Erp Operating LTD Partnership 10K 2010 Annual report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended DECEMBER 31, 2010


o		TRANSITION 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 (State or Other Jurisdiction of Incorporation or Organization)		36-3894853 (I.R.S. Employer Identification No.)

Two North Riverside Plaza, Chicago, Illinois (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. Yesþ 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. Yeso Noþ

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. Yesþ 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 filero	Accelerated filero	Non-accelerated filerþ	Smaller reporting companyo
		(Do not check if a smaller reporting company)

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

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information to be contained in Equity Residential’s Proxy Statement relating to its 2011 Annual Meeting of Shareholders, which Equity Residential intends to file no later than 120 days after the end of its fiscal year ended December 31, 2010. Equity Residential is the general partner and 95.5% owner of ERP Operating Limited Partnership.

ERP OPERATING LIMITED PARTNERSHIP

TABLE OF CONTENTS


	PAGE
PART I.

Item 1. Business		4
Item 1A. Risk Factors		8
Item 1B. Unresolved Staff Comments		15
Item 2. Properties		15
Item 3. Legal Proceedings		17
Item 4. Reserved		17

PART II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18
Item 6. Selected Financial Data		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 7A. Quantitative and Qualitative Disclosures about Market Risk		42
Item 8. Financial Statements and Supplementary Data		43
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		43
Item 9A. Controls and Procedures		43
Item 9B. Other Information		44

PART III.

Item 10. Trustees, Executive Officers and Corporate Governance		45
Item 11. Executive Compensation		45
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		45
Item 13. Certain Relationships and Related Transactions, and Trustee Independence		45
Item 14. Principal Accounting Fees and Services		45

PART IV.

Item 15. Exhibits and Financial Statement Schedules		46
EX-12
EX-21
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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 the general partner of, and as of December 31, 2010 owned an approximate 95.5% ownership interest in ERPOP. All 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, 2010, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 451 properties located in 17 states and the District of Columbia consisting of 129,604 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):


	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 December 31, 2010, the Operating Partnership had approximately 4,000 employees who provided 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 invests 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 revenue while exercising tight cost control to generate the highest possible return 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.

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

service requests on-line.

We seek to maximize capital appreciation of our properties by investing in markets that are characterized by conditions favorable to multifamily property appreciation. These markets generally feature one or more of the following:

	•		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.

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. 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 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 has 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 targeted 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.

As part of its 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 not 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 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, 2010.

Major Debt and Equity Activities for the Years Ended December 31, 2010, 2009 and 2008

During 2010:

	•		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 $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 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

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

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 through the ATM share offering program. EQR has not issued any shares under this program since January 13, 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 October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on October 14, 2013 and does not contain a maximum issuance amount). However, as of February 16, 2011, issuances under the 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 $1.425 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.

As of December 31, 2010, the amount available on the credit facility was $1.28 billion (net of $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). The Operating Partnership did not draw and had no balance outstanding on its revolving credit facility at any time during the year ended December 31, 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 family housing provide housing alternatives to potential residents of multifamily properties. See Item 1A.Risk Factorsfor additional information with respect to competition.

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 units, 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 preference units, OP Units and LTIP Units together as our “securities” and the investors who own Units and/or OP/LTIP Units as our “security holders”.

Our Performance and Securities 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. Numerous factors may adversely affect the economic performance and value of our 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 multifamily properties 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 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. 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

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’s policies, many of which may encourage home ownership, can increase competition and possibly limit 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

We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate. We may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to lease up these apartment properties on schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and 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. 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.

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.

Risks Involved in Real Estate Activity Through Joint Ventures

We have 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 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 reallocate our capital promptly 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.

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.

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 consulting 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.

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

prohibitively high rates. While 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, 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 Counterparties

As of December 31, 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, 2010 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, 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 has 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 worker’s compensation insurance. While there has yet to be any non-performance by these major insurance providers, 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 time, 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 complete transactions with us as intended, both of which could result in disruptions to our operations that may adversely affect our business and results of operations.

Debt Financing and Preference 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, 2010.

In addition to debt, we have $200.0 million of combined liquidation value of outstanding preference units with a weighted average dividend preference of 6.93% per annum as of December 31, 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 capital and credit markets could impact liquidity in the debt markets, resulting in financing terms that are less attractive to us and/or the unavailability of certain types of debt financing. Should the capital and credit markets experience volatility and the availability of funds again become limited, or be available only on unattractive terms, 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. 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, disruptions 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, declared bankruptcy in 2008 and will not honor its financial commitment. Our borrowing capacity under the credit facility has in essence been permanently reduced to $1.425 billion.

The Operating Partnership also has developed assets with joint venture partners which were financed by financial institutions that have experienced varying degrees of 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.

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 impact our ability to

borrow secured and unsecured debt, 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 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, 2010.

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

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. While the Operating Partnership believes it was in compliance with its unsecured public debt covenants for both the years ended December 31, 2010 and 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 low or moderate-income residents, or eligible/qualified residents, then our income from these properties may be limited. 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, this may not always be the case.

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

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:


	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 make distributions to security holders.

Derivatives and Hedging Activity Could Adversely Affect Cash Flow

In the normal course of business, we use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times we may utilize derivatives to increase our exposure to floating interest rates. There can be no assurance that these hedging arrangements will have the desired beneficial impact. 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 (“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.

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 Sixth 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 could 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, see EQR’s definitive proxy statement.

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

We rely to a significant extent upon our 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 “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 included in Risk Factors in EQR’s Annual Report on Form 10-K for a discussion of these federal income tax considerations.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of December 31, 2010, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 451 properties located in 17 states and the District of Columbia consisting of 129,604 apartment units. The Operating Partnership’s properties are summarized by building type in the following table:


					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		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, 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


		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 Portfolio Summary until construction has been completed, at which time the 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 94.1% (94.5% on a same store basis) at December 31, 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 can 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, 2010 are included in the following table:

Consolidated Development and Lease-Up Projects as of December 31, 2010

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


		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)		Total capital cost represents estimated 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 23^rd Street — The land under this development is subject to a long-term ground lease.


(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 tax-exempt bonds that are entirely outstanding, with $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, 2010. The Operating Partnership paid off the $28.2 million in taxable bonds during the fourth quarter of 2010.

(5)		The Operating Partnership acquired these completed development projects prior to stabilization and has begun/continued lease-up activities.

(6)		Total book value not placed in service excludes $5.9 million of construction-in-progress related to the reconstruction of the 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 or a possible loss or a range of loss, and no amounts have been accrued at December 31, 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 be expected to have a material adverse effect on the Operating Partnership.

Item 4. Reserved

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
	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 Long-Term Incentive Plan (“LTIP”) Units in the Operating Partnership at February 16, 2011 were 528 and 18, respectively. The number of outstanding OP and LTIP Units as of February 16, 2011 were 307,338,881 and 401,971, respectively.

Unregistered OP Units Issued in the Quarter Ended December 31, 2010

During the quarter ended December 31, 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, 2010 with respect to EQR’s Common Shares that may be issued under its existing equity compensation plans.

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)

Equity compensation plans approved by shareholders

10,106,488

33.00

8,799,709

Equity compensation plans not approved by shareholders

N/A


(1)		The amounts shown in columns (a) and (b) of the above table do not include 911,950 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’S ESPP.

(2)		Includes 5,395,739 EQR Common Shares that may be issued under the 2002 Plan, of which only 25% may


		be in the form of restricted shares, and 3,403,970 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, 2011, this amount equaled 22,785,696, of which 5,395,739 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.

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

CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

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


	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)		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 and excludes:

	•		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 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 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 Units 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 Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Units, Normalized FFO and Normalized FFO available to Units should not be exclusively considered as alternatives to net income, net income available to Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Operating Partnership’s calculation of FFO, FFO available to Units, 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, each such subsidiary entity has been consolidated with the Operating Partnership for financial reporting 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, 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:

•

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;

	•		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”.

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

Overview

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 in each of its markets. As of December 31, 2010, the Operating Partnership had approximately 4,000 employees who provided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

Business Objectives and Operating and Investing Strategies

	•		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.

Current Environment

Through much of 2009, the Operating Partnership assumed 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

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 better 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 greater 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 debt maturities in an unsure capital markets climate. This had the result of increasing the Operating Partnership’s earnings by decreasing debt prefunding costs. Finally, the Operating Partnership was 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 the improvement realized in 2010 will be sustained for the foreseeable future.

We currently have access to multiple sources of capital including the equity markets as well as both the secured and unsecured debt markets. In July 2010, the Operating Partnership completed 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 maturing 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 disposition assets and increased competition for assets in our target markets, we expect 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 the year ended December 31, 2010. While competition for the properties we were 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 2011 acquisitions to occur in the latter half of the year. We believe 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 year ended December 31, 2010, the Operating Partnership sold 35 consolidated properties consisting of 7,171 apartment units for $718.4 million and 27 unconsolidated properties consisting of 6,275 apartment units generating cash proceeds to the Operating Partnership of $26.9 million, as well as 2 condominium units for $0.4 million and one land parcel for $4.0 million. We 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 non-strategic assets. Our dispositions in 2010 were at higher capitalization (“cap”) rates (see definition in Results of 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, securities 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 maturities and existing development projects through 2011. We expect that our remaining longer-term funding requirements 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. There is significant uncertainty surrounding the 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 as of December 31, 2010 (our properties are geographically diverse and were approximately 94.1% occupied (94.5% on a same store basis)), little new multifamily rental supply will be added to most of our markets over the next several years and the long-term demographic picture is positive. We believe our strong balance sheet and ample liquidity will allow us to fund our debt maturities and development fundings in the near term, and should also allow us to take advantage of investment opportunities in 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 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).

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 in apartment properties located in strategically targeted markets during the years ended December 31, 2010 and December 31, 2009. In summary, we:

Year Ended December 31, 2010:

	•		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).

Year Ended December 31, 2009:

	•		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.

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 its operating performance 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 2010 and 2009 (the “2010 Same Store Properties”), which represented 112,042 apartment units, impacted the Operating Partnership’s results of operations. Properties that the Operating Partnership owned for all of both 2009 and 2008 (the “2009 Same Store Properties”), which represented 113,598 apartment units, also impacted the Operating Partnership’s results of operations. Both the 2010 Same Store Properties and 2009 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, 2010 and 2009. Dilution, as a result of the Operating

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 discussed in greater detail in the following paragraphs.

Comparison of the year ended December 31, 2010 to the year ended December 31, 2009

For the year ended December 31, 2010, 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 increased approximately $22.8 million when compared to the year ended December 31, 2009. The decrease in continuing operations is discussed below.

Revenues from the 2010 Same Store Properties decreased $2.1 million primarily as a result of a decrease in average rental rates charged to residents, partially offset by an increase in occupancy. Expenses from the 2010 Same Store Properties increased $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 and leasing and advertising expenses. The following tables provide comparative same store results and statistics for the 2010 Same Store Properties:

2010 vs. 2009
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) — 112,042 Same Store Units


	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)		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,


		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 2010 Same Store Properties.


	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, 2010 and expects to continue to own through December 31, 2011, the Operating Partnership anticipates the following same store results for the full year ending December 31, 2011:


2011 Same Store Assumptions
Physical occupancy		95.0%
Revenue change		4.0% to 5.0%
Expense change		1.0% to 2.0%
NOI change		5.0% to 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 2011 assumptions are based on current expectations and are forward-looking.

Non-same store operating results increased approximately $84.6 million and consist primarily of properties acquired in calendar years 2009 and 2010, as well as operations from the Operating Partnership’s completed development properties and 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 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 $1.5 million or 53.4% 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, 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

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:

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, 2009 and 2008, the Operating Partnership managed 12,681 apartment units and 14,485 apartment units, respectively, primarily for unconsolidated entities and its military housing ventures at Fort Lewis and 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 approximately $5.1 million or 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 decreases in temporary help/contractors, telecommunications and travel expenses.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $23.0 million or 4.3% primarily as a result of additional depreciation expense on properties acquired in 2008 and 2009, development properties placed in service and capital expenditures for all properties owned.

General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $6.0 million or 13.3% primarily due 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 $2.9 million decrease in severance related costs in 2009 and a decrease in tax consulting costs.

Impairment from continuing operations decreased approximately $105.3 million due to an $11.1 million impairment charge taken during 2009 on a land parcel held for development compared 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 are no longer being pursued. See Note 20 in the Notes to Consolidated Financial Statements for further discussion.

Interest and other income from continuing operations decreased approximately $16.8 million or 50.3% primarily as a result of an $18.7 million gain recognized during 2008 related to the partial debt extinguishment of the Operating Partnership’s notes compared to a $4.5 million gain recognized in 2009 (see Note 9). In addition, interest earned on cash and cash equivalents decreased due to a decrease in interest rates and because the Operating Partnership received less insurance/litigation settlement proceeds and forfeited deposits in 2009, partially offset by a $4.9 million gain on the sale of investment securities realized in 2009.

Other expenses from continuing operations increased approximately $0.7 million or 12.6% primarily due to an 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 costs associated with the Operating Partnership’s acquisition of all of its partners’ interests in five previously partially owned properties consisting of 1,587 apartment units in 2009.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $16.9 million or 3.4% primarily as a result of an increase in debt extinguishment costs and lower capitalized interest. During the year ended December 31, 2009, the Operating Partnership capitalized interest costs of approximately $34.9 million as compared to $60.1 million for the year ended December 31, 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, 2009 was 5.62% as compared to 5.56% for the year ended December 31, 2008.

Income and other tax expense from continuing operations decreased approximately $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 business taxes for Washington, D.C.

Loss from investments in unconsolidated entities increased approximately $2.7 million as compared to the year ended December 31, 2008 primarily due to the Operating Partnership’s $1.8 million share of 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 as well as a decline in the operating performance of these properties.

Net gain on sales of unconsolidated entities increased approximately $7.8 million as the Operating Partnership sold seven unconsolidated properties in 2009 (inclusive of the one property where the Operating Partnership acquired its partners’ interest) compared to three unconsolidated properties in 2008.

Net gain on sales of land parcels decreased approximately $3.0 million due to the sale of vacant land located in Florida during the year ended December 31, 2008 versus no land sales in 2009.

Discontinued operations, net decreased approximately $97.4 million or 20.4% between the periods under comparison. This decrease is primarily due to lower gains from property sales during the year ended December 31, 2009 compared to the same period in 2008 and the operations of those properties. In addition, properties sold in 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.

Liquidity and Capital Resources

For the Year Ended December 31, 2010

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

revolving credit facility (net of $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). 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, 2010 was approximately $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 $1.28 billion (net of $147.3 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above).

During the year ended December 31, 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 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 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). EQR may, but shall have no obligation to, sell Common Shares through the ATM share offering program in amounts and at times to be determined by EQR. Actual sales will depend on a variety of 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, 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 share offering program. 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 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.

Depending on its analysis of market prices, economic conditions and other opportunities for the investment of available capital, EQR may repurchase its Common Shares pursuant to its existing share repurchase program authorized by the Board of Trustees. EQR repurchased $1.9 million (58,130 shares at an average price per share of $32.46) of its Common Shares (all related to the vesting of employee restricted shares) during the year ended December 31, 2010. Concurrent with these transactions, the Operating Partnership repurchased and retired 58,130 OP Units previously issued to EQR. As of December 31, 2010, EQR had authorization to repurchase an additional $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.

The Operating Partnership’s total debt summary and debt maturity schedules as of December 31, 2010 are as follows:

Debt Summary as of December 31, 2010
(Amounts in thousands)


									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)		Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2010.

Note: The Operating Partnership capitalized interest of approximately $13.0 million and $34.9 million during the years ended December 31, 2010 and 2009, respectively.

Debt Maturity Schedule as of December 31, 2010
(Amounts in thousands)


												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)		Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 2010.

(2)		Includes $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,

2010:

Unsecured Debt Summary as of December 31, 2010
(Amounts in thousands)


										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)		$300.0 million in fair value interest rate swaps converts a portion of the 5.200% notes due April 1, 2013 to a floating interest rate.

(2)		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.

(3)		Facilities are private. All other unsecured debt is public.

(4)		Represents 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.

(5)		As of December 31, 2010, there was approximately $1.28 billion available on the Operating Partnership’s unsecured revolving credit facility.

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 October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on October 14, 2013 and does not contain a maximum issuance amount). However, as of February 16, 2011, issuances under the 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, 2010 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 Units at the equivalent market value of the closing price of EQR’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preference units outstanding.

Capital Structure as of December 31, 2010
(Amounts in thousands except for unit and per unit amounts)


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


							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 for cash consideration of $0.8 million and 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 debt and equity securities, including additional OP Units, and proceeds received from the disposition of certain properties as well as joint

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 $19.7 billion in investment in real estate on the Operating Partnership’s balance sheet at December 31, 2010, $12.6 billion or 63.9%, was unencumbered. However, there can be no assurances that these sources of capital will be available to the Operating Partnership in the future on acceptable terms or otherwise.

The Operating Partnership’s credit ratings from Standard & Poor’s (“S&P”), Moody’s and Fitch for its outstanding senior debt are BBB+, Baal and BBB+, respectively. EQR’s equity ratings from S&P, Moody’s and Fitch for its outstanding preferred equity are BBB+, Baa2 and 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 16, 2011 of $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.

On July 16, 2010, a portion of the 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 recorded relating to this 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 20 in the Notes to Consolidated Financial Statements for discussion of the events which occurred subsequent to December 31, 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;

	•		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,

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

Capital Expenditures to Real Estate
For the Year Ended December 31, 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)		Total Apartment Units — Excludes 4,738 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Operating Partnership’s results.

(2)		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 — Primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold.

(4)		Non-Same Store Properties — Primarily includes all properties acquired during 2009 and 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 9,141 apartment units.

(5)		Other — Primarily includes expenditures for properties sold during the period.

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

Capital Expenditures to Real Estate
For the Year Ended December 31, 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)		Total Apartment Units — Excludes 8,086 unconsolidated apartment units and 4,595 military housing apartment units, for which capital expenditures to real estate are self-funded and do not consolidate into the Operating Partnership’s results.

(2)		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 — Primarily includes all properties acquired or completed and stabilized prior to January 1, 2008, less properties subsequently sold.

(4)		Non-Same Store Properties — Primarily includes all properties acquired during 2008 and 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 9,823 apartment units.

(5)		Other — Primarily includes expenditures for properties sold during the period.

For 2011, the Operating Partnership estimates that it will spend approximately $1,200 per apartment unit of capital expenditures for its 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 assumptions are based on current expectations and are forward-looking.

During the year ended December 31, 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 $3.0 million. The Operating Partnership expects to fund approximately $8.5 million in total additions to non-real estate property in 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 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 these 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, 2010.

Other

Total distributions paid in January 2011 amounted to $141.3 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 2010.

Off-Balance Sheet Arrangements and Contractual Obligations

The Operating Partnership had co-invested in various properties that were unconsolidated and accounted for under the equity method of accounting. Management does not believe these investments had 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. As of December 31, 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.

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, 2010:


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)		Amounts include aggregate principal payments 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, 2010 and inclusive of capitalized interest. For floating rate debt, the current rate in effect for the most recent payment through December 31, 2010 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 four properties/parcels.

(d)		Estimated payments to EQR’s Chairman, Vice Chairman and two former CEO’s 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, 2010 and are consistent with the year ended December 31, 2009.

The Operating Partnership has identified five 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 five 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

The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate, for indicators of 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,

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.

For all development projects, the 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 valuation of financial instruments 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.

Funds From Operations and Normalized Funds From Operations

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

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

Funds From Operations and Normalized Funds From Operations
(Amounts in thousands)


	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 and excludes:

	•		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 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 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 Units 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 Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Units, Normalized FFO and Normalized FFO available to Units should not be exclusively considered as alternatives to net income, net income available to Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Operating Partnership’s calculation of FFO, FFO available to Units, 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 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 manage market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice 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 $4.7 billion and $5.5 billion, respectively, at December 31, 2010.

At December 31, 2010, the Operating Partnership had total outstanding floating rate debt of approximately $1.7 billion, or 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 14 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 $2.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 14 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 $2.4 million.

At December 31, 2010, the Operating Partnership had total outstanding fixed rate debt of approximately $8.2 billion, or 82.5% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 57 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 $7.5 billion. If market rates of interest permanently decreased by 57 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 $9.1 billion.

At December 31, 2010, the Operating Partnership’s derivative instruments had a net liability fair value of approximately $23.3 million. If market rates of interest permanently increased by 12 basis points (a 10% increase 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 $9.8 million. If market rates of interest permanently decreased by 12 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 $37.0 million.

At December 31, 2009, the Operating Partnership had total outstanding floating rate debt of approximately $1.8 billion, or 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 13 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 $2.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 13 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 $2.4 million.

At December 31, 2009, the Operating Partnership had total outstanding fixed rate debt of approximately $7.5 billion, or 80.3% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 59 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 59 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, 2009, the Operating Partnership’s derivative instruments had a net asset fair value of approximately $25.2 million. If market rates of interest permanently increased by 20 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the net asset fair value of the Operating Partnership’s derivative instruments would be approximately $35.5 million. If market rates of interest permanently decreased by 20 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the net asset fair value of the Operating Partnership’s derivative instruments would be approximately $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, 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

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, 2010. Our internal control over financial reporting has been audited as of December 31, 2010 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 2010 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.

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 Proxy Statement, which EQR intends to file no later than 120 days after the end of its fiscal year ended December 31, 2010. EQR is the general partner of and owns an approximate 95.5% ownership interest in ERPOP.

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.

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 Chief Executive Officer

	Date: February 24, 2011

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 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

/s/ David J. Neithercut	President, Chief Executive Officer and Trustee	February 24, 2011

David J. Neithercut

/s/ Mark J. Parrell	Executive Vice President and Chief Financial Officer	February 24, 2011
Mark J. Parrell

/s/ Ian S. Kaufman	Senior Vice President and Chief Accounting Officer	February 24, 2011
Ian S. Kaufman

/s/ John W. Alexander	Trustee	February 24, 2011

John W. Alexander

/s/ Charles L. Atwood	Trustee	February 24, 2011

Charles L. Atwood

/s/ Linda Walker Bynoe	Trustee	February 24, 2011

Linda Walker Bynoe

/s/ John E. Neal	Trustee	February 24, 2011
John E. Neal

/s/ Mark S. Shapiro	Trustee	February 24, 2011

Mark S. Shapiro

/s/ B. Joseph White	Trustee	February 24, 2011

B. Joseph White

/s/ Gerald A. Spector	Vice Chairman of the Board of Trustees	February 24, 2011

Gerald A. Spector

/s/ Samuel Zell	Chairman of the Board of Trustees	February 24, 2011
Samuel Zell

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

ERP OPERATING LIMITED PARTNERSHIP


		PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

Report of Independent Registered Public Accounting Firm		F-2

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		F-3

Consolidated Balance Sheets as of December 31, 2010 and 2009		F-4

Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008		F-5 to F-6

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008		F-7 to F-9

Consolidated Statements of Changes in Capital for the years ended December 31, 2010, 2009 and 2008		F-10 to F-11

Notes to Consolidated Financial Statements		F-12 to F-46

SCHEDULE FILED AS PART OF THIS REPORT

Schedule III — Real Estate and Accumulated Depreciation		S-1 to S-11

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, 2010 and 2009 and the related consolidated statements of operations, changes in capital and cash flows for each of the three years in the period ended December 31, 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, 2010 and 2009 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 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, 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 24, 2011 expressed an unqualified opinion thereon.



	/s/ ERNST & YOUNG LLP
	ERNST & YOUNG LLP

Chicago, Illinois
February 24, 2011

F-2

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, 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, 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, 2010 and 2009 and the related consolidated statements of operations, changes in capital and cash flows for each of the three years in the period ended December 31, 2010 of ERP Operating Limited Partnership and our report dated February 24, 2011, expressed an unqualified opinion thereon.



	/s/ ERNST & YOUNG LLP
	ERNST & YOUNG LLP

Chicago, Illinois
February 24, 2011

F-3

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)


	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 Unit data)


	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 Unit data)


	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,
	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,
	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,
	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 CAPITAL

(Amounts in thousands)


	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 CAPITAL (Continued)
(Amounts in thousands)


	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

EQR is the general partner of, and as of December 31, 2010 owned an approximate 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.


	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 422 of the 425 Wholly Owned Properties and all but one of its wholly owned development 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, 2077 and 2101 for the 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.

The “Partially Owned Properties — Consolidated” are controlled by the Operating Partnership but have partners with noncontrolling interests and are accounted for under the consolidation method of accounting. The “Military 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

Basis of Presentation

Due to the Operating Partnership’s ability as general partner to control either through ownership or by contract its subsidiaries, each such subsidiary has been consolidated with the Operating Partnership for financial reporting purposes, 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.

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.

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 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 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.

Replacements inside an 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 (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

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 would record an impairment loss for the difference between the estimated fair value and the carrying amount of the 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.

F-13

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.

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 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, 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 $43.9 million and $34.6 million at December 31, 2010 and 2009, respectively.

Fair Value of Financial Instruments, Including Derivative Instruments

The Operating Partnership recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either partners’ capital

F-14

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 is marked-to-market each period. The Operating Partnership does not use derivatives for trading or speculative purposes.

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 expenses share-based compensation such as restricted shares and share 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 fair value of the option grants are 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 average assumptions:


	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)		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 after consideration of any net operating losses.

Deferred tax assets and liabilities are recognized for future tax consequences attributable 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 effects 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, 2010, the Operating Partnership has recorded a deferred tax asset of approximately $38.7 million, which is 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, 2010, 2009 and 2008 (amounts in thousands):


	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)		Primarily includes state and local income, excise and franchise taxes.

(2)		Primarily represents federal income taxes (recovered) 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 provisions for income tax amounts are current and none are deferred.

The Operating Partnership’s TRSs carried back approximately $7.3 million of 2008 net operating losses (“NOL”) to 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’s TRSs have approximately $59.3 million of NOL carryforwards available as of January 1, 2011 that will expire in 2028, 2029 and 2030.

During the years ended December 31, 2010, 2009 and 2008, the Operating Partnership’s tax treatment of dividends and distributions were as follows:


	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, 2010 and 2009 was approximately $11.1 billion and $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.

Noncontrolling 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 noncontrolling 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 noncontrolling interests are reflected as noncontrolling 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 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 the codification as required, effective for the quarter ended September 30, 2009. The adoption of the codification 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 is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. The Operating Partnership is the controlling partner in various consolidated partnerships owning 24 properties and 5,232 apartment units and various completed and uncompleted development

F-17

properties having a noncontrolling interest book value of $8.0 million at December 31, 2010. Some of these partnership agreements contain provisions that require the partnerships to be liquidated through the sale of their 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 Noncontrolling Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of their assets warrant a distribution based on the partnership agreements. As of December 31, 2010, the Operating Partnership estimates the value of Noncontrolling Interest distributions would have been approximately $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, 2010 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 Noncontrolling 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 Noncontrolling Interests in these Partially Owned Properties.

Effective beginning the quarter ended June 30, 2009, disclosures about fair value of financial instruments are required for interim reporting periods in summarized financial information for publicly traded companies as well as in annual financial statements. This does not have a material effect on the Operating Partnership’s consolidated results of operations or financial position. See Note 11 for further discussion.

Effective January 1, 2010, companies are required to separately disclose the amounts of significant transfers of assets and liabilities into and out of Level 1, Level 2 and Level 3 of the fair value hierarchy and the reasons for those transfers. Companies must also develop and disclose their policy for determining when transfers between levels are recognized. In addition, companies are required to provide fair value disclosures for 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), companies are required to disclose the valuation technique and the inputs used in determining fair value for each class of assets and liabilities. This does not have a material effect on the Operating Partnership’s consolidated results of operations or financial position. See Note 11 for further discussion.

Effective January 1, 2011, companies will be required to separately disclose purchases, sales, issuances and settlements on a gross basis in the reconciliation of recurring Level 3 fair value measurements. The Operating Partnership does not expect this will have a material effect on its consolidated results of operations or financial position.

Effective January 1, 2009, in an effort to improve financial standards for derivative instruments and hedging activities, companies 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; and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Other than the enhanced disclosure requirements, this does not have a material effect on the Operating Partnership’s consolidated financial statements. See Note 11 for further 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 each issuer’s nonconvertible debt borrowing rate. As the Operating Partnership is required to apply this retrospectively, the accounting for the Operating Partnership’s $650.0 million ($482.5 million outstanding at December 31, 2010) 3.85% convertible unsecured notes that were issued in August 2006 and mature in August 2026 was affected. The Operating Partnership recognized $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 $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 balance 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 resulted in a reduction to earnings of 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

F-18

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’ Units for the years ended December 31, 2010, 2009 and 2008:


	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 October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on October 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).

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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 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. Considering the repurchase activity for the year ended December 31, 2010, EQR has remaining authorization to repurchase an additional $464.6 million of its shares as of December 31, 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, EQR 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 Limited Partners of the Operating Partnership as of December 31, 2010 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 exceptions (including the “book-up” requirements of LTIP Units), Limited Partners may exchange their 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, 2010 and 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)		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,

F-21


		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, 2010, the Operating Partnership acquired all of its partner’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 valued at $50,000. The Operating Partnership also increased its ownership in three consolidated partially owned properties through the buyout of certain equity interests which were funded through the issuance of 15,948 OP Units valued at $0.8 million and cash payments of $15.3 million. In conjunction with these transactions, the Operating Partnership reduced paid in capital (included in general partner’s capital) by $16.9 million and other liabilities by $0.2 million and increased Noncontrolling Interests — Partially Owned Properties by $0.2 million.

During the year ended December 31, 2009, the Operating Partnership acquired all of its partners’ interests in five consolidated partially owned properties consisting of 1,587 apartment units for $9.2 million. In addition, the Operating Partnership also acquired a portion of the outside partner interests in two consolidated partially owned properties, one funded using cash of $2.1 million and the other funded through the issuance of 32,061 OP Units valued at $0.8 million. In conjunction with these transactions, the Operating Partnership reduced paid in capital (included in general partner’s capital) by $1.5 million and Noncontrolling Interests — Partially Owned Properties by $11.7 million.

During the year ended December 31, 2008, the Operating Partnership acquired all of its partners’ interests in one consolidated partially owned property consisting 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 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, 2010, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

F-22


					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, 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		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)		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 $298.0 million, a net gain on sales of unconsolidated entities of approximately $28.1 million and a net loss on sales of land parcels of approximately $1.4 million on the above sales.

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


	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)		The Operating Partnership owned a 25% interest in these unconsolidated rental 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 $335.3 million and a net gain on sales of unconsolidated entities of approximately $10.7 million on the above sales.

5. Commitments to Acquire/Dispose of Real Estate

In addition to the properties that were subsequently acquired as discussed in Note 20, the Operating Partnership had entered into separate agreements to acquire 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 properties that were subsequently disposed of as discussed in Note 20, the Operating Partnership had entered into separate agreements to dispose of the following (sales price in thousands):


	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

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 tables and information summarize the Operating Partnership’s investments in partially owned entities as of December 31, 2010 (amounts in thousands except for project and apartment unit amounts):

F-24


	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)			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 $14.0 million in mortgage debt on one development 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.

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

The following table presents the Operating Partnership’s restricted deposits as of December 31, 2010 and 2009 (amounts in thousands):


	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)

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

As of December 31, 2010, the Operating Partnership had outstanding mortgage debt of approximately $4.8 billion.

During the year ended December 31, 2010, the Operating Partnership:

	•		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.

The Operating Partnership recorded approximately $2.5 million and $1.0 million of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, during the year ended December 31, 2010 as additional interest expense related to debt extinguishment of mortgages.

As of December 31, 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, 2010, the interest rate range on the Operating Partnership’s mortgage debt was 0.21% to 11.25%. During the year ended December 31, 2010, the weighted average interest rate on the Operating Partnership’s mortgage debt was 4.79%.

The historical cost, net of accumulated depreciation, of encumbered properties was $5.6 billion and $5.8 billion at December 31, 2010 and 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
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, 2009, the Operating Partnership had outstanding mortgage debt of approximately $4.8 billion.

F-27

During the year ended December 31, 2009, the Operating Partnership:

	•		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.

As of December 31, 2009, scheduled maturities for the Operating Partnership’s outstanding mortgage indebtedness were at various dates through September 1, 2048. At December 31, 2009, the interest rate range on the Operating Partnership’s mortgage debt was 0.20% to 12.465%. During the year ended December 31, 2009, the weighted average interest rate on the Operating Partnership’s mortgage debt was 4.89%.

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, 2010 and 2009, respectively:


	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)		At December 31, 2010 and 2009, $300.0 million in fair value interest rate swaps converts a portion of the $400.0 million face value 5.200% notes due April 1, 2013 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. The interest rate is 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, 2010 and 2009.

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 October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on October 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, 2010, 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.

During the year ended December 31, 2009, the Operating Partnership:

F-28

	•		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. 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 Operating Partnership has the ability to increase available borrowings by an additional $250.0 million under certain circumstances. The loan bears 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. The notes have a current face value of $482.5 million at December 31, 2010 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 exchange rate is subject to adjustment in certain circumstances, including upon an increase in EQR’s dividend 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)
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)		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 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.

(3)		Includes $482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026.

10. Lines of Credit

11. Derivative and Other Fair Value 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.

The following table summarizes the Operating Partnership’s consolidated derivative instruments at December 31, 2010 (dollar amounts are in thousands):

F-30


				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)		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.

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, 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 effect of fair value hedges on the Operating Partnership’s accompanying Consolidated Statements of Operations for the years ended December 31, 2010 and 2009, respectively (amounts in thousands):

Location of Gain/(Loss)

Amount of Gain/(Loss)

Income Statement

Amount of Gain/(Loss)

December 31, 2010

Recognized in Income

Location of Hedged

Recognized in Income

Type of Fair Value Hedge

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

Location of Hedged

Recognized in Income

Type of Fair Value Hedge

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 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

Gain/(Loss)

Reclassified from

December 31, 2010

Recognized in OCI

Accumulated OCI

Recognized in Income

Accumulated OCI

Type of Cash Flow Hedge

on Derivative

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

Gain/(Loss)

Reclassified from

December 31, 2009

Recognized in OCI

Accumulated OCI

Recognized in Income

Accumulated OCI

Type of Cash Flow Hedge

on Derivative

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, 2010 and 2009, there were approximately $58.3 million in deferred losses, net, included in accumulated other comprehensive (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, 2010, the Operating Partnership may recognize an estimated $5.6 million of accumulated other comprehensive (loss) as additional interest expense during the year ending December 31, 2011.

In July 2010, the Operating Partnership paid approximately $10.0 million to settle a forward starting swap in conjunction with the issuance of $600.0 million of ten-year fixed rate public notes. The entire amount was deferred as a component of accumulated other comprehensive loss and is 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.

During the year ended December 31, 2009, the Operating Partnership sold 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 interest and other income. The following tables 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, 2010 and 2009, respectively (amounts in thousands):

F-32


		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 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 $58.1 million as of December 31, 2010 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

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 Unit — basic and net income per Unit — diluted (amounts in thousands except per Unit amounts):


	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 325,103, 402,501 and 427,090 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the years ended December 31, 2010, 2009 and 2008, respectively, were outstanding but were not included in the computation of diluted earnings per 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 ($482.5 million outstanding at December 31, 2010) exchangeable senior notes was not included in the computation of diluted earnings per 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

The Operating Partnership has presented separately as discontinued operations in all periods the results of operations for all consolidated assets disposed of 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, 2010, 2009 and 2008 (amounts in thousands).

F-34


	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)		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 2010, the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 2009 were $430.5 million and $89.4 million, respectively.

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 units 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, 2011, this amount equaled 22,785,696, of which 5,395,739 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. In addition, each year prior to 2007, certain executive officers of the Company participated 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, 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.

Restricted shares that have been awarded through December 31, 2010 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 (included in general partner’s capital) and have not been considered in reducing net income available to Units in a manner similar to the Operating Partnership’s preference unit dividends for the earnings per Unit calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.

In December 2008, the Company’s 2002 Share Incentive Plan was amended to allow for the issuance of long-term incentive plan units (“LTIP Units”) to officers of the Company 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 were allowed to choose, 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 Limited Partners capital and have not been considered in reducing net income available to Units in a manner similar to the Operating Partnership’s preference unit dividends for the earnings per Unit calculation. If employment is terminated prior to vesting, the LTIP Units are generally canceled. An LTIP Unit will automatically convert to an OP Unit when the capital account of each LTIP Unit increases (“books-up”) to a specified target. If the capital target is not attained within ten years following the date of issuance, the LTIP Unit will automatically be canceled and no compensation will be payable to the holder of 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.

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 Rule of 70 in 2009. Bruce C. Strohm, Executive Vice President and General Counsel, became 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 EQR’s Board of Trustees.

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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, 2010, 2009 and 2008 (amounts in thousands):


	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, 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.

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, 2010 is $19.5 million, which is expected to be recognized over a weighted average term of 1.5 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, 2010, 2009 and 2008:

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				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)		The weighted average grant date fair value for Options granted during the years ended December 31, 2010, 2009 and 2008 was $6.18 per share, $3.38 per share and $4.08 per share, respectively.

(2)		The aggregate intrinsic value of options exercised during the years ended December 31, 2010, 2009 and 2008 was $39.6 million, $2.8 million and $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 was $9.1 million, $8.0 million and $23.9 million, respectively.

The following table summarizes information regarding options outstanding and exercisable at December 31, 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)		The aggregate intrinsic value of options outstanding that are vested and expected to vest as of December 31, 2010 is $184.3 million.

(2)		The aggregate intrinsic value and weighted average remaining contractual life in years of options exercisable as of December 31, 2010 is $117.1 million and 4.4 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 $51.95 per share on December 31, 2010 and the strike price of the underlying awards.

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As of December 31, 2009 and 2008, 7,974,815 Options (with a weighted average exercise price of $33.55) and 7,522,344 Options (with a weighted average exercise price of $31.58) were exercisable, respectively.

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 3,403,970 Common Shares available for purchase under the ESPP at December 31, 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,
	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 $4.0 million, $3.5 million and $3.8 million for the years ended December 31, 2010, 2009 and 2008, 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 years ended December 31, 2010, 2009 and 2008 and as such, no expense was recognized 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

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 4,905,736 Common Shares available for issuance under the DRIP Plan at December 31, 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

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, which terminated in December 2008. Fees received for providing such services were approximately $0.3 million for the year ended December 31, 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, 2021. Amounts incurred for such office space for the years ended December 31, 2010, 2009 and 2008, respectively, were approximately $2.7 million, $3.0 million and $2.9 million. The Operating Partnership believes these amounts equal market rates for such rental space.

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 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, 2010, the Operating Partnership recorded additional reserves of approximately $0.7 million, paid approximately $2.9 million in 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 $3.3 million at December 31, 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, 2010, the Operating Partnership has four projects totaling 717 apartment units in various stages of development with estimated completion dates ranging through September 30, 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 were 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).

During the years ended December 31, 2010, 2009 and 2008, total operating lease payments incurred for office

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space, including a portion of real estate taxes, insurance, repairs and utilities, and including rent due under three ground leases, aggregated $7.6 million, $8.4 million and $8.3 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 Vice 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.

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, 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)		Minimum basic rent due for various office space the Operating Partnership leases and fixed base rent due on ground leases for four properties/parcels.

(b)		Estimated payments to EQR’s Chairman, Vice Chairman and two former CEO’s based on planned retirement dates.

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 the acquisition, development and management 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 its 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 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, 2010, 2009 or 2008.

The primary financial measure for the Operating Partnership’s rental real estate segment 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 its operating performance 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, 2010, 2009 and 2008, respectively, as well as total assets for the years ended December 31, 2010 and 2009, respectively (amounts in thousands):

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	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.

(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 $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.

(4)		Reflects discontinued operations for properties sold during 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 – Denver, Portland, San Francisco Bay Area and Seattle/Tacoma.

(c)		Southeast – Atlanta, Jacksonville, Orlando, South Florida and Tampa.

(d)		Southwest – Albuquerque, Inland Empire, Los Angeles, Orange County, Phoenix and San 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, 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


		Subsequent 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

F-43

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, the Operating Partnership recorded $116.4 million of 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.

During the years ended December 31, 2010, 2009 and 2008, the Operating Partnership incurred charges of $6.6 million, $1.7 million and $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 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 2010, 2009 and 2008, the Operating Partnership received $5.2 million, $0.2 million and $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.

21.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 and reflect dispositions and/or properties held for sale through December 31, 2010. Amounts are in thousands, except for per Unit amounts.

F-44


	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)		The amounts presented for the first three quarters of 2010 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 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


(2)		The amounts presented for the four quarters of 2009 are not equal to the same amounts previously reported in either the Form 8-K filed with the SEC on September 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 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

ERP OPERATING LIMITED PARTNERSHIP

Schedule III — Real Estate and Accumulated Depreciation

Overall Summary
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
Encumbrances Reconciliation
December 31, 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

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, 2010, 2009 and 2008 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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

ERP OPERATING LIMITED PARTNERSHIP
Schedule III — Real Estate and Accumulated Depreciation
December 31, 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


(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 $1,231,391,664 as of December 31, 2010.

(B)		The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 2010 was approximately $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 and/or construction-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 the Military Housing consisting of two properties and 4,738 units.

(I)		through (L) See Encumbrances Reconciliation schedule.

(M)		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 or 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	Location
3.1	Sixth Amended and Restated Agreement of Limited Partnership for ERP Operating Limited Partnership dated as of March 12, 2009.	Included as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated March 12, 2009, filed on March 18, 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	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.

4.6	Terms 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.

4.7	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.

4.8	Form 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.

4.9	Form 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.

4.10	Terms 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.

4.11	Terms 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.

4.12	Form 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.

4.13	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.


Exhibit	Description	Location
4.14	Terms 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.

4.15	Form 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 Notes 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*	Noncompetition Agreement (Zell).	Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

10.2*	Noncompetition Agreement (Spector).	Included as an exhibit to Equity Residential’s Form S-11 Registration Statement, File No. 33-63158.

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.

10.4	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, SunTrust 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 10.5 to Equity Residential’s Form 10-K for the year ended December 31, 2010.

10.5	Guaranty of Payment made as of February 28, 2007 between Equity Residential and Bank of America, N.A., as administrative 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.

10.6	Amendment to Revolving Credit Agreement.	Included as Exhibit 10.1 to Equity Residential’s Form 10-Q for the quarterly period ended March 31, 2007.

10.7	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 10.8 to Equity Residential’s Form 10-K for the year ended December 31, 2010.

10.8	Guaranty of Payment made as of October 5, 2007 between Equity Residential and Bank of America, N.A., as administrative 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.


Exhibit	Description	Location
10.9	Amended 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.

10.10*	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.

10.11*	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.

10.13*	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.

10.14*	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.

10.15*	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.

10.16*	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.

10.17*	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.

10.18*	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.

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.

10.20*	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.

10.21*	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.

10.22*	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.

10.23*	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.

10.24*	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.

10.25*	Change in Control Agreement dated as of March 13, 2009 by and between Equity Residential and Mark J. Parrell, Executive Vice President and Chief Financial Officer.	Included as Exhibit 10.2 to the Operating Partnership’s Form 8-K dated March 12, 2009, filed on March 18, 2009.

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.


Exhibit	Description	Location
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.

10.28*	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.

10.30	Amended 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.

10.31	Sales 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.

10.32	Amended 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.

10.33	Amended 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.

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Erp Operating LTD Partnership 10-K2010 FY Annual report

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