UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              --------------------

                                    FORM 10-K
(Mark One)
  |X|         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1997

                                       OR

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

               For the transition period from ________ to ________

                         Commission file number 0-22109
                             ----------------------

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

                   Delaware                               86-0766007
        (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)                Identification No.)

     Two North Riverside Plaza, Suite 400
               Chicago, Illinois                             60606
        (Address of Principal Executive                   (Zip Code)
                   Offices)

       Registrant's telephone number, including area code: (312) 474-1300
                            ------------------------

        Securities registered pursuant to Section 12(b) of the Act: None


Securities  registered  pursuant to Section  12(g) of the Act:  Units of limited
partnership interests


Indicate  by check  mark  whether  the  Registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ X ]
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.

                                TABLE OF CONTENTS

Item No.                                                                Page No.

           PART I

1.  Business ..............................................................  1
2.  Properties ............................................................  6
3.  Legal Proceedings .....................................................  8
4.  Submission of Matters to a Vote of Security Holders ...................  8

           PART II

5.  Market for Registrant's Common Equity and Related Shareholder Matters .  9
6.  Selected Financial Data ............................................... 10
7.  Management's Discussion and Analysis of Financial Condition and
      Results of Operations ............................................... 12
8.  Financial Statements and Supplementary Data ........................... 21
9.  Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure ................................................ 21

           PART III

10. Trustees and Executive Officers of the Registrant ..................... 22
11. Executive Compensation ................................................ 25
12. Security Ownership of Certain Beneficial Owners and Management ........ 25
13. Certain Relationships and Related Transactions ........................ 26

           PART IV

14. Exhibits, Financial Statement Schedules and Reports on Form 8-K ....... 26
<PAGE>
ITEM 1.  BUSINESS

Evans  Withycombe  Residential,  L.P.  (the  "Operating  Partnership")  owns and
manages 44 stabilized  multifamily apartment communities located in Arizona, one
stabilized  multifamily apartment community each in Minnesota and Massachusetts,
and seven stabilized multifamily communities in Southern California,  containing
a total of 15,331 apartments,  of which 12,349 are in Arizona, 248 in Minnesota,
336 in  Massachusetts,  and  2,398 in  Southern  California.  The 53  stabilized
communities are referred to herein as the "Stabilized Properties." The Operating
Partnership is also in the process of developing three apartment  communities in
Arizona with a total of 953 apartments (the "Properties Under Construction" and,
together  with the  Stabilized  Properties,  the  "Properties").  The  Operating
Partnership  generally considers a property stabilized when it first reaches 93%
physical occupancy.

Business Combination

The Operating Partnership entered into an Asset Contribution Agreement, dated as
of August 27, 1997 (the  "Agreement"),  with ERP Operating  Limited  Partnership
("ERP") pursuant to which the Operating  Partnership agreed,  subject to certain
conditions,  to  contribute  all of its assets to ERP in  exchange  for units of
limited partnership interest in ERP following the Merger (as defined below). The
Agreement was entered into in connection with the business  combination of Evans
Withycombe  Residential,  Inc.  (the  "Predecessor"),  a  Maryland  real  estate
investment trust ("REIT"),  previously the sole general partner of the Operating
Partnership,  with and into  Equity  Residential  Properties  Trust  ("EQR"),  a
Maryland real estate  investment trust and sole general partner of ERP, pursuant
to an Agreement and Plan of Merger between the  Predecessor and EQR dated August
27,  1997  (the  "Merger").  The  Agreement  provided  for the  exchange  of all
outstanding limited  partnership units in the Operating  Partnership for limited
partnership  units in ERP,  at an  exchange  ratio of 0.50 units of ERP for each
unit of the Operating Partnership.

On December 23, 1997,  the Merger was approved by the  shareholders  of both EQR
and the  Predecessor.  On December 23, 1997, the Predecessor and certain limited
partners who held 24,811,438 units in the Operating  Partnership exchanged their
limited  partnership  units for limited  partnership  units in ERP.  EQR and ERP
replaced the Predecessor as co-general partners of the Operating Partnership and
owned 82.1 percent and 17.1 percent,  respectively, of the Operating Partnership
at December 31, 1997.

Organization Structure

Prior to December  23,  1997,  the  effective  date of the  Merger,  the general
partner of the Operating  Partnership was the  Predecessor,  which operated as a
self-administered and self-managed REIT. All of the Properties and substantially
all other assets of the Predecessor were held by, and  substantially  all of the
Predecessor's  operations  were  conducted  through,  the Operating  Partnership
(either directly or through subsidiaries).  The Predecessor was the sole general
partner and was also a limited partner of the Operating Partnership and owned an
approximate  82.4 percent interest therein at December 23, 1997. To maintain the
Predecessor's  qualification  as a REIT  while  realizing  income  from  its fee
management and related service business, the Predecessor's management operations
were  conducted  through Evans  Withycombe  Management,  Inc.  (the  "Management
Company")  pursuant to the terms of  management  agreements  with the  Operating
Partnership  and Evans  Withycombe  Finance  Partnership,  L.P. (the  "Financing
Partnership").

The structure of EQR, the Predecessor,  the Operating Partnership, the Financing
Partnership  and the Management  Company and the ownership of the equity in such
entities, as of December 22, 1997 and December 31, 1997,  respectively,  were as
set forth below.
                                       1
<PAGE>
<TABLE>
<CAPTION>
                                                      Company
                                              As of December 31, 1997

---------------------------------------------------------------------------------------------------------------------
                                        EQUITY RESIDENTIAL PROPERTIES TRUST
---------------------------------------------------------------------------------------------------------------------
<S>                  <C>                 <C>                <C>                <C>                <C>
                                                                                     Other
                                                                               ------------------

                                         General partner     Limited partner
                                             Interest           Interest
                                                1%                89.1%


                                        --------------------------------------
                                                         ERP
                                                OPERATING PARTNERSHIP
                                        --------------------------------------


  General partner     Limited partner    General partner     Limited partner    Limited partner          100%
     Interest            Interest            Interest           Interest           Interest          common stock
        1%                 81.1%                1%                16.1%               .8%


           -----------------------------------------------------------------------------          -------------------
                                         Evans Withycombe                                               Evans
                                        Residential, L.P.                                             Withycombe
                                     [Operating Partnership]                                         Finance Inc.
           -----------------------------------------------------------------------------          -------------------


     Current members of
    senior management of
            EQR
-----------------------------
                              100% Non-voting common stock                  99%                           1%
                                     1% Voting common stock           Limited partner              General partner
                                   (99% of economic interest)             interest                     interest


       99% Voting common stock
        (1% economic interest)


           ------------------------------------------------          ------------------------------------------------
                          Evans Withycombe                                          Evans Withycombe
                          Management, Inc.                                      Finance Partnership, L.P.
                        [Management Company]                                     [Financing Partnership]
           ------------------------------------------------          ------------------------------------------------
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                                                Predecessor Company
                                              As of December 22, 1997

---------------------------------------------------------------------------------------------------------------------
                                         EVANS WITHYCOMBE RESIDENTIAL, INC.
---------------------------------------------------------------------------------------------------------------------
<S>                  <C>                 <C>                <C>                                   <C>
                                                                  Other
                                                            ------------------

                      General partner    Limited partner     Limited partner                             100%
                         Interest            Interest           Interest                             common stock
                            1%                81.4%               17.6%



           -----------------------------------------------------------------------------          -------------------
                                         Evans Withycombe                                               Evans
                                        Residential, L.P.                                             Withycombe
                                     [Operating Partnership]                                         Finance Inc.
           -----------------------------------------------------------------------------          -------------------


     Current and former
     members of senior
         management
-----------------------------
                              100% Non-voting common stock                  99%                           1%
                                     1% Voting common stock           Limited partner              General partner
                                   (99% of economic interest)             interest                     interest



       99% Voting common stock
        (1% economic interest)


           ------------------------------------------------          ------------------------------------------------
                          Evans Withycombe                                          Evans Withycombe
                          Management, Inc.                                      Finance Partnership, L.P.
                        [Management Company]                                     [Financing Partnership]
           ------------------------------------------------          ------------------------------------------------
</TABLE>
                                       3
<PAGE>
The Operating  Partnership's  principal executive office is located at Two North
Riverside  Plaza,   Chicago,   Illinois  60606,  and  its  telephone  number  is
312-474-1300.  EQR has  approximately  4,200  full-time  employees.  Each of the
Properties  is  directed  by an on-site  manager,  who  supervises  the  on-site
employees and is responsible for the day-to-day operations of the Property.  The
manager  is  generally  assisted  by a  leasing  administrator  and/or  property
administrator. In addition, a maintenance director at each Property supervises a
maintenance staff whose  responsibilities  include a variety of tasks, including
responding  to  service  requests,  preparing  vacant  apartments  for the  next
resident and performing preventive maintenance procedures year-round.

Business Objectives and Operating Strategies

The Operating  Partnership  seeks to maximize both current  income and long-term
growth in income,  thereby  increasing:  (i) the value of the  Properties;  (ii)
distributions  on a per limited  partnership  interest ("OP Units")  basis;  and
(iii) EQR's shareholders' value.

The Operating Partnership's strategies for accomplishing these objectives are:

         o        maintaining and increasing Property occupancy while increasing
                  rental rates and

         o        controlling    expenses,    providing    regular    preventive
                  maintenance,   making   periodic   renovations  and  enhancing
                  amenities.

The Operating  Partnership  is committed to tenant  satisfaction  by striving to
anticipate  industry trends and implementing  strategies and policies consistent
with providing quality tenant services.  In addition,  the Operating Partnership
continuously   surveys  rental  rates  of  competing   properties  and  conducts
satisfaction  surveys of residents to determine  the factors they  consider most
important in choosing a particular apartment unit.

Acquisition Strategies

EQR  intends to pursue  property  acquisitions  through  ERP and not through the
Operating Partnership.

Development Strategies

The Operating  Partnership seeks to make investments  towards the development of
properties  in markets  where it discerns  strong  demand,  which the  Operating
Partnership  believes will enable it to achieve  superior  rates of return.  The
Operating  Partnership's  current  communities  under development are in markets
where  certain  market  demographics  justify the  development  of high  quality
multifamily  communities offering extensive amenities and services to residents.
In  evaluating  whether  to  develop  an  apartment  community  in a  particular
location, the Operating Partnership analyzes relevant demographic,  economic and
financial data. Specifically,  the Operating Partnership considers the following
factors, among others, in determining the viability of a potential new apartment
community;  (i)  income  levels and  employment  growth  trends in the  relevant
market, (ii) uniqueness of location, (iii) household growth and net migration of
the relevant market's population,  (iv) supply/demand ratio, competitive housing
alternatives,  sub-market  occupancy  and rent levels and (v)  barriers to entry
that  would  limit  competition,  and (vi) the  purchase  price  and  yields  of
available existing stabilized communities, if any.

Disposition Strategies

Management  will use market  information to evaluate  dispositions.  Factors the
Operating Partnership considers in deciding whether to dispose of its Properties
include the following:  (i) potential increases in new construction;  (ii) areas
where the economy is expected to decline substantially;  and (iii) markets where
the Operating Partnership does not intend to establish long-term concentrations.
The  Operating  Partnership  will  reinvest the proceeds  received from property
dispositions  to fund  property  acquisitions.  In addition,  when  feasible the
Operating   Partnership  will  structure  these  transactions  as  tax  deferred
exchanges.
                                       4
<PAGE>
Competition

All of the  Properties  are  located  in  developed  areas  that  include  other
multifamily  properties.  The number of competitive  multifamily properties in a
particular  area  could have a material  effect on the  Operating  Partnership's
ability to lease units at the Properties or at any newly acquired properties and
on the rents  charged.  The Operating  Partnership  may be competing  with other
entities that have greater  resources than the Operating  Partnership  and whose
managers  have more  experience  than the Operating  Partnership's  officers and
trustees.  In  addition,  other  forms  of  multifamily  properties,   including
multifamily  properties  and  manufactured  housing  controlled by Mr. Zell, and
single-family  housing,  provide housing  alternatives to potential residents of
multifamily properties.

Potential Environmental Liability Affecting the Operating Partnership

Under  various  federal,  state and local  environmental  laws,  ordinances  and
regulations,  an owner of real  estate may be liable for the costs of removal or
remediation of certain  hazardous or toxic  substances on such  property.  These
laws often impose  environmental  liability  without regard to whether the owner
knew of,  or was  responsible  for,  the  presence  of such  hazardous  or toxic
substances.  The  presence  of  such  substances,  or the  failure  properly  to
remediate such  substances,  may adversely affect the owner's ability to sell or
rent the  property or to borrow using the  property as  collateral.  Persons who
arrange for the disposal or treatment of hazardous or toxic  substances may also
be liable  for the costs of  removal  or  remediation  of such  substances  at a
disposal  or  treatment  facility,  whether  or not  such  facility  is owned or
operated  by  such  person.   Certain  laws  impose  liability  for  release  of
asbestos-containing  materials  ("ACMs") into the air and third parties may seek
recovery  from  owners or  operators  of real  properties  for  personal  injury
associated  with ACMs.  In connection  with the ownership  (direct or indirect),
operation,   management  and  development  of  real  properties,  the  Operating
Partnership or the Subsidiaries,  as the case may be, may be considered an owner
or  operator  of such  properties  or as having  arranged  for the  disposal  or
treatment of hazardous or toxic substances and,  therefore,  potentially  liable
for removal or  remediation  costs,  as well as for certain other related costs,
including governmental fines and injuries to persons and property.

All the  Properties  have been the subject of a Phase I, and in certain  cases a
supplemental,   environmental  assessment  completed  by  qualified  independent
environmental  consultant  companies.  Environmental  assessments  were obtained
prior to the acquisition by the Operating Partnership of each of the Properties.
These  environmental  assessments  have  not  revealed,  nor  is  the  Operating
Partnership   aware  of,  any   environmental   liability   that  the  Operating
Partnership's  management  believes would have a material  adverse effect on the
Operating Partnership's business, results of operations,  financial condition or
liquidity.

No assurance can be given that existing  environmental  assessments with respect
to any of the Properties  reveal all environmental  liabilities,  that any prior
owner of a Property  did not create any  material  environmental  condition  not
known to the Operating Partnership,  or that a material environmental  condition
does not otherwise exist as to any one or more Properties.
                                       5
<PAGE>
ITEM 2.  PROPERTIES

The following sets forth certain information regarding the Stabilized Properties
at December 31, 1997.  The Operating  Partnership  beneficially  owns fee simple
title  to  all 53  properties.  For  description  of  liens  on  certain  of the
Properties  listed  below,  see  Schedule  III -  Real  Estate  Investments  and
Accumulated Depreciation on page S-1.
<TABLE>
<CAPTION>
                                                                                                       Average      Physical
                                                                             Year         Average      Physical     Occupancy
                                                                           Developed       Unit       Occupancy       as of
                                               Number of    Developed/        or           Size         During    December 31,
          Properties               City       Apartments     Acquired      Acquired    (square feet)   1997 (1)     1997 (1)
          ----------               ----       ----------     --------      --------    -------------   --------     --------
<S>                            <C>                 <C>     <C>           <C>                <C>        <C>           <C>

Stabilized Properties

Arizona
-------
    Phoenix:
Acacia Creek                    Scottsdale           508     Acquired        1995              910       96%           98%
Bayside at the Islands            Gilbert            272     Developed       1988              870       96%           98%
Country Brook                    Chandler            396    Acq/Dev/Dev  1991/1993/1996        961       97%           99%
Gateway Villas                    Phoenix            180     Developed       1995              998       94%           97%
Greenwood Village                  Tempe             270     Acquired        1993              884       96%           96%
Hawthorne (3)                     Phoenix            276     Developed     1995/1996           904       96%           91%
Heritage Point (2)                 Mesa              148     Acquired        1994              773       95%           96%
Isle at Arrowhead Ranch (3)      Glendale            256     Developed     1996/1997           940       91%           96%
La Mariposa                        Mesa              222     Acquired        1990              928       95%           98%
La Valencia                        Mesa              361     Acquired        1990              950       92%           97%
Ladera                            Phoenix            248     Developed     1995/1996         1,012       96%           98%
Little Cottonwoods                 Tempe             379    Acq/Acq/Dev   1989/89/90         1,023       94%           97%
Mirador                           Phoenix            316     Developed     1995/1996           987       94%           98%
Miramonte                       Scottsdale           151     Developed       1983              782       98%           98%
Morningside                     Scottsdale           160     Acquired        1992            1,019       96%          100%
Mountain Park Ranch               Phoenix            240     Developed       1995              961       95%           98%
Park Meadow                       Gilbert            224     Acquired        1992              880       96%           99%
Preserve at Squaw Peak            Phoenix            108     Acquired        1991              952       95%           95%
Promontory Pointe (Phase I &
II) (3)                           Phoenix            424    Acq/Dev/Dev  1988/1996/1997        986       93%           97%
Rancho Murietta                    Tempe             292     Acquired        1995              866       92%           98%
Scottsdale Courtyards           Scottsdale           274     Developed       1993            1,044       98%          100%
Scottsdale Meadows              Scottsdale           168     Developed       1984              888       95%           99%
Shadow Brook                      Phoenix            224     Acquired        1993            1,010       96%           99%
Shores at Andersen Springs       Chandler            299     Developed     1989/1993           889       97%           97%
Silver Creek                      Phoenix            174     Acquired        1991              775       95%           97%
Sonoran                           Phoenix            429     Developed       1995              965       95%           95%
Sun Creek                        Glendale            175     Acquired        1993              762       95%           97%
Superstition Vista                 Mesa              316     Acquired        1995              950       95%           96%
The Enclave                        Tempe             204     Developed       1995              952       96%          100%
The Heritage                      Phoenix            204     Developed       1995              973       93%           94%
The Ingleside                     Phoenix            120     Developed     1995/1996           987       97%          100%
The Meadows                        Mesa              306     Acquired        1987              809       95%           97%
The Palms                         Phoenix            132     Developed       1990            1,026       98%          100%
Towne Square                     Chandler            584      Acq/Dev      1992/1995           960       95%           98%
Villa Encanto                     Phoenix            382     Developed       1983              810       95%           97%
Village at Lakewood               Phoenix            240     Developed       1988              857       94%           94%
                                             --------------
                                                   9,662
   Tucson:
Bear Canyon (3)                   Tucson             238     Developed     1995/1996           973       93%           95%
Harrison Park (Phase I & II)
(3)                               Tucson             360      Acq/Dev      1991/1996           809       91%           94%
La Reserve                      Oro Valley           240     Developed       1988              900       90%           98%
Orange Grove Village              Tucson             400      Acq/Dev      1991/1996           714       87%           94%
Suntree Village                 Oro Valley           424     Acquired        1992              831       88%           96%
The Arboretum                     Tucson             496      Acq/Dev      1992/1995           886       94%           98%
The Legends                       Tucson             312     Developed     1995/1996         1,041       92%           96%
Village at Tanque Verde           Tucson             217      Acq/Dev      1990/1994           694       90%           94%
                                             --------------
                                                   2,687
</TABLE>
                                       6
<PAGE>
ITEM 2.  PROPERTIES (continued)
<TABLE>
<CAPTION>
                                                                                                       Average      Physical
                                                                             Year         Average      Physical     Occupancy
                                                                           Developed       Unit       Occupancy       as of
                                               Number of    Developed/        or           Size         During    December 31,
    Stabilized Properties          City       Apartments     Acquired      Acquired    (square feet)   1997 (1)     1997 (1)
    ---------------------          ----       ----------     --------      --------    -------------   --------     --------
<S>                            <C>                 <C>     <C>           <C>                <C>        <C>           <C>

   California:
Canyon Crest Views               Riverside           178     Acquired        1996            1,193       95%          100%
Canyon Ridge (4)                 San Diego           162     Acquired        1997              778       99%          100%
Marquessa (4)                  Corona Hills          336     Acquired        1997              892       97%           96%
Portofino                       Chino Hills          176     Acquired        1996              873       99%          100%
Parkview Terrace Club            Redlands            558     Acquired        1996              801       96%           98%
Redlands Lawn & Tennis Club      Redlands            496     Acquired        1996              795       93%           97%
The Ashton                     Corona Hills          492     Acquired        1995              850       95%           93%
                                             --------------
                                                   2,398

Massachusetts:
Lincoln Heights (5)               Quincey            336     Acquired        1997              793       96%           96%
                                             --------------
                                                     336
Minnesota:
Woodlands at Minnetonka (5)     Minnetonka           248     Acquired        1997            1,083       98%           98%
                                             --------------
                                                     248
                                             --------------

Total                                             15,331
                                             ==============
</TABLE>

(1) Physical  occupancy is defined as apartments  occupied or leased  (including
    models and  employee  apartments)  divided by the total  number of leaseable
    apartments within the Property, expressed as a percentage.
(2) Property was combined with Superstition  Vista and operated as one apartment
    community in 1997.
(3) Property or an expansion phase of this property reached stabilized occupancy
    during 1997.
(4) Property was acquired in the first quarter 1997.
(5) Property was acquired in the fourth quarter 1997.

Of the current  Stabilized  Properties  included in the table, 36 are located in
the  greater  Phoenix  areas,  eight are located in the Tucson  area,  seven are
located in  California,  one in Minnesota and one in  Massachusetts.  All of the
Stabilized  Properties are managed and operated by the Operating Partnership and
have an average  size of 289 units.  The  Stabilized  Properties  are  primarily
oriented  to  upscale  residents  seeking  high  levels  of  amenities,  such as
clubhouses,  exercise rooms,  tennis courts,  swimming pools,  therapy pools and
covered  parking.  The  average  unit  size  of the  Stabilized  Properties  and
Properties  under  Construction  combined is 903 square feet per unit. All units
have  fully-equipped   kitchens  with  upgraded  cabinets,   individual  utility
metering,  dishwashers,  microwave  ovens,  separate  dining  areas,  individual
storage,  spacious  patios and  balconies,  and ceramic tile entries.  Most have
washers/dryers;  and many  offer  high  ceilings,  fireplaces  and alarm  system
prewiring.
                                       7
<PAGE>
Development and Construction Activity

The apartment communities under construction and in lease-up are listed below:
<TABLE>
<CAPTION>
                                                                             Actual         Actual or
                                                   Average   Estimated       Date of      Estimated     Estimated
                                                    Unit    Construction  Construction     Commence-      Date of
                                           Total    Size       Cost       Commence-        ment of      Stabilized
             Name                  City    Units  (Sq. Ft.) (Millions)         Ment        Lease-Up    Occupancy
--------------------------------------------------------------------------------------------------------------------
                                                                                            Quarter
                                                                          ------------------------------------------
<S>                             <C>          <C>      <C>      <C>            <C>            <C>           <C>
Phoenix
-------
Montierra                       Scottsdale    249     1,052    $   21         3:97           2:98           1:99
The Retreat Phase I             Phoenix       240       973        14         1:97           3:97           2:98
The Retreat Phase II            Phoenix       240       973        17         3:97           2:98           1:99
Vista Grove                     Mesa          224       911        14         1:97           3:97           2:98
                                          -------              -------
     Total                                    953              $   66
                                          =======              =======
</TABLE>

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

ITEM 3.  LEGAL PROCEEDINGS

Neither the Operating Partnership,  nor the Management Company and the Financing
Partnership,  or  any  of  the  Properties  is  presently  subject  to  material
litigation  nor, to the Operating  Partnership's  knowledge,  is any  litigation
threatened  against the Operating  Partnership or any of the  Properties,  other
than  routine  litigation  arising in the ordinary  course of business,  some of
which  are  expected  to be  covered  by  liability  insurance  and all of which
collectively  are not expected to have a material adverse effect on the business
or financial condition of the Operating Partnership.

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

On  December  23,  1997,  at a  Special  Meeting  of  the  Stockholders  of  the
Predecessor, the sole general partner of the Operating Partnership, approved the
Merger of the Predecessor with EQR and the Agreement.  The stockholders voted to
approve the merger as follows:


              Total Votes for          Total Votes Against
                 The Merger                The Merger                 Abstained
                 ----------                ----------                 ---------
                 13,928,169                  63,424                     47,194
                                       8
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

There is no established  public trading market for the Units.  As of January 30,
1998,  there  were  24,947,481  outstanding  Units of  record  in the  Operating
Partnership.

The Operating Partnership has made consecutive quarterly distributions since its
formation  in the third  quarter of 1994.  In  connection  with the Merger,  the
annual  distribution  was reduced to $1.335 per unit which is  equivalent to the
distribution paid to unit holders of ERP.


                                                    Distributions Declared
                                Period                     and Paid
                                ------              ----------------------
1997:
Fourth Quarter..................................              $0.335
Third Quarter...................................              $0.38
Second Quarter..................................              $0.405
First Quarter...................................              $0.405
1996:
Fourth Quarter..................................              $0.40
Third Quarter...................................              $0.40
Second Quarter..................................              $0.39
First Quarter...................................              $0.39
                                       9
<PAGE>
ITEM 6.   SELECTED FINANCIAL DATA

The  following  table sets  forth  certain  financial  and  operating  data on a
consolidated  basis for the Operating  Partnership and on a combined  historical
basis  for  the  Predecessor.  The  following  information  should  be  read  in
conjunction with all of the consolidated  financial statements and notes thereto
included elsewhere in this Annual Report on Form 10-K.
<TABLE>
<CAPTION>
                                                Period from
                                      --------------------------------
                                       December 23,    January 1,
                                           1997           1997                    Year Ended December 31,
                                         through         through      -------------------------------------------------
                                       December 31,    December 22,
                                            1997           1997        1996         1995         1994        1993
                                      ---------------------------------------------------------------------------------
                                              (Amounts in thousands, except per unit and property information)
<S>                                         <C>          <C>          <C>           <C>          <C>         <C>
Operating Information:
   Revenues:
   Total revenues                           $2,779       $117,394     $101,626      $74,531      $56,959     $43,938
   Expenses:
   Total expenses                            2,305        109,079       82,821       53,517       45,374      37,326
                                      ---------------------------------------------------------------------------------
   Income before gain on disposition
     of properties, extraordinary
     items and allocation to
     minority interest                        $474         $8,315      $18,805      $21,014      $11,585      $6,612
                                      =================================================================================
   Net income                                 $473        $14,269      $18,730      $20,925      $11,543     $12,673
                                      =================================================================================
   Net income per weighted average
     unit (1)                                                            $0.84       $ 1.02
                                                                      ========================
   Net income per weighted average
     unit for the period (1)                $0.02           $0.58
                                      ================================

   Net income per weighted average
     unit for the period August 17
     to December 31, 1994 (1)                                                                     $ 0.38
                                                                                                ===========
</TABLE>
<TABLE>
<CAPTION>
                                                Period from
                                      --------------------------------
                                       December 23,    January 1,
                                           1997           1997                    Year Ended December 31,
                                         through         through      -------------------------------------------------
                                       December 31,    December 22,
                                            1997           1997        1996         1995         1994        1993
                                      ---------------------------------------------------------------------------------
                                            (Amounts in thousands, except per unit and property information)
<S>                                       <C>          <C>          <C>           <C>          <C>         <C>
Other Information:
   Cash flows from:
     Operating activities                 $(2,362)       $46,504      $38,721      $36,983     $21,998     $20,897
     Investing activities                       -        (89,313)    (127,811)    (116,716)   (211,651)    (79,511)
     Financing activities                   1,170         47,175       88,024       80,928     189,614      57,417
   Total Stabilized Properties
     (end of period)                           53             53           49           41          32          31
   Total number of units
     Stabilized Properties
     (end of period)                       15,331         15,331       13,905       11,053       7,924       7,695
   Physical occupancy
     Stabilized Properties
     (end of period) (2)                       97%            97%          93%          96%         97%         97%
</TABLE>
                                       10
<PAGE>
<TABLE>
<CAPTION>
                                                                       December 31,
                                                  1997        1996        1995         1994         1993
                                              ---------------------------------------------------------------
                                                                  (Amounts in thousands)
<S>                                             <C>          <C>          <C>          <C>          <C>
Balance Sheet Information:
Real estate, before accumulated depreciation    $1,142,177   $761,550     $587,183     $399,987     $292,513
Total assets                                    $1,152,063   $735,467     $579,564     $402,486     $271,055
Total debt                                        $499,000   $436,172     $297,456     $127,787     $106,545
Partners' Capital                                 $630,815   $283,954     $259,055     $253,867     $142,886
</TABLE>


--------------------------------------------------------------------------------
(1)      Net income per Unit is based on  22,184,395,  20,590,873 and 20,086,884
         weighted  average  number  of Units  outstanding  for the  years  ended
         December  31,  1996 and 1995 and the period  from August 17 to December
         31, 1994,  respectively,  and 24,669,769 and 24,978,056 for the periods
         from  January 1, 1997  through  December 22, 1997 and December 23, 1997
         through December 31, 1997, respectively.

 (2)     Physical  Occupancy is defined as the number of apartments  occupied or
         leased (including models and employee  apartments) divided by the total
         number of leaseable  apartments  within the  community,  expressed as a
         percentage. Physical occupancy has been calculated using the average of
         the  occupancy  that  existed  on the last day of each  month over each
         period.
                                       11
<PAGE>
ITEM 7.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS (Dollars in thousands, except apartment data)

Overview

The following discussion, which is based primarily on the consolidated financial
statements of the Operating Partnership,  should be read in conjunction with the
"Selected  Financial Data" and all financial  statements  appearing elsewhere in
this Annual Report on Form 10-K. The  consolidated  financial  statements of the
Operating  Partnership  consist of the Stabilized  Properties,  Properties Under
Construction and the Management Company.

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

Results of Operations - Consolidated Financial Statements

The  results of  operations  for the years  ended  December  31,  1997 and 1996,
respectively,   were  significantly  affected  by  acquisitions,   dispositions,
developments and expansions and the Merger of the Predecessor with EQR.

Comparison of Results of Operations  for the Year Ended December 31, 1997 to the
Year Ended December 31, 1996

                                         Years Ended
                                         December 31,
                                  ---------------------------   Percentage
                                      1997          1996          Change
                                  ----------    ----------      ----------
    Rental income                 $  112,375    $   94,350          19.1%
    Third party management fees          711         1,157         (38.5)
    Interest income -
        investment in mortgage
        notes                            273             -          N/A
    Interest and other                 6,814         6,119          11.4
                                  ----------    ----------      ----------
         Total revenues              120,173       101,626          18.3


    Property operating and
      maintenance (1)                 40,413        33,099          22.1
    Property management                3,634         3,225          12.7
    Depreciation and
        amortization                  26,386        20,885          26.3
    Interest:
        Expensed                      30,476        23,446          30.0
        Amortized                      1,097           779          40.8
    Other                              7,493             -          N/A
    General and administrative         1,885         1,387          35.9
                                  ----------    ----------      ----------
    Total expenses                   111,384        82,821          34.5
                                  ----------    ----------      ----------
    Income before minority
        interest, gain on sale
        of real estate assets
        and extraordinary item    $    8,789    $   18,805         (53.3)%
                                  ==========    ==========      ==========
    Weighted average monthly
        rental revenue per
        unit, net of concessions  $      692    $      678
                                  ==========    ==========
    Weighted average number of
        apartments                    14,998        12,887
                                  ==========    ==========
    Economic occupancy (2)             90.0%         90.0%
                                  ==========    ==========
                                       12
<PAGE>
         (1) The   Operating   Partnership   defines   property   operating  and
             maintenance expense as property and maintenance,  real estate taxes
             and insurance.
         (2) Stabilized Properties only.

Rental income  increased by $18,025 or 19.1 percent for the year ended  December
31, 1997 as compared to the similar  period in 1996 as a result of  increases in
the weighted  average  number of  apartments  and the weighted  average  monthly
revenue  per  occupied  apartment,  and a  change  in  economic  occupancy.  The
Operating  Partnership  believes  that the increase in rental income was largely
attributable to the  acquisitions and  stabilization of properties  developed by
the Operating Partnership in its rental markets.

Third party  management  fees  decreased $446 or 38.5 percent for the year ended
December  31,  1997  due to the sale of  several  properties  in the  management
portfolio  in 1996  including  a $500 one time  termination  fee for the sale of
management contracts received in the second quarter of 1996, as compared to $250
gain on the sale of a management contract received in the third quarter of 1997.

Interest  income - investment in mortgage  notes of $273 relates to the mortgage
notes  receivable  arising from the sale of Deer Creek  Village and The Pines in
June 1997.  Both mortgage notes were repaid during the third and fourth quarters
of 1997.

Interest and other income for the year ended December 31, 1997 increased $695 or
11.4  percent  as  compared  to the  similar  period  in 1996 as a result  of an
increase in ancillary  income  related to the weighted  average number of units,
additional  interest income from funds held by third party  intermediaries,  and
cable revenue sharing.

Property operating and maintenance  expense increased due to the increase in the
weighted  average  number of apartments  for the year ended December 31, 1997 as
compared to the same period in 1996, respectively.

Other expenses of $7,493  represent the  amortization of the remaining  deferred
compensation,  cash out of employee  stock  options,  payments  under  change in
control agreements and other merger related costs.

Interest   expense   increased  due  to  an  increase  in  debt  resulting  from
acquisitions  and the  increase  in  weighted  average  number  of  units in the
portfolio. The Operating Partnership capitalized $1,919 of interest for the year
ended December 31, 1997 compared to $2,714 for the same periods in 1996 due to a
decrease in construction  activity.  Interest costs incurred during construction
of a  new  property  are  capitalized  until  completion  of  construction  on a
building-by-building basis.

"Same Store" Portfolio

The Operating  Partnership  defines its same store portfolio as those Properties
that  reached  stabilized  occupancy  prior to January  1, 1996.  The same store
portfolio consists of 38 Stabilized Properties containing 10,319 apartment units
that were owned by the  Operating  Partnership  for the year ended  December 31,
1997 and 1996. The same store portfolio was adjusted to reflect the sale of Deer
Creek Village,  The Pines and Los Arboles during the second and third quarter of
1997.
                                       13
<PAGE>
"Same Store" Portfolio (continued)
                                            Years Ended
                                           December 31,
                                    ----------------------------   Percentage
                                        1997          1996           Change
                                    ------------  -------------  ---------------
 Rental income                      $    74,957   $   74,698            0.3%
 Other income                             3,874        4,308          (10.1)
                                    ------------  -------------  ---------------
                                         78,831       79,006           (0.2)
 Property operating and
     maintenance                         27,318       25,968            5.2
                                    ------------  -------------  ---------------
 Property net operating income      $    51,513   $   53,038           (2.9)%
                                    ============  =============  ===============
 Weighted average monthly rental
     revenue per unit, net of
     concessions                    $       673   $      671
                                    ============  =============
 Economic occupancy                        90.0%        89.9%
                                    ============  =============


Rental  income for the year ended  December 31, 1997 was  comparable to the same
period in 1996. Other income for the year ended December 31, 1997 decreased as a
result of the 1996  balance  including a one-time  gain on the sale of telephone
servicing  rights.  Property  operating and  maintenance  expense  increased 5.3
percent due to higher labor costs and real estate tax expense.

Properties Stabilized Less Than Two Years

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

                                                     Years Ended
                                                    December 31,
                                             -------------------------
                                                 1997          1996
                                             -----------   ----------
          Rental income                      $    12,085   $    9,922
          Other income                               603          573
                                             -----------   ----------
                                                  12,688       10,495

          Property operating and
              maintenance                          4,042        3,187
                                             -----------   ----------
          Property net operating income      $     8,646   $    7,308
                                             ===========   ==========
          Weighted average number of
              apartments                           1,444        1,208
                                             ===========   ==========
                                       14
<PAGE>
Properties Under Construction and in Lease Up

Properties under  construction and in lease up consist of the development of six
new  properties  and the  expansion of two  existing  properties  containing  an
aggregate   of  2,031   apartment   units  that  were  in  the   "construction,"
"development," or "lease up" stage during 1997 and therefore,  not considered to
have achieved stabilized  occupancy for all of the periods presented.  Increases
in the year ended  December 31, 1997 as compared to the year ended  December 31,
1996 are the result of an increase in the weighted average number of apartments.

                                                     Years Ended
                                                    December 31,
                                             ------------------------
                                                 1997          1996
                                             -----------   ----------
          Rental income                      $     7,520   $    1,354
          Other income                               560          147
                                             -----------   ----------
                                                   8,080        1,501

          Property operating and
              maintenance                          2,589          806
                                             -----------   ----------
          Property net operating income      $     5,491   $      695
                                             ===========   ==========

          Weighted average number of
              apartments in lease up                 952          190
                                             ===========   ==========

Acquisitions

Acquisitions consist of eight properties containing 2,490 apartment units, which
have been  acquired by the  Operating  Partnership  since  January 1, 1996.  The
Operating Partnership acquired 1,408 apartment units in 1996 and 1,082 apartment
units in 1997.

                                                     Years Ended
                                                    December 31,
                                             ----------------------------
                                                 1997          1996
                                             -----------   ----------
          Rental income                      $    15,050   $    3,593
          Other income                               525          200
                                             -----------   ----------
                                                  15,575        3,793
          Property operating and
              maintenance                          5,255        1,352
                                             -----------   ----------
          Property net operating income      $    10,320   $    2,441
                                             ===========   ==========
          Weighted average number of
              apartments                           1,858          436
                                             ===========   ==========
                                       15
<PAGE>
Dispositions

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

                                                     Years Ended
                                                    December 31,
                                             ------------------------
                                                 1997          1996
                                             -----------   ----------
          Rental income                      $     2,763   $    4,783
          Other income                               126          195
                                             -----------   ----------
                                                   2,889        4,978
          Property operating and
              maintenance                          1,209        1,786
                                             -----------   ----------
          Property net operating income      $     1,680   $    3,192
                                             ===========   ==========
          Weighted average number of
              apartments                             425          734
                                             ===========   ==========

Comparison of Results of Operations  for the Year Ended December 31, 1996 to the
Year Ended December 31, 1995

The  results of  operations  for the years  ended  December  31,  1996 and 1995,
respectively,  were  significantly  affected by  acquisitions,  developments and
expansions.

                                                Years Ended
                                                December 31,
                                         ------------------------    Percentage
                                             1996          1995        Change
                                         ----------    ----------     ----------
   Rental income                         $   94,350    $   68,864        37.0%
   Third party management fees                1,157         1,268        (8.8)
   Interest and other                         6,119         4,399        39.1
                                         ----------    ----------     ----------
      Total revenues                        101,626        74,531        36.4

   Property operating and maintenance
      (1)                                    33,099        22,959        44.2
   Property management                        3,225         2,825        14.2
   Depreciation and amortization             20,885        13,762        51.8
   Interest:
      Expensed                               23,446        11,957        96.1
      Amortized                                 779           693        12.4
   General and administrative                 1,387         1,321         5.0
                                         ----------    ----------     ----------
   Total expenses                            82,821        53,517        54.8
                                         ----------    ----------     ----------
   Income before minority interest       $   18,805    $   21,014       (10.5)%
                                         ==========    ==========     ==========

   Weighted average monthly rental
      revenue per unit, net of
      concessions                        $      678    $      640
                                         ==========    ==========
   Weighted average number of
      apartments                             12,887         9,798
                                         ==========    ==========
   Economic occupancy (2)                      90.0%         91.6%
                                         ==========    ==========

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

Rental revenues increased by $25,486 or 37.0 percent for the year ended December
31, 1996 as compared to the similar period in 1995,  respectively as a result of
increases in the weighted average number of apartments and
                                       16
<PAGE>
weighted  average  monthly  revenue  per  occupied   apartment.   The  Operating
Partnership believes that the increase in rental income was largely attributable
to the acquisitions and  stabilization of properties  developed by the Operating
Partnership in its rental markets.

Third party  management  fees  decreased  $111 or 8.8 percent due to the sale of
several  properties  from the  management  portfolio.  Included  in third  party
management fees is a non recurring $500 fee received in exchange for terminating
the management contract on nine apartment communities containing 1,298 apartment
units in the second quarter 1996.

Interest  and other income  increased  $1,720 or 39.1 percent for the year ended
December  31, 1996  compared to the year ended  December 31, 1995 as a result of
the sale of telephone  servicing rights on certain properties and an increase in
ancillary  income such as redecoration  and application  fees as a result of the
increase in the weighted average number of apartments.

Property operating and maintenance  expense increased due to the increase in the
weighted  average  number of apartments  for the year ended December 31, 1996 as
compared to the same period in 1995, respectively.

Interest   expense   increased  due  to  an  increase  in  debt  resulting  from
acquisitions  and the  increase  in  weighted  average  number  of  units in the
portfolio. The Operating Partnership capitalized $2,714 of interest for the year
ended  December 31, 1996 compared to $5,048 for the year ended December 31, 1995
due to a decrease in  construction  activity.  Interest  costs  incurred  during
construction of a new property are capitalized  until completion of construction
on a building-by-building basis.

"Same Store" Portfolio

The Operating  Partnership defines same store portfolio as those properties that
reached  stabilized  occupancy  prior to January 1, 1995.  Same store  portfolio
consists of 32 stabilized  properties containing 7,924 apartment units that were
owned by the  Operating  Partnership  for the years ended  December 31, 1996 and
1995.

                                               Years Ended
                                                December 31,
                                       -------------------------     Percentage
                                           1996          1995          Change
                                       -----------   -----------     ----------
  Rental income                        $    55,074   $    55,202        (.2)%
  Other income                               3,296         2,581       27.7
                                       -----------   -----------     ----------
                                            58,370        57,783        1.0
  Property operating and maintenance        20,129        18,525        8.7
                                       -----------   -----------     ----------
  Property net operating income        $    38,241   $    39,258       (2.6)%
                                       ===========   ===========     ==========
  Weighted average monthly rental
     revenue per unit, net of
     concessions                       $       646   $       637
                                       ===========   ===========
  Economic occupancy                          89.7%         91.1%
                                       ===========   ===========

Rental income for the year ended December 31, 1996 was comparable  with the same
period in 1995 as a result  of the  increase  in the  weighted  average  monthly
rental  revenue  per unit  being  offset by a decline  in the  average  economic
occupancy  during the year ended December 31, 1996 as compared to the year ended
December 31, 1995.  Other income for the year ended  December 31, 1996 increased
as a result of gains  from the sale of  telephone  servicing  rights at  various
properties.

Property operating and maintenance  expense increased $1,604 or 8.7 percent over
1995 due to higher  apartment  turnover  and utility  costs  associated  with an
increased number of vacant  apartments and higher  advertising costs incurred by
the Operating Partnership in its "same store" portfolio.
                                       17
<PAGE>
Properties Stabilized Less Than Two Years

Properties stabilized less than two years consist of the development of five new
properties  and  the  expansion  of two  existing  properties  by the  Operating
Partnership,  containing 1,521 apartment units that reached stabilized occupancy
during the year ended  December 31, 1995.  Increases in the year ended  December
31, 1996 as compared to the year ended  December  31, 1995 are the result of the
increase in the weighted average number of apartments.


                                                           Years Ended
                                                           December 31,
                                                     ------------------------
                                                         1996          1995
                                                     ----------    ----------
                Rental income                        $   12,606    $    7,113
                Other income                                680           541
                                                     ----------    ----------
                                                         13,286         7,654
                Property operating and maintenance        3,543         2,141
                                                     ----------    ----------
                Property net operating income        $    9,743    $    5,513
                                                     ==========    ==========
                Weighted average number of
                   apartments                             1,521           888
                                                     ==========    ==========

Properties Under Construction and in Lease Up

Properties  under  construction and in lease up consist of the development of 13
new  properties  or  the  expansion  of  existing  properties  containing  2,522
apartment  units that were in the  "construction,"  "development"  or "lease up"
stage during 1996 and  therefore,  not  considered to have  achieved  stabilized
occupancy for all of the periods presented. Increases in the year ended December
31, 1996 as compared  to the year ended  December  31, 1995 are the result of an
increase in the weighted average number of apartments.


                                                             Years Ended
                                                            December 31,
                                                      -----------------------
                                                         1996           1995
                                                      ---------     ---------
                Rental income                         $  11,276     $   1,281
                Other income                                720           128
                                                      ---------     ---------
                                                         11,996         1,409
                Property operating and maintenance        3,993           730
                                                      ---------     ---------
                Property net operating income         $   8,003     $     679
                                                      =========     =========
                Weighted average number of
                   apartments in lease-up                 1,398           174
                                                      =========     =========

Acquisitions

Acquisitions consist of eight properties containing 3,016 apartment units, which
had been acquired by the Operating  Partnership since January 1, 1995. Increases
in the year ended  December 31, 1996, as compared to the year ended December 31,
1995,  are  the  result  of the  increase  in the  weighted  average  number  of
apartments.


                                                           Years Ended
                                                           December 31,
                                                     ------------------------
                                                         1996          1995
                                                     ----------    ----------
                Rental income                        $   15,394    $    5,268
                Other income                                727           193
                                                     ----------    ----------
                                                         16,121         5,461
                Property operating and maintenance        5,434         1,563
                                                     ----------    ----------
                Property net operating income        $   10,687    $    3,898
                                                     ==========    ==========
                Weighted average number of
                   apartments                             2,044           769
                                                     ==========    ==========
                                       18
<PAGE>
Liquidity and Capital Resources

Liquidity

The Operating  Partnership's net cash provided by operating activities increased
$5.4  million from $38.7  million for the year ended  December 31, 1996 to $44.1
million for the year ended December 31, 1997 principally due to increased rental
operations  from  additional  Properties  acquired and  developed  subsequent to
December 31, 1996. Net cash used in investing  activities  decreased from $127.8
million for the year ended December 31, 1996 to $89.3 million for the year ended
December 31, 1997.  Net cash  provided by financing  activities  decreased  from
$88.0 million for the year ended December 31, 1996 to $48.3 million for the year
ended December 31, 1997. The decrease in both cash used in investing  activities
and cash  provided  by  financing  activities  is the  result  of the  Operating
Partnership  slowing down its activity in the  development  and  acquisition  of
properties.

The Operating Partnership expects to meet its short-term liquidity  requirements
relating to maintaining its existing  properties,  generally through its working
capital and net cash provided by operating activities. The Operating Partnership
considers  its cash  provided  by  operating  activities  to be adequate to meet
operating requirements and payments of distributions.  The Operating Partnership
also expects to meet its  long-term  liquidity  requirements,  such as scheduled
mortgage debt maturities,  financing of construction and development  activities
and capital  improvements from  undistributed  funds from operations ("FFO") and
proceeds received from the disposition of certain properties.

Capital Resources

As of December 31, 1997,  the Operating  Partnership's  total  indebtedness  was
approximately $499 million.

Accounting for the Merger

The  Merger is  accounted  for  under  the  purchase  method  of  accounting  in
accordance with Accounting  Principles Board Opinion No. 16. Purchase accounting
for a merger is the same as the accounting treatment used for the acquisition of
any group of assets.  The fair market value of the  combination  given by EQR in
the Merger was used as the valuation basis of the combination.  Accordingly, the
assets  acquired  and  liabilities  assumed of the  Operating  Partnership  were
recorded at the relative  fair market  value as of December  23, 1997.  The debt
discussed below include $7.2 million premium arising from the allocation of fair
market value.

Conventional Mortgage Loans

Conventional mortgage loans are comprised of one fixed rate loan at December 31,
1997 which is  collateralized by a first mortgage lien on a property included in
real estate assets. The mortgage is payable in monthly installments of principal
and interest  and matures on August 17, 2004.  The  conventional  mortgage  loan
aggregated  $18.2  million at December  31,  1997 with an  interest  rate of 6.5
percent.  In January 1997, the Operating  Partnership  extinguished  the debt on
four mortgages with unpaid principal balances of approximately $25.0 million. As
a  result,   the   Operating   Partnership   incurred  a  loss  from  the  early
extinguishment  of debt of  approximately  $1.5 million.  On July 15, 1997,  the
Operating  Partnership  repaid two  additional  mortgage  loans  with  principal
balances of  approximately  $15.2  million.  There were no prepayment  penalties
associated with the repayment of these two mortgages.

In December 1995, the Operating  Partnership entered into a ten year $50 million
fixed rate loan from an insurance  company that bears a stated  interest rate at
7.17  percent,  with  principal  and  interest  due  monthly  based on a 25-year
amortization schedule beginning January 1, 1996 through January 1, 2006, and the
remaining unpaid principal balance due January 1, 2006. The loan is secured by a
first deed of trust on five  properties.  The outstanding debt was $50.2 million
at December 31, 1997 inclusive of a $1.2 million premium. The effective interest
rate  inclusive of the premium at December 31, 1997 is 6.5 percent.  The loan is
convertible  to an unsecured  borrowing  status upon the  Operating  Partnership
achieving an investment grade rating of BBB or better.
                                       19
<PAGE>
Mortgage Loan Certificates

The Operating Partnership,  through the Financing  Partnership,  borrowed $102.0
million  under a  securitized  loan in August 1994.  During  January  1995,  the
Operating  Partnership  borrowed the balance of $29.0  million  (increasing  the
total to $131.0 million).  The loan is secured by the first mortgage liens on 21
Properties.  The $102.0  million was issued at 99.97  percent of its face amount
and the $29.0 million was issued at 97.9375  percent of its face amount and will
mature on August 1, 2001.  The balance  inclusive of a $2.7 million  premium was
$133.7  million at December 31, 1997.  The effective  interest rate inclusive of
the premium at December 31, 1997 is 6.84 percent.

Senior Unsecured Notes

On April 2, 1997,  the Operating  Partnership  completed the sale of $75 million
senior unsecured notes priced at 99.44 percent of par with a coupon rate of 7.50
percent due April 15,  2004 and $50 million  senior  unsecured  notes  priced at
99.21  percent of par with a coupon rate of 7.625  percent  due April 15,  2007.
Proceeds  to the  Operating  Partnership  from  the  sale of the  notes,  net of
underwriter's  discount  and  out-of-pocket  costs,  were  approximately  $122.8
million.  In anticipation of this Offering,  the Operating  Partnership  entered
into two forward  treasury lock  agreements  on February 25, 1997.  The treasury
lock agreements were settled concurrently with the completion of the sale of the
senior  unsecured  notes in April 1997, and the Operating  Partnership  received
proceeds from the settlement of the treasury lock agreements of approximately $3
million which were deferred and amortized as a reduction in interest  expense by
the Operating  Partnership under the effective  interest rate method through the
date of the Merger.

At the Merger  date,  the basis in the bonds was adjusted to $76,726 and $51,618
at  December  31,  1997,  inclusive  of the  premiums  of $1.7  million and $1.6
million, respectively. The effective interest rates inclusive of the premium are
6.73 percent and 6.86 percent, respectively, at December 31, 1997.

Tax Exempt Bonds

Tax exempt  bonds are  comprised of three  floating  rate bonds based on the tax
exempt note rate set by the respective  remarketing agents (or, at the option of
the Operating Partnership at a fixed rate determined by the remarketing agents).
The bonds are secured by letters of credit  which are secured by first  mortgage
liens on four properties.

Revolving Credit Facility

On June 13, 1997,  the Operating  Partnership  amended its existing $225 million
unsecured Revolving Credit Facility with a bank group to decrease the commitment
amount from $225 million to $150  million and decrease the interest  rate from a
floating  rate of London  Inter Bank  Offered Rate (LIBOR ) plus 1.50 percent to
LIBOR plus 1.15 percent (or, at the option of the Operating Partnership,  at the
prime  rate  announced  by the  banks).  The  Operating  Partnership  repaid the
outstanding  balance on the Revolving  Credit Facility with proceeds from a note
payable  from ERP on  November  4,  1997 and  terminated  the  Revolving  Credit
Facility agreement on January 1, 1998.

Intercompany Note Payable

On November 4, 1997, the Operating  Partnership entered a note payable agreement
with ERP to  provide  funds  to pay off the  Operating  Partnership's  Revolving
Credit  Facility,  provide  proceeds  to  fund  the  completion  of the  current
construction  and  development  activity and acquire  properties to complete the
Section 1031 tax free exchanges that were already in progress.  The note payable
bears  interest at LIBOR plus 1.15  percent.  At December  31,  1997,  there was
$104,596  outstanding  on the note payable,  with an effective  interest rate of
7.14 percent.
                                       20
<PAGE>
Indebtedness of the Operating Partnership as of December 31, 1997
                                                Outstanding     Weighted Average
                                                  Balance         Interest Rate
                                            ----------------    ----------------
Fixed Rate Debt:
   Mortgage Debt:
     Conventional........................   $         68,372           6.50%
     Mortgage Loan Certificates..........            133,688           6.84
   Unsecured:
     $75 million senior notes ...........             76,726           6.73
     $50 million senior notes ...........             51,618           6.86
                                            ----------------    ----------------
         Total Fixed Rate Debt...........            330,404           6.74

Variable Rate Debt:
   Intercompany note payable ............            104,596           7.14
   Tax Exempt Bonds......................             64,000           5.75
                                            ----------------    ----------------
         Total Variable Rate Debt........            168,596           6.61
                                            ----------------    ----------------
         Total Debt......................   $        499,000           6.70%
                                            ================    ================


The Operating Partnership had 6,754 unencumbered  apartment units related to the
Stabilized  Properties  and 953  unencumbered  apartment  units  related  to the
Properties Under Construction and in Lease-Up at December 31, 1997.

Inflation

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

Year 2000

The  Operating  Partnership  has  conducted a review of its  computer  operating
systems and has identified those areas that could be affected by the "Year 2000"
issue and has developed a plan to resolve this issue. The Operating  Partnership
believes that by modifying certain existing hardware and software and , in other
cases,  converting  to new  application  systems,  the Year 2000  problem can be
resolved without significant operational difficulties. The Operating Partnership
has also  identified  the cost of the Year 2000  issue and does not  expect  the
financial  impact to be  material  to the  Operating  Partnership's  results  of
operations or financial position.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  Report of  Independent  Auditors,  Consolidated  Financial  Statements  and
selected Quarterly Financial  Information are set forth on Pages F-1 to F-18 and
S-1 to S-6 of this Annual Report.

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

There  were no  changes  in  accountants  or  disagreements  with the  Operating
Partnership's accountants on accounting and financial disclosures in 1997.
                                       21
<PAGE>
                                    PART III

ITEM 10.  TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT
     (a,b,c,d,e & f) TRUSTEES AND EXECUTIVE OFFICERS
                     -------------------------------

The Operating Partnership does not have any trustees or executive officers.  The
trustees and executive officers,  as of March 1, 1998, of EQR (which is also the
general  partner  of ERP  Operating  Partnership,  a  co-general  partner of the
Operating Partnership), their ages and their positions and offices are set forth
in the following table:
<TABLE>
<CAPTION>
              Name                Age                         Positions and Offices Held
--------------------------        ---     ---------------------------------------------------------------
<S>                                <C>   <C>
Samuel Zell                        56     Chairman of the Board of Trustees (term expires in 1999)
Douglas Crocker II                 57     President, Chief Executive Officer and Trustee (term expires in
                                          1998)
John W. Alexander                  51     Trustee (term expires in 1999)
Stephen O. Evans                   52     Executive Vice President - Strategic Investments and Trustee (term
                                          expires in 2000)
Henry H. Goldberg                  59     Trustee (term expires in 1999)
Errol R. Halperin                  57     Trustee (term expires in 1999)
James D. Harper, Jr.               64     Trustee (term expires in 1998)
Edward Lowenthal                   53     Trustee (term expires in 2000)
Jeffrey H. Lynford                 50     Trustee (term expires in 2000)
Sheli Z. Rosenberg                 56     Trustee (term expires in 1998)
Gerald A. Spector                  51     Executive Vice President, Chief Operating Officer and Trustee
                                          (term expires in 1998)
Barry S. Sternlicht                37     Trustee (term expires in 2000)
B. Joseph White                    50     Trustee (term expires in 2000)
Richard G. Berry                   53     Executive Vice President - Development
Alan W. George                     40     Executive Vice President-Acquisitions
Edward J. Geraghty                 48     Executive Vice President - Development and Asset Management
Michael J. McHugh                  42     Executive Vice President, Chief Accounting Officer and Treasurer
David J. Neithercut                42     Executive Vice President and Chief Financial Officer
Gregory H. Smith                   46     Executive Vice President-Asset Management
Bruce C. Strohm                    43     Executive Vice President, General Counsel and Secretary
Frederick C. Tuomi                 43     Executive Vice President-Property Management
</TABLE>

The following is a  biographical  summary of the  experience of the trustees and
executive  officers  of EQR.  Officers  serve at the  pleasure  of the  Board of
Trustees.

Samuel  Zell.  Mr. Zell has been  Chairman of the Board of EQR since March 1993.
Mr. Zell is  chairman of the board of  directors  of Equity  Group  Investments,
Inc., an owner,  manager and financier of real estate and corporations  ("EGI"),
Jacor  Communications,  Inc., an owner and operator of radio stations ("Jacor"),
American  Classic Voyages Co., an owner and operator of cruise lines  ("American
Classic") and Anixter  International  Inc., a provider of integrated network and
cabling systems  ("Anixter"),  and Manufactured Home  Communities,  Inc., a REIT
specializing  in the ownership and management of manufactured  home  communities
("MHC").  Mr.  Zell is  chairman  of the  board of  trustees  of  Equity  Office
Properties  Trust, a REIT specializing in the ownership and management of office
buildings  ("EOP") and Capital Trust,  a specialized  finance  company.  He is a
director of Fred Meyer, Inc., an owner and operator of supermarkets, Chart House
Enterprises,  Inc., an owner and operator of  restaurants,  Ramco Energy plc, an
independent  oil company  based in the United  Kingdom,  and TeleTech  Holdings,
Inc., a provider of telephone and computer based customer care solutions.

Douglas Crocker II. Mr. Crocker II has been a Trustee,  Chief Executive  Officer
and  President  of EQR since  March 1993.  Mr.  Crocker is a director of Horizon
Group Inc., an owner, developer and operator of outlet retail properties and has
been a director  of WRP, a publicly  traded real estate  merchant  banking  firm
since its formation in June 1997. Mr.
                                       22
<PAGE>
Crocker  has been  President  and  Chief  Executive  Officer  of  First  Capital
Financial  Corporation,  previously  a sponsor  of public  limited  real  estate
partnerships  ("First  Capital"),  since  December  1992 and a director of First
Capital  since  January  1993.  He was an  Executive  Vice  President  of Equity
Financial  and  Management  Company  ("EF&M"),  a subsidiary  of EGI,  providing
strategic direction and services for EGI's real estate and corporate  activities
from November 1992 until March 1997.

John W. Alexander. Mr. Alexander has been a Trustee of EQR since May 1993 and is
the  President of Mallard Creek Capital  Partners,  Inc., an investment  company
with interests in real estate and development  entities. He is also a partner of
Meringoff Equities,  a real estate investment and development  company, and is a
director of Jacor.

Stephen O.  Evans.  Mr.  Evans has been  Executive  Vice  President  - Strategic
Investments  and Trustee of EQR since  December 23, 1997, the date of the Merger
with Evans Withycombe  Residential,  Inc. Prior to the Evans Withycombe  Merger,
Mr.  Evans served as the  Chairman of the Board and Chief  Executive  Officer of
Evans  Withycombe  since its  formation  in May 1994.  Mr. Evans  founded  Evans
Withycombe, Inc., the predecessor of Evans Withycombe, in 1977 and served as its
Chairman of the Board and Chief  Executive  Officer from 1977 to 1994. Mr. Evans
is a member of the National  Multi-Housing  Counsel,  NAREIT,  Lambda  Alpha,  a
national land economic fraternity, and the Urban Land Institute.

Henry H.  Goldberg.  Mr.  Goldberg has been a Trustee of EQR since January 1995.
Mr. Goldberg is Chairman of the Board,  Chief  Executive  Officer and founder of
The Artery Group,  L.L.C., a diversified  real estate company.  Mr. Goldberg was
the  direct or  indirect  general  partner  (or an  executive  thereof)  of four
partnerships owning residential  apartment communities and one commercial office
building, each of which filed petitions under the Federal bankruptcy laws during
1993. Each of the partnerships is now out of bankruptcy through a reorganization
plan agreed to by the project lender.

Errol R.  Halperin.  Mr.  Halperin has been a Trustee of EQR since May 1993. Mr.
Halperin  has been an  attorney  at  Rudnick & Wolfe,  a law firm,  since  1979,
serving as a senior partner and a member of such firm's policy  committee  since
1981,  specializing  in  Federal  income  tax  counseling  and real  estate  and
corporate transactions.

James D. Harper,  Jr. Mr.  Harper has been a Trustee of EQR since May 1993.  Mr.
Harper is the  President  of JDH  Realty  Co.,  a real  estate  development  and
investment company, and is the principal partner in AH Development,  S.E. and AH
HA Investments,  S.E., special limited  partnerships  formed to develop over 400
acres of land in Puerto Rico.  He is a Trustee of EOP, and a director of Burnham
Pacific Properties Inc., a REIT that owns,  develops and manages commercial real
estate  properties in California and American  Health  Properties,  Inc., a REIT
specializing  in health  care  facilities.  Mr.  Harper is also a trustee of the
Urban Land Institute.

Edward  Lowenthal.  Mr. Lowenthal has been a Trustee of EQR since June 1997. Mr.
Lowenthal has been the President,  Chief  Executive  Officer and director of WRP
since  its  formation  in  January  1997 and had been the  President  and  Chief
Executive Officer and a trustee of Wellsford, a multifamily property REIT, since
its  formation  in July 1992 until the  Wellsford  Merger on May 30,  1997.  Mr.
Lowenthal  is a director of United  American  Energy  Corporation,  a developer,
owner and operator of hydroelectric  and other  alternative  energy  facilities,
Corporate  Renaissance  Group,  Inc., a mutual fund, Omega  Healthcare,  Inc., a
healthcare REIT, and Great Lakes REIT, Inc., an office building REIT. He is also
a member of the Board of Governors of NAREIT and a member of the New York bar.

Jeffrey H. Lynford.  Mr.  Lynford has been a Trustee of EQR since June 1997. Mr.
Lynford has been the Chairman of the Board,  Secretary and Director of WRP since
its  formation  in  January  1997 and had been the  Chairman  of the  Board  and
Secretary of  Wellsford  since its  formation  in July 1992 until the  Wellsford
Merger,  and was the Chief  Financial  Officer of Wellsford from July 1992 until
December  1994.  Mr.  Lynford  currently  serves  as a trustee  emeritus  of the
National Trust for Historic Preservation and as a director of five mutual funds:
Cohen & Steers Total Return Realty Fund,  Inc.,  Cohen & Steers  Realty  Shares,
Inc.,  Cohen & Steers Realty Income Fund,  Inc.,  Cohen & Steers  Special Equity
Fund,  Inc. and Cohen & Steers Equity  Income Fund,  Inc. He is also a member of
the New York bar.
                                       23
<PAGE>
Sheli Z.  Rosenberg.  Ms.  Rosenberg has been a Trustee of EQR since March 1993.
Ms.  Rosenberg is Chief Executive  Officer,  President and a director of EGI and
was a principal  of the law firm of  Rosenberg &  Liebentritt,  P.C., a law firm
("R&L"),  from 1980 to 1997. Ms. Rosenberg is a trustee of Capital Trust and EOP
and is a director of Jacor, American Classic,  MHC, Anixter, CVS Corporation,  a
drugstore  chain,  Illinois Power Co., a supplier of electricity and natural gas
in Illinois, and its parent holding company, Illinova Corp.

Gerald A. Spector.  Mr.  Spector has been a Trustee and Executive Vice President
of EQR since March 1993 and Chief Operating  Officer of EQR since February 1995.
Mr.  Spector was Treasurer of EQR from March 1993 through  February  1995.  From
January  1973 until  January  1996,  Mr.  Spector  was an officer of EF&M,  most
recently  serving as Vice President from November 1994 through January 1996. Mr.
Spector was Executive  Vice President and Chief  Operating  Officer of EF&M from
September 1990 through  November 1994. From January 1988 until January 1996, Mr.
Spector was an officer of EGI,  most  recently  serving as Vice  President  from
November 1994 through January 1996. Mr. Spector was Executive Vice President and
Chief Operating Officer of EGI from January 1991 through January 1994.

Barry S.  Sternlicht.  Mr.  Sternlicht has been a Trustee of EQR since May 1993.
Mr.  Sternlicht is Chief  Executive  Officer and  President of Starwood  Capital
Group,  L.P., a privately owned real estate  investment firm. Mr.  Sternlicht is
Chairman of the Board and Chief  Executive  Officer of Starwood Hotels & Resorts
Trust,  a REIT  specializing  in the  ownership  of hotels.  Mr.  Sternlicht  is
Chairman  of the Board of  Starwood  Financial  Trust,  a mortgage  REIT,  and a
director of U.S.  Franchise  Systems,  a hotel franchise  company,  and Starwood
Hotel & Resorts  Worldwide,  which  manages  hotels  owned by Starwood  Hotels &
Resorts Trust.

B. Joseph White.  Mr. White has been a Trustee of EQR since May 1993.  Mr. White
is the Dean of the  University  of  Michigan  Business  School.  Mr.  White is a
director  of Kelly  Services,  Inc.,  a  temporary  services  firm,  Gordon Food
Service,  Inc., a midwestern food distribution  company,  and the Cummins Engine
Foundation,  the  philanthropic  arm of Cummins  Engine Co., a heavy duty engine
manufacturer.

Richard G. Berry. Mr. Berry has been Executive Vice President-Development of EQR
since the Merger  with  Evans  Withycombe  Residential,  Inc..  Mr.  Berry was a
director of Evans Withycombe  Residential,  Inc. since its formation in May 1994
until the Evans Withycombe  Residential,  Inc. Merger and had been President and
Chief Operating Officer of Evans Withycombe Residential,  Inc. from January 1997
until  the  Evans  Withycombe  Residential,  Inc.  Merger.  Mr.  Berry  had been
Executive Vice President of Evans  Withycombe  Residential,  Inc. since May 1994
until  December  1997  and  served  as the  Executive  Vice  President  of Evans
Withycombe,  Inc., (the predecessor of Evans Withycombe Residential,  Inc.) from
1992 until 1994.

Alan W. George. Mr. George has been Executive Vice President-Acquisitions of EQR
since February  1997,  Senior Vice  President-Acquisitions  of EQR from December
1995 until  February 1997 and Vice  President-Acquisitions  and asset manager of
EQR from December 1993 until December 1995. Mr. George was Vice  President-Asset
Management  of Equity  Assets  Management,  Inc.  ("EAM"),  a subsidiary  of EGI
providing real estate ownership services, from June 1992 to August 1993.

Edward G. Geraghty.  Mr. Geraghty has been Executive Vice  President-Development
and  Asset  Management  since  March  1,  1998.  Mr.  Geraghty  was  a  Managing
Director-Real  Estate of The  Travelers  Insurance  Company from January 1995 to
March 1998.  Mr.  Geraghty  was an officer of The  Travelers  Realty  Investment
Company,  a subsidiary of The  Travelers  Insurance  Company,  from July 1989 to
January 1995, most recently serving as an Executive Vice President from December
1992 to January 1995.

Michael J. McHugh.  Mr. McHugh has been  Executive  Vice  President of EQR since
January 1998 and Chief  Accounting  Officer and Treasurer of EQR since  February
1995.  Mr.  McHugh was Senior Vice  President  of EQR from  November  1994 until
January 1998 and, from May 1990 until January 1995, Mr. McHugh was a Senior Vice
President and Chief Financial Officer of First Capital.

David J. Neithercut.  Mr. Neithercut has been Executive Vice President and Chief
Financial  Officer of EQR since  February  1995.  Mr.  Neithercut  had been Vice
President--Financing of EQR from September 1993 until February
                                       24
<PAGE>
1995. Mr.  Neithercut was a Senior Vice  President--Finance  of EGI from January
1995 until February 1995. He was a Vice  President--Finance  of EAM from October
1990 until December 1994.

Gregory H. Smith. Mr. Smith has been Executive Vice President--Asset  Management
of EQR since  December  1994. Mr. Smith was a Senior Vice President of Strategic
Realty  Advisors,  Inc., a real estate and advisory  company,  from January 1994
until December 1994. Mr. Smith was employed at VMS Realty Partners, a sponsor of
public  and  private  real  estate  limited  partnerships,  from June 1989 until
December 1993, most recently serving as First Vice President.

Bruce C.  Strohm.  Mr.  Strohm has been  Executive  Vice  President  and General
Counsel of EQR since March 1995 and Secretary  since  November  1995. Mr. Strohm
was a Vice  President of EQR from March 1993 through March 1995 and an Assistant
Secretary of EQR from March 1995 through  November  1995.  Mr. Strohm was a Vice
President  of R&L from January 1988 to March 1995,  most  recently  serving as a
member of the firm's management committee.

Frederick  C.  Tuomi.  Mr.  Tuomi has been  Executive  Vice  President--Property
Management  of EQR since  January  1994.  Mr.  Tuomi had been  President  of RAM
Partners,  Inc., a subsidiary of Post Properties,  Inc., a REIT, from March 1991
to January 1994.

Pursuant to EQR's  declaration  of trust,  the  trustees  are divided into three
classes as nearly equal in number as possible,  with each class having a term of
three years.

ITEM 11.  EXECUTIVE COMPENSATION

The Operating Partnership does not have any executive compensation.  Information
concerning the Equity Residential  Properties Trust's executive  compensation is
contained in its definitive proxy statement  relating to the 1998 Annual Meeting
of  Shareholders  to  be  held  on  May  14,  1998,  which  proxy  statement  is
incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table sets forth  information,  as of March 1, 1998,  (except as
otherwise indicated in the footnotes)  regarding the beneficial ownership of the
OP Units by each person known by the Operating  Partnership to be the beneficial
owner of more than five percent of the Operating  Partnership's  outstanding  OP
Units,  and in  addition,  by all trustees  and  executive  officers of EQR as a
group. None of the trustees or executive officers of EQR own any OP Units in the
Operating  Partnership.  Each  person  named in the  table has sole  voting  and
investment  power with  respect to all OP Units shown as  beneficially  owned by
such person, except as otherwise set forth in the notes to the table.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
           (continued)
<TABLE>
<CAPTION>
                                                                              OP Units
                                                                         Beneficially Owned
                                                                         ------------------
                     Name and Business                                                    Percent
                Address of Beneficial Owner                           Amount              of Class
                ---------------------------                           ------              --------
<S>                                                              <C>                      <C>
Equity Residential Properties Trust(1)                             20,577,220               82.1%

ERP Operating Limited Partnership(1)                                4,234,218               17.1%

All trustees and executive officers of the Company as a
group                                                                  None
</TABLE>

* Less than 1%

(1)      The business  address for each of these entities and individuals is Two
         North Riverside Plaza, Chicago, Illinois 60606.
                                       25
<PAGE>
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under heading "Certain  Relationships and Related Transactions -
Interest of Messrs.  Evans and Berry in the Evans  Merger"  contained in the EQR
Proxy  Statement  relating to the 1998 Annual Meeting of Shareholders to be held
on May 14, 1998 is incorporated herein by reference.

                                     PART IV



ITEM 14.  FINANCIAL STATEMENTS AND EXHIBITS

(a)      The following documents are filed as part of this report

         1 & 2             See Index to  Financial  Statements  and  Schedule on
                           Page F-1 of this Form 10-K

                           All other  schedules  for which  provision is made in
                           the   applicable   accounting   regulation   of   the
                           Securities  and Exchange  Commission are not required
                           under the related  instructions  or are  inapplicable
                           and therefore have been omitted.

         3.       Certain of the exhibits required by Item 601 of Regulation S-K
                  have been filed with  previous  reports by the Company and are
                  herein incorporated by reference thereto.

                  Exhibit
                  Number     Description of Document
                  ------     -----------------------

                  2.1+++     Asset  Contribution  Agreement  by and among Equity
                             Residential Properties Trust and Equity Residential
                             Operating  Partnership,  as  purchasers  and  Evans
                             Withycombe  Residential,  Inc. and Evans Withycombe
                             Residential, L.P., dated as of August 27, 1997.

                  4.1*       Amended   and   Restated   Agreement   of   Limited
                             Partnership  of the Evans  Withycombe  Residential,
                             L.P., dated as of August 17, 1994.

                  10.1**     Asset  Contribution  Agreement  by and among  Evans
                             Withycombe  Residential,  Inc. and Evans Withycombe
                             Residential,  L.P., as purchasers,  and the Sellers
                             listed therein, dated as of June 9, 1994.

                  10.2*      Revolving  Loan  Agreement by and between Bank One,
                             Arizona, NA and Evans Withycombe Residential, L.P.,
                             dated December 1, 1995.

                  10.3*      Property Management  Agreement by and between Evans
                             Withycombe  Residential,  L.P. and Evans Withycombe
                             Management, Inc. dated August 17, 1994.

                  10.4*      Property  Contribution  Agreement  by  and  between
                             Evans   Withycombe    Residential,    L.P.,   Evans
                             Withycombe  Residential,   Inc.  and  Acacia  Creek
                             Limited Partnership dated as of February 1, 1995.

                  10.5*      Loan Agreement by and between  Northwestern  Mutual
                             Life  Insurance and Evans  Withycombe  Residential,
                             L.P., dated December 15, 1995.
                                       26
<PAGE>
                  10.6***    Revolving  Loan  Agreement by and between the Banks
                             named   herein,   Bank  One   Arizona,   N.A.,   as
                             administrative agent, and Bank of America, National
                             Trust and Savings Association and Wells Fargo Bank,
                             National   Association  as  co-agents,   and  Evans
                             Withycombe  Residential,  L.P., dated September 24,
                             1996.

                  10.7****   Prospectus  Supplement relating to the issuance and
                             sale of $75  million  senior  unsecured  notes  due
                             April 15,  2004 and $50  million  senior  unsecured
                             notes due April 15, 2007 and  exhibits  relating to
                             the sale and issuance of these notes.

                  10.8++     Modification  of  Revolving  Loan  Agreement by and
                             between the Banks named  herein,  Bank One Arizona,
                             N.A., as administrative agent, and Bank of America,
                             National  Trust and Savings  Association  and Wells
                             Fargo Bank,  National  Association as co-agents and
                             Evans Withycombe Residential,  L.P., dated June 13,
                             1997.

                  12.1       Ratio of Earnings to Fixed Charges

                  21.1+      List of Subsidiaries.

                  24.1       Power of Attorney for John W. Alexander dated March
                             27, 1998

                  24.2       Power of Attorney  for James D.  Harper,  Jr. dated
                             March 20, 1998

                  24.3       Power of Attorney for Errol R. Halperin dated March
                             19, 1998

                  24.4       Power of Attorney  for B. Joseph  White dated March
                             19, l 998

                  24.5       Power of  Attorney  for Barry S.  Sternlicht  dated
                             March 19, 1998

                  24.6       Power of Attorney for Henry H. Goldberg dated March
                             23, 1998

                  24.7       Power of Attorney for Edward  Lowenthal dated March
                             19, 1998

                  24.8       Power of  Attorney  for  Jeffrey H.  Lynford  dated
                             March 25, 1998

                  24.9       Power of Attorney  for Stephen O. Evans dated March
                             23, 1998

*Previously  filed as an exhibit  to the Evans  Withycombe  Residential,  Inc.'s
annual report on Form 10-K for the fiscal year ended  December 31, 1995 and 1994
and incorporated herein by reference.

**Previously  filed as an exhibit  to the Evans  Withycombe  Residential  Inc.'s
Registration  Statement on Form S-11 and amendments  thereto (File No. 33-80150)
and incorporated herein by reference.

*** Previously filed as an exhibit to the Evans Withycombe  Inc.'s  Registration
Statement  on Form  S-3 and  amendments  thereto  (File  No.  333-17805)  and is
incorporated herein by reference.

**** Previously filed as an exhibit to Evans Withycombe  Residential L.P.'s Form
8-K dated April 2, 1997 and  Registration  Statement on Form S-3 and  amendments
thereto (File No. 333-19879) and incorporated herein by reference.

+ Previously  filed as an exhibit to Evans  Withycombe  Residential  L.P.'s Form
10/A for the  fiscal  year ended  December  31,  1996 and 1995 and  incorporated
herein by reference.

++ Previously filed as an exhibit to Evans Withycombe  Residential,  L.P.'s Form
8-K dated August 25, 1997 and incorporated herein by reference.
                                       27
<PAGE>
+++ Previously filed as an exhibit to Evans Withycombe Residential,  L.P.'s Form
8-K dated August 27, 1997 and incorporated herein by reference.

(b)      The  Registrant  filed a Current  Report on Form 8-K dated December 23,
         1997 reporting a Change in Control of the Registrant pursuant to Item 1
         and an Acquisition  or Disposition of Assets  pursuant to Item 2, which
         report was filed on January 8, 1998.

                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.


                                     EQUITY RESIDENTIAL PROPERTIES TRUST

Date:    March 27, 1998         By:  /s/ Douglas Crocker II
       --------------------          ----------------------
                                     Douglas Crocker II
                                     President, Chief Executive Officer,
                                     Trustee and *Attorney-in-Fact

Date:    March 27, 1998         By:  /s/ David J. Neithercut
       --------------------          -----------------------
                                     David J. Neithercut
                                     Executive Vice-President and
                                     Chief Financial Officer

Date:    March 27, 1998         By:  /s/ Michael J. McHugh
       --------------------          ---------------------
                                     Michael J. McHugh
                                     Executive Vice-President, Chief Accounting
                                     Officer, Treasurer and *Attorney-in fact

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

Date:    March 27, 1998         By:  /s/ Samuel Zell
       --------------------          ---------------
                                     Samuel Zell
                                     Chairman of the Board of Trustees

Date:    March 27, 1998         By:  /s/ Gerald A. Spector
       --------------------          ---------------------
                                     Gerald A. Spector
                                     Executive Vice-President, Chief
                                     Operating Officer and Trustee

Date:    March 27, 1998         By:  /s/ Sheli Z. Rosenberg
       --------------------          ----------------------
                                          Sheli Z. Rosenberg
                                          Trustee

Date:    March 27, 1998         By:  /s/ James D. Harper
       --------------------          -------------------
                                         James D. Harper
                                         Trustee

Date:    March 27, 1998         By:  /s/ Errol R. Halperin
       --------------------          ---------------------
                                         Errol R. Halperin
                                         Trustee
                                       28
<PAGE>
Date:    March 27, 1998         By:  /s/ Barry S. Sternlicht
       --------------------          -----------------------
                                         Barry S. Sternlicht
                                         Trustee

Date:    March 27, 1998         By:  /s/ John W. Alexander
       --------------------          ---------------------
                                         John W. Alexander
                                         Trustee

Date:    March 27, 1998         By:  /s/ B. Joseph White
       --------------------          -------------------
                                         B. Joseph White
                                         Trustee

Date:    March 27, 1998         By:  /s/ Henry H. Goldberg
       --------------------          ---------------------
                                         Henry H. Goldberg
                                         Trustee

Date:    March 27, 1998         By:  /s/ Jeffrey H. Lynford
       --------------------          ----------------------
                                         Jeffrey H. Lynford
                                         Trustee

Date:    March 27, 1998         By:  /s/ Edward Lowenthal
       --------------------          --------------------
                                         Edward Lowenthal
                                         Trustee

Date:    March 27, 1998         By:  /s/ Stephen O. Evans
       --------------------          --------------------
                                         Stephen O. Evans
                                         Trustee
                                       29
<PAGE>
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT                                              PAGE
                                                                                               ----
<S>                                                                                       <C>
         Report of Independent Auditors ............................................           F-2

         Consolidated Balance Sheets as of
              December 31, 1997 and 1996 ...........................................           F-3

         Consolidated Statements of Operations for the periods from
              December 23, 1997 through December 31, 1997 and
              January 1, 1997 through December 22, 1997 and
              For the years ended December 31, 1996 and 1995 .......................           F-4

         Consolidated Statements of Partners' Capital for the periods from
              December 23, 1997 through December 31, 1997 and
              January 1, 1997 through December 22, 1997 and
              For the years ended December 31, 1996 and 1995 .......................        F-5 to F-6

         Consolidated Statements of Cash Flows for the period from
              December 23, 1997 through December 31, 1997 and
              January 1, 1997 through December 22, 1997 and
              For the years ended December 31, 1996 and 1995 .......................        F-7 to F-8

         Notes to Consolidated Financial Statements ................................           F-9

SCHEDULE FILED AS PART OF THIS REPORT

         Schedule III - Real Estate and Accumulated Depreciation ...................           S-1
</TABLE>
                                      F-1
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

Partners
Evans Withycombe Residential, L.P.

We have audited the accompanying consolidated balance sheets of Evans Withycombe
Residential, L.P. (the "Operating Partnership") as of December 31, 1997 and 1996
and the related  consolidated  statements of income,  partners' capital and cash
flows for the periods  from  December  23, 1997  through  December  31, 1997 and
January 1, 1997  through  December 22, 1997 and for each of the two years in the
period ended December 31, 1996. Our audits also included the financial statement
schedule listed in the Index at Item 14 (a). These financial  statements and the
schedule are the responsibility of the Operating Partnership's  management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Operating  Partnership  at  December  31,  1997 and 1996,  and the  consolidated
results of its  operations  and its cash flows for the periods from December 23,
1997 through December 31, 1997 and January 1, 1997 through December 22, 1997 and
for each of the two years in the period ended  December 31, 1996,  in conformity
with generally accepted accounting principles.  Also, in our opinion the related
financial  statement schedule when considered in relation to the basic financial
statements  taken as a whole,  presents  fairly,  in all  material  respects the
information set forth therein.



                                          Ernst & Young LLP

Phoenix, Arizona
February 26, 1998
                                      F-2
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                         December 31, 1997         December 31, 1996
                                                                         -----------------         -----------------
<S>                                                                     <C>                         <C>
ASSETS

Investment in real estate:
  Land..........................................................        $       137,646             $       121,915
  Buildings and improvements ...................................                953,160                     543,839
  Furniture and fixtures .......................................                 15,331                      29,567
  Construction-in-progress......................................                 36,040                      66,229
                                                                        ---------------             ---------------
                                                                              1,142,177                     761,550
  Accumulated depreciation .....................................                   (609)                    (38,331)
                                                                        ---------------             ---------------
       Investment in real estate, net of accumulated depreciation             1,141,568                     723,219

Cash and cash equivalents.......................................                  5,742                       2,568
Restricted cash.................................................                  2,546                       1,622
Rents and notes receivable......................................                  1,493                       2,702
Deferred costs, net of accumulated amortization
  of $1,265 at December 31, 1996 ...............................                      -                       3,838
Other assets ...................................................                    714                       1,518
                                                                        ---------------             ---------------

Total assets ...................................................        $     1,152,063             $       735,467
                                                                        ===============             ===============


LIABILITIES AND PARTNERS' CAPITAL

Intercompany note payable ......................................        $       104,596             $             -
Mortgage and notes payable .....................................                394,404                     436,172
Accounts payable and other liabilities .........................                 10,096                       7,782
Accrued interest payable .......................................                  3,161                       1,417
Accrued property taxes .........................................                  3,476                       2,912
Resident security deposits .....................................                  3,020                       1,818
Prepaid rent ...................................................                    453                         585
                                                                        ---------------             ---------------
Total liabilities ..............................................                519,206                     450,686

Minority interest ..............................................                  2,042                         827

Partners' capital ..............................................                630,815                     283,954
                                                                        ---------------             ---------------

Total liabilities and partners' capital ........................        $     1,152,063             $       735,467
                                                                        ===============             ===============
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-3
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                        CONSOLIDATED STATEMENTS OF INCOME
     (Amounts in thousands, except for number of units and per unit amounts)
<TABLE>
<CAPTION>
                                                               For the Period from
                                                         -----------------------------
                                                         December 23,       January 1,                Year Ended
                                                         1997 through      1997 through              December 31,
                                                         December 31,     December 22,      ------------------------------
                                                             1997              1997             1996              1995
                                                             ----              ----             ----              ----
<S>                                                     <C>                <C>             <C>              <C>
Revenues:
  Rental income ..................................      $        2,667      $   109,708     $      94,350    $      68,864
  Third party management fees ....................                   7              704             1,157            1,268
  Interest income - investment in mortgage notes .                   -              273                 -                -
  Interest and other income ......................                 105            6,709             6,119            4,399
                                                        --------------      -----------     -------------    -------------
Total revenues ...................................               2,779          117,394           101,626           74,531

Expenses:
  Property and maintenance .......................                 641           29,797            25,194           17,576
  Real estate taxes and insurance ................                 199            9,776             7,905            5,383
  Property management ............................                  92            3,542             3,225            2,825
  Depreciation ...................................                 609           25,777            20,885           13,762
  Interest:
    Expense incurred, net of amounts capitalized .                 713           29,763            23,446           11,957
    Amortization of deferred financing costs .....                   -            1,097               779              693
  Other ..........................................                   -            7,493                 -                -
  General and administrative .....................                  51            1,834             1,387            1,321
                                                        --------------      -----------     -------------    -------------
Total expenses ...................................               2,305          109,079            82,821           53,517
                                                        --------------      -----------     -------------    -------------

Income before gain on disposition of properties,
  extraordinary items and allocation to
  minority interest...............................                 474            8,315            18,805           21,014
Gain on disposition of properties ................                   -            7,510                 -                -
                                                        --------------      -----------     -------------    -------------

Income before extraordinary items and allocation
  to minority interest ...........................                 474           15,825            18,805           21,014
Loss on early extinguishment of debt..............                   -           (1,500)                -                -
                                                        --------------      -----------     -------------    -------------

Income before allocation to minority interest ....                 474           14,325            18,805           21,014
Income allocated to minority interest ............                  (1)             (56)              (75)             (89)
                                                        --------------      -----------     -------------    -------------

Net income .......................................      $          473      $    14,269     $      18,730    $      20,925
                                                        ==============      ===========     =============    =============

Net income per weighted average unit .............      $         0.02      $      0.58     $        0.84    $        1.02
                                                        ==============      ===========     =============    =============

Weighted average units outstanding ...............          24,978,056       24,669,769        22,184,395       20,590,873
                                                        ==============      ===========     =============    =============
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-4
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                  CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
     (Amounts in thousands, except for number of units and per unit amounts)
<TABLE>
<CAPTION>
                                                                       Equity          Equity          Evans            Other
                                                                     Residential    Residential      Withycombe        Limited
                                                      Number of      Properties      Operating      Residential,       Partners
                                                        Units           Trust       Partnership         Inc.           Capital
                                                     ------------    ------------   ------------    ------------   -------------
<S>                                                    <C>           <C>            <C>             <C>            <C>
Partners' capital, December 31, 1994                   20,140,530    $          -   $          -    $    201,241   $      52,626

     Net income ....................................            -               -              -          16,331           4,594
     Distributions ($1.50 per unit) ................            -               -              -         (24,102)         (6,801)
     Issuance of units for acquisition of apartment
       Communities .................................      710,550               -              -               -          14,207
     Conversion of limited partners' units into
       Common stock.................................                            -              -             390            (390)
     Issuance of restricted units for
       Executive deferred compensation .............       82,802               -              -           1,657               -
     Amortization of deferred compensation .........            -               -              -               -               -
                                                     ------------    ------------   ------------    ------------   -------------
Partners' capital, December 31, 1995................   20,933,882               -              -         195,517          64,236

    Net income......................................            -               -              -          14,720           4,010
    Distributions on units ($1.58 per unit).........            -               -              -         (28,040)         (7,545)
    Purchase of units by Evans Withycombe
     Residential, Inc. from proceeds of second
     offering, net of underwriting discount and
     offering costs of $3,237 ......................    2,088,889               -              -          40,891               -
    Conversion of limited partners' units
     into common stock..............................            -               -              -           2,583          (2,583)
    Purchase of units from proceeds from the
     exercise of stock options......................       19,500               -              -             390               -
    Issuance of restricted units....................       10,895               -              -             240               -
    Forfeiture of restricted units..................       (8,454)              -              -               -               -
    Amortization of deferred compensation...........            -               -              -               -               -
                                                     ------------    ------------   ------------    ------------   -------------
Partners' capital, December 31, 1996 ...............   23,044,712               -              -         226,301          58,118


                                                            Unamortized
                                                             Restricted
                                                           Units Employee
                                                            Compensation         Total
                                                          -------------     -------------
<S>                                                       <C>               <C>
Partners' capital, December 31, 1994                      $           -     $     253,867

     Net income ....................................                  -            20,925
     Distributions ($1.50 per unit) ................                  -           (30,903)
     Issuance of units for acquisition of apartment
       Communities .................................                  -            14,207
     Conversion of limited partners' units into
       Common stock.................................                  -                 -
     Issuance of restricted units for
       Executive deferred compensation .............             (1,657)                -
     Amortization of deferred compensation .........                959               959
                                                          -------------     -------------
Partners' capital, December 31, 1995................               (698)          259,055

    Net income......................................                  -            18,730
    Distributions on units ($1.58 per unit).........                  -           (35,585)
    Purchase of units by Evans Withycombe
     Residential, Inc. from proceeds of second
     offering, net of underwriting discount and
     offering costs of $3,237 ......................                  -            40,891
    Conversion of limited partners' units
     into common stock..............................                  -                 -
    Purchase of units from proceeds from the
     exercise of stock options......................                  -               390
    Issuance of restricted units....................               (240)                -
    Forfeiture of restricted units..................                  -                 -
    Amortization of deferred compensation...........                473               473
                                                          -------------     -------------
Partners' capital, December 31, 1996 ...............               (465)          283,954
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-5
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
            CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (continued)
     (Amounts in thousands, except for number of units and per unit amounts)
<TABLE>
<CAPTION>
                                                                       Equity          Equity          Evans            Other
                                                                     Residential    Residential      Withycombe        Limited
                                                      Number of      Properties      Operating      Residential,       Partners
                                                        Units           Trust       Partnership         Inc.           Capital
                                                     ------------    ------------   ------------    ------------   -------------
<S>                                                    <C>           <C>            <C>             <C>            <C>
    Net income..................................                -               -              -          11,738           2,531

    Distributions on units ($1.525 per unit)....                -               -              -         (31,067)         (6,915)
    Capital contribution from ERP Operating
     Partnership ("ERP") .......................                -               -          6,000               -               -
    Purchase of units by Evans Withycombe
     Residential, Inc. from proceeds of third
     offering, net of underwriting discount and
     offering costs of $406.....................        1,800,000               -              -          35,415               -
    Conversion of limited partners' units
     into common stock..........................                -               -              -           5,509          (5,509)
    Purchase of units from proceeds from the
     exercise of stock options..................           67,075               -              -           1,323               -
    Issuance of restricted units ...............           69,775               -              -           1,435               -
    Forfeiture of restricted units..............           (3,506)              -              -               -               -
    Amortization of deferred compensation.......                -               -              -               -               -
                                                     ------------    ------------   ------------    ------------   -------------

Partners' capital, December 22, 1997............       24,978,056               -          6,000         250,654          48,225

    Adjust to reflect fair market value of
     Operating Partnership units at date of
     Merger ....................................                -         507,535        104,427        (250,654)        (44,098)
    Capital contribution from ERP ..............                -               -          9,567               -               -
    Adjust to reflect fair market value of
     minority interest in Financing Partnership
     at date of Merger .........................                -          (1,082)          (223)              -              (9)
    Net Income .................................                -             390             80               -               3
                                                     ------------    ------------   ------------    ------------   -------------
Partners' capital, December 31, 1997 ...........       24,978,056    $    506,843   $    119,851    $          -   $       4,121
                                                     ============    ============   ============    ============   =============

                                                            Unamortized
                                                             Restricted
                                                           Units Employee
                                                            Compensation         Total
                                                          -------------     -------------
<S>                                                       <C>               <C>
    Net income..................................                     -            14,269

    Distributions on units ($1.525 per unit)....                     -           (37,982)
    Capital contribution from ERP Operating
     Partnership ("ERP") .......................                     -             6,000
    Purchase of units by Evans Withycombe
     Residential, Inc. from proceeds of third
     offering, net of underwriting discount and
     offering costs of $406.....................                     -            35,415
    Conversion of limited partners' units
     into common stock..........................                     -                 -
    Purchase of units from proceeds from the
     exercise of stock options..................                     -             1,323
    Issuance of restricted units ...............                (1,435)                -
    Forfeiture of restricted units..............                     -                 -
    Amortization of deferred compensation.......                 1,900             1,900
                                                          -------------     -------------
Partners' capital, December 22, 1997............                     -           304,879

    Adjust to reflect fair market value of
     Operating Partnership units at date of
     Merger ....................................                     -           317,210
    Capital contribution from ERP ..............                     -             9,567
    Adjust to reflect fair market value of
     minority interest in Financing Partnership
     at date of Merger .........................                     -            (1,314)
    Net Income .................................                     -               473
                                                          -------------     -------------
Partners' capital, December 31, 1997 ...........         $           -     $     630,815
                                                         ============      =============
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-6
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                              For the period ended
                                                      ------------------------------------
                                                      December 23, 1997   January 1,  1997    For the year ended December 31,
                                                           through            through         -------------------------------
                                                      December 31, 1997   December 22, 1997       1996            1995
                                                      -----------------   -----------------    ---------       ---------
<S>                                                    <C>                  <C>                <C>             <C>
Cash flows from operating activities
Net income .........................................   $     473            $  14,269          $  18,730       $  20,925
Adjustments to reconcile net income to net cash
  provided by operating  activities:
    Depreciation and amortization ..................         609               25,517             20,799          13,727
     Minority Interest .............................           1                   56                 75              89
    Amortization of restricted stock ...............        --                  1,900                390             693
    Amortization of financing costs ................        --                  1,097                779             693
    Write-off of real estate assets ................        --                    423                227            --
    Write-off of deferred loan costs ...............        --                    269               --               172
    Gain on sale of real estate ....................        --                 (7,510)              --              --
Decrease (increase) in assets
    Restricted cash ................................        --                   (923)            (1,100)            561
    Accounts and notes receivable ..................          (7)               1,208             (1,356)           (934)
    Due from related parties .......................        --                   (765)              --              --
    Other assets ...................................        --                   (883)               (74)         (1,051)
(Decrease) increase in liabilities
    Accounts payable and other liabilities .........        (407)               5,444             (1,583)            540
    Accrued interest ...............................        (456)               2,194                812             505
    Accrued property taxes .........................         199                  365                554             825
    Resident security deposits .....................        --                  1,202                321             500
    Prepaid rent ...................................      (2,774)               2,641                147            (262)
                                                       ---------            ---------          ---------       ---------
Net cash provided (used) by operating activities....      (2,362)              46,504             38,721          36,983

Cash flows from investing activities
Purchase of real estate assets .....................        --               (121,820)          (127,811)       (116,716)
Sale of real estate assets .........................        --                 32,507               --              --
                                                       ---------            ---------          ---------       ---------
Net cash (used) in investing activities ............        --                (89,313)          (127,811)       (116,716)

Cash flows from financing activities
Proceeds from Public Offering, net of expenses .....        --                 35,415             40,891            --
Proceeds from exercise of options ..................        --                  1,323                390            --
Proceeds from intercompany revolving note payable...        --                104,596               --              --
Proceeds from mortgage notes and
  credit facility ..................................        --                223,185            269,778         315,653
Principal payments on mortgage notes ...............         (40)            (291,774)          (177,762)       (202,477)
Payment for organization and loan costs ............        --                 (1,789)            (1,650)         (1,345)
Minority interest distributions ....................        --                   (156)              (137)           (447)
Distributions paid .................................      (8,357)             (29,625)           (43,486)        (30,456)
Capital contributions ..............................       9,567                6,000               --              --
                                                       ---------            ---------          ---------       ---------
Net cash provided by financing activities ..........       1,170               47,175             88,024          80,928
                                                       ---------            ---------          ---------       ---------
Net increase (decrease) in cash and cash
  Equivalents ......................................      (1,192)               4,366             (1,066)          1,195
Cash and cash equivalents, beginning of period .....       6,934                2,568              3,634           2,439
                                                       ---------            ---------          ---------       ---------
Cash and cash equivalents, end of period ...........   $   5,742            $   6,934          $   2,568       $   3,634
                                                       =========            =========          =========       =========
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-7
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                 For the period ended
                                                           ----------------------------------
                                                            December 23,     January 1,
                                                                1997            1997
                                                               through         through        For the year ended December 31,
                                                            December 31,      December 22,    --------------------------------
                                                                1997              1997             1996              1995
                                                               --------       ----------          --------         ---------
<S>                                                            <C>            <C>                 <C>              <C>
Supplemental information
Cash paid during the period for interest ..........            $   1,201      $    29,563         $  22,648        $  11,487
                                                               =========      ===========         =========        =========

Supplemental disclosure of non-cash activity
Assumption of debt related to the acquisition
of Apartment communities ...........................           $       -      $    18,318         $  46,700        $  56,493
                                                               =========      ===========         =========        =========

Acquisition of apartment communities through
  issuance of units in the Operating Partnership...            $       -      $         -         $       -        $  14,207
                                                               =========      ===========         =========        =========
Issuance of stock under executive stock incentive plan         $       -      $         -         $      83        $     959
                                                               =========      ===========         =========        =========

Allocation of fair market value in connection with the Merger

Increase in real estate assets ....................            $ 268,964      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Decrease in accumulated depreciation ..............            $  60,651      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Decrease in deferred costs and other assets .......            $   6,734      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Increase in mortgage notes payable ................            $   8,379      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Increase in other liabilities .....................            $   2,708      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Increase in minority interest .....................            $   1,314      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
Increase in partners' capital .....................            $ 315,896      $         -         $       -        $       -
                                                               =========      ===========         =========        =========
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-8
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)


1.   Organization and Formation of the Operating Partnership

Evans Withycombe Residential,  L.P. (the "Operating  Partnership") is one of the
largest  developers and owners of upscale  apartment  communities in Arizona and
has expanded its operations into selected sub-markets. The Operating Partnership
owns and operates 53 stabilized  multifamily  apartment  communities  containing
15,331 units. The multifamily  apartment  communities are located in Phoenix and
Tucson,  Arizona,  which are  comprised of 44 stabilized  multifamily  apartment
communities  containing a total of 12,349 units,  seven  stabilized  multifamily
apartment communities are located in the Southern California market containing a
total of 2,398  units,  one  stabilized  multifamily  community  of 248 units in
Minnetonka,  Minnesota and one stabilized multifamily apartment community of 336
units  in  Quincey,  Massachusetts.  The  Operating  Partnership  is also in the
process of  developing  or  expanding  four  multifamily  apartment  communities
comprising 953 units in its Phoenix market.  The Operating  Partnership is fully
integrated  with  expertise  in  development,  acquisitions,   construction  and
management of apartment communities.

The Operating  Partnership was formed in June 1994 to develop,  acquire, own and
operate  upscale   multifamily   apartment   communities  for  Evans  Withycombe
Residential,  Inc. On August 17, 1994, Evans Withycombe  Residential,  Inc. (the
"Predecessor")  completed  an Initial  Public  Offering  and  engaged in various
formation  transactions  designed to transfer  ownership of the  communities and
other assets of Evans  Withycombe,  Inc. to the Operating  Partnership  or Evans
Withycombe  Finance  Partnership,   L.P.  (the  "Financing  Partnership").   The
Operating  Partnership owns 99.0 percent of Evans Withycombe  Finance,  L.P. and
has a 99.0 percent economic interest in Evans Withycombe  Management,  Inc. (the
"Management Company"). The Predecessor was the sole general partner of and owned
a 82.4  percent,  79.7  percent  and  77.3  percent  interest  in the  Operating
Partnership at December 22, 1997, and December 31, 1996 and 1995, respectively.

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

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

2.   Business Combination

The Operating Partnership entered into an Asset Contribution Agreement, dated as
of August 27, 1997 (the  "Agreement"),  with ERP Operating  Partnership  ("ERP")
pursuant  to  which  the  Operating  Partnership  agreed,   subject  to  certain
conditions,  to  contribute  all of its assets to ERP in  exchange  for units of
limited partnership interest in ERP following the Merger (as defined below). The
Agreement  was entered into in  connection  with a business  combination  of the
Predecessor,  previously the sole general partner of Operating Partnership, with
and into Equity  Residential  Properties  Trust ("EQR"),  a Maryland real estate
investment  trust and sole general partner of ERP,  pursuant to an Agreement and
Plan of Merger  between  the  Predecessor  and EQR dated  August  27,  1997 (the
"Merger").  The Agreement  provides for the exchange of all outstanding  limited
partnership units in the Operating  Partnership for limited partnership units in
ERP,  at an exchange  ratio of 0.50 units of ERP for each unit of the  Operating
Partnership.
                                      F-9
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


2.   Business Combination (continued)

On December 23, 1997,  the Merger was approved by the  shareholders  of both EQR
and the  Predecessor.  On December 23, 1997, the Predecessor and certain limited
partners who held 24,811,438 units in the Operating  Partnership exchanged their
limited  partnership  units for limited  partnership  units in ERP.  EQR and ERP
replaced the  Predecessor  as co-general  partners of the Operating  Partnership
which owned 82.1 percent and 17.1 percent interest in the Operating  Partnership
at December 31, 1997, respectively.

3.   Basis of Presentation

The accompanying  consolidated  financial  statements of the Predecessor include
the  consolidated   accounts  of  the  Operating   Partnership,   the  Financing
Partnership and the Management Company.

The  Merger is  accounted  for  under  the  purchase  method  of  accounting  in
accordance with Accounting  Principles Board Opinion No. 16. Purchase accounting
for a merger is the same as the accounting treatment used for the acquisition of
any group of assets. The fair market value of the consideration  given by EQR in
the Merger was used as the valuation basis of the combination.  Accordingly, the
assets  acquired  and  liabilities  assumed of the  Operating  Partnership  were
recorded at the relative fair market value as of December 23, 1997.

All significant  intercompany  accounts and transactions have been eliminated in
consolidation.

Certain amounts in the consolidated statements of income and cash flows for 1996
and 1995 have been reclassified to conform to the 1997 presentation.

4.   Summary of Significant Accounting Policies

(a)  Real Estate Assets and Depreciation

The Operating  Partnership  records its real estate  assets in  accordance  with
Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the Impairment of Long-Lived  Assets and  Long-Lived  Assets to be Disposed of."
SFAS No. 121 requires  that  long-lived  assets such as real estate  assets,  be
reviewed  whenever  events or changes in  circumstances  indicate  that the book
value of the asset may not be recoverable. If the sum of the expected future net
cash flows  (undiscounted and without interest charges) from an asset to be held
and used is less than the book value of the asset,  an  impairment  loss must be
recognized in the amount of the difference  between book value and fair value as
opposed to the difference  between book value and net realizable value under the
previous accounting standard.  For long-term assets like apartment  communities,
the determination of whether there is an impairment loss is dependent  primarily
on  the  Operating  Partnership's  estimates  on  occupancy,  rent  and  expense
increases, which involves numerous assumptions and judgments as to future events
over a period of many years. At December 31, 1997 the Operating Partnership does
not hold any assets that meet the impairment criteria of SFAS No. 121.

Costs related to the acquisition and improvement of real estate are capitalized.
Interest costs incurred  during  construction  of a new property are capitalized
until  completion of  construction  on a  building-by-building  basis.  Interest
capitalized  was $38 and $1,881 for the periods  from  December 23, 1997 through
December 31, 1997 and January 1, 1997  through  December 22, 1997 and $2,714 and
$5,048 for the years ended December 31, 1996 and 1995, respectively.
                                      F-10
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)

4.   Summary of Significant Accounting Policies (continued)

(a)  Real Estate Assets and Depreciation (continued)

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

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

The Operating Partnership also reports land relating to construction-in-progress
as land on its balance sheet. Land associated with  construction-in-progress was
$8,272 and $16,542 at December 31, 1997 and 1996, respectively.

(b)  Revenue Recognition

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

(c)  Cash and Cash Equivalents

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

(d)  Restricted Cash

Restricted cash includes  restricted  deposits for sinking fund accounts related
to tax exempt bonds, property taxes and escrow accounts.

(e)  Deferred Costs

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

(f)  Premiums and Discounts

Premiums and  discounts on mortgage and notes  payable are  amortized  using the
straight-line  basis  over the life of the  mortgage  and  notes  payable  which
approximates the effective interest rate method.

(g)  Income Taxes

The Operating  Partnership has made an election to be taxed as a partnership and
accordingly,  no  federal  or state  income  taxes  have  been  provided  in the
accompanying consolidated financial statements.
                                      F-11
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


4.   Summary of Significant Accounting Policies (continued)

(h)  Use of Estimates

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

(i)  Net Income Per Unit

In 1997,  the Financial  Accounting  Standards  Board issued  Statement No. 128,
"Earnings per Share."  Statement No. 128 replaced the calculation of primary and
fully  diluted  earnings  per share with basic and diluted  earnings  per share.
Unlike  primary  earnings  per share,  basic  earnings  per share  excludes  any
dilutive effects of options,  warrants and convertible securities.  All earnings
per unit amounts for all periods have been presented.
No diluted  earnings  per unit are  presented as they were the same as the basic
earnings per unit.

(j)  Fair Value of Financial Instruments

The following  disclosures of estimated fair value were determined by management
using available  market  information and  appropriate  valuation  methodologies.
Judgment is necessary to interpret market data and develop estimated fair value.
Accordingly,  the estimates  presented herein are not necessarily  indicative of
the  amounts the  Operating  Partnership  could  realize on  disposition  of the
financial instruments. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

Cash equivalents,  accounts receivable,  accounts payable and other accruals are
carried at amounts that reasonably  approximate their fair values as of December
31, 1997 and 1996. The Operating  Partnership's debt has an estimated  aggregate
fair value of  approximately  $394,404  at December  31,  1997 which  equals the
carrying value of $394,404  inclusive of the premium of $7,248.  At December 31,
1996,  the  Operating   Partnership's  debt  had  an  estimated  fair  value  of
approximately  $437,800 compared to the carrying value of $436,172.  Fair values
were estimated  using  discounted  cash flow  analyses,  based on interest rates
currently  available  to the  Operating  Partnership  for  issuance of debt with
similar terms and remaining maturities.
                                      F-12
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


5.   Other

Prior to the Merger, the Predecessor set in place a Stock Incentive Plan ("Stock
Incentive  Plan").  Pursuant to the Stock Incentive Plan,  certain  officers and
employees  ("Participants")  of the Management Company were granted the right to
receive  shares of restricted  stock and/or  options to acquire shares of common
stock in the Predecessor. The awards would have vested over a three to four year
period  from  the  date of  grant.  At the  effective  date of the  Merger,  the
Participants' unvested portion of restricted stock and options to acquire shares
of the Predecessor's  common stock vested.  The Participant's  received cash for
the  difference  between the exercise price per share and $25.06 per share price
at the effective date of the Merger.  The cash payment to Participants  relating
to  accelerated  vesting of the  options  of $3,437  and the $1,544  unamortized
portion of restricted units were expensed by the Operating Partnership.

The remaining  amount of $2,512 relates to payments made to certain  officers of
the Predecessor  Company under the terms of their  respective  change in control
agreements and other merger related costs.

6.   Intercompany Note Payable

The  Operating  Partnership  has an  unsecured  note  payable  to ERP that bears
interest at LIBOR plus 1.15 percent and is due on demand. Proceeds from the note
payable  were  used  to  repay  the   outstanding   balance  on  the   Operating
Partnership's  revolving credit facility and provide funds to acquire a 336-unit
apartment community.  The outstanding balance was $104,596 with accrued interest
payable of $847 at December 31, 1997.
                                      F-13
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


7. Mortgage and Notes Payable

The Operating  Partnership's  mortgage  notes and notes payable  consists of the
following:
<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                        1997           1996
                                                                                        ----           ----
<S>                                                                                <C>             <C>
Conventional Mortgage Loans:
----------------------------
Mortgage note payable at a fixed interest rate of 8.0 percent, monthly principal   $        -      $    5,380
and interest payments. The unpaid principal balance was repaid on January 9,
1997.

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

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

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

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

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

Mortgage note payable at fixed interest rates ranging from 6.5 percent to 9.0          18,169              -
percent,  monthly principal and interest payments through August 17, 2004,
remaining balance due August 17, 2004.  Interest rate increases annually each
September.  Secured by a first mortgage lien on one apartment community.  The
mortgage note can be repaid at any time at the Operating Partnership's option
without prepayment penalty.

$50 million securitized debt at a fixed stated interest rate of 7.17 percent,          50,203         49,509
monthly principal and interest payments through January 1, 2006, remaining
balance due January 1, 2006.  Secured by first mortgage liens on 5 apartment
communities. The balance includes a premium of $1.2 million at December 31,
1997.  The effective interest rate inclusive of the premium at December 31, 1997
is 6.5 percent.                                                                       _______         ______
                                                                                       68,372         89,652

Mortgage Loan Certificates:
---------------------------

Securitized  debt at a fixed  stated  interest  rate  of 7.98  percent,  monthly      133,688        130,520
interest  payments only through August 1, 2001.  Secured by first mortgage liens
on 21  communities.  The face amount of $131 million is due August 1, 2001.  The
balance  includes a premium of $2.7 million at December 31, 1997 and is net of a
discount of $480 at December 31, 1996. The effective interest rate inclusive of
the premium at December 31, 1997 is 6.84 percent.

Senior Unsecured Notes:
-----------------------

$75 million  senior  unsecured  notes with a fixed coupon rate of 7.50  percent.       76,726              -
Semiannual interest only payments due April 15 and October 15 commencing October
15, 1997. Face amount of $75 million is due April 15, 2004. The balance includes
a premium of $1.7 million at December 31, 1997. The effective interest
rate inclusive of the premium at December 31, 1997 is 6.73 percent.
</TABLE>
                                      F-14
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)
<TABLE>
<S>                                                                                <C>             <C>
7. Mortgage and Notes Payable (continued)

$50 million  senior  unsecured  notes with a fixed coupon rate of 7.625 percent.     $  51,618               -
Semiannual interest only payments due April 15 and October 15 commencing October
15, 1997. Face amount of $50 million is due April 15, 2007. The balance
includes a premium of $1.6 million at December 31, 1997.  The effective interest
rate inclusive of the premium at December 31, 1997 is 6.86 percent.                    _______         _______
                                                                                       128,344               -
Tax Exempt Bonds:
-----------------

$17.3  million tax exempt bonds with a floating  interest  rate based on the tax        17,300          17,300
exempt note rate set by the remarketing agent, or at the option of the Operating
Partnership can convert to a fixed rate as determined by the remarketing  agent.
Secured by a $17.5 million direct pay letter of credit,  interest payments only,
matures December 1, 2007. (Effective interest rate of 5.52 percent at December
31, 1997).

$22.6  million tax exempt bonds with a floating  interest  rate based on the tax        22,650          22,650
exempt note rate set by the remarketing  agent,  interest payments only. Secured
by a $22.9 million direct pay letter of credit, matures February 1, 2016.
(Effective interest rate of 5.95 percent at December 31, 1997).

$24.05 million tax exempt bonds with a floating interest rate based on the tax          24,050         24,050
exempt note rate set by the remarketing agent, interest payments only.  Secured by
a $24.4 million direct pay letter of credit, matures August 1, 2005.  (Effective
interest rate of 5.72 percent at December 31, 1997).                                    ______         ______
                                                                                        64,000         64,000

Revolving Credit Facility:
--------------------------

Unsecured Revolving Credit Facility with floating interest rate based on LIBOR               -        152,000
plus 1.15 percent (1.50 percent at December 31, 1996) or at the option of the
Operating Partnership at prime rate, interest payments only.  The Revolving Credit
Facility was repaid on November 4, 1997 and the facility agreement terminated on
January 1, 1998.
                                                                                    --------------- -----------
                                                                                       $394,404       $436,172
                                                                                    =============== ===========
</TABLE>

Scheduled  principal payments on debt are as follows,  net of the $7,248 premium
at December 31, 1997:
<TABLE>
<CAPTION>
                 --------------- --------------- -------------- --------------- -----------------
                    Mortgage        Mortgage        Senior
                     Notes            Loan         Unsecured      Tax-Exempt
                    Payable       Certificates       Notes          Bonds            Total
                 --------------- --------------- -------------- --------------- -----------------
<S>              <C>             <C>             <C>            <C>             <C>
1998             $       743     $         -     $         -    $         -     $       743
1999                     834               -               -              -             834
2000                     886               -               -              -             886
2001                     942         131,000               -              -         131,942
2002                     999               -               -              -             999
Thereafter            62,752               -         125,000         64,000         251,752
                 --------------- --------------- -------------- --------------- -----------------
   Total         $    67,156     $   131,000     $   125,000    $    64,000     $   387,156
                 --------------- --------------- -------------- --------------- -----------------
</TABLE>
                                      F-15
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


7.   Mortgage and Notes Payable (continued)

On June 13, 1997,  the Operating  Partnership  amended its existing $225 million
Revolving  Credit  Facility with a bank group to decrease the commitment  amount
from $225 million to $150  million and reduce the interest  rate from LIBOR plus
1.50 percent to LIBOR plus 1.15 percent.  The Revolving Credit Facility provided
funding for working  capital,  construction  activities  and  acquisitions.  The
Revolving  Credit  Facility  was  repaid on  November  4, 1997 and the  facility
agreement terminated on January 1, 1998.

The  Operating  Partnership  has three  direct pay letters of credit of $17,500,
$22,900  and  $24,400  which  serve as a credit  enhancement  for the tax exempt
bonds.  The  letters of credit are  secured  by a first  mortgage  liens on four
apartment communities.

In  January  1997,  the  Operating  Partnership  extinguished  the  debt on four
mortgages with unpaid principal balances of approximately  $25,000 with proceeds
from the Revolving  Credit  Facility.  As a result,  the  Operating  Partnership
incurred a loss from the early extinguishment of debt of approximately $1,500.

8.   Distributions

On December 30, 1997, the Operating Partnership paid a distribution of $.335 per
unit ($8,357) to unitholders of record as of December 14, 1997. Approximately 51
percent,  36 percent and 30 percent of the distributions  paid during 1997, 1996
and 1995 represented return of capital to the unit holders.

9.    Management and Development Fees

The Operating  Partnership,  through the Management Company performs  management
services for certain  unaffiliated  communities.  Management  fees received from
managed  communities  were $7 and $704 for the periods  from  December  23, 1997
through  December  31, 1997 and January 1, 1997  through  December  22, 1997 and
$1,157 and $1,268 for the years ended December 31, 1996 and 1995,  respectively.
Included  in  third  party  management  fees  is a $250  gain  on the  sale of a
management  contract  in the third  quarter  1997 and a non  recurring  $500 fee
received in exchange for terminating  the management  contract on nine apartment
communities containing 1,298 apartment units in the second quarter 1996.

10.  Disposition Activity

During  the  second  quarter  of  1997,  the  Operating   Partnership  sold  two
properties,  Deer Creek Village and The Pines,  containing 502 apartment  units.
The aggregate sales price was  approximately  $22.4 million  resulting in a gain
from the sale of approximately $5.2 million. The Operating  Partnership received
cash  of  approximately  $7.3  million  and  two  carryback  mortgage  notes  of
approximately  $15.1  million.  The $7.9  million  mortgage  note on Deer  Creek
Village was repaid on July 23, 1997.  The mortgage  note on The Pines was repaid
on November 19, 1997.

On September 30, 1997, the Operating Partnership sold Los Arboles Apartments,  a
232 unit  apartment  community  located  in  Chandler,  Arizona.  The  aggregate
proceeds were  approximately  $12.5 million resulting in a gain from the sale of
approximately  $2.3  million.   In  connection  with  the  sale,  the  Operating
Partnership sold the management  contract on an adjoining  apartment  community,
Los  Arboles II and the  Predecessor  received  payment of the unpaid  principal
balance and accrued interest on the mortgage note on that property.
                                      F-16
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


11.  Retirement Plan

The Operating  Partnership has a defined  contribution  wealth accumulation plan
and trust (the "Plan")  covering all employees  whom have elected to participate
in the Plan. Each  participant may make pretax  contributions  to the Plan up to
the  maximum  allowed by the IRS.  The  Operating  Partnership  makes a matching
contribution of 25 percent of the participant's  contribution up to 1 percent of
a participant's  salary, which totaled $3 and $116 for the periods from December
23, 1997 through December 31, 1997 and January 1, 1997 through December 22, 1997
and $113 and $53 for 1996 and 1995, respectively.

12.  Commitments and Contingencies

The Operating Partnership leases office space in buildings and certain equipment
under noncancelable operating leases. Future minimum payments under these leases
with initial  terms of one year or more consist of the following at December 31,
1997:

               1998                                    $ 364
               1999                                      224
               2000                                        4
                                                       -------

                                                       $ 592
                                                       =======


Rent  expense for the periods from  December 23, 1997 through  December 31, 1997
and January 1, 1997 through  December 22, 1997 was $9 and $405 and for the years
ended December 31, 1996 and 1995 was $360 and $300, respectively.

13.  Minority Interest

Evans  Withycombe  Finance,  Inc.  owns a one percent  interest in the Financing
Partnership at December 31, 1997, 1996 and 1995, respectively, as follows:


                                                             Dollars
                                                           -----------
          Balance at December 31, 1994                     $   1,247
          Allocation of net income                                89
          Distributions                                         (447)
                                                           ---------
          Balance at December 31, 1995                           889
          Allocation of net income                                75
          Distributions                                         (137)
                                                           ---------
          Balance at December 31, 1996                           827
          Allocation of net income                                56
          Distributions                                         (156)
                                                           ---------
          Balance at December 22, 1997                           727
          Fair market value related to the Merger              1,314
          Allocation of net income                                 1
                                                           ---------
          Balance at December 31, 1997                     $   2,042
                                                           =========
                                      F-17
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1997
   (Amounts in thousands, except for apartment data, number of units or shares
                             and per unit amounts)
                                   (Continued)


14. Selected Quarterly Financial Information  (Unaudited,  amounts in thousands,
except per unit amounts).
<TABLE>
<CAPTION>
                                                                   Quarter
                                         First            Second            Third             Fourth
                                         -----            ------            -----             ------
<S>                                       <C>               <C>              <C>               <C>
1997

Revenue .......................           $29,007           $29,593          $31,241           $30,332
Net operating income ..........            19,333            20,098           20,980            19,349
Income (loss) before gain
  on disposition of properties,
  extraordinary items and
  allocation to Minority Interest           4,440             4,740            5,313            (5,704)
Minority Interest .............               (17)              (13)             (15)              (12)
Gain on disposition of
  Properties ..................                 -             5,253            2,278               (21)
Extraordinary item - loss
  on early extinguishment of
  debt ........................            (1,500)                -                -                 -

Net income (loss) .............             2,923             9,980            7,576            (5,737)
Net income (loss) per unit ....              $.12              $.40             $.30             $(.24)

1996

Revenue .......................           $24,161           $24,085          $25,938           $27,442
Net operating income ..........            16,840            16,287           16,724            18,676
Income before
  Minority interest ...........             5,341             4,748            3,986             4,730
Minority interest .............               (23)              (16)             (15)              (21)

Net income.....................             5,318             4,732            3,971             4,709
Net income per unit............              $.25              $.22             $.17              $.20
</TABLE>

The  Operating  Partnership  defines net  operating  income as  earnings  before
property   management,   general  and  administrative   expense,   interest  and
depreciation.
                                      F-18
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
       SCHEDULE III - REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             Costs Capitalized
                                                                Subsequent        Gross Amounts at Which
                                                              to Acquisition /      Carried at Close of
                                          Initial Cost         Construction               Period
                                      -----------------------------------------------------------------------------
                                                Buildings             Buildings                Buildings
                                                   and                   and                     and
Description                Encumbrances  Land   Improvements  Land    Improvements   Land    Improvements   Total
-------------------------------------------------------------------------------------------------------------------
<S>                             <C>     <C>       <C>          <C>      <C>          <C>         <C>      <C>
Same Store
   Phoenix
Acacia Creek
   Scottsdale, AZ                  $-    $6,122    $24,382         $-    $10,918      $6,122      $35,300  $41,422
Bayside at the Islands
   Gilbert, AZ                  6,752     1,877      6,623      1,429      8,918       3,306       15,541   18,847
Country Brook
   Chandler, AZ                 7,982       937      3,886         25     15,111         962       18,997   19,959
Gateway Villas
   Phoenix, AZ                      -     1,431     11,238          -      3,664       1,431       14,902   16,333
Greenwood Village
   Tempe, AZ                    6,711     1,770      7,119        349     10,102       2,119       17,221   19,340
Heritage Point (1)
   Mesa, AZ                         -       666      5,125          -      3,322         666        8,447    9,113
La Mariposa
   Mesa, AZ                     4,866     1,440      3,962        608      8,463       2,048       12,425   14,473
La Valencia
   Mesa, AZ                         -     2,485      6,569      1,068     13,930       3,553       20,499   24,052
Little Cottonwoods
   Tempe, AZ                    9,652     2,834      6,655        216     20,326       3,050       26,981   30,031
Miramonte
   Scottsdale, AZ                   -     1,133      3,711          -      5,135       1,133        8,846    9,979
Morningside
   Scottsdale, AZ               4,653       533      6,316        137      6,276         670       12,592   13,262
Mountain Park Ranch
   Phoenix, AZ                  9,839     1,662     12,540          -      5,684       1,662       18,224   19,886
Park Meadow
   Gilbert,  AZ                 3,008       607      2,828        225      6,147         832        8,975    9,807
Preserve at Squaw Peak
   Phoenix, AZ                  3,248       377      4,252        141      4,267         518        8,519    9,037
Promontory Pointe
   Phoenix, AZ                  7,794     2,038      6,987       (379)    14,831       1,659       21,818   23,477
Rancho Murietta
   Tempe, AZ                        -     1,766     10,208          -      7,341       1,766       17,549   19,315
Scottsdale Courtyards
   Scottsdale, AZ              10,695     2,946      8,385         33     16,624       2,979       25,009   27,988
Scottsdale Meadows
   Scottsdale, AZ                   -     1,512      4,203          -      7,178       1,512       11,381   12,893
Shadow Brook
   Phoenix, AZ                  8,115     2,440      9,320        625      9,008       3,065       18,328   21,393
</TABLE>
<TABLE>
<CAPTION>
                                                             Depreciable
                               Accumulated    Year     Year   Lives in
Description                    Depreciation Developed Acquired  Years
-----------------------        ------------------------------------------
<S>                                    <C>  <C>       <C>     <C>
Same Store
   Phoenix
Acacia Creek
   Scottsdale, AZ                       $20            1995    5 to 40 years
Bayside at the Islands
   Gilbert, AZ                           10 1988-1989          5 to 40 years
Country Brook
   Chandler, AZ                          11            1991    5 to 40 years
Gateway Villas
   Phoenix, AZ                            9 1994-1995          5 to 40 years
Greenwood Village
   Tempe, AZ                             10            1993    5 to 40 years
Heritage Point (1)
   Mesa, AZ                               5            1994    5 to 40 years
La Mariposa
   Mesa, AZ                               8            1990    5 to 40 years
La Valencia
   Mesa, AZ                              13            1990    5 to 40 years
Little Cottonwoods
   Tempe, AZ                             16            1989    5 to 40 years
Miramonte
   Scottsdale, AZ                         5            1993    5 to 40 years
Morningside
   Scottsdale, AZ                         8            1992    5 to 40 years
Mountain Park Ranch
   Phoenix, AZ                           11 1994-1995          5 to 40 years
Park Meadow
   Gilbert,  AZ                           6            1992    5 to 40 years
Preserve at Squaw Peak
   Phoenix, AZ                            5            1991    5 to 40 years
Promontory Pointe
   Phoenix, AZ                           13            1988    5 to 40 years
Rancho Murietta
   Tempe, AZ                             11            1995    5 to 40 years
Scottsdale Courtyards
   Scottsdale, AZ                        15   1993             5 to 40 years
Scottsdale Meadows
   Scottsdale, AZ                         7            1993    5 to 40 years
Shadow Brook
   Phoenix, AZ                           11            1993    5 to 40 years
</TABLE>
                                      S-1
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
       SCHEDULE III - REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             Costs Capitalized
                                                                Subsequent        Gross Amounts at Which
                                                              to Acquisition /      Carried at Close of
                                          Initial Cost         Construction               Period
                                      -----------------------------------------------------------------------------
                                                Buildings             Buildings                Buildings
                                                   and                   and                     and
Description                Encumbrances  Land   Improvements  Land    Improvements   Land    Improvements   Total
-------------------------------------------------------------------------------------------------------------------
<S>                             <C>     <C>       <C>          <C>      <C>          <C>         <C>      <C>
Same Store (continued)
Shores at Andersen Springs
   Chandler, AZ                $8,396    $2,095     $9,682       $649    $13,051      $2,744      $22,733  $25,477
Silver Creek
   Phoenix, AZ                  3,289       484      3,157        228      3,531         712        6,688    7,400
Sonoran
   Phoenix, AZ                 11,534     2,362     20,802          -     10,958       2,362       31,760   34,122
Sun Creek
   Glendale, AZ                 3,903       715      3,950        182      3,095         897        7,045    7,942
Superstition Vista
   Mesa, AZ                         -     1,641     12,272          -      7,759       1,641       20,031   21,672
The Enclave
   Tempe, AZ                    8,485     1,500     10,527          -      8,735       1,500       19,262   20,762
The Heritage
   Phoenix, AZ                  5,484     1,211     12,370          -        734       1,211       13,104   14,315
The Meadows
   Mesa, AZ                         -       650      4,797          -     10,610         650       15,407   16,057
The Palms
   Phoenix, AZ                  5,013     2,152      4,455      1,133      6,787       3,285       11,242   14,527
Towne Square
   Chandler, AZ                     -     1,042     14,474        277     13,380       1,319       27,854   29,173
Villa Encanto
   Phoenix, AZ                      -     2,884      8,558          -     13,536       2,884       22,094   24,978
Village at Lakewood
   Phoenix, AZ                  8,434     1,652      5,776      1,514      8,037       3,166       13,813   16,979
  Tucson
Harrison Park
   Tucson, AZ                   3,395       516      3,511          -      2,248         516        5,759    6,275
La Reserve
   Oro, Valley                  6,564     2,309      6,356        956     (1,433)      3,265        4,923    8,188
Orange Grove Village
   Tucson, AZ                   3,877       814      3,233        906      3,756       1,720        6,989    8,709
Suntree Village
   Oro, Valley                  8,757     1,246      8,862        326      4,206       1,572       13,068   14,640
The Arboretum
   Tucson, AZ                  16,919     1,928     16,706      1,525      2,272       3,453       18,978   22,431
Village at Tanque Verde
   Tucson, AZ                   6,526       690      1,280        745      5,846       1,435        7,126    8,561
</TABLE>

<TABLE>
<CAPTION>
                                                             Depreciable
                               Accumulated    Year     Year   Lives in
Description                    Depreciation Developed Acquired  Years
-----------------------        ------------------------------------------
<S>                                    <C>  <C>       <C>     <C>
Same Store (continued)
Shores at Andersen Springs
   Chandler, AZ                        $14   1993             5 to 40 years
Silver Creek
   Phoenix, AZ                           4            1991    5 to 40 years
Sonoran
   Phoenix, AZ                          19 1994-1995          5 to 40 years
Sun Creek
   Glendale, AZ                          5            1993    5 to 40 years
Superstition Vista
   Mesa, AZ                             12            1995    5 to 40 years
The Enclave
   Tempe, AZ                            11 1994-1995          5 to 40 years
The Heritage
   Phoenix, AZ                           8 1994-1995          5 to 40 years
The Meadows
   Mesa, AZ                             10            1987    5 to 40 years
The Palms
   Phoenix, AZ                           7   1990             5 to 40 years
Towne Square
   Chandler, AZ                         17            1992    5 to 40 years
Villa Encanto
   Phoenix, AZ                          14            1991    5 to 40 years
Village at Lakewood
   Phoenix, AZ                           8            1991    5 to 40 years
  Tucson
Harrison Park
   Tucson, AZ                            4            1991    5 to 40 years
La Reserve
   Oro, Valley                           4   1988             5 to 40 years
Orange Grove Village
   Tucson, AZ                            5            1991    5 to 40 years
Suntree Village
   Oro, Valley                           9            1992    5 to 40 years
The Arboretum
   Tucson, AZ                           12            1992    5 to 40 years
Village at Tanque Verde
   Tucson, AZ                            5            1990    5 to 40 years
</TABLE>
                                      S-2
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
       SCHEDULE III - REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             Costs Capitalized
                                                                Subsequent        Gross Amounts at Which
                                                              to Acquisition /      Carried at Close of
                                          Initial Cost         Construction               Period
                                      -----------------------------------------------------------------------------
                                                Buildings             Buildings                Buildings
                                                   and                   and                     and                Accumulated
Description                Encumbrances  Land   Improvements  Land    Improvements   Land    Improvements   Total   Depreciation
------------------------------------------------------------------------------------------------------------------- -----------
<S>                             <C>     <C>       <C>          <C>      <C>          <C>         <C>      <C>             <C>
Same Store (continued)
  California
The Ashton
   Corona Hills, CA           $17,300    $2,594    $18,679         $-    $14,333      $2,594      $33,012  $35,606         $19
                           -----------------------------------------------------------------------------------------------------
Subtotal Same Store           201,191    63,061    313,756     12,918    308,686      75,979      622,442  698,421         381
Communities Stabilized
Less Than Two Years
  Phoenix
Country Brook Expansion
Phase III
   Chandler, AZ                     -       543      6,779          -      3,710         543       10,489   11,032           6
Ingleside
   Phoenix, AZ                      -     1,204      6,242          -      4,421       1,204       10,663   11,867           6
Ladera
   Phoenix, AZ                      -     2,979     14,884          -      5,714       2,979       20,598   23,577          12
Mirador
   Phoenix, AZ                      -     2,597     20,885          -      2,483       2,597       23,368   25,965          14
Park Meadow Expansion
Phase II
   Gilbert, AZ                      -         4      3,998          -      2,122           4        6,120    6,124           4
Towne Square Expansion
Phase III
   Chandler, AZ                     -       605      6,092          -      2,420         605        8,512    9,117           5
  Tucson
The Legends
   Tucson, AZ                       -     2,728     17,893          -        (26)      2,728       17,867   20,595          11
Orange Grove Expansion
Phase II
   Tucson, AZ                       -        93      7,213          -        665          93        7,878    7,971           5
                           -----------------------------------------------------------------------------------------------------
Subtotal Communities
Stabilized
Less than Two Years                 -    10,753     83,986          -     21,509      10,753      105,495  116,248          63

Developments and Lease-Up
Properties
  Phoenix
The Hawthorne
   Phoenix, AZ                      -     2,695     14,087          2      1,583       2,697       15,670   18,367          10
The Retreat
   Phoenix, AZ                      -     1,738      2,578          -     10,654       1,738       13,232   14,970           7
The Retreat Phase II
   Phoenix, AZ                      -     1,739          -          -      4,412       1,739        4,412    6,151           2
Vista Grove
   Mesa, AZ                         -     1,343      1,897          -      9,316       1,343       11,213   12,556           6
The Gates Project (2)
   Various Locations                -         -        551          -      1,794           -        2,345    2,345           1
</TABLE>

<TABLE>
<CAPTION>
                                                 Depreciable
                                  Year     Year   Lives in
Description                     Developed Acquired  Years
-----------------------       -------------------------------
<S>                             <C>       <C>     <C>
Same Store (continued)
  California
The Ashton
   Corona Hills, CA                      1995    5 to 40 years

Subtotal Same Store
Communities Stabilized
Less Than Two Years
  Phoenix
Country Brook Expansion
Phase III
   Chandler, AZ               1995-1996          5 to 40 years
Ingleside
   Phoenix, AZ                  1995             5 to 40 years
Ladera
   Phoenix, AZ                1994-1995          5 to 40 years
Mirador
   Phoenix, AZ                1994-1995          5 to 40 years
Park Meadow Expansion
Phase II
   Gilbert, AZ                1995-1996          5 to 40 years
Towne Square Expansion
Phase III
   Chandler, AZ               1995-1996          5 to 40 years
  Tucson
The Legends
   Tucson, AZ                 1994-1995          5 to 40 years
Orange Grove Expansion
Phase II
   Tucson, AZ                 1995-1996          5 to 40 years

Subtotal Communities
Stabilized
Less than Two Years

Developments and Lease-Up
Properties
  Phoenix
The Hawthorne
   Phoenix, AZ                1995-1997          5 to 40 years
The Retreat
   Phoenix, AZ                  1997             5 to 40 years
The Retreat Phase II
   Phoenix, AZ                  1997             5 to 40 years
Vista Grove
   Mesa, AZ                     1997             5 to 40 years
The Gates Project (2)
   Various Locations           Various           5 to 40 years
</TABLE>
                                      S-3
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
       SCHEDULE III - REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             Costs Capitalized
                                                                Subsequent        Gross Amounts at Which
                                                              to Acquisition /      Carried at Close of
                                          Initial Cost         Construction               Period
                                      -----------------------------------------------------------------------------
                                                Buildings             Buildings                Buildings
                                                   and                   and                     and                Accumulated
Description                Encumbrances  Land   Improvements  Land    Improvements   Land    Improvements   Total   Depreciation
------------------------------------------------------------------------------------------------------------------- -----------
<S>                             <C>     <C>       <C>          <C>      <C>          <C>         <C>      <C>             <C>
Developments and Lease-Up
Properties (continued)
The Isle at Arrowhead
Ranch
   Glendale, AZ                   $ -    $1,652     $9,806         $-     $9,927      $1,652      $19,733  $21,385          $12
Promontory Pointe
Expansion Phase II
   Phoenix, AZ                      -       665      8,141         32        428         697        8,569    9,266            5
Montierra
   Scottsdale, AZ                   -     3,456        508          -      4,331       3,456        4,839    8,295            3
  Tucson
Bear Canyon
   Tucson, AZ                       -     1,645     12,926         16     (1,723)      1,661       11,203   12,864            7
Harrison Park Expansion
Phase II
   Tucson, AZ                       -       749      8,912          -      1,644         749       10,556   11,305            7
                           -----------------------------------------------------------------------------------------------------
Subtotal Developments and
Lease-Up Properties                 -    15,682     59,406         50     42,366      15,732      101,772  117,504           60

Acquisitions
  California
Canyon Crest Views
   Riverside, CA                    -     1,745     12,163          -      5,193       1,745       17,356   19,101           10
Canyon Ridge
   San Diego, CA                    -     4,869      7,316          -      4,656       4,869       11,972   16,841            7
Marquessa
   Corona Hills, CA            18,169     6,888     17,221          -      4,549       6,888       21,770   28,658           13
Portofino
   Chino Hills, CA                  -     3,572      9,031          -      5,597       3,572       14,628   18,200            9
Parkview Terrace Club
   Redlands, CA                22,650     4,969     28,301          -      7,350       4,969       35,651   40,620           22
Redlands Lawn and Tennis
Club
   Redlands, CA                24,050     4,822     24,045          -      2,267       4,822       26,312   31,134           16
   Massachusetts
Lincoln Heights
   Quincey, MA                      -     5,925     33,586          -        (11)      5,925       33,575   39,500           20
   Minnesota
Woodlands at Minnetonka
   Minnetonka, MN                   -     2,392     13,570          -        (12)      2,392       13,558   15,950            8
                           -----------------------------------------------------------------------------------------------------
Subtotal Acquisitions          64,869    35,182    145,233          -     29,589      35,182      174,822  210,004          105
</TABLE>

<TABLE>
<CAPTION>
                                                 Depreciable
                                  Year     Year   Lives in
Description                     Developed Acquired  Years
-----------------------       -------------------------------
<S>                             <C>       <C>     <C>
Developments and Lease-Up
Properties (continued)
The Isle at Arrowhead
Ranch
   Glendale, AZ               1996             5 to 40 years
Promontory Pointe
Expansion Phase II
   Phoenix, AZ                1995             5 to 40 years
Montierra
   Scottsdale, AZ             1997             5 to 40 years
  Tucson
Bear Canyon
   Tucson, AZ                 1995             5 to 40 years
Harrison Park Expansion
Phase II
   Tucson, AZ                 1995             5 to 40 years

Subtotal Developments and
Lease-Up Properties

Acquisitions
  California
Canyon Crest Views
   Riverside, CA                       1996    5 to 40 years
Canyon Ridge
   San Diego, CA                       1997    5 to 40 years
Marquessa
   Corona Hills, CA                    1997    5 to 40 years
Portofino
   Chino Hills, CA                     1996    5 to 40 years
Parkview Terrace Club
   Redlands, CA                        1996    5 to 40 years
Redlands Lawn and Tennis
Club
   Redlands, CA                        1996    5 to 40 years
   Massachusetts
Lincoln Heights
   Quincey, MA                         1997    5 to 40 years
   Minnesota
Woodlands at Minnetonka
   Minnetonka, MN                      1997    5 to 40 years

Subtotal Acquisitions
</TABLE>
                                      S-4
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
       SCHEDULE III - REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             Costs Capitalized
                                                                Subsequent        Gross Amounts at Which
                                                              to Acquisition /      Carried at Close of
                                          Initial Cost         Construction               Period
                                      -----------------------------------------------------------------------------
                                                Buildings             Buildings                Buildings
                                                   and                   and                     and                Accumulated
Description                Encumbrances  Land   Improvements  Land    Improvements   Land    Improvements   Total   Depreciation
------------------------------------------------------------------------------------------------------------------- -----------
<S>                             <C>     <C>       <C>          <C>      <C>          <C>         <C>      <C>             <C>
Corporate Office
   Scottsdale, AZ                 $ -       $ -      $ 325        $ -      $(325)        $ -           $-       $-           $-

                           =====================================================================================================
Total                        $266,060  $124,678   $602,706    $12,968   $401,825    $137,646   $1,004,531 $1,142,177       $609
                           =====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                 Depreciable
                                  Year     Year   Lives in
Description                     Developed Acquired  Years
-----------------------       -------------------------------
<S>                             <C>       <C>     <C>
Corporate Office
   Scottsdale, AZ                         1994    5 to 8 years
                                          1997

Total
</TABLE>


(1) Heritage  Point serves as  collateral  for a letter of credit for The Ashton
    tax exempt bonds.

(2) The  Gates  Project  represents  the  costs  associated  with the  Company's
    investment  in  constructing  security  gate  systems  at all its  apartment
    communities.
                                      S-5
<PAGE>
EVANS WITHYCOMBE RESIDENTIAL, INC.
  SCHEDULE III - REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION




A summary of activity for real estate  investments and accumulated  depreciation
is as follows:
<TABLE>
<CAPTION>
                                                                    Years Ended December 31,
                                                            1997               1996            1995
                                                         ------------      ------------     ------------
                                                                     (Amounts in thousands)
<S>                                                      <C>               <C>              <C>
Balance at beginning of period                           $    761,550      $    587,183     $    399,987
   Acquisitions, including construction costs                  91,767            88,648           77,895
   Disposals                                                  (28,475)                -                -
   Improvements, including construction costs                  48,371            85,719          109,301
   Fair value adjustment                                      268,964                 -                -
                                                         ------------      ------------     ------------
   Balance at close of period                            $  1,142,177      $    761,550     $    587,183
                                                         ============      ============     ============

Accumulated depreciation
   Balance at beginning of period                        $     38,331      $     17,511     $      3,749
     Depreciation                                              26,386            20,885           13,762
     Accumulated depreciation on disposals                     (3,457)              (65)               -
     Elimination of accumulated depreciation
       at date of acquisition                                 (60,651)                -                -
                                                         ------------      ------------     ------------
   Balance at close of period                            $        609      $     38,331     $     17,511
                                                         ============      ============     ============
</TABLE>
                                      S-6