UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

**Form 10-Q**

[ x ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-12486

**Associated Estates Realty Corporation**

(Exact name of registrant as specified in its charter)

|Ohio                                     | 34-1747603            
|---------------------------------------- | ----------------------
|(State or other jurisdiction of          | (I.R.S. Employer      
|incorporation or organization)           | Identification Number)
|                                         |                       
|                                         |                       
|5025 Swetland Court, Richmond Hts., Ohio | 44143-1467            
|(Address of principal executive offices) | (Zip 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 [   ]                                                                           







**INDEX**

|**PART I  -  FINANCIAL INFORMATION**  | Page                                                     
|------------------------------------- | ---------------------------------------------------------
|ITEM 1                                | Condensed Financial Statements                           
|                                      |                                                          
|                                      | Consolidated Balance Sheets as of                        
|                                      | June 30, 2001 and December 31, 2000                      
|                                      |                                                          
|                                      | Consolidated Statements of Income for the three and      
|                                      | six months ended June 30, 2001 and 2000                  
|                                      |                                                          
|                                      | Consolidated Statements of Cash Flows for the six        
|                                      | month period ended June 30, 2001 and 2000                
|                                      |                                                          
|                                      | Notes to Financial Statements                            
|                                      |                                                          
|ITEM 2                                | Management's Discussion and Analysis of Financial        
|                                      | Condition and Results of Operations                      
|                                      |                                                          
|ITEM 3                                | Quantitative and Qualitative Disclosure About Market Risk
|**PART II**  -  **OTHER INFORMATION** |                                                          
|ITEM 1                                | Legal Proceedings                                        
|ITEM 2                                | Changes in Securities                                    
|ITEM 3                                | Defaults Upon Senior Securities                          
|ITEM 4                                | Submission of Matters to a Vote of Security-Holders      
|ITEM 5                                | Other Information                                        
|ITEM 6                                | Exhibits and Reports on Form 8-K                         
|                                      |                                                          
|**SIGNATURES**                        | 35                                                       

**ASSOCIATED ESTATES REALTY CORPORATION**

**CONSOLIDATED BALANCE SHEETS**

**(UNAUDITED)**

|                                                               |           |             
|-------------------------------------------------------------- | --------- | ------------
|                                                               | June 30,  | December 31,
|(In thousands, except share amounts)                           | 2001      | 2000        
|**ASSETS**                                                     |          
|Real estate assets                                             |           |             
|Land                                                           | $  91,524 | $   92,083  
|Buildings and improvements                                     | 785,026   | 794,908     
|Furniture and fixtures                                         | 32,629    | 32,248      
|                                                               | 909,179   | 919,239     
|Less:  accumulated depreciation                                | (190,395) | (184,600)   
|                                                               | 718,784   | 734,639     
|Construction in progress                                       | 8,742     | 7,543       
|Real estate, net                                               | 727,526   | 742,182     
|Properties held for sale, net of accumulated depreciation      | 13,875    | 27,845      
|Cash and cash equivalents                                      | 4,115     | 566         
|Restricted cash                                                | 17,103    | 14,784      
|Accounts and notes receivable                                  |           |             
|Rents                                                          | 919       | 864         
|Affiliates and joint ventures                                  | 15,754    | 12,456      
|Other                                                          | 3,194     | 3,886       
|Intangible and other assets, net                               | 16,329    | 16,976      
|                                                               | $798,815  | $ 819,559   
|                                                               |           |             
|**LIABILITIES AND SHAREHOLDERS' EQUITY**                       |           |             
|Secured debt                                                   | $556,695  | $ 567,468   
|Unsecured debt                                                 | 709       | 709         
|Total indebtedness                                             | 557,404   | 568,177     
|Accounts payable and accrued expenses                          | 25,795    | 24,198      
|Dividends payable                                              | 4,857     | -           
|Resident security deposits                                     | 4,864     | 5,412       
|Funds held on behalf of managed properties                     |           |             
|Affiliates and joint ventures                                  | 7,411     | 8,123       
|Other                                                          | 1,283     | 1,380       
|Accrued interest                                               | 2,751     | 2,942       
|Accumulated losses and distributions of joint ventures         |           |             
|in excess of investment and advances                           | 1,952     | 1,351       
|Total liabilities                                              | 606,317   | 611,583     
|                                                               |           |             
|Operating partnership minority interest                        | 10,591    | 11,520      
|                                                               |           |             
|Commitments and contingencies                                  | -         | -           
|Shareholders' equity                                           |           |             
|Preferred shares, Class A cumulative, without par value;       |           |             
|3,000,000 authorized; 225,000 issued and outstanding           | 56,250    | 56,250      
|Common shares, without par value, $.10 stated value;           |           |             
|50,000,000 authorized; 22,995,764 issued and 19,429,613        |           |             
|and 19,349,584 outstanding at June 30, 2001 and                |           |             
|December 31, 2000, respectively                                | 2,300     | 2,300       
|Paid-in capital                                                | 278,857   | 279,618     
|Accumulated distributions in excess of accumulated net income  | (122,876) | (108,002)   
|Accumulated other comprehensive income                         | (2)       | (2)         
|Less: Treasury shares, at cost, 3,566,150 and 3,646,180 shares |           |             
|at June 30, 2001 and December 31, 2000, respectively           | (32,622)  | (33,708)    
|Total shareholders' equity                                     | 181,907   | 196,456     
|                                                               | $798,815  | $ 819,559   





**ASSOCIATED ESTATES REALTY CORPORATION**

**CONSOLIDATED STATEMENTS OF INCOME**

**(UNAUDITED)**

|                                                           | For the three months ended | For the six months ended
|---------------------------------------------------------- | -------------------------- | ------------------------
|                                                           | June 30,                   | June 30,                
|(In thousands, except per share amounts)                   | 2001                       | 2000                    
|                                                           |                            |                         
|Revenues                                                   |                            |                         
|Rental                                                     | $36,329                    | $ 36,374                
|Property management fees                                   | 1,298                      | 1,263                   
|Asset management fees                                      | 731                        | 600                     
|Painting services                                          | 508                        | 347                     
|Other                                                      | 1,048                      | 794                     
|Total revenues                                             | 39,914                     | 39,378                  
|Expenses                                                   |                            |                         
|Property operating and maintenance                         | 16,721                     | 16,377                  
|Depreciation and amortization                              | 8,499                      | 8,585                   
|Painting services                                          | 396                        | 338                     
|General and administrative                                 | 3,305                      | 3,585                   
|Interest expense                                           | 11,036                     | 11,061                  
|Total expenses                                             | 39,957                     | 39,946                  
|(Loss) income before gain on sale of operating properties, |                            |                         
|equity in net loss of joint ventures and minority interest | (43)                       | (568)                   
|Gain on sale of operating properties                       | 3,344                      | -                       
|Equity in net loss of joint ventures                       | (176)                      | (57)                    
|Minority interest in operating partnership                 | (116)                      | (60)                    
|**Net income** **(loss)**                                  | $  3,009                   | $    (685)              
|                                                           |                            |                         
|**Net income (loss) applicable to common shares**          | $  1,638                   | $ (2,056)               
|                                                           |                            |                         
|**Earnings per common share - basic:**                     |                            |                         
|Net income (loss) applicable to common shares              | $      .08                 | $     (.10)             
|                                                           |                            |                         
|**Earnings per common share - diluted:**                   |                            |                         
|Net income (loss) applicable to common shares              | $      .08                 | $     (.10)             
|                                                           |                            |                         
|**Dividends declared per common share**                    | $      .25                 | $      .25              
|****                                                       |                            |                         
|**Weighted average number of common**                      |                            |                         
|**shares outstanding - Basic**                             | 19,429                     | 19,611                  
|**- Diluted**                                              | 19,622                     | 19,611                  





**ASSOCIATED ESTATES REALTY CORPORATION**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE SIX MONTH PERIOD ENDED JUNE 30,**

**(UNAUDITED)**

|(In thousands)                                                      | 2001         | 2000     
|------------------------------------------------------------------- | ------------ | ---------
|                                                                    |             
|Cash flow from operating activities:                                |              |          
|Net income (loss)                                                   | $ 2,421      | $ (2,302)
|Adjustments to reconcile net income (loss) to net cash provided by  |              |          
|operating activities:                                               |              |          
|Depreciation and amortization                                       | 16,969       | 16,985   
|Gain on sale of operating properties                                | (3,344)      | -        
|Minority interest in operating partnership                          | 241          | 148      
|Equity in net loss of joint ventures                                | 435          | 90       
|Earnings distributed from joint ventures                            | 157          | -        
|Net change in assets and liabilities:                               |              |          
|-	Accounts and notes receivable                                     | 637          | 1,975    
|-	Accounts and notes receivable of affiliates and                   |              |          
|joint ventures                                                      | (1,020)      | (1,473)  
|-	Accounts payable and accrued expenses                             | 1,442        | (2,126)  
|-	Other operating assets and liabilities                            | (1,252)      | 1,979    
|-	Restricted cash                                                   | (2,597)      | (2,007)  
|-	Funds held for non-owned managed properties                       | (97)         | (800)    
|-  Funds held for non-owned managed properties                      |              |          
|of affiliates and joint ventures                                    | (712)        | (1,464)  
|Total adjustments                                                   | 10,859       | 13,307   
|Net cash flow provided by operations                                | 13,280       | 11,005   
|                                                                    |              |          
|Cash flow from investing activities:                                |              |          
|Real estate and fixed asset additions acquired or developed         | (7,388)      | (10,935) 
|Net proceeds received from sale of operating properties             | 4,661        | -        
|(Contributions to) distributions from joint ventures                | (2,268)      | 1,630    
|Net cash flow used for investing activities                         | (4,995)      | (9,305)  
|                                                                    |              |          
|Cash flow from financing activities:                                |              |          
|Principal payments on secured debt                                  | (2,893)      | (2,505)  
|Proceeds from secured debt                                          | 4,200        | -        
|Principal payment on senior note                                    | -            | (8,543)  
|Line of credit borrowings                                           | 17,500       | 21,500   
|Line of credit repayments                                           | (11,500)     | (15,500) 
|Common share dividends paid                                         | (9,693)      | (15,227) 
|Preferred share dividends paid                                      | (2,743)      | (2,742)  
|Proceeds from redemption of operating partnership minority interest | 393          | -        
|Purchase of treasury shares                                         | -            | (13,752) 
|Net cash flow used for financing activities                         | (4,736)      | (36,769) 
|Increase (decrease) in cash and cash equivalents                    | 3,549        | (35,069) 
|Cash and cash equivalents, beginning of period                      | 566          | 36,385   
|Cash and cash equivalents, end of period                            | $ 4,115      | $  1,316 
|                                                                    |              |          
|Supplemental disclosure of cash flow information:                   |              |          
|Issuance of common shares in connection with the second anniversary |              |          
|payment for the MIGRA merger                                        | $          - | $ 2,983  
|Assumption of debt by purchaser of properties                       | 18,081       | -        
|Dividends declared but not paid                                     | 4,857        | 4,956    
|Adjustment for redemption of minority interest                      | 536          | -        
|Cash paid for interest (excluding capitalized interest)             | 21,520       | 21,947   
|Contribution of land to Joint Venture                               | -            | 4,603    





**ASSOCIATED ESTATES REALTY CORPORATION**

**NOTES TO FINANCIAL STATEMENTS**



**1.**	**BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**

**Business**

Associated Estates Realty Corporation (the "Company") is a self-administered and self-managed real estate investment trust ("REIT") which specializes in multifamily property management,
advisory, development, acquisition, disposition, operation and ownership activities.  The Company or its
affiliates receive certain property and asset management fees, acquisition, disposition and incentive
fees, supervisory fees, loan origination and consultation fees, and mortgage servicing fees.  MIG II
Realty Advisors, Inc. ("MIG"), an affiliate of the Company, is a registered investment advisor and serves
as a real estate advisor to pension funds.  MIG recognizes revenue primarily from client generated
acquisition, disposition and incentive fees, loan origination, mortgage  servicing, asset and property
management and construction lending activities.  MIG earns the majority of its mortgage servicing fee
revenue from two of its pension fund clients.  Additionally, the Company owns substantially all of the
economic interest in four corporations which provide management and other services for the Company
and third parties.  These corporations are referred to as "Service Companies".

The Company's portfolio currently consists of a total of 129 properties of which 77 (64 Market
Rate properties and 13 Affordable Housing properties) are owned, directly or indirectly, by the Company
or by a subsidiary of the Company; eight properties in which the Company is a joint venture partner (one
Market Rate property 66.67% owned; three Market Rate properties 33.33% owned; two Market Rate
properties 50.0% owned; one Affordable Housing property 50.0% owned; and one Market Rate property
49.0% owned) and 44 non-owned properties (of which one is a commercial property) managed by the
Company or one of its subsidiaries or Service Companies.   Additionally, MIG provides asset
management services for an additional seven properties, six of which are commercial properties.

**Basis of Presentation**

The accompanying unaudited financial statements have been prepared by the Company's
management in accordance with generally accepted accounting principles 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 generally accepted
accounting principles ("GAAP") for complete financial statements.  In the opinion of management, all
adjustments (consisting only of normally recurring adjustments) considered necessary for a fair
presentation 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 Company's audited financial statements and notes thereto included in the Associated Estates
Realty Corporation Annual Report on Form 10-K for the year ended December 31, 2000.

**Recent Accounting Pronouncements**

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities as amended by SFAS No. 137 and No. 138.  The provisions of this statement require
that derivative instruments be carried at fair value on the balance sheet.  The statement continues to
allow derivative instruments to be used to hedge various risks and sets forth specific criteria to be used
to determine when hedge accounting can be used.  For derivative instruments not accounted for as
hedges, changes in fair value are required to be recognized in earnings.  The provisions of this
statement become effective January 1, 2001.  The Company has adopted these provisions and the
impact on the Company's financial position, results of operations and cash flows is not material to the
Company as no derivative instruments were outstanding at the date of adoption through June 30, 2001.
The FASB continues to issue interpretive guidance that could require changes in the Company's
application of the standard.

In June 2001, the Financial Accounting Standards Board approved Statements of Financial
Accounting Standards No. 141 "Business Combinations" ("SFAS 141") and No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142") which are effective July 1, 2001 and January 1, 2002, respectively, for
the Company.  SFAS 141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001.  Under SFAS 142, amortization of goodwill, including
goodwill recorded in past business comminations, will discontinue upon adoption of this standard.  In
addition, goodwill recorded as a result of business combinations completed during the six-month period
ending December 31, 2001 will not be amortized.  All goodwill and intangible assets will be tested for
impairment in accordance with the provisions of the Statement.  The Company is currently reviewing the
provisions of SFAS 141 and SFAS 142 and assessing the impact of adoption.

**Reclassifications**

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

**2.**	**DEVELOPMENT OF MULTIFAMILY PROPERTIES**

Construction in progress, including the cost of land, for the development of multifamily properties
was $8.7 million and $7.5 million at June 30, 2001 and December 31, 2000, respectively.  The Company
capitalizes interest costs on funds used in construction, real estate taxes and insurance from the
commencement of development activity through the time the property is available for leasing.
Capitalized interest, real estate taxes and insurance aggregated approximately $482,000 and $568,000
during the six month period ended June 30, 2001 and 2000, respectively.  During the six months ended
June 30, 2001, the Company completed the construction of a property and the last 16 units were brought
on line.  In connection with the completion of this construction, the final $1.7 million was transferred from
construction in progress to buildings and improvements.

**3.**	**REAL ESTATE SALES**

In June 2001, the Company completed a sale of four Market Rate properties located in Central
and Southwestern Ohio.  The buyer purchased the four properties for $5.1 million in gross cash
proceeds plus assumed mortgage indebtedness of $18.1 million.  The sale resulted in the Company
recording a gain of $3.3 million.

******4.**	**PROPERTIES HELD FOR SALE**

Three Market Rate properties located in Ohio were sold on December 31, 1999.  To facilitate the
sale, the Company financed the sale with fixed rate debt which had an original maturity date of July 1,
2001.  The maturity date of this debt has been extended to December 31, 2001.  The sale provided for
the Company's continued management of the properties.  These sales will not be recognized for GAAP
purposes until the seller financing is repaid.  These three properties are presented as "Properties held
for sale" in the Consolidated Balance Sheets at June 30, 2001 and December 31, 2000.  Additionally, at
June 30, 2001, the Company had contracts to sell one Market Rate property and one Affordable Housing
property,  which are presented in the Consolidated Balance Sheets as "Properties held for sale" at June
30, 2001.  These five properties had an aggregate net income of $243,000 for the six months ended
June 30, 2001.  Also, at December 31, 2000, the four properties sold in June 2001 (see Note 3) were
presented in the Consolidated Balance Sheets as "Properties held for sale".

**5.**	**SHAREHOLDERS' EQUITY**

The following table summarizes the changes in shareholders' equity since December 31, 2000:

|                                            |          |            |                        |          | Accumulated   |               |          
|------------------------------------------- | -------- | ---------- | ---------------------- | -------- | ------------- | ------------- | ---------
|                                            |          | Class A    |                        |          | Distributions | Accumulated   |          
|                                            |          | Cumulative | Common                 |          | In Excess Of  | Other         | Treasury 
|                                            |          | Preferred  | Shares                 | Paid-In  | Accumulated   | Comprehensive | Shares   
|(In thousands, except share amounts)        | Total    | Shares     | (at $.10 stated value) | Capital  | Net Income    | Income        | (at cost)
|                                            |          |            |                        |          |               |               |          
|Balance, Dec. 31, 2000                      | $196,456 | $56,250    | $2,300                 | $279,618 | $(108,002)    | $(2)          | $(33,708)
|Net income                                  | 2,421    |            |                        |          | 2,421         |               |          
|Issuance of 80,133 restricted common shares |          |            |                        |          |               |               |          
|from treasury shares                        | 696      |            |                        | (378)    |               |               | 1,074    
|Deferred compensation                       | (371)    |            |                        | (371)    |               |               |          
|Exercise of options on 2,000 shares         |          |            |                        |          |               |               |          
|from treasury shares                        | 18       |            |                        | (11)     |               |               | 29       
|Issue 250 shares from treasury shares       | 2        |            |                        | (1)      |               |               | 3        
|Purchase of 2,353 treasury shares           | (20)     |            |                        |          |               |               | (20)     
|Common share dividends declared             | (14,552) |            |                        |          | (14,552)      |               |          
|Preferred share dividends declared          | (2,743)  |            |                        |          | (2,743)       |               |          
|Balance, June 30, 2001                      | $181,907 | $56,250    | $2,300                 | $278,857 | $(122,876)    | $(2)          | $(32,622)

******6.**	**DEBT**

**Conventional**

In 2000, the Company caused to be obtained a $14.0 million first mortgage loan encumbering a
property owned by a subsidiary.  The loan provided for disbursement in two installments.  The first
installment of $9.8 million was disbursed in September 2000.  The balance of $4.2 million was disbursed
in March 2001.  The loan requires monthly interest only payments at the rate of 7.76% through October
15, 2002 at which time payments of principal and interest are required through the maturity date of
October 15, 2005.

**Line of Credit**

On June 30, 2001, $6.0 million was outstanding under a $20.0 million secured line of credit.
Borrowings under this line of credit are currently restricted to an amount of $12.6 million.  The remaining
$7.4 million may become available upon completion of certain requirements.  Borrowings under this line
of credit bear interest at a rate of LIBOR plus 1.5% which was 5.36% at June 30, 2001.  There were no
borrowings outstanding under either this line of credit at December 31, 2000 nor under the Company's
$12.0 million line of credit.

**7.**	**TRANSACTIONS WITH AFFILIATES AND JOINT VENTURES**

**Management and Other Services**

The Company or one of its subsidiaries or Service Companies provides management and other
services to (and is reimbursed for certain expenses incurred on behalf of) certain non-owned properties
in which the Company's Chief Executive Officer and/or other related parties have varying ownership
interests.  The entities which own these properties, as well as other related parties, are referred to as
"affiliates".  The Company or one of its subsidiaries or Service Companies also provides similar services
to joint venture properties.

Summarized affiliate and joint venture transaction activity is as follows:

|                                            | Three months ended | Six months ended
|------------------------------------------- | ------------------ | ----------------
|                                            | June 30,           | June 30,        
|(In thousands)                              | 2001               | 2000            
|                                            |                    |                 
|Property management fee and other           |                    |                 
|miscellaneous service revenues	- affiliates | $ 376              | $   539         
|- joint ventures                            | 230                | 245             
|Painting service revenues	- affiliates      | 58                 | 57              
|- joint ventures                            | 150                | 48              
|Expenses incurred on behalf                 |                    |                 
|of and reimbursed by (1)	- affiliates       | 943                | 1,157           
|- joint ventures                            | 816                | 805             
|Interest income 	- affiliates               | 59                 | 66              
|Interest expense	- affiliates               | (28)               | (45)            
|- joint ventures                            | (5)                | (7)             

(1)  *Primarily payroll and employee benefits, reimbursed at cost.***

Property management fees and other miscellaneous receivables due from affiliates and joint
venture properties aggregated $5.1 million and $4.9 million at June 30, 2001 and December 31, 2000,
respectively.  Other miscellaneous payables due to affiliates and joint venture properties aggregated
$2.9 million at both June 30, 2001 and December 31, 2000.

***Advances to Affiliates and Joint Ventures***

In the normal course of business, the Company advances funds on behalf of, or holds funds for
the benefit of, affiliates and joint ventures.  Funds advanced to affiliates and joint ventures aggregated
$186,000 and $7.1 million  at June 30, 2001, respectively, and $573,000 and $3.6 million at December
31, 2000, respectively.  The Company held funds for the benefit of affiliates and joint ventures in the
aggregate amount of $2.9 million and $1.6 million at June 30, 2001, respectively, and $4.3 million and
$950,000 at December 31, 2000, respectively.



***Notes Receivable***

At June 30, 2001 and December 31, 2000, two notes of equal amounts were receivable from the
Company's Chief Executive Officer aggregating $3.3 million (included in "Accounts and notes
receivables-affiliates and joint ventures").  One of the notes is partially secured by 150,000 of the
Company's common shares; the other note is unsecured.  For the six months ended June 30, 2001 and
2000, the interest rates charged on these notes were approximately 7.0% and 7.5%, respectively, with
principal due May 1, 2002.  The Company recognized interest income of $125,000 and $127,000 for the
six months ended June 30, 2001 and 2000, respectively, relating to these notes.

**8.	OPERATING PARTNERSHIP MINORITY INTEREST**

In conjunction with the settlement of the lawsuit in the Harris County, Texas District Court
against MIG Realty Advisors, Inc. ("MIGRA"), MIG's predecessor company, (see Note 12 for further
details concerning the settlement) the former MIGRA shareholders agreed to redeem 39,314 Operating
Partnership units ("OP units") for cash in the amount of approximately $393,000, which represented the
Company's common share price of $10.00 per unit on the day of redemption.  The proceeds of the
redemption will be used to satisfy certain indemnification obligations owed by the former MIGRA
stockholders to the Company in connection with this lawsuit.   These units had a recorded value of
approximately $929,000  when issued.  The difference between the effective purchase price of the
minority interest and its recorded value was approximately $536,000, which reduced the recorded value
of the underlying real estate.

**9.	SHARES**

On February 28, 2001, the Company granted 80,133 of restricted shares to executives of the
Company under the annual incentive plan.  These awards were made from the Company's 2001 Equity
Incentive Plan pursuant to which grants are made solely from Treasury Shares.  The Company's policy
on the reissuance of Treasury Shares is to account for the issuance on the First-In First-Out method.  At
June 30, 2001, Treasury Shares equaled 3,566,150 at a cost of $32.6 million.

**10.	EARNINGS PER SHARE**

Earnings per share ("EPS") has been computed pursuant to the provisions of SFAS No. 128.
The following table provides a reconciliation of both the net income (loss) and the number of common
shares used in the computation of basic EPS, which utilizes the weighted average number of common
shares outstanding without regard to dilutive potential common shares, and diluted EPS, which includes
all such shares, as applicable.

|                                              | For the three months | For the six months
|--------------------------------------------- | -------------------- | ------------------
|(In thousands, except per share amounts)      | ended June 30,       | ended June 30,    
|                                              | 2001                 | 2000              
|**Earnings Per Common Share - Basic:**        |                      |                   
|Net income (loss)                             | $3,009               | $   (685)         
|Less:	Preferred share dividends               | 1,371                | 1,371             
|Net income (loss) applicable to common shares | $1,638               | $(2,056)          
|                                              |                      |                   
|**Earnings Per Share - Diluted:**             |                      |                   
|Net income (loss)                             | $3,009               | $   (685)         
|Less:	Preferred share dividends               | 1,371                | 1,371             
|Net income (loss) applicable to common shares | $1,638               | $(2,056)          
|                                              |                      |                   
|**Number of Shares:**                         |                      |                   
|Basic-average shares outstanding              | 19,429               | 19,611            
|Diluted-average shares outstanding            | 19,622               | 19,611            
|                                              |                      |                   
|**Earnings Per Common Share - Basic:**        |                      |                   
|Net income (loss)                             | $    .08             | $   (.10)         
|                                              |                      |                   
|**Earnings Per Common Share - Diluted:**      |                      |                   
|Net income (loss)                             | $    .08             | $   (.10)         

Options to purchase 3.2 million and 1.8 million common shares were outstanding at June 30,
2001 and 2000, respectively, which has been reflected above using the treasury stock method.  For the
three months ended June 30, 2000 and the six months ended June 30, 2001 and 2000, approximately
8,000, 81,000 and 16,000 common share options were respectively excluded from the dilutive
calculation under the treasury stock method as these shares are considered antidilutive due to the net
loss incurred for the three months ended June 30, 2000 and the six months ended June 30, 2001 and
2000, respectively.

The exchange of operating partnership minority interests into common shares was not included
in the computation of diluted EPS because the Company plans to settle these OP units in cash.

**11.	INTERIM SEGMENT REPORTING**

The Company has four reportable segments: (1) Acquisition/Disposition multifamily properties,
(2) Same Store Market Rate ("Market Rate") multifamily properties, (3) Affordable Housing multifamily
properties, and (4) Management and Service Operations.  The Company has identified these segments
because this discrete information is the basis upon which management makes decisions regarding
resource allocation and performance assessment.  The Acquisition/Disposition properties represent
acquired or developed properties which have not yet reached stabilization (the Company considers a
property stabilized when its occupancy rate reaches 93.0%) and properties that have been sold.  The
Market Rate multifamily properties are same store conventional multifamily residential apartments.  The
Affordable Housing properties are multifamily properties for which the rents are subsidized and certain
aspects of the operations are regulated by HUD pursuant to Section 8 of the National Housing Act of
1937.  The Management and Service Operations provide management and advisory services to the
Acquired, Market Rate and Affordable Housing properties which are owned by the Company, as well as
to clients and properties not owned by the Company.  All of the Company's segments are located in the
United States.  Effective January 1, 2001, management revised its reported segments by showing
Acquisition/Disposition properties as a separate segment.  Previously, Acquisition/Disposition properties
were included within the Market Rate segment.  Also, the Unallocated Corporate Overhead segment has
been eliminated and the costs previously allocated to this segment have been reallocated to the other
four segments.  Management has adjusted the reportable segments in order to reflect a better
representation of the operations of the Company.  For comparability purposes, the presentation for the
three and six months ended June 30, 2000 have been restated to reflect these revisions to the
Company's reportable segments.

The accounting policies of the reportable segments are the same as those described in the
"Basis of Presentation and Significant Accounting Policies".  The Company previously evaluated the
performance of its reportable segments based on EBITDA; however, effective January 1, 2001,
management changed its evaluation performance measure to Net Operating Income ("NOI"), as the
Company believes that NOI represents a more accurate measure of the reportable segment's activity.
NOI is determined by deducting property operating and maintenance expenses from total revenues for
the Acquisition/Disposition, Market Rate and Affordable Housing segments and deducting service
companies expense, which is included within the general and administrative expenses in the
Consolidated Statements of Income and painting service expenses from total revenues for the
Management and Service Operations segment.  NOI should not be considered as an alternative to net
income (determined in accordance with GAAP), as an indicator of the Company's financial performance,
cash flow from operating activities (determined in accordance with GAAP) or as a measure of the
Company's liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company's
needs.  Certain other real estate companies may define NOI in a different manner.

Information on the Company's segments for the three and six months ended June 30, 2001 and
2000 is as follows:

|                                     | For the three months ended June 30, 2001
|------------------------------------ | ----------------------------------------
|                                     |                                         
|                                     | Acquisition/                            
|(In thousands)                       | Disposition                             
|                                     |                                         
|Total segment revenues               | $   2,785                               
|Elimination of intersegment revenues | -                                       
|Consolidated revenues                | 2,785                                   
|                                     |                                         
|Equity in net loss of joint ventures | (85)                                    
|                                     |                                         
|*NOI                                 | 1,384                                   
|                                     |                                         
|Total assets                         | 82,419                                  



|                                     | For the six months ended June 30, 2001
|------------------------------------ | --------------------------------------
|                                     |                                       
|                                     | Acquisition/                          
|(In thousands)                       | Disposition                           
|                                     |                                       
|Total segment revenues               | $  5,526                              
|Elimination of intersegment revenues | -                                     
|Consolidated revenues                | 5,526                                 
|                                     |                                       
|Equity in net loss of joint ventures | (132)                                 
|                                     |                                       
|*NOI                                 | 2,650                                 
|                                     |                                       
|Total assets                         | 82,419                                

|                                     | For the three months ended June 30, 2000
|------------------------------------ | ----------------------------------------
|                                     |                                         
|                                     | Acquisition/                            
|(In thousands)                       | Disposition                             
|                                     |                                         
|Total segment revenues               | $     3,485                             
|Elimination of intersegment revenues | -                                       
|Consolidated revenues                | 3,485                                   
|                                     |                                         
|Equity in net loss of joint ventures | (30)                                    
|                                     |                                         
|*NOI                                 | 2,114                                   
|                                     |                                         
|Total assets                         | 104,720                                 

|                                     | For the six months ended June 30, 2000
|------------------------------------ | --------------------------------------
|                                     |                                       
|                                     | Acquisition/                          
|(In thousands)                       | Disposition                           
|                                     |                                       
|Total segment revenues               | $     6,554                           
|Elimination of intersegment revenues | (1)                                   
|Consolidated revenues                | 6,553                                 
|                                     |                                       
|Equity in net loss of joint ventures | (30)                                  
|                                     |                                       
|*NOI                                 | 3,653                                 
|                                     |                                       
|Total assets                         | 104,720                               

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

A reconciliation of total segment NOI to total consolidated net income (loss) for the three and six
months ended June 30, 2001 and 2000 is as follows:

|                                           | For the three months ended | For the six months ended
|------------------------------------------ | -------------------------- | ------------------------
|                                           | June 30,                   | June 30,                
|(In thousands)                             | 2001                       | 2000                    
|                                           |                            |                         
|Total NOI for reportable segments          | $ 21,200                   | $ 21,095                
|Depreciation and amortization              | (8,499)                    | (8,585)                 
|General and administrative expense         | (1,708)                    | (2,017)                 
|Interest expense                           | (11,036)                   | (11,061)                
|Gain on sale of properties                 | 3,344                      | -                       
|Equity in net loss of joint ventures       | (176)                      | (57)                    
|Minority interest in operating partnership | (116)                      | (60)                    
|Consolidated net income (loss)             | $    3,009                 | $     (685)             

**12.	CONTINGENCIES**

The Company recently settled a lawsuit pending in the Harris County, Texas District Court
against MIG Realty Advisors, Inc. ("MIGRA") (MIG's predecessor company) and others involving a claim
for contribution and indemnity arising out of MIGRA having served as an investment advisor to an
advisory client in connection with the acquisition of an apartment project located in Houston, Texas.  On
or about December 30, 1998, the advisory client that acquired the property filed suit against the seller,
the consulting engineer who performed the engineering due diligence and others seeking damages for
defective conditions discovered at the property that were allegedly concealed by the seller and not
discovered by the consulting engineer during the pre-purchase due diligence investigation conducted by
the engineer.  The consulting engineer filed a third party claim against MIGRA, alleging that MIGRA  was
responsible for the conduct of the due diligence investigation and consequently MIGRA, rather than the
engineer was responsible for any damages suffered by the advisory client.  Some of the other
defendants, including the seller and the general contractor filed cross actions against MIGRA under the
Texas contribution and proportionate liability statutes alleging that MIGRA was responsible in whole or in
part for the damages alleged to have been suffered by the plaintiff advisory client.  The consulting
engineer later amended its cross action to include similar claims against MIGRA for contribution and
determination of proportionate responsibility.  The advisory client and MIGRA entered into a tolling
agreement for the purpose of tolling any claims that the advisory client may have had against MIGRA in
connection with the apartment project.  The effect of the cross actions was to attempt to make MIGRA
potentially responsible for some or all of the claims of the advisory client irrespective of whether MIGRA
had been sued directly by the advisory client.  On March 28, 2001, the Company entered into a
settlement agreement, which had the effect of releasing MIGRA, the Company and others from all
liability in connection with the lawsuit.  The terms of the settlement agreement are confidential.  In
respect to the above settlement, the Company recorded a liability and a charge to its results of
operations to reflect the cash settlement.  In addition, the Company is entitled to indemnification from the
former MIGRA stockholders arising out of the Merger Agreement between the Company and MIGRA
dated April 16, 1998 which had the effect of offsetting a portion of the aforementioned costs recorded by
the Company.  The Company believes that the amounts not recovered under the aforementioned
indemnification, are covered under MIG's liability insurance policy.  Accordingly, the net amounts
charged to the Company's general and administrative expense in respect of the settlement were not
material.

The Company is also subject to other legal proceedings and claims which arise in the ordinary
course of its business.  Although occasional adverse decisions (or settlements) may occur, the Company
believes that the final disposition of any such pending matters will not have a material adverse effect on
the financial position or results of operations of the Company.

**13.	GUARANTIES**

The Company has guaranteed completion of certain improvements totaling $1.8 million in
connection with the refinancing of the Americana Apartments, a 738 unit multifamily community located
in Euclid, Ohio, in which the Company is a 33.33% joint venture partner.  This obligation is secured by a
$1.8 million letter of credit.  Additionally, in connection with the refinancing of the Watergate Apartments,
a 949 unit multifamily community located in Euclid, Ohio, in which the Company is a 33.33% joint
venture partner, the Company has guaranteed completion of certain improvements totaling
approximately $7.0 million.  This obligation is secured by a $3.5 million letter of credit.  Also, the
Company provided a $407,000 performance bond to the City of Boynton Beach, Florida, which
guarantees performance by a Company subsidiary of certain improvements in connection with the
Company's proposed Boynton Beach development.  Furthermore, the Company has guaranteed the
payment of a $30.0 million construction loan in connection with the Idlewylde Apartments Phase II, a 535
unit multifamily community located in Atlanta, Georgia which is being developed by the Company and its
pension fund joint venture partner.  The Company also has guaranty obligations under a $220,000 letter
of credit for purposes of guaranteeing certain equity contributions required by the construction lender in
connection with Berkley Manor, a 252 unit multifamily community located in Cranberry Township,
Pennsylvania, which is being developed by the Company and its joint venture partner.

**14.	SUBSEQUENT EVENTS**

**Dividends Declared and Paid**

On June 28, 2001, the Company declared a dividend of $0.25 per common share which was
paid on August 1, 2001 to shareholders of record on July 13, 2001.

******Sale of Property**

On July 17, 2001, the Company completed the sale of one property located in Northeast Ohio.
The buyer purchased the property for a sale price of $7.5 million, which includes the assumption of
mortgage obligations of $7.2 million.  The sale resulted in a gain of approximately $2.7 million, which will
be recorded in the period ended September 30, 2001.

**Joint Ventures**

On July 20, 2001, the Company entered into multiple agreements concerning the disposition of
five Market Rate joint venture properties located in Northeast Ohio.  Under the agreements, the
Company would eventually become the 100% fee owner of three of the properties and relinquish its
ownership interest in two of the properties (one property of which the Company is a 66.67% owner).
These transactions are anticipated to be completed during the fourth quarter of the current year.



**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION AND RESULTS OF OPERATIONS.**

The following discussion should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this report.  Historical results and percentage relationships set forth in
the Consolidated Statements of Income contained in the financial statements, including trends which
might appear, should not be taken as indicative of future operations.  This discussion may also 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.  Accordingly, readers are cautioned not to place undue reliance on forward-looking
statements. These forward-looking statements are intended to be covered by the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995.  Investors are cautioned that the Company's
forward-looking statements involve risks and uncertainty, including without limitation, changes in
economic conditions in the markets in which the Company owns properties, risks of a lessening of
demand for the multifamily units owned by the Company, changes in government regulations affecting
the Affordable Housing Properties, changes in or termination of contracts relating to third party
management and advisory business, and expenditures that cannot be anticipated such as utility rate and
usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax
valuation reassessments.

**Federal Income Taxes**

The Company has elected to be taxed as a real estate investment trust ("REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year
ending December 31, 1993.  REITs are subject to a number of organizational and operational
requirements including a requirement that 90.0% of the income that would otherwise be considered as
taxable income be distributed to shareholders.  Providing the Company continues to qualify as a REIT, it
will generally not be subject to federal income tax on net income.  However, the Company's Service
Companies may be subject to federal income tax.

On December 17, 1999, as part of a larger bill, the President signed into law the REIT
Modernization Act ("RMA").  Effective beginning January 1, 2001, the RMA has amended the tax rules
relating to the composition of a REIT's assets.  Under prior law, a REIT was precluded from owning
more than 10.0% of the outstanding voting securities of any one issuer, other than a wholly owned
subsidiary or another REIT.  Beginning in 2001, a REIT will generally remain subject to this current
restriction and will also be precluded from owning more than 10.0% of the value of all securities of any
one issuer.

As an exception to this prohibition, a REIT will be allowed to own up to 100% of the securities of
a taxable REIT subsidiary ("TRS") that can provide non-customary services to REIT tenants and others
without disqualifying the rents that a REIT receives from its tenants.  However, no more than 20.0% of
the value of a REIT's total assets can be represented by securities of one or more TRS's.  The amount
of interest and other expenses from a TRS to a REIT will be limited to ensure that a TRS is subject to an
appropriate level of corporate tax.  The new 10.0% asset test will not apply to certain arrangements
(including third party subsidiaries) in place on July 12, 1999, provided that a subsidiary does not engage
in a "substantial new line of business" or acquire any "substantial asset", and a REIT does not acquire
any new securities in the subsidiary.  Under the RMA, a third party subsidiary will be able to convert tax
free into a TRS.  The Company has elected TRS status for all of its preferred stock subsidiaries for
2001.

**Liquidity and Capital Resources**

The Company expects to meet its short-term liquidity requirements generally through its net
cash provided by operations, secured borrowings and property sales proceeds.  The Company believes
that these sources will be sufficient to meet both operating requirements and the payment of dividends in
accordance with REIT requirements.  In November 2001, an $11.0 million non-recourse first mortgage
loan matures.  The Company is currently in discussions to refinance this maturing loan and anticipates
that the refinancing will occur.  Additionally, during the remainder of 2001 and 2002, approximately $3.4
million and $6.0 million, respectively, of principal amortization payments on secured debt are required.
Also, the Americana Apartments, a property located in Euclid, Ohio, in which the Company is a 33.33%
joint venture partner, has an $11.0 million first mortgage loan maturing in November 2001.  The
Company's 33.33% share of this loan is approximately $3.9 million.  The Company anticipates that this
loan will be refinanced.

On July 16, 2001, the Company and its joint venture partners obtained a new loan in the amount
of $17.2 million on the Watergate Apartments, a 949 unit multifamily community located in Euclid, Ohio,
in which the Company is a 33.33% joint venture partner.  Approximately $14.0 million of proceeds were
used to repay the maturing loan on the property and the balance will be used to pay for a portion of the
improvements to the property's underground parking garage.

In 2000, the Company caused to be obtained a $14.0 million first mortgage loan encumbering a
property owned by a subsidiary.  The loan provided for disbursement in two installments.  The first
installment of $9.8 million was disbursed in September 2000.  The balance of $4.2 million was disbursed
in March 2001.  The loan requires monthly interest only payments at the rate of 7.76% through October
15, 2002 at which time payments of principal and interest are required through the maturity date of
October 15, 2005.

At June 30, 2001, the Company had $6.0 million outstanding under a $20.0 million secured line
of credit.  Borrowings under this line of credit are currently restricted up to an amount of $12.6 million.
The remaining $7.4 million may become available upon completion of certain requirements.  Borrowings
under this line of credit bear interest at a rate of LIBOR plus 1.5%.  There were no borrowings
outstanding under this line of credit at December 31, 2000.

The Company has guaranteed completion of certain improvements totaling $1.8 million in
connection with the refinancing of the Americana Apartments, a 738 unit multifamily community located
in Euclid, Ohio, in which the Company is a 33.33% joint venture partner.  This obligation is secured by a
$1.8 million letter of credit.  Additionally, the Company has guaranteed completion of certain
improvements totaling $7.0 million in connection with the refinancing of the Watergate Apartments, a
949 unit multifamily community located in Euclid, Ohio, in which the Company is a 33.33% joint venture
partner.  This obligation is secured by a $3.5 million letter of credit.  Also, the Company provided a
$407,000 performance bond to the City of Boynton Beach, Florida, which guarantees performance by a
Company subsidiary of certain improvements in connection with the Company's proposed Boynton
Beach development.  Furthermore, the Company has guaranteed the payment of a $30.0 million
construction loan in connection with the Idlewylde Apartments Phase II, a 535 unit multifamily community
located in Atlanta, Georgia which is being developed by the Company and its pension fund joint venture
partner.  The Company also has guaranty obligations under a $220,000 letter of credit for purposes of
guaranteeing certain equity contributions required by the construction lender in connection with Berkley
Manor, a 252 unit multifamily community located in Cranberry Township, Pennsylvania, which is being
developed by the Company and its joint venture partner.

*Operating Partnership:*In conjunction with the settlement of the lawsuit in the Harris County,
Texas District Court against MIG Realty Advisors, Inc. ("MIGRA"), MIG's predecessor company (see
Note 12 for further details concerning the settlement), the former MIGRA shareholders redeemed 39,314
Operating Partnership units ("OP units") for cash in the amount of approximately $393,000, which
represented a value of $10.00 per unit.  The proceeds of the redemption will be used to satisfy certain
indemnification obligations owed by the former MIGRA stockholders to the Company in connection with
this lawsuit.   These units had a recorded value of approximately $929,000  when issued.  The difference
between the redeemed value and the recorded value was approximately $536,000, which reduced the
recorded value of the underlying real estate.

**Acquisitions, Dispositions and Development**

Any future multifamily property acquisitions or developments would be financed with the most
appropriate sources of capital, which may include the assumption of mortgage indebtedness, bank and
other institutional borrowings, the exchange of properties, secured debt financings, or the issuance of
shares or units exchangeable into common shares.

*Advisory Potential Acquisitions and Dispositions:*  During the second half of the year, MIG
expects to acquire an additional $50.0 to $60.0 million of assets on behalf of advisory clients.  MIG
further expects to sell $40.0 million of assets on behalf of advisory clients during this period.

*Advisory Acquisitions:*   In January 2001 and March 2001, MIG acquired two multifamily
properties in Florida containing 319 units and 364 units, respectively.  Both acquisitions were made on
behalf of MIG advisory clients.  MIG was retained to provide asset property management services for
both properties and a Company subsidiary was hired to provide property management services.

***Advisory Dispositions:*  In January 2001, one property containing 236 units was sold on behalf of
a MIG advisory client.

*Potential Dispositions:*  The Company is strategically marketing 12 properties.  These 12
properties are comprised of one of the Affordable Housing properties and 11 Market Rate properties
(seven located in Ohio and four located in Michigan).  As of June 30, 2001, the Company had entered
into contracts to sell three of these properties.

*Dispositions:* In June 2001, the Company completed a sale of four Market Rate properties
located in Central and Southwestern Ohio.  The buyer purchased the four properties for $5.1 million in
gross cash proceeds plus assumed mortgage obligations of $18.1 million.  The sale resulted in the
Company recording a gain of $3.3 million.  Additionally, on July 17, 2001, the Company completed the
sale of one property located in Northeast Ohio.  The buyer purchased the property for a sales price of
$7.5 million which includes the assumption of mortgage obligations of $7.2 million.  The sale resulted in
an estimated gain of approximately $2.7 million which will be recognized in the period ended September
30, 2001.



In the short run, the sale of properties will likely result in a reduction in net income and portfolio
size for the Company; however, it is expected that sale proceeds will either be redeployed into new
growth opportunities or the Company will continue to alter its capital structure.  Investment alternatives
are chosen based on whether they are anticipated to be accretive to earnings per share in the long run.
The proceeds from sales will be allocated to investment alternatives with the highest projected marginal
returns.

*Development:*  For the six month period ended June 30, 2001, the Company completed the
construction and leasing of 16 units at one of the Company's development properties.

The Company is in the process of constructing or planning the construction of an additional
1,304 units as follows:

|                                               |                    | Additional | Anticipated
|---------------------------------------------- | ------------------ | ---------- | -----------
|Property                                       | Location           | Units      | Completion 
|Boynton Beach-Land                             | Boynton Beach, FL  | 229        | TBD1       
|Courtney Chase-Land                            | Orlando, FL        | 288        | TBD1       
|Berkley Manor (49.0% owned Joint Venture)      | Cranberry Twp., PA | 252        | 2001       
|Idlewylde-Phase II (49.0% owned Joint Venture) | Atlanta, GA        | 535        | 2002       
|                                               |                    | 1,304      |            

1To be Determined

**Management Contract Cancellation**

During 2001, the Company's management contracts associated with the following properties
were terminated:

|Effective                          |            | Management         | Approximate        | Approximate Annualized
|---------------------------------- | ---------- | ------------------ | ------------------ | ----------------------
|Date of                            | Management | Contract           | Management Fees    | Loss of Management    
|Termination                        | Company    | Canceled           | Earned During 2001 | Fees During 2001      
|                                   |            |                    | (In thousands)    
|**Affordable Housing Properties:** |            |                   
|3/08/01                            | AERC       | Jaelot             | $ 16               | $ 80                  
|3/21/01                            | AERC       | Spring Hill Villa  | 11                 | 33                    
|3/21/01                            | AERC       | Warrensville Manor | 11                 | 33                    
|                                   |            |                    |                   
|**Advisory Properties:**           |            |                    |                   
|1/02/01                            | AERC       | Advised Assets     | -                  | 474                   
|1/25/01                            | AERC       | Advised Assets     | 3                  | 123                   

Additionally, the Company anticipates that the following management contracts on certain
properties may be canceled during 2001 because of proposed sales:

|                            |            |                                           | Approximate        
|--------------------------- | ---------- | ----------------------------------------- | -------------------
|                            |            |                                           | Management         
|Effective                   |            |                                           | Fees Earned During 
|Date of                     | Management |                                           | The Six Months     
|Termination                 | Company    | Management Contract Canceled              | Ended June 30, 2001
|                            |            |                                           | (In thousands)     
|**Affordable Housing:**     |            |                                          
|Undetermined                | AEMC       | Hillwood II                               | $   54             
|                            |            |                                          
|**Market Rate Properties:** |            |                                          
|Undetermined                | AERC       | Americana (33.33% Joint Venture)          | 60*                
|Undetermined                | AERC       | Gates Mills Towers (33.33% Joint Venture) | 94*                
|Undetermined                | AERC       | Watergate (33.33% Joint Venture)          | 124*               
|Undetermined                | AERC       | College Towers (50.00% Joint Venture)     | 47*                
|                            |            |                                           |                    
|**Advisory Properties:**    |            |                                          
|Undetermined                | AERC       | Advised Assets                            | 115                
|Undetermined                | AERC       | Advised Assets                            | 59                 

*Net fees

*Dividends*:  On June 28, 2001, the Company declared a dividend of $0.25 per common share
which was paid on August 1, 2001 to shareholders of record on July  13, 2001.  On May 15, 2001, the
Company declared a dividend of $0.60938 per depository share on the Company's Class A Cumulative
Preferred Shares which was paid on June 15, 2001 to shareholders of record on June 1, 2001.

*Cash flow sources and applications:*  Net cash provided by operating activities increased $2.3
million from $11.0 million to $13.3 million for the six months ended June 30, 2001 when compared with
the six months ended June 30, 2000.  This increase was primarily due to the net activity of the following
items:

(i)	For the six months ended June 30, 2001, the net loss before the gain on sale of the
properties, was $923,000 compared to a net loss of $2.3 million for the six months
ended June 30, 2000, an improvement of $1.4 million. This improvement was primarily
due to an increase of $1.9 million in total revenues.  As explained in greater detail
below, the primary reason for the increase was due to rental revenues increasing
$469,000 because of increased rental rates.  Also, other revenues were $788,000
higher primarily due to the recording of a $363,000 supervisory fee earned at the time of
the sale of a non-owned managed Affordable Housing property and the recognition of
increased income related to the residential billings program during 2001.

(ii)	For 2001, accounts and notes receivable and accounts and notes receivable of affiliates
and joint ventures decreased $383,000, while for 2000 they increased $502,000.  This
results in a decrease of $885,000 when comparing the two periods.

(iii)	For 2001, accounts payable and accrued expenses increased $1.4 million, while for
2000 they decreased $2.1 million resulting in an increase to cash flow provided by
operations of $3.5 million.  The primary reason for this variance relates to the timing of
the payment of liabilities, thus lowering the necessity of accruals due to cash payments
at June 30, 2000 compared to June 30, 2001.

(iv)	For 2001, other assets and liabilities decreased $1.3 million, primarily as a result of the
payment of the insurance premium for the policy commencing July 1, 2001, while for
2000 they increased $2.0 million primarily due to preliminary costs paid in advance of
the Company's investment in a 49.0% joint venture property.  This results in a decrease
of $3.3 million when comparing the two periods.

(v)	For 2001, funds held for non-owned managed properties and non-owned managed
properties of affiliates and joint ventures decreased $809,000.  For 2000, they
decreased $2.3 million.  This results in an increase of $1.5 million when comparing the
two periods.

Net cash flows used for investing activities of $5.0 million for the six months ended June 30,
2001 were primarily the net result of $7.4 million used for the development of multifamily real estate, the
purchase of development land and other capital expenditures, and $2.3 million for capital improvements
to certain joint venture properties net of $4.7 million of net proceeds from the sale of four operating
properties.

Net cash flows used for financing activities of $4.7 million for the six months ended June 30,
2001 were primarily used to pay dividends on the Company's common and preferred shares and to pay
principal payments on secured debt offset by proceeds from secured debt and by net borrowings on the
Company's line of credit.

***RESULTS OF OPERATIONS***

***Comparison of the quarter and six months ended June 30, 2001 to the quarter and six months
ended June 30, 2000***

In the following discussion of the comparison of the quarter and six months ended June 30,
2001 to the quarter and six months ended June 30, 2000, Market Rate properties refers to the Same
Store Market Rate property portfolio.  Market Rate properties represents 62 wholly owned properties and
one property which is 66.67% owned.  Acquired/Disposed properties represents two recently
constructed properties that have not yet reached a stabilization occupancy rate of at least 93.0%, one
property in which the Company was a 33.33% owner and purchased the remaining 66.67% ownership in
December 2000 and properties which have been sold.  Affordable Housing represents 13 properties
subject to HUD regulations.

The Company uses Net Operating Income ("NOI") as a measure of the performance of its
properties.  NOI is determined by deducting property operating and maintenance expenses and service
companies expense for the Management and Service Operations segment from total revenues.  For the
six months ended June 30, 2001, NOI was $42.1 million, an increase of $400,000 when compared to the
NOI of $41.7 million for the six months ended June 30, 2000.  The NOI for each of the four segments of
the Company for the six months ended June 30, 2001 and 2000 was: Acquisition/Disposition $2.7 million
and $3.7 million, Market Rate $34.9 million and $33.9 million, Affordable Housing $2.6 million and $2.8
million and Management and Service Operations $1.9 million and $1.3 million, respectively.  The
components of NOI together with an explanation of the variances are described as follows:

Overall, total revenues increased $536,000 or 1.4% and $1.9 million or 2.4% and total expenses
increased $11,000 and $68,000 when comparing the quarter and six months ended June 30, 2001 to the
quarter and six months ended June 30, 2000, respectively.  Net income applicable to common shares
after deduction for the dividends on the Company's preferred shares increased $3.7 million or 179.7%
for the quarter and $4.7 million or 93.6% for the six months.

*Rental Revenues:* Rental revenues decreased $45,000 for the quarter and increased $469,000
or 1.0% for the six months.  Rental revenues from the Acquired/Disposed properties decreased
$660,000 for the quarter and $1.1 million for the six months.  For both periods, the decrease was
primarily the result of the properties sold during 2000 which contributed $1.1 million and $2.1 million of
rental income for the quarter and six months, respectively.  The Market Rate properties increased
$600,000 for the quarter and $1.5 million for the six months primarily due to increased rental rates.  The
average rental rate per unit was $768 for the 2001 quarter compared to $740 for the 2000 quarter and
$760 for the 2001 six months compared to $731 for the 2000 six months.  During these periods, the
economic occupancies were 89.9% and 90.4% for the 2001 quarter and six months, respectively,
compared to 91.0% and 90.1% for the 2000 quarter and six months, respectively.

*Other Revenues:* Other Income increased $254,000 or 32.0% and $788,000 or 48.0% for the
quarter and six month periods, respectively.  The increase for the quarter was primarily due to revenues
earned in connection with the residential utility billings ("RUBS") program ($536,000 for 2001 compared
to $178,000 for 2000).  The RUBS program is expected to continue to provide quarter over quarter
increases until it levels off in the fourth quarter of the current year.  The RUBS revenue was primarily
recorded on the Market Rate properties.  In addition to the RUBS program ($968,000 for 2001 compared
to $240,000 for 2000), the six month increase also included a $363,000 supervisory fee, recorded on the
Management and Service companies segment, earned in March 2001 upon the sale of a non-owned
Affordable Housing property.

The management and Service Companies recognized property and asset management fees of
$2.0 million and $4.1 million for the quarter and six months 2001 compared to $1.9 million and $3.7
million for the quarter and six months 2000.  The increases in 2001 were primarily due to the addition of
seven client management contracts (five added during 2000 and two during 2001) net of the loss of two
client management contracts.  Additionally, the quarter and six months 2001 activity includes the loss of
three management contracts on non-owned properties in 2001 (the three properties were sold in March
2001).

*Property Operating and Maintenance Expenses:*  Property operating and maintenance expenses
increased $344,000 or 2.1% for the quarter and $1,563,000 or 4.9% for the six months.  These
expenses for the Acquisition/Disposition properties increased $30,000 for the quarter and decreased
$23,000 for the six months.  For both periods, the variance was primarily the result of the sale of the six
properties during 2000 which incurred expenses of $499,000 for the quarter and $1.1 million for the six
months.  Offsetting these decreases were increases of $655,000 and $1.1 million for the quarter and six
months, respectively, for a property acquired in December 2000 and two development properties which
came on line during 2000.  For the Market Rate properties, these expenses increased $305,000 or 2.2%
for the quarter and $1,406,000 or 5.2% for the six months.  These increases were primarily due to utility
costs which increased $148,000 or 7.0% for the quarter and $698,000 or 16.0% for the six months
mainly because of increased gas costs as both usage and rates were higher in 2001 then 2000.  For the
Affordable Housing properties, these expenses increased $9,000 or 1.0% for the quarter and $181,000
or 8.7% for the six months, primarily due to increased utility costs, principally gas costs which were up
due to greater usage and increased rates.

*Other Expenses:* The Company allocates general and administrative expenses to its four
segments as follows: An amount equal to 85% of the management and Service Companies' revenues is
classified as Service Companies' expense, ($1.6 million and $3.2 million for the quarter and six months
2001 and $1.6 million and $3.2 million for the quarter and six months 2000), the balance of the general
and administrative expenses is allocated to the other three segments on a per unit basis (number of
units in the segment divided by the total units in the portfolio).  Since the general and administrative
expenses are allocated as described above, the Company believes that a comparative analysis of the
total expenses is more meaningful than by segments.  General and administrative expenses decreased
$280,000 or 7.8% for the quarter and $1.1 million or 14.1% for the six months.  These decreases were
primarily attributable to a decrease in payroll and related expenses, primarily due to the refinement of
certain estimates used by the Company in allocating certain payroll and related expenses, and a
decrease in consulting and professional fees incurred by the Company.  During 2000, the Company
identified and eliminated approximately $3.0 million on an annualized basis in general and administrative
expenses.  The decreases in comparing 2001 to 2000 reflect this effort.  The general and administrative
expenses for the third and fourth quarters of 2001 are anticipated to be lower than the comparable
quarters of 2000; however, the difference between the comparable quarters should decrease as the
effects of cost reductions made during 2000 take effect.

Interest expense decreased $25,000 for the quarter and $321,000 or 1.4% for the six months.
Interest expense for the Acquired/Disposed properties increased $64,000 for the quarter and $185,000
for the six months.  Since the Company capitalizes interest costs on funds used in construction, the
related reduction of interest expense is recorded in the Acquired/Disposed properties segment as this is
the segment to which development properties are classified.   For both the quarter and six months
ended June 30, 2001, capitalized interest was lower than the comparable periods in 2000 as less
construction is underway in 2001 than in 2000.  For the Market Rate properties, interest expense
decreased $179,000 for the quarter and $453,000 for the six months, primarily as a result of lower
outstanding balances as the majority of the first mortgages secured by Market Rate properties require
monthly principal payments.  For the Affordable Housing properties, interest expense decreased $2,000
for the quarter and $2,000  for the six months, primarily due to lower outstanding balances.

***Equity in net loss of joint ventures*****

The combined equity in net loss of joint ventures increased $119,000 or 208.8% and $345,000
or 383.3% for the quarter and six months ended June 30, 2001, respectively, compared to the same
periods in 2000.  The increases were primarily the net result of an increase in rental revenue combined
with a greater increase in the costs of operations, interest expense and depreciation.  It should be noted
that in May 2000, the Company made a 49.0% investment in a 308 unit multifamily property.  The net
loss in this property (which is included in the chart below) was $74,000 and $120,000 for the quarter and
six months ended June 30, 2001 compared to a net loss of $30,000 for both the quarter and six months
ended June 30, 2000.

The following table presents the historical statements of operations of the Company's beneficial
interest in the operations of the joint ventures for the three and six months ended June 30, 2001 and
2000.

|                         | For the three months | For the six months
|------------------------ | -------------------- | ------------------
|                         | ended June 30,       | ended June 30,    
|(In thousands)           | 2001                 | 2000              
|                         |                      |                   
|Beneficial interests in  |                      |                   
|joint venture operations |                      |                   
|Rental revenue           | $1,939               | $1,849            
|Cost of operations       | 1,354                | 1,230             
|                         | 585                  | 619               
|Interest income          | 4                    | 21                
|Interest expense         | (516)                | (508)             
|Depreciation             | (245)                | (177)             
|Amortization             | (4)                  | (12)              
|Net (loss) income        | $  (176)             | $   (57)          

******Inflation**

Management's belief is that the effects of inflation would be minimal on the operational
performance of its portfolio primarily due to the high correlation between inflation and housing costs
combined with the short term nature, typically one year, of the leases.

The market for the Affordable Housing properties is unique in that the residents of these
properties receive assistance under the Rental Assistance Program.  At many of the Affordable Housing
properties, waiting lists of qualified applicants are maintained which minimizes the need to advertise
these units.  The average Economic Occupancy of these properties consistently exceeds 98.0%.
However, changes in these Government Programs could potentially create decreased rental revenues,
additional vacancies, require more marketing costs and, in some cases, these properties may be
converted to Market Rate properties.

**CONTINGENCIES**

**Litigation**

The Company recently settled a lawsuit pending in the Harris County, Texas district court
against MIG Realty Advisors, Inc. ("MIGRA") (MIG's predecessor company and others ) involving a claim
for contribution and indemnity arising out of MIGRA having served as an investment advisor to an
advisory client in connection with the acquisition of an apartment project located in Houston, Texas.  On
or about December 30, 1998, the advisory client that acquired the property filed suit against the seller,
the consulting engineer who performed the engineering due diligence and others seeking damages for
defective conditions discovered at the property that were allegedly concealed by the seller and not
discovered by the consulting engineer during the pre-purchase due diligence investigation conducted by
the engineer.  The consulting engineer filed a third party claim against MIGRA, alleging that MIGRA  was
responsible for the conduct of the due diligence investigation and consequently MIGRA, rather than the
engineer was responsible for any damages suffered by the advisory client.  Some of the other
defendants, including the seller and the general contractor filed cross actions against MIGRA under the
Texas contribution and proportionate liability statutes alleging that MIGRA was responsible in whole or in
part for the damages alleged to have been suffered by the plaintiff advisory client.  The consulting
engineer later amended its cross action to include similar claims against MIGRA for contribution and
determination of proportionate responsibility.  The advisory client and MIGRA entered into a tolling
agreement for the purpose of tolling any claims that the advisory client may have had against MIGRA in
connection with the apartment project.  The effect of the cross actions was to attempt to make MIGRA
potentially responsible for some or all of the claims of the advisory client irrespective of whether MIGRA
had been sued directly by the advisory client.  On March 28, 2001, the Company entered into a
settlement agreement, which had the effect of releasing MIGRA, the Company and others from all
liability in connection with the lawsuit.  The terms of the settlement agreement are confidential.  In
respect to the above settlement, the Company recorded a liability and a charge to its results of
operations to reflect the cash settlement.  In addition, the Company is entitled to indemnification from the
former MIGRA stockholders arising out of the Merger Agreement between the Company and MIGRA
dated April 16, 1998 which had the effect of offsetting a portion of the aforementioned costs recorded by
the Company.  The Company believes that the amounts not recovered under the aforementioned
indemnification, are covered under MIG's liability insurance policy.  Accordingly, the net amounts
charged to the Company's general and administrative expense in respect of the settlement were not
material.  (See Note 12 of the Notes to the Financial Statements presented in Part 1, Item 1 of this report
for additional discussion).

The Company is also subject to other legal proceedings and claims which arise in the ordinary
course of its business.  Although occasional adverse decisions (or settlements) may occur, the Company
believes that the final disposition of any such pending matters will not have a material adverse effect on
the financial position or results of operations of the Company.

**Expected Property Sales**

Three Market Rate properties located in Ohio were sold on December 31, 1999.  To facilitate the
sale, the Company financed the sale with fixed rate debt maturing July 1, 2001.  The maturity date of this
debt has been extended to December 31, 2001.  The sale provided for the Company's continued
management of the properties.  These sales will not be recognized for GAAP purposes until the seller
financing is repaid.  These three properties are presented as "Properties held for sale" in the
Consolidated Balance Sheets at June 30, 2001 and December 31, 2000.

The following tables present information concerning the Multifamily Properties owned by Associated Estates Realty Corporation. 					C:\2001Q\2q01\junq01.wpd

|                                      |          |                |              |       |          |           | For the three months ending | For the three months ending
|------------------------------------- | -------- | -------------- | ------------ | ----- | -------- | --------- | --------------------------- | ---------------------------
|                                      |          |                |              |       |          |           | June 30, 2001               | June 30, 2000              
|                                      |          |                |              |       | Year     | Average   | Average                     |                            
|                                      | Date     |                | Type of      | Total | Built or | Unit Size | Economic                    | Physical                   
|The Multifamily Properties            | Acquired | Location       | Construction | Units | Rehab.   | Sq. Ft.   | Occupancy                   | Occupancy                  
|                                      |          |                |              |       |          |           |                             |                            
|MARKET RATE                           |          |                |              |       |          |           |                             |                            
|Acquired Properties                   |          |                |              |       |          |           |                             |                            
|Ohio                                  |          |                |              |       |          |           |                             |                            
|Euclid House (formerly a JV
property) | 12/01/00 | Euclid         | Mid Rise     | 126   | 1969     | 654       | 88.4%                       | 84.9%                      
|Village at Avon (completed 2/01)      | 02/01/01 | Avon           | Ranch        | 312   | 2001     | 1,069     | 78.0                        | 85.6                       
|Windsor Kirkman (completed 6/00)      | 06/01/00 | Orlando        | Garden       | 460   | 2000     | 1,070     | 83.3                        | 95.0                       
|                                      |          |                |              | 898   |          | 1,011     | 81.6%                       | 90.3%                      
|                                      |          |                |              |       |          |           |                             |                            
|JOINT VENTURE                         |          |                |              |       |          |           |                             |                            
|Idlewylde                             | 5/15/00  | Deluth         | Garden       | 308   | 2000     | 968       | 92.8%                       | 94.8%                      
|Total Acquired Properties             |          |                |              | 1,206 |          | 1,000     | 84.3%                       | 91.5%                      
|                                      |          |                |              |       |          |           |                             |                            
|                                      |          |                |              |       |          |           |                             |                            
|SAME STORE-MARKET RATE                |          |                |              |       |          |           |                             |                            
|Phoenix, Arizona                      |          |                |              |       |          |           |                             |                            
|20th & Campbell Apartments            | 06/30/98 | Phoenix        | Garden       | 204   | 1989     | 982       | 84.7%                       | 89.7%                      
|                                      |          |                |              |       |          |           |                             |                            
|Florida                               |          |                |              |       |          |           |                             |                            
|Cypress Shores Apartments             | 02/03/98 | Coconut Creek  | Garden       | 300   | 1991     | 991       | 93.5%                       | 93.0%                      
|Windsor Pines                         | 10/23/98 | Pembroke Pines | Garden       | 368   | 1998     | 1,132     | 92.0                        | 94.0                       
|                                      |          |                |              | 668   |          | 1,069     | 92.6%                       | 93.6%                      
|                                      |          |                |              |       |          |           |                             |                            
|Atlanta, Georgia                      |          |                |              |       |          |           |                             |                            
|The Falls Apartments                  | 02/03/98 | Atlanta        | Garden       | 520   | 1986     | 963       | 80.5%                       | 81.5%                      
|Morgan Place Apartments               | 06/30/98 | Atlanta        | Garden       | 186   | 1989     | 679       | 88.5                        | 94.6                       
|                                      |          |                |              | 706   |          | 888       | 82.8%                       | 85.0%                      
|                                      |          |                |              |       |          |           |                             |                            
|Indianapolis, Indiana                 |          |                |              |       |          |           |                             |                            
|The Gables at White River             | 02/06/97 | Indianapolis   | Garden       | 228   | 1991     | 974       | 88.7%                       | 88.6%                      
|Steeplechase Apartments               | 08/11/98 | Indianapolis   | Garden       | 264   | 1998     | 929       | 82.4                        | 89.0                       
|Waterstone Apartments                 | 08/29/97 | Indianapolis   | Garden       | 344   | 1997     | 984       | 90.7                        | 97.4                       
|                                      |          |                |              | 836   |          | 964       | 87.7%                       | 92.3%                      
|**Maryland**                          |          |                |              |       |          |           |                             |                            
|Reflections Apartments                | 02/03/98 | Metro D.C.     | Garden       | 184   | 1985     | 1,020     | 97.3%                       | 98.4%                      
|The Gardens at Annen Woods            | 06/30/98 | Metro D.C.     | Garden       | 132   | 1987     | 1,269     | 94.9                        | 96.2                       
|Hampton Point Apartments              | 06/30/98 | Metro D.C.     | Garden       | 352   | 1986     | 817       | 95.5                        | 95.7                       
|                                      |          |                |              | 668   |          | 962       | 95.9%                       | 96.6%                      
|                                      |          |                |              |       |          |           |                             |                            
|                                      |          |                |              |       |          |           |                             |                            

|                              |          |                  |              |       |          |           | For the three months ending | For the three months ending
|----------------------------- | -------- | ---------------- | ------------ | ----- | -------- | --------- | --------------------------- | ---------------------------
|                              |          |                  |              |       |          |           | June 30, 2001               | June 30, 2000              
|                              |          |                  |              |       | Year     | Average   | Average                     |                            
|                              | Date     |                  | Type of      | Total | Built or | Unit Size | Economic                    | Physical                   
|The Multifamily Properties    | Acquired | Location         | Construction | Units | Rehab.   | Sq. Ft.   | Occupancy                   | Occupancy                  
|                              |          |                  |              |       |          |           |                             |                            
|Michigan                      |          |                  |              |       |          |           |                             |                            
|Arbor Landings Apartments     | 01/20/95 | Ann Arbor        | Garden       | 328   | 1990     | 2,229     | 96.5%                       | 96.6%                      
|Aspen Lakes                   | 09/04/96 | Grand Rapids     | Garden       | 144   | 1981     | 789       | 96.5                        | 98.6                       
|Central Park Place            | 12/29/94 | Grand Rapids     | Garden       | 216   | 1988     | 850       | 96.4                        | 98.6                       
|Clinton Place                 | 08/25/97 | Clinton Twp.     | Garden       | 202   | 1988     | 954       | 94.2                        | 98.5                       
|Country Place Apartments      | 06/19/95 | Mt. Pleasant     | Garden       | 144   | 1987-89  | 859       | 96.0                        | 94.4                       
|Georgetown Park Apartments    | 12/28/94 | Fenton           | Garden       | 480   | 1987-96  | 1,005     | 85.2                        | 87.3                       
|The Landings at the Preserve  | 09/21/95 | Battle Creek     | Garden       | 190   | 1990-91  | 952       | 94.5                        | 96.3                       
|The Oaks and Woods at Hampton | 08/08/95 | Rochester Hills  | Gdn/Tnhms    | 544   | 1986-88  | 1,050     | 94.6                        | 93.8                       
|Spring Brook Apartments       | 06/20/96 | Holland          | Gdn/Tnhms    | 168   | 1986-88  | 818       | 90.1                        | 92.9                       
|Spring Valley Apartments      | 10/31/97 | Farmington Hills | Garden       | 224   | 1987     | 893       | 97.9                        | 97.3                       
|Summer Ridge Apartments       | 04/01/96 | Kalamazoo        | Garden       | 248   | 1989-91  | 960       | 97.4                        | 98.8                       
|                              |          |                  |              | 2,888 |          | 1,092     | 93.9%                       | 94.8%                      
|**North Carolina**            |          |                  |              |       |          |           |                             |                            
|Windsor Falls Apartments      | 06/30/98 | Raleigh          | Garden       | 276   | 1994     | 979       | 87.1%                       | 90.2%                      
|                              |          |                  |              |       |          |           |                             |                            
|Central Ohio                  |          |                  |              |       |          |           |                             |                            
|Arrowhead Station             | 02/28/95 | Columbus         | Townhomes    | 102   | 1987     | 1,344     | 93.4%                       | 92.2%                      
|Bedford Commons               | 12/30/94 | Columbus         | Townhomes    | 112   | 1987     | 1,157     | 96.8                        | 99.1                       
|Bolton Estates                | 07/27/94 | Columbus         | Garden       | 196   | 1992     | 687       | 92.5                        | 94.9                       
|Bradford at Easton            | 05/01/98 | Columbus         | Garden       | 324   | 1996     | 1,010     | 95.9                        | 96.6                       
|Colony Bay East               | 02/21/95 | Columbus         | Garden       | 156   | 1994     | 903       | 95.1                        | 92.9                       
|Heathermoor                   | 08/18/94 | Worthington      | Gdn/Tnhms    | 280   | 1989     | 829       | 94.1                        | 95.0                       
|Kensington Grove              | 07/17/95 | Westerville      | Gdn/Tnhms    | 76    | 1995     | 1,109     | 94.2                        | 97.4                       
|Lake Forest                   | 07/28/94 | Columbus         | Garden       | 192   | 1994     | 788       | 88.9                        | 92.7                       
|Muirwood Village at Bennell   | 03/07/94 | Columbus         | Ranch        | 164   | 1988     | 769       | 91.2                        | 97.0                       
|Muirwood Village at London    | 03/03/94 | London           | Ranch        | 112   | 1989     | 769       | 91.9                        | 92.9                       
|Oak Bend Commons              | 05/30/97 | Canal Winchester | Garden/Tnhm  | 102   | 1997     | 1,110     | 98.3                        | 99.0                       
|Pendleton Lakes East          | 08/25/94 | Columbus         | Garden       | 256   | 1990-93  | 899       | 96.7                        | 94.1                       
|Perimeter Lakes               | 09/20/96 | Dublin           | Gdn/Tnhms    | 189   | 1992     | 999       | 92.9                        | 96.3                       
|Residence at Christopher Wren | 03/14/94 | Gahanna          | Gdn/Tnhms    | 264   | 1993     | 1,062     | 91.8                        | 96.2                       
|Residence at Turnberry        | 03/16/94 | Pickerington     | Gdn/Tnhms    | 216   | 1991     | 1,182     | 94.3                        | 98.6                       
|Saw Mill Village              | 04/22/97 | Columbus         | Garden       | 340   | 1987     | 1,161     | 90.8                        | 96.8                       
|Sterling Park                 | 08/25/94 | Grove City       | Garden       | 128   | 1994     | 763       | 92.0                        | 100.0                      
|                              |          |                  |              | 3,209 |          | 969       | 93.5%                       | 95.9%                      
|                              |          |                  |              |       |          |           |                             |                            
|Cincinnati, Ohio              |          |                  |              |       |          |           |                             |                            
|Remington Place Apartments    | 03/31/97 | Cincinnati       | Garden       | 234   | 1988-90  | 830       | 94.5%                       | 97.9%                      
|                              |          |                  |              |       |          |           |                             |                            
|                              |          |                  |              |       |          |           |                             |                            
|                              |          |                  |              |       |          |           |                             |                            
|                              |          |                  |              |       |          |           |                             |                            

|                                  |          |                  |              |        |          |           | For the three months ending | For the three months ending
|--------------------------------- | -------- | ---------------- | ------------ | ------ | -------- | --------- | --------------------------- | ---------------------------
|                                  |          |                  |              |        |          |           | June 30, 2001               | June 30, 2000              
|                                  |          |                  |              |        | Year     | Average   | Average                     |                            
|                                  | Date     |                  | Type of      | Total  | Built or | Unit Size | Economic                    | Physical                   
|The Multifamily Properties        | Acquired | Location         | Construction | Units  | Rehab.   | Sq. Ft.   | Occupancy                   | Occupancy                  
|                                  |          |                  |              |        |          |           |                             |                            
|Northeastern Ohio                 |          |                  |              |        |          |           |                             |                            
|Bay Club                          | IPO      | Willowick        | Garden       | 96     | 1990     | 925       | 93.9%                       | 94.8%                      
|Residence at Barrington           | 06/30/99 | Aurora           | Gdn/Tnhms    | 288    | 1999     | 1,131     | 84.1                        | 93.8                       
|Edgewater Landing                 | 04/20/94 | Cleveland        | High Rise    | 241    | 1988r    | 585       | 95.3                        | 94.6                       
|Gates Mills III                   | IPO      | Mayfield Hts.    | High Rise    | 320    | 1978     | 874       | 67.7                        | 74.1                       
|Mallard's Crossing                | 02/16/95 | Medina           | Garden       | 192    | 1990     | 998       | 84.9                        | 92.2                       
|Portage Towers                    | IPO      | Cuyahoga Falls   | High Rise    | 376    | 1973     | 869       | 96.2                        | 96.3                       
|Woodlands of North Royalton       |          |                  |              |        |          |           |                             |                            
|fka Somerset West (a)             | IPO      | North Royalton   | Gdn/Tnhms    | 197    | 1982     | 1,038     | 85.1                        | 82.7                       
|The Triangle (b)                  | IPO      | Cleveland        | High Rise    | 279    | 1989     | 616       | 98.6                        | 86.0                       
|Village at Western Reserve        | 08/01/98 | Streetsboro      | Ranch        | 108    | 1998     | 999       | 94.5                        | 99.1                       
|Westchester Townhouses            | IPO      | Westlake         | Townhomes    | 136    | 1989     | 1,000     | 95.9                        | 94.9                       
|Williamsburg at Greenwood Village | 02/18/94 | Sagamore Hills   | Townhomes    | 260    | 1990     | 938       | 84.8                        | 92.7                       
|Westlake Townhomes                | IPO      | Westlake         | Townhomes    | 7      | 1985     | 1,000     | 99.8                        | 100.0                      
|Winchester Hills I  (c)           | IPO      | Willoughby Hills | High Rise    | 362    | 1972     | 822       | 73.1                        | 74.3                       
|Winchester Hills II               | IPO      | Willoughby Hills | High Rise    | 362    | 1979     | 822       | 68.4                        | 71.0                       
|                                  |          |                  |              | 3,224  |          | 875       | 84.8%                       | 86.2%                      
|                                  |          |                  |              |        |          |           |                             |                            
|CONGREGATE CARE                   |          |                  |              |        |          |           |                             |                            
|Gates Mills Club                  | IPO      | Mayfield Heights | High Rise    | 120    | 1980     | 721       | 72.6%                       | 72.5%                      
|The Oaks                          | IPO      | Westlake         | Garden       | 50     | 1985     | 672       | 70.9                        | 70.0                       
|                                  |          |                  |              | 170    |          | 707       | 72.1%                       | 71.8%                      
|                                  |          |                  |              |        |          |           |                             |                            
|Toledo, Ohio                      |          |                  |              |        |          |           |                             |                            
|Country Club Apartments           | 02/19/98 | Toledo           | Garden       | 316    | 1989     | 811       | 89.5%                       | 88.0%                      
|Hawthorne Hills Apartments        | 05/14/97 | Toledo           | Garden       | 88     | 1973     | 1,145     | 94.4                        | 92.0                       
|Kensington Village                | 09/14/95 | Toledo           | Gdn/Tnhms    | 506    | 1985-90  | 1,072     | 94.3                        | 91.7                       
|Vantage Villa                     | 10/30/95 | Toledo           | Garden       | 150    | 1974     | 935       | 90.1                        | 94.7                       
|                                  |          |                  |              | 1,060  |          | 981       | 92.3%                       | 91.0%                      
|**Pittsburgh, Pennsylvania**      |          |                  |              |        |          |           |                             |                            
|Chestnut Ridge                    | 03/01/96 | Pittsburgh       | Garden       | 468    | 1986     | 769       | 81.9%                       | 91.5%                      
|                                  |          |                  |              |        |          |           |                             |                            
|Texas                             |          |                  |              |        |          |           |                             |                            
|Fleetwood Apartments              | 06/30/98 | Houston          | Garden       | 104    | 1993     | 1,019     | 93.5%                       | 96.2%                      
|Market Rate Subtotal              |          |                  |              | 14,545 |          | 966       | 90.2%                       | 92.1%                      
|Same Store Market Rate            |          |                  |              | 14,715 |          | 963       | 89.9%                       | 91.8%                      
|                                  |          |                  |              |        |          |           |                             |                            
|AFFORDABLE HOUSING-ELDERLY        |          |                  |              |        |          |           |                             |                            
|Ellet Development                 | IPO      | Akron            | High Rise    | 100    | 1978     | 589       | 100.0%                      | 100.0%                     
|Hillwood I                        | IPO      | Akron            | High Rise    | 100    | 1976     | 570       | 100.0                       | 100.0                      
|Puritas Place (d)                 | IPO      | Cleveland        | High Rise    | 100    | 1981     | 518       | 100.0                       | 98.0                       
|Riverview                         | IPO      | Massillon        | High Rise    | 98     | 1979     | 553       | 100.0                       | 100.0                      

|                                         |          |                |              |        |          |           | For the three months ending | For the three months ending
|---------------------------------------- | -------- | -------------- | ------------ | ------ | -------- | --------- | --------------------------- | ---------------------------
|                                         |          |                |              |        |          |           | June 30, 2001               | June 30, 2000              
|                                         |          |                |              |        | Year     | Average   | Average                     |                            
|                                         | Date     |                | Type of      | Total  | Built or | Unit Size | Economic                    | Physical                   
|The Multifamily Properties               | Acquired | Location       | Construction | Units  | Rehab.   | Sq. Ft.   | Occupancy                   | Occupancy                  
|                                         |          |                |              |        |          |           |                             |                            
|State Road Apartments                    | IPO      | Cuyahoga Falls | Garden       | 72     | 1977 r   | 750       | 93.0%                       | 100.0%                     
|Statesman II                             | IPO      | Shaker Heights | Garden       | 47     | 1987 r   | 796       | 100.0                       | 95.7                       
|Sutliff Apartments II                    | IPO      | Cuyahoga Falls | High Rise    | 185    | 1979     | 577       | 97.5                        | 98.4                       
|Tallmadge Acres                          | IPO      | Tallmadge      | Mid Rise     | 125    | 1981     | 641       | 99.7                        | 100.0                      
|Twinsburg Apartments                     | IPO      | Twinsburg      | Garden       | 100    | 1979     | 554       | 100.0                       | 100.0                      
|Village Towers                           | IPO      | Jackson Twp.   | High Rise    | 100    | 1979     | 557       | 100.0                       | 100.0                      
|West High Apartments                     | IPO      | Akron          | Mid Rise     | 68     | 1981 r   | 702       | 100.0                       | 98.5                       
|                                         |          |                |              | 1,095  |          | 602       | 99.5%                       | 99.3%                      
|                                         |          |                |              |        |          |           |                             |                            
|AFFORDABLE HOUSING-FAMILY                |          |                |              |        |          |           |                             |                            
|Jennings Commons                         | IPO      | Cleveland      | Garden       | 50     | 1981     | 823       | 99.8%                       | 100.0%                     
|Shaker Park Gardens II                   | IPO      | Warrensville   | Garden       | 151    | 1964     | 753       | 99.9                        | 96.0                       
|                                         |          |                |              | 201    |          | 770       | 99.9%                       | 97.0%                      
|Total Affordable Housing                 |          |                |              | 1,296  |          | 628       | 99.6%                       | 98.9%                      
|Wholly Owned Portfolio                   |          |                |              | 16,909 |          | 939       | 90.1%                       | 92.3%                      
|                                         |          |                |              |        |          |           |                             |                            
|JOINT VENTURE PROPERTIES                 |          |                |              |        |          |           |                             |                            
|Northeastern Ohio-Market Rate            |          |                |              |        |          |           |                             |                            
|Americana                                | IPO      | Euclid         | High Rise    | 738    | 1968     | 803       | 73.0%                       | 77.0%                      
|College Towers                           | IPO      | Kent           | Mid Rise     | 458    | 1969     | 662       | 94.5                        | 93.0                       
|Gates Mills Towers                       | IPO      | Mayfield Hts.  | High Rise    | 757    | 1969     | 856       | 78.8                        | 83.8                       
|Highland House                           | IPO      | Painesville    | Garden       | 36     | 1964     | 539       | 97.4                        | 97.2                       
|Watergate                                | IPO      | Euclid         | High Rise    | 949    | 1971     | 831       | 84.2                        | 87.5                       
|                                         |          |                |              | 2,938  |          | 801       | 81.1%                       | 84.9%                      
|**AFFORDABLE HOUSING-FAMILY**            |          |                |              |        |          |           |                             |                            
|Lakeshore Village                        | IPO      | Cleveland      | Garden       | 108    | 1982     | 786       | 100.0%                      | 98.1%                      
|Total Joint Venture                      |          |                |              | 3,046  |          | 800       | 81.9%                       | 85.3%                      
|Total Portfolio Less Acquired Properties |          |                | 19,057       |        | 914      | 89.6%     | 91.3%                       | $ 726                      
|Total Portfolio                          |          |                |              | 20,263 |          | 919       | 89.1%                       | 91.3%                      

(a)	Woodlands of North Royalton (fka Somerset West) has 39 Contract Units and 158 Market-rate units.

(b)	The Triangle also contains 63,321 square feet of office/retail space.

(c)	The Company acquired a noteholder interest entitling the Company to substantially all cash flows from operations.  The Company has certain rights under a security agreement to foreclose on the

property to the extent that the unpaid principal and interest on the underlying notes exceed seven years equivalent principal and interest payments.

(d)	The property was developed in 1981 subject to a warranty deed provision which states that the assignment of fee simple title of the property to the Company shall expire in 2037.

R = 	Rehabilitated

******HISTORICAL FUNDS FROM OPERATIONS AND DISTRIBUTABLE CASH FLOW**



Industry analysts generally consider Funds From Operations ("FFO") to be an appropriate
measure of the performance of an equity REIT.  The National Association of Real Estate Investment
Trusts ("NAREIT") defines FFO generally as net income (loss) applicable to common shareholders,
excluding gains (losses) on the disposition of properties and extraordinary items under GAAP, adjusted
for depreciation on real estate assets and amortization of intangible assets and adding the Company's
proportionate share of FFO of its unconsolidated joint ventures.  FFO does not represent cash generated
from operating activities in accordance with GAAP and is not necessarily indicative of cash available to
fund cash needs and should not be considered an alternative to net income as an indicator of the
Company's operating performance or as an alternative to cash flow as a measure of liquidity.  Certain
other real estate companies may define FFO in a different manner.

FFO and Funds Available for Distribution ("Distributable Cash Flow") for the three and six month
period ended June 30, 2001 and 2000 are summarized in the following table:

|                                                   | For the three months | For the six months
|-------------------------------------------------- | -------------------- | ------------------
|                                                   | ended June 30,       | ended June 30,    
|(In thousands)                                     | 2001                 | 2000              
|                                                   |                      |                   
|**Net income (loss)  applicable to common shares** | $1,638               | $(2,056)          
|                                                   |                      |                   
|Depreciation on real estate assets:                |                      |                   
|Wholly owned properties                            | 7,691                | 7,673             
|Joint venture properties                           | 214                  | 160               
|Amortization of intangible assets                  | 289                  | 404               
|Gain on sale of properties                         | (3,344)              | -                 
|**Funds From Operations**                          | 6,488                | 6,181             
|                                                   |                      |                   
|Depreciation - other assets                        | 551                  | 526               
|Amortization of deferred financing fees            | 336                  | 257               
|Fixed asset additions                              | (2,888)              | (2,713)           
|**Distributable Cash Flow**                        | $4,487               | $4,251            
|                                                   |                      |                   
|**Weighted average shares - Basic**                | 19,429               | 19,611            
|**- Diluted**                                      | 19,622               | 19,611            

**ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**

The Company is exposed to interest rate changes associated with variable rate debt as well as
refinancing risk on its fixed-rate debt.  The Company's involvement with derivative financial instruments
is limited and management does not expect to use such instruments for trading or other speculative
purposes.  The Company occasionally uses derivative instruments to manage its exposure to interest
rates.  See the Company's Form 10-K "Item 7A Qualitative and Quantitative Disclosures About Market
Risk" for a more complete discussion of the Company's interest rate sensitive assets and liabilities.  As
of June 30, 2001, the fair market value of the Company's debt has increased approximately $12.1 million
or 2.2% as a result of the decline in interest rates since December 31, 2000.  There have been no other
material changes in the fair value of assets and liabilities since the date of the Company's Form 10-K.



**OTHER INFORMATION**

**ITEM 1.  LEGAL PROCEEDINGS**

Except as provided below, there are no material pending legal proceedings to which the
Company or any of its subsidiaries or service companies is a party or of which any of their properties is
subject that is required to be reported pursuant to Item 103 of Regulation S-K.

On January 25, 2000, Associated Estates Management Company ("AEMC") filed suit in the
Cuyahoga County, Ohio Court of Common Pleas against Euclid Medical and Commercial Arts, an Ohio
limited partnership and its general partner, Metro City No. 1, an Ohio general partnership, seeking
damages in excess of $729,000.  Euclid Medical and Commercial Arts formerly owned the Euclid
Medical and Office Building located in Euclid, Ohio.  AEMC was the property manager of that property
until on or about March 23, 1999.  Metro City No. 1 is 56.0% owned by the Company's Chairman of the
Board and CEO, his wife and his brothers-in-law, one of whom is a director of the Company.  In the
normal course of business, the Company had followed a practice for many years of advancing funds on
behalf of, or holding funds for the benefit of, affiliates, which owned real estate properties managed by
the Company.  Euclid Medical and Office Building was one of those properties for which the Company so
advanced funds.  The suit seeks reimbursement for the funds advanced by the Company for the benefit
of this property.  Metro City No. 1 made a capital call to its partners requesting funds to pay this
obligation.  The Chairman of the Board, his wife and brothers-in-law have paid the Company their
proportionate share of the capital call; however, the remaining non-affiliated partners of Metro City No. 1
have refused to do so.  The Company believes the recorded amount of the receivable is stated at its net
realizable value.

The Company recently settled a lawsuit pending in the Harris County, Texas district court
against MIG Realty Advisors, Inc. ("MIGRA") (MIG's predecessor company and others ) involving a claim
for contribution and indemnity arising out of MIGRA having served as an investment advisor to an
advisory client in connection with the acquisition of an apartment project located in Houston, Texas.  On
or about December 30, 1998, the advisory client that acquired the property filed suit against the seller,
the consulting engineer who performed the engineering due diligence and others seeking damages for
defective conditions discovered at the property that were allegedly concealed by the seller and not
discovered by the consulting engineer during the pre-purchase due diligence investigation conducted by
the engineer.  The consulting engineer filed a third party claim against MIGRA, alleging that MIGRA  was
responsible for the conduct of the due diligence investigation and consequently MIGRA, rather than the
engineer was responsible for any damages suffered by the advisory client.  Some of the other
defendants, including the seller and the general contractor filed cross actions against MIGRA under the
Texas contribution and proportionate liability statutes alleging that MIGRA was responsible in whole or in
part for the damages alleged to have been suffered by the plaintiff advisory client.  The consulting
engineer later amended its cross action to include similar claims against MIGRA for contribution and
determination of proportionate responsibility.  The advisory client and MIGRA entered into a tolling
agreement for the purpose of tolling any claims that the advisory client may have had against MIGRA in
connection with the apartment project.  The effect of the cross actions was to attempt to make MIGRA
potentially responsible for some or all of the claims of the advisory client irrespective of whether MIGRA
had been sued directly by the advisory client.  On March 28, 2001, the Company entered into a
settlement agreement, which had the effect of releasing MIGRA, the Company and others from all
liability in connection with the lawsuit.  The terms of the settlement agreement are confidential.  In
respect to the above settlement, the Company recorded a liability and a charge to its results of
operations to reflect the cash settlement.  In addition, the Company is entitled to indemnification from the
former MIGRA stockholders arising out of the Merger Agreement between the Company and MIGRA
dated April 16, 1998 which had the effect of offsetting a portion of the aforementioned costs recorded by
the Company.  The Company believes that the amounts not recovered under the aforementioned
indemnification, are covered under MIG's liability insurance policy.  Accordingly, the net amounts
charged to the Company's general and administrative expense in respect of the settlement were not
material.  (See Note 12 of the Notes to the Financial Statements presented in Part 1, Item 1 of this report
for additional discussion).

**ITEM 2.	CHANGES IN SECURITIES**

****None

**ITEM 3.	DEFAULTS UPON SENIOR SECURITIES**

None

**ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

On May 25, 2001, the Company held its Annual Meeting of Shareholders.  Following are
the matters the Company's shareholders voted upon and the results of the vote:

|    |                                          | For            | Withhold Authority
|--- | ---------------------------------------- | -------------- | ------------------
|(a) | The election of the following directors: |                |                   
|    |                                          |                |                   
|    | Albert T. Adams                          | 16,108,270.761 | 448,668.160       
|    | James M. Delaney                         | 16,322,300.761 | 234,638.160       
|    | Jeffrey I. Friedman                      | 15,551,701.761 | 1,005,237.160     
|    | Gerald C. McDonough                      | 16,315,093.429 | 241,845.492       
|    | Mark L. Milstein                         | 16,290,526.915 | 266,412.006       
|    | Frank E. Mosier                          | 16,309,047.583 | 247,891.338       
|    | Richard T. Schwarz                       | 16,331,794.761 | 225,144.160       
|    | Louis E. Vogt                            | 15,672,555.761 | 884,383.160       
|    | Larry E. Wright                          | 16,324,164.761 | 232,774.160       

**ITEM 5.	OTHER INFORMATION**

None

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

(a)	Exhibits

|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | **Filed herewith or**                                                            
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | **incorporated**                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | **herein by**                                                                    
|Number | **Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | **reference**                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|2.01   | Second Amended and Restated Agreement and Plan of Merger by  and
among the Company, MIG Realty Advisors, Inc.  ("MIGRA")  and the
MIGRA stockholders dated as of March 30, 1998                                                                                                                                                                                                                                                                                                                                                                       |  | Exhibit 2.01 to Form 8-K filed March 31, 1998.                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|3.1    | Second Amended and Restated Articles of Incorporation of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Exhibit 3.1 to Form
S-11 filed June 30,
1994 (File No. 33-80950 as amended)      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|3.2    | Code of Regulations of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | Exhibit 3.2 to Form
S-11 filed June 30,
1994 (File No. 33-80950 as amended).     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.1    | Specimen Stock Certificate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Exhibit 3.1 to Form S-11 filed September 2,
1993 (File No. 33-68276 as amended). 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.2    | Form of Indemnification Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Exhibit 4.2 to Form S-11 filed September 2,
1993 (File No. 33-68276 as amended). 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.3    | Promissory Note dated October 23, 1991 from Triangle Properties Limited
Partnership, et. al., in favor of PFL Life Insurance Company; Open End
Mortgage from Triangle Properties Limited Partnership I, et. al., in favor of
PFL Life Insurance Company (The Registrant undertakes to provide
additional long-term loan documents upon request).                                                                                                                                                                                                      |  | Exhibit 4.3 to Form S-11 filed September 2,
1993 (File No. 33-68276 as amended). 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.4    | Promissory Note dated February 28, 1994 in the amount of $25 million.
Open-End Mortgage Deed and Security Agreement from AERC to
National City Bank (Westchester Townhouse); Open-End Mortgage Deed
and Security Agreement from AERC to National City Bank (Bay Club);
Open-End Mortgage Deed and Security Agreement from Winchester II
Apartments, Inc. to National City Bank (Winchester II Apartments); and
Open-End Mortgage Deed and Security Agreement from Portage Towers
Apartments, Inc. to  National City Bank (Portage Towers Apartments). |  | Exhibit 4.4 to Form  10-K filed March 31, 1993.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|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.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.6    | Indenture dated as of March 31, 1995 between Associated Estates Realty
Corporation and National City Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Exhibit 4.6 to Form 10-Q filed May 11, 1995.                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.9    | Form of Medium-Term Note-Fixed Rate-Senior Security.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Exhibit 4(I) to Form S-3
filed December 7, 1995
(File No. 33-80169) as
amended.  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.10   | Form of Preferred Share Certificate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Exhibit 4.1 to Form 8-K
filed July 12, 1995.                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.11   | Form of Deposit Agreement and Depositary Receipt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Exhibit 4.2 to Form 8-K
filed July 12, 1995.                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.13   | Loan Agreement between Associated Estates Realty Corporation and
National City Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Exhibit 4.13 to Form
10-K filed March 15,
2000.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.13a  | First Amendment to Loan Agreement between Associated Estates Realty
Corporation and National City Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Exhibit 4.13a to Form
10-Q filed August 8,
2000.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.13b  | Second Amendment to Loan Agreement between Associated Estates
Realty Corporation and National City Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Exhibit 4.13b to Form
10-K filed March 13,
2001.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|4.14   | Guaranty Agreement dated November 28, 2000 from Associated Estates
Realty Corporation to Southtrust Bank                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Exhibit 4.14 to Form
10-K filed March 13,
2001.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10     | Associated Estates Realty Corporation Directors' Deferred Compensation
Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Exhibit 10 to Form 10-Q filed November 14,
1996.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.1   | Registration Rights Agreement among the Company and certain holders
of the Company's Common Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Exhibit 10.1 to Form S-11 filed September 2,
1993 (File No. 33-68276 as amended).
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.2   | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Exhibit 10.2 to Form S-11 filed September 2,
1993 (File No. 33-68276 as amended).
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.3   | Amended and Restated Employment Agreement between the Company
and Jeffrey I. Friedman.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Exhibit 10.1 to Form
10-Q filed May 13,
1996.                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.4   | Equity-Based Incentive Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Exhibit 10.4 to Form
10-K filed March 29,
1995.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.5   | Long-Term Incentive Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Exhibit 10.5 to Form
10-K filed March 29,
1995.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.6   | Lease Agreement dated November 29, 1990 between Royal American
Management Corporation and Airport Partners Limited Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Exhibit 10.6 to Form
10-K filed March 29,
1995.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.7   | Sublease dated February 28, 1994 between the Company as Sublessee,
and Progressive Casualty Insurance Company, as Sublessor.                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Exhibit 10.7 to Form
10-K filed March 29,
1995.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.8   | Assignment and Assumption Agreement dated May 17, 1994 between the
Company, as Assignee, and Airport Partners Limited Partnership, as
Assignor.                                                                                                                                                                                                                                                                                                                                                                                                       |  | Exhibit 10.8 to Form
10-K filed March 29,
1995.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.9   | Form of Restricted Agreement dated by and among the Company and Its
Independent Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Exhibit 10.9 to Form
10-K filed March 28,
1996.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.10  | Pledge Agreement dated May 23, 1997 between Jeffrey I. Friedman and
the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Exhibit 10.01 to Form
10-Q filed August 8,
1997                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.11  | Secured Promissory Note dated May 23, 1997 in the amount of
$1,671,000 executed by Jeffrey I. Friedman in favor of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Exhibit 10.02 to Form
10-Q filed August 8,
1997                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.12  | Unsecured Promissory Note dated May 23, 1997 in the amount of
$1,671,000 executed by Jeffrey I. Friedman in favor of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Exhibit 10.03 to Form
10-Q filed August 8,
1997                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.14  | 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.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.15  | Agreement dated March 11, 1999 by and among the Company and The
Milstein Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Exhibit 10.15 to Form
10-Q filed May 17,
1999.                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.16  | Agreement dated March 11, 1999 by and among the Company and The
Milstein Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Exhibit 10.16 to Form
10-Q filed May 17,
1999.                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.19  | Amended and Restated Confidentiality and Noncompete Agreement
dated January 26, 2000 by and between the Company and James A.
Cote'.                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Exhibit 10.19 to Form
10-K filed March 15,
2000.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.19a | Consulting Agreement between James A. Cote' and the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Exhibit 10.19a to Form
10-K filed March 13,
2001.                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.20  | Agreement dated October 11, 1999 by and among the Company and
certain of the former holders (the "MIGRA Stockholders") of the issued
and outstanding shares of common stock of MIG Realty Advisors, Inc.
("MIGRA").                                                                                                                                                                                                                                                                                                                                   |  | Exhibit 10.20 to Form
10-K filed March 15,
2000.                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.21  | Swap Agreement dated February 16, 2000 by and among the Company
and National City Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Exhibit 10.21 to Form
10-Q filed May 10,
2000.                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|10.22  | Year 2000 Equity Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Exhibit 10.22 to Form
10-Q filed May 15,
2001.                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                  
|18.1   | Letter regarding change in accounting principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Exhibit 18.1 to Form
10-Q filed May 17,
1999.                                    

(b)	Reports on Form 8-K.

None

**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      
|--------------- |  | -------------------------------------------
|                |  |                                            
|August 10, 2001 |  | /s/ Lou Fatica                             
|(Date)          |  | Lou Fatica, Vice President, Chief Financial
|                |  | Officer and Treasurer                      

**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

August 10, 2001

(Date)						Lou Fatica, Vice President, Chief Financial Officer

and Treasurer