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UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission file number:
    000-52612
  GRUBB & ELLIS
    APARTMENT REIT, INC.
 (Exact name of registrant as
    specified in its charter)
  Maryland

20-3975609(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   1551 N. Tustin Avenue, Suite 300, Santa Ana,
    California(Address of principal executive
    offices)

92705(Zip Code)   Registrants telephone number,
    including area code:
    (714) 667-8252
  Securities registered pursuant to
    Section 12(b) of the Act:
  Title of each class

Name of each exchange on which
    registeredNone

None   Securities registered pursuant to
    Section 12(g) of the Act:
  Common Stock
 (Title of class)
  Indicate by check mark if the registrant is a well-known
    seasoned issuer, as defined in Rule 405 of the Securities
    Act.

Yes o     No þ   Indicate by check mark if the registrant is not required to file
    reports pursuant to Section 13 or Section 15(d) of the
    Act.

Yes o     No þ   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.

Yes þ     No o   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.

o   Rule 12b-2
  Large accelerated filer

o

Accelerated filer

oNon-accelerated filer

þ
    (Do not check if a smaller reporting company)

Smaller reporting company

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

Yes o     No þ       DOCUMENTS
    INCORPORATED BY REFERENCE
    None




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##### 





GRUBB &
    ELLIS APARTMENT REIT, INC.
    (A Maryland Corporation)
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


3Item 1A.

Risk Factors


17Item 1B.

Unresolved Staff Comments


46Item 2.

Properties


47Item 3.

Legal Proceedings


47Item 4.

Submission of Matters to a Vote of Security
    Holders


47PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


48Item 6.

Selected Financial Data


50Item 7.

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


51Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


67Item 8.

Financial Statements and Supplementary Data


68Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


68Item 9A(T).

Controls and Procedures


68Item 9B.

Other Information


69PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


70Item 11.

Executive Compensation


76Item 12.

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


78Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


79Item 14.

Principal Accounting Fees and Services


80PART IVItem 15.

Exhibits, Financial Statement Schedules


82SIGNATURES


118EX-21.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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PART I  Item 1.
    Business.  The use of the words we, us or
    our refers to Grubb & Ellis Apartment
    REIT, Inc. and its subsidiaries, including Grubb &
    Ellis Apartment REIT Holdings, L.P., except where the context
    otherwise requires.
  Our
    Company
          Developments
    during 2008 and 2009
  
    In June 2008, we terminated our credit agreement, or the Credit
    Agreement, with Wachovia Bank, National Association, or
    Wachovia, for a secured revolving line of credit with a maximum
    borrowing 3




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amount of $75,000,000, and our mezzanine credit agreement, or
    the Mezzanine Credit Agreement, for a mezzanine secured
    revolving line of credit with a maximum borrowing amount of
    $15,000,000 with Wachovia. We decided to terminate the Credit
    Agreement and Mezzanine Credit Agreement since we had not been
    utilizing the Credit Agreement or Mezzanine Credit Agreement. We
    did not incur any early termination penalty upon our terminating
    the Credit Agreement or the Mezzanine Credit Agreement.  
    Effective August 2008, our board of directors adopted and
    approved certain amendments to our Share Repurchase Plan to
    provide stockholders with the opportunity to have their shares
    of our common stock redeemed, at the sole discretion of our
    board of directors, at increasing prices based upon the period
    of time the shares of our common stock have been continuously
    held.
    In October 2008, we extended the maturity date of our loan
    agreement with Wachovia in the principal amount of up to
    $10,000,000, or the Wachovia Loan, for one year to mature on
    November 1, 2009.
    In November 2008, we entered into an amendment to the Advisory
    Agreement with our advisor, which reduced the annual asset
    management fee we pay to our advisor in connection with the
    management of our assets from 1.0% of our average invested
    assets to 0.5% of our average invested assets, effective
    November 1, 2008. Further, effective January 1, 2009,
    our advisor waived the asset management fee until the quarter
    following the quarter in which we generate funds from
    operations, or FFO, excluding non-recurring charges, sufficient
    to cover 100% of the distributions declared to our stockholders
    for such quarter.
    For the year ended December 31, 2008, we completed the
    acquisition of four consolidated properties for an aggregate
    purchase price of $120,300,000, plus closing costs, adding a
    total of 1,158 apartment units to our property portfolio.
    On February 10, 2009, our board of directors approved a
    decrease in our distribution to a 6.0% per annum, or $0.60 per
    common share, distribution to be paid to our stockholders
    beginning with our March 2009 monthly distribution to be
    paid on or about April 15, 2009.
    On February 17, 2009, we filed a Registration Statement on
    Form S-11 with the United States Securities and Exchange
    Commission, or SEC, with respect to a proposed secondary public
    offering, or our secondary offering, of up to
    105,000,000 shares of our common stock. The offering would
    include up to 100,000,000 shares of our common stock to be
    offered for sale at $10.00 per share in the primary offering and
    up to 5,000,000 shares of our common stock to be offered
    for sale pursuant to the DRIP at $9.50 per share during the
    primary offering.  
    As of March 13, 2009, we had received and accepted
    subscriptions in our offering for 15,328,230 shares of our
    common stock, or $153,117,000, excluding shares of our common
    stock issued under the DRIP. 4




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Our
    Structure
    
 5




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(714) 667-8252. www.gbe-reits.com/apartment www.gbe-reits.com/apartment
 6




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Current
    Investment Objectives and Policies
    
    stable cash flows available for distribution to our stockholders;
    preservation, protection, and return of capital; and
    growth of income and principal without taking undue risk.    
    invest in income-producing real estate and real estate-related
    investments in a manner which permits us to maintain our
    qualification as a REIT for federal income tax purposes; and
    realize capital appreciation upon the ultimate sale of our
    properties.      Business
    Strategies
    Following
    Demographic Trends and Population Shifts to Find Attractive
    Tenants in Quality Apartment Community Markets
  and/or
    Leveraging
    the Experience of Our Management
   7




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Investment
    Strategy
        Acquisition
    Standards
  and/or
  lease-up lease-up lease-up lease-up
   8




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12-month
      
    We seek to purchase apartment communities at favorable prices
    and obtain immediate income from tenant rents, with the
    potential for appreciation in value over time.
    We seek to preserve capital through selective acquisitions and
    professional management, whereby we intend to increase rental
    rates, maintain high economic occupancy rates, reduce tenant
    turnover, make value-enhancing and income-producing capital
    improvements, where appropriate, and control operating costs and
    capital expenditures.
    We seek to acquire apartment properties in growth markets, at
    attractive prices relative to replacement cost, that provide the
    opportunity to improve operating performance through
    professional management, marketing and selective leasing and
    renovation programs.    
    geographic location and type;
    construction quality and condition;
    potential for capital appreciation;
    the general credit quality of current and potential tenants;
    the potential for rent increases;
    the interest rate environment;
    potential for economic growth in the tax and regulatory
    environment of the community in which the property is located;
    potential for expanding the physical layout of the property;
    occupancy and demand by tenants for properties of a similar type
    in the same geographic vicinity;
    prospects for liquidity through sale, financing or refinancing
    of the property;
    competition from existing properties and the potential for the
    construction of new properties in the area; and
    treatment under applicable federal, state and local tax and
    other laws and regulations.   9




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
    changes in general economic or local conditions;
    changes in supply of or demand for similar competing properties
    in an area;
    changes in interest rates and availability of permanent mortgage
    funds, which may render the sale of a property difficult or
    unattractive;
    changes in tax, real estate, environmental and zoning laws;
    periods of high interest rates and tight money supply which may
    make the sale of properties more difficult;
    tenant turnover; and
    general overbuilding or excess supply in the market area.    Property
    Acquisitions
       10




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Demographic
    Investing
    Age.
  
    Seniors  The 65+ age group who are the elders
    of the baby boomers.
    Boomers  Born between 1946 and 1964, the
    American Hospital Association and First Consulting Group state
    that this group controls approximately 75.0% of the
    U.S. financial assets.
    Echo boomers  Born between 1982 and 1994, this
    group represents the children of the boomers.  Essential Needs.
  
    Seniors Older retirees may prefer the ease of
    living associated with renting such as senior housing and small
    apartments, instead of dealing with the expenses and burden of
    home ownership.
    Boomers  This aging population, currently the
    largest, controls the largest percent of U.S. financial
    assets according to the American Hospital Association and First
    Consulting Group. As their children reach adulthood and move out
    or go off to college, they may be more likely to consider
    renting smaller, luxury apartments or condominiums.
    Echo boomers   This group, most likely to rent
    apartments, is entering their household formation years which is
    helping to fuel new demand for apartments, according to the
    Joint Center for Housing Studies of Harvard University, or JCHS.
    With approximately 4,000,000 echo boomers turning 21 every year,
    in fast growing areas, the existing housing stock will be unable
    to accommodate the rising number of young households according
    to a study by the JCHS.   11




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Geographic Regions.
  Joint
    Ventures
      
    there are no duplicate property management or other fees;
    the investment of each entity is on substantially the same terms
    and conditions as those received by other joint
    venturers; and
    we have a right of first refusal to acquire the property if the
    other joint venturers wish to sell their interest in the
    property.      Real
    Estate-Related Investments
    Operating
    Strategies
    
    aggressively leasing available space through targeted marketing;
    emphasizing regular maintenance and periodic renovation to meet
    the needs of tenants and to maximize long-term returns; and
    financing acquisitions and refinancing properties when favorable
    terms are available to increase cash flow. 12




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Sale or
    Disposition of Properties
            
    we believe the value of a property might decline substantially;
    an opportunity has arisen to improve other properties;
    we can increase cash flows through the disposition of the
    property; or
    we believe the sale of the property is in our best interest.   13




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Financing
    Policies
            Board
    Review of Our Investment Policies
   14




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Tax
    Status
      Distribution
    Policy
      Competition
     15




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Government
    Regulations
    Costs of Compliance with the Americans with Disabilities
    Act.
  Costs of Government Environmental Regulation and Private
    Litigation.
  Other Federal, State and Local
    Regulations.
  Geographic
    Concentration
   16




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Employees
  and/or
  Financial
    Information About Industry Segments
  Disclosures
    about Segments of an Enterprise and Related Information
  Item 1A.
    Risk
    Factors.  Investment
    Risks
  There
    is no public market for the shares of our common stock.
    Therefore, it is difficult for our stockholders to sell their
    shares of our common stock and, if they are able to sell their
    shares of our common stock, they will likely sell them at a
    substantial discount.
   17




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We
    have a limited operating history. Therefore, our stockholders
    may not be able to adequately evaluate our ability to achieve
    our investment objectives.
    
    identify and acquire investments that further our investment
    strategy;
    build, expand and maintain our network of licensed securities
    brokers and other agents;
    attract, integrate, motivate and retain qualified personnel to
    manage our day-to-day operations;
    respond to competition both for investment opportunities and
    potential investors in us; and
    build and expand our operations structure to support our
    business.    If we
    are unable to find suitable investments, we may not have
    sufficient cash flows available for distributions to our
    stockholders.
    We
    face competition from other apartment communities and housing
    alternatives for tenants, and we face competition from other
    acquirers of apartment communities for investment opportunities,
    both of which may limit our profitability and returns to our
    stockholders.
       18




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Our
    stockholders are limited in their ability to sell their shares
    of our common stock pursuant to our share repurchase plan, and
    repurchases are made at our sole discretion.
    Our
    advisor will be entitled to receive significant compensation in
    the event of our liquidation or in connection with a termination
    of the Advisory Agreement.
   19




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Risks
    Related to Our Business
  We
    have paid distributions from sources other than our cash flows
    from operations, including from the net proceeds from our
    offering and from borrowed funds. We may continue to pay
    distributions from the net proceeds of our offering or from
    borrowings in anticipation of future cash flows. Any such
    distributions may reduce the amount of capital we ultimately
    invest in assets and negatively impact the value of our
    stockholders investments.
    on-site
      We may
    suffer from delays in locating suitable investments, which may
    have adverse effects on our results of operations and our
    ability to pay distributions to our stockholders.
   20




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We are
    uncertain of our sources of debt or equity for funding our
    capital needs. If we cannot obtain funding on acceptable terms,
    our ability to make necessary capital improvements to our
    properties may be impaired or delayed.
    The
    recent market disruptions may adversely affect our operating
    results and financial condition.
  and/or and/or
  
    Debt and Equity Markets Our results of
    operations are sensitive to the volatility of the credit
    markets. The real estate debt markets are currently experiencing
    volatility as a result of certain factors, including the
    tightening of underwriting standards by lenders and credit
    rating agencies and the significant inventory of unsold
    commercial mortgage-backed securities in the market. Credit
    spreads for major sources of capital have widened significantly
    as investors have demanded a higher risk premium. This is
    resulting in lenders increasing the cost for debt financing.
    Should the overall cost of borrowings increase, either by
    increases in the index rates or by increases in lender spreads,
    we will need to factor such increases into the economics of our
    acquisitions, developments and property contributions. This may
    result in our property operations generating lower overall
    economic returns and a reduced level of cash flows, which could
    potentially impact our ability to pay distributions to our
    stockholders. In addition, the recent dislocations in the debt
    markets have reduced the amount of capital that is available to
    finance real estate, which, in turn: (1) limits the ability
    of real estate investors to benefit from reduced real estate
    values or to realize enhanced returns on real estate
    investments; (2) has slowed real estate transaction
    activity; and (3) may result in an inability to refinance
    debt as it becomes due, all of which may reasonably be expected
    to have a material impact, favorable or unfavorable, on
    revenues, income
    and/or cash
    flows from the acquisition and operations of real estate and
    mortgage loans. In addition, the state of the debt markets could
    have an impact on the overall amount of capital being invested
    in real estate, which may result in price or value decreases of
    real estate assets and impact our ability to raise equity
    capital.
    Valuations The recent market volatility will
    likely make the valuation of our properties more difficult.
    There may be significant uncertainty in the valuation, or in the
    stability of the value, of our properties that could result in a
    substantial decrease in the value of our properties. As a
    result, we may not be able to recover the carrying amount of our
    properties, which may require us to recognize an impairment
    charge in earnings.
    Government Intervention The pervasive and
    fundamental disruptions that the global financial markets are
    currently undergoing have led to extensive and unprecedented
    governmental intervention. Although the government intervention
    is intended to stimulate the flow of capital and to undergird
    the U.S. economy in the short term, it is impossible to
    predict the actual effect of the government 21




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intervention and what effect, if any, additional interim or
    permanent governmental intervention may have on the financial
    markets
    and/or the
    effect of such intervention on us and our results of operations.
    In addition, there is a high likelihood that regulation of the
    financial markets will be significantly increased in the future,
    which could have a material impact on our operating results and
    financial condition.  We may
    structure acquisitions of property in exchange for limited
    partnership units in our operating partnership on terms that
    could limit our liquidity or our flexibility.
    Our
    success is dependent on the performance of our
    advisor.
  and/or
 22




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Our
    advisor may terminate the Advisory Agreement, which could
    require us to pay substantial fees and may require us to find a
    new advisor.
      Our
    success is dependent on the performance of our
    sponsor.
   23




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The
    failure of any bank in which we deposit our funds could reduce
    the amount of cash we have available to pay distributions and
    make additional investments.
    Our
    advisor and its affiliates have no obligation to defer or
    forgive fees or loans or advance any funds to us, which could
    reduce our ability to acquire investments or pay
    distributions.
    Risks
    Related to Conflicts of Interest
    
    any person directly or indirectly owning, controlling or
    holding, with the power to vote, 10.0% or more of the
    outstanding voting securities of such other person;
    any person 10.0% or more of whose outstanding voting securities
    are directly or indirectly owned, controlled or held, with the
    power to vote, by such other person;
    any person directly or indirectly controlling, controlled by or
    under common control with such other person;
    any executive officer, director, manager, trustee or general
    partner of such other person; and
    any legal entity for which such person acts as an executive
    officer, director, manager, trustee or general partner.  The
    conflicts of interest described below may mean we are not
    managed solely in our stockholders best interest, which
    may adversely affect our results of operations and the value of
    their investments in shares of our common stock.
  and/or
   24




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We may
    compete with other Grubb & Ellis Group programs for
    investment opportunities. As a result, our advisor may not cause
    us to invest in favorable investment opportunities which may
    reduce our returns on our investments.
    Our
    advisors officers face conflicts of interest relating to
    the allocation of their time and other resources among the
    various entities that they serve or have interests in, and such
    conflicts may not be resolved in our favor.
   25




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Our
    advisor faces conflicts of interest relating to its compensation
    structure, which could result in actions that are not
    necessarily in our stockholders long-term best
    interest.
    Our
    advisor may receive economic benefits from its status as a
    special limited partner without bearing any of the investment
    risk.
    The
    distribution payable to our advisor may influence our decisions
    about listing the shares of our common stock on a national
    securities exchange, merging our company with another company
    and acquisition or disposition of our investments.
    The
    absence of arms-length bargaining may mean that our
    agreements may not be as favorable to our stockholders as they
    otherwise could have been.
   26




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Any
    joint venture arrangements may not solely reflect our
    stockholders best interest.
      
    a venture partner may at any time have economic or other
    business interests or goals which become inconsistent with our
    business interests or goals, including inconsistent goals
    relating to the sale of properties held in a joint venture or
    the timing of the termination and liquidation of the venture;
    a venture partner might become bankrupt and such proceedings
    could have an adverse impact on the operation of the partnership
    or joint venture;
    actions taken by a venture partner might have the result of
    subjecting the property to liabilities in excess of those
    contemplated;
    a venture partner may be in a position to take action contrary
    to our instructions or requests or contrary to our strategies or
    objectives, including our strategy to qualify and maintain our
    qualification as a REIT; and
    the joint venture may provide for the distribution of income to
    us otherwise than in direct proportion to our ownership interest
    in the joint venture.    Risks
    Related to Our Organizational Structure
  Several
    potential events could cause our stockholders investments
    in us to be diluted, which may reduce the overall value of their
    investment.
    
    future offerings of our securities, including issuances pursuant
    to the DRIP and up to 50,000,000 shares of any preferred
    stock that our board of directors may authorize;
    private issuances of our securities to other investors,
    including institutional investors;
    issuances of our securities pursuant to our 2006 Incentive Award
    Plan; or
    redemptions of units of limited partnership interest in our
    operating partnership in exchange for shares of our common stock. 27




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Our
    stockholders interests may be diluted in various ways,
    which may reduce their returns.
    Our
    ability to issue preferred stock may include a preference in
    distributions superior to our common stock and also may deter or
    prevent a sale of shares of our common stock in which our
    stockholders could profit.
    
    a merger, tender offer or proxy contest;
    assumption of control by a holder of a large block of our
    securities; or
    removal of incumbent management.  Upon
    investment in shares of our common stock, our stockholders
    experience an immediate dilution of $1.00 per
    share.
   28




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Our
    board of directors may change our investment objectives without
    seeking stockholder approval.
    Our
    stockholders ability to control our operations is severely
    limited.
    
    the election or removal of directors;
    any amendment of our charter, except that our board of directors
    may amend our charter without stockholder approval to change our
    name or the name of other designation or the par value of any
    class or series of our stock and the aggregate par value of our
    stock, increase or decrease the aggregate number of our shares
    of stock, increase or decrease the number of our shares of any
    class or series that we have the authority to issue, or effect
    certain reverse stock splits;
    our dissolution; and
    certain mergers, consolidations and sales or other dispositions
    of all or substantially all of our assets.    The
    limitation on ownership of our common stock prevents any single
    stockholder from acquiring more than 9.9% of our capital stock
    or more than 9.9% of our common stock and may force him or her
    to sell stock back to us.
    
    may consider the transfer to be null and void;
    will not reflect the transaction on our books;
    may institute legal action to enjoin the transaction;
    will not pay dividends or other distributions to him or her with
    respect to those excess shares of stock;
    will not recognize his or her voting rights for those excess
    shares of stock; and
    may consider the excess shares of stock held in trust for the
    benefit of a charitable beneficiary. 29




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
    he or she may lose his or her power to dispose of the stock;
    he or she may not recognize profit from the sale of such stock
    if the market price of the stock increases; and
    he or she may incur a loss from the sale of such stock if the
    market price decreases.  Limitations
    on share ownership and transfer may deter a sale of our common
    stock in which a stockholder could profit.
    Maryland
    takeover statutes may deter others from seeking to acquire us
    and prevent a stockholder from making a profit in such
    transaction.
    The
    MGCL and our organizational documents limit our
    stockholders right to bring claims against our officers
    and directors.
   30




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Our
    stockholders investment return may be reduced if we are
    required to register as an investment company under the
    Investment Company Act.
    
    limitations on capital structure;
    restrictions on specified investments;
    prohibitions on transactions with affiliates; and
    compliance with reporting, record keeping, voting, proxy
    disclosure and other rules and regulations that would
    significantly change our operations.    and/or
     31




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Risks
    Related to Investments in Real Estate
  Our
    results of operations, our ability to pay distributions to our
    stockholders and our ability to dispose of our investments are
    subject to general economic and regulatory factors we cannot
    control or predict.
    
    poor economic times may result in defaults by tenants of our
    properties and borrowers. We may also be required to provide
    rent concessions or reduced rental rates to maintain or increase
    occupancy levels;
    job transfers and layoffs may cause vacancies to increase and a
    lack of future population and job growth may make it difficult
    to maintain or increase occupancy levels;
    increases in supply of competing properties or decreases in
    demand for our properties may impact our ability to maintain or
    increase occupancy levels;
    changes in interest rates and availability of debt financing
    could render the sale of properties difficult or unattractive;
    periods of high interest rates may reduce cash flows from
    leveraged properties; and
    increased insurance premiums, real estate taxes or energy or
    other expenses may reduce funds available for distribution.
    Also, any such increased expenses may make it difficult to
    increase rents to tenants on turnover, which may limit our
    ability to increase our returns.    We
    depend on our tenants to pay rent, and their inability to pay
    rent may substantially reduce our revenues and cash available
    for distribution to our stockholders.
    Short-term
    apartment leases expose us to the effects of declining market
    rent, which could adversely impact our ability to pay cash
    distributions to our stockholders.
    Some
    or all of our properties have incurred, and will incur,
    vacancies, which may result in reduced revenue and resale value,
    a reduction in cash available for distribution and a diminished
    return on our stockholders investments.
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We are
    dependent on our investment in a single asset class, making our
    performance more vulnerable to economic downturns in the
    apartment industry than if we had diversified
    investments.
    Lack
    of geographic diversity may expose us to regional economic
    downturns that could adversely impact our operations or our
    ability to recover our investment in one or more
    properties.
    We may
    be unable to secure funds for future capital improvements, which
    could adversely impact our ability to pay cash distributions to
    our stockholders.
    We may
    obtain only limited warranties when we purchase a property and
    would have only limited recourse in the event our due diligence
    did not identify any issues that lower the value of our
    property.
    Uninsured
    losses relating to real estate and lender requirements to obtain
    insurance may reduce our stockholders
    returns.
   33




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##### Table of Contents



Increases
    in our insurance rates could adversely affect our cash flow and
    our ability to make future cash distributions to our
    stockholders.
    If one
    of our insurance carriers does not remain solvent, we may not be
    able to fully recover on our claims.
    Uncertain
    market conditions relating to the future disposition of
    properties could cause us to sell our properties at a loss in
    the future.
    Our
    inability to sell a property when we desire to do so could
    adversely impact our ability to pay cash distributions to our
    stockholders.
   34




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##### Table of Contents



Our
    stockholders may not receive any profits resulting from the sale
    of our properties, or receive such profits in a timely manner,
    because we may provide financing to the purchaser of such
    properties.
    We
    face possible liability for environmental cleanup costs and
    damages for contamination related to properties we acquire,
    which could substantially increase our costs and reduce our
    liquidity and cash distributions to our
    stockholders.
   35




---



##### Table of Contents



Increased
    construction of similar properties that compete with our
    properties in any particular location could adversely affect the
    operating results of our properties and our cash available for
    distribution to our stockholders.
    
    make it more difficult for us to find tenants to lease units in
    our apartment communities;
    force us to lower our rental prices in order to lease units in
    our apartment communities; and
    substantially reduce our revenues and cash available for
    distribution to our stockholders.  Costs
    required to become compliant with the Americans with
    Disabilities Act at our properties may affect our ability to pay
    distributions to our stockholders.
    Our
    real properties are subject to property taxes that may increase
    in the future, which could adversely affect our cash
    flows.
    Risks
    Related to Debt Financing
  We
    have incurred, and intend to continue to incur, mortgage
    indebtedness and other borrowings, which may increase our
    business risks, could hinder our ability to pay distributions
    and could decrease the value of our stockholders
    investments.
   36




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##### Table of Contents



Higher
    mortgage rates may make it more difficult for us to finance or
    refinance properties, which could reduce the number of
    properties we can acquire and the amount of cash distributions
    we can pay to our stockholders.
    Increases
    in interest rates could increase the amount of our debt payments
    and therefore negatively impact our operating
    results.
    To the
    extent we borrow at fixed rates or enter into fixed interest
    rate swaps, we will not benefit from reduced interest expense if
    interest rates decrease.
   37




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##### Table of Contents



Hedging
    activity may expose us to risks.
    Lenders
    may require us to enter into restrictive covenants relating to
    our operations, which could limit our ability to pay
    distributions to our stockholders.
    Interest-only
    indebtedness may increase our risk of default and ultimately may
    reduce our funds available for distribution to our
    stockholders.
    If we
    enter into financing arrangements involving balloon payment
    obligations, it may adversely affect our ability to refinance or
    sell properties on favorable terms, and to pay distributions to
    our stockholders.
   38




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##### Table of Contents



Risks
    Related to Other Real Estate-Related Investments
  We do
    not have substantial experience in acquiring mortgage loans or
    investing in real estate-related securities, which may result in
    our real estate-related investments failing to produce returns
    or incurring losses.
    Real
    estate-related equity securities in which we may invest are
    subject to specific risks relating to the particular issuer of
    the securities and may be subject to the general risks of
    investing in real estate or real estate-related
    assets.
    The
    mortgage loans in which we may invest and the mortgage loans
    underlying the mortgage-backed securities in which we may invest
    may be impacted by unfavorable real estate market conditions,
    which could decrease their value.
    Delays
    in liquidating defaulted mortgage loan investments could reduce
    our investment returns.
   39




---



##### Table of Contents



The
    commercial mortgage-backed securities in which we may invest are
    subject to several types of risks.
    longer-term
    The
    mezzanine loans in which we may invest would involve greater
    risks of loss than senior loans secured by income-producing real
    properties.
    We
    expect a portion of our real estate-related investments to be
    illiquid and we may not be able to adjust our portfolio in
    response to changes in economic and other
    conditions.
    Interest
    rate and related risks may cause the value of our real
    estate-related investments to be reduced.
   40




---



##### Table of Contents



If we
    liquidate prior to the maturity of our real estate-related
    investments, we may be forced to sell those investments on
    unfavorable terms or at a loss.
    Federal
    Income Tax Risks
  Failure
    to remain qualified as a REIT for federal income tax purposes
    would subject us to federal income tax on our taxable income at
    regular corporate rates, which would substantially reduce our
    ability to pay distributions to our stockholders.
        To
    remain qualified as a REIT and to avoid the payment of federal
    income and excise taxes, we may be forced to borrow funds, use
    proceeds from the issuance of securities, or sell assets to pay
    distributions, which may result in our distributing amounts that
    may otherwise be used for our operations.
   41




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##### Table of Contents



Our
    investment strategy may cause us to incur penalty taxes, lose
    our REIT status, or own and sell properties through taxable REIT
    subsidiaries, each of which would diminish the return to our
    stockholders.
  i.e.
  i.e.
   42




---



##### Table of Contents



Our
    stockholders may have a current tax liability on distributions
    they elect to reinvest in shares of our common
    stock.
    Legislative
    or regulatory action with respect to taxes could adversely
    affect the returns to our stockholders.
     43




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##### Table of Contents



In
    certain circumstances, we may be subject to federal and state
    income taxes as a REIT, which would reduce our cash available
    for distribution to our stockholders.
    Distributions
    to tax-exempt stockholders may be classified as unrelated
    business taxable income.
  tax-exempt
  
    part of the income and gain recognized by certain qualified
    employee pension trusts with respect to our common stock may be
    treated as unrelated business taxable income if the shares of
    our common stock are predominately held by qualified employee
    pension trusts, and we are required to rely on a special
    look-through rule for purposes of meeting one of the REIT share
    ownership tests, and we are not operated in a manner to avoid
    treatment of such income or gain as unrelated business taxable
    income;
    part of the income and gain recognized by a tax-exempt
    stockholder with respect to the shares of our common stock would
    constitute unrelated business taxable income if the stockholder
    incurs debt in order to acquire shares of our common
    stock; and
    part or all of the income or gain recognized with respect to the
    shares of our common stock by social clubs, voluntary employee
    benefit associations, supplemental unemployment benefit trusts
    and qualified group legal services plans which are exempt from
    federal income taxation under Sections 501(c)(7), (9),
    (17) or (20) of the Code may be treated as unrelated
    business taxable income.  Complying
    with the REIT requirements may cause us to forego otherwise
    attractive opportunities.
   44




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##### Table of Contents



Foreign
    purchasers of shares of our common stock may be subject to
    FIRPTA tax upon the sale of their shares of our common
    stock.
    Foreign
    stockholders may be subject to FIRPTA tax upon the payment of a
    capital gains dividend.
    Employee
    Benefit Plan, IRA, and Other Tax-Exempt Investor Risks
    If a
    stockholder fails to meet the fiduciary and other standards
    under ERISA or the Internal Revenue Code as a result of an
    investment in shares of our common stock, such stockholder could
    be subject to criminal and civil penalties.
    
    whether its investment is consistent with the applicable
    provisions of ERISA and the Code, or any other applicable
    governing authority in the case of a government plan;
    whether its investment is made in accordance with the documents
    and instruments governing its Benefit Plan or IRA, including its
    Benefit Plan or IRAs investment policy;
    whether its investment satisfies the prudence and
    diversification requirements of Sections 404(a)(1)(B) and
    404(a)(1)(C) of ERISA;
    whether its investment will impair the liquidity of the Benefit
    Plan or IRA;
    whether its investment will constitute a prohibited transaction
    under Section 406 of ERISA or Section 4975 of the Code;
    whether its investment will produce unrelated business taxable
    income, referred to as UBTI and as defined in Sections 511
    through 514 of the Code, to the Benefit Plan or IRA; and
    its need to value the assets of the Benefit Plan or IRA annually
    in accordance with ERISA and the Code.   45




---



##### Table of Contents



and/or and/or
  Item 1B.
    Unresolved
    Staff Comments.   46




---



##### Table of Contents



Item 2.
    Properties.      % Total





Annual RentProperty

# of


Ownership


Date


Purchase


Annual


of Annual


Physical


Per LeasedProperty

Location

Units


Percentage


Acquired


Price


Rent(1)


Rent


Occupancy(2)


Unit(3)Consolidated Properties:Walker Ranch Apartment Homes

San Antonio, TX


325



100
%


10/31/06


$
30,750,000


$
3,519,000



9.9
%


92.9
%

$
11,651Hidden Lake Apartment Homes

San Antonio, TX


380



100
%


12/28/06



32,030,000



3,665,000



10.3



94.5



10,208Part at Northgate

Spring, TX


248



100
%


06/12/07



16,600,000



2,369,000



6.6



92.7



10,300Residences at Braemar

Charlotte, NC


160



100
%


06/29/07



15,000,000



1,476,000



4.1



91.9



10,043Baypoint Resort

Corpus Christi, TX


350



100
%


08/02/07



33,250,000



3,588,000



10.1



91.4



11,213Towne Crossing Apartments

Mansfield, TX


268



100
%


08/29/07



21,600,000



2,637,000



7.4



92.5



10,635Villas of El Dorado

McKinney, TX


248



100
%


11/02/07



18,000,000



2,040,000



5.7



88.3



9,315The Heights at Olde Towne

Portsmouth, VA


148



100
%


12/21/07



17,000,000



2,006,000



5.6



94.6



14,330The Myrtles at Olde Towne

Portsmouth, VA


246



100
%


12/21/07



36,000,000



2,920,000



8.2



86.6



13,708Arboleda Apartments

Cedar Park, TX


312



100
%


03/31/08



29,250,000



2,713,000



7.6



84.9



10,239Creekside Crossing

Lithonia, GA


280



100
%


06/26/08



25,400,000



2,974,000



8.3



91.1



11,664Kedron Village

Peachtree City, GA


216



100
%


06/27/08



29,600,000



2,529,000



7.1



88.4



13,242Canyon Ridge Apartments

Hermitage, TN


350



100
%


09/15/08



36,050,000



3,257,000



9.1



85.4



10,892Total/Weighted Average




3,531










$
340,530,000


$
35,693,000



100
%


90.3
%

$
11,196     (1)
    
    Annual rent is based on contractual base rent from leases in
    effect as of December 31, 2008.(2)
    
    Physical occupancy as of December 31, 2008.(3)
    
    Average effective annual rent per leased unit as of
    December 31, 2008.      
    we believe all of our properties are adequately covered by
    insurance and are suitable for their intended purposes;
    we have no plans for any material renovations, improvements or
    development with respect to any of our properties, except in
    accordance with planned budgets; and
    our properties are located in markets where we are subject to
    competition for attracting new tenants and retaining current
    tenants.  Indebtedness
    Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   47




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information
    Form 10-K; Form 10-K
  Stockholders
    Distributions
     48




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##### Table of Contents



Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Use of
    Public Offering Proceeds
  Form S-11 No. 333-130945)
       49




---



##### Table of Contents



Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
      (d)(c)


Maximum ApproximateTotal Number of


Dollar ValueShares Purchased As


of Shares that May(a)


(b)


Part of Publicly


Yet Be PurchasedTotal Number of


Average Price


Announced


Under thePeriod

Shares Purchased


Paid per Share


Plan or Program(1)


Plans or ProgramsOctober 1, 2008 to October 31, 2008


64,720


$
9.45



64,720


$

(2)November 1, 2008 to November 30, 2008





$







$
December 1, 2008 to December 31, 2008





$







$
     (1)
    
    Our board of directors adopted a share repurchase plan effective
    July 19, 2006. Our board of directors adopted, and we
    publicly announced, an amended share repurchase plan effective
    August 25, 2008. Through December 31, 2008, we had
    repurchased 84,308 shares pursuant to our share repurchase
    plan. Our share repurchase plan does not have an expiration date.(2)
    
    Subject to funds being available, we will limit the number of
    shares of our common stock repurchased during any calendar year
    to 5.0% of the weighted average number of shares of our common
    stock outstanding during the prior calendar year.  Item 6.
    Selected
    Financial Data.    Form 10-K.
  December 31,


January 10, 2006Selected Financial Data

2008


2007


2006


(Date of Inception)BALANCE SHEET DATA:Total assets

$
344,685,000


$
228,814,000


$
67,214,000


$
201,000Mortgage loan payables, net

$
217,713,000


$
139,318,000


$
19,218,000


$
Stockholders equity

$
106,705,000


$
66,056,000


$
14,247,000


$
201,000   50




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##### Table of Contents



Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006STATEMENT OF OPERATIONS DATA:Total revenues

$
31,878,000


$
12,705,000


$
659,000Loss from continuing operations

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Net loss

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Loss per share  basic and diluted(1):Loss from continuing operations

$
(1.04
)

$
(1.10
)

$
(1.99
)Net loss

$
(1.04
)

$
(1.10
)

$
(1.99
)STATEMENT OF CASH FLOWS DATA:Cash flows provided by operating activities

$
1,567,000


$
2,195,000


$
301,000Cash flows used in investing activities

$
(126,638,000
)

$
(126,965,000
)

$
(63,991,000
)Cash flows provided by financing activities

$
126,041,000


$
125,010,000


$
65,144,000OTHER DATA:Distributions declared

$
8,633,000


$
3,519,000


$
145,000Distributions declared per share

$
0.70


$
0.68


$
0.14Funds from operations(2)

$
(1,106,000
)

$
(194,000
)

$
(234,000
)Net operating income(3)

$
15,832,000


$
6,482,000


$
393,000     (1)
    
    Net loss per share is based upon the weighted-average number of
    shares of our common stock outstanding. Distributions by us of
    our current and accumulated earnings and profits for federal
    income tax purposes are taxable to stockholders as ordinary
    income. Distributions in excess of these earnings and profits
    generally are treated as a non-taxable reduction of the
    stockholders basis in the shares of our common stock to
    the extent thereof (a return of capital for tax purposes) and,
    thereafter, as taxable gain. These distributions in excess of
    earnings and profits will have the effect of deferring taxation
    of the distributions until the sale of the stockholders
    common stock.(2)
    
    For additional information on FFO, see Item 7.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations  Funds from Operations,
    which includes a reconciliation of our GAAP net income (loss) to
    FFO for the years ended December 31, 2008 and 2007 and for
    the period from January 10, 2006 (Date of Inception)
    through December 31, 2006.(3)
    
    For additional information on net operating income, see
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations  Net
    Operating Income, which includes a reconciliation of our GAAP
    net income (loss) to net operating income for the years ended
    December 31, 2008 and 2007 and for the period from
    January 10, 2006 (Date of Inception) through
    December 31, 2006.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The use of the words we, us or
    our refers to Grubb & Ellis Apartment
    REIT, Inc. and its subsidiaries, including Grubb &
    Ellis Apartment REIT Holdings, L.P., except where the context
    otherwise requires.
  Form 10-K.
 51




---



##### Table of Contents



Forward-Looking
    Statements
    Overview
    and Background
         52




---



##### Table of Contents



Business
    Strategies
    Following
    Demographic Trends and Population Shifts to Find Attractive
    Tenants in Quality Apartment Community Markets
  and/or
   53




---



##### Table of Contents



Leveraging
    the Experience of Our Management
      Critical
    Accounting Policies
    Use of
    Estimates
    Revenue
    Recognition, Tenant Receivables and Allowance for Uncollectible
    Accounts
  Revenue Recognition
  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent No. 99-19. No. 99-19
 54




---



##### Table of Contents



Capitalization
    of Expenditures and Depreciation of Assets
    Impairment
    
    significant negative industry or economic trends;
    a significant underperformance relative to historical or
    projected future operating results; and
    a significant change in the manner in which the asset is used.    Properties
    Held for Sale
  Accounting for the Impairment or Disposal of
    Long Lived Assets, long-lived
    
    management, having the authority to approve the action, commits
    to a plan to sell the asset;
    the asset is available for immediate sale in its present
    condition subject only to terms that are usual and customary for
    sales of such assets; 55




---



##### Table of Contents




    an active program to locate a buyer and other actions required
    to complete the plan to sell the asset has been initiated;
    the sale of the asset is probable and the transfer of the asset
    is expected to qualify for recognition as a completed sale
    within one year;
    the asset is being actively marketed for sale at a price that is
    reasonable in relation to its current fair value; and
    given the actions required to complete the plan to sell the
    asset, it is unlikely that significant changes to the plan would
    be made or that the plan would be withdrawn.  Purchase
    Price Allocation
  Business
    Combinations, lease-up
         56




---



##### Table of Contents



Qualification
    as a REIT
      Recently
    Issued Accounting Pronouncements
    Acquisitions
    in 2008 and 2007
    Factors
    Which May Influence Results of Operations
    Rental
    Income
    Offering
    Proceeds
    Sarbanes-Oxley
    Act
   57




---



##### Table of Contents



Results
    of Operations
  Comparison
    of the Years Ended December 31, 2008 and 2007 and the
    Period from January 10, 2006 (Date of Inception) through
    December 31, 2006
      Revenues
     58




---



##### Table of Contents



Rental
    Expenses
    Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Real estate taxes

$
5,368,000


$
2,488,000


$
115,000Administration


4,600,000



1,606,000



72,000Utilities


2,399,000



599,000



28,000Repairs and maintenance


2,089,000



852,000



22,000Property management fees


1,129,000



489,000



24,000Insurance


461,000



189,000



5,000Total rental expenses

$
16,046,000


$
6,223,000


$
266,000     General
    and Administrative
    Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Asset management fees

$
2,563,000


$
950,000


$
Acquisition related costs


825,000







Professional and legal fees


672,000



601,000



99,000Bad debt expense


544,000



264,000



Director and officers insurance premiums


220,000



202,000



87,000Directors fees


101,000



100,000



53,000Acquisition related audit fees to comply with the provisions of
    Article 3-14
    of
    Regulation S-X


84,000



187,000



36,000Other


345,000



79,000



19,000Total general and administrative

$
5,354,000


$
2,383,000


$
294,000    59




---



##### Table of Contents



Depreciation
    and Amortization
    Interest
    Expense
    Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Interest expense on mortgage loan payables

$
9,783,000


$
3,358,000


$
11,000Amortization of deferred financing fees  mortgage
    loan payables


173,000



36,000



Amortization of debt discount


136,000



47,000



Interest expense on the Wachovia Loan


714,000



39,000



Write off of deferred financing fees  line of credit


243,000







Interest expense on the line of credit and the mezzanine line of
    credit






377,000



258,000Unused and annual fees on line of credit






128,000



32,000Amortization of deferred financing fees  lines of
    credit


338,000



197,000



30,000Interest expense on unsecured note payables to affiliate


220,000



204,000



8,000Total interest expense

$
11,607,000


$
4,386,000


$
339,000     Interest
    and Dividend Income
   60




---



##### Table of Contents



Liquidity
    and Capital Resources
             61




---



##### Table of Contents



Other
    Liquidity Needs
        Cash
    Flows
     62




---



##### Table of Contents



Distributions
      Years Ended December 31,2008


2007


2006Ordinary income

$





%

$





%

$





%Capital gain






















Return of capital


8,216,000



100



3,115,000



100



68,000



100$
8,216,000



100
%

$
3,115,000



100
%

$
68,000



100
%     Capital
    Resources
  Financing
   63




---



##### Table of Contents



Mortgage
    Loan Payables, Net
    Unsecured
    Note Payables to Affiliate
    Lines of
    Credit and Mezzanine Line of Credit
    REIT
    Requirements
    Commitments
    and Contingencies
    Debt
    Service Requirements
         64




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##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess than 1 Year


1-3 Years


4-5 Years


More than 5 Years(2009)


(2010-2011)


(2012-2013)


(After 2013)


TotalPrincipal payments  fixed rate debt

$
9,515,000


$
1,289,000


$
1,880,000


$
153,926,000


$
166,610,000Interest payments  fixed rate debt


9,107,000



17,605,000



17,456,000



23,705,000



67,873,000Principal payments  variable rate debt


3,200,000







37,000



60,963,000



64,200,000Interest payments  variable rate debt (based on rates
    in effect as of December 31, 2008)


1,815,000



3,260,000



3,264,000



2,593,000



10,932,000Repairs expense and capital replacements


48,000















48,000Total

$
23,685,000


$
22,154,000


$
22,637,000


$
241,187,000


$
309,663,000   Off-Balance
    Sheet Arrangements
    Inflation
    Funds
    from Operations
       65




---



##### Table of Contents



Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Net loss

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Add:Depreciation and amortization  consolidated properties


11,720,000



5,385,000



289,000FFO

$
(1,106,000
)

$
(194,000
)

$
(234,000
)FFO per share  basic and diluted

$
(0.09
)

$
(0.04
)

$
(0.89
)Weighted average common shares outstanding  basic and
    diluted


12,322,032



5,063,942



262,609     Net
    Operating Income
   66




---



##### Table of Contents



Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Net loss

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Add:General and administrative


5,354,000



2,383,000



294,000Depreciation and amortization


11,720,000



5,385,000



289,000Interest expense


11,607,000



4,386,000



339,000Less:Interest and dividend income


(22,000
)


(91,000
)


(6,000
)Other income, net






(2,000
)


Minority interest


(1,000
)






Net operating income

$
15,832,000


$
6,482,000


$
393,000   Subsequent
    Events
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.       67




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##### Table of Contents



Expected Maturity Date2009


2010


2011


2012


2013


Thereafter


Total


Fair ValueFixed rate debt  principal payments

$
9,515,000


$
588,000


$
701,000


$
735,000


$
1,145,000


$
153,926,000


$
166,610,000



*Weighted average interest rate on maturing debt


5.11
%


5.32
%


5.32
%


5.32
%


5.47
%


5.58
%


5.55
%


Variable rate debt  principal payments

$
3,200,000


$



$



$



$
37,000


$
60,963,000


$
64,200,000



*Weighted average interest rate on maturing debt (based on rates
    in effect as of December 31, 2008)


6.94
%



%



%



%


2.66
%


2.64
%


2.85
%


     *
    
    The estimated fair value of our mortgage loan payables was
    $215,274,000 as of December 31, 2008. The estimated fair
    value of the Wachovia Loan was $3,194,000 as of
    December 31, 2008. The estimated fair value of the
    $9,100,000 unsecured note payables to an affiliate as of
    December 31, 2008 is not determinable due to the related
    party nature of the note.            Item 8.
    Financial
    Statements and Supplementary Data.    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A(T).
    Controls
    and Procedures.  Evaluation of disclosure controls and
    procedures.
 68




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##### Table of Contents



Rules 13a-15(e) 15d-15(e)
  Managements Report on Internal Control over
    Financial Reporting. Rules 13a-15(f) 15d-15(f).
      Changes in internal control over financial
    reporting.
  Form 10-K Form 10-K.
  Item 9B.
    Other
    Information.   69




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Name

Age*

Position

Term of OfficeStanley J. (Jay) Olander, Jr.


54


Chief Executive Officer, President and Chairman of the Board of
    Directors

Since 2006David L. Carneal


45


Executive Vice President and Chief Operating Officer

Since 2006Gustav G. Remppies


48


Executive Vice President and Chief Investment Officer

Since 2006Shannon K S Johnson


31


Chief Financial Officer

Since 2006Cora Lo


34


Assistant Secretary

Since 2008Andrea R. Biller


59


Director

Since 2008Glenn W. Bunting, Jr.


64


Independent Director

Since 2006Robert A. Gary, IV


55


Independent Director

Since 2006W. Brand Inlow


55


Independent Director

Since 2006     *
    
    As of March 24, 2009.    Stanley J. (Jay) Olander, Jr.
  David L. Carneal
  Gustav G. Remppies
 70




---



##### Table of Contents



Shannon K S Johnson
  Cora Lo
  Andrea R. Biller
  Glenn W. Bunting, Jr.
 71




---



##### Table of Contents



Robert A. Gary, IV
  W. Brand Inlow
  Our
    Advisor
  Management
    Name

Age*

PositionStanley J. (Jay) Olander, Jr.


54


Chief Executive Officer and PresidentDavid L. Carneal


45


Executive Vice President and Chief Operating OfficerGustav G. Remppies


48


Executive Vice President and Chief Investment Officer     *
    
    As of March 24, 2009.       72




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##### Table of Contents



Grubb &
    Ellis, NNN Realty Advisors and Grubb & Ellis Realty
    Investors
          Committees
    of Our Board of Directors
    Audit
    Committee
    
    makes recommendations to our board of directors concerning the
    engagement of independent public accountants;
    reviews the plans and results of the audit engagement with the
    independent public accountants;
    approves professional services provided by, and the independence
    of, the independent public accountants;
    considers the range of audit and non-audit fees; and
    consults with the independent public accountants regarding the
    adequacy of our internal accounting controls. 73




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##### Table of Contents



Executive
    Committee
    Acquisition
    Committee
    Compensation
    Committee
    Nominating
    and Corporate Governance Committee
    2006
    Incentive Award Plan
     74




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##### Table of Contents



Awards
    Pursuant to the 2006 Incentive Award Plan
        Automatic
    Grants of Restricted Stock to Independent
    Directors
      Amendment
    and Termination of the 2006 Plan
      Code of
    Business Conduct and Ethics
   75




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##### Table of Contents



Section 16(a)
    Beneficial Ownership Reporting Compliance
    Item 11.
    Executive
    Compensation.  Executive
    Compensation
  and/or Form 10-K.
  Option/SAR
    Grants in Last Fiscal Year
    Compensation
    Committee Interlocks and Insider Participation
    Director
    Compensation
    
    Annual Retainer. Our independent directors receive an
    annual retainer of $15,000.
    Meeting Fees. Our independent directors receive $1,000
    for each board meeting and executive committee meeting attended
    in person or by telephone, $500 for each committee meeting,
    other than an executive committee meeting, attended in person or
    by telephone, and an additional $2,000 to the audit committee
    chair for each audit committee meeting attended in person or by
    telephone. If a board meeting is held on the same day as a
    committee meeting, an additional fee will not be paid for
    attending the committee meeting, except to the audit committee
    chairman.
    Equity Compensation. Upon initial election to the board,
    each independent director receives 1,000 shares of
    restricted common stock, and an additional 1,000 shares of
    restricted common stock upon his or her subsequent election each
    year. The restricted shares vest as to 20.0% of the shares on
    the date of grant and on each anniversary thereafter over four
    years from the date of grant. 76




---



##### Table of Contents




    Other Compensation. We reimburse our directors for
    reasonable out-of-pocket expenses incurred in connection with
    attendance at meetings, including committee meetings, of our
    board of directors. Our independent directors do not receive
    other benefits from us.      Fees Earnedor Paid


Stockin Cash


Awards


TotalName

($)(1)


($)(2)


($)Stanley J. Olander, Jr.(3)










Scott D. Peters(3)(4)










Andrea R. Biller(3)(5)










Glenn W. Bunting, Jr.


32,000



7,052



39,052Robert A. Gary, IV


38,000



7,052



45,052W. Brand Inlow


31,000



7,052



38,052     (1)
    
    Consists of the amounts described below.  Basic AnnualRetainer


Meeting FeesDirector

Role

($)


($)Olander

Chairman of the Board






Peters

Director






Biller

Director






Bunting

Member, Audit Committee


15,000



17,000Gary

Chairman, Audit Committee


15,000



23,000Inlow

Member, Audit Committee


15,000



16,000   (2)
    
    The amounts in this column represent the proportionate amount of
    the total fair value of stock awards recognized by us in 2008
    for financial accounting purposes, disregarding for this purpose
    the estimate of forfeitures related to service-based vesting
    conditions. The amounts included in the table for each award
    include the amount recorded as expense in our consolidated
    statement of operations for the year ended December 31,
    2008. The fair values of these awards and the amounts expensed
    in 2008 were determined in accordance with Statement of
    Financial Accounting Standards, or SFAS, No. 123(R),
    Share-Based Payment, or FAS No. 123(R).    Full GrantNumber of


Date FairRestricted


Value ofDirector

Grant Date


Shares (#)


Award ($)Olander










Peters










Biller










Bunting


06/25/08



1,000



10,000Gary


06/25/08



1,000



10,000Inlow


06/25/08



1,000



10,000  77




---



##### Table of Contents



NonvestedDirector

Restricted StockOlander


Peters


Biller


Bunting


1,800Gary


1,800Inlow


1,800   (3)
    
    Mr. Olander and Ms. Biller are not independent
    directors. In addition, Mr. Peters was not an independent
    director.(4)
    
    Mr. Peters served as our director until June 2008.(5)
    
    Ms. Biller has served as our director since June 2008.  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  Principal
    Stockholders
    Number of Sharesof Common StockName of Beneficial Owners(1)

Beneficially Owned


PercentageStanley J. Olander, Jr.(2)


22,223



*Shannon K S Johnson






*Andrea R. Biller






*Glenn W. Bunting, Jr.(3)


3,293



*Robert A. Gary, IV(3)


3,000



*W. Brand Inlow(3)


3,000



*All directors and executive officers as a group (9 persons)


31,516



*     *
    
    Represents less than 1.0% of our outstanding common stock.(1)
    
    The address of each beneficial owner listed is
    c/o Grubb &
    Ellis Apartment REIT, Inc., 1551 N. Tustin Avenue,
    Suite 300, Santa Ana, California 92705.(2)
    
    Includes 22,223 shares of our common stock owned by our
    advisor. Stanley J. Olander, Jr. is the Chief Executive Officer
    of our advisor. Our advisor also owns 100 units of
    Grubb & Ellis Apartment REIT Holdings, L.P., or our
    operating partnership.(3)
    
    Includes vested and nonvested restricted shares of common stock. 78




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##### Table of Contents



Equity
    Compensation Plan Information
    Number of Securities





Number ofto be Issued upon


Weighted Average


SecuritiesExercise of


Exercise Price of


RemainingOutstanding Options,


Outstanding Options,


Available forPlan Category

Warrants and Rights


Warrants and Rights


Future IssuanceEquity compensation plans approved by security holders(1)










1,990,800Equity compensation plans not approved by security holders










Total










1,990,800     (1)
    
    On July 19, 2006 we granted an aggregate of
    4,000 shares of restricted common stock, as defined in the
    2006 plan, to our independent directors under the 2006 plan, of
    which 20.0% vested on the grant date and 20.0% will vest on each
    of the first four anniversaries of the date of the grant. On
    each of June 12, 2007 and June 25, 2008, in connection
    with their re-election, we granted an aggregate of
    3,000 shares of restricted common stock to our independent
    directors under the 2006 plan, which will vest over the same
    period described above. Such shares are not shown in the chart
    above as they are deemed outstanding shares of our common stock;
    however such grants reduce the number of securities remaining
    available for future issuance. In addition, 800 shares of
    restricted common stock were forfeited in November 2006.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.  Relationships
    Among Our Affiliates
  and/or
       79




---



##### Table of Contents



Fees
    and Expenses Paid to Affiliates
    Process
    for Resolution of Conflicting Opportunities
        Director
    Independence
      Item 14.
    Principal
    Accounting Fees and Services.   80




---



##### Table of Contents



Services

2008


2007Audit Fees(1)

$
505,000


$
410,000Audit related fees(2)






10,000Tax fees(3)


20,000



5,000All other fees






Total

$
525,000


$
425,000     (1)
    
    Audit fees billed in 2008 and 2007 consisted of the audit of our
    annual consolidated financial statements, a review of our
    quarterly consolidated financial statements, and statutory and
    regulatory audits, consents and other services related to
    filings with the SEC, including filings related to our offering.
    These amounts include fees paid by our advisor and its
    affiliates for costs in connection with our offering and to the
    extent cumulative other organizational and offering expenses
    exceed 1.5% of the gross proceeds of our offering, these amounts
    are not included within our consolidated financial statements,
    as they are subject to the accounting policy described in
    Note 8, Commitments and Contingencies  Other
    Organizational and Offering Expenses, to the Consolidated
    Financial Statements.(2)
    
    Audit related fees consist of financial accounting and reporting
    consultations.(3)
    
    Tax services consist of tax compliance and tax planning and
    advice.   81




---



##### 



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules.  Financial Statements:
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of Independent Registered Public
    Accounting Firm


83Consolidated Balance Sheets as of
    December 31, 2008 and 2007


84Consolidated Statements of Operations for the
    Years Ended December 31, 2008 and 2007 and for the Period
    from January 10, 2006 (Date of Inception) through
    December 31, 2006


85Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2008 and 2007 and
    for the Period from January 10, 2006 (Date of Inception)
    through December 31, 2006


86Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008 and 2007 and for the Period
    from January 10, 2006 (Date of Inception) through
    December 31, 2006


87Notes to Consolidated Financial Statements


88   Financial Statement Schedule:
     
 PageReal Estate Operating Properties and Accumulated
    Depreciation (Schedule III)


116      Exhibits:
    Exhibits:
    Financial Statement Schedule:
   
 PageReal Estate Operating Properties and Accumulated
    Depreciation (Schedule III)


116   82




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Deloitte &
    Touche, LLP
    83




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  CONSOLIDATED
    BALANCE SHEETS
 As of
    December 31, 2008 and 2007
  December 31,2008


2007ASSETSReal estate investments:Operating properties, net

$
335,267,000


$
220,390,000Cash and cash equivalents


2,664,000



1,694,000Accounts and other receivables


395,000



438,000Restricted cash


3,762,000



3,286,000Identified intangible assets, net


249,000



1,171,000Other assets, net


2,348,000



1,835,000Total assets

$
344,685,000


$
228,814,000LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS
    EQUITYLiabilities:Mortgage loan payables, net

$
217,713,000


$
139,318,000Unsecured note payables to affiliate


9,100,000



7,600,000Lines of credit


3,200,000



10,000,000Accounts payable and accrued liabilities


5,859,000



4,388,000Accounts payable due to affiliates, net


864,000



776,000Security deposits and prepaid rent


1,244,000



675,000Total liabilities


237,980,000



162,757,000Commitments and contingencies (Note 8)Minority interest of limited partner in operating partnership






1,000Stockholders equity:Preferred stock, $0.01 par value; 50,000,000 shares
    authorized; none issued and outstanding






Common stock, $0.01 par value; 300,000,000 shares
    authorized; 15,488,810 and 8,528,844 shares issued and
    outstanding as of December 31, 2008 and December 31,
    2007, respectively


155,000



85,000Additional paid-in capital


137,775,000



75,737,000Accumulated deficit


(31,225,000
)


(9,766,000
)Total stockholders equity


106,705,000



66,056,000Total liabilities, minority interest and stockholders
    equity

$
344,685,000


$
228,814,000    84




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.CONSOLIDATED STATEMENTS OF OPERATIONSFor the Years Ended December 31, 2008 and 2007 and
    for the Period from January 10, 2006 (Date of Inception)
    through December 31, 2006
  Period fromJanuary 10, 2006(Date of Inception)throughYears Ended December 31,


December 31,2008


2007


2006Revenues:Rental income

$
28,692,000


$
11,610,000


$
615,000Other property revenues


3,186,000



1,095,000



44,000Total revenues


31,878,000



12,705,000



659,000Expenses:Rental expenses


16,046,000



6,223,000



266,000General and administrative


5,354,000



2,383,000



294,000Depreciation and amortization


11,720,000



5,385,000



289,000Total expenses


33,120,000



13,991,000



849,000Loss before other income (expense)


(1,242,000
)


(1,286,000
)


(190,000
)Other income (expense):Interest expense (including amortization of deferred financing
    costs and debt discount):Interest expense related to unsecured note payables to affiliate
    and mezzanine line of credit


(220,000
)


(204,000
)


(25,000
)Interest expense related to mortgage loan payables, net and
    lines of credit


(11,387,000
)


(4,182,000
)


(314,000
)Interest and dividend income


22,000



91,000



6,000Other income, net






2,000



Loss before minority interest


(12,827,000
)


(5,579,000
)


(523,000
)Minority interest


1,000







Net loss

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Net loss per share  basic and diluted

$
(1.04
)

$
(1.10
)

$
(1.99
)Weighted-average number of shares outstanding 
    basic and diluted


12,322,032



5,063,942



262,609    85




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITYFor the Years Ended December 31, 2008 and 2007 and
    for the Period from January 10, 2006 (Date of Inception)
    through December 31, 2006
  Common Stock











TotalNumber of





Additional


Preferred


Accumulated


StockholdersShares


Amount


Paid-In Capital


Stock


Deficit


EquityBALANCE  January 10, 2006 (Date of Inception)





$



$



$



$



$
Issuance of common stock


1,680,776



17,000



16,752,000











16,769,000Issuance of vested and nonvested restricted common stock


4,000







8,000











8,000Offering costs










(1,884,000
)










(1,884,000
)Forfeiture of nonvested shares of common stock


(800
)






(1,000
)










(1,000
)Amortization of nonvested common stock compensation










3,000











3,000Issuance of common stock under the DRIP


2,092







20,000











20,000Distributions


















(145,000
)


(145,000
)Net loss


















(523,000
)


(523,000
)BALANCE  December 31, 2006


1,686,068



17,000



14,898,000







(668,000
)


14,247,000Issuance of common stock


6,707,393



67,000



66,934,000











67,001,000Issuance of vested and nonvested restricted common stock


3,000







6,000











6,000Offering costs










(7,367,000
)










(7,367,000
)Amortization of nonvested common stock compensation










9,000











9,000Issuance of common stock under the DRIP


132,383



1,000



1,257,000











1,258,000Distributions


















(3,519,000
)


(3,519,000
)Net loss


















(5,579,000
)


(5,579,000
)BALANCE  December 31, 2007


8,528,844



85,000



75,737,000







(9,766,000
)


66,056,000Issuance of common stock


6,641,058



67,000



66,269,000











66,336,000Issuance of vested and nonvested restricted common stock


3,000







6,000











6,000Offering costs










(7,254,000
)










(7,254,000
)Amortization of nonvested common stock compensation










15,000











15,000Issuance of common stock under the DRIP


400,216



4,000



3,798,000











3,802,000Repurchase of common stock


(84,308
)


(1,000
)


(796,000
)










(797,000
)Distributions


















(8,633,000
)


(8,633,000
)Net loss


















(12,826,000
)


(12,826,000
)BALANCE  December 31, 2008


15,488,810


$
155,000


$
137,775,000


$



$
(31,225,000
)

$
106,705,000    86




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Years Ended December 31, 2008 and 2007 and
    for the Period from January 10, 2006 (Date of Inception)
    through December 31, 2006
  Period fromJanuary 10, 2006(Date of inception)throughYears Ended December 31,


December 31,2008


2007


2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(12,826,000
)

$
(5,579,000
)

$
(523,000
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Depreciation and amortization (including deferred financing
    costs and debt discount)


12,610,000



5,665,000



319,000Loss on property insurance settlements


16,000







Stock based compensation, net of forfeitures


21,000



15,000



11,000Bad debt expense


544,000



264,000



Minority interest


(1,000
)






Changes in operating assets and liabilities:Accounts and other receivables


(712,000
)


(307,000
)


(43,000
)Other assets


(79,000
)


218,000



(97,000
)Accounts payable and accrued liabilities


1,819,000



2,125,000



344,000Accounts payable due to affiliates, net


324,000



28,000



325,000Security deposits and prepaid rent


(149,000
)


(234,000
)


(35,000
)Net cash provided by operating activities


1,567,000



2,195,000



301,000CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of real estate operating properties


(124,874,000
)


(123,657,000
)


(63,794,000
)Capital expenditures


(1,648,000
)


(215,000
)


(4,000
)Proceeds from property insurance settlements


360,000







Restricted cash


(476,000
)


(3,093,000
)


(193,000
)Net cash used in investing activities


(126,638,000
)


(126,965,000
)


(63,991,000
)CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on mortgage loan payables


78,651,000



82,482,000



19,218,000Borrowings on unsecured note payables to affiliate


9,100,000



31,900,000



10,000,000Payments on mortgage loan payables


(391,000
)


(137,000
)


Payments on unsecured note payables to affiliate


(7,600,000
)


(34,300,000
)


(Payments) borrowings under the lines of credit, net


(6,800,000
)


(11,585,000
)


21,585,000Deferred financing costs


(1,050,000
)


(1,174,000
)


(543,000
)Security deposits


196,000



(7,000
)


Proceeds from issuance of common stock


66,636,000



66,796,000



16,651,000Repurchase of common stock


(797,000
)






Minority interest contributions to our operating partnership










1,000Payment of offering costs


(7,490,000
)


(7,108,000
)


(1,720,000
)Distributions


(4,414,000
)


(1,857,000
)


(48,000
)Net cash provided by financing activities


126,041,000



125,010,000



65,144,000NET CHANGE IN CASH AND CASH EQUIVALENTS


970,000



240,000



1,454,000CASH AND CASH EQUIVALENTS  Beginning of period


1,694,000



1,454,000



CASH AND CASH EQUIVALENTS  End of period

$
2,664,000


$
1,694,000


$
1,454,000SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for:Interest

$
10,376,000


$
3,483,000


$
128,000Income taxes

$
11,000


$
2,000


$
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:Investing Activities:Accrued capital expenditures

$
20,000


$
17,000


$
The following represents the increase in certain assets and
    liabilities in connection with our acquisitions of operating
    properties:Accounts and other receivables

$
2,000


$
20,000


$
11,000Other assets, net

$
141,000


$
314,000


$
185,000Mortgage loan payables, net

$



$
37,709,000


$
Accounts payable and accrued liabilities

$
399,000


$
1,385,000


$
94,000Accounts payable due to affiliates, net

$



$



$
961,000Security deposits and prepaid rent

$
521,000


$
732,000


$
222,000Financing Activities:Issuance of common stock under the DRIP

$
3,802,000


$
1,258,000


$
20,000Distributions declared but not paid

$
898,000


$
481,000


$
77,000Accrued offering costs

$
187,000


$
423,000


$
164,000Accrued deferred financing costs

$



$
4,000


$
13,000Receivable for issuance of common stock

$
23,000


$
323,000


$
118,000    87




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 For the Years Ended December 31, 2008 and 2007
    and
 for the Period from January 10, 2006
 (Date of Inception) through December 31, 2006
  The use of the words we, us or
    our refers to Grubb & Ellis Apartment
    REIT, Inc. and its subsidiaries, including Grubb &
    Ellis Apartment REIT Holdings, L.P., except where the context
    otherwise requires.
  1.
    Organization
    and Description of Business      Form S-11
  day-to-day
   88




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2.
    Summary
    of Significant Accounting Policies    Basis
    of Presentation
  Consolidation of
    Variable Interest Entities, an Interpretation of Accounting
    Research Bulletin No. 51,
  Use of
    Estimates
    Cash
    and Cash Equivalents
   89




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Cash
    Revenue
    Recognition, Tenant Receivables and Allowance for Uncollectible
    Accounts
  Revenue Recognition
  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent No. 99-19. No. 99-19
    Properties
    Held for Sale
  Accounting for the Impairment or Disposal of
    Long Lived Assets
    
    management, having the authority to approve the action, commits
    to a plan to sell the asset;
    the asset is available for immediate sale in its present
    condition subject only to terms that are usual and customary for
    sales of such assets; 90




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    an active program to locate a buyer and other actions required
    to complete the plan to sell the asset has been initiated;
    the sale of the asset is probable and the transfer of the asset
    is expected to qualify for recognition as a completed sale
    within one year;
    the asset is being actively marketed for sale at a price that is
    reasonable in relation to its current fair value; and
    given the actions required to complete the plan to sell the
    asset, it is unlikely that significant changes to the plan would
    be made or that the plan would be withdrawn.    Purchase
    Price Allocation
  Business
    Combinations lease-up
       91




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Operating
    Properties, Net
      Fair
    Value Measurements
  Fair Value Measurements
     92




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other
    Assets, Net
    Stock
    Compensation
  Share-Based Payment
  Minority
    Interest
    Income
    Taxes
      Accounting for
    Uncertainty in Income
  Segment
    Disclosure
  Disclosures about
    Segments of an Enterprise and Related Information
 93




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recently
    Issued Accounting Pronouncements
  SFAS No. 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement Under Statement 13, SFAS No. 157-1. SFAS No. 157-1 Accounting for Leases SFAS No. 157-2, Effective Date of FASB Statement No. 157, SFAS No. 157-2. SFAS No. 157-2 SFAS No. 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active SFAS No. 157-3. SFAS No. 157-3 SFAS No. 157-1 SFAS No. 157-1 SFAS No. 157-3 SFAS No. 157-2
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities,
  Business Combinations, Noncontrolling Interests in
    Consolidated Financial Statements  An Amendment of
    ARB No. 51,
 94




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SFAS No. 142-3, Determination of the Useful Life of Intangible Assets, SFAS No. 142-3. SFAS No. 142-3 Goodwill and Other Intangible Assets, SFAS No. 142-3 SFAS No. 142-3 SFAS No. 142-3 SFAS No. 142-3 SFAS No. 142-3 SFAS No. 142-3
  No. 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities, No. 03-6-1. No. 03-6-1 Earnings per
    Share. No. 03-6-1 No. 03-6-1 No. 03-6-1. No. 03-6-1 No. 03-6-1 No. 03-6-1
 95




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Real
    Estate Investments    December 31,2008


2007Land

$
41,926,000


$
24,670,000Land improvements


22,066,000



12,592,000Building and improvements


273,171,000



179,226,000Furniture, fixtures and equipment


10,734,000



7,454,000347,897,000



223,942,000Less: accumulated depreciation


(12,630,000
)


(3,552,000
)$
335,267,000


$
220,390,000     Acquisitions
    in 2008
  Arboleda
    Apartments  Cedar Park, Texas
    Creekside
    Crossing  Lithonia, Georgia
    Kedron
    Village  Peachtree City, Georgia
   96




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Canyon
    Ridge Apartments  Hermitage, Tennessee
    Acquisitions
    in 2007
  Park at
    Northgate  Spring, Texas
    Residences
    at Braemar  Charlotte, North Carolina
    Baypoint
    Resort  Corpus Christi, Texas
    Towne
    Crossing Apartments  Mansfield, Texas
    Villas of
    El Dorado  McKinney, Texas
   97




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  The
    Heights at Olde Towne  Portsmouth, Virginia
    The
    Myrtles at Olde Towne  Portsmouth, Virginia
    4.
    Identified
    Intangible Assets, Net    December 31,2008


2007In place leases, net of accumulated amortization of $185,000 and
    $450,000 as of December 31, 2008 and 2007, respectively,
    (with a weighted average remaining life of 4 months and
    5 months as of December 31, 2008 and 2007,
    respectively)

$
181,000


$
785,000Tenant relationships, net of accumulated amortization of $69,000
    and $499,000 as of December 31, 2008 and 2007,
    respectively, (with a weighted average remaining life of
    4 months and 5 months as of December 31, 2008 and
    2007, respectively)


68,000



386,000$
249,000


$
1,171,000       5.
    Other
    Assets, Net    December 31,2008


2007Deferred financing costs, net of accumulated amortization of
    $225,000 and $262,000 as of December 31, 2008 and 2007,
    respectively

$
1,750,000


$
1,457,000Prepaid expenses and deposits


598,000



378,000$
2,348,000


$
1,835,000    98




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year

Amount2009

$
315,0002010

$
232,0002011

$
232,0002012

$
232,0002013

$
232,000Thereafter

$
507,000   6.
    Mortgage
    Loan Payables, Net and Unsecured Note Payables to
    Affiliate  Mortgage
    Loan Payables, Net
     99




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,Property

Interest Rate



Maturity Date


2008


2007Fixed Rate Debt:Hidden Lake Apartment Homes


5.34
%



01/11/17


$
19,218,000


$
19,218,000Walker Ranch Apartment Homes


5.36
%



05/11/17



20,000,000



20,000,000Residences at Braemar


5.72
%



06/01/15



9,513,000



9,662,000Park at Northgate


5.94
%



08/01/17



10,295,000



10,295,000Baypoint Resort


5.94
%



08/01/17



21,612,000



21,612,000Towne Crossing Apartments


5.04
%



11/01/14



15,046,000



15,289,000Villas of El Dorado


5.68
%



12/01/16



13,600,000



13,600,000The Heights at Olde Towne


5.79
%



01/01/18



10,475,000



10,475,000The Myrtles at Olde Towne


5.79
%



01/01/18



20,100,000



20,100,000Arboleda Apartments


5.36
%



04/01/15



17,651,000



157,510,000



140,251,000Variable Rate Debt:Creekside Crossing


2.61
%
*


07/01/15



17,000,000



Kedron Village


2.63
%
*


07/01/15



20,000,000



Canyon Ridge Apartments


2.66
%
*


10/01/15



24,000,000



61,000,000



Total fixed and variable debt











218,510,000



140,251,000Less: discount











(797,000
)


(933,000
)Mortgage loan payables, net










$
217,713,000


$
139,318,000     *
    
    Represents the interest rate in effect as of December 31,
    2008. In addition, pursuant to the terms of the related loan
    documents the maximum interest rate allowable is capped at a
    rate ranging from 6.50% to 6.75% per annum.    Year

Amount2009

$
415,0002010

$
588,0002011

$
701,0002012

$
735,0002013

$
1,182,000Thereafter

$
214,889,000  100




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Unsecured
    Note Payables to Affiliate
    Date of Note

Amount


Maturity Date


Interest Rate


Date Paid in Full12/28/06

$
10,000,000



06/28/07



6.86
%

04/06/0706/29/07

$
3,300,000



12/29/07



6.85
%

07/31/0708/01/07

$
13,200,000



02/01/08



6.86
%

08/22/0708/29/07

$
5,400,000



03/01/08



6.85
%

10/17/0712/21/07

$
10,000,000



06/20/08



7.46
%

02/20/0806/27/08

$
3,700,000



05/10/09
*


5.26
%

09/15/08

$
5,400,000



09/15/09
**


5.00
%

     *
    
    On November 10, 2008, we executed an extension to extend
    the maturity date from December 27, 2008 to May 10,
    2009.**
    
    On March 9, 2009, we executed an extension to extend the
    maturity date from March 15, 2009 to September 15,
    2009. See Note 19, Subsequent Events  Extension
    of Unsecured Note Payable to Affiliate for a further discussion.        7.
    Lines of
    Credit and Mezzanine Line of Credit  Line
    of Credit and Mezzanine Line of Credit
         101




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Wachovia
    Loan
        8.
    Commitments
    and Contingencies  Litigation
    Environmental
    Matters
   102




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other
    Organizational and Offering Expenses
    Other
    9.
    Related
    Party Transactions  Fees
    and Expenses Paid to Affiliates
  and/or
  Offering
    Stage
  Selling
    Commissions
   103




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Marketing
    Support Fee and Due Diligence Expense Reimbursements
    Other
    Organizational and Offering Expenses
    Acquisition
    and Development Stage
  Acquisition
    Fee
    Reimbursement
    of Acquisition Expenses
   104




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Operational
    Stage
  Asset
    Management Fee
        Property
    Management Fee
    On-site
    Personnel Payroll
  on-site
  Operating
    Expenses
   105




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Compensation
    for Additional Services
            Liquidity
    Stage
  Disposition
    Fee
   106




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Incentive
    Distribution Upon Sales
    Incentive
    Distribution Upon Listing
    Fees
    Payable upon Termination of the Advisory Agreement
    Accounts
    Payable Due to Affiliates, Net
    December 31,Entity

Fee

2008


2007Grubb & Ellis Realty Investors

Operating Expenses

$
10,000


$
50,000Grubb & Ellis Realty Investors

Offering Costs


157,000



270,000Grubb & Ellis Realty Investors

On-site Personnel Payroll






10,000Grubb & Ellis Realty Investors

Acquisition Related Expenses


1,000



Grubb & Ellis Securities

Selling Commissions and Marketing Support Fees


30,000



153,000Residential Management

Property Management Fees


85,000



9,000Realty

Asset and Property Management Fees


581,000



284,000$
864,000


$
776,000  107




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Unsecured
    Note Payables to Affiliate
    Director
    and Former Presidents Financial Arrangement with Legal
    Counsel
      10.
    Minority
    Interest   108




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Stockholders
    Equity  Common
    Stock
      Preferred
    Stock
    Distribution
    Reinvestment Plan
    Share
    Repurchase Plan
       109




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2006
    Incentive Award Plan
          WeightedRestricted


Average GrantCommon


Date FairStock


ValueBalance  January 10, 2006 (Date of Inception)





$
Granted


4,000



10.00Vested


(800
)


10.00Forfeited


(800
)


10.00Balance  December 31, 2006


2,400



10.00Granted


3,000



10.00Vested


(1,200
)


10.00Forfeited






Balance  December 31, 2007


4,200



10.00Granted


3,000



10.00Vested


(1,800
)


10.00Forfeited






Balance  December 31, 2008


5,400


$
10.00Expected to vest  December 31, 2008


5,400


$
10.00  110




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    Special
    Limited Partner Interest    13.
    Fair
    Value of Financial Instruments  Disclosure About Fair
    Value of Financial Instruments
  Financial
    Instruments Reported at Fair Value
  Cash and
    Cash Equivalents
      Quoted Prices inActive Markets forIdentical Assets


Significant Other


Significantand Liabilities


Observable Inputs


Unobservable Inputs(Level 1 )


(Level 2)


(Level 3)


TotalAssetsMoney market funds

$
43,000


$



$



$
43,000Total assets at fair value

$
43,000


$



$



$
43,000     Financial
    Instruments Disclosed at Fair Value
       111




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      14.
    Tax
    Treatment of Distributions    Years Ended December 31,2008


2007


2006Ordinary income

$





%

$





%

$





%Capital gain






















Return of capital


8,216,000



100



3,115,000



100



68,000



100$
8,216,000



100.0
%

$
3,115,000



100
%

$
68,000



100
%   15.
    Business
    Combinations        Arboleda


Creekside


Kedron


Canyon RidgeProperty


Property


Property


Property


TotalLand

$
4,051,000


$
5,233,000


$
4,057,000


$
3,915,000


$
17,256,000Land improvements


2,232,000



1,393,000



2,767,000



3,081,000



9,473,000Buildings and improvements


22,670,000



18,818,000



22,774,000



28,671,000



92,933,000Furniture, fixtures and equipment


954,000



488,000



603,000



1,235,000



3,280,000In place leases


96,000



243,000



269,000



366,000



974,000Tenant relationships


236,000



95,000



96,000



138,000



565,000Net assets acquired

$
30,239,000


$
26,270,000


$
30,566,000


$
37,406,000


$
124,481,000  112




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        16.
    Concentration
    of Credit Risk      17.
    Per Share
    Data  Earnings Per Share
    18.
    Selected
    Quarterly Financial Data (Unaudited)    113




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Quarters EndedDecember 31,


September 30,


June 30,


March 31,2008


2008


2008


2008Revenues

$
9,421,000


$
8,885,000


$
7,267,000


$
6,305,000Expenses


(9,900,000
)


(8,883,000
)


(7,470,000
)


(6,867,000
)(Loss) income before other expense


(479,000
)


2,000



(203,000
)


(562,000
)Other expense, net


(3,198,000
)


(3,172,000
)


(2,857,000
)


(2,358,000
)Loss before minority interest


3,677,000



3,170,000



3,060,000



2,920,000Minority interest






1,000







Net loss

$
(3,677,000
)

$
(3,169,000
)

$
(3,060,000
)

$
(2,920,000
)Loss per share  basic and diluted

$
(0.25
)

$
(0.23
)

$
(0.27
)

$
(0.31
)Weighted average number of shares outstanding  basic
    and diluted


14,998,194



13,499,942



11,368,448



9,368,150   Quarters EndedDecember 31,


September 30,


June 30,


March 31,2007


2007


2007


2007Revenues

$
5,014,000


$
3,852,000


$
2,003,000


$
1,836,000Expenses


(5,441,000
)


(4,035,000
)


(2,462,000
)


(2,053,000
)Loss before other expense


(427,000
)


(183,000
)


(459,000
)


(217,000
)Other expense, net


(1,705,000
)


(1,237,000
)


(599,000
)


(752,000
)Net loss

$
(2,132,000
)

$
(1,420,000
)

$
(1,058,000
)

$
(969,000
)Loss per share  basic and diluted

$
(0.28
)

$
(0.24
)

$
(0.24
)

$
(0.42
)Weighted average number of shares outstanding   basic
    and diluted


7,590,409



5,990,009



4,374,486



2,293,301   19.
    Subsequent
    Events  Status
    of our Offering
    Share
    Repurchases
    Distributions
   114




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Proposed
    Secondary Offering
  Form S-11
  Extension
    of Unsecured Note Payable to Affiliate
     115




---



##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.SCHEDULE III  REAL ESTATE
    OPERATING PROPERTIES AND
    ACCUMULATED DEPRECIATIONDecember 31, 2008
  Initial Cost to Company





Gross Amount at Which Carried at Close of PeriodBuilding,


Cost Capitalized





Building,Improvements and


Subsequent to





Improvements and





Accumulated


Date of

DateEncumbrances


Land


Fixtures


Acquisition(a)


Land


Fixtures


Total(b)


Depreciation(d)(e)


Construction

AcquiredWalker Ranch Apartment Homes (Residential)

San Antonio, TX

$
20,000,000


$
3,025,000


$
28,273,000


$
22,000


$
3,025,000


$
28,295,000


$
31,320,000


$
(2,258,000
)


2004



10/31/06Hidden Lake Apartment Homes (Residential)

San Antonio, TX


19,218,000



3,031,000



29,540,000



145,000



3,031,000



29,685,000



32,716,000



(1,790,000
)


2004



12/28/06Park at Northgate (Residential)

Spring, TX


10,295,000



1,870,000



14,958,000



124,000



1,870,000



15,082,000



16,952,000



(988,000
)


2002



06/12/07Residences at Braemar (Residential)

Charlotte, NC


9,513,000



1,564,000



13,718,000



49,000



1,564,000



13,767,000



15,331,000



(780,000
)


2005



06/29/07Baypoint Resort (Residential)

Corpus Christi, TX


21,612,000



5,306,000



28,522,000



427,000



5,306,000



28,949,000



34,255,000



(1,225,000
)


1998



08/02/07Towne Crossing Apartments (Residential)

Mansfield, TX


15,046,000



2,041,000



19,079,000



52,000



2,041,000



19,131,000



21,172,000



(1,038,000
)


2004



08/29/07Villas of El Dorado (Residential)

McKinney, TX


13,600,000



1,622,000



16,741,000



115,000



1,622,000



16,856,000



18,478,000



(963,000
)


2002



11/02/07The Heights at Old Towne (Residential)

Portsmouth, VA


10,475,000



2,513,000



14,957,000



162,000



2,513,000



15,119,000



17,632,000



(516,000
)


1972



12/21/07The Myrtles at Old Towne (Residential)

Portsmouth, VA


20,100,000



3,698,000



33,319,000



41,000



3,698,000



33,360,000



37,058,000



(1,064,000
)


2004



12/21/07Arboleda Apartments (Residential)

Cedar Park, TX


17,651,000



4,051,000



25,857,000



(1,000
)


4,051,000



25,856,000



29,907,000



(645,000
)


2007



03/31/08Creekside Crossing (Residential)

Lithonia, GA


17,000,000



5,233,000



20,699,000



24,000



5,233,000



20,723,000



25,956,000



(411,000
)


2003



06/26/08Kedron Village (Residential)

Peachtree City, GA


20,000,000



4,057,000



26,144,000



10,000



4,057,000



26,154,000



30,211,000



(532,000
)


2001



06/27/08Canyon Ridge Apartments (Residential)

Hermitage, TN


24,000,000



3,915,000



32,987,000



7,000



3,915,000



32,994,000



36,909,000



(420,000
)


2005



09/15/08Total



$
218,510,000


$
41,926,000


$
304,794,000


$
1,177,000


$
41,926,000


$
305,971,000


$
347,897,000(c
)

$
(12,630,000
)     (a)
    
    The cost capitalized subsequent to acquisition is net of
    dispositions. 116




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##### Table of Contents



GRUBB &
    ELLIS APARTMENT REIT, INC.
  SCHEDULE III 
    REAL ESTATE OPERATING PROPERTIES AND
 ACCUMULATED
    DEPRECIATION  (Continued)
  (b)
    
    The changes in total real estate for the years ended
    December 31, 2008 and 2007 and for the period from
    January 10, 2006 (Date of Inception) through
    December 31, 2006 are as follows:  AmountBalance as of January 10, 2006 (Date of Inception)

$
Acquisitions


63,869,000Additions


Dispositions


Balance as of December 31, 2006


63,869,000Acquisitions


159,909,000Additions


232,000Dispositions


(72,000
)Balance as of December 31, 2007

$
223,938,000Acquisitions


122,942,000Additions


1,698,000Dispositions


(681,000
)Balance as of December 31, 2008

$
347,897,000   (c)
    
    The aggregate cost of our real estate for federal income tax
    purposes is $352,096,000.(d)
    
    The changes in accumulated depreciation for the years ended
    December 31, 2008 and 2007 and for the period from
    January 10, 2006 (Date of Inception) through
    December 31, 2006 are as follows:  AmountBalance as of January 10, 2006 (Date of Inception)

$
Additions


188,000Dispositions


Balance as of December 31, 2006


188,000Additions


3,434,000Dispositions


(70,000
)Balance as of December 31, 2007

$
3,552,000Additions


9,260,000Dispositions


(182,000
)Balance as of December 31, 2008

$
12,630,000   (e)
    
    The cost of building and improvements is depreciated on a
    straight-line basis over the estimated useful lives of the
    buildings and improvements, ranging primarily from 10 to
    40 years. Land improvements are depreciated over the
    estimated useful lives ranging primarily from five to
    15 years. Furniture, fixtures and equipment is depreciated
    over the estimated useful lives ranging primarily from five to
    15 years. 117




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##### Table of Contents



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. Grubb & Ellis Apartment REIT,
    Inc.(Registrant)By   /s/  Stanley J. Olander, JrStanley
    J. Olander, Jr

Chief Executive Officer and President
    (principal executive officer)Date March 24, 2009By   /s/  Shannon
    K S JohnsonShannon
    K S Johnson

Chief Financial Officer
    (principal financial officer and principal
    accounting officer)Date March 24, 2009    By   /s/  Stanley
    J. Olander, Jr.Stanley
    J. Olander, Jr.

Chief Executive Officer and President
    (principal executive officer)Date March 24, 2009By   /s/  Shannon
    K S JohnsonShannon
    K S Johnson

Chief Financial Officer
    (principal financial officer and principal
    accounting officer)Date March 24, 2009By   /s/  Glenn
    W. Bunting, Jr.Glenn
    W. Bunting, Jr.

DirectorDate March 24, 2009By   /s/  Robert
    A. Gary, IVRobert
    A. Gary, IV

DirectorDate March 24, 2009By   /s/  W.
    Brand InlowW.
    Brand Inlow

DirectorDate March 24, 2009By   /s/  Andrea
    R. BillerAndrea
    R. Biller

DirectorDate March 24, 2009  118




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##### Table of Contents



EXHIBIT INDEX
    Regulation S-K,
  Form 10-K Regulation S-K).
  3
.1

Articles of Amendment and Restatement of NNN Apartment REIT,
    Inc. dated July 18, 2006 (included as Exhibit 3.1 to our Form
    10-Q filed November 9, 2006 and incorporated herein by reference)3
.2

Amended and Restated Bylaws of NNN Apartment REIT, Inc. dated
    July 19, 2006 (included as Exhibit 3.2 to our Form 10-Q filed
    November 9, 2006 and incorporated herein by reference)3
.3

Agreement of Limited Partnership of NNN Apartment REIT Holdings,
    L.P. dated July 19, 2006 (included as Exhibit 3.3 to our Form
    10-Q filed November 9, 2006 and incorporated herein by reference)3
.4

Amendment to Amended and Restated Bylaws of NNN Apartment REIT,
    Inc. dated December 6, 2006 (included as Exhibit 3.6 to
    Post-Effective Amendment No. 1 to the registrants
    Registration Statement on Form S-11 (File No. 333-130945) filed
    January 31, 2007 and incorporated herein by reference)3
.5

Articles of Amendment to the Articles of Amendment and
    Restatement of Grubb & Ellis Apartment REIT, Inc. dated
    December 7, 2007 (included as Exhibit 3.1 to our Current Report
    on Form 8-K filed on December 10, 2007 and incorporated herein
    by reference)4
.1

Form of Subscription Agreement (included as Exhibit B to our
    prospectus)10
.1

Distribution Reinvestment Plan (included as Exhibit 10.1 to
    Post-Effective Amendment No. 6 to the registrants
    Registration Statement on Form S-11 (File No. 333-130945) filed
    December 19, 2007 and incorporated herein by reference)10
.2

Share Repurchase Plan (included as Exhibit 10.2 to
    Post-Effective Amendment No. 6 to the registrants
    Registration Statement on Form S-11 (File No. 333-130945) filed
    December 19, 2007 and incorporated herein by reference)10
.3

2006 Incentive Award Plan (included as Exhibit 10.3 to the
    registrants Registration Statement on
    Form S-11,
    Amendment No. 3 (File No. 333-130945) filed on April 21, 2006
    and incorporated herein by reference)10
.4

Amendment to 2006 Incentive Award Plan (included as Exhibit 10.6
    to our Form 10-Q filed on November 9, 2006 and incorporated
    herein by reference)10
.5

Advisory Agreement between NNN Apartment REIT, Inc. and NNN
    Apartment REIT Advisor, LLC dated July 19, 2006 (included as
    Exhibit 10.4 to our Form 10-Q filed on November 9, 2006 and
    incorporated herein by reference)10
.6

Escrow Agreement (included as Exhibit 10.5 to our Form 10-Q
    filed on November 9, 2006 and incorporated herein by reference)10
.7

Amendment to Advisory Agreement dated November 16, 2006 among
    NNN Apartment REIT, Inc. and NNN Apartment Advisor, LLC
    (included as Exhibit 10.7 to Post-Effective Amendment No. 1 to
    the registrants Registration Statement on Form S-11 (File
    No. 333-130945) filed January 31, 2007 and incorporated herein
    by reference)10
.8

Contract of Sale by and between Cedar Park Multifamily, Ltd. and
    Triple Net Properties, LLC, dated January 8, 2008 (included as
    Exhibit 10.1 to our Current Report on Form 8-K filed April 4,
    2008 and incorporated herein by reference)




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##### Table of Contents



10
.9

Amendment to Contract of Sale by and between Cedar Park
    Multifamily, Ltd. and Triple Net Properties, LLC, dated February
    26, 2008 (included as Exhibit 10.2 to our Current Report on Form
    8-K filed April 4, 2008 and incorporated herein by reference)10
.10

Second Amendment to Contract of Sale by and between Cedar Park
    Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC,
    dated March 7, 2008 (included as Exhibit 10.3 to our Current
    Report on Form 8-K filed April 4, 2008 and incorporated herein
    by reference)10
.11

Third Amendment to Contract of Sale by and between Cedar Park
    Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC,
    dated March 27, 2008 (included as Exhibit 10.4 to our Current
    Report on Form 8-K filed April 4, 2008 and incorporated herein
    by reference)10
.12

Sale Agreement Assignment by and between Grubb & Ellis
    Realty Investors, LLC and G&E Apartment REIT Arboleda, LLC,
    dated March 27, 2008 (included as Exhibit 10.5 to our Current
    Report on Form 8-K filed April 4, 2008 and incorporated herein
    by reference)10
.13

Fixed+1 Multifamily Note by G&E Apartment REIT Arboleda,
    LLC in favor of PNC ARCS, LLC, dated March 31, 2008 (included as
    Exhibit 10.6 to our Current Report on Form 8-K filed April 4,
    2008 and incorporated herein by reference)10
.14

Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement and Fixture Filing by G&E Apartment REIT
    Arboleda, LLC for the benefit of PNC ARCS, LLC, dated March 31,
    2008 (included as Exhibit 10.7 to our Current Report on Form 8-K
    filed April 4, 2008 and incorporated herein by reference)10
.15

Second Amendment to and Waiver of Loan Agreement by and between
    Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank,
    National Association, date March 31, 2008 (included as Exhibit
    10.8 to our Current Report on Form 8-K filed April 4, 2008 and
    incorporated herein by reference)10
.16

Amended and Restated Promissory Note by Grubb & Ellis
    Apartment REIT, Inc. in favor of Wachovia Bank, National
    Association, dated March 31, 2008 (included as Exhibit 10.9 to
    our Current Report on Form 8-K filed April 4, 2008 and
    incorporated herein by reference)10
.17

Second Amended and Restated Pledge Agreement (Membership and
    Partnership Interests) by and between Wachovia Bank, National
    Association and Grubb & Ellis Apartment REIT Holdings,
    L.P., dated March 31, 2008 (included as Exhibit 10.10 to our
    Current Report on Form 8-K filed April 4, 2008 and incorporated
    herein by reference)10
.18

Purchase and Sale Agreement by and between Atlanta Creekside
    Gardens Associates, LLC and Grubb & Ellis Realty Investors,
    LLC, dated June 12, 2008 (included as Exhibit 10.1 to our
    Current Report on Form 8-K filed July 2, 2008 and incorporated
    herein by reference)10
.19

First Amendment to Purchase and Sale Agreement by and between
    Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis
    Realty Investors, LLC, dated June 18, 2008 (included as Exhibit
    10.2 to our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)10
.20

Purchase and Sale Agreement by and between AMLI at Peachtree
    City-Phase I, LLC, AMLI at Peachtree City-Phase II, LLC and
    Grubb and Ellis Realty Investors, LLC, dated June 23, 2008
    (included as Exhibit 10.4 to our Current Report on Form 8-K
    filed July 2, 2008 and incorporated herein by reference)10
.21

Purchase and Sale Agreement Assignment by and between Grubb
    & Ellis Realty Investors, LLC and G&E Apartment REIT
    Creekside Crossing, LLC, dated June 26, 2008 (included as
    Exhibit 10.3 to our Current Report on Form 8-K filed July 2,
    2008 and incorporated herein by reference)10
.22

Multifamily Note by G&E Apartment REIT Creekside Crossing,
    LLC to the order of Capmark Bank for Freddie Mac, dated June 26,
    2008 (included as Exhibit 10.6 to our Current Report on Form 8-K
    filed July 2, 2008 and incorporated herein by reference)10
.23

Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement by G&E Apartment REIT Creekside Crossing, LLC and
    Capmark Bank, dated June 26, 2008 (included as Exhibit 10.7 to
    our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)10
.24

Guaranty by G&E Apartment REIT, Inc. for the benefit of
    Capmark Bank, dated June 26, 2008 (included as Exhibit 10.8 to
    our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)10
.25

Multifamily Note by G&E Apartment REIT Kedron Village, LLC
    to the order of Capmark Bank for Freddie Mac, dated June 26,
    2008 (included as Exhibit 10.9 to our Current Report on Form 8-K
    filed July 2, 2008 and incorporated herein by reference)10
.26

Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement by G&E Apartment REIT Kedron Village, LLC and
    Capmark Bank, dated June 26, 2008 (included as Exhibit 10.10 to
    our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)




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##### Table of Contents



10
.27

Guaranty by G&E Apartment REIT, Inc. for the benefit of
    Capmark Bank, dated June 26, 2008 (included as Exhibit 10.11 to
    our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)10
.28

Third Amendment to and Waiver of Loan Agreement between Grubb
    & Ellis Apartment REIT, Inc. and Wachovia Bank, National
    Association, dated June 26, 2008 (included as Exhibit 10.12 to
    our Current Report on Form 8-K filed July 2, 2008 and
    incorporated herein by reference)10
.29

Third Amended and Restated Pledge Agreement by and between
    Wachovia Bank, National Association and Grubb and Ellis
    Apartment REIT Holdings, L.P., dated June 26, 2008 (included as
    Exhibit 10.13 to our Current Report on Form 8-K filed July 2,
    2008 and incorporated herein by reference)10
.30

Assignment and Assumption of Real Estate Purchase Agreement by
    and between Grubb & Ellis Realty Investors, LLC and
    G&E Apartment REIT Kedron Village, LLC, dated June 27, 2008
    (included as Exhibit 10.5 to our Current Report on Form 8-K
    filed July 2, 2008 and incorporated herein by reference)10
.31

Unsecured Promissory Note by Grubb & Ellis Apartment REIT
    Holdings, LP in favor of NNN Realty Advisors, Inc., dated June
    27, 2008 (included as Exhibit 10.14 to our Current Report on
    Form 8-K filed July 2, 2008 and incorporated herein by reference)10
.32

Real Estate Purchase and Sale Agreement by and between
    Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty
    Investors, LLC, dated July 10, 2008 (included as Exhibit 10.1 to
    our Current Report on Form 8-K filed September 19, 2008 and
    incorporated herein by reference)10
.33

First Amended and Restated Advisory Agreement by and between
    Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis
    Apartment REIT Advisor, LLC, dated July 18, 2008 (included as
    Exhibit 10.1 to our Current Report on Form 8-K filed July 21,
    2008 and incorporated herein by reference)10
.34

First Amendment to Real Estate Purchase and Sale Agreement by
    and between Apartments at Canyon Ridge, LLC and Grubb &
    Ellis Realty Investors, LLC, dated August 15, 2008 (included as
    Exhibit 10.2 to our Current Report on Form 8-K filed September
    19, 2008 and incorporated herein by reference)10
.35

Assignment and Assumption of Real Estate Purchase and Sale
    Agreement by and between Grubb & Ellis Realty Investors,
    LLC and G&E Apartment REIT Canyon Ridge, LLC, dated
    September 15, 2008 (included as Exhibit 10.3 to our Current
    Report on Form 8-K filed September 19, 2008 and incorporated
    herein by reference)10
.36

Multifamily Note by G&E Apartment REIT Canyon Ridge, LLC to
    the order of Capmark Bank, dated September 15, 2008 (included as
    Exhibit 10.4 to our Current Report on Form 8-K filed September
    19, 2008 and incorporated herein by reference)10
.37

Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement by G&E Apartment REIT Canyon Ridge, LLC for the
    benefit of Capmark Bank, dated September 15, 2008 (included as
    Exhibit 10.5 to our Current Report on Form 8-K filed September
    19, 2008 and incorporated herein by reference)10
.38

Guaranty by G&E Apartment REIT, Inc. for the benefit of
    Capmark Bank, dated September 15, 2008 (included as Exhibit 10.6
    to our Current Report on Form 8-K filed September 19, 2008 and
    incorporated herein by reference)10
.39

Fourth Amendment to and Waiver of Loan Agreement between Grubb
    & Ellis Apartment REIT, Inc. and Wachovia Bank, National
    Association, dated September 15, 2008 (included as Exhibit 10.7
    to our Current Report on Form 8-K filed September 19, 2008 and
    incorporated herein by reference)10
.40

Fourth Amended and Restated Pledge Agreement by and between
    Wachovia Bank, National Association and Grubb and Ellis
    Apartment REIT Holdings, L.P., dated September 15, 2008
    (included as Exhibit 10.8 to our Current Report on Form 8-K
    filed September 19, 2008 and incorporated herein by reference)10
.41

Unsecured Promissory Note by Grubb & Ellis Apartment REIT
    Holdings, LP in favor of NNN Realty Advisors, Inc., dated
    September 15, 2008 (included as Exhibit 10.9 to our Current
    Report on Form 8-K filed September 19, 2008 and incorporated
    herein by reference)10
.42

Assignment and Assumption of Real Estate Purchase and Sale
    Agreement by and between Grubb & Ellis Realty Investors,
    LLC and G&E Apartment REIT Canyon Ridge, LLC, dated
    September 15, 2008 (included as Exhibit 10.3 to our Current
    Report on Form 8-K/A filed September 25, 2008 and incorporated
    herein by reference)10
.43

Amendment No. 1 to First Amended and Restated Advisory Agreement
    by and between Grubb & Ellis Apartment REIT, Inc. and Grubb
    & Ellis Apartment REIT Advisor, LLC, dated as of November
    26, 2008 (included as Exhibit 10.1 to our Current Report on Form
    8-K filed on December 2, 2008 and incorporated herein by
    reference)21
.1*

Subsidiaries of Grubb & Ellis Apartment REIT, Inc.31
.1*

Certification of Chief Executive Officer, pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002




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##### Table of Contents



31
.2*

Certification of Chief Financial Officer, pursuant to Section
    302 of the Sarbanes-Oxley Act of 200232
.1*

Certification of Chief Executive Officer, pursuant to
    18 U.S.C. Section 1350, as created by Section 906 of the
    Sarbanes-Oxley Act of 200232
.2*

Certification of Chief Financial Officer, pursuant to
    18 U.S.C. Section 1350, as created by Section 906 of the
    Sarbanes-Oxley Act of 2002     *
    
    Filed herewith.