**THIRD AMENDMENT TO**

**SECOND AMENDED AND RESTATED**

**LOAN AGREEMENT**

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED LOAN
AGREEMENT (this "Amendment") is made as of the 15th day of July, 2003, by and
between **ASSOCIATED ESTATES REALTY CORPORATION**, an Ohio corporation having
an address at 5025 Swetland Court, Cleveland, Ohio  44143 ("Borrower"), and **NATIONAL
CITY BANK**, a national banking association having an address at 1900 East Ninth Street,
Cleveland, Ohio  44114 (the "Bank").



A.  Borrower and the Bank are parties to a Second Amended and Restated Loan
Agreement, dated as of April 19, 2002, and amended by a First Amendment to Second
Amended and Restated Loan Agreement dated as of May 14, 2002 and a Second
Amendment to Amended and Restated Loan Agreement dated as of April 27, 2003 (as so
amended, the ("Loan Agreement"), pursuant to which the Bank agreed to extend certain
financial accommodations to Borrower on the terms and subject to the conditions set forth
therein.  The maximum principal amount of all of such financial accommodations which
may be outstanding at any time (the "Maximum Commitment") may not exceed Fourteen
Million Dollars ($14,000,000).

B.  Borrower has requested that the Bank agree to modify the Loan Agreement in
order to extend the maturity date of the indebtedness advanced thereunder, and to make
certain other changes to the terms of the Loan Agreement more particularly described
below, and the Bank has agreed to do so on the terms set forth below.

NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower and the Bank agree
as follows:

1.  Certain Capitalized Terms.  Capitalized terms which are used but are not
defined in this Amendment shall have the respective meanings ascribed to them in the
Loan Agreement.

2.  Specific Amendments to the Loan Agreement.  Borrower and the Bank
agree that the Loan Agreement is amended, effective upon and as of the date hereof, in
the following specific respects:

(a)	The definition of the term "Conventional Sublimit", contained in Section 1 of
the Loan Agreement, is deleted in its entirety, and the following definition is substituted
therefor:

"Conventional Sublimit" means that portion of the Credit Commitment, equal
to Twelve Million Four Hundred Thousand Dollars ($12,400,000), reserved
exclusively for Loans advanced and Letters of Credit issued pursuant to this
Agreement.  The aggregate of all Letter of Credit Usage and the principal
amount of all Loans made hereunder shall not, at any time, exceed the
Conventional Sublimit.

(b)	The definition of the term "Measured Credit Risk Sublimit", contained in
Section 1 of the Loan Agreement, is deleted in its entirety, and the following definition is
substitute therefor:

"Measured Credit Risk Sublimit" means a portion of the Credit Commitment,
in the amount of One Million Six Hundred Thousand Dollars ($1,600,000),
which shall, at all times during the pendency of this Agreement, be reserved
exclusively for Measured Credit Risk.

(c)	The definition of the term "Termination Date", contained in Section 1 of the
Loan Agreement, is amended by deleting therefrom the reference to the date "December
31, 2003" and by replacing that reference with the date "December 31, 2004".

3.	Conditions to Amendment.  The amendment to the Loan Agreement
contemplated by this Amendment is subject to the satisfaction of all of the following
conditions precedent:

(a)	Absence of Default.  No Event of Default or event which, with the passage
of time or the giving of notice, or both, might mature into an Event of Default, shall have
occurred and be continuing under the Loan Agreement or any other Loan Document.

(b)	Warranties.  The representations and warranties of Borrower under the Loan
Agreement and the other Loan Documents shall be true and correct in all material respects
on and as of the date hereof.

(c)	Other Actions.  The Borrower shall take such other actions and deliver to the
Bank such other documents, certificates and instruments as the Bank may reasonably
request to carry out the intent of this Amendment.

(d)	Legality of Transactions.  It shall not be unlawful (i) for the Bank to perform
any of its obligations hereunder, or (ii) for the Borrower to perform any of its obligations
hereunder or under any other Loan Document.

(e)	Proceedings and Documents.  All corporate, governmental and other
proceedings in connection with the transactions contemplated hereby and by the other
Loan Documents, and all documents and instruments incidental thereto, shall be
completed and in full force and effect, and the Bank shall have received such original or
certified copies of such instruments as the Bank may reasonably require.

4.	Ratification.  Borrower warrants and represents to the Bank that (a)
immediately prior to the date hereof, the Loan Agreement and each other Loan Document
is in full force and effect and has not been modified, amended or supplemented; and (b)
there are no offsets or defenses to any of Borrower's obligations under the Loan
Agreement or the other Loan Documents, and no counterclaims which might affect any
such obligations.  Borrower hereby ratifies and affirms the Loan Agreement (as the same
is amended hereby) and ratifies and affirms each of the Loan Documents.

5.	Payment of Certain Fees.  Concurrently with its execution and delivery
of this Amendment, Borrower shall pay the following fees to the Bank in consideration of
the Bank's extension of the Termination Date: (a) an extension fee in the amount of
Twenty-Five Thousand Dollars ($25,000), and (b) a measured credit sublimit extension fee
in the amount of Six Thousand Dollars ($6,000).

6.	Miscellaneous.

(a)	Expenses; Indemnity.  The Borrower agrees to pay (in addition to the fees
payable pursuant to the preceding paragraphs) all out-of-pocket expenses of the Bank in
connection with the preparation, execution and delivery of this Amendment or with the
closing of the transactions described herein.

(b)	Severability.  Any provision of this Amendment or any of the other Loan
Documents which is determined by a court of competent jurisdiction to be invalid or
unenforceable shall be ineffective to the extent of determination without invalidating the
remaining portions hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

(c)	Successors.  This instrument shall be binding upon and inure tot he benefit
of Borrower and the Bank and their respective successors and assigns.  Borrower shall not
assign its rights or delegate its duties hereunder without the prior written consent of the
Bank.

(d)	Counterparts.  This instrument may be executed in any number of
counterparts, and signature pages from any counterpart may be attached to any other.  All
such counterparts shall together constitute a single agreement.  In making proof of this
Amendment, it shall not be necessary to produce or account for more than one counterpart
hereof signed by each of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date first above
written.

**NATIONAL CITY BANK**

By:  /s/ Martin D. Rodriguez



Printed Name:  Martin D. Rodriguez

Title:  Vice President

**ASSOCIATED ESTATES REALTY CORPORATION**

By:  /s/ Martin A. Fishman

Printed Name:  Martin A. Fishman

Title:  Vice President