================================================================================
                          UNITED STATES SECURITIES AND
                               EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                               ------------------
                                    FORM 10-Q
                               ------------------
(Mark One)

     X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2000

                                       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)


              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                          IF CHANGED SINCE LAST REPORT)
                              ---------------------

     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
                                      ----       ----

The number of shares outstanding of the Registrant's  common stock as of May 12,
2000 was 120,031,477.
================================================================================



<PAGE>




                         HOMESTEAD VILLAGE INCORPORATED
                                TABLE OF CONTENTS

<TABLE>
                                                                                                             NUMBER
                                                                                                              PAGE
                                                                                                           -----------

PART I.          Condensed Financial Information

<S>              <C>                                                                                       <C>
       Item 1.   Financial Statements

                 Condensed Balance Sheets (unaudited) - March 31, 2000 and December 31, 1999...............     3

                 Condensed Statements of Operations (unaudited) - Three-month Periods Ended March 31, 2000
                 and 1999..................................................................................     4

                 Condensed Statements of Cash Flows (unaudited) - Three-month Periods Ended March 31, 2000
                 and 1999..................................................................................     5

                 Notes to Condensed Financial Statements (unaudited).......................................     6

                 Report of Independent Public Accountants..................................................     11

       Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations.....     12

       Item 3.   Quantitative and Qualitative Disclosures About Market Risk................................     16

PART II.         Other Information

       Item 1.   Legal Proceedings.........................................................................     17

       Item 6.   Exhibits and Reports on Form 8-K.........................................................      17


</TABLE>

<PAGE>


                         HOMESTEAD VILLAGE INCORPORATED

                            CONDENSED BALANCE SHEETS

                                   (UNAUDITED)

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
                                            ASSETS                                                MARCH 31,    DECEMBER 31,
                                                                                                     2000          1999
                                                                                                ------------  ----------------
<S>                                                                                            <C>            <C>
Current assets:
     Cash and cash equivalents .............................................................    $        214  $      20,747
     Accounts receivable, net of allowance..................................................           7,723          5,767
     Other current assets...................................................................           1,837          1,821
                                                                                                ------------  --------------
          Total current assets..............................................................           9,774         28,335
                                                                                                ------------  --------------
Property and equipment......................................................................       1,103,887      1,111,999
Less accumulated depreciation...............................................................         (82,081)       (72,008)
                                                                                                ------------  --------------
Net investment in property and equipment....................................................       1,021,806      1,039,991
                                                                                                ------------  --------------
Deferred loan costs, net of accumulated amortization........................................           2,638          1,588
Trademark and intangibles, net of accumulated amortization.................................           41,175         41,796
Other assets ...............................................................................          21,824         21,730
                                                                                                ------------  --------------
   Total assets.............................................................................    $1,097,217    $   1,133,440
                                                                                                ============  ==============
                             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Line of credit, current................................................................    $        --   $      125,449
     Capital lease obligation, current......................................................           3,932          3,837
     Development costs payable, including retainage.........................................             839          1,101
     Due to affiliate.......................................................................             946            882
     Accrued interest payable to affiliate..................................................           6,917          1,882
     Accrued real estate taxes..............................................................           7,509          7,628
     Accounts payable and other accrued expenses............................................          12,608         12,269
     Accrued payroll and related accrued expenses...........................................           7,214          8,332
     Accrued special charge expense.........................................................           2,130          5,372
                                                                                                ------------  -------------
          Total current liabilities.........................................................          42,095        166,752
Line of credit, non-current.................................................................          80,949            --
Capital lease obligation, noncurrent........................................................         135,998        137,017
Convertible mortgage notes payable to affiliate.............................................         221,334        221,334
                                                                                                ------------  -------------
          Total liabilities.................................................................         480,376        525,103
                                                                                                ------------  -------------

Shareholders' equity:
     Common stock, $.01 par value, 249,822,502 shares authorized, 120,031,477 shares
        issued and outstanding in 2000 and 1999.............................................           1,200          1,200
     Preferred stock, 177,498 shares authorized, none issued................................             --             --
     Additional paid-in capital.............................................................         694,913        694,930
     Accumulated deficit....................................................................         (79,229)       (87,724)
     Less deferred compensation.............................................................             (43)           (69)
                                                                                                ------------  -------------
          Total shareholders' equity........................................................         616,841        608,337
                                                                                                ------------  -------------
          Total liabilities and shareholders' equity........................................    $1,097,217    $   1,133,440
                                                                                                ============  =============

         The accompanying notes are an integral part of these condensed
                             financial statements.
</TABLE>


<PAGE>


                         HOMESTEAD VILLAGE INCORPORATED

                       CONDENSED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
                                                                                                  THREE MONTHS ENDED
                                                                                                      MARCH 31,
                                                                                             ------------------------------
                                                                                                  2000           1999
                                                                                             ------------  -------------
<S>                                                                                         <C>            <C>
Revenues:
     Room revenue........................................................................... $   59,542     $   48,119
     Other revenue..........................................................................        520             33
                                                                                             ------------  -------------
          Total revenues....................................................................     60,062         48,152
                                                                                             ------------  -------------
Operating expenses:
     Property operating expenses............................................................     25,489         22,030
     Corporate operating expenses...........................................................      6,010          9,694
     Special charge (credit) (Note 3).......................................................     (1,922)           --
     Depreciation and amortization..........................................................     10,962          9,997
                                                                                             ------------  -------------
          Total operating expenses..........................................................     40,539         41,721
                                                                                             ------------  -------------

Operating income............................................................................     19,523          6,431

Interest income.............................................................................        262            154
Interest expense, net of capitalized interest...............................................    (11,290)       (11,316)
                                                                                             ------------  -------------
Earnings (loss) before income taxes and cumulative effect of accounting change..............      8,495         (4,731)
Provision for income taxes..................................................................         --              --
                                                                                             ------------  -------------
Earnings (loss) before cumulative effect of accounting change...............................      8,495         (4,731)
Cumulative effect of accounting change for organizational, pre-opening and
   start-up activities......................................................................        --         (14,230)
                                                                                             ------------  -------------
Net earnings (loss)......................................................................... $    8,495     $  (18,961)
                                                                                             ==========     ===========

Basic weighted average shares outstanding...................................................    120,031          38,245
                                                                                             ==========     ===========
Diluted weighted average shares outstanding.................................................    120,031          38,245
                                                                                             ==========     ===========

Net earnings (loss) per share:
Basic earnings (loss) before cumulative effect of accounting change......................... $     0.07     $    (0.12)
Cumulative effect of accounting change......................................................        --           (0.37)
                                                                                             ==========     ===========
Basic earnings (loss)....................................................................... $     0.07          (0.49)
                                                                                             ==========     ===========

Diluted earnings (loss) before cumulative effect of accounting change....................... $     0.07     $    (0.12)
Cumulative effect of accounting change......................................................        --           (0.37)
                                                                                             ------------  -------------
Diluted earnings (loss)..................................................................... $     0.07          (0.49)
                                                                                             ==========     ===========





</TABLE>


              The accompanying notes are an integral part of these
                        condensed financial statements.


<PAGE>


                         HOMESTEAD VILLAGE INCORPORATED

                       CONDENSED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

<TABLE>
                                                                                                THREE MONTHS
                                                                                              ENDED MARCH 31,
                                                                                       -------------------------------
                                                                                           2000             1999
                                                                                       ------------  -------------
<S>                      `                                                             <C>              <C>
Operating activities:
    Net  earnings(loss)...........................................................     $     8,495      $   (18,961)
    Adjustments to reconcile net earnings (loss) to net cash provided by operating
activities:
        Gain on sales of land.....................................................            (713)              --
        Cumulative effect of accounting change....................................              --            14,230
        Depreciation and amortization.............................................          10,962             9,997
        Deferred compensation.....................................................              10               107
        Amortization of deferred loan costs.......................................             368               994
    Change in assets and liabilities:
        Increase in accounts receivable, net of change in allowance...............          (1,956)           (807)
        Decrease in funds held in escrow..........................................              --             1,701
        (Increase) in other current assets........................................             (16)             (243)
        Decrease in accrued real estate taxes.....................................            (119)             (350)
        Increase in accrued interest on convertible mortgage notes................            5,035             4,979
        Decrease in accrued payroll and related accrued expenses..................           (1,118)          (1,570)
        Increase in accounts payable and other accrued expenses...................             338              2,139
        Decrease in accrued special charge........................................          (3,117)           (1,453)
        Increase in due to affiliate..............................................              64                379
                                                                                       --------------   --------------
            Net cash provided by operating activities.............................          18,233             11,142
                                                                                       --------------   --------------

Investing activities:
        Investment in properties, net of development costs payable................          (1,558)          (48,782)
        Proceeds from sales of land...............................................           9,996               --
        Decrease in deposits and pursuit costs....................................              --               688
        Increase in other assets..................................................            (361)           (1,190)
                                                                                       --------------   --------------
            Net cash provided by (used in) investing activities...................           8,077           (49,284)
                                                                                       --------------   --------------

Financing activities:
        Proceeds from lines of credit.............................................              --            41,920
        Payments on line of credit................................................         (44,500)              --
        Deferred loan costs for line of credit....................................          (1,419)           (2,377)
        Payments on mortgage note payable.........................................              --          (122,028)
        Sale of property and equipment, net.......................................              --           127,262
        Payments on capital lease.................................................            (924)           (1,740)
        Payments on other long-term liabilities...................................              --                (3)
        Repurchase of stock.......................................................              --              (107)
        Proceeds from principal payments on notes from officers..................               --                14
                                                                                       --------------   --------------
            Net cash provided by (used in) financing activities...................         (46,843)           42,941
                                                                                       --------------   --------------

Net (decrease) increase in cash and cash equivalents..............................         (20,533)             4,799
Cash and cash equivalents, beginning of period....................................          20,747             12,144
                                                                                       --------------   --------------
Cash and cash equivalents, end of period..........................................     $       214      $      16,943
                                                                                       ==============   ==============

Non-cash investing and financing transaction:

        Increase in property and equipment and lease obligation, from capital lease    $        --      $     145,000
                                                                                       ==============   ==============



</TABLE>



              The accompanying notes are an integral part of these
                        condensed financial statements.


<PAGE>





                         HOMESTEAD VILLAGE INCORPORATED
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (UNAUDITED)

NOTE 1--GENERAL

   Principles of Financial Presentation

     The financial statements of Homestead Village Incorporated ("Homestead") as
of March 31, 2000 and for the three-month  periods ended March 31, 2000 and 1999
are  unaudited,  and  pursuant  to the  rules  of the  Securities  and  Exchange
Commission,  certain information and footnote  disclosures  normally included in
financial  statements have been omitted.  While management of Homestead believes
that the disclosures presented are adequate,  these interim financial statements
should be read in conjunction  with the financial  statements and notes included
in Homestead's 1999 Annual Report on Form 10-K.

     In  the  opinion  of  management,   the  accompanying  unaudited  financial
statements  contain  all  adjustments,   consisting  only  of  normal  recurring
adjustments,   necessary  for  a  fair  presentation  of  Homestead's  financial
statements for the interim periods presented.  The results of operations for the
three-month periods ended March 31, 2000 and 1999 are not necessarily indicative
of the results to be expected for the entire year.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

   Per Share Data

     Basic  earnings  (loss) per share is  calculated  by dividing  net earnings
(loss)  available  to common  shareholders  by weighted  average  common  shares
outstanding.  Diluted  earnings per share is  equivalent  to basic  earnings per
share unless dilution results from a calculation which divides adjusted earnings
available to common  shareholders  by adjusted  weighted  average  common shares
outstanding.  Adjusted earnings available for common  shareholders adds back all
net interest expense from  convertible  debt.  Adjusted  weighted average shares
outstanding  includes any dilutive  effect of options  using the treasury  stock
method and the dilutive effect of convertible debt. For the three-month  periods
ended March 31, 2000 and 1999 exercise of options and  conversion of debt is not
assumed as the  effects  are not  dilutive  in 2000 and are  anti-dilutive  in a
period of loss in 1999.



<PAGE>


     A reconciliation of the numerators and denominators used to calculate basic
and  diluted  earnings  (loss) per share for the periods  indicated  follows (in
thousands, except per share amounts):

<TABLE>
                                                                                     THREE MONTHS ENDED
                                                                                         MARCH 31,
                                                                               ------------------------------
                                                                                    2000            1999
                                                                                    ----            ----
<S>                                                                           <C>               <C>
     Net earnings (loss) attributable to common shares
       before cumulative effect of accounting change..........................  $    8,495       $ (4,731)
                                                                               ===========      ==========

     Weighted average shares outstanding - basic..............................     120,031          38,245
                                                                               ===========      ==========

     Net  earnings  (loss)  per share  before  cumulative  effect of  accounting
       change:
     Basic....................................................................  $    0.07        $  (0.12)
                                                                               ===========      ==========
     Diluted..................................................................  $    0.07        $  (0.12)
                                                                               ===========      ==========
</TABLE>

   Reclassifications

     Certain 1999 financial  statement amounts have been reclassified to conform
to the 2000 presentation.

   New Accounting Rules

     In  June  1998,   Statement  of  Financial  Accounting  Standards  No.  133
"Accounting  for  Derivative  Instruments  and Hedging  Activities"  was issued,
establishing   standards  for  the   accounting  and  reporting  for  derivative
instruments.  The new rules,  which become effective for Homestead on January 1,
2001,  are not  expected  to have a  material  impact on  Homestead's  financial
position or results of operations.


NOTE 2--PROPERTY AND EQUIPMENT

     Property and equipment consist of the following (in thousands):
<TABLE>

                                                                  MARCH 31, 2000         DECEMBER 31, 1999
                                                             --------------------------------------------------
                                                               NUMBER OF                NUMBER OF
                                                              PROPERTIES/                            CARRYING
                                                                            CARRYING   PROPERTIES/
                                                                PARCELS      AMOUNT      PARCELS      AMOUNT
                                                             --------------------------------------------------

            <S>                                              <C>          <C>           <C>         <C>
            Operating properties:
               Owned properties:
                    Land....................................               $ 197,232                $ 197,226
                    Buildings and improvements..............                 658,924                  658,668
                    Furniture, fixtures and equipment.......                  89,036                   88,145
                                                                           -----------              -----------
                 Subtotal, owned properties.................       118       945,192        118       944,039
               Properties under a capital lease.............        18       145,000         18       145,000
                                                                  ----                     ----
                                                                           -----------              -----------
                                                                   136     1,090,192        136     1,089,039
                                                                   ===                      ===
            Under construction..............................        --            --         --            --
                                                                   ===                      ===
            Land held for development.......................       (a)         1,177         --            --
                                                                 =====                      ===
            Land held for sale, including excess parcels....         9        12,518         13        22,960
                                                                 =====                     ====
                                                                           ===========              ===========
                      Total.................................               $1,103,887               $1,111,999
                                                                           ===========              ===========
<FN>


(a)  Land held for  development  at March 31, 2000 consists of one excess parcel
     upon which Homestead will expand an existing operating property. The excess
     parcel had been held for sale as of December 31, 1999.

     Land held for sale at March 31, 2000 consists of seven  suburban  sites and
     two excess parcels  located  adjacent to operating  properties.  During the
     first quarter of 2000 the sole remaining  urban site was sold, as well as a
     suburban  site  and an  excess  land  parcel,  for  aggregate  proceeds  of
     approximately $9.9 million.
</FN>
</TABLE>



<PAGE>



NOTE 3--SPECIAL CHARGE CREDIT

     In 1999 Homestead  recorded a special charge of $65.3 million primarily for
write-downs of land to be held for sale, write-offs of pursuit costs, closure of
offices and discontinuance of new initiatives, and severance of personnel costs.
In the  quarter  ended  March 31, 2000  credit  adjustments  have been  recorded
consisting  of  gains  on  sales of land  and  anticipated  cost  recoveries  of
approximately $2.0 million and a decrease in the costs of closing administrative
offices (due to Homestead obtaining subleases for unused space) of approximately
$1.2 million.  The credit adjustments were offset by additional  severance costs
for the  separation of 2 executive  officers in first quarter 2000  estimated at
$1.3 million.

     The remaining $2.1 million  liability for special charge  expenses at March
31, 2000  consists of  approximately  $2.2  million of unpaid  severance  costs,
approximately   $1.3  million  for  ongoing   costs  of  closed   offices,   and
approximately $1.4 million of estimated recoveries of costs.


NOTE 4--DEBT

     The following table summarizes Homestead's outstanding debt.

<TABLE>
                                                                             MARCH 31,          DECEMBER 31,
                                                                                2000                 1999
                                                                          ----------------    -----------------

                                                                            (UNAUDITED)

            <S>                                                          <C>                  <C>
            Credit facility:
               Revolving portion......................................... $         5,949     $        125,449
               Term portion..............................................          75,000                   --
                                                                          ----------------    -----------------
                 Total credit facility...................................          80,949             125,449
            Capital lease obligation.....................................         139,930              140,854
            Convertible mortgage notes...................................         221,334              221,334
                                                                          ----------------    -----------------
                 Total debt.............................................. $       442,213     $        487,637
                                                                          ================    =================
</TABLE>

   Credit Facility

     On February 29, 2000  Homestead  entered into an amended and restated  bank
credit  facility which allows for $110 million of total  borrowings of which $35
million is  available on a revolving  basis and $75 million is a term loan.  Any
repayment  on the term loan  before  the  maturity  date  cancels  the term loan
commitment  in the amount of the  repayment.  The amended and restated  facility
matures  February 28, 2003,  bears interest at LIBOR plus 2.5%, is secured by 64
operating properties and permits payment of dividends based upon a definition of
free cash flow. The amended and restated credit facility requires maintenance of
financial  ratio and  coverage  covenants  effective  with first  quarter  2000.
Homestead was in compliance  with all covenants  under its credit facility as of
March 31, 2000.

     As of March 31, 2000, Homestead has an outstanding balance of $80.9 million
under the credit  facility,  of which $75  million was  outstanding  on the term
portion and $5.9 million was outstanding on the revolving portion.

     Convertible Mortgage Notes Payable

     At March 31, 2000  Homestead owed  convertible  mortgage notes to Archstone
Communities Trust ("Archstone"), an affiliate, in the principal amount of $221.3
million.  The notes are  collateralized by mortgages on 54 Homestead  properties
with a historical cost of $359.6  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 of each year.  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 (a conversion ratio
equal to one share of common  stock for every  approximate  $10.44 of  principal
amount outstanding).



<PAGE>


   Capital Lease Obligation

     Homestead  operates  eighteen  properties  under a long-term  lease through
December 2015 and pays a minimum rent of approximately  $16 million per year and
a  minimum  of $1.5  million  per year  payment  to a  furniture,  fixtures  and
equipment reserve. Homestead posted a security deposit equal to one year's rent.

     The lease is considered a capital lease for  financial  reporting  purposes
and  thus  the  present  value  of the  minimum  lease  payments  discounted  at
approximately  9.8%  has  been  recorded  as an  asset  of  $145,000,000,  being
amortized over the lease term, and an obligation, which is reduced over the term
of the lease by allocating rent payments  between interest expense and reduction
of the lease obligation. Future minimum payments aggregate $17,460,000 per year,
or a total of  $274,995,000  for the  remainder of 2000 through  2015,  of which
$135,065,000  represents  interest.  The balance of the  obligation at March 31,
2000 was $139,930,000.

     The lease also provides for two  extension  periods of 15 years each at the
option of Homestead,  requires  payment of percentage  rents beginning July 2000
based on increases in revenues over a base period,  and requires a percentage of
revenues be paid to a furniture,  fixtures and equipment  reserve to be used for
capital expenditures.

   Interest

     The following summarizes Homestead's interest expense (in thousands):

<TABLE>
                                                                                         THREE MONTH PERIODS ENDED
                                                                                                 MARCH 31,
                                                                                       -------------------------------
                                                                                           2000             1999
                                                                                       --------------   --------------
    <S>                                                                                <C>              <C>
    Credit facilities..............................................................    $      2,822     $      7,622
    Convertible mortgage notes....................................................            5,035            4,980
    Mortgage note payable..........................................................              --            1,282
    Capital lease obligation......................................................            3,433            1,407
    Other.........................................................................               --              193
                                                                                       --------------   --------------
        Total interest cost.......................................................           11,290           15,484
    Capitalized interest..........................................................               --          (4,168)
                                                                                       --------------   --------------
        Net interest expense......................................................     $     11,290     $     11,316
                                                                                       ==============   ==============
    Amortization of deferred financing costs included in interest cost............     $        368     $        994
                                                                                       ==============   ==============
</TABLE>

     The total interest paid in cash for the three-month periods ended March 31,
2000 and 1999 was $6,434,000 and $9,571,000, respectively.


NOTE 5--INCOME TAXES

     As Security Capital Group Incorporated's ("Security Capital's") ownership
in Homestead exceeded 80% as of May 1999, Homestead's results after May 1999 are
included in Security  Capital's federal income tax return.  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  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 income tax returns,  such loss carryforwards will not
be available to Homestead  in the future.  Homestead  and Security  Capital have
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  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.

     Homestead  presents in its financial  statements its provision for taxes as
though Homestead filed a separate  return.  Deferred tax assets relate primarily
to: (1) the  difference  in the  carrying  amount of  deferred  financing  costs
recognized  at  formation  and  in  connection  with   subsequent   fundings  of
convertible  mortgage  notes  payable for financial  reporting  purposes and the
amount recognized for tax purposes; (2) the difference in the carrying amount of
the lease  obligation,  convertible  mortgage notes,  and other  liabilities for
financial reporting purposes and the amount recognized for tax purposes; and (3)
tax net  operating  loss.  Deferred  tax  liabilities  relate  primarily  to the
difference  in the carrying  amount and the methods of  depreciation  of certain
depreciable  assets for financial  reporting  purposes and the amount recognized
for tax purposes.  A valuation  allowance has been  recognized to offset the net
deferred tax assets,  due to  uncertainty  of  realization of those deferred tax
assets in future years.


NOTE 6--ADMINISTRATIVE SERVICES AGREEMENT

     Homestead and Security Capital have an  administrative  services  agreement
(the "Administrative  Services  Agreement"),  pursuant to which Security Capital
provides Homestead with administrative  services with respect to 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. 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  December 31, 2000, is renewable for a one-year  term,
subject to approval by a majority of the  independent  members of the  Homestead
Board of Directors. Additionally, Security Capital provides legal administration
services  under a separate  agreement  which  expires  December 31, 2000.  Total
administrative  services fees for the  three-month  periods ended March 31, 2000
and 1999 were $1,215,000 and $1,457,000, respectively.


NOTE 7--COMMITMENTS AND CONTINGENCIES

     Other than  described  below  Homestead is not a party to any litigation or
claims,  other  than  routine  matters  arising  out of the  ordinary  course of
business  that are  incidental to the  development  process and operation of the
business  of  Homestead.  As a result of the  announcement  on March 23, 2000 of
Security  Capital's  proposal to  Homestead  to purchase all shares of Homestead
common  stock not  already  owned by Security  Capital,  several  lawsuits  (the
"Actions")  were filed against  Homestead,  Security  Capital,  and  Homestead's
directors  which purport to be stockholder  class actions  alleging the proposed
$3.40 cash per share offer was unfair and breaches of duties of Security Capital
and Homestead  directors.  On May 2, 2000, as the result of negotiations between
counsel  for parties in the  Actions,  an  agreement  in  principle  was reached
providing for the  settlement of the Actions,  subject to court approval and the
completion of the merger,  among other things.  Homestead  does not believe that
the results of all claims and litigation, individually or in the aggregate, will
have a material adverse effect on its business, financial position or results of
operation.

NOTE 8--PROPOSED TRANSACTION WITH SECURITY CAPITAL

     On March 23, 2000,  Security  Capital  submitted a letter to the  Homestead
Board of Directors  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.  On May 2,  2000,  Homestead
announced that it has entered into a definitive  merger agreement  providing for
the  acquisition by cash tender offer by Security  Capital for all the shares of
Homestead's common stock and the associated  preferred share purchase rights not
owned by Security  Capital at $4.10 per share.  Any shares of  Homestead  common
stock and associated preferred share purchase rights not purchased in the tender
offer will be acquired by Security Capital in a subsequent merger transaction at
the same $4.10 per share cash price. On May 9, 2000 Security Capital commenced a
cash tender  offer for all shares of Homestead  common stock and the  associated
preferred  share  purchase  rights  not owned by  Security  Capital at $4.10 per
share.



<PAGE>






                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Homestead Village Incorporated:


     We have reviewed the accompanying  condensed  consolidated balance sheet of
Homestead Village  Incorporated (a Maryland  corporation) and subsidiaries as of
March 31, 2000 and the related condensed  consolidated  statements of operations
for the  three-month  periods  ended  March  31,  2000 and 1999 and the  related
condensed  consolidated  statements  of cash flows for the  three-month  periods
ended March 31, 2000 and 1999. These financial statements are the responsibility
of the Company's management.

     We conducted our review in accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards  generally accepted in the United States, the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

     Based on our review,  we are not aware of any material  modifications  that
should be made to the financial  statements  referred to above for them to be in
conformity with accounting principles generally accepted in the United States.

     We have previously audited, in accordance with auditing standards generally
accepted in the United  States,  the  consolidated  balance  sheet of  Homestead
Village Incorporated and subsidiaries as of December 31, 1999, and in our report
dated January 28, 2000, we expressed an unqualified  opinion on that  statement.
In  our  opinion,  the  information  set  forth  in the  accompanying  condensed
consolidated  balance  sheet as of December 31, 1999, is fairly  stated,  in all
material respects,  in relation to the consolidated  balance sheet from which it
has been derived.


                               ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 28, 2000



<PAGE>




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following  discussion  should be read in conjunction  with  Homestead's
1999 Annual  Report on Form 10-K (the "1999 Form 10-K") as well as the financial
statements  and the notes  thereto  in Item 1 of this  report.  In  addition  to
historical  information,  this discussion  contains  forward-looking  statements
under the  federal  securities  laws.  These  statements  are  based on  current
expectations,  estimates and projections about the industry and markets in which
Homestead  operates,  management's  beliefs and assumptions  made by management.
Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates",  variations of such words and similar  expressions  are intended to
identify such forward-looking statements. These statements are not guarantees of
future  performance and involve risks,  uncertainties  and assumptions which are
difficult  to  predict.  Therefore,  actual  outcomes  and  results  may  differ
materially  from  what  is  expressed  or  forecasted  in  such  forward-looking
statements.  Among the  important  factors that could cause  Homestead's  actual
results  to  differ  materially  from  those  expressed  in the  forward-looking
statements are (i) changes in general economic  conditions in its target markets
that could adversely affect demand for Homestead's properties,  (ii) the effects
of increased or unexpected  competition  with respect to one or more properties,
(iii)  availability to Homestead of debt or equity  financing,  (iv) the matters
described under "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Risk Factors" in Item 7 of the 1999 Form 10-K, (v) changes
in financial markets and interest rates that could adversely affect  Homestead's
cost of capital and its  ability to meet its  financing  needs and  obligations,
(vi) weather, and (vii) the ability of potential buyers of land held for sale to
obtain financing for such purchases.


OVERVIEW

     First  quarter  2000  results  reflect the  transition  of  Homestead to an
operating  company  composed  of  136  stabilized  properties  with,  management
believes, an appropriately scaled corporate overhead structure.  The transition,
which largely took place during 1999,  included focusing on Homestead's  balance
sheet to dispose of land held for sale,  reduce  debt  balances,  and extend the
maturities of debt;  focusing on property  operations to maximize cash flow from
operations,  and reducing  corporate overhead costs to a level appropriate for a
136-property  operating  company.  By  first  quarter  2000 the  effects  of the
transition are reflected in Homestead's  improved operating results and, through
additional  first  quarter  2000  land  sales  and debt  repayments,  a  further
strengthened balance sheet at the end of the quarter.

   Balance Sheet Focus

     Homestead  has reduced  its debt to $442.2  million at March 31, 2000 (from
$487.6  million at December 31, 1999),  which  primarily  reflects  repayment of
$44.5 million on the bank line of credit  during first  quarter 2000.  Homestead
reduced the bank debt in first quarter 2000 by utilizing cash on hand, cash from
operations  and  proceeds  from the  sales of land.  Land  sales in the  quarter
generated net proceeds of  approximately  $9.9 million from the sale of the sole
remaining urban site, one suburban site and an excess land parcel.

     In addition to the debt reductions,  on February 29, 2000 Homestead entered
into an amended and restated bank credit  facility which allows for $110 million
of total  borrowings of which $35 million is available on a revolving basis. The
amended and restated line matures February 28, 2003 (the former facility was due
December  2000),  bears  interest at LIBOR plus 2.5%, is secured by 64 operating
properties,  and permits  payment of dividends  based upon a definition  of free
cash flow.

   Focus on Property Operations

   Beginning in late second  quarter 1999  Homestead  lowered  rates in selected
markets which were experiencing  competitive pressures.  Management believes the
improvements  in occupancy  levels and revenues for the three months ended March
31, 2000 were partially due to these actions. Occupancy of same-store properties
increased  560 basis points from 65.1% for the three months ended March 31, 1999
to 70.7% for the same period in 2000.


<PAGE>



   Reduction of Overhead

     In May 1999, Homestead's management established a goal of reducing overhead
to reflect a company with stabilized operations of 136 properties.  In the first
quarter of 2000, on an annualized  basis,  total  overhead  costs was reduced to
$24.5 million from $48.6 million from the same period in 1999.

   Proposed Transaction with Security Capital

     On March 23, 2000,  Security  Capital  submitted a letter to the  Homestead
Board of Directors  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.  On May 2,  2000,  Homestead
announced that it has entered into a definitive  merger agreement  providing for
the  acquisition by cash tender offer by Security  Capital for all the shares of
Homestead's common stock and the associated  preferred share purchase rights not
owned by Security  Capital at $4.10 per share.  Any shares of  Homestead  common
stock and associated preferred share purchase rights not purchased in the tender
offer will be acquired by Security Capital in a subsequent merger transaction at
the same $4.10 per share cash price. On May 9, 2000,  Security Capital commenced
a cash tender for all the shares of Homestead  common  stock and the  associated
preferred  share  purchase  rights  not owned by  Security  Capital at $4.10 per
share.


RESULTS OF OPERATIONS

   Three Months Ended March 31, 2000 and 1999

     Net  earnings  (loss),  for the three  months ended March 31, 2000 and 1999
were $8.49  million and  $(18.96)  million,  respectively.  Net earnings for the
three-month period ended March 31, 2000 includes a special charge credit of $1.9
million  relating to an adjustment to the second quarter 1999 special charge and
additional  severances  in  first  quarter  2000.  The net  loss  for the  three
month-period  ended March 31, 1999 includes a cumulative effect of an accounting
change of $14.2  million  relating  to  Homestead's  adoption  of  Statement  of
Position 98-5 "Reporting on the Costs of Start-Up Activities" beginning with its
1999 fiscal  year.  Net earnings  (loss)  before the special  charge  credit and
cumulative  effect was $6.6  million for the three month  period ended March 31,
2000 and ($4.7)  million for the  three-month  period ended March 31, 1999.  The
$11.3 million increase is primarily attributable to an increase of $11.4 million
in room  revenue.  A discussion of the major  components of net earnings  (loss)
follows.

   Property Operations

     Homestead's first quarter 2000 revenue per available room performance shows
a 14.0%  increase  compared  to the same  period of 1999 which  reflects  higher
occupancy  levels offset  partially by lower average weekly rates. The following
table sets forth certain  information for Homestead's  total operating  property
portfolio for the periods indicated:

<TABLE>
                                                              THREE MONTHS ENDED
                                                                  MARCH 31,
                                                     -------------------------------------
                                                         2000         1999      CHANGE
                                                     -------------------------------------
<S>                                                  <C>          <C>        <C>
Weekly RevPAR(1).....................................    $252         $221       14.0%
Average Weekly Rate(2)...............................    $349         $352      (0.8%)
Occupancy............................................    72.2%        62.8%       9.4
Number of Operating Properties at Period End.........     136          125        8.8%
Property Operating Income Margin.....................    57.4%        54.2%       3.2
----------
<FN>

(1)  Weekly revenue per available room ("RevPAR") is determined by dividing room
     revenue  by the  number of guest  room days  available  for the  period and
     multiplying by seven.

(2)  Average  weekly rate is  determined  by dividing  room  revenue by the
     number of guest room days occupied for the period and multiplying by seven.
</FN>
</TABLE>

     Homestead's  11 new  openings  since the end of the first  quarter  of 1999
account for approximately one-half of the room revenue increase of $11.4 million
(23.7%) for the three months ended March 31, 2000 as compared to the same period
in 1999.  The  remainder of the  increase in room  revenue is  primarily  due to
stabilized  operations of properties  which were in a  pre-stabilized  status in
first quarter 1999 and the effect of occupancy increases on RevPAR of properties
operating and  stabilized in both periods.  Total  property  operating  expenses
increased  $3.5  million  (15.7%) for the three months ended March 31, 2000 over
1999.  The increase is due  primarily to the increase in the number of operating
properties as noted above.

   Same-Store Properties

     Homestead  had  100   properties   which  were   operating  and  stabilized
("stabilized" means those properties which obtained 80% occupancy for a one-week
period or have been opened for 24 weeks)  throughout  both  three-month  periods
ended March 31, 2000 and 1999  ("same-store"  properties).  RevPAR for the three
months ended March 31, 2000 for the same-store properties increased to $230 from
$219 for the same period in 1999. The RevPAR  increase was due to an increase in
occupancy  to 70.7% for the three month  period  ended March 31, 2000 from 65.1%
for the same period in 1999,  offset in part by a decrease in the average weekly
rate of $11 (3.3%) for the three  months ended March 31, 2000 as compared to the
same  period in 1999.  The  increase  in  RevPAR  and  occupancy  is a result of
management's  efforts to improve  occupancy in select  markets by reducing  room
rates.

   Corporate Operating Expenses

     Corporate  operating  expenses  decreased  $3.7 million for the three month
period ended March 31, 2000 as compared to the same period in 1999. The decrease
is due to the  severance of personnel and the cost  reductions  initiated in May
1999.

   Depreciation and Amortization

     Depreciation and amortization increased $965,000 for the three months ended
March 31,  2000 as  compared  to the same  period in 1999  primarily  due to the
increased number of properties  operating for the three-month period ended March
31, 2000 as compared to the same period in 1999.

   Interest Income

     Interest  income of $262,000  and $154,000 for the three months ended March
31, 2000 and 1999, respectively, was a result of interest earned from investment
of excess cash on hand.

   Interest Expense

     The following summarizes Homestead's interest expense (in thousands):
<TABLE>
                                                                       THREE MONTHS ENDED
                                                                           MARCH 31,
                                                                  -----------------------------
                                                                       2000          1999
                                                                  -----------------------------
    <S>                                                           <C>            <C>
    Credit facilities.............................................$      2,822   $     7,622
    Convertible mortgage notes....................................       5,035         4,980
    Mortgage note payable.........................................          --         1,282
    Capital lease obligation......................................       3,433         1,407
    Other.........................................................          --           193
                                                                  -------------  --------------
        Total interest cost.......................................      11,290        15,484
    Capitalized interest..........................................           --      (4,168)
                                                                  -------------  --------------
        Net interest expense......................................$     11,290   $    11,316
                                                                  =============  ==============

    Amortization of deferred financing costs included in
      interest cost                                               $        368   $       994
                                                                  =============  ==============
</TABLE>


     Interest expense on credit facilities borrowings decreased $4.8 million for
the three months ended March 31, 2000 as compared to the same period in 1999 due
primarily  to a  lower  average  outstanding  balance  ($111.0  million  in 2000
compared to $376.5 million in 1999).

     Homestead incurred $1.3 million in interest cost for the three months ended
March 31, 1999 relating to a mortgage note which was repaid on February 23, 1999
with proceeds from the  sale-leaseback  of properties.  Homestead  incurred $3.4
million and $1.4  million in interest  cost in the three  months ended March 31,
2000 and 1999,  respectively,  as a result of the  leaseback of such  properties
under a capital lease.

     In 1999 interest cost on borrowings was offset by interest capitalized with
respect to Homestead's development  activities.  Capitalized interest levels are
reflective of Homestead's  cost of funds and the level of development  activity.
Capitalized  interest decreased by $4.2 million for the three months ended March
31, 2000 as compared  to the same  period in 1999 due to the  completion  of all
properties in construction during the second quarter of 1999.


LIQUIDITY AND CAPITAL RESOURCES

   Investing and Financing Activities

     During the three month  periods  ended  March 31, 2000 and 1999,  Homestead
invested $1.6 million and $48.8 million,  respectively in Homestead  properties.
The amounts  invested  in the three  months  ended March 31, 2000 were  financed
primarily  from cash flows from  operations.  The amounts  invested in the three
months ended March 31, 1999 were financed  primarily from  borrowings  under the
lines of credit.

     During the first  three  months of 2000,  Homestead  reduced  its debt from
$487.6  million at  December  31,  1999 to $442.2  million at March 31,  2000 by
paying a total of $44.5  million  on the  line of  credit  reducing  its line of
credit to $80.9 million.

     Homestead  believes it will have adequate cash  resources from cash on hand
and cash flow from  operations  to fund its debt  service  needs and  payment of
severances  and other  special  charge  liabilities.  In addition  Homestead may
generate additional cash by the sale of the remaining land held for sale, but no
assurance  can be given that such sales  will occur or provide  significant  net
proceeds.  While Homestead  believes it will continue to generate  positive cash
flow from operations of its properties,  there can be no assurance of generation
of positive cash flow from future  operations  due to the risks of operations of
lodging properties including  competitive  pressures,  rates,  occupancies,  and
costs of operation.  Additionally,  Homestead's  ability to meet its obligations
could be adversely affected by increases in interest rates.

   Operating Activities

     Net cash flow  provided by operating  activities  increased by $7.1 million
for the three months  ended March 31, 2000 as compared to 1999.  The increase is
due primarily to an increase in cash from  operations  provided by the growth in
the number of operating properties as described under "Results of Operations."


ENVIRONMENTAL MATTERS

    Homestead is not aware of, nor does it expect,  any environmental  condition
on its properties to have a material  adverse effect upon its business,  results
of operations or financial position.



<PAGE>



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   Interest Rate Risk

     Homestead's  exposure to market risk for changes in interest  rates relates
primarily to its credit facility.  On February 29, 2000, the credit facility was
amended and restated to provide for, among other things,  interest at LIBOR plus
2.5% and a due date of February 28, 2003.  As the facility  bears  interest at a
rate which fluctuates with the market, fair value approximates carrying value at
the balance sheet date.

     As  of  March  31,  2000  no  other  significant  change  had  occurred  in
Homestead's interest rate risk as discussed in Homestead's 1999 Annual Report on
Form 10-K.



<PAGE>


                            PART II OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         As a  result  of the  announcement  on  March  23,  2000,  of  Security
Capital's proposal to Homestead to purchase all shares of Homestead common stock
not  already  owned by  Security  Capital  for $3.40 per  share,  and before the
Homestead  Board of  Directors  took any action  with  respect to the  proposal,
several lawsuits were filed against Homestead,  Security Capital and Homestead's
directors. Homestead, Security Capital and Homestead's directors have been named
as  defendants  in four  purported  stockholder  class  actions.  Three of these
actions have been filed in the Circuit Court for Baltimore City,  Maryland,  and
are  captioned  Earl Joseph  Maisonneuve  v. Eugene B.  Vesell,  et al.;  Robert
Merritt v. Security  Capital  Group  Incorporated;  and Harold  McClintock v. C.
Ronald  Blankenship,  et al. One of these  actions has been filed in the Circuit
Court for Montgomery County,  Maryland, and is captioned Aron Rubin v. Homestead
Village,  Inc., et al. The  allegations  in all four cases (the  "Actions")  are
substantially  similar,  and each complaint in the Actions  alleges that (a) the
Security  Capital  proposal of $3.40 in cash per share was unfair,  (b) Security
Capital  and  the  Homestead  directors  were  breaching  their  duties  to  the
stockholders  of Homestead not  affiliated  with Security  Capital in connection
with the Homestead  proposal,  and (c) appropriate steps were not being taken to
insure that the  stockholders of Homestead not affiliated with Security  Capital
would  receive fair value for their  Homestead  shares in any  transaction  that
might  occur.  As relief,  the  complaints  in the Actions  sought,  among other
things,  damages in an unspecified amount and rescission of the transaction,  if
effected. In addition, the action brought by Harold McClintock was also filed in
a Georgia court and is captioned Harold McClintock v. C. Ronald Blankenship. The
plaintiff has filed a motion to dismiss the Georgia action;  however,  the court
has not yet granted the motion.

     On May 2, 2000, as the result of  negotiations  between counsel for parties
in the  Actions,  an  agreement  in  principle  was  reached  providing  for the
settlement of the Actions,  subject to Court  approval and the completion of the
merger,  among other things.  Homestead does not believe that the results of the
settlement  will  have a  material  adverse  effect on its  business,  financial
position or results of operations.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits:

10.1     Change in Control Agreement between James C. Potts and Homestead

10.2     Agreement  and Plan of  Merger  by and  among  Security  Capital  Group
         Incorporated,   HSD  Acquisition   Corporation  and  Homestead  Village
         Incorporated  dated as of May 2,  2000  (previously  filed  as  Exhibit
         (d)(1) to Schedule TO of Security Capital Group  Incorporated dated May
         9, 2000, and incorporated by reference).

15       Letter regarding unaudited interim financial information

27       Financial Data Schedules

     (b) Reports on Form 8-K.

    Form              Date            Items Reported        Financial Statements

    8-K         March 29, 2000          Item 5,7                    No
    8-K         April 10, 2000          Item 5,7                    No




<PAGE>


                                   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.


                                      HOMESTEAD VILLAGE INCORPORATED

                                      /S/ A. RICHARD MOORE
                                      Interim Chief Financial Officer
                                      (Principal Financial Officer)


                                      /S/ F. JOSEPH ROGERS
                                      Vice President
                                      (Principal Accounting Officer)



Date:  May 12, 2000