<PAGE>
                                                                    EXHIBIT 10.4

                               ADVISORY AGREEMENT

     ADVISORY AGREEMENT made as of _______, 2006 between NNN Apartment REIT,
Inc., a Maryland corporation (the "Company"), and NNN Apartment REIT Advisor,
LLC, a Virginia limited liability company (the "Advisor").

                                   WITNESSETH:

     WHEREAS, the Company intends to qualify as a real estate investment trust
(a "REIT") as defined in Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended (the "Code"), and to make investments of the type permitted
to qualified REITs under the Code and not inconsistent with the Charter of the
Company (the "Charter"), and the Bylaws of the Company; and

     WHEREAS, the Company desires to avail itself of the experience, sources of
information, advice and assistance of the Advisor and to have the Advisor
undertake the duties and responsibilities hereinafter set forth, on behalf of
and subject to the supervision of the Board of Directors of the Company (the
"Board of Directors"), as provided herein; and

     WHEREAS, the Advisor is willing to undertake to render such services,
subject to the supervision of the Board of Directors, on the terms and
conditions herein set forth;

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the parties hereto agree as follows:

     1.   DEFINITIONS.

     As used herein, the following terms shall have the meanings set forth
below:

          (a) "Acquisition Expenses" shall mean any and all expenses related to
     the Company's selection, evaluation and acquisition of, and investment in
     properties, whether or not acquired or made, including, but not limited to,
     legal fees and expenses, travel and communications expenses, cost of
     appraisals and surveys, nonrefundable option payments on property not
     acquired, accounting fees and expenses, computer use related expenses,
     architectural, engineering and other property reports, environmental and
     asbestos audits, title insurance and escrow fees, loan fees or points or
     any fee of a similar nature paid to a third party, however designated,
     transfer taxes, and personnel and miscellaneous expenses related to the
     selection, evaluation and acquisition of properties.

          (b) "Advisor" shall mean NNN Apartment REIT Advisor, LLC, a Virginia
     limited liability company, any successor advisor to the Company, the
     Partnership or any person or entity to which NNN Apartment REIT Advisor,
     LLC or any successor advisor subcontracts substantially all of its
     functions.

<PAGE>

          (c) "Affiliate" shall mean: (i) any Person directly or indirectly
     owning, controlling or holding, with the power to vote 10% or more of the
     outstanding voting securities of such other Person; (ii) any Person 10% or
     more of whose outstanding voting securities are directly or indirectly
     owned, controlled or held, with the power to vote, by such other Person;
     (iii) any Person directly or indirectly controlling, controlled by or under
     common control with such other Person; (iv) any executive officer,
     director, trustee or general partner of such other Person; and (v) any
     legal entity for which such Person acts as an executive officer, director,
     trustee or general partner.

          (d) "Asset Management Fee" shall mean an annual amount equal to the
     percentage of the Company's Average Invested Assets set forth in Section
     9(b).

          (e) "Average Invested Assets" shall mean, for any period, the average
     of the aggregate Book Value of the assets of the Company invested, directly
     or indirectly, in real estate assets or equity interests in and loans
     secured by real estate, before deducting depreciation, bad debts or other
     similar non-cash reserves, computed by taking the average of such values at
     the end of each month during such period.

          (f) "Book Value" of an asset shall mean the value of such asset on the
     books of the Company, before allowance for depreciation or amortization.

          (g) "Common Stock" shall mean the common stock, par value $.01 per
     share, of the Company.

          (h) "Company" shall have the meaning set forth in the preamble of this
     Agreement.

          (i) "Competitive Real Estate Commission" shall mean the real estate or
     brokerage commission paid for the purchase or sale of a property which is
     reasonable, customary and competitive in light of the size, type and
     location of such property.

          (j) "Contract Purchase Price" shall mean the amount actually paid or
     allocated to the purchase or improvement of Real Estate Assets, exclusive
     of Real Estate Commissions and Acquisition Expenses.

          (k) "Contract Sales Price" shall mean the amount actually paid or
     allocated to the Sale of a Property or Properties, exclusive of Disposition
     Fees.

          (l) "Cumulative Return" shall mean a cumulative, non-compounded return
     equal to 8% per annum on Invested Capital commencing upon acceptance by the
     Company of an investor's subscription.

          (m) "Director" shall mean a member of the Board of Directors of the
     Company.

          (n) "Fiscal Year" shall mean any period for which any income tax
     return is submitted by the Company to the Internal Revenue Service and
     which is treated by the Internal Revenue Service as a reporting period.

          (o) "Funds from Operations" shall mean the Company's net income,
     computed in accordance with GAAP, excluding gains (or losses) from sales of
     property, plus depreciation and amortization, and after adjustments for
     unconsolidated partnerships and joint ventures.


                                       2

<PAGE>

          (p) "GAAP" means accounting principles generally accepted in the
     United States of America.

          (q) "Gross Offering Proceeds" shall mean the total proceeds from the
     sale of Shares before deductions for Organizational and Offering Expenses.
     For purposes of calculating Gross Offering Proceeds, the purchase price for
     all Shares issued in the Company's initial public offering, including those
     for which volume discounts apply, shall be deemed to be $10.00 per Share.

          (r) "Gross Income From Properties" shall mean all cash receipts
     derived from the operation of the Company's Property, excluding (i) tenant
     security deposits unless and until such deposits are forfeited upon a
     tenant default, and (ii) proceeds from insurance claims, condemnation
     proceedings, sales or refinancings.

          (s) "Incentive Distribution Upon Sales" shall mean an amount equal to
     10% of the net proceeds from the sale of a Property after the Company has
     received and paid to Stockholders the sum of (i) Invested Capital initially
     allocated to that Property, and (ii) any remaining shortfall in the
     recovery of Invested Capital with respect to prior sales of Properties, and
     (iii) any remaining shortfall in the Cumulative Return as described in
     Section 9(e).

          (t) "Independent Directors" shall mean a Director who is not, and
     within the last two (2) years has not been, directly or indirectly
     associated with a Sponsor or the Advisor by virtue of (i) ownership of an
     interest in a Sponsor, the Advisor or their Affiliates, (ii) employment by
     a Sponsor, the Advisor or their Affiliates, (iii) service as an officer or
     director of a Sponsor, the Advisor or their Affiliates, (iv) performance of
     services, other than as a Director, for the Company, (v) service as a
     director or trustee of more than three (3) real estate investment trusts
     organized by a Sponsor or advised by the Advisor, or (vi) maintenance of a
     material business or professional relationship with a Sponsor, the Advisor
     or any of their Affiliates. An indirect relationship shall include
     circumstances in which a Director's spouse, parents, children, siblings,
     mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or
     sisters-in-law is or has been associated with a Sponsor, the Advisor, any
     of their Affiliates or the Company. A business or professional relationship
     is considered material if the gross revenue derived by the Director from a
     Sponsor, the Advisor and Affiliates exceeds five percent (5%) of either the
     Director's annual gross revenue during either of the last two (2) years or
     the Director's net worth on a fair market value basis.

          (u) "Invested Capital" shall mean the total proceeds from the sale of
     Shares. When a Property is sold, Invested Capital shall be reduced by the
     lesser of (i) the net sale proceeds available for distribution from such
     sale or (ii) the sum of (A) the portion of Invested Capital that initially
     was allocated to that Property and (B) any remaining shortfall in the
     recovery of Invested Capital with respect to prior sales of Properties.

          (v) "Joint Venture" shall mean any partnership, limited liability
     company, business trust or other unincorporated organization through or by
     means of which the Company acts jointly with any Person or Affiliate to
     make an investment in Real Estate Assets.


          (w) "Listing" shall mean the listing of the Shares on a national
     securities exchange or quotation on a national market system. Upon such
     Listing, the Shares shall be deemed Listed.

          (x) "Net Income" shall mean, for any period, total revenues applicable
     to such period, less the operating expenses applicable to such period other
     than additions to or allowances


                                       3

<PAGE>

     for reserves for depreciation, amortization or bad debts or other similar
     noncash reserves; provided, however, that Net Income shall not include any
     gain from the sale of the Company's assets.

          (y) "Organizational and Offering Expenses" shall mean those expenses
     incurred by and to be paid from the assets of the Company in connection
     with and in preparing the Company for registration and subsequently
     offering and distributing Shares to the public, including, but not limited
     to, total underwriting and brokerage discounts and commissions (including
     fees of the underwriters' attorneys), expenses for printing, engraving and
     mailing, salaries of employees while engaged in sales activities, charges
     of transfer agents, registrars, trustees, escrow holders, depositaries and
     experts, expenses of qualification of the sale of the securities under
     federal and state laws, including taxes and fees, and accountants',
     consultants' and attorneys' fees and expenses.

          (z) "Partnership" shall mean NNN Apartment REIT Holdings, L.P., a
     Virginia limited partnership.

          (aa) "Property" or "Properties" shall mean any, or all, respectively,
     of the real property and improvements thereon owned or to be owned by the
     Company, directly or indirectly.

          (ab) "Property Disposition Fee" shall mean a real estate disposition
     fee, payable (under certain conditions) to the Advisor and its Affiliates
     upon the sale of the Company's Property as described in Section 9(e).

          (ac) "Property Management Fee" shall mean any fee paid to an Affiliate
     or third party as compensation for management of the Company's Properties
     as described in Section 9(c).

          (ad) "Property Manager" shall mean an entity that provides property
     rental, leasing, operation and management services to the Properties owned
     by the Company, directly or indirectly. The Property Manager may be the
     Advisor, an Affiliate or a third-party property management firm.

          (ae) "Person" shall mean any natural person, partnership, corporation,
     association, trust, limited liability company or other legal entity.

          (af) "Prospectus" shall mean the final prospectus of the Company in
     connection with the initial registration of Shares filed with the
     Securities and Exchange Commission on Form S-11, as supplemented and
     amended from time to time.

          (ag) "Real Estate Assets" shall mean any and all investments in: (i)
     Property whether directly or indirectly through owned or controlled
     subsidiaries and including amounts invested in Joint Ventures; and (ii)
     loans, or other evidence of indebtedness secured, directly or indirectly,
     by interests in Property.

          (ah) "Real Estate Commission" shall mean the real estate or brokerage
     commission paid in connection with the purchase of a Property as described
     in Section 9(a).

          (ai) "Return Ratio" shall mean the ratio of the Funds from Operations
     of the Company to the Gross Offering Proceeds of the Company calculated
     quarterly.


                                       4

<PAGE>

          (aj) "Sale" or "Sales" shall mean any transaction or series of
     transactions whereby: (A) the Company or the Partnership directly or
     indirectly (except as described in other subsections of this definition)
     sells, grants, transfers, conveys or relinquishes its ownership of any
     Property or portion thereof, including the lease of any Property consisting
     of a building only, and including any event with respect to any Property
     which results in the payment to the Company or the Partnership, directly or
     indirectly, of a significant amount of insurance proceeds or condemnation
     or similar award related to a Property; (B) the Company or the Partnership
     directly or indirectly (except as described in other subsections of this
     definition) sells, grants, transfers, conveys or relinquishes its ownership
     of all or substantially all of the interests of the Company or the
     Partnership in any Joint Venture in which it is a co-venturer or partner;
     (C) any Joint Venture directly or indirectly (except as described in other
     subsections of this definition) in which the Company or the Partnership as
     a co-venturer or partner sells, grants, transfers, conveys or relinquishes
     its ownership of any Property or portion thereof, including any event with
     respect to any Property which results in the payment to the Joint Venture,
     directly or indirectly, of a significant amount of insurance proceeds or
     condemnation or similar award related to a Property; or (D) the Company or
     the Partnership directly or indirectly (except as described in other
     subsections of this definition) sells, grants, conveys or relinquishes its
     interest in any loan or mortgage or any portion thereof (including with
     respect to any mortgage or loan, all payments thereunder or in satisfaction
     thereof other than regularly scheduled interest payments) of amounts owed
     pursuant to such loan or mortgage and any event which gives rise to the
     payment of a significant amount of insurance proceeds or condemnation or
     similar award; or (E) the Company or the Partnership directly or indirectly
     (except as described in other subsections of this definition) sells,
     grants, transfers, conveys or relinquishes its ownership of any other Real
     Estate Asset not previously described in this definition or any portion
     thereof.

          (ak) "Shares" shall mean the shares of Common Stock of the Company.

          (al) "Sponsor" shall mean any Person directly or indirectly
     instrumental in organizing, wholly or in part, the Company or any Person
     who will control, manage or participate in the management of the Company,
     and any Affiliate of such Person. Not included is any Person whose only
     relationship with the Company is that of an independent property manager of
     Company assets, and whose only compensation is as such. Sponsor does not
     include wholly independent third parties such as attorneys, consultants,
     accountants and underwriters whose only compensation is for professional
     services. A Person also may be deemed a Sponsor of the Company by:

               (i) taking the initiative, directly or indirectly, in founding or
          organizing the business or enterprise of the Company, either alone or
          in conjunction with one or more other Persons;

               (ii) receiving a material participation in the Company in
          connection with the founding or organizing of the business of the
          Company, in consideration of services or property, or both services
          and property;

               (iii) having a substantial number of relationships and contacts
          with the Company;

               (iv) possessing significant rights to control Company properties;

               (v) receiving fees for providing services to the Company which
          are paid on a basis that is not customary in the industry; or


                                       5

<PAGE>

               (vi) providing goods or services to the Company on a basis which
          was not negotiated at arms length with the Company.

          (am) "Stockholders" shall mean holders of the Shares.

          (an) "Total Development Cost" shall mean, with regard to any Property
     acquired by the Company prior to or during the development or acquisition
     stages, all costs and expenses paid or incurred by the Company that are in
     any way related to the development of such Property, including, but not
     limited to, land and construction costs.

          (ao) "Total Operating Expenses" shall mean the aggregate expenses of
     every character paid or incurred by the Company as determined under
     generally accepted accounting principles, including fees paid to the
     Advisor, but excluding:

               (i) the expenses of raising capital such as Organizational and
          Offering Expenses, legal, audit, accounting, underwriting, brokerage,
          listing, registration and other fees, printing and other such
          expenses, and taxes incurred in connection with the issuance,
          distribution, transfer, registration and Listing of the Shares;

               (ii) interest payments;

               (iii) taxes;

               (iv) non-cash expenditures such as depreciation, amortization and
          bad debt reserves;

               (v) the Incentive Distribution upon Sales; and

               (vi) Acquisition Expenses, real estate commissions on resale of
          property and other expenses connected with the acquisition,
          disposition (whether by sale, exchange or condemnation) and ownership
          of real estate interests, mortgage loans or other property (such as
          the costs of foreclosure, insurance premiums, legal services,
          maintenance, repair and improvement of property).

     2.   DUTIES OF ADVISOR.

     The Advisor shall consult with the Company and shall, at the request of the
Board of Directors or the officers of the Company, furnish advice and
recommendations with respect to all aspects of the business and affairs of the
Company. In general, the Advisor shall inform the Board of Directors of factors
that come to its attention which could influence the policies of the Company.
Subject to the supervision of the Board of Directors and consistent with the
provisions of the Charter, the Advisor undertakes to use its reasonable efforts
to:

          (a) Present to the Company a continuing and suitable investment
     program and opportunities to make investments consistent with the
     investment policies of the Company and the investment program adopted by
     the Board of Directors and in effect at the time and furnish the Company
     with advice with respect to the making, acquisition, holding and
     disposition of investments and commitments therefor. The Advisor is also
     obligated to provide the Company with the first opportunity to purchase any
     Class A income producing multi-family property which satisfies the
     Company's investment objectives placed under contract by the Advisor or its


                                       6

<PAGE>

     Affiliates. If the Board of Directors of the Company does not vote to make
     such purchase within seven (7) days of being offered such property, the
     Advisor is free to offer such opportunity to any other Affiliates or
     non-Affiliates, as it so chooses. The Advisor shall use commercially
     reasonable efforts to identify potential investment opportunities
     consistent with the Company's investment objectives and policies including
     but not limited to:

               (i)  locating, analyzing and selecting potential investments in
                    Real Estate Assets;

               (ii) structuring and negotiating the terms and conditions of
                    acquisition and disposition transactions;

               (iii) arranging for financing and refinancing and making other
                    changes in the asset or capital structure of the Company and
                    disposing of and reinvesting the proceeds from the sale of,
                    or otherwise deal with the investments in, Real Estate
                    Assets; and

               (iv) entering into leases and service contracts, on the Company's
                    behalf, for Real Estate Assets and, to the extent necessary,
                    performing all functions necessary to maintain and
                    administer the Company's assets.

          (b) Manage the Company's day-to-day operations to effect the
     investment program adopted by the Board of Directors and perform or
     supervise the performance of such other administrative functions necessary
     in connection with the management of the Company as may be agreed upon by
     the Advisor and the Company;

          (c) Serve as the Company's investment advisor in connection with
     policy decisions to be made by the Board of Directors and, as requested,
     furnish reports to the Board of Directors and provide research, economic
     and statistical data in connection with the Company's investments and
     investment policies;

          (d) On behalf of the Company, investigate, select and conduct
     relations with lenders, consultants, accountants, brokers, property
     managers, attorneys, underwriters, appraisers, insurers, corporate
     fiduciaries, banks, builders and developers, sellers and buyers of
     investments and persons acting in any other capacity specified by the
     Company from time to time, and enter into contracts with, retain and
     supervise services performed by such parties in connection with investments
     which have been or may be acquired or disposed of by the Company;

          (e) Act as property manager or cooperate with a third party or
     affiliated Property Manager in connection with property management services
     and other activities relating to the Company's assets, subject to the
     requirement that the Advisor, its Affiliate or the Property Manager, as the
     case may be, qualifies as an "independent contractor" as the phrase is used
     in connection with applicable laws, rules and regulations affecting REITs
     that own real property;

          (f) Conduct periodic on-site property visits to some or all (as the
     Advisor deems reasonably necessary) of the Properties to inspect the
     physical condition of the Properties and to evaluate the performance of the
     Property Manager;

          (g) Review, analyze and comment on the operating budgets, capital
     budgets and leasing plans prepared and submitted by the Property Manager
     and aggregate these property budgets into the Company's overall budget;

          (h) Review and analyze on-going financial information pertaining to
     each Property and the overall portfolio of Properties;


                                       7

<PAGE>

          (i) Upon request of the Company, act, or obtain the services of others
     to act, as attorney-in-fact or agent of the Company in making, acquiring
     and disposing of investments, disbursing and collecting the funds, paying
     the debts and fulfilling the obligations of the Company and handling,
     prosecuting and settling any claims of the Company, including foreclosing
     and otherwise enforcing mortgage and other liens and security interests
     securing investments;

          (j) Assist in negotiations on behalf of the Company with investment
     banking firms and other institutions or investors for public or private
     sales of securities of the Company or for other financing on behalf of the
     Company, but in no event in such a way that the Advisor shall be acting as
     a broker, dealer or underwriter of securities of the Company;

          (k) On behalf of the Company, maintain, with respect to any Real
     Estate Assets and to the extent available, title insurance or other
     assurance of title and customary fire, casualty and public liability
     insurance;

          (l) At the direction of the Board of Directors, invest and reinvest
     any money of the Company;

          (m) Provide the Company with all necessary cash management services;

          (n) Supervise the preparation and filing and distribution of returns
     and reports to governmental agencies and to investors and act on behalf of
     the Company in connection with investor relations;

          (o) Provide office space, equipment and personnel as required for the
     performance of the foregoing services as advisor;

          (p) Advise the Company of the operating results of the Company's
     properties, prepare on a timely basis, and review, for such properties,
     operating budgets, maintenance and improvement schedules, projections of
     operating results and such other reports as may be requested by the Board
     of Directors;

          (q) As requested by the Company, make reports to the Company of its
     performance of the foregoing services and furnish advice and
     recommendations with respect to other aspects of the business of the
     Company;

          (r) Prepare on behalf of the Company, or engage independent
     professionals to prepare, all reports and returns required by the
     Securities and Exchange Commission, Internal Revenue Service and other
     state or federal governmental agencies, provided that the Company shall be
     responsible for the fees of such independent professionals;

          (s) Undertake and perform all services or other activities necessary
     and proper to carry out the investment objectives of the Company;

          (t) Undertake communications with Stockholders in accordance with
     applicable law and the Charter; and


                                       8

<PAGE>

          (u) Enter into ancillary agreements with the Sponsor and its
     Affiliates to arrange for the services to be provided by the Advisor
     hereunder in accordance with this Agreement;

provided, however, that Affiliates of the Advisor have no obligations to the
Company other than as expressly stated herein, and the Advisor and its
Affiliates have no obligations to present to the Company any specific investment
opportunity except as described herein and in the Prospectus. Notwithstanding
the foregoing, the Advisor hereby represents and acknowledges that it will have
fiduciary duties to the Stockholders and that the Company is making a statement
to that effect in its registration statement filed with the Securities and
Exchange Commission.

     3.   NO PARTNERSHIP OR JOINT VENTURE.

     The Company and the Advisor are not, and shall not be deemed to be,
partners or joint venturers with each other.

     4.   RECORDS.

     The Advisor shall maintain appropriate books of account and records
relating to services performed hereunder, which shall be accessible for
inspection by the Company at any time during ordinary business hours.

     5.   ACTIONS RELATING TO REIT QUALIFICATION.

     Notwithstanding any other provision of this Agreement to the contrary, the
Advisor shall refrain from any action which, in its reasonable judgment or in
any judgment of the Board of Directors of which the Advisor has written notice,
would adversely affect the qualification of the Company as a REIT under the Code
or which would violate any law, rule or regulation of any governmental body or
agency having jurisdiction over the Company or its securities, or which would
otherwise not be permitted by the Charter. If any such action is ordered by the
Board of Directors, the Advisor shall promptly notify the Board of Directors of
the Advisor's judgment that such action would adversely affect such status or
violate any such law, rule or regulation or the Charter, and shall thereafter
refrain from taking such action pending further clarification or instruction
from the Board of Directors.

     6.   BANK ACCOUNTS.

     At the direction of the Board of Directors, the Advisor may establish and
maintain bank accounts in the name of the Company, and may collect and deposit
into and disburse from such accounts any money on behalf of the Company, under
such terms and conditions as the Board of Directors may approve, provided that
no funds in any such account shall be commingled with funds of the Advisor. The
Advisor shall from time to time, as the Company may require, render appropriate
accountings of such collections, deposits and disbursements to the Board of
Directors and to the auditors of the Company.

     7.   FIDELITY BOND.

     The Advisor shall not be required to obtain or maintain a fidelity bond in
connection with the performance of its services hereunder.


                                       9

<PAGE>

     8.   INFORMATION FURNISHED TO THE ADVISOR.

     The Board of Directors will keep the Advisor informed in writing concerning
the investment and financing policies of the Company. The Board of Directors
shall notify the Advisor promptly in writing of its intention to make any
investments or to sell or dispose of any existing investments. The Company shall
furnish the Advisor with a certified copy of all financial statements, a signed
copy of each report prepared by independent certified public accountants, and
such other information with regard to its affairs as the Advisor may reasonably
request.

     9.   COMPENSATION.

     The Advisor and its Affiliates shall be paid for services rendered by the
Advisor under this Agreement as follows:

          (a) The Advisor or its Affiliates shall receive as compensation for
     services rendered in connection with the investigation, selection and
     acquisition of Real Estate Assets (by purchase, investment or exchange) a
     Real Estate Commission payable by the Company. The total Real Estate
     Commissions paid to the Advisor or its Affiliates shall not exceed (i) 3.0%
     of the Contract Purchase Price of Real Estate Assets acquired directly or
     indirectly by the Company, and (ii) 4.0% of the Total Development Cost of
     Properties developed by or on behalf of the Company for services provided
     by the Advisor, its Affiliates or sub-contractors thereof. At the Advisor's
     discretion, a portion of the Real Estate Commission may be paid to
     third-party developers for services rendered. Real Estate Commissions shall
     be payable on the acquisition of a specific Property, on the acquisition of
     a portfolio of Properties through a purchase of assets, controlling
     securities or by Joint Venture, by a merger or similar business combination
     or other comparable transaction, or on the completion of development of a
     Property or Properties for the Company. However, the total of all Real
     Estate Commissions and Acquisition Expenses payable with respect to any
     Real Estate Assets shall not exceed 6% of the Contract Purchase Price or
     the Total Development Cost (as applicable) of such Real Estate Assets
     unless fees in excess of such amount are approved by a majority of the
     Directors not interested in such transaction and by a majority of the
     Independent Directors not interested in such transaction and which
     transaction is determined to be commercially competitive, fair and
     reasonable to the Company.

          (b) The Advisor shall receive as compensation for services rendered in
     connection with the management of the Company's assets the Asset Management
     Fee. The Asset Management Fee shall be payable monthly in arrears by the
     Company in cash or in shares at the option of the Advisor, and may be
     deferred, in whole or in part, from time to time, by the Advisor (without
     interest). The Asset Management Fee shall be equal to:

               (i) 0.75% of Average Invested Assets if the Return Ratio for the
     calculation period is 6% or less;

               (ii) 1.0% of Average Invested Assets if the Return Ratio for the
     calculation period is more than 6%.

     The Asset Management Fee shall be calculated monthly not to exceed
     one-twelfth of the applicable percentage of the Average Invested Assets of
     the Company as the last day of the immediately preceding quarter.

          (c) The Advisor, an Affiliate or an unaffiliated third party shall
     receive a monthly Property Management Fee equal to 4.0% of the monthly
     Gross Income from Properties.


                                       10

<PAGE>

          (d) If the Advisor or an Affiliate provides a substantial amount of
     the services in connection with the Sale of one or more Properties the
     Advisor or an Affiliate shall receive a Disposition Fee equal to the lesser
     of (i) one-half of a Competitive Real Estate Commission or (ii) 3% of the
     Contract Sales Price of such Property or Properties. The Disposition Fee
     may be paid in addition to real estate commissions paid to non-Affiliates;
     provided, however, that the total real estate commissions paid to all
     Persons by the Company with respect to the Sale of such Property or
     Properties shall not exceed an amount equal to the lesser of (i) 6% of the
     Contract Sales Price of the Property or Properties or (ii) the Competitive
     Real Estate Commission.

          (e) Upon the Sale of a Property by the Company, the Partnership will
     pay an Incentive Distribution upon Sale equal to 10% of the net proceeds
     from the Sale after the Company has received and paid to the Stockholders
     the sum of (i) the Invested Capital that initially was allocated to that
     property, (ii) any remaining shortfall in the recovery of Invested Capital
     with respect to prior Sales of Properties, and (iii) any remaining
     shortfall in the Cumulative Return. If the Company, and in turn the
     Stockholders, have not received a return of Invested Capital or if there is
     a shortfall in the Cumulative Return after the Sale of the last Property
     and the Advisor previously has received Incentive Distributions, other than
     Incentive Distributions that have been repaid previously, the Advisor will
     repay to the Partnership a portion of those distributions sufficient to
     cause the Company, and in turn the Stockholders, to receive a full return
     of Invested Capital and the full Cumulative Return. In no event will the
     aggregate amount repaid by the Advisor to the Partnership exceed the
     aggregate amount of Incentive Distributions that the Advisor previously
     received.

          (f) To the extent the Advisor or an Affiliate provides a substantial
     amount of services in connection with the construction management of a
     Property, the Advisor or an Affiliate will receive a Construction
     Management Fee equal to 5% of any amount (including professional services)
     up to $25,000, 4% of any amount over $25,000 but less than $50,000 and 3%
     of any amount in excess of $50,000 which is expended in any calendar year
     for construction or repair at any Company Property.

     10.  Expenses.

          (a) In addition to the compensation paid to the Advisor pursuant to
     Section 9 hereof, the Company or the Partnership shall pay directly or
     reimburse the Advisor for all of the expenses paid or incurred by the
     Advisor in connection with the services it provides to the Company and the
     Partnership pursuant to this Agreement, including, but not limited to:

               (i) the Company's Organizational and Offering Expenses; provided,
          however, that within 60 days after the end of the month in which the
          Offering terminates, the Advisor shall reimburse the Company for any
          Organizational and Offering Expenses reimbursement received by the
          Advisor pursuant to this Section 10, to the extent that such
          reimbursement exceeds the maximum amount permitted or, at the option
          of the Company, such excess shall be subtracted from the next
          reimbursement of expenses to be made by the Company pursuant to this
          Section 10. The Advisor shall be responsible for the payment of all
          the Company's Organizational and Offering Expenses in excess of the
          maximum amount permitted;

               (ii) Acquisition Expenses incurred in connection with the
          selection, evaluation and acquisition of Properties;


                                       11

<PAGE>

               (iii) the actual cost of goods and services used by the Company
          and obtained from entities not affiliated with the Advisor, other than
          Acquisition Expenses;

               (iv) interest and other costs for borrowed money, including
          discounts, points and other similar fees;

               (v) taxes and assessments on income of the Company or its Real
          Estate Assets;

               (vi) costs associated with insurance required in connection with
          the business of the Company or by the Directors;

               (vii) expenses of managing and operating Properties owned by the
          Company, payable to the Property Manager, whether the Property Manager
          is an Affiliate of the Company or a non-affiliated Person.

               (viii) all compensation and expenses payable to the Independent
          Directors and all expenses payable to the non-Independent Directors in
          connection with their services to the Company and the Stockholders and
          their attendance at meetings of the Directors and Stockholders;

               (ix) expenses associated with a Listing, if applicable, or with
          the issuance and distribution of Shares, such as selling commissions
          and fees, marketing and advertising expenses, taxes, legal and
          accounting fees, Listing and registration fees, and other
          Organizational and Offering Expenses;

               (x) expenses connected with payments of distributions in cash or
          otherwise made or caused to be made by the Company to the
          Stockholders;

               (xi) expenses of amending, converting, liquidating or terminating
          the Company or the Charter;

               (xii) expenses of maintaining communications with Stockholders,
          including the cost of preparation, printing and mailing annual and
          other Stockholder reports, proxy statements and other reports required
          by governmental entities;

               (xiii) administrative services expenses (including personnel
          costs; provided, however, that no reimbursement shall be made for
          costs of personnel to the extent that such personnel perform services
          for which the Advisor receives a separate fee);

               (xiv) transfer agent and registrar's fees and charges paid to
          third parties; and

               (xv) audit, accounting, legal and other professional fees.

          (b) Expenses incurred by the Advisor on behalf of the Company and the
     Partnership and payable pursuant to this Section 10 shall be reimbursed no
     less than monthly to the Advisor. The Advisor shall prepare a statement
     documenting the expenses of the Company and the Partnership and the
     calculation of the Asset Management Fee during each quarter, and shall
     deliver such statement to the Company and the Partnership within 45 days
     after the end of each quarter.


                                       12

<PAGE>

     11.  COMPENSATION FOR ADDITIONAL SERVICES, CERTAIN LIMITATIONS.

          (a) If the Company shall request the Advisor or its Affiliates to
     render services for the Company other than those required to be rendered by
     the Advisor hereunder, such additional services, if the Advisor elects to
     perform them, will be compensated separately on terms to be agreed upon
     between such party and the Company from time to time in accordance with
     this Section. The rate of compensation for such services shall be approved
     by a majority of the Board of Directors, including a majority of the
     Independent Directors, and shall not exceed an amount that would be paid to
     nonaffiliated third parties for similar services.

          (b) In extraordinary circumstances fully justified to the official or
     agency administering the state securities laws, the Advisor and its
     Affiliates may provide other goods and services to the Company if all of
     the following criteria are met: (i) the goods or services must be necessary
     to the prudent operation of the Company; or (ii) the compensation, price or
     fee must be equal to the lesser of 90% of the compensation, price or fee
     the Company would be required to pay to independent parties who are
     rendering comparable services or selling or leasing comparable goods on
     competitive terms in the same geographic location, or 90% of the
     compensation, price or fee charged by the Advisor or its Affiliates for
     rendering comparable services or selling or leasing comparable goods on
     competitive terms. In addition, any such payment will be subject to the
     further limitation described in paragraph (c) below. Extraordinary
     circumstances shall be presumed only when there is an emergency situation
     requiring immediate action by the Advisor or its Affiliates and the goods
     or services are not immediately available from unaffiliated parties.
     Services which may be performed in such extraordinary circumstances include
     emergency maintenance of Company Properties, janitorial and other related
     services due to strikes or lock-outs, emergency tenant evictions and repair
     services which require immediate action, as well as operating and
     re-leasing properties with respect to which the leases are in default or
     have been terminated.

          (c) No reimbursement will be permitted to the Advisor or its
     Affiliates under Section 10(a) above for the salaries, fringe benefits,
     travel expenses and other administrative items of any controlling persons
     of the Advisor, its Affiliates or any other supervisory personnel except in
     those instances in which the Company believes it to be in the best interest
     of the Company that the Advisor or its Affiliates operate or otherwise deal
     with, for an interim period, a property with respect to which the lease is
     in default or terminated. Permitted reimbursements, except as set forth
     above, include salaries and related salary expenses for non-supervisory
     services which could be performed directly for the Company by independent
     parties such as legal, accounting, transfer agent, data processing and
     duplication. Controlling persons, for purposes of this Section, include,
     but are not limited to, those entities or individuals holding 5% or more of
     the ownership interests of the Advisor or a person having the power to
     direct or cause the direction of the Advisor, whether through ownership of
     voting securities, by contract or otherwise, and any person, irrespective
     of his or her title, who performs functions for the Advisor similar to
     those of: (a) chairman or member of the board of directors; or (b)
     president or executive vice president.

     Notwithstanding the foregoing, and subject to the approval of the Board of
Directors, the Company may reimburse the Advisor for expenses related to the
activities of controlling persons undertaken in capacities other than those
which cause them to be controlling persons. The Advisor believes that the
employees of the Advisor, its Affiliates and controlling persons who perform
services for the Company for which reimbursement is allowed pursuant to Section
11(b) have the experience and educational background, in their respective fields
of expertise, appropriate for the performance of such services.


                                       13

<PAGE>

     The Advisor and its Affiliates may not be reimbursed by the Company for
their overhead, nor can overhead costs or expenses of the Advisor or its
Affiliates be allocated to or paid by the Company. The foregoing reimbursements
of expenses, as limited by this Agreement, will be made regardless of whether
any cash distributions are made to the Stockholders.

     12.  STATEMENTS.

     The Advisor shall furnish to the Company not later than the 30th day
following the end of each Fiscal Year, a statement showing a computation of the
fees or other compensation payable to the Advisor or an Affiliate of the Advisor
with respect to such Fiscal Year under Sections 9 and 11 hereof. The final
settlement of compensation payable under Sections 9 and 11 hereof for each
Fiscal Year shall be subject to adjustments in accordance with, and upon
completion of, the annual audit of the Company's financial statements.

     13.  INTERNALIZATION OF THE ADVISOR.

     The Company shall consider becoming a self-administered REIT once the
Company's assets and income are, in the view of the Board of Directors,
including a majority of the Independent Directors, of sufficient size such that
internalizing the management functions by the Advisor and the Property Manager
is in the best interests of the Stockholders. The compensation payable to the
Advisor upon such internalization shall be agreed upon by the Independent
Directors and the Advisor.

     14.  LISTING OF THE SHARES.

     If this Agreement is terminated in connection with a Listing, the Advisor
will receive, in exchange for terminating this Agreement and the giving up or
waiving of its fees then earned but not paid and all future fees, such
consideration to be determined by the Independent Directors and the Advisor. In
addition, at such time, the Company may cause the Partnership to redeem the
Advisor's "Incentive Limited Partnership Interests" (as defined in the
Partnership's Agreement of Limited Partnership) for cash, or if agreed by both
parties, units of interest in the Partnership or Shares, for the amount the
Advisor would have received if the Partnership immediately sold all of its
assets at fair market value. In the event of such a termination of this
Agreement, the Company shall thereafter be relieved of its obligation to pay the
fees contemplated by this Agreement.


                                       14

<PAGE>

     15.  REIMBURSEMENT BY ADVISOR.

     The parties acknowledge that pursuant to the "Statement of Policy Regarding
Real Estate Investment Trusts," as revised and adopted by the North American
Securities Administrators Association on September 29, 1993, Total Operating
Expenses of the Company shall be deemed to be excessive if in any Fiscal Year
they exceed the greater of (a) 2% of the Company's Average Invested Assets for
such Fiscal Year; or (b) 25% of the Net Income for such Fiscal Year. The
Independent Directors shall have the fiduciary responsibility of limiting such
expenses to amounts that do not exceed such limitations. Within 60 days after
the end of any fiscal quarter of the Company for which Total Operating Expenses
(for the 12 months then ended) exceed 2% of Average Invested Assets or 25% of
Net Income, whichever is greater, the Company shall send to the Stockholders
written notice of such fact together with the determination of the Independent
Directors as to whether such higher operating expenses were justified and if so
justified, an explanation of the facts the Independent Director considered in
arriving at that conclusion also shall be included. If the Independent Directors
determine that such excess expenses are not justified, then the Advisor shall
reimburse the Company the amount by which the aggregate expenses incurred by the
Company exceed the limitations described above at the end of the Fiscal Year;
provided, however, that the Company may instead permit such reimbursements to be
effected by a reduction in the amount of the next payments of compensation under
Section 9.

     16.  NAME.

     Triple Net Properties, LLC has a proprietary interest in the name "NNN."
Accordingly, and in recognition of this right, if, at any time the Company or
the Partnership ceases to retain Triple Net Properties, LLC or an Affiliate
thereof to perform the services of Advisor, the Company or the Partnership, as
the case may be, will, promptly after receipt of written request from Triple Net
Properties, LLC, cease to conduct business under or use the name "NNN" or any
derivative thereof and the Company or the Partnership shall use its best efforts
to change the name of the Company to a name that does not contain the name "NNN"
or any other word or words that might, in the sole discretion of the Advisor, be
susceptible of indication of some form of relationship between the Company and
the Advisor or any Affiliate thereof. Consistent with the foregoing, it is
specifically recognized that the Advisor or one or more of its Affiliates has in
the past and may in the future organize, sponsor or otherwise permit to exist
other investment entities (including entities for investment in real estate) and
financial and service organizations having "NNN" as a part of their name, all
without the need for any consent (and without the right to object thereto) by
the Company or its Board of Directors.

     17.  OTHER ACTIVITIES OF THE ADVISOR.

     Subject to the provisions specifically set forth herein, the Advisor and
its Affiliates currently engage, and may engage in the future, in other
businesses or activities including the rendering of services and investment
advice with respect to real estate investment opportunities to other persons or
entities and may manage other investments (including the investments of the
Advisor and its Affiliates), including those in competition with the Company.
The Advisor or its Affiliates may, with respect to any investment in which the
Company is a participant, also render advice and service to each and every other
participant therein. The Advisor shall report to the Board of Directors the
existence of any condition or circumstance, existing or anticipated, of which it
has knowledge, which creates or could create a conflict of interest between the
Advisor's obligations to the Company and its obligations to or its interest in
any other Person. The Advisor or its Affiliates shall promptly disclose to the
Board of Directors knowledge of such condition or circumstance.

     Directors, officers, employees and agents of the Advisor or of Affiliates
of the Advisor may serve as directors, officers, employees or agents of the
Company.


                                       15

<PAGE>

     18.  TERM; TERMINATION OF AGREEMENT.

     This Agreement will have an initial term of one year from its date, subject
to successive one year renewals with the written mutual consent of the parties
including approval of a majority of the Independent Directors.

     Notwithstanding any other provision of this Agreement to the contrary,
either the Company or the Advisor may terminate this Agreement, or any extension
hereof, or the parties by mutual consent or a majority of the Independent
Directors may do so, in each case upon 60 days written notice without cause or
penalty. In the event of the termination of this Agreement, the Advisor will
cooperate with the Company and take all reasonable steps requested to assist the
Board of Directors in making an orderly transition of the advisory function.

     If this Agreement is terminated pursuant to this Section, such termination
shall be without any further liability or obligation of either parry to the
other, except as provided in Section 21.

     If this Agreement is terminated for any reason other than the Listing of
the Shares as contemplated in Section 14, all obligations of the Advisor and its
Affiliates to offer property to the Company for purchase, as described in
Section 2(a), also shall terminate.

     19.  ASSIGNMENTS.

     The Company may terminate this Agreement immediately in the event of its
assignment by the Advisor except an assignment to a successor organization which
acquires substantially all of the property and carries on the affairs of the
Advisor, provided that following such assignment the persons who controlled the
operations of the Advisor immediately prior thereto shall control the operations
of the successor organization, including the performance of its duties under
this Agreement; however, if at any time subsequent to such assignment such
persons shall cease to control the operations of the successor organization, the
Company may thereupon immediately terminate this Agreement. This Agreement shall
not be assignable by the Company without the consent of the Advisor, except in
the case of assignment by the Company to a corporation, trust or other
organization which is a successor to the Company. Any assignment of this
Agreement shall bind the assignee hereunder in the same manner as the assignor
is bound hereunder.

     20.  DEFAULT, BANKRUPTCY, ETC.

     At the sole option of the Company, this Agreement shall be terminated
immediately upon written notice of termination from the Board of Directors to
the Advisor if any of the following events occur:

          (a) The Advisor violates any material provisions of this Agreement
     and, after receipt of written notice of violation, such violation is not
     cured within 30 days; or

          (b) A court of competent jurisdiction enters a decree or order for
     relief in respect of the Advisor in any involuntary case under the
     applicable bankruptcy, insolvency or other similar law now or hereafter in
     effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
     sequestrator (or similar official) of the Advisor or for any substantial
     part of its property or orders the winding up or liquidation of the
     Advisor's affairs; or


                                       16

<PAGE>

          (c) The Advisor commences a voluntary case under any applicable
     bankruptcy, insolvency or other similar law now or hereafter in effect, or
     consents to the entry of an order for relief in an involuntary case under
     any such law, or consents to the appointment of or taking possession by a
     receiver, liquidator, assignee, custodian, trustee, sequestrator (or
     similar official) of the Advisor or for any substantial part of its
     property, or makes any general assignment for the benefit of creditors, or
     fails generally to pay its debts as they become due.

               The Advisor agrees that if any of the events specified in
     subsections (b) and (c) of this Section 20 occur, it will give written
     notice thereof to the Company within 7 days after the occurrence of such
     event.

     21.  ACTION UPON TERMINATION.

     The Advisor shall not be entitled to compensation after the date of
termination of this Agreement for further services hereunder, but shall be paid
all compensation accruing to the date of termination. Subject to the provisions
of Sections 13 and 14, the Advisor shall forthwith upon a termination caused by
factors other than Listing:

          (a) Pay over to the Company all monies collected and held for the
     account of the Company pursuant to this Agreement, after deducting any
     accrued compensation and reimbursement for its expenses to which it is then
     entitled;

          (b) Deliver to the Board of Directors a full accounting, including a
     statement showing all payments collected by it and a statement of all
     monies held by it, covering the period following the date of the last
     accounting furnished to the Board of Directors;

          (c) Deliver to the Board of Directors all property and documents of
     the Company then in the custody of the Advisor; and

          (d) Cooperate with the Company and take all reasonable steps requested
     by the Company to assist the Board of Directors in making an orderly
     transition of the advisory function.

     22.  AMENDMENTS.

     This Agreement shall not be amended, changed, modified, terminated or
discharged in whole or in part except by an instrument in writing signed by both
parties hereto, or their respective successors or assigns.

     23.  SUCCESSORS AND ASSIGNS.

     This Agreement shall bind any successors or permitted assigns of the
parties hereto as herein provided.

     24.  GOVERNING LAW.

     The provisions of this Agreement shall be governed, construed and
interpreted in accordance with the laws of the Commonwealth of Virginia, without
regard to its conflict of laws provisions.


                                       17

<PAGE>

     25.  LIABILITY AND INDEMNIFICATION.

          (a) The Company shall, to the fullest extent permitted by Virginia
     statutory or decisional law, as amended or interpreted, indemnify and pay
     or reimburse reasonable expenses to the Advisor and its Affiliates,
     provided, that: (i) the Advisor or other party seeking indemnification has
     determined, in good faith, that the course of conduct which cased the loss
     or liability was in the best interest of the Company; (ii) the Advisor or
     other person seeking indemnification was acting on behalf of or performing
     services on the part of the Company; (iii) such liability or loss was not
     the result of negligence, misconduct or a knowing violation of the criminal
     law or any federal or state securities laws on the part of the indemnified
     party; and (iv) such indemnification or agreement to be, held harmless is
     recoverable only out of the net assets of the Company and not from the
     Stockholders.

          (b) The Company shall not indemnify the Advisor or its Affiliates for
     losses, liabilities or expenses arising from or out of an alleged violation
     of federal or state securities laws by such party unless one or more of the
     following conditions are met: (i) there has been a successful adjudication
     on the merits of each count involving alleged securities law violations as
     to the particular indemnitee; (ii) such claims have been dismissed with
     prejudice on the merits by a court of competent jurisdiction as to the
     particular indemnitee; or (iii) a court of competent jurisdiction approves
     a settlement of the claims and finds that indemnification of the settlement
     and related costs should be made and the court considering the request has
     been advised of the position of the Securities and Exchange Commission and
     the published opinions of any state securities regulatory authority in
     which securities of the Company were offered and sold as to indemnification
     for securities law violations.

          (c) The Company may advance amounts to persons entitled to
     indemnification hereunder for legal and other expenses and costs incurred
     as a result of any legal action for which indemnification is being sought
     only if all of the following conditions are satisfied: (i) the legal action
     relates to acts or omissions with respect to the performance of duties or
     services by the indemnified party for or on behalf of the Company; (ii) the
     legal action is initiated by a third party and a court of competent
     jurisdiction specifically approves such advancement; and (iii) the
     indemnified party receiving such advances undertakes to repay the advanced
     funds to the Company, together with the applicable legal rate of interest
     thereon, in which such party would not be entitled to indemnification.

     26.  NOTICES.

     Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice,
report or other communication is accepted by the party to whom it is given and
shall be given by being delivered at the following addresses of the parties
hereto:

          THE COMPANY AND/OR THE BOARD OF DIRECTORS:

          NNN Apartment REIT, Inc.
          Suite 200
          1551 N. Tustin Avenue
          Santa Ana, CA 92705


                                       18

<PAGE>

          THE ADVISOR:

          NNN Apartment REIT Advisor, LLC
          Suite 200
          1551 N. Tustin Avenue
          Santa Ana, CA 92705

     Either party may at any time give notice in writing to the other party of a
change of its address for the purpose of this Section 24.

     25.  HEADINGS.

     The section headings hereof have been inserted for convenience of reference
only and shall not be construed to affect the meaning, construction or effect of
this Agreement.


                                       19

<PAGE>

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

COMPANY:

NNN Apartment REIT, Inc., a Maryland
corporation


By:
    ---------------------------------
Title:
       ------------------------------


ADVISOR:

NNN Apartment REIT Advisor, LLC, a
Virginia limited liability company


By: Triple Net Properties, LLC, a
    Virginia limited liability
    company, its Manager


By:
    ---------------------------------
Title:
       ------------------------------


                                       20