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| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

|   Maryland                                                       |   | 77-0369576                           |
|----------------------------------------------------------------------------|--------|--------------------------------------|
|   (State or Other Jurisdiction of Incorporation or Organization) |   | (IRS Employer Identification Number) |

| Title of each class            |   | Name of each exchange on which registered |
|--------------------------------|--------|-------------------------------------------|
| Common Stock, $.0001 par value |   | New York Stock Exchange                   |

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| Large accelerated filer x | Accelerated filer o | Non-accelerated filer o  (Do not check if a smaller reporting company) | Smaller reporting company o |
|---------------------------|---------------------|----------------------------------------------------------------------------------|-----------------------------|

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OF 

| Part I     |                                                                                                         | Page   |
|------------|--------------------------------------------------------------------------------------------------------------|--------|
| Item 1.    | Business                                                                                                     | 1      |
| Item 1A.   | Risk Factors                                                                                                 | 6      |
| Item 1B.   | Unresolved Staff Comments                                                                                    | 17     |
| Item 2.    | Properties                                                                                                   | 17     |
| Item 3.    | Legal Proceedings                                                                                            | 23     |
| Item 4.    | Mine Safety Disclosures                                                                                      | 23     |
| Part II.   |                                                                                                         |   |
| Item 5.    | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 24     |
| Item 6.    | Selected Financial Data                                                                                      | 27     |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 28     |
| Item 7A.   | Quantitative and Qualitative Disclosures About Market Risks                                                  | 43     |
| Item 8.    | Financial Statements and Supplementary Data                                                                  | 44     |
| Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 44     |
| Item 9A.   | Controls and Procedures                                                                                      | 44     |
| Item 9B.   | Other Information                                                                                            | 44     |
| Part III.  |                                                                                                         |   |
| Item 10.   | Directors, Executive Officers and Corporate Governance                                                       | 45     |
| Item 11.   | Executive Compensation                                                                                       | 45     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 45     |
| Item 13.   | Certain Relationships and Related Transactions, and Director Independence                                    | 45     |
| Item 14.   | Principal Accounting Fees and Services                                                                       | 45     |
| Part IV.   |                                                                                                         |   |
| Item 15.   | Exhibits and Financial Statement Schedules                                                                   | 46     |
| Signatures |                                                                                                         | S-1    |

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Business

|   | · | Focus on markets in major metropolitan areas that have regional population in excess of one million; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Constraints on new supply driven by: (i) low availability of developable land sites where competing housing could be economically built; (ii) political growth barriers, such as protected land, urban growth boundaries, and potential lengthy and expensive development permit processes; and (iii) natural limitations to development, such as mountains or waterways; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Rental demand is enhanced by affordability of rents relative to costs of for-sale housing; and |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Housing demand that is based on proximity to jobs, high median incomes, the quality of life and related commuting factors, as well as potential job growth |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Property Management– The Senior Vice President of Operations, Divisional Managers, Regional Portfolio Managers and Area Managers are accountable for the performance and maintenance of the communities. They supervise, provide training for the on-site managers, review actual performance against budget, monitor market trends and prepare operating and capital budgets. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Capital Preservation – The Executive Vice President and First Vice President of Asset Management and the Capital and Maintenance department are responsible for the planning, budgeting and completion of major capital improvement projects at the Company’s communities. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Business Planning and Control – Comprehensive business plans are implemented in conjunction with every investment decision.  These plans include benchmarks for future financial performance, based on collaborative discussions between on-site managers and senior management. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Development and Redevelopment – The Company focuses on acquiring and developing apartment communities in supply constrained markets, and redeveloping its existing communities to improve the financial and physical aspects of the Company’s communities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1) | In March, the Company acquired Santee Village, a 73-unit vacant condominium community that is operated as a rental community located in downtown Los Angeles for $17.0 million. This community is adjacent to Santee Court apartments which the Company acquired in 2010. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | Also in March, the Company purchased 1000 Kiely (formerly Family Tree Apartments), a 121-unit garden-style community located in Santa Clara, California for $31.4 million. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3) | In June, the Company acquired Bellerive, a recently constructed 63-unit vacant condominium project that is operated as a rental community located in West Los Angeles for $27.0 million. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4) | In May, the Company entered into a 50/50 programmatic joint venture, Wesco I, LLC (“Wesco I”), with an institutional partner for a total equity commitment of $200 million.  Wesco I's first acquisition was Arbors at Parc Rose, a 373-unit community located in Oxnard, California, for $92.0 million. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5) | In July, Wesco I acquired Reveal (formerly Millennium at Warner Center), a 438-unit community located in the Canoga Park area of Los Angeles.  The property, which was completed in 2010, was acquired for $132.9 million. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6) | In September, the Company acquired the Bernard, a 63-unit community located in the Lower Queen Anne district of Seattle, Washington for $13.8 million. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 7) | In September, Wesco I acquired Redmond Hill East and Redmond Hill West, a group of communities built between 1985 and 2003 totaling 882-units in Redmond, Washington.  The properties are operated as two separate communities and the total purchase price was $151.3 million. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8) | In November, Wesco I acquired Briarwood for $27.8 million.  The property is a 160-unit community located in Fremont, California that was built in 1979. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9) | Also in November, Wesco I acquired The Woods for $25.2 million.  The property is a 160-unit community built in 1978 and located less than a half mile from Briarwood, in Fremont, California. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10) | In December, the Company acquired Delano, a 66-unit community located in Redmond, Washington for $14.1 million. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|                                     |               |   |       |   |   |   |   |   | As of 12/31/11 ($ in millions) |   |
|------------------------------------------|--------------------|--------|------------|--------|--------|--------|--------|--------|--------------------------------|--------|
| Development Pipeline                     | Location           |   | Ownership% |   |   | Units  |   |   | Incurred Project Cost          |   |   | Estimated Remaining Cost |   |   | EstimatedProject Cost(1) |   |
| Development Projects - Joint Venture     |               |   |       |   |   |   |   |   |                           |   |   |   |   |   |   |   |
| Queen Anne                               | Seattle, WA        |   |       | 50     | %      |   |   | 275    |                           |   | $ | 33.5 |   |   | $ | 45.6 |   |   | $ | 79.1 |   |
| Epic (formerly Cadence) Phase I          | San Jose, CA       |   |       | 55     | %      |   |   | 280    |                           |   |   | 36.7 |   |   |   | 61.9 |   |   |   | 98.6 |   |
| West Dublin                              | Dublin, CA         |   |       | 55     | %      |   |   | 309    |                           |   |   | 23.1 |   |   |   | 71.4 |   |   |   | 94.5 |   |
| Fountain at La Brea                      | West Hollywood, CA |   |       | 50     | %      |   |   | 187    |                           |   |   | 27.0 |   |   |   | 48.0 |   |   |   | 75.0 |   |
| Santa Monica at La Brea                  | West Hollywood, CA |   |       | 50     | %      |   |   | 184    |                           |   |   | 19.7 |   |   |   | 55.7 |   |   |   | 75.4 |   |
|                                     |               |   |       |   |   |   |   | 1,235  |                           |   |   | 140.0 |   |   | $ | 282.6 |   |   | $ | 422.6 |   |
| Predevelopment project - joint venture   | San Jose, CA       |   |       | 55     | %      |   |   | 481    |                           |   |   | 42.8 |   |   |   |   |   |   |   |   |   |
| Land held for future development or sale | various            |   |       |   |   |   |   | 298    |                           |   |   | 44.3 |   |   |   |   |   |   |   |   |   |
| Development Pipeline                     |               |   |       |   |   |   |   | 2,014  |                           |   | $ | 227.1 |   |   |   |   |   |   |   |   |   |

| (1) | Includes incurred costs and estimated costs to complete these development projects. |
|-----|-------------------------------------------------------------------------------------|

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Risk Factors

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|   | · | cash flow may not be sufficient to meet required payments of principal and interest; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | inability to refinance maturing indebtedness on encumbered apartment communities; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | inability to comply with debt covenants could cause an acceleration of the maturity date; and |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | repaying debt before the scheduled maturity date could result in prepayment penalties. |
|--------|--------|----------------------------------------------------------------------------------------|

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|   | · | the general economic climate; |
|--------|--------|-------------------------------|

|   | · | local economic conditions in which the communities are located, such as oversupply of housing or a reduction in demand for rental housing; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the attractiveness of the communities to tenants; |
|--------|--------|---------------------------------------------------|

|   | · | competition from other available housing; and |
|--------|--------|-----------------------------------------------|

|   | · | the Company’s ability to provide for adequate maintenance and insurance. |
|--------|--------|--------------------------------------------------------------------------------|

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|   | · | funds may be expended and management's time devoted to projects that may not be completed; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | construction costs of a project may exceed original estimates possibly making the project economically unfeasible; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | projects may be delayed due to, without limitation, adverse weather conditions; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | occupancy rates and rents at a completed project may be less than anticipated; and |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | expenses at completed development projects may be higher than anticipated. |
|--------|--------|----------------------------------------------------------------------------|

|   | · | regional, national and global economic conditions; |
|--------|--------|----------------------------------------------------|

|   | · | actual or anticipated variations in the Company’s quarterly operating results or dividends; |
|--------|--------|---------------------------------------------------------------------------------------------------|

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|   | · | changes in the Company’s funds from operations or earnings estimates; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | issuances of common stock, preferred stock or convertible debt securities; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | publication of research reports about the Company or the real estate industry; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | the general reputation of real estate investment trusts and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate based companies); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | general stock and bond market conditions, including changes in interest rates on fixed income securities, that may lead prospective purchasers of the Company’s stock to demand a higher annual yield from dividends; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | availability to capital markets and cost of capital; |
|--------|--------|------------------------------------------------------|

|   | · | a change in analyst ratings or the Company’s credit ratings; |
|--------|--------|--------------------------------------------------------------------|

|   | · | terrorist activity may adversely affect the markets in which the Company’s securities trade, possibly increasing market volatility and causing erosion of business and consumer confidence and spending; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natural disasters such as earthquakes. |
|--------|--------|----------------------------------------|

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|   | · | authorize or create any class or series of stock that ranks senior to the Series H Preferred Stock with respect to the payment of dividends, rights upon liquidation, dissolution or winding-up of the Company’s business;  or |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | amend, alter or repeal the provisions of the Company’s Charter, including by merger or consolidation, that would materially and adversely affect the rights of the Series H Preferred Stock; provided that in the case of a merger or consolidation, so long as the Series H Preferred Stock remains outstanding with the terms thereof materially unchanged or the holders of shares of Series H Preferred Stock receive shares of stock or other equity securities with rights, preferences, privileges and voting powers substantially similar to that of the Series H Preferred Stock, the occurrence of such merger or consolidation shall not be deemed to materially and adversely affect the rights of the holders of the Series H Preferred Stock. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 80% of the votes entitled to be cast by holders of outstanding voting shares; and |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Two-thirds of the votes entitled to be cast by holders of outstanding voting shares other than shares held by the interested stockholder with whom the business combination is to be effected. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | the Company’s directors have terms of office of three years and the board of directors is divided into three classes with staggered terms; as a result, less than a majority of directors are up for re-election to the board in any one year; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | directors may be removed, without cause, only upon a two-thirds vote of stockholders, and with cause, only upon a majority vote of stockholders; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the Company’s board can fix the number of directors and fill vacant directorships upon the vote of a majority of the directors; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | stockholders must give advance notice to nominate directors or propose business for consideration at a stockholders’ meeting; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | for stockholders to call a special meeting, the meeting must be requested by not less than a majority of all the votes entitled to be cast at the meeting. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the Company’s partners in Fund II might remove the Company as the general partner of Fund II; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | the Company’s  partners in Fund II might have economic or business interests or goals that are inconsistent with the Company’s business interests or goals; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the Company’s partners in Fund II might fail to approve decisions regarding Fund II that are in the Company’s best interest. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | that the value of mortgaged property may be less than the amounts owed, causing realized or unrealized losses; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | the borrower may not pay indebtedness under the mortgage when due, requiring the Company to foreclose, and the amount recovered in connection with the foreclosure may be less than the amount owed; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | that interest rates payable on the mortgages may be lower than the Company’s cost of funds; and |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | in the case of junior mortgages, that foreclosure of a senior mortgage could eliminate the junior mortgage. |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

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Unresolved Staff Comments

Properties

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|   | · | located near employment centers; |
|--------|--------|----------------------------------|

|   | · | attractive communities that are well maintained; and |
|--------|--------|------------------------------------------------------|

|   | · | proactive customer service approach. |
|--------|--------|--------------------------------------|

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| Communities (1)          |   | Location             |   | Units  |   | RentableSquareFootage |   | YearBuilt |   | YearAcquired |   | Occupancy(2) |
|--------------------------|--------|----------------------|--------|--------|--------|-----------------------|--------|-----------|--------|--------------|--------|--------------|
| Southern California      |   |                 |   |   |   |                  |   |      |   |         |   |         |
| Alpine Country           |   | Alpine, CA           |   | 108    |   | 81,900                |   | 1986      |   | 2002         |   | 95%          |
| Alpine Village           |   | Alpine, CA           |   | 301    |   | 254,400               |   | 1971      |   | 2002         |   | 97%          |
| Anavia                   |   | Anaheim, CA          |   | 250    |   | 312,343               |   | 2009      |   | 2010         |   | 92%          |
| Barkley, The(3)(4)       |   | Anaheim, CA          |   | 161    |   | 139,800               |   | 1984      |   | 2000         |   | 97%          |
| Bonita Cedars            |   | Bonita, CA           |   | 120    |   | 120,800               |   | 1983      |   | 2002         |   | 96%          |
| Camarillo Oaks           |   | Camarillo, CA        |   | 564    |   | 459,000               |   | 1985      |   | 1996         |   | 96%          |
| Camino Ruiz Square       |   | Camarillo, CA        |   | 160    |   | 105,448               |   | 1990      |   | 2006         |   | 98%          |
| Cielo (5)                |   | Chatsworth, CA       |   | 119    |   | 125,400               |   | 2009      |   | 2009         |   | 96%          |
| Cambridge                |   | Chula Vista, CA      |   | 40     |   | 22,100                |   | 1965      |   | 2002         |   | 96%          |
| Mesa Village             |   | Clairemont, CA       |   | 133    |   | 43,600                |   | 1963      |   | 2002         |   | 98%          |
| Parcwood(5)              |   | Corona, CA           |   | 312    |   | 270,000               |   | 1989      |   | 2004         |   | 95%          |
| Tierra del Sol/Norte     |   | El Cajon, CA         |   | 156    |   | 117,000               |   | 1969      |   | 2002         |   | 97%          |
| Regency at Encino        |   | Encino, CA           |   | 75     |   | 78,487                |   | 1989      |   | 2009         |   | 96%          |
| Valley Park(6)           |   | Fountain Valley, CA  |   | 160    |   | 169,700               |   | 1969      |   | 2001         |   | 97%          |
| Capri at Sunny Hills(6)  |   | Fullerton, CA        |   | 100    |   | 128,100               |   | 1961      |   | 2001         |   | 97%          |
| Wilshire Promenade       |   | Fullerton, CA        |   | 149    |   | 128,000               |   | 1992      |   | 1997         |   | 97%          |
| Montejo(6)               |   | Garden Grove, CA     |   | 124    |   | 103,200               |   | 1974      |   | 2001         |   | 96%          |
| CBC Apartments           |   | Goleta, CA           |   | 148    |   | 91,538                |   | 1962      |   | 2006         |   | 96%          |
| Chimney Sweep Apartments |   | Goleta, CA           |   | 91     |   | 88,370                |   | 1967      |   | 2006         |   | 83%          |
| 416 on Broadway          |   | Glendale, CA         |   | 115    |   | 126,782               |   | 2009      |   | 2010         |   | 93%          |
| Hampton Court            |   | Glendale, CA         |   | 83     |   | 71,500                |   | 1974      |   | 1999         |   | 97%          |
| Hampton Place            |   | Glendale, CA         |   | 132    |   | 141,500               |   | 1970      |   | 1999         |   | 97%          |
| Devonshire               |   | Hemet, CA            |   | 276    |   | 207,200               |   | 1988      |   | 2002         |   | 94%          |
| Huntington Breakers      |   | Huntington Beach, CA |   | 342    |   | 241,700               |   | 1984      |   | 1997         |   | 96%          |
| Axis 2300                |   | Irvine, CA           |   | 115    |   | 170,714               |   | 2010(7)   |   | 2010         |   | 96%          |
| Hillsborough Park        |   | La Habra, CA         |   | 235    |   | 215,500               |   | 1999      |   | 1999         |   | 97%          |
| Trabuco Villas           |   | Lake Forest, CA      |   | 132    |   | 131,000               |   | 1985      |   | 1997         |   | 97%          |
| Marbrisa                 |   | Long Beach, CA       |   | 202    |   | 122,800               |   | 1987      |   | 2002         |   | 97%          |
| Pathways                 |   | Long Beach, CA       |   | 296    |   | 197,700               |   | 1975(8)   |   | 1991         |   | 96%          |
| Belmont Station          |   | Los Angeles, CA      |   | 275    |   | 225,000               |   | 2008      |   | 2008         |   | 97%          |
| Bellerive                |   | Los Angeles, CA      |   | 63     |   | 79,296                |   | 2011      |   | 2011         |   | 99%          |
| Bunker Hill              |   | Los Angeles, CA      |   | 456    |   | 346,600               |   | 1968      |   | 1998         |   | 96%          |
| Cochran Apartments       |   | Los Angeles, CA      |   | 58     |   | 51,400                |   | 1989      |   | 1998         |   | 97%          |
| Kings Road               |   | Los Angeles, CA      |   | 196    |   | 132,100               |   | 1979(9)   |   | 1997         |   | 97%          |
| Marbella, The            |   | Los Angeles, CA      |   | 60     |   | 50,108                |   | 1991      |   | 2005         |   | 97%          |
| Park Place               |   | Los Angeles, CA      |   | 60     |   | 48,000                |   | 1988      |   | 1997         |   | 97%          |
| Renaissance, The(5)      |   | Los Angeles, CA      |   | 169    |   | 154,268               |   | 1990(10)  |   | 2006         |   | 97%          |
| Santee Court             |   | Los Angeles, CA      |   | 165    |   | 132,040               |   | 2004      |   | 2010         |   | 93%          |
| Santee Village           |   | Los Angeles, CA      |   | 73     |   | 69,817                |   | 2011      |   | 2010         |   | 99%          |
| Windsor Court            |   | Los Angeles, CA      |   | 58     |   | 46,600                |   | 1988      |   | 1997         |   | 97%          |
| Marina City Club(11)     |   | Marina Del Rey, CA   |   | 101    |   | 127,200               |   | 1971      |   | 2004         |   | 98%          |
| Mirabella                |   | Marina Del Rey, CA   |   | 188    |   | 176,800               |   | 2000      |   | 2000         |   | 97%          |
| Mira Monte               |   | Mira Mesa, CA        |   | 355    |   | 262,600               |   | 1982(12)  |   | 2002         |   | 97%          |
| Hillcrest Park           |   | Newbury Park, CA     |   | 608    |   | 521,900               |   | 1973      |   | 1998         |   | 96%          |
| Fairways(13)             |   | Newport Beach, CA    |   | 74     |   | 107,100               |   | 1972      |   | 1999         |   | 98%          |
| Muse                     |   | North Hollywood, CA  |   | 152    |   | 135,292               |   | 2011      |   | 2011         |   | 99%          |
| Country Villas           |   | Oceanside, CA        |   | 180    |   | 179,700               |   | 1976      |   | 2002         |   | 96%          |
| Mission Hills            |   | Oceanside, CA        |   | 282    |   | 244,000               |   | 1984      |   | 2005         |   | 96%          |
| Mariners Place           |   | Oxnard, CA           |   | 105    |   | 77,200                |   | 1987      |   | 2000         |   | 97%          |
| Monterey Villas          |   | Oxnard, CA           |   | 122    |   | 122,100               |   | 1974      |   | 1997         |   | 96%          |
| Tierra Vista             |   | Oxnard, CA           |   | 404    |   | 387,100               |   | 2001      |   | 2001         |   | 97%          |
| Arbors Parc Rose(14)     |   | Oxnard, CA           |   | 373    |   | 503,196               |   | 2001      |   | 2011         |   | 94%          |
| Monterra del Mar         |   | Pasadena, CA         |   | 123    |   | 74,400                |   | 1972      |   | 1997         |   | 96%          |
| Monterra del Rey         |   | Pasadena, CA         |   | 84     |   | 73,100                |   | 1972      |   | 1999         |   | 97%          |
| Monterra del Sol         |   | Pasadena, CA         |   | 85     |   | 69,200                |   | 1972      |   | 1999         |   | 97%          |
| Villa Angelina(6)        |   | Placentia, CA        |   | 256    |   | 217,600               |   | 1970      |   | 2001         |   | 97%          |

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| Communities (1)                       |   | Location                |   | Units  |    | RentableSquare Footage |     | Year Built    |   | Year Acquired |   | Occupancy(2) |
|---------------------------------------|--------|-------------------------|--------|--------|---------|------------------------|----------|---------------|--------|---------------|--------|--------------|
| Southern California (continued)       |   |                    |   |   |    |                   |     |          |   |          |   |         |
| Fountain Park                         |   | Playa Vista, CA         |   | 705    |    | 608,900                |     | 2002          |   | 2004          |   | 97%          |
| Highridge(6)                          |   | Rancho Palos Verdes, CA | 255    |   | 290,200 |                   | 1972(15) |          | 1997   |          | 95%    |
| Bluffs II, The                        |   | San Diego, CA           |   | 224    |    | 126,700                |     | 1974(16)      |   | 1997          |   | 97%          |
| Summit Park                           |   | San Diego, CA           |   | 300    |    | 229,400                |     | 1972          |   | 2002          |   | 96%          |
| Vista Capri - North                   |   | San Diego, CA           |   | 106    |    | 51,800                 |     | 1975          |   | 2002          |   | 97%          |
| Brentwood(6)                          |   | Santa Ana, CA           |   | 140    |    | 154,800                |     | 1970          |   | 2001          |   | 98%          |
| Essex Skyline at MacArthur Place (17) |   | Santa Ana, CA           |   | 349    |    | 512,791                |     | 2008(7)       |   | 2010          |   | 89%          |
| Treehouse(6)                          |   | Santa Ana, CA           |   | 164    |    | 135,700                |     | 1970          |   | 2001          |   | 97%          |
| Hope Ranch Collection                 |   | Santa Barbara, CA       |   | 108    |    | 126,700                |     | 1965&73   |   | 2007          |   | 98%          |
| Hidden Valley(18)                     |   | Simi Valley, CA         |   | 324    |    | 310,900                |     | 2004          |   | 2004          |   | 95%          |
| Meadowood                             |   | Simi Valley, CA         |   | 320    |    | 264,500                |     | 1986          |   | 1996          |   | 95%          |
| Shadow Point                          |   | Spring Valley, CA       |   | 172    |    | 131,200                |     | 1983          |   | 2002          |   | 97%          |
| Coldwater Canyon                      |   | Studio City, CA         |   | 39     |    | 34,125                 |     | 1979          |   | 2007          |   | 96%          |
| Studio 40-41 (5)                      |   | Studio City, CA         |   | 149    |    | 127,238                |     | 2009          |   | 2009          |   | 96%          |
| Allegro                               |   | Valley Village, CA      |   | 97     |    | 127,812                |     | 2010(7)       |   | 2010          |   | 97%          |
| Lofts at Pinehurst, The               |   | Ventura, CA             |   | 118    |    | 71,100                 |     | 1971          |   | 1997          |   | 97%          |
| Pinehurst(19)                         |   | Ventura, CA             |   | 28     |    | 21,200                 |     | 1973          |   | 2004          |   | 99%          |
| Woodside Village                      |   | Ventura, CA             |   | 145    |    | 136,500                |     | 1987          |   | 2004          |   | 97%          |
| Walnut Heights                        |   | Walnut, CA              |   | 163    |    | 146,700                |     | 1964          |   | 2003          |   | 96%          |
| Reveal (Millenium)(14)                |   | Woodland Hills, CA      |   | 438    |    | 414,892                |     | 2010          |   | 2011          |   | 80%          |
| Avondale at Warner Center             |   | Woodland Hills, CA      |   | 446    |    | 331,000                |     | 1970(20)      |   | 1997          |   | 97%          |
|                                  |   |                    |   | 15,114 |    | 13,433,457             |     |          |   |          |   | 96%          |
| Northern California                   |   |                    |   |   |    |                   |     |          |   |          |   |         |
| Belmont Terrace                       |   | Belmont, CA             |   | 71     |    | 72,951                 |     | 1974          |   | 2006          |   | 99%          |
| Carlmont Woods(5)                     |   | Belmont, CA             |   | 195    |    | 107,200                |     | 1971          |   | 2004          |   | 89%          |
| Davey Glen(5                          |   | Belmont, CA             |   | 69     |    | 65,974                 |     | 1962          |   | 2006          |   | 97%          |
| Fourth and U                          |   | Berkley, CA             |   | 171    |    | 146,255                |     | 2010          |   | 2010          |   | 96%          |
| Commons, The                          |   | Campbell, CA            |   | 264    |    | 153,168                |     | 1973          |   | 2010          |   | 98%          |
| Pointe at Cupertino, The              |   | Cupertino, CA           |   | 116    |    | 135,200                |     | 1963(21)      |   | 1998          |   | 95%          |
| Harbor Cove(5)                        |   | Foster City, CA         |   | 400    |    | 306,600                |     | 1971          |   | 2004          |   | 95%          |
| Stevenson Place                       |   | Fremont, CA             |   | 200    |    | 146,200                |     | 1971          |   | 1983          |   | 97%          |
| Boulevard                             |   | Fremont, CA             |   | 172    |    | 131,200                |     | 1978(22)      |   | 1996          |   | 94%          |
| Briarwood(14)                         |   | Fremont, CA             |   | 160    |    | 111,160                |     | 1975          |   | 2011          |   | 100%         |
| The Woods(14)                         |   | Fremont, CA             |   | 160    |    | 105,280                |     | 1978          |   | 2011          |   | 100%         |
| City View                             |   | Hayward, CA             |   | 572    |    | 462,400                |     | 1975(23)      |   | 1998          |   | 95%          |
| Alderwood Park(5)                     |   | Newark, CA              |   | 96     |    | 74,624                 |     | 1987          |   | 2006          |   | 98%          |
| Bridgeport                            |   | Newark, CA              |   | 184    |    | 139,000                |     | 1987(24)      |   | 1987          |   | 97%          |
| The Grand                             |   | Oakland, CA             |   | 243    |    | 205,026                |     | 2009          |   | 2009          |   | 98%          |
| Regency Towers(5)                     |   | Oakland, CA             |   | 178    |    | 140,900                |     | 1975(25)      |   | 2005          |   | 96%          |
| San Marcos                            |   | Richmond, CA            |   | 432    |    | 407,600                |     | 2003          |   | 2003          |   | 97%          |
| Mt Sutro                              |   | San Francisco, CA       |   | 99     |    | 64,000                 |     | 1973          |   | 2001          |   | 95%          |
| 101 San Fernando                      |   | San Jose, CA            |   | 323    |    | 296,078                |     | 2001          |   | 2010          |   | 98%          |
| Bella Villagio                        |   | San Jose, CA            |   | 231    |    | 227,511                |     | 2004          |   | 2010          |   | 98%          |
| Carlyle, The                          |   | San Jose, CA            |   | 132    |    | 129,200                |     | 2000          |   | 2000          |   | 97%          |
| Enclave, The(5)                       |   | San Jose, CA            |   | 637    |    | 525,463                |     | 1998          |   | 2005          |   | 97%          |
| Esplanade                             |   | San Jose, CA            |   | 278    |    | 279,000                |     | 2002          |   | 2004          |   | 96%          |
| Waterford, The                        |   | San Jose, CA            |   | 238    |    | 219,600                |     | 2000          |   | 2000          |   | 97%          |
| Hillsdale Garden                      |   | San Mateo, CA           |   | 697    |    | 611,505                |     | 1948          |   | 2006          |   | 97%          |
| Bel Air                               |   | San Ramon, CA           |   | 462    |    | 391,000                |     | 1988/2000(26) |   | 1997          |   | 96%          |
| Canyon Oaks                           |   | San Ramon, CA           |   | 250    |    | 237,894                |     | 2005          |   | 2007          |   | 96%          |
| Foothill Gardens                      |   | San Ramon, CA           |   | 132    |    | 155,100                |     | 1985          |   | 1997          |   | 97%          |
| Mill Creek at Windermere              |   | San Ramon, CA           |   | 400    |    | 381,060                |     | 2005          |   | 2007          |   | 96%          |
| Twin Creeks                           |   | San Ramon, CA           |   | 44     |    | 51,700                 |     | 1985          |   | 1997          |   | 97%          |
| 1000 Kiely (Family Tree)              |   | Santa Clara, CA         |   | 121    |    | 128,486                |     | 1971          |   | 2011          |   | 96%          |
| Le Parc Luxury Apartments             |   | Santa Clara, CA         |   | 140    |    | 113,200                |     | 1975          |   | 1994          |   | 98%          |
| Marina Cove(27)                       |   | Santa Clara, CA         |   | 292    |    | 250,200                |     | 1974(28)      |   | 1994          |   | 97%          |
| Chestnut Street                       |   | Santa Cruz, CA          |   | 96     |    | 87,640                 |     | 2002          |   | 2008          |   | 93%          |
| Harvest Park                          |   | Santa Rosa, CA          |   | 104    |    | 116,628                |     | 2004          |   | 2007          |   | 97%          |
| Bristol Commons                       |   | Sunnyvale, CA           |   | 188    |    | 142,600                |     | 1989          |   | 1997          |   | 98%          |
| Brookside Oaks(6)                     |   | Sunnyvale, CA           |   | 170    |    | 119,900                |     | 1973          |   | 2000          |   | 96%          |
| Magnolia Lane(29)                     |   | Sunnyvale, CA           |   | 32     |    | 31,541                 |     | 2001(30)      |   | 2007          |   | 97%          |
| Montclaire, The                       |   | Sunnyvale, CA           |   | 390    |    | 294,100                |     | 1973(31)      |   | 1988          |   | 97%          |
| Summerhill Park                       |   | Sunnyvale, CA           |   | 100    |    | 78,500                 |     | 1988          |   | 1988          |   | 99%          |
| Magnolia Square (Thomas Jefferson)(6) |   | Sunnyvale, CA           |   | 156    |    | 110,824                |     | 1969(30)      |   | 2007          |   | 97%          |
| Windsor Ridge                         |   | Sunnyvale, CA           |   | 216    |    | 161,800                |     | 1989          |   | 1989          |   | 98%          |
| Via                                   |   | Sunnyvale, CA           |   | 284    |    | 309,421                |     | 2011          |   | 2011          |   | 95%          |
| Vista Belvedere                       |   | Tiburon, CA             |   | 76     |    | 78,300                 |     | 1963          |   | 2004          |   | 96%          |
| Tuscana                               |   | Tracy, CA               |   | 30     |    | 29,088                 |     | 2007          |   | 2007          |   | 96%          |
|                                  |   |                    |   | 10,001 |    | 8,532,077              |     |          |   |          |   | 97%          |

----

Table of Contents

| Communities (1)                       |   | Location       |   | Units  |   | RentableSquare Footage |   | Year Built |   | Year Acquired |   | Occupancy(2) |
|---------------------------------------|--------|----------------|--------|--------|--------|------------------------|--------|------------|--------|---------------|--------|--------------|
| Seattle, Washington Metropolitan Area |   |           |   |   |   |                   |   |       |   |          |   |         |
| Cedar Terrace                         |   | Bellevue, WA   |   | 180    |   | 174,200                |   | 1984       |   | 2005          |   | 96%          |
| Courtyard off Main                    |   | Bellevue, WA   |   | 109    |   | 108,388                |   | 2000       |   | 2010          |   | 95%          |
| Emerald Ridge-North                   |   | Bellevue, WA   |   | 180    |   | 144,000                |   | 1987       |   | 1994          |   | 96%          |
| Foothill Commons                      |   | Bellevue, WA   |   | 388    |   | 288,300                |   | 1978(32)   |   | 1990          |   | 95%          |
| Palisades, The                        |   | Bellevue, WA   |   | 192    |   | 159,700                |   | 1977(33)   |   | 1990          |   | 97%          |
| Sammamish View                        |   | Bellevue, WA   |   | 153    |   | 133,500                |   | 1986(34)   |   | 1994          |   | 98%          |
| Woodland Commons                      |   | Bellevue, WA   |   | 236    |   | 172,300                |   | 1978(35)   |   | 1990          |   | 96%          |
| Canyon Pointe                         |   | Bothell, WA    |   | 250    |   | 210,400                |   | 1990       |   | 2003          |   | 96%          |
| Inglenook Court                       |   | Bothell, WA    |   | 224    |   | 183,600                |   | 1985       |   | 1994          |   | 96%          |
| Salmon Run at Perry Creek             |   | Bothell, WA    |   | 132    |   | 117,100                |   | 2000       |   | 2000          |   | 97%          |
| Stonehedge Village                    |   | Bothell, WA    |   | 196    |   | 214,800                |   | 1986       |   | 1997          |   | 98%          |
| Highlands at Wynhaven                 |   | Issaquah, WA   |   | 333    |   | 424,674                |   | 2000       |   | 2008          |   | 97%          |
| Park Hill at Issaquah                 |   | Issaquah, WA   |   | 245    |   | 277,700                |   | 1999       |   | 1999          |   | 98%          |
| Wandering Creek                       |   | Kent, WA       |   | 156    |   | 124,300                |   | 1986       |   | 1995          |   | 96%          |
| Bridle Trails                         |   | Kirkland, WA   |   | 108    |   | 99,700                 |   | 1986(36)   |   | 1997          |   | 97%          |
| Corbella at Juanita Bay               |   | Kirkland, WA   |   | 169    |   | 103,339                |   | 1978       |   | 2010          |   | 96%          |
| Evergreen Heights                     |   | Kirkland, WA   |   | 200    |   | 188,300                |   | 1990       |   | 1997          |   | 97%          |
| Laurels at Mill Creek, The            |   | Mill Creek, WA |   | 164    |   | 134,300                |   | 1981       |   | 1996          |   | 96%          |
| Morning Run(5)                        |   | Monroe, WA     |   | 222    |   | 221,786                |   | 1991       |   | 2005          |   | 97%          |
| Anchor Village(6)                     |   | Mukilteo, WA   |   | 301    |   | 245,900                |   | 1981       |   | 1997          |   | 95%          |
| Castle Creek                          |   | Newcastle, WA  |   | 216    |   | 191,900                |   | 1997       |   | 1997          |   | 97%          |
| Delano                                |   | Redmond, WA    |   | 66     |   | 52,864                 |   | 2011       |   | 2011          |   | 100%         |
| Elevation (Eagle Rim)                 |   | Redmond, WA    |   | 157    |   | 138,916                |   | 1986       |   | 2010          |   | 95%          |
| Redmond Hill East                     |   | Redmond, WA    |   | 440    |   | 381,675                |   | 1998       |   | 2011          |   | 95%          |
| Redmond Hill West                     |   | Redmond, WA    |   | 442    |   | 350,275                |   | 1985       |   | 2011          |   | 93%          |
| Brighton Ridge                        |   | Renton, WA     |   | 264    |   | 201,300                |   | 1986       |   | 1996          |   | 96%          |
| Fairwood Pond                         |   | Renton, WA     |   | 194    |   | 189,200                |   | 1997       |   | 2004          |   | 96%          |
| Forest View                           |   | Renton, WA     |   | 192    |   | 182,500                |   | 1998       |   | 2003          |   | 96%          |
| Bernard, The                          |   | Seattle, WA    |   | 63     |   | 43,151                 |   | 2008       |   | 2011          |   | 96%          |
| Cairns, The                           |   | Seattle, WA    |   | 100    |   | 70,806                 |   | 2006       |   | 2007          |   | 97%          |
| Eastlake 2851(5)                      |   | Seattle, WA    |   | 133    |   | 234,086                |   | 2008       |   | 2008          |   | 96%          |
| Fountain Court                        |   | Seattle, WA    |   | 320    |   | 207,000                |   | 2000       |   | 2000          |   | 96%          |
| Joule                                 |   | Seattle, WA    |   | 295    |   | 191,109                |   | 2010       |   | 2010          |   | 96%          |
| Linden Square                         |   | Seattle, WA    |   | 183    |   | 142,200                |   | 1994       |   | 2000          |   | 96%          |
| Tower @ 801(5)                        |   | Seattle, WA    |   | 173    |   | 118,500                |   | 1970       |   | 2005          |   | 96%          |
| Wharfside Pointe                      |   | Seattle, WA    |   | 142    |   | 119,200                |   | 1990       |   | 1994          |   | 96%          |
| Echo Ridge(5)                         |   | Snoqualmie, WA |   | 120    |   | 124,359                |   | 2000       |   | 2005          |   | 97%          |
|                                  |   |           |   | 7,638  |   | 6,665,328              |   |       |   |          |   | 96%          |
| Total/Weighted Average                |   |           |   | 32,753 |   | 28,630,862             |   |       |   |          |   | 96%          |

| Other real estate assets(1)     |   | Location        |   | Tenants |   |   | RentableSquare Footage |   |    | Year Built |   |   | Year Acquired |   |   | Occupancy(2) |        |
|---------------------------------|--------|-----------------|--------|---------|--------|--------|------------------------|--------|---------|------------|--------|--------|---------------|--------|--------|--------------|-------------|
| Office Buildings                |   |            |   |    |   |   |                   |   |    |       |   |   |          |   |   |         |        |
| 925 / 935 East Meadow Drive(37) |   | Palo Alto, CA   |   |    | 1      |   |                   |   | 31,900  |       |   |   | 1988 / 1962   |   |   |         | 1997 / 2007 |   |   |   | 100 | % |
| 6230 Sunset Blvd(38)            |   | Los Angeles, CA |   |    | 1      |   |                   |   | 35,000  |       |   |   | 1938          |   |   |         | 2006        |   |   |   | 100 | % |
| 17461DerianAve(39)              |   | Irvine, CA      |   |    | 6      |   |                   |   | 110,000 |       |   |   | 1983          |   |   |         | 2000        |   |   |   | 93 | % |
| Santa Clara Retail              |   | Santa Clara, CA |   |    | 3      |   |                   |   | 139,000 |       |   |   | 1970          |   |   |         | 2011        |   |   |   | 100 | % |
| Total Office Buildings          |   |            |   |    | 11     |   |                   |   | 315,900 |       |   |   |          |   |   |         |        |   |   |   | 99 | % |

|   | (1) | Unless otherwise specified, the Company has a 100% ownership interest in each community. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (2) | For communities, occupancy rates are based on financial occupancy for the year ended December 31, 2011; for the commercial buildings or properties which have not yet stabilized, or have insufficient operating history, occupancy rates are based on physical occupancy as of December 31, 2011.  For an explanation of how financial occupancy and physical occupancy are calculated, see “Properties-Occupancy Rates” in this Item 2. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|   | (3) | The Company has a 30% special limited partnership interest in the entity that owns this apartment community. This investment was made under arrangements whereby Essex Management Corporation (“EMC”) became the general partner and the existing partners were granted the right to require the applicable partnership to redeem their interest for cash.  Subject to certain conditions, the Company may, however, elect to deliver an equivalent number of shares of the Company’s common stock in satisfaction of the applicable partnership's cash redemption obligation. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | The community is subject to a ground lease, which, unless extended, will expire in 2082. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (5) | This community is owned by Fund II. The Company has a 28.2% interest in Fund II which is accounted for using the equity method of accounting. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | The Company holds a 1% special limited partner interest in the partnerships which own these apartment communities. These investments were made under arrangements whereby EMC became the 1% sole general partner and the other limited partners were granted the right to require the applicable partnership to redeem their interest for cash. Subject to certain conditions, the Company may, however, elect to deliver an equivalent number of shares of the Company’s common stock in satisfaction of the applicable partnership’s cash redemption obligation. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | The Company completed development of the property in 2010. |
|--------|-----|------------------------------------------------------------|

|   | (8) | The Company completed a $10.8 million redevelopment in 2009. |
|--------|-----|--------------------------------------------------------------|

|   | (9) | The Company completed a $6.2 million redevelopment in 2007. |
|--------|-----|-------------------------------------------------------------|

|   | (10) | Fund II completed a $5.3 million redevelopment in 2008. |
|--------|------|---------------------------------------------------------|

|   | (11) | This community is subject to a ground lease, which, unless extended, will expire in 2067. |
|--------|------|-------------------------------------------------------------------------------------------|

|   | (12) | The Company completed a $6.1 million redevelopment in 2007. |
|--------|------|-------------------------------------------------------------|

|   | (13) | This community is subject to a ground lease, which, unless extended, will expire in 2027. |
|--------|------|-------------------------------------------------------------------------------------------|

|   | (14) | This community is owned by Wesco I.  The Company has a 50% interest in Wesco I which is accounted for using the equity method of accounting. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (15) | The Company completed a $16.6 million redevelopment in 2009. |
|--------|------|--------------------------------------------------------------|

|   | (16) | The Company is in the process of performing a $9.7 million redevelopment. |
|--------|------|---------------------------------------------------------------------------|

|   | (17) | Company has a 47% interest in this community which is accounted for under the equity method. |
|--------|------|----------------------------------------------------------------------------------------------|

|   | (18) | The Company and EMC have a 74.0% and a 1% member interest, respectively. |
|--------|------|--------------------------------------------------------------------------|

|   | (19) | The community is subject to a ground lease, which, unless extended, will expire in 2028. |
|--------|------|------------------------------------------------------------------------------------------|

|   | (20) | The Company completed a $12.0 million redevelopment in 2008. |
|--------|------|--------------------------------------------------------------|

|   | (21) | The Company is in the process of performing a $8.6 million redevelopment |
|--------|------|--------------------------------------------------------------------------|

|   | (22) | The Company completed an $8.9 million redevelopment in 2008. |
|--------|------|--------------------------------------------------------------|

|   | (23) | The Company completed a $9.4 million redevelopment in 2009. |
|--------|------|-------------------------------------------------------------|

|   | (24) | The Company completed a $4.6 million redevelopment in 2009. |
|--------|------|-------------------------------------------------------------|

|   | (25) | Fund II completed a $4.5 million redevelopment in 2008. |
|--------|------|---------------------------------------------------------|

|   | (26) | The Company completed construction of 114 units of the 462 total units in 2000. |
|--------|------|---------------------------------------------------------------------------------|

|   | (27) | A portion of this community on which 84 units are presently located is subject to a ground lease, which, unless extended, will expire in 2028. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (28) | The Company is in the process of performing a $9.9 million redevelopment. |
|--------|------|---------------------------------------------------------------------------|

|   | (29) | The community is subject to a ground lease, which, unless extended, will expire in 2070. |
|--------|------|------------------------------------------------------------------------------------------|

|   | (30) | The Company is in the process of performing a $10.4 million redevelopment. |
|--------|------|----------------------------------------------------------------------------|

|   | (31) | The Company completed a $12.5 million redevelopment in 2009. |
|--------|------|--------------------------------------------------------------|

|   | (32) | The Company is in the process of performing a $36.3 million redevelopment, which included the construction of 28 in-fill units in 2009. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (33) | The Company completed a $7.0 million redevelopment in 2007. |
|--------|------|-------------------------------------------------------------|

|   | (34) | The Company completed a $3.9 million redevelopment in 2007. |
|--------|------|-------------------------------------------------------------|

|   | (35) | The Company is in the process of performing an $21.6 million redevelopment. |
|--------|------|-----------------------------------------------------------------------------|

|   | (36) | The Company completed a $5.1 million redevelopment and completed construction of 16 units of the community’s 108 units in 2006. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (37) | The Company occupies 100% of this property. |
|--------|------|---------------------------------------------|

|   | (38) | The property is leased through July 2014 to a single tenant. |
|--------|------|--------------------------------------------------------------|

|   | (39) | The Company occupies 7% of this property. |
|--------|------|-------------------------------------------|

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Table of Contents

Proceedings

Safety 

----

Table of Contents

Registrant’s 

| Quarter Ended      |   | High   |   |   | Low    |   |   | Close  |   |
|--------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, 2011  |   | $      | 148.44 |   |   | $      | 111.25 |   |   | $ | 140.51 |   |
| September 30, 2011 |   | $      | 145.40 |   |   | $      | 119.15 |   |   | $ | 120.04 |   |
| June 30, 2011      |   | $      | 138.31 |   |   | $      | 122.67 |   |   | $ | 135.29 |   |
| March 31, 2011     |   | $      | 124.41 |   |   | $      | 109.98 |   |   | $ | 124.00 |   |
|               |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010  |   | $      | 117.12 |   |   | $      | 105.60 |   |   | $ | 114.22 |   |
| September 30, 2010 |   | $      | 115.08 |   |   | $      | 92.62  |   |   | $ | 109.44 |   |
| June 30, 2010      |   | $      | 113.03 |   |   | $      | 89.23  |   |   | $ | 97.54 |   |
| March 31, 2010     |   | $      | 93.98  |   |   | $      | 76.35  |   |   | $ | 89.95 |   |

|                                   |   | 2011   |   |   | 2010   |   |   | 2009   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Common Stock                           |   |   |   |   |   |   |   |   |   |
| Ordinary income                        |   |   | 63.68  | %      |   |   | 82.46  | %      |   |   | 79.82 | % |
| Capital gain                           |   |   | 11.16  | %      |   |   | 5.61   | %      |   |   | 15.76 | % |
| Unrecaptured section 1250 capital gain |   |   | 0.74   | %      |   |   | 0.00   | %      |   |   | 4.42 | % |
| Return of capital                      |   |   | 24.42  | %      |   |   | 11.93  | %      |   |   | 0.00 | % |
|                                   |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | 2011   |   |   | 2010   |   |   | 2009   |   |
| Series F, G, and H Preferred stock     |   |   |   |   |   |   |   |   |   |   |   |   |
| Ordinary income                        |   |   | 100.00 | %      |   |   | 93.63  | %      |   |   | 79.82 | % |
| Capital gains                          |   |   | 0.00   | %      |   |   | 6.37   | %      |   |   | 15.76 | % |
| Unrecaptured section 1250 capital gain |   |   | 0.00   | %      |   |   | 0.00   | %      |   |   | 4.42 | % |
| Return of capital                      |   |   | 0.00   | %      |   |   | 0.00   | %      |   |   | 0.00 | % |
|                                   |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |

----

Table of Contents

| Year Ended |   | Annual Dividend |   | Quarter Ended |            | 2011   |   |   | 2010   |   |   | 2009   |   |
|------------|--------|-----------------|--------|---------------|-----------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 1995       |   | $               | 1.685  |          | March 31        |   | $      | 1.040  |   |   | $      | 1.033  |   |   | $ | 1.030 |   |
| 1996       |   | $               | 1.720  |          | June 30,        |   |   | 1.040  |   |   |   | 1.033  |   |   |   | 1.030 |   |
| 1997       |   | $               | 1.770  |          | September 30    |   |   | 1.040  |   |   |   | 1.033  |   |   |   | 1.030 |   |
| 1998       |   | $               | 1.950  |          | December 31     |   |   | 1.040  |   |   |   | 1.033  |   |   |   | 1.030 |   |
| 1999       |   | $               | 2.150  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2000       |   | $               | 2.380  |          | Annual Dividend |   | $      | 4.160  |   |   | $      | 4.130  |   |   | $ | 4.120 |   |
| 2001       |   | $               | 2.800  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2002       |   | $               | 3.080  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2003       |   | $               | 3.120  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2004       |   | $               | 3.160  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2005       |   | $               | 3.240  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2006       |   | $               | 3.360  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2007       |   | $               | 3.720  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008       |   | $               | 4.080  |          |            |   |   |   |   |   |   |   |   |   |   |   |   |

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|                         |   | Period Ending |   |
|------------------------------|--------|---------------|--------|
| Index                        |   | 12/31/06      |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |   | 12/31/10 |   |   | 12/31/11 |   |
| Essex Property Trust, Inc.   |   |          | 100.00 |   |   |   | 77.91 |   |   |   | 63.88 |   |   |   | 73.84 |   |   |   | 104.94 |   |   |   | 133.33 |   |
| NAREIT All Equity REIT Index |   |          | 100.00 |   |   |   | 84.31 |   |   |   | 52.50 |   |   |   | 67.20 |   |   |   | 85.98 |   |   |   | 93.10 |   |
| S&P 500                  |   |          | 100.00 |   |   |   | 105.49 |   |   |   | 66.46 |   |   |   | 84.05 |   |   |   | 96.71 |   |   |   | 98.76 |   |

| (1) | Common stock performance data is provided by SNL Financial. |
|-----|-------------------------------------------------------------|

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Financial 

|                                                                                                             |   | Years Ended December 31,                        |    |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                             |   | 2011                                            |    |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                                                             |   | ($ in thousands, except per share amounts) |    |
| OPERATING DATA:                                                                                                  |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental and other property                                                                                        |   | $                                               | 468,778 |   |   | $ | 408,734 |   |   | $ | 404,556 |   |   | $ | 400,693 |   |   | $ | 367,190 |   |
| Management and other fees from affiliates                                                                        |   |                                            | 6,780   |   |   |   | 4,551 |   |   |   | 4,325 |   |   |   | 5,166 |   |   |   | 5,090 |   |
|                                                                                                             |   |                                            | 475,558 |   |   |   | 413,285 |   |   |   | 408,881 |   |   |   | 405,859 |   |   |   | 372,280 |   |
| EXPENSES                                                                                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property operating expenses                                                                                      |   |                                            | 160,585 |   |   |   | 144,465 |   |   |   | 138,704 |   |   |   | 131,495 |   |   |   | 120,589 |   |
| Depreciation                                                                                                     |   |                                            | 152,228 |   |   |   | 129,011 |   |   |   | 117,296 |   |   |   | 108,955 |   |   |   | 95,859 |   |
| General and administrative                                                                                       |   |                                            | 25,304  |   |   |   | 25,962 |   |   |   | 28,062 |   |   |   | 27,684 |   |   |   | 26,673 |   |
| Impairment and other charges                                                                                     |   |                                            | -       |   |   |   | 2,302 |   |   |   | 13,084 |   |   |   | 650 |   |   |   | 800 |   |
|                                                                                                             |   |                                            | 338,117 |   |   |   | 301,740 |   |   |   | 297,146 |   |   |   | 268,784 |   |   |   | 243,921 |   |
| Earnings from operations                                                                                         |   |                                            | 137,441 |   |   |   | 111,545 |   |   |   | 111,735 |   |   |   | 137,075 |   |   |   | 128,359 |   |
|                                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense before amortization expense                                                                     |   |                                            | (91,694 | ) |   |   | (82,756 | ) |   |   | (81,196 | ) |   |   | (78,203 | ) |   |   | (79,053 | ) |
| Amortization expense                                                                                             |   |                                            | (11,474 | ) |   |   | (4,828 | ) |   |   | (4,820 | ) |   |   | (6,860 | ) |   |   | (6,843 | ) |
| Interest and other income                                                                                        |   |                                            | 17,139  |   |   |   | 27,841 |   |   |   | 13,040 |   |   |   | 11,337 |   |   |   | 10,310 |   |
| Equity (loss) income from co-investments                                                                         |   |                                            | (467    | ) |   |   | (1,715 | ) |   |   | 670 |   |   |   | 7,820 |   |   |   | 3,120 |   |
| Gain (loss) on early retirement of debt                                                                          |   |                                            | (1,163  | ) |   |   | (10 | ) |   |   | 4,750 |   |   |   | 3,997 |   |   |   | - |   |
| Gain on the sales of real estate                                                                                 |   |                                            | -       |   |   |   | - |   |   |   | 103 |   |   |   | 4,578 |   |   |   | - |   |
| Income before discontinued operations                                                                            |   |                                            | 49,782  |   |   |   | 50,077 |   |   |   | 44,282 |   |   |   | 79,744 |   |   |   | 55,893 |   |
| Income from discontinued operations                                                                              |   |                                            | 7,734   |   |   |   | 705 |   |   |   | 9,457 |   |   |   | 4,651 |   |   |   | 147,168 |   |
| Net income                                                                                                       |   |                                            | 57,516  |   |   |   | 50,782 |   |   |   | 53,739 |   |   |   | 84,395 |   |   |   | 203,061 |   |
|                                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to noncontrolling interest                                                               |   |                                            | (10,446 | ) |   |   | (14,848 | ) |   |   | (16,631 | ) |   |   | (22,255 | ) |   |   | (90,961 | ) |
| Net income attributable to controlling interest                                                                  |   |                                            | 47,070  |   |   |   | 35,934 |   |   |   | 37,108 |   |   |   | 62,140 |   |   |   | 112,100 |   |
| Dividends to preferred stockholders                                                                              |   |                                            | (4,753  | ) |   |   | (2,170 | ) |   |   | (4,860 | ) |   |   | (9,241 | ) |   |   | (9,174 | ) |
| Excess (deficit) of the carrying amount of preferred stock redeemed over the cash paid to redeem preferred stock |   |                                            | (1,949  | ) |   |   | - |   |   |   | 49,952 |   |   |   | - |   |   |   | - |   |
| Net income available to common stockholders                                                                      |   | $                                               | 40,368  |   |   | $ | 33,764 |   |   | $ | 82,200 |   |   | $ | 52,899 |   |   | $ | 102,926 |   |
| Per share data:                                                                                                  |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic:                                                                                                           |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before discontinued operations available to  common stockholders                                |   | $                                               | 1.02    |   |   | $ | 1.12 |   |   | $ | 2.69 |   |   | $ | 1.92 |   |   | $ | 1.11 |   |
| Net income available to common stockholders                                                                      |   | $                                               | 1.24    |   |   | $ | 1.14 |   |   | $ | 3.01 |   |   | $ | 2.10 |   |   | $ | 4.19 |   |
| Weighted average common stock outstanding                                                                        |   |                                            | 32,542  |   |   |   | 29,667 |   |   |   | 27,270 |   |   |   | 25,205 |   |   |   | 24,548 |   |
| Diluted:                                                                                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before discontinued operations available to  common stockholders                                |   | $                                               | 1.02    |   |   | $ | 1.11 |   |   | $ | 2.59 |   |   | $ | 1.91 |   |   | $ | 1.08 |   |
| Net income available to common stockholders                                                                      |   | $                                               | 1.24    |   |   | $ | 1.14 |   |   | $ | 2.91 |   |   | $ | 2.09 |   |   | $ | 4.10 |   |
| Weighted average common stock outstanding                                                                        |   |                                            | 32,629  |   |   |   | 29,734 |   |   |   | 29,747 |   |   |   | 25,347 |   |   |   | 25,101 |   |
| Cash dividend per common share                                                                                   |   | $                                               | 4.16    |   |   | $ | 4.13 |   |   | $ | 4.12 |   |   | $ | 4.08 |   |   | $ | 3.72 |   |

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|                                                              |   | As of December 31,                         |      |
|-------------------------------------------------------------------|--------|--------------------------------------------|-----------|
|                                                              |   | 2011                                       |      |   | 2010 |   |   | 2009 |   |   | 2008 |   |   |   | 2007 |   |
|                                                              |   | ($ in thousands)                           |      |
| BALANCE SHEET DATA:                                               |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in rental properties (before accumulated depreciation) |   | $                                          | 4,313,064 |   |   | $ | 3,964,561 |   |   | $ | 3,412,930 |   |   | $ | 3,279,788 |   |   | $ | 3,117,759 |   |
| Net investment in rental properties                               |   |                                       | 3,393,038 |   |   |   | 3,189,008 |   |   |   | 2,663,466 |   |   |   | 2,639,762 |   |   |   | 2,575,772 |   |
| Real estate for development                                       |   |                                       | 44,280    |   |   |   | 217,531 |   |   |   | 274,965 |   |   |   | 272,273 |   |   |   | 233,445 |   |
| Total assets                                                      |   |                                       | 4,036,964 |   |   |   | 3,732,887 |   |   |   | 3,254,637 |   |   |   | 3,164,823 |   |   |   | 2,980,323 |   |
| Total secured indebtedness                                        |   |                                       | 1,745,858 |   |   |   | 2,082,754 |   |   |   | 1,832,549 |   |   |   | 1,588,931 |   |   |   | 1,362,873 |   |
| Total unsecured indebtedness                                      |   |                                       | 615,000   |   |   |   | 176,000 |   |   |   | 14,893 |   |   |   | 165,457 |   |   |   | 282,486 |   |
| Cumulative convertible preferred stock                            |   |                                       | 4,349     |   |   |   | 4,349 |   |   |   | 4,349 |   |   |   | 145,912 |   |   |   | 145,912 |   |
| Cumulative redeemable preferred stock                             |   |                                       | 73,750    |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |
| Stockholders' equity                                              |   |                                       | 1,437,527 |   |   |   | 1,149,946 |   |   |   | 1,053,096 |   |   |   | 852,227 |   |   |   | 803,417 |   |
|                                                              |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   | As of and for the years ended December 31, |      |
|                                                              |   |                                       | 2011      |   |   |   | 2010 |   |   |   | 2009 |   |   |   | 2008 |   |   |   | 2007 |   |
| OTHER DATA:                                                       |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                        |   | $                                          | 57,516    |   |   | $ | 50,782 |   |   | $ | 53,739 |   |   | $ | 84,395 |   |   |   | 203,061 |   |
| Interest expense before amortization expense                      |   |                                       | 91,694    |   |   |   | 82,756 |   |   |   | 81,196 |   |   |   | 78,203 |   |   |   | 79,053 |   |
| Amortization expense                                              |   |                                       | 11,474    |   |   |   | 4,828 |   |   |   | 4,820 |   |   |   | 6,860 |   |   |   | 6,843 |   |
| Tax expense (benefit)                                             |   |                                       | (1,682    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 396 |   |
| Depreciation                                                      |   |                                       | 152,543   |   |   |   | 129,712 |   |   |   | 118,522 |   |   |   | 113,294 |   |   |   | 102,250 |   |
| EBITDA(1)                                                         |   | $                                          | 311,545   |   |   | $ | 268,078 |   |   | $ | 258,277 |   |   | $ | 282,752 |   |   |   | 391,603 |   |

|   | (1) | EBITDA is an operating measure and is defined as net income before interest expense, income taxes, depreciation and amortization.  EBITDA, as defined by the Company, is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP.  This measurement should not be considered in isolation or as a substitute for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity.  The Company’s definition may not be comparable to that of other companies. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Management’s 

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|                |   | As of December 31, 2011 |   |   | As of December 31, 2010 |   |
|---------------------|--------|-------------------------|--------|--------|-------------------------|--------|
|                |   | Apartment Units         |   |   | %                       |   |   | Apartment Units |   |   | % |   |
| Southern California |   |                    | 13,205 |   |                    |   | 48 | % |   |   | 13,076 |   |   |   | 49 | % |
| Northern California |   |                    | 8,106  |   |                    |   | 30 | % |   |   | 7,696 |   |   |   | 29 | % |
| Seattle Metro       |   |                    | 6,108  |   |                    |   | 22 | % |   |   | 5,980 |   |   |   | 22 | % |
| Total               |   |                    | 27,419 |   |                    |   | 100 | % |   |   | 26,752 |   |   |   | 100 | % |

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|                |   | Years endedDecember 31, |   |
|---------------------|--------|-------------------------|--------|
|                |   | 2011                    |   |   | 2010 |   |
| Southern California |   |                    | 96.3   | % |   |   | 96.8 | % |
| Northern California |   |                    | 96.6   | % |   |   | 97.2 | % |
| Seattle Metro       |   |                    | 96.4   | % |   |   | 96.9 | % |

|                                     |   | Number of  |   |   | Years EndedDecember 31, |   |    | Dollar |   |   | Percentage |   |
|------------------------------------------|--------|------------|--------|--------|-------------------------|--------|---------|--------|--------|--------|------------|--------|
|                                     |   | Properties |   |   | 2011                    |   |    | 2010   |   |   | Change     |   |   | Change |   |
| Property Revenues ($ in thousands)  |   |       |   |   |                    |   |    |   |   |   |       |   |   |   |   |
| 2011/2010 Same-Properties:               |   |       |   |   |                    |   |    |   |   |   |       |   |   |   |   |
| Southern California                      |   |       | 60     |   |                    | $      | 207,813 |   |   | $      | 202,354    |   |   | $ | 5,459 |   |   |   | 2.7 | % |
| Northern California                      |   |       | 28     |   |                    |   | 123,451 |   |   |   | 116,796    |   |   |   | 6,655 |   |   |   | 5.7 |   |
| Seattle Metro                            |   |       | 23     |   |                    |   | 61,827  |   |   |   | 59,101     |   |   |   | 2,726 |   |   |   | 4.6 |   |
| Total 2011/2010 Same-Property revenues   |   |       | 111    |   |                    |   | 393,091 |   |   |   | 378,251    |   |   |   | 14,840 |   |   |   | 3.9 |   |
| 2011/2010 Non-Same Property Revenues (1) |   |       |   |   |                    |   | 75,687  |   |   |   | 30,483     |   |   |   | 45,204 |   |   |   | 148.3 |   |
| Total property revenues                  |   |       |   |   |                    | $      | 468,778 |   |   | $      | 408,734    |   |   | $ | 60,044 |   |   |   | 14.7 | % |

| (1)  | Includes twelve communities acquired after January 1, 2010, two redevelopment communities, eight development communities, and three commercial buildings. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                |   | Years endedDecember 31, |   |
|---------------------|--------|-------------------------|--------|
|                |   | 2010                    |   |   | 2009 |   |
| Southern California |   |                    | 96.8   | % |   |   | 96.6 | % |
| Northern California |   |                    | 97.3   | % |   |   | 97.7 | % |
| Seattle Metro       |   |                    | 96.9   | % |   |   | 97.1 | % |

|                                     |   |                |   |   | Years Ended  |   |    |   |   |   |       |   |
|------------------------------------------|--------|---------------------|--------|--------|--------------|--------|---------|--------|--------|--------|------------|--------|
|                                     |   | Number ofProperties |   |   | December 31, |   |    | Dollar |   |   | Percentage |   |
|                                     |   | 2010                |   |   | 2009         |   |    | Change |   |   | Change     |   |
| Property Revenues ($ in thousands)  |   |                |   |   |         |   |    |   |   |   |       |   |   |   |   |
| 2010/2009 Same-Properties:               |   |                |   |   |         |   |    |   |   |   |       |   |   |   |   |
| Southern California                      |   |                | 58     |   |         | $      | 195,202 |   |   | $      | 199,197    |   |   | $ | (3,995 | ) |   |   | (2.0 | ) % |
| Northern California                      |   |                | 28     |   |         |   | 114,346 |   |   |   | 118,776    |   |   |   | (4,430 | ) |   |   | (3.7 | ) |
| Seattle Metro                            |   |                | 23     |   |         |   | 59,101  |   |   |   | 63,575     |   |   |   | (4,474 | ) |   |   | (7.0 | ) |
| Total 2010/2009 Same-Property revenues   |   |                | 109    |   |         |   | 368,649 |   |   |   | 381,548    |   |   |   | (12,899 | ) |   |   | (3.4 | ) |
| 2010/2009 Non-Same Property Revenues (1) |   |                |   |   |         |   | 40,085  |   |   |   | 23,008     |   |   |   | 17,077 |   |   |   | 74.2 |   |
| Total property revenues                  |   |                |   |   |         | $      | 408,734 |   |   | $      | 404,556    |   |   | $ | 4,178 |   |   |   | 1.0 | % |

| 1)  | Includes ten communities acquired after January 1, 2009, two redevelopment communities, six development communities, and two commercial buildings. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                              |   | 2012   |    |   | 2013 and 2014 |   |          | 2015 and 2016 |   |   | Thereafter |   |   | Total  |      |
|---------------------------------------------------|--------|--------|---------|--------|---------------|--------|---------------|---------------|--------|--------|------------|--------|--------|--------|-----------|
| Mortgage notes payable                            |   | $      | 35,953  |   |          | $      | 292,762       |          |   | $      | 83,212     |   |   | $      | 1,333,931 |   |   | $ | 1,745,858 |   |
| Unsecured debt                                    |   |   | -       |   |          |   | -             |          |   |   | 350,000    |   |   |   | 115,000   |   |   |   | 465,000 |   |
| Lines of credit                                   |   |   | -       |   |          |   | 150,000       |          |   |   | -          |   |   |   | -         |   |   |   | 150,000 |   |
| Interest on indebtedness (1)                      |   |   | 108,129 |   |          |   | 181,688  |          |   |   | 141,274    |   |   |   | 181,488   |   |   |   | 612,579 |   |
| Redevelopment commitments                         |   |   | 30,587  |   |          |   | 12,480        |          |   |   | -          |   |   |   | -         |   |   |   | 43,067 |   |
| Co-investment commitments (including development) |   |   | 115,100 |   |          |   | 46,600        |          |   |   | 8,000      |   |   |   | -         |   |   |   | 169,700 |   |
|                                              |   | $      | 289,769 |   |          | $      | 683,530       |          |   | $      | 582,486    |   |   | $      | 1,630,419 |   |   | $ | 3,186,204 |   |

| (1) | Interest on indebtedness for variable debt was calculated using interest rates as of December 31, 2011. |
|-----|---------------------------------------------------------------------------------------------------------|

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|   | (a) | historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on Funds from Operations “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate.  The exclusion, in NAREIT’s definition of FFO, of gains from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                            |   | For the year ended |       |   | For the quarter ended |   |
|-----------------------------------------------------------------|--------|--------------------|------------|--------|-----------------------|--------|
|                                                            |   | 12/31/11           |       |   | 12/31/11              |   |   | 9/30/11 |   |   | 6/30/11 |   |   | 3/31/11 |   |
| Net income available to common stockholders                     |   | $                  | 40,368     |   |                  | $      | 13,938 |   |   | $ | 7,687 |   |   | $ | 10,325 |   |   | $ | 8,418 |   |
| Adjustments:                                                    |   |               |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                    |   |               | 152,543    |   |                  |   | 39,865 |   |   |   | 38,137 |   |   |   | 37,510 |   |   |   | 37,031 |   |
| Gains not included in FFO, net of internal disposition cost     |   |               | (7,543     | )      |                  |   | (3,158 | ) |   |   | 880 |   |   |   | (5,265 | ) |   |   | - |   |
| Depreciation add back from unconsolidated co-investments        |   |               | 12,642     |   |                  |   | 4,145 |   |   |   | 3,502 |   |   |   | 1,957 |   |   |   | 3,038 |   |
| Noncontrolling interests related to Operating Partnership units |   |               | 3,228      |   |                  |   | 1,027 |   |   |   | 583 |   |   |   | 987 |   |   |   | 631 |   |
| Depreciation attributable to third party of co-investments      |   |               | (1,066     | )      |                  |   | (277 | ) |   |   | (266 | ) |   |   | (260 | ) |   |   | (263 | ) |
| Funds from operations                                           |   | $                  | 200,172    |   |                  | $      | 55,540 |   |   | $ | 50,523 |   |   | $ | 45,254 |   |   | $ | 48,855 |   |
| Weighted average number of shares outstanding, diluted(1)       |   |               | 34,860,521 |   |                  |   | 35,818,631 |   |   |   | 35,437,693 |   |   |   | 34,365,418 |   |   |   | 33,787,232 |   |
|                                                            |   |               |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                            |   | For the year ended |       |   | For the quarter ended |   |
|-----------------------------------------------------------------|--------|--------------------|------------|--------|-----------------------|--------|
|                                                            |   | 12/31/10           |       |   | 12/31/10              |   |   | 9/30/10 |   |   | 6/30/10 |   |   | 3/31/10 |   |
| Net income available to common stockholders                     |   | $                  | 33,764     |   |                  | $      | 4,778 |   |   | $ | 6,377 |   |   | $ | 9,482 |   |   | $ | 13,127 |   |
| Adjustments:                                                    |   |               |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                    |   |               | 129,711    |   |                  |   | 36,326 |   |   |   | 31,638 |   |   |   | 31,261 |   |   |   | 30,486 |   |
| Gains not included in FFO, net of internal disposition cost     |   |               | -          |   |                  |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Depreciation add back from unconsolidated co-investments        |   |               | 6,128      |   |                  |   | 1,840 |   |   |   | 1,684 |   |   |   | 1,364 |   |   |   | 1,240 |   |
| Noncontrolling interests related to Operating Partnership units |   |               | 2,779      |   |                  |   | 354 |   |   |   | 485 |   |   |   | 798 |   |   |   | 1,142 |   |
| Depreciation attributable to third party of co-investments      |   |               | (1,014     | )      |                  |   | (256 | ) |   |   | (254 | ) |   |   | (252 | ) |   |   | (252 | ) |
| Funds from operations                                           |   | $                  | 171,368    |   |                  | $      | 43,042 |   |   | $ | 39,930 |   |   | $ | 42,653 |   |   | $ | 45,743 |   |
| Weighted average number of shares outstanding, diluted(1)       |   |               | 32,028,269 |   |                  |   | 32,931,723 |   |   |   | 31,963,327 |   |   |   | 31,759,956 |   |   |   | 31,438,408 |   |

| (1)  | Assumes conversion of all dilutive outstanding operating partnership interests in the Operating Partnership. |
|-----------|--------------------------------------------------------------------------------------------------------------|

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|                             |   | For the year ended |     |   | For the quarter ended |   |
|----------------------------------|--------|--------------------|----------|--------|-----------------------|--------|
|                             |   | 12/31/11           |     |   | 12/31/2011            |   |   | 9/30/2011 |   |   | 6/30/2011 |   |   | 3/31/2011 |   |
| Cash flow provided by (used in): |   |               |     |   |                  |   |   |   |   |   |   |   |   |   |   |
| Operating activities             |   | $                  | 216,571  |   |                  | $      | 45,877 |   |   | $ | 66,343 |   |   | $ | 47,044 |   |   | $ | 57,307 |   |
| Investing activities             |   |               | (425,783 | )      |                  |   | (167,271 | ) |   |   | (108,393 | ) |   |   | (65,933 | ) |   |   | (84,186 | ) |
| Financing activities             |   |               | 208,348  |   |                  |   | 125,263 |   |   |   | 42,261 |   |   |   | (69,985 | ) |   |   | 110,809 |   |

|                             |   | For the yearended |     |   | For the quarter ended |   |
|----------------------------------|--------|-------------------|----------|--------|-----------------------|--------|
|                             |   | 12/31/10          |     |   | 12/31/2010            |   |   | 9/30/2010 |   |   | 6/30/2010 |   |   | 3/31/2010 |   |
| Cash flow provided by (used in): |   |              |     |   |                  |   |   |   |   |   |   |   |   |   |   |
| Operating activities             |   | $                 | 175,530  |   |                  | $      | 27,246 |   |   | $ | 58,870 |   |   | $ | 36,439 |   |   | $ | 52,975 |   |
| Investing activities             |   |              | (510,868 | )      |                  |   | (259,350 | ) |   |   | (128,362 | ) |   |   | (45,661 | ) |   |   | (77,495 | ) |
| Financing activities             |   |              | 328,431  |   |                  |   | 231,189 |   |   |   | 75,793 |   |   |   | (4,723 | ) |   |   | 26,172 |   |

Quantitative 

|                   |   |            |    |   |
|------------------------|--------|-----------------|---------|--------|
|                   |   |            |    |   |   |   |   | Carrying and  |   |   | Estimated Carrying Value |   |
|                   |   | Notional Amount |    |   | Maturity Date Range |   |   |   Estimate Fair Value |   |   | + 50 Basis Points |   |   | - 50 Basis Points |   |
| ($ in thousands)       |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flow hedges:      |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps    |   | $               | 150,000 |   |   |   | 2016 |   |   | $ | (1,366 | ) |   | $ | 2,277 |   |   | $ | (4,760 | ) |
| Interest rate caps     |   |            | 187,788 |   |   |   | 2013-2016 |   |   |   | 156 |   |   |   | 420 |   |   |   | 44 |   |
| Total cash flow hedges |   | $               | 337,788 |   |   |   | 2011-2015 |   |   | $ | (1,210 | ) |   | $ | 2,697 |   |   | $ | (4,716 | ) |

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|                  |   | For the Years Ended December 31, |   |
|-----------------------|--------|----------------------------------|--------|
|                  |   | 2012                             |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | 2016 |   |   | Thereafter |   |   | Total |   |   | Fair value |   |
|                  |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed rate debt       |   | $                                | 30,305 |   |   | $ | 180,322 |   |   | $ | 77,179 |   |   | $ | 70,305 |   |   | $ | 162,907 |   |   | $ | 1,246,190 |   |   | $ | 1,767,208 |   |   | $ | 1,876,700 |   |
| Average interest rate |   |                             | 5.4    | % |   |   | 5.6 | % |   |   | 5.3 | % |   |   | 5.2 | % |   |   | 4.4 | % |   |   | 6.0 | % |   |   |   |   |   |   |   |   |
| Variable rate debt    |   | $                                | 5,648  |   |   | $ | 35,261 |   |   | $ | 150,000 |   |   | $ | - |   |   | $ | 200,000 |   |   | $ | 202,741 |  (1 | ) | $ | 593,650 |   |   | $ | 572,300 |   |
| Average interest rate |   |                             | 5.4    | % |   |   | 1.6 | % |   |   | 3.8 | % |   |   | - |   |   |   | 2.6 | % |   |   | 1.7 | % |   |   |   |   |   |   |   |   |

| (1) | $187.8 million subject to interest rate caps. |
|-----|-----------------------------------------------|

Financial 

and 

Procedures

Other Information

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Directors

Compensation

Security 

Certain 

Accounting 

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Table of Contents

Exhibits 

| (A)    | Financial Statements                                                                                                                  |                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                  |                                                                                                                                                                |   |
| (1)    |                                                                                                                                  | Consolidated Financial Statements                                                                                                                                   | Page |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Reports of Independent Registered Public Accounting Firm                                                                                                            | F-1 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Consolidated Balance Sheets:As of December 31, 2011 and 2010                                                                                                        | F-4 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Consolidated Statements of Operations: Years ended December 31, 2011, 2010, and 2009                                                                                | F-5 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Consolidated Statements of Stockholders’ Equity, Noncontrolling Interest and Comprehensive Income: Years ended December 31, 2011, 2010, and 2009              | F-6 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Consolidated Statements of Cash Flows:Years ended December 31, 2011, 2010, and 2009                                                                                 | F-7 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   |                                                                                                                                  | Notes to the Consolidated Financial Statements                                                                                                                      | F-9 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
| (2)    |                                                                                                                                  | Financial Statement Schedule - Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2011                                                      | F-37 |
|   |                                                                                                                                  |                                                                                                                                                                |   |
| (3)    |                                                                                                                                  | See the Exhibit Index immediately following the signature page and certifications for a list of exhibits filed or incorporated by reference as part of this report. |   |
|   |                                                                                                                                  |                                                                                                                                                                |   |
| (B)    | Exhibits                                                                                                                              |                                                                                                                                                                |
|   |                                                                                                                                  |                                                                                                                                                                |   |
|   | The Company hereby files, as exhibits to this Form 10-K, those exhibits listed on the Exhibit Index referenced in Item 15(A)(3) above |                                                                                                                                                                |

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|                      | /S/ KPMG LLP |
|---------------------------|--------------|
|                      | KPMG LLP     |
|                      |         |
| San Francisco, California |         |
| February 23, 2012         |         |

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Table of Contents

|                      | /S/ KPMG LLP |
|---------------------------|--------------|
|                      | KPMG LLP     |
|                      |         |
| San Francisco, California |         |
| February 23, 2012         |

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Table of Contents

|                                                                                                                   |   | 2011   |      |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| ASSETS                                                                                                                 |   |   |      |   |   |   |
| Real estate:                                                                                                           |   |   |      |   |   |   |
| Rental properties:                                                                                                     |   |   |      |   |   |   |
| Land and land improvements                                                                                             |   | $      | 860,661   |   |   | $      | 802,325 |   |
| Buildings and improvements                                                                                             |   |   | 3,452,403 |   |   |   | 3,162,236 |   |
|                                                                                                                   |   |   | 4,313,064 |   |   |   | 3,964,561 |   |
| Less: accumulated depreciation                                                                                         |   |   | (920,026  | )      |   |   | (775,553 | ) |
|                                                                                                                   |   |   | 3,393,038 |   |   |   | 3,189,008 |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Real estate for development                                                                                            |   |   | 44,280    |   |   |   | 217,531 |   |
| Co-investments                                                                                                         |   |   | 383,412   |   |   |   | 107,840 |   |
|                                                                                                                   |   |   | 3,820,730 |   |   |   | 3,514,379 |   |
| Cash and cash equivalents-unrestricted                                                                                 |   |   | 12,889    |   |   |   | 13,753 |   |
| Cash and cash equivalents-restricted                                                                                   |   |   | 22,574    |   |   |   | 21,941 |   |
| Marketable securities                                                                                                  |   |   | 74,275    |   |   |   | 92,310 |   |
| Notes and other receivables                                                                                            |   |   | 66,369    |   |   |   | 49,444 |   |
| Prepaid expenses and other assets                                                                                      |   |   | 22,682    |   |   |   | 25,188 |   |
| Deferred charges, net                                                                                                  |   |   | 17,445    |   |   |   | 15,872 |   |
| Total assets                                                                                                           |   | $      | 4,036,964 |   |   | $      | 3,732,887 |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY AND                                                                               |   |   |      |   |   |   |   |   |
|  NONCONTROLLING INTEREST                                                                                          |   |   |      |   |   |   |   |   |
| Mortgage notes payable                                                                                                 |   | $      | 1,745,858 |   |   | $      | 1,832,745 |   |
| Unsecured debt                                                                                                         |   |   | 465,000   |   |   |   | - |   |
| Lines of credit                                                                                                        |   |   | 150,000   |   |   |   | 426,000 |   |
| Accounts payable and accrued liabilities                                                                               |   |   | 48,324    |   |   |   | 44,750 |   |
| Construction payable                                                                                                   |   |   | 6,505     |   |   |   | 9,023 |   |
| Dividends payable                                                                                                      |   |   | 39,611    |   |   |   | 36,405 |   |
| Derivative liabilities                                                                                                 |   |   | 3,061     |   |   |   | 5,633 |   |
| Other liabilities                                                                                                      |   |   | 20,528    |   |   |   | 18,968 |   |
| Total liabilities                                                                                                      |   |   | 2,478,887 |   |   |   | 2,373,524 |   |
| Commitments and contingencies                                                                                          |   |   |      |   |   |   |   |   |
| Cumulative convertible preferred stock; $.0001 par value:                                                              |   |   |      |   |   |   |   |   |
| 4.875% Series G - 5,890,000 issued, and 178,249 outstanding                                                            |   |   | 4,349     |   |   |   | 4,349 |   |
| Stockholders' equity and noncontrolling interest:                                                                      |   |   |      |   |   |   |   |   |
| Common stock; $.0001 par value, 656,020,000 shares authorized; 33,888,082 and 31,324,808 shares issued and outstanding |   |   | 3         |   |   |   | 3 |   |
| Cumulative redeemable preferred stock at liquidation value                                                             |   |   | 73,750    |   |   |   | 25,000 |   |
| Excess stock, $.0001 par value, 330,000,000 shares authorized and no shares issued or outstanding                      |   |   | -         |   |   |   | - |   |
| Additional paid-in capital                                                                                             |   |   | 1,844,611 |   |   |   | 1,515,468 |   |
| Distributions in excess of accumulated earnings                                                                        |   |   | (408,066  | )      |   |   | (313,308 | ) |
| Accumulated other comprehensive (loss) income                                                                          |   |   | (72,771   | )      |   |   | (77,217 | ) |
| Total stockholders' equity                                                                                             |   |   | 1,437,527 |   |   |   | 1,149,946 |   |
| Noncontrolling interest                                                                                                |   |   | 116,201   |   |   |   | 205,068 |   |
| Total stockholders' equity and noncontrolling interest                                                                 |   |   | 1,553,728 |   |   |   | 1,355,014 |   |
| Total liabilities, stockholders' equity and noncontrolling interest                                                    |   | $      | 4,036,964 |   |   | $      | 3,732,887 |   |

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|                                                                                                             |   | 2011   |       |   | 2010   |   |       | 2009   |   |
|------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Revenues:                                                                                                        |   |   |       |   |   |   |       |   |   |
| Rental and other property                                                                                        |   | $      | 468,778    |   |   | $      | 408,734    |   |   | $ | 404,556 |   |
| Management and other fees from affiliates                                                                        |   |   | 6,780      |   |   |   | 4,551      |   |   |   | 4,325 |   |
|                                                                                                             |   |   | 475,558    |   |   |   | 413,285    |   |   |   | 408,881 |   |
| Expenses:                                                                                                        |   |   |       |   |   |   |       |   |   |   |   |   |
| Property operating, excluding real estate taxes                                                                  |   |   | 116,583    |   |   |   | 105,054    |   |   |   | 102,126 |   |
| Real estate taxe                                                                                                 |   |   | 44,002     |   |   |   | 39,411     |   |   |   | 36,578 |   |
| Depreciation                                                                                                     |   |   | 152,228    |   |   |   | 129,011    |   |   |   | 117,296 |   |
| General and administrative                                                                                       |   |   | 25,304     |   |   |   | 25,962     |   |   |   | 28,062 |   |
| Impairment and other charges                                                                                     |   |   | -          |   |   |   | 2,302      |   |   |   | 13,084 |   |
|                                                                                                             |   |   | 338,117    |   |   |   | 301,740    |   |   |   | 297,146 |   |
| Earnings from operations                                                                                         |   |   | 137,441    |   |   |   | 111,545    |   |   |   | 111,735 |   |
| Interest expense before amortization                                                                             |   |   | (91,694    | )      |   |   | (82,756    | )      |   |   | (81,196 | ) |
| Amortization expense                                                                                             |   |   | (11,474    | )      |   |   | (4,828     | )      |   |   | (4,820 | ) |
| Interest and other income                                                                                        |   |   | 17,139     |   |   |   | 27,841     |   |   |   | 13,040 |   |
| Equity (loss) income from co-investments                                                                         |   |   | (467       | )      |   |   | (1,715     | )      |   |   | 670 |   |
| Gain (loss) on early retirement of debt                                                                          |   |   | (1,163     | )      |   |   | (10        | )      |   |   | 4,750 |   |
| Gain on sale of real estate                                                                                      |   |   | -          |   |   |   | -          |   |   |   | 103 |   |
| Income before discontinued operations                                                                            |   |   | 49,782     |   |   |   | 50,077     |   |   |   | 44,282 |   |
| Income from discontinued operations                                                                              |   |   | 7,734      |   |   |   | 705        |   |   |   | 9,457 |   |
| Net income                                                                                                       |   |   | 57,516     |   |   |   | 50,782     |   |   |   | 53,739 |   |
| Net income attributable to noncontrolling interest                                                               |   |   | (10,446    | )      |   |   | (14,848    | )      |   |   | (16,631 | ) |
| Net income attributable to controlling interest                                                                  |   |   | 47,070     |   |   |   | 35,934     |   |   |   | 37,108 |   |
| Dividends to preferred stockholders                                                                              |   |   | (4,753     | )      |   |   | (2,170     | )      |   |   | (4,860 | ) |
| Excess (deficit) of the carrying amount of preferred stock redeemed over the cash paid to redeem preferred stock |   |   | (1,949     | )      |   |   | -          |   |   |   | 49,952 |   |
| Net income available to common stockholders                                                                      |   | $      | 40,368     |   |   | $      | 33,764     |   |   | $ | 82,200 |   |
| Per share data:                                                                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic:                                                                                                           |   |   |       |   |   |   |       |   |   |   |   |   |
| Income before discontinued operations available to common stockholders                                           |   | $      | 1.02       |   |   | $      | 1.12       |   |   | $ | 2.69 |   |
| Income from discontinued operations available to common stockholders                                             |   |   | 0.22       |   |   |   | 0.02       |   |   |   | 0.32 |   |
| Net income available to common stockholders                                                                      |   | $      | 1.24       |   |   | $      | 1.14       |   |   | $ | 3.01 |   |
| Weighted average number of shares outstanding during the year                                                    |   |   | 32,541,792 |   |   |   | 29,667,064 |   |   |   | 27,269,547 |   |
| Diluted:                                                                                                         |   |   |       |   |   |   |       |   |   |   |   |   |
| Income before discontinued operations available to common stockholders                                           |   | $      | 1.02       |   |   | $      | 1.11       |   |   | $ | 2.59 |   |
| Income from discontinued operations available to common stockholders                                             |   |   | 0.22       |   |   |   | 0.03       |   |   |   | 0.32 |   |
| Net income available to common stockholders                                                                      |   | $      | 1.24       |   |   | $      | 1.14       |   |   | $ | 2.91 |   |
| Weighted average number of shares outstanding during the year                                                    |   |   | 32,628,714 |   |   |   | 29,734,383 |   |   |   | 29,746,614 |   |

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|                                                                                 |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   | Distributions |   |   | Accumulated   |      |   |     |   |     |   |   |
|--------------------------------------------------------------------------------------|--------|-----------------|--------|--------|-----------------|--------|---------|--------------|--------|--------|---------|--------|--------|-------------|--------|--------|---------------|--------|--------|----------------|--------|--------|---------------|--------|--------|---------------|-----------|--------|----------|--------|----------|--------|--------|
|                                                                                 |   | Series F        |   |   | Series H        |   |    |         |   |   |    |   |   | Additional  |   |   | in excess of  |   |   | other          |   |   |          |   |   |          |      |
|                                                                                 |   | Preferred stock |   |   | Preferred stock |   |    | Common stock |   |   | paid-in |   |   | accumulated |   |   | comprehensive |   |   | Noncontrolling |   |   |          |   |
|                                                                                 |   | Shares          |   |   | Amount          |   |    | Shares       |   |   | Amount  |   |   | Shares      |   |   | Amount        |   |   | capital        |   |   | earnings      |   |   | (loss) income |      |   | Interest |   |     | Total  |   |
| Balances at December 31, 2008                                                        |   |            | 1,000  |   |            | $      | 25,000  |         |   |   | -       |   |   | $           | -      |   |          |   | 26,396 |           |   | $      | 3             |   |   | $             | 1,043,984 |   |     | $      | (141,336 | )      |   | $ | (75,424 | ) |   | $ | 233,771 |   |   | $ | 1,085,998 |   |
| Comprehensive income:                                                                |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                           |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | 37,108   |   |   |   | - |   |   |   | 16,631 |   |   |   | 53,739 |   |
| Changes in fair value of cash flow hedges and amortization of settlement swaps       |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | 39,354 |   |   |   | 3,534 |   |   |   | 42,888 |   |
| Changes in fair value of marketable securities                                       |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | 11,864 |   |   |   | 1,066 |   |   |   | 12,930 |   |
| Comprehensive income                                                                 |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 109,557 |   |
| Issuance of common stock under:                                                      |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock option plans                                                                   |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 62     |           |   |   | -             |   |   |          | 943       |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 943 |   |
| Sale of common stock                                                                 |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 2,741  |           |   |   | -             |   |   |          | 198,511   |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 198,511 |   |
| Equity based compensation costs                                                      |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | 6,859     |   |     |   | -        |   |   |   | - |   |   |   | 276 |   |   |   | 7,135 |   |
| Retirement of Series G Preferred                                                     |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | 49,952    |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 49,952 |   |
| Retirement of common stock                                                           |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | (350   | )              |   |   | -             |   |   |          | (20,271   | )      |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | (20,271 | ) |
| Retirement of exchangeable bonds                                                     |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (4,727    | )      |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | (4,727 | ) |
| Redemptions of noncontrolling interest                                               |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | (12,725 | ) |   |   | (12,725 | ) |
| Distributions to noncontrolling interest                                             |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | (22,108 | ) |   |   | (22,108 | ) |
| Common and preferred stock dividends declared                                        |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | (118,724 | )      |   |   | - |   |   |   | - |   |   |   | (118,724 | ) |
| Balances at December 31, 2009                                                        |   |            | 1,000  |   |            |   | 25,000  |         |   |   | -       |   |   |        | -      |   |          |   | 28,849 |           |   |   | 3             |   |   |          | 1,275,251 |   |     |   | (222,952 | )      |   |   | (24,206 | ) |   |   | 220,445 |   |   |   | 1,273,541 |   |
| Comprehensive income (loss)                                                          |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                           |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | 35,934   |   |   |   | - |   |   |   | 14,848 |   |   |   | 50,782 |   |
| Reversal of unrealized gains upon the sale of   marketable securities |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | (11,163 | ) |   |   | (864 | ) |   |   | (12,027 | ) |
| Changes in fair value of cash flow hedges and amortization of settlement swaps  |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | (46,817 | ) |   |   | (3,620 | ) |   |   | (50,437 | ) |
| Changes in fair value of marketable securities                                       |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | 4,969 |   |   |   | 388 |   |   |   | 5,357 |   |
| Comprehensive income (loss)                                                          |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | (6,325 | ) |
| Issuance of common stock under:                                                      |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock option plans                                                                   |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 122    |           |   |   | -             |   |   |          | 5,803     |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 5,803 |   |
| Sale of common stock                                                                 |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 2,354  |           |   |   | -             |   |   |          | 251,455   |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 251,455 |   |
| Equity based compensation costs                                                      |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (260      | )      |     |   | -        |   |   |   | - |   |   |   | 2,474 |   |   |   | 2,214 |   |
| Retirement of exchangeable bonds                                                     |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (434      | )      |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | (434 | ) |
| Contributions of noncontrolling interest                                             |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | 4,038 |   |   |   | 4,038 |   |
| Redemptions of noncontrolling interest                                               |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (16,347   | )      |     |   | -        |   |   |   | - |   |   |   | (7,839 | ) |   |   | (24,186 | ) |
| Distributions to noncontrolling interest                                             |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | (24,802 | ) |   |   | (24,802 | ) |
| Common and preferred stock dividends declared                                        |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | (126,290 | )      |   |   | - |   |   |   | - |   |   |   | (126,290 | ) |
| Balances at December 31, 2010                                                        |   |            | 1,000  |   |            |   | 25,000  |         |   |   | -       |   |   |        | -      |   |          |   | 31,325 |           |   |   | 3             |   |   |          | 1,515,468 |   |     |   | (313,308 | )      |   |   | (77,217 | ) |   |   | 205,068 |   |   |   | 1,355,014 |   |
| Comprehensive income:                                                                |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                           |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | 47,070   |   |   |   | - |   |   |   | 10,446 |   |   |   | 57,516 |   |
| Reversal of unrealized gains upon the sale of marketable securities                  |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | (4,011 | ) |   |   | (275 | ) |   |   | (4,286 | ) |
|                                                                                 |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in fair value of cash flow hedges and amortization of settlement swaps       |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | 7,212 |   |   |   | 495 |   |   |   | 7,707 |   |
| Changes in fair value of marketable securities                                       |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | 1,245 |   |   |   | 85 |   |   |   | 1,330 |   |
| Comprehensive income                                                                 |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 62,267 |   |
| Issuance of common stock under:                                                      |   |            |   |   |            |   |    |         |   |   |    |   |   |        |   |   |          |   |   |           |   |   |          |   |   |          |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock option plans                                                                   |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 103    |           |   |   | -             |   |   |          | 8,412     |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 8,412 |   |
| Sale of common stock                                                                 |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | 2,460  |           |   |   | -             |   |   |          | 323,931   |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 323,931 |   |
| Equity based compensation costs                                                      |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (725      | )      |     |   | -        |   |   |   | - |   |   |   | 1,598 |   |   |   | 873 |   |
| Issuance of Series H Preferred                                                       |   |            | -      |   |            |   | -       |         |   |   | 2,950   |   |   |        | 73,750 |   |          |   | -      |           |   |   | -             |   |   |          | (2,541    | )      |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | 71,209 |   |
| Redemptions of Series F Preferred                                                    |   |            | (1,000 | )      |            |   | (25,000 | )            |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | - |   |   |   | (25,000 | ) |
| Redemptions of Series B Preferred                                                    |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | 1,200     |   |     |   | -        |   |   |   | - |   |   |   | (80,000 | ) |   |   | (78,800 | ) |
| Redemptions of noncontrolling interest                                               |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | (1,134    | )      |     |   | -        |   |   |   | - |   |   |   | (4,253 | ) |   |   | (5,387 | ) |
| Distributions to noncontrolling interest                                             |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | -        |   |   |   | - |   |   |   | (16,963 | ) |   |   | (16,963 | ) |
| Common and preferred stock dividends declared                                        |   |            | -      |   |            |   | -       |         |   |   | -       |   |   |        | -      |   |          |   | -      |           |   |   | -             |   |   |          | -         |   |     |   | (141,828 | )      |   |   | - |   |   |   | - |   |   |   | (141,828 | ) |
| Balances at December 31, 2011                                                        |   |            | -      |   |            | $      | -       |         |   |   | 2,950   |   |   | $           | 73,750 |   |          |   | 33,888 |           |   | $      | 3             |   |   | $             | 1,844,611 |   |     | $      | (408,066 | )      |   | $ | (72,771 | ) |   | $ | 116,201 |   |   | $ | 1,553,728 |   |

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Table of Contents

|                                                                              |   | 2011   |       |   | 2010   |   |      | 2009   |   |
|-----------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Cash flows from operating activities:                                             |   |   |       |   |   |   |      |   |   |
| Net income                                                                        |   | $      | 57,516     |   |   | $      | 50,782    |   |   | $ | 53,739 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |       |   |   |   |      |   |   |   |   |   |
| Gain on sale of marketable securities                                             |   |   | (4,956     | )      |   |   | (12,491   | )      |   |   | (1,014 | ) |
| Loss (gain) on early retirement of debt                                           |   |   | 1,163      |   |   |   | 10        |   |   |   | (4,750 | ) |
| Co-investments                                                                    |   |   | 7,929      |   |   |   | 1,715     |   |   |   | (670 | ) |
| Amortization expense                                                              |   |   | 11,474     |   |   |   | 4,828     |   |   |   | 4,820 |   |
| Amortization of discount on marketable securities                                 |   |   | (4,794     | )      |   |   | (3,714    | )      |   |   | (3,605 | ) |
| Amortization of discount on notes receivables                                     |   |   | (1,757     | )      |   |   | (4,806    | )      |   |   | - |   |
| Loss on derivative instruments - ineffectiveness                                  |   |   | -          |   |   |   | 2,301     |   |   |   | - |   |
| Gain on sale of co-investment                                                     |   |   | (919       | )      |   |   | -         |   |   |   | (530 | ) |
| Gain on the sales of real estate                                                  |   |   | (8,562     | )      |   |   | -         |   |   |   | (8,729 | ) |
| Impairment loss and reserve for loan loss                                         |   |   | -          |   |   |   | -         |   |   |   | 13,084 |   |
| Non-cash expense due to cancellation of outperformance plan                       |   |   | -          |   |   |   | -         |   |   |   | 3,807 |   |
| Depreciation                                                                      |   |   | 152,542    |   |   |   | 129,711   |   |   |   | 118,522 |   |
| Equity-based compensation                                                         |   |   | 2,927      |   |   |   | 3,251     |   |   |   | 3,412 |   |
| Changes in operating assets and liabilities:                                      |   |   |       |   |   |   |      |   |   |   |   |   |
| Prepaid expenses and other assets                                                 |   |   | (1,172     | )      |   |   | (2,771    | )      |   |   | (2,249 | ) |
| Accounts payable and accrued liabilities                                          |   |   | 3,620      |   |   |   | 4,302     |   |   |   | (2,364 | ) |
| Other liabilities                                                                 |   |   | 1,560      |   |   |   | 2,412     |   |   |   | 114 |   |
| Net cash provided by operating activities                                         |   |   | 216,571    |   |   |   | 175,530   |   |   |   | 173,587 |   |
| Cash flows from investing activities:                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Additions to real estate:                                                         |   |   |       |   |   |   |      |   |   |   |   |   |
| Acquisitions of real estate                                                       |   |   | (57,478    | )      |   |   | (279,607  | )      |   |   | (16,000 | ) |
| Improvements to recent acquisitions                                               |   |   | (16,446    | )      |   |   | (6,388    | )      |   |   | (3,210 | ) |
| Redevelopment                                                                     |   |   | (45,130    | )      |   |   | (14,096   | )      |   |   | (25,812 | ) |
| Revenue generating capital expenditures                                           |   |   | (7,616     | )      |   |   | (1,584    | )      |   |   | (855 | ) |
| Non-revenue generating capital expenditures                                       |   |   | (26,090    | )      |   |   | (29,278   | )      |   |   | (25,722 | ) |
| Acquisition of and additions to real estate under development                     |   |   | (79,194    | )      |   |   | (155,267  | )      |   |   | (120,844 | ) |
| Dispositions of real estate                                                       |   |   | 23,003     |   |   |   | -         |   |   |   | 38,178 |   |
| Changes in restricted cash and refundable deposits                                |   |   | (1,376     | )      |   |   | (4,414    | )      |   |   | 11,995 |   |
| Purchases of marketable securities                                                |   |   | (8,048     | )      |   |   | (49,974   | )      |   |   | (116,402 | ) |
| Sales and maturities marketable securities                                        |   |   | 32,998     |   |   |   | 102,039   |   |   |   | 22,964 |   |
| Proceeds from tax investor                                                        |   |   | -          |   |   |   | 1,223     |   |   |   | 3,762 |   |
| Purchases of and advances under notes and other receivables                       |   |   | (12,325    | )      |   |   | (37,627   | )      |   |   | (3,424 | ) |
| Collections of notes and other receivables                                        |   |   | 884        |   |   |   | 1,855     |   |   |   | 15,728 |   |
| Contributions to co-investments                                                   |   |   | (246,106   | )      |   |   | (79,450   | )      |   |   | (270 | ) |
| Non-operating distributions from co-investments                                   |   |   | 17,141     |   |   |   | 41,700    |   |   |   | 954 |   |
| Net cash used in investing activities                                             |   |   | (425,783   | )      |   |   | (510,868  | )      |   |   | (218,958 | ) |
| Cash flows from financing activities:                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Borrowings under debt agreements                                                  |   |   | 1,514,684  |   |   |   | 1,214,216 |   |   |   | 453,570 |   |
| Repayment of debt                                                                 |   |   | (1,435,135 | )      |   |   | (882,646  | )      |   |   | (199,979 | ) |
| Additions to deferred charges                                                     |   |   | (5,533     | )      |   |   | (4,109    | )      |   |   | (3,935 | ) |
| Payments to settle derivative instruments                                         |   |   | (2,395     | )      |   |   | (81,282   | )      |   |   | - |   |
| Retirement of exchangeable bonds                                                  |   |   | -          |   |   |   | (5,396    | )      |   |   | (161,084 | ) |
| Retirement of common stock                                                        |   |   | -          |   |   |   | -         |   |   |   | (20,271 | ) |
| Net proceeds from issuance of Preferred stock, Series H                           |   |   | 71,209     |   |   |   | -         |   |   |   | - |   |
| Retirement of Series D preferred units and Series G Preferred stock               |   |   | -          |   |   |   | -         |   |   |   | (91,703 | ) |
| Retirement of Series B preferred units and Series F Preferred stock               |   |   | (103,800   | )      |   |   | -         |   |   |   | - |   |
| Equity related issuance cost                                                      |   |   | (627       | )      |   |   | -         |   |   |   | - |   |
| Net proceeds from stock options exercised                                         |   |   | 6,986      |   |   |   | 4,765     |   |   |   | 943 |   |
| Net proceeds from issuance of common stock                                        |   |   | 323,931    |   |   |   | 251,455   |   |   |   | 198,511 |   |
| Contributions from noncontrolling interest                                        |   |   | -          |   |   |   | 4,038     |   |   |   | - |   |
| Distributions to noncontrolling interest                                          |   |   | (16,963    | )      |   |   | (24,795   | )      |   |   | (22,108 | ) |
| Redemption of noncontrolling interest                                             |   |   | (5,387     | )      |   |   | (24,186   | )      |   |   | (12,720 | ) |
| Common and preferred stock dividends paid                                         |   |   | (138,622   | )      |   |   | (123,629  | )      |   |   | (117,102 | ) |
| Net cash provided by financing activities                                         |   |   | 208,348    |   |   |   | 328,431   |   |   |   | 24,112 |   |
| Net (decrease) increase in cash and cash equivalents                              |   |   | (864       | )      |   |   | (6,907    | )      |   |   | (21,249 | ) |
| Cash and cash equivalents at beginning of year                                    |   |   | 13,753     |   |   |   | 20,660    |   |   |   | 41,909 |   |
| Cash and cash equivalents at end of year                                          |   | $      | 12,889     |   |   | $      | 13,753    |   |   | $ | 20,660 |   |

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Table of Contents

| Cash paid for interest, net of $8,240, $9,486, and $10,463capitalized in 2011, 2010 and 2009, respectively |   | $      | 89,691  |   |   | $      | 83,497  |   |   | $      | 81,878 |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
|                                                                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Supplemental disclosure of noncash investing and financing activities:                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Transfer from real estate under development to rental properties                                           |   | $      | 165,214 |   |   | $      | 170,940 |   |   | $      | 92,517 |   |
| Transfer from real estate under development to co-investments                                              |   | $      | 54,472  |   |   |   | -       |   |   |   | -      |   |
|                                                                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Mortgage notes assumed in connection with purchases of real estate                                         |   | $      | 20,927  |   |   |   | 87,336  |   |   |   | -      |   |
|                                                                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Note receivable settled when the company purchased the property securingthe note receivable                |   | $      | -       |   |   |   | 25,750  |   |   |   | -      |   |
| Change in accrual of dividends                                                                             |   | $      | 3,206   |   |   | $      | 2,655   |   |   | $      | 1,626  |   |
| Change in fair value of derivative liabilities                                                             |   | $      | 230     |   |   | $      | 1,907   |   |   | $      | 42,973 |   |
| Change in fair value of marketable securities                                                              |   | $      | 2,836   |   |   | $      | 6,670   |   |   | $      | 12,900 |   |
| Change in construction payable                                                                             |   | $      | 2,518   |   |   | $      | 1,304   |   |   | $      | 8,278  |   |

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| Computer software and equipment                                    | 3 - 5 years |
|--------------------------------------------------------------------|-------------|
| Interior unit improvements                                         | 5 years     |
| Land improvements and certain exterior components of real property | 10 years    |
| Real estate structures                                             | 30 years    |

|   | (1) | Adjust the purchase price for any fair value adjustments resulting from such things as assumed debt or contingencies. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------|

|   | (2) | estimate the value of the real estate “as if vacant” as of the acquisition date; |
|--------|-----|----------------------------------------------------------------------------------------------|

|   | (3) | allocate that value among land and building; |
|--------|-----|----------------------------------------------|

|   | (4) | compute the value of the difference between the “as if vacant” value and the adjusted purchase price, which will represent the total intangible assets; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | compute the value of the above and below market leases and determine the associated life of the above market/ below market leases; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | compute the value of the in-place leases and customer relationships, if any, and the associated lives of these assets. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------|

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|                             |   | December 31, 2011    |   |
|----------------------------------|--------|----------------------|--------|
|                             |   | AmortizedCost        |   |   | GrossUnrealizedGain(Loss) |   |   |   Fair Value |   |
| Available for sale:              |   |                 |   |   |   |   |   |   |   |
| Investment-grade unsecured bonds |   | $                    | 3,615  |   |   | $ | 399 |   |   | $ | 4,014 |   |
| Investment funds - US treasuries |   |                 | 11,783 |   |   |   | 121 |   |   |   | 11,904 |   |
| Common stock                     |   |                 | 10,067 |   |   |   | 1,552 |   |   |   | 11,619 |   |
| Held to maturity:                |   |                 |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities       |   |                 | 46,738 |   |   |   | - |   |   |   | 46,738 |   |
| Total                            |   | $                    | 72,203 |   |   | $ | 2,072 |   |   | $ | 74,275 |   |
|                             |   |                 |   |   |   |   |   |   |   |   |   |   |
|                             |   | December 31, 2010    |   |
|                             |   |   AmortizedCost |   |   | GrossUnrealizedGain |   |   |    Fair Value |   |
| Available for sale:              |   |                 |   |   |   |   |   |   |   |   |   |   |
| Investment-grade unsecured bonds |   | $                    | 22,243 |   |   | $ | 4,403 |   |   | $ | 26,646 |   |
| Investment funds - US treasuries |   |                 | 14,345 |   |   |   | 582 |   |   |   | 14,927 |   |
| Common stock                     |   |                 | 8,638  |   |   |   | 112 |   |   |   | 8,750 |   |
| Held to maturity:                |   |                 |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities       |   |                 | 41,987 |   |   |   | - |   |   |   | 41,987 |   |
| Total                            |   | $                    | 87,213 |   |   | $ | 5,097 |   |   | $ | 92,310 |   |

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|                                    |   | 2011   |   |   | 2010   |   |   | 2009   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Interest income                         |   | $      | 10,501 |   |   | $      | 15,350 |   |   | $ | 11,841 |   |
| Gains on sales of marketable securities |   |   | 4,956  |   |   |   | 12,491 |   |   |   | 1,014 |   |
| Tax benefit - Taxable REIT Subsidiary   |   |   | 1,682  |   |   |   | -      |   |   |   | - |   |
| Other income                            |   |   | -      |   |   |   | -      |   |   |   | 185 |   |
|                                    |   | $      | 17,139 |   |   | $      | 27,841 |   |   | $ | 13,040 |   |

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|                                   |   | 2011   |   |   | 2010   |   |   | 2009   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Common Stock                           |   |   |   |   |   |   |   |   |   |
| Ordinary income                        |   |   | 63.68  | %      |   |   | 82.46  | %      |   |   | 79.82 | % |
| Capital gain                           |   |   | 11.16  | %      |   |   | 5.61   | %      |   |   | 15.76 | % |
| Unrecaptured section 1250 capital gain |   |   | 0.74   | %      |   |   | 0.00   | %      |   |   | 4.42 | % |
| Return of capital                      |   |   | 24.42  | %      |   |   | 11.93  | %      |   |   | 0.00 | % |
|                                   |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   |   | 2011   |   |   |   | 2010   |   |   |   | 2009 |   |
| Series F, G, and H Preferred stock     |   |   |   |   |   |   |   |   |   |   |   |   |
| Ordinary income                        |   |   | 100.00 | %      |   |   | 93.63  | %      |   |   | 79.82 | % |
| Capital gains                          |   |   | 0.00   | %      |   |   | 6.37   | %      |   |   | 15.76 | % |
| Unrecaptured section 1250 capital gain |   |   | 0.00   | %      |   |   | 0.00   | %      |   |   | 4.42 | % |
| Return of capital                      |   |   | 0.00   | %      |   |   | 0.00   | %      |   |   | 0.00 | % |
|                                   |   |   | 100.00 | %      |   |   | 100.00 | %      |   |   | 100.00 | % |

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| Communities             |   | Purchase Price |    |   | Units  |   |   | Quarter Acquired |   |
|-------------------------|--------|----------------|---------|--------|--------|--------|--------|------------------|--------|
| 416 @ Broadway          |   | $              | 43,000  |   |   |   | 115    |             |   |   | Q4 2010 |   |
| Anavia                  |   |           | 80,600  |   |   |   | 250    |             |   |   | Q4 2010 |   |
| Santee Court            |   |           | 31,100  |   |   |   | 165    |             |   |   | Q4 2010 |   |
| Courtyard off Main      |   |           | 30,000  |   |   |   | 110    |             |   |   | Q4 2010 |   |
| Corbella at Juanita Bay |   |           | 23,400  |   |   |   | 169    |             |   |   | Q4 2010 |   |
| Allegro                 |   |           | 29,850  |   |   |   | 97     |             |   |   | Q4 2010 |   |
| 101 San Fernando        |   |           | 64,100  |   |   |   | 323    |             |   |   | Q3 2010 |   |
| The Commons             |   |           | 42,500  |   |   |   | 264    |             |   |   | Q3 2010 |   |
| Bella Villagio          |   |           | 54,000  |   |   |   | 231    |             |   |   | Q3 2010 |   |
| Muse                    |   |           | 39,100  |   |   |   | 152    |             |   |   | Q3 2010 |   |
| Elevation               |   |           | 18,600  |   |   |   | 156    |             |   |   | Q2 2010 |   |
| Total 2010 purchases    |   | $              | 456,250 |   |   |   | 2,032  |             |   |   |   |   |

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|                                                                                                                                           |   | 2011   |    |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Investments in joint ventures accounted for under the equity method of accounting:                                                        |   |   |    |   |   |   |
| Membership interest in Wesco I                                                                                                                 |   | $      | 75,588  |   |   | $      | - |   |
| Partnership interest in Fund II                                                                                                                |   |   | 64,294  |   |   |   | 66,000 |   |
| Membership interest in a limited liability company that owns                                                                                   |   |   |    |   |   |   |   |   |
| Essex Skyline at MacArthur Place                                                                                                               |   |   | 24,063  |   |   |   | 29,187 |   |
| Total operating co-investments                                                                                                                 |   |   | 163,945 |   |   |   | 95,187 |   |
|                                                                                                                                           |   |   |    |   |   |   |   |   |
| Membership interests in limited liability companies that own and are developing Cadence and West Dublin                                        |   |   | 62,897  |   |   |   | - |   |
| Membership interest in a limited liability company that owns and is developing Queen Anne                                                      |   |   | 17,981  |   |   |   | - |   |
| Membership interests in limited liability companies that own and are developing Fountain at La Brea and Santa Monica at La Brea                |   |   | 15,194  |   |   |   | - |   |
| Total development co-investments                                                                                                               |   |   | 96,072  |   |   |   | - |   |
|                                                                                                                                           |   |   |    |   |   |   |   |   |
| Membership interest in Wesco II that owns a preferred equity interest in Park Merced with a perferred return of 10.1%                          |   |   | 88,075  |   |   |   | - |   |
| Preferred interests in limited liability companies that own apartment communities in downtown Los Angeles with preferred returns of 9% and 10% |   |   | 22,792  |   |   |   | - |   |
| Preferred interest in a related limited liability company that owns Madison Park at Anaheim with a preferred return of 13%                     |   |   | 12,528  |   |   |   | 12,014 |   |
| Total preferred interest investments                                                                                                           |   |   | 123,395 |   |   |   | 12,014 |   |
|                                                                                                                                           |   |   |    |   |   |   |   |   |
| Investments accounted for under the cost method of accounting:                                                                                 |   |   |    |   |   |   |   |   |
| Series A and B-2 Preferred Stock interests in Multifamily Technology Solutions, Inc                                                            |   |   | -       |   |   |   | 639 |   |
| Total co-investments                                                                                                                           |   | $      | 383,412 |   |   | $      | 107,840 |   |

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|                                                |   | December 31,             |      |   |   |   |
|-----------------------------------------------------|--------|--------------------------|-----------|--------|--------|--------|
|                                                |   | 2011                     |      |   | 2010   |   |   |   |   |
| Balance sheets:                                     |   |                     |      |   |   |   |   |   |   |
| Rental properties and real estate under development |   | $                        | 1,659,078 |   |   | $      | 750,808 |   |   |   |   |
| Other assets                                        |   |                     | 63,847    |   |   |   | 15,864 |   |   |   |   |
| Total assets                                        |   | $                        | 1,722,925 |   |   | $      | 766,672 |   |   |   |   |
|                                                |   |                     |      |   |   |   |   |   |   |   |   |
| Debt                                                |   | $                        | 900,095   |   |   | $      | 450,693 |   |   |   |   |
| Other liabilities                                   |   |                     | 48,518    |   |   |   | 7,076 |   |   |   |   |
| Equity                                              |   |                     | 774,312   |   |   |   | 308,903 |   |   |   |   |
| Total liabilities and partners' equity              |   | $                        | 1,722,925 |   |   | $      | 766,672 |   |   |   |   |
|                                                |   |                     |      |   |   |   |   |   |   |   |   |
| Company's share of equity                           |   | $                        | 383,412   |   |   | $      | 107,201 |   |   |   |   |
|                                                |   |                     |      |   |   |   |   |   |   |   |   |
|                                                |   | Years ended December 31, |      |
|                                                |   |                     | 2011      |   |   |   | 2010 |   |   |   | 2009 |   |
| Statements of operations:                           |   |                     |      |   |   |   |   |   |   |   |   |   |
| Property revenues                                   |   | $                        | 106,386   |   |   | $      | 54,699 |   |   | $ | 47,201 |   |
| Property operating expenses                         |   |                     | (43,066   | )      |   |   | (24,098 | ) |   |   | (18,450 | ) |
| Net operating income                                |   |                     | 63,320    |   |   |   | 30,601 |   |   |   | 28,751 |   |
|                                                |   |                     |      |   |   |   |   |   |   |   |   |   |
| Interest expense                                    |   |                     | (27,843   | )      |   |   | (13,619 | ) |   |   | (10,805 | ) |
| General and administrative                          |   |                     | (1,748    | )      |   |   | (709 | ) |   |   | (294 | ) |
| Depreciation and amortization                       |   |                     | (44,412   | )      |   |   | (20,850 | ) |   |   | (15,656 | ) |
| Net (loss) income                                   |   | $                        | (10,683   | )      |   | $      | (4,577 | ) |   | $ | 1,996 |   |
| Company's share of net (loss) income                |   | $                        | (467      | )      |   | $      | (1,715 | ) |   | $ | 670 |   |

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|                                                                          |   | 2011   |   |   | 2010   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                          |   |   |   |   |   |   |
| Note receivable, secured, bearing interest at 9.8%, paid in full January 2012 |   | $      | 7,331  |   |   | $      | 7,331 |   |
| Note receivable, secured, bearing interest at 5.0%, due November 2012         |   |   | 12,428 |   |   |   | - |   |
| Note receivable, secured, bearing interest at 8.8%, due December 2012         |   |   | 10,928 |   |   |   | 10,930 |   |
| Note receivable, secured, bearing interest at LIBOR + 8.0%, due December 2012 |   |   | 6,422  |   |   |   | 6,513 |   |
| Note receivable, secured, bearing interest at 8.0%, due November 2013         |   |   | 971    |   |   |   | 971 |   |
| Note receivable, secured, bearing interest at 6.5%, due December 2014         |   |   | 3,221  |   |   |   | 3,221 |   |
| Note receivable, secured, bearing interest at 6.3%, due June 2017             |   |   | 17,646 |   |   |   | 16,708 |   |
| Note receivable from affiliates                                               |   |   | 2,734  |   |   |   | 531 |   |
| Other receivables                                                             |   |   | 4,688  |   |   |   | 3,239 |   |
|                                                                          |   | $      | 66,369 |   |   | $      | 49,444 |   |

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|                                    |   | 2011   |   |   | 2010   |   |   | 2009   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                    |   |   |   |   |   |   |   |   |   |
| Revenues                                |   | $      | 1,016  |   |   | $      | 2,447  |   |   | $ | 4,498 |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Property operating expenses             |   |   | (510   | )      |   |   | (1,042 | )      |   |   | (1,760 | ) |
| Depreciation and amortization           |   |   | (315   | )      |   |   | (700   | )      |   |   | (1,224 | ) |
| Expenses                                |   |   | (825   | )      |   |   | (1,742 | )      |   |   | (2,984 | ) |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income from real estate sold  |   |   | 191    |   |   |   | 705    |   |   |   | 1,514 |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, secured mortgage debt |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Gain on sale of real estate             |   |   | 8,382  |   |   |   | -      |   |   |   | 8,626 |   |
| Internal disposition costs              |   |   | (839   | )      |   |   | -      |   |   |   | (683 | ) |
| Income from discontinued operations     |   | $      | 7,734  |   |   | $      | 705    |   |   | $ | 9,457 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2011   |      |   | 2010   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |      |   |   |   |
| Mortgage notes payable, secured by deeds of trust, bearing interest at ranges ranging from 4.9% to 7.4% as of December 31, 2011 principal and interest payments due monthly, and maturity dates ranging from August 2012 through April 2021                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $      | 1,502,208 |   |   | $      | 1,563,513 |   |
| Multifamily housing mortgage revenue bonds secured by deeds of trust on  rental properties and guaranteed by collateral pledge agreements, payable monthly at a variable rate as defined in the Loan Agreement  (approximately 2.0% at December 2011 and 2.1% at December 2010), plus credit enhancement and underwriting fees ranging from approximately1.2% to 1.9%. Among the terms imposed on the properties, which are security for the bonds, is a requirement that 20% of the units are subject to tenant income criteria. Principal balances are due in full at various maturity dates from June 2012 through December 2039.  Of these bonds $187.8 million are subject to various interest rate cap agreements which limit the maximum interest rate to such bonds |   |   | 243,650   |   |   |   | 269,232 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $      | 1,745,858 |   |   | $      | 1,832,745 |   |

| 2012       |   | $      | 35,953    |   |
|------------|--------|--------|-----------|--------|
| 2013       |   |   | 215,583   |   |
| 2014       |   |   | 77,179    |   |
| 2015       |   |   | 70,305    |   |
| 2016       |   |   | 12,907    |   |
| Thereafter |   |   | 1,333,931 |   |
|       |   | $      | 1,745,858 |   |

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|       |   | Future  |   |
|------------|--------|---------|--------|
|       |   | Minimum |   |
|       |   | Rent    |   |
|  2012 |   | $       | 6,778  |   |
|  2013 |   |    | 6,772  |   |
|  2014 |   |    | 6,735  |   |
|  2015 |   |    | 5,404  |   |
|  2016 |   |    | 3,259  |   |
| Thereafter |   |    | 16,301 |   |
|       |   | $       | 45,249 |   |

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|     Description |   | Issue Date                                                 |   | SharesAuthorized |   | SharesOutstanding |   | LiquidationPreference |   |
|-------------------------------------|--------|------------------------------------------------------------|--------|------------------|--------|-------------------|--------|-----------------------|--------|
|   7.125% Series H         |   |         April 2011 |   | 8,000,000 shares |   | 2,950,000 shares  |   | $                     | 73,750 |   |
|   4.875% Series G         |   |      July 2006                    |   | 5,980,000 shares |   | 178,249 shares    |   | $                     | 4,456  |   |

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|                                                                            |   | 2011   |   |   | 2010      |   |       | 2009   |   |
|---------------------------------------------------------------------------------|--------|--------|--------|--------|-----------|--------|------------|--------|--------|
|                                                                            |   |   |   |   | Weighted- |   |       | Per    |   |   |   |   |   | Weighted- |   |   | Per |   |   |   |   |   | Weighted- |   |   | Per |   |
|                                                                            |   |   |   |   | average   |   |       | Common |   |   |   |   |   | average |   |   | Common |   |   |   |   |   | average |   |   | Common |   |
|                                                                            |   |   |   |   | Common    |   |       | Share  |   |   |   |   |   | Common |   |   | Share |   |   |   |   |   | Common |   |   | Share |   |
|                                                                            |   | Income |   |   | Shares    |   |       | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |
| Basic:                                                                          |   |   |   |   |      |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations available to common stockholders              |   | $      | 33,130 |   |      |   | 32,541,792 |   |   | $ | 1.02 |   |   | $ | 33,110 |   |   |   | 29,667,064 |   |   | $ | 1.12 |   |   | $ | 73,459 |   |   |   | 27,269,547 |   |   | $ | 2.69 |   |
| Income from discontinued operations                                             |   |   | 7,238  |   |      |   | 32,541,792 |   |   |   | 0.22 |   |   |   | 654 |   |   |   | 29,667,064 |   |   |   | 0.02 |   |   |   | 8,741 |   |   |   | 27,269,547 |   |   |   | 0.32 |   |
| available to common stockholders                                                |   |   | 40,368 |   |      |   |       |   |   |   | 1.24 |   |   |   | 33,764 |   |   |   |   |   |   |   | 1.14 |   |   |   | 82,200 |   |   |   |   |   |   |   | 3.01 |   |
|                                                                            |   |   |   |   |      |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of Dilutive Securities (1)                                               |   |   | -      |   |      |   | 86,922     |   |   |   |   |   |   |   | - |   |   |   | 67,319 |   |   |   |   |   |   |   | 4,224 |   |   |   | 2,477,067 |   |   |   |   |   |
|                                                                            |   |   |   |   |      |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                                                        |   |   |   |   |      |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations available to common stockholders (1)          |   | $      | 33,130 |   |      |   |       |   |   |   |   |   |   | $ | 33,110 |   |   |   |   |   |   |   |   |   |   | $ | 73,459 |   |   |   |   |   |   |   |   |   |
| Add: noncontrolling interests OP unitholders (2)                                |   |   | -      |   |      |   |       |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | 3,508 |   |   |   |   |   |   |   |   |   |
| Adjusted income from continuing operations available to common stockholders (1) |   |   | 33,130 |   |      |   | 32,628,714 |   |   | $ | 1.02 |   |   |   | 33,110 |   |   |   | 29,734,383 |   |   | $ | 1.11 |   |   |   | 76,967 |   |   |   | 29,746,614 |   |   | $ | 2.59 |   |
| Income (loss) from discontinued operations available to common stockholders     |   |   | 7,238  |   |      |   |       |   |   |   |   |   |   |   | 654 |   |   |   |   |   |   |   |   |   |   |   | 8,741 |   |   |   |   |   |   |   |   |   |
| Add: noncontrolling interests OP unitholders (2)                                |   |   | -      |   |      |   |       |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | 716 |   |   |   |   |   |   |   |   |   |
| Adjusted income from discontinued operations available to common stockholders   |   |   | 7,238  |   |      |   | 32,628,714 |   |   |   | 0.22 |   |   |   | 654 |   |   |   | 29,734,383 |   |   |   | 0.03 |   |   |   | 9,457 |   |   |   | 29,746,614 |   |   |   | 0.32 |   |
|                                                                            |   | $      | 40,368 |   |      |   |       |   |   | $ | 1.24 |   |   | $ | 33,764 |   |   |   |   |   |   | $ | 1.14 |   |   | $ | 86,424 |   |   |   |   |   |   | $ | 2.91 |   |

|   | (1) | Weighted convertible limited partnership units of 2,231,807 and 2,293,886, which include vested Series Z incentive units, for the years ended December 31, 2011 and 2010, respectively, were not included in the determination of diluted EPS because they were anti-dilutive.  Weighted convertible limited partnership units of 2,447,751, which include vested Series Z incentive units, for the year ended December 31, 2009, were included in the determination of diluted EPS because they were dilutive. The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Stock options of 175,500; 123,164; and 260,736 for the years ended December 31, 2011, 2010, and 2009, respectively, were not included in the diluted earnings per share calculation because the exercise price of these options were greater than the average market price of the common shares for the years ended and, therefore, were anti-dilutive. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | All shares of cumulative convertible preferred stock Series G have been excluded from diluted earnings per share for the years ended 2011, 2010, and 2009 respectively, as the effect was anti-dilutive. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | For the year ended December 31, 2009, net income allocated to convertible limited partnership units including vested Series Z units have been included in income available to common stock holders for the calculation of net income per common share since these units are included in the diluted weighted average common shares for the that year as discussed in (1) above. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                     |   | 2011     |   |   | 2010     |   |   | 2009     |   |
|--------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Stock price              |   | $        | 131.87 |   |     | $      | 107.21 |     |   | $ | 66.05-$84.90 |   |
| Risk-free interest rates |   |     | 2.23%  |   |     |   | 3.50%  |     |   |   | 4.58% |   |
| Expected lives           |   | 10 years |   |   | 10 years |   |   | 10 years |   |
| Volatility               |   |     | 19.63% |   |     |   | 22.00% |     |   |   | 20.00% |   |
| Dividend yield           |   |     | 3.29%  |   |     |   | 3.85%  |     |   |   | 4.85% |   |

|                             |   | 2011   |    |   | 2010                          |   |   | 2009   |   |
|----------------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|--------|--------|
|                             |   | Shares |    |   | Weighted-averageexerciseprice |   |   | Shares |   |   | Weighted-averageexerciseprice |   |   | Shares |   |   | Weighted-averageexerciseprice |   |
| Outstanding at beginning of year |   |   | 300,642 |   |                          | $      | 88.11  |   |   |   | 378,542 |   |   | $ | 82.08 |   |   |   | 393,443 |   |   | $ | 80.63 |   |
| Granted                          |   |   | 197,500 |   |                          |   | 131.87 |   |   |   | 18,214 |   |   |   | 107.21 |   |   |   | 32,259 |   |   |   | 76.68 |   |
| Exercised                        |   |   | (83,122 | )      |                          |   | 84.24  |   |   |   | (78,381 | ) |   |   | 63.97 |   |   |   | (18,407 | ) |   |   | 38.31 |   |
| Forfeited and canceled           |   |   | -       |   |                          |   | 0.00   |   |   |   | (17,733 | ) |   |   | 105.40 |   |   |   | (28,753 | ) |   |   | 85.11 |   |
| Outstanding at end of year       |   |   | 415,020 |   |                          |   | 109.71 |   |   |   | 300,642 |   |   |   | 88.11 |   |   |   | 378,542 |   |   |   | 82.08 |   |
|                             |   |   |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options exercisable at year end  |   |   | 219,820 |   |                          |   | 92.31  |   |   |   | 265,770 |   |   |   | 86.28 |   |   |   | 329,909 |   |   |   | 81.37 |   |

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|                    |            |   | Options outstanding                    |   |                                     | Options exercisable |                          |
|-------------------------|-----------------|--------|----------------------------------------|--------|------------------------------------------|---------------------|-------------------------------|
| Range ofexercise prices |            |   | Numberoutstandingas ofDecember 31,2011 |   | Weighted-averageremainingcontractuallife |                | Weighted-averageexerciseprice |   |   | Numberexercisableas ofDecember 31,2011 |   |   | Weighted-averageexerciseprice |   |
| $                       | 48.68 - 73.38   |   |                                   |   | 50,577                                   |                | 2.8 years                     |   | $ | 61.78 |   |   |   | 50,577 |   |   | $ | 61.78 |   |
|                    | 79.05 - 125.84  |   |                                   |   | 167,693                                  |                | 5.0 years                     |   |   | 97.70 |   |   |   | 148,193 |   |   |   | 97.15 |   |
|                    | 126.73 - 134.44 |   |                                   |   | 196,750                                  |                |  9.8 years               |   |   | 132.27 |   |   |   | 21,050 |   |   |   | 131.66 |   |
|                    |            |   |                                   |   | 415,020                                  |                |  7.0 years               |   |   | 109.71 |   |   |   | 219,820 |   |   |   | 92.31 |   |

|                          |   | 2011   |   |   | 2010      |   |   | 2009   |   |
|-------------------------------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                          |   |   |   |   | Weighted- |   |   |   |   |   | Weighted- |   |   |   |   |   | Weighted- |   |
|                          |   |   |   |   | average   |   |   |   |   |   | average |   |   |   |   |   | average |   |
|                          |   |   |   |   | grant     |   |   |   |   |   | grant |   |   |   |   |   | grant |   |
|                          |   | Shares |   |   | price     |   |   | Shares |   |   | price |   |   | Shares |   |   | price |   |
| Unvested at beginning of year |   |   | 44,877 |   |      | $      | 102.46 |   |   |   | 37,727 |   |   | $ | 99.43 |   |   |   | 30,304 |   |   | $ | 119.31 |   |
| Granted                       |   |   | 1,540  |   |      |   | 134.44 |   |   |   | 14,415 |   |   |   | 109.62 |   |   |   | 18,954 |   |   |   | 75.77 |   |
| Vested                        |   |   | (9,532 | )      |      |   | 104.91 |   |   |   | (6,126 | ) |   |   | 102.27 |   |   |   | (5,647 | ) |   |   | 108.49 |   |
| Forfeited and canceled        |   |   | (1,666 | )      |      |   | 94.35  |   |   |   | (1,139 | ) |   |   | 93.92 |   |   |   | (5,884 | ) |   |   | 116.89 |   |
| Unvested at end of year       |   |   | 35,219 |   |      |   | 98.57  |   |   |   | 44,877 |   |   |   | 102.46 |   |   |   | 37,727 |   |   |   | 99.43 |   |

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|                   |   | Long Term Incentive Plan - Z Units |
|------------------------|--------|------------------------------------|
|                   |   |                               |   |   |   |   |   | Aggregate |   |   |   |   |   |   |   | Weighted- |
|                   |   |                               |   |   |   |   |   | Intrinsic |   |   |   |   |   | Weighted- |   | average |
|                   |   | Total                              |   |   | Total |   |   | Value |   |   | Total |   |   | average |   | Remaining |
|                   |   | Vested                             |   |   | Unvested |   |   | of Unvested |   |   | Outstanding |   |   | Grant-date |   | Contractual |
|                   |   | Units                              |   |   | Units |   |   | Units |   |   | Units |   |   | Fair Value |   | Life |
| Balance, December 2008 |   |                               | 250,928 |   |   |   | 143,604 |   |   | $ | 10,878 |   |   |   | 394,532 |   |   | $ | 39.36 |   |  9.2 years |
| Vested                 |   |                               | 37,723 |   |   |   | (37,723 | ) |   |   |   |   |   |   | - |   |   |   |   |   |   |
| Balance, December 2009 |   |                               | 288,651 |   |   |   | 105,881 |   |   |   | 8,751 |   |   |   | 394,532 |   |   |   | 39.36 |   |  8.2 years |
| Granted                |   |                               | - |   |   |   | 108,000 |   |   |   |   |   |   |   | 108,000 |   |   |   |   |   |   |
| Vested                 |   |                               | 37,629 |   |   |   | (37,629 | ) |   |   |   |   |   |   | - |   |   |   |   |   |   |
| Cancelled              |   |                               |   |   |   |   | (4,350 | ) |   |   |   |   |   |   | (4,350 | ) |   |   |   |   |   |
| Balance, December 2010 |   |                               | 326,280 |   |   |   | 171,902 |   |   |   | 19,463 |   |   |   | 498,182 |   |   |   | 54.15 |   |  11.2 years |
| Granted                |   |                               | - |   |   |   | 46,500 |   |   |   |   |   |   |   | 46,500 |   |   |   |   |   |   |
| Vested..               |   |                               | 44,520 |   |   |   | (44,520 | ) |   |   |   |   |   |   | - |   |   |   |   |   |   |
| Converted              |   |                               | (191,718 | ) |   |   | - |   |   |   |   |   |   |   | (191,718 | ) |   |   |   |   |   |
| Cancelled              |   |                               | - |   |   |   | (3,863 | ) |   |   |   |   |   |   | (3,863 | ) |   |   |   |   |   |
| Balance, December 2011 |   |                               | 179,082 |   |   |   | 170,019 |   |   | $ | 23,719 |   |   |   | 349,101 |   |   | $ | 58.17 |   |  12.3 years |

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|                                      |   | Years Ended December 31, |     |
|-------------------------------------------|--------|--------------------------|----------|
|                                      |   | 2011                     |     |   | 2010 |   |   | 2009 |   |
| Revenues:                                 |   |                     |     |   |   |   |   |   |   |
| Southern California                       |   | $                        | 226,369  |   |   | $ | 203,547 |   |   | $ | 204,089 |   |
| Northern California                       |   |                     | 149,457  |   |   |   | 127,302 |   |   |   | 121,582 |   |
| Seattle Metro                             |   |                     | 81,967   |   |   |   | 70,348 |   |   |   | 71,060 |   |
| Other real estate assets                  |   |                     | 10,985   |   |   |   | 7,537 |   |   |   | 7,825 |   |
| Total property revenues                   |   | $                        | 468,778  |   |   | $ | 408,734 |   |   | $ | 404,556 |   |
|                                      |   |                     |     |   |   |   |   |   |   |   |   |   |
| Net operating income:                     |   |                     |     |   |   |   |   |   |   |   |   |   |
| Southern California                       |   | $                        | 148,233  |   |   | $ | 133,855 |   |   | $ | 135,938 |   |
| Northern California                       |   |                     | 99,047   |   |   |   | 82,288 |   |   |   | 80,274 |   |
| Seattle Metro                             |   |                     | 52,173   |   |   |   | 43,006 |   |   |   | 44,603 |   |
| Other real estate assets                  |   |                     | 8,740    |   |   |   | 5,120 |   |   |   | 5,037 |   |
| Total net operating income                |   |                     | 308,193  |   |   |   | 264,269 |   |   |   | 265,852 |   |
|                                      |   |                     |     |   |   |   |   |   |   |   |   |   |
| Depreciation                              |   |                     | (152,228 | ) |   |   | (129,011 | ) |   |   | (117,296 | ) |
| Interest expense before amortization      |   |                     | (91,694  | ) |   |   | (82,756 | ) |   |   | (81,196 | ) |
| Amortization expense                      |   |                     | (11,474  | ) |   |   | (4,828 | ) |   |   | (4,820 | ) |
| Management and other fees from affiliates |   |                     | 6,780    |   |   |   | 4,551 |   |   |   | 4,325 |   |
| General and administrative                |   |                     | (25,304  | ) |   |   | (25,962 | ) |   |   | (28,062 | ) |
| Impairment and other charges              |   |                     | -        |   |   |   | (2,302 | ) |   |   | (13,084 | ) |
| Interest and other income                 |   |                     | 17,139   |   |   |   | 27,841 |   |   |   | 13,040 |   |
| Gain (loss) on early retirement of debt   |   |                     | (1,163   | ) |   |   | (10 | ) |   |   | 4,750 |   |
| Equity (loss) income in co-investments    |   |                     | (467     | ) |   |   | (1,715 | ) |   |   | 670 |   |
| Gain on sale of real estate               |   |                     | -        |   |   |   | - |   |   |   | 103 |   |
|                                      |   |                     |     |   |   |   |   |   |   |   |   |   |
| Income before discontinued operations     |   | $                        | 49,782   |   |   | $ | 50,077 |   |   | $ | 44,282 |   |

|                                                   |   | As of December 31, |      |
|--------------------------------------------------------|--------|--------------------|-----------|
| Assets:                                                |   | 2011               |      |   | 2010 |   |
| Southern California                                    |   | $                  | 1,478,018 |   |   | $ | 1,428,264 |   |
| Northern California                                    |   |               | 1,241,320 |   |   |   | 1,119,555 |   |
| Seattle Metro                                          |   |               | 579,612   |   |   |   | 560,463 |   |
| Other real estate assets                               |   |               | 94,088    |   |   |   | 80,726 |   |
| Net reportable operating segments - real estate assets |   |               | 3,393,038 |   |   |   | 3,189,008 |   |
| Real estate for development                            |   |               | 44,280    |   |   |   | 217,531 |   |
| Co-investments                                         |   |               | 383,412   |   |   |   | 107,840 |   |
| Cash and cash equivalents, including restricted cash   |   |               | 35,463    |   |   |   | 35,694 |   |
| Marketable securities                                  |   |               | 74,275    |   |   |   | 92,310 |   |
| Notes and other receivables                            |   |               | 66,369    |   |   |   | 49,444 |   |
| Other non-segment assets                               |   |               | 40,127    |   |   |   | 41,060 |   |
| Total assets                                           |   | $                  | 4,036,964 |   |   | $ | 3,732,887 |   |

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|                                        |   | Quarter ended |    |   | Quarter ended |   |    | Quarter ended |   |   | Quarter ended |   |
|---------------------------------------------|--------|---------------|---------|--------|---------------|--------|---------|---------------|--------|--------|---------------|--------|
|                                        |   | December 31   |    |   | September 30  |   |    | June 30       |   |   | March 31      |   |
| 2011:                                       |   |          |    |   |          |   |    |          |   |   |          |   |
| Total property revenues                     |   | $             | 123,151 |   |          | $      | 118,002 |          |   | $      | 115,657       |   |   | $ | 111,968 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Income before discontinued operations       |   | $             | 14,713  |   |          | $      | 11,992  |          |   | $      | 10,720        |   |   | $ | 12,357 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Net income                                  |   | $             | 17,867  |   |          | $      | 11,085  |          |   | $      | 16,053        |   |   | $ | 12,511 |   |
| Net income available to common stockholders |   | $             | 13,937  |   |          | $      | 7,688   |          |   | $      | 10,325        |   |   | $ | 8,418 |   |
| Per share data:                             |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Net income:                                 |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Basic                                       |   | $             | 0.42    |   |          | $      | 0.23    |          |   | $      | 0.32          |   |   | $ | 0.27 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Diluted                                     |   | $             | 0.42    |   |          | $      | 0.23    |          |   | $      | 0.32          |   |   | $ | 0.27 |   |
| Market price:                               |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| High                                        |   | $             | 148.44  |   |          | $      | 145.40  |          |   | $      | 138.31        |   |   | $ | 124.41 |   |
| Low                                         |   | $             | 111.25  |   |          | $      | 119.15  |          |   | $      | 122.67        |   |   | $ | 109.98 |   |
| Close                                       |   | $             | 140.51  |   |          | $      | 120.04  |          |   | $      | 135.29        |   |   | $ | 124.00 |   |
| Dividends declared                          |   | $             | 1.04    |   |          | $      | 1.04    |          |   | $      | 1.04          |   |   | $ | 1.04 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| 2010:                                       |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Total property revenues                     |   | $             | 107,465 |   |          | $      | 103,225 |          |   | $      | 98,959        |   |   | $ | 99,085 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Income before discontinued operations       |   | $             | 8,494   |   |          | $      | 10,260  |          |   | $      | 13,643        |   |   | $ | 17,680 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Net income                                  |   | $             | 8,628   |   |          | $      | 10,426  |          |   | $      | 13,869        |   |   | $ | 17,859 |   |
| Net income available to common stockholders |   | $             | 4,778   |   |          | $      | 6,377   |          |   | $      | 9,482         |   |   | $ | 13,127 |   |
| Per share data:                             |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Net income:                                 |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Basic                                       |   | $             | 0.16    |   |          | $      | 0.21    |          |   | $      | 0.32          |   |   | $ | 0.45 |   |
|                                        |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| Diluted                                     |   | $             | 0.16    |   |          | $      | 0.21    |          |   | $      | 0.32          |   |   | $ | 0.45 |   |
| Market price:                               |   |          |    |   |          |   |    |          |   |   |          |   |   |   |   |   |
| High                                        |   | $             | 117.12  |   |          | $      | 115.08  |          |   | $      | 113.03        |   |   | $ | 93.98 |   |
| Low                                         |   | $             | 105.60  |   |          | $      | 92.62   |          |   | $      | 89.23         |   |   | $ | 76.35 |   |
| Close                                       |   | $             | 114.22  |   |          | $      | 109.44  |          |   | $      | 97.54         |   |   | $ | 89.95 |   |
| Dividends declared                          |   | $             | 1.03    |   |          | $      | 1.03    |          |   | $      | 1.03          |   |   | $ | 1.03 |   |

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|                                   |   |   |            |                    |   |                                                                                                         |   |                                                                                              | Initial cost |         | Costscapitalized |        | Gross amount carried at close of period |         |     |         |          |     |   |         |        |
|----------------------------------------|--------|--------|-----------------|-------------------------|--------|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------------|--------------|------------------|-------------|-----------------------------------------|--------------|----------|--------------|---------------|----------|--------|--------------|-------------|
|                                   |   |   |            |                    |   |                                                                                                         |   |                                                                                              |         |         | Buildings and    |        | subsequent to                           |         | Land and |         | Buildings and |     |   |         | Accumulated |   | Date of |   | Date |   | Lives |
| Property                               |   | Units  |            | Location                |   | Encumbrance                                                                                                  |   | Land                                                                                              |         | improvements |             | acquisition |                                    | improvements |     | improvements |          | Total(1) |   | depreciation |        | construction |   | acquired |   | (years) |
| Encumbered communities                 |   |   |            |                    |   |                                                                                                         |   |                                                                                              |         |         |             |        |                                    |         |     |         |          |     |   |         |        |   |   |   |   |   |   |
|                                   |   |   |            |                    |   |                                                                                                         |   |                                                                                              |         |         |             |        |                                    |         |     |         |          |     |   |         |        |   |   |   |   |   |   |
|  Alpine Village                   |   | 301    |            | Alpine, CA              |   | 15,690                                                                                                       |   | 4,967                                                                                             |         | 19,728       |             | 3,062       |                                    | 4,982        |     | 22,775       |          | 27,757   |   | 7,170        |        | 1971 |   |  12/02 |   |    3-30 |
|  Anchor Village                   |   | 301    |            | Mukilteo, WA            |   | 10,750                                                                                                       |   | 2,498                                                                                             |         | 10,595       |             | 10,541      |                                    | 2,824        |     | 20,810       |          | 23,634   |   | 8,070        |        | 1981 |   |  01/97 |   |    3-30 |
|  Avondale at Warner Center        |   | 446    |            | Woodland Hills, CA      |   | 47,396                                                                                                       |   | 10,536                                                                                            |         | 24,522       |             | 13,764      |                                    | 10,601       |     | 38,221       |          | 48,822   |   | 17,483       |        | 1970 |   |  01/97 |   |    3-30 |
|  Bridgeport                       |   | 184    |            | Newark, CA              |   | 22,051                                                                                                       |   | 1,608                                                                                             |         | 7,582        |             | 5,605       |                                    | 1,525        |     | 13,270       |          | 14,795   |   | 8,870        |        | 1987 |   |  07/87 |   |    3-30 |
|  Barkley, The(2)                  |   | 161    |            | Anaheim, CA             |   | 17,015                                                                                                       |   |                 - |         | 8,520        |             | 4,229       |                                    | 2,353        |     | 10,396       |          | 12,749   |   | 3,975        |        | 1984 |   | 04/00 |   |    3-30 |
|  Bel Air                          |   | 462    |            | San Ramon, CA           |   | 56,759                                                                                                       |   | 12,105                                                                                            |         | 18,252       |             | 19,590      |                                    | 12,682       |     | 37,265       |          | 49,947   |   | 17,133       |        | 1988 |   |  01/97 |   |    3-30 |
|  Belmont Station                  |   | 275    |            | Los Angeles, CA         |   | 30,045                                                                                                       |   | 8,100                                                                                             |         | 66,666       |             | 2,645       |                                    | 8,267        |     | 69,144       |          | 77,411   |   | 10,007       |        | 2008 |   |  12/08 |   |    3-30 |
|  Bella Villagio                   |   | 231    |            | San Jose, CA            |   | 38,834                                                                                                       |   | 17,247                                                                                            |         | 40,343       |             | 1,295       |                                    | 17,247       |     | 41,638       |          | 58,885   |   | 1,802        |        | 2004 |   | 09/10 |   |    3-30 |
|  Brentwood                        |   | 140    |            | Santa Ana, CA           |   | 19,603                                                                                                       |   | 2,833                                                                                             |         | 11,303       |             | 5,282       |                                    | 3,502        |     | 15,916       |          | 19,418   |   | 5,049        |        | 1970 |   |  11/01 |   |    3-30 |
|  Brighton Ridge                   |   | 264    |            | Renton, WA              |   | 14,948                                                                                                       |   | 2,623                                                                                             |         | 10,800       |             | 2,560       |                                    | 2,656        |     | 13,327       |          | 15,983   |   | 6,654        |        | 1986 |   |  12/96 |   |    3-30 |
|  Brookside Oaks                   |   | 170    |            | Sunnyvale, CA           |   | 20,277                                                                                                       |   | 7,301                                                                                             |         | 16,310       |             | 19,168      |                                    | 10,328       |     | 32,451       |          | 42,779   |   | 9,673        |        | 1973 |   |  06/00 |   |    3-30 |
|  Camarillo Oaks                   |   | 564    |            | Camarillo, CA           |   | 48,622                                                                                                       |   | 10,953                                                                                            |         | 25,254       |             | 2,362       |                                    | 11,075       |     | 27,494       |          | 38,569   |   | 14,171       |        | 1985 |   |  07/96 |   |    3-30 |
|  Camino Ruiz Square               |   | 160    |            | Camarillo, CA           |   | 21,110                                                                                                       |   | 6,871                                                                                             |         | 26,119       |             | 685         |                                    | 6,931        |     | 26,744       |          | 33,675   |   | 4,555        |        | 1990 |   |  12/06 |   |    3-30 |
|  Canyon Oaks                      |   | 250    |            | San Ramon, CA           |   | 29,389                                                                                                       |   | 19,088                                                                                            |         | 44,473       |             | 1,028       |                                    | 19,088       |     | 45,501       |          | 64,589   |   | 7,191        |        | 2005 |   | 05/07 |   |    3-30 |
|  Canyon Pointe                    |   | 250    |            | Bothell, WA             |   | 14,689                                                                                                       |   | 4,692                                                                                             |         | 18,288       |             | 3,116       |                                    | 4,693        |     | 21,403       |          | 26,096   |   | 6,118        |        | 1990 |   |  10/03 |   |    3-30 |
|  Capri at Sunny Hills             |   | 100    |            | Fullerton, CA           |   | 18,132                                                                                                       |   | 3,337                                                                                             |         | 13,320       |             | 5,639       |                                    | 4,048        |     | 18,248       |          | 22,296   |   | 6,026        |        | 1961 |   |  09/01 |   |    3-30 |
|  Carlyle, The                     |   | 132    |            | San Jose, CA            |   | 18,936                                                                                                       |   | 3,954                                                                                             |         | 15,277       |             | 9,718       |                                    | 5,801        |     | 23,148       |          | 28,949   |   | 8,372        |        | 2000 |   |  04/00 |   |    3-30 |
|  City View                        |   | 572    |            | Hayward, CA             |   | 64,254                                                                                                       |   | 9,883                                                                                             |         | 37,670       |             | 20,103      |                                    | 10,350       |     | 57,306       |          | 67,656   |   | 25,819       |        | 1975 |   |  03/98 |   |    3-30 |
|  Coldwater Canyon                 |   | 39     |            | Studio City, CA         |   | 5,623                                                                                                        |   | 1,674                                                                                             |         | 6,640        |             | 1,108       |                                    | 1,676        |     | 7,746        |          | 9,422    |   | 1,589        |        | 1979 |   | 05/07 |   |    3-30 |
|  Courtyard off Main               |   | 109    |            | Bellevue, WA            |   | 16,491                                                                                                       |   | 7,465                                                                                             |         | 21,405       |             | 1,265       |                                    | 7,465        |     | 22,670       |          | 30,135   |   | 924          |        | 2000 |   | 10/10 |   |    3-30 |
|  Devonshire                       |   | 276    |            | Hemet, CA               |   | 10,216                                                                                                       |   | 3,470                                                                                             |         | 13,786       |             | 1,981       |                                    | 3,482        |     | 15,755       |          | 19,237   |   | 5,080        |        | 1988 |   |  12/02 |   |    3-30 |
|  Elevation (Eagle Rim)            |   | 157    |            | Redmond, WA             |   | 12,087                                                                                                       |   | 4,758                                                                                             |         | 14,285       |             | 3,840       |                                    | 4,757        |     | 18,125       |          | 22,882   |   | 1,077        |        | 1986 |   | 06/10 |   |    3-30 |
|  Emerald Ridge - North            |   | 180    |            | Bellevue, WA            |   | 9,967                                                                                                        |   | 3,449                                                                                             |         | 7,801        |             | 2,592       |                                    | 3,449        |     | 10,393       |          | 13,842   |   | 6,101        |        | 1987 |   |  11/94 |   |    3-30 |
|  Esplanade                        |   | 278    |            | San Jose, CA            |   | 45,836                                                                                                       |   | 18,170                                                                                            |         | 40,086       |             | 5,065       |                                    | 18,429       |     | 44,892       |          | 63,321   |   | 11,393       |        | 2002 |   |  11/04 |   |    3-30 |
|  Evergreen Heights                |   | 200    |            | Kirkland, WA            |   | 10,143                                                                                                       |   | 3,566                                                                                             |         | 13,395       |             | 2,704       |                                    | 3,649        |     | 16,016       |          | 19,665   |   | 7,619        |        | 1990 |   |  06/97 |   |    3-30 |
|  Fairwood Pond                    |   | 194    |            | Renton, WA              |   |                  13,574 |   | 5,296                                                                                             |         | 15,564       |             | 1,782       |                                    | 5,297        |     | 17,345       |          | 22,642   |   | 4,511        |        | 1997 |   |  10/04 |   |    3-30 |
|  Fountain Park                    |   | 705    |            | Playa Vista, CA         |   | 97,747                                                                                                       |   | 25,073                                                                                            |         | 94,980       |             | 20,409      |                                    | 25,203       |     | 115,259      |          | 140,462  |   | 31,693       |        | 2002 |   |  02/04 |   |    3-30 |
|  Harvest Park                     |   | 104    |            | Santa Rosa, CA          |   | 10,895                                                                                                       |   | 6,700                                                                                             |         | 15,479       |             | 720         |                                    | 6,690        |     | 16,209       |          | 22,899   |   | 2,769        |        | 2004 |   | 03/07 |   |    3-30 |
|  Hampton Place                    |   | 132    |            | Glendale, CA            |   | 21,602                                                                                                       |   | 4,288                                                                                             |         | 11,081       |             | 3,033       |                                    | 4,307        |     | 14,095       |          | 18,402   |   | 5,901        |        | 1970 |   |  06/99 |   |    3-30 |
|  Hidden Valley                    |   | 324    |            | Simi Valley, CA         |   | 31,180                                                                                                       |   | 14,174                                                                                            |         | 34,065       |             | 1,155       |                                    | 11,663       |     | 37,731       |          | 49,394   |   | 9,383        |        | 2004 |   |  12/04 |   |    3-30 |
|  Highridge                        |   | 255    |            | Rancho Palos Verdes, CA | 44,807 |                                                                                                         | 5,419  |                                                                                              | 18,347       |         | 20,037           |        | 6,073                                   |         | 37,730   |         | 43,803        |     | 14,420 |         | 1972        |   |  05/97 |   |    3-30 |
|  Highlands at Wynhaven            |   | 333    |            | Issaquah, WA            |   | 33,859                                                                                                       |   | 16,271                                                                                            |         | 48,932       |             | 3,595       |                                    | 16,271       |     | 52,527       |          | 68,798   |   | 6,280        |        | 2000 |   |  08/08 |   |    3-30 |
|  Hillcrest Park                   |   | 608    |            | Newbury Park, CA        |   | 70,707                                                                                                       |   | 15,318                                                                                            |         | 40,601       |             | 12,920      |                                    | 15,755       |     | 53,084       |          | 68,839   |   | 23,030       |        | 1973 |   |  03/98 |   |    3-30 |
|  Hillsborough Park                |   | 235    |            | La Habra, CA            |   | 38,566                                                                                                       |   | 6,291                                                                                             |         | 15,455       |             | 1,029       |                                    | 6,272        |     | 16,503       |          | 22,775   |   | 6,820        |        | 1999 |   |  09/99 |   |    3-30 |
|  Huntington Breakers              |   | 342    |            | Huntington Beach, CA    |   | 39,321                                                                                                       |   | 9,306                                                                                             |         | 22,720       |             | 4,601       |                                    | 9,315        |     | 27,312       |          | 36,627   |   | 12,592       |        | 1984 |   |  10/97 |   |    3-30 |
|  Inglenook Court                  |   | 224    |            | Bothell, WA             |   | 8,300                                                                                                        |   | 3,467                                                                                             |         | 7,881        |             | 5,251       |                                    | 3,474        |     | 13,125       |          | 16,599   |   | 7,262        |        | 1985 |   |  10/94 |   |    3-30 |
|  Kings Road                       |   | 196    |            | Los Angeles, CA         |   | 29,863                                                                                                       |   | 4,023                                                                                             |         | 9,527        |             | 7,148       |                                    | 4,031        |     | 16,667       |          | 20,698   |   | 6,856        |        | 1979 |   |  06/97 |   |    3-30 |
|  Le Parc Luxury Apartments        |   | 140    |            | Santa Clara, CA         |   | 12,678                                                                                                       |   | 3,090                                                                                             |         | 7,421        |             | 10,704      |                                    | 3,092        |     | 18,123       |          | 21,215   |   | 7,834        |        | 1975 |   |  02/94 |   |    3-30 |
|  Marbrisa                         |   | 202    |            | Long Beach, CA          |   | 19,391                                                                                                       |   | 4,700                                                                                             |         | 18,605       |             | 2,026       |                                    | 4,760        |     | 20,571       |          | 25,331   |   | 6,506        |        | 1987 |   |  09/02 |   |    3-30 |
|  Mirabella                        |   | 188    |            | Marina Del Rey, CA      |   | 47,154                                                                                                       |   | 6,180                                                                                             |         | 26,673       |             | 12,220      |                                    | 6,270        |     | 38,803       |          | 45,073   |   | 12,680       |        | 2000 |   |  05/00 |   |    3-30 |
|  Mill Creek at Windermere         |   | 400    |            | San Ramon, CA           |   | 50,787                                                                                                       |   | 29,551                                                                                            |         | 69,032       |             | 1,242       |                                    | 29,551       |     | 70,274       |          | 99,825   |   | 10,199       |        | 2005 |   | 09/07 |   |    3-30 |
|  Park Place/Windsor Court/Cochran | 176    |   | Los Angeles, CA |                    | 20,299 |                                                                                                         | 4,965  |                                                                                              | 11,806       |         | 7,613            |        | 5,015                                   |         | 19,369   |         | 24,384        |     | 9,093  |         | 1988        |   |  08/97 |   |    3-30 |
|  Montclaire, The                  |   | 390    |            | Sunnyvale, CA           |   | 47,934                                                                                                       |   | 4,842                                                                                             |         | 19,776       |             | 19,287      |                                    | 4,997        |     | 38,908       |          | 43,905   |   | 24,654       |        | 1973 |   |  12/88 |   |    3-30 |
|  Montejo                          |   | 124    |            | Garden Grove, CA        |   | 13,538                                                                                                       |   | 1,925                                                                                             |         | 7,685        |             | 2,029       |                                    | 2,194        |     | 9,445        |          | 11,639   |   | 3,351        |        | 1974 |   |  11/01 |   |    3-30 |
|  Monterey Villas                  |   | 122    |            | Oxnard, CA              |   | 12,776                                                                                                       |   | 2,349                                                                                             |         | 5,579        |             | 4,425       |                                    | 2,424        |     | 9,929        |          | 12,353   |   | 4,209        |        | 1974 |   |  07/97 |   |    3-30 |
|  Park Hill at Issaquah            |   | 245    |            | Issaquah, CA            |   | 29,956                                                                                                       |   | 7,284                                                                                             |         | 21,937       |             | 1,488       |                                    | 7,284        |     | 23,425       |          | 30,709   |   | 5,965        |        | 1999 |   |  02/99 |   |    3-30 |

----

Table of Contents

|                               |   |   |   |                |   |        |      |                                                        |         |                                                                                       |          |                                                                                                                        | Costs                                   |         |     |         |          |                                             |      |         |        |         |    |        |   |                   |   |
|------------------------------------|--------|--------|--------|---------------------|--------|-------------|-----------|-------------------------------------------------------------|--------------|--------------------------------------------------------------------------------------------|---------------|-----------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|--------------|----------|--------------|---------------|--------------------------------------------------|-----------|--------------|-------------|--------------|---------|-------------|--------|------------------------|--------|
|                               |   |   |   |                |   |        |      |                                                        | Initial cost |                                                                                       | capitalized   |                                                                                                                        | Gross amount carried at close of period |         |     |         |          |                                             |      |         |        |
|                               |   |   |   |                |   |        |      |                                                        |         |                                                                                       | Buildings and |                                                                                                                        | subsequent to                           |         | Land and |         | Buildings and |                                             |      |         | Accumulated |         | Date of |        | Date   |                   | Lives  |
| Property                           |   | Units  |   | Location            |   | Encumbrance |      | Land                                                        |         | improvements                                                                               |          | acquisition                                                                                                                 |                                    | improvements |     | improvements |          | Total(1)                                         |      | depreciation |        | construction |    | acquired    |   | (years)                |
| Encumbered communities (continued) |   |   |   |                |   |        |      |                                                        |         |                                                                                       |          |                                                                                                                        |                                    |         |     |         |          |                                             |      |         |        |         |    |        |   |                   |
|  Palisades, The               |   | 192    |   | Bellevue, WA        |   | 21,596      |      | 1,560                                                       |         | 6,242                                                                                      |          | 9,390                                                                                                                       |                                    | 1,565        |     | 15,627       |          | 17,192                                           |      | 9,084        |        | 1977         |    |  05/90 |   |    3-30 |
|  Pathways                     |   | 296    |   | Long Beach, CA      |   | 38,747      |      | 4,083                                                       |         | 16,757                                                                                     |          | 17,418                                                                                                                      |                                    | 6,239        |     | 32,019       |          | 38,258                                           |      | 18,707       |        | 1975         |    |  02/91 |   |    3-30 |
|  Pointe at Cupertino, The     |   | 116    |   | Cupertino, CA       |   | 12,173      |      | 4,505                                                       |         | 17,605                                                                                     |          | 7,383                                                                                                                       |                                    | 4,505        |     | 24,988       |          | 29,493                                           |      | 5,141        |        | 1963         |    |  08/98 |   |    3-30 |
|  101 San Fernando             |   | 323    |   | San Jose, CA        |   | 35,261      |      | 4,173                                                       |         | 58,961                                                                                     |          | 2,332                                                                                                                       |                                    | 4,173        |     | 61,293       |          | 65,466                                           |      | 3,059        |        | 2001         |    | 07/10       |   |    3-30 |
|  Sammamish View               |   | 153    |   | Bellevue, WA        |   | 10,020      |      | 3,324                                                       |         | 7,501                                                                                      |          | 5,255                                                                                                                       |                                    | 3,331        |     | 12,749       |          | 16,080                                           |      | 7,296        |        | 1986         |    |  11/94 |   |    3-30 |
|  Stevenson Place              |   | 200    |   | Fremont, CA         |   | 22,320      |      | 996                                                         |         | 5,582                                                                                      |          | 6,594                                                                                                                       |                                    | 1,001        |     | 12,171       |          | 13,172                                           |      | 8,074        |        | 1971         |    |  04/83 |   |    3-30 |
|  Stonehedge Village           |   | 196    |   | Bothell, WA         |   | 12,907      |      | 3,167                                                       |         | 12,603                                                                                     |          | 3,501                                                                                                                       |                                    | 3,201        |     | 16,070       |          | 19,271                                           |      | 7,642        |        | 1986         |    |  10/97 |   |    3-30 |
|  Summerhill Park              |   | 100    |   | Sunnyvale, CA       |   | 13,971      |      | 2,654                                                       |         | 4,918                                                                                      |          | 956                                                                                                                         |                                    | 2,656        |     | 5,872        |          | 8,528                                            |      | 4,253        |        | 1988         |    |  09/88 |   |    3-30 |
|  Summit Park                  |   | 300    |   | San Diego, CA       |   | 19,457      |      | 5,959                                                       |         | 23,670                                                                                     |          | 2,984                                                                                                                       |                                    | 5,977        |     | 26,636       |          | 32,613                                           |      | 8,564        |        | 1972         |    |  12/02 |   |    3-30 |
|  The Bernard                  |   | 63     |   | Seattle, CA         |   | 10,344      |      | 3,699                                                       |         | 11,345                                                                                     |          | 5                                                                                                                           |                                    | 3,699        |     | 11,350       |          | 15,049                                           |      | 108          |        | 2008         |    | 09/11       |   |    3-30 |
|  Magnolia Square              |   | 156    |   | Sunnyvale, CA       |   | 18,589      |      | 8,190                                                       |         | 19,306                                                                                     |          | 8,465                                                                                                                       |                                    | 8,191        |     | 27,770       |          | 35,961                                           |      | 3,427        |        | 1969         |    | 09/07       |   |    3-30 |
|  Tierra Vista                 |   | 404    |   | Oxnard, CA          |   | 58,462      |      | 13,652                                                      |         | 53,336                                                                                     |          | 1,837                                                                                                                       |                                    | 13,661       |     | 55,164       |          | 68,825                                           |      | 14,308       |        | 2001         |    |  01/01 |   |    3-30 |
|  Treehouse                    |   | 164    |   | Santa Ana, CA       |   | 17,568      |      | 2,626                                                       |         | 10,485                                                                                     |          | 3,863                                                                                                                       |                                    | 2,957        |     | 14,017       |          | 16,974                                           |      | 4,371        |        | 1970         |    |  11/01 |   |    3-30 |
|  Valley Park                  |   | 160    |   | Fountain Valley, CA |   | 22,983      |      | 3,361                                                       |         | 13,420                                                                                     |          | 3,123                                                                                                                       |                                    | 3,761        |     | 16,143       |          | 19,904                                           |      | 5,481        |        | 1969         |    |  11/01 |   |    3-30 |
|  Villa Angelina               |   | 256    |   | Placentia, CA       |   | 28,020      |      | 4,498                                                       |         | 17,962                                                                                     |          | 3,101                                                                                                                       |                                    | 4,962        |     | 20,599       |          | 25,561                                           |      | 6,910        |        | 1970         |    |  11/01 |   |    3-30 |
|  Vista Belvedere              |   | 76     |   | Tiburon, CA         |   | 10,499      |      | 5,573                                                       |         | 11,901                                                                                     |          | 3,445                                                                                                                       |                                    | 5,573        |     | 15,346       |          | 20,919                                           |      | 4,457        |        | 1963         |    |  08/04 |   |    3-30 |
|  Wandering Creek              |   | 156    |   | Kent, WA            |   | 5,300       |      | 1,285                                                       |         | 4,980                                                                                      |          | 3,144                                                                                                                       |                                    | 1,296        |     | 8,113        |          | 9,409                                            |      | 4,499        |        | 1986         |    |  11/95 |   |    3-30 |
|  Waterford, The               |   | 238    |   | San Jose, CA        |   | 31,975      |      | 11,808                                                      |         | 24,500                                                                                     |          | 12,052                                                                                                                      |                                    | 15,165       |     | 33,195       |          | 48,360                                           |      | 12,433       |        | 2000         |    |  06/00 |   |    3-30 |
|  Wilshire Promenade           |   | 149    |   | Fullerton, CA       |   | 18,560      |      | 3,118                                                       |         | 7,385                                                                                      |          | 6,395                                                                                                                       |                                    | 3,797        |     | 13,101       |          | 16,898                                           |      | 5,288        |        | 1992         |    |  01/97 |   |    3-30 |
|  Wharfside Pointe             |   | 142    |   | Seattle, WA         |   | 7,277       |      | 2,245                                                       |         | 7,020                                                                                      |          | 5,531                                                                                                                       |                                    | 2,258        |     | 12,538       |          | 14,796                                           |      | 6,155        |        | 1990         |    |  06/94 |   |    3-30 |
|                               |   |   |   |                |   |        | 1,729,822 |                                                        | 442,136      |                                                                                       | 1,391,045     |                                                                                                                        | 398,435                                 |         | 459,766  |         | 1,771,849     |                                             | 2,231,615 |         | 557,187     |         |    |        |   |                   |   |
| Unencumbered communities           |   |   |   |                |   |        |      |                                                        |         |                                                                                       |          |                                                                                                                        |                                    |         |     |         |          |                                             |      |         |
|  Allegro                      |   | 97     |   | Valley Village, CA  |   |        |      |          5,869 |         |               23,977 |          |                     792 |                                    | 5,869        |     | 24,769       |          | 30,638                                           |      | 1,323        |        | 2010         |    | 10/10       |   |    3-30 |
|  Alpine Country               |   | 108    |   | Alpine, CA          |   |        |      | 1,741                                                       |         | 6,914                                                                                      |          | 869                                                                                                                         |                                    | 1,746        |     | 7,778        |          | 9,524                                            |      | 2,413        |        | 1986         |    |  12/02 |   |    3-30 |
|  Anavia                       |   | 250    |   | Anaheim, CA         |   |        |      | 15,925                                                      |         | 63,712                                                                                     |          | 5,243                                                                                                                       |                                    | 15,925       |     | 68,955       |          | 84,880                                           |      | 2,360        |        | 2009         |    | 12/10       |   |    3-30 |
|  Axis 2300                    |   | 115    |   | Irvine, CA          |   |        |      | 5,405                                                       |         | 33,585                                                                                     |          | 438                                                                                                                         |                                    | 5,405        |     | 34,023       |          |        39,428 |      | 1,988        |        | 2010         |    | 08/10       |   |    3-30 |
|  Bluffs II, The               |   | 224    |   | San Diego, CA       |   |        |      | 3,405                                                       |         | 7,743                                                                                      |          | 8,622                                                                                                                       |                                    | 3,442        |     | 16,328       |          | 19,770                                           |      | 4,995        |        | 1974         |    |  06/97 |   |    3-30 |
|  Bellerive                    |   | 63     |   | Los Angeles, CA     |   |        |      | 5,401                                                       |         | 21,803                                                                                     |          | 363                                                                                                                         |                                    | 5,401        |     | 22,166       |          | 27,567                                           |      | 325          |        | 2011         |    |  08/11 |   |    3-30 |
|  Belmont Terrace              |   | 71     |   | Belmont, CA         |   |        |      | 4,446                                                       |         | 10,290                                                                                     |          | 2,118                                                                                                                       |                                    | 4,473        |     | 12,381       |          | 16,854                                           |      | 2,959        |        | 1974         |    |  10/06 |   |    3-30 |
|  Bonita Cedars                |   | 120    |   | Bonita, CA          |   |        |      | 2,496                                                       |         | 9,913                                                                                      |          | 1,418                                                                                                                       |                                    | 2,503        |     | 11,324       |          | 13,827                                           |      | 3,643        |        | 1983         |    |  12/02 |   |    3-30 |
|  Boulevard                    |   | 172    |   | Fremont, CA         |   |        |      | 3,520                                                       |         | 8,182                                                                                      |          | 9,707                                                                                                                       |                                    | 3,580        |     | 17,829       |          | 21,409                                           |      | 8,521        |        | 1978         |    |  01/96 |   |    3-30 |
|  Bridle Trails                |   | 108    |   | Kirkland, WA        |   |        |      | 1,500                                                       |         | 5,930                                                                                      |          | 4,922                                                                                                                       |                                    | 1,531        |     | 10,821       |          | 12,352                                           |      | 4,656        |        | 1986         |    |  10/97 |   |    3-30 |
|  Bristol Commons              |   | 188    |   | Sunnyvale, CA       |   |        |      | 5,278                                                       |         | 11,853                                                                                     |          | 1,537                                                                                                                       |                                    | 5,293        |     | 13,375       |          | 18,668                                           |      | 6,789        |        | 1989         |    |  01/97 |   |    3-30 |
|  416 on Broadway              |   | 115    |   | Glendale, CA        |   |        |      | 8,557                                                       |         | 34,235                                                                                     |          | 425                                                                                                                         |                                    | 8,557        |     | 34,660       |          | 43,217                                           |      | 1,207        |        | 2009         |    | 12/10       |   |    3-30 |
|  Bunker Hill                  |   | 456    |   | Los Angeles, CA     |   |        |      | 11,498                                                      |         | 27,871                                                                                     |          | 3,632                                                                                                                       |                                    | 11,639       |     | 31,362       |          | 43,001                                           |      | 14,263       |        | 1968         |    |  03/98 |   |    3-30 |
|  Cairns, The                  |   | 100    |   | Seattle, WA         |   |        |      | 6,937                                                       |         | 20,679                                                                                     |          | 240                                                                                                                         |                                    | 6,939        |     | 20,917       |          | 27,856                                           |      | 3,215        |        | 2006         |    | 06/07       |   |    3-30 |
|  Cambridge                    |   | 40     |   | Chula Vista, CA     |   |        |      | 497                                                         |         | 1,973                                                                                      |          | 309                                                                                                                         |                                    | 498          |     | 2,281        |          | 2,779                                            |      | 731          |        | 1965         |    |  12/02 |   |    3-30 |
|  Castle Creek                 |   | 216    |   | Newcastle, WA       |   |        |      | 4,149                                                       |         | 16,028                                                                                     |          | 1,925                                                                                                                       |                                    | 4,833        |     | 17,269       |          | 22,102                                           |      | 8,526        |        | 1997         |    |  12/97 |   |    3-30 |
|  CBC Apartments               |   | 148    |   | Goleta, CA          |   |        |      | 6,283                                                       |         | 24,000                                                                                     |          | 2,263                                                                                                                       |                                    | 6,288        |     | 26,258       |          | 32,546                                           |      | 5,650        |        | 1962         |    |  01/06 |   |    3-30 |
|  Cedar Terrace                |   | 180    |   | Bellevue, WA        |   |        |      | 5,543                                                       |         | 16,442                                                                                     |          | 3,346                                                                                                                       |                                    | 5,652        |     | 19,679       |          | 25,331                                           |      | 5,295        |        | 1984         |    |  01/05 |   |    3-30 |
|  Chimney Sweep Apartments     |   | 91     |   | Goleta, CA          |   |        |      | 5,558                                                       |         | 21,320                                                                                     |          | 1,738                                                                                                                       |                                    | 5,618        |     | 22,998       |          | 28,616                                           |      | 5,691        |        | 1967         |    |  01/06 |   |    3-30 |
|  Chestnut Street              |   | 96     |   | Santa Cruz, CA      |   |        |      | 6,582                                                       |         | 15,689                                                                                     |          | 884                                                                                                                         |                                    | 6,582        |     | 16,573       |          | 23,155                                           |      | 1,967        |        | 2002         |    |  07/08 |   |    3-30 |
|  The Commons                  |   | 264    |   | Campbell, CA        |   |        |      | 12,555                                                      |         | 29,307                                                                                     |          | 3,438                                                                                                                       |                                    | 12,556       |     | 32,744       |          | 45,300                                           |      | 1,710        |        | 1973         |    | 07/10       |   |    3-30 |
|  Corbella at Juanita Bay      |   | 169    |   | Kirkland, WA        |   |        |      | 5,801                                                       |         | 17,415                                                                                     |          | 645                                                                                                                         |                                    | 5,801        |     | 18,060       |          | 23,861                                           |      | 706          |        | 1978         |    | 11/10       |   |    3-30 |
|  Country Villas               |   | 180    |   | Oceanside, CA       |   |        |      | 4,174                                                       |         | 16,583                                                                                     |          | 2,183                                                                                                                       |                                    | 4,187        |     | 18,753       |          | 22,940                                           |      | 6,111        |        | 1976         |    |  12/02 |   |    3-30 |
|  Delano                       |   | 66     |   | Redmond, WA         |   |        |      | 3,527                                                       |         | 10,600                                                                                     |          | 0                                                                                                                           |                                    | 3,527        |     | 10,600       |          | 14,127                                           |      | 15           |        | 2005         |    |  12/11 |   |    3-30 |

----

Table of Contents

|                                 |   |   |   |               |   |        |      |                                                                                              |         |                                                                                                                                              |          |                                                                                                        | Costs                                   |                                                                                                                                                                                        |     |                                                                                       |          |                                             |      |                                                                                |        |         |    |        |   |                   |   |
|--------------------------------------|--------|--------|--------|--------------------|--------|-------------|-----------|---------------------------------------------------------------------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------|-------------------------------------------------------------------------------------------------------------|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------------------------------------------------------------------------------|---------------|--------------------------------------------------|-----------|-------------------------------------------------------------------------------------|-------------|--------------|---------|-------------|--------|------------------------|--------|
|                                 |   |   |   |               |   |        |      |                                                                                              | Initial cost |                                                                                                                                              | capitalized   |                                                                                                        | Gross amount carried at close of period |                                                                                                                                                                                        |     |                                                                                       |          |                                             |      |                                                                                |        |
|                                 |   |   |   |               |   |        |      |                                                                                              |         |                                                                                                                                              | Buildings and |                                                                                                        | subsequent to                           |                                                                                                                                                                                        | Land and |                                                                                       | Buildings and |                                             |      |                                                                                | Accumulated |         | Date of |        | Date   |                   | Lives  |
| Property                             |   | Units  |   | Location           |   | Encumbrance |      | Land                                                                                              |         | improvements                                                                                                                                      |          | acquisition                                                                                                 |                                    | improvements                                                                                                                                                                                |     | improvements                                                                               |          | Total(1)                                         |      | depreciation                                                                        |        | construction |    | acquired    |   | (years)                |
| Unencumbered communities (continued) |   |   |   |               |   |        |      |                                                                                              |         |                                                                                                                                              |          |                                                                                                        |                                    |                                                                                                                                                                                        |     |                                                                                       |          |                                             |      |                                                                                |        |         |    |        |   |
|  Monterra del Mar/Rey/Sol       |   | 292    |   | Pasadena, CA       |   |        |      | 2,202                                                                                             |         | 4,794                                                                                                                                             |          | 27,733                                                                                                      |                                    | 8,385                                                                                                                                                                                       |     | 26,344                                                                                     |          | 34,729                                           |      | 10,915                                                                              |        | 1972         |    |  04/99 |   |    3-30 |
|  Fairways(3)                    |   | 74     |   | Newport Beach, CA  |   |        |      |                 - |         | 7,850                                                                                                                                             |          | 2,106                                                                                                       |                                    | 9                                                                                                                                                                                           |     | 9,947                                                                                      |          | 9,956                                            |      | 4,112                                                                               |        | 1972         |    |  06/99 |   |    3-30 |
|  Foothill Commons               |   | 388    |   | Bellevue, WA       |   |        |      | 2,435                                                                                             |         | 9,821                                                                                                                                             |          | 28,562                                                                                                      |                                    | 2,440                                                                                                                                                                                       |     | 38,378                                                                                     |          | 40,818                                           |      | 15,129                                                                              |        | 1978         |    |  03/90 |   |    3-30 |
|  Foothill Gardens/Twin Creeks   |   | 176    |   | San Ramon, CA      |   |        |      | 5,875                                                                                             |         | 13,992                                                                                                                                            |          | 2,515                                                                                                       |                                    | 5,964                                                                                                                                                                                       |     | 16,418                                                                                     |          | 22,382                                           |      | 8,311                                                                               |        | 1985         |    |  02/97 |   |    3-30 |
|  Forest View                    |   | 192    |   | Renton, WA         |   |        |      | 3,731                                                                                             |         | 14,530                                                                                                                                            |          | 979                                                                                                         |                                    | 3,731                                                                                                                                                                                       |     | 15,509                                                                                     |          | 19,240                                           |      | 4,524                                                                               |        | 1998         |    |  10/03 |   |    3-30 |
|  Fountain Court                 |   | 320    |   | Seattle, WA        |   |        |      |          6,702                                       |         |               27,306                                                        |          |                  2,741 |                                    |                        6,985                                             |     |               29,764 |          |        36,749 |      |            12,332            |        | 2000         |    |  03/00 |   |    3-30 |
|  Fourth & U                 |   | 171    |   | Berkeley, CA       |   |        |      | 8,879                                                                                             |         |               52,351                                                        |          |                  1,271 |                                    | 8,879                                                                                                                                                                                       |     |               53,622 |          |        62,501 |      |              3,275 |        | 2010         |    | 04/10       |   |    3-30 |
|  Hampton Court                  |   | 83     |   | Glendale, CA       |   |        |      | 2,407                                                                                             |         | 5,672                                                                                                                                             |          | 1,843                                                                                                       |                                    | 2,426                                                                                                                                                                                       |     | 7,496                                                                                      |          | 9,922                                            |      | 3,049                                                                               |        | 1974         |    |  06/99 |   |    3-30 |
|  Hillsdale Garden Apartments    |   | 697    |   | San Mateo, CA      |   |        |      | 22,000                                                                                            |         | 94,681                                                                                                                                            |          | 13,308                                                                                                      |                                    | 22,244                                                                                                                                                                                      |     | 107,745                                                                                    |          | 129,989                                          |      | 18,625                                                                              |        | 1948         |    |  09/06 |   |    3-30 |
|  Hope Ranch Collection          |   | 108    |   | Santa Barbara, CA  |   |        |      | 4,078                                                                                             |         | 16,877                                                                                                                                            |          | 2,011                                                                                                       |                                    | 4,208                                                                                                                                                                                       |     | 18,758                                                                                     |          | 22,966                                           |      | 2,645                                                                               |        | 1965         |    | 03/07       |   |    3-30 |
|  Joule                          |   | 295    |   | Seattle, WA        |   |        |      | 14,558                                                                                            |         |               69,417                                                        |          | 1,910                                                                                                       |                                    |                      14,558                                                        |     |               71,327 |          |        85,885 |      |              4,467 |        | 2010         |    | 03/10       |   |    3-30 |
|  1000 Kiely                     |   | 121    |   | Santa Clara, CA    |   |        |      | 9,359                                                                                             |         | 21,845                                                                                                                                            |          | 1,167                                                                                                       |                                    | 9,359                                                                                                                                                                                       |     | 23,012                                                                                     |          |        32,371 |      | 601                                                                                 |        | 1971         |    | 03/11       |   |    3-30 |
|  Linden Square                  |   | 183    |   | Seattle, WA        |   |        |      | 4,374                                                                                             |         | 11,588                                                                                                                                            |          | 1,721                                                                                                       |                                    | 4,202                                                                                                                                                                                       |     | 13,481                                                                                     |          | 17,683                                           |      | 5,091                                                                               |        | 1994         |    |  06/00 |   |    3-30 |
|  Lofts at Pinehurst, The        |   | 118    |   | Ventura, CA        |   |        |      | 1,570                                                                                             |         | 3,912                                                                                                                                             |          | 3,851                                                                                                       |                                    | 1,618                                                                                                                                                                                       |     | 7,715                                                                                      |          | 9,333                                            |      | 3,120                                                                               |        | 1971         |    |  06/97 |   |    3-30 |
|  Magnolia Lane(4)               |   | 32     |   | Sunnyvale, CA      |   |        |      |                 - |         | 5,430                                                                                                                                             |          | 173                                                                                                         |                                    |                                - |     | 5,603                                                                                      |          | 5,603                                            |      | 871                                                                                 |        | 2001         |    |  06/07 |   |    3-30 |
|  Marbella, The                  |   | 60     |   | Los Angeles, CA    |   |        |      |          2,826                                       |         | 11,269                                                                                                                                            |          | 2,870                                                                                                       |                                    | 2,871                                                                                                                                                                                       |     | 14,094                                                                                     |          | 16,965                                           |      | 3,874                                                                               |        | 1991         |    |  09/05 |   |    3-30 |
|  Marina City Club(5)            |   | 101    |   | Marina Del Rey, CA |   |        |      |                 - |         | 28,167                                                                                                                                            |          | 4,845                                                                                                       |                                    |                                - |     | 33,012                                                                                     |          | 33,012                                           |      | 9,046                                                                               |        | 1971         |    |  01/04 |   |    3-30 |
|  Marina Cove(6)                 |   | 292    |   | Santa Clara, CA    |   |        |      | 5,320                                                                                             |         | 16,431                                                                                                                                            |          | 6,403                                                                                                       |                                    | 5,324                                                                                                                                                                                       |     | 22,830                                                                                     |          | 28,154                                           |      | 12,103                                                                              |        | 1974         |    |  06/94 |   |    3-30 |
|  Mariners Place                 |   | 105    |   | Oxnard, CA         |   |        |      | 1,555                                                                                             |         | 6,103                                                                                                                                             |          | 1,601                                                                                                       |                                    | 1,562                                                                                                                                                                                       |     | 7,697                                                                                      |          | 9,259                                            |      | 3,105                                                                               |        | 1987         |    |  05/00 |   |    3-30 |
|  Meadowood                      |   | 320    |   | Simi Valley, CA    |   |        |      | 7,852                                                                                             |         | 18,592                                                                                                                                            |          | 4,380                                                                                                       |                                    | 7,898                                                                                                                                                                                       |     | 22,926                                                                                     |          | 30,824                                           |      | 11,000                                                                              |        | 1986         |    |  11/96 |   |    3-30 |
|  Mesa Village                   |   | 133    |   | Clairemont, CA     |   |        |      | 1,888                                                                                             |         | 7,498                                                                                                                                             |          | 936                                                                                                         |                                    | 1,894                                                                                                                                                                                       |     | 8,428                                                                                      |          | 10,322                                           |      | 2,536                                                                               |        | 1963         |    |  12/02 |   |    3-30 |
|  Mira Monte                     |   | 355    |   | Mira Mesa, CA      |   |        |      | 7,165                                                                                             |         | 28,459                                                                                                                                            |          | 7,336                                                                                                       |                                    | 7,186                                                                                                                                                                                       |     | 35,774                                                                                     |          | 42,960                                           |      | 12,507                                                                              |        | 1982         |    |  12/02 |   |    3-30 |
|  Mission Hills                  |   | 282    |   | Oceanside, CA      |   |        |      | 10,099                                                                                            |         | 38,778                                                                                                                                            |          | 3,554                                                                                                       |                                    | 10,167                                                                                                                                                                                      |     | 42,264                                                                                     |          | 52,431                                           |      | 10,092                                                                              |        | 1984         |    |  07/05 |   |    3-30 |
|  Mt. Sutro                      |   | 99     |   | San Francisco, CA  |   |        |      | 2,334                                                                                             |         | 8,507                                                                                                                                             |          | 2,504                                                                                                       |                                    | 2,809                                                                                                                                                                                       |     | 10,536                                                                                     |          | 13,345                                           |      | 4,445                                                                               |        | 1973         |    |  06/01 |   |    3-30 |
|  Muse                           |   | 152    |   | Hollywood, CA      |   |        |      |        39,100                                                  |         |                         - |          |                  2,697 |                                    |                        7,823                                             |     |               33,974 |          |        41,797 |      |              1,410 |        | 11/10        |    | 09/10       |   |    3-30 |
|  Pinehurst(7)                   |   | 28     |   | Ventura, CA        |   |        |      | 355                                                                                               |         | 1,356                                                                                                                                             |          | 364                                                                                                         |                                    | 6                                                                                                                                                                                           |     | 2,069                                                                                      |          | 2,075                                            |      | 628                                                                                 |        | 1973         |    |  12/04 |   |    3-30 |
|  Regency at Encino              |   | 75     |   | Encino, CA         |   |        |      | 3,184                                                                                             |         | 12,737                                                                                                                                            |          | 1,094                                                                                                       |                                    | 3,184                                                                                                                                                                                       |     | 13,830                                                                                     |          | 17,014                                           |      | 1,099                                                                               |        | 1989         |    |  12/09 |   |    3-30 |
|  Salmon Run at Perry Creek      |   | 132    |   | Bothell, WA        |   |        |      | 3,717                                                                                             |         | 11,483                                                                                                                                            |          | 864                                                                                                         |                                    | 3,801                                                                                                                                                                                       |     | 12,263                                                                                     |          | 16,064                                           |      | 4,541                                                                               |        | 2000         |    |  10/00 |   |    3-30 |
|  San Marcos                     |   | 432    |   | Richmond, CA       |   |        |      | 15,563                                                                                            |         | 36,204                                                                                                                                            |          | 25,997                                                                                                      |                                    | 22,866                                                                                                                                                                                      |     | 54,898                                                                                     |          | 77,764                                           |      | 15,222                                                                              |        | 2003         |    |  11/03 |   |    3-30 |
|  Santee Court                   |   | 165    |   | Los Angeles, CA    |   |        |      | 6,177                                                                                             |         | 24,716                                                                                                                                            |          | 517                                                                                                         |                                    | 6,177                                                                                                                                                                                       |     | 25,233                                                                                     |          | 31,410                                           |      | 1,039                                                                               |        | 2004         |    | 10/10       |   |    3-30 |
|  Santee Village                 |   | 73     |   | Los Angeles, CA    |   |        |      | 3,404                                                                                             |         | 15,601                                                                                                                                            |          | 640                                                                                                         |                                    | 3,404                                                                                                                                                                                       |     | 16,241                                                                                     |          | 19,645                                           |      | 230                                                                                 |        | 2011         |    | 07/11       |   |    3-30 |
|  Shadow Point                   |   | 172    |   | Spring Valley, CA  |   |        |      | 2,812                                                                                             |         | 11,170                                                                                                                                            |          | 1,666                                                                                                       |                                    | 2,820                                                                                                                                                                                       |     | 12,828                                                                                     |          | 15,648                                           |      | 4,062                                                                               |        | 1983         |    |  12/02 |   |    3-30 |
|  The Laurels at Mill Creek      |   | 164    |   | Mill Creek, WA     |   |        |      | 1,559                                                                                             |         | 6,430                                                                                                                                             |          | 4,472                                                                                                       |                                    | 1,595                                                                                                                                                                                       |     | 10,866                                                                                     |          | 12,461                                           |      | 4,872                                                                               |        | 1981         |    |  12/96 |   |    3-30 |
|  The Grand                      |   | 243    |   | Oakland, CA        |   |        |      | 4,531                                                                                             |         | 89,208                                                                                                                                            |          | 3,755                                                                                                       |                                    | 4,531                                                                                                                                                                                       |     | 92,963                                                                                     |          | 97,494                                           |      | 9,851                                                                               |        | 2009         |    | 01/09       |   |    3-30 |
|  Tierra del Sol/Norte           |   | 156    |   | El Cajon, CA       |   |        |      | 2,455                                                                                             |         | 9,753                                                                                                                                             |          | 1,033                                                                                                       |                                    | 2,463                                                                                                                                                                                       |     | 10,778                                                                                     |          | 13,241                                           |      | 3,440                                                                               |        | 1969         |    |  12/02 |   |    3-30 |
|  Trabucco Villas                |   | 132    |   | Lake Forest, CA    |   |        |      | 3,638                                                                                             |         | 8,640                                                                                                                                             |          | 1,469                                                                                                       |                                    | 3,890                                                                                                                                                                                       |     | 9,857                                                                                      |          | 13,747                                           |      | 4,462                                                                               |        | 1985         |    |  10/97 |   |    3-30 |
|  Tuscana                        |   | 30     |   | Tracy, CA          |   |        |      | 2,828                                                                                             |         | 6,599                                                                                                                                             |          | 155                                                                                                         |                                    | 2,870                                                                                                                                                                                       |     | 6,712                                                                                      |          | 9,582                                            |      | 1,036                                                                               |        | 2007         |    | 02/07       |   |    3-30 |
|  Via                            |   | 284    |   | Sunnyvale, CA      |   |        |      |        22,000                                                  |         |                         - |          |                82,270            |                                    |                      22,016                                                        |     |               82,254 |          |      104,270            |      |              1,051 |        | 07/09        |    | 04/08       |   |    3-30 |
|  Vista Capri - North            |   | 106    |   | San Diego, CA      |   |        |      | 1,663                                                                                             |         | 6,609                                                                                                                                             |          | 788                                                                                                         |                                    | 1,668                                                                                                                                                                                       |     | 7,392                                                                                      |          | 9,060                                            |      | 2,228                                                                               |        | 1975         |    |  12/02 |   |    3-30 |
|  Walnut Heights                 |   | 163    |   | Walnut, CA         |   |        |      | 4,858                                                                                             |         | 19,168                                                                                                                                            |          | 1,883                                                                                                       |                                    | 4,887                                                                                                                                                                                       |     | 21,022                                                                                     |          | 25,909                                           |      | 5,929                                                                               |        | 1964         |    |  10/03 |   |    3-30 |
|  Windsor Ridge                  |   | 216    |   | Sunnyvale, CA      |   |        |      | 4,017                                                                                             |         | 10,315                                                                                                                                            |          | 4,342                                                                                                       |                                    | 4,021                                                                                                                                                                                       |     | 14,653                                                                                     |          | 18,674                                           |      | 10,382                                                                              |        | 1989         |    |  03/89 |   |    3-30 |
|  Woodland Commons               |   | 236    |   | Bellevue, WA       |   |        |      | 2,040                                                                                             |         | 8,727                                                                                                                                             |          | 9,235                                                                                                       |                                    | 2,044                                                                                                                                                                                       |     | 17,958                                                                                     |          | 20,002                                           |      | 8,915                                                                               |        | 1978         |    |  03/90 |   |    3-30 |
|  Woodside Village               |   | 145    |   | Ventura, CA        |   |        |      | 5,331                                                                                             |         | 21,036                                                                                                                                            |          | 2,413                                                                                                       |                                    | 5,341                                                                                                                                                                                       |     | 23,439                                                                                     |          | 28,780                                           |      | 5,706                                                                               |        | 1987         |    |  12/04 |   |    3-30 |
|                                 |   | 27,419 |   |               |   |        | 1,729,822 |                                                                                              | 835,218      |                                                                                                                                              | 2,670,710     |                                                                                                        | 727,465                                 |                                                                                                                                                                                        | 837,731  |                                                                                       | 3,395,662     |                                             | 4,233,393 |                                                                                | 904,125     |         |    |        |   |                   |   |

----

Table of Contents

|                                                     |   |     |      |     |            |        |    |   |         |   |      |          |   |   | Costs                                   |   |   |         |    |   |          |   |      |     |   |   |         |   |   |         |    |   |     |   |   |    |   |
|----------------------------------------------------------|--------|----------|-----------|----------|-----------------|-------------|---------|--------|--------------|--------|-----------|---------------|--------|--------|-----------------------------------------|--------|--------|--------------|---------|--------|---------------|--------|-----------|----------|--------|--------|--------------|--------|--------|--------------|---------|--------|----------|--------|--------|---------|--------|
|                                                     |   | Rentable |      |     |            |        |    |   | Initial cost |   |      | capitalized   |   |   | Gross amount carried at close of period |   |   |         |    |   |          |   |      |     |   |   |         |   |
|                                                     |   | Square   |      |     |            |        |    |   |         |   |      | Buildings and |   |   | subsequent to                           |   |   | Land and     |    |   | Buildings and |   |      |     |   |   | Accumulated  |   |   | Date of      |    |   | Date     |   |   | Lives   |   |
| Property                                                 |   | Footage  |      | Location |            | Encumbrance |    |   | Land         |   |      | improvements  |   |   | acquisition                             |   |   | improvements |    |   | improvements  |   |      | Total(1) |   |   | depreciation |   |   | construction |    |   | acquired |   |   | (years) |   |
| Other real estate assets                                 |   |     |      |     |            |        |    |   |         |   |      |          |   |   |                                    |   |   |         |    |   |          |   |      |     |   |   |         |   |   |         |    |   |     |   |   |    |   |
| Office Buildings                                         |   |     |      |     |            |        |    |   |         |   |      |          |   |   |                                    |   |   |         |    |   |          |   |      |     |   |   |         |   |   |         |    |   |     |   |   |    |   |
| Essex Hollywood                                          |   |     | 35,000    |     | Los Angeles, CA |        |    |   |         |   | 10,200    |          |   |   | 13,800                                  |   |   |         | 2,154   |   |          |   | 10,200    |     |   |   | 15,954       |   |   |         | 26,154  |   |     |   | 3,740  |    |   |   | 1938 |   |   |   | 07/06 |   |   |   | 3-30 |   |
| Santa Clara Square                                       |   |     | 139,000   |     | Santa Clara, CA |        |    | 10,388 |         |   |      | 6,472         |   |   |                                    | 11,704 |   |         |    | 1,670  |          |   |      | 6,472    |   |   |         | 13,374 |   |         |    | 19,846 |     |   |   | 734     |   |   |   | 1970 |   |   |   | 09/11 |   |   |   | 3-30 |   |
| 925/935 East Meadow                                      |   |     | 31,900    |     | Palo Alto, CA   |        |    |   |         |   |      | 1,401         |   |   |                                    | 3,172  |   |         |    | 7,985  |          |   |      | 3,147    |   |   |         | 9,411  |   |         |    | 12,558 |     |   |   | 3,173   |   |   |   | 1988 |   |   |   | 11/97 |   |   |   | 3-30 |   |
| 17461 Derian                                             |   |     | 110,000   |     | Irvine, CA      |        |    |   |         |   |      | 3,079         |   |   |                                    | 12,315 |   |         |    | 5,713  |          |   |      | 3,105    |   |   |         | 18,002 |   |         |    | 21,107 |     |   |   | 8,254   |   |   |   | 1983 |   |   |   | 07/00 |   |   |   | 3-30 |   |
| Consolidated Development Pipeline                        |   |     |      |     |            |        |    | 5,648  |         |   |      | 25,139        |   |   |                                    | -      |   |         |    | 19,147 |          |   |      | 44,280   |   |   |         | -      |   |         |    | 44,280 |     |   |   | -       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |     |      |     |            |        |    |   |         |   |      |          |   |   |                                    |   |   |         |    |   |          |   |      |     |   |   |         |   |   |         |    |   |     |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total apartment communities and other real estate assets |   | $        | 1,745,858 |     |            | $           | 881,509 |   |         | $      | 2,711,701 |          |   | $      | 764,134                                 |   |   | $            | 904,941 |   |          | $      | 3,452,403 |     |   | $      | 4,357,344    |   |   | $            | 920,026 |   |     |   |   |    |   |   |   |   |   |   |   |   |

|   | (1) | The aggregate cost for federal income tax purposes is approximately $3.0 billion (unaudited). |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | (2) | The land is leased pursuant to a ground lease expiring 2082. |
|--------|-----|--------------------------------------------------------------|

|   | (3) | The land is leased pursuant to a ground lease expiring 2027. |
|--------|-----|--------------------------------------------------------------|

|   | (4) | The land is leased pursuant to a ground lease expiring 2070. |
|--------|-----|--------------------------------------------------------------|

|   | (5) | The land is leased pursuant to a ground lease expiring 2067. |
|--------|-----|--------------------------------------------------------------|

|   | (6) | A portion of land is leased pursuant to a ground lease expiring in 2028. |
|--------|-----|--------------------------------------------------------------------------|

|   | (7) | The land is leased pursuant to a ground lease expiring in 2028. |
|--------|-----|-----------------------------------------------------------------|

|                         |   | 2011   |      |   | 2010   |   |      | 2009   |   |                      |      | 2011   |                                           |   | 2010   |    |   | 2009   |   |
|------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|---------------------------|-----------|--------|------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Rental properties:           |   |   |      |   |   |   |      |   |   | Accumulated depreciation: |      |   |                                           |   |   |    |   |   |   |
| Balance at beginning of year |   | $      | 3,964,561 |   |   | $      | 3,310,152 |   |   | $                         | 3,177,010 |   | Balance at beginning of year                   |   | $      | 775,553 |   |   | $      | 646,686 |   |   | $ | 537,248 |   |
| Improvements                 |   |   | 68,338    |   |   |   | 51,101    |   |   |                      | 79,094    |   | Depreciation expense - Acquisitions            |   |   | 1,279   |   |   |   | 2,505 |   |   |   | 18 |   |
| Acquisition of real estate   |   |   | 103,300   |   |   |   | 387,300   |   |   |                      | 16,000    |   | Depreciation expense - Discontinued operations |   |   | 315     |   |   |   | 700 |   |   |   | 1,224 |   |
| Development of real estate   |   |   | 195,634   |   |   |   | 216,008   |   |   |                      | 74,590    |   | Depreciation expense - Rental properties       |   |   | 148,337 |   |   |   | 125,662 |   |   |   | 116,033 |   |
| Disposition of real estate   |   |   | (18,769   | )      |   |   | -         |   |   |                      | (36,542   | )      | Dispositions                                   |   |   | (5,458  | )      |   |   | - |   |   |   | (7,837 | ) |
| Balance at the end of year   |   | $      | 4,313,064 |   |   | $      | 3,964,561 |   |   | $                         | 3,310,152 |   | Balance at the end of year                     |   | $      | 920,026 |   |   | $      | 775,553 |   |   | $ | 646,686 |   |

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Table of Contents

SIGNATURES

|   | ESSEX PROPERTY TRUST, INC.                                                                         |
|--------|----------------------------------------------------------------------------------------------------|
|   | (Registrant)                                                                                       |   |
|   |                                                                                               |   |   |
|   | Date: February 29, 2012                                                                            |   |
|   |                                                                                               |   |   |
|   |                                                                                               |   |   |
|   |                                                                                               | By:  /S/ MICHAEL T. DANCE |
|   |                                                                                               |   |   |
|   | Michael T. Dance                                                                                   |   |
|   | Executive Vice President, Chief Financial Officer(Authorized Officer, Principal Financial Officer) |
|   |                                                                                               |   |   |
|   |                                                                                               | By:  /S/ BRYAN G. HUNT |
|   |                                                                                               |   |   |
|   | Bryan G. Hunt                                                                                      |   |
|   | First Vice President, Chief Accounting Officer                                                     |

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Table of Contents

| Exhibit No. | Document                                                                                                                                                                                                                                                                                   |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                       |
| 3.1         | Articles of Restatement of Essex Property Trust, Inc., attached as Exhibit 3.1 to the Company's Current Report on Form 8-K, filed February 16, 2012, and incorporated herein by reference.                                                                                                 |
|        |                                                                                                                                                                                                                                                                                       |
| 3.2         | Second Amended and Restated Bylaws of Essex Property Trust, Inc., dated as of September 16, 2008, attached as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed September 22, 2008, and incorporated herein by reference.                                               |
|        |                                                                                                                                                                                                                                                                                       |
| 4.1         | Form of 4.875% Series G Cumulative Convertible Preferred Stock Certificate, attached as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed July 27, 2006, and incorporated herein by reference.                                                                          |
|        |                                                                                                                                                                                                                                                                                       |
| 4.2         | Form of 7.125% Series H Cumulative Redeemable Preferred Stock Certificate, attached as Exhibit 4.1 to the Company's Current Report on Form 8-K, filed April 13, 2011, and incorporated herein by reference.                                                                                |
|        |                                                                                                                                                                                                                                                                                       |
| 10.1        | Essex Property Trust, Inc. 1994 Stock Incentive Plan, (amended and restated), attached as Exhibit 10.1 to the Company's Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference.*                                                                               |
|        |                                                                                                                                                                                                                                                                                       |
| 10.2        | Form of Essex Property Trust, Inc. 1994 Non-Employee and Director Stock Incentive Plan, attached as Exhibit 10.3 to the Company's Registration Statement on Form S-11 (Registration No. 33-76578), which became effective on June 6, 1994, and incorporated herein by reference.*          |
|        |                                                                                                                                                                                                                                                                                       |
| 10.3        | Agreement between Essex Property Trust, Inc. and George M. Marcus, dated March 27, 2003 attached as Exhibit 10.32 to the Company's Form 10-K for the year ended December 31, 2002 and incorporated herein by reference.                                                                    |
|        |                                                                                                                                                                                                                                                                                       |
| 10.4        | Essex Property Trust, Inc. 2004 Stock Incentive Plan, attached as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by reference.*                                                                                  |
|        |                                                                                                                                                                                                                                                                                       |
| 10.5        | 2005 Deferred Compensation Plan (as amended and restated) of Essex Portfolio, L.P., dated as of December 2, 2008, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed December 8, 2008, and incorporated herein by reference.*                                     |
|        |                                                                                                                                                                                                                                                                                       |
| 10.6        | Executive Severance Plan of Essex Property Trust, Inc., amended and restated effective as of December 31, 2008, attached as Exhibit 10.2 to the Company's Current Report on Form 8-K, filed December 8, 2008, and incorporated herein by reference.*                                       |
|        |                                                                                                                                                                                                                                                                                       |
| 10.7        | Credit Agreement, dated as of November 17, 2008, by and between Essex CAL-WA, L.P., as Borrower, and Northmarq Capital, Inc., as Lender, attached as Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference. |
|        |                                                                                                                                                                                                                                                                                       |
| 10.8        | Second Amended and Restated Agreement of Limited Partnership of Essex Portfolio, L.P., dated as of May 27, 2009, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed May 27, 2009, and incorporated herein by reference.*                                          |
|        |                                                                                                                                                                                                                                                                                       |
| 10.9        | First Amendment to the Second Amended and Restated Agreement of Limited Partnership of Essex Portfolio, L.P., dated as of December 23, 2009, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed December 30, 2009, and incorporated herein by reference.*         |
|        |                                                                                                                                                                                                                                                                                       |
| 10.10       | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and Cantor Fitzgerald & Co., attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                             |
|        |                                                                                                                                                                                                                                                                                       |
| 10.11       | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and KeyBanc Capital Markets Inc., attached as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                      |

----

Table of Contents

| 10.12  | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and Barclays Capital Inc., attached as Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.13  | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and BMO Capital Markets Corp., attached as Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.14  | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and Liquidnet, Inc., attached as Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.15  | Equity Distribution Agreement, dated January 18, 2011, between Essex Property Trust, Inc. and Mitsubishi UFJ Securities (USA), Inc., attached as Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed January 19, 2011, and incorporated herein by reference.                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.16  | Form of Indemnification Agreement between Essex Property Trust, Inc. and its directors and officers, attached as Exhibit 99.1 to the Company's Current Report on Form 8-K, filed February 25, 2011, and incorporated herein by reference.*                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.17  | Note Purchase Agreement, dated as of March 31, 2011, among Essex Portfolio, L.P., Essex Property Trust, Inc. and the purchasers of the notes party thereto (including the form of the 4.36% Senior Guaranteed Notes, due March 31, 2016), attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed April 1, 2011, and incorporated herein by reference.†                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.18  | Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of Essex Portfolio, L.P., dated as of April 13, 2011, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed April 13, 2011, and incorporated herein by reference.                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.19  | Note Purchase Agreement, dated as of June 30, 2011, among Essex Portfolio, L.P., Essex Property Trust, Inc. and the purchasers of the notes party thereto (including the forms of the 4.50% Senior Guaranteed Notes, Series A, due September 30,  2017, and the 4.92% Senior Guaranteed Notes, Series B, due December 30, 2019) , attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed July 5, 2011, and incorporated herein by reference.† |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.20  | Amended and Restated 2004 Non-Employee Director Equity Award Program, dated May 1, 2011, attached as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, and incorporated herein by reference.*                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.21  | Amended and Restated Revolving Credit Agreement, dated as of September 16, 2011, by and among Essex Portfolio, L.P., PNC Bank, National Association, as Administrative Agent, Swing Line Lender and L/C Issuer, and other lenders as specified therein, attached as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, and incorporated herein by reference.                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.1   | Schedule of Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends, attached as Exhibit 12.1 to the Company's Annual Report on From 10-K for the year ended December 31, 2011, filed on February 27, 2012 and incorporated herein by reference.                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 14.1   | Code of Business Conduct and Ethics.                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 21.1   | List of Subsidiaries of Essex Property Trust, Inc., attached as Exhibit 21.1 to the Company's Annual Report on From 10-K for the year ended December 31, 2011, filed on February 27, 2012 and incorporated herein by reference.                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 23.1   | Consent of KPMG LLP, Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1   | Certification of Michael J. Schall, Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.2   | Certification of Michael T. Dance, Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                         |

----

| 32.1      | Certification of Michael J. Schall, Principal Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                    |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 32.2      | Certification of Michael T. Dance, Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.INS** | XBRL Instance Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.SCH** | XBRL Taxonomy Extension Schema Document                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      | * Management contract or compensatory plan or arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      | † The schedules and certain exhibits to this agreement, as set forth in the agreement, have not been filed herewith.  The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      | ** XBRL (Extensible Business Reporting Language) information was furnished with the Company's Annual Report on Form 10-K for the year ended December 31, 2011 filed on February 27, 2012 and not filed herewith, was not part of a registration statement or Prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |

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