================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                               ------------------

                                   FORM 10-K/A
                                (AMENDMENT NO. 1)

(Mark One)
    X             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1999

                                       OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                       For the Transition period from to .

                         COMMISSION FILE NUMBER 1-12269
                               ------------------

                         HOMESTEAD VILLAGE INCORPORATED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                    MARYLAND
                          (STATE OR OTHER JURISDICTION
                        OF INCORPORATION OR ORGANIZATION)
                                   74-2770966
                                (I.R.S. EMPLOYER
                               IDENTIFICATION NO.)
                        2100 RIVEREDGE PARKWAY, 9TH FLOOR
                             ATLANTA, GEORGIA 30328
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
                                 (770) 303-2200
                 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA
                 CODE) SECURITIES REGISTERED PURSUANT TO SECTION
                                12(B) OF THE ACT:

                                                   NAME OF EACH EXCHANGE ON
              TITLE OF EACH CLASS                      WHICH REGISTERED

Shares of Common Stock, par value $.01 per share    New York Stock Exchange
Preferred Share Purchase Rights                     New York Stock Exchange

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

     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 X     No ____

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K 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.

     Based on the closing  price of the  registrant's  Common  Stock on March 8,
2000, the aggregate market value of the Common Stock held by  non-affiliates  of
the registrant was $37,987,957.

     At March 8, 2000, there were 120,031,477 shares of the registrant's  Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None
================================================================================

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
  ITEM                                          DESCRIPTION                                          PAGE


                                                  PART III

<S>     <C>                                                                                         <C>
10.     Directors and Executive Officers of the Registrant.........................................      1
11.     Executive Compensation.....................................................................      3
12.     Security Ownership of Certain Beneficial Owners and Management.............................      7
13.     Certain Relationships and Related Transactions.............................................     10



</TABLE>


Note: The purpose of this Amendment No. 1 is to include the information required
by Items 10, 11, 12, and 13 of the Homestead Village  Incorporated Annual Report
on Form 10-K for the year ended December 31, 1999.







<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

C.  RONALD  BLANKENSHIP -50-  Director,  Interim  Chairman  and Chief  Executive
Officer of Homestead since May 1999. Mr.  Blankenship  was Advisory  Director of
Homestead  from  October  1996 to May 1999.  Mr.  Blankenship  has been the Vice
Chairman,  Chief Operating  Officer and a Director of Security Capital since May
1998 and was Managing  Director of Security Capital from March 1991 to May 1998.
Mr.  Blankenship was Non-Executive  Chairman of Archstone from June 1997 to July
1998. From June 1991 to July 1997, Mr. Blankenship was Chairman of Archstone. He
became a Trustee of  Archstone  in March  2000,  and was  formerly  an  Advisory
Trustee of  Archstone.  He is also a Director of  CarrAmerica  Realty Corp.  and
Storage USA, Inc. Mr.  Blankenship is a Class I Director and his term expires in
2001.

JOHN P.  FRAZEE,  JR. -55-  Director of Homestead  since May 1996.  Since August
1997, Mr. Frazee has served as Director,  Chairman,  and Chief Executive Officer
of PageNet,  Inc. (a provider of wireless  messaging  and  wireless  information
services).  Since August 1999, Mr. Frazee has been Chairman and Chief  Executive
Officer of Vast  Wireless  Solutions,  an Internet  solutions  provider.  He was
President of PageNet, Inc. from August 1997 to June 1999, and formerly was Chief
Operating  Officer  of Sprint  Corporation;  prior to the March  1993  merger of
Sprint and  Centel  Corporation,  Mr.  Frazee  had been the  Chairman  and Chief
Executive  Officer of Centel  since 1972.  He is a Director of Security  Capital
Group  Incorporated,  C-Span, Dean Foods Company,  Vast Wireless Solutions,  and
Cabot Microelectronics  Corporation. He is also an Executive Board Member of The
Edwin L. Cox School of  Business  at Southern  Methodist  University  and a Life
Trustee of Rush-Presbyterian St. Luke's Medical Center in Chicago, Illinois. Mr.
Frazee is a Class II Director and his term expires in 2002.

MANUEL A. GARCIA,  III -56-  Director of Homestead since April 1997. Since 1992,
Mr. Garcia has been the Chief  Executive  Officer of Atlantic Coast  Management,
Inc. He is also Chief  Executive  Officer of Pebbles  Restaurants,  Inc.  and M.
Garcia's,  Inc. and a Vice  President of Culinary  Concepts,  Inc.  From 1969 to
1996, Mr. Garcia was the Chief Executive Officer of Davgar Restaurants, Inc. Mr.
Garcia is a Class III  Director  and his term  expires at the annual  meeting of
shareholders in 2000.

JAMES C.  POTTS -53- President  and Director of  Homestead  since March 2000 and
Chief  Operating  Officer  since  December  1999,  where he is  responsible  for
Homestead  operations.  Mr. Potts was Executive Vice President of Homestead from
May 1999 to March  2000.  From  July 1998 to May 1999,  Mr.  Potts was  Managing
Director of Homestead responsible for development.  Prior thereto, Mr. Potts was
Co-Chairman  and  Chief   Investment   Officer  for  Security  Capital  Atlantic
Incorporated  ("ATLANTIC")  from  January  1996 to July 1998 and a  Director  of
ATLANTIC and the management  company  responsible for the management of ATLANTIC
from  October  1993 to July 1998.  Mr.  Potts was  Chairman of ATLANTIC  and the
management  company  responsible  for its  management  from May 1994 to December
1995.  Mr.  Potts is a Class III  Director  and his term  expires  at the annual
meeting of shareholders in 2000.

JOHN C. SCHWEITZER -55- Director of Homestead since April 1997, and a Trustee of
Archstone since 1976. Since 1974, Mr.  Schweitzer has been President of Westgate
Corp., general partner of Campbell Capital,  Ltd., a real estate and investments
company in Austin,  Texas. Mr. Schweitzer serves as a Director of Regency Realty
Corporation,  Chase Bank of Texas, and KLRU Public Television. Mr. Schweitzer is
a Class II Director and his term expires in 2002.

EUGENE B. VESELL -60- Director of Homestead  since June 1999. From December 1990
until his  retirement  in April  1999,  Mr.  Vesell  was  Managing  Director  at
Oppenheimer Capital, where he was a senior equity portfolio manager and research
analyst.  Prior to joining Oppenheimer Capital, Mr. Vesell was a partner for ten
years with David J.  Greene and  Company,  where his  responsibilities  included
research and portfolio management. Mr. Vesell is a Class I Director and his term
expires in 2001.

         Security  Capital has the right to nominate  up to two  Directors.  See
Item 13 - "Certain  Relationships  and  TransactionsCSecurity  Capital  Investor
Agreement."  Mr.  Blankenship  is Security  Capital's only current  nominee.  In
addition,  Archstone  has the  right to  nominate  one  Director.  See Item 13 -
"Certain  Relationships  and  TransactionsCArchstone  Investor  Agreement."  Mr.
Schweitzer is Archstone's nominee.  Homestead's Amended and Restated Articles of
Incorporation   requires  that  a  majority  of  the  Directors  be  independent
Directors.
                                       1
<PAGE>

EXECUTIVE OFFICERS

         For information regarding the Executive Officers of Homestead, see Item
1.

MEETINGS AND COMMITTEES

         The Board of Directors (the "Board") held fifteen meetings during 1999.

         The Audit  Committee of the Board consists of Messrs.  Frazee,  Garcia,
Schweitzer and Vesell. The Audit Committee makes recommendations  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 the independent public  accountants,  reviews
the independence of the independent public  accountants,  considers the range of
audit and  non-audit  fees and reviews  the  adequacy  of  Homestead's  internal
accounting  controls.  The Audit  Committee  held two meetings  during 1999. Mr.
Frazee, who is also a director of Security Capital,  has resigned from the Audit
Committee  because of new rules issued by the New York Stock Exchange  regarding
independent directors serving on an audit committee.

         The Management Development and Compensation Committee ("MDCC") consists
of Messrs. Frazee, Garcia,  Schweitzer and Vesell. The MDCC reviews and approves
the  management  development  and  compensation  arrangements  of Homestead  and
administers the 1996 Long-Term  Incentive Plan and the 1999 Long-Term  Incentive
Plan. The MDCC held four meetings during 1999.

         The Board does not have a nominating committee.

         During 1999,  each  Director  attended at least 75 percent of the total
number of  meetings  of the  Board and the  committees  on which  such  Director
served.

DIRECTOR COMPENSATION

         During  1999,  the  directors  who are not  employees  of  Homestead or
Security Capital ("Outside  Directors")  received an annual retainer of $22,000,
meeting  fees of $1,000 for each Board  meeting  attended in person and $500 for
each Board meeting attended by telephone.  For committee meetings,  each outside
director  receives $500 for each committee  meeting  attended in person and $250
for each committee meeting attended by telephone. Each Outside Director receives
a fee of $3,000  annually if the director is a chairman of any  committee of the
Board. Both the retainer and meeting fees are paid quarterly.  Directors who are
employees of Homestead or Security  Capital are not separately  compensated  for
serving as  directors.  Directors  are  reimbursed  for any  out-of-town  travel
expenses incurred in connection with attendance at Board meetings.

OUTSIDE DIRECTORS PLAN

         Homestead  adopted the  Homestead  Village  Incorporated  1996  Outside
Directors Plan,  under which up to 100,000 shares may be subject to options (the
"Outside  Directors Plan").  Options granted in 1999 under the Outside Directors
Plan  have a ten year term and vest at a rate of 25% per year  beginning  on the
first  anniversary  of the  grant  date.  Options  granted  prior to 1999 have a
five-year term and are immediately  exercisable in whole or in part. Options are
granted  to each  outside  director  as of the date of each  annual  meeting  of
shareholders of Homestead at an exercise price equal to the fair market value of
the shares as of those dates. In 1999, options to purchase 5,000 shares each, at
an exercise price of $2.6250 per share, were granted to Messrs.  Frazee, Garcia,
Schweitzer and Vesell.  Options granted under the Outside Directors Plan provide
that the option  holder may, in the event of the  acquisition  of 50% or more of
the  outstanding  shares as a result of any cash tender offer or exchange  offer
(other  than  one  made by  Homestead),  exercise  the  options  immediately  or
surrender  the options,  or any  unexercised  option  thereof,  to Homestead and
receive cash from Homestead  equal to the difference  between the exercise price
of each  option and the per share price of the tender  offer or exchange  offer,
multiplied by the number of shares for which options are held.

                                       2

<PAGE>


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires Homestead
directors,  officers and beneficial  owners of more than 10% of the  outstanding
shares to file reports of ownership  and changes in ownership of the shares with
the  Securities  and Exchange  Commission  and to send copies of such reports to
Homestead.  Based  solely upon a review of such reports and  amendments  thereto
furnished  to  Homestead  and upon  written  representations  of certain of such
persons that they were not required to file certain of such  reports,  Homestead
believes  that no such person  failed to file any such report on a timely  basis
during  1999,  except  Mr.  Schweitzer  filed  one late  report  reporting  four
transactions, and Mr. Dressler filed one late report reporting two transactions.


ITEM 11.   EXECUTIVE COMPENSATION

         The following table presents the  compensation  for 1999, 1998 and 1997
paid to the Interim  Chairman and Chief  Executive  Officer,  the Interim  Chief
Financial  Officer and the three other most highly  compensated  officers during
1999 (the "Named Executive Officers"):

<TABLE>
                                           ANNUAL COMPENSATION                      LONG-TERM COMPENSATION
                              ----------------------------------------------     ------------------------------


                                                                                    SHARES
                                                               OTHER ANNUAL       UNDERLYING    ALL OTHER
NAME AND POSITION                 YEAR    SALARY($)  BONUS($)  COMPENSATION         STOCK     COMPENSATION
                                                                   ($) (1)        OPTIONS (#)    ($) (2)
                                                               ------------      ------------ ------------
<S>                             <C>     <C>        <C>         <C>               <C>          <C>
C. Ronald Blankenship             1999     (3)         (3)          __               __           (3)
Interim Chairman and Chief
Executive Officer

David C. Dressler, Jr. (4)        1999     350,000     454,000      __               550,000           528
President                         1998     261,218     427,000      __                90,900           270
                                  1997     250,000     300,000      __               258,058           270

James C. Potts (5)                1999     300,000     400,000      __               575,000         4,052
Executive Vice President and      1998     104,974     140,000      __               162,950         2,099
Chief Operating Officer

Gary L. DeLapp                    1999     220,000     220,000      __               240,000         4,792
Senior Vice President             1998     200,000      90,000      __                22,750         3,576
                                  1997     200,000      75,000      __                74,710         3,716

A. Richard Moore, Jr.             1999     (6)         (6)          __               __           (6)
Interim Chief Financial
Officer
<FN>

---------------
         (1) Includes  perquisites and personal  benefits received by each Named
Executive  Officer if such amounts exceed the lesser of either $50,000 or 10% of
the executive's total combined annual salary and bonus.

         (2) Includes the dollar value of insurance  premiums  paid by Homestead
with respect to term life insurance for the benefit of Named  Executive  Officer
as follows:  Mr. Dressler $528 in 1999, $270 in 1998 and $270 in 1997; Mr. Potts
$852 in  1999;  and Mr.  DeLapp  $632 in  1999,  $216 in 1998  and $216 in 1997.
Beginning in 1997,  Homestead  matches up to 50% of the first 6% of compensation
contributed by the employee under the 401(k) Savings Plan with Homestead  common
stock as follows:  Mr. Potts $3,200 in 1999 and $2,099 in 1998;  and Mr.  DeLapp
$3,200 in 1999, $2,400 in 1998 and $3,500 in 1997.  Includes  contributions made
by Homestead under its Non-Qualified Savings Plan for Mr. DeLapp of $960 in 1999
and $960 in 1998.

         (3) Mr. Blankenship became Interim Chairman and Chief Executive Officer
on May 11, 1999. Mr. Blankenship is also Vice Chairman,  Chief Operating Officer
and  a  Director  of  Security  Capital.   Mr.  Blankenship   received  no  cash
compensation or options from Homestead. All compensation paid to Mr. Blankenship
in 1999 was paid exclusively by Security Capital.  During 1999, Security Capital
paid Mr. Blankenship a salary of $550,000 and a bonus of $574,150, and paid life
insurance premiums of $4,260 for the benefit of Mr. Blankenship.
                                       3
<PAGE>

         (4) Mr. Dressler resigned as President and Director on March 2, 2000.

         (5) Mr. Potts  became an  executive  officer of Homestead in July 1998,
and the  1998  compensation  figures  reflect  the  portion  of the  year he was
employed by  Homestead.  On March 2, 2000,  Mr. Potts was elected  President and
Director.

         (6) Mr. Moore became Interim Chief Financial  Officer on June 23, 1999.
Mr.  Moore is also a Managing  Director  of the  Capital  Division  of  Security
Capital. Mr. Moore received no cash compensation or options from Homestead.  All
compensation paid to Mr. Moore in 1999 was paid exclusively by Security Capital.
During 1999, Security Capital paid Mr. Moore a salary of $400,000 and a bonus of
$400,000,  paid life insurance  premiums of $2,566 for the benefit of Mr. Moore,
and made contributions under the Security Capital Non-Qualified Savings Plan and
matching  contributions  under the Security  Capital 401(k) Savings Plan for Mr.
Moore.
</FN>
</TABLE>

OPTION GRANTS

         During 1999, options for 3,542,018 shares were granted to 185 employees
and officers of Homestead.  The options vest twenty-five  percent on each of the
first,  second, third and fourth anniversaries of the date of grant. All options
expire  ten  years  after  the  date of  grant.  The  following  table  presents
information about individual grants of options to the Named Executive Officers.

<TABLE>
                                INDIVIDUAL GRANTS
                                                     PERCENT OF
                                    SHARES         TOTAL OPTIONS
                                  UNDERLYING         GRANTED TO       EXERCISE OR                       GRANT
            NAME                    OPTIONS         EMPLOYEES IN      BASE PRICE       EXPIRATION   DATE PRESENT
                                  GRANTED (#)         1999 (%)         ($/SHARE)          DATE      VALUE ($) (1)
                             -------------------      --------         ---------          ----      -------------

<S>                          <C>                    <C>              <C>               <C>          <C>
C. Ronald Blankenship (2)              _                 _                 _               _              _

David C.  Dressler, Jr.             450,000                             $2.1875          7/8/09        722,430
                                    100,000                             $3.0000          7/8/09        150,220
                                    -------
                                    550,000            15.53%
                                    -------

James C. Potts                      475,000                             $2.1875          7/8/09        762,565
                                    100,000                             $3.0000          7/8/09        150,220
                                    -------
                                    575,000            16.23%
                                    -------

Gary A. DeLapp                      200,000                             $2.1875          7/8/09        321,080
                                     40,000                             $3.0000          7/8/09         60,088
                                    -------
                                    240,000            6.78%
                                    -------

A. Richard Moore, Jr. (2)              _                 _                 _               _              _
<FN>

         (1) The amounts  shown are based on the  Black-Scholes  option  pricing
model.  The material  assumptions  incorporated  in the  Black-Scholes  model in
estimating the value of the options  include the following:  an expected  option
life of 4.5 years;  a risk-free  interest  rate of 6.55%;  no expected  dividend
yield;  and expected  volatility of 96%. The actual  value,  if any, an optionee
will realize upon  exercise of an option will depend on the excess of the market
value of the shares over the exercise price on the date the option is exercised.
There can be no assurance  that the value  realized by an optionee will be at or
near the value estimated by using the Black-Scholes model.

         (2) Neither  Mr.  Blankenship  nor Mr.  Moore  received  any options to
purchase Homestead common stock.
</FN>

</TABLE>
                                       4
<PAGE>



OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES

         None of the Named Executive Officers exercised options during 1999. The
following  table  presents  certain  information  about  the  year-end  value of
unexercised  options for  Homestead  common stock and Security  Capital  Class A
Common Stock owned by the Named Executive Officers.

<TABLE>
                                                                                           SECURITY CAPITAL
                                    HOMESTEAD COMMON STOCK                               CLASS A COMMON STOCK
                       --------------------------------------------------    ----------------------------------------------



                                                     VALUE OF UNEXERCISED
                         SECURITIES UNDERLYING       IN-THE-MONEY OPTIONS       SECURITIES UNDERLYING       VALUE OF UNEXERCISED
                          UNEXERCISED OPTIONS        AT DECEMBER 31, 1999        UNEXERCISED OPTIONS        IN-THE-MONEY OPTIONS
                            AT YEAR END (#)                ($) (1)                 AT YEAR END (#)           AT YEAR END ($)(2)
                    EXERCISABLE  UNEXERCISABLE   EXERCISABLE  UNEXERCISABLE  EXERCISABLE  UNEXERCISABLE   EXERCISABLE  UNEXERCISABLE

<S>                 <C>          <C>             <C>          <C>            <C>          <C>             <C>          <C>
C. Ronald Blankenship (3)    _          _             _             _            _              _              _            _

David C. Dressler (4)    154,309     804,649          _             _          2,942          1,415         666,799      189,055

James C. Potts             9,487     728,463          _             _          3,067          1,686         666,779      189,053

Gary A. DeLapp            31,864     330,596          _             _             66             66            _            _

A. Richard Moore, Jr. (3)    _          _             _             _             _             _              _            _

<FN>

     (1) Based on the December  31, 1999  closing  price of $2.1250 per share on
the New York Stock Exchange.

     (2) Based on the  December  31,  1999,  closing  price of $620 per share of
Security Capital Class A Common Stock.

     (3)  Neither  Mr.  Blankenship  nor Mr.  Moore own any  options to purchase
Homestead  common  stock.  Both  Messrs.  Blankenship  and Moore own  options to
purchase Security Capital common stock.

     (4) Mr.  Dressler  resigned as President and Director on March 2, 2000, and
his  Homestead  and  Security  Capital  options  expire  three  months after his
resignation. Mr. Dressler exercised a portion of his Security Capital options in
March  2000.  See Item 13 -  "Certain  Relationships  and  Related  Transactions
Agreements with Officers and Former Officers."
</FN>
</TABLE>

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

         Homestead has no employment contracts with any Named Executive Officer.
Under the Homestead  1996 Long-Term  Incentive  Plan, if a change in control (as
defined in the plan) of  Homestead  occurs,  all  unexpired  options will become
immediately exercisable. Under the Homestead 1999 Long-Term Incentive Plan, if a
change of control (as defined in the plan) of  Homestead  occurs and an optionee
is terminated all unexpired options will become immediately exercisable.

         In addition,  Homestead  has entered into change in control  agreements
with each of its current  officers,  except Mr.  Blankenship and Mr. Moore.  The
agreements   provide  that  if  the  officer  is  terminated  or  constructively
terminated  other than for cause  within two years  after a change in control of
Homestead,  the officer will be entitled to receive a lump-sum severance payment
(which  amount  depends  upon  the  individual's   responsibility  level  within
Homestead),  together with certain payments and benefits, including continuation
of  certain  employee  benefits.  An  additional  payment  will be  required  to
compensate  certain  officers for excise taxes imposed upon  severance  payments
under these agreements. The severance amount for Mr. Potts would equal two times
the sum of his base  salary and target  bonus for the year in which  termination
                                       5
<PAGE>

occurs, plus target bonus through the date of termination. The severance amounts
for other  officers  would be one times  salary,  plus  pro-rated  target  bonus
through the date of termination.  A transaction with Security Capital or another
affiliate of Homestead would not be treated as a change in control.

LOANS TO EXECUTIVE OFFICERS

         See  Item  13 -  "Certain  Relationships  and  Related  Transactions  -
Agreements with Officers and Former Officers" for a description of loans made to
executive officers of Homestead.

1999 LONG-TERM INCENTIVE PLAN

         The 1999 Long-Term  Incentive Plan authorizes the MDCC to establish one
or more qualified and non-qualified  option programs and authorizes the award of
share grants (any of which may be subject to restrictions). A total of 6,000,000
shares have been reserved for issuance and 3,078,599 shares remain available for
award as of February 29, 2000.  In the event of a  transaction,  such as a stock
split,  affecting  the type or  number  of  outstanding  shares,  the MDCC  will
appropriately  adjust  the  number  of  shares  subject  to the  1999  Long-Term
Incentive  Plan, the number or type of shares subject to outstanding  awards and
the exercise price of outstanding awards. If Homestead is reorganized, merged or
consolidated  with another  company and the  shareholders  of Homestead  receive
securities  or other  property,  the  MDCC  shall  provide  for  adjustments  to
outstanding awards to allow the holders of such awards to receive an appropriate
portion  of  such   securities  or  property.   Such   adjustments  may  include
substitution  of the shares  subject to the awards  with the other  property  or
securities or providing for cancellation of all awards after providing the award
holders  with the  opportunity  to exercise  their  awards.  If a  participant's
employment is terminated or the 1999 Long-Term Incentive Plan is terminated as a
result of a change in control (as defined in the 1999 Long-Term  Incentive Plan)
of  Homestead,   all  unexpired  options  and  awards  will  become  immediately
exercisable  or fully vested,  as the case may be. A  transaction  with Security
Capital or another  affiliate of  Homestead  would not be treated as a change in
control.

         Subject to the terms of the 1999  Long-Term  Incentive  Plan,  the MDCC
determines  which  employees and other persons  providing  advisory  services to
Homestead  and its  affiliates  are  eligible to receive  awards  under the 1999
Long-Term  Incentive  Plan,  and the amount,  price,  timing and other terms and
conditions applicable to those awards.  Non-employee  directors of Homestead are
not eligible to participate in the 1999 Long-Term Incentive Plan.

         Options become  exercisable in accordance with the terms established by
the MDCC,  which may include  conditions  relating to  completion of a specified
period of service or achievement of performance standards. Options expire on the
date determined by the MDCC, which shall not be later than the earliest to occur
of (i) the tenth  anniversary of the grant date,  (ii) the first  anniversary of
the  participant's  termination of employment by reason of death,  disability or
retirement  or (iii) the date three months  after the date of the  participant's
termination  of  employment  for  any  other  reason.  Shares  transferred  to a
participant  pursuant  to the  exercise  of an  option  may be  subject  to such
additional restrictions or limitations as the MDCC may determine.

         The 1999 Long-Term  Incentive Plan authorizes the award of share grants
of up to 20% of the shares  reserved for issuance  under the Plan.  The MDCC may
provide  that any share  award is subject  to  performance  or other  conditions
determined by the MDCC.

         The MDCC may establish share purchase programs under the 1999 Long-Term
Incentive Plan. Any share purchase under the 1999 Long-Term  Incentive Plan will
be subject to conditions, including price, established by the MDCC. The MDCC may
also provide for the award of matching shares with respect to any share purchase
award or for Homestead to provide the recipient with a loan for all or a portion
of the purchase price. Any loan must be full recourse and be secured by a pledge
of the shares purchased. No loan may have a term of longer than 10 years.

         Subject to obtaining any approvals  required by applicable  law or NYSE
requirements, the Board may amend or terminate the 1999 Long-Term Incentive Plan
at any time, provided that no amendment or termination may materially  adversely
affect the rights of  participants  under any award made under the plan prior to
the date that the amendment or termination is adopted by the Board.

                                       6

<PAGE>


1996 LONG-TERM INCENTIVE PLAN

         The 1996 Long-Term  Incentive Plan authorizes the  establishment of one
or more qualified and non-qualified  option programs and authorizes the award of
share  grants,  any of which  may be  subject  to  restriction.  In the event of
certain  transactions  affecting the type or number of outstanding  shares,  the
number of shares  subject to the 1996  Long-Term  Incentive  Plan, the number or
type of shares subject to outstanding awards and the exercise price thereof will
be  appropriately  adjusted.  The 1996 Long-Term  Incentive Plan  authorizes the
award of stock grants (which may be subject to  restrictions),  and  performance
stock and authorizes the  establishment of one or more stock purchase  programs.
The MDCC  administers  the  Plan.  Subject  to the  terms of the 1996  Long-Term
Incentive  Plan,  the MDCC  determines  which  employees  or  other  individuals
providing  services to Homestead  shall be eligible to receive  awards under the
1996 Long-Term Incentive Plan, and the amount, price, timing and other terms and
conditions  applicable to such awards. A total of 4,000,000 shares were reserved
for issuance under the plan of which 2,364,243 remain available for awards as of
February 29, 2000.

         Options become  exercisable in accordance with the terms established by
the MDCC,  which may include  conditions  relating to  completion of a specified
period of service or achievement of performance standards. Options expire on the
date determined by the MDCC, which shall not be later than the earliest to occur
of (i) the tenth  anniversary of the grant date,  (ii) the first  anniversary of
the  participant's  termination of employment by reason of death,  disability or
retirement  or (iii) the date three months  after the date of the  participant's
termination  of  employment  for  any  other  reason.  Shares  transferred  to a
participant  pursuant  to the  exercise  of an  option  may be  subject  to such
additional restrictions or limitations as the MDCC may determine.

         Under the 1996 Long-Term  Incentive  Plan, the MDCC may grant awards of
shares to participants,  which are subject to such conditions and  restrictions,
if any,  as the MDCC  determines.  During the period a stock award is subject to
restrictions or limitations,  the MDCC may award the participant dividend rights
with respect to such shares.  The 1996  Long-Term  Incentive  Plan also provides
that the  MDCC  may  establish  one or more  stock  programs  which  may  permit
purchases of shares.

         The MDCC may award participants  performance stock, the distribution of
which is subject to achievement of performance objectives.  The number of shares
and the performance measures and periods shall be established by the MDCC at the
time the award is made.

         Subject to obtaining any approvals  required by applicable  law or NYSE
requirements, the Board may amend or terminate the 1999 Long-Term Incentive Plan
at any time, provided that no amendment or termination may materially  adversely
affect the rights of  participants  under any award made under the plan prior to
the date that the amendment or termination is adopted by the Board.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

OWNERSHIP OF HOMESTEAD COMMON STOCK

         The following  table sets forth,  as of February 29, 2000,  information
concerning the beneficial  ownership of shares of Homestead Common Stock for (i)
each person  known to Homestead  to be the  beneficial  owner of more than 5% of
shares outstanding,  (ii) each Director of Homestead, (iii) each Named Executive
Officer,  and (iv) the  Directors  and  executive  officers  as a group.  Unless
otherwise  indicated,  all such  shares are owned  directly,  and the  indicated
person or entity has sole voting and  investment  power and the address for each
such person is Homestead  Village  Incorporated,  2100  RiverEdge  Parkway,  9th
Floor, Atlanta, Georgia 30328.

                                       7

<PAGE>


<TABLE>

                                                                          NUMBER OF SHARES         PERCENT OF
                   NAME AND ADDRESS OF BENEFICIAL OWNER                  BENEFICIALLY OWNED        SHARES (1)
<S>                                                                      <C>                       <C>
Security Capital Group Incorporated ..............................        125,637,936 (2)            88.96%
         125 Lincoln Avenue
         Santa Fe, New Mexico 87501

Archstone Communities Trust ......................................         21,191,262 (3)            15.01%
         7670 South Chester Street
         Englewood, Colorado 80112

C. Ronald Blankenship.............................................              7,311 (4)              *

John P. Frazee, Jr................................................             79,358 (5)              *

Manuel A. Garcia, III.............................................             29,000 (6)              *

John C. Schweitzer................................................            105,062 (7)              *

Eugene B. Vesell..................................................             87,546 (8)              *

David C. Dressler, Jr.............................................            205,348 (9)              *

James C. Potts....................................................             15,916 (10)             *

A. Richard Moore, Jr..............................................                  0                  *

Gary A. DeLapp....................................................             41,864 (11)             *

All Directors and executive officers as a group (13 persons)                  635,278                  *

-------------------
<FN>

         *  Less than 1%


         (1) Assumes (i) in the case of Archstone  that  Archstone has converted
the principal  amount of the  convertible  mortgage notes held by it and that no
other  person  has  converted  or  exercised  any  outstanding   convertible  or
exercisable securities, (ii) in the case of Security Capital, that Archstone has
converted  the  principal  amount  of the  convertible  mortgage  notes  held by
Archstone,  and that no other person has converted or exercised any  outstanding
convertible  or  exercisable  securities  and  (iii) in the  case of each  other
person,  that such person has  exercised  all options  owned by him which may be
exercised within 60 days and that no other person has converted or exercised any
outstanding convertible or exercisable securities.

         (2)  Includes  shares   beneficially   owned  by  Archstone  under  the
convertible  mortgage notes. As a result of its ownership of approximately 39.2%
of  Archstone's  outstanding  common shares and Security  Capital's  contractual
arrangements with Archstone,  Security Capital may be deemed to beneficially own
all shares  beneficially owned by Archstone.  SC Realty  Incorporated,  a wholly
owned subsidiary of Security Capital, owns of record 104,446,674 shares.

       (3) All such shares are issuable upon conversion of the principal  amount
of the  convertible  mortgage  notes  outstanding.  As of February 29, 2000, the
principal amount of the Archstone  convertible  mortgage notes was approximately
$221 million, which are convertible into 21,191,262 shares at a conversion price
of one share for each $10.44 principal amount of convertible mortgage notes. See
Item  13  -  "Certain  Relationships  and  Transactions--Archstone   Convertible
Mortgages."

         (4)  Includes   2,895  shares  held  by  a  corporation  in  which  Mr.
Blankenship is the controlling shareholder.

                                       8
<PAGE>

         (5) Includes 22,758 shares held in an IRA, 600 shares held by children,
50,000  shares held by a  corporation,  of which Mr.  Frazee is an officer,  and
options to acquire 6,000 shares.

       (6)  Includes  15,000  shares  held by a trust of  which  Mr.  Garcia  is
trustee,  10,000  shares held by a family  limited  partnership,  and options to
acquire 4,000 Shares.

       (7) Includes 5,000 shares held by a partnership  of which Mr.  Schweitzer
is a general  partner,  2,000 shares held by a corporation  that Mr.  Schweitzer
owns, options to acquire 4,000 shares, and 1,062 shares held by Mr. Schweitzer's
wife.

       (8) Includes 393 shares held by Mr. Vesell's wife and 45,675 shares held
by a trust for which Mr. Vesell is a trustee.

       (9) Includes 5,010 shares held in trusts for Mr.  Dressler's  children of
which Mr. Dressler is a co-trustee and options to acquire 154,309 shares.

       (10) Includes options to acquire 9,487 shares.

       (11) Includes options to acquire 31,864 shares.
</FN>
</TABLE>

OWNERSHIP OF SECURITY CAPITAL CLASS A SHARES AND CLASS B SHARES

         The following  table sets forth,  as of February 29, 2000,  information
concerning  the  beneficial  ownership  of Class A Shares  and Class B Shares of
Security  Capital for (i) each Director of Homestead,  (ii) each Named Executive
Officer,  and (iii) the  Directors  and  executive  officers as a group.  Unless
otherwise  indicated,  all such  shares are owned  directly,  and the  indicated
person has sole voting and investment power and the address for each such person
is Homestead Village  Incorporated,  2100 RiverEdge Parkway, 9th Floor, Atlanta,
Georgia 30328.


<TABLE>

                                     NUMBER OF SECURITY CAPITAL              NUMBER OF SECURITY CAPITAL
                                           CLASS A SHARES                   CLASS B SHARES BENEFICIALLY
     NAME OF BENEFICIAL OWNER          BENEFICIALLY OWNED (1)      % (2)            OWNED (3)(4)              % (2)(5)
     ------------------------          ----------------------      -----            ------------              --------

<S>                                   <C>                         <C>           <C>                         <C>
C. Ronald Blankenship (6)                       8,968               *                  543,407                 1.06%
John P. Frazee, Jr. (7)                         6,067               *                  318,366                   *
Manuel A. Garcia, III                               0               *                        0                   *
John C. Schweitzer                                  0               *                        0                   *
Eugene B. Vesell (8)                              844               *                   52,200                   *
David C. Dressler, Jr.                          4,660               *                  233,022                   *
James C. Potts                                  3,862               *                  193,090                   *
A. Richard Moore, Jr.                               0               *                   14,092                   *
Gary A. DeLapp                                     65               *                    3,285                   *
All Directors and executive officers
as a group (13 persons)                        25,651             2.16%              1,433,127                 2.76%

-------------
<FN>

*  Less than 1%

       (1) Includes  Class A Shares  which may be acquired  upon the exercise of
options within 60 days for Messrs. Blankenship (8,582), Frazee (2,549), Dressler
(3,390),  Potts  (3,472),  and DeLapp  (65),  and all  Directors  and  executive
officers as a group (19,161).

       (2) For each person who owns restricted  stock units which vest within 60
days, or options or convertible securities which are exercisable within 60 days,
the  calculation of the percentage  ownership  assumes that only that person has
exercised all of his options and converted all of his convertible securities and
that no other person has restricted stock units which have vested, has exercised
any outstanding options or has converted any convertible securities.

       (3) Each  Class A Share  may be  converted  at any  time  into 50 Class B
Shares. Includes Class B Shares which may be acquired upon conversion of Class A
Shares,  including  Class A Shares  which may be acquired  upon the  exercise of
options for Class A Shares as described in footnote 1 above.

       (4) Includes  Class B Shares  which may be acquired  upon the exercise of
options  or  vesting  of  restricted  stock  units  within  60 days for  Messrs.
Blankenship  (91,207),  Frazee (15,000),  Moore (12,500),  and all Directors and
executive officers as a group (128,791).
                                    9

<PAGE>
       (5) For each  person  who owns  Class A Shares,  the  calculation  of the
percentage  ownership  assumes  that only that person has  converted  all of his
Class A Shares into Class B Shares and that no other  person has  converted  any
Class A Shares.

       (6)  Includes  2,000  Class B Shares held by a  corporation  in which Mr.
Blankenship is the controlling shareholder.

       (7) Includes eleven Class A Shares held by Mr. Frazee's  children and
three Class A Shares held by his wife.

       (8)  Includes  422 Class A Shares  held by a family  trust for which Mr.
Vesell is trustee and 115 Class A Shares held in an IRA account.
</FN>
</TABLE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PROPOSED TRANSACTION WITH SECURITY CAPITAL

         On March 23, 2000, Security Capital submitted a letter to the Homestead
Board  setting  forth  Security  Capital's  proposal to acquire all  outstanding
shares of Homestead  common stock not currently  beneficially  owned by Security
Capital for $3.40 per share in cash. In  discussions  with the Homestead  Board,
Mr.  Blankenship  described  the offer on behalf of Security  Capital and stated
that the offer price included payment for Homestead's pre-May 1999 net operating
loss of $.12 per share, which Security Capital estimated was the value per share
of such net operating loss to an unaffiliated  party which might seek to acquire
Homestead.  If the proposed  transaction were completed,  Security Capital would
own 100% of the issued and  outstanding  shares,  and  Homestead  would become a
wholly owned  subsidiary of Security  Capital.  Security  Capital's  proposal is
conditioned,  among other  things,  upon the  approval of the  Homestead  Board,
including the approval of the independent  members of the Homestead  Board.  The
proposal is not  conditioned on financing.  The Homestead Board formed a Special
Committee  consisting  of three  independent  members  of the  Homestead  Board,
Messrs. Vesell, Garcia and Schweitzer,  to consider Security Capital's proposal.
The Special Committee also retained a financial advisor and counsel.

PROTECTION OF BUSINESS AGREEMENT

         Each  of  Archstone  and  Security  Capital,   upon  the  formation  of
Homestead,  entered into a Protection of Business Agreement, dated as of October
17, 1996, with Homestead which prohibits  Archstone,  Security Capital and their
respective   affiliates   from  engaging,   directly  or   indirectly,   in  the
extended-stay  lodging business in the continental  United States except through
Homestead  and its  subsidiaries.  The  Protection  of Business  Agreement  also
prohibits  Homestead  from,  directly or indirectly,  engaging in the ownership,
operation,  development,  management or leasing of multifamily  properties.  The
Protection of Business Agreement does not prohibit Archstone or Security Capital
from:  (i)  owning  securities  of  Homestead;  (ii)  owning  up to  5%  of  the
outstanding   securities  of  another  person  engaged  in  owning,   operating,
developing,  managing or leasing  extended-stay  lodging properties,  so long as
they do not actively  participate  in the business of such person;  (iii) owning
the  outstanding  securities of another  person,  a majority  owned  subsidiary,
division,  group, franchise or segment of which is engaged in owning, operating,
developing, managing or leasing extended-stay lodging properties, so long as not
more  than 5% of such  person's  consolidated  revenues  are  derived  from such
                                      10
<PAGE>
properties;  and (iv) owning  securities of another person primarily  engaged in
business  other than a  business  owning,  operating,  developing,  managing  or
leasing extended-stay  lodging properties,  including a person primarily engaged
in business as an owner,  operator or developer of hotel properties,  whether or
not such  person  owns,  operates,  develops,  manages  or leases  extended-stay
lodging  properties.  The  Protection  of Business  Agreement  does not prohibit
Homestead  from: (i) owning  securities of Archstone or Security  Capital;  (ii)
owning up to 5% of the  outstanding  securities  of  another  person  engaged in
owning,  operating,  developing,  managing or leasing  garden style  multifamily
properties;  and (iii) owning the outstanding  securities of another  person,  a
majority owned  subsidiary,  division,  group,  franchise or segment of which is
engaged in owning,  operating,  developing,  managing  or leasing  garden  style
multifamily  properties,   so  long  as  not  more  than  5%  of  such  person's
consolidated  revenues  are derived  from such  properties.  The  Protection  of
Business  Agreement  terminates  in the  event of an  acquisition,  directly  or
indirectly  (other than by purchase from Archstone and Security Capital or their
respective affiliates),  by any person (or group of associated persons acting in
concert), other than Archstone, Security Capital or their respective affiliates,
of 25% or more of the outstanding  shares of voting stock of Homestead,  without
the prior written consent of the Board.  Subject to earlier termination pursuant
to the preceding  sentence,  the Protection of Business Agreement will terminate
on October 17, 2006.

SECURITY CAPITAL INVESTOR AGREEMENT

         Homestead  and Security  Capital are parties to an Investor  Agreement,
dated as of October 17,  1996,  and  amended as of April 5, 1999 (the  "Security
Capital Investor Agreement"),  which provides Security Capital with a variety of
rights  regarding the  management  of  Homestead.  The amendment to the Security
Capital Investor Agreement was a condition to Security Capital's  increasing its
funding  commitment from $200 million to $225 million in connection with the May
1999  common  stock  rights  offering.   Under  the  Security  Capital  Investor
Agreement,  for so long as Security Capital  beneficially owns at least 50.1% of
Homestead's outstanding shares, Security Capital has the right to approve, among
other things: (i) Homestead's annual budget;  (ii) the incurrence of expenses in
any year exceeding (A) any line item in the annual budget by $500,000 or 10% and
(B) the total  expenses set forth in the annual budget by 5%; (iii) the offer or
sale of any shares or any securities convertible into or exchangeable for shares
other than  pursuant to (A) an employee  benefit  plan  approved by  Homestead's
shareholders,  (B) previously issued warrants, options or rights, (C) a dividend
reinvestment  plan or  share  purchase  plan  approved  by the  Board  or (D) an
issuance of rights,  options, or warrants for shares issued to all shareholders;
(iv) the issuance or sale of securities that are subject to mandatory redemption
or  redemption  at the option of the holder;  (v) the  adoption of any  employee
benefit plan  pursuant to which shares may be issued and any action with respect
to  senior   officers'   compensation;   (vi)  the  incurrence,   restructuring,
renegotiation  or  repayment  of  indebtedness  in which  the  aggregate  amount
involved exceeds $1,000,000; (vii) the declaration or payment of any dividend or
other   distribution;   (viii)  the  acquisition  or  disposition  in  a  single
transaction or group of related transactions where the purchase price exceeds $1
million;   (ix)  the  entering  into  of  service  contracts  (A)  for  property
management,  investment  management or leasing services, or (B) that contemplate
annual  payments  in  excess  of  $500,000;  (x)  the  entering  into of any new
contract, including for construction, development, or other capital expenditure,
for which the total cost is  reasonably  expected to exceed  $1,000,000  for any
contract or  $5,000,000  in the  aggregate;  (xi) the entering into of any joint
venture for the  development of any  properties  owned by Homestead in which the
book value of any property to be  contributed  by Homestead  exceeds  $1,000,000
individually  or  $5,000,000  in the  aggregate;  (xii) the entering into of any
franchising  or licensing  agreements;  (xiii) the  amendment of the articles of
incorporation  or bylaws of  Homestead;  and (xiv) the  waiver of  anti-takeover
provisions of Maryland law or Homestead's articles of incorporation.

         The Security Capital Investor  Agreement also provides that, so long as
Security Capital owns at least 10% of the outstanding shares,  Homestead may not
increase  the number of  directors  on the Board to more than seven  without the
approval of Security Capital. Security Capital also is entitled to designate one
or more persons as directors of Homestead,  as follows:  (i) so long as Security
Capital  owns at least 10% but less than 25% of the  outstanding  shares,  it is
entitled to nominate  one person;  and (ii) so long as Security  Capital owns at
least 25% of the outstanding  shares,  it is entitled to nominate that number of
persons  as shall  bear  approximately  the same  ratio to the  total  number of
members  of the Board as the  number of shares  beneficially  owned by  Security
Capital bears to the total number of outstanding shares,  provided that Security
Capital  shall be entitled to  designate no more than two persons so long as the
Homestead  Board  consists  of no more  than  seven  members.  Security  Capital
currently has one designee on the Board, Mr. Blankenship.

         The Security Capital Investor  Agreement also provides Security Capital
with registration rights pursuant to which, in certain specified  circumstances,
Security Capital may request, on not more than three occasions,  registration of
all of Security  Capital's  shares pursuant to Rule 415 under the Securities Act
of 1933.
                                      11
<PAGE>



ARCHSTONE CONVERTIBLE MORTGAGES

         At December 31, 1999,  Homestead  owed  convertible  mortgage  notes to
Archstone  in the amount of  $221,333,620.  The notes were funded  pursuant to a
mortgage funding  commitment  agreement to finance the development of properties
acquired by Homestead from Archstone in 1996. The notes are collateralized by 54
Homestead  properties with a historical cost of $359.3 million. The notes accrue
interest at 9.0% on the  principal  amount,  and require  interest only payments
every six months on May 28 and  November 28. The notes are due October 31, 2006,
and are callable on or after May 28,  2001.  The notes are  convertible,  at the
option of the holder,  into  21,191,262  shares of  Homestead  common stock at a
conversion  ratio equal to one share for every  approximate  $10.44 of principal
amount outstanding. Archstone has no further funding commitment.

ARCHSTONE INVESTOR AGREEMENT

         Archstone  has  entered  into  an  investor  and  registration   rights
agreement  with Homestead  pursuant to which  Archstone is entitled to designate
one person for nomination to the Board,  and Homestead will use its best efforts
to cause the election of such nominee, for so long as Archstone has the right to
convert in excess of $20 million in principal  amount of loans made  pursuant to
Archstone's funding commitment  agreement.  Such nominee may, but need not, be a
person also  nominated  by Security  Capital  pursuant to the  Security  Capital
Investor  Agreement.  Archstone has designated Mr. Schweitzer as its nominee. In
addition,  Homestead has granted Archstone  registration  rights with respect to
the issuance upon conversion and the  distribution of all of the shares issuable
upon conversion of the convertible  mortgage notes.  Archstone may request three
registrations pursuant to Rule 415 under the Securities Act of all shares issued
or  issuable  upon   conversion  of  the  convertible   mortgage   notes.   Such
registrations,  except for the fees and  disbursements  of counsel to Archstone,
shall be at the expense of Homestead.

COMMERZBANK LOAN AGREEMENTS, SECURITY CAPITAL SUBSCRIPTION AGREEMENT AND RIGHTS
OFFERING

         During 1999, Homestead had three credit facilities with Commerzbank AG,
New York Branch ("CAG"), as the arranger or agent, and other lenders.  CAG holds
all of the  outstanding  shares of Security  Capital  Series B Preferred  Stock,
which is convertible  into shares of Security  Capital Class B Common Stock.  On
March 18,  1999,  two of the credit  facilities,  one in the  maximum  principal
amount  of $170  million  and  secured  by  mortgages  on  Homestead's  suburban
properties (the "Suburban  Line") and the other in the maximum  principal amount
of $30 million and secured by mortgages on  Homestead's  urban  properties  (the
"Urban  Line"),  were  extended  from April 23, 1999,  to December 31, 2000.  In
November  1999 the Urban Line was repaid and  terminated.  Borrowings  under the
Suburban  Line  bore  interest  at rates  equal to 2.0% to 3.0% over  LIBOR,  or
alternatively  1% to 2% over the  prime  rate or 1.5% to 2.5%  over the  federal
funds rate, with the margin depending upon the ratio of outstanding indebtedness
to the amount of qualifying collateral. Additionally, the Suburban Line required
a  commitment  fee of .375% per annum of the average  undrawn  amount  under the
Suburban Line.  Borrowings under the Urban Line incurred interest at the rate of
3.0% over  LIBOR,  or  alternatively  2.0% over the prime  rate or 2.5% over the
federal funds rate.

         The third credit facility, which had a maximum principal amount of $200
million (the "Bridge Facility"), bore interest at the Eurodollar rate plus 1.25%
or at a base  rate of prime  plus  0.25%.  The line was  scheduled  to expire on
October 31, 1999,  and was secured by a  subscription  agreement  with  Security
Capital  for  $200  million  of   convertible   subordinated   debentures.   The
subscription  obligation was  terminated  upon the repayment of all amounts owed
under the Bridge Facility on May 28, 1999.

         In May 1999  Homestead  closed a common stock rights  offering for $225
million of shares.  Security Capital  purchased  77,749,220  shares at $2.75 per
share in the  common  stock  rights  offering  on the same terms and at the same
price as all other  investors.  Security  Capital's  participation in the rights
offering  satisfied  Security  Capital's   obligations  under  the  subscription
agreement.
                                       12

<PAGE>

         On February  29, 2000,  Homestead  entered into an amended and restated
bank credit facility which allows for  $110,000,000 of total borrowings of which
$35,000,000  is available on a revolving  basis.  The amended and restated  line
matures  February 28, 2003,  bears interest at LIBOR plus 2.5%, is secured by 64
operating  properties,  permits  payment of dividends based upon a definition of
free cash  flow,  and  requires  maintenance  of  financial  ratio and  coverage
covenants.

ADMINISTRATIVE SERVICES AGREEMENT

         Homestead  and  Security  Capital  are  parties  to  an  administrative
services  agreement  (the  "Administrative  Services  Agreement"),  under  which
Security Capital  provides  Homestead with  administrative  services for certain
aspects of Homestead's business. These services include, but are not limited to,
insurance administration,  accounts payable administration, internal audit, cash
management, human resources, management information systems, tax administration,
shareholder  communications and investor relations. The fees payable to Security
Capital are fixed fees for particular services provided.  Any arrangements under
the Administrative Services Agreement for the provision of services are required
to be  commercially  reasonable and on terms not less favorable than those which
could be obtained from unaffiliated third parties.  The Administrative  Services
Agreement, which expires on December 31, 2000, is renewable for a one-year term,
subject to approval by a majority of the  independent  directors  of  Homestead.
Additionally,  Security Capital provides legal  administration  services under a
separate  agreement which expires on December 31, 2000.  Homestead incurred fees
of $5,201,000 for  administrative  services  provided by Security Capital during
1999.

TAX ALLOCATION AGREEMENT

         As a result of Security Capital's  ownership in Homestead exceeding 80%
after the  closing of the May 1999 common  stock  rights  offering,  Homestead's
results after May 1999 are included in the federal income tax return of Security
Capital.  Security  Capital  may  utilize  tax  operating  losses  generated  by
Homestead  subsequent to May 1999. In order for Security  Capital to utilize the
net  operating  loss  carryforwards  generated  by  Homestead  through May 1999,
Homestead must generate  future taxable  income.  To the extent  Homestead's net
operating loss  carryforwards are so utilized on Security  Capital's federal tax
return,  such loss  carryforwards  will not be  available  to  Homestead  in the
future. The use of the net operating losses was disclosed in the May 1999 common
stock  rights  offering  documents.  In order to formalize  this  understanding,
Homestead and Security  Capital  entered into a tax allocation  agreement  which
provides for tax liability or refund payments between the entities as determined
by a defined  calculation of Homestead's  proportionate  share of taxable income
versus the total of taxable  income for all entities  filing as part of Security
Capital's  federal tax return.  The  agreement  also  provides that if a capital
transaction  were to  occur  where  Security  Capital  owned  less  than  50% of
Homestead after the transaction,  all net operating loss carryforwards generated
by  Homestead  through  May 1999 would inure to  Security  Capital.  For 1999 no
amounts were paid or due under the agreement

AGREEMENTS WITH OFFICERS AND FORMER OFFICERS

         In January 1999, upon Robert  Aldworth's  resignation from Homestead as
Chief Financial  Officer,  Homestead and Mr. Aldworth  entered into a separation
agreement and general release.  Under the agreement  Homestead paid Mr. Aldworth
$400,000 in consideration for a general release by Mr. Aldworth of Homestead and
its affiliates from all claims of Mr.  Aldworth  arising through the date of the
agreement.

         In May  1999,  upon  Michael  Cryan's  resignation  from  Homestead  as
Co-Chairman and Chief Operating Officer,  Homestead and Mr. Cryan entered into a
separation  agreement and general release.  Under the agreement Homestead agreed
to  pay  Mr.  Cryan  $1,245,833  in  twelve  monthly  installments  and  to  pay
outplacement  services in  consideration  for a general  release by Mr. Cryan of
Homestead and its  affiliates  from all claims of Mr. Cryan arising  through the
date of the agreement.  In addition,  Homestead reduced the principal amount and
interest  outstanding  under a secured  promissory note,  originally made by Mr.
Cryan to  Homestead  in October  1996 in payment for 25,000  shares of Homestead
common  stock,  from  $235,000 to $62,500 and forgave  payment of the  remaining
$62,500.  Upon  forgiveness  of the note,  all the  shares  were  released  from
Homestead=s lien and delivered to Mr. Cryan.

         In May 1999, upon Robert Morse's resignation from Homestead as Managing
Director,  Homestead  and Mr.  Morse  entered into a  separation  agreement  and
general release.  Under the agreement Homestead agreed to pay Mr. Morse $950,000
in twelve monthly installments and to pay outplacement services in consideration
for a general  release by Mr. Morse of  Homestead  and its  affiliates  from all
claims of Mr. Morse arising through the date of the agreement.  In addition, Mr.
Morse and Homestead amended the stock purchase agreement originally entered into
in March 1998 between Mr. Morse and  Homestead for the purchase of 31,250 shares
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and the secured  promissory  note  originally  made by Mr. Morse to Homestead in
March 1998,  in  consideration  for the shares  purchased by Mr. Morse under the
stock purchase agreement.  The purchase price per share under the stock purchase
agreement was reduced from $16.00 to $2.375 and the principal amount of the note
was  reduced  from  $500,000 to $74,219.  After these  modifications,  Homestead
redeemed the 31,250 shares held by Mr. Morse in  consideration  for cancellation
of the note.

         In February 2000, upon Bryan  Flanagan's  resignation from Homestead as
Senior Vice President and Chief Accounting  Officer,  Homestead and Mr. Flanagan
entered into a separation  agreement and general  release.  Under the agreement,
Homestead agreed to pay Mr. Flanagan $310,000 in twelve monthly installments and
pay outplacement  services and moving expenses,  in consideration  for a general
release by Mr.  Flanagan of Homestead and its affiliates  from all claims of Mr.
Flanagan arising through the date of the agreement.

         In March  2000,  upon Mr.  Dressler's  resignation  from  Homestead  as
President and Director,  Homestead  and Mr.  Dressler  entered into a separation
agreement and general release. Under the agreement,  Homestead paid Mr. Dressler
$87,500  and agreed to pay him  $875,000  in fifteen  monthly  installments,  in
consideration  for a  general  release  by Mr.  Dressler  of  Homestead  and its
affiliates  from all  claims of Mr.  Dressler  arising  through  the date of the
agreement.

         Homestead and Mr. Dressler entered into a consulting agreement dated as
of April 1, 2000, for a  twelve-month  period.  Under the  agreement,  Homestead
agreed to pay Mr. Dressler a monthly consulting fee of $40,000 through March 31,
2001,  for services  consisting of advice and  consultation  with respect to the
marketing  and  sale of  Homestead's  remaining  land  held  for  sale  and,  if
applicable,  certain developed properties,  and oversight of the construction of
an  expansion  of an existing  facility at  Milpitas,  California.  All services
performed  under the  consulting  agreement  will be under the  direction of Mr.
Blankenship.  The ultimate responsibility for making all decisions regarding the
marketing and sale of the properties subject to the consulting  agreement remain
with  Homestead  and shall be subject to  approval  by Messrs.  Blankenship  and
Potts.  Mr.  Dressler will be entitled to a transaction fee from the sale of the
properties  subject to the consulting  agreement in an amount of 1% of the first
$90 million of gross  receipts (as defined in the  consulting  agreement) on the
sale of the  properties and 2% of gross receipts in excess of $90 million on the
sale of such  properties.  A  transaction  fee will be earned on any  properties
which are sold before  March 31,  2001,  or  properties  under  either a binding
agreement  for sale or a binding  letter of intent on or before  March 31, 2001,
and  which  close.  Any  monthly  consulting  fee  paid  prior to  payment  of a
transaction  fee will be  deducted  from the  transaction  fee.  The  consulting
agreement can be terminated for cause, in which event no further amounts will be
due Mr. Dressler. Homestead can terminate the consulting agreement without cause
after  September 30, 2000,  upon payment to Mr. Dressler of the greatest of: (a)
$360,000; (b) 80% of the total commission value of properties under contract for
sale or bona fide offers on properties subject to the consulting  agreement;  or
(c) the unpaid  transaction  fees on the sale of  properties  which  close.  Mr.
Dressler  will be  entitled to keep any monthly  fees or  transaction  fees paid
before termination which are in excess of these minimums.

         During 1999, Mr.  Dressler had one  outstanding  loan from Homestead in
the principal  amount of $250,000 which was entered into on October 15, 1996. He
used the proceeds of that loan to purchase  25,000  restricted  shares under the
1996 Long-Term Incentive Plan, which shares vested on October 15, 1998. The loan
was due on January 5, 2006,  was secured by the shares  purchased  with the loan
proceeds,  and interest  accrued at the lowest rate  charged by Morgan  Guaranty
Trust Company on maturities of 90 days or less,  plus 0.25%. As of July 8, 1999,
Homestead  agreed to reduce the aggregate amount of principal and interest under
the note to $54,687.  In  September  1999 Mr.  Dressler  repaid all amounts owed
under the note with the proceeds of a bonus paid by Homestead. Upon repayment of
the note, the shares were released from  Homestead=s  lien and were delivered to
Mr.  Dressler.  Mr. Dressler then pledged these shares as additional  collateral
for a loan from Security Capital to Mr. Dressler.

         Mr.  Dressler had six  outstanding  loans from Security  Capital in the
aggregate  amount of $1,419,113 as of March 1, 2000,  which are described below.
All these loans were repaid in full in March 2000.

         Under the terms of an amended and restated secured  promissory note and
related pledge  agreement,  Security Capital loaned Mr. Dressler  $962,113.  The
note was  payable on the  earlier of December  31,  2000,  or 120 days after Mr.
Dressler was no longer an officer of an affiliate of Security Capital.  Interest
on the unpaid balance  accrued at 7.00% per year and was payable  annually.  The
proceeds of the note were used to pay personal obligations of Mr. Dressler.  The
note was secured by 25,000 shares of Homestead  common stock,  1,244.78  Class A
Shares of Security  Capital  and options to purchase  Class A Shares of Security
Capital  owned by Mr.  Dressler.  The note was also secured by a life  insurance
policy on Mr. Dressler in the amount of $1,300,000.
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<PAGE>

         Security  Capital also loaned Mr.  Dressler  $207,000 in September 1993
under an  unsecured  full  recourse  promissory  note.  At the time the note was
issued, Mr. Dressler was an officer of Security Capital. The note was payable on
September  1, 2003,  or 90 days after Mr.  Dressler was no longer an employee of
Security  Capital or one of its  subsidiaries.  Interest on the unpaid principal
amount of the note accrued at a floating rate per annum equal to the lowest rate
charged by Morgan  Guaranty  Trust Company of New York to its most  creditworthy
corporate  customers  for  unsecured  loans  having a maturity of ninety days or
less, in effect from time to time, plus .25%. Interest was payable annually. Mr.
Dressler  used the  proceeds of the loan to  purchase  Security  Capital  common
stock.

         The other four loans made by Security  Capital to Mr.  Dressler in 1992
and 1993 were unsecured and full recourse and had an aggregate  principal amount
of $250,000. At the time these four loans were made, Mr. Dressler was an officer
of  Security  Capital.  Each loan was due on January 4,  2001.  Interest  on the
unpaid  principal amount of the loans accrued at a floating rate per annum equal
to the lowest rate charged by Morgan  Guaranty  Trust Company of New York to its
most creditworthy  corporate  customers for unsecured loans having a maturity of
ninety days or less.  Interest was payable  semiannually.  Mr. Dressler used the
proceeds of these four loans to purchase Security Capital common stock.

         Under an  agreement  entered  into as of March 1, 2000,  with  Security
Capital,  Mr.  Dressler  sold to Security  Capital  1,244.748  Class A Shares of
Security  Capital  at $640 per share and  25,000  Homestead  shares at $2.50 per
share for a total of  $859,139,  executed  cashless  exercises  of  options  for
1,784.305  Class A Shares of Security  Capital  and  delivered  net  proceeds of
$573,760 to Security Capital, and delivered a check for $577, in full payment of
principal and interest on all six notes.

         During 1999,  James C. Potts had two loans  outstanding  with  Security
Capital in the aggregate  principal  amount of $255,550 under two unsecured full
recourse promissory notes. The first note was in the principal amount of $75,000
and was  payable on  September  1, 2003.  The second  note was in the  principal
amount of $180,550 and was payable on January 5, 2006.  Interest under each note
accrued on the unpaid principal amount at a floating rate per annum equal to the
lowest rate  charged by Morgan  Guaranty  Trust  Company of New York to its most
creditworthy corporate customers for unsecured loans having a maturity of ninety
days or less,  in effect from time to time,  plus .25%.  Interest on the $75,000
note was  payable  annually  and  interest  on the  $180,550  note  was  payable
semiannually.  Mr.  Potts used the  proceeds of the loans to  purchase  Security
Capital  common  stock.  At the time the notes  were  issued,  Mr.  Potts was an
employee of Security  Capital.  In February  2000 Mr. Potts repaid both loans in
full.

         In January  1999,  Mr.  Potts and  Archstone  entered into an agreement
pursuant  to which  Mr.  Potts (i)  resigned  as a trustee  of  Archstone,  (ii)
tendered to Archstone 89,136 Common Shares of Archstone, and (iii) agreed to the
cancellation of all options and dividend  equivalent  units of Archstone held by
him, and in exchange Archstone forgave the $1,885,308 loan that had been made to
Mr. Potts to acquire such Archstone Common Shares and made a cash payment to Mr.
Potts of $550,000.  At the time the loan was made,  Mr. Potts was an officer and
trustee of Archstone.

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                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and pursuant to the  authorization  granted by that certain
Power of Attorney  filed by the  registrant  with its Annual Report on Form 10-K
for the year ended December 31, 1999, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                      HOMESTEAD VILLAGE INCORPORATED


                                      By:   /s/   JEFFREY A. KLOPF

                                      Its:  Senior Vice President and Secretary

                                      Date:  April 26, 2000









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