FORWARD TREASURY LOCK AGREEMENT

     WHEREAS, Walden Residential Properties, Inc. (the "Company")
wishes to enter into one or more transactions based upon current
interest rates and Smith Barney Capital Services Inc. ("SB") is
willing to enter into this Forward Treasury Lock Agreement, dated
as of August 29, 1997 to enable Company to do so.

     WHEREAS, the parties have entered and/or anticipate entering
into one or more Forward Treasury Lock transactions and any
amendments thereto (each a "Transaction") that are or will be
governed by this Forward Treasury Lock Agreement, which shall
incorporate the terms of any Confirmation substantially in the form
of Exhibit A hereto, (collectively, the "Agreement").

     NOW, THEREFORE, Company and SB hereby agree as follows:

1.   Definitions.  As used in this Agreement, the following terms
shall have the following meanings:

(a)  "Determination Date" shall mean the day on which the price of
     the Reference Treasury will be determined as set forth in a
     Confirmation.

(b)  "Notional Amount" shall mean that amount set forth in a
     Confirmation.

(c)  "Unwind Date" shall mean any day including the Determination
     Date on which the parties agree to unwind all or part of an
     existing Transaction.

(d)  "Unwind Amount" shall mean in regard to a Transaction that
     portion of the Notional Amount of an existing Transaction
     which the parties agree to terminate.

(e)  "Unwind Price" for the Reference Treasury on any Unwind Date
     shall mean the latest "asked" price for the Reference
     Treasury, expressed as a percentage, as determined by SB in it
     good faith judgement.

(f)  "Payment Amount" for each Transaction shall mean an amount
     equal to the product of (i) the difference of the Reference
     Price minus the Unwind Price for the Reference Treasury on the
     Determination Date or on the Unwind Date, as the case may be,
     multiplied by (ii) the Unwind Amount.

(g)  "Reference Price" for the Reference Treasury shall mean that
     price, expressed as a percentage, set forth in a Confirmation.

(h)  "Reference Treasury" shall mean the United States Treasury
     Bill or Note having the interest rate and maturity set forth
     in a Confirmation.

(i)  "Settlement Date" shall mean the day set forth in a
     Confirmation.

(j)  "Transaction Date" shall mean the date on which the parties
enter into a Transaction.

(k)  "Business Day" shall mean a day in which the New York Stock
     Exchange and commercial banks in New York City are open for
     business.

2.   The Transactions.  On a Transaction Date the parties may, but
are not obligated to, enter into a Transaction by agreeing on such
day to a Reference Treasury, Notional Amount, Determination Date,
Settlement Date and a Reference Price.  All Transactions are
entered into in reliance on the fact that this Forward Treasury
Lock Agreement and all Confirmations subject thereto form a single
agreement between the parties, and the parties would not otherwise
enter into any Transactions.

3.   Payment.  The parties hereto agree that for each Transaction
a payment shall be made on the Settlement Date specified for that
Transaction, such payment to equal the Payment Amount calculated
for the relevant Unwind or Determination Date.  If such Payment
Amount is a positive number, SB shall pay such Payment Amount to
Company.  If such Payment Amount is a negative number, Company
shall pay the absolute value of such Payment Amount to SB.  The
payment to be made pursuant to this Section 3 shall be made not
later than 4:00 p.m. (New York City time) on the Settlement Date to
the account of the party entitled to receive such payment.

4.   Transfer.  Neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred by either
party without the prior written consent of the other party.
Provided, however that SB may without the consent of the Company,
assign its rights and obligations under this Agreement to any of
its affiliates so long as the obligations of any such assignee are
guaranteed by Smith Barney Holdings Inc.

5.   Set-off.  In addition to any rights of set-off a Party may
have as a matter of all or otherwise, upon the occurrence of an
Event of Default with respect to Party ("X") hereof, the other
Party ("Y") shall have the right (but shall not be obliged) without
prior notice to X or any other person to set off any obligation of
X owing to Y or any Affiliate of Y (whether or not arising under
this Agreement, whether or not matured, whether or not contingent
and regardless of the currency, place of payment or booking office
of the obligation) against any obligations of Y or any Affiliate of
Y owing to X (whether or not arising under this Agreement, whether
or not contingent and regardless of the currency, place of payment
or booking office of the obligation).  If an obligation is
unascertained, Y may in good faith estimate that obligation and set
off in respect of the estimate, subject to the relevant Party
accounting to the other when the obligation is ascertained.

6.   Netting.  If on any date amounts would otherwise be payable in
the same currency, and in respect of any Transaction, by each party
to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have
been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, such obligations
shall be replaced by an obligation upon the party by whom the
larger aggregate amount would have been payable to pay to the other
party the excess of the larger aggregate amount over the smaller
aggregate amount.


7.   Events of Default.  The occurrence of any of the following
events with respect to a party which party shall be the Defaulting
Party.

(i)  The failure to make payment on the Settlement Date; or

(ii) Any representation or warranty made in this Agreement shall
     prove to have been false or misleading in any material respect
     at the time it was made, given or reaffirmed; or

(iii)     The failure to perform or comply with any other
          obligation in this Agreement which failure shall continue
          for 2 business days after written notice of such failure
          has been sent to the Defaulting Party; or

(iv) (A) The initiation of any case, proceeding or other action (1)
     under any existing or future law of any jurisdiction, domestic
     or foreign, relating to bankruptcy, insolvency, reorganization
     or other relief of debtors, seeking to have an order for
     relief entered with respect to it, or seeking to have itself
     adjudicated as bankrupt or insolvent, or seeking
     reorganization, arrangement, adjustment, winding-up,
     liquidation, dissolution or compost or other relief under
     bankruptcy or insolvency law with respect to it or its debts
     or (2) which seeks appointment of a receiver, trustee,
     custodian, conservator or other similar official for it or for
     all or any substantial part of its assets; (B) a general
     assignment for the benefit of its creditors; (C) the
     initiation of any case, proceeding or other action of a nature
     referred to in clause (iv) (A) hereof which (1) results in the
     entry of an order for relief or any such adjudication or
     appointment with respect to the party or any of its assets or
     (2) is not dismissed, stayed, discharged or bonded for a
     period of 5 days; (D) the initiation of any case, proceeding
     or other action seeking issuance of a warrant of attachment,
     execution, or similar process against all or any substantial
     part of its assets, which case, proceeding or other action
     results in the entry of an order for any such relief which
     shall not have been vacated, discharged, or stayed or bonded
     pending appeal within 30 days from the entry thereof; (E) a
     party shall take any action in furtherance of, or indicating
     its consent t, approval of, or acquiescence in, any of the
     acts set forth in clauses (iv) (A) - (D) hereof; or (F) either
     party shall generally not, or shall admit in writing its
     inability to, pay its debts as they become due; or

(v)  Any loan or other obligation in respect of borrowed money
     (whether present or future, contingent or otherwise, as
     principal or surety or otherwise) of a party in an amount, as
     it applies to SB of not less than $25,000,000, and in an
     amount of not less than $5,000,000 as it applies to the
     Company, shall have become payable before the due date thereof
     as a result of acceleration of maturity caused by the
     occurrence of any event of default thereunder or if any other
     such loan or obligation shall not be repaid when due, as
     extended by any applicable grace period specified in the
     contracts or agreements constituting such loan or obligation;
     or

(vi) A party ("X"), consolidates or amalgamates with, or merges
     with or into, or transfers all or substantially all its assets
     to, another entity and the credit worthiness of the resulting,
     surviving or transferee entity is materially weaker than that
     of X, immediately prior to such action.

8.   Remedies Upon Event of Default.  Upon the occurrence and the
continuance of an Event of Default, the obligation of the Non-Defaulting
Party to make any payment contemplated by Section 3 of
this Agreement will terminate (it being understood that such
termination will not affect or suspend any payment or other
obligations of the Defaulting Party).  The Non-Defaulting Party
may, upon notice to the Defaulting Party, terminate and liquidate
as soon as is commercially practicable all outstanding Transactions
in accordance with this Section 8.  The Defaulting Party shall
immediately upon receipt of a determination by the Non-Defaulting
Party of its losses hereunder, pay to the Non-Defaulting Party an
amount determined by the Non-Defaulting Party that such party
reasonably in good faith believes to be its total losses and costs
in connection with this Agreement and terminated Transactions.
Such computation shall include any loss of bargain, cost of funding
or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, or
obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them).  In addition to the
foregoing, the Non-Defaulting Party may include in its
determination of its losses hereunder such losses and costs (or
gains) in respect of any payment or delivery required to have been
made on or before the relevant termination date The Defaulting
Party agrees to indemnify the Non-Defaulting Party from and against
any expenses it may incur (including legal fees and other expenses
of collection) it may incur as a result of any Default by such
party.  The parties agree that the amounts recoverable pursuant to
this Section 8 are a reasonable pre-estimate of loss and are not a
penalty.  Such amounts are payable as liquidated damages for the
loss of bargain and the loss of protection against future risk.

9.   Representations.  SB and Company as an inducement to enter
into this Agreement each represent and warrant as follows:

(i)  It is validly organized and existing under the laws of the
     jurisdiction of its incorporation.

(ii) Its execution, delivery and performance of this Agreement, are
     within its corporate or organizational powers, have been and
     remain duly authorized and do not conflict with any provision
     of its articles or certificate of incorporation or by-laws (or
     equivalent constituent documents) or any law, regulation,
     rule, decree, order, judgement or contractual restriction
     binding on or affecting it or its property or assets and will
     not result in or require the creation of any lien, security
     interest or other charge or encumbrance upon or with respect
     to any of its assets or property;

(iii)     This Agreement has been duly executed and delivered and
          constitutes its valid and legally binding obligation
          enforceable against it in accordance with its terms,
          subject to applicable bankruptcy, reorganization,
          insolvency, moratorium or similar laws affecting
          creditors' rights generally and subject, as to
          enforceability, to provisions of public order and to
          equitable principles of general application (regardless
          of whether enforcement is sought in a proceeding in
          equity or at law);

(iv) All necessary covenants, authorizations, licenses and
     approvals of, and registrations and declarations with, any
     governmental authority, required in connection with its
     execution, delivery and performance of this Agreement have
     been obtained and remain in full force and effect (including
     any exchange control licenses or exemptions), and all
     conditions thereof have been duly complied with; and no other
     action by, and no notice to or filing with, any governmental,
     judicial or regulatory authority or body is required for such
     execution, delivery or performance;

(v)  No occurrence or condition with respect to such party which
     constitutes an Event of Default (or which with the passage of
     time or the giving of notice or both would constitute an Event
     of Default) has occurred or would occur by reason of its
     entering into or performing its obligations under this
     Agreement;

(vi) The determination of proceedings (if any) pending or, insofar
     as it is aware, threatened against it, at law or in equity, or
     before any arbitrator, governmental instrumentality or any
     other competent body, will not, in the aggregate, materially
     impair its ability to perform, or render it unable to perform,
     its obligations under the Agreement, and there is no
     proceeding pending or threatened against such party which is
     likely to affect the legality, validity or enforceability of
     this Agreement; and

(vii)     It shall, upon learning of the occurrence of any event or
          the commencement of any condition that constitutes an
          Event of Default with respect to it, promptly give the
          other party notice of such event or condition.

10.  No Reliance.  In connection with the negotiation of, the
entering into, and the confirming of the execution of this
Agreement, any Credit Support Document to which it is a party, each
Transaction, and any other documentation relating to this Agreement
that it is required by this Agreement to deliver each party
acknowledges that: (i) the other party hereto or thereto is not
acting as a fiduciary or financial, investment, or commodity
trading advisor for it, (ii) it is not relying (for purposes of
making any investment decision or otherwise) upon any advice,
counsel or representations expressly set forth in this Agreement,
in such Credit Support Document, and in any Confirmation; (iii) the
other party hereto or thereto has not given to it (directly or
indirectly through any other person) any assurance or guaranty
whatsoever as to the merits (either legal, regulatory, tax,
financial, accounting or otherwise) of this Agreement, such Credit
Support Document, such Transaction or such other documentation (iv)
it has consulted with its own legal, regulatory, tax, business,
investment, financial and accounting advisors to the extent deemed
necessary, and it has made its own investment, hedging, and trading
decisions based upon its own judgment and upon any advice as it has
deemed necessary and not upon any view expressed by the other party
hereto or thereto; (v) it has determined that all trading decisions
have been the result of arm's length negotiations between the
parties; (vi) it is entering into this Agreement, such Credit
Support Document, such Transaction and such other documentation
with a full understanding of all of the terms, conditions and risks
hereof and thereof (economic and otherwise), and it is capable of
assuming and willing to assume (financially and otherwise) those
risks; (vii) that every Transaction subject to this Agreement is a
distinct obligation or Transaction between the parties whether
pursuant to this Agreement or otherwise and; (viii) it is a
sophisticated investor.

11.  Entire Agreement.  This Agreement, including Confirmation,
constitutes the entire agreement and understanding of the parties
with respect to the subject matter of this Agreement and supersedes
all oral statements and prior writings with respect thereto.

12.  Waiver.  A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not operate as a
waiver, and a single or partial exercise of any right, power or
privilege will not preclude any subsequent or further exercise of
that right, power or privilege or the exercise of any other right,
power or privilege.

13.  Notices.  Notices hereunder shall given in writing as follows:

If to SB at:                            If to Company at:

     Smith Barney Capital Services Inc.           Walden
Residential Properties, Inc.
     388 Greenwich Street                         1 Lincoln Centre
     New York, New York 10013                5400 LBJ Freeway,
Suite 400
                                        Dallas, Texas 75240

     Primary:  Gino Petroni                  Primary:  Mark
Dillinger
     Telephone:     (212) 723-5003           Telephone:     (972)
788-0510
     Fax:      (212) 723-8769           Fax:      (972) 934-9303

     copy to:  Timothy Lu                    copy to:  _____________
               Capital Markets                         _____________

     Telephone:     (212) 723-7668           Telephone:     _____________
     Fax:      (212) 723-8798           Fax:      _____________

Notice by facsimile shall be effective when confirmed by telephone
to the contact person designated above.

Each party may change the individuals designated for notice by
written notice delivered to the other prior to the effective date
of such change.

14.  Counterparts.  This Agreement may be executed in counterparts,
each of which will be deemed an original.

15.  Amendment.  No amendment, modification, supplement or waiver
in respect of this Agreement will be effective unless in writing
and signed by each of the parties hereto.

16.  Governing Law and Jurisdiction, Waiver of Jury Trial.  This
Agreement shall be governed by and construed in accordance with the
law of the State of New York without reference to choice of law
rules.  In any dispute involving or arising out of this agreement,
the parties agree to the jurisdiction of the United States District
Court for the Southern District of New York or the Supreme  Court
of the State of New York in the Borough of Manhattan, and waive any
claim or defense that such forum is inconvenient.  The parties
agree to waive their right to a trial by jury.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in New York, N.Y. by their duly authorized officers
as of the date specified on the first page of this Agreement.

                    Walden Residential Properties, Inc.

                    by:  _____________________________

                    title:    _____________________________

                    Smith Barney Capital Services Inc.

                    by:  _____________________________

                    title:    _____________________________

                    by:  _____________________________

                    title:    _____________________________