exterior building improvements. Non-recurring, revenue generating upgrades include, among other items community centers, new windows, and kitchen and bath apartment upgrades. Revenue generating capital improvements will directly result in increased rental earnings or expense savings. The Company capitalizes interest and certain internal personnel costs related to the communities under rehabilitation and construction.

The table below is a list of the items that management considers recurring, non-revenue enhancing capital and maintenance expenditures for a standard garden style apartment. Included are the per unit replacement cost and the useful life that Management estimates the Company incurs on an annual basis.

							Maintenance
					Capitalized		Expense		Total
	Capitalized				Expenditure		Cost Per		Cost Per
	Cost Per		Useful		Per Unit		Unit		Unit
Category	Unit		Life(1)		Per Year(2)		Per Year(3)		Per Year
Appliances	$	1,624		9	$	180	$	13	$	193
Blinds, shades		135		3		45		5		50
Carpets, cleaning		760		4		190		142		332
Computers, equipment, misc.(4)		120		6		20		2		22
Contract repairs		-		-		-		250		250
Exterior painting (5)		84		3		28		-		28
Flooring		250		9		28		24		52
Furnace, air (HVAC)		854		24		36		24		60
Hot water heater		293		7		42		-		42
Interior painting		-		-		-		178		178
Kitchen, bath cabinets upgrades		1,200		15		80		-		80
Landscaping site		-		-		-		120		120
New roof		880		24		37		-		37
Parking lot site		750		15		50		-		50
Pool, exercise facility		147		15		10		38		48
Windows major		1,663		20		83		-		83
Miscellaneous (6)		326		17		19		-		19
Total	$	9,086			$	848	$	796	$	1,644

(1)	Estimated weighted average actual physical useful life of the expenditure capitalized.

(2)	This amount is not necessarily incurred each and every year. Some years will be higher, or lower depending on the timing of certain longer life expenditures.

(3)

These expenses are included in the Operating and Maintenance line item of the Consolidated Statement of Operations. Maintenance labor costs are not included in the $796 per unit estimate. All personnel costs for site supervision, leasing agents, and maintenance staff are combined and disclosed in the Company's Core Properties expense detail schedule.

(4)	Includes computers, office equipment, furniture, and maintenance vehicles.

(5)	The level of exterior painting may be lower than other similarly titled presentations as the Company's portfolio has a significant amount of brick exteriors. In addition, the other exposed surfaces are most often covered in aluminum or vinyl.

(6)	Includes items such as balconies, siding, and concrete sidewalks.

The breakdown of costs above reflects the Company's unique strategies to improve every property every year regardless of age, and to purchase older properties and rehabilitate and reposition them to enhance internal rates of return. These strategies result in higher costs of capital expenditures and maintenance costs which permit the Company to realize higher revenue growth, higher net operating income growth and a higher rate of property appreciation.

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Table of Contents

Capital Expenditure Summary

The Company estimates that on an annual basis $848 per unit is spent on recurring capital expenditures in 2012. During the three months ended September 30, 2012 approximately $212 per unit was spent on recurring capital expenditures. For the nine months ended September 30, 2012 approximately $636 per unit was spent on recurring capital expenditures. The table below summarizes the actual total capital improvements incurred by major categories and an estimate of the breakdown of total capital improvements by major categories between recurring, and non-recurring revenue generating capital improvements for the three and nine months ended September 30, 2012 as follows:

For the three months ended September 30, 2012
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Cap Ex		Per Unit(a)		Cap Ex		Per Unit(a)		Improvements		Per Unit(a)
New buildings	$	-	$	-	$	443	$	10	$	443	$	10
Major building improvements		1,372		32		6,585		156		7,957		188
Roof replacements		391		9		1,267		30		1,658		39
Site improvements		633		15		4,971		118		5,604		133
Apartment upgrades		1,319		31		14,422		342		15,741		373
Appliances		1,900		45		553		13		2,453		58
Carpeting/flooring		2,301		55		2,636		62		4,937		117
HVAC/mechanicals		823		20		3,266		77		4,089		97
Miscellaneous		211		5		1,022		24		1,233		29
Totals	$	8,950	$	212	$	35,165	$	832	$	44,115	$	1,044

(a)	Calculated using the weighted average number of units owned, including 37,386 core units, 2011 acquisition units of 2,817, and 2012 acquisition units of 2,018 for the three months ended September 30, 2012.

For the nine months ended September 30, 2012
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Cap Ex		Per Unit(a)		Cap Ex		Per Unit(a)		Improvements		Per Unit(a)
New Buildings	$	-	$	-	$	1,144	$	28	$	1,144	$	28
Major building improvements		4,000		97		14,468		353		18,468		450
Roof replacements		1,138		28		2,544		62		3,682		90
Site improvements		1,846		45		12,127		296		13,973		341
Apartment upgrades		3,846		94		36,773		896		40,619		990
Appliances		5,538		135		770		19		6,308		154
Carpeting/flooring		6,707		164		5,182		126		11,889		290
HVAC/mechanicals		2,400		58		8,441		206		10,841		264
Miscellaneous		615		15		3,219		78		3,834		93
Totals	$	26,090	$	636	$	84,668	$	2,064	$	110,758	$	2,700

(a)	Calculated using the weighted average number of units owned, including 37,386 core units, 2011 acquisition units of 2,817, and 2012 acquisition units of 818 for the nine months ended September 30, 2012.

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Table of Contents

Capital Expenditure Summary (continued)

The schedule below summarizes the breakdown of total capital improvements between core and non-core as follows:

For the three months ended September 30, 2012
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Cap Ex		Per Unit(a)		Cap Ex		Per Unit(a)		Improvements		Per Unit(a)
Core Communities	$	7,925	$	212	$	31,024	$	830	$	38,949	$	1,042
2012 Acquisition Communities		473		212		1,119		555		1,592		767
2011 Acquisition Communities		552		212		3,022		1,073		3,574		1,285
Sub-total		8,950		212		35,165		832		44,115		1,044
2012 Disposed Communities		76		212		30		83		106		295
Corporate office expenditures (b)		-		-		-		-		506		-
	$	9,026	$	212	$	35,195	$	827	$	44,727	$	1,039

(a)	Calculated using the weighted average number of units owned, including 37,386 core units, 2011 acquisition units of 2,817, 2012 acquisition units of 2,018, and 2012 disposed units of 359 for the three months ended September 30, 2012.

(b)	No distinction is made between recurring and non-recurring expenditures for corporate office. Corporate office expenditures includes principally computer hardware, software, office furniture, fixtures and leasehold improvements. Corporate office expenditures are excluded from per unit figures.

For the nine months ended September 30, 2012
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Cap Ex		Per Unit(a)		Cap Ex		Per Unit(a)		Improvements		Per Unit(a)
Core Communities	$	23,778	$	636	$	74,222	$	1,985	$	98,000	$	2,621
2012 Acquisition Communities		520		636		1,110		1,357		1,630		1,993
2011 Acquisition Communities		1,792		636		9,336		3,314		11,128		3,950
Sub-total		26,090		636		84,668		2,064		110,758		2,700
2012 Disposed Communities		256		636		346		861		602		1,497
Corporate office expenditures (b)		-		-		-		-		2,065		-
	$	26,346	$	636	$	85,014	$	2,052	$	113,425	$	2,688

(a)	Calculated using the weighted average number of units owned, including 37,386 core units, 2011 acquisition units of 2,817, 2012 acquisition units of 818, and 2012 disposed units of 402 for the nine months ended September 30, 2012.

(b)	No distinction is made between recurring and non-recurring expenditures for corporate office. Corporate office expenditures includes principally computer hardware, software, office furniture, fixtures and leasehold improvements. Corporate office expenditures are excluded from per unit figures.

Adjusted Net Operating Income - Core Properties

($ in thousands)

	Quarter			Quarter
	9/30/2012			9/30/2011		Change

Net Operating Income	$	91,087		$	84,089		8.3	%

Less: Non Recurring Cap Ex @ 6%		(1,861	)		-		-

Adjusted Net Operating Income	$	89,226		$	84,089		6.1	%

Some of our Core Property NOI reflects incremental investments in the communities above and beyond normal capital replacements. After charging ourselves a 6% cost of debt capital on these additional expenditures, what we refer to as the adjusted NOI for the quarter is recalculated and presented above.

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Development Pipeline as of September 30, 2012

($ in thousands)

# of

Estimated

Costs

Con-

Physical

Property

Units at

Estimated

Costs

Incurred

struction

Initial

struction

Complete

Leased

Occupancy

Type

Completion

Costs

Per Unit

Start

Occupancy

Completion

(2)

(3)

(4)

Completed:

The Apartments at

Cobblestone Square (5)

Fredericksburg, VA

Garden

314

49,100

156.4

48,339

1Q 11

4Q 11

2Q 12

100.0

98.4

97.1

Under construction:

Eleven55 Ripley

Silver Spring, MD

High Rise

379

111,200

293.4

48,181

4Q 11

3Q 13

1Q 14

0.0

n/a

Courts at

Spring Mill Station

Conshohocken, PA

Donut/

Podium

385

89,000

231.2

16,474

2Q 12

1Q 14

2H 14

0.0

n/a

Pre-construction:

Falkland North (6)

Silver Spring, MD

High Rise

tbd

4,756

tbd

n/a

Under contract:

Westpark Tysons

(part of Arbor Row final

development plan) (6)

Tysons Corner, VA

Mid Rise/

High Rise

600

205,000

tbd

830

1H 14

tbd

n/a

Total

118,580

(1)	Costs classified as Construction in Progress at September 30, 2012 are comprised of:

Courts at Spring Mill Station	$	16,474
Eleven55 Ripley		48,181
	$	64,655

(2)	Represents the percentage of units that have been completed and are available to rent as of October 31, 2012.

(3)	Represents the percentage of units that have been leased as of October 31, 2012.

(4)	Represents the percentage of units occupied as of October 31, 2012.

(5)	Final Certificates of Occupancy were received in 2Q'12 with all units available for rent. All assets have been transferred out of Construction in Progress as of September 30, 2012.

(6)	Costs incurred are classified as Other Assets at September 30, 2012 for these projects.

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	Actual			Actual			Actual
2012 Earnings Guidance	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter			Year

2012 compared to 2011
FFO per share - 2012 guidance	$	0.979		$	0.955		$	1.093		$	1.02 - $1.06		$	4.05 - $4.09

Actual/Midpoint of guidance	$	0.979		$	0.955		$	1.093		$	1.04		$	4.07

FFO per share - 2011 actual	$	0.865		$	0.867		$	0.866		$	0.934		$	3.539

Improvement projected		13.2	%		10.1	%		26.3	%		11.3	%		15.0	%


2012 compared to 2011 based on "Operating FFO"
FFO per share - 2012 Operating FFO	$	0.979		$	1.000		$	1.094		$	1.02 - $1.06		$	4.09 - $4.13

Midpoint of guidance	$	0.979		$	1.000		$	1.094		$	1.04		$	4.11

Operating FFO per share - 2011 actual	$	0.865		$	0.869		$	0.896		$	0.959		$	3.599

Improvement projected		13.2	%		15.1	%		22.1	%		8.4	%		14.2	%

Difference between FFO and OFFO is expensed acquisition costs


Fourth Quarter and Full Year 2012 include an estimated charge of one-half cent in FFO and OFFO from the net effect, after insurance reimbursements, of Hurricane Sandy.


Same store assumptions:
Same store total revenue growth		4.6	%		4.8	%		4.3	%		4.0% - 4.75	%		4.25% - 5.0	%

Same store expense growth		-2.8	%		-0.3	%		-2.1	%		3.8% - 4.2	%		-0.6% - 0	%

Same store NOI growth		9.9	%		8.0	%		8.3	%		4.2% - 4.8	%		7.5% - 8.0	%

The midpoint of revenue growth remains at 4.6% .

The midpoint of expense growth is now -0.3% versus 0.75% previously provided.

The midpoint of NOI growth is now 7.75% versus 7.0% previously provided.




Occupancy assumptions:
Same store 2012 physical occupancy		95.5	%		96.2	%		95.5	%		95.3	%		95.6	%

Same store 2011 physical occupancy		95.3	%		95.8	%		95.5	%		95.3	%		95.5	%

Change in occupancy		0.2	%		0.4	%		0.0	%		0.0	%		0.1	%

The occupancy projected for 2012 is now 95.6% versus 95.8% previously provided.

General & Administrative costs are expected to range between $6.6 million and $7.0 million for the fourth quarter of 2012.

Interest Expense is projected to be $32.0 million to $32.4 million for the fourth quarter of 2012..

Acquisitions: no additional acquisitions are expected to close before year end.

Disposition range of $160 million to $190 million. This range has been decreased as timing for certain transactions have been delayed until 2013.

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