UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,
  D.C.  20549Form 10-Q[x]
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
  THESECURITIES EXCHANGE ACT OF 1934For the
  quarterly period ended March 31, 2009OR[ ]
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
  THESECURITIES EXCHANGE ACT OF 1934For the transition
  period from     toCommission File
  Number 1-12486Associated Estates Realty
  Corporation(Exact name of registrant as specified in its
  charter)OHIO
  
  34-1747603(State or other
  jurisdiction of
  
  (I.R.S. Employerincorporation or
  organization)
  
  Identification
  Number)1 AEC Parkway, Richmond Hts., Ohio  44143-1467(Address of principal executive offices)(216) 261-5000(Registrant's telephone number, including area code)Indicate by check mark whether
  the registrant (1) has filed all reports required to be filed by Section 13
  or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
  (or for such shorter period that the registrant was required to file such
  reports), and (2) has been subject to such filing requirements for the past
  90 days.  Yes [x]  No [ ]Indicate by check mark whether the registrant has
  submitted electronically and posted on its corporate Web site, if any, every
  Interactive Data File required to be submitted and posted pursuant to Rule
  405 of Regulation S-T (subsection 232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was
  required to submit and post such files).  Yes [ ]  No [ ]Indicate by check mark whether
  the registrant is a large accelerated filer, an accelerated filer, a
  non-accelerated filer, or a smaller reporting company.  See the definitions
  of "large accelerated filer", "accelerated filer" and "smaller
  reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):Large accelerated
  filer [  ]  Accelerated filer [ x ]  Non-accelerated filer [  ]  (Do not
  check if a smaller reporting company)  Smaller reporting company [  ]Indicate by check
  mark whether the registrant is a shell company (as defined in Rule 12b-2 of
  the Exchange Act).  Yes [  ]  No [ x ]The number of
  shares outstanding as of April 28, 2009 was 16,698,510 shares


1





ASSOCIATED ESTATES
REALTY CORPORATION

Index

PART I  FINANCIAL INFORMATION
  PageITEM 1
  Consolidated Financial Statements (Unaudited)Consolidated Balance
  Sheetsat March 31, 2009 and December 31, 2008
  3Consolidated
  Statements of Operationsfor the three monthperiods ended March 31, 2009 and 2008
  4Consolidated
  Statements of Cash Flowsfor the three month periodsended March 31, 2009 and 2008
  5Notes to
  Consolidated Financial Statements
  6ITEM 2
  Management's
  Discussion and Analysis of FinancialCondition and Results of Operations
  18ITEM 3
  Quantitative
  and Qualitative DisclosuresAbout Market Risk
  23ITEM 4
  Controls and Procedures
  23PART II  OTHER INFORMATIONITEM 1
  Legal Proceedings
  23ITEM 1A
  Risk Factors
  23ITEM 2
  Unregistered
  Sales of Equity Securitiesand Use of Proceeds
  24ITEM 6
  Exhibits
  25SIGNATURES
  27




2





PART 1.  FINANCIAL
INFORMATION
ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

ASSOCIATED ESTATES REALTY CORPORATIONCONSOLIDATED BALANCE SHEETS
(UNAUDITED)

|(In thousands, except
  share amounts)                                                                   | March 31, |         | December 31,
|-------------------------------------------------------------------------------------------------------- | --------- | ------- | ------------
|ASSETS                                                                                                   | 2009      |         | 2008        
|Real estate assets                                                                                       |           |         |             
|Land                                                                                                     | $         | 110,220 |             
|Buildings
  and improvements                                                                             | 813,283   |         | 812,443     
|Furniture
  and fixtures                                                                                 | 29,625    |         | 29,315      
|                                                                                                         | 953,128   |         | 951,978     
|Less: 
  accumulated depreciation                                                                        | (288,928) |         | (280,541)   
|                                                                                                         | 664,200   |         | 671,437     
|Construction
  in progress                                                                               | 883       |         | 745         
|Real
  estate associated with property held for sale, net                                                | -         |         | 1,666       
|Real
  estate, net                                                                                       | 665,083   |         | 673,848     
|Cash and cash equivalents                                                                                | 3,508     |         | 3,551       
|Restricted cash                                                                                          | 6,953     |         | 6,873       
|Accounts and notes
  receivable, net                                                                     |           |         |             
|Rents                                                                                                    | 1,010     |         | 1,320       
|Affiliates                                                                                               | 197       |         | 606         
|Other                                                                                                    | 1,250     |         | 1,842       
|Goodwill                                                                                                 | 1,725     |         | 1,725       
|Other assets, net                                                                                        | 9,848     |         | 10,131      
|Total assets                                                                                             | $         | 689,574 |             
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                                     |           |         |             
|Mortgage notes payable                                                                                   | $         | 489,868 |             
|Unsecured revolving credit
  facility                                                                    | 38,300    |         | 21,500      
|Unsecured debt                                                                                           | 25,780    |         | 25,780      
|Total
  debt                                                                                             | 553,948   |         | 557,481     
|Accounts payable, accrued
  expenses and other liabilities                                               | 22,350    |         | 26,217      
|Dividends payable                                                                                        | 2,961     |         | 2,920       
|Resident security deposits                                                                               | 3,383     |         | 3,360       
|Accrued interest                                                                                         | 2,289     |         | 2,468       
|Total liabilities                                                                                        | 584,931   |         | 592,446     
|Noncontrollingredeemable
  interest                                                                      | 1,829     |         | 1,829       
|Shareholders' equity                                                                                     |           |         |             
|Preferred
  shares, without par value; 9,000,000 shares authorized; 8.70% Class B Series
  II cumulative |           |         |             
|redeemable,
  $250 per share liquidation preference, 232,000 issued and 193,050                          |           |         |             
|outstanding
  at March 31, 2009 and December 31, 2008, respectively                                      | 48,263    |         | 48,263      
|Common
  shares, without par value, $.10 stated value; 41,000,000 authorized;
  22,995,763 issued and    |           |         |             
|16,698,563
  and 16,556,221 outstanding at March 31, 2009 and December 31, 2008,
  respectively          | 2,300     |         | 2,300       
|Paid-in
  capital                                                                                        | 282,254   |         | 282,501     
|Accumulated
  distributions in excess of accumulated net income                                          | (163,401) |         | (159,595)   
|Accumulated
  other comprehensive loss                                                                   | (2,209)   |         | (2,899)     
|Less: 
  Treasury shares, at cost, 6,297,200 and 6,439,542 shares                                        |           |         |             
|at
  March 31, 2009 and December 31, 2008, respectively                                                  | (64,393)  |         | (64,949)    
|Total shareholders' equity                                                                               | 102,814   |         | 105,621     
|Total liabilities and shareholders' equity                                                               | $         | 689,574 |             
|                                                                                                         |           |         |             
|The accompanying notes are an integral part of these
  consolidated financial statements.               



3





ASSOCIATED ESTATES
REALTY CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)

|                                                                                          | Three Months Ended
|----------------------------------------------------------------------------------------- | ------------------
|                                                                                          | March 31,         
|(In thousands,
  except per share amounts)                                                | 2009              
|Revenue                                                                                   |                   
|Property
  revenue                                                                        | $                 
|Management
  and service company revenue:                                                 |                   
|Fees,
  reimbursements and other                                                          | 468               
|Painting
  services                                                                       | 96                
|Total
  revenue                                                                           | 33,458            
|Expenses                                                                                  |                   
|Property
  operating and maintenance                                                      | 14,200            
|Depreciation
  and amortization                                                           | 9,466             
|Direct
  property management and service company expense                                  | 359               
|Painting
  services                                                                       | 213               
|General
  and administrative                                                              | 3,140             
|Total
  expenses                                                                          | 27,378            
|Operating income                                                                          | 6,080             
|Interest
  income                                                                         | 15                
|Interest
  expense                                                                        | (8,213)           
|(Loss) income before equity
  in net loss of joint ventures                               |                   
|and
  income from discontinued operations                                                 | (2,118)           
|Equity
  in net loss of joint ventures                                                    | -                 
|(Loss) income from
  continuing operations                                                | (2,118)           
|Income
  from discontinued operations:                                                    |                   
|Operating
  (loss) income                                                                 | (33)              
|Gain
  on disposition of properties                                                       | 2,278             
|Income
  from discontinued operations                                                     | 2,245             
|Net income                                                                                | 127               
|Net
  loss attributable to noncontrolling redeemable interest                             | (14)              
|Net income attributable
  to AERC                                                         | 113               
|Preferred share dividends                                                                 | (1,049)           
|Allocation to participating
  securities                                                  | -                 
|Net (loss) income
  attributable to AERC applicable to common shares                      | $                 
|                                                                                          |                   
|Earnings per common share
  - basic and diluted:                                          |                   
|(Loss)
  income from continuing operations attributable to AERC                           |                   
|applicable
  to common shares                                                             | $                 
|Income
  from discontinued operations                                                     | 0.13              
|Net
  (loss) income attributable to AERC applicable to common shares                      | $                 
|                                                                                          |                   
|Dividends declared per
  common share                                                     | $                 
|                                                                                          |                   
|Weighted average number
  of common shares                                                |                   
|outstanding - basic and diluted                                                           | 16,434            
|                                                                                          |                   
|The accompanying notes are an integral part of these
  consolidated financial statements.



4





ASSOCIATED ESTATES
REALTY CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS
(UNAUDITED)

|                                                                                          | Three Months Ended
|----------------------------------------------------------------------------------------- | ------------------
|                                                                                          | March 31,         
|(In thousands)                                                                            | 2009              
|Cash flow from operating
  activities:                                                    |                   
|Net
  income                                                                              | $                 
|Adjustments
  to reconcile net income to net cash provided by operating activities:       |                   
|Depreciation
  and amortization (including discontinued operations)                       | 9,466             
|Loss
  on fixed asset replacements write-off                                              | 13                
|Gain
  on disposition of properties                                                       | (2,278)           
|Amortization
  of deferred financing costs and other                                      | 322               
|Share-based
  compensation                                                                | 604               
|Equity
  in net loss of joint ventures                                                    | -                 
|Net
  change in assets and liabilities:                                                   |                   
|Accounts
  and notes receivable                                                           | 1,310             
|Accounts
  payable and accrued expenses                                                   | (2,469)           
|Other
  operating assets and liabilities                                                  | (314)             
|Restricted
  cash                                                                         | (80)              
|Total
  adjustments                                                                       | 6,574             
|Net
  cash flow provided by operations                                                    | 6,701             
|Cash flow from investing
  activities:                                                    |                   
|Recurring
  fixed asset additions                                                         | (2,193)           
|Revenue
  enhancing/non-recurring fixed asset additions                                   | (69)              
|Acquisition
  fixed asset additions                                                       | (58)              
|Net
  proceeds from disposition of operating properties                                   | 3,836             
|Deposit
  of sale proceeds to escrow account                                              | -                 
|Net
  cash flow provided by investing activities                                          | 1,516             
|Cash flow from financing
  activities:                                                    |                   
|Principal
  payments on mortgage notes payable                                            | (72,784)          
|Payment
  of debt procurement costs                                                       | (686)             
|Proceeds
  from mortgage notes obtained                                                   | 52,450            
|Revolver
  borrowings                                                                     | 78,500            
|Revolver
  repayments                                                                     | (61,700)          
|Common
  share dividends paid                                                             | (2,801)           
|Preferred
  share dividends paid                                                          | (1,049)           
|Operating
  partnership distributions paid                                                | (14)              
|Purchase
  of preferred and/or treasury shares                                            | (176)             
|Net
  cash flow used for financing activities                                             | (8,260)           
|(Decrease) increase in cash
  and cash equivalents                                        | (43)              
|Cash and cash equivalents,
  beginning of period                                          | 3,551             
|Cash and cash
  equivalents, end of period                                                | $                 
|                                                                                          |                   
|Supplemental disclosure of
  cash flow information:                                       |                   
|Dividends
  declared but not paid                                                         | $                 
|Cash
  paid for interest                                                                  | 8,070             
|Net
  change in accounts payable related to fixed asset additions                         | (780)             
|                                                                                          |                   
|The accompanying notes are an integral part of these
  consolidated financial statements.



5





ASSOCIATED
ESTATES REALTY CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED

1.         BASIS OF
PRESENTATION AND ACCOUNTING POLICIES

Except
as the context otherwise requires, all references to "we,"
"our," "us," "AERC" and the "Company"
in this report collectively refer to Associated Estates Realty Corporation and
its consolidated subsidiaries.

Business

We are a self-administered and self-managed equity real estate
investment trust ("REIT") specializing in multifamily property management,
advisory, development, acquisition, disposition, operation and ownership
activities.  Our main source of income is rental revenue.  Additional income is
derived primarily from property and asset management fees.

As of March 31, 2009, our property portfolio consisted of: (i) 49
apartment communities containing 12,576 units in eight states that are wholly owned,
either directly or indirectly through subsidiaries; (ii) three apartment
communities that we manage for third party owners consisting of 616 units; and (iii)
a 186-unit apartment community and a commercial property containing
approximately 145,000 square feet that we asset manage for a government
sponsored pension fund.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared by management in accordance with accounting principles generally
accepted in the United States of America ("GAAP") for interim
financial information and applicable rules and regulations of the Securities
and Exchange Commission.  Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements. 
In the opinion of management, all adjustments, consisting only of normal and
recurring adjustments considered necessary for a fair statement, have been
included.  The reported results of operations are not necessarily indicative of
the results that may be expected for the full year.  These financial statements
should be read in conjunction with the audited financial statements and
accompanying notes in our Annual Report on Form 10-K for the year ended
December 31, 2008.

Noncontrolling
Redeemable Interest

In
December 2007, the Financial Accounting Standards Board ("FASB")
issued Statement No. 160, "Noncontrolling Interests in Consolidated
Financial Statements  an Amendment of ARB No. 51" ("SFAS 160"),
which establishes and expands accounting and reporting standards for minority
interests in a subsidiary and the deconsolidation of a subsidiary.  SFAS 160
also requires minority interests to be recharacterized as noncontrolling
interests.  SFAS 160 was effective for us January 1, 2009, and as such, the
operating partnership minority interest reported in our Annual Report on Form
10-K for the year ended December 31, 2008, has been recharacterized as
noncontrolling redeemable interest for all periods presented.

6





Share-Based
Compensation

During the three months ended March 31, 2009 and 2008, we recognized
total share-based compensation cost of $606,000 and $471,000, respectively, in "General
and administrative expense" in the Consolidated Statements of Operations.

Stock Options.During the three months ended March 31, 2009,
there were 8,000 options awarded and no options exercised.  There were no stock
options awarded or exercised during the three months ended March 31, 2008.  We
use the Black-Scholes option pricing model to estimate the fair value of
share-based awards.  The weighted average Black-Scholes assumptions and fair
value for options awarded during the three months ended March 31, 2009, were as
follows:

|Expected volatility                   |  | 36.5 %
|------------------------------------- |  | ------
|Risk-free interest rate               |  | 2.0 % 
|Expected life of options (in
  years) |  | 7.2   
|Dividend yield                        |  | 12.2 %
|Grant-date fair value                 |  | $     

The
expected volatility was based upon the historical volatility of our weekly
share closing prices over a period equal to the expected life of the options
granted.  The risk-free interest rate used was the yield from U.S. Treasury
bonds on the date of grant with a maturity approximating the expected life of
the options.  The expected life of the options was derived using our historical
experience for similar awards.  The dividend yield was derived using our annual
dividend rate as a percentage of the price of our shares on the date of grant.

Restricted Shares.  The following table represents restricted
share activity for the three months ended March 31, 2009:

|                                   |  |           |  | Weighted  
|---------------------------------- |  | --------- |  | ----------
|                                   |  |           |  | Average   
|                                   |  | Number of |  | Grant-Date
|                                   |  | Shares    |  | Fair Value
|                                   |  |           |  |           
|Nonvested at beginning of
  period |  | 189,867   |  | $         
|Granted                            |  | 176,108   |  | $         
|Vested                             |  | 101,005   |  | $         
|Forfeited                          |  | 625       |  | $         
|Nonvested at end of period         |  | 264,345   |  | $         

At March 31, 2009, there
was $2.8 million of unrecognized compensation cost related to nonvested
restricted share awards that we expect to recognize over a weighted average
period of 2.5 years.  Pursuant to the terms of the Company's Elective Deferred
Compensation Program, certain of our officers elected to defer the receipt of all
or a portion of the restricted shares granted them during the three months
ended March 31, 2009.

7





Derivative
Instruments and Hedging Activities

Statement of Financial Accounting
Standards No. 161, "Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement No. 133" ("SFAS
161"), amends and expands the disclosure requirements of FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133") with the intent to provide users of financial statements
with an enhanced understanding of: (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. SFAS 161 requires qualitative
disclosures about objectives and strategies for using derivatives, quantitative
disclosures about the fair value of and gains and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in
derivative instruments.  SFAS 133, as amended and interpreted, establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities.  As required by SFAS 133, we record all derivatives on the balance
sheet at fair value.  The accounting for changes in the fair value of derivatives
depends on the intended use of the derivative and the resulting designation.  Derivatives
used to hedge the exposure to changes in the fair value of an asset, liability,
or firm commitment attributable to a particular risk, such as interest rate
risk, are considered fair value hedges.  Derivatives used to hedge the exposure
to variability in expected future cash flows, or other types of forecasted
transactions, are considered cash flow hedges.

For derivatives designated as fair value hedges, changes in the
fair value of the derivative and the hedged item related to the hedged risk are
recognized in earnings.  For derivatives designated as cash flow hedges, the
effective portion of changes in the fair value of the derivative is initially
reported in other comprehensive income (outside of earnings) and subsequently
reclassified to earnings when the hedged transaction affects earnings, and the
ineffective portion of changes in the fair value of the derivative is
recognized directly in earnings.  Hedge ineffectiveness is measured by
comparing the changes in fair value or cash flows of the derivative hedging
instrument with the changes in fair value or cash flows of the designated
hedged item or transaction.  For derivatives not designated as hedges, changes in
fair value are recognized in earnings.

We do not use derivatives for trading or speculative purposes.  Further,
we have a policy of only entering into contracts with major financial
institutions based upon their credit ratings and other factors.  When viewed in
conjunction with the underlying and offsetting exposure that the derivatives
are designed to hedge, we have not sustained a material loss from these hedges.

We have utilized interest rate swaps and caps to add stability to
interest expense and to manage our exposure to interest rate movements. 
Interest rate swaps designated as cash flow hedges involve the receipt of
variable-rate amounts in exchange for fixed-rate payments over the life of the
agreements without exchange of the underlying principal amount.  Interest rate
caps designated as cash flow hedges involve the receipt of variable-rate
amounts if interest rates rise above a certain level in exchange for an up
front premium.

Interest Rate Hedge Activity:  During 2007, we
executed two interest rate swaps to hedge the cash flows of existing variable
rate debt.  No hedge ineffectiveness on these cash flow hedges was recognized
during the three months ended March 31, 2009.  Amounts reported in accumulated
other comprehensive loss related to derivatives will be reclassified to
interest expense as interest payments are made on our variable-rate debt.  During
the next twelve months, we estimate that approximately $2.1 million will be
reclassified from "Accumulated other comprehensive loss" as an
increase to "Interest expense."  The following table presents the notional
amounts of the swaps as of March 31, 2009:

|(Dollar amount in
  thousands) | Number of |             | Notional
|------------------------------ | --------- | ----------- | --------
|Interest Rate Derivative       |           | Instruments |         
|Interest rate swaps            |           | 2           |         



8





The
following table presents the fair value of our derivative financial instruments
as well as their classification on the Consolidated Balance Sheets (see Note 7
for additional information regarding the fair value of these derivative
instruments):

|Fair Value of Derivative Instruments
|------------------------------------
|                                    
|                                    
|                                    
|                                    
|(In thousands)                      
|Derivatives designated as
  hedging 
|instruments under SFAS 133:         
|Interest rate swaps                 
|                                    
|                                    

The
following table presents the effect of our derivative financial instruments on
the Consolidated Statements of Income (see Note 5 for additional information
regarding the effect of these derivative instruments on total comprehensive
income):

|The Effect of Derivative Instruments on the Consolidated
  Statements of Operations
|-----------------------------------------------------------------------------------
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|(In thousands)                                                                     
|Derivatives in SFAS 133 Cash                                                       
|Flow Hedging Relationships                                                         
|Interest rate swaps                                                                
|                                                                                   

We have agreements with each of our derivative
counterparties that contain a provision where if we either default or are capable
of being declared in default on any of our indebtedness, then we could also be
declared in default on our derivative obligations.

We have an agreement with a derivative counterparty
that incorporates the loan covenant provisions of our indebtedness with a
lender affiliate of the derivative counterparty. Failure to comply with the
loan covenant provisions would result in our being in default on any derivative
instrument obligations covered by the agreement.

As of March 31, 2009, the fair value of derivatives
in a net liability position, which includes accrued interest but excludes any
adjustment for nonperformance risk, related to these agreements was $2.9
million. As of March 31, 2009, we have not posted any collateral related to
these agreements. If we had breached any of these provisions at March 31, 2009,
we would have been required to settle our obligations under the agreements at
their termination value of $2.9 million.

Classification
of Fixed Asset Additions

We define recurring fixed asset additions to a property to be capital
expenditures made to replace worn out assets to maintain the property's value. 
Revenue enhancing/non-recurring fixed asset additions are defined as capital
expenditures that increase the value of the property and/or enable us to
increase rents.  Acquisition fixed asset additions are defined as capital
expenditures for the purchase or construction of new properties to be added to
our portfolio, or fixed asset additions identified at the time of purchase that
are not made until subsequent periods.

9





Reclassifications

Certain reclassifications have been made to the 2008 financial
statements to conform to the 2009 presentation.

2.         DISPOSITION ACTIVITY

We
report the results of operations and gain/loss related to the sale of real
estate assets as discontinued operations in accordance with SFAS 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets"
("SFAS 144").  Real estate assets that are classified as held for
sale are also reported as discontinued operations.  We classify properties as
held for sale when all significant contingencies surrounding the closing have
been resolved.  In most transactions, these contingencies are not satisfied
until the actual closing of the transaction.  Interest expense included in
discontinued operations is limited to interest on mortgage debt specifically
associated with properties sold or classified as held for sale.

On January 9, 2009, we completed the sale of a 96-unit property located
in Northeast Ohio.  The sales price was $4.1 million and we recorded a gain of
$2.3 million.

"Income
from discontinued operations" in the accompanying Consolidated Statements
of Operations for the three months ended March 31, 2009 and 2008, includes the
operating results for the properties sold in 2009 and prior years, as well as the
gains recognized on properties sold during each reporting period.   The
following table summarizes "Income from discontinued operations:"

|                                      | Three Months Ended
|------------------------------------- | ------------------
|                                      | March 31,         
|(In thousands)                        | 2009              
|REVENUE                               |                   
|Property revenue                      | $                 
|                                      |                   
|EXPENSES                              |                   
|Property operating and
  maintenance  | 60                
|Depreciation and
  amortization       | -                 
|Total
  expenses                      | 60                
|Operating income                      | (33)              
|Interest income                       | -                 
|Interest expense(1)                   | -                 
|Gain on disposition of
  properties   | 2,278             
|Income from discontinued
  operations | $                 



|(1) | Interest expense for the three
  months ended March 31, 2008 includes $2.0 million of defeasance and other
  prepayment costs.
|--- | ------------------------------------------------------------------------------------------------------------------------------



10





3.         DEBT

The following table identifies our
total debt outstanding and weighted average interest rates:

|                                      | March 31, 2009 |         | December 31, 2008
|------------------------------------- | -------------- | ------- | -----------------
|                                      | Balance        |         | Weighted Average 
|(Dollar amounts in
  thousands)       | Outstanding    |         | Interest Rate    
|FIXED RATE DEBT                       |                |         |                  
|Mortgages payable - CMBS              | $              | 116,991 |                  
|Mortgages payable - other (1)         | 337,646        |         | 5.8%             
|Unsecured borrowings                  | 25,780         |         | 7.9%             
|Total
  fixed rate debt               | 480,417        |         | 6.4%             
|                                      |                |         |                  
|VARIABLE RATE DEBT                    |                |         |                  
|Mortgages payable                     | 35,231         |         | 4.9%             
|Unsecured revolving credit
  facility | 38,300         |         | 2.4%             
|Total
  variable rate debt            | 73,531         |         | 3.6%             
|TOTAL
  DEBT                          | $              | 553,948 |                  



|(1) | Includes $63.0 million of
  variable rate debt swapped to fixed as of March 31, 2009 and December 31,
  2008.
|--- | -------------------------------------------------------------------------------------------------------------

Mortgage Notes Payable

The following
table provides information on loans repaid at par as well as loans obtained
during 2009:

|(Dollar amounts in
  thousands) |  | Loans Repaid |        |      | Loans Obtained
|------------------------------- |  | ------------ | ------ | ---- | --------------
|Property                        |  | Amount       |        | Rate |               
|Saw Mill Village                |  | $            | 11,119 |      | 7.5%          
|Georgetown Park                 |  | 16,000       |        | 1.6% | (a)           
|Chestnut Ridge                  |  | 19,000       |        | 1.4% | (a)           
|Oaks at Hampton                 |  | 25,977       |        | 7.5% |               
|Steeplechase at Shiloh          |  | -            |        | N/A  |               
|Courtney Chase                  |  | -            |        | N/A  |               
|                                |  | $            | 72,096 |      | 4.6%          



|(a) | Denotes
  variable rate loans.  Variable rates on loans obtained are as of March 31,
  2009.
|--- | --------------------------------------------------------------------------------------------
|    |                                                                                             
|(b) | Represents
  weighted average interest rate for the loans listed.                           

During
2008, 2007 and 2006, we defeased 21 loans.  These loans were defeased in
accordance with the loan documents.  Also, in accordance with SFAS 140,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities," we removed those financial assets and the
mortgage loans from our financial records.  All risk of loss associated with
these defeasances have been transferred from us to the successor borrower and
any ongoing relationship between the successor borrower and us was deemed
inconsequential at the time of completion of the initial transfer.  However, we
subsequently learned that certain defeasance transactions, completed prior to
June 2007, could enable us to receive a refund of a portion of the costs
incurred in connection with the transaction.  During the first quarter of 2009,
we received a refund of $563,000, which is included as a reduction to interest
expense.  It is possible that we may receive additional refunds in the future,
however such amounts cannot be estimated due to the uncertainty of future
payments and we believe that any amounts we may receive would not be material
to our consolidated financial position, cash flow or results of operations.

11





4.         GOODWILL
AND OTHER INTANGIBLE ASSETS

Goodwill

In June 1998, we recorded goodwill in connection with the MIG Realty
Advisors, Inc. merger.

We
have a policy of completing our annual review of goodwill during the first
quarter of each year and more frequently if events or changes in circumstances
indicate that the carrying value may not be recoverable.  The review that was
completed during the three months ended March 31, 2009 determined that goodwill
was not impaired and as such there were no changes to the carrying value of
goodwill as of March 31, 2009.  In performing this analysis, we use a multiple
of revenues to the range of potential alternatives and assign a probability of
the various alternatives under consideration by management.  Should the
estimates used to determine alternatives or the probabilities of the occurrence
thereof change, impairment may result which could materially impact our results
of operations for the period in which it is recorded.

Intangible
Assets

In accordance with
SFAS 141(R), "Business Combinations," we allocate a portion of the
total purchase price of a property acquisition to any intangible assets
identified, such as existing leases and tenant relationships.  The intangible
assets are amortized over the remaining lease terms or estimated life of the
tenant relationship, which is approximately 12 to 16 months.  Due to the short
term nature of residential leases, we believe that existing lease rates
approximate market rates; therefore, no allocation is made for above/below
market leases.

12





5.         SHAREHOLDERS' EQUITY

The following table provides a reconciliation of activity in Shareholders'
equity accounts:

|                                                                            | Three
  Months |         | Twelve
  Months  
|--------------------------------------------------------------------------- | -------------- | ------- | -----------------
|                                                                            | Ended          |         | Ended            
|(In thousands)                                                              | March 31, 2009 |         | December 31, 2008
|Noncontrolling redeemable
  interest                                        |                |         |                  
|Balance outstanding at
  beginning of period                                | $              | 1,829   |                  
|Balance outstanding at end
  of period                                      | $              | 1,829   |                  
|                                                                            |                |         |                  
|Preferred shares                                                            |                |         |                  
|Balance outstanding at
  beginning of period                                | $              | 48,263  |                  
|Purchase and retirement of
  Class B Cumulative Redeemable Preferred Shares | -              |         | (6,950)          
|Balance outstanding at end
  of period                                      | 48,263         |         | 48,263           
|                                                                            |                |         |                  
|Common shares (at $.10
  stated value)                                      |                |         |                  
|Balance outstanding at
  beginning and end of period                        | 2,300          |         | 2,300            
|                                                                            |                |         |                  
|Paid-in capital                                                             |                |         |                  
|Balance outstanding at
  beginning of period                                | 282,501        |         | 281,152          
|Share based compensation                                                    | (247)          |         | 1,294            
|Shares issued from treasury
  for stock option exercises                    | -              |         | (88)             
|Purchase and retirement of
  Class B Cumulative Redeemable Preferred Shares | -              |         | 143              
|Balance outstanding at end
  of period                                      | 282,254        |         | 282,501          
|                                                                            |                |         |                  
|Accumulated distributions
  in excess of accumulated net income             |                |         |                  
|Balance outstanding at
  beginning of period                                | (159,595)      |         | (180,436)        
|Net income                                                                  | 127            |         | 34,680           
|Net loss attributable to
  noncontrolling redeemable interest               | (14)           |         | (53)             
|Share based compensation                                                    | 1              |         | 8                
|Purchase and retirement of
  Class B Cumulative Redeemable Preferred Shares | -              |         | 2,146            
|Common share dividends
  declared                                           | (2,871)        |         | (11,285)         
|Preferred share dividends
  declared                                        | (1,049)        |         | (4,655)          
|Balance outstanding at end
  of period                                      | (163,401)      |         | (159,595)        
|                                                                            |                |         |                  
|Accumulated other
  comprehensive loss                                      |                |         |                  
|Balance outstanding at
  beginning of period                                | (2,899)        |         | (1,050)          
|Change in fair value of hedge
  instruments                                 | 690            |         | (1,849)          
|Balance outstanding at end
  of period                                      | (2,209)        |         | (2,899)          
|                                                                            |                |         |                  
|Treasury shares (at cost)                                                   |                |         |                  
|Balance outstanding at
  beginning of period                                | (64,949)       |         | (67,393)         
|Purchase of common shares                                                   | (177)          |         | (221)            
|Share based compensation                                                    | 733            |         | 734              
|Shares issued from treasury
  for stock option exercises                    | -              |         | 1,931            
|Balance outstanding at end
  of period                                      | (64,393)       |         | (64,949)         
|Total Shareholders'
  Equity                                                | $              | 102,814 |                  



13





The
following table identifies total comprehensive income:

|                                            | Three Months Ended
|------------------------------------------- | ------------------
|                                            | March 31,         
|(In thousands)                              | 2009              
|Comprehensive income:                       |                   
|Net income attributable to
  AERC           | $                 
|Other comprehensive income
  (loss):        |                   
|Change
  in fair value of hedge instruments | 690               
|Total comprehensive income                  | $                 

6.         EARNINGS
PER SHARE

Earnings per share ("EPS") have been computed pursuant to the
provisions of SFAS 128, "Earnings per Share."  In June 2008, the
Financial Accounting Standards Board issued Staff Position FSP EITF 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities," which was effective for us January 1, 2009. 
This FSP clarifies that nonvested awards containing nonforfeitable dividend
rights are participating securities and are therefore required to be included
in the computations of basic and diluted earnings per share.  This FSP requires
retrospective application to all periods presented.

There were 1.4
million and 1.6 million options to purchase common shares outstanding at March
31, 2009 and 2008, respectively.  The dilutive effect of these options were not
included in the calculation of diluted earnings per share for the periods
presented as their inclusion would be antidilutive to the net loss applicable
to common shares from continuing operations.

The exchange of
operating partnership noncontrolling interests into common shares was also not
included in the computation of diluted EPS because we intend to settle these OP
units in cash.

7.         FAIR VALUE

Fair value determined   in accordance with GAAP should be based on the
assumptions that market participants would use when pricing certain assets or
liabilities.  Inputs used in determining fair value should be from the highest
level available in the following hierarchy:

| | Level 1 inputs utilize quoted
  prices (unadjusted) in active markets for identical assets or liabilities
  that we have the ability to access;                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 2 inputs may include
  quoted prices for similar assets and liabilities in active markets, as well as
  interest rates and yield curves that are observable at commonly quoted
  intervals; and
| | Level 3 inputs are unobservable
  inputs for the asset or liability that are typically based on an entitys own
  assumptions as there is little, if any, related market activity.                   

In instances where
the determination of the fair value measurement is based on inputs from
different levels of the fair value hierarchy, the fair value measurement will
fall within the lowest level input that is significant to the fair value measurement
in its entirety.

The following table presents the financial liabilities that we measured
at fair value on a recurring basis as of March 31, 2009:

|(In thousands)      |  | Level 1 |   | Level 2 |   | Level 3 |  | Total
|------------------- |  | ------- | - | ------- | - | ------- |  | -----
|Interest rate swaps |  | $       | - |         | $ | 2,209   |  | $    



14





We incorporate
credit valuation adjustments to appropriately reflect both our own
nonperformance risk and that of the respective counterparty in the fair value
measurements.  The credit valuation adjustments utilize Level 3 inputs, such as
estimates of current credit spreads, to evaluate the likelihood of default by either
the respective counterparty or us.  However, we determined that as of March 31,
2009, the impact of the credit valuation adjustments were not significant to
the overall valuation of the swaps.  See "Derivative Instruments and Hedging
Activities" in Note 1 for additional information regarding the swaps.

8.         INTERIM SEGMENT
REPORTING

We have three reportable segments:  (1) Acquisition/Disposition
Multifamily Properties; (2) Same Community Multifamily Properties; and (3)
Management and Service Operations.  We have identified our reportable segments
based upon how management makes decisions regarding resource allocation and
performance assessment.  The Acquisition/Disposition properties represent
acquired or developed properties which have not yet reached stabilization (we
consider a property stabilized when its occupancy rate reaches 93.0% and we
have owned the property for one year), and properties that have been sold or
are classified as held for sale in accordance with SFAS 144.  The Same
Community properties are multifamily residential apartments that have been
owned during the entirety of the comparison periods.  The Management and
Service Operations provide management and advisory services to the
Acquisition/Disposition and Same Community properties that we own, as well as
to third party clients and properties, both affiliate and non-affiliates, and
charge a market rate fee based upon such services.  All of our segments are located
in the United States.

The accounting policies of the reportable segments are the same as those
described in the "Basis of Presentation and Significant Accounting
Policies" in our Annual Report on Form 10-K for the year ended December
31, 2008.  We evaluate the performance of our reportable segments based on Net
Operating Income ("NOI").  NOI is determined by deducting property
operating and maintenance expenses from property revenue for the
Acquisition/Disposition (excluding amounts classified as discontinued
operations) and Same Community segments and deducting direct property
management and service company expenses and painting service expenses from
Management and Service Company revenue for the Management and Service
Operations segment.  We consider NOI to be an appropriate supplemental measure
of our performance because it reflects the operating performance of our real
estate portfolio and management and service companies at the property and
management and service company level and is used to assess regional property
level performance.  NOI should not be considered (i) as an alternative to net
income (determined in accordance with GAAP), (ii) as an indicator of financial
performance, (iii) as cash flow from operating activities (determined in accordance
with GAAP) or (iv) as a measure of liquidity; nor is it necessarily indicative
of sufficient cash flow to fund all of our needs.  Other real estate companies
may define NOI in a different manner.

Segment information for the three months ended March 31, 2009 and 2008
is as follows:

|                                              |  | Three Months Ended March 31, 2009
|--------------------------------------------- |  | ---------------------------------
|                                              |  |                                  
|                                              |  | Acquisition/                     
|(In thousands)                                |  | Disposition                      
|                                              |  |                                  
|Total segment revenue                         |  | $                                
|Elimination of intersegment
  revenue         |  | (1)                              
|Consolidated revenue                          |  | 1,700                            
|                                              |  |                                  
|Operating loss from
  discontinued operations |  | (33)                             
|                                              |  |                                  
|*NOI                                          |  | 1,117                            

*Intersegment revenue and expenses have been eliminated in the computation of
NOI for each of the segments.

15





|                                              |  | Three Months Ended March 31, 2008
|--------------------------------------------- |  | ---------------------------------
|                                              |  |                                  
|                                              |  | Acquisition/                     
|(In thousands)                                |  | Disposition                      
|                                              |  |                                  
|Total segment revenue                         |  | $                                
|Elimination of intersegment
  revenue         |  | -                                
|Consolidated revenue                          |  | -                                
|                                              |  |                                  
|Operating loss from
  discontinued operations |  | (1,308)                          
|                                              |  |                                  
|*NOI                                          |  | -                                

*Intersegment revenue and expenses have been eliminated in the computation of
NOI for each of the segments.

Total assets for each of the reportable segments are summarized as
follows:

|                                    |  | March 31, |         | December 31,
|----------------------------------- |  | --------- | ------- | ------------
|                                    |  | 2009      |         | 2008        
|(In thousands)                      |  |           |         |             
|Acquisition/disposition             |  | $         | 72,082  |             
|Same community                      |  | 603,991   |         | 610,975     
|Management and service
  operations |  | 13,501    |         | 13,909      
|Total assets                        |  | $         | 689,574 |             

A reconciliation of NOI to total consolidated net income attributable to
AERC is as follows:

|                                                   | Three Months Ended
|-------------------------------------------------- | ------------------
|                                                   | March 31,         
|(In thousands)                                     | 2009              
|                                                   |                   
|Property NOI                                       | $                 
|Management and service
  operations NOI            | (8)               
|Depreciation and
  amortization                    | (9,466)           
|General and administrative
  expense               | (3,140)           
|Interest income                                    | 15                
|Interest expense                                   | (8,213)           
|Equity in net loss of joint
  ventures             | -                 
|Income from discontinued
  operations:             |                   
|Operating (loss) income                            | (33)              
|Gain on disposition of
  properties                | 2,278             
|Income from discontinued
  operations              | 2,245             
|Net income                                         | 127               
|Net loss attributable to
  noncontrolling interest | (14)              
|Consolidated net income
  attributable to AERC     | $                 



16





9.         CONTINGENCIES

Legal
Proceedings

We are subject to legal proceedings, lawsuits and other claims,
including proceedings by government authorities (collectively "Litigation"). 
Litigation is subject to uncertainties and outcomes are difficult to predict. 
Consequently, we are unable to estimate ultimate aggregate monetary liability
or financial impact with respect to the Litigation matter described in the
following paragraph as of March 31, 2009, and no accrual has been made for this
matter.  We believe that other Litigation will not have a material adverse
impact on us after final disposition.  However, because of the uncertainties of
Litigation, one or more lawsuits could ultimately result in a material
obligation.

Pending Lawsuits

On or about April
14, 2002, Melanie and Kyle Kopp commenced an action against us in the Franklin
County, Ohio Court of Common Pleas seeking undetermined damages, injunctive
relief and class action certification.  This case arose out of our Suredeposit
program.  This program allowed cash short prospective residents to purchase a
bond in lieu of paying a security deposit.  The bond serves as a fund to pay
those resident obligations that would otherwise have been funded by the
security deposit.  Plaintiffs allege that the nonrefundable premium paid for
the bond is a disguised form of security deposit, which is otherwise required
to be refundable in accordance with Ohio's Landlord-Tenant Act.  Plaintiffs
further allege that certain pet deposits and other nonrefundable deposits
required by us are similarly security deposits that must be refundable in
accordance with Ohio's Landlord-Tenant Act.On or about January 15, 2004, the Plaintiffs filed a motion
for class certification.  We subsequently filed a motion for summary judgment.  On
or about September 3, 2008, the court granted our motion for summary judgment
thereby dismissing all Plaintiff claims against us.  However, Plaintiff
subsequently appealed the courts ruling and the matter is now on appeal before
the Ohio Court of Appeals for the 10th District.

10.        SUBSEQUENT
EVENTS

Dividends.

On May 1, 2009,
we paid a dividend of $0.17 per common share to shareholders of record on April
15, 2009, which had been declared on March 17, 2009.

17







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

The following
discussion should be read in conjunction with the consolidated financial
statements and notes thereto included in Part I, Item 1 of this report on Form
10-Q.  This discussion may contain forward-looking statements based on current
judgments and current knowledge of management, which are subject to certain
risks, trends and uncertainties that could cause actual results to vary from
those projected, including but not limited to, expectations regarding our 2009
performance, which are based on certain assumptions.  Accordingly, readers are
cautioned not to place undue reliance on forward-looking statements which speak
only as of the dates of the document.  These forward-looking statements are
intended to be covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.  The words "expects," "projects,"
"believes," "plans," "anticipates" and similar
expressions are intended to identify forward-looking statements.  Investors are
cautioned that these forward-looking statements involve risks and uncertainty
that could cause actual results to differ from estimates or projections
contained in these forward-looking statements, including without limitation the
following:

| | changes in the economic climate
  in the markets in which we own and manage properties, including interest
  rates, our ability to consummate the sale of properties pursuant to our
  current plan, the overall level of economic activity, the availability of
  consumer credit and mortgage financing, unemployment rates and other factors;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | our ability to refinance debt
  on favorable terms at maturity;                                                                                                                                                                                                                                                                                 
| | our ability to defease or
  prepay debt pursuant to our current plan;                                                                                                                                                                                                                                                                           
| | risks of a lessening of demand
  for the multifamily units that we own or manage;                                                                                                                                                                                                                                                               
| | competition from other
  available multifamily units and changes in market rental rates;                                                                                                                                                                                                                                                        
| | increases in property and
  liability insurance costs;                                                                                                                                                                                                                                                                                          
| | unanticipated increases in real
  estate taxes and other operating expenses;                                                                                                                                                                                                                                                                    
| | weather conditions that
  adversely affect operating expenses;                                                                                                                                                                                                                                                                                  
| | expenditures that cannot be
  anticipated such as utility rate and usage increases, unanticipated repairs
  and real estate tax valuation reassessments or millage rate increases;                                                                                                                                                              
| | our inability to control
  operating expenses or achieve increases in revenue;                                                                                                                                                                                                                                                                  
| | the results of litigation filed
  or to be filed against us;                                                                                                                                                                                                                                                                                    
| | changes in tax legislation;                                                                                                                                                                                                                                                                                                                     
| | risks of personal injury claims
  and property damage related to mold claims because of diminished insurance
  coverage;                                                                                                                                                                                                                        
| | catastrophic property damage
  losses that are not covered by our insurance;                                                                                                                                                                                                                                                                    
| | our ability to acquire
  properties at prices consistent with our investment criteria;                                                                                                                                                                                                                                                          
| | risks associated with property
  acquisitions such as environmental liabilities, among others;                                                                                                                                                                                                                                                  
| | changes in or termination of
  contracts relating to third party management and advisory business; and                                                                                                                                                                                                                                          
| | risks related to the perception
  of residents and prospective residents as to the attractiveness, convenience
  and safety of our properties or the neighborhoods in which they are located.                                                                                                                                                   



18





Overview.

We are engaged
primarily in the ownership and operation of multifamily residential units.  We
also provide asset and property management services to third party owners of
multifamily residential units.  Our primary source of cash and revenue from
operations is rents from the leasing of owned apartment units, which represented
98.3% of our consolidated revenue for the three months ended March 31, 2009.

The operating
performance of our properties is affected by general economic trends including
but not limited to factors such as household formation, job growth,
unemployment rates, population growth, immigration, the supply of new
multifamily rental communities and in certain markets the supply of other
housing alternatives, such as condominiums, single and multifamily rental homes
and owner occupied single and multifamily homes.  Additionally, our performance
may be affected by access to and the cost of capital.

Rental revenue collections are a combination of rental rates,
occupancy levels and rent concessions.  We attempt to adjust these factors to
adapt to changing market conditions, thus allowing us to maximize rental income. 
Indicators that we use in measuring these factors include physical occupancy
and net rents.  These indicators are more fully described in the Results of
Operations comparison.  Additionally, we consider property NOI to be an
important indicator of our overall performance.  Property NOI (property
operating revenue less property operating and maintenance expenses) is a
measure of the profitability of our properties and has the largest impact on
our financial condition and operating results.  See Note 8 of the Notes to
Consolidated Financial Statements presented in Part I, Item 1 of this report on
Form 10-Q for additional information regarding property NOI and total NOI, in
addition to a reconciliation of NOI to consolidated net income in accordance
with GAAP.

We have three
reportable segments:  (1) Acquisition/Disposition Multifamily Properties; (2)
Same Community Multifamily Properties; and (3) Management and Service
Operations.  Our Same Community portfolio consists of 47 properties containing
12,040 units and accounted for 94.8% of total property revenue and 94.0% of our
property NOI during the three months ended March 31, 2009.  NOI for the Same
Community portfolio decreased $551,000 or 3.0% during the three months ended
March 31, 2009 when compared to the three months ended March 31, 2008.  This decrease
was primarily attributable to an $806,000 or 15.6% reduction in NOI at our
Florida and Georgia properties, while NOI at our Midwest portfolio increased $342,000
or 3.2%.

Updated 2009
Expectations.

| | Portfolio performance-We expect Same Community property NOI to decrease in the range of -3.1%
  to -0.6% in 2009.                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Property acquisitions and
  sales We plan to acquire approximately $80.0 million of properties,
  while disposing of approximately $80.0 million of properties.  We also plan
  to develop 60 units on the land parcel adjacent to one of our properties in
  the Richmond, Virginia metropolitan area, at an approximate cost of $7.0
  million.                                                       
| | Debt repayment
  We expect net defeasance/prepayment costs to be approximately $1.2 million to
  defease/prepay debt during 2009.  Defeasance/prepayment costs are expected to
  be incurred in conjunction with the sales of certain properties that are
  secured by mortgages that are subject to defeasance/prepayment penalties if the
  debt is repaid prior to their respective prepayment dates.



Forecast Qualification.The uncertainties caused by
the current economic turndown and the unprecedented financial crisis complicate
our ability to forecast future performance and disposition/acquisition
activity. We believe that the apartment industry is better situated to weather
the recession and financial crisis than other real estate sectors, because
people will normally choose shelter over discretionary spending such as going
to the mall or hotel stays and because government sponsored agencies such as
Fannie Mae and Freddie Mac continue to provide needed financing and refinancing
credit facilities, which are otherwise unavailable to other commercial real
estate sectors. However, our 2009 expectations may be adversely impacted if
recessionary forces accelerate or Congress curtails Fannie Mae or Freddie Mac
financing support to the apartment industry.

19





LIQUIDITY AND CAPITAL
RESOURCES

Cash Flows and Liquidity.  Significant
sources and uses of cash during the three months ended March 31, 2009 and 2008
are summarized as follows:

|                                                                      | Three Months Ended
|--------------------------------------------------------------------- | ------------------
|                                                                      | March 31,         
|(In thousands)                                                        | 2009              
|Net cash provided by
  operating activities                           | $                 
|Fixed assets:                                                         |                   
|Property/land
  acquisitions, net                                     | (58)              
|Net
  property disposition proceeds                                   | 3,836             
|Recurring,
  revenue enhancing and non-recurring capital expenditures | (2,262)           
|Debt:                                                                 |                   
|Decrease
  in mortgage notes                                          | (20,334)          
|Increase
  (decrease) in revolver borrowings                          | 16,800            
|Cash dividends and operating
  partnership distributions paid         | (3,864)           

Our primary sources
of liquidity are cash flow provided by operations, short-term borrowings on the
revolver and proceeds from property sales.  We believe that we are well
positioned to weather the recent turmoil in the financial markets.  Four
mortgage loans totaling approximately $72.2 million were to mature in 2009.  During
the three months ended March 31, 2009, we repaid $52.5 million of the maturing
debt with funds from new mortgage loans that mature in 2016 and we utilized
short term funding from our revolver for the remaining $19.7 million.  As of
March 31, 2009, our revolver had $111.7 million available for borrowing and matures
on March 11, 2011.

While we expect the slowing of
rental revenue growth rates to continue, we
anticipate that cash flow provided by operations for the remainder of the year
will remain nearly consistent with current levels and will be adequate to fund
our cash needs, other than the $7.0 million required to develop a 60-unit
expansion of a Richmond, Virginia property, which we intend to fund with
borrowings on our revolver.

Cash flow
provided by operations increased during 2009 compared to 2008 primarily due to
an increase in cash flow from property operations of $2.3 million and changes
in accounts payable and accrued expenses of $1.7 million.  The changes in
accounts payable and accrued expenses are primarily a result of the payment of
capital improvement projects completed in 2008 but paid for during the first
quarter of 2009 and differences in the timing of the payment of insurance
premiums.

We anticipate funding
approximately $9.1 million for recurring, revenue enhancing and nonrecurring
capital expenditures for the remainder of 2009.  These expenditures are
expected to be funded largely from cash flow provided by operating activities.

Any future multifamily property acquisitions or developments would be
financed with the most appropriate sources of capital, which may include secured
or unsecured debt financings, borrowings on the revolver, the assumption of
mortgage indebtedness, bank and other institutional borrowings, the exchange of
properties and undistributed earnings.

We anticipate that we will meet our 2009 liquidity requirements through
cash flow provided by operations.  We believe that this and other sources, such
as the revolver, should be sufficient to meet operating requirements, capital
additions, mortgage amortization payments and the payment of dividends in
accordance with REIT requirements.  We anticipate that we will continue paying
quarterly regular dividends in cash.

20





RESULTS
OF OPERATIONS

Comparison of the three months
ended March 31, 2009 to the three months ended March 31, 2008.

In the following discussion, Same Community properties
represent 47 properties that we have owned during the entirety of the
comparison periods.  Acquired properties represent two properties acquired in
April 2008.

The net loss from continuing operations decreased $825,000 during 2009
compared to 2008 primarily due to total property NOI increases and reductions
in interest expense during 2009.  Property NOI for the acquisition properties
increased approximately $1.1 million in the first quarter.  Property NOI for
the Same Community properties decreased approximately $551,000 during 2009,
primarily as a result of increased property operating expenses coupled with flat
property revenue during the first quarter.  These reductions to net loss from
continuing operations were partially offset by increases in depreciation and
amortization during the first quarter.

The following chart reflects the amount and percentage change in line
items that are relevant to the changes in overall operating performance:

|                                      |  | Increase (decrease) when  
|------------------------------------- |  | --------------------------
|                                      |  | comparing the three months
|                                      |  | ended March 31, 2009      
|(In thousands)                        |  | to March 31, 2008         
|Property revenue                      |  | $                         
|Property operating and
  maintenance  |  | 1,093                     
|Property NOI                          |  | 566                       
|                                      |  |                           
|Depreciation and
  amortization       |  | 961                       
|Interest expense                      |  | (870)                     
|Income from discontinued
  operations |  | (39,357)                  

Property revenue.Property revenue is impacted by a combination of rental rates, rent concessions
and occupancy levels, i.e., net collected rent per unit.  We measure these
factors using indicators such as physical occupancy (number of units occupied
divided by total number of units at the end of the period) and average monthly
net rent per unit (gross potential rents less concessions divided by total number
of units).  This information is presented in the following tables for the three
months ended March 31, 2009 and 2008:

|                           |  | Physical Occupancy
|-------------------------- |  | ------------------
|                           |  | March 31,         
|                           |  | 2009              
|Same Community Properties: |  |                   
|Midwest                    |  | 95.8%             
|Mid-Atlantic               |  | 95.1%             
|Southeast                  |  | 88.8%             
|Total Same Community       |  | 94.0%             
|Acquired Properties        |  | 93.5%             



21





|                           |  | Average Monthly Net Collected
|-------------------------- |  | -----------------------------
|                           |  | Rent Per Unit                
|                           |  | For the Three Months         
|                           |  | Ended March 31,              
|                           |  | 2009                         
|Same Community Properties: |  |                              
|Midwest                    |  | $                            
|Mid-Atlantic               |  | $                            
|Southeast                  |  | $                            
|Total Same Community       |  | $                            
|Acquired Properties        |  | $                            

Total property revenue
increased in the first quarter primarily as a result of increases in revenue
from the Acquired properties of $1.7 million.  Property revenue for the Same
Community segment remained relatively flat in the first quarter of 2009
compared to the first quarter of 2008.  Property revenue for the Midwest
portfolio increased $564,000 or 3.0% during 2009 primarily as a result of stable
occupancy combined with rental rate increases and a reduction in concessions
being offered.  Property revenue for the Southeast portfolio decreased $665,000
or 7.6% during 2009 primarily because of decreased physical occupancy and
increases in concessions being offered.  Property revenue for the Mid-Atlantic
portfolio remained relatively unchanged during the first quarter of 2009 when
compared to the first quarter of 2008.

Property operating and maintenance expenses.Property operating
and maintenance expenses for the Same Community segment increased $510,000 or
3.9% during the first quarter of 2009 primarily as a result of increases in
real estate tax and insurance expense, repairs and maintenance costs, and
utilities expense.  Additionally, property operating and maintenance expenses
related to the Acquired properties increased $583,000 during the first quarter
of 2009.

Depreciation and amortization.
Depreciation and amortization
expense increased in 2009 primarily due to an increase in depreciation and the
amortization of intangible assets related to the Acquired properties.

Interest expense.Interest expense decreased in 2009 primarily
as a result of a refund of $563,000 in defeasance costs in connection with certain
previously defeased loans and decreased interest expense of $137,000 for
borrowings on our revolver.

Income from
Discontinued Operations.Discontinued operations include the operating
results of a property sold in the first quarter of 2009 and 15 properties that
were sold during 2008 and the gains related to sales completed during the first
quarter of 2009 and 2008.  Defeasance/prepayment costs recognized in 2008
totaling $2.0 million were included in discontinued operations.  For further
details on "Income from discontinued operations," see Note 2 of the
Notes to Consolidated Financial Statements presented in Part I, Item 1 of this
report on Form 10-Q.

CONTINGENCIES

For a discussion of contingencies, see Note 9 of the Notes to Consolidated
Financial Statements presented in Part I, Item 1 of this report on Form 10-Q.

22





ITEM 3.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We are exposed to
interest rate changes associated with variable rate debt and the refinancing risk
on our fixed-rate debt.  Based on our variable rate debt outstanding at March
31, 2009 and 2008, an interest rate change of 100 basis points would impact
interest expense approximately $735,000 and $480,000 on an annual basis,
respectively. We occasionally use derivative instruments to manage our exposure
to interest rates.  See Note 1 of the Notes to Consolidated Financial
Statements presented in Part I, Item 1 of this report on Form 10-Q for
additional information regarding derivative instruments and "Item 7A
Qualitative and Quantitative Disclosures About Market Risk" of our Annual
Report on Form 10-K for the year ended December 31, 2008, for a more complete
discussion of interest rate sensitive assets and liabilities.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure
Controls and Procedures.We have evaluated the design and operations of
our disclosure controls and procedures to determine whether they are effective
in ensuring that the disclosure of required information is timely made in
accordance with the Securities Exchange Act of 1934 ("Exchange Act")
and the rules and forms of the Securities and Exchange Commission.  This
evaluation was made under the supervision and with the participation of
management, including our Chief Executive Officer ("CEO") and Chief
Financial Officer ("CFO"), as of the end of the period covered by
this report on Form 10-Q.  The CEO and CFO have concluded, based on their
review, that our disclosure controls and procedures, as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e), are effective to ensure that information
required to be disclosed in reports that we file under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms, and (ii) accumulated and
communicated to management, including the principal executive and principal
financial officers, as appropriate, to allow timely decisions regarding
disclosure.

Changes
in Internal Control over Financial Reporting.  There were no changes in our
internal control over financial reporting during the first quarter of 2009 that
materially affected, or are reasonably likely to materially affect, internal
control over financial reporting.

We believe that
because of its inherent limitations, internal control over financial reporting
may not always prevent or detect misstatements.  Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

PART II.     OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information
related to legal proceedings, see Note 9 of the Notes to Consolidated Financial
Statements presented in Part I, Item 1 of this report on Form 10-Q.

ITEM 1A. RISK
FACTORS

See "Risk
Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2008.

23





ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS

|Issuer Purchases of Equity Securities for the Three
  Months Ended March 31, 2009
|---------------------------------------------------------------------------------
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Period                                                                           
|January 1 through                                                                
|January
  31                                                                     
|February 1 through                                                               
|February
  28                                                                    
|March 1 through                                                                  
|March
  31                                                                       
|Total                                                                            

In December 2008, our
Board of Directors authorized the repurchase of up to $25.0 million of our
common and/or preferred shares.  This authorization is in addition to the $1.3
million remaining on our $50.0 million authorization, which was originally
approved by our Board of Directors in July 2005 and October 2006. 
Additionally, we have a policy which allows employees to pay their portion of
the income taxes related to restricted share vesting by surrendering a number
of shares to us equal in value on the day of vesting to the amount of taxes due
up to the minimum statutory withholding amount.

During the quarter
ended March 31, 2009, the amount of dividends declared on our common shares
exceeded net income attributable to AERC.  Net cash provided by operating
activities, however, was sufficient to pay such dividends.  For an additional
discussion of cash flow and liquidity, see "Liquidity and Capital
Resources" presented in Part I, Item 2 of this report on Form 10-Q.

24





ITEM 6.     EXHIBITS

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Filed herewith or                                                                 
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | incorporated herein                                                               
|Number |  | Title                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | by reference                                                                      
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|3.1    |  | Amendment to Second Amended
  and Restated Articles of Incorporation.                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Exhibit 3.1 to Form 8-K
  filed December 8, 2004.                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|3.2    |  | Second Amended and Restated
  Articles of Incorporation.                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Exhibit 3.2 to Form 10-Q
  filed July 31, 2007.                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|3.3    |  | Amended and Restated Code of
  Regulations of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Exhibit 3.3 to Form 10-Q
  filed August 1, 2006.                                  
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.1    |  | Specimen Common Share
  Certificate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Exhibit 3.1 to Form S-11
  filed September 2, 1993 (File No. 33-68276 as amended).
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.1a   |  | Amended and Restated
  Shareholders Rights Agreement dated December 30 2008.                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Exhibit 4.1 to Form 8-K
  filed December 30, 2008.                                
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.2    |  | Specimen 8.70% Class B
  Series II Cumulative Redeemable Preferred Shares.                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Exhibit 4.3 to Form 8-A
  filed December 8, 2004.                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.3    |  | Deposit Agreement by and
  among Associated Estates Realty Corporation and National City Bank and
  Depositary Receipts.                                                                                                                                                                                                                                                                                                                                                                            |  | Exhibit 4.5 to Form 8-A
  filed December 8, 2004.                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.5    |  | Form of Promissory Note and
  Form of Mortgage and Security Agreement dated May 10, 1999 from AERC to The
  Chase Manhattan Bank.                                                                                                                                                                                                                                                                                                                                                                   |  | Exhibit 4.5 to Form 10-Q
  filed August 13, 1999.                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.5a   |  | Form of Promissory Note and
  Form of Mortgage and Security Agreement dated September 10, 1999 from AERC to
  The Chase Manhattan Bank.                                                                                                                                                                                                                                                                                                                                                             |  | Exhibit 4.5a to Form 10-Q
  filed November 12, 1999.                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.5b   |  | Form of Promissory Note and
  Form of Mortgage and Security Agreement dated November 18, 1999 from AERC to
  The Chase Manhattan Bank.                                                                                                                                                                                                                                                                                                                                                              |  | Exhibit 4.5b to Form 10-K
  filed March 15, 2000.                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.13   |  | Credit Agreement Dated As of
  April 24, 2007 among Associated Estates Realty Corporation, as Borrower and
  National City Bank as Administrative Agent, Lead Arranger, and Book Manager
  and The Several Lenders From Time to Time Parties Hereto, as Lenders.                                                                                                                                                                                                                                    |  | Exhibit 4.13 to Form 10-Q
  filed July 31, 2007.                                  
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.15   |  | First Amendment to Credit
  Agreement dated March 20, 2008 by and among Associated Estates Realty
  Corporation (the Borrower), National City Bank and other banks and financial
  institutions (the Lenders) and National City Bank (the Administrative Agent).                                                                                                                                                                                                                                    |  | Exhibit 4.15 to Form 10-Q
  filed May 6, 2008.                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|4.16   |  | Joinderto Subsidiary
  Guaranty dated March 20, 2008 for the benefit of National City Bank, as agent
  for itself and certain other lenders, with respect to a loan from the Lenders
  to Associated Estates Realty Corporation.                                                                                                                                                                                                                                                                    |  | Exhibit 4.16 to Form 10-Q
  filed May 6, 2008.                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|       |  | Certain of the Registrant's
  assets are subject to mortgage obligations each of which individually relates
  to indebtedness totaling less than 10.0% of the total assets of the
  Registrant.  The Registrant hereby agrees to furnish a copy of such
  agreements to the Commission upon its request.                                                                                                                                                                                            |  |                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                   
|       |  | The Registrant issued
  unsecured debt in the form of Trust Preferred Securities on March 15, 2005 in
  a private placement in an amount less than 10.0% of the total assets of the
  Registrant.  The Registrant hereby agrees to furnish a copy of the Purchase
  Agreement dated March 15, 2005 between Associated Estates Realty Corporation,
  AERC Delaware Trust and Taberna Preferred Funding 1, Ltd. And a specimen
  Preferred Securities Certificate to the Commission upon its request. |  |                                                                                   



25





|       |  |                                                                                                                                                                                                                       |  | Filed herewith or                                                                  
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                       |  | incorporated herein                                                                
|Number |  | Title                                                                                                                                                                                                                 |  | by reference                                                                       
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10     |  | Associated Estates Realty
  Corporation Directors' Deferred Compensation Plan.                                                                                                                                        |  | Exhibit 10 to Form 10-Q
  filed November 14, 1996.                                 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10a    |  | Associated Estates Realty
  Corporation Directors' Deferred Compensation Plan  (January 1, 2005 Restatement).                                                                                                         |  | Exhibit 10a to Form 10-K
  filed February 25, 2009.                                
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.1   |  | Stock Option Plan.                                                                                                                                                                                                    |  | Exhibit 10.2 to Form S-11
  filed September 2, 1993 (File No. 33-68276 as amended).
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.2   |  | Amended and Restated Employment
  Agreement between the Company and Jeffrey I. Friedman.                                                                                                                              |  | Exhibit 10.1 to Form 10-Q
  filed May 13, 1996.                                    
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.3   |  | Equity-Based Incentive
  Compensation Plan.                                                                                                                                                                           |  | Exhibit 10.4 to Form 10-K
  filed March 29, 1995.                                  
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.4   |  | Form of Restricted Agreement
  by and among the Company and its Independent Directors.                                                                                                                                |  | Exhibit 10.9 to Form 10-K
  filed March 28, 1996.                                  
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.5   |  | Form of Indemnification
  Agreement.                                                                                                                                                                                  |  | Exhibit 4.2 to Form S-11 filed
  September 2, 1993 (File No. 33-68276 as amended). 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.6   |  | Amended 2008 Equity-Based
  Award Plan.                                                                                                                                                                               |  | Exhibit 10.1 to Form 8-K
  filed May 13, 2008.                                     
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.7   |  | Amendment to Associated
  Estates Realty Corporation 2008 Equity-Based Award Plan.                                                                                                                                    |  | Exhibit 10.7 to Form 10-K
  filed February 25, 2009.                               
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.7a  |  | Amendment to Associated Estates
  Realty Corporation Amended and Restated Equity-Based Award Plan.                                                                                                                    |  | Exhibit 10.7a to Form 10-K
  filed February 25, 2009.                              
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.7b  |  | Associated Estates Realty
  Corporation  Supplemental Executive Retirement Plan (Restated).                                                                                                                           |  | Exhibit 10.7b to Form 10-K
  filed February 25, 2009.                              
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.8   |  | Form of Share Option
  Agreement by and among the Company and its Independent Directors.                                                                                                                              |  | Exhibit 10.14 to Form 10-K
  filed March 30, 1993.                                 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.10  |  | Associated Estates Realty
  Corporation Amended and Restated 2001 Equity-Based Plan (as amended on May 4,
  2005).  Incorporated by reference to Appendix 1 to the Definitive Proxy
  Statement filed March 28, 2005. |  | Exhibit 99.01 to Form S-8
  filed May 26, 2005.                                    
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.11  |  | Form of Equity Award
  Agreement.                                                                                                                                                                                     |  | Exhibit 10.11 to Form 10-Q
  filed August 2, 2005.                                 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.12  |  | Long Term Incentive
  Compensation Plan.                                                                                                                                                                              |  | Exhibit 10.12 to Form 10-Q
  filed November 1, 2005.                               
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.13  |  | Associated Estates Realty
  Corporation Elective Deferred Compensation Plan.                                                                                                                                          |  | Exhibit 10.13 to Form 10-Q filed
  July 31, 2007.                                  
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.14  |  | Agreement of Purchase and
  Sale dated August 31, 2007 between River Forest Properties, LLC, and
  Associated Estates Realty Corporation.                                                                             |  | Exhibit 10.14 to Form 10-Q
  filed August 5, 2008.                                 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|10.15  |  | Agreement of Purchase and
  Sale dated August 31, 2007 between Belvedere Properties, LLC, and Associated
  Estates Realty Corporation.                                                                                |  | Exhibit 10.15 to Form 10-Q
  filed August 5, 2008.                                 
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|31     |  | Certification of Chief Executive
  Officer Pursuant to Section 302 of the Sarbanes Oxley Act.                                                                                                                         |  | Exhibit 31 to Form 10-Q
  filed herewith.                                          
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|31.1   |  | Certification of Chief
  Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act.                                                                                                                         |  | Exhibit 31.1 to Form 10-Q
  filed herewith.                                        
|       |  |                                                                                                                                                                                                                       |  |                                                                                    
|32     |  | Certification of Chief
  Executive Officer and Chief Financial Officer Pursuant to Section 906 of the
  Sarbanes Oxley Act.                                                                                           |  | Exhibit 32 to Form 10-Q
  filed herewith.                                          



26





SIGNATURES

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

|            |  | ASSOCIATED ESTATES REALTY
  CORPORATION
|----------- |  | ---------------------------------------
|            |  |                                        
|            |  |                                        
|May 5, 2009 |  | /s/ Lou Fatica                         
|(Date)      |  | Lou Fatica, Vice President             
|            |  | Chief Financial Officer and
  Treasurer



27