<PAGE>

                                                                   EXHIBIT 10.57


                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
December 8, 2000, by and between BRE PROPERTIES, INC., a Delaware corporation
(the "Company"), and BRADLEY P. GRIGGS (the "Executive").

                                  Background
                                  ----------

     WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, on the terms and subject to the conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the covenants, duties, terms, and
conditions set forth in this Agreement, the parties agree as follows:

     1.   Term.  The term of this Agreement is from December 11, 2000 to
          ----
December 10, 2003, unless earlier terminated pursuant to Section 7 (the "Term").
Executive commenced the rendering of personal services under this Agreement on
December 11, 2000 (the "Start Date").

     2.   Duties. Executive shall be employed by the Company as its Executive
          ------
Vice-President and Chief Investment Officer. Executive shall be under the
direction and supervision of the Company's Chief Operating Officer ("COO").
Executive shall devote his full business time and best efforts to the Company,
with his powers and duties to be determined by the COO. Executive shall not,
except for incidental management of his personal financial affairs, engage in
any other business, nor shall he serve in any position with any other
corporation or entity, without the prior written consent of the COO and the
Board of Directors of the Company (the "Board").

     3.   Compensation. During the Term, Executive shall be entitled to receive
          ------------
compensation in accordance with this Section 3.

          3.1  Base Salary.  Commencing on the Start Date, Executive shall
               -----------
receive an annual base salary ("Base Salary") of $250,000.  The Board, in its
discretion, may review the Base Salary annually and increase the Base Salary
based on relevant circumstances. The Base Salary shall be payable by the Company
to the Executive in equal installments on the dates payments of salary are
regularly made by the Company to its executive employees.

          3.2  Annual Performance Bonus.  Executive shall be eligible to receive
               ------------------------
an annual incentive bonus (the "Annual Bonus") for each fiscal year of the
Company during the Term beginning with the fiscal year ending December 31, 2001.
The amount of the Annual Bonus shall be

                                       1
<PAGE>

based on the achievement of management by objective criteria established by the
Board (the "MBO Criteria"). It is anticipated that, for any given year, the
amount of the Annual Bonus could range from 0% of Base Salary (in the event of a
failure to achieve the Annual Criteria), to 40% of Base Salary (in the event of
achievement of the Annual Criteria), to between 40% and 80% of Base Salary (in
the event the Annual Criteria are exceeded). Except as otherwise specified in
this Agreement, Executive shall earn the Annual Bonus only at the end of each of
the Company's fiscal years during the Term. The Annual Bonus, if earned, shall
be paid within 90 days after the end of each fiscal year.

          3.3  Developer Incentive Awards.  Executive shall be entitled to
               ---------------------------
receive additional long-term incentive awards during the Term of the Agreement
under the Long Term Developer Incentive Program ("DIP") which has been adopted
by the Board, in the form attached as Exhibit A, as it may be implemented and
amended by the Board from time to time; provided, if the DIP is modified to the
substantial detriment of Executive or eliminated, the Company shall supplement
or replace the DIP with another substantial long-term incentive plan which, in
the reasonable judgment of the Board, shall possess substantially similar
potential economic benefits to Executive as existed prior to such modification
or elimination of the DIP.  Executive shall participate on a pro rata basis with
respect to projects which have been initiated or committed to prior to his Start
Date, as further defined on Exhibit B.

     4.   Benefits.  During the Term, Executive shall be entitled to receive
          --------
such other benefits and to participate (in accordance with the terms of such
plans, which in some cases requires employees to bear all or part of the cost of
the benefits) in such benefit plans as are generally provided by the Company to
its executive employees, including, without limitation, automobile allowances of
$500 per month, parking, 401(k), deferred compensation, and medical, dental,
vision, disability and life insurance plans. Executive shall be entitled to four
weeks vacation for each calendar year.

          At Executive's option which may be exercised only during the first
ninety days of employment, the Company shall provide Executive with a five year,
full recourse loan (the "Transition Assistance Loan") in an original principal
amount of $50,000 to be evidenced by a promissory note in substantially the form
attached as Exhibit C.

                                       2
<PAGE>

     5.   Expenses.  The Company shall pay or reimburse Executive for all
          --------
reasonable travel and other expenses incurred by Executive in performing his
duties under this Agreement in accordance with Company policy.

     6.   Non-Solicitation. For a period of one year following any termination
          ----------------
of this Agreement, Executive shall not recruit, attempt to hire, direct, assist
others in recruiting or hiring, or encourage any employee of the Company to
terminate his or her employment with the Company or to accept employment with
any subsequent employer or business with whom Executive is affiliated in any
way.

     7.   Termination of Employment.
          -------------------------

          7.1  Termination Due to Death or Disability; Voluntary Termination.
               -------------------------------------------------------------
If at any time during the Term, Executive shall die, suffer any Disability (as
defined below), or voluntarily terminate his employment by the Company, then, in
any such event, his employment under this Agreement shall automatically
terminate on the date of death, upon any Disability, or the date of voluntary
termination, as the case may be.  As used herein, the term "Disability" shall
mean the inability of Executive to perform his duties because of physical or
mental illness or incapacity as determined by the Board.

          7.2  Termination by the Company for Good Cause.  The Company may
               -----------------------------------------
terminate this Agreement and Executive's employment at any time for Good Cause.
In such event, this Agreement shall terminate on such date as shall be specified
in writing by the Company.  As used herein, the term "Good Cause" shall mean (i)
any act or omission of gross negligence, willful misconduct, dishonesty, or
fraud by Executive in the performance of his duties hereunder or in material
violation of the Company's employment policies and practices, (ii) after written
notification and a reasonable opportunity to cure, the failure or refusal of
Executive to substantially perform the duties or to render the services assigned
to him from time to time by the COO, (iii) the charging or indictment of
Executive in connection with a felony or any misdemeanor involving dishonesty or
moral turpitude, or (iv) the material breach by Executive of this Agreement or
the breach of Executive's fiduciary duty or duty of trust to the Company.

          7.3  Termination by the Company Other Than for Good Cause.  The
               ----------------------------------------------------
Company may terminate this Agreement and Executive's employment for any reason
other than for Good

                                       3
<PAGE>

Cause. In such event, this Agreement shall terminate on the 30th day following
written notice of such termination by the Company.

          7.4  Termination of the Agreement due to Non-Extension. Refusal of the
               --------------------------------------------------
Company, within 60 days prior to the end of the initial term of the Employment
Agreement, to extend a written offer for Executive's continued employment on
substantially the same terms as set forth in this Agreement; provided, that,
such extension may be for a one-year term.  In such event, Executive shall
terminate employment with the Company at the end of the Term.

     8.   Compensation upon Termination.
          -----------------------------

          8.1  Termination Other Than in Connection With a Change in Control.
               -------------------------------------------------------------

               (a)  In the event of termination of Executive's employment
pursuant to Section 7.1 or 7.2, the Company shall not be obligated, from and
after the date of termination, to provide to Executive, and Executive shall not
be entitled to receive from the Company, any compensation (including any
payments of Base Salary, Annual Bonus, or other awards) or other benefits;
except that if termination pursuant to Section 7.1 is due to death or
Disability, Executive or his estate shall receive the following compensation:

                    (i)  Within 90 days after the close of the fiscal year in
which the death or Disability occurred, a lump-sum payment equal to the
estimated Annual Bonus that the Executive would have earned for the fiscal year
in question (based on actual performance relative to MBO Criteria for the fiscal
year and Executive's contribution up to the date of death or Disability),
calculated on a pro-rated basis to the date of termination; and

                    (ii) Any vested DIP payments, which shall be awarded
pursuant to the early vesting rights described in paragraph 8.1(b)(ii) below.

               (b)  In the event of termination of Executive's employment
pursuant to Section 7.3 or 7.4, provided that Executive provides to the Company
a full and complete release of all known and unknown claims against the Company
and its representatives, the Company shall provide Executive with the following
compensation after such termination:

                    (i)  Within 15 days, Executive shall be entitled to receive
a lump-sum payment from the Company equal to his then Base Salary plus an amount
equal to (x) the average of his Annual Bonus, if any, over the most recent two
years or (y) the previous Annual

                                       4
<PAGE>

Bonus if only one full Annual Bonus period has passed or (z) forty percent of
Base Salary if less than one Annual Bonus period has passed, and

                    (ii) Executive shall be entitled to receive early vesting in
the DIP with respect to all projects in which he has been afforded a
participation ("Griggs DIP Projects"). The early vesting rights set forth in
this Section shall have no effect on the timetable for DIP payouts which shall
continue to be one year after Stabilization as set forth in the DIP.The early
vesting shall vest:

                         (w)  in full with respect to all Griggs DIP Projects
that have completed construction and are either in lease-up or in their
Stabilization Year (as that term is defined in the DIP),

                         (x)  1/36 per month from the date a Griggs DIP Project
is approved by the Board, provided that any initial vesting shall not occur
sooner than 12 months from the later of the date a Griggs DIP Project is
approved by the Board or the Start Date for all Griggs DIP Projects under
construction as of the date of Executive's termination,

                         (y)  25% as to Griggs DIP Projects where (i) the
Company has an option or agreement to purchase the site; (ii) not less than six
months of entitlement activity has been expended by the Company prior to
termination, and (iii) the Company begins construction within six months after
Executive's termination;

                         (z)  If Executive's termination is related to a
material failure by Executive to meet volume objectives established within the
MBO Criteria during the Term or to meet cost objectives as established by the
construction budgets approved for Griggs DIP Projects, the special vesting
provisions of this Section 8.1(b) shall not apply and Executive's DIP rights
with respect to the Griggs DIP Projects shall expire upon termination. Prior to
Executive being terminated under these circumstances, Executive shall be given
written notice of the Company's intent to terminate Executive's employment on
these grounds and Executive shall receive a cure period of not less than ninety
(90) days to cure the failure(s) giving rise to a termination that would result
in the forfeiture of vesting.

               (iii) The company shall also extend in connection with
Executive's termination, 6 months of outplacement services.

                                       5
<PAGE>

          8.2  Termination Following a Change in Control.  The following
               -----------------------------------------
provisions shall apply in lieu of Section 8.1 if, and only if, the termination
of Executive's employment occurs within 12 months following a Change in Control
(as defined in Section 8.2(d)):

               (a)  In the event of termination of Executive's employment
pursuant to Section 7.1 due to death or disability, or pursuant to Section 7.2,
all provisions of Section 8.1(a) apply.

               (b)  In the event of termination of Executive's employment
pursuant to Section 7.1 due to voluntary termination by Executive without Good
Reason (as defined below), provided that the Executive provide to the Company a
full and complete release of all known and unknown claims against the Company
and its representatives, the Company shall pay Executive within 15 days after
such termination, a lump-sum payment from the Company equal to: (i) one hundred
and forty percent (140%) of his then Base Salary if termination occurs prior to
Executive's first Annual Bonus being determined pursuant to Section 3.2; (ii)
his then Base Salary plus the amount of the Annual Performance Bonus awarded in
the immediately preceding year if termination occurs subsequent to the
determination of the Annual Performance Bonus for his first full year and prior
to the determination for the second full year; or (iii) for any subsequent
termination, his then Base Salary plus the average of the Annual Performance
Bonus awarded in the prior two years. In addition, Executive shall be entitled
to early vesting under the DIP program pursuant to the terms of Section 8.2(c);
provided, that, any amounts vested thereby shall be subject to a twenty-five
percent (25%) reduction.

               (c)  In the event of termination of Executive's employment
pursuant to Section 7.1 due to voluntary termination by Executive with Good
Reason, or pursuant to Section 7.3 or 7.4 provided that Executive provides to
the Company a full and complete release of all known and unknown claims against
the Company and its representatives, the Company shall provide Executive with
the following compensation after such termination:

                    (i)  Within 15 days, Executive shall be entitled to receive
a lump-sum payment from the Company equal to two times his then Base Salary plus
an amount equal to (x) two times the average of his Annual Bonus, if any, over
the most recent two years or (y) two times his previous Annual Bonus if only one
Annual Bonus period has passed or (z) eighty percent of his Base Salary if
termination occurs prior to Executive's first Annual Bonus being determined
pursuant to Section 3.2., and

                                       6
<PAGE>

                    (ii) Executive shall be entitled to receive early vesting
rights in the DIP. The early DIP vesting shall vest:

                         (x)  in full for Griggs DIP Projects where as a minimum
threshold, construction has commenced,

                         (y)  50% as to Griggs DIP Projects which have been
approved by the Board and with respect to which all Board established
contingencies have been satisfied to develop the site as of the date of
Executive's termination, and

                         (z)  25% as to Griggs DIP Projects where (i) the
Company has a purchase option or agreement to purchase the site; (ii) not less
than six months of entitlement activity by the Company has been expended prior
to termination and (iii) the Company begins construction within six months after
Executive's termination.

     The early vesting rights set forth in this Section shall have no effect on
the timetable for DIP payouts which shall continue to be one year after
Stabilization as set forth in the DIP.

               (d)  The company shall also extend in accordance with Executive's
termination, 6 months of outplacement services.

               (e)  As used herein, the term "Good Reason" means (i) a material
change in Executive's annual compensation, short-term and long-term incentive
plans, duties, responsibilities, or authority, (ii) the Company's relocation of
the Executive, without the Executive's consent, to a location outside of the San
Francisco metropolitan area, and (iii) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to perform this
Agreement as contemplated in Section 13.4 below after a written request by
Executive subsequent to the change in control.

               (f)  As used herein, a "Change in Control" shall be deemed to
have occurred when any of the following events occur:

                    (i)  any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), as in
effect on the date hereof, (a "Person")) acquiring "beneficial ownership" (as
defined in Rule 13D-3 under the Exchange Act), of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; or

                                       7
<PAGE>

                    (ii) a change in the Board that is the result of a proxy
solicitation(s) or other action(s) to influence voting at a shareholders'
meeting of the Company (other than by voting one's own stock) by a Person or
group of Persons who has Beneficial Ownership of 5% or more of the combined
voting power of the securities of the Company and which causes the Continuing
Directors (as defined below) to cease to constitute a majority of the Board;
provided, however, that neither of the events described in (i) or (ii) of this
Section 8.2(d) shall be deemed to be a Change in Control if the event(s) or
election(s) causing such change shall have been approved specifically for
purposes of this Agreement by the affirmative vote of at least a majority of the
members of the Continuing Directors.  For these purposes, a "Continuing
Director" shall mean a member of the Board (i) who is a member of the Board on
the date of this Agreement, or (ii) who subsequently becomes a member of the
Board and who either (x) is appointed or recommended for election with the
affirmative vote of a majority of the Directors then in office who are Directors
on the date hereof, or (y) is appointed or recommended for election with the
affirmative vote of a majority of the Directors then in office who are described
in clauses (i) and (ii) (including clause (ii)(y)), as applicable.

               (g)  Notwithstanding anything to the contrary in this Section
8.2, if any of the payments or other compensation to be made to Executive
pursuant to this Section 8.2 are determined to be "parachute payments" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then the amount of such payments or other compensation shall be reduced
to the largest amount which would not constitute "parachute payments" as so
defined.

     9.   Confidentiality. It is specifically understood and agreed that some of
          ---------------
the Company's business activities are secret in nature and constitute trade
secrets, or are otherwise confidential and/or proprietary in nature, including
but not limited to the Company's "know-how," methods of business and operations,
and property and financial analyses and reports (all such information,
"Proprietary Information"). All of the Company's Proprietary Information is and
shall be the sole property of the Company for its own exclusive use and benefit,
and Executive agrees that upon termination of his employment for any reason
whatsoever, he shall return to the Company all Proprietary Information in his
possession or under his control. Executive further agrees that he shall hold all
of the Company's Proprietary Information in strictest confidence and shall not
at any time, either during or after his employment by the Company, use or
disclose, or permit the use or disclosure of, the same for his own benefit or
for the benefit of others, unless authorized to do so by

                                       8
<PAGE>

the Company's written consent or by a contract or agreement to which the Company
is a party or by which it is bound. The provisions of this Section 9 shall
perpetually survive the termination of the Agreement, and Executive shall
likewise be bound by all other agreements between him and the Company relating
in any way to the protection of the Company's Proprietary Information.

     10.  Arbitration.  If a dispute arises between Company and Executive
          -----------
concerning this Agreement, or in any way relating to Executive's employment by
the Company and/or the termination thereof, the disputed matter shall first be
submitted to mandatory mediation, such mediation to be conducted in the City of
San Francisco pursuant to the then-current rules of the Judicial Arbitration and
Mediation Services ("JAMS") by a mediator affiliated with JAMS, or by such other
mediator as is mutually agreeable to the parties.  If the mediation does not
successfully resolve such dispute, then the dispute shall be submitted to
mandatory, final, and binding arbitration in the City of San Francisco,
California in accordance with the employment arbitration rules of the American
Arbitration Association ("AAA Rules").  Any judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.  The
arbitrators shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve the
disputed matter.  The arbitrators shall apply the law of the State of California
in making any determination hereunder.  Notwithstanding anything to the contrary
which may now or hereafter be contained in the AAA Rules, the parties agree any
such arbitration shall be conducted before a panel of three arbitrators, who
shall be compensated for their services at a rate to be determined by the
American Arbitration Association in the event the parties are not able to agree
upon their rate of compensation.  Each party shall have the right to appoint one
arbitrator (to be appointed within twenty days of the notice of a dispute to be
resolved by arbitration hereunder), and the two arbitrators so chosen shall
mutually agree upon the selection of the third, impartial arbitrator.  The
majority decision of the arbitrators will be final and conclusive upon the
parties hereto.  The parties hereby acknowledge and agree that final and binding
arbitration shall be the sole and exclusive means of resolving any such dispute,
that they waive all rights to a civil court action, and that the dispute shall
be fully and finally resolved by the arbitrators and shall not be resolved by a
jury or a court.

     11.  Taxes; Withholdings. All compensation payable by the Company to the
          -------------------
Executive under this Agreement, which is or may become subject to withholding
under the Code or other

                                       9
<PAGE>

pertinent provisions of laws or regulation, shall be reduced for all applicable
income and/or employment taxes required to be withheld.

     12.  Administration by the Board. The Board, or its Compensation Committee
          ---------------------------
as determined by the Board, shall be (i) solely responsible for the
interpretation and administration of Section 3.2 of this Agreement, and (ii)
entitled to modify Section 3.2 of this Agreement and the (including, without
limitation, performance criteria and targets) as necessary or appropriate to
achieve the purposes and intents of the same in light of changing or extenuating
circumstances. All such actions, decisions, and modifications regarding this
Agreement made in good faith by the Board, or by its Compensation Committee,
shall be final and binding on Executive.

     13.  Miscellaneous.
          -------------

          13.1 Written notices required by this Agreement shall be sent to
Company or Executive by certified mail, with a return receipt requested, to
Company's registered address and to Executive's last shown address on Company's
records, respectively.  Such notice shall be deemed to be delivered two days
after mailing.

               If to Company:      BRE Properties, Inc.
               -------------
                                   Forty Four Montgomery Street, Suite 3600
                                   San Francisco, CA 94104-4809
                                   Attn: Lee Carlson

               With Copy to:       Farella, Braun & Martel
               ------------
                                   235 Montgomery Street, Suite 3000
                                   San Francisco, CA 94104
                                   Attn: Daniel E. Cohn, Esq.

               If to Executive:    Bradley P. Griggs
               ---------------
                                   50 Corwin Drive
                                   Alamo, CA 94507

          13.2 This Agreement contains the full and complete understanding of
the parties and supersede all prior representations, promises, agreements, and
warranties, whether oral or written.

          13.3 This Agreement shall be governed by and interpreted according to
the laws of the State of California.

                                       10
<PAGE>

          13.4  With respect to the Company, this Agreement shall inure to the
benefit of and be binding upon any successors or assigns of Company.

          13.5  With respect to Executive, this Agreement shall not be
assignable but shall inure to the benefit of estate of Executive or his legal
successor upon death or disability. Nothing in this Agreement shall limit the
Executive's rights or powers to dispose of his property by will or limit any
rights or powers which his executor or administrator would otherwise have. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. If the Executive should die while any
amount is still payable to the Executive hereunder had the Executive continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement, to the Executive's devisee,
legatee, or their designee, or if there is no such designee, to the Executive's
estate.

          13.6  The captions of the various sections of this Agreement are
inserted only for convenience and shall not be considered in construing this
Agreement.
          13.7  This Agreement can be modified, amended, or any of its terms
waived only by a writing signed by both parties.

          13.8  If any provision of this Agreement shall be held invalid,
illegal, or unenforceable, the remaining provisions of the Agreement shall
remain in full force and effect, and the invalid, illegal, or unenforceable
provision shall be limited or eliminated only to the extent necessary to remove
such invalidity, illegality, or unenforceability in accordance with the
applicable law at that time.

          13.9  Without limiting the provisions of Section 10, if either party
institutes arbitration proceedings pursuant to Section 10 or an action to
enforce the terms of this Agreement, the prevailing party in such proceeding or
action shall be entitled to recover reasonable attorneys' fees, costs, and
expenses.

          13.10 Notwithstanding the foregoing or anything else to the contrary
in this Agreement, nothing in this Agreement is intended to terminate or
otherwise affect any rights, benefits or claims that Executive may have now or
in the future against Company under the Indemnification Agreement, dated
December __, 2000, between Executive and Company.

                                       11
<PAGE>

          13.11 No remedy made available to Company by any of the provisions of
this Agreement is intended to be exclusive of any other remedy.  Each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder as well as those remedies existing at law, in equity, by statute, or
otherwise.

                                       12
<PAGE>

          IN WITNESS WHEREOF, this Agreement has been executed as of the date
specified in the first paragraph.

                                   COMPANY:  BRE PROPERTIES, INC.


                                   By:   /s/ Frank McDowell
                                      ------------------------------------------
                                   Its:  President and Chief Operating Officer
                                       -----------------------------------------


                                   EXECUTIVE:  Bradley P. Griggs


                                   /s/ Bradley P. Griggs
                                   ---------------------------------------------



Attachments:
------------

Exhibit A-1 & A-2

Exhibit B

Exhibit C

                                       13
<PAGE>

                                   EXHIBIT A
                                   ---------

                 Long Term Developer Incentive Program ("DIP")
<PAGE>

                                  MEMORANDUM

                             Last Revised 11/10/00
                             ---------------------

TO:       Compensation Committee

FROM:     Frank McDowell

DATE:     November 10, 2000

RE:       Developer Incentive Program


Earlier this year, the Committee and the Board of BRE approved in concept the
Long Term Developer Incentive Plan (see attached memo dated March 20, 2000).  At
that time, it was agreed that the program would be effective as of 1/1/2000.  If
you will recall, the development group received no stock options this year based
on that assumption.  It was agreed that I would come back to the committee with
certain recommendations for items that were contemplated in the document, but
not decided at that time.  The Development group is anxious to see the final
program and I have promised them it will be forthcoming very soon.

I am having drafted now a document that represents a BRE comp plan.  It will be
provided to the Committee for final review.  It will describe the plan
consistent with the memo dated March 20, modified by the contents of this memo.

I will break this memo into two sections, the first section represents
modifications from the prior memo based on input since March, and secondly,
recommendations for items that were not covered in the earlier memo.

 .  In the original memo, we contemplated asking the Acquisition/Development
   Committee to review the Market Cap Rates annually and make changes. I would
   like to change that to have Management make a recommendation to the
   Acquisitions/Development Committee at the time of approval on what the
   appropriate cap rate should be. We will use the cap rates included in the
   March 20 memo as a guide, but cap rates do change, and as the Committee
   earlier pointed out, different sub markets and assets will be valued at
   different cap rates.

 .  We had earlier said that percentage allocations for individuals would be
   reviewed annually. I would prefer to set the allocations at a level that will
   remain the same until the A & D Committee changes them. We don't want
   developers thinking the levels will be raised.

 .  Earlier, we had allocated a 2% override to a Managing Director who is
   overseeing a Director (for instance, Ashish overseeing David Wood in San
   Diego). Jeff is concerned that the MD may not spend enough time overseeing a
   deal where he has
<PAGE>

   a 2% interest versus a 10% interest in his direct deals. I would like to
   recommend that where we have an MD (Ashish and Jeff at this point), that the
   total of the EVA participation be the same as the MD's allocation (i.e. if
   Ashish has 10% allocation on direct deals, then whatever levels the Director
   receives, say 6%, reduces his availability).

 .  We will add a provision to the plan that states that if a participant in the
   Developer Incentive Plan changes the scope of a project, or changes the
   specs/amenities of the project without proper pre-approval, BRE reserves the
   right to unilaterally reduce or cancel shares of the responsible party.

 .  In the event a participant in the EVA program is deemed to be inadequately
   performing the duties of the position, it is the prerogative of BRE to give
   the participant written notice of performance issues along with notice of
   potential remedies. The participant will be given a minimum of 90 days to
   cure the performance issues. Remedies may include the forfeiture of up to 50%
   of EVA awards that are not yet in the 12 month stabilization period.

 .  In the case of rehab projects, participants are encouraged to consider
   seeking ideas and proposing ideas for additional value added capital
   investments. For instance, if a rehab is going well and acceptance of higher
   rents is positive, we want Development group to consider if market might be
   willing to pay for even greater upgrades to interiors, etc, and recommend
   additional capital budget for approval. If this were to occur, BRE would
   change the measurement time (i.e. first 12 months after stabilization) to
   allow for NOI impact of additional improvements to be fully reflected in
   Incentive shares

Below are items that needed to have specific recommendations made:

 .  On projects that started before 1/1/00, we needed to make judgments on what a
   fair allocation of EVA would be on projects that were in the pipeline, but
   not completed. Attached find a spread sheet titled Allocation of Long term
   Development Incentive shares and another called Recommended Allocations.

 .  Because Jeff Duke has been functioning as Interim Head of Development, I have
   made allocations splitting the Head of Development share between Jeff and the
   incoming permanent Head of Development. Jeff is intended to permanently be a
   Managing Director over certain other markets (Denver and Pacific Northwest).
   If he receives a share as MD, then he does not get anything for Interim head
   of Development.

 .  In the above mentioned spread sheets, I have also recommended Target Cap
   rates and Target Returns (100 b.p. higher than Target Cap Rate) for each
   deal. They are consistent with earlier memo except Adams Place is higher cap
   rate because of rehab and asset quality.
<PAGE>

 .  I have spent a good deal of time with the issue of Overhead allocation to
   each deal. We have clearly been allocating overhead at too low a level
   ($2,000 per unit). The allocation of overhead for each deal is a corporate
   decision and participants in the EVA program have varying levels of control
   of the overhead in the group. I would recommend that for the purposes of EVA,
   the calculation of overhead will be consistent with how the original
   underwriting is approved. For instance if there was an assumption of $2,000
   per unit over an assumed 18 month development period, then the deal will be
   evaluated using the approval parameters. If in this example, the deal takes
   27months to complete, then it would be charged the $2000 prorated over the
   longer time to complete, or $3000 per unit in this case. I believe that
   responsibility to meet overhead budgets and adequate levels of construction
   starts should be evaluated individually in their annual bonus review. (NOTE:
   The head of Development does have control over the factors affecting overhead
   allocation. Thus, he will be charged with actual overhead incurred on all
   deals approved after 1/1/01. We will consider changes in future years for
   other personnel based on the overhead they can control.)

 .  The EVA calculation will include a normalized real estate tax accrual in case
   the property is not assessed during the first year of stabilization.

 .  Failed Pursuit Costs will be allocated to individuals based on their regions
   or level of oversight. We will begin accumulating pursuit costs as of
   1/1/2000.

 .  The concept of this plan is to compensate the Development group for value
   added development, major rehabs, and to a lesser extent acquisitions they
   source. We have spent most of our time thinking about ground up developments.
   In the case of acquisitions, we have said we will pay a cash payment of $50-
   $75,000 to the responsible person, after the first stabilized year, assuming
   the deal performs up to expectations. I would recommend that we pay from $25-
   75,000 based on a scale that pays the max $75,000 on successful acquisitions
   above $35 million, and the minimum paid starting at $10 million.

 .  We will define stabilization for the purposes of this agreement as follows:

     .  For acquisitions, the first full 12 months following closing

     .  For development or rehabs, the first full 12 months following: (a)the
        property achieving occupancies of 93% (for 3 consecutive months), or (b)
        not later than 9 months after receipt of final C of O.

 .  Major Rehabs are part of our strategy for value added activities as we move
   forward, just as ground up development is. The risk and effort are
   considerable, and should be commensurate with the value added component of
   each project. We need to also recognize that virtually every acquisition has
   some level of rehab budget included. I recommend that we use the basic EVA
   model for evaluating incentives for the Development team, with the following
   adjustment. We will compare the ratio
<PAGE>

   of non acquisition expenses of the rehab project to the non-land (plus fees)
   costs of development in that market, and adjust the EVA calculation
   accordingly. See spreadsheet tab headed "Rehab EVA Calculation".

 .  The final area for review is how to evaluate JV transactions. They have
   complexity because of low level of capital invested by BRE, the possibility
   of promoted interest, and different types of fees. In the case of
   Construction and Development fees, these are one time fees and will not be
   capitalized in any way. To the extent that we actually recognize profits from
   one time fees (net of overhead) then we would pay out to the development
   group the percentage of the fee received. To the extent we receive above
   market management fees, then the excess above market (say $240 per unit)
   would be included in the NOI. See example attached.

The Developer Long Term Incentive Plan will be administered by the Acquisition
and Development Committee of the Board.

Our longer term incentive program was a key element in being able to attract the
interest of numerous candidates for the Head of Development.  I believe it is
innovative and well aligned with shareholders.  If we achieve good results there
are good potential pay outs.  If we under perform in development, then the
development group shares in the pain.

I look forward to discussing this with you and moving forward to finalize the
program.
<PAGE>

                                   EXHIBIT C
                                   ---------

                         Full-Recourse Promissory Note
                         (Transition Assistance Loan)

$50,000                                                         December 8, 2000
                                                       San Francisco, California


     FOR VALUE RECEIVED, the undersigned Borrower promises to pay to BRE
PROPERTIES, INC., a Delaware corporation (the "Company"), at its principal
offices at San Francisco, California the principal sum of Fifty Thousand and
no/100 dollars ($50,000) from the date of this Note on the unpaid principal
balance, upon the terms and conditions specified below.

     1.   Term.  The principal balance of this Note shall be due and payable at
the close of business on December 8, 2005 (insert five year anniversary date).

     2.   Rate of Interest.  Note shall be interest free.

     3.   Prepayment. Prepayment of principal may be made at any time without
penalty.

     4.   Events of Acceleration.  The entire unpaid principal sum under this
Note shall become immediately due and payable upon:

          (a)  Upon termination of Borrower's employment by the Company with
     cause or termination by the Borrower without Good Reason pursuant to the
     Employment Agreement between Borrower and the Company dated as of December
     11, 2000 (the "Employment Agreement"); and

          (b)  The refusal of the Borrower to accept an offer by the Company
     extending Borrower's employment through at least the term of this Note on
     substantially the same terms as set forth in the Employment Agreement.

     5.   Events of Forgiveness.  The Company shall forgive payment of unpaid
principal under this Note as follows:

          (a)  All unpaid principal shall be forgiven by the Company upon:

               (i)   Borrower's remaining continuously employed by the Company
          through the term of this Note;

               (ii)  Borrower's death or disability, as defined in the
          Employment Agreement, while employed by the Company;

               (iii) Termination without cause of Borrower's employment by the
          Company or, in the event of a Change of Control, termination with or
          without Cause, or with Good Reason of Borrower's employment by
          Borrower pursuant to the Employment Agreement; or
<PAGE>

               (iv)  The refusal of the Company, by the completion of the
          initial term of the Employment Agreement, to extend an offer for
          Borrower's continued employment through at least the term of this Note
          on substantially the same terms as set forth in the Employment
          Agreement.

          (b)  The outstanding balance of the unpaid principal sum under this
     Note shall be forgiven and reduced by the Company based on a monthly pro
     rata adjustment taking into consideration the number of months Borrower is
     employed and the term of the Note.

     6.   Waiver.  No previous waiver and no failure or delay by the Company or
the Borrower in acting with respect to the terms of this Note shall constitute a
waiver of any breach, default or failure of condition under this Note.  A waiver
of any term of this Note must be made in writing and signed by a duly authorized
officer of the Company and shall be limited to the express terms of such waiver.

     The Borrower hereby expressly waives presentment and demand for payment at
such time as any payments are due under this Note.

     7.   Conflicting Agreements.  In the event of any inconsistencies between
the terms of this Note and the terms of any other document related to the loan
evidenced by the Note, the terms of this Note shall prevail.

     8.   Governing Law.  This Note shall be construed in accordance with the
laws of the State of California without reference to conflicts of law
principles.



                                             /s/ Bradley P. Griggs
                                             ---------------------------
                                             Bradley P. Griggs

                                             Address:
                                             50 Corwin Drive
                                             Alamo, CA 94507