##### 









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




---

FORM 10-Q

|     |  |                                                                                                         
|---- |  | --------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|[X]  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
        15(d) OF THE SECURITIES EXCHANGE ACT OF 1934         
|     |  | For the quarterly period ended September 30, 2001                                                       
|     |  | 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 0-22411



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SUMMIT PROPERTIES PARTNERSHIP, L.P.

(Exact name of registrant as specified in its
charter)


|                                                                                                                           |  |                                                       
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------
|                                                                                                                          
|                                                                                                                          
|                                                                                                                          
|                                                                                                                          
|Delaware(State or other jurisdiction of
        incorporation or organization)                                             |  | 56-1857809(I.R.S. Employer
        Identification No.)
|                                                                                                                          
|                                                                                                                          
|                                                                                                                          
|                                                                                                                          
|                                                                                                                          
|309 E. Morehead Street
        Suite 200
        Charlotte, North Carolina(Address of principal executive
        offices) |  | 28202(Zip code)                                       

(704) 334-3000

(Registrants telephone number, including
area code)


N/A

(Former name, former address and former fiscal
year, if changed since last report)


Indicate by check 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
[ ]



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

INDEX


|        |  |                                                                                                                   |  |          |    | 
|------- |  | ----------------------------------------------------------------------------------------------------------------- |  | -------- | -- | 
|        |  |                                                                                                                   |  | Page No.
|        |  |                                                                                                                   |  |         
|Part I  |  | Financial Information                                                                                             |  |          |    | 
|Item 1  |  | Financial Statements                                                                                              |  |          |    | 
|       
|       
|       
|       
|        |  | Consolidated Balance Sheets as of
	September 30, 2001 and December 31, 2000 (Unaudited)                           |  |          | 3  | 
|       
|       
|       
|       
|        |  | Consolidated Statements of Earnings for the three
	and nine months ended September 30, 2001 and 2000
	(Unaudited) |  |          | 4  | 
|       
|       
|       
|       
|        |  | Consolidated Statement of Partners Equity
	for the nine months ended September 30, 2001 (Unaudited)              |  |          | 5  | 
|       
|       
|       
|       
|        |  | Consolidated Statements of Cash Flows for the
	nine months ended September 30, 2001 and 2000 (Unaudited)          |  |          | 6  | 
|       
|       
|       
|       
|        |  | Notes to Consolidated Financial Statements
	(Unaudited)                                                           |  |          | 7  | 
|       
|       
|       
|       
|Item 2  |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations                            |  |          | 14 | 
|       
|       
|       
|       
|Item 3  |  | Quantitative and Qualitative Disclosures about
	Market Risk                                                       |  |          | 27 | 
|       
|       
|       
|       
|       
|Part II |  | Other Information                                                                                                 |  |          |    | 
|       
|       
|       
|       
|Item 2  |  | Changes in Securities                                                                                             |  |          | 28 | 
|       
|       
|       
|       
|Item 6  |  | Exhibits and Reports on Form 8-K                                                                                  |  |          | 28 | 
|       
|       
|       
|       
|        |  | Signatures                                                                                                        |  |          | 29 | 

2



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##### 



PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS


(Dollars in Thousands, except per unit data)


(Unaudited)


|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |           |         |           |           | 
|------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------------------------------- | -------------------------------------- | ---------------------------- | ------- | --------- | --------- | --------- | ------- | --------- | --------- | 
|                                                                                |                                                                                   | September 30,                                                    |                                        | December 31,                
|                                                                                |                                                                                   | 2001                                                             |                                        | 2000                        
|                                                                                |                                                                                   |                                                                  |                                        |                             
|ASSETS                                                                          |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Real estate assets:                                                             |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Land and land improvements                                                        |                                                                  | $                                      | 188,287                      |         |           | $         | 184,494   |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Buildings and building improvements                                               |                                                                  |                                        | 1,065,272                    |         |           |           | 1,001,183 |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Furniture, fixtures and equipment                                                 |                                                                  |                                        | 81,400                       |         |           |           | 74,920    |        
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  | Real estate assets before depreciation |                              |         | 1,334,959 |           |           |         | 1,260,597 |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Less: accumulated depreciation                                                    |                                                                  |                                        | (164,136                     | )       |           |           | (147,437  | )      
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  |                                        | Operating real estate assets |         |           | 1,170,823 |           |         |           | 1,113,160 | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Construction in progress                                                          |                                                                  |                                        | 134,649                      |         |           |           | 167,462   |        
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  |                                        | Net real estate assets       |         |           | 1,305,472 |           |         |           | 1,280,622 | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Cash and cash equivalents                                                       |                                                                                   |                                                                  | 2,653                                  |                              |         |           | 3,148     |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Restricted cash                                                                 |                                                                                   |                                                                  | 3,847                                  |                              |         |           | 41,809    |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Investments in Summit Management Company and real
        estate joint ventures |                                                                                   |                                                                  | 3,088                                  |                              |         |           | 736       |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Deferred financing costs, net                                                   |                                                                                   |                                                                  | 7,607                                  |                              |         |           | 7,760     |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Other assets                                                                    |                                                                                   |                                                                  | 8,547                                  |                              |         |           | 6,536     |          
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  |                                        | Total assets                 |         | $         | 1,331,214 |           |         | $         | 1,340,611 | 
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|LIABILITIES AND PARTNERS
        EQUITY                                        |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Liabilities:                                                                    |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Notes payable                                                                     |                                                                  | $                                      | 764,485                      |         |           | $         | 763,899   |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Accounts payable and accrued expenses                                             |                                                                  |                                        | 24,184                       |         |           |           | 20,415    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Distributions payable                                                             |                                                                  |                                        | 14,129                       |         |           |           | 13,481    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Accrued interest payable                                                          |                                                                  |                                        | 6,315                        |         |           |           | 7,729     |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Security deposits and prepaid rents                                               |                                                                  |                                        | 3,812                        |         |           |           | 3,959     |        
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  |                                        | Total liabilities            |         |           | 812,925   |           |         |           | 809,483   | 
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|Partners common and preferred equity:                                          |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Series B preferred
        units  3,400,000 issued and outstanding               |                                                                  |                                        | 82,713                       |         |           |           | 82,713    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Series C preferred
        units  2,200,000 issued and outstanding               |                                                                  |                                        | 53,547                       |         |           |           | 53,547    |        
|                                                                                | Partnership common units issued and outstanding
        30,549,930 and 30,814,661 |                                                                  |                                        |                              |         |           |           |           |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                                                                                   | General partner  outstanding 305,499
        and 308,147        |                                        |                              | 4,551   |           |           |           | 4,680   |          
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                                                                                   | Limited partners  outstanding
        30,244,431 and 30,506,514 |                                        |                              | 377,478 |           |           |           | 390,188 |          
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|                                                                                |                                                                                   |                                                                  |                                        | Total partners equity       |         |           | 518,289   |           |         |           | 531,128   | 
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          
|Total liabilities and partners common and
        preferred equity             |                                                                                   | $                                                                | 1,331,214                              |                              |         | $         | 1,340,611 |          
|                                                                                |                                                                                   |                                                                  |                                        |                              |         |           |           |          

See notes to consolidated financial statements.

3



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF EARNINGS


(Dollars in thousands, except per unit data)


(Unaudited)


|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |            |        |         | 
|--------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------------- | ----------------- | ----- | ------ | ------ | ---------- | ----- | ------ | ------ | ---------- | ------ | ------- | ------ | ---------- | ------ | ------- | 
|                                                                      |                                                                                                                                    |                                  |                |                  
|                                                                      |                                                                                                                                    | Three Months Ended               |                | Nine Months Ended
|                                                                      |                                                                                                                                    | September 30,                    |                | September 30,    
|                                                                      |                                                                                                                                    |                                  |                |                  
|                                                                      |                                                                                                                                    | 2001                             |                | 2000              |       | 2001   |        | 2000      
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |           
|Revenues:                                                             |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Rental                                                                                                                             |                                  | $              | 45,377            |       |        | $      | 44,653     |       |        | $      | 135,629    |        |         | $      | 128,257    |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Other property income                                                                                                              |                                  |                | 3,483             |       |        |        | 3,442      |       |        |        | 10,236     |        |         |        | 9,555      |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Interest                                                                                                                           |                                  |                | 458               |       |        |        | 665        |       |        |        | 1,724      |        |         |        | 2,404      |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Other income                                                                                                                       |                                  |                | 202               |       |        |        | 155        |       |        |        | 707        |        |         |        | 468        |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      |                                                                                                                                    |                                  | Total revenues |                   |       | 49,520 |        |            |       | 48,915 |        |            |        | 148,296 |        |            |        | 140,684 | 
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Expenses:                                                             |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Property operating and maintenance:                                                                                                |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |            |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Personnel                        |                |                   | 3,487 |        |        |            | 3,542 |        |        |            | 10,164 |         |        |            | 9,661  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Advertising and promotion        |                |                   | 467   |        |        |            | 739   |        |        |            | 1,718  |         |        |            | 1,987  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Utilities                        |                |                   | 2,363 |        |        |            | 2,290 |        |        |            | 6,824  |         |        |            | 6,426  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Building repairs and maintenance |                |                   | 2,248 |        |        |            | 2,183 |        |        |            | 6,314  |         |        |            | 6,295  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Real estate taxes and insurance  |                |                   | 5,117 |        |        |            | 4,982 |        |        |            | 15,878 |         |        |            | 14,285 |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Depreciation                     |                |                   | 9,858 |        |        |            | 9,626 |        |        |            | 29,385 |         |        |            | 27,910 |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Property supervision             |                |                   | 1,418 |        |        |            | 1,308 |        |        |            | 4,310  |         |        |            | 3,766  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Other operating expenses         |                |                   | 857   |        |        |            | 751   |        |        |            | 2,345  |         |        |            | 2,112  |        
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      |                                                                                                                                    |                                  | 25,815         |                   |       |        | 25,421 |            |       |        | 76,938 |            |        |         | 72,442 |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Interest                                                                                                                           |                                  |                | 9,933             |       |        |        | 10,089     |       |        |        | 30,089     |        |         |        | 28,544     |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Amortization                                                                                                                       |                                  |                | 382               |       |        |        | 256        |       |        |        | 1,079      |        |         |        | 731        |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | General and administrative                                                                                                         |                                  |                | 1,872             |       |        |        | 1,058      |       |        |        | 4,217      |        |         |        | 3,020      |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | (Income) loss on equity investments:                                                                                               |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |            |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Summit Management Company        |                |                   | 89    |        |        |            | 123   |        |        |            | (396   | )       |        |            | 685    |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                                                                                                                    | Real estate joint ventures       |                |                   | (271  | )      |        |            | 249   |        |        |            | (232   | )       |        |            | 397    |        
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      |                                                                                                                                    |                                  | Total expenses |                   |       | 37,820 |        |            |       | 37,196 |        |            |        | 111,695 |        |            |        | 105,819 | 
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Income before gain on sale of real estate assets,
	impairment loss on investments in technology companies and
	extraordinary items |                                  |                | 11,700            |       |        |        | 11,719     |       |        |        | 36,601     |        |         |        | 34,865     |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Gain on sale of real estate assets                                                                                                 |                                  |                | 2,788             |       |        |        | 21,346     |       |        |        | 13,570     |        |         |        | 29,232     |       
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Impairment loss on investments in technology
	companies                                                                            |                                  |                |                  |       |        |        |           |       |        |        | (1,217     | )      |         |        |           |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Income before extraordinary items                                     |                                                                                                                                    |                                  | 14,488         |                   |       |        | 33,065 |            |       |        | 48,954 |            |        |         | 64,097 |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Extraordinary items                                                   |                                                                                                                                    |                                  |               |                   |       |        | (111   | )          |       |        |       |            |        |         | (111   | )         
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Net income                                                            |                                                                                                                                    |                                  | 14,488         |                   |       |        | 32,954 |            |       |        | 48,954 |            |        |         | 63,986 |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Distributions to Series B preferred
	unitholders                      |                                                                                                                                    |                                  | (1,902         | )                 |       |        | (1,902 | )          |       |        | (5,706 | )          |        |         | (5,706 | )         
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Distributions to Series C preferred
	unitholders                      |                                                                                                                                    |                                  | (1,203         | )                 |       |        | (1,203 | )          |       |        | (3,609 | )          |        |         | (3,609 | )         
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Income available to common unitholders                                |                                                                                                                                    |                                  | 11,383         |                   |       |        | 29,849 |            |       |        | 39,639 |            |        |         | 54,671 |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Income available to common unitholders allocated
	to general partner  |                                                                                                                                    |                                  | (114           | )                 |       |        | (298   | )          |       |        | (396   | )          |        |         | (547   | )         
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Income available to common unitholders allocated
	to limited partners |                                                                                                                                    | $                                | 11,269         |                   |       | $      | 29,551 |            |       | $      | 39,243 |            |        | $       | 54,124 |           
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|Per unit data:                                                        |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Income before extraordinary items 
	basic                                                                                         |                                  | $              | 0.47              |       |        | $      | 1.08       |       |        | $      | 1.59       |        |         | $      | 2.09       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Income before extraordinary items 
	diluted                                                                                       |                                  | $              | 0.47              |       |        | $      | 1.07       |       |        | $      | 1.57       |        |         | $      | 2.08       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Net income  basic                                                                                                                 |                                  | $              | 0.47              |       |        | $      | 1.07       |       |        | $      | 1.59       |        |         | $      | 2.09       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Net income  diluted                                                                                                               |                                  | $              | 0.47              |       |        | $      | 1.07       |       |        | $      | 1.57       |        |         | $      | 2.07       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Distributions to Series B preferred
	unitholders  basic and diluted                                                               |                                  | $              | (0.06             | )     |        | $      | (0.06      | )     |        | $      | (0.18      | )      |         | $      | (0.19      | )     
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Distributions to Series C preferred
	unitholders  basic and diluted                                                               |                                  | $              | (0.04             | )     |        | $      | (0.04      | )     |        | $      | (0.12      | )      |         | $      | (0.12      | )     
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Income available to common
	unitholders  basic                                                                                    |                                  | $              | 0.37              |       |        | $      | 0.97       |       |        | $      | 1.29       |        |         | $      | 1.78       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Income available to common
	unitholders  diluted                                                                                  |                                  | $              | 0.37              |       |        | $      | 0.97       |       |        | $      | 1.27       |        |         | $      | 1.76       |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Distributions declared                                                                                                             |                                  | $              | 0.4625            |       |        | $      | 0.4375     |       |        | $      | 1.3875     |        |         | $      | 1.3125     |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Weighted average units  basic                                                                                                     |                                  |                | 30,502,457        |       |        |        | 30,664,610 |       |        |        | 30,868,393 |        |         |        | 30,667,450 |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           
|                                                                      | Weighted average units  diluted                                                                                                   |                                  |                | 30,879,316        |       |        |        | 30,935,031 |       |        |        | 31,191,185 |        |         |        | 30,839,406 |       
|                                                                      |                                                                                                                                    |                                  |                |                   |       |        |        |            |       |        |        |            |        |         |        |           

See notes to consolidated financial statements.

4



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED STATEMENT OF PARTNERS EQUITY


(Dollars in thousands)


(Unaudited)


|                             |                                                        |                                                 |        |           |   |         |        |         |   |       |       |      |    |   |         |         |       |   |         |         |       | 
|---------------------------- | ------------------------------------------------------ | ----------------------------------------------- | ------ | --------- | - | ------- | ------ | ------- | - | ----- | ----- | ---- | -- | - | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|                             |                                                        | Series B                                        |        | Series C  |   |         |        |         |   |      
|                             |                                                        | Preferred                                       |        | Preferred |   | General |        | Limited |   |      
|                             |                                                        | Units                                           |        | Units     |   | Partner |        | Partner |   | Total
|                             |                                                        |                                                 |        |           |   |         |        |         |   |      
|Balance, December 31, 2000   |                                                        | $                                               | 82,713 |           |   | $       | 53,547 |         |   | $     | 4,680 |      |    | $ | 390,188 |         |       | $ | 531,128 |        
|                            
|                            
|                            
|                            
|                             | Distributions                                          |                                                 |        |          |   |         |        |        |   |       |       | (428 | )  |   |         | (42,343 | )     |   |         | (42,771 | )    
|                            
|                            
|                            
|                            
|                             | Contributions from Summit Properties Inc. related
	to: |                                                 |        |           |   |         |        |         |   |       |       |      |    |   |         |         |       |   |         |         |      
|                            
|                            
|                            
|                            
|                             |                                                        | Proceeds from dividend and stock purchase plans |        |           |   |         |        |         |   |       |       |      | 63 |   |         |         | 6,254 |   |         |         | 6,317 | 
|                            
|                            
|                            
|                            
|                             |                                                        | Exercise of stock options                       |        |           |  |         |        |         |  |       |       |      | 10 |   |         |         | 1,004 |   |         |         | 1,014 | 
|                            
|                            
|                            
|                            
|                             | Amortization of restricted stock grants                |                                                 |        |          |   |         |        |        |   |       |       | 11   |    |   |         | 1,106   |       |   |         | 1,117   |      
|                            
|                            
|                            
|                            
|                             | Issuance of restricted stock grants                    |                                                 |        |          |   |         |        |        |   |       |       | (7   | )  |   |         | (724    | )     |   |         | (731    | )    
|                            
|                            
|                            
|                            
|                             | Issuance of employee notes receivable                  |                                                 |        |          |   |         |        |        |   |       |       | (31  | )  |   |         | (3,062  | )     |   |         | (3,093  | )    
|                            
|                            
|                            
|                            
|                             | Repayments of employee notes receivable                |                                                 |        |          |   |         |        |        |   |       |       | 13   |    |   |         | 1,321   |       |   |         | 1,334   |      
|                            
|                            
|                            
|                            
|                             | Redemption of common units  sale of
	communities      |                                                 |        |          |   |         |        |        |   |       |       | (176 | )  |   |         | (17,389 | )     |   |         | (17,565 | )    
|                            
|                            
|                            
|                            
|                             | Issuance of common units  purchase of
	communities    |                                                 |        |          |   |         |        |        |   |       |       | 19   |    |   |         | 1,881   |       |   |         | 1,900   |      
|                            
|                            
|                            
|                            
|                             | Distributions to preferred unitholders                 |                                                 |        |          |   |         |        |        |   |       |       | (93  | )  |   |         | (9,222  | )     |   |         | (9,315  | )    
|                            
|                            
|                            
|                            
|                             | Net income                                             |                                                 |        |          |   |         |        |        |   |       |       | 490  |    |   |         | 48,464  |       |   |         | 48,954  |      
|                             |                                                        |                                                 |        |           |   |         |        |         |   |       |       |      |    |   |         |         |       |   |         |        
|Balance, September 30, 2001. |                                                        | $                                               | 82,713 |           |   | $       | 53,547 |         |   | $     | 4,551 |      |    | $ | 377,478 |         |       | $ | 518,289 |        
|                             |                                                        |                                                 |        |           |   |         |        |         |   |       |       |      |    |   |         |         |       |   |         |        

See notes to consolidated financial statements.

5



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS


(Dollars in thousands)


(Unaudited)


|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |          |        |         |  
|---------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | ------- | ------ | -------- | ------ | ------- | -
|                                                                                                                       |                                                                                   |                                                                                                   
|                                                                                                                       |                                                                                   | Nine Months Ended                                                                                 
|                                                                                                                       |                                                                                   | September 30,                                                                                     
|                                                                                                                       |                                                                                   |                                                                                                   
|                                                                                                                       |                                                                                   | 2001                                                                                               |                                           | 2000   
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |        
|Cash flows from operating activities:                                                                                  |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Net income                                                                                                             |                                                                                   | $                                                                                                  | 48,954                                    |         |         | $       | 63,986 |         
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Adjustments to reconcile net income to net cash
        provided by operating activities:                              |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Extraordinary items                                                               |                                                                                                    |                                           |        |         |         |        | 111      |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Impairment loss on investments in technology
        companies                    |                                                                                                    |                                           | 1,217   |         |         |        |         |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Gain on sale of real estate assets                                                |                                                                                                    |                                           | (13,570 | )       |         |        | (29,232  | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | (Income) loss on equity method investments                                        |                                                                                                    |                                           | (628    | )       |         |        | 1,082    |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Depreciation and amortization                                                     |                                                                                                    |                                           | 31,562  |         |         |        | 29,229   |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Increase in restricted cash                                                       |                                                                                                    |                                           | (266    | )       |         |        | (2,627   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Increase in other assets                                                          |                                                                                                    |                                           | (2,276  | )       |         |        | (1,371   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Decrease in accrued interest payable                                              |                                                                                                    |                                           | (1,414  | )       |         |        | (2,418   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Increase in accounts payable and accrued expenses                                 |                                                                                                    |                                           | 9,015   |         |         |        | 7        |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | (Decrease) increase in security deposits and
        prepaid rents                |                                                                                                    |                                           | (86     | )       |         |        | 302      |       
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                       |                                                                                   |                                                                                                    | Net cash provided by operating activities |         |         | 72,508  |        |          |        | 59,069  |  
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|Cash flows from investing activities:                                                                                  |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Construction of real estate assets and land
        acquisitions, net of payables |                                                                                                    |                                           | (85,760 | )       |         |        | (127,131 | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Proceeds from sale of communities                                                 |                                                                                                    |                                           | 72,950  |         |         |        | 83,677   |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Purchase of communities                                                           |                                                                                                    |                                           |        |         |         |        | (33,127  | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Capitalized interest                                                              |                                                                                                    |                                           | (9,053  | )       |         |        | (7,594   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Investment in real estate joint venture                                           |                                                                                                    |                                           | (4,075  | )       |         |        |         |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Recurring capital expenditures                                                    |                                                                                                    |                                           | (3,736  | )       |         |        | (4,006   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Non-recurring capital expenditures                                                |                                                                                                    |                                           | (4,447  | )       |         |        | (1,957   | )     
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                       |                                                                                   |                                                                                                    | Net cash used in investing activities     |         |         | (34,121 | )      |          |        | (90,138 | )
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|Cash flows from financing activities:                                                                                  |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Net (repayments) borrowings on unsecured
        credit facility                  |                                                                                                    |                                           | (17,003 | )       |         |        | 57,175   |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Repayments of unsecured notes                                                     |                                                                                                    |                                           |        |         |         |        | (15,000  | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Net borrowings on unsecured medium-term notes                                     |                                                                                                    |                                           | 29,399  |         |         |        | 9,545    |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Proceeds from issuance of mortgage debt                                           |                                                                                                    |                                           |        |         |         |        | 47,912   |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Repayments of mortgage debt                                                       |                                                                                                    |                                           | (4,061  | )       |         |        | (7,175   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Repayments of tax exempt bonds                                                    |                                                                                                    |                                           | (620    | )       |         |        | (885     | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Distributions to common unitholders                                               |                                                                                                    |                                           | (42,123 | )       |         |        | (39,811  | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Distributions to Series B preferred
        unitholders                           |                                                                                                    |                                           | (5,706  | )       |         |        | (5,706   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Distributions to Series C preferred
        unitholders                           |                                                                                                    |                                           | (3,609  | )       |         |        | (3,609   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Increase in employee notes receivable                                             |                                                                                                    |                                           | (3,093  | )       |         |        | (9,472   | )     
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Proceeds from employee notes receivable                                           |                                                                                                    |                                           | 1,334   |         |         |        | 1,044    |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Contributions from Summit Properties Inc. related
        to:                     |                                                                                                    |                                           |         |         |         |        |          |       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                   | Proceeds from dividend reinvestment and stock
        purchase plans and exercise of stock options |                                           |         | 6,600   |         |        |          | 5,503  |        
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                   | Repurchase of Summit Properties Inc. common stock                                                  |                                           |         |        |         |        |          | (8,024 | )      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                   | Repurchase of common units in Operating
        Partnership                                        |                                           |         |        |         |        |          | (1,759 | )      
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|                                                                                                                       |                                                                                   | Net cash (used in) provided by financing
        activities                                        |                                           |         | (38,882 | )       |        |          | 29,738 |        
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|Net decrease in cash and cash equivalents                                                                              |                                                                                   |                                                                                                    | (495                                      | )       |         |         | (1,331 | )       
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Cash and cash equivalents, beginning of year                                                                           |                                                                                   |                                                                                                    | 3,148                                     |         |         |         | 4,130  |         
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|Cash and cash equivalents, end of period                                                                               |                                                                                   | $                                                                                                  | 2,653                                     |         |         | $       | 2,799  |         
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         
|Supplemental disclosure of cash flow
        information  Cash paid for interest, net of
        capitalized interest |                                                                                   | $                                                                                                  | 31,503                                    |         |         | $       | 30,962 |         
|                                                                                                                       |                                                                                   |                                                                                                    |                                           |         |         |         |        |         

See notes to consolidated financial statements.

6



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)





Unless the context otherwise requires, all references to
we, our or us in this report
refer collectively to Summit Properties Partnership, L.P., a
Delaware limited partnership (the Operating
Partnership), and its subsidiaries. All references to
Summit in this report refer to Summit Properties
Inc., a Maryland corporation and the sole general partner of the
Operating Partnership.

1.  BASIS OF PRESENTATION

We have prepared the accompanying unaudited financial statements
in accordance with generally accepted accounting principles for
interim financial information and in conformity with the rules
and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. We have included all
adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation. The results of operations for
the nine months ended September 30, 2001 are not
necessarily indicative of the results that may be expected for
the full year. You should read our December 31, 2000
audited financial statements and notes included in our Annual
Report on Form 10-K in conjunction with these interim
statements.

We conduct the business of operating, developing and acquiring
Class A luxury apartment communities for
Summit, which is a self-administered and self-managed real
estate investment trust.

Recently Issued Accounting Standards 
On June 29, 2001, the Financial Accounting Standards Board
approved Statement of Financial Accounting Standards
(SFAS) No. 141, Business Combinations and
No. 142, Goodwill and Other Intangible Assets.
SFAS No. 141 will require that the purchase method of
accounting be used for all business combinations initiated after
June 30, 2001 and that the use of the pooling-of-interest
method is no longer allowed. SFAS No. 142 requires that
upon adoption, amortization of goodwill will cease and instead,
the carrying value of goodwill will be evaluated for impairment
on an annual basis. Identifiable intangible assets will continue
to be amortized over their useful lives and reviewed for
impairment in accordance with SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. SFAS No. 142 is
effective for fiscal years beginning after December 15,
2001. We are evaluating the impact of the adoption of these
standards and have not yet determined the effect of adoption on
our financial position and results of operations.

The Financial Accounting Standards Board has approved SFAS
No. 143, Accounting for Asset Retirement
Obligations and No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS
No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs,
including legal obligations that result from the acquisition,
construction, development and/or the normal operation of
long-lived assets. It requires that the fair value of a
liability for an asset retirement obligation be recognized in
the period in which it is incurred if a reasonable estimate of
fair value can be made. The associated asset retirement costs
are capitalized as part of the carrying amount of the long-lived
asset. SFAS No. 143 is effective for fiscal years beginning
after June 15, 2002. SFAS No. 144 supersedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of and
Accounting Principles Bulletin No. 30, Reporting the
Results of Operations  Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions. Along
with establishing a single accounting model, based on the
framework established in SFAS No. 121, for long-lived
assets to be disposed of by sale, this standard retains the
basic provisions of APB 30 for the presentation of discontinued
operations in the income statement but broadens that
presentation to include a component of an entity. SFAS
No. 144 is effective for fiscal years beginning after
December 15, 2001. We are evaluating the impact of the
adoption of these standards and have not yet determined the
effect of adoption on our financial position and results of
operations.

Earnings per Common Unit  The only
difference between basic and diluted
weighted average common units is the dilutive effect of
Summits outstanding stock options. There were 376,859 and
322,792 common

7



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




units added to weighted average common units outstanding for the
three and nine months ended September 30, 2001,
respectively, and 270,421 and 171,956 common units added to
weighted average common units outstanding for the three and nine
months ended September 30, 2000, respectively.

Reclassifications  Certain
reclassifications have been made to the 2000 financial
statements to conform to the 2001 presentation.

2.  REAL ESTATE JOINT VENTURES

We own a 25% interest in a joint venture named Station Hill,
LLC, in which we and Hollow Creek, LLC, a subsidiary of a major
financial services company, are members. In exchange for our
interest in Station Hill, we contributed one phase of each of
two communities. We sold three communities and one phase of each
of the two communities contributed to Station Hill to Hollow
Creek and Hollow Creek concurrently contributed them to Station
Hill for a 75% joint venture interest. The two phases
contributed to Station Hill and the two phases sold to Hollow
Creek are now considered two communities and, therefore, we
currently own a 25% interest in four communities owned by
Station Hill. Station Hill is accounted for on the equity method
of accounting.

On August 1, 2001, Station Hill sold an apartment community
located in Tampa, Florida formerly known as Summit Station (230
apartment homes) for $11.9 million. The disposition of Summit
Station resulted in the recognition of a gain on sale by Station
Hill of $1.1 million. The purchaser of Summit Station
assumed an $8.3 million mortgage and paid the balance of
the purchase price in cash.

The following are condensed balance sheets and income statements
for Station Hill as of, and for the nine months ended,
September 30, 2001 and 2000. The balance sheets and income
statements below reflect the financial position and operations
of Station Hill in its entirety, not only our 25% interest
(amounts in thousands).

|                          |                                         |               |        |        |  |   |        |        | 
|------------------------- | --------------------------------------- | ------------- | ------ | ------ |  | - | ------ | ------ | 
|                          |                                         |              
|                          |                                         | Balance Sheet
|                          |                                         |              
|                          |                                         | 2001          |        | 2000  
|                          |                                         |               |        |       
|Real estate assets, net   |                                         | $             | 74,783 |        |  | $ | 87,493 |       
|                         
|                         
|                         
|                         
|Cash and cash equivalents |                                         |               | 1,653  |        |  |   | 2,176  |       
|                         
|                         
|                         
|                         
|Other assets              |                                         |               | 354    |        |  |   | 408    |       
|                          |                                         |               |        |        |  |   |        |       
|                          | Total assets                            |               | $      | 76,790 |  |   | $      | 90,077 | 
|                          |                                         |               |        |        |  |   |        |       
|Mortgages payable         |                                         | $             | 59,729 |        |  | $ | 68,863 |       
|                         
|                         
|                         
|                         
|Other liabilities         |                                         |               | 1,217  |        |  |   | 1,448  |       
|                         
|                         
|                         
|                         
|Partners capital         |                                         |               | 15,844 |        |  |   | 19,766 |       
|                          |                                         |               |        |        |  |   |        |       
|                          | Total liabilities and partners capital |               | $      | 76,790 |  |   | $      | 90,077 | 
|                          |                                         |               |        |        |  |   |        |       

|                                                 |                               |                  |       |       |       |   |       |       |       | 
|------------------------------------------------ | ----------------------------- | ---------------- | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|                                                 |                               |                 
|                                                 |                               | Income Statement
|                                                 |                               |                 
|                                                 |                               | 2001             |       | 2000 
|                                                 |                               |                  |       |      
|Revenues                                         |                               | $                | 9,235 |       |       | $ | 9,267 |      
|                                                
|                                                
|                                                
|                                                
|Expenses:                                        |                               |                  |       |       |       |   |       |      
|                                                
|                                                
|                                                
|                                                
|                                                 | Property operating            |                  |       | 3,253 |       |   |       | 3,331 |      
|                                                
|                                                
|                                                
|                                                
|                                                 | Interest                      |                  |       | 3,339 |       |   |       | 3,474 |      
|                                                
|                                                
|                                                
|                                                
|                                                 | Depreciation and amortization |                  |       | 2,357 |       |   |       | 2,256 |      
|                                                 |                               |                  |       |       |       |   |       |      
|                                                 |                               | Total expenses   |       |       | 8,949 |   |       |       | 9,061 | 
|                                                 |                               |                  |       |       |       |   |       |      
|Income before gain on sale of real estate assets |                               |                  | 286   |       |       |   | 206   |      
|                                                
|                                                
|                                                
|                                                
|Gain on sale of real estate assets               |                               |                  | 1,082 |       |       |   |      |      
|                                                 |                               |                  |       |       |       |   |       |      
|Net income                                       |                               | $                | 1,368 |       |       | $ | 206   |      
|                                                 |                               |                  |       |       |       |   |       |      

8



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




We also own a 49% interest in a joint venture which developed an
apartment community in Atlanta, Georgia. This project is
accounted for under the equity method of accounting and,
therefore, its operating results are presented in (Income)
loss on equity investments: Real estate joint ventures in
our consolidated statements of earnings. The construction costs
were funded through a separate loan to the joint venture from an
unrelated third party equal to 100% of the construction costs.
We have the option to purchase our partners interest in
the joint venture for a period of four months after the project
becomes stabilized. The project reached stabilization on
September 1, 2001, and we have not yet decided whether we
will exercise our option. If we do not exercise our option, we
will be required to make a capital contribution of 25% of the
joint ventures total construction loan amount which was
$26.9 million at September 30, 2001.

On May 25, 2001, we contributed $4.2 million for a
29.78% interest in a joint venture that owns substantially all
of the interests in a limited liability company that will
develop an apartment community in Miami, Florida. The community
will consist of 323 apartment homes and 17,795 square feet of
office/retail space. The construction costs are being funded
through the equity which the joint venture contributed to the
limited liability company and by a loan to that company from an
unrelated third party. In the event that construction costs
exceed the construction loan amount, we have agreed to lend to
the joint venture, which will in turn advance to the limited
liability company, the amount required to fund such cost
overruns. This loan would accrue interest at the rate of 11% per
year. Upon completion of construction, the joint venture will
pay, or refinance, the construction loan. In the event the
limited liability company defaults on the construction loan, we
have the right, under certain circumstances, to cure the
defaults, keep the construction loan in place and complete
construction of the community. The joint venture has also
acquired an adjacent piece of land.

We are serving as the managing member of the joint venture, and
Summit Management Company will be the property management
company for the project. This project is accounted for on the
equity method of accounting.

3.  COMMUNITY DISPOSITIONS

During the nine months ended September 30, 2001, we sold
four apartment communities and one parcel of land for an
aggregate sales price of $62.5 million. The four communities
sold were the former Summit Palm Lake (304 apartment homes)
located in West Palm Beach, Florida, Summit Arbors and Summit
Radbourne (an aggregate of 345 apartment homes) both located in
Charlotte, North Carolina and Summit Lofts (200 apartment homes)
located in Palm Harbour, Florida. The parcel of land was located
in Richmond, Virginia. The disposition of these four communities
and parcel of land resulted in the recognition of a net gain on
sale of $13.9 million.

The proceeds from Summit Palm Lake, Summit Lofts and the parcel
of land, a total of $34.8 million, were used to repay
amounts outstanding under our unsecured line of credit. The
purchaser of Summit Arbors and Summit Radbourne assumed
$8.5 million in mortgages and exchanged 741,148 common
units valued at $17.6 million as consideration in the
transaction.

4.  NOTES PAYABLE

We have a syndicated unsecured line of credit in the amount of
$225.0 million. The credit facility provides funds for new
development, acquisitions and general working capital purposes.
Loans under the credit facility bear interest at LIBOR plus 100
basis points. The spread component of the aggregate interest
rate will be reduced in the event of an upgrade of our unsecured
credit rating. The credit facility is repayable monthly on an
interest only basis with principal due at maturity. The credit
facilitys initial three-year term was scheduled to expire
on September 26, 2003. On July 6, 2001, we closed on a
one-year extension option under this credit facility. The new
maturity date is September 26, 2004, and all other terms
and covenants of the credit facility remain unchanged.

9



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




On April 20, 2000, we commenced a new program for the sale
of up to $250.0 million aggregate principal amount of
medium-term notes due nine months or more from the date of
issuance. During the nine months ended September 30, 2001,
we issued medium-term notes with an aggregate principal amount
of $60.0 million in connection with the new MTN program,
including (a) $25.0 million of notes which are due on
May 9, 2006 and bear interest at 7.04% per year and
(b) $35.0 million of notes which are due on May 9,
2011 and bear interest at 7.703% per year. We had medium-term
notes with an aggregate principal amount of $112.0 million
outstanding in connection with the new MTN program at
September 30, 2001.

On May 29, 1998, we established a program for the sale of
up to $95.0 million aggregate principal amount of
medium-term notes due nine months or more from the date of
issuance. We had medium-term notes with an aggregate principal
amount of $25.0 million outstanding in connection with this
MTN program at September 30, 2001. As a result of the
commencement of the $250.0 million MTN program, we cannot
issue any additional notes under the $95.0 million MTN
program.

5.  DERIVATIVE FINANCIAL INSTRUMENTS

We are exposed to capital market risk, such as changes in
interest rates. To manage the volatility relating to interest
rate risk, we may enter into interest rate hedging arrangements
from time to time. We do not utilize derivative financial
instruments for trading or speculative purposes.

On January 1, 2001, we adopted Statement of Financial
Accounting Standard No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. FAS 133
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. It requires that
entities recognize all derivatives as either assets or
liabilities in the statement of financial position and measure
those instruments at fair value. The cumulative effect of
adopting FAS 133 was not material to our financial statements.

At September 30, 2001, we had one interest rate swap with a
notional amount of $30.0 million, relating to
$30.0 million of 6.625% fixed rate notes issued under our
MTN program. Under the interest rate swap agreement, through the
maturity date of December 15, 2003, (a) we have agreed
to pay to the counterparty the interest on a $30.0 million
notional amount at a floating interest rate of three-month LIBOR
plus 11 basis points, and (b) the counterparty has agreed
to pay to us the interest on the same notional amount at the
fixed rate. The floating rate at September 30, 2001 was
3.26%. The fair value of the interest rate swap was
$2.4 million at September 30, 2001. The swap has been
designated as a fair value hedge of the underlying fixed rate
debt obligation and has been recorded as a reduction of the
related debt instrument. We assume no ineffectiveness as the
interest rate swap meets the short-cut method conditions
required under FAS 133 for fair value hedges of debt
instruments. Accordingly, no gains or losses were recorded in
income relative to our underlying debt and interest rate swap.

6.  RESTRICTED STOCK

During the nine months ended September 30, 2001, Summit
granted 94,818 shares of restricted stock valued at
$1.2 million pursuant to its Performance Stock Award Plan.
One half of these shares vested on the date of grant, with the
remaining shares vesting in two equal annual installments on
January 1, 2002 and January 1, 2003. The value of the
unvested shares has been recorded as unamortized restricted
stock compensation.

During the nine months ended September 30, 2001 and 2000,
Summit granted 11,804 (net of 12,202 forfeited shares for
terminated employees) and 72,805 shares, respectively, of
restricted stock to employees under its 1994 Stock Option and
Incentive Plan. The market value of the restricted stock grants
awarded during these nine months in 2001 and 2000 totaled
$375,000 (net of $234,000 in forfeited shares for terminated
employees) and $1.3 million, respectively, which has been
recorded as unamortized restricted stock compensation.

10



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




Unearned compensation related to these restricted stock grants
is being amortized to expense over the vesting period which
ranges from three to five years.

7.  SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities for the nine months
ended September 30, 2001 and 2000 are as follows:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | We accrued distributions payable in the amounts of
	$14.1 million and $13.4  million at September 30,
	2001 and 2000, respectively.                                                                                                                                                                                                                                                            
|
| | B. | Summit issued 11,804 (net of 12,202 forfeited shares for
	terminated employees) and 72,805 shares of restricted stock
	valued at $375,000 (net of $234,000 in forfeited shares for
	terminated employees) and $1.3 million during the nine
	months ended September 30, 2001 and 2000, respectively.                                                                                            
|
| | C. | Summit issued 94,818 shares of restricted stock valued at
	$1.2 million during the nine months ended
	September 30, 2001 in connection with its Performance Stock
	Award Plan. There were no such issuances of restricted stock in
	connection with the plan during the nine months ended
	September 30, 2000.                                                                                 
|
| | D. | Summit issued 145,907 and 43,545 shares of common stock in
	exchange for 145,907 and 43,545 of our common units of limited
	partnership interest valued at $3.9 million and $875,000
	during the nine months ended September 30, 2001 and 2000,
	respectively.                                                                                                                                 
|
| | E. | We issued 66,376 common units at a price of $28.625 per unit
	during the nine months ended September 30, 2001 in
	connection with the purchase of a building and a parcel of land.                                                                                                                                                                                                             
|
| | F. | As partial consideration for the purchase of the former Summit
	Radbourne and Summit Arbors communities on June 27, 2001,
	the purchaser assumed mortgages with an aggregate balance of
	$8.5  million at the date of sale, and exchanged 741,148
	common units valued at $17.6 million.                                                                                                       
|
| | G. | We purchased our joint venture partners interest in each
	of two communities during the nine months ended
	September 30, 2000 at an aggregate purchase price of
	approximately $36.0 million. The acquisitions were
	primarily financed with the issuance of 96,455 common units in
	the aggregate valued at $2.2  million, as well as the
	payment of $33.7 million in cash in the aggregate.

8.  COMMITMENTS AND CONTINGENCIES

The estimated cost to complete the five development projects
currently under construction was $64.0 million at
September 30, 2001. Anticipated construction completion
dates of the projects range from the fourth quarter of 2001 to
the first quarter of 2003.

On January 19, 2000, we entered into a Real Estate Purchase
Agreement with a third-party real estate developer. Under the
terms of the agreement, we have agreed to purchase a
Class A mixed-use community, which will be
called Summit Brickell and will be located in Miami, Florida. We
expect to close on the purchase of Summit Brickell during the
second half of 2002 following its completion and achievement of
85% occupancy. The final purchase price will be determined based
on actual construction costs plus a bonus to the developer based
on the capitalized income of the property at the time of
purchase. The purchase price is expected to range from
$50.5 million to $60.0 million. The purchase of Summit
Brickell is subject to customary closing conditions. We issued a
letter of credit in the amount of $13.0 million, which
serves as a credit enhancement to the developers
construction loan. In the event that the letter of credit is
drawn upon, we will be treated as having issued a loan to the
developer in the amount of such draw. Any such loan will accrue
interest at a rate of 18% per year.

11



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




Summit has employment agreements with two of its former
executive officers both of whom resigned from such executive
positions, but who remain as employees and have agreed to
provide various services to Summit from time to time over the
next ten years. Each employment agreement requires that Summit
pay to the former officer a base salary aggregating up to
$2.1 million over the period from July 1, 2001 to
December 31, 2011. Either party can terminate the
employment agreements, effective 20 business days after
written notice is given. The full base salary amount due shall
be payable through 2011 whether or not the agreements are
terminated earlier in accordance with their terms.

9.  BUSINESS SEGMENTS

We are an established leader in the operation, development and
acquisition of Class A luxury apartments
located in the southeastern, southwestern and mid-atlantic
United States. We develop apartments solely for our own use and
do not perform development activities for third parties. We
evaluate each communitys performance individually.
However, because of the similar economic characteristics and
services provided to our residents at each community, our
communities have been aggregated into one reportable segment,
apartment operations. This segment generated 98.4% and 98.0% of
our total revenues for the nine months ended September 30,
2001 and 2000, respectively.

10.  PREFERRED UNITS

As of September 30, 2001, we had outstanding
3.4 million preferred units of limited partnership interest
designated as 8.95% Series B Cumulative Redeemable
Perpetual Preferred Units. We may redeem these preferred units
on or after April 29, 2004 for cash, or at our option,
shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock, or a combination of cash
and stock. Holders of the Series B preferred units have the
right to exchange these preferred units for shares of
Summits Series B preferred stock on a one-for-one
basis, subject to adjustment: (a) on or after
April 29, 2009, (b) if full quarterly distributions
are not made for six quarters, or (c) upon the occurrence
of specified events related to our treatment or the treatment of
the preferred units for federal income tax purposes.
Distributions on the Series B preferred units are
cumulative from the date of original issuance and are payable
quarterly at the rate of 8.95% per year of the $25.00 original
capital contribution. We made distributions to the holders of
the Series B preferred units in the aggregate amount of
$5.7 million during each of the nine-month periods ended
September 30, 2001 and 2000.

As of September 30, 2001, we had outstanding
2.2 million preferred units of limited partnership interest
designated as 8.75% Series C Cumulative Redeemable
Perpetual Preferred Units. The preferred units are redeemable by
the Operating Partnership on or after September 3, 2004 for
cash. Holders of the Series C preferred units have the
right to exchange these preferred units for shares of
Summits Series C preferred stock on a one-for-one
basis, subject to adjustment: (a) on or after
September 3, 2009, (b) if full quarterly distributions
are not made for six quarters, (c) upon the occurrence of
specified events related to our treatment or the treatment of
the preferred units for federal income tax purposes, or
(d) if the holdings in the Operating Partnership of the
Series C unitholder exceed 18% of the total profits of or
capital interest in the Operating Partnership for a taxable
year. Distributions on the Series C preferred units are
cumulative from the date of original issuance and are payable
quarterly at the rate of 8.75% per year of the $25.00 original
capital contribution. We made distributions to the holder of the
Series C preferred units in the aggregate amount of
$3.6 million during each of the nine-month periods ended
September 30, 2001 and 2000.

11.  COMMON STOCK REPURCHASE PROGRAM

On March 12, 2000, Summits Board of Directors
authorized a common stock repurchase program pursuant to which
Summit was authorized to purchase up to an aggregate of
$25.0 million of currently issued and outstanding shares of
its common stock. During the three months ended
September 30, 2001, Summits Board

12



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




of Directors increased the size of this common stock repurchase
program to $56.0 million. All repurchases have been, and
will be, made on the open market at prevailing prices or in
privately negotiated transactions. This authority may be
exercised from time to time and in such amounts as market
conditions warrant. Summit did not repurchase any shares of its
common stock during the nine months ended September 30,
2001. During the year ended December 31, 2000, Summit
repurchased 279,400 shares of its common stock under the
common stock repurchase program for an aggregate purchase price,
including commissions, of $5.5 million, or an average price
of $19.80 per share.

During 2000, Summit completed a common stock repurchase program
pursuant to which it was authorized to purchase up to an
aggregate of $50.0 million of its common stock. The total
number of shares of common stock repurchased under this program
was 2.5 million shares for an aggregate purchase price,
including commissions, of $50.0 million, or an average
price of $19.63 per share.

12.  IMPAIRMENT LOSS

Management considers events and circumstances that may indicate
impairment of an investment, including operating performance and
cash flow projections. Management determined during the second
quarter of 2001 that our investments in Broadband Now, Inc. and
Yieldstar Technology LLC were impaired and that such impairment
was other than temporary. As a result, we recorded an impairment
loss in the amount of $1.2 million, which represents our
entire investments in these two technology companies. We have no
other technology company investments.

13.  SUBSEQUENT EVENTS

Subsequent to September 30, 2001, we sold three apartment
communities formerly known as Summit Stony Point (250 apartment
homes) located in Richmond, Virginia, Summit Gateway (212
apartment homes) located in Tampa, Florida and Summit Deerfield
(498 apartment homes) located in Cincinnati, Ohio for
$77.1 million in the aggregate. The disposition of these
communities resulted in the recognition of a gain on sale of
$10.2 million in the aggregate. The net proceeds of
$4.3 million from the disposition of Summit Gateway were
placed into escrow in accordance with like-kind exchange rules
and regulations and are expected to be used to fund development
activities. Net proceeds in the aggregate amount of
$57.1 million from the disposition of Summit Stony Point
and Summit Deerfield were used to repay amounts outstanding
under our unsecured credit facility.

13



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##### 





|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, including, without limitation, statements
relating to the operating performance of fully stabilized
communities, the development, acquisition or disposition of
properties, anticipated construction commencement and completion
and lease-up dates, and estimated development costs. You can
identify forward-looking statements by the use of the words
believe, expect, anticipate,
intend, estimate, assume and
other similar expressions which predict or indicate future
events and trends and which do not relate to historical matters.
You should not rely on forward-looking statements, because they
involve known and unknown risks, uncertainties and other
factors, some of which are beyond our control. These risks,
uncertainties and other factors may cause our actual results,
performance or achievements to be materially different from the
anticipated future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could have a material adverse effect on our operations and
future prospects include, but are not limited to:



|  |                                                                                                                                                                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | economic conditions generally and the real estate market
	specifically, including changes in occupancy rates and rents,
	the continuing deceleration of economic conditions in our
	markets, and the failure of national and local economic
	conditions to rebound in a timely manner;
| 
| | legislative/regulatory changes;                                                                                                                                                                                                                                                       
| 
| | availability and cost of capital;                                                                                                                                                                                                                                                     
| 
| | changes in interest rates;                                                                                                                                                                                                                                                            
| 
| | uncertainties associated with our development activities,
	including the failure to obtain zoning and other approvals,
	actual costs exceeding our budgets, and increases in
	construction costs;                                                                                     
| 
| | the failure of acquisitions to yield expected results;                                                                                                                                                                                                                                
| 
| | the failure to sell communities marketed for sale, including
	properties currently under contract for sale which are subject
	to customary closing conditions, or to sell communities in a
	timely manner or on favorable terms;                                                      
| 
| | construction delays due to the unavailability of materials,
	weather conditions or other delays;                                                                                                                                                                                      
| 
| | competition, which could limit our ability to secure attractive
	investment opportunities, lease apartment homes or increase or
	maintain rents;                                                                                                                                      
| 
| | supply and demand for apartment communities in our current and
	proposed market areas, especially our core markets described
	below;                                                                                                                                                  
| 
| | changes in generally accepted accounting principles, or policies
	and guidelines applicable to REITs; and                                                                                                                                                                             
| 
| | those factors discussed below and in the sections entitled
	Operating Performance of Communities in Lease-up and
	Certain Factors Affecting the Performance of Development
	Communities, on pages  19 and 25 of this report.                                                      

You should consider these risks and uncertainties when
evaluating forward-looking statements and you should not place
undue reliance on such statements. These forward-looking
statements represent our estimates and assumptions only as of
the date of this report. We do not undertake to update these
forward-looking statements. You should read the following
discussion in conjunction with our unaudited consolidated
financial statements and notes which accompany this report, and
our audited financial statements for the year ended
December 31, 2000 and notes included in our annual report
on Form 10-K.

We focus on the operation, development and acquisition of
Class A luxury apartment communities located in
the southeastern, southwestern and mid-atlantic United States.
We focus our efforts in seven core markets, with particular
emphasis on Washington, D.C., Southeast Florida and Atlanta,
Georgia. Our other core markets are Dallas and Austin, Texas and
Raleigh and Charlotte, North Carolina. Because we focus on these

14



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##### 





We have experienced weakening fundamentals in all of our markets
during the year, particularly during the three months ended
September 30, 2001. This weakness has been due to the
downturn in the national economy, as well as declining economic
conditions in our core markets, especially Atlanta, Austin,
Charlotte and Raleigh. Local demand for apartment homes has
declined due to lower job growth in many of our markets, and
there has been a decrease in the number of potential residents
visiting our communities. We also have experienced increased
turnover in resident occupancy. Although the current political
and economic environment is unpredictable, we expect these
trends to continue for the next few quarters.

HISTORICAL RESULTS OF OPERATIONS

Our net income is generated primarily from operations of our
apartment communities. The changes in operating results from
period to period reflect changes in existing community
performance and changes in the number of apartment homes due to
development, acquisition, or disposition of communities. Where
appropriate, comparisons are made on a fully stabilized
communities, acquisition communities,
stabilized development communities,
communities in lease-up and disposition
communities basis in order to adjust for changes in the
number of apartment homes. We consider a community to be
stabilized when it has attained a physical occupancy
level of at least 93%. A community that we have acquired is
deemed fully stabilized when we have owned it for
one year or more as of the beginning of the current year. A
community that we have developed is deemed fully
stabilized when stabilized for the two prior years as of
the beginning of the current year. A community is deemed to be a
stabilized development community when stabilized as
of the beginning of the current year but not the entire two
prior years. A community in lease-up is defined as one that has
commenced rental operations but was not stabilized as of the
beginning of the current year. A communitys average
physical occupancy is defined as the number of apartment homes
occupied divided by the total number of apartment homes
contained in the communities, expressed as a percentage. Average
physical occupancy has been calculated using the average of the
occupancy that existed on Sunday during each week of the period.
Average monthly rental revenue presented represents the average
monthly net rental revenue per occupied apartment home. Our
methodology for calculating average physical occupancy and
average monthly rental revenue may differ from the methodology
used by other apartment companies and, accordingly, may not be
comparable to other apartment companies. All communities
information is presented before real estate depreciation and
amortization expense.

Results of Operations for the Three and
Nine Months Ended September 30, 2001 and 2000

Income before gain on sale of real estate assets, impairment
loss on investments in technology companies and extraordinary
items remained stable at $11.7 million for the three months
ended September 30, 2001 and 2000 and increased from
$34.9 million to $36.6 million for the nine-month
periods ended September 30, 2001 and 2000, respectively,
primarily due to increased property operating income generated
by our portfolio of communities, offset by increased interest
costs primarily as a result of increased average indebtedness
outstanding.

15



---



##### 



Operating Performance of Our Portfolio of Communities

The operating performance of our communities for the three and
nine months ended September 30, 2001 and 2000 is summarized
below (dollars in thousands). All property operating and
maintenance expense amounts in this Managements Discussion
and Analysis section is presented before depreciation.

|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |        |      | 
|------------------------------------------- | ---------------------------------- | ------------------------------------------------ | ------ | ------------------------------- | ------ | -------- | ------ | ------ | ------ | ---- | ----- | -------- | ---- | - | ------ | ------ | ------- | - | ------ | ------ | ------- |  | ----- | ------ | ---- | 
|                                            |                                    |                                                  |        |                                
|                                            |                                    | Three Months Ended September 30,                 |        | Nine Months Ended September 30,
|                                            |                                    |                                                  |        |                                
|                                            |                                    | 2001                                             |        | 2000                            |        | % Change |        | 2001   |        | 2000 |       | % Change
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |         
|Property revenues:                          |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|                                           
|                                           
|                                           
|                                           
|                                            | Fully stabilized communities       |                                                  | $      | 28,371                          |        |          | $      | 28,424 |        |      |       | -0.2%    |      |   | $      | 85,109 |         |   | $      | 83,332 |         |  |       | 2.1%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Acquisition communities            |                                                  |        | 1,287                           |        |          |        | 894    |        |      |       | 44.0%    |      |   |        | 3,855  |         |   |        | 894    |         |  |       | 331.2% |     
|                                           
|                                           
|                                           
|                                           
|                                            | Stabilized development communities |                                                  |        | 13,695                          |        |          |        | 13,050 |        |      |       | 4.9%     |      |   |        | 40,717 |         |   |        | 35,159 |         |  |       | 15.8%  |     
|                                           
|                                           
|                                           
|                                           
|                                            | Communities in lease-up            |                                                  |        | 5,346                           |        |          |        | 1,067  |        |      |       | 401.0%   |      |   |        | 11,957 |         |   |        | 2,991  |         |  |       | 299.8% |     
|                                           
|                                           
|                                           
|                                           
|                                            | Communities sold                   |                                                  |        | 161                             |        |          |        | 4,660  |        |      |       | -96.5%   |      |   |        | 4,227  |         |   |        | 15,436 |         |  |       | -72.6% |     
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|                                            |                                    | Total property revenues                          |        |                                 | 48,860 |          |        |        | 48,095 |      |       |          | 1.6% |   |        |        | 145,865 |   |        |        | 137,812 |  |       |        | 5.8% | 
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|Property operating and maintenance expense: |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|                                           
|                                           
|                                           
|                                           
|                                            | Fully stabilized communities       |                                                  |        | 9,748                           |        |          |        | 9,442  |        |      |       | 3.2%     |      |   |        | 28,532 |         |   |        | 27,380 |         |  |       | 4.2%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Acquisition communities            |                                                  |        | 445                             |        |          |        | 289    |        |      |       | 54.0%    |      |   |        | 1,319  |         |   |        | 289    |         |  |       | 356.4% |     
|                                           
|                                           
|                                           
|                                           
|                                            | Stabilized development communities |                                                  |        | 4,177                           |        |          |        | 3,822  |        |      |       | 9.3%     |      |   |        | 12,436 |         |   |        | 9,977  |         |  |       | 24.6%  |     
|                                           
|                                           
|                                           
|                                           
|                                            | Communities in lease-up            |                                                  |        | 1,514                           |        |          |        | 487    |        |      |       | 210.9%   |      |   |        | 3,861  |         |   |        | 1,515  |         |  |       | 154.9% |     
|                                           
|                                           
|                                           
|                                           
|                                            | Communities sold                   |                                                  |        | 73                              |        |          |        | 1,755  |        |      |       | -95.8%   |      |   |        | 1,405  |         |   |        | 5,371  |         |  |       | -73.8% |     
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|                                            |                                    | Total property operating and maintenance expense |        |                                 | 15,957 |          |        |        | 15,795 |      |       |          | 1.0% |   |        |        | 47,553  |   |        |        | 44,532  |  |       |        | 6.8% | 
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|Property operating income                   |                                    | $                                                | 32,903 |                                 |        | $        | 32,300 |        |        |      | 1.9%  |          |      | $ | 98,312 |        |         | $ | 93,280 |        |         |  | 5.4%  |       
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       
|Apartment homes, end of period              |                                    |                                                  | 18,079 |                                 |        |          | 18,094 |        |        |      | -0.1% |          |      |   | 18,079 |        |         |   | 18,094 |        |         |  | -0.1% |       
|                                            |                                    |                                                  |        |                                 |        |          |        |        |        |      |       |          |      |   |        |        |         |   |        |        |         |  |       |       

A summary of our apartment homes (excluding joint ventures) for
the nine months ended September 30, 2001 and 2000 is as
follows:

|                                                              |  |      |        |      |  |  |        |  
|------------------------------------------------------------- |  | ---- | ------ | ---- |  |  | ------ | -
|                                                              |  | 2001 |        | 2000
|                                                              |  |      |        |     
|Apartment homes at January 1 of the year                      |  |      | 18,928 |      |  |  | 17,673 |  
|                                                             
|                                                             
|                                                             
|                                                             
|Developments which began rental operations during
	the period |  |      |       |      |  |  | 1,284  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Apartment homes acquired                                      |  |      |       |      |  |  | 490    |  
|                                                             
|                                                             
|                                                             
|                                                             
|Sale of apartment homes                                       |  |      | (849   | )    |  |  | (1,353 | )
|                                                              |  |      |        |      |  |  |        |  
|Apartment homes at September 30 of the year                   |  |      | 18,079 |      |  |  | 18,094 |  
|                                                              |  |      |        |      |  |  |        |  

16



---



##### 



Operating Performance of Fully Stabilized Communities

The operating performance of our communities stabilized prior to
January 1, 1999 is summarized below (dollars in thousands
except average monthly rental revenue):

|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |        |      | 
|------------------------------------------- | -------------------------------- | ------------------------------------------------ | ------ | ------------------------------- | ----- | -------- | ------ | ------ | ----- | ---- | ----- | -------- | ---- | - | ------ | ------ | ------ | - | ------ | ------ | ------ |  | ----- | ------ | ---- | 
|                                            |                                  |                                                  |        |                                
|                                            |                                  | Three Months Ended September 30,                 |        | Nine Months Ended September 30,
|                                            |                                  |                                                  |        |                                
|                                            |                                  | 2001                                             |        | 2000                            |       | % Change |        | 2001   |       | 2000 |       | % Change
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |         
|Property revenues:                          |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|                                           
|                                           
|                                           
|                                           
|                                            | Rental                           |                                                  | $      | 26,352                          |       |          | $      | 26,484 |       |      |       | -0.5%    |      |   | $      | 79,251 |        |   | $      | 77,711 |        |  |       | 2.0%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Other                            |                                                  |        | 2,019                           |       |          |        | 1,940  |       |      |       | 4.1%     |      |   |        | 5,858  |        |   |        | 5,621  |        |  |       | 4.2%   |     
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Total property revenues                     |                                  |                                                  | 28,371 |                                 |       |          | 28,424 |        |       |      | -0.2% |          |      |   | 85,109 |        |        |   | 83,332 |        |        |  | 2.1%  |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Property operating and maintenance expense: |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|                                           
|                                           
|                                           
|                                           
|                                            | Personnel                        |                                                  |        | 2,024                           |       |          |        | 1,929  |       |      |       | 4.9%     |      |   |        | 5,822  |        |   |        | 5,401  |        |  |       | 7.8%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Advertising and promotion        |                                                  |        | 229                             |       |          |        | 366    |       |      |       | -37.4%   |      |   |        | 856    |        |   |        | 1,086  |        |  |       | -21.2% |     
|                                           
|                                           
|                                           
|                                           
|                                            | Utilities                        |                                                  |        | 1,336                           |       |          |        | 1,251  |       |      |       | 6.8%     |      |   |        | 3,818  |        |   |        | 3,606  |        |  |       | 5.9%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Building repairs and maintenance |                                                  |        | 1,420                           |       |          |        | 1,348  |       |      |       | 5.3%     |      |   |        | 3,961  |        |   |        | 3,909  |        |  |       | 1.3%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Real estate taxes and insurance  |                                                  |        | 3,438                           |       |          |        | 3,311  |       |      |       | 3.8%     |      |   |        | 10,243 |        |   |        | 9,761  |        |  |       | 4.9%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Property supervision             |                                                  |        | 790                             |       |          |        | 794    |       |      |       | -0.5%    |      |   |        | 2,375  |        |   |        | 2,325  |        |  |       | 2.2%   |     
|                                           
|                                           
|                                           
|                                           
|                                            | Other operating expense          |                                                  |        | 511                             |       |          |        | 443    |       |      |       | 15.3%    |      |   |        | 1,457  |        |   |        | 1,292  |        |  |       | 12.8%  |     
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|                                            |                                  | Total property operating and maintenance expense |        |                                 | 9,748 |          |        |        | 9,442 |      |       |          | 3.2% |   |        |        | 28,532 |   |        |        | 27,380 |  |       |        | 4.2% | 
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Property operating income                   |                                  | $                                                | 18,623 |                                 |       | $        | 18,982 |        |       |      | -1.9% |          |      | $ | 56,577 |        |        | $ | 55,952 |        |        |  | 1.1%  |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Average physical occupancy                  |                                  |                                                  | 92.9%  |                                 |       |          | 95.6%  |        |       |      | -2.7% |          |      |   | 93.2%  |        |        |   | 94.7%  |        |        |  | -1.5% |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Average monthly rental revenue              |                                  | $                                                | 924    |                                 |       | $        | 903    |        |       |      | 2.3%  |          |      | $ | 924    |        |        | $ | 894    |        |        |  | 3.4%  |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Number of apartment homes                   |                                  |                                                  | 10,457 |                                 |       |          | 10,457 |        |       |      |       |          |      |   | 10,457 |        |        |   | 10,457 |        |        |  |       |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       
|Number of apartment communities             |                                  |                                                  | 36     |                                 |       |          | 36     |        |       |      |       |          |      |   | 36     |        |        |   | 36     |        |        |  |       |       
|                                            |                                  |                                                  |        |                                 |       |          |        |        |       |      |       |          |      |   |        |        |        |   |        |        |        |  |       |       

For the three-month period, property revenues declined due to
lower occupancy levels as a result of a decline in job growth
throughout our markets. The increase in other property revenues
is the result of increases in such income items as water
sub-meter income, trash fees and redecorating fees. Property
revenues increased for the nine-month period primarily in our
Washington, D.C. and Southeast Florida markets, offset by weaker
performance in our other markets. The decrease in advertising
costs for the three and nine-month periods is primarily due to a
reduction in media advertising and locator fees. Other operating
expenses have increased for both the three and nine-month
periods primarily due to amounts expended for internet
connectivity projects in 2001. As a percentage of total property
revenue, total property operating and maintenance expenses
increased to 34.4% for the three months ended September 30,
2001 from 33.2% for the three months ended September 30,
2000, and increased to 33.5% for the nine months ended
September 30, 2001 from 32.9% for the nine months ended
September 30, 2000.

Operating Performance of Acquisition Communities

Acquisition communities for the three and nine months ended
September 30, 2001 consist of Summit Sweetwater and Summit
Shiloh, both located in Atlanta, Georgia, representing a total
of 490 apartment homes, in each of which we acquired our joint
venture partners 51% interest on August 1, 2000.

17



---



##### 



The operations of these two communities for the three and nine
months ended September 30, 2001 and 2000 are summarized as
follows (dollars in thousands except average monthly rental
revenue):

|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |     |     | 
|------------------------------------------ | ------ | ----------------------- | ----- | ----------------- | ----- | ---- | ----- | ---- | --- | - | ----- | ----- | ----- | - | ----- | --- | --- | 
|                                           |        |                         |       |                  
|                                           |        | Three Months Ended      |       | Nine Months Ended
|                                           |        | September 30,           |       | September 30,    
|                                           |        |                         |       |                  
|                                           |        | 2001                    |       | 2000              |       | 2001 |       | 2000
|                                           |        |                         |       |                   |       |      |       |     
|Property revenues:                         |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|                                          
|                                          
|                                          
|                                          
|                                           | Rental |                         | $     | 1,178             |       |      | $     | 827  |     |   | $     | 3,571 |       |   | $     | 827 |    
|                                          
|                                          
|                                          
|                                          
|                                           | Other  |                         |       | 109               |       |      |       | 67   |     |   |       | 284   |       |   |       | 67  |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|                                           |        | Total property revenues |       |                   | 1,287 |      |       |      | 894 |   |       |       | 3,855 |   |       |     | 894 | 
|                                          
|                                          
|                                          
|                                          
|Property operating and maintenance expense |        |                         | 445   |                   |       |      | 289   |      |     |   | 1,319 |       |       |   | 289   |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|Property operating income                  |        | $                       | 842   |                   |       | $    | 605   |      |     | $ | 2,536 |       |       | $ | 605   |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|Average physical occupancy                 |        |                         | 92.5% |                   |       |      | 93.1% |      |     |   | 92.5% |       |       |   | 93.1% |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|Average monthly rental revenue             |        | $                       | 892   |                   |       | $    | 912   |      |     | $ | 900   |       |       | $ | 912   |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    
|Number of apartment homes                  |        |                         | 490   |                   |       |      | 490   |      |     |   | 490   |       |       |   | 490   |    
|                                           |        |                         |       |                   |       |      |       |      |     |   |       |       |       |   |       |    

Operating Performance of Stabilized Development
Communities

We had fifteen stabilized development communities (Summit
Ballantyne, Summit Sedgebrook, Summit Governors Village,
Summit Lake, Summit Russett I, Summit Westwood, Summit New
Albany, Summit Fair Lakes, Summit Doral, Summit Largo, Summit
Hunters Creek, Summit Ashburn Farm, Summit Deer Creek,
Summit Fairview and Reunion Park by Summit) at
September 30, 2001. Summit Fairview is an existing
community which underwent major renovations during 1999 and
2000. Its operating results are included in results of
stabilized development communities as it reached stabilization
after renovation subsequent to January 1, 1999. The
operating performance of these fifteen communities for the three
and nine months ended September 30, 2001 and 2000 is
summarized below (dollars in thousands except average monthly
rental revenue):

|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |        |        | 
|------------------------------------------ | ------ | ----------------------- | ----- | ----------------- | ------ | ---- | ----- | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                           |        |                         |       |                  
|                                           |        | Three Months Ended      |       | Nine Months Ended
|                                           |        | September 30,           |       | September 30,    
|                                           |        |                         |       |                  
|                                           |        | 2001                    |       | 2000              |        | 2001 |       | 2000  
|                                           |        |                         |       |                   |        |      |       |       
|Property revenues:                         |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|                                          
|                                          
|                                          
|                                          
|                                           | Rental |                         | $     | 12,699            |        |      | $     | 12,082 |        |   | $      | 37,861 |        |   | $      | 32,622 |       
|                                          
|                                          
|                                          
|                                          
|                                           | Other  |                         |       | 996               |        |      |       | 968    |        |   |        | 2,856  |        |   |        | 2,537  |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|                                           |        | Total property revenues |       |                   | 13,695 |      |       |        | 13,050 |   |        |        | 40,717 |   |        |        | 35,159 | 
|                                          
|                                          
|                                          
|                                          
|Property operating and maintenance expense |        |                         | 4,177 |                   |        |      | 3,822 |        |        |   | 12,436 |        |        |   | 9,977  |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|Property operating income                  |        | $                       | 9,518 |                   |        | $    | 9,228 |        |        | $ | 28,281 |        |        | $ | 25,182 |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|Average physical occupancy                 |        |                         | 94.8% |                   |        |      | 92.2% |        |        |   | 94.4%  |        |        |   | 86.1%  |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|Average monthly rental revenue             |        | $                       | 970   |                   |        | $    | 927   |        |        | $ | 968    |        |        | $ | 875    |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       
|Number of apartment homes                  |        |                         | 4,668 |                   |        |      | 4,668 |        |        |   | 4,668  |        |        |   | 4,668  |       
|                                           |        |                         |       |                   |        |      |       |        |        |   |        |        |        |   |        |       

18



---



##### 



Operating Performance of Communities in Lease-up

We had seven communities in lease-up during the nine months
ended September 30, 2001. Six of the seven communities in
lease-up are new developments and one of the communities in
lease-up, Summit Lenox, is an existing community that underwent
major renovations during 1999 and 2000. A summary of the six new
development communities in lease-up as of September 30,
2001 is as follows (dollars in thousands):

|                                       |  |           |       |           |  |              |         |               |  |           |         |               |  |  |         |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | --------- | ----- | --------- |  | ------------ | ------- | ------------- |  | --------- | ------- | ------------- |  |  | ------- |  |  |  | ----- |  |  |  | ----- | 
|                                       |  |           |       | Total     |  | Actual/      |         |               |  |           |         | % Leased     
|                                       |  | Number of |       | Actual/   |  | Anticipated  |         | Actual/       |  | Q3 2001   |         | as of        
|                                       |  | Apartment |       | Estimated |  | Construction |         | Anticipated   |  | Average   |         | September 30,
|Community                              |  | Homes     |       | Cost      |  | Completion   |         | Stabilization |  | Occupancy |         | 2001         
|                                       |  |           |       |           |  |              |         |               |  |           |         |              
|Summit Russett II 
	Laurel, MD        |  |           | 112   |           |  | $            | 10,700  |               |  |           | Q4 2000 |               |  |  | Q2 2001 |  |  |  | 95.7% |  |  |  | 87.5% | 
|                                      
|                                      
|                                      
|                                      
|Summit Grandview 
	Charlotte, NC      |  |           | 266   |           |  |              | 51,500  |               |  |           | Q4 2000 |               |  |  | Q4 2001 |  |  |  | 85.1% |  |  |  | 91.7% | 
|                                      
|                                      
|                                      
|                                      
|Summit Deerfield 
	Cincinnati, OH (1) |  |           | 498   |           |  |              | 45,200  |               |  |           | Q3 2001 |               |  |  | Q2 2002 |  |  |  | 60.8% |  |  |  | 67.3% | 
|                                      
|                                      
|                                      
|                                      
|Summit Crest  Raleigh, NC             |  |           | 438   |           |  |              | 32,400  |               |  |           | Q3 2001 |               |  |  | Q2 2002 |  |  |  | 50.8% |  |  |  | 70.1% | 
|                                      
|                                      
|                                      
|                                      
|Summit Peachtree City 
	Atlanta, GA   |  |           | 399   |           |  |              | 33,400  |               |  |           | Q3 2001 |               |  |  | Q4 2002 |  |  |  | 32.1% |  |  |  | 42.4% | 
|                                      
|                                      
|                                      
|                                      
|Summit Overlook 
	Raleigh, NC (2)     |  |           | 320   |           |  |              | 27,400  |               |  |           | Q4 2001 |               |  |  | Q1 2002 |  |  |  | 41.6% |  |  |  | 50.3% | 
|                                       |  |           |       |           |  |              |         |               |  |           |         |               |  |  |         |  |  |  |       |  |  |  |       | 
|                                       |  |           | 2,033 |           |  | $            | 200,600 |               |  |           |         |               |  |  |         |  |  |  |       |  |  |  |       | 
|                                       |  |           |       |           |  |              |         |               |  |           |         |               |  |  |         |  |  |  |       |  |  |  |       | 






|    |                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------
|(1) | Summit Deerfield was sold on October 12, 2001 as part of
	our strategy to exit the midwest markets.                 
|(2) | The related assets of this property are included in the
	Construction in progress category at
	September 30, 2001.

The actual stabilization dates for our communities in lease-up
may be later than anticipated if economic conditions in the
relevant markets continue to decline or do not recover in a
timely manner. The rental rates that we charge may also be less
than expected, and we may need to offer rent concessions to
residents.

In addition to the communities listed in the table above, Summit
Lenox in Atlanta, Georgia is an existing community that
underwent major renovations during 1999 and 2000. The
renovations included upgrades of the interior of the apartment
homes (new cabinets, fixtures and other interior upgrades),
upgrades to the parking lots and landscaping, as well as
exterior painting of buildings. The renovations required certain
apartment homes to be unavailable for rental over the course of
the project. The operations of Summit Lenox are included in the
results of our lease-up communities due to the renovation work.
The renovation work at Summit Lenox was complete at
September 30, 2001. Summit Lenox was 89.6% occupied at
September 30, 2001.

The operating performance of our lease-up communities for the
three and nine months ended September 30, 2001 and 2000 is
summarized below (dollars in thousands):

|                                           |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |       |       | 
|------------------------------------------ | ------ | ----------------------- | ----- | ------------- | ----- | ---- | ----- | ---- | ----- | - | ----- | ------ | ------ | - | ----- | ----- | ----- | 
|                                           |        |                         |       |              
|                                           |        | Three Months            |       | Nine Months  
|                                           |        | Ended                   |       | Ended        
|                                           |        | September 30,           |       | September 30,
|                                           |        |                         |       |              
|                                           |        | 2001                    |       | 2000          |       | 2001 |       | 2000
|                                           |        |                         |       |               |       |      |       |     
|Property revenues:                         |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |      
|                                          
|                                          
|                                          
|                                          
|                                           | Rental |                         | $     | 5,001         |       |      | $     | 952  |       |   | $     | 11,005 |        |   | $     | 2,769 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Other  |                         |       | 345           |       |      |       | 115  |       |   |       | 952    |        |   |       | 222   |      
|                                           |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |      
|                                           |        | Total property revenues |       |               | 5,346 |      |       |      | 1,067 |   |       |        | 11,957 |   |       |       | 2,991 | 
|                                          
|                                          
|                                          
|                                          
|Property operating and maintenance expense |        |                         | 1,514 |               |       |      | 487   |      |       |   | 3,861 |        |        |   | 1,515 |      
|                                           |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |      
|Property operating income                  |        | $                       | 3,832 |               |       | $    | 580   |      |       | $ | 8,096 |        |        | $ | 1,476 |      
|                                           |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |      
|Number of apartment homes                  |        |                         | 2,464 |               |       |      | 2,464 |      |       |   | 2,464 |        |        |   | 2,464 |      
|                                           |        |                         |       |               |       |      |       |      |       |   |       |        |        |   |       |      

Operating Performance of Disposition Communities

We sold the former Summit Palm Lake community on June 1,
2001 (30 apartment units), the former Summit Arbors and
Summit Radbourne communities on June 27, 2001
(345 apartment homes) and the former Summit Lofts community
on August 1, 2001 (200 apartment homes). The
information in the table

19



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##### 





|                                           |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |        |        | 
|------------------------------------------ | ------ | ----------------------- | --- | ------------- | --- | ---- | ----- | ----- | ----- | - | ----- | ----- | ----- | - | ------ | ------ | ------ | 
|                                           |        |                         |     |              
|                                           |        | Three Months            |     | Nine Months  
|                                           |        | Ended                   |     | Ended        
|                                           |        | September 30,           |     | September 30,
|                                           |        |                         |     |              
|                                           |        | 2001                    |     | 2000          |     | 2001 |       | 2000 
|                                           |        |                         |     |               |     |      |       |      
|Property revenues:                         |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |       
|                                          
|                                          
|                                          
|                                          
|                                           | Rental |                         | $   | 147           |     |      | $     | 4,306 |       |   | $     | 3,941 |       |   | $      | 14,328 |       
|                                          
|                                          
|                                          
|                                          
|                                           | Other  |                         |     | 14            |     |      |       | 354   |       |   |       | 286   |       |   |        | 1,108  |       
|                                           |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |       
|                                           |        | Total property revenues |     |               | 161 |      |       |       | 4,660 |   |       |       | 4,227 |   |        |        | 15,436 | 
|                                          
|                                          
|                                          
|                                          
|Property operating and maintenance expense |        |                         | 73  |               |     |      | 1,755 |       |       |   | 1,405 |       |       |   | 5,371  |       
|                                           |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |       
|Property operating income                  |        | $                       | 88  |               |     | $    | 2,905 |       |       | $ | 2,822 |       |       | $ | 10,065 |       
|                                           |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |       
|Number of apartment homes                  |        |                         | 200 |               |     |      | 2,045 |       |       |   | 849   |       |       |   | 2,525  |       
|                                           |        |                         |     |               |     |      |       |       |       |   |       |       |       |   |        |       

Operating Performance of Summit Management Company

The operating performance of Summit Management Company and its
wholly-owned subsidiary, Summit Apartment Builders, Inc., for
the three and nine months ended September 30, 2001 and 2000
is summarized below (in thousands):

|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |        |      |  
|----------------- | ------------------------------------------ | ------------------ | --- | ----------------- | ----- | -------- | ---- | ----- | ----- | ---- | ---- | -------- | --- | - | --- | ----- | ----- | - | ---- | ----- | ----- |  | ----- | ------ | ---- | -
|                  |                                            |                    |     |                  
|                  |                                            | Three Months Ended |     | Nine Months Ended
|                  |                                            | September 30,      |     | September 30,    
|                  |                                            |                    |     |                  
|                  |                                            | 2001               |     | 2000              |       | % Change |      | 2001  |       | 2000 |      | % Change
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |         
|Revenues:         |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|                 
|                 
|                 
|                 
|                  | Management fees charged to our communities |                    | $   | 1,418             |       |          | $    | 1,477 |       |      |      | -4.0     | %   |   | $   | 5,010 |       |   | $    | 4,292 |       |  |       | 16.7   | %   
|                 
|                 
|                 
|                 
|                  | Third party management fee revenue         |                    |     | 194               |       |          |      | 279   |       |      |      | -30.5    | %   |   |     | 633   |       |   |      | 829   |       |  |       | -23.6  | %   
|                 
|                 
|                 
|                 
|                  | Construction revenue                       |                    |     | 701               |       |          |      | 496   |       |      |      | 41.3     | %   |   |     | 2,255 |       |   |      | 2,085 |       |  |       | 8.2    | %   
|                 
|                 
|                 
|                 
|                  | Gain on sale of real estate assets         |                    |     |                  |       |          |      |      |       |      |      | 0.0      | %   |   |     |      |       |   |      | 238   |       |  |       | -100.0 | %   
|                 
|                 
|                 
|                 
|                  | Other revenue                              |                    |     | 120               |       |          |      | 99    |       |      |      | 21.2     | %   |   |     | 372   |       |   |      | 234   |       |  |       | 59.0   | %   
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|                  |                                            | Total revenue      |     |                   | 2,433 |          |      |       | 2,351 |      |      |          | 3.5 | % |     |       | 8,270 |   |      |       | 7,678 |  |       |        | 7.7  | %
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|Expenses:         |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|                 
|                 
|                 
|                 
|                  | Operating                                  |                    |     | 2,293             |       |          |      | 2,237 |       |      |      | 2.5      | %   |   |     | 7,186 |       |   |      | 7,276 |       |  |       | -1.2   | %   
|                 
|                 
|                 
|                 
|                  | Depreciation                               |                    |     | 80                |       |          |      | 86    |       |      |      | -7.0     | %   |   |     | 239   |       |   |      | 257   |       |  |       | -7.0   | %   
|                 
|                 
|                 
|                 
|                  | Amortization                               |                    |     | 74                |       |          |      | 76    |       |      |      | -2.6     | %   |   |     | 224   |       |   |      | 227   |       |  |       | -1.3   | %   
|                 
|                 
|                 
|                 
|                  | Interest                                   |                    |     | 75                |       |          |      | 75    |       |      |      | 0.0      | %   |   |     | 225   |       |   |      | 603   |       |  |       | -62.7  | %   
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|                  |                                            | Total expenses     |     |                   | 2,522 |          |      |       | 2,474 |      |      |          | 1.9 | % |     |       | 7,874 |   |      |       | 8,363 |  |       |        | -5.8 | %
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       
|Net (loss) income |                                            | $                  | (89 | )                 |       | $        | (123 | )     |       |      | 27.6 | %        |     | $ | 396 |       |       | $ | (685 | )     |       |  | 157.8 | %     
|                  |                                            |                    |     |                   |       |          |      |       |       |      |      |          |     |   |     |       |       |   |      |       |       |  |       |       

The decrease in management fees charged to our communities for
the three-month period is primarily due to the absence of fees
earned from managing lease-up communities as a result of the
stage of development of such communities during the third
quarter of 2001. The increase in management fees charged to our
communities for the nine-month period in 2001 was primarily the
result of a 5.8% increase in property revenues at our
communities for that period over the previous year, as well as
an increase in fees earned during the first six months of the
year from managing our communities in lease-up. Operating
expenses for the three-month period remained stable, increasing
by only $56,000. The decrease in operating expenses during the
nine-month period was a result of a decrease in the number of
management personnel at Summit

20



---



##### 





Property management revenues included property management fees
from third parties of $194,000 and $633,000 for the three and
nine months ended September 30, 2001 and $279,000 and $829,000
for the same periods in 2000. Property management fees from
third parties as a percentage of total property management
revenues were 12.0% and 11.2% for the three and nine months
ended September 30, 2001 and 15.9% and 16.1% for the same
periods in 2000. We expect third-party management revenues as a
percentage of total property management revenues to continue to
decline.

All of the construction revenue during the nine-month periods
ended September 30, 2001 and 2000 was from contracts with Summit.

Other Income and Expenses

Interest expense decreased by $156,000, or 1.5%, and increased
by $1.5 million, or 5.4%, for the three and nine months
ended September 30, 2001 compared with the same periods in
2000. The decrease for the three-month period was primarily due
to a decrease in our average interest rate from 2000 to 2001 of
0.43%, as well as the assumption of Summit Radbournes
9.80% mortgage by the purchaser of that community at the end of
the second quarter of 2001. The increase for the nine-month
period was primarily the result of an increase in our average
indebtedness outstanding, which increased by $69.3 million,
or 10.1%, from 2000 to 2001.

Depreciation expense increased $232,000 and $1.5 million,
or 2.4% and 5.3%, for the three and nine months ended
September 30, 2001 as compared with the same periods in
2000, primarily due to the initiation of depreciation on
recently developed communities as well as the depreciation of
communities acquired during the second half of 2000, offset by
the absence of depreciation on communities sold during 2001.

General and administrative expenses increased $814,000 and
$1.2 million, or 76.9% and 39.6%, for the three and nine
months ended September 30, 2001 as compared to the same
periods in 2000. This increase was primarily the result of an
increase in compensation costs of $299,000 due to performance
stock grants which partially vested during the nine months ended
September 30, 2001, as well as an increase in the reserve
for the costs of abandoned pursuit projects of $350,000 during
2001. We also increased several operating accruals by a total of
$330,000 during 2001. As a percentage of revenues, general and
administrative expenses were 3.8% and 2.8% for the three and
nine months ended September 30, 2001 and 2.2% and 2.1% for
the same periods in 2000.

Management considers events and circumstances that may indicate
impairment of an investment, including operating performance and
cash flow projections. Management determined during the three
months ended June 30, 2001 that our investments in
Broadband Now, Inc. and Yieldstar Technology LLC were impaired
and that such impairment was other than temporary. As a result,
we recorded an impairment loss during the period in the amount
of $1.2 million, which represents our entire investments in
these two technology companies. We have no other technology
company investments.

Liquidity and Capital Resources



| |          
| | ---------
| | Liquidity

Our net cash provided by operating activities increased from
$59.1 million for the nine months ended September 30,
2000 to $72.5 million for the same period in 2001,
primarily due to a $5.0 million increase in property
operating income as well as a $9.0 million increase in cash
provided by accounts payable and accrued expenses.

Net cash used in investing activities decreased from
$90.1 million for the nine months ended September 30,
2000 to $34.1 million for the same period in 2001 due to a
$41.4 million decrease in construction spending and a
$33.1 million reduction in cash used for the purchase of
communities, offset by a decrease in proceeds from the sale of
communities of $10.7 million and an increase in cash used
for investments in real estate joint ventures of
$4.1 million. Property sale proceeds from six of seven
communities sold during 2000 were placed in

21



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##### 





Net cash provided by financing activities was $29.7 million
for the nine months ended September 30, 2000. Net cash used
in financing activities was $38.9 million for the nine months
ended September 30, 2001. The increase in cash used in
financing activities is primarily due to a decrease in mortgage
debt proceeds of $47.9 million and an increase in
repayments on our unsecured credit facility of
$74.2 million, offset by a decrease in cash used for the
repurchase of Summits common stock and our common units in
the aggregate of $9.8 million, a decrease in cash used for
employee notes receivable of $6.4 million, a decrease in
repayments on unsecured notes of $15.0 million and an
increase in the net proceeds from borrowings on unsecured
medium-term notes of $19.9 million which were used to repay
amounts outstanding on our unsecured credit facility.

The ratio of earnings to fixed charges was 1.61 for the nine
months ended September 30, 2001 as compared to 2.02 for the
nine months ended September 30, 2000. The decrease is
primarily due to a decrease in gain on sale of communities from
the nine months ended September 30, 2000 to the same period
in 2001.

Our outstanding indebtedness at September 30, 2001 totaled
$764.5 million. This amount included $290.8 million of
fixed rate conventional mortgages, $36.7 million of
variable rate tax-exempt bonds, $308.0 million of fixed
rate unsecured notes, $4.0 million of tax-exempt fixed rate
mortgages, and $125.0 million under our unsecured credit
facility.

We expect to meet our liquidity requirements over the next
twelve months, including recurring capital expenditures relating
to maintaining our existing communities, primarily through our
working capital, net cash provided by operating activities and
borrowings under our unsecured credit facility. We consider our
cash provided by operating activities to be adequate to meet
operating requirements and payments of distributions during the
next twelve months. We expect to meet our long-term liquidity
requirements, such as scheduled mortgage debt maturities,
property acquisitions, financing of construction and development
activities and other non-recurring capital improvements, through
the issuance of unsecured notes and equity securities, from
undistributed cash flow, from proceeds received from the
disposition of certain communities and, in connection with the
acquisition of land or improved property, through the issuance
of common units.



| |                
| | ---------------
| | Credit Facility

We have a syndicated unsecured line of credit in the amount of
$225.0 million. The unsecured credit facility provides
funds for new development, acquisitions and general working
capital purposes. Loans under the unsecured credit facility
initially bear interest at LIBOR plus 100 basis points
based upon our current credit rating of BBB- by Standard &
Poors Rating Services and Baa3 by Moodys Investors
Service. The interest rate will be reduced in the event of an
upgrade of our unsecured credit rating. The unsecured credit
facility also provides a bid option sub-facility equal to a
maximum of 50% of the total facility ($112.5 million). This
sub-facility provides us with the option to place borrowings in
a fixed LIBOR contract up to 180 days. The credit
facilitys initial three-year term was scheduled to expire
on September 26, 2003. On July 6, 2001, we closed on a
one-year extension option under the credit facility. The new
maturity date is September 26, 2004. All other terms and
covenants remain unchanged.



| |                  
| | -----------------
| | Medium-Term Notes

On April 20, 2000, we commenced a new program for the sale
of up to $250.0 million aggregate principal amount of
medium-term notes due nine months or more from the date of
issuance. During the nine months ended September 30, 2001,
we issued medium-term notes with an aggregate principal amount
of $60.0 million in connection with the new MTN program,
including (a) $25.0 million of notes which are due on
May 9, 2006 and bear interest at 7.04% per year and
(b) $35.0 million of notes which are due on
May 9, 2011 and bear

22



---



##### 





On May 29, 1998, we established a program for the sale of
up to $95.0 million aggregate principal amount of
medium-term notes due nine months or more from the date of
issuance. We had medium-term notes with an aggregate principal
amount of $25.0 million outstanding in connection with this
MTN program at September 30, 2001. As a result of the
commencement of the $250.0 million MTN program, we cannot
issue any additional notes under the $95.0 million MTN
program.



| |                                 
| | --------------------------------
| | Derivative Financial Instruments

We are exposed to capital market risk, such as changes in
interest rates. To manage the volatility relating to interest
rate risk, we may enter into interest rate hedging arrangements
from time to time. We do not utilize derivative financial
instruments for trading or speculative purposes.

On January 1, 2001, we adopted Statement of Financial
Accounting Standard No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. FAS 133
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. It requires that
entities recognize all derivatives as either assets or
liabilities in the statement of financial position and measure
those instruments at fair value. The cumulative effect of
adopting FAS 133 was not material to our financial statements.

At September 30, 2001, we had one interest rate swap with a
notional amount of $30.0 million, relating to
$30.0 million of 6.625% fixed rate notes issued under our
MTN program. Under the interest rate swap agreement, through the
maturity date of December 15, 2003, (a) we have agreed
to pay to the counterparty the interest on a $30.0 million
notional amount at a floating interest rate of three-month LIBOR
plus 11 basis points, and (b) the counterparty has agreed
to pay to us the interest on the same notional amount at the
fixed rate. The floating rate at September 30, 2001 was
3.26%. The fair value of the interest rate swap was
$2.4 million at September 30, 2001. The swap has been
designated as a fair value hedge of the underlying fixed rate
debt obligation and has been recorded as a reduction of the
related debt instrument. We assume no ineffectiveness as the
interest rate swap meets the short-cut method conditions
required under FAS 133 for fair value hedges of debt
instruments. Accordingly, no gains or losses were recorded in
income relative to our underlying debt and interest rate swap.



| |                
| | ---------------
| | Preferred Units

As of September 30, 2001, we had outstanding
3.4 million preferred units of limited partnership interest
designated as 8.95% Series B Cumulative Redeemable
Perpetual Preferred Units. We may redeem these preferred units
on or after April 29, 2004 for cash, or at our option,
shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock, or a combination of cash
and stock. Holders of the Series B preferred units have the
right to exchange these preferred units for shares of
Summits Series B preferred stock on a one-for-one
basis, subject to adjustment: (a) on or after
April 29, 2009, (b) if full quarterly distributions
are not made for six quarters, or (c) upon the occurrence
of specified events related to our treatment or the treatment of
the preferred units for federal income tax purposes.
Distributions on the Series B preferred units are
cumulative from the date of original issuance and are payable
quarterly at the rate of 8.95% per year of the $25.00 original
capital contribution. We made distributions to the holders of
the Series B preferred units in the aggregate amount of
$5.7 million during each of the nine-month periods ended
September 30, 2001 and 2000.

As of September 30, 2001, we had outstanding
2.2 million preferred units of limited partnership interest
designated as 8.75% Series C Cumulative Redeemable
Perpetual Preferred Units. We may redeem the preferred units on
or after September 3, 2004 for cash. Holders of the
Series C preferred units have the right to exchange these
preferred units for shares of Summits Series C
preferred stock on a one-for-one basis, subject to adjustment:
(a) on or after September 3, 2009, (b) if full
quarterly distributions are not made for six quarters,
(c) upon the occurrence of specified events related to our
treatment or the treatment of the preferred units for federal
income tax purposes, or (d) if the holdings in the
Operating Partnership of the Series C

23



---



##### 





Common Stock Repurchase
Program

On March 12, 2000, Summits Board of Directors
authorized a common stock repurchase program pursuant to which
Summit was authorized to purchase up to an aggregate of
$25.0 million of currently issued and outstanding shares of
its common stock. During the three months ended
September 30, 2001, Summits Board of Directors
increased the size of this common stock repurchase program to
$56.0 million. All repurchases have been, and will be, made
on the open market at prevailing prices or in privately
negotiated transactions. This authority may be exercised from
time to time and in such amounts as market conditions warrant.
Summit did not repurchase any shares of its common stock during
the nine months ended September 30, 2001. During the year
ended December 31, 2000, Summit repurchased 279,400 shares
of its common stock under the common stock repurchase program
for an aggregate purchase price, including commissions, of
$5.5 million, or an average price of $19.80 per share.

During 2000, Summit completed a common stock repurchase program
pursuant to which it was authorized to purchase up to an
aggregate of $50.0 million of our common stock. The total
number of shares of common stock repurchased under this program
was 2.5 million shares for an aggregate purchase price,
including commissions, of $50.0 million, or an average
price of $19.63 per share.

Employee Loan Program

Summits Board of Directors believes that ownership of its
common stock by its executive officers and certain other
qualified employees will align the interests of these officers
and employees with the interests of Summits stockholders.
To this end, Summits Board of Directors approved, and
Summit instituted, a loan program under which Summit may lend
amounts to certain of its executive officers and other qualified
employees to (a) finance the purchase of Summits
common stock on the open market at then-current market prices,
(b) finance the payment of the exercise price of one or
more stock options to purchase shares of Summits common
stock, or (c) finance the annual tax liability or other
expenses of an executive officer related to the vesting of
shares of common stock which constitute a portion of a
restricted stock award granted to the executive officer. Summit
has amended the terms of the loan program from time to time
since its inception in 1997. The relevant officer or employee
has executed a Promissory Note and Security Agreement related to
each loan extended. These notes bear interest at the applicable
federal rate as established by the Internal Revenue Service, are
full recourse to the officers and employees and are
collateralized by the shares of Summits common stock which
are the subject of the loans.

Communities Being Marketed for Sale

At September 30, 2001, we had three communities under
contract for sale. These three communities, the former Summit
Gateway, Summit Stony Point and Summit Deerfield, were sold
subsequent to September 30, 2001 for an aggregate sales
price of $77.1 million. The total proceeds received upon
sale of these three communities were $61.4 million,
$4.3 million of which was placed into escrow with a
qualified intermediary in accordance with like-kind exchange
income tax rules and regulations and are expected to be used to
fund future development communities. The remaining proceeds were
used to reduce amounts outstanding under our unsecured credit
facility. The sale of these three communities resulted in an
aggregate gain on sale of $10.2 million.

Subsequent to September 30, 2001, we executed contracts for
the sale of two apartment communities. The net book value of the
real estate assets of these communities was $19.2 million
at September 30, 2001. We do not expect to incur a loss
upon sale of either of these communities. Proceeds from the sale
of the communities are expected to be used to fund future
development. The two apartment communities held for sale
represented

24



---



##### 





Development Activity

Our construction in progress at September 30, 2001 is
summarized as follows (dollars in thousands):

|                                              |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 
|--------------------------------------------- |  | --------- | ----- | --------- |  | ------- | ------- | --------- |  | ------------ | ------- |  |  | - | ------ |  |  |  | ------- | 
|                                              |  |           |       | Total     |  |         |         | Estimated |  | Anticipated 
|                                              |  | Apartment |       | Estimated |  | Cost To |         | Cost To   |  | Construction
|Community                                     |  | Homes     |       | Costs     |  | Date    |         | Complete  |  | Completion  
|                                              |  |           |       |           |  |         |         |           |  |             
|Summit Overlook  Raleigh, NC (1)             |  |           | 320   |           |  | $       | 27,400  |           |  | $            | 26,674  |  |  | $ | 726    |  |  |  | Q4 2001 | 
|                                             
|                                             
|                                             
|                                             
|Summit Grand Parc  Washington, DC            |  |           | 105   |           |  |         | 35,900  |           |  |              | 21,155  |  |  |   | 14,745 |  |  |  | Q2 2002 | 
|                                             
|                                             
|                                             
|                                             
|Summit Shiloh II  Atlanta, GA                |  |           | 50    |           |  |         | 3,900   |           |  |              | 1,292   |  |  |   | 2,608  |  |  |  | Q2 2002 | 
|                                             
|                                             
|                                             
|                                             
|Summit Brookwood  Atlanta, GA                |  |           | 359   |           |  |         | 41,500  |           |  |              | 15,212  |  |  |   | 26,288 |  |  |  | Q4 2002 | 
|                                             
|                                             
|                                             
|                                             
|Summit Valley Brook  Philadelphia, PA        |  |           | 352   |           |  |         | 37,000  |           |  |              | 17,349  |  |  |   | 19,651 |  |  |  | Q1 2003 | 
|                                             
|                                             
|                                             
|                                             
|Other development and construction costs  (2) |  |           |      |           |  |         |        |           |  |              | 52,967  |  |  |   |       |  |  |  |         | 
|                                              |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 
|                                              |  |           | 1,186 |           |  | $       | 145,700 |           |  | $            | 134,649 |  |  | $ | 64,018 |  |  |  |         | 
|                                              |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 



---



|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(1) | This community was in lease-up at September 30, 2001.                            
|(2) | Consists primarily of land held for development and other
	pre-development costs.

Estimated costs to complete the development communities
represent substantially all of our material development
commitments for capital expenditures at September 30, 2001.
We have curtailed, and may continue to curtail, our development
spending in an effort to increase our financial flexibility in
the current economic environment.

Certain Factors
Affecting the Performance of Development Communities

We are optimistic about the operating prospects of the
communities under construction. However, as with any development
effort, there are uncertainties and risks associated with the
communities described above. While we have prepared development
budgets and have estimated completion and stabilization target
dates based on what we believe are reasonable assumptions in
light of current conditions, there can be no assurance that
actual costs will not exceed current budgets or that we will not
experience construction delays due to the unavailability of
materials, weather conditions or other events. We also may be
unable to obtain, or experience delays in obtaining, all
necessary zoning, land-use, building, occupancy, and other
required governmental permits and authorizations.

Other development risks include the possibility of incurring
additional costs or liabilities resulting from defects in
construction material, and the possibility that financing may
not be available on favorable terms, or at all, to pursue or
complete development activities. Similarly, economic and market
conditions at the time these communities become available for
leasing will affect the rental rates that may be charged and the
period of time necessary to achieve stabilization, which could
make one or more of the development communities unprofitable or
result in achieving stabilization later than currently
anticipated.

In addition, we are conducting feasibility and other
pre-development work for nine communities. We could abandon the
development of any one or more of these potential communities in
the event that we determine that economic or market conditions
do not support development, financing is not available on
favorable terms or other circumstances exist which may prevent
development. Similarly, there can be no assurance that, if we do
pursue one or more of these potential communities, we will be
able to complete construction within the currently estimated
development budgets or construction can be started at the time
currently anticipated.

25



---



##### 



Commitments and Contingencies

The estimated cost to complete the five development projects
currently under construction was $64.0 million at
September 30, 2001. Anticipated construction completion
dates of the projects range from the fourth quarter of 2001 to
the first quarter of 2003.

On January 19, 2000, we entered into a Real Estate Purchase
Agreement with a third-party real estate developer. Under the
terms of the agreement, we have agreed to purchase a
Class A mixed-use community, which will be
called Summit Brickell and will be located in Miami, Florida. We
expect to close on the purchase of Summit Brickell during the
second half of 2002 following its completion and achievement of
85% occupancy. The final purchase price will be determined based
on actual construction costs plus a bonus to the developer based
on the capitalized income of the property at the time of
purchase. The purchase price is expected to range from
$50.5 million to $60.0 million. The purchase of Summit
Brickell is subject to customary closing conditions. We issued a
letter of credit in the amount of $13.0 million, which
serves as a credit enhancement to the developers
construction loan. In the event that the letter of credit is
drawn upon, we will be treated as having issued a loan to the
developer in the amount of such draw. Any such loan will accrue
interest at a rate of 18% per year.

Summit has employment agreements with two of its former
executive officers both of whom resigned from such executive
positions, but who remain as employees and have agreed to
provide various services to Summit from time to time over the
next ten years. Each employment agreement requires that Summit
pay to the former officers a base salary aggregating up to
$2.1 million over the period from July 1, 2001 to
December 31, 2011. Either party can terminate the
employment agreements, effective 20 business days after written
notice is given. The full base salary amount due shall be
payable through 2011 whether or not the agreements are
terminated earlier in accordance with their terms.

Funds From Operations

We consider funds from operations (FFO) to be an
appropriate measure of performance of an equity REIT. We compute
FFO in accordance with standards established by the National
Association of Real Estate Investment Trusts
(NAREIT). FFO, as defined by NAREIT, represents net
income (loss) excluding gains or losses from sales of
property, plus depreciation of real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures,
all determined on a consistent basis in accordance with
generally accepted accounting principles (GAAP).
Funds Available for Distribution (FAD) is defined as
FFO less capital expenditures funded by operations (recurring
capital expenditures). Our methodology for calculating FFO and
FAD may differ from the methodology for calculating FFO and FAD
utilized by other real estate companies, and accordingly, may
not be comparable to other real estate companies. FFO and FAD do
not represent amounts available for managements
discretionary use because of needed capital expenditures or
expansion, debt service obligations, property acquisitions,
development, dividends and distributions or other commitments
and uncertainties. FFO and FAD should not be considered as
alternatives to net income (determined in accordance with GAAP)
as an indication of our financial performance or to cash flows
from operating activities (determined in accordance with GAAP)
as a measure of our liquidity, nor are they indicative of funds
available to fund our cash needs, including our ability to make
dividend or distribution payments. We believe FFO and FAD are
helpful to investors as measures of our performance because,
along with cash flows from operating activities, financing
activities and investing activities, they provide investors with
an understanding of our ability to incur and service debt and
make capital expenditures.

26



---



##### 



FFO and FAD for the three and nine months ended
September 30, 2001 and 2000 are calculated as follows
(dollars in thousands):

|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |         |        | 
|-------------------------------------------------------- | ------------------------- | ------------------ | ---------- | ----------------- | ----- | ---- | ---------- | ------- | ----- | - | ---------- | ------- | ------ | - | ---------- | ------- | ------ | 
|                                                         |                           |                    |            |                  
|                                                         |                           | Three Months Ended |            | Nine Months Ended
|                                                         |                           | September 30,      |            | September 30,    
|                                                         |                           |                    |            |                  
|                                                         |                           | 2001               |            | 2000              |       | 2001 |            | 2000   
|                                                         |                           |                    |            |                   |       |      |            |        
|Income available to common unitholders                   |                           | $                  | 11,383     |                   |       | $    | 29,849     |         |       | $ | 39,639     |         |        | $ | 54,671     |        
|                                                        
|                                                        
|                                                        
|                                                        
|Extraordinary items                                      |                           |                    |           |                   |       |      | 111        |         |       |   |           |         |        |   | 111        |        
|                                                        
|                                                        
|                                                        
|                                                        
|Gain on sale of real estate assets                       |                           |                    | (2,788     | )                 |       |      | (21,346    | )       |       |   | (13,570    | )       |        |   | (29,232    | )      
|                                                        
|                                                        
|                                                        
|                                                        
|Gain on sale of real estate assets 
	Joint venture      |                           |                    | (271       | )                 |       |      |            |         |       |   | (271       | )       |        |   |            |        
|                                                        
|                                                        
|                                                        
|                                                        
|Gain on sale of real estate assets 
	Management Company |                           |                    |           |                   |       |      |           |         |       |   |           |         |        |   | (238       | )      
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|                                                         |                           | Subtotal           |            |                   | 8,324 |      |            |         | 8,614 |   |            |         | 25,798 |   |            |         | 25,312 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Depreciation:                                            |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Real estate assets        |                    |            | 9,768             |       |      |            | 9,563   |       |   |            | 29,115  |        |   |            | 27,741  |       
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Real estate joint venture |                    |            | 282               |       |      |            | 578     |       |   |            | 856     |        |   |            | 1,176   |       
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|Funds from Operations                                    |                           |                    | 18,374     |                   |       |      | 18,755     |         |       |   | 55,769     |         |        |   | 54,229     |        
|                                                        
|                                                        
|                                                        
|                                                        
|Recurring capital expenditures (1)                       |                           |                    | (1,201     | )                 |       |      | (1,729     | )       |       |   | (3,736     | )       |        |   | (4,006     | )      
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|Funds Available for Distribution                         |                           | $                  | 17,173     |                   |       | $    | 17,026     |         |       | $ | 52,033     |         |        | $ | 50,223     |        
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|Non-recurring capital expenditures (1) (2)               |                           | $                  | 748        |                   |       | $    | 1,562      |         |       | $ | 4,447      |         |        | $ | 1,957      |        
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|Cash Flow Provided By (Used In):                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Operating Activities      |                    | $          | 29,568            |       |      | $          | 19,983  |       |   | $          | 72,508  |        |   | $          | 59,069  |       
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Investing Activities      |                    |            | (21,062           | )     |      |            | (55,748 | )     |   |            | (34,121 | )      |   |            | (90,138 | )     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Financing Activities      |                    |            | (8,357            | )     |      |            | (35,613 | )     |   |            | (38,882 | )      |   |            | 29,738  |       
|                                                        
|                                                        
|                                                        
|                                                        
|Weighted average units outstanding 
	basic              |                           |                    | 30,502,457 |                   |       |      | 30,664,610 |         |       |   | 30,868,393 |         |        |   | 30,667,450 |        
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        
|Weighted average units outstanding 
	diluted            |                           |                    | 30,879,316 |                   |       |      | 30,935,031 |         |       |   | 31,191,185 |         |        |   | 30,839,406 |        
|                                                         |                           |                    |            |                   |       |      |            |         |       |   |            |         |        |   |            |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Recurring capital expenditures are expected to be funded from
	operations and consist primarily of interior painting, carpets,
	new appliances, vinyl, blinds, tile, and wallpaper. In contrast,
	non-recurring capital expenditures, such as major improvements,
	new garages and access gates, are expected to be funded by
	financing activities and, therefore, are not included in the
	calculation of FAD.                                                                                                                                                                          
|(2) | Non-recurring capital expenditures for the nine months ended
	September 30, 2001 and 2000 primarily consist of: $646,000 and
	$1.2  million for major renovations in 2001 and 2000,
	respectively; $120,000 and $53,000 for access gates and security
	fences in 2001 and 2000, respectively; $2.1 million and $80,000
	in other revenue enhancement expenditures in 2001 and 2000,
	respectively; and $1.5  million in fixed asset additions,
	including management information systems expenditures and other
	property improvements, during the nine months ended
	September  30, 2001.



|        |                                                           
|------- | ----------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in our market risk since the
filing of our Annual Report on Form 10-K for the year ended
December 31, 2000.

27



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##### 



PART II



|        |                      
|------- | ---------------------
|ITEM 2. | CHANGES IN SECURITIES

During the three months ended September 30, 2001, we issued
common units in private placements in reliance on the exemption
from registration under Section 4(2) of the Securities Act
in the amounts and for the consideration set forth below:



| |    |                                                                                                                                                                                                                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | Summit issued an aggregate of 92,684 shares of common stock
	pursuant to its Dividend Reinvestment and Stock Purchase Plans.
	Summit contributed the proceeds ($2.3 million) of these
	sales to us in consideration of an aggregate of 92,684 common
	units.                                                                  
|
| | B. | Summit issued an aggregate of 1,016 shares of common stock in
	connection with restricted stock awards. Each time a share of
	common stock is issued in connection with a restricted stock
	award, we issue a common unit to Summit during the relevant
	period; consequently, 1,016 common units have been issued to
	Summit.
|
| | C. | Summit issued an aggregate of 23,063 shares of common stock
	pursuant to the exercise of stock options. Summit contributed
	the proceeds ($434,000) of these option exercises to us in
	consideration of an aggregate of 23,063 common units.                                                                                 

In light of the circumstances under which common units were
issued and information obtained by us in connection with such
transactions, management of Summit, in its capacity as our
general partner, believes that we may rely on such exemption.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

|      |  |                                                                                                                                                                                                                                                                                                                                                  
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1  |  | Employment Agreement, dated February 15,
	1999, by and among William B. McGuire, Jr., Summit
	Properties Inc. and Summit Management Company, as restated on
	August 24, 2001 (incorporated herein by reference to
	Exhibit 10.1 to Summits quarterly report on
	Form 10-Q for the quarterly period ended September 30,
	2001, File No. 1-12792).
|*12.1 |  | Statement Regarding Calculation of Ratio of
	Earnings to Fixed Charges for the nine months ended
	September 30, 2001.                                                                                                                                                                                                                            






|  |               
|- | --------------
|* | Filed herewith

(b)  Reports on Form 8-K

We did not file any reports on Form 8-K during the third
quarter of 2001.

28



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##### 



SIGNATURES

Pursuant to the requirements 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.

|                        |  |                                                                                                                            
|----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------
|                        |  | SUMMIT PROPERTIES PARTNERSHIP, L.P.By: Summit Properties Inc., as General
        Partner                                  
|                       
|November 12, 2001(Date) |  | /s/ STEVEN R. LEBLANC
        Steven R. LeBlanc,President and Chief Executive Officer                                      
|                       
|November 12, 2001(Date) |  | /s/ MICHAEL L. SCHWARZ
        Michael L. Schwarz,Executive Vice President  Operations
        and Chief Financial Officer

29