<PAGE>

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                                       
                            Washington, D. C. 20549
                                       
                                       
                                   FORM 10-Q
                                       
                                       
                                       
               Quarterly Report Under Section 13 or 15(d) of the
                        Securities Exchange Act of 1934
                                       

FOR QUARTER ENDED SEPTEMBER 30, 1997          COMMISSION FILE NUMBER 0-22109
                         _____________________________


                                       
                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
            (Exact name of registrant as specified in its charter)


           DELAWARE                                 86-0766007
(State or other jurisdiction            (I.R.S. employer identification no.)
of incorporation or organization)

                                       
       6991 EAST CAMELBACK ROAD, SUITE A200, SCOTTSDALE, ARIZONA  85251
                   (Address of principal executive offices)

      Registrant's telephone number, including area code:  (602) 840-1040




     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                    YES            NO  X
                       ---            ---







  As of November 7, 1997 there were 24,947,481 partnership units outstanding.


                                 Page 1 of 25

<PAGE>

                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                                       
                                       
                                     INDEX
                                       
PART I   FINANCIAL INFORMATION                                              PAGE

         Item 1  Financial Statements
               
         Consolidated Balance Sheets as of September 30, 1997 (Unaudited)
         and December 31, 1996...............................................  3
               
         Consolidated Statements of Income for the three and nine months
         ended September 30, 1997 and 1996 (Unaudited).......................  4
               
         Consolidated Statement of Partners' Capital as of September 30,
         1997 (Unaudited)....................................................  5
               
         Consolidated Statements of Cash Flows for the nine months
         ended September 30, 1997 and 1996 (Unaudited).......................  6
               
         Notes to Consolidated Financial Statements..........................  7
               
         Item 2  Management's Discussion
                 and Analysis of Financial
                 Condition and Results of
                 Operations.................................................. 14

PART II OTHER INFORMATION

        Item 6   Exhibits and Reports on Form 8-K............................ 25

SIGNATURES................................................................... 25


                                 Page 2 of 25

<PAGE>

                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                          CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)

<TABLE>
<CAPTION>

                                                       SEPTEMBER 30, 1997   DECEMBER 31, 1996
                                                       ------------------   -----------------
                                                         (Unaudited)

<S>                                                    <C>                   <C>
ASSETS                                                
Real Estate:
  Land..............................................      $  129,278           $  121,915
  Buildings and improvements........................         606,882              543,839
  Furniture and fixtures............................          34,780               29,567
  Construction-in-progress..........................          35,568               66,229
                                                          ----------           ----------
                                                             806,508              761,550

  Less accumulated depreciation.....................         (54,409)             (38,331)
                                                          ----------           ----------
                                                             752,099              723,219
Cash and cash equivalents...........................           2,488                2,568
Restricted cash.....................................          15,305                1,622
Accounts and notes receivable.......................           1,849                2,702
Mortgage notes receivable...........................           7,188                   --
Deferred costs, net of accumulated amortization
 of $1,841 and $1,265 at September 30, 1997 and  
 December 31, 1996, respectively....................           4,503                3,838
Other assets........................................           3,135                1,518
                                                          ----------           ----------

Total assets........................................      $  786,567           $  735,467
                                                          ----------           ----------
                                                          ----------           ----------


LIABILITIES AND PARTNERS' CAPITAL

Mortgage and notes payable..........................      $  442,156           $  436,172
Accounts payable and other liabilities..............           8,945                7,782
Distributions payable...............................           9,480                   --
Accrued interest....................................           5,327                1,417
Accrued property taxes..............................           5,306                2,912
Resident security deposits..........................           2,617                1,818
Prepaid rent........................................             838                  585
                                                          ----------           ----------
Total liabilities...................................         474,669              450,686

Minority interest...................................             799                  827

Partners' capital...................................         311,099              283,954
                                                          ----------           ----------
Total liabilities and partners' capital.............      $  786,567           $  735,467
                                                          ----------           ----------
                                                          ----------           ----------

</TABLE>

See Notes to Consolidated Financial Statements
                                       

                                 Page 3 of 25

<PAGE>

                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                       CONSOLIDATED STATEMENTS OF INCOME
    (Amounts in thousands, except for number of units and per unit amounts)
                                  (Unaudited)
                                       
                                       
<TABLE>>
<CAPTION>

                                                              THREE MONTHS ENDED                        NINE MONTHS ENDED
                                                      SEPTEMBER 30,        SEPTEMBER 30,        SEPTEMBER 30,      SEPTEMBER 30,
                                                      -------------        -------------        -------------      -------------
                                                           1997                 1996                 1997               1996
                                                           ----                 ----                 ----               ----
<S>                                                   <C>                  <C>                  <C>                <C>
Revenues:
  Rental..........................................    $    28,417          $    24,351          $    83,282        $    68,565
  Third party management fees.....................            381                  103                  611              1,054
  Interest income - investment in mortgage notes..            194                   --                  201                 --
  Interest and other..............................          2,249                1,484                5,747              4,565
                                                      -----------          -----------          -----------        -----------
Total revenues....................................         31,241               25,938               89,841             74,184

Expenses:
  Property and maintenance........................          7,709                7,367               22,143             18,759
  Real estate taxes and insurance.................          2,552                1,847                7,287              5,574
  Property management.............................            788                  721                2,328              2,429
  General and administrative......................            305                  329                  978              1,126
  Depreciation....................................          6,701                5,437               19,338             15,077
  Interest:
    Expense incurred, net of amounts capitalized..          7,587                6,077               22,534             16,693
    Amortization of deferred financing costs......            286                  174                  741                451
                                                      -----------          -----------          -----------        -----------
Total expenses....................................         25,928               21,952               75,349             60,109
                                                      -----------          -----------          -----------        -----------

Income before minority interest, gain on sale of
  real estate assets and extraordinary item.......          5,313                3,986               14,492             14,075
Gain on sale of real estate assets................          2,278                   --                7,531                 --
Minority interest.................................            (15)                 (15)                 (45)               (54)
                                                      -----------          -----------          -----------        -----------

Income before extraordinary item..................          7,576                3,971               21,978             14,021

Extraordinary item-
  loss on early extinguishment of debt............             --                   --               (1,500)                --
                                                      -----------          -----------          -----------        -----------

Net income........................................    $     7,576          $     3,971          $    20,478        $    14,021
                                                      -----------          -----------          -----------        -----------
                                                      -----------          -----------          -----------        -----------


Earnings per unit before extraordinary item.......    $      0.30          $      0.17          $      0.89        $      0.64
                                                      -----------          -----------          -----------        -----------
                                                      -----------          -----------          -----------        -----------

Earnings per unit.................................    $      0.30          $      0.17          $      0.83        $      0.64
                                                      -----------          -----------          -----------        -----------
                                                      -----------          -----------          -----------        -----------




Weighted average units outstanding................     24,915,866           23,038,163           24,583,939         21,897,381
                                                      -----------          -----------          -----------        -----------
                                                      -----------          -----------          -----------        -----------

</TABLE>


See Notes to Consolidated Financial Statements
                                       

                                 Page 4 of 25

<PAGE>

                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                  CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
    (Amounts in thousands, except for number of units and per unit amounts)
                                  (Unaudited)
                                       
<TABLE>
<CAPTION>
                                                                                                    UNAMORTIZED
                                                                        EVANS          OTHER          EMPLOYEE
                                                                      WITHYCOMBE      LIMITED        RESTRICTED
                                                        NUMBER OF    RESIDENTIAL      PARTNERS         STOCK
                                                          UNITS          INC.         CAPITAL       COMPENSATION      TOTAL
                                                       ----------    -----------      ---------     ------------   ----------

<S>                                                    <C>           <C>              <C>           <C>            <C>
Partners' capital, December 31, 1996..............     23,044,712     $  226,301      $  58,118     $    (465)     $  283,954

  Net income......................................             --         16,755          3,723            --          20,478
  Distributions  ($1.19 per unit).................             --        (24,199)        (5,445)           --         (29,644)
  Proceeds of third offering, net of underwriting
    discount and offering costs of $406...........      1,800,000         35,415             --            --          35,415
  Conversion of units to common stock.............             --          3,235         (3,235)           --              --
  Exercise of stock options.......................         36,500            731             --            --             731
  Issuance of restricted stock....................         69,775          1,435             --        (1,435)             --
  Forfeiture of restricted stock..................         (3,506)           (44)            --            --             (44)
  Amortization of deferred compensation...........             --             --             --           209             209
                                                       ----------     ----------      ---------     ---------      ----------

Partners' capital, September 30 1997..............     24,947,481     $  259,629      $  53,161     $  (1,691)     $  311,099
                                                       ----------     ----------      ---------     ---------      ----------
                                                       ----------     ----------      ---------     ---------      ----------

</TABLE>
                                       
                                       
                                       
See Notes to Consolidated Financial Statements


                                 Page 5 of 25

<PAGE>

                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)
                                  (Unaudited)
                                       
<TABLE>
<CAPTION>
                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                     -------------------------------
                                                           1997           1996
                                                           ----           ----
<S>                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income..........................................    $  20,478      $  14,021
Adjustments to reconcile net income to net cash
  provided by operating  activities:
    Depreciation and amortization...................       19,338         15,077
    Amortization of deferred financing costs and 
      bond discount.................................          807            495
    Amortization of deferred comp...................          255            360
    Minority interest...............................           45             54
    Net gain on sale of real estate assets..........       (7,531)            --
    Write-off of development and acquisition costs..          402            107
    Write-off of deferred loan costs................          294             --
Decrease (increase) in assets:
    Restricted cash.................................      (13,683)          (371)
    Accounts and notes receivable...................          744         (1,386)
    Other assets....................................       (1,548)          (160)
(Decrease) increase in liabilities:
    Accounts payable and other liabilities..........        1,129           (425)
    Accrued interest................................        3,910            141
    Accrued property taxes..........................        2,394          2,201
    Resident security deposits......................          799            158
    Prepaid rent....................................          253            341
                                                        ---------      ---------
Net cash provided by operating activities...........       28,086         30,613

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate assets......................      (54,431)      (103,443)
Sale of real estate assets..........................       24,383             --
                                                        ---------      ---------
Net cash used in investing activities...............      (30,048)      (103,443)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Third Public Offering, net of 
  expenses..........................................       35,415             --
Proceeds from Second Public Offering, net of 
  expenses..........................................           --         40,891
Proceeds from exercise of options...................          731            234
Proceeds from mortgage notes and revolving
  credit facility...................................      209,306        235,028
Principal payments on mortgage notes................     (221,706)      (178,748)
Payment for loan costs..............................       (1,700)        (1,758)
Dividends paid......................................      (20,091)       (24,963)
Minority interest distributions.....................          (73)           (96)
                                                        ---------      ---------
Net cash provided by financing activities...........        1,882         70,588
                                                        ---------      ---------

Net decrease in cash and cash equivalents...........          (80)        (2,242)
Cash and cash equivalents, beginning of period......        2,568          3,634
                                                        ---------      ---------
Cash and cash equivalents, end of period............    $   2,488      $   1,392
                                                        ---------      ---------
                                                        ---------      ---------

SUPPLEMENTAL INFORMATION
Cash paid during the period for interest............    $  18,624      $  16,500
                                                        ---------      ---------
                                                        ---------      ---------

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY
Assumption of debt related to the acquisition of
  apartment communities.............................    $  18,318      $  22,650
                                                        ---------      ---------
                                                        ---------      ---------

Origination of carryback mortgage notes arising 
  from sale of apartment communities................    $   7,188      $      --
                                                        ---------      ---------
                                                        ---------      ---------

Issuance of stock under restricted stock 
  incentive plan....................................    $      89      $      66
                                                        ---------      ---------
                                                        ---------      ---------

Conversion of units to common stock.................    $   3,234      $     888
                                                        ---------      ---------
                                                        ---------      ---------

</TABLE>

See Notes to Consolidated Financial Statements


                                 Page 6 of 25

<PAGE>
                                       
                      EVANS WITHYCOMBE RESIDENTIAL, L.P.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS, EXCEPT FOR APARTMENT DATA, NUMBER OF UNITS OR SHARES AND
                               PER UNIT AMOUNTS)
                                  (UNAUDITED)

1.  ORGANIZATION AND FORMATION OF THE COMPANY

Evans Withycombe Residential, L.P. (the "Operating Partnership") is one of 
the largest developers and managers of upscale apartment communities in 
Arizona and is expanding its operations into selected sub-markets in Southern 
California. The Operating Partnership owns and manages 51 stabilized 
multifamily apartment communities containing 14,747 units, of which 44 
stabilized multifamily apartment communities are located in Phoenix and 
Tucson, Arizona, containing a total of 12,349 units and seven stabilized 
multifamily apartment communities are located in the Southern California 
market containing a total of 2,398 units.  The Operating Partnership is also 
in the process of developing or expanding four multifamily apartment 
communities comprising 953 units in its Phoenix market.  The Operating 
Partnership is fully integrated with expertise in development, acquisitions, 
construction and management of apartment communities.  The Operating 
Partnership had approximately 600 employees at September 30, 1997.

The Operating Partnership was formed in June 1994 to develop, acquire, own 
and manage upscale multifamily apartment communities for Evans Withycombe 
Residential, Inc.  On August 17, 1994, Evans Withycombe Residential, Inc. 
(the "Company") completed an Initial Public Offering and engaged in various 
formation transactions designed to transfer ownership of the communities and 
other assets of the predecessor company to the Operating Partnership or Evans 
Withycombe Finance Partnership, L.P. (the "Financing Partnership").  The 
Operating Partnership owns 99.0 percent of Evans Withycombe Finance, L.P. and 
has a 99.0 percent economic interest in Evans Withycombe Management, Inc. 
(the "Management Company").  Evans Withycombe Residential, Inc. is the sole 
general partner of and owned a 81.9 percent and 79.3 percent interest in the 
Operating Partnership at September 30, 1997 and 1996, respectively.

In the second quarter of 1996, the Company completed the Second Public 
Offering.  The net proceeds of $40,891 from the sale of 2,088,889 shares of 
common stock from the Second Public Offering were used to purchase 2,088,889 
units in the Operating Partnership.  The Operating Partnership used the 
proceeds to repay a portion of the $150 million unsecured Revolving Credit 
Facility (Revolving Credit Facility).

In the first quarter of 1997, the Company completed the Third Public 
Offering. The net proceeds of $35,415 from the sale of 1,800,000 shares of 
common stock from the Third  Public Offering were used to purchase 1,800,000 
units in the Operating Partnership.  The Operating Partnership use the 
proceeds to repay a portion of the Revolving Credit Facility.

2.  BASIS OF PRESENTATION

The accompanying consolidated financial statements of Evans Withycombe 
Residential, L.P. include the consolidated accounts of the Operating 
Partnership, the Financing Partnership and the Management Company.

The accompanying unaudited consolidated financial statements have been 
presented by the Operating Partnership's management in accordance with 
generally accepted accounting principles for interim financial information 
and the rules and regulations of the Securities and Exchange Commission 
(SEC). Accordingly, they do not include all of the information and footnotes 
required by generally accepted accounting principles for complete financial 
statements. All significant intercompany accounts and transactions have been 
eliminated in consolidation.  In the opinion of management, all adjustments 
(consisting of normally recurring accruals) considered necessary for a fair 
presentation have been included.  The results of operations for the nine 
month period ended September 30, 1997 are not necessarily indicative of the 
results that may be expected for the year ended December 31, 1997.


                                 Page 7 of 25

<PAGE>

2.  BASIS OF PRESENTATION (CONTINUED)

These consolidated financial statements should be read in conjunction with 
the Operating Partnership's December 31, 1996 audited consolidated financial 
statements and accompanying notes in the Evans Withycombe Residential, L.P. 
Annual Report on Form 10 /A.

RECLASSIFICATION

Certain amounts in the consolidated statements of income for 1996 have been 
reclassified to conform to the 1997 presentation.

3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REAL ESTATE ASSETS AND DEPRECIATION

The Operating Partnership records its real estate assets in accordance with 
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for 
the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of". 
SFAS No. 121 requires that long-lived assets such as real estate assets, be 
reviewed whenever events or changes in circumstances indicate that the book 
value of the asset may not be recoverable.  If the sum of the estimated 
future net cash flows (undiscounted and without interest charges) from an 
asset to be held and used is less than the book value of the asset, an 
impairment loss must be recognized in the amount of the difference between 
book value and fair value as opposed to the difference between book value and 
net realizable value under the previous accounting standard.  For long-term 
assets like apartment communities, the determination of whether there is an 
impairment loss is dependent primarily on the Operating Partnership's 
estimates on occupancy, rent and expense increases, which involves numerous 
assumptions and judgments as to future events over a period of many years. At 
September 30, 1997 the Operating Partnership does not hold any assets that 
meet the impairment criteria of SFAS No. 121.

Costs related directly to the acquisition and improvement of real estate are 
capitalized. Interest costs incurred during construction of a new property 
are capitalized until completion of construction on a building-by-building 
basis. Interest capitalized was $509 and $1,479 and $608 and $2,072, for the 
three and the nine months ended September 30, 1997 and 1996, respectively.

Ordinary repairs, maintenance and costs incurred in connection with resident 
turnover such as unit cleaning, painting, and carpet cleaning are expensed as 
incurred; major replacements and betterments are capitalized and depreciated 
over their estimated useful lives. Depreciation is computed on a 
straight-line basis over the expected useful lives of depreciable property, 
which ranges from 10 to 40 years for buildings and improvements and five to 
eight years for furnishings and equipment.

The Operating Partnership reports developments and lease-up properties as 
construction-in-progress until construction on the apartment community has 
been completed and the apartment community has reached stabilized occupancy.

The Operating Partnership also reports land relating to 
construction-in-progress as land on its balance sheet.  Land associated with 
construction-in-progress was $8,272 and $12,060 at September 30, 1997 and 
December 31, 1996, respectively.

REVENUE RECOGNITION

Rental income attributable to residential leases is recorded when due from 
residents. Leases are for periods of up to one year, with rental payments due 
monthly.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all cash and cash equivalent investments 
with original maturities of three months or less, primarily consisting of 
demand deposits in banks.


                                 Page 8 of 25

<PAGE>
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RESTRICTED CASH

Restricted cash includes restricted deposits held by third party 
intermediaries for the purpose of completing an IRS Section 1031 tax free 
exchange, sinking fund accounts related to tax exempt bonds, property taxes 
and escrow accounts.

DEFERRED COSTS

Costs incurred in obtaining long-term financing are deferred. These costs are 
amortized on the effective interest method over the terms of the related debt 
agreements.

INCOME TAXES

The Operating Partnership has made an election to be taxed as a Partnership 
and accordingly, no federal or state income taxes have been provided in the 
accompanying consolidated financial statements.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with 
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the amounts reported in the 
consolidated financial statements and accompanying notes. Actual results 
could differ from those estimates.

EARNINGS PER UNIT

Earnings per unit has been computed by dividing net income for the three and 
the nine months ended September 30, 1997 and 1996, respectively, by the 
weighted average number of units outstanding during the period.

In February 1997, the Financial Accounting Standards Board issued SFAS No. 
128, "Earnings per Share" which is required to be adopted on December 31, 
1997.  At that time, the Operating Partnership will be required to change the 
method currently used to compute earnings per unit and to restate all prior 
periods presented.  Under the new requirements for calculating basic earnings 
per unit, the dilutive effect of stock options will be excluded.  The impact 
of SFAS No. 128 is not expected to be material.

4.  MORTGAGE NOTES RECEIVABLE

The Operating Partnership's mortgage notes receivable consists of a $7.2 
million mortgage note receivable at a fixed rate of 8.0 percent secured by a 
first mortgage lien on The Pines Apartments, matures November 1, 1997.  The 
mortgage note receivable maturity date can be extended 30 days to December 1, 
1997 at the option of the borrower.

                                 Page 9 of 25
<PAGE>

5.  MORTGAGE AND NOTES PAYABLE

The Operating Partnership's mortgage notes and notes payable consists of the 
following:

<TABLE>
<CAPTION>

                                                                                   SEPTEMBER 30,      DECEMBER 31,
                                                                                       1997               1996
                                                                                       ----               ----
  <S>                                                                               <C>                <C>
  CONVENTIONAL MORTGAGE LOANS:
  Mortgage note payable at a fixed interest rate of 8.0 percent, monthly            $     --           $  5,380
  principal and interest payments.  The unpaid principal balance was repaid on
  January 9, 1997.                                                            

  Mortgage note payable at a fixed interest rate of 8.0 percent, monthly                  --              4,340
  principal and interest payments. The unpaid principal balance was repaid on
  January 9, 1997.                                                           

  Mortgage note payable at a fixed interest rate of 8.0 percent,  monthly                 --              8,951
  principal and interest payments. The unpaid principal balance was repaid on
  January 9, 1997.                                                          

  Mortgage note payable at a fixed interest rate of 8.28 percent, monthly                 --              6,225
  principal and interest payments.  The unpaid principal balance was repaid on
  January 31, 1997.                                                           

  Mortgage note payable at a fixed interest rate of 9.95 percent, monthly                 --             12,065
  principal and interest payments.  The unpaid principal balance was repaid on
  July 15, 1997.                                                                 

  Mortgage note payable at a fixed interest rate of 9.3 percent, monthly                  --              3,182
  principal and interest payments.  The unpaid principal balance was repaid on
  July 15, 1997.

  Mortgage note payable at fixed interest rates ranging from 6.5 percent to 9.0       18,219                --
  percent,  monthly principal and interest payments through August 17, 2004,
  remaining balance due August 17, 2004.  Interest rate increases 0.25 percent
  annually each September.  Secured by a first mortgage lien on one apartment
  community.  The mortgage note can be repaid at any time at the Operating
  Partnership's option without prepayment penalty.                          

  $50 million securitized debt at a fixed interest rate of 7.17 percent, monthly      49,117            49,509
  principal and interest payments through January 1, 2006, remaining balance due
  January 1, 2006.  Secured by first mortgage liens on 5 apartment communities.
                                                                                     -------           -------
                                                                                      67,336            89,652

  MORTGAGE LOAN CERTIFICATES:
  Securitized debt at a fixed stated interest rate of 7.98 percent, with an          130,586           130,520
  effective interest rate of 8.05 percent, monthly interest payments only through
  August 1, 2001. Secured by first mortgage liens on 21 communities.  The face
  amount of $131 million is  due August 1, 2001.  The balance is net of
  unamortized discount of $414 and $480 at September 30, 1997 and December 31,
  1996, respectively.                                                     

  SENIOR UNSECURED NOTES:
  $75 million senior unsecured notes with a fixed coupon rate of 7.50 percent.        74,610                --
  Semiannual interest only payments due April 15 and October 15 commencing
  October 15, 1997.  Face amount of $75 million is due April 15, 2004.  The
  balance is net of an unamortized discount of $390 at September 30, 1997.  The
  effective interest rate inclusive of the benefit of a treasury lock transaction
  is 7.18 percent.                                                         

  $50 million senior unsecured notes with a fixed coupon rate of 7.625 percent.       49,624                --
  Semiannual interest only payments due April 15 and October 15 commencing
  October 15, 1997.  Face amount of $50 million is due April 15, 2007.  The
  balance is net of an unamortized discount of $375 at September 30, 1997.  The
  effective interest rate inclusive of the benefit of a treasury lock transaction
  is 7.36 percent.                                                                   
                                                                                     -------           -------
                                                                                     124,234                --

</TABLE>

                                 Page 10 of 25

<PAGE>

5.  MORTGAGE AND NOTES PAYABLE (CONTINUED)

<TABLE>
<CAPTION>

                                                                                   SEPTEMBER 30,      DECEMBER 31,
                                                                                       1997               1996
                                                                                       ----               ----
  <S>                                                                               <C>                <C>
  TAX EXEMPT BONDS:
  $17.3 million tax exempt bonds with a floating interest rate based on the tax     $ 17,300           $ 17,300
  exempt note rate set by the remarketing agent, or at the option of the
  Operating Partnership can convert to a fixed rate as determined by the
  remarketing agent.  Secured by a $17.5 million direct pay letter of credit,
  interest payments only, matures December 1, 2007 (Effective interest rate of
  5.61 percent at September 30, 1997).                                   

  $22.6 million tax exempt bonds with a floating interest rate based on the tax       22,650             22,650
  exempt note rate set by the remarketing agent, interest payments only.  Secured
  by a $22.8 million direct pay letter of credit, matures February 1, 2016.
  (Effective interest rate of 5.58 percent at September 30, 1997).         

  $24.05 million tax exempt bonds with a floating interest rate based on the tax      24,050             24,050
  exempt note rate set by the remarketing agent, interest payments only.  Secured
  by a $24.4 million direct pay letter of credit, matures August 1, 2005.
  (Effective interest rate of 5.29 percent at September 30, 1997).         
                                                                                     -------           -------
                                                                                      64,000            64,000

  REVOLVING CREDIT FACILITY:
  $150 million unsecured Revolving Credit Facility with floating interest rate        56,000           152,000
  based on LIBOR plus 1.15 percent or at the option of the Operating Partnership
  at prime rate, interest payments only.  Matures September 24, 1999 (Effective
  interest rate of 6.92 percent at September 30, 1997).                  
                                                                                     -------           -------
                                                                                    $442,156          $436,172
                                                                                     -------           -------
                                                                                     -------           -------

</TABLE>

  Scheduled principal payments on debt, assuming that the Operating Partnership
  exercises its options to extend the maturity date on the Revolving Credit
  Facility, are as follows:

<TABLE>
<CAPTION>

                 ----------------------------------------------------------------------------------------
                      MORTGAGE     MORTGAGE       SENIOR                        REVOLVING
                       NOTES         LOAN        UNSECURED     TAX-EXEMPT        CREDIT
                      PAYABLE    CERTIFICATES      NOTES          BONDS         FACILITY        TOTAL
                 ----------------------------------------------------------------------------------------
  <S>                 <C>         <C>            <C>            <C>             <C>           <C>      
  1997                $   154     $     --       $     --       $    --         $    --       $    154
  1998                    784           --             --            --              --            784
  1999                    831           --             --            --          56,000         56,831
  2000                    882           --             --            --              --            882
  2001                    937      130,586             --            --              --        131,523
  Thereafter           63,748           --        124,234        64,000              --        251,982
                 ----------------------------------------------------------------------------------------
   Total              $67,336     $130,586       $124,234       $64,000         $56,000       $442,156
                 ----------------------------------------------------------------------------------------

</TABLE>

  On June 13, 1997, the Operating Partnership amended its existing $225 million
  Revolving Credit Facility with a bank group to decrease the commitment amount
  from $225 million to $150 million and decrease the interest rate from LIBOR
  plus 1.50 percent to LIBOR plus 1.15 percent.  The Revolving Credit Facility
  provides funding for working capital, construction activities and 
  acquisitions.
  
  The Operating Partnership has three direct pay letters of credit of $17,500,
  $22,800 and $24,400 which serve as a credit enhancement for the tax exempt
  bonds.  The letters of credit are secured by a first mortgage lien on four
  apartment communities.
  
  In January 1997, the Operating Partnership extinguished the debt on four
  mortgages with unpaid principal balances of approximately $25,000 with 
  proceeds from the Revolving Credit Facility.  As a result, the Operating 
  Partnership incurred a loss from the early extinguishment of debt of 
  approximately $1,500.


                                 Page 11 of 25

<PAGE>
  
6.  DISTRIBUTIONS
  
On October 15, 1997, the Operating Partnership paid a distribution of $0.38 
per unit ($9,480) to unitholders of record as of September 30, 1997.

7.  MANAGEMENT FEES

The Operating Partnership, through the Management Company, performs 
management services for certain unaffiliated communities. Management fees 
received from managed communities were $380 and $102 for the three months 
ended September 30, 1997 and 1996 and $610 and $1,053 for the nine months 
ended September 30, 1997 and 1996, respectively.  The nine months ended 
September 30, 1997 and 1996 balance includes a one time non-recurring $250 
and $500 termination fee received from the sale of management contracts, 
respectively.

8.  STOCK INCENTIVE PLAN

STOCK OPTION PLAN

The Company has elected to follow Accounting Principles Board Opinion No. 25, 
"Accounting for Stock Issued to Employees" (APB 25) and related 
interpretations in accounting for its employee stock options because the 
alternative fair value accounting provided for under SFAS No. 123, 
"Accounting for Stock-Based Compensation," requires use of option valuation 
models that were not developed for use in valuing employee stock options.  
Under APB 25, because the exercise price of the Company's employee stock 
options equals the market price of the underlying stock on the date of grant, 
no compensation expense is recognized. Proforma information regarding net 
income and earnings per share is required by SFAS No. 123 and is provided by 
the Company in its annual report.

Initially 1,830,000  shares of the Company's common stock were reserved for 
issuance under the plan.  Information with respect to stock options granted 
during the nine months ended September 30, 1997 is as follows:

                                                                     Weighted
                                                                     Average
                                                                  Exercise Price
                                                     Shares          Per Share
                                                     ------          ---------

Options outstanding at December 31, 1996             908,850          $20.63
     Exercised                                       (36,500)          20.02
     Granted                                         266,500           20.58
     Forfeited                                       (33,588)          20.81
                                                   ---------          ------
Options outstanding at September 30, 1997          1,105,262          $20.70
                                                   ---------          ------
                                                   ---------          ------

Options exercisable:
     December 31, 1996                               357,700          $19.98
     September 30, 1997                              601,664          $20.40


Options to purchase 724,738 and 901,650 shares of common stock were available 
for grant under the plan at September 30, 1997 and December 31, 1996, 
respectively.

EXECUTIVE STOCK INCENTIVE PLAN

Prior to the Initial Public Offering, the Company's predecessor Evans 
Withycombe, Inc. had in place an Executive Incentive Deferred Compensation 
Plan (the "Executive Plan").  Pursuant to the Executive Plan, certain 
executives of Evans Withycombe, Inc. (the "Participants") were granted an 
aggregate of 98,500 shares of restricted stock from the Company one year 
following the Initial Public Offering if they remained employees of the 
Company during such period.  One-third of the shares vest on each of the 
second, third and fourth anniversaries of the Initial Public Offering based 
on an offering price per share of $20.  The expense is being amortized 
ratably over the 


                                 Page 12 of 25

<PAGE>

periods in which the shares vest and an expense of $35 and $48 and $95 and 
$360 for the three and nine months ended September 30, 1997 and 1996, 
respectively, is included in general and administrative expense.  Information 
with respect to the executive restricted stock incentive plan is as follows:

                                                                       Shares
                                                                       ------
      
      Restricted stock, net of forfeitures, at December 31, 1996       74,346
      Forfeited                                                        (1,174)
                                                                       ------
      Restricted stock at September 30, 1997                           73,172
                                                                       ------
                                                                       ------
      
      Number of shares vested at September 30, 1997                    53,325

RESTRICTED STOCK PROGRAM

The Company has awarded 45,220 shares, net of forfeitures, of restricted 
stock to certain employees of the Company under its 1994 Stock Incentive 
Plan.  The restricted stock vests ratably over periods ranging from one to 
seven years from the date of the award and are based on the price of the 
stock at the award date which ranges from $19.13 to $22.25.  The related 
expense will be amortized ratably over the periods in which the shares vest 
and an expense of $92 and $34 and $168 and $66, for the three and nine months 
ended September 30, 1997 and 1996, respectively, is included in general and 
administrative expense.

The Company uses the proceeds from the exercise of stock options and the 
issuance of restricted stock to acquire a similar number of units in the 
Operating Partnership.

9.  MINORITY INTEREST

Evans Withycombe Finance, Inc., a wholly owned subsidiary of Evans Withycombe 
Residential, Inc., owns a one percent interest in the Financing Partnership 
at September 30, 1997 as follows:

                                                          Dollars
                                                          -------
      
      Balance at December 31, 1996                          $827
      Allocation of net income                                45
      Distributions paid                                     (73)
                                                           ------
      Balance at September 30, 1997                         $799
                                                           ------
                                                           ------

10.  MERGER AND RECENT DEVELOPMENTS

The Operating Partnership has entered into an Asset Contribution Agreement, 
dated as of August 27, 1997 (the "Agreement"), with Equity Residential 
Operating Partnership ("EROP") pursuant to which Operating Partnership 
agreed, subject to certain conditions, to contribute all of its assets to 
EROP in exchange for units of limited partnership interest in EROP following 
the Merger (as defined below)  The Asset Contribution Agreement was entered 
into in connection with the contemplated merger ("Merger") of the Company, 
the sole general partner of Operating Partnership, with and into Equity 
Residential Property Trust ("EQR"), a Maryland real estate investment trust 
and sole general partner of EROP, pursuant to an Agreement and Plan of Merger 
between the Company and EQR dated August 27, 1997.   The Asset Contribution 
Agreement provides for the exchange of all outstanding limited partnership 
units in the Operating Partnership for limited partnership units in EROP, at 
an exchange ratio of 0.50 units of EROP for each unit of the Operating 
Partnership.

The Merger is subject to the approval of the shareholders of both EQR and the 
Company and the Asset Contribution Agreement is subject to the approval of 
the Operating Partnership's limited partners.


                                 Page 13 of 25

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
         (Amounts in thousands, except apartment data and number of shares and
         units)
     
The following discussion, which is based primarily on the consolidated 
financial statements of Evans Withycombe Residential, L.P. should be read in 
conjunction with the consolidated financial statements appearing elsewhere in 
this report.  The consolidated financial statements of the Operating 
Partnership consist of the Operating Partnership, the Financing Partnership, 
and the Management Company.

OVERVIEW

When used in the following discussion, the words "believes," "anticipates," 
"expects," and similar expressions are intended to identify forward-looking 
statements.  Such statements are subject to certain risks and uncertainties 
which could cause actual results to differ materially from those projected, 
including, but not limited to, the actual timing of the Operating 
Partnership's planned acquisitions and developments, the strength of the 
local economies in the sub-markets in which the Operating Partnership 
operates, the Operating Partnership's ability to successfully manage its 
planned expansion into Southern California and the culmination of its pending 
merger with EROP. Readers are cautioned not to place undue reliance on these 
forward-looking statements, which speak only as of the date hereof.  The 
Operating Partnership undertakes no obligation to publicly release any 
revisions to these forward-looking statements which may be made to reflect 
events or circumstances after the date hereof or to reflect the occurrence of 
unanticipated events.

RESULTS OF OPERATIONS - CONSOLIDATED FINANCIAL STATEMENTS

The results of operations for the three and the nine months ended September 
30, 1997 and 1996, respectively, were significantly affected by acquisitions, 
developments and expansions.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS 
ENDED SEPTEMBER 30, 1997 TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996

<TABLE>
<CAPTION>

                                    THREE MONTHS ENDED                     NINE MONTHS ENDED
                                -----------------------                 -----------------------
                                     SEPTEMBER 30,                           SEPTEMBER 30,              
                                -----------------------    PERCENTAGE   -----------------------   PERCENTAGE
                                  1997           1996        CHANGE       1997           1996       CHANGE
                                --------       --------    ----------   --------       --------   ----------
<S>                             <C>            <C>         <C>          <C>           <C>         <C>      
Rental income                   $ 28,417       $ 24,351        16.7%     $ 83,282     $ 68,565       21.5%
Third party management fees          381            103       269.9           611        1,054      (42.0)
Interest income - investment     
  in mortgage notes                  194             --         N/A           201           --        N/A
Interest and other                 2,249          1,484        51.5         5,747        4,565       25.9
                                --------       --------       -----      --------      -------       ----
     Total revenues               31,241         25,938        20.4        89,841       74,184       21.1

Property operating and 
  maintenance (1)                 10,261          9,214        11.4        29,430       24,333       20.9
Property management                  788            721         9.3         2,328        2,429       (4.2)
General and administrative           305            329        (7.3)          978        1,126      (13.3)
Interest                           7,873          6,251        25.9        23,275       17,144       35.8
Depreciation and amortization      6,701          5,437        23.2        19,338       15,077       28.3
                                --------       --------       -----      --------      -------       ----
Total expenses                    25,928         21,952        18.1        75,349       60,109       25.4
                                --------       --------       -----      --------      -------       ----

Income before minority 
  interest, gain on sale
  of real estate assets and
  extraordinary item            $  5,313       $  3,986        33.9%     $ 14,492     $ 14,075        3.0%
                                --------       --------       -----      --------      -------       ----
                                --------       --------       -----      --------      -------       ----

Weighted average monthly 
  rental revenue per unit, 
  net of concessions            $    697       $    664                  $    682     $    678
                                --------       --------                  --------     --------
                                --------       --------                  --------     --------

Weighted average number of 
  apartments                      14,927         13,325                    14,989       12,519
                                --------       --------                  --------     --------
                                --------       --------                  --------     --------

Economic occupancy (2)              92.2%          89.3%                     89.1%        90.0%
                                --------       --------                  --------     --------
                                --------       --------                  --------     --------

</TABLE>


                                 Page 14 of 25

<PAGE>

      (1) The Operating Partnership defines property operating and maintenance
          expense as property and maintenance, real estate taxes and insurance.
      (2) Stabilized properties only.

Rental revenues increased by $4,066 and $14,717 or 16.7 percent and 21.5 
percent for the three and nine months ended September 30, 1997 as compared to 
the similar period in 1996 as a result of increases in the weighted average 
number of apartments and the weighted average monthly revenue per occupied 
apartment, and a change in economic occupancy.  The Operating Partnership 
believes that the increase in rental income was largely attributable to the 
acquisitions and stabilization of properties developed by the Operating 
Partnership in its rental markets.

Third party management fees increased $278 or 269.9 percent for the three 
months ended September 30, 1997 as a result of a $250 gain on the sale of a 
management contract and decreased $442 or 42.0 percent for the nine months 
ended September 30, 1997 due to the sale of several properties in the 
management portfolio in 1996 including a $500 one time termination fee for 
the sale of management contracts received in the second quarter of 1996.

Interest and other income for the three and nine months ended September 30, 
1997 increased $765 and $1,182 or 51.5 percent and 25.9 percent as compared 
to the similar period in 1996 as a result of an increase in ancillary income 
related to the weighted average number of units, additional interest income 
from funds held by third party intermediaries, and cable revenue sharing.

Property operating and maintenance expense increased due to the increase in 
the weighted average number of apartments for the three and the nine months 
ended September 30, 1997 as compared to the same period in 1996, respectively.

Interest expense increased due to an increase in debt resulting from 
acquisitions and the increase in weighted average number of units in the 
portfolio.  The Operating Partnership capitalized $509 and $1,479 of interest 
for the three and nine months ended September 30, 1997 compared to $608 and 
$2,072 for the same periods in 1996 due to a decrease in construction 
activity. Interest costs incurred during construction of a new property are 
capitalized until completion of construction on a building-by-building basis.

"SAME STORE" PORTFOLIO

The Operating Partnership defines same store portfolio as those communities 
that reached stabilized occupancy prior to January 1, 1996.   Same store 
portfolio consists of 38 stabilized properties containing 10,319 apartment 
units that were owned by the Operating Partnership for the three months and 
nine months ended September 30, 1997 and 1996.  Same store portfolio was 
adjusted to reflect the sale of Deer Creek Village, The Pines and Los Arboles 
apartment communities.

<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                  SEPTEMBER 30,                           SEPTEMBER 30,         
                                            ------------------------   PERCENTAGE   ------------------------    PERCENTAGE
                                               1997           1996       CHANGE        1997           1996        CHANGE
                                            ---------      ---------   ----------   ---------      ---------    ----------
<S>                                         <C>            <C>         <C>          <C>            <C>          <C>
Rental income                               $  19,038      $  18,561      2.6%      $  55,763      $  56,082      (0.6)%
Other income                                    1,110          1,044      6.3           3,203          2,973       7.7
                                            ---------      ---------      ---       ---------      ---------      -----
                                               20,148         19,605      2.8          58,966         59,055      (0.2)
Property operating and maintenance              7,080          7,053      0.4          20,208         19,725       2.4
                                            ---------      ---------      ---       ---------      ---------      -----
Property net operating income               $  13,068      $  12,552      4.1%      $  38,758      $  39,330      (1.5)%
                                            ---------      ---------      ---       ---------      ---------      -----
                                            ---------      ---------      ---       ---------      ---------      -----

Weighted average monthly rental 
  revenue per unit, net of concessions      $     668      $     667                $     674      $     670
                                            ---------      ---------                ---------      ---------
                                            ---------      ---------                ---------      ---------

Economic occupancy                               92.2%          89.3%                    89.1%          90.0%
                                            ---------      ---------                ---------      ---------
                                            ---------      ---------                ---------      ---------

</TABLE>

                                 Page 15 of 25
<PAGE>

Rental income for the three months ended September 30, 1997 increased $477 
and decreased $319 for the nine months ended September 30, 1997 as compared 
to the same period in 1996 as a result of a change in the average economic 
occupancy. Other income for the three and nine months ended September 30, 
1997 increased as a result of higher ancillary income such as redecoration 
and application fees, and lease termination fees.

COMMUNITIES STABILIZED LESS THAN TWO YEARS

Communities stabilized less than two years consist of the development of four 
new apartment communities and the expansion of four existing apartment 
communities by the Operating Partnership, containing an aggregate of 1,444 
new apartment units that reached stabilized occupancy during the year ended 
December 31, 1996.  Increases in the three and nine month periods ended 
September 30, 1997 as compared to the three and nine month periods ended 
September 30, 1996 are the result of the increase in the weighted average 
number of apartments.

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                             -----------------------------------------------------
                                                1997           1996           1997           1996
                                             --------       --------       --------       --------
     <S>                                     <C>            <C>            <C>            <C>  
     Rental income                           $  3,020       $  2,768       $  9,017       $  6,948
     Other income                                 183            180            479            442
                                             --------       --------       --------       --------
                                                3,203          2,948          9,496          7,390
     
     Property operating and maintenance         1,052            873          2,969          2,295
                                             --------       --------       --------       --------
     
     Property net operating income           $  2,151       $  2,075       $  6,527       $  5,095
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------
     Weighted average number of apartments      1,444          1,354          1,444          1,136
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------

</TABLE>

DEVELOPMENT AND LEASE UP COMMUNITIES

Development and lease up communities consist of the development of six new 
apartment communities and the expansion of two existing apartment communities 
containing an aggregate of 2,031 apartment units that were in the 
"construction," "development," or "lease up" stage during 1997 and therefore, 
not considered to have achieved stabilized occupancy for all of the periods 
presented.  Increases in the three and the nine month periods ended September 
30, 1997 as compared to the three and the nine month periods ended September 
30, 1996 are the result of an increase in the weighted average number of 
apartments.

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                             -----------------------------------------------------
                                                1997           1996           1997           1996
                                             --------       --------       --------       --------
     <S>                                     <C>            <C>            <C>            <C>  
     Rental income                           $  2,041       $  410         $  5,090       $  513
     Other income                                 150           79              404          104
                                             --------       ------         --------       ------
                                                2,191          489            5,494          617
     
     Property operating and maintenance           649          295            1,696          420
                                             --------       ------         --------       ------
     
     Property net operating income           $  1,542       $  194         $  3,798       $  197
                                             --------       ------         --------       ------
                                             --------       ------         --------       ------

     Weighted average number of 
       apartments in lease up                   1,026          251              806          107
                                             --------       ------         --------       ------
                                             --------       ------         --------       ------

</TABLE>


                                 Page 16 of 25

<PAGE>

ACQUISITIONS

Acquisitions consist of six properties containing 1,906 apartment units, 
which have been acquired by the Operating Partnership since January 1, 1996.  
The Operating Partnership acquired three apartment communities containing 912 
apartment units during the third quarter of 1996.  There were no acquisitions 
of apartment communities during the third quarter of 1997.

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                             -----------------------------------------------------
                                                1997           1996           1997           1996
                                             --------       --------       --------       --------
     <S>                                     <C>            <C>            <C>            <C>  
     Rental income                           $  3,908       $  1,400       $  10,647      $  1,418
     Other income                                 193             35             404            35
                                             --------       --------       --------       --------
                                                4,101          1,435          11,051         1,453
     
     Property operating and maintenance         1,321            513           3,585           515
                                             --------       --------       --------       --------
     
     Property net operating income           $  2,780         $  922        $  7,466        $  938
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------
     Weighted average number of apartments      1,906            667           1,795           222
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------

</TABLE>

DISPOSITIONS

Dispositions consist of three properties containing 734 apartment units, 
which were sold by the Operating Partnership in 1997.  The Operating 
Partnership sold one apartment community, containing 232 units, in the third 
quarter of 1997 and two apartment communities, containing 502 units, in the 
second quarter of 1997. There were no dispositions of apartment communities 
during 1996.

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                             -----------------------------------------------------
                                                1997           1996           1997           1996
                                             --------       --------       --------       --------
     <S>                                     <C>            <C>            <C>            <C>  
     Rental income                           $  410         $  1,212       $  2,766       $  3,604
     Other income                                14               57            127            155
                                             --------       --------       --------       --------
                                                424            1,269          2,893          3,759
     
     Property operating and maintenance         159              480            973          1,378
                                             --------       --------       --------       --------
     
     Property net operating income           $  265           $  789       $  1,920       $  2,381
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------
     Weighted average number of apartments      232              734            567            734
                                             --------       --------       --------       --------
                                             --------       --------       --------       --------

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY

The Operating Partnership's net cash provided by operating activities of 
$30.6 million for the nine months ended September 30, 1996 decreased to $28.1 
million for the nine months ended September 30, 1997 as a result of cash 
related to the sale of apartment communities being held by a third party 
intermediary in order to complete a tax free exchange.  Net cash used in 
investing activities decreased from $103.4 million for the nine months ended 
September 30, 1996 to $30.0 million for the nine months ended September 30, 
1997.  The decrease is the result of a reduction in construction activity for 
the first nine months of 1997 of $32.5 million as compared to $66 million for 
the first nine months of 1996 and a decrease in cash used to fund the 
Operating Partnership's acquisition activity from $34.9 million to $17.5 
million in the first nine months of 1996 as compared to the first nine months 
of 1997 and the proceeds received from the sale of three apartment 
communities.  Net cash provided by financing activities decreased from $70.6 
million for the nine months ended September 30, 1996 to $1.9 million for the 
nine months ended September 30, 1997 due to less borrowings under the 
Revolving Credit Facility as a result of the reduction in construction and 
acquisition activity.


                                 Page 17 of 25

<PAGE>

The Operating Partnership expects to meet its short-term liquidity 
requirements, including capital expenditures relating to maintaining 
Stabilized Communities, generally through its net cash provided by operations 
and borrowings under its credit arrangements and anticipates meeting 
long-term liquidity requirements, such as scheduled debt maturities, 
financing of construction and development activities and possible 
acquisitions through long-term unsecured borrowings, issuance of additional 
equity securities of the Operating Partnership or debt securities of the 
Operating Partnership, or, possibly in connection with acquisitions of land 
or existing properties, issuance of Units of the Operating Partnership.  The 
Operating Partnership believes that its net cash provided by operations will 
be adequate and anticipates that it will continue to be adequate to meet both 
operating requirements and payment of dividends by the Operating Partnership 
in accordance with the Company's REIT requirements in both the short and the 
long term.

The information in the immediately preceding paragraph is forward looking and 
involves risks and uncertainties that could significantly impact the 
Operating Partnership's expected liquidity requirements in the short and long 
term. While it is impossible to itemize the many factors and specific events 
that could affect the Operating Partnership's outlook for its liquidity 
requirements, such factors would include the actual timing of the Operating 
Partnership's planned development of new, and expansion of existing, 
communities; acquisitions of existing apartment communities; the actual costs 
associated with such developments and acquisitions; the strength of the local 
economies in the sub-markets in which the Operating Partnership operates and 
the culmination of its pending merger with EROP.  The Operating Partnership 
is further subject to risks relating to the limited geographic area in which 
it operates and its ability to successfully manage its planned expansion into 
Southern California, a market in which it did not have any operating history 
prior to 1995.  Higher than expected costs, delays in development of 
communities, a downturn in the local economies and/or the lack of growth of 
such economies could reduce the Operating Partnership's revenues and increase 
its expenses, resulting in a greater burden on the Operating Partnership's 
liquidity than that which the Operating Partnership has described above.

CAPITAL RESOURCES

At September 30, 1997, the Operating Partnership's total debt was 
approximately $442.2 million and the Operating Partnership's debt to total 
market capitalization (Market Equity plus Debt) was approximately 40.2 
percent.  The Operating Partnership received an investment grade security 
rating of "BBB-" from Standard & Poor's Corporation,  "Baa3" from Moody's 
Investors Service, Inc., and " BBB-" from Fitch Investors Service, L.P. in 
December 1996 with respect to prospective issuances of senior unsecured debt.

A security rating is not a recommendation to buy, sell or hold securities and 
may be subject to revision or withdrawal at any time by the assigning rating 
organization, and each rating should be evaluated independently of any other 
rating.  A rating of (a) BBB- from Standard & Poor's Corporation indicates 
that the obligations of the Operating Partnership are in the lower range of 
those obligations that exhibit adequate protection parameters, (b) Baa3 from 
Moody's Investors Service, Inc. indicates that the obligations of the 
Operating Partnership are considered to be in the lower range of medium-grade 
obligations, which are not considered to be highly protected or poorly 
secured and (c) BBB- from Fitch Investors Service, L.P. indicates that the 
obligations of the Operating Partnership are considered to be in the lower 
range of obligations considered to be of investment grade and of satisfactory 
credit quality and that its ability to pay interest and to repay principal is 
considered to be adequate.

CONVENTIONAL MORTGAGE LOANS

Conventional mortgage loans are comprised of one fixed rate loan at September 
30, 1997 which is collateralized by a first mortgage lien on an apartment 
community included in real estate assets.  The mortgage is payable in monthly 
installments of principal and interest and matures on August 17, 2004.  The 
conventional mortgage loan aggregated $18.2 million at September 30, 1997 
with an interest rate of 6.5 percent.  In January 1997, the Operating 
Partnership extinguished the debt on four mortgages with unpaid principal 
balances of approximately $25.0 million with proceeds from the Revolving 
Credit Facility. As a result, the Operating Partnership incurred a loss from 
the early extinguishment of debt of approximately $1.5 million.  On July 15, 
1997, the Operating Partnership repaid two additional mortgages with unpaid 
principal balances of approximately $15.2 million with proceeds from the 
Revolving Credit Facility.  There were no prepayment penalties associated 
with the repayment of these two mortgages.

                                 Page 18 of 25
<PAGE>

In December 1995, the Operating Partnership entered into a ten year $50 
million fixed rate loan from an insurance company that bears interest at 7.17 
percent, with principal and interest due monthly based on a 25-year 
amortization schedule beginning January 1, 1996 through January 1, 2006, and 
the remaining unpaid principal balance due January 1, 2006.  The loan is 
secured by a first deed of trust on five apartment communities.  Proceeds 
from the loan were used to pay down the outstanding balances on the Revolving 
Credit Facility. The outstanding debt was $49.1 million at September 30, 
1997.  The loan is convertible to unsecured upon the Operating Partnership 
achieving an investment grade rating of BBB or better.

MORTGAGE LOAN CERTIFICATES

The Operating Partnership, through the Financing Partnership, borrowed $102.0 
million under a securitized loan in August 1994.  During January 1995, the 
Operating Partnership borrowed the balance of $29.0 million (increasing the 
total to $131.0 million).  The loan is secured by the first mortgage liens on 
21 Communities.  The $102.0 million was issued at 99.97 percent of its face 
amount and the $29.0 million was issued at 97.9375 percent of its face amount 
and will mature on August 1, 2001.  Although both amounts bear interest at 
7.98 percent, the $29.0 million has an effective interest rate of 8.40 
percent due to the discount.  The weighted average effective interest rate of 
the total $131 million loan is 8.05 percent.  The bonds have been rated "AA" 
by Standard & Poor's.

In March 1997, the Operating Partnership substituted two apartment 
communities, Sonoran and The Heritage, as collateral for the securitized loan 
in exchange for releasing the liens on three apartment communities, The Pines 
and Deer Creek Village, which were sold in June 1997, and La Valencia.

SENIOR UNSECURED NOTES

On April 2, 1997,  the Operating Partnership completed the sale of $75 
million senior unsecured notes priced at 99.44 percent of par with a coupon 
rate of 7.50 percent due April 15, 2004 and $50 million senior unsecured 
notes priced at 99.21 percent of par with a coupon rate of 7.625 percent due 
April 15, 2007. Proceeds to the Operating Partnership from the sale of the 
notes, net of underwriter's discount and out-of-pocket costs, was 
approximately $122.8 million. In anticipation of the Offering, the Operating 
Partnership entered into two forward treasury lock agreements on February 25, 
1997.  The treasury lock agreements were settled concurrently with the 
completion of the sale of the senior unsecured notes on April 2, 1997, and 
the Operating Partnership received proceeds from the settlement of the 
treasury lock agreements of approximately $3 million.  The Operating 
Partnership is amortizing the gain on the settlement of the treasury lock 
transaction as a reduction in interest expense on the notes using the 
effective interest rate method.  The effective interest rates on the senior 
unsecured notes inclusive of the benefit from the settlement of the treasury 
lock transaction is 7.18 percent and 7.36 percent, respectively.  The 
Operating Partnership used the proceeds from the sale of the notes and 
settlement of the treasury lock transaction to pay down its Revolving Credit 
Facility.

TAX EXEMPT BONDS

Tax exempt bonds were comprised of three floating rate bonds based on the tax 
exempt note rate set by the respective remarketing agents (or, at the option 
of the Operating Partnership at a fixed rate determined by the remarketing 
agents).  The bonds are secured by letters of credit which are secured by 
first mortgage liens on four apartment communities.  The tax exempt bonds 
have monthly interest only payments and mature at various dates through 2016. 
The tax exempt bonds aggregated $64.0 million at September 30, 1997 with 
interest rates ranging from 5.29 percent to 5.61  percent.

REVOLVING CREDIT FACILITY

On June 13, 1997, the Operating Partnership amended its existing $225 million 
unsecured Revolving Credit Facility with a bank group to decrease the 
commitment amount from $225 million to $150 million and decrease the interest 
rate from a floating rate of London Inter Bank Offered Rate (LIBOR ) plus 150 
basis points (100 basis points equals one percent) to 115 basis points (or, 
at the option of the Operating Partnership, at the prime rate announced by 
the banks).  The Revolving Credit Facility  has a term of three years which 
expires in September 1999, with an option to extend for one year and provides 
for monthly payments of interest only.  It will be used to 

                                 Page 19 of 25
<PAGE>

finance acquisitions, to fund construction and development and renovation 
costs, and for working capital purposes.  At September 30, 1997, there was 
$56.0 million outstanding on the Revolving Credit Facility, with an effective 
interest rate of 6.92 percent. The Revolving Credit Facility contains 
customary representations, covenants and events of default, including a 
limitation which restricts dividends to 95 percent of Funds From Operations, 
as defined.  The Operating Partnership does not expect that the covenants 
will affect its ability to pay dividends in accordance with its current 
dividend policy or the Company's ability to maintain a REIT status.

The table below outlines the Operating Partnership's debt structure as of 
September 30, 1997.

                                       OUTSTANDING      WEIGHTED AVERAGE
                                         BALANCE          INTEREST RATE

FIXED RATE DEBT:
  Mortgage Debt:
    Conventional...................     $  67,336              6.98%
    Mortgage Loan Certificates.....       130,586              8.05
  Unsecured:
    $75 million senior notes.......        74,610              7.18
    $50 million senior notes.......        49,624              7.36
                                        ---------              ----
      Total Fixed Rate Debt........       322,156              7.51

VARIABLE RATE DEBT:
  Tax Exempt Bonds.................        64,000              5.38
  Revolving Credit Facility........        56,000              6.92
                                        ---------              ----
      Total Variable Rate Debt.....       120,000              6.10
                                        ---------              ----
      Total Debt...................    $  442,156              7.12%
                                        ---------              ----
                                        ---------              ----

The Operating Partnership had 6,164 unencumbered apartment units related to 
the Stabilized Communities and 953 unencumbered apartment units related to 
the Communities Under Construction and in Lease-Up at September 30, 1997.

SUBSEQUENT OFFERINGS

On May 28, 1996, the Company completed the Second Public Offering of 
4,500,000 shares of its Common Stock of which 2,000,000 shares were sold by 
the Company and an aggregate of 2,500,000 were sold by two institutional 
stockholders.  On June 25, 1996, the underwriters exercised their 
over-allotment option for 200,000 shares and the Company issued an additional 
88,889 shares of its Common Stock and the institutional stockholders sold an 
additional 111,111 shares pursuant to a partial exercise of the 
over-allotment option granted to the underwriters. Net proceeds to the 
Company from the Second Public Offering were approximately $40,891,000.  The 
Company used the proceeds from the sale of Common Stock to purchase 2,088,889 
units in the Operating Partnership.  The Operating Partnership used the 
proceeds to pay down its Revolving Credit Facility.

In January 1997, the Company filed a shelf registration statement with the 
SEC for up to $125 million of common stock, preferred stock and warrants 
issuable by the Company and $200 million of debt securities issuable by the 
Operating Partnership.  The registration statement, which has been declared 
effective by the SEC includes $125 million of available securities under the 
September 1995 registration statement.  These registration statements provide 
the Company with the ability to issue and sell a portion of such securities 
from time to time.

On February 14, 1997, the Company completed the Third Public Offering of 
1,800,000 shares of its Common Stock.  Net proceeds to the Company from the 
February 1997 Offering were approximately $35,415,000.  The Company used the 
proceeds from the sale of Common Stock to purchase 1,800,000 units in the 
Operating Partnership.  The Operating Partnership used the proceeds to pay 
down its Revolving Credit Facility.


                                 Page 20 of 25

<PAGE>

INFLATION

Most of the leases at the communities are for a term of one year or less, 
which may enable the Operating Partnership to seek increased rents upon 
renewal of existing leases or commencement of new leases.  The short-term 
nature of the leases generally serves to reduce the risk to the Operating 
Partnership of the adverse effects of inflation.

FUNDS FROM OPERATIONS

The Operating Partnership and industry analysts consider Funds from 
Operations ("FFO") to be an appropriate measure of the performance of an 
equity REIT because it is predicated on cash flow analyses.  The Operating 
Partnership computes FFO in accordance with standards established by the 
National Association of Real Estate Investment Trusts ("NAREIT").  FFO is 
defined as net income (loss) determined in accordance with GAAP, excluding 
gains (or losses) from debt restructuring and sales of property plus 
depreciation and amortization, excluding depreciation on non-real estate 
assets and amortization of deferred financing costs.  Funds from Operations 
should not be considered as an alternative to net income (determined in 
accordance with GAAP) as an indicator of the Operating Partnership's 
financial performance or to cash flow from operating activities (determined 
in accordance with GAAP) as a measure of the Operating Partnership's needs.  
The Operating Partnership believes that in order to facilitate a clear 
understanding of the consolidated historical operating results of the 
Operating Partnership, FFO should be examined in conjunction with net income, 
as presented in the consolidated financial statements and elsewhere in this 
document.

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                             ------------------------------------------------------
                                               1997           1996           1997           1996
                                             --------       --------      ---------      ---------
     <S>                                     <C>            <C>           <C>            <C>     
     Income before minority interest,
       gain on sale of real estate assets
       and extraordinary item                $  5,313       $  3,986      $  14,492      $  14,075
     Depreciation and amortization, net of 
       corporate depreciation                   6,603          5,390         19,101         14,951
     Amortization of executive deferred 
       compensation expense                        35             48             95            360
                                             --------       --------      ---------      ---------
     Funds from Operations                   $ 11,951       $  9,424      $  33,688      $  29,386
                                             --------       --------      ---------      ---------
                                             --------       --------      ---------      ---------

</TABLE>

NUMBER OF UNITS

The Operating Partnership had 24,915,866 and 24,583,939 weighted average 
number of units for the three and the nine months ended September 30, 1997 
and 23,038,163 and 21,897,381 for the three and the nine months ended 
September 30, 1996, respectively.

CAPITALIZATION OF FIXED ASSETS AND COMMUNITY IMPROVEMENTS.

The Operating Partnership has established a policy of capitalizing those 
expenditures relating to acquiring new assets, materially enhancing the value 
of an existing asset, or substantially extending the useful life of an 
existing asset.  All expenditures necessary to maintain a community in 
ordinary operating condition are expensed as incurred.


                                 Page 21 of 25

<PAGE>
Acquisition of assets and community expenditures are as follows:

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED            NINE MONTHS ENDED 
                                              SEPTEMBER 30,                 SEPTEMBER 30,
                                           1997           1996           1997           1996
                                        --------      ---------      ---------      ---------
<S>                                     <C>           <C>            <C>            <C>
New community development               $ 10,556      $  20,143      $  32,881      $  66,314
Acquisitions                                  --         44,193         34,800         57,211
Nonrecurring capital expenditures:
Vehicle access control gates                 712            154          1,437            154
Computer upgrade                             195            148            347            199
Recurring capital expenditures:
 Community additions and
    improvements                             930            746          2,972          2,075
 Corporate additions and improvements         13             21             59             21
                                        --------      ---------      ---------     ----------
                                        $ 12,406      $  65,405      $  72,496     $  125,974
                                        --------      ---------      ---------     ----------
                                        --------      ---------      ---------     ----------

</TABLE>

DEVELOPMENT AND CONSTRUCTION ACTIVITY

The apartment communities under construction and in lease-up are listed below:

<TABLE>
<CAPTION>
                                                                       ACTUAL        ACTUAL OR
                                            AVERAGE    ESTIMATED       DATE OF       ESTIMATED    ESTIMATED
                                             UNIT     CONSTRUCTION   CONSTRUCTION    COMMENCE-     DATE OF
                                    TOTAL    SIZE         COST         COMMENCE-      MENT OF     STABILIZED
        NAME              CITY      UNITS  (SQ. FT.)   (MILLIONS)        MENT         LEASE-UP    OCCUPANCY
-------------------------------------------------------------------------------------------------------------
                                                                                      QUARTER
                                                                     ----------------------------------------
<S>                    <C>           <C>     <C>         <C>         <C>               <C>         <C>
PHOENIX
Montierra              Scottsdale    249     1,052       $  21           3:97           2:98        1:99
The Retreat Phase I    Phoenix       240       973          14           1:97           3:97        2:98
The Retreat Phase II   Phoenix       240       973          17           3:97           2:98        1:99
Vista Grove            Mesa          224       911          14           1:97           3:97        2:98
                                     ---                 -----
     TOTAL                           953                 $  66
                                     ---                 -----
                                     ---                 -----

</TABLE>

The information set forth in the table above is based upon a number of 
estimates and assumptions that are inherently subject to business, economic 
and competitive uncertainties and contingencies, many of which are beyond the 
Operating Partnership's control.  The actual development cost, completion 
date and stabilization date of any project will be dependent upon a variety 
of factors beyond the control of the Operating Partnership including, for 
example, labor and other personnel costs, material costs, weather conditions, 
government fees and leasing rates.

DISPOSITION ACTIVITY

During the second quarter of 1997, the Operating Partnership sold two 
properties, Deer Creek Village and The Pines, containing 502 apartment units. 
The aggregate sales price was approximately $22.4 million resulting in a gain 
from the sale of approximately $5.2 million.  The Operating Partnership 
received cash of approximately $7.3 million and two carryback mortgage notes 
of approximately $15.1 million.  The $7.9 million mortgage note on Deer Creek 
Village was paid off on July 23, 1997.  The mortgage note is secured by a 
first deed of trust on The Pines property and matures in November 1997.  The 
buyer may repay the remaining mortgage note at anytime without prepayment 
penalties. The mortgage note receivable maturity date can be extended 30 days 
to December 1, 1997 at the option of the borrower.

                                 Page 22 of 25
<PAGE>

On September 30, 1997, the Operating Partnership sold Los Arboles Apartments, 
a 232 unit apartment community located in Chandler, Arizona.  The aggregate 
proceeds were approximately $12.5 million resulting in a gain from the sale 
of approximately $2.3 million.  In connection with the sale, the Operating 
Partnership sold the management contract on an adjoining apartment community, 
Los Arboles II and received payment of the unpaid principal balance and 
accrued interest on the mortgage note on that property.

APARTMENT COMMUNITIES

The following sets forth certain information regarding the current apartment 
communities at September 30, 1997.  All of the communities are owned 100 
percent in fee by the Operating Partnership.

<TABLE>
<CAPTION>

                                                                                                        YEAR
                                                                                                      DEVELOPED
                                                                       NUMBER OF      DEVELOPED/         OR
        APARTMENT COMMUNITIES                             CITY        APARTMENTS       ACQUIRED       ACQUIRED
        ---------------------                             ----        ----------      ----------      ---------
<S>                                                    <C>            <C>             <C>             <C>  
SAME STORE
ARIZONA
-------
    PHOENIX:
Acacia Creek                                           Scottsdale            508       Acquired           1995
Bayside at the Islands                                    Gilbert            272      Developed           1988
Country Brook                                            Chandler            276        Acq/Dev      1991/1993
Gateway Villas                                            Phoenix            180      Developed           1995
Greenwood Village                                           Tempe            270       Acquired           1993
Heritage Point                                               Mesa            148       Acquired           1994
La Mariposa                                                  Mesa            222       Acquired           1990
La Valencia                                                  Mesa            361       Acquired           1990
Little Cottonwoods                                          Tempe            379    Acq/Acq/Dev     1989/89/90
Miramonte                                              Scottsdale            151      Developed           1983
Morningside                                            Scottsdale            160       Acquired           1992
Mountain Park Ranch                                       Phoenix            240      Developed           1995
Park Meadow                                               Gilbert            156       Acquired           1992
Preserve at Squaw Peak                                    Phoenix            108       Acquired           1991
Promontory Pointe                                         Phoenix            304       Acquired           1988
Rancho Murietta                                             Tempe            292       Acquired           1995
Scottsdale Courtyards                                  Scottsdale            274      Developed           1993
Scottsdale Meadows                                     Scottsdale            168      Developed           1984
Shadow Brook                                              Phoenix            224       Acquired           1993
Shores at Andersen Springs                               Chandler            299      Developed      1989/1993
Silver Creek                                              Phoenix            174       Acquired           1991
Sonoran                                                   Phoenix            429      Developed           1995
Sun Creek                                                Glendale            175       Acquired           1993
Superstition Vista                                           Mesa            316       Acquired           1995
The Enclave                                                 Tempe            204      Developed           1995
The Heritage                                              Phoenix            204      Developed           1995
The Meadows                                                  Mesa            306       Acquired           1987
The Palms                                                 Phoenix            132      Developed           1990
Towne Square                                             Chandler            468        Acq/Dev      1992/1995
Villa Encanto                                             Phoenix            382      Developed           1983
Village at Lakewood                                       Phoenix            240      Developed           1988
                                                                         -------
                                                                           8,022
   TUCSON:
Harrison Park                                              Tucson            172       Acquired           1991
La Reserve                                             Oro Valley            240      Developed           1988
Orange Grove Village                                       Tucson            256       Acquired           1991
Suntree Village                                        Oro Valley            424       Acquired           1992
The Arboretum                                              Tucson            496        Acq/Dev      1992/1995
Village at Tanque Verde                                    Tucson            217        Acq/Dev      1990/1994
                                                                         -------
                                                                           1,805
   CALIFORNIA:
The Ashton                                           Corona Hills            492       Acquired           1995
                                                                         -------
                                                                             492
                                                                         -------
     Total Same Store                                                     10,319
                                                                         -------
                                                                         -------
</TABLE>
                                 Page 23 of 25
<PAGE>

<TABLE>
<CAPTION>

                                                                                                        YEAR
                                                                                                      DEVELOPED
                                                                       NUMBER OF      DEVELOPED/         OR
        APARTMENT COMMUNITIES                             CITY        APARTMENTS       ACQUIRED       ACQUIRED
        ---------------------                             ----        ----------      ----------      ---------
<S>                                                    <C>            <C>             <C>             <C>  
COMMUNITIES STABILIZED LESS THAN TWO YEARS
ARIZONA
-------
    PHOENIX:
Country Brook Expansion Phase III                        Chandler            120      Developed        1995/96
Ingleside                                                 Phoenix            120      Developed        1995/96
Ladera                                                    Phoenix            248      Developed        1995/96
Mirador                                                   Phoenix            316      Developed        1995/96
Park Meadow Expansion Phase II                            Gilbert             68      Developed        1995/96
Towne Square Expansion Phase III                         Chandler            116      Developed        1995/96
                                                                         -------
                                                                             988
TUCSON:
The Legends                                                Tucson            312      Developed        1995/96
Orange Grove Expansion Phase II                            Tucson            144      Developed        1995/96
                                                                         -------
                                                                             456
                                                                         -------
     Total Communities Stabilized Less than Two Years                      1,444
                                                                         -------
                                                                         -------

DEVELOPMENTS AND LEASE-UP PROPERTIES
ARIZONA
   PHOENIX:
The Hawthorne (1)                                         Phoenix            276      Developed        1995/96
The Retreat Phase I (2)                                   Phoenix            240      Developed        1996/97
The Retreat Phase II                                      Phoenix            240      Developed           1997
Vista Grove (2)                                              Mesa            224      Developed        1996/97
The Isle at Arrowhead Ranch (4)                          Glendale            256      Developed           1996
Promontory Pointe Expansion Phase II (1)                  Phoenix            120      Developed        1995/96
Montierra                                              Scottsdale            249      Developed           1997
                                                                         -------
                                                                           1,605
  TUCSON:
Bear Canyon (3)                                            Tucson            238      Developed        1995/96
Harrison Park Expansion Phase II (3)                       Tucson            188      Developed        1995/96
                                                                         -------
                                                                             426
                                                                         -------
    Total Developments and Lease-Up Properties                             2,031
                                                                         -------
                                                                         -------

ACQUISITIONS
CALIFORNIA
Canyon Crest Views                                      Riverside            178       Acquired           1996
Canyon Ridge                                            San Diego            162       Acquired           1997
Marquessa                                            Corona Hills            336       Acquired           1997
Portofino                                             Chino Hills            176       Acquired           1996
Parkview Terrace Club                                    Redlands            558       Acquired           1996
Redlands Lawn & Tennis Club                              Redlands            496       Acquired           1996
                                                                         -------
                                                                           1,906
                                                                         -------

Total                                                                     15,700
                                                                         -------
                                                                         -------

DISPOSITIONS
ARIZONA
Deer Creek Village                                        Phoenix            308       Acquired           1991
The Pines                                                    Mesa            194       Acquired           1992
Los Arboles                                              Chandler            232      Developed           1985
                                                                         -------
                                                                             734
                                                                         -------
                                                                         -------

</TABLE>

(1) Community reached stabilized occupancy in the first quarter 1997
(2) Community is in lease-up
(3) Community reached stabilized occupancy in the second quarter 1997
(4) Community reached stabilized occupancy in the third quarter 1997


                                 Page 24 of 25

<PAGE>

PART II     OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.

(b)  Two Form 8-K's were filed during the third quarter 1997.

     -  A Form 8-K was filed on August 25, 1997 reporting under Item 5 the
        modification of the Operating Partnership's existing Revolving Loan 
        Agreement by and between the banks named herein, Bank One Arizona, 
        N.A., as administrative agent, and Bank of America National Trust and 
        Savings Association and Wells Fargo Bank, National Association as 
        co-agents and Item 7 exhibits containing the modification agreement.
  
     -  A Form 8-K was filed on August 27, 1997 reporting under Item 5 the 
        pending merger between the Operating Partnership and Equity Residential
        Operating Partnership and Item 7 exhibits relating to the agreement 
        and plan of merger.


                                  SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, 
the Registrant duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                   EVANS WITHYCOMBE RESIDENTIAL, L.P.
                                   By: Evans Withycombe Residential, Inc., as
                                   General Partner


November  11 , 1997                /s/ Stephen O. Evans
------------------------           ----------------------------------
(Date)                             Stephen O. Evans,
                                   Chairman of the Board and
                                   Chief Executive Officer




November   11 , 1997               /s/ Paul R. Fannin
------------------------           ----------------------------------
(Date)                             Paul R. Fannin,
                                   Senior Vice President and
                                   Chief Financial Officer


                                 Page 25 of 25