<PAGE>

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

                                   FORM 10-Q


[ X ]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

                                       OR

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

            For the transition period from _________   to ________.

                         Commission File Number 1-10272

                          ARCHSTONE COMMUNITIES TRUST
             (Exact name of registrant as specified in its charter)

                Maryland                                        74-6056896
    (State or other jurisdiction of                          (I.R.S. employer
     incorporation or organization)                         identification no.)


       7670 South Chester Street                                   80112
          Englewood, Colorado                                   (Zip Code)
(Address of principal executive offices)

                                 (303) 708-5959
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report)

  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 for the past 90 days.


                              Yes  X       No ___
                                  ---

  At August 1, 2000, there were approximately 122,039,000 of the Registrant's
                           common shares outstanding.
<PAGE>

                          Archstone Communities Trust

                                     Index


<TABLE>
<CAPTION>
                                                                                                              Page
                                                                                                             Number
                                                                                                             ------
<S>                                                                                                          <C>
PART I.   Condensed Financial Information

 Item 1.  Financial Statements
          Condensed Balance Sheets - June 30, 2000 (unaudited) and December 31, 1999......................        3
          Condensed Statements of Earnings - Three and six months ended June 30, 2000 and 1999
            (unaudited)...................................................................................        4
          Condensed Statement of Shareholders' Equity - Six months ended June 30, 2000 (unaudited)........        5
           Condensed Statements of Cash Flows - Six months ended June 30, 2000 and 1999
            (unaudited)...................................................................................        6
          Notes to Condensed Financial Statements (unaudited).............................................        7
          Independent Accountants' Review Report..........................................................       15

 Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
            Operations....................................................................................       16

 Item 3.  Quantitative and Qualitative Disclosures About Market Risk......................................       21

PART II.  Other Information

 Item 4.  Submission of Matters to a Vote of Security Holders.............................................       22

 Item 6.  Exhibits and Reports on Form 8-K................................................................       22
</TABLE>

                                       2
<PAGE>

                   PART I - CONDENSED FINANCIAL INFORMATION
                         Item 1. Financial Statements

                          Archstone Communities Trust

                           Condensed Balance Sheets

                       (In thousands, except share data)


<TABLE>
<CAPTION>
                                                                                                          June 30,      December 31,
                                          ASSETS                                                            2000           1999
                                          ------                                                         -----------    -----------
                                                                                                                  (unaudited)
<S>                                                                                                      <C>            <C>
Real estate ..........................................................................................   $ 5,173,627    $ 5,086,486
Less accumulated depreciation ........................................................................       342,757        300,658
                                                                                                         -----------    -----------
                                                                                                           4,830,870      4,785,828
Investments in and advances to unconsolidated entities ...............................................       135,065        130,845
Mortgage notes receivable, net .......................................................................       207,819        210,357
                                                                                                         -----------    -----------
     Net investments .................................................................................     5,173,754      5,127,030
Cash and cash equivalents ............................................................................        14,294         10,072
Restricted cash in tax-deferred exchange escrow ......................................................        71,361         68,729
Other assets .........................................................................................        99,800         96,606
                                                                                                         -----------    -----------
     Total assets ....................................................................................   $ 5,359,209    $ 5,302,437
                                                                                                         ===========    ===========

                           LIABILITIES AND SHAREHOLDERS' EQUITY
                           ------------------------------------

Liabilities:
   Unsecured credit facilities .......................................................................   $   306,208    $   493,536
   Long-Term Unsecured Debt ..........................................................................     1,276,417      1,276,572
   Mortgages payable .................................................................................       872,868        694,948
   Dividends payable .................................................................................          --           53,518
   Accounts payable ..................................................................................        30,771         26,677
   Accrued expenses ..................................................................................        78,551         74,462
   Other liabilities .................................................................................        55,910         59,915
                                                                                                         -----------    -----------
     Total liabilities ...............................................................................     2,620,725      2,679,628
                                                                                                         -----------    -----------

Minority interest:
   Perpetual preferred units .........................................................................        73,223         41,996
   Convertible operating partnership units ...........................................................        20,152         13,307
                                                                                                         -----------    -----------
     Total minority interest .........................................................................        93,375         55,303
                                                                                                         -----------    -----------

Shareholders' equity:
   Series A Convertible Preferred Shares (3,525,723 shares in 2000 and 3,705,390 in 1999;
     liquidation preference of $25 per share) ........................................................        88,143         92,635
   Series B Preferred Shares (4,187,700 shares in 2000 and 4,200,000 shares in 1999,
     liquidation preference of $25 per share) ........................................................       104,693        105,000
   Series C Preferred Shares (1,989,200 shares in 2000 and 2,000,000 shares in 1999,
     liquidation preference of $25 per share) ........................................................        49,730         50,000
   Series D Preferred Shares (1,992,200 shares in 2000 and 2,000,000 shares in 1999,
     liquidation preference of $25 per share) ........................................................        49,805         50,000
   Common Shares (139,398,924 shares in 2000 and 139,008,353 in 1999) ................................       139,399        139,008
   Additional paid-in capital ........................................................................     2,297,980      2,291,026
   Unrealized holding gain ...........................................................................           114            394
   Employee share purchase notes .....................................................................        (9,526)       (19,170)
   Distributions in excess of net earnings ...........................................................       (75,229)      (141,387)
                                                                                                         -----------    -----------
     Total shareholders' equity ......................................................................     2,645,109      2,567,506
                                                                                                         -----------    -----------
     Total liabilities and shareholders' equity ......................................................   $ 5,359,209    $ 5,302,437
                                                                                                         ===========    ===========
</TABLE>

            The accompanying notes are an integral part of the condensed
                             financial statements.

                                       3
<PAGE>

                          Archstone Communities Trust

                       Condensed Statements of Earnings

                   (In thousands, except per share amounts)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                             Three Months Ended             Six Months Ended
                                                                                  June 30,                      June 30,
                                                                         ----------------------------  ----------------------------
                                                                             2000           1999           2000          1999
                                                                         -------------  -------------  ------------- --------------
<S>                                                                      <C>            <C>            <C>           <C>
Revenues:
     Rental revenues....................................................      $175,072       $156,644       $343,536      $309,898
     Income from unconsolidated entities................................         2,314            548          1,201         2,028
     Other income.......................................................         7,427          6,125         17,092        12,778
                                                                              --------       --------       --------      --------
                                                                               184,813        163,317        361,829       324,704
                                                                              --------       --------       --------      --------
Expenses:
     Rental expenses....................................................        41,666         39,853         79,462        78,972
     Rental expenses paid to affiliate..................................           536            529          1,194         1,099
     Real estate taxes..................................................        15,533         14,006         30,776        28,058
     Depreciation on real estate investments............................        36,696         31,450         73,221        64,247
     Interest expense...................................................        37,325         29,023         71,527        56,041
     General and administrative expenses................................         5,317          4,739         11,414         9,472
     General and administrative expenses paid to affiliate..............           149            433            337         1,032
     Other expenses.....................................................           709            531          3,819         3,362
                                                                              --------       --------       --------      --------
                                                                               137,931        120,564        271,750       242,283
                                                                              --------       --------       --------      --------
Earnings from operations................................................        46,882         42,753         90,079        82,421

     Less: minority interest - perpetual preferred units................         1,567             --          2,781           --
            minority interest - convertible operating partnership units.           366            338            596          676
     Plus:  gains on dispositions of investments, net...................        41,869         13,659         46,001       18,978
                                                                              --------       --------       --------     --------
Earnings before extraordinary item......................................        86,818         56,074        132,703      100,723
     Less:  extraordinary item - loss on early extinguishment of debt ..            --             --             --        1,113
                                                                              --------       --------       --------     --------
Net earnings............................................................        86,818         56,074        132,703       99,610
     Less:  Preferred Share dividends...................................         6,370          5,617         12,801       11,308
                                                                              --------       --------       --------     --------
Net earnings attributable to Common Shares - Basic......................      $ 80,448       $ 50,457       $119,902     $ 88,302
                                                                              ========       ========       ========     ========

Weighted average Common Shares outstanding - Basic......................       139,232        139,046        139,152      140,180
                                                                              --------       --------       --------     --------
Weighted average Common Shares outstanding - Diluted....................       145,138        139,108        144,910      140,207
                                                                              --------       --------       --------     --------
Earnings before extraordinary item per Common Share:
     Basic..............................................................      $   0.58       $   0.36       $   0.86     $   0.64
                                                                              ========       ========       ========
     Diluted............................................................      $   0.57       $   0.36       $   0.86     $   0.64
                                                                              ========       ========       ========     ========
Net earnings per Common Share:
     Basic..............................................................      $   0.58       $   0.36       $   0.86     $   0.63
                                                                              ========       ========       ========     ========
     Diluted............................................................      $   0.57       $   0.36       $   0.86     $   0.63
                                                                              ========       ========       ========     ========
Dividends paid per Common Share.........................................      $  0.385       $  0.370       $  0.770     $  0.740
                                                                              ========       ========       ========     ========
</TABLE>

    The accompanying notes are an integral part of the condensed financial
                                  statements.

                                       4
<PAGE>

                          Archstone Communities Trust

                  Condensed Statement of Shareholders' Equity

                        Six Months Ended June 30, 2000

                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                        Series A
                                       Convertible    Series B        Series C      Series D
                                        Preferred     Preferred      Preferred      Preferred
                                        Shares at     Shares at      Shares at      Shares at
                                        aggregate     aggregate      aggregate      aggregate      Common     Additional  Unrealized
                                       liquidation   liquidation    liquidation    liquidation    Shares at     paid-in     holding
                                       preference    preference      preference    preference     par value     capital    gain/loss
                                      ------------   -----------    ------------   -----------   ----------   ----------  ----------
<S>                                   <C>            <C>            <C>            <C>          <C>          <C>         <C>
Balances at December 31, 1999........    $  92,635    $ 105,000      $    50,000     $ 50,000    $  139,008    $2,291,026  $    394
    Comprehensive income:
     Net earnings....................            -            -                -            -             -             -         -
     Preferred Share dividends
       paid..........................            -            -                -            -             -             -         -
     Other...........................            -            -                -            -             -             -      (280)

    Comprehensive income
     attributable to Common Shares..
Common Share dividends...............            -            -                -            -             -             -         -
Conversion of Series A
Preferred
  Shares into Common Shares..........       (4,492)           -                -            -           242         4,250         -
Other, net...........................            -         (307)            (270)        (195)          149         2,704
                                       -----------    ---------      -----------    ---------    ----------    ---------- ---------
Balances at June 30, 2000............    $  88,143    $ 104,693      $    49,730    $  49,805    $  139,399    $2,297,980  $    114
                                       ===========    =========      ===========    =========    ==========    ========== =========

<CAPTION>
                                              Employee
                                               share       Distributions
                                              purchase      in excess of
                                                notes       net earnings        Total
                                             ---------     -------------      ----------
<S>                                          <C>           <C>                <C>
Balances at December 31, 1999........          (19,170)         (141,387)     $2,567,506
    Comprehensive income:
     Net earnings....................                -           132,703         132,703
     Preferred Share dividends
       paid..........................                -           (12,801)        (12,801)
     Other...........................                -                 -            (280)
                                                                              ----------
    Comprehensive income
     attributable to Common Shares...                                            119,622
                                                                              ----------
Common Share dividends...............                -           (53,744)        (53,744)
Conversion of Series A Preferred
  Shares into Common Shares..........                -                 -               -
Other, net...........................            9,644                 -          11,725
                                             ---------        ----------      ----------
Balances at June 30, 2000............           (9,526)       $  (75,229)     $2,645,109
                                             =========        ==========      ==========
</TABLE>

    The accompanying notes are an integral part of the condensed financial
                                 statements.


                                       5
<PAGE>

                          Archstone Communities Trust

                      Condensed Statements of Cash Flows
                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                      Six Months Ended
                                                                                                          June 30,
                                                                                                 ----------------------------
                                                                                                    2000             1999
                                                                                                 ------------    ------------
<S>                                                                                              <C>             <C>
Operating activities:
     Net earnings..............................................................................     $ 132,703        $  99,610
     Adjustments to reconcile net earnings to net cash flow provided by operating
       activities:
        Depreciation and amortization..........................................................        73,624           64,394
        Gains on dispositions of investments, net..............................................       (46,001)         (18,978)
        Provision for possible loss on investments.............................................           400            2,000
        Loss recognized on write-down of convertible mortgage notes............................         2,753               --
        Minority interest......................................................................         3,377              676
     Change in accounts payable................................................................         4,360           (3,623)
     Change in accrued expenses and other liabilities..........................................        (1,189)         (10,186)
     Change in other assets....................................................................        (4,471)           6,363
                                                                                                    ---------        ---------
        Net cash flow provided by operating activities.........................................       165,556          140,256
                                                                                                    ---------        ---------
Investing activities:
     Real estate investments...................................................................      (367,469)        (362,796)
     Investments in unconsolidated entities....................................................         5,088          (43,451)
     Proceeds from dispositions, net of closing costs..........................................       298,225          193,322
     Change in tax-deferred exchange escrow....................................................        (2,632)          55,373
     Principal repayments on mortgage notes receivable.........................................        39,829            1,526
     Change in pursuit costs and earnest money deposits........................................         4,615          (11,812)
     Other, net................................................................................        (5,298)          (2,712)
                                                                                                    ---------        ---------
        Net cash flow used in investing activities.............................................       (27,642)        (170,550)
                                                                                                    ---------        ---------
Financing activities:
     Proceeds from secured debt................................................................       156,528           36,206
     Debt issuance costs.......................................................................        (3,367)          (3,900)
     Proceeds from tax-exempt bond refinancing.................................................            --           16,000
     Principal prepayment of mortgages payable.................................................       (16,629)          (7,871)
     Regularly scheduled principal payments on mortgages payable...............................        (2,454)          (3,095)
     Proceeds from (repayments on) unsecured credit facilities, net............................      (187,328)         197,074
     Repurchase of Common and Preferred Shares.................................................          (773)         (94,365)
     Proceeds from issuance of perpetual preferred units.......................................        31,224               --
     Cash dividends paid on Common Shares......................................................      (107,262)        (104,764)
     Cash dividends paid on Preferred Shares...................................................       (12,801)         (11,306)
     Cash dividends paid to minority interests.................................................        (3,377)            (676)
     Proceeds from dividend reinvestment and repayment of share purchase loans, net............         9,706              836
     Other, net................................................................................         2,841            1,535
                                                                                                    ---------        ---------
        Net cash flow provided by (used in) financing activities...............................      (133,692)          25,674
                                                                                                    ---------        ---------
Net change in cash and cash equivalents........................................................         4,222           (4,620)
Cash and cash equivalents at beginning of period...............................................        10,072           10,119
                                                                                                    ---------        ---------
Cash and cash equivalents at end of period.....................................................     $  14,294        $   5,499
                                                                                                    =========        =========

Significant non-cash investing and financing activities:
     Assumption of mortgages payable upon purchase of apartment communities....................     $  40,674        $  45,756
     Issuance of mortgage note receivable in exchange for apartment community..................     $  35,880        $    --
     Bond refinancing..........................................................................     $    --          $  44,600
     Issuance of convertible operating partnership units in exchange for development site......     $   6,843        $    --
     Series A Convertible Preferred Shares converted to Common Shares..........................     $   4,492        $  13,457
     Partnership units exchanged for Common Shares.............................................     $    --          $   7,012
</TABLE>

    The accompanying notes are an integral part of the condensed financial
                                  statements.

                                       6
<PAGE>

                          Archstone Communities Trust

                    Notes to Condensed Financial Statements

                            March 31, 2000 and 1999
                                  (Unaudited)


(1) General

     The condensed financial statements of Archstone are unaudited and certain
information and footnote disclosures normally included in financial statements
have been omitted.  While management believes that the disclosures presented are
adequate, these interim financial statements should be read in conjunction with
the financial statements and notes included in Archstone's 1999 Annual Report on
Form 10-K ("1999 Form 10-K").

     In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary for a fair presentation of
Archstone's financial statements for the interim periods presented. The results
of operations for the three and six month periods ended June 30, 2000 and 1999
are not necessarily indicative of the results to be expected for the entire
year.

     The accounts of Archstone and its controlled subsidiaries are consolidated
in the accompanying condensed financial statements. All significant intercompany
accounts and transactions have been eliminated in consolidation. Archstone uses
the equity method to account for its investments when it does not control, but
has the ability to exercise significant influence over, the operating and
financial policies of the investee. For a real estate investee accounted for
under the equity method, Archstone's share of net earnings or losses of the
investee is reflected in "Income from unconsolidated entities" as earned and
distributions are credited against the investment as received.

     The preparation of these financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the dates of the financial statements
and the reported amounts of revenues and expenses during the reporting periods.
Actual amounts realized or paid could differ from those estimates.

 Reclassifications

  Certain 1999 amounts have been reclassified to conform to the 2000
presentation.


 Per Share Data

  Following is a reconciliation of basic earnings per share ("EPS") to diluted
EPS for the periods indicated (in thousands).

<TABLE>
<CAPTION>
                                                                        Three Months Ended                Six Months Ended
                                                                              June 30,                         June 30,
                                                                  -------------------------------- --------------------------------
                                                                       2000             1999             2000             1999
                                                                  --------------- ---------------- --------------- ----------------
<S>                                                               <C>             <C>              <C>             <C>
Reconciliation of numerator between basic and diluted net earnings per Common Share /(1)/:

Net earnings attributable to Common Shares - Basic...............  $      80,448    $      50,457   $     119,902   $       88,302
  Dividends on Series A Preferred Shares.........................          1,851                -           3,748                -
  Minority interest - convertible operating partnership units....            366                -             596                -
                                                                  --------------- ---------------- --------------- ----------------
Net earnings attributable to Common Shares - Diluted.............  $      82,665    $      50,457   $     124,246   $       88,302
                                                                  =============== ================ =============== ================

Reconciliation of denominator between basic and diluted net earnings per Common Share /(1)/:

Weighted average number of Common Shares outstanding - Basic.....        139,232          139,046         139,152          140,180
  Assumed conversion of Series A Preferred Shares into Common
   Shares........................................................          4,812                -           4,878                -
  Minority interest - convertible operating partnership units....            949                -             802                -
  Incremental options outstanding................................            145               62              78               27
                                                                  --------------- ---------------- --------------- ----------------
Weighted average number of Common Shares outstanding - Diluted           145,138          139,108         144,910          140,207
                                                                  =============== ================ =============== ================
</TABLE>


(1)  Excludes the impact of potentially dilutive equity securities during
     periods in which they are anti-dilutive.

                                       7
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)


(2) Real Estate

  Equity investments in real estate, at cost, were as follows (dollar amounts in
thousands):

<TABLE>
<CAPTION>
                                                                        June 30, 2000                    December 31, 1999
                                                              --------------------------------    --------------------------------
                                                                Investment          Units          Investment           Units
                                                              --------------    --------------    --------------    --------------
<S>                                                           <C>               <C>               <C>               <C>
Apartment Communities:
  Operating communities....................................    $  4,623,049            66,180       $ 4,444,289            68,255
  Communities under construction/(1)/......................         441,344             6,189           563,020             7,830
  Development communities In Planning/(1) (2)/:
     Owned.................................................          66,536             1,374            45,481             2,096
     Under Control /(3)/...................................               -             3,403                 -             2,375
                                                              --------------    --------------    --------------    --------------
       Total development communities In Planning...........          66,536             4,777            45,481             4,471
                                                              --------------    --------------    --------------    --------------
         Total apartment communities.......................       5,130,929            77,146         5,052,790            80,556
                                                              ==============    ==============    ==============    ==============
Hotel asset /(4)/..........................................          22,870                              22,870
Land held..................................................          19,828                              10,826
                                                              --------------                      --------------
         Total real estate.................................    $  5,173,627                        $  5,086,486
                                                              ==============                      ==============
</TABLE>

(1)  Unit information is based on management's estimates and has not been
     audited or reviewed by Archstone's independent accountants.
(2)  "In Planning" is defined as parcels of land owned or Under Control upon
     which construction of apartments is expected to commence within 36 months.
     "Under Control" means Archstone has an exclusive right (through contingent
     contract or letter of intent) during a contractually agreed-upon time
     period to acquire land for future development of apartment communities at a
     fixed price, subject to approval of contingencies during the due diligence
     process, but does not currently own the land. There is no assurance that
     such land will be acquired.
(3)  Archstone's investment as of June 30, 2000 and December 31, 1999 for
     developments Under Control was $7.1 million and $5.3 million, respectively,
     and is reflected in the ''Other assets'' caption of Archstone's Balance
     Sheets.
(4)  Represents Archstone's investment in a five-story Holiday Inn hotel located
     in the Fisherman's Wharf area of San Francisco, California.

     The change in investments in real estate, at cost, consisted of the
following (in thousands):

<TABLE>
     <S>                                                                <C>
     Balance at January 1, 2000.....................................    $       5,086,486
       Apartment communities:
          Acquisition-related expenditures..........................              218,631
          Redevelopment expenditures................................               18,122
          Recurring capital expenditures............................                5,270
          Development expenditures, excluding land acquisitions.....              111,699
          Acquisition and improvement of land for development.......               40,062
          Dispositions..............................................             (315,245)
          Provision for possible loss on investments................                 (400)
                                                                        -----------------
             Net apartment community activity.......................            5,164,625
       Other:
          Change in other real estate assets, net...................                9,002
                                                                        -----------------
     Balance at June 30, 2000.......................................    $       5,173,627
                                                                        =================
</TABLE>

     At June 30, 2000, we had unfunded contractual commitments related to real
estate investment activities aggregating approximately $224.1 million.

                                       8
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)


     We were committed to the sale of 17 apartment communities and certain other
real estate assets having an aggregate carrying value of $282.6 million as of
June 30, 2000.  Each property's carrying value is less than or equal to its
estimated fair market value, net of estimated costs to sell.  The property-level
earnings, after mortgage interest and depreciation, from communities under
contract at June 30, 2000, which are included in our earnings from operations
for the six months ended June 30, 2000 and 1999 were $8.9 million and $7.5
million, respectively.  See Note 10, Subsequent Events, for information
regarding the disposition of apartment communities in connection with our joint
venture transaction.

     During the six months ended June 30, 2000, we concluded that the full
recovery of certain real estate assets was doubtful. As a result, a provision
for possible loss of $400,000 was recorded to reduce these assets to their
estimated fair value. A similar provision of $2.0 million was recorded during
the three months ended March 31, 1999.

(3) Investments in and Advances to Unconsolidated Entities

     Archstone has investments in affiliates that are accounted for using the
equity method.  The most significant of these investments is Ameriton Properties
Incorporated, a corporation whose business is acquiring and developing
properties to sell to third parties.  Archstone owns a 95% economic interest
through its investment in Ameriton's non-voting common stock.  The voting common
stock is owned by a limited liability company.  Archstone's investment in
Ameriton at June 30, 2000 and December 31, 1999 was $127.8 million and $130.8
million, respectively.

     In June 2000, Archstone formed a joint venture with the First Islamic
Investment Bank ("FIIB").  The venture was formed through Archstone's
contribution of five apartment communities with an aggregate fair value of
approximately $101.2 million.  FIIB contributed $28.3 million of cash for an 80%
ownership interest in the venture.  The venture also obtained $65.8 million in
mortgage loans from Freddie Mac, secured by the five communities, which are
located in Salt Lake City, San Antonio, Atlanta, Nashville and Raleigh.
Archstone maintained a 20% ownership interest in the venture valued at
approximately $7.1 million and received a cash distribution of $94.1 million.
For financial reporting purposes, Archstone accounted for the transaction as a
partial disposition of the communities, which resulted in a net gain of $5.1
million.  The venture has a five-year life with flexible liquidation terms to
ensure an orderly disposition of the communities, based on prevailing market
conditions.  Archstone will receive management fees for managing the communities
and the venture. See Note 10, Subsequent Events, for information on an
additional transaction with FIIB.

(4) Mortgage Notes Receivable

     During the three months ended March 31, 2000, we concluded that for various
reasons, including the proposed transaction which would eliminate the publicly-
traded common shares of Homestead Village Incorporated, the conversion feature
associated with our Homestead mortgage notes receivable had no continuing
economic value.  A write-off of the net unamortized balance of the conversion
feature, aggregating $2.8 million, was therefore recorded.  The remaining
balances associated with the convertible mortgage notes were not affected.  See
Note 10, Subsequent Events, for further information on the sale of the Homestead
mortgage notes receivable.

(5) Borrowings

  Unsecured Credit Facilities

     We have a $750 million unsecured revolving line of credit provided by a
group of financial institutions led by The Chase Manhattan Bank, National
Association ("Chase"). The $750 million line of credit matures in July 2001, at
which time it may be converted into a two-year term loan at our option. The line
of credit bears interest at the greater of prime or the federal funds rate plus
0.50%, or at our option, LIBOR (6.68% at June 30, 2000) plus 0.65%. Under a
competitive bid option contained in the credit agreement, we may be able to
borrow at a lower interest rate spread over LIBOR, depending on market
conditions, on up to $375 million of borrowings. Under the agreement, we pay a
facility fee, which is equal to 0.15% of the commitment.

                                       9
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)


     The following table summarizes our unsecured revolving line of credit
borrowings (dollars in thousands):

<TABLE>
<CAPTION>
                                                                             Six Months Ended             Year Ended
                                                                               June 30, 2000           December 31, 1999
                                                                           --------------------      ----------------------
<S>                                                                        <C>                        <C>
Total line of credit.................................................            $750,000                   $750,000
Borrowings outstanding at end of period..............................            $292,000                   $485,000
Weighted average daily borrowings....................................            $508,187                   $387,082
Maximum borrowings outstanding during the period.....................            $558,000                   $485,000
Weighted average daily nominal interest rate.........................                 6.9%                       6.0%
Weighted average daily effective interest rate.......................                 7.1%                       6.4%
</TABLE>

     Our $100 million short-term, unsecured borrowing agreement with Chase bears
interest at an overnight rate that ranged from 6.3% to 7.6% during the six
months ended June 30, 2000.  At June 30, 2000 and December 31, 1999, there was
$14.2 million and $8.5 million, respectively, outstanding under this agreement.

     Long-Term Unsecured Debt

     A summary of our long-term unsecured notes and unsecured tax-exempt bonds
(collectively, "Long-Term Unsecured Debt") outstanding at June 30, 2000 follows
(amounts in thousands):

<TABLE>
<CAPTION>
                                                   Effective                                              Average
                                       Coupon      Interest       Balance at          Balance at         Remaining
           Type of Debt               Rate/(1)/    Rate /(2)/   June 30, 2000     December 31, 1999     Life (years)
----------------------------------   -----------  -----------  ---------------   -------------------   --------------
<S>                                  <C>          <C>          <C>               <C>                   <C>
Long-term unsecured notes/(3)/....       7.3%        7.5%         $1,200,702         $1,200,857              7.4
Unsecured tax-exempt bonds/(4)/...       4.2%        5.5%             75,715             75,715              7.9
                                     -----------  -----------  ---------------   -------------------   --------------
  Total/average...................       7.1%        7.4%         $1,276,417         $1,276,572              7.4
                                     ===========  ===========  ===============   ===================   ==============
</TABLE>

(1)  Represents a fixed rate for the long-term unsecured notes and a variable
     rate for the unsecured tax-exempt bonds.  See Archstone's 1999 10-K for
     information on our derivative financial instruments.
(2)  Includes the effect of interest rate hedges, loan cost amortization and
     other ongoing fees and expenses, where applicable.
(3)  Our long-term unsecured notes generally have semi-annual interest payments
     and either amortizing annual principal payments or balloon payments due at
     maturity --see "Scheduled Debt Maturities".  See Note 10, Subsequent
     Events, for information on an additional $200 million of Long-Term
     Unsecured Debt issued in July 2000.
(4)  The unsecured tax-exempt bonds require semi-annual interest payments and
     have a mandatory tender date of June 1, 2008.

  Mortgages Payable
  -----------------

     Archstone's mortgages payable generally feature either monthly interest and
principal payments or monthly interest-only payments with balloon payments due
at maturity.  A summary of mortgages payable outstanding at June 30, 2000
follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                     Effective Interest                      Principal Balance at
               Type of Mortgage                           Rate /(1)/              June 30, 2000              December 31, 1999
-----------------------------------------------   ---------------------    --------------------------   -------------------------
<S>                                                 <C>                      <C>                          <C>
Fannie Mae secured debt/(2)/...................            7.0%                     $407,163                    $304,365
Conventional fixed rate........................            7.8%                      179,302                     110,776
Tax-exempt fixed rate..........................            6.4%                       41,124                      56,576
Tax-exempt floating rate.......................            5.2%                      220,934                     192,847
Other..........................................            5.7%                       24,345                      30,384
                                                  ---------------------    --------------------------   -------------------------
  Total/average mortgage debt..................            6.6%                     $872,868                    $694,948
                                                  =====================    ==========================   =========================
</TABLE>

(1)  Includes the effect of interest rate hedges, credit enhancement fees, other
     bond-related costs and loan cost amortization, where applicable.
(2)  Represents long-term secured debt agreements with Fannie Mae.  Archstone
     issued $103.0 million of Fannie Mae secured debt in June 2000, which
     matures in June 2009.

                                       10
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)


     The change in mortgages payable during the six months ended June 30, 2000
consisted of the following (in thousands):

<TABLE>
     <S>                                               <C>
     Balance at January 1, 2000....................    $694,948
     Mortgage notes assumed or originated..........     197,202
     Regularly scheduled principal amortization....      (2,454)
     Prepayments, final maturities and other.......     (16,828)
                                                       --------
     Balance at June 30, 2000......................    $872,868
                                                       ========
</TABLE>

 Scheduled Debt Maturities

     Approximate principal payments due during each of the next five calendar
years and thereafter, as of June 30, 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                   Mortgages Payable
                                                           -----------------------------------
                                                             Regularly
                                         Long-Term           Scheduled               Final
                                         Unsecured           Principal            Maturities
                                            Debt            Amortization           and Other              Total
                                        ------------        ------------          ------------         ------------
<S>                                     <C>                 <C>                   <C>                  <C>
2000 (July through December)..........  $     75,155        $      2,257          $      2,161         $     79,573
2001..................................        70,010               5,712                 5,174               80,896
2002..................................        97,810               6,093                   280              104,183
2003..................................       171,560               6,430                20,577              198,567
2004..................................        51,560               6,777                36,571               94,908
Thereafter............................       810,322             160,347               620,489            1,591,158
                                        ------------        ------------          ------------         ------------
     Total............................  $  1,276,417        $    187,616          $    685,252         $  2,149,285
                                        ============        ============          ============         ============
</TABLE>

     The scheduled annual principal payments due from 2005 to 2019 average $103
million per year.

     The $750 million unsecured credit facility matures in July 2001, at which
time it may be converted into a two-year term loan, at our option.

General

     Archstone's debt instruments generally contain certain covenants common to
the type of facility or borrowing, including financial covenants establishing
minimum debt service coverage ratios and maximum leverage ratios. We were in
compliance with all financial covenants pertaining to our debt instruments at
June 30, 2000.

     For the six months ended June 30, 2000 and 1999, the total interest paid in
cash on all outstanding debt was $81.4 million and $74.1 million, respectively.
We capitalize interest incurred during the construction period as part of the
cost of apartment communities under development.  Interest capitalized during
the six months ended June 30, 2000 and 1999 was $13.0 million and $17.7 million,
respectively.

     Amortization of loan costs included in interest expense for the six months
ended June 30, 2000 and 1999 was $2.4 million and $2.6 million, respectively.


                                       11
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)

 Derivative Financial Instruments

     Our involvement with derivative financial instruments is limited and we do
not use them for trading or other speculative purposes. We occasionally utilize
derivative financial instruments to manage our exposure to interest rates. See
Archstone's 1999 Form 10-K for additional information on Archstone's derivative
financial instruments.

     In March, 2000, we entered into an interest rate cap agreement with a
notional amount of $20.9 million, relating to a tax-exempt bond which carried a
floating interest rate of 4.9% per annum as of June 30, 2000. The debt is capped
at an effective interest rate of 8.9% per annum until termination in March 2005.

     As of June 30, 2000, marking our various interest rate agreements to market
would result in a net gain of $15.4 million, prior to consideration of the
associated issuance costs, if each had been terminated on such date.

(6)  Minority Interest

     In February 2000, a consolidated subsidiary issued 680,000 Series E
perpetual preferred units ($25 liquidation preference per unit) to a limited
partnership in exchange for $17.0 million. The units pay cumulative quarterly
distributions of $0.5234 per share ($2.09375 or 8.375% per annum), are
redeemable at our option after August 13, 2004 and are exchangeable for
Archstone Series E Cumulative Redeemable Perpetual Preferred shares on or after
August 13, 2009.

     In March 2000, a consolidated subsidiary issued 600,000 Series G perpetual
preferred units ($25 liquidation preference per unit) to a limited partnership
in exchange for $15.0 million.  The units pay cumulative quarterly distributions
of $0.5391 per share ($2.15625 or 8.625% per annum), are redeemable at our
option after March 3, 2005 and are exchangeable for Archstone Series G
Cumulative Redeemable Perpetual Preferred shares on or after March 3, 2010.

     The total net proceeds of $31.2 million from the issuance of perpetual
preferred units during the six months ended June 30, 2000 were used to repay
borrowings under our unsecured credit facilities.

     In March 2000, a consolidated subsidiary acquired a development site in Los
Angeles County, California in exchange for cash and 351,000 convertible
operating partnership units valued at approximately $6.8 million.   The units
are convertible on a one for one basis into Common Shares and are generally
entitled to distribution in amounts equal to those distributed on Common Shares.

     The units are included in minority interest in the accompanying Balance
Sheets.  Distributions associated with the units were equal to the income
allocated to these minority interests, which is reflected as minority interest
expense in the accompanying Statements of Earnings.

(7)  Cash Dividends

     The following table summarizes the cash dividends paid per share on the
Common Shares and Preferred Shares during 2000:

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                            --------------------------------------
                                                            June 30, 2000          March 31, 2000
                                                            ---------------         --------------
          <S>                                               <C>                     <C>
          Common Shares...............................           $0.3850                 $0.3850
          Series A Convertible Preferred Shares (1)...           $0.5186                 $0.5186
          Series B Preferred Shares (1)...............           $0.5625                 $0.5625
          Series C Preferred Shares (1)...............           $0.5391                 $0.5391
          Series D Preferred Shares (1)...............           $0.5469                 $0.5469
</TABLE>

           (1)   Collectively, the Series A, B, C and D Preferred Shares are
                 referred to as the "Preferred Shares".

  On July 18, 2000, Archstone's Board of Trustees declared the third quarter
2000 cash dividend of $0.385 per Common Share, payable on August 30, 2000, to
shareholders of record on August 16, 2000.  This dividend represents our 98th
consecutive Common Share dividend.

                                       12
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Continued)


(8)  Shareholders' Equity

   During the six months ended June 30, 2000, approximately 180,000 of Series A
Convertible Preferred Shares were converted, at the option of the holders, into
approximately 242,000 Common Shares.

   At June 30, 2000, Security Capital Group Incorporated ("Security Capital"),
our largest shareholder, owned approximately 36% of our Common Stock on a fully
diluted basis and approximately 38% based on Common Shares outstanding.  See
Note 10, Subsequent Events, for an update on Security Capital's ownership.

(9) Segment Data

   We define each of our apartment communities as individual operating segments.
We have determined that all of our apartment communities have similar economic
characteristics and also meet the other criteria which permit the apartment
communities to be aggregated into one reportable segment.  We rely primarily on
net operating income, defined as rental revenues less rental expenses and real
estate taxes, for purposes of making decisions about allocating resources and
assessing segment performance.

   Following are reconciliations of the reportable segment's: (i) revenues to
consolidated revenues and (ii) net operating income to consolidated earnings
from operations (in thousands):

<TABLE>
<CAPTION>
                                                                          Three Months Ended                   Six Months Ended
                                                                              June 30,                            June 30,
                                                                       2000              1999              2000              1999
                                                                ---------------   ---------------   ---------------   -------------
<S>                                                             <C>               <C>               <C>               <C>
Reportable apartment community segment revenues...........          $173,962          $155,648          $341,693          $308,138
Income from unconsolidated entities.......................             2,314               548             1,201             2,028
Income from hotel asset...................................             1,110               996             1,843             1,760
Other (1).................................................             7,427             6,125            17,092            12,778
                                                                ------------      ------------      ------------      ------------
Total segment and consolidated revenues...................          $184,813          $163,317          $361,829          $324,704
                                                                ============      ============      ============      ============
</TABLE>


<TABLE>
<CAPTION>
                                                                           Three Months Ended               Six Months Ended
                                                                                  June 30,                      June 30,
                                                                     ---------------------------     ----------------------------

                                                                           2000         1999             2000            1999
                                                                     -----------     -----------     ------------    ------------
<S>                                                                    <C>           <C>             <C>             <C>
Reportable apartment community segment net operating income...          $116,230      $101,254         $  230,266       $  200,026
Net operating income from hotel asset.........................             1,107         1,002              1,838            1,743
                                                                     -----------     ---------           --------      -----------
   Total segment net operating income.........................           117,337       102,256            232,104          201,769
                                                                     -----------     ---------           --------      -----------

Reconciling items:
   Income from unconsolidated entities...........................          2,314           548              1,201            2,028
   Other income..................................................          7,427         6,125             17,092           12,778
   Depreciation on real estate investments.......................        (36,696)      (31,450)           (73,221)         (64,247)
   Interest expense..............................................        (37,325)      (29,023)           (71,527)         (56,041)
   General and administrative expenses...........................         (5,466)       (5,172)           (11,751)         (10,504)
   Other expenses................................................           (709)         (531)            (3,819)          (3,362)
                                                                     -----------      --------           --------      -----------
Consolidated earnings from operations............................       $ 46,882      $ 42,753           $ 90,079       $   82,421
                                                                     ===========      ========           ========      ===========
</TABLE>

(1)  Includes $11.9 million and $11.7 million of interest income on the
     Homestead mortgage notes receivable for the six months ended June 30, 2000
     and 1999, respectively.  Also includes interest income on cash equivalents
     and other notes receivable.  For the six months ended June 30, 2000,
     includes a $3.3 million gain on the sale of Spectrum Apartment Locators, an
     apartment locator company acquired in January 1998.

     Archstone does not derive any of its consolidated revenues from foreign
countries and does not have any major customers that individually account for
10% or more of its consolidated revenues.

                                       13
<PAGE>

                          Archstone Communities Trust

             Notes to Condensed Financial Statements - (Concluded)


(10) Subsequent Events

  In July 2000, we issued $200.0 million of Long-Term Unsecured Debt.  The notes
have a coupon rate of 8.2% and pay interest semi-annually through maturity on
July 3, 2005.  The effective interest rate, including discount and issuance
costs is approximately 8.4%. We used the $198.6 million of net proceeds to repay
borrowings under our unsecured credit facilities.

  In July 2000, Archstone formed a second joint venture with FIIB.  The
structure of this transaction is identical to the venture transaction discussed
in Note 3, Investments in and Advances to Unconsolidated Entities. The venture
was formed through Archstone's contribution of six apartment communities with an
aggregate fair value of approximately $135.9 million.  FIIB contributed $38.4
million of cash for an 80% ownership interest in the venture.  The venture also
obtained $87.9 million in mortgage loans from Freddie Mac, secured by the six
communities, which are located in Phoenix, Albuquerque, Houston, Richmond and
two in Atlanta.  Archstone maintained a 20% ownership interest in the venture
valued at approximately $9.6 million and received a cash distribution of $126.3
million.  For financial reporting purposes, Archstone accounted for the
transaction as a partial disposition of the communities, which resulted in a net
gain of $8.2 million.

  In July 2000, we completed a transaction to repurchase approximately 17.5
million of our Common Shares held by Security Capital in exchange for Homestead
mortgage notes receivable with a face amount of $221.3 million and cash of
$178.7 million.  Security Capital's ownership of our Common Shares was reduced
from approximately 36% to approximately 27% on a fully diluted basis (from
approximately 38% to approximately 29% based on Common Shares outstanding).

                                       14
<PAGE>

                    INDEPENDENT ACCOUNTANTS' REVIEW REPORT


The Board of Trustees and Shareholders
of Archstone Communities Trust:

     We have reviewed the accompanying condensed balance sheet of Archstone
Communities Trust as of June 30, 2000, and the related condensed statements of
earnings for the three and six month periods ended June 30, 2000 and 1999, the
condensed statement of shareholders' equity for the six month period ended June
30, 2000 and the condensed statements of cash flows for the six month periods
ended June 30, 2000 and 1999. These condensed financial statements are the
responsibility of the Trust's management.

     We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

     Based on our review, we are not aware of any material modifications that
should be made to the condensed financial statements referred to above for them
to be in conformity with generally accepted accounting principles.

     We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet of Archstone Communities Trust as of December 31,
1999, and the related statements of earnings, shareholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
January 27, 2000, except as to Note 16, which is as of February 4, 2000, we
expressed an unqualified opinion on those financial statements.  In our opinion,
the information set forth in the accompanying condensed balance sheet as of
December 31, 1999 is fairly stated, in all material respects, in relation to the
balance sheet from which it has been derived.



                                  KPMG LLP

Chicago, Illinois
July 26, 2000

                                       15
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

     The following information should be read in conjunction with Archstone's
1999 Form 10-K as well as the financial statements and notes included in Item 1
of this report.  Certain statements in this Form 10-Q are "forward-looking
statements" as that term is defined under the Private Securities Litigation
Reform Act of 1995.  These forward-looking statements are based on management's
current expectations, estimates and projections about the industry and markets
in which Archstone operates.  Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates" and variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions, which are difficult to predict and many of
which are beyond the control of Archstone.  Therefore, actual outcomes and
results may differ materially from what is expressed, forecasted or implied in
such forward-looking statements.  Information concerning expected investment
balances, expected funding sources, planned investments and revenue and expense
growth assumptions are examples of forward-looking statements.  We undertake no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
applicable law.

     Archstone's operating results depend primarily on income from apartment
communities, which is substantially influenced by demand and supply of apartment
units in Archstone's primary target markets and submarkets, operating expense
levels, property level operations and the pace and price at which we can
develop, acquire or dispose of apartment communities.  Capital and credit market
conditions which affect Archstone's cost of capital also influence operating
results.  See Archstone's 1999 Form 10-K "Item 1. Business" for a more complete
discussion of risk factors that could impact Archstone's future financial
performance.

Results of Operations

  Three and Six Months Ended June 30, 2000 Compared to June 30, 1999

     Archstone's overall rental revenues increased $18.4 million (11.8%) and net
operating income increased $15.1 million (14.8%) during the three months ended
June 30, 2000 as compared to the same period in 1999.  During the six months
ended June 30, 2000, rental revenues increased $33.6 million (10.9%) and net
operating income increased $30.3 million (15.0%).  These increases were
attributable to strong performance from our operating communities and the
execution of our capital redeployment program, which involves the disposition of
operating communities in secondary markets with less attractive growth prospects
to fund new investments in targeted markets with higher barriers to entry.

     In addition, net earnings attributable to Common Shares increased $30.0
million during the three months ended June 30, 2000 as compared to the same
period in 1999.  This increase resulted primarily from a $4.1 million increase
in earnings from operations and a $28.2 million increase in gains on
dispositions in 2000.  These increases were partially offset by a $2.3 million
increase in minority interest expense and Preferred Share dividends.

     During the six months ended June 30, 2000 net earnings attributable to
Common Shares increased $31.6 million as compared to the same period in 1999.
This increase resulted primarily from a $7.7 million increase in earnings from
operations and a $27.0 million increase in gains on dispositions. These
increases were partially offset by a $4.2 million increase in minority interest
expense and Preferred Share dividends.

  Apartment Community Operations

     At June 30, 2000, investments in apartment communities comprised over 99%
of our total real estate portfolio, based on total expected investment,
including planned capital expenditures. The following table summarizes the net
operating income generated from our apartment communities for each period (in
thousands, except for percentages):

<TABLE>
<CAPTION>
                                                         Three Months Ended June 30,                Six Months Ended June 30,
                                                       ---------------------------------       ---------------------------------
                                                            2000                1999                2000              1999
                                                       --------------     --------------       --------------    ---------------
<S>                                                   <C>                <C>                  <C>                <C>
Rental revenues.................................             $173,962           $155,648             $341 693           $308,138
Property operating expenses.....................               57,732             54,394              111,427            108,112
                                                       --------------     --------------       --------------    ---------------
Net operating income............................             $116,230           $101,254             $230,266           $200,026
                                                       ==============     ==============       ==============    ===============
Operating margin (NOI/rental revenues)..........                 66.8%              65.1%                67.4%              64.9%
                                                       ==============     ==============       ==============    ===============
Average occupancy during period.................                 96.0%              94.7%                95.7%              94.5%
                                                       --------------     --------------       --------------    ---------------
Average number of operating units...............               67,715             69,111               67,875             69,082
                                                       --------------     --------------       --------------    ---------------
</TABLE>

                                       16
<PAGE>

     The increases in net operating income for the three and six months ended
June 30, 2000 compared to the same periods in 1999 are primarily attributable to
an increase in rental revenues from our operating communities and the successful
lease-up of development communities. The execution of our capital redeployment
program continues to improve operating margins as a result of higher rental
rates and improved revenue growth as capital is redeployed into markets with
higher barriers to entry. Such markets typically achieve higher and more
consistent growth in net operating income. The improved operating margins for
the three and six months ended June 30, 2000 were also impacted by operating
efficiencies, lower insurance expenses due to refinement of claim estimates and
lower utility costs due to increased levels of utility reimbursements from
residents. Offsetting these expense reductions were increases in personnel costs
and higher real estate taxes in 2000 due to projected increases in certain
property tax valuations.

  Income from Unconsolidated Entities

     Income from unconsolidated entities is primarily influenced by Archstone's
investment in Ameriton Properties Incorporated, a corporation whose business is
acquiring and developing properties to sell to third parties. Archstone owns a
95% economic interest through its investment in Ameriton's non-voting common
stock. The voting common stock is owned by a limited liability company. For the
three and six months ended June 30, 2000 Archstone's equity in Ameriton's
earnings were $2.4 million and $1.3 million, respectively. Archstone's income
from unconsolidated entities in 1999 is related entirely to our investment in
Ameriton.

     In June 2000, Archstone formed a joint venture with FIIB. The venture was
formed through Archstone's contribution of five apartment communities with an
aggregate fair value of approximately $101.2 million. FIIB contributed $28.3
million of cash for an 80% ownership interest in the venture. The venture also
obtained $65.8 million in mortgage loans from Freddie Mac, secured by the five
communities, which are located in Salt Lake City, San Antonio, Atlanta,
Nashville and Raleigh. Archstone maintained a 20% ownership interest in the
venture valued at approximately $7.1 million and received a cash distribution of
$94.1 million. For financial reporting purposes, Archstone accounted for the
transaction as a partial disposition of the communities. The venture has a five-
year life with flexible liquidation terms to ensure an orderly disposition of
the communities, based on prevailing market conditions. Archstone will receive
management fees for managing the communities and the venture.

  Other Income

     Other income is primarily influenced by interest income on the Homestead
mortgage notes receivable, other notes receivable and cash balances.  During the
six months ended June 30, 2000, other income also included a $3.3 million gain
from the sale of Spectrum Apartment Locators, a wholly-owned start-up company we
acquired in January 1998.  See "Liquidity and Capital Resources, Recent Events",
for information on the sale of the Homestead mortgage notes receivable.

  Depreciation Expense

     The $5.2 million and the $9.0 million increases in depreciation expense for
the three and six months ended June 30, 2000 as compared to 1999 resulted
primarily from the increase in the cost basis of operating communities as a
result of our active capital redevelopment program and the reduction in
depreciable lives on certain real estate investments during 2000.

  Interest Expense

       The $8.3 million and $15.5 million increases in interest expense for the
three and six months ended June 30, 2000 as compared to 1999 are primarily
attributable to higher outstanding debt balances associated with the financing
of our investment activities, higher interest rates and a decrease in interest
capitalization due to lower levels of investments undergoing active development.

  General and Administrative Expenses

     The overall increase in general and administrative expenses during the
three and six months ended June 30, 2000 as compared to the same period in 1999
relates primarily to higher severance costs in 2000 as a result of certain staff
reductions. In addition, research and development costs and depreciation
associated with information technology initiatives and higher expenses
associated with Archstone's long-term incentive plan increased general and
administrative expenses.

                                       17
<PAGE>

  Other Expenses

     During the three months ended March 31, 2000, we concluded that for various
reasons, including the proposed transaction which would eliminate the publicly-
traded common shares of Homestead Village Incorporated, the conversion feature
associated with our Homestead convertible mortgage notes receivable had no
continuing economic value.  A write-off of the net unamortized balance of the
conversion feature, aggregating $2.8 million, was therefore recorded.

     During the six months ended June 30, 2000, we concluded that full recovery
of certain real estate investments was doubtful. As a result, a provision for
possible loss of $400,000 was recorded to reduce these assets to their estimated
fair value. A similar provision of $2.0 million was recorded during the three
months ended March 31, 1999. All of the above charges are included in "Other" in
the accompanying Condensed Statements of Earnings.

  Gains on Dispositions of Investments

     During the six months ended June 30, 2000, we disposed of 18 apartment
communities and certain other real estate assets representing gross proceeds of
$339.1 million.  We disposed of 15 apartment communities and certain other real
estate assets, representing gross proceeds of $198.5 million during the six
months ended June 30, 1999.  Aggregate net gains of $46.0 million and $19.0
million were recorded for the six months ended June 30, 2000 and 1999,
respectively.

  Preferred Share Dividends

     The higher level of Preferred Share dividends is attributable to an
increase in the Series A Convertible Preferred Share dividend rate and the
issuance of Series D Preferred Shares in August 1999, partially offset by
conversions of Series A Convertible Preferred Shares into Common Shares.

Liquidity and Capital Resources

     We believe Archstone's liquidity and financial condition are strong and we
remain committed to managing our balance sheet to preserve financial
flexibility.  Despite the capital-constrained operating environment that has
existed in the real estate industry, we have continued to fund attractive new
investment opportunities primarily through the use of proceeds from dispositions
in non-core secondary markets.  We believe our solid financial position will
continue to allow us to take advantage of investment opportunities that become
available in the future.

     We consider our liquidity and ability to generate cash from operations,
dispositions and financings to be adequate to meet all of our cash flow needs
during the remainder of 2000.

  Recent Events

     During July 2000, Archstone's liquidity and financial condition were
impacted by the following transactions:

i)   Archstone issued $200 million in Long-Term Unsecured Debt, proceeds from
     which were used to repay borrowings under unsecured credit facilities.

ii)  In July 2000, Archstone formed a second joint venture with FIIB. The
     structure of this transaction is identical to the venture transaction
     discussed in "Results of Operations, Income from Unconsolidated Entities".
     The venture was formed through Archstone's contribution of six apartment
     communities with an aggregate fair value of approximately $135.9 million.
     FIIB contributed $38.4 million of cash for an 80% ownership interest in the
     venture. The venture also obtained $87.9 million in mortgage loans from
     Freddie Mac, secured by the six communities, which are located in Phoenix,
     Albuquerque, Houston, Richmond and two in Atlanta. Archstone maintained a
     20% ownership interest in the venture valued at approximately $9.6 million
     and received a cash distribution of $126.3 million. For financial reporting
     purposes, Archstone accounted for the transaction as a partial disposition
     of the communities. The proceeds were used to repay borrowings under
     unsecured credit facilities.

iii) Archstone repurchased approximately 17.5 million Common Shares held by
     Security Capital in exchange for Homestead mortgage notes receivable which
     have a face amount of $221.3 million and $178.7 million in cash. Security
     Capital's ownership of our Common Shares was reduced from approximately 36%
     to approximately 27% on a fully diluted basis (from approximately 38% to
     approximately 29% based on Common Shares outstanding). As a result of this
     transaction, our leverage ratios increased temporarily although we
     anticipate that incremental dispositions will bring the financial ratios
     back to historical levels.

                                       18
<PAGE>

  Operating Activities

     Net cash flow provided by operating activities increased by $25.3 million,
or 18.0%, for the six months ended June 30, 2000 as compared to the same period
of 1999. This increase is due primarily to cash flow growth from operating
apartment communities.

  Investing and Financing Activities

     Real estate investments of $367.5 million during the six months ended June
30, 2000 were financed primarily from cash flow from operations, dispositions,
the joint venture transaction with FIIB, cash held in escrow pending tax-
deferred exchanges and borrowings under unsecured credit facilities. Unsecured
credit facilities were reduced $187.3 million during the period using net
proceeds from secured debt financing, mortgage notes receivable paydowns and the
issuance of perpetual preferred limited partnership units. Real estate
investments of $362.8 million and the repurchase of $94.4 million of Common
Shares during the six months ended June 30, 1999 were financed primarily from
proceeds from property dispositions, cash held in escrow pending tax-deferred
exchanges and borrowings under unsecured credit facilities. These unsecured
credit facilities were partially repaid with cash flow from operations,
disposition proceeds and secured debt proceeds.

     Other significant financing activities included the payment of $123.4
million and $116.7 million in Common Share, Preferred Share and minority
interest dividends/distributions for the six months ended June 30, 2000 and
1999, respectively. The increase was primarily attributable to the issuance of
the Series D Preferred Shares in August 1999, an increase in the cash dividends
paid per Common Share and an increase in the number of units issued to minority
interests. We prepaid mortgages due to community dispositions of $16.6 million
and $7.9 million during the six months ended June 30, 2000 and 1999,
respectively.

     Significant non-cash investing and financing activities during the six
months ended June 30, 2000 and 1999 included the assumption of mortgage debt,
the issuance of convertible operating partnership units and the conversion of
Series A Convertible Preferred Shares into Common Shares.

  Scheduled Debt Maturities and Interest Payment Requirements

     As of June 30, 2000, we have $79.6 million of long-term debt maturing
during the remainder of 2000 and $80.9 million maturing during 2001. See Note 5
to the financial statements contained in Item 1 for more information on
scheduled debt maturities.

     We currently have $850 million in total borrowing capacity under our
unsecured credit facilities, with $129.2 million outstanding and an available
balance of $720.8 million at August 1, 2000. Archstone's unsecured credit
facilities, Long-Term Unsecured Debt and mortgages payable had effective
interest rates of 7.1%, 7.4% and 6.6%, respectively, as of June 30, 2000. These
rates give effect to interest rate swaps and caps, as applicable.

     We were in compliance with all financial covenants pertaining to our debt
instruments at June 30, 2000.

                                       19
<PAGE>

  Shareholder Dividend Requirements

     Based on announced dividend levels for 2000 (assuming no changes in our
dividend levels) and the number of Archstone shares or units outstanding as of
June 30, 2000, we anticipate that Archstone will pay the following
dividends/distributions during the next 12 months (in thousands, except per
share amounts):

<TABLE>
<CAPTION>
                                                                                  Per Share/             Total
                                                                                     Unit
                                                                               ---------------    ------------------
<S>                                                                            <C>                <C>
Common Share /(1)/...........................................................     $   1.54         $     187,756
Series A Convertible Preferred Share.........................................         2.07                 7,312
Series B Preferred Share.....................................................         2.25                 9,422
Series C Preferred Share.....................................................         2.16                 4,289
Series D Preferred Share.....................................................         2.19                 4,358
Series E perpetual preferred limited partnership units/(2)/..................         2.09                 3,350
Series F perpetual preferred limited partnership units /(2)/.................         2.03                 1,625
Series G perpetual preferred limited partnership units /(2)/.................         2.16                 1,294
Other distributions on minority interests /(2)/..............................         1.54                 1,461
                                                                                                  ------------------
Total dividend/distribution requirements.....................................                      $     220,867
                                                                                                  ==================
</TABLE>

/1)/  Total anticipated Common Share dividends have been adjusted to give effect
      to the repurchase of 17.5 million shares from Security Capital Group
      Incorporated in July 2000.
/2)/  See Note 6 to the financial statements contained in Item 1 for information
      on the perpetual preferred limited partnership units and other minority
      interests.

  Planned Investments

     Following is a summary of unfunded planned investments as of June 30, 2000
(dollar amounts in thousands).  The amounts labeled "Discretionary" represent
future investments that we plan to make, although there is not a contractual
commitment to do so.  The amounts labeled "Committed" represent the approximate
amount that Archstone has contractually committed to fund.

<TABLE>
<CAPTION>
                                                                                          Planned Investments
                                                        ---------------   --------------------------------------------------
                                                              Units             Discretionary               Committed
                                                        ---------------   -----------------------   ------------------------
<S>                                                       <C>               <C>                       <C>
Planned operating community improvements.............            66,180      $             58,358      $               1,857
Communities under construction.......................             6,189                      -                       222,273
Communities In Planning and owned....................             1,374                   182,857                       -
Communities In Planning and Under Control............             3,403                   504,338                       -
Operating community acquisition under contract.......               280                    22,500                       -
                                                        ---------------   -----------------------   ------------------------
     Total...........................................            77,426      $            768,053      $             224,130
                                                        ===============   =======================   ========================
</TABLE>

     We anticipate completion of most of the communities that are currently
under construction and the planned operating community improvements in the
remainder of 2000 and 2001 and expect to start construction on approximately
$135.0 million, based on total expected investment, of communities that are
currently in planning, during the remainder of 2000. No assurances can be given
that communities we do not currently own will be acquired or that planned
developments will actually occur. In addition, actual costs incurred could be
greater or less than our current estimates.

  Funding Sources

     We expect to finance the company's planned investment and operating needs
primarily with cash flow from operating activities, disposition proceeds derived
from our capital redeployment program, joint venture financing and borrowings
under unsecured credit facilities prior to arranging long-term financing.  We
anticipate that net cash flow from operating activities during 2000 will be
sufficient to fund anticipated dividend requirements and scheduled debt
principal payments.  To fund planned investment activities, we had $720.8
million in available capacity on our unsecured credit facilities and
approximately $40 million in our tax-deferred exchange escrow account at August
1, 2000.  Subject to normal closing risks, we expect to complete the disposition
of an additional $200 million of operating communities and certain other real
estate assets during the remainder of 2000.

     After giving effect to the $200 million Long-Term Unsecured Debt issuance
in July, we have $577.2 million in shelf registered securities which can be
issued in the form of Long-Term Unsecured Debt, preferred shares or Common
Shares on an as-needed basis, subject to our ability to effect offerings on
satisfactory terms.

                                       20
<PAGE>

  Other Contingencies and Hedging Activities

     We are a party to various claims and routine litigation arising in the
ordinary course of business.  We do not believe that the results of any such
claims and litigation, individually or in aggregate, will have a material
adverse effect on our business, financial position or results of operations.

     Our involvement with derivative financial instruments is limited and we do
not use them for trading or other speculative purposes. We occasionally utilize
derivative financial instruments to manage our exposure to interest rates. See
Note 5 to the financial statements contained in Item 1 of this Form 10-Q and
Archstone's 1999 Form 10-K for more information on derivative financial
instruments currently in use.

  Funds From Operations

     Funds from operations has been a supplemental industry-wide standard to
measure operating performance of a real estate investment trust ("REIT") since
its adoption by the National Association of Real Estate Investment Trusts
("NAREIT") in 1991.  In October 1999, NAREIT revised the definition of funds
from operations.  The changes involved bringing the calculation of funds from
operations into closer alignment with GAAP net income.  The revised measure
generally calls for adjustments to net income for gains (losses) from sales of
depreciated real estate, depreciation on real estate investments and items
defined as "extraordinary items" under GAAP.  To conform to the revised
definition, Archstone's primary changes were:  (i) to include in funds from
operations certain non-cash components of interest income associated with
Homestead mortgage notes receivable, consistent with GAAP, and (ii) to include
the impact of net gains and losses associated with the disposition of
undepreciated real estate.  We have restated our 1999 funds from operations to
conform to this revised definition.

     Funds from operations should not be considered as an alternative to net
earnings or any other GAAP measurement of performance or as an alternative to
cash flow from operating, investing or financing activities as a measure of
liquidity.  The funds from operations measure presented by Archstone, while
consistent with NAREIT's definition, will not be comparable to similarly titled
measures of other REIT's that do not compute funds from operations in a manner
consistent with Archstone.  Funds from operations is not intended to represent
cash available to shareholders.  Anticipated cash dividends to shareholders are
summarized above in "-Shareholder Dividend Requirements".  Funds from operations
using the revised definition were as follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                                               Three Months Ended           Six Months Ended
                                                                                    June 30,                    June 30,
                                                                         ------------------------------------------------------
                                                                              2000           1999          2000          1999
                                                                         ------------   -----------    ----------   -----------
                                                                                        (restated)                  (restated)
<S>                                                                          <C>          <C>           <C>           <C>
Net earnings attributable to Common Shares - Basic..................     $     80,448   $    50,457    $  119,902   $    88,302
Add (Deduct):
   Depreciation on real estate investments..........................           36,696        31,450        73,221        64,247
   Gains on dispositions of investments, net........................          (41,869)      (13,835)      (46,001)      (19,585)
   Extraordinary item - loss on early extinguishment of debt........               --            --                       1,113
   Provision for possible loss on investments.......................              400            --           400           450
   Other, net.......................................................              280           (18)        1,108             4
                                                                         ------------   -----------    ----------   -----------
Funds from operations attributable to Common Shares - Basic.........           75,955        68,054       148,630       134,531
   Minority interest - convertible operating partnership units......              366           338           596           676
   Series A Convertible Preferred Share dividends...................            1,851         2,179         3,748         4,429
                                                                         ------------   -----------    ----------   -----------
Funds from operations attributable to Common Shares - Diluted.......     $     78,172   $    70,571    $  152,974   $   139,636
                                                                         ============   ===========    ==========   ===========
Weighted average Common Shares outstanding - Diluted................          145,138       145,872       144,910       147,149
                                                                         ============   ===========    ==========   ===========
</TABLE>

                                       21
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Archstone is exposed to interest rate changes associated with our unsecured
credit facilities and other variable rate debt as well as refinancing risk on
fixed-rate debt. Our involvement with derivative financial instruments is
limited and we do not use them for trading or other speculative purposes.  We
occasionally utilize derivative financial instruments to manage our exposure to
interest rates.

     See Archstone's 1999 Form 10-K "Item 7A.  Quantitative and Qualitative
Disclosures About Market Risk" for a more complete discussion of our interest
rate sensitive assets and liabilities.  As of June 30, 2000, there have been no
material changes in the fair values of assets and liabilities disclosed in "Item
7A.  Quantitative and Qualitative Disclosures About Market Risk" in Archstone's
1999 Form 10-K as compared to their respective fair market values at June 30,
2000.

                           PART II-OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

     At the annual shareholders meeting held May 17, 2000, shareholders elected
the following individuals to serve on the Board:

<TABLE>
<CAPTION>
                                                         Shares Voted            Shares Voted
                             Name                          in Favor                 Against
                ---------------------------------     -------------------     -------------------
               <S>                                     <C>                     <C>
               C. Ronald Blankenship............             123,699,112                 778,790
               John T. Kelley, III..............             123,723,481                 730,052
               Constance B. Moore /(1)/.........             123,714,154                 748,706
               John C. Schweitzer...............             123,740,288                 696,438
</TABLE>

/(1)/  Ms. Moore resigned as a Trustee on July 25, 2000.

     Additionally, at the annual meeting the shareholders voted to amend
Archstone's Declaration of Trust to (i) provide for the issuance of
uncertificated shares and electronic proxies, (ii) provide the ability of
Archstone to consummate mergers without shareholder approval provided the merger
does not reclassify or change the terms of any class or series of our shares and
the number of shares outstanding does not increase by more than 20%, (iii)
exclude agents from the mandatory limitation of liability provisions and (iv)
provide for permissive rather than mandatory indemnification for agents of
Archstone.  At the annual meeting 103,898,803 shares voted in favor of the
amendment, 11,068,836 shares voted against, 1,029,821 shares were recorded as
abstentions and 23,143,970 shares were recorded as broker non-votes.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits:

          3.1    Articles of Amendment of Amended and Restated Declaration of
                 Trust of Archstone, dated May 17, 2000

          10.1   Purchase and Sale Agreement dated as of July 19, 2000 between
                 Archstone and Security Capital (incorporated by reference to
                 Security Capital's Schedule 13D-A filed on July 24, 2000)

          10.2   Amendment No. 2, dated July 25, 2000, to the Third Amended and
                 Restated Investor Agreement by and between Archstone and
                 Security Capital

          12.1   Computation of Earnings to Fixed Charges

          12.2   Computation of Ratio of Earnings to Combined Fixed Charges and
                 Preferred Share Dividends

          15.1   Letter from KPMG LLP dated August 11, 2000 regarding unaudited
                 financial information

          27     Financial Data Schedule

          99.1   Current Development Activity

     (b)  Reports on Form 8-K:
          None.

                                       22
<PAGE>

                                  SIGNATURES

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


                              ARCHSTONE COMMUNITIES TRUST



                              BY:  /s/ Charles E. Mueller, Jr.
                                   ---------------------------
                                       Charles E. Mueller, Jr.
                              Senior Vice President and Chief Financial Officer
                                        (Principal Financial Officer)



                              BY:        /s/ William Kell
                                   ---------------------------
                                             William Kell
                               Senior Vice President and Controller
                                  (Principal Accounting Officer)



Date: August 11, 2000

                                       23