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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31,
2002               Commission
file number 0-22411

SUMMIT PROPERTIES
PARTNERSHIP, L.P.

(Exact name of registrant as specified in its
charter)




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|                                                                                                                 |  |                                                   
|---------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or other jurisdiction of
    incorporation or organization)                                       |  | 56-1857809(I.R.S. Employer
    Identification No.)
|                                                                                                                
|309 East Morehead Street
    Suite 200
    Charlotte, North Carolina(Address of principal executive
    offices) |  | 28202(Zip Code)                                   

(704) 334-3000

(Registrants telephone number, including
area code)




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

Securities registered pursuant to
Section 12(g) of the Act:

Common Units of Limited Partnership
Interest

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

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of
Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.     o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Exchange Act
Rule 12b-2).     Yes o          No x

The aggregate market value of common units of
limited partnership interest (Units) held by
nonaffiliates of the Registrant as of June 28, 2002 was
$54,573,643 based on the last reported sale price on that date
of the Common Stock of Summit Properties Inc., a Maryland
corporation and the sole general partner of the Registrant, into
which Units are redeemable under certain circumstances at the
election of the Registrant.



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TABLE OF CONTENTS

|         |  |                                                                                                    |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|Item     |  |                                                                                                    |  | Page
|         |  |                                                                                                    |  |     
|PART I   |  |                                                                                                    |  |     
|        
|1.       |  | Business                                                                                           |  |      | 3  | 
|        
|2.       |  | Properties                                                                                         |  |      | 8  | 
|        
|3.       |  | Legal Proceedings                                                                                  |  |      | 11 | 
|        
|4.       |  | Submission of Matters to a Vote of Security
    Holders                                            |  |      | 11 | 
|PART II  |  |                                                                                                    |  |     
|        
|5.       |  | Market for Registrants Common Equity and
    Related Stockholder Matters                          |  |      | 11 | 
|        
|6.       |  | Selected Financial Data                                                                            |  |      | 13 | 
|        
|7.       |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations          |  |      | 15 | 
|        
|7A.      |  | Quantitative and Qualitative Disclosures about
    Market Risk                                     |  |      | 38 | 
|        
|8.       |  | Financial Statements and Supplementary Data                                                        |  |      | 38 | 
|        
|9.       |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure           |  |      | 38 | 
|PART III |  |                                                                                                    |  |     
|        
|10.      |  | Directors and Executive Officers of Registrant                                                     |  |      | 39 | 
|        
|11.      |  | Executive Compensation                                                                             |  |      | 42 | 
|        
|12.      |  | Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters |  |      | 47 | 
|        
|13.      |  | Certain Relationships and Related Transactions                                                     |  |      | 48 | 
|        
|14.      |  | Controls and Procedures                                                                            |  |      | 51 | 
|PART IV  |  |                                                                                                    |  |     
|        
|15.      |  | Exhibits, Financial Statement Schedules and
    Reports on Form 8-K                                |  |      | 52 | 
|         |  | Signatures                                                                                         |  |      | 60 | 
|         |  | Certifications                                                                                     |  |      | 61 | 

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PART I

This Form 10-K contains forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Our actual results
could differ materially from those set forth in the
forward-looking statements. Certain factors that might cause
such a difference are discussed in this report on Form 10-K,
including the section entitled Forward-Looking
Statements on page 15. Unless the context otherwise
requires, all references to we, our or
us in this report refer collectively to Summit
Properties Partnership, L.P., a Delaware limited partnership
(the Operating Partnership), and its subsidiaries.
All references to Summit in this report refer to
Summit Properties Inc., a Maryland corporation and the sole
general partner of the Operating Partnership.

Item 1.     Business

Our Company

We are a real estate operating company that
focuses on the development, construction, acquisition, and
operation of luxury apartment communities. As of
December 31, 2002, we owned 51 completed communities
comprised of 15,428 apartment homes with an additional 1,206
apartment homes under construction in four new communities. We
also own a 25% interest in a joint venture comprised of four
completed communities with 1,203 apartment homes. We are a fully
integrated organization with multifamily development,
construction, acquisition and operation expertise. As of
December 31, 2002, we had approximately 500 employees.

We operate throughout the Southeast and
Mid-Atlantic states and have chosen to focus our current efforts
in five core markets consisting of Atlanta, Charlotte, Raleigh,
Southeast Florida and Washington, D.C. While we currently
operate in Texas as well, we intend to exit our Texas markets
and use the sales proceeds from those communities primarily to
increase our presence in the Washington, D.C. and Southeast
Florida markets. We have established city operating offices in
all of our core markets. These city offices have direct
responsibility for development, construction, and management of
the communities in their geographic markets. We believe that
this decentralized structure provides us with superior local
knowledge and experience in each market.

The sole general partner of the Operating
Partnership is Summit, a real estate investment trust
(REIT). Summits common stock, par value $0.01
per share, is listed on the New York Stock Exchange under the
symbol SMT. Our property management, certain
construction, and other businesses are conducted through our
subsidiaries, Summit Management Company, a Maryland corporation,
and Summit Apartment Builders, Inc., a Florida corporation.
Throughout this report, we refer to Summit Management Company as
the Management Company and to Summit Apartment
Builders, Inc. as the Construction Company.

Operating Philosophy

We view customer service as one of our key values
and seek to provide our residents with experienced, well-trained
and attentive management staffs. Utilizing a hiring process
known as Success By Selection, we select potential
candidates who believe in superior customer service. Once hired,
our associates enter into a comprehensive training program
called Ask for Action. This training program ensures
that our associates have a clear understanding of their job
responsibilities, the high standards of performance expected of
them, and the importance of excellent customer service. We have
also developed several classes focusing on excellence in
property management to provide on-going training for our
associates and to further enhance associate productivity. We
believe that this training regimen, along with the Success
by Selection hiring process, has provided a higher quality
management staff, evidenced by high resident satisfaction at our
communities. For an unprecedented four years (1998 to 2001), we
received the CEL & Associates, Inc. Customer Service
Award for Excellence. This award is based on survey
results of apartment residents throughout the country.

We have long stressed the importance of
developing strong customer relationships with our residents. Our
commitment to resident satisfaction is evidenced by our
Peak Services. Among the many Peak Services are: a
Happiness Guarantee where residents can move from one of our
communities without early lease

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termination charges if they are not satisfied
with their home during the first 30 days; Same Day
Maintenance Service and


Emergency Maintenance available 24 hours a
day; Business Services; Package Acceptance and Delivery; Loaner
Living Accessories where we provide convenience tools for our
residents use; No Nonsense Transfer Policy where residents
can easily move from one Summit community to another without
incurring many of the additional fees normally associated with
such a move; and a free current run Video Library.

Business and Growth Strategies

In addition to superior customer service, we have
identified four other strategies to create long term value for
our unitholders and Summits stockholders: Disciplined
Capital Management; Strategic Market Selection; Decentralized,
Fully Integrated Operating Teams; and Sound Risk Management.

Disciplined Capital
Management.We have determined that
currently our most efficient source of capital continues to be
contained within our existing portfolio of communities. By
disposing of older communities in less desirable locations, and
redeploying that capital in new communities in our core markets,
we are able to create value in two ways. First, we have
historically realized higher returns, on average, from the newer
communities where this Recycled Capital has been
utilized as compared to the older communities that have provided
this capital. Second, this Capital Recycling Program has reduced
the average age of the communities in our portfolio to
approximately six years. This reduction in average age has
resulted in lower maintenance and capital expenditure costs and
has allowed us to better adapt our product to constantly
changing market demands. Although we anticipate continuing this
strategy of reinvesting capital obtained from dispositions into
the development of new communities, there can be no assurance
that we will be able to complete our disposition strategy, that
assets identified for sale can be sold, or sold on satisfactory
terms, or that we will be able to locate favorable opportunities
for investment in our core markets.

Strategic Market
Selection.Our goal is to be a
market-leading operator of luxury apartment homes in a carefully
selected group of core markets. We believe this strategy will
improve our financial performance by improving economies of
scale, concentrating market knowledge, and increasing brand
awareness. We believe employment growth is a critical economic
factor which affects apartment occupancy and rental rates. Based
on a historical comparison of employment growth in our five core
markets versus the U.S. average (excluding our core markets),
these markets have typically generated higher job growth over an
extended period of time and recovered from economic downturns
more quickly.

Decentralized, Fully Integrated Operating
Teams.We have integrated property
management, development, and construction on a local level
through our City Team concept. Each of the City Teams
includes a developer employed by Summit adept at visualizing
market opportunities, construction personnel at the Construction
Company who specialize in building luxury apartment communities,
and management personnel at the Management Company experienced
in the marketing, leasing and maintenance of luxury apartment
communities. Working within well-understood corporate guidelines
under the direction of senior management at our headquarters,
these teams operate as autonomous units. We believe this
integrated approach will create premium quality communities and
increased customer satisfaction.

Sound Risk
Management.We endeavor to practice
sound risk management with respect to our portfolio of
communities. Potential developments proposed by the City Teams
are vigorously reviewed by a panel of senior management at our
headquarters prior to the commitment of significant investment
dollars. We believe that this combination of locally generated
development opportunities, together with centralized review and
assessment, produces a premium quality community with manageable
risk.

Development Program

Through our City Teams, we maintain an active
development program which is appropriate for each market.
Focusing on development allows us to build premium quality
communities and provide returns which generally exceed those
achieved on acquired communities.

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Although we have historically focused on suburban
apartment communities, we have developed, or are currently
developing, several communities in downtown areas in our
Atlanta, Charlotte, Southeast Florida and Washington, D.C.
core markets. These urban-oriented communities will augment our
portfolio of primarily suburban communities.

During 2002, we curtailed, and may continue to
curtail, our development spending in an effort to increase our
financial flexibility in the current economic environment. In
2002, we completed development of four communities, adding 866
apartment homes to our portfolio. These four communities
represent a total investment of approximately
$129.6 million. The communities completed in 2002 are
Summit Shiloh II, Summit Valleybrook, Summit Brookwood and
Summit Grand Parc.

We utilize the Construction Company, in addition
to third-party general contractors, to build our new
communities. Of the 1,206 apartment homes under development as
of December 31, 2002, 65% are being built by the
Construction Company.

The following provides summary information
regarding the four communities under construction as of
December 31, 2002 (dollars in thousands):

|                                                |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |        | 
|----------------------------------------------- |  | --------- | ----- | --------- |  | ------- | ------- | --------- |  | ------------ | ------- |  |  | - | ------ |  |  |  | ------ | 
|                                                |  |           |       | Total     |  |         |         | Estimated |  | Anticipated 
|                                                |  | Apartment |       | Estimated |  | Cost To |         | Cost To   |  | Construction
|Community                                       |  | Homes     |       | Costs     |  | Date    |         | Complete  |  | Completion  
|                                                |  |           |       |           |  |         |         |           |  |             
|Summit Roosevelt 
    Washington, D.C.         |  |           | 198   |           |  | $       | 49,600  |           |  | $            | 42,036  |  |  | $ | 7,564  |  |  |  | Q22003 | 
|Summit Stockbridge  Atlanta, GA                |  |           | 304   |           |  |         | 23,600  |           |  |              | 18,608  |  |  |   | 4,992  |  |  |  | Q32003 | 
|Summit Silo Creek  Washington,
    D.C.        |  |           | 284   |           |  |         | 41,700  |           |  |              | 17,430  |  |  |   | 24,270 |  |  |  | Q22004 | 
|Summit Las Olas  Ft. Lauderdale, FL            |  |           | 420   |           |  |         | 73,700  |           |  |              | 34,648  |  |  |   | 39,052 |  |  |  | Q32005 | 
|Other development and construction
    costs(1) |  |           |      |           |  |         |        |           |  |              | 26,541  |  |  |   |       |  |  |  |        | 
|                                                |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |        | 
|                                                |  |           | 1,206 |           |  | $       | 188,600 |           |  | $            | 139,263 |  |  | $ | 75,878 |  |  |  |        | 
|                                                |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |        | 



|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|(1) | Consists primarily of land held for development
    and other predevelopment costs.

As with any development project, there are
uncertainties and risks associated with the development of the
communities described above. While we have prepared development
budgets and have estimated completion and stabilization target
dates based on what we believe are reasonable assumptions in
light of current conditions, there can be no assurance that
actual costs will not exceed current budgets or that we will not
experience construction delays due to the unavailability of
materials, weather conditions or other events. Similarly, market
conditions at the time these communities become available for
leasing will affect rental rates and the period of time
necessary to achieve stabilization, and could result in
achieving stabilization later than currently anticipated. See
Managements Discussions and Analysis of Financial
Condition and Results of Operations  Development
Activity beginning on page 35 for a discussion of
uncertainties and risks associated with our development program.

Acquisition and Disposition Program

While we have emphasized development of new
apartment communities, we also have the expertise to capitalize
on acquisition opportunities that meet our investment criteria.
We believe our City Teams give us an advantage in identifying
and underwriting attractive acquisition opportunities. We have
acquired more than 9,200 apartment homes since Summits
initial public offering in 1994.

In 2002, elevated purchase prices for
acquisitions in the open market would have generally resulted in
economic performance for those assets that was unattractive when
compared to the potential economic performance of our
development program. As a result, we acquired only one community
during 2002, representing a total investment of
$17.1 million. However, this pricing dynamic also created
an opportunity for us to increase our disposition activity,
thereby enhancing our Capital Recycling Program, which is
dependent on the execution of attractively priced dispositions.

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During 2002, we disposed of eight communities for
an aggregate sales price of $211.8 million. For the most
part, these communities were located outside our core markets
and, as such, did not fit into our strategic market selection
strategy. The proceeds from certain of these dispositions
provided the basis for our Capital Recycling Program.

The Operating Partnership

We are a Delaware limited partnership which was
formed on January 14, 1994 to continue and expand the
multifamily development, construction, acquisition, operation,
management and leasing businesses of the predecessor entities
through which we historically conducted operations prior to the
initial public offering of Summit. The predecessor entities were
founded by one of Summits Co-Chairmen of the Board,
William B. McGuire, Jr. in 1972. In 1981,
William F. Paulsen joined Summits predecessor as
Chief Executive Officer and shepherded the growth of its
multifamily development and management activities.

As our sole general partner, Summit has the
exclusive power to manage and conduct our business, subject to
certain voting rights of holders of our common units of limited
partnership interest, including the consent of holders
(including Summit) of 85% of the common units in connection with
a sale, transfer or other disposition of all or substantially
all of our assets, or any other transaction which would result
in the recognition of a significant taxable gain to the holders
of common units, and subject to certain voting rights of holders
of our preferred units of limited partnership interest. Subject
to the rights and preferences of the outstanding preferred
units, Summits general and limited partnership interests
as of December 31, 2002, entitled it to share in 88.6% of
our cash distributions and profits and losses. As of
December 31, 2002, we had outstanding 3.4 million
Series B and 2.2 million Series C Cumulative
Perpetual Preferred Units.

Each common unit may be redeemed by the holder
for cash equal to the fair market value of a share of
Summits common stock or, at our option, one share of
common stock (subject to adjustment). We presently determine on
a case-by-case basis whether we will cause Summit to issue
shares of common stock in connection with a redemption of common
units rather than paying cash. With each redemption of common
units for common stock, Summits percentage ownership
interest in the Operating Partnership will increase. Similarly,
when Summit acquires a share of common stock under its common
stock repurchase program or otherwise, it simultaneously
disposes of one of our common units. In addition, whenever
Summit issues shares of common stock for cash, Summit will
contribute any resulting net proceeds to us and we will issue an
equivalent number of common units to Summit.

The Operating Partnership cannot be terminated,
except in connection with a sale of all or substantially all of
its assets, for a period of 99 years from the date of
formation without a vote of our limited partners.

Our executive offices are located at 309 East
Morehead Street, Suite 200, Charlotte, North Carolina
28202. Our telephone number is (704) 334-3000 and our
facsimile number is (704) 333-8340. We also maintain
offices in Atlanta, Georgia; Austin, Texas; Bethesda, Maryland;
Ft. Lauderdale, Florida; and Raleigh, North Carolina.

2002 Significant Events

Summit has a common stock repurchase program,
approved by its Board of Directors, pursuant to which Summit is
authorized to purchase up to an aggregate of $56.0 million
of currently issued and outstanding shares of its common stock.
All repurchases have been, and will be, made on the open market
at prevailing prices or in privately negotiated transactions.
This authority may be exercised from time to time and in such
amounts as market conditions warrant. Summit repurchased 151,300
shares of its common stock for an aggregate purchase price,
including commissions, of $2.7 million, or an average price
of $17.62 per share during the year ended December 31,
2002. Summit repurchased 8,800 shares of its common stock for an
aggregate purchase price, including commissions, of $197,000, or
an average price of $22.38 per share during the year ended
December 31, 2001. Summit repurchased 279,400 shares of its
common stock for an aggregate purchase price, including
commissions, of $5.5 million, or an average price of $19.80
per share during the year ended December 31, 2000.
Subsequent to December 31, 2002, Summit has repurchased
422,200 shares of its common stock for an aggregate purchase
price, including commissions, of $7.5 million, or an
average price of

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$17.70 per share. As of March 5, 2003,
Summit had $40.1 million remaining available for
repurchases under the plan.


Summit has a non-qualified employee stock
purchase plan (ESPP) as well as a dividend
reinvestment and direct stock purchase plan (DRIP).
Transactions under the ESPP were suspended effective
July 2, 2002. Direct stock purchases under the DRIP were
suspended effective October 31, 2002 and dividend
reinvestment under the DRIP was suspended effective
November 15, 2002. The ESPP allowed Summits employees
to purchase up to $25,000 per year of its common stock at a
discount of 15%. The DRIP provided both new investors and
existing holders of Summits stock with a method to
purchase shares of common stock and the ability for those
stockholders to designate all, a portion or none of the cash
dividends on shares of our common stock for reinvestment in more
shares of Summits common stock.

In December 2002, we announced our intention to
take advantage of the strong sales market that we have been
experiencing by exiting our Texas markets, where, relative to
our other markets, we lack the size and penetration to operate
at maximum efficiency. We currently intend to use sales proceeds
from our Texas communities primarily to increase our presence in
the Washington, D.C. and Southeast Florida markets.

In December 2002, Summits Board of
Directors approved a reduction of our annual distribution from
$1.90 to $1.35 per common unit. A corresponding reduction was
made in Summits annual dividend per share of common stock.
This decision was made in order to bring the distribution in
line with the expected cash flow generated by our communities.
We intend to continue to make regular quarterly distributions to
holders of our common units. Future distributions will be made
at the discretion of Summits Board of Directors and will
depend on actual cash flow, our financial condition, our capital
requirements, the annual distribution requirements under the
REIT provisions of the Internal Revenue Code, and such other
factors as Summits Board of Directors may deem relevant.
Summits Board of Directors may modify our distribution
policy from time to time.

Competition

Within each market, our communities compete
directly with other rental apartments, condominiums and
single-family homes that are available for rent or sale. These
housing alternatives could adversely affect our ability to lease
apartment homes, and increase or maintain our rents. In
addition, various entities, including insurance companies,
pension and investment funds, partnerships, investment companies
and other multifamily REITs, compete with us for the acquisition
of existing communities and the development of new communities,
some of which may have greater resources than us. We compete
against these firms and other housing alternatives by stressing
customer service, market presence, product quality and
experience.

Environmental Matters

Under various federal, state and local
environmental laws, ordinances and regulations, a current or
previous owner or operator of real estate may be required, in
many instances regardless of knowledge or responsibility, to
investigate and remediate the effects of hazardous or toxic
substances or petroleum product releases at that property. The
owner or operator of real estate may be held liable to a
governmental entity or to third parties for property damage and
for investigation and remediation costs incurred by those
parties in connection with the contamination, which may be
substantial. The presence of these substances, or the failure to
properly remediate the contamination, may adversely affect the
owners ability to borrow against, sell or rent that
property. In addition, some environmental laws create a lien on
the contaminated site in favor of the government for damages and
costs it incurs in connection with the contamination. In
connection with the ownership, operation, management and
development of our communities and other real properties, we may
be potentially liable for these damages and costs.

Certain federal, state and local laws, ordinances
and regulations govern the removal, encapsulation and
disturbance of asbestos-containing materials (ACMs),
when these materials are in poor condition or in the event of
construction, remodeling, renovation or demolition of a
building. These laws, ordinances and regulations may impose
liability for release of ACMs and may provide for third parties
to seek recovery from owners or operators of real properties for
personal injury associated with ACMs. In connection with the

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ownership, operation, management and development
of our communities and other real properties, we may be
potentially liable for these costs.


Finally, when excessive moisture accumulates in
buildings or on building materials, mold growth may occur,
particularly if the moisture problem remains undiscovered or is
not addressed. Concern about indoor exposure to mold has been
increasing as exposure to mold may cause a variety of health
effects and symptoms, including severe allergic or other
reactions. As a result, the presence of mold at one of our
communities could require us to undertake a costly remediation
program to contain or remove the mold from the affected
community. Such a remediation program could necessitate the
temporary relocation of some or all of the communitys
residents or the complete rehabilitation of the community. In
addition, the presence of significant mold could expose us to
liability from residents and others if property damage or health
concerns arise.

The assessments of our communities have not
revealed any environmental liability that we believe would have
a material adverse effect on our business, assets, financial
condition or results of operations, nor are we aware of any
other environmental conditions which would have a material
adverse effect. It is possible, however, that our assessments do
not reveal all environmental liabilities or that there are
material environmental liabilities of which we are unaware.
Moreover, there can be no assurance that future laws, ordinances
or regulations will not impose any material environmental
liability, or that the current environmental condition of our
communities will not be affected by residents, the condition of
land or operations in the vicinity of the communities, such as
the presence of underground storage tanks, or third parties
unrelated to us. In addition, environmental liabilities could
develop at communities sold pursuant to our disposition strategy
for which we may have liability.

Item 2.     Properties

Our Communities

As of December 31, 2002, we owned 51
completed communities with 15,428 apartment homes. Forty two of
the communities were completed after January 1, 1990 and,
as of December 31, 2002, the average age of our completed
communities was approximately six years. All of our communities
target middle to upper income apartment renters as customers and
have amenities, apartment home sizes and mixes consistent with
the desires of this resident population. We have an additional
1,206 apartment homes under construction, which have not yet
begun lease-up. As of December 31, 2002, we also held an
ownership interest in four completed communities with 1,203
apartment homes through a joint venture. The following is a
summary of the 51 completed communities by market (the
table below does not include joint venture communities):

|                           |  |             |    |           |  |            |        |  |  |  |     |  
|-------------------------- |  | ----------- | -- | --------- |  | ---------- | ------ |  |  |  | --- | -
|                           |  |             |    | Number of |  |           
|                           |  | Number of   |    | Apartment |  | % of Total
|                           |  | Communities |    | Homes     |  | Revenues  
|                           |  |             |    |           |  |           
|Washington, D.C.           |  |             | 8  |           |  |            | 2,406  |  |  |  | 20  | %
|Atlanta, Georgia           |  |             | 11 |           |  |            | 3,275  |  |  |  | 19  | %
|Southeast Florida          |  |             | 5  |           |  |            | 1,715  |  |  |  | 15  | %
|Raleigh, North Carolina    |  |             | 8  |           |  |            | 2,582  |  |  |  | 14  | %
|Charlotte, North Carolina  |  |             | 9  |           |  |            | 1,901  |  |  |  | 12  | %
|Dallas, Texas              |  |             | 4  |           |  |            | 1,581  |  |  |  | 9   | %
|Austin, Texas              |  |             | 2  |           |  |            | 856    |  |  |  | 5   | %
|Orlando, Florida           |  |             | 2  |           |  |            | 510    |  |  |  | 3   | %
|San Antonio, Texas         |  |             | 1  |           |  |            | 250    |  |  |  | 2   | %
|Philadelphia, Pennsylvania |  |             | 1  |           |  |            | 352    |  |  |  | 1   | %
|                           |  |             |    |           |  |            |        |  |  |  |     |  
|                           |  |             | 51 |           |  |            | 15,428 |  |  |  | 100 | %
|                           |  |             |    |           |  |            |        |  |  |  |     |  

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##### 



The following table highlights information
regarding these 51 completed communities:

|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|--------------------------------------------------------------------- |  | -------- | ------------------ | ---------- |  | --------- | ------ |  |  |  | ---- | 
|                                                                      |  |          |                    | Number of  |  | Year     
|Market Area/Community                                                 |  | Location |                    | Apartments |  | Completed
|                                                                      |  |          |                    |            |  |          
|FULLY STABILIZED COMMUNITIES(3)                                       |  |          |                    |            |  |           |        |  |  |  |      | 
|ATLANTA                                                               |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Club at Dunwoody                                               |  |          | Atlanta, GA        |            |  |           | 324    |  |  |  | 1997 | 
|Summit Deer Creek                                                     |  |          | Atlanta, GA        |            |  |           | 292    |  |  |  | 2000 | 
|Summit Glen                                                           |  |          | Atlanta, GA        |            |  |           | 242    |  |  |  | 1992 | 
|Summit on the River                                                   |  |          | Atlanta, GA        |            |  |           | 352    |  |  |  | 1997 | 
|Summit Shiloh                                                         |  |          | Atlanta, GA        |            |  |           | 182    |  |  |  | 2000 | 
|Summit St. Clair                                                      |  |          | Atlanta, GA        |            |  |           | 336    |  |  |  | 1997 | 
|Summit Sweetwater                                                     |  |          | Atlanta, GA        |            |  |           | 308    |  |  |  | 2000 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|ATLANTA WEIGHTED AVERAGE                                              |  |          |                    |            |  |           | 2,036  |  |  |  |      | 
|CHARLOTTE                                                             |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Ballantyne                                                     |  |          | Charlotte, NC      |            |  |           | 400    |  |  |  | 1998 | 
|Summit Crossing                                                       |  |          | Charlotte, NC      |            |  |           | 128    |  |  |  | 1985 | 
|Summit Fairview                                                       |  |          | Charlotte, NC      |            |  |           | 135    |  |  |  | 1983 | 
|Summit Foxcroft(5)                                                    |  |          | Charlotte, NC      |            |  |           | 156    |  |  |  | 1979 | 
|Summit Norcroft                                                       |  |          | Charlotte, NC      |            |  |           | 216    |  |  |  | 1997 | 
|Summit Sedgebrook                                                     |  |          | Charlotte, NC      |            |  |           | 368    |  |  |  | 1999 | 
|Summit Simsbury                                                       |  |          | Charlotte, NC      |            |  |           | 100    |  |  |  | 1985 | 
|Summit Touchstone                                                     |  |          | Charlotte, NC      |            |  |           | 132    |  |  |  | 1986 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|CHARLOTTE WEIGHTED AVERAGE                                            |  |          |                    |            |  |           | 1,635  |  |  |  |      | 
|ORLANDO                                                               |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Fairways                                                       |  |          | Orlando, FL        |            |  |           | 240    |  |  |  | 1996 | 
|Summit Hunters Creek                                                 |  |          | Orlando, FL        |            |  |           | 270    |  |  |  | 2000 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|ORLANDO WEIGHTED AVERAGE                                              |  |          |                    |            |  |           | 510    |  |  |  |      | 
|RALEIGH                                                               |  |          |                    |            |  |           |        |  |  |  |      | 
|Reunion Park by Summit                                                |  |          | Raleigh, NC        |            |  |           | 248    |  |  |  | 2000 | 
|Summit Governors Village                                             |  |          | Raleigh, NC        |            |  |           | 242    |  |  |  | 1999 | 
|Summit Highland                                                       |  |          | Raleigh, NC        |            |  |           | 172    |  |  |  | 1987 | 
|Summit Lake                                                           |  |          | Raleigh, NC        |            |  |           | 446    |  |  |  | 1999 | 
|Summit Square                                                         |  |          | Raleigh, NC        |            |  |           | 362    |  |  |  | 1990 | 
|Summit Westwood                                                       |  |          | Raleigh, NC        |            |  |           | 354    |  |  |  | 1999 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|RALEIGH WEIGHTED AVERAGE                                              |  |          |                    |            |  |           | 1,824  |  |  |  |      | 
|SOUTHEAST FLORIDA                                                     |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Aventura                                                       |  |          | Aventura, FL       |            |  |           | 379    |  |  |  | 1995 | 
|Summit Del Ray                                                        |  |          | Delray Beach, FL   |            |  |           | 252    |  |  |  | 1993 | 
|Summit Doral                                                          |  |          | Miami, FL          |            |  |           | 260    |  |  |  | 1999 | 
|Summit Plantation                                                     |  |          | Plantation, FL     |            |  |           | 502    |  |  |  | 1997 | 
|Summit Portofino                                                      |  |          | Broward County, FL |            |  |           | 322    |  |  |  | 1995 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|SOUTHEAST FLORIDA WEIGHTED AVERAGE                                    |  |          |                    |            |  |           | 1,715  |  |  |  |      | 
|WASHINGTON, D.C.                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Ashburn Farm                                                   |  |          | Loudon County, VA  |            |  |           | 162    |  |  |  | 2000 | 
|Summit Belmont                                                        |  |          | Fredericksburg, VA |            |  |           | 300    |  |  |  | 1987 | 
|Summit Fair Lakes                                                     |  |          | Fairfax, VA        |            |  |           | 530    |  |  |  | 1999 | 
|Summit Fair Oaks                                                      |  |          | Fairfax, VA        |            |  |           | 246    |  |  |  | 1990 | 
|Summit Largo                                                          |  |          | Largo, MD          |            |  |           | 219    |  |  |  | 2000 | 
|Summit Reston                                                         |  |          | Reston, VA         |            |  |           | 418    |  |  |  | 1987 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|WASHINGTON, D.C. WEIGHTED AVERAGE                                     |  |          |                    |            |  |           | 1,875  |  |  |  |      | 
|DALLAS                                                                |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Belcourt                                                       |  |          | Dallas, TX         |            |  |           | 180    |  |  |  | 1994 | 
|Summit Buena Vista                                                    |  |          | Dallas, TX         |            |  |           | 467    |  |  |  | 1996 | 
|Summit Camino Real                                                    |  |          | Dallas, TX         |            |  |           | 712    |  |  |  | 1998 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|DALLAS WEIGHTED AVERAGE                                               |  |          |                    |            |  |           | 1,359  |  |  |  |      | 
|SAN ANTONIO                                                           |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Turtle Rock                                                    |  |          | San Antonio, TX    |            |  |           | 250    |  |  |  | 1995 | 
|AUSTIN                                                                |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Arboretum                                                      |  |          | Austin, TX         |            |  |           | 408    |  |  |  | 1996 | 
|Summit Las Palmas                                                     |  |          | Austin, TX         |            |  |           | 448    |  |  |  | 1998 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|AUSTIN WEIGHTED AVERAGE                                               |  |          |                    |            |  |           | 856    |  |  |  |      | 
|TOTAL WEIGHTED AVERAGE OF COMMUNITIES STABILIZED
    IN 2002 AND 2001 |  |          |                    |            |  |           | 12,060 |  |  |  |      | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|STABILIZED DEVELOPED COMMUNITIES(8)                                   |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit Lenox                                                          |  |          | Atlanta, GA        |            |  |           | 431    |  |  |  | 1965 | 
|Summit Russett                                                        |  |          | Laurel, MD         |            |  |           | 426    |  |  |  | 2000 | 
|                                                                      |  |          |                    |            |  |           | 857    |  |  |  |      | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 
|ACQUISITION COMMUNITY(9)                                              |  |          |                    |            |  |           |        |  |  |  |      | 
|Summit San Raphael                                                    |  |          | Dallas, TX         |            |  |           | 222    |  |  |  | 1999 | 
|                                                                      |  |          |                    |            |  |           |        |  |  |  |      | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|--------------------------------------------------------------------- |  | -------------- | ----- | --------- |  | --------- | ---- | ------- |  | ------- | ---- | -------------- |  | - | ----- |  |  | - | ----- |  |  | - | ------ | -
|                                                                      |  |                |       |           |  |           |      |         |  |         |      | Mortgage      
|                                                                      |  |                |       |           |  |           |      | Average |  | Average |      | Notes         
|                                                                      |  |                |       | Average   |  | Average   |      | Monthly |  | Monthly |      | Payable at    
|                                                                      |  | Average        |       | Physical  |  | Physical  |      | Rental  |  | Rental  |      | December 31,  
|                                                                      |  | Apartment      |       | Occupancy |  | Occupancy |      | Revenue |  | Revenue |      | 2002          
|Market Area/Community                                                 |  | Size (sq. ft.) |       | 2002(1)   |  | 2001(1)   |      | 2002(2) |  | 2001(2) |      | (in thousands)
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |               
|FULLY STABILIZED COMMUNITIES(3)                                       |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|ATLANTA                                                               |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Club at Dunwoody                                               |  |                | 1,007 |           |  |           | 91.7 |         |  |         | 93.2 |                |  | $ | 895   |  |  | $ | 955   |  |  |   | (4     | )
|Summit Deer Creek                                                     |  |                | 1,187 |           |  |           | 90.1 |         |  |         | 89.7 |                |  |   | 915   |  |  |   | 955   |  |  |   |       |  
|Summit Glen                                                           |  |                | 983   |           |  |           | 93.6 |         |  |         | 94.9 |                |  |   | 905   |  |  |   | 981   |  |  |   | (4     | )
|Summit on the River                                                   |  |                | 1,103 |           |  |           | 94.3 |         |  |         | 88.5 |                |  |   | 841   |  |  |   | 890   |  |  |   | (4     | )
|Summit Shiloh                                                         |  |                | 1,151 |           |  |           | 95.9 |         |  |         | 93.8 |                |  |   | 868   |  |  |   | 923   |  |  |   |       |  
|Summit St. Clair                                                      |  |                | 969   |           |  |           | 93.1 |         |  |         | 92.8 |                |  |   | 994   |  |  |   | 1,045 |  |  |   | (4     | )
|Summit Sweetwater                                                     |  |                | 1,151 |           |  |           | 93.6 |         |  |         | 92.2 |                |  |   | 790   |  |  |   | 867   |  |  |   |       |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|ATLANTA WEIGHTED AVERAGE                                              |  |                | 1,075 |           |  |           | 93.0 |         |  |         | 91.9 |                |  |   | 888   |  |  |   | 946   |  |  |   |        |  
|CHARLOTTE                                                             |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Ballantyne                                                     |  |                | 1,053 |           |  |           | 90.9 |         |  |         | 90.4 |                |  |   | 799   |  |  |   | 869   |  |  |   | (4     | )
|Summit Crossing                                                       |  |                | 978   |           |  |           | 92.6 |         |  |         | 92.7 |                |  |   | 639   |  |  |   | 703   |  |  |   |       |  
|Summit Fairview                                                       |  |                | 1,036 |           |  |           | 93.3 |         |  |         | 93.5 |                |  |   | 717   |  |  |   | 810   |  |  |   |       |  
|Summit Foxcroft(5)                                                    |  |                | 940   |           |  |           | 93.6 |         |  |         | 92.5 |                |  |   | 643   |  |  |   | 695   |  |  | $ | 6,900  |  
|Summit Norcroft                                                       |  |                | 1,126 |           |  |           | 94.8 |         |  |         | 94.6 |                |  |   | 745   |  |  |   | 781   |  |  |   |       |  
|Summit Sedgebrook                                                     |  |                | 1,017 |           |  |           | 94.0 |         |  |         | 92.2 |                |  |   | 693   |  |  |   | 740   |  |  |   |       |  
|Summit Simsbury                                                       |  |                | 874   |           |  |           | 94.6 |         |  |         | 92.9 |                |  |   | 717   |  |  |   | 769   |  |  |   | (6     | )
|Summit Touchstone                                                     |  |                | 899   |           |  |           | 95.5 |         |  |         | 96.5 |                |  |   | 678   |  |  |   | 702   |  |  |   | (6     | )
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|CHARLOTTE WEIGHTED AVERAGE                                            |  |                | 1,013 |           |  |           | 93.3 |         |  |         | 92.6 |                |  |   | 719   |  |  |   | 774   |  |  |   |        |  
|ORLANDO                                                               |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Fairways                                                       |  |                | 1,302 |           |  |           | 94.4 |         |  |         | 91.7 |                |  |   | 845   |  |  |   | 864   |  |  |   |       |  
|Summit Hunters Creek                                                 |  |                | 1,082 |           |  |           | 94.7 |         |  |         | 94.2 |                |  |   | 812   |  |  |   | 838   |  |  |   |       |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|ORLANDO WEIGHTED AVERAGE                                              |  |                | 1,186 |           |  |           | 94.6 |         |  |         | 93.1 |                |  |   | 827   |  |  |   | 850   |  |  |   |        |  
|RALEIGH                                                               |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Reunion Park by Summit                                                |  |                | 941   |           |  |           | 95.1 |         |  |         | 96.7 |                |  |   | 653   |  |  |   | 705   |  |  |   |       |  
|Summit Governors Village                                             |  |                | 1,134 |           |  |           | 94.3 |         |  |         | 93.4 |                |  |   | 839   |  |  |   | 860   |  |  |   |       |  
|Summit Highland                                                       |  |                | 986   |           |  |           | 95.5 |         |  |         | 95.2 |                |  |   | 656   |  |  |   | 706   |  |  |   |       |  
|Summit Lake                                                           |  |                | 1,075 |           |  |           | 93.5 |         |  |         | 95.7 |                |  |   | 773   |  |  |   | 847   |  |  |   |       |  
|Summit Square                                                         |  |                | 925   |           |  |           | 91.8 |         |  |         | 94.6 |                |  |   | 709   |  |  |   | 782   |  |  |   |       |  
|Summit Westwood                                                       |  |                | 1,112 |           |  |           | 89.6 |         |  |         | 92.7 |                |  |   | 756   |  |  |   | 825   |  |  |   | (4     | )
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|RALEIGH WEIGHTED AVERAGE                                              |  |                | 1,034 |           |  |           | 92.9 |         |  |         | 94.7 |                |  |   | 739   |  |  |   | 799   |  |  |   |        |  
|SOUTHEAST FLORIDA                                                     |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Aventura                                                       |  |                | 1,106 |           |  |           | 94.4 |         |  |         | 94.2 |                |  |   | 1,164 |  |  |   | 1,180 |  |  |   |       |  
|Summit Del Ray                                                        |  |                | 968   |           |  |           | 92.7 |         |  |         | 93.5 |                |  |   | 887   |  |  |   | 937   |  |  |   | (4     | )
|Summit Doral                                                          |  |                | 1,172 |           |  |           | 96.5 |         |  |         | 97.6 |                |  |   | 1,264 |  |  |   | 1,230 |  |  |   |       |  
|Summit Plantation                                                     |  |                | 1,152 |           |  |           | 94.4 |         |  |         | 91.7 |                |  |   | 1,072 |  |  |   | 1,128 |  |  |   | (4     | )
|Summit Portofino                                                      |  |                | 1,307 |           |  |           | 94.7 |         |  |         | 93.5 |                |  |   | 1,096 |  |  |   | 1,094 |  |  |   |       |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|SOUTHEAST FLORIDA WEIGHTED AVERAGE                                    |  |                | 1,147 |           |  |           | 94.6 |         |  |         | 93.8 |                |  |   | 1,099 |  |  |   | 1,121 |  |  |   |        |  
|WASHINGTON, D.C.                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Ashburn Farm                                                   |  |                | 1,061 |           |  |           | 96.0 |         |  |         | 96.6 |                |  |   | 1147  |  |  |   | 1,234 |  |  |   |        |  
|Summit Belmont                                                        |  |                | 881   |           |  |           | 97.8 |         |  |         | 97.7 |                |  |   | 825   |  |  |   | 790   |  |  |   | (7     | )
|Summit Fair Lakes                                                     |  |                | 996   |           |  |           | 93.5 |         |  |         | 94.7 |                |  |   | 1,300 |  |  |   | 1,381 |  |  |   | 48,340 |  
|Summit Fair Oaks                                                      |  |                | 938   |           |  |           | 93.9 |         |  |         | 94.5 |                |  |   | 1,115 |  |  |   | 1,198 |  |  |   |       |  
|Summit Largo                                                          |  |                | 1,042 |           |  |           | 95.6 |         |  |         | 96.0 |                |  |   | 1,257 |  |  |   | 1,195 |  |  |   | (4     | )
|Summit Reston                                                         |  |                | 854   |           |  |           | 93.6 |         |  |         | 91.2 |                |  |   | 1,087 |  |  |   | 1,237 |  |  |   |       |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|WASHINGTON, D.C. WEIGHTED AVERAGE                                     |  |                | 949   |           |  |           | 94.7 |         |  |         | 94.7 |                |  |   | 1,135 |  |  |   | 1,196 |  |  |   |        |  
|DALLAS                                                                |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Belcourt                                                       |  |                | 875   |           |  |           | 96.1 |         |  |         | 91.3 |                |  |   | 1,025 |  |  |   | 1,088 |  |  |   | 9,018  |  
|Summit Buena Vista                                                    |  |                | 925   |           |  |           | 93.4 |         |  |         | 91.9 |                |  |   | 847   |  |  |   | 877   |  |  |   | 24,067 |  
|Summit Camino Real                                                    |  |                | 860   |           |  |           | 91.6 |         |  |         | 90.9 |                |  |   | 756   |  |  |   | 786   |  |  |   | 15,886 |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|DALLAS WEIGHTED AVERAGE                                               |  |                | 884   |           |  |           | 92.8 |         |  |         | 91.3 |                |  |   | 823   |  |  |   | 857   |  |  |   |        |  
|SAN ANTONIO                                                           |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Turtle Rock                                                    |  |                | 857   |           |  |           | 94.9 |         |  |         | 91.8 |                |  |   | 769   |  |  |   | 798   |  |  |   | 10,214 |  
|AUSTIN                                                                |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Arboretum                                                      |  |                | 847   |           |  |           | 91.9 |         |  |         | 90.4 |                |  |   | 825   |  |  |   | 918   |  |  |   | 18,796 |  
|Summit Las Palmas                                                     |  |                | 890   |           |  |           | 89.0 |         |  |         | 87.6 |                |  |   | 830   |  |  |   | 936   |  |  |   | (4     | )
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|AUSTIN WEIGHTED AVERAGE                                               |  |                | 870   |           |  |           | 90.4 |         |  |         | 89.0 |                |  |   | 828   |  |  |   | 927   |  |  |   |        |  
|TOTAL WEIGHTED AVERAGE OF COMMUNITIES STABILIZED
    IN 2002 AND 2001 |  |                | 977   |           |  |           | 93.4 |         |  |         | 92.9 |                |  |   | 895   |  |  |   | 946   |  |  |   |        |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|STABILIZED DEVELOPED COMMUNITIES(8)                                   |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit Lenox                                                          |  |                | 963   |           |  |           | 94.7 |         |  |         | 85.9 |                |  |   | 993   |  |  |   | 1,020 |  |  |   |       |  
|Summit Russett                                                        |  |                | 1,025 |           |  |           | 92.3 |         |  |         | 90.7 |                |  |   | 1,131 |  |  |   | 1,096 |  |  |   |       |  
|                                                                      |  |                | 994   |           |  |           | 93.5 |         |  |         | 88.3 |                |  |   | 1,062 |  |  |   | 1,078 |  |  |   |        |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|ACQUISITION COMMUNITY(9)                                              |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  
|Summit San Raphael                                                    |  |                | 898   |           |  |           | 93.2 |         |  |         | N/A  |                |  |   | 890   |  |  |   | N/A   |  |  |   |       |  
|                                                                      |  |                |       |           |  |           |      |         |  |         |      |                |  |   |       |  |  |   |       |  |  |   |        |  

9



---



##### 



|                                                 |  |          |                  |            |  |           |        |  |  |  |      | 
|------------------------------------------------ |  | -------- | ---------------- | ---------- |  | --------- | ------ |  |  |  | ---- | 
|                                                 |  |          |                  | Number of  |  | Year     
|Market Area/Community                            |  | Location |                  | Apartments |  | Completed
|                                                 |  |          |                  |            |  |          
|TOTAL WEIGHTED AVERAGE OF STABILIZED COMMUNITIES |  |          |                  |            |  |           | 13,139 |  |  |  |      | 
|                                                 |  |          |                  |            |  |           |        |  |  |  |      | 
|COMMUNITIES IN LEASE-UP(10)                      |  |          |                  |            |  |           |        |  |  |  |      | 
|Summit Brookwood(11)                             |  |          | Atlanta, GA      |            |  |           | 359    |  |  |  | 2002 | 
|Summit Crest                                     |  |          | Raleigh, NC      |            |  |           | 438    |  |  |  | 2001 | 
|Summit Grandview(12)                             |  |          | Charlotte, NC    |            |  |           | 266    |  |  |  | 2000 | 
|Summit Grand Parc(13)                            |  |          | Washington, D.C. |            |  |           | 105    |  |  |  | 2002 | 
|Summit Overlook                                  |  |          | Raleigh, NC      |            |  |           | 320    |  |  |  | 2001 | 
|Summit Peachtree City                            |  |          | Atlanta, GA      |            |  |           | 399    |  |  |  | 2001 | 
|Summit Shiloh II                                 |  |          | Atlanta, GA      |            |  |           | 50     |  |  |  | 2002 | 
|Summit Valleybrook                               |  |          | Philadelphia, PA |            |  |           | 352    |  |  |  | 2002 | 
|                                                 |  |          |                  |            |  |           |        |  |  |  |      | 
|                                                 |  |          |                  |            |  |           | 2,289  |  |  |  |      | 
|                                                 |  |          |                  |            |  |           |        |  |  |  |      | 
|TOTAL COMMUNITIES                                |  |          |                  |            |  |           | 15,428 |  |  |  |      | 
|                                                 |  |          |                  |            |  |           |        |  |  |  |      | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                 |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|------------------------------------------------ |  | -------------- | ----- | --------- |  | --------- | ---- | ------- |  | ------- | ---- | -------------- |  |  | --- |  |  |  | --- |  |  |  | - | 
|                                                 |  |                |       |           |  |           |      |         |  |         |      | Mortgage      
|                                                 |  |                |       |           |  |           |      | Average |  | Average |      | Notes         
|                                                 |  |                |       | Average   |  | Average   |      | Monthly |  | Monthly |      | Payable at    
|                                                 |  | Average        |       | Physical  |  | Physical  |      | Rental  |  | Rental  |      | December 31,  
|                                                 |  | Apartment      |       | Occupancy |  | Occupancy |      | Revenue |  | Revenue |      | 2002          
|Market Area/Community                            |  | Size (sq. ft.) |       | 2002(1)   |  | 2001(1)   |      | 2002(2) |  | 2001(2) |      | (in thousands)
|                                                 |  |                |       |           |  |           |      |         |  |         |      |               
|TOTAL WEIGHTED AVERAGE OF STABILIZED COMMUNITIES |  |                | 1,014 |           |  |           | 93.4 |         |  |         | 92.6 |                |  |  | 898 |  |  |  | 955 |  |  |  |   | 
|                                                 |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|COMMUNITIES IN LEASE-UP(10)                      |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|Summit Brookwood(11)                             |  |                | 906   |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Crest                                     |  |                | 1,129 |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Grandview(12)                             |  |                | 1,082 |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Grand Parc(13)                            |  |                | 904   |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Overlook                                  |  |                | 1,056 |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Peachtree City                            |  |                | 1,026 |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Shiloh II                                 |  |                | 1,151 |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|Summit Valleybrook                               |  |                | 992   |           |  |           |     |         |  |         |     |                |  |  |    |  |  |  |    |  |  |  |  | 
|                                                 |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|                                                 |  |                | 1,030 |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|                                                 |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|TOTAL COMMUNITIES                                |  |                | 1,017 |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 
|                                                 |  |                |       |           |  |           |      |         |  |         |      |                |  |  |     |  |  |  |     |  |  |  |   | 



|    |                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Average physical occupancy is defined as the
    number of apartment homes occupied divided by the total number
    of apartment homes contained in the communities, expressed as a
    percentage. Average physical occupancy has been calculated using
    the average occupancy that existed on Sunday during each week of
    the period.
|   
|(2) | Represents the average monthly net rental revenue
    per occupied apartment home. Average rental revenue is not shown
    for the periods during which a community was not stabilized.                                                                                                                                                      
|   
|(3) | Communities that reached stabilization (93%
    physical occupancy) at least one year prior to the beginning of
    the current year.                                                                                                                                                                                                        
|   
|(4) | Collateral for fixed rate mortgage of
    $133.9 million.                                                                                                                                                                                                                                                                                    
|   
|(5) | Summit Foxcroft is held by a partnership in which
    we are a 75% managing general partner.                                                                                                                                                                                                                                                 
|   
|(6) | Collateral for a fixed rate mortgage of
    $8.0 million.                                                                                                                                                                                                                                                                                    
|   
|(7) | Collateral for letters of credit in an aggregate
    amount of $10.8 million which serve as collateral for
    $10.6 million in tax exempt bonds.                                                                                                                                                                                            
|   
|(8) | Communities that were stabilized in 2002 but did
    not stabilize at least one year prior to the beginning of the
    current year.                                                                                                                                                                                                         
|   
|(9) | A community which we have acquired is not
    considered fully stabilized until owned for one year or more as
    of the beginning of the current year.                                                                                                                                                                                      



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Communities that were in lease-up during 2002. As
    with any community in lease-up, there are uncertainties and
    risks. While we have estimated stabilization target dates and
    rental rates based on what we believe are reasonable assumptions
    in light of current conditions, there can be no assurance that
    actual rental rates will not be less than current budgets or
    that we will not experience delays in reaching stabilization of
    these communities. These communities are each in various stages
    of lease-up. For lease-up communities, average physical
    occupancy and average monthly rental revenue information is not
    meaningful and, therefore, is not presented.
|    
|(11) | Lessee as of December 31, 2002 under a land
    lease related to the land on which Summit Brookwood was
    constructed. We have exercised our purchase option under the
    land lease to purchase the related land for $10.6 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|(12) | The apartment homes at Summit Grandview
    stabilized during the fourth quarter of 2001. The information in
    the table represents data for the apartment homes only. The
    75,203 square feet of commercial space at Summit Grandview was
    74.7% occupied and leased as of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|(13) | Summit Grand Parc was completed during the fourth
    quarter of 2002. The information in the table represents data
    for the apartment homes only. The 13,790 square feet of
    commercial space at Summit Grand Parc was 71.0% occupied and
    leased as of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                 

10



---



##### 



Information with respect to total debt secured by
20 of our communities having an aggregate net book value of
$398.4 million as of December 31, 2002, is as follows
(dollars in thousands):

|                               |  |            |               |               |  |  |               |     
|------------------------------ |  | ---------- | ------------- | ------------- |  |  | ------------- | ----
|                               |  | Fixed Rate |               | Variable Rate
|                               |  |            |               |              
|Total principal                |  |            | $268,271      |               |  |  | $17,465       |     
|Interest rates range from      |  |            | 6.75% to 8.00 | %             |  |  | 2.47% to 3.08 | %(1)
|Weighted average interest rate |  |            | 6.98          | %             |  |  | 3.05          | %(1)
|Annual debt service(2)         |  |            | $24,047       |               |  |  | $642          |     

The aggregate maturities for secured debt as of
December 31, 2002 are (in thousands):

|           |  |   |         | 
|---------- |  | - | ------- | 
|2003       |  | $ | 5,722   | 
|2004       |  |   | 6,105   | 
|2005       |  |   | 47,921  | 
|2006       |  |   | 28,422  | 
|2007       |  |   | 36,291  | 
|Thereafter |  |   | 161,275 | 
|           |  |   |         | 
|Total      |  | $ | 285,736 | 
|           |  |   |         | 



|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Interest rates as of December 31, 2002.                                                                                                                                                  
|   
|(2) | Annual debt service includes interest and
    principal payments, and for variable rate loans represents 2002
    costs including letter of credit fees and other bond related
    costs.

Community Management

Our property management staff operates each of
our communities. The management team for each community includes
on-site management and maintenance personnel as well as
supervision by a regional vice-president and regional property
manager, and an off-site support staff. On-site community
management teams perform leasing and rent collection functions,
maintenance tasks and coordinate resident services. All
personnel are extensively trained and are encouraged to continue
their education through both internal and outside courses.

Item 3.     Legal
Proceedings

We are not, nor are any of our communities,
presently subject to any material litigation nor, to our
knowledge, is any litigation threatened against us or any of our
communities, other than routine actions for negligence or other
claims and administrative proceedings arising in the ordinary
course of business, some of which are expected to be covered by
liability insurance and all of which collectively are not
expected to have a material adverse effect on our business,
financial condition or results of operations.

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

No matters were submitted to a vote of our
security holders during the fourth quarter of 2002.

PART II



|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity
    and Related Stockholder Matters

Market Information and Stockholders

There is no established public trading market for
the common units. As of March 3, 2003, there were 103
holders of record of common units.

11



---



##### 



Distributions

We declared a distribution of $0.4750 per common
unit for each of the first through third quarters in 2002, which
was paid on May 15, 2002 for the first quarter,
August 15, 2002 for the second quarter and
November 15, 2002 for the third quarter. We declared a
distribution of $0.3375 per common unit for the fourth quarter
of 2002, which was paid on February 14, 2003.

We declared a distribution of $0.4625 per common
unit for each of the four quarters in 2001, which was paid on
May 15, 2001 for the first quarter, August 15, 2001 for the
second quarter, November 15, 2001 for the third quarter and
February 15, 2002 for the fourth quarter.

Securities Authorized for Issuance under
Equity Compensation Plans

There are no equity compensation plans under
which common units are authorized for issuance. All of the
equity compensation plans for Summits directors, officers
and employees have been adopted by Summits Board of
Directors and authorize for issuance equity securities of
Summit. The following table sets forth information regarding
securities authorized for issuance under Summits equity
compensation plans as of December 31, 2002:

|                                                               |  |                                      |           |                      |  |                           |       |     |  |  |        |    
|-------------------------------------------------------------- |  | ------------------------------------ | --------- | -------------------- |  | ------------------------- | ----- | --- |  |  | ------ | ---
|                                                               |  |                                     
|                                                               |  | Equity Compensation Plan Information
|                                                               |  |                                     
|                                                               |  |                                      |           | Number of securities
|                                                               |  | Number of securities                 |           |                      |  | remaining available      
|                                                               |  | to be issued                         |           | Weighted-average     |  | for future issuance under
|                                                               |  | upon exercise of                     |           | exercise price of    |  | equity compensation plans
|                                                               |  | outstanding options,                 |           | outstanding options, |  | (excluding securities    
|Plan category                                                  |  | warrants and rights (1)              |           | warrants and rights  |  | reflected in column (a)) 
|                                                               |  |                                      |           |                      |  |                          
|                                                               |  | (a)                                  |           | (b)                  |  | (c)                      
|Equity compensation plans approved by security
    holders(2)  |  |                                      | 2,340,197 | (3)                  |  | $                         | 20.45 | (4) |  |  | 42,613 | (5)
|Equity compensation plans not approved by
    security holders |  |                                      |          |                      |  |                           |      |     |  |  |       |    
|                                                               |  |                                      |           |                      |  |                           |       |     |  |  |        |    
|Total                                                          |  |                                      | 2,340,197 |                      |  | $                         | 20.45 |     |  |  | 42,613 |    
|                                                               |  |                                      |           |                      |  |                           |       |     |  |  |        |    



|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Does not include any restricted stock as such
    shares are already reflected in Summits outstanding shares
    of common stock.                                                                          
|   
|(2) | Consists of Summits 1994 Stock Option and
    Incentive Plan. Summit also has a non-qualified employee stock
    purchase plan, but transactions under such plan were suspended
    effective July 2, 2002.
|   
|(3) | Includes:                                                                                                                                                                                                   



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 2,018,932 shares subject to stock options
    outstanding as of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | 227,450 shares that may be issued pursuant to
    stock award agreements dated February 6, 2002. Under the
    stock award agreements, certain employees were awarded the
    opportunity to earn shares of Summits common stock. The
    number of shares of common stock to be received by each
    respective employee is based on the following schedule of dates
    and percentages: 15% on March 1, 2003; an additional 20% on
    each of March 1, 2004, 2005 and 2006; and the final 25% on
    March 1, 2007. The respective employee will receive the
    applicable number of shares on each date if he or she continues
    to be employed by us on such date. If an employee is terminated
    for any reason other than death or disability, his or her right
    to receive the remaining unacquired shares will terminate. Upon
    the death or disability of the employee, or upon a change
    of control, such employee or his or her estate, as the
    case may be, will be entitled to immediately receive the
    remaining unacquired shares regardless of the schedule set forth
    above. The number of shares represents 100% of the shares of
    common stock that could be potentially issued under the stock
    award agreements.
|
| |  | 93,815 shares that may be issued pursuant to
    performance stock award agreements dated February 23, 2001.
    Under the performance stock award agreements, certain employees
    have the opportunity to earn up to 150% of a target number of
    performance shares based upon the average annual total return
    (share appreciation and distributions) of Summits common
    stock from January 1, 2001 to December 31, 2003 as
    compared to the average annual total returns of Summits
    peers included in the NAREIT All                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

12



---



##### 



| |  |                                                                                                                                                                                                                
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | REIT Index for Apartments during the same period.
    The number of shares represents 100% of the shares of common
    stock that could be potentially issued under the performance
    stock award agreements.



|    |                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Represents the weighted average exercise price of
    the outstanding stock options. Does not include information
    about shares which may be issued under the stock award
    agreements and performance stock award agreements because such
    shares do not have an exercise price.
|   
|(5) | Does not include 74,270 shares of common stock
    available for future issuance under Summits non-qualified
    employee stock purchase plan, as transactions under such plan
    were suspended effective July 2, 2002.                                                               



|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The following table sets forth selected
consolidated financial and other information on a consolidated
historical basis as of and for each of the years in the
five-year period ended December 31, 2002. This table should
be read in conjunction with our consolidated financial
statements and related notes which accompany this report, as
well as the Managements Discussion and Analysis of
Financial Condition and Results of Operations section of
this report (amounts in thousands except per share and property
information).

SELECTED FINANCIAL DATA

SUMMIT PROPERTIES PARTNERSHIP, L.P.


|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |         | 
|---------------------------------------------------------------------------------------------------------------------------- | ------------------ | ----------------------- | ------- | ------- |  | ---- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                                                                                                             |                    |                        
|                                                                                                                             |                    | Year Ended December 31,
|                                                                                                                             |                    |                        
|                                                                                                                             |                    | 2002                    |         | 2001    |  | 2000 |         | 1999    |  | 1998
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |     
|OPERATING INFORMATION:                                                                                                       |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Revenue                                                                                                                      |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|                                                                                                                             | Rental             |                         | $       | 143,791 |  |      | $       | 154,167 |  |      | $       | 149,855 |  |   | $       | 142,002 |  |   | $       | 119,060 | 
|                                                                                                                             | Interest and other |                         |         | 13,130  |  |      |         | 14,366  |  |      |         | 15,300  |  |   |         | 12,588  |  |   |         | 7,958   | 
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Total                                                                                                                        |                    |                         | 156,921 |         |  |      | 168,533 |         |  |      | 165,155 |         |  |   | 154,590 |         |  |   | 127,018 |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Property operating and maintenance expense
    (before depreciation and amortization)                                        |                    |                         | 55,660  |         |  |      | 55,078  |         |  |      | 51,580  |         |  |   | 50,262  |         |  |   | 44,911  |        
|Interest expense                                                                                                             |                    |                         | 33,315  |         |  |      | 38,301  |         |  |      | 36,880  |         |  |   | 35,594  |         |  |   | 30,771  |        
|Depreciation and amortization                                                                                                |                    |                         | 37,130  |         |  |      | 35,347  |         |  |      | 32,767  |         |  |   | 31,000  |         |  |   | 26,147  |        
|General and administrative expense                                                                                           |                    |                         | 6,032   |         |  |      | 6,599   |         |  |      | 4,752   |         |  |   | 3,876   |         |  |   | 3,861   |        
|Loss (income) from equity investments                                                                                        |                    |                         | 357     |         |  |      | (277    | )       |  |      | 1,178   |         |  |   | 615     |         |  |   | 328     |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Total                                                                                                                        |                    |                         | 132,494 |         |  |      | 135,048 |         |  |      | 127,157 |         |  |   | 121,347 |         |  |   | 106,018 |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Income from continuing operations before gain on
    sale of real estate assets, impairment loss and extraordinary
    items |                    |                         | 24,427  |         |  |      | 33,485  |         |  |      | 37,998  |         |  |   | 33,243  |         |  |   | 21,000  |        
|Gain on sale of real estate assets                                                                                           |                    |                         | 13,831  |         |  |      | 34,435  |         |  |      | 38,510  |         |  |   | 17,427  |         |  |   | 37,148  |        
|Gain on sale of real estate assets 
    joint ventures                                                                      |                    |                         | 4,955   |         |  |      | 271     |         |  |      |        |         |  |   |        |         |  |   |        |        
|Impairment loss on technology investments                                                                                    |                    |                         |        |         |  |      | (1,217  | )       |  |      |        |         |  |   |        |         |  |   |        |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Income from continuing operations before
    extraordinary items                                                             |                    | $                       | 43,213  |         |  | $    | 66,974  |         |  | $    | 76,508  |         |  | $ | 50,670  |         |  | $ | 58,148  |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Net Income                                                                                                                   |                    | $                       | 115,928 |         |  | $    | 77,316  |         |  | $    | 86,814  |         |  | $ | 59,760  |         |  | $ | 66,475  |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Income available to common unitholders                                                                                       |                    | $                       | 103,508 |         |  | $    | 64,896  |         |  | $    | 74,394  |         |  | $ | 53,062  |         |  | $ | 66,881  |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Income from continuing operations per
    unit  basic                                                                       |                    | $                       | 1.39    |         |  | $    | 2.17    |         |  | $    | 2.49    |         |  | $ | 1.58    |         |  | $ | 2.00    |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        
|Income from continuing operations per
    unit  diluted                                                                     |                    | $                       | 1.39    |         |  | $    | 2.15    |         |  | $    | 2.48    |         |  | $ | 1.57    |         |  | $ | 1.99    |        
|                                                                                                                             |                    |                         |         |         |  |      |         |         |  |      |         |         |  |   |         |         |  |   |         |        

13



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|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|------------------------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | - |  | - | --------- | -
|                                                              |  |                        
|                                                              |  | Year Ended December 31,
|                                                              |  |                        
|                                                              |  | 2002                    |           | 2001 |  | 2000 |           | 1999 |  | 1998
|                                                              |  |                         |           |      |  |      |           |      |  |     
|Income from discontinued operations per
    unit  basic      |  | $                       | 2.35      |      |  | $    | 0.34      |      |  | $    | 0.34      |   |  | $ | 0.28      |   |  | $ | 0.26      |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Income from discontinued operations per
    unit  diluted    |  | $                       | 2.34      |      |  | $    | 0.33      |      |  | $    | 0.33      |   |  | $ | 0.28      |   |  | $ | 0.26      |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Income available to common unitholders per
    unit  basic   |  | $                       | 3.35      |      |  | $    | 2.11      |      |  | $    | 2.42      |   |  | $ | 1.65      |   |  | $ | 2.26      |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Income available to common unitholders per
    unit  diluted |  | $                       | 3.33      |      |  | $    | 2.09      |      |  | $    | 2.41      |   |  | $ | 1.65      |   |  | $ | 2.26      |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Distributions per common unit                                 |  | $                       | 1.76      |      |  | $    | 1.85      |      |  | $    | 1.75      |   |  | $ | 1.67      |   |  | $ | 1.63      |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Weighted average units
    outstanding  basic                |  |                         | 30,937    |      |  |      | 30,796    |      |  |      | 30,697    |   |  |   | 32,135    |   |  |   | 29,141    |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Weighted average units
    outstanding  diluted              |  |                         | 31,107    |      |  |      | 31,106    |      |  |      | 30,897    |   |  |   | 32,206    |   |  |   | 29,150    |  
|                                                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|BALANCE SHEET INFORMATION:                                    |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Real estate, before accumulated depreciation                  |  | $                       | 1,405,189 |      |  | $    | 1,410,339 |      |  | $    | 1,428,059 |   |  | $ | 1,284,818 |   |  | $ | 1,206,536 |  
|Total assets                                                  |  |                         | 1,338,024 |      |  |      | 1,297,936 |      |  |      | 1,340,611 |   |  |   | 1,217,780 |   |  |   | 1,199,067 |  
|Total long-term debt                                          |  |                         | 702,456   |      |  |      | 719,345   |      |  |      | 763,899   |   |  |   | 649,632   |   |  |   | 726,103   |  
|Partners equity                                              |  |                         | 584,411   |      |  |      | 531,847   |      |  |      | 531,128   |   |  |   | 518,670   |   |  |   | 416,512   |  
|                                                             
|OTHER INFORMATION:                                            |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Cash flow provided by (used in):                              |  |                         |           |      |  |      |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Operating activities                                          |  | $                       | 70,721    |      |  | $    | 78,966    |      |  | $    | 83,388    |   |  | $ | 65,719    |   |  | $ | 63,808    |  
|Investing activities                                          |  |                         | (5,590    | )    |  |      | 6,177     |      |  |      | (118,197  | ) |  |   | (39,751   | ) |  |   | (219,170  | )
|Financing activities                                          |  |                         | (64,592   | )    |  |      | (86,477   | )    |  |      | 33,827    |   |  |   | (24,675   | ) |  |   | 154,636   |  
|Funds from Operations(1)                                      |  | $                       | 60,526    |      |  | $    | 70,167    |      |  | $    | 73,342    |   |  | $ | 70,707    |   |  | $ | 58,242    |  
|Total completed communities (at end of period)(2)             |  |                         | 51        |      |  |      | 54        |      |  |      | 59        |   |  |   | 65        |   |  |   | 66        |  
|Total apartment homes developed(3)                            |  |                         | 866       |      |  |      | 1,157     |      |  |      | 1,696     |   |  |   | 1,650     |   |  |   | 973       |  
|Total apartment homes acquired                                |  |                         | 222       |      |  |      |          |      |  |      | 490       |   |  |   |          |   |  |   | 3,557     |  
|Total apartment homes (at end of period)(2)                   |  |                         | 15,428    |      |  |      | 16,739    |      |  |      | 17,273    |   |  |   | 16,765    |   |  |   | 16,631    |  
|Ratio of earnings to fixed charges(4)                         |  |                         | 2.58      |      |  |      | 1.83      |      |  |      | 1.99      |   |  |   | 1.85      |   |  |   | 2.52      |  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We consider funds from operations
    (FFO) to be an appropriate measure of performance of
    an equity REIT. We compute FFO in accordance with standards
    established by the National Association of Real Estate
    Investment Trusts (NAREIT). FFO, as defined by
    NAREIT, represents net income (loss) excluding
    extraordinary items and gains or losses from sales of property,
    plus depreciation of real estate assets, and after adjustments
    for unconsolidated partnerships and joint ventures, all
    determined on a consistent basis in accordance with accounting
    principles generally accepted in the United States of America
    (GAAP). Our methodology for calculating FFO may
    differ from the methodology for calculating FFO utilized by
    other real estate companies, and accordingly, may not be
    comparable to other real estate companies.

We believe that FFO is helpful to investors as a
measure of the performance of an equity REIT because, along with
cash flows from operating activities, financing activities and
investing activities, it provides investors with an
understanding of our ability to incur and service debt and to
make capital expenditures. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP)
as an indication of our financial performance or to cash flows
from operating activities (determined in

14



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##### 



accordance with GAAP) as a measure of our
liquidity, nor is it indicative of funds available to fund our
cash needs, including our ability to make dividend or
distribution payments.


FFO is calculated as follows (dollars in
thousands):

|                                                                             |  |                         |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|---------------------------------------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                                             |  |                        
|                                                                             |  | Year Ended December 31,
|                                                                             |  |                        
|                                                                             |  | 2002                    |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                                                             |  |                         |        |      |  |      |        |      |  |     
|Income before gain on sale of real estate assets
    and extraordinary items |  | $                       | 20,126 |      |  | $    | 30,190 |      |  | $    | 35,676 |  |  | $ | 35,635 |  |  | $ | 29,327 | 
|Real estate depreciation                                                     |  |                         | 40,400 |      |  |      | 39,977 |      |  |      | 37,666 |  |  |   | 35,072 |  |  |   | 28,915 | 
|                                                                             |  |                         |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|Funds from operations                                                        |  | $                       | 60,526 |      |  | $    | 70,167 |      |  | $    | 73,342 |  |  | $ | 70,707 |  |  | $ | 58,242 | 
|                                                                             |  |                         |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Represents the total number of completed
    communities and apartment homes in those completed communities
    owned at the end of the period (excludes joint venture
    communities).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(3) | Represents the total number of apartment homes in
    communities completed during the period and owned at the end of
    the period (excludes joint venture communities).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(4) | The ratios of earnings to fixed charges were
    computed by dividing earnings by fixed charges. For this
    purpose, earnings consist of pre-tax income from continuing
    operations (including gains on sale of real estate) plus fixed
    charges (excluding capitalized interest). Fixed charges consist
    of interest expense (whether expensed or capitalized), dividends
    to preferred unitholders in the Operating Partnership, the
    estimated interest component of rent expense and the
    amortization of debt issuance costs. To date, Summit has not
    issued any preferred stock; therefore, the ratios of earnings to
    combined fixed charges and preferred stock dividend requirements
    are the same as the ratios of earnings to fixed charges
    presented.



|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Unless the context otherwise requires, all
references to we, our or us
in this report refer collectively to Summit Properties
Partnership, L.P., a Delaware limited partnership (the
Operating Partnership), and its subsidiaries. All
references to Summit in this report refer to Summit
Properties Inc., a Maryland corporation and the sole general
partner of the Operating Partnership.

Forward-Looking Statements

This report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. You can identify forward-looking statements
by the use of the words believe, expect,
anticipate, intend,
estimate, assume and other similar
expressions which predict or indicate future events and trends
and which do not relate to historical matters. In addition,
information concerning the following are forward-looking
statements:



|  |                                                                                                                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the future operating performance of stabilized
    communities;                                                                                                                                          
| 
| | expected national and regional economic and real
    estate market conditions, including the market for sales of real
    estate assets;                                                                 
| 
| | the proposed development, acquisition or
    disposition of communities, including our strategy to exit our
    Texas markets and to increase our presence in
    Washington, D.C. and Southeast Florida;
| 
| | anticipated construction commencement,
    completion, lease-up and stabilization dates; and                                                                                                             
| 
| | estimated development costs.                                                                                                                                                                             

You should not rely on forward-looking statements
because they involve known and unknown risks, uncertainties and
other factors, some of which are beyond our control. These
risks, uncertainties and other factors may cause our actual
results, performance or achievements to be materially different
from the anticipated future results, performance or achievements
expressed or implied by the forward-looking

15



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statements. Factors which could have a material
adverse effect on our operations and future prospects include,
but are not limited to:




|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | economic conditions generally, and the real
    estate market specifically, including changes in occupancy
    rates, market rents and rental rate concessions, the continuing
    deceleration of economic conditions in our markets, and the
    failure of national and local economic conditions to rebound in
    a timely manner;                                                                                                                                                                                                                                                          
| 
| | changes in job growth, household formation and
    population growth in our markets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| | uncertainties associated with our development
    activities, including the failure to obtain zoning and other
    approvals, actual development costs exceeding our budgets, and
    construction material defects;                                                                                                                                                                                                                                                                                                                                                                             
| 
| | the failure of acquisition and development
    communities to yield expected results;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| | the failure to sell communities marketed for
    sale, including our Texas communities, or to sell these
    communities in a timely manner or on favorable terms;                                                                                                                                                                                                                                                                                                                                                                                                                               
| 
| | the failure to locate favorable opportunities for
    investment in our core markets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| | construction delays due to the unavailability of
    materials, weather conditions or other delays;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| 
| | potential environmental liabilities and related
    property damages, costs of investigation and remediation and
    liability to third parties;                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| 
| | competition, which could limit our ability to
    secure attractive investment opportunities, lease apartment
    homes or increase or maintain rents;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| | supply of and demand for apartment communities in
    our current market areas, especially our core markets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
| | availability and cost of financing and access to
    cost-effective capital;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
| | the inability to refinance existing indebtedness
    or to refinance existing indebtedness on favorable terms;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
| | changes in interest rates;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | legislative and regulatory changes, including
    changes to laws governing the taxation of real estate investment
    trusts (REITs);                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| 
| | changes in accounting principles generally
    accepted in the United States of America (GAAP), or
    policies and guidelines applicable to REITs; and                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
| | those factors discussed below and in the sections
    entitled Results of Operations for the Years Ended
    December 31, 2002, 2001 and 2000 beginning on
    page 18 of this report, Operating Performance of our
    Fully Stabilized Communities beginning on page 21 of
    this report, Operating Performance of our Communities in
    Lease Up beginning on page 23 of this report,
    Factors Affecting the Performance of our Development
    Communities beginning on page 35 of this report and
    Commitments and Contingencies beginning on
    page 36 of this report.

Our common unitholders could suffer adverse tax
consequences upon the sale of certain of our communities. We may
sometimes make strategic decisions that are advantageous
transactions for Summit, but may not be in the best interests of
our common unitholders, including certain directors.

You should consider these risks and uncertainties
in evaluating forward-looking statements and you should not
place undue reliance on forward-looking statements. These
forward-looking statements represent our estimates and
assumptions only as of the date of this report. We do not
undertake to update these forward-looking statements. You should
read the following discussion in conjunction with our
consolidated financial statements and related notes which
accompany this report.

Summit conducts all of its business through the
Operating Partnership and its subsidiaries. As of
December 31, 2002, Summit held 88.6% of our outstanding
partnership interests, consisting of a 1% general partnership
interest and an 87.6% limited partner interest. Each common unit
of limited partnership interest may be redeemed by the holder
for cash equal to the fair market value of one share of
Summits common

16



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##### 



stock or, at our option, one share of common
stock (subject to adjustment). We presently determine on a
case-by-case basis whether we will cause Summit to issue shares
of common stock in connection with a redemption of common units
rather than paying cash. With each redemption of common units
for common stock, Summits percentage ownership interest in
the Operating Partnership will increase. Similarly, when Summit
acquires a share of common stock under its common stock
repurchase program or otherwise, it simultaneously disposes of
one of our common units. In addition, whenever Summit issues
shares of common stock for cash, Summit will contribute any
resulting net proceeds to us and we will issue an equivalent
number of common units to Summit.


We are a real estate operating company that
focuses on the operation, development and acquisition of
Class A luxury apartment communities located
throughout the Southeast and Mid-Atlantic United States, as well
as in Texas. We focus our efforts in five core markets, with
particular emphasis on Washington, D.C., Southeast Florida and
Atlanta, Georgia. Our other core markets are Raleigh-Durham and
Charlotte, North Carolina. While we currently operate in Texas
as well, we intend to exit our Texas markets and use the sales
proceeds from those communities primarily to increase our
presence in the Washington, D.C. and Southeast Florida markets.
Because we focus on certain core markets, changes in local
economic and market conditions in these markets may
significantly affect our current operations and future prospects.

Critical Accounting Policies

We prepare our financial statements in accordance
with GAAP. A summary of our significant accounting policies is
disclosed in Note 3 to our consolidated financial
statements, which are included in this annual report. The
preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates. As an owner, operator, developer
and acquirer of apartment communities, our critical accounting
policies are related to rental revenue recognition, cost
capitalization and asset impairment evaluation.

We lease our residential properties under
operating leases with terms of generally one year or less.
Rental revenue is recognized on the accrual method of accounting
as earned, which is not materially different from revenue
recognition on a straight-line basis. We lease our office and
retail space under operating leases with terms ranging from two
to ten years. Rental revenue for office and retail space is
recognized on a straight-line basis over the lives of the
respective leases. It is our policy to reduce rental revenue by
the amount of rent receivable from those residents whose
payments are more than 30 days past due following move-out.
We have recorded an allowance for uncollectible rent in the
accompanying balance sheets for such items.

Expenditures directly related to the acquisition,
development and improvement of real estate assets are
capitalized at cost as land, buildings and improvements or
furniture, fixtures and equipment in accordance with Statement
of Financial Accounting Standards (SFAS)
No. 67, Accounting for Costs and Initial Rental
Operations of Real Estate Projects. Improvements are
categorized as either non-recurring or recurring capitalized
expenditures. Non-recurring capitalized expenditures primarily
consist of the cost of improvements such as new garages, water
submeters, gated security access and improvements made in
conjunction with renovations of apartment homes. Excluding
rehabilitations, recurring capitalized expenditures consist
primarily of floor coverings, furniture, appliances and
equipment, and exterior paint and carpentry. Repairs and
maintenance, such as landscaping maintenance, interior painting
and cleaning and supplies used in such activities, are expensed
as incurred and we do not accrue for such costs in advance.

We capitalize interest, the cost of our
development efforts directly related to apartment construction,
and certain operational costs for communities under construction
and in lease-up. Interest costs are capitalized in accordance
with SFAS No. 34, Capitalization of Interest
Cost, based on the ratio of those units available for
rental to the total number of units in the community and
depreciated over the lives of the constructed assets. We
capitalize the cost of our development department efforts to
projects currently under construction, currently at a rate of
3.0% of such construction assets. Such costs are then
depreciated over the lives of the constructed assets upon their
completion. We treat each unit in an apartment community
separately for

17



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##### 



capitalization and expense recognition purposes,
resulting in a proration of interest and operational costs in a
development community between costs that are capitalized or
expensed. As units become available for their intended use, we
cease capitalization of interest and operational costs on those
units based on the ratio of those units available for rental to
the total number of units in the community.


We record our real estate assets at cost less
accumulated depreciation and, if there are indications that
impairment exists, adjust the carrying value of those assets in
accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. Assets to be
disposed of are recorded at the lower of carrying amount or fair
value less cost to sell.

In accordance with SFAS No. 144, we present
operating results of communities we consider held for sale, as
well as those sold, in discontinued operations in our
consolidated statements of earnings prospectively from the date
of adoption, which was January 1, 2002. Although the
adoption of SFAS No. 144 did not have a material impact on
our financial position or results of operations for the year
ended December 31, 2002, it did have a significant effect
on the comparability of amounts presented from year to year on
the consolidated statements of earnings.

Historical Results of Operations

Our income from continuing operations is
generated primarily from operations of our apartment
communities. The changes in operating results from period to
period reflect changes in existing community performance and
changes in the number of apartment homes due to development,
acquisition or disposition of communities. Where appropriate,
comparisons are made on a fully stabilized
communities, acquisition communities,
stabilized development communities,
communities in lease-up and disposition
communities basis in order to adjust for changes in the
number of apartment homes.

A community that we have acquired is deemed
fully stabilized when we have owned it for one year
or more as of the beginning of the current year. A community
that we have developed is deemed fully stabilized
when stabilized for at least one year as of the beginning of the
current year. A community is deemed to be a stabilized
development community when stabilized as of the beginning
of the current year but not the entire prior year. We consider a
community to be stabilized when it has attained a
physical occupancy level of at least 93%. A community in
lease-up is defined as one that has commenced rental
operations but was not stabilized as of the beginning of the
current year. A communitys average physical occupancy is
defined as the number of apartment homes occupied divided by the
total number of apartment homes contained in the community,
expressed as a percentage. Average physical occupancy has been
calculated using the average of the occupancy that existed on
Sunday during each week of the period. Average monthly rental
revenue presented represents the average monthly net rental
revenue per occupied apartment home. Our methodology for
calculating average physical occupancy and average monthly
rental revenue may differ from the methodology used by other
apartment companies and, accordingly, may not be comparable to
other apartment companies.



| |                                                                               
| | ------------------------------------------------------------------------------
| | Results of Operations for the Years Ended
    December 31, 2002, 2001 and 2000

We have experienced weakening apartment
fundamentals due to the downturn in the national economy as well
as declining economic conditions in our core markets. Local
demand for apartment homes has declined due to lower job growth
and/or job losses, primary drivers of apartment demand, which
has led to lower rental rates and higher concessions in order to
achieve increased occupancy rates. Additionally, the favorable
interest rate environment has produced record homes sales which,
when combined with the slowing economy, has depleted the number
of prospective residents. The favorable interest rate
environment has also provided the opportunity for developers to
continue to add to the supply of apartments in our core markets.
Although the current economic environment is unpredictable, we
expect these trends to continue in 2003.

Income from continuing operations before gain on
sale of real estate assets, impairment loss on investments in
technology companies and extraordinary items decreased to
$24.4 million in 2002 from $33.5 million in 2001. The
primary factors causing this decrease are a $12.3 million
decrease in property operating income from continuing operations
and an increase in depreciation expense of $1.9 million due
to the initiation and increase

18



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##### 



of depreciation on recently developed
communities, as well as depreciation on the community acquired
during the second half of 2002, offset by the absence of a full
year of depreciation on communities sold during 2002 and 2001,
all offset by a decrease in interest expense of
$5.0 million as a result of decreased average indebtedness
outstanding and a decreased average effective interest rate.
This same measure decreased to $33.5 million in 2001 from
$38.0 million in 2000 primarily due to a $2.2 million
increase in depreciation expense, a $2.2 million increase in
general and administrative costs primarily as a result of
$1.8 million of non-recurring charges related to an
increase in costs for abandoned pursuit projects and severance
costs associated with senior staff reductions and a
$1.4 million increase in interest expense as a result of
increased average indebtedness outstanding, all offset by
increased property operating income of $1.3 million.


Operating Performance of our Portfolio of
Communities

We evaluate community performance based on growth
of property operating income, which is defined as rental and
other property revenues less property operating and maintenance
expense. We believe that property operating income is a
meaningful measure for an investors analysis of community
performance as it represents the most consistent, comparable
operating performance among our communities. Depreciation is a
fixed cost not controllable by our property management staff and
not all communities are encumbered by financing instruments.
Therefore, all property operating and maintenance expense
amounts in this Managements Discussion and Analysis
section are presented before depreciation, interest and
amortization. Property operating income does not include any
allocation of corporate overhead. You should not consider
property operating income as an alternative to net income
(determined in accordance with GAAP) as an indication of our
financial performance or as an alternative to cash flows from
operating activities (determined in accordance with GAAP), as a
measure of our liquidity. Our calculation of property operating
income may differ from the methodology and definition used by
other apartment companies, and accordingly, may not be
comparable to similarly entitled measures used by other
apartment companies.

A summary of our apartment homes (excluding joint
ventures) for the years ended December 31, 2002, 2001 and
2000 is as follows:

|                                                  |  |      |        |      |  |      |        |   |  |  |        |  
|------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                  |  | 2002 |        | 2001 |  | 2000
|                                                  |  |      |        |      |  |     
|Apartment homes at the beginning of the year      |  |      | 16,739 |      |  |      | 18,928 |   |  |  | 17,673 |  
|Acquisitions                                      |  |      | 222    |      |  |      |       |   |  |  | 490    |  
|Developments which were completed during the year |  |      | 866    |      |  |      |       |   |  |  | 2,441  |  
|Sale of apartment homes                           |  |      | (2,399 | )    |  |      | (2,189 | ) |  |  | (1,676 | )
|                                                  |  |      |        |      |  |      |        |   |  |  |        |  
|Apartment homes at the end of the year            |  |      | 15,428 |      |  |      | 16,739 |   |  |  | 18,928 |  
|                                                  |  |      |        |      |  |      |        |   |  |  |        |  

19



---



##### 



The operating performance of our communities is
summarized below (dollars in thousands):

|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |       |  
|--------------------------------------------------------------- | ---------------------------------- | ----------------------- | ------- | ----------------------- |  | -------- | ------- | ------- |  | ---- | ------ | -------- | - | - | ------- | ------- |  | - | ------- | ------- |  |  | ----- | ----- | -
|                                                                |                                    |                         |         |                        
|                                                                |                                    | Year Ended December 31, |         | Year Ended December 31,
|                                                                |                                    |                         |         |                        
|                                                                |                                    | 2002                    |         | 2001                    |  | % Change |         | 2001    |  | 2000 |        | % Change
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |         
|Property revenue:                                               |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|                                                                | Fully stabilized communities       |                         | $       | 127,201                 |  |          | $       | 133,824 |  |      |        | -4.9     | % |   | $       | 104,697 |  |   | $       | 103,424 |  |  |       | 1.2   | %
|                                                                | Acquisition communities            |                         |         | 1,111                   |  |          |         |        |  |      |        | 100.0    | % |   |         | 5,112   |  |   |         | 2,194   |  |  |       | 133.0 | %
|                                                                | Stabilized development communities |                         |         | 10,672                  |  |          |         | 10,349  |  |      |        | 3.1      | % |   |         | 53,905  |  |   |         | 48,581  |  |  |       | 11.0  | %
|                                                                | Communities in lease-up            |                         |         | 16,679                  |  |          |         | 8,271   |  |      |        | 101.7    | % |   |         | 14,562  |  |   |         | 4,797   |  |  |       | 203.6 | %
|                                                                | Disposition communities            |                         |         | 18,511                  |  |          |         | 38,726  |  |      |        | -52.2    | % |   |         | 12,894  |  |   |         | 26,438  |  |  |       | -51.2 | %
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Total property revenue                                          |                                    |                         | 174,174 |                         |  |          | 191,170 |         |  |      | -8.9   | %        |   |   | 191,170 |         |  |   | 185,434 |         |  |  | 3.1   | %    
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Property operating and maintenance expense:                     |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|                                                                | Fully stabilized communities       |                         |         | 45,623                  |  |          |         | 44,423  |  |      |        | 2.7      | % |   |         | 35,254  |  |   |         | 33,710  |  |  |       | 4.6   | %
|                                                                | Acquisition communities            |                         |         | 521                     |  |          |         |        |  |      |        | 100.0    | % |   |         | 1,773   |  |   |         | 687     |  |  |       | 158.1 | %
|                                                                | Stabilized development communities |                         |         | 3,638                   |  |          |         | 3,273   |  |      |        | 11.2     | % |   |         | 16,748  |  |   |         | 14,018  |  |  |       | 19.5  | %
|                                                                | Communities in lease-up            |                         |         | 6,530                   |  |          |         | 2,882   |  |      |        | 126.6    | % |   |         | 5,138   |  |   |         | 1,612   |  |  |       | 218.7 | %
|                                                                | Disposition communities            |                         |         | 6,350                   |  |          |         | 12,875  |  |      |        | -50.7    | % |   |         | 4,540   |  |   |         | 9,060   |  |  |       | -49.9 | %
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Total property operating and maintenance expense                |                                    |                         | 62,662  |                         |  |          | 63,453  |         |  |      | -1.2   | %        |   |   | 63,453  |         |  |   | 59,087  |         |  |  | 7.4   | %    
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Property operating income:                                      |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|                                                                | Fully stabilized communities       |                         |         | 81,578                  |  |          |         | 89,401  |  |      |        | -8.8     | % |   |         | 69,443  |  |   |         | 69,714  |  |  |       | -0.4  | %
|                                                                | Acquisition communities            |                         |         | 590                     |  |          |         |        |  |      |        | 100.0    | % |   |         | 3,339   |  |   |         | 1,507   |  |  |       | 121.6 | %
|                                                                | Stabilized development communities |                         |         | 7,034                   |  |          |         | 7,076   |  |      |        | -0.6     | % |   |         | 37,157  |  |   |         | 34,563  |  |  |       | 7.5   | %
|                                                                | Communities in lease-up            |                         |         | 10,149                  |  |          |         | 5,389   |  |      |        | 88.3     | % |   |         | 9,424   |  |   |         | 3,185   |  |  |       | 195.9 | %
|                                                                | Disposition communities            |                         |         | 12,161                  |  |          |         | 25,851  |  |      |        | -53.0    | % |   |         | 8,354   |  |   |         | 17,378  |  |  |       | -51.9 | %
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Property operating income                                       |                                    |                         | 111,512 |                         |  |          | 127,717 |         |  |      | -12.7  | %        |   |   | 127,717 |         |  |   | 126,347 |         |  |  | 1.1   | %    
|Interest and other income                                       |                                    |                         | 3,049   |                         |  |          | 3,156   |         |  |      | -3.4   | %        |   |   | 3,156   |         |  |   | 4,210   |         |  |  | -25.0 | %    
|Depreciation expense                                            |                                    |                         | (39,740 | )                       |  |          | (39,080 | )       |  |      | 1.7    | %        |   |   | (39,080 | )       |  |   | (36,602 | )       |  |  | 6.8   | %    
|Interest and amortization expense                               |                                    |                         | (35,785 | )                       |  |          | (41,285 | )       |  |      | -13.3  | %        |   |   | (41,285 | )       |  |   | (39,721 | )       |  |  | 3.9   | %    
|General and administrative expense                              |                                    |                         | (6,133  | )                       |  |          | (6,958  | )       |  |      | -11.9  | %        |   |   | (6,958  | )       |  |   | (4,752  | )       |  |  | 46.4  | %    
|(Loss) income on equity investments                             |                                    |                         | (357    | )                       |  |          | 277     |         |  |      | -228.9 | %        |   |   | 277     |         |  |   | (1,178  | )       |  |  | 123.5 | %    
|Gain on sale of real estate assets                              |                                    |                         | 83,693  |                         |  |          | 34,706  |         |  |      | 141.1  | %        |   |   | 34,706  |         |  |   | 38,510  |         |  |  | -9.9  | %    
|Impairment loss on technology investments                       |                                    |                         |        |                         |  |          | (1,217  | )       |  |      | -100.0 | %        |   |   | (1,217  | )       |  |   |        |         |  |  | 100.0 | %    
|Dividends to preferred unitholders in Operating
    Partnership |                                    |                         | (12,420 | )                       |  |          | (12,420 | )       |  |      | 0.0    | %        |   |   | (12,420 | )       |  |   | (12,420 | )       |  |  | 0.0   | %    
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Extraordinary items, net of minority interest                   |                                    |                         | (311    | )                       |  |          |        |         |  |      | 100.0  | %        |   |   |        |         |  |   |        |         |  |  | 0.0   | %    
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      
|Income available to common unitholders                          |                                    | $                       | 103,508 |                         |  | $        | 64,896  |         |  |      | 62.2   | %        |   | $ | 64,896  |         |  | $ | 74,394  |         |  |  | -11.5 | %    
|                                                                |                                    |                         |         |                         |  |          |         |         |  |      |        |          |   |   |         |         |  |   |         |         |  |  |       |      

20



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##### 



Operating Performance of our Fully Stabilized
Communities

The operating performance of our fully stabilized
communities is summarized below (dollars in thousands, except
average monthly rental revenue):

|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |       |  
|------------------------------------------------ | -------------------------------- | ----------------------- | ------- | ----------------------- |  | -------- | ------- | ------- |  | ---- | ---- | -------- | - | - | ------- | ------ |  | - | ------- | ------ |  |  | ---- | ----- | -
|                                                 |                                  |                         |         |                        
|                                                 |                                  | Year Ended December 31, |         | Year Ended December 31,
|                                                 |                                  |                         |         |                        
|                                                 |                                  | 2002                    |         | 2001                    |  | % Change |         | 2001    |  | 2000 |      | % Change
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |         
|Property revenue:                                |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|                                                 | Rental                           |                         | $       | 118,546                 |  |          | $       | 124,670 |  |      |      | 4.9     | % |   | $       | 97,607 |  |   | $       | 96,583 |  |  |      | 1.1   | %
|                                                 | Other                            |                         |         | 8,655                   |  |          |         | 9,154   |  |      |      | 5.5     | % |   |         | 7,090  |  |   |         | 6,841  |  |  |      | 3.6   | %
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Total property revenue                           |                                  |                         | 127,201 |                         |  |          | 133,824 |         |  |      | 4.9 | %        |   |   | 104,697 |        |  |   | 103,424 |        |  |  | 1.2  | %    
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Property operating and maintenance expense:      |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|                                                 | Personnel                        |                         |         | 9,679                   |  |          |         | 9,024   |  |      |      | 7.3      | % |   |         | 6,786  |  |   |         | 6,193  |  |  |      | 9.6   | %
|                                                 | Advertising and promotion        |                         |         | 1,815                   |  |          |         | 1,474   |  |      |      | 23.1     | % |   |         | 1,141  |  |   |         | 1,376  |  |  |      | 17.1 | %
|                                                 | Utilities                        |                         |         | 5,860                   |  |          |         | 6,145   |  |      |      | 4.6     | % |   |         | 4,740  |  |   |         | 4,481  |  |  |      | 5.8   | %
|                                                 | Building repairs and maintenance |                         |         | 6,190                   |  |          |         | 6,259   |  |      |      | 1.1     | % |   |         | 5,014  |  |   |         | 4,855  |  |  |      | 3.3   | %
|                                                 | Real estate taxes and insurance  |                         |         | 16,543                  |  |          |         | 15,600  |  |      |      | 6.0      | % |   |         | 12,820 |  |   |         | 12,192 |  |  |      | 5.2   | %
|                                                 | Property supervision             |                         |         | 3,575                   |  |          |         | 3,767   |  |      |      | 5.1     | % |   |         | 2,940  |  |   |         | 2,895  |  |  |      | 1.6   | %
|                                                 | Other operating expense          |                         |         | 1,961                   |  |          |         | 2,154   |  |      |      | 9.0     | % |   |         | 1,813  |  |   |         | 1,718  |  |  |      | 5.5   | %
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Total property operating and maintenance expense |                                  |                         | 45,623  |                         |  |          | 44,423  |         |  |      | 2.7  | %        |   |   | 35,254  |        |  |   | 33,710  |        |  |  | 4.6  | %    
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Property operating income                        |                                  | $                       | 81,578  |                         |  | $        | 89,401  |         |  |      | 8.8 | %        |   | $ | 69,443  |        |  | $ | 69,714  |        |  |  | 0.4 | %    
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Average physical occupancy                       |                                  |                         | 93.4    | %                       |  |          | 92.9    | %       |  |      | 0.5  | %        |   |   | 92.9    | %      |  |   | 94.5    | %      |  |  | 1.7 | %    
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Average monthly rental revenue                   |                                  | $                       | 895     |                         |  | $        | 946     |         |  |      | 5.4 | %        |   | $ | 931     |        |  | $ | 909     |        |  |  | 2.4  | %    
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Number of apartment homes                        |                                  |                         | 12,060  |                         |  |          | 12,060  |         |  |      |      |          |   |   | 9,615   |        |  |   | 9,615   |        |  |  |      |      
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      
|Number of apartment communities                  |                                  |                         | 40      |                         |  |          | 40      |         |  |      |      |          |   |   | 37      |        |  |   | 37      |        |  |  |      |      
|                                                 |                                  |                         |         |                         |  |          |         |         |  |      |      |          |   |   |         |        |  |   |         |        |  |  |      |      

Rental and other revenue decreased from 2001 to
2002 due to weakening fundamentals in our markets primarily
driven by a decline in job growth and/or an increase in job
losses, residents leaving our communities to purchase homes in
the low interest rate environment, and the new supply of
apartment homes added to our core markets by builders taking
advantage of low interest rates. Concessions at our fully
stabilized communities increased by $9.4 million, or 81.7%,
in 2002 when compared to 2001. The current level of concessions
offered to residents in our markets ranges from one to three
months of free rent and we expect significant concessions to
continue in our core markets in 2003 as we try to maintain
elevated occupancy levels.

Property operating and maintenance expense
increased by 2.7% from 2001 to 2002 primarily due to an increase
in advertising costs, personnel costs and real estate taxes and
insurance costs. The increase in advertising costs is primarily
due to a 158% increase in fees paid to locator companies for
assistance in referring residents to our communities. Personnel
costs increased from 2001 to 2002 primarily due to an 11.7%
increase in group insurance costs. Real estate taxes and
insurance costs increased primarily due to an increase in
property liability insurance costs of 64.8%. As a percentage of
total property revenue, total property operating and maintenance
expenses for our fully stabilized communities increased to 35.9%
in 2002 from 33.2% in 2001. We expect that property operating
income for our fully stabilized communities will continue to
decline in 2003 based on what we believe to be reasonable
assumptions as to future economic conditions and the quantity of
competitive supply expected in our markets. However, there can
be no assurance that actual results will not differ from this
assumption, especially due to the unpredictable nature of the
current economy.

21



---



##### 



Rental and other revenue increased by 1.2% from
2000 to 2001 primarily due to higher average rental rates and
increased revenue from sources other than rental income, such as
water sub-meter income, trash fees and redecorating fees.

Property operating and maintenance expense
increased by 4.6% from 2000 to 2001 primarily due to increased
personnel costs, utility costs and real estate taxes and
insurance, all offset by a decrease in advertising costs.
Personnel costs increased from 2000 to 2001 primarily due to a
one-time policy change which decreased discounts offered to
employees who rent apartment homes at our communities resulting
in commensurate increases in those employees salaries.
Utility costs increased from 2000 to 2001 primarily as a result
of rising gas prices, as well as an increase in vacant utility
costs driven by lower occupancy. Real estate tax costs increased
as a result of higher assessments for our communities in 2001
over 2000, primarily in Texas. The decrease in advertising costs
from 2000 to 2001 is primarily the result of a reduction in
media advertising and locator fees. As a percentage of total
property revenues, property operating and maintenance expense
increased to 33.7% in 2001 from 32.6% in 2000.

Operating Performance of our Acquisition
Communities

On July 1, 2002, we acquired a stabilized,
luxury apartment community in the Galleria sub-market of Dallas,
Texas for cash in the amount of $17.7 million. The
community, now known as Summit San Raphael, has 222 apartment
homes and was constructed in 1999. Acquisition communities for
the December 31, 2001 to 2000 comparison consist of Summit
Sweetwater and Summit Shiloh (representing a total of 490
apartment homes), both located in Atlanta, Georgia, in each of
which we acquired our joint venture partners 51% interest
on August 1, 2000. There were no community acquisitions
during 2001. The operating performance of our acquisition
communities is summarized below (dollars in thousands except
average monthly rental revenue):

|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |       | 
|------------------------------------------ | ------ | ----------------------- | ----- | ----------------------- |  | ---- | - | ---- |  | - | ----- | ----- |  | - | ----- | ----- | 
|                                           |        |                         |       |                        
|                                           |        | Year Ended December 31, |       | Year Ended December 31,
|                                           |        |                         |       |                        
|                                           |        | 2002                    |       | 2001                    |  | 2001 |   | 2000
|                                           |        |                         |       |                         |  |      |   |     
|Property revenue:                          |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|                                           | Rental |                         | $     | 1,062                   |  |      | $ |     |  |   | $     | 4,726 |  |   | $     | 2,016 | 
|                                           | Other  |                         |       | 49                      |  |      |   |     |  |   |       | 386   |  |   |       | 178   | 
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|Total property revenue                     |        |                         | 1,111 |                         |  |      |  |      |  |   | 5,112 |       |  |   | 2,194 |      
|Property operating and maintenance expense |        |                         | 521   |                         |  |      |  |      |  |   | 1,773 |       |  |   | 687   |      
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|Property operating income                  |        | $                       | 590   |                         |  | $    |   |      |  | $ | 3,339 |       |  | $ | 1,507 |      
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|Average physical occupancy                 |        |                         | 93.2  | %                       |  |      |  |      |  |   | 92.8  | %     |  |   | 92.8  | %    
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|Average monthly rental revenue             |        | $                       | 890   |                         |  |      |  |      |  | $ | 888   |       |  | $ | 914   |      
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      
|Number of apartment homes                  |        |                         | 222   |                         |  |      |   |      |  |   | 490   |       |  |   | 490   |      
|                                           |        |                         |       |                         |  |      |   |      |  |   |       |       |  |   |       |      

Operating Performance of our Stabilized
Development Communities

The comparison of the years ended
December 31, 2002 and 2001 represents two communities with
a total of 857 apartment homes (Summit Russett and Summit Lenox)
which were stabilized during the entire year ended
December 31, 2002, but were stabilized subsequent to
January 1, 2001. Summit Lenox is an existing community with
431 apartment homes that underwent major renovations during 2000
and 2001. Its operating results are included in results of
stabilized development communities as it reached stabilization
after renovation subsequent to January 1, 2001.

The comparison of the years ended
December 31, 2001 and 2000 represents 15 communities with a
total of 4,668 apartment homes (Summit Ballantyne, Summit Largo,
Summit Sedgebrook, Summit Governors Village, Summit Lake,
Summit Westwood, Summit New Albany, Summit Fair Lakes, Summit
Hunters Creek, Summit Russett I, Summit Doral, Summit
Ashburn Farm, Summit Deer Creek, Summit Reunion Park I and
Summit Fairview).

22



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##### 



The operating performance of our stabilized
development communities is summarized below (dollars in
thousands except average monthly rental revenue):

|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |        | 
|------------------------------------------ | ------ | ------------------------ | ------ | ----------------------- |  | ---- | ------ | ----- |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                           |        |                          |        |                        
|                                           |        | Year Ended December 31,? |        | Year Ended December 31,
|                                           |        |                          |        |                        
|                                           |        | 2002                     |        | 2001                    |  | 2001 |        | 2000 
|                                           |        |                          |        |                         |  |      |        |      
|Property revenue:                          |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|                                           | Rental |                          | $      | 9,950                   |  |      | $      | 9,487 |  |   | $      | 50,130 |  |   | $      | 45,079 | 
|                                           | Other  |                          |        | 722                     |  |      |        | 862   |  |   |        | 3,775  |  |   |        | 3,502  | 
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|Total property revenue                     |        |                          | 10,672 |                         |  |      | 10,349 |       |  |   | 53,905 |        |  |   | 48,581 |       
|Property operating and maintenance expense |        |                          | 3,638  |                         |  |      | 3,273  |       |  |   | 16,748 |        |  |   | 14,018 |       
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|Property operating income                  |        | $                        | 7,034  |                         |  | $    | 7,076  |       |  | $ | 37,157 |        |  | $ | 34,563 |       
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|Average physical occupancy                 |        |                          | 93.5   | %                       |  |      | 88.3   | %     |  |   | 93.9   | %      |  |   | 88.1   | %     
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|Average monthly rental revenue             |        | $                        | 1,062  |                         |  | $    | 1,078  |       |  | $ | 966    |        |  | $ | 897    |       
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       
|Number of apartment homes                  |        |                          | 857    |                         |  |      | 857    |       |  |   | 4,668  |        |  |   | 4,668  |       
|                                           |        |                          |        |                         |  |      |        |       |  |   |        |        |  |   |        |       

Operating Performance of our Communities in
Lease-Up

We had eight communities in lease-up during the
year ended December 31, 2002. The following is a summary of
the communities in lease-up during 2002 (dollars in thousands):

|                                        |  |           |       |        |  |              |         |               |  |           |         |              |  |  |         |  |  |  |      |   |  |  |       |  
|--------------------------------------- |  | --------- | ----- | ------ |  | ------------ | ------- | ------------- |  | --------- | ------- | ------------ |  |  | ------- |  |  |  | ---- | - |  |  | ----- | -
|                                        |  |           |       |        |  |              |         |               |  | Average   |         | % Leased    
|                                        |  | Number of |       | Total  |  | Actual       |         | Actual/       |  | Physical  |         | as of       
|                                        |  | Apartment |       | Actual |  | Construction |         | Anticipated   |  | Occupancy |         | December 31,
|Community                               |  | Homes     |       | Cost   |  | Completion   |         | Stabilization |  | 2002      |         | 2002        
|                                        |  |           |       |        |  |              |         |               |  |           |         |             
|Summit Brookwood  Atlanta, GA          |  |           | 359   |        |  | $            | 44,524  |               |  |           | Q4 2002 |              |  |  | Q3 2003 |  |  |  | 22.9 | % |  |  | 61.0  | %
|Summit Crest  Raleigh, NC              |  |           | 438   |        |  |              | 32,609  |               |  |           | Q3 2001 |              |  |  | Q3 2002 |  |  |  | 84.3 | % |  |  | 94.5  | %
|Summit Grand Parc  Washington, D.C.(1) |  |           | 105   |        |  |              | 43,508  |               |  |           | Q4 2002 |              |  |  | Q3 2003 |  |  |  | 0.0  | % |  |  | 1.9   | %
|Summit Grandview  Charlotte, NC(2)     |  |           | 266   |        |  |              | 51,261  |               |  |           | Q4 2000 |              |  |  | Q4 2001 |  |  |  | 90.6 | % |  |  | 91.7  | %
|Summit Overlook  Raleigh, NC           |  |           | 320   |        |  |              | 28,697  |               |  |           | Q4 2001 |              |  |  | Q3 2002 |  |  |  | 84.2 | % |  |  | 99.4  | %
|Summit Peachtree City  Atlanta, GA     |  |           | 399   |        |  |              | 33,231  |               |  |           | Q3 2001 |              |  |  | Q4 2002 |  |  |  | 70.1 | % |  |  | 77.7  | %
|Summit Shiloh II  Atlanta, GA          |  |           | 50    |        |  |              | 4,015   |               |  |           | Q1 2002 |              |  |  | Q2 2002 |  |  |  | 76.3 | % |  |  | 100.0 | %
|Summit Valleybrook  Philadelphia, PA   |  |           | 352   |        |  |              | 37,574  |               |  |           | Q4 2002 |              |  |  | Q3 2003 |  |  |  | 31.1 | % |  |  | 58.8  | %
|                                        |  |           |       |        |  |              |         |               |  |           |         |              |  |  |         |  |  |  |      |   |  |  |       |  
|                                        |  |           | 2,289 |        |  | $            | 275,419 |               |  |           |         |              |  |  |         |  |  |  |      |   |  |  |       |  
|                                        |  |           |       |        |  |              |         |               |  |           |         |              |  |  |         |  |  |  |      |   |  |  |       |  



|    |                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Summit Grand Parc was completed during the fourth
    quarter of 2002. Stabilization, occupancy and percent leased
    information in the table above represents data for the apartment
    homes only. The 13,790 square feet of commercial space at Summit
    Grand Parc was 71.0% occupied and leased as of December 31,
    2002.                  
|   
|(2) | The apartment homes at Summit Grandview
    stabilized during the fourth quarter of 2001. Stabilization,
    occupancy and percent leased information in the table above
    represents data for the apartment homes only. The 75,203 square
    feet of commercial space at Summit Grandview was 74.7% occupied
    and leased as of December 31, 2002.

The actual stabilization dates for our
communities in lease-up may be later than anticipated. The
rental rates that we charge also may be less than expected, and
we may need to offer rent concessions to the residents.

We had six communities with 1,966 apartment homes
in lease-up during the year ended December 31, 2001 (Summit
Crest, Summit Grandview, Summit Lenox, Summit Overlook, Summit
Peachtree City and Summit Russett II).

23



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##### 



The operating performance of our lease-up
communities is summarized below (dollars in thousands):

|                                           |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |       | 
|------------------------------------------ | ------ | ----------------------- | ------ | ----------------------- |  | ---- | ----- | ----- |  | - | ------ | ------ |  | - | ----- | ----- | 
|                                           |        |                         |        |                        
|                                           |        | Year Ended December 31, |        | Year Ended December 31,
|                                           |        |                         |        |                        
|                                           |        | 2002                    |        | 2001                    |  | 2001 |       | 2000 
|                                           |        |                         |        |                         |  |      |       |      
|Property revenue:                          |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |      
|                                           | Rental |                         | $      | 15,765                  |  |      | $     | 7,752 |  |   | $      | 13,469 |  |   | $     | 4,459 | 
|                                           | Other  |                         |        | 914                     |  |      |       | 519   |  |   |        | 1,093  |  |   |       | 338   | 
|                                           |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |      
|Total property revenue                     |        |                         | 16,679 |                         |  |      | 8,271 |       |  |   | 14,562 |        |  |   | 4,797 |      
|Property operating and maintenance expense |        |                         | 6,530  |                         |  |      | 2,882 |       |  |   | 5,138  |        |  |   | 1,612 |      
|                                           |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |      
|Property operating income                  |        | $                       | 10,149 |                         |  | $    | 5,389 |       |  | $ | 9,424  |        |  | $ | 3,185 |      
|                                           |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |      
|Number of apartment homes                  |        |                         | 2,289  |                         |  |      | 2,289 |       |  |   | 1,966  |        |  |   | 1,966 |      
|                                           |        |                         |        |                         |  |      |       |       |  |   |        |        |  |   |       |      

Operating Performance of our Disposition
Communities

The 2002 disposition communities consist of the
former Summit Breckenridge, Summit New Albany, Summit Pike
Creek, Summit Stonefield, Summit Meadow, Summit Mayfaire, Summit
Sand Lake and Summit Windsor (an aggregate of 2,399 apartment
homes), all of which were sold during the year ended
December 31, 2002. The disposition of three of these eight
communities completed our exit of the Richmond, Virginia,
Columbus, Ohio and Newark, Delaware markets.

During the year ended December 31, 2002, a
joint venture in which we held a 50% ownership interest sold an
apartment community formerly known as The Heights at Cheshire
Bridge (318 apartment homes) located in Atlanta, Georgia.

The 2001 disposition communities consist of the
former Summit Palm Lake, Summit Arbors, Summit Radbourne, Summit
Lofts, Summit Stony Point, Summit Gateway, Summit Deerfield,
Summit Waterford and Summit Walk (an aggregate of 2,189
apartment homes), all of which were sold during the year ended
December 31, 2001. The 2000 disposition communities consist
of the former Summit Creekside, Summit Eastchester, Summit
Sherwood, Summit River Crossing, Summit Blue Ash, Summit Park
and Summit Village (an aggregate of 1,676 apartment homes), all
of which were sold during the year ended December 31, 2000.

The operating performance of the disposition
communities (excluding The Heights at Cheshire Bridge) is
summarized below (dollars in thousands):

|                                           |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------------ | ------ | ------------------------ | ------ | ----------------------- |  | ---- | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                           |        |                          |        |                        
|                                           |        | Year Ended December 31,? |        | Year Ended December 31,
|                                           |        |                          |        |                        
|                                           |        | 2002                     |        | 2001                    |  | 2001 |        | 2000  
|                                           |        |                          |        |                         |  |      |        |       
|Property revenue:                          |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |       
|                                           | Rental |                          | $      | 17,212                  |  |      | $      | 35,928 |  |   | $      | 11,905 |  |   | $      | 24,503 | 
|                                           | Other  |                          |        | 1,299                   |  |      |        | 2,798  |  |   |        | 989    |  |   |        | 1,935  | 
|                                           |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |       
|Total property revenue                     |        |                          | 18,511 |                         |  |      | 38,726 |        |  |   | 12,894 |        |  |   | 26,438 |       
|Property operating and maintenance expense |        |                          | 6,350  |                         |  |      | 12,875 |        |  |   | 4,540  |        |  |   | 9,060  |       
|                                           |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |       
|Property operating income                  |        | $                        | 12,161 |                         |  | $    | 25,851 |        |  | $ | 8,354  |        |  | $ | 17,378 |       
|                                           |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |       
|Number of apartment homes                  |        |                          | 2,399  |                         |  |      | 4,588  |        |  |   | 2,189  |        |  |   | 3,865  |       
|                                           |        |                          |        |                         |  |      |        |        |  |   |        |        |  |   |        |       

On March 5, 2003, we sold Summit Fairways,
located in Orlando, Florida, for $18.8 million as part of
our strategy to exit our non-core markets. We expect to record a
gain on disposition of Summit Fairways.

Operating Performance of Summit Management
Company

We own 1% of the voting stock and 99% of the
non-voting stock of Summit Management Company (the
Management Company). The remaining 99% of voting
stock and 1% of non-voting stock are held by one of

24



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##### 



the Co-Chairmen of our Board of Directors. As a
result of this stock ownership, we have a 99% economic interest
and the Co-Chairman has a 1% economic interest in the Management
Company. Because of our ability to exercise significant
influence, the Management Company is accounted for on the equity
method of accounting.


The operating performance of the Management
Company and its wholly owned subsidiary, Summit Apartment
Builders, Inc. (the Construction Company), is
summarized below (dollars in thousands):

|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |        |      |     |  
|---------------------------------------- | ------------------------------------------------ | ----------------------- | -------------- | ----------------------- | ----- | -------- | --- | ----- | ------ | ------ | ------ | -------- | ---- | ----- | --- | ----- | ------ | ------ | ---- | ----- | ------ | ----- | ----- | ------ | ---- | --- | -
|                                         |                                                  |                         |                |                        
|                                         |                                                  | Year Ended December 31, |                | Year Ended December 31,
|                                         |                                                  |                         |                |                        
|                                         |                                                  | 2002                    |                | 2001                    |       | % Change |     | 2001  |        | 2000   |        | % Change
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |         
|Revenues:                                |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|                                         | Management fees charged to Operating Partnership |                         | $              | 6,022                   |       |          | $   | 6,473 |        |        |        | -7.0     | %    |       | $   | 6,473 |        |        | $    | 5,735 |        |       |       | 12.9   | %   
|                                         | Third party management fee revenue               |                         |                | 787                     |       |          |     | 913   |        |        |        | -13.8    | %    |       |     | 913   |        |        |      | 1,103 |        |       |       | -17.2  | %   
|                                         | Construction revenue                             |                         |                | 2,031                   |       |          |     | 2,701 |        |        |        | -24.8    | %    |       |     | 2,701 |        |        |      | 2,494 |        |       |       | 8.3    | %   
|                                         | Gain on sale of real estate assets               |                         |                |                        |       |          |     |      |        |        |        |         |      |       |     |      |        |        |      | 238   |        |       |       | -100.0 | %   
|                                         | Other                                            |                         |                | 261                     |       |          |     | 455   |        |        |        | -42.6    | %    |       |     | 455   |        |        |      | 372   |        |       |       | 22.3   | %   
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|                                         |                                                  |                         | Total revenues |                         |       | 9,101    |     |       |        | 10,542 |        |          |      | -13.7 | %   |       |        | 10,542 |      |       |        | 9,942 |       |        |      | 6.0 | %
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|Expenses:                                |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|                                         | Operating                                        |                         |                | 8,240                   |       |          |     | 9,177 |        |        |        | -10.2    | %    |       |     | 9,177 |        |        |      | 9,398 |        |       |       | -2.4   | %   
|                                         | Depreciation                                     |                         |                | 575                     |       |          |     | 319   |        |        |        | 80.3     | %    |       |     | 319   |        |        |      | 313   |        |       |       | 1.9    | %   
|                                         | Amortization                                     |                         |                | 294                     |       |          |     | 298   |        |        |        | -1.3     | %    |       |     | 298   |        |        |      | 303   |        |       |       | -1.7   | %   
|                                         | Interest                                         |                         |                | 300                     |       |          |     | 300   |        |        |        | 0.0      | %    |       |     | 300   |        |        |      | 677   |        |       |       | -55.7  | %   
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|                                         |                                                  | Total expenses          |                |                         | 9,409 |          |     |       | 10,094 |        |        |          | -6.8 | %     |     |       | 10,094 |        |      |       | 10,691 |       |       |        | -5.6 | %  
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|(Loss) income before extraordinary items |                                                  |                         | (308           | )                       |       |          | 448 |       |        |        | -168.8 | %        |      |       | 448 |       |        |        | (749 | )     |        |       | 159.8 | %     
|Extraordinary items                      |                                                  |                         |               |                         |       |          |    |       |        |        |       |          |      |       |    |       |        |        | (30  | )     |        |       | 100.0 | %     
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       
|Net (loss) income                        |                                                  | $                       | (308           | )                       |       | $        | 448 |       |        |        | -168.8 | %        |      | $     | 448 |       |        | $      | (779 | )     |        |       | 157.5 | %     
|                                         |                                                  |                         |                |                         |       |          |     |       |        |        |        |          |      |       |     |       |        |        |      |       |        |       |       |       

The decrease in revenue from 2001 to 2002 is
primarily due to a 4.9% decline in collections from our fully
stabilized communities and a $670,000 decrease in construction
revenue. All of the construction revenue during the years ended
December 31, 2002, 2001 and 2000 was from contracts with
the Operating Partnership. Operating expenses decreased at the
Management Company primarily due to a reduction in personnel
expenses of $769,000 at the Management Company and Construction
Company during the year. The decrease in construction revenues
and reduction in personnel expenses at the Construction Company
were due to the fact that we have curtailed, and may continue to
curtail, our development efforts to increase our financial
flexibility in the current economic environment.

The increase in revenue from 2000 to 2001 was
primarily due to an increase in fees earned from managing our
lease-up communities. Operating expenses remained stable in 2001
as compared to 2000, decreasing by only $221,000. In addition,
interest expense decreased from 2000 to 2001 due to the
repayment of an intercompany loan during 2000.

Third party apartment homes under management were
1,105 in 2002, 1,004 in 2001 and 1,723 in 2000. Property
management fees from third parties as a percentage of total
property management revenues were 11.6% in 2002, 12.4% in 2001
and 16.1% in 2000.

Other Income and Expenses

Interest income increased by $306,000 to
$2.6 million in 2002 compared to 2001, primarily due to a
preferred return of $375,000 earned on an equity investment in
2002. Interest income decreased by $1.3 million to

25



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##### 



$2.3 million in 2001 compared to 2000,
primarily due to a $1.0 million decrease in interest earned
on proceeds from property sales placed in escrow in accordance
with like-kind exchange income tax regulations.


Other income decreased by $413,000 to $478,000 in
2002 compared to 2001, and increased by $273,000 to $891,000 in
2001 compared to 2000 primarily as a result of a $325,000 fee
received in 2001 in connection with a community that is being
developed by a third party developer.

Depreciation expense increased by
$1.9 million to $35.8 million in 2002 compared to
2001, primarily due to depreciation expense related to the
initiation and increase of depreciation expense related to
recently developed communities as well as depreciation on the
community acquired during 2002, offset by the absence of a full
year of depreciation for the communities sold during 2002 and
2001. Depreciation expense increased by $2.5 million to
$33.9 million in 2001 compared to 2000, primarily due to
depreciation expense related to the initiation of depreciation
on recently developed communities as well as a full year of
depreciation on communities acquired during the second half of
2000, partially offset by the absence of a full year of
depreciation on communities sold during 2000 and 2001.

Interest expense decreased by $5.0 million
to $33.3 million in 2002 compared to 2001 primarily due to
a $20.8 million decrease in our average indebtedness
outstanding and a decrease in the average effective interest
rate of 0.39% (6.62% to 6.23%) in 2002 as compared to 2001.
Interest expense increased by $1.4 million to
$38.3 million in 2001 compared to 2000 primarily due to an
increase of $45.9 million in our average indebtedness
outstanding, offset by a decrease in the average effective
interest rate of 0.34% (7.04% to 6.70%) in 2001 as compared to
2000.

General and administrative expenses decreased by
$825,000 to $6.1 million in 2002 compared to 2001 primarily
due to $1.8 million of non-recurring charges related to an
increase in the costs of abandoned pursuit projects and
severance costs associated with senior staff reductions in our
organization during 2001, offset by an increase in professional
fees of $449,000 related to the increased cost of doing business
as a public company in 2002 when compared to 2001 and an
increase in non-cash compensation of $304,000 recorded in 2002
as compared to 2001. Approximately $900,000 of the
$1.8 million non-recurring charges in 2001 is related to an
increase in the costs of abandoned pursuit projects and
approximately $900,000 is related to severance costs associated
with senior staff reductions in our organization. As a
percentage of total revenues, general and administrative
expenses before non-recurring charges were 3.5% in 2002, 3.6% in
2001, and 2.5% in 2000.

The $78.7 million gain on sale of assets in
2002 resulted from the disposition of eight communities. The
eight communities were (referred to below using former community
names):

|                    |  |                 
|------------------- |  | ----------------
|Community           |  | Market          
|                    |  |                 
|Summit Breckenridge |  | Richmond, VA    
|Summit Mayfaire     |  | Raleigh, NC     
|Summit Meadow       |  | Columbia, MD    
|Summit New Albany   |  | Columbus, OH    
|Summit Pike Creek   |  | Wilmington, DE  
|Summit Sand Lake    |  | Orlando, FL     
|Summit Stonefield   |  | Philadelphia, PA
|Summit Windsor      |  | Frederick, MD   

The communities disposed of in 2002 were part of
our plan to dispose of assets that no longer meet our growth
objectives or to make desired changes in the number of apartment
homes in each of our core markets. The sale of Summit
Breckenridge, Summit New Albany and Summit Pike Creek completed
our exit of Richmond, Virginia, Columbus, Ohio and Wilmington,
Delaware. We believe that by concentrating our efforts and
capital in a limited number of core markets we will gain a
competitive advantage as we improve operational efficiencies,
build a more significant brand name and improve market
knowledge. Also, by disposing of assets that no longer meet our
long-term growth objectives, capital is provided to fund the
development and acquisition of new assets with higher growth
potential. In December 2002, we announced our intention to exit
our Texas markets and use the sale proceeds from those
communities primarily to increase our presence in the
Washington, D.C. and Southeast Florida markets. As a result, we
would reduce the number of core markets in which we operate from
seven to five. We currently own seven communities with a total
of 2,687 apartment

26



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##### 



homes located in Texas. There can be no assurance
that we will be able to sell our Texas communities in a timely
manner, on satisfactory terms or at all, or that we will be able
to find attractive investment opportunities in the Washington,
D.C. and Southeast Florida markets.


The $34.4 million gain on sale of assets in
2001 resulted from the disposition of one parcel of land and
nine communities. The $38.5 million gain on sale of assets
in 2000 resulted from the disposition of seven communities.

Liquidity and Capital Resources

Liquidity

Net cash provided by operating activities
decreased to $70.7 million for the year ended
December 31, 2002 from $79.0 million for the year
ended December 31, 2001, primarily due to a
$9.1 million decrease in income from continuing operations
before gain on sale of real estate assets, impairment loss on
technology investments and extraordinary items.

Net cash used in investing activities was
$5.6 million for the year ended December 31, 2002. Net
cash provided by investing activities was $6.2 million for
the year ended December 31, 2001. The decrease in cash
provided by investing activities is due to an increase in cash
used for the acquisition of real estate assets in 2002 of
$17.9 million and a decrease in proceeds received from the
sale of our real estate assets of $8.1 million, partially
offset by an increase in proceeds received from the sale of
joint venture real estate assets of $11.2 million and a
decrease in cash used for the construction of real estate assets
and land purchases of $4.2 million. In addition to cash
proceeds received in connection with 2002 dispositions, proceeds
from the sale of communities represent funds expended from
like-kind exchange escrows. In the event that the proceeds from
these property sales are not fully invested in qualified
like-kind property during the required time period, a special
distribution may be made or company level tax may be incurred.

Net cash used in financing activities decreased
to $64.6 million for the year ended December 31, 2002
from $86.5 million for the year ended December 31,
2001. The decrease in cash used in financing activities during
2002 is primarily due to an increase in net borrowings from 2001
to 2002 of $97.5 million on our unsecured credit facility, an
increase in proceeds received from the issuance of mortgage debt
of $6.9 million and a decrease of cash used to repay
unsecured medium-term notes of $30.0 million, all offset by
a decrease in repayments of unsecured notes, unsecured
medium-term notes and mortgages in the aggregate amount of
$107.5 million, an increase in cash used for the repurchase
of Summits common stock of $2.5 million and an
increase in cash used for dividends and distributions of
$3.2 million.

The ratio of earnings to fixed charges was 2.58
to 1 for the year ended December 31, 2002 compared to 1.83
to 1 for the year ended December 31, 2001. The increase in
the ratio of earnings to fixed charges is primarily due to an
increase in gain on sale of real estate assets of
$49.0 million in 2002 when compared to 2001.

Our outstanding indebtedness (excluding fair
value adjustments of hedged debt instruments of
$5.7 million) as of December 31, 2002 totaled
$696.8 million. This amount includes $268.3 million in
fixed rate conventional mortgages, $10.6 million of variable
rate tax-exempt bonds, $267.0 million of unsecured notes,
$6.9 million of variable rate mortgages and
$144.0 million under our unsecured credit facility.

We expect to meet our short-term liquidity
requirements (i.e., liquidity requirements arising within
12 months) including recurring capital expenditures
relating to maintaining our existing properties, generally
through our working capital, net cash provided by operating
activities and borrowings under our unsecured credit facility.
We believe that our cash provided by operating activities will
be adequate to meet operating requirements and payments of
dividends and distributions during the next twelve months.

We expect to meet our long-term liquidity
requirements (i.e., liquidity requirements arising after
12 months), such as scheduled mortgage debt maturities,
property acquisitions, financing of construction and development
activities and other non-recurring capital improvements, through
the issuance of unsecured notes, equity securities and mortgage
debt, from undistributed funds from operations (see
page 37), from proceeds received

27



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from the disposition of certain properties, and,
in connection with the acquisition of land or improved property,
through the issuance of common units.


Credit
Facility

We have a syndicated unsecured line of credit in
the amount of $225.0 million which matures on
September 26, 2004. The credit facility provides funds for
new development, acquisitions and general working capital
purposes. Loans under the credit facility bear interest at LIBOR
plus 100 basis points. The spread component of the aggregate
interest rate will change in the event of an upgrade or
downgrade of our unsecured credit rating of BBB- by Standard
& Poors Rating Services and Baa3 by Moodys
Investors Service. Amounts are borrowed for thirty, sixty or
ninety day increments at the appropriate interest rates for such
time period. Therefore, amounts are borrowed and repaid within
those thirty, sixty or ninety day periods. The credit facility
is repayable monthly on an interest only basis with principal
due at maturity of each thirty, sixty or ninety day increment.

The credit facility had an average interest rate
of 2.69% in 2002, 4.99% in 2001 and 7.20% in 2000 and an average
balance outstanding of $135.9 million in 2002,
$113.5 million in 2001 and $119.8 million in 2000. In
addition, the maximum outstanding principal amount was
$175.0 million in 2002, $146.5 million in 2001 and
$174.0 million in 2000. As of December 31, 2002, the
outstanding balance of the credit facility was
$144.0 million, leaving $81.0 million of remaining
availability on the $225.0 million commitment.

The credit facility also provides a bid
sub-facility equal to a maximum of fifty percent of the total
facility ($112.5 million). This sub-facility provides us
with the choice to place borrowings in fixed LIBOR contract
periods of thirty, sixty, ninety and one hundred eighty days. We
may have up to seven fixed LIBOR contracts outstanding at any
one time. Upon proper notifications, all lenders participating
in the credit facility may, but are not obligated to,
participate in a competitive bid auction for these fixed LIBOR
contracts.

On September 27, 2002, we entered into an
amendment to the credit agreement related to our unsecured line
of credit which modified certain definitions and financial
covenants that we are required to meet at the end of each fiscal
quarter. We were in compliance with these covenants and all
other covenants included in the credit agreement as of
December 31, 2002.

Medium-Term
Notes

On April 20, 2000, we commenced a new
program for the sale of up to $250.0 million aggregate principal
amount of medium-term notes (MTNs), due nine months
or more from the date of issuance. We had notes with an
aggregate principal amount of $112.0 million outstanding in
connection with this MTN program as of December 31, 2002.

On May 29, 1998, we established a program
for the sale of up to $95.0 million aggregate principal
amount of MTNs due nine months or more from the date of
issuance. We had notes with an aggregate principal amount of
$25.0 million outstanding in connection with this MTN
program as of December 31, 2002. As a result of the
commencement of the $250.0 million MTN program, we cannot
issue any additional notes under the $95.0 million MTN
program.

The medium-term notes require that we comply with
certain affirmative, negative and financial covenants. We were
in compliance with these covenants as of December 31, 2002.

Unsecured
Notes

The unsecured notes consist of $30.0 million
of notes due 2003, $50.0 million of notes due 2004 and
$50.0 million of notes due 2007. The unsecured notes
require semi-annual interest payments until the end of the
respective terms. The unsecured notes require that we comply
with certain affirmative, negative and financial covenants. We
were in compliance with these covenants as of December 31,
2002.

28



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Preferred
Units

As of December 31, 2002, we had outstanding
3.4 million preferred units of limited partnership interest
designated as 8.95% Series B Cumulative Redeemable
Perpetual Preferred Units. We may redeem these preferred units
on or after April 29, 2004 for cash at a redemption price
equal to the holders capital account or, at our option,
shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock, or a combination of cash
and shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock. Holders of the
Series B preferred units have the right to exchange these
preferred units for shares of Summits Series B
preferred stock on a one-for-one basis, subject to adjustment:
(a) on or after April 29, 2009, (b) if full quarterly
distributions are not made for six quarters, or (c) upon
the occurrence of specified events related to our treatment or
the treatment of the preferred units for federal income tax
purposes. Distributions on the Series B preferred units are
cumulative from the date of original issuance and are payable
quarterly at the rate of 8.95% per year of the $25.00 original
capital contribution. We made distributions to the holders of
the Series B preferred units in the aggregate amount of
$7.6 million during each of the years ended
December 31, 2002 and 2001.

As of December 31, 2002, we had outstanding
2.2 million preferred units of limited partnership interest
designated as 8.75% Series C Cumulative Redeemable
Perpetual Preferred Units. We may redeem the preferred units on
or after September 3, 2004 for cash at a redemption price
equal to the holders capital account. The holder of the
Series C preferred units has the right to exchange these
preferred units for shares of Summits Series C
preferred stock on a one-for-one basis, subject to adjustment:
(a) on or after September 3, 2009, (b) if full
quarterly distributions are not made for six quarters,
(c) upon the occurrence of specified events related to our
treatment or the treatment of the preferred units for federal
income tax purposes, or (d) if the holdings in the
Operating Partnership of the Series C unitholder exceed 18%
of the total profits of or capital interest in the Operating
Partnership for a taxable year. Distributions on the
Series C preferred units are cumulative from the date of
original issuance and are payable quarterly at the rate of 8.75%
per year of the $25.00 original capital contribution. We made
distributions to the holder of the Series C preferred units
in the aggregate amount of $4.8 million during each of the
years ended December 31, 2002 and 2001.

Common Stock
Repurchase Program

Summit has a common stock repurchase program,
originally approved by Summits Board of Directors in March
of 2000, pursuant to which Summit is authorized to purchase up
to an aggregate of $56.0 million of its currently issued
and outstanding shares of common stock. All repurchases have
been, and will be, made on the open market at prevailing prices
or in privately negotiated transactions. This authority may be
exercised from time to time and in such amounts as market
conditions warrant. The following is a summary of stock
repurchases under the common stock repurchase program (dollars
in thousands, except per share amounts):

|                                |                           |             |         |             |  |               |       |        |  |   |       |       | 
|------------------------------- | ------------------------- | ----------- | ------- | ----------- |  | ------------- | ----- | ------ |  | - | ----- | ----- | 
|                                |                           |             |         |             |  | Average Price
|                                |                           | Number      |         | Value       |  | per Share    
|                                |                           | of Shares   |         | of Shares   |  | of Shares    
|Year Ended December 31,         |                           | Repurchased |         | Repurchased |  | Repurchased  
|                                |                           |             |         |             |  |              
|2000                            |                           |             | 279,400 |             |  | $             | 5,533 |        |  | $ | 19.80 |      
|2001                            |                           |             | 8,800   |             |  |               | 197   |        |  |   | 22.38 |      
|2002                            |                           |             | 151,300 |             |  |               | 2,666 |        |  |   | 17.62 |      
|                                |                           |             |         |             |  |               |       |        |  |   |       |      
|Total as of December 31, 2002   |                           |             | 439,500 |             |  |               | 8,396 |        |  |   | 19.10 |      
|Subsequent to December 31, 2002 |                           |             | 422,200 |             |  |               | 7,472 |        |  |   | 17.70 |      
|                                |                           |             |         |             |  |               |       |        |  |   |       |      
|                                | Total as of March 5, 2003 |             |         | 861,700     |  |               | $     | 15,868 |  |   | $     | 18.41 | 
|                                |                           |             |         |             |  |               |       |        |  |   |       |      

Summit had $40.1 million of remaining
availability for repurchases under the program as of
March 5, 2003.

Dividend
Reinvestment and Direct Stock Purchase Plan

Summit has a dividend reinvestment and direct
stock purchase plan (DRIP). Direct stock purchases
under the DRIP were suspended effective October 31, 2002
and dividend reinvestment under the DRIP was

29



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suspended effective November 15, 2002. The
DRIP provided both new investors and existing holders of
Summits stock (including common stock and other classes of
stock which may be outstanding from time to time) with a method
to purchase shares of common stock under the Stock Purchase
Program component of the plan. The plan also permitted
stockholders to designate all, a portion or none of the cash
dividends on their newly purchased common stock and cash
dividends on their existing stock for reinvestment in more
shares of common stock through the Dividend Reinvestment Program
component of the plan. With respect to reinvested dividends and
optional cash payments, shares of common stock were purchased
for the plan at a discount ranging from 0% to 5% (established
from time to time) from the market price, as more fully
described in the prospectus relating to the plan. Common stock
was purchased by the plans agent (Wachovia Bank) directly
from us or in open market or privately negotiated transactions,
as determined from time to time, to fulfill requirements for the
plan.


Employee Stock
Purchase Plan

In 1996, Summit established a non-qualified
employee stock purchase plan (ESPP) which allowed
Summits employees to purchase up to $25,000 of common
stock per year. The price of the shares of the common stock
purchased was the lesser of 85 percent of the closing price
of such shares either on (a) the first day of each six
month purchase period, or (b) the last day of each six
month purchase period. Transactions under the ESPP were
suspended effective July 2, 2002.

Employee Loan
Program

Summits Board of Directors believes that
ownership of its common stock by its executive officers and
certain other qualified employees aligns the interests of these
officers and employees with the interests of Summits
stockholders. To this end, Summits Board of Directors
approved, and Summit instituted, a loan program. As a result of
recent legislation, Summit is no longer permitted to make loans
to its executive officers and, therefore, new issuances to its
executive officers under the loan program have been terminated.
Under the terms of the loan program, Summit lent amounts to
certain of its executive officers and other qualified employees
to (a) finance the purchase of Summits common stock
on the open market at then-current market prices,
(b) finance the payment of the exercise price of one or
more stock options to purchase shares of Summits common
stock, or (c) finance the annual tax liability or other
expenses of an executive officer related to the vesting of
shares of common stock which constitute a portion of a
restricted stock award granted to the executive officer. The
relevant officer or employee has executed a promissory note and
security agreement related to each loan extended. Each
outstanding note bears interest at a rate established on the
date of the note, is full recourse to the officers and employees
and is collateralized by the shares of Summits common
stock which are the subject of the loans. If the market price of
Summits common stock falls materially below the price at
which the shares of stock were purchased, the proceeds of the
sale of the common stock may not be sufficient to repay the
loan. During the three months ended June 30, 2002, Summit
issued $6.7 million of loans to six executive officers. As
of December 31, 2002, we had loans receivable in the amount
of $19.5 million which were collateralized by
939,586 shares of Summits common stock valued at
$16.7 million. The proceeds from the shares that serve as
collateral for the loans would not be sufficient to repay the
loans in full. However, since the loans are full recourse, we
have the right to collect any additional amount owed directly
from the officer or employee to the extent such officer or
employee is able to pay such amount. We had loans receivable in
the amount of $14.5 million as of December 31, 2001.

Impairment
Loss

Management considers events and circumstances
that may indicate impairment of an investment, including
operating performance and cash flow projections. In 2001,
management determined that our investments in BroadbandNOW!,
Inc. and YieldStar Technology LLC were impaired and that such
impairment was other than temporary. As a result, we recorded an
impairment loss in the aggregate amount of $1.2 million,
which represents our entire investment in these two technology
companies. We have no other technology company investments.

30



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##### 



Schedule of
Debt

The following table sets forth information
regarding our debt financing (excluding fair value adjustments
of hedged debt instruments) as of December 31, 2002 and 2001
(dollars in thousands):

|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |         |        |         | 
|------------------ | ------------------------------------------- | -------------------------------- | ------------------------------ | --------------- | ----- | --------------------- |  | ---------- | ---------- |  | - | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                   |                                             |                                  |                                |                 |       |                      
|                   |                                             |                                  |                                |                 |       | Principal Outstanding
|                   |                                             | Interest                         |                                |                 |       | December 31,         
|                   |                                             | Rate as of                       |                                | Maturity        |       |                      
|                   |                                             | December 31, 2002                |                                | Date(1)         |       | 2002                  |  | 2001      
|                   |                                             |                                  |                                |                 |       |                       |  |           
|Fixed Rate Debt    |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   | Mortgage Loan(2)                            |                                  |                                | 6.76%           |       |                       |  | 10/15/2008 |            |  | $ | 133,909 |        |         | $ | 137,321 |       
|                   | Mortgage Loan(3)                            |                                  |                                | 8.00%           |       |                       |  | 9/1/2005   |            |  |   | 8,040   |        |         |   | 8,161   |       
|                   | Mortgage Notes:                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |         |       
|                   |                                             | Summit Fair Lakes                |                                |                 | 7.82% |                       |  |            | 7/1/2010   |  |   |         | 48,340 |         |   |         | 48,340 |        
|                   |                                             | Summit Buena Vista               |                                |                 | 6.75% |                       |  |            | 2/15/2007  |  |   |         | 24,067 |         |   |         | 24,539 |        
|                   |                                             | Summit Belcourt                  |                                |                 | 6.75% |                       |  |            | 1/1/2006   |  |   |         | 9,018  |         |   |         | 9,209  |        
|                   |                                             | Summit Camino Real               |                                |                 | 6.75% |                       |  |            | 6/1/2006   |  |   |         | 15,886 |         |   |         | 16,213 |        
|                   |                                             | Summit Turtle Rock               |                                |                 | 6.75% |                       |  |            | 12/1/2005  |  |   |         | 10,215 |         |   |         | 10,431 |        
|                   |                                             | Summit Arboretum                 |                                |                 | 6.75% |                       |  |            | 12/1/2005  |  |   |         | 18,796 |         |   |         | 19,194 |        
|                   |                                             | Mortgage notes repaid in 2002.   |                                |                 |       |                       |  |            |            |  |   |         |       |         |   |         | 16,041 |        
|                   | Tax exempt mortgage note repaid in
    2002 |                                  |                                |                 |       |                       |  |            |            |  |   |        |        |         |   | 3,918   |       
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Mortgage Debt            |                 |       |                       |  |            |            |  |   |         |        | 268,271 |   |         |        | 293,367 | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   | Unsecured Notes:                            |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |         |       
|                   |                                             | Medium-Term Notes due 2003.      |                                |                 | 7.87% |                       |  |            | 10/20/2003 |  |   |         | 17,000 |         |   |         | 17,000 |        
|                   |                                             | Medium-Term Notes due 2005.      |                                |                 | 8.04% |                       |  |            | 11/17/2005 |  |   |         | 25,000 |         |   |         | 25,000 |        
|                   |                                             | Medium-Term Notes due 2006.      |                                |                 | 7.04% |                       |  |            | 5/9/2006   |  |   |         | 25,000 |         |   |         | 25,000 |        
|                   |                                             | Medium-Term Notes due 2009.      |                                |                 | 7.59% |                       |  |            | 3/16/2009  |  |   |         | 25,000 |         |   |         | 25,000 |        
|                   |                                             | Medium-Term Notes due 2010.      |                                |                 | 8.50% |                       |  |            | 7/19/2010  |  |   |         | 10,000 |         |   |         | 10,000 |        
|                   |                                             | Medium-Term Notes due 2011.      |                                |                 | 7.70% |                       |  |            | 5/9/2011   |  |   |         | 35,000 |         |   |         | 35,000 |        
|                   |                                             | Notes due 2003.                  |                                |                 | 6.63% |                       |  |            | 12/15/2003 |  |   |         | 30,000 |         |   |         | 30,000 |        
|                   |                                             | Notes due 2004.                  |                                |                 | 6.95% |                       |  |            | 8/15/2004  |  |   |         | 50,000 |         |   |         | 50,000 |        
|                   |                                             | Notes due 2007.                  |                                |                 | 7.20% |                       |  |            | 8/15/2007  |  |   |         | 50,000 |         |   |         | 50,000 |        
|                   |                                             | Unsecured notes repaid in 2002.  |                                |                 |       |                       |  |            |            |  |   |         |       |         |   |         | 41,000 |        
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Unsecured Notes          |                 |       |                       |  |            |            |  |   |         |        | 267,000 |   |         |        | 308,000 | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Fixed Rate Debt          |                 |       |                       |  |            |            |  |   |         |        | 535,271 |   |         |        | 601,367 | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|Variable Rate Debt |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   | Unsecured credit facility                   |                                  |                                | LIBOR + 100 bps |       |                       |  | 9/26/2004  |            |  |   | 144,000 |        |         |   | 94,000  |       
|                   | Summit Foxcroft mortgage note               |                                  |                                | LIBOR + 170 bps |       |                       |  | 7/1/2005   |            |  |   | 6,900   |        |         |   |        |       
|                   | Tax Exempt Bonds:                           |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |         |       
|                   |                                             | Summit Belmont(4)                |                                |                 | 3.05% |                       |  |            | 4/1/2007   |  |   |         | 10,565 |         |   |         | 10,785 |        
|                   |                                             | Tax Exempt Bonds repaid in 2002. |                                |                 |       |                       |  |            |            |  |   |         |       |         |   |         | 11,408 |        
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Tax Exempt Bonds         |                 |       |                       |  |            |            |  |   |         |        | 10,565  |   |         |        | 22,193  | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Variable Rate Debt       |                 |       |                       |  |            |            |  |   |         |        | 161,465 |   |         |        | 116,193 | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        
|                   |                                             |                                  | Total Outstanding Indebtedness |                 |       |                       |  |            |            |  |   |         | $      | 696,736 |   |         | $      | 717,560 | 
|                   |                                             |                                  |                                |                 |       |                       |  |            |            |  |   |         |        |         |   |        



|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | All of the secured debt can be prepaid at any
    time. Prepayment of all secured debt is generally subject to
    penalty or premium.
|   
|(2) | Mortgage loan secured by the following
    communities:                                                                               

|                                                                                 |  |                                                                                  |  |                                     
|-------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------- |  | ------------------------------------
|Summit Ballantyne
    Summit Club at Dunwoody
    Summit Del Ray
    Summit Glen |  | Summit Largo
    Summit Las Palmas
    Summit on the River
    Summit Plantation |  | Summit St. Clair
    Summit Westwood



|    |                                                                    
|--- | -------------------------------------------------------------------
|(3) | Mortgage loan secured by Summit Simsbury and
    Summit Touchstone.

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The tax exempt bond bears interest at various
    rates set by a remarketing agent at the demand note index plus
    0.50%, set weekly, or the lowest percentage of prime which
    allows the resale at a price of par. The bond is enhanced by a
    letter of credit from a financial institution, which will
    terminate prior to the maturity date of the related bond. In the
    event the credit enhancement is not renewed or replaced upon
    termination, the related loan obligation will be accelerated.

The one-month LIBOR rate as of December 31,
2002 was 1.38%.

Our outstanding indebtedness (excluding our
unsecured credit facility which matures in 2004) had an average
maturity of 4.6 years as of December 31, 2002. The
aggregate annual maturities of all outstanding debt as of
December 31, 2002 (excluding our unsecured credit facility
which had an outstanding balance of $144.0 million as of
December 31, 2002) are as follows (in thousands):

|           |  |   |         | 
|---------- |  | - | ------- | 
|2003       |  | $ | 52,722  | 
|2004       |  |   | 56,105  | 
|2005       |  |   | 72,920  | 
|2006       |  |   | 53,422  | 
|2007       |  |   | 86,292  | 
|Thereafter |  |   | 231,275 | 
|           |  |   |         | 
|Total      |  | $ | 552,736 | 
|           |  |   |         | 

Market
Risk

Our capital structure includes the use of
variable rate and fixed rate debt and, therefore, we are exposed
to the impact of changes in interest rates. We generally
refinance maturing debt instruments at then-existing market
interest rates and terms which may be more or less favorable
than the interest rates and terms of the maturing debt. While we
have historically had limited involvement with derivative
financial instruments, we may utilize such instruments in
certain situations to hedge interest rate exposure by modifying
the interest rate characteristics of related balance sheet
instruments and prospective financing transactions. We generally
do not utilize derivative financial instruments for trading or
speculative purposes.

On January 1, 2001, we adopted SFAS
No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended. SFAS No. 133
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. It requires that
entities recognize all derivatives as either assets or
liabilities in the consolidated balance sheet and measure those
instruments at fair value. The cumulative effect of adopting
SFAS No. 133 was not material to our financial statements.

On June 13, 2002, we terminated an interest
rate swap with a $30.0 million notional amount. Under SFAS
No. 133, as a result of the termination, we de-designated
the $30.0 million swap as a fair value hedge against
certain fixed rate debt. We will amortize as a reduction of
interest expense $1.5 million, which represents the difference
between the par value and carrying amount of the fixed-rate debt
obligation, over the remaining term of the debt obligation,
which matures on December 15, 2003. Interest expense was
reduced by $545,000 in 2002 as a result of amortizing this
difference.

On June 14, 2002, we entered into an
interest rate swap with a notional amount of $50.0 million,
relating to $50.0 million of 7.20% fixed rate notes issued
under our MTN program. Under the interest rate swap agreement,
through the maturity date of August 15, 2007, (a) we
have agreed to pay to the counterparty the interest on a
$50.0 million notional amount at a floating interest rate
of three-month LIBOR plus 241.75 basis points, and (b) the
counterparty has agreed to pay to us the interest on the same
notional amount at the fixed rate of the underlying debt
obligation. The floating rate as of December 31, 2002 was
3.8175%. The fair value of the interest rate swap was an asset
of $4.8 million as of December 31, 2002. The swap has
been designated as a fair value hedge of the underlying fixed
rate debt obligation and has been recorded in Other
assets in the accompanying balance sheets. We assume no
ineffectiveness as the interest rate swap meets the short-cut

32



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method conditions required under SFAS
No. 133 for fair value hedges of debt instruments.
Accordingly, no gains or losses were recorded in income relative
to our underlying debt and interest rate swap.


The following table provides information about
our interest rate swap and other financial instruments that are
sensitive to changes in interest rates and should be read in
conjunction with the accompanying consolidated financial
statements and related notes. For debt, the table presents
principal cash flows and related weighted average interest rates
in effect as of December 31, 2002 by expected maturity
dates. The weighted average interest rates presented in this
table for the tax exempt variable rate debt are inclusive of
credit enhancement fees. For the interest rate swap, the table
presents the notional amount and related weighted average pay
rate by year of maturity (dollars in thousands):

Expected Year of Maturity

|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |         |         |  
|-------------------------- | ----------------------------- | ------------------------ | ------ | ------ | ------ | ---- | ------- | ------- | ------- | ---- | ------ | ---------- | ------ | ----- | ------ | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        | 2002  |        | 2001  
|                           |                               | 2003                     |        | 2004   |        | 2005 |         | 2006    |         | 2007 |        | Thereafter |        | Total |        | Total 
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |       
|Fixed Rate Debt:           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|                           | Conventional fixed rate       |                          | $      | 5,502  |        |      | $       | 5,885   |         |      | $      | 40,800     |        |       | $      | 28,202 |        |   | $       | 26,607 |        |   | $       | 161,275 |         |   | $       | 268,271 |         |   | $       | 289,449 |        
|                           | Average interest rate         |                          |        | 6.79   | %      |      |         | 6.79    | %       |      |        | 6.99       | %      |       |        | 6.75   | %      |   |         | 6.75   | %      |   |         | 7.08    | %       |   |         | 6.99    | %       |   |         | 7.03    | %      
|                           | Tax exempt fixed rate         |                          |        |       |        |      |         |        |         |      |        |           |        |       |        |       |        |   |         |       |        |   |         |        |         |   |         |        |         |   |         | 3,918   |        
|                           | Average interest rate         |                          |        |       |        |      |         |        |         |      |        |           |        |       |        |       |        |   |         |       |        |   |         |        |         |   |         |        |         |   |         | 6.95    | %      
|                           | Unsecured fixed rate          |                          |        | 47,000 |        |      |         | 50,000  |         |      |        | 25,000     |        |       |        | 25,000 |        |   |         | 50,000 |        |   |         | 70,000  |         |   |         | 267,000 |         |   |         | 308,000 |        
|                           | Average interest rate         |                          |        | 7.08   | %      |      |         | 6.95    | %       |      |        | 8.04       | %      |       |        | 7.04   | %      |   |         | 7.20   | %      |   |         | 7.78    | %       |   |         | 7.35    | %       |   |         | 7.33    | %      
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|                           |                               | Total fixed rate debt    |        |        | 52,502 |      |         |         | 55,885  |      |        |            | 65,800 |       |        |        | 53,202 |   |         |        | 76,607 |   |         |         | 231,275 |   |         |         | 535,271 |   |         |         | 601,367 |  
|                           |                               | Average interest rate    |        |        | 7.05   | %    |         |         | 6.93    | %    |        |            | 7.39   | %     |        |        | 6.89   | % |         |        | 7.04   | % |         |         | 7.29    | % |         |         | 7.17    | % |         |         | 7.14    | %
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|Variable Rate Debt:        |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|                           | Tax exempt variable rate      |                          |        | 220    |        |      |         | 220     |         |      |        | 220        |        |       |        | 220    |        |   |         | 9,685  |        |   |         |        |         |   |         | 10,565  |         |   |         | 22,193  |        
|                           | Average interest rate         |                          |        | 3.05   | %      |      |         | 3.05    | %       |      |        | 3.05       | %      |       |        | 3.05   | %      |   |         | 3.05   | %      |   |         |        |         |   |         | 3.05    | %       |   |         | 4.21    | %      
|                           | Variable rate mortgage note   |                          |        |       |        |      |         |        |         |      |        | 6,900      |        |       |        |       |        |   |         |       |        |   |         |        |         |   |         | 6,900   |         |   |         |        |        
|                           | Average interest rate         |                          |        |       |        |      |         |        |         |      |        | 3.08       | %      |       |        |       |        |   |         |       |        |   |         |        |         |   |         | 3.08    | %       |   |         |        |        
|                           | Variable rate credit facility |                          |        |       |        |      |         | 144,000 |         |      |        |           |        |       |        |       |        |   |         |       |        |   |         |        |         |   |         | 144,000 |         |   |         | 94,000  |        
|                           | Average interest rate         |                          |        |       |        |      |         | 2.69    | %       |      |        |           |        |       |        |       |        |   |         |       |        |   |         |        |         |   |         | 2.69    | %       |   |         | 4.99    | %      
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|                           |                               | Total variable rate debt |        |        | 220    |      |         |         | 144,220 |      |        |            | 7,120  |       |        |        | 220    |   |         |        | 9,685  |   |         |         |        |   |         |         | 161,465 |   |         |         | 116,193 |  
|                           |                               | Average interest rate    |        |        | 3.05   | %    |         |         | 2.69    | %    |        |            | 3.08   | %     |        |        | 3.05   | % |         |        | 3.05   | % |         |         |        |   |         |         | 2.73    | % |         |         | 4.84    | %
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|Total debt                 |                               | $                        | 52,722 |        |        | $    | 200,105 |         |         | $    | 72,920 |            |        | $     | 53,422 |        |        | $ | 86,292  |        |        | $ | 231,275 |         |         | $ | 696,736 |         |         | $ | 717,560 |        
|Average interest rate      |                               |                          | 7.03   | %      |        |      | 3.88    | %       |         |      | 6.97   | %          |        |       | 6.87   | %      |        |   | 6.60    | %      |        |   | 7.29    | %       |         |   | 6.14    | %       |         |   | 6.72    | %      
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|Interest Rate Swap:        |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   |         |        |        |   |         |         |         |   |         |         |         |   |         |        
|Pay variable/receive fixed |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        | $ | 50,000  |        |        |   |         |         |         | $ | 50,000  |         |         | $ | 30,000  |        
|Average pay rate           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   | 3-month |        |        |   |         |         |         |   | 3-month |         |         |   | 3-month |        
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   | LIBOR   |        |        |   |         |         |         |   | LIBOR   |         |         |   | LIBOR   |        
|                           |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   | +2.4175 | %      |        |   |         |         |         |   | +2.4175 | %       |         |   | +0.11   | %      
|Receive rate               |                               |                          |        |        |        |      |         |         |         |      |        |            |        |       |        |        |        |   | 7.20    | %      |        |   |         |         |         |   | 7.20    | %       |         |   | 6.625   | %      

We estimate that the fair value of the variable
rate debt approximates carrying value based upon our effective
borrowing rates for issuance of debt with similar terms and
remaining maturities. Fixed rate mortgage debt and fixed rate
unsecured notes with a carrying value of $535.3 million had
an estimated aggregate fair value of $587.1 million as of
December 31, 2002. Rates currently available to us for
similar terms and maturities were used to estimate the fair
value of this debt. The fair market value of long-term fixed
rate debt is subject to changes in interest rates.

33



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##### 



Acquisitions and Dispositions

During the year ended December 31, 2002, we
sold eight communities comprising 2,399 apartment homes for an
aggregate sales price of $211.8 million, resulting in an
aggregate net gain on sale of $78.7 million. The eight
communities sold were the former Summit Breckenridge, Summit New
Albany, Summit Pike Creek, Summit Mayfaire, Summit Stonefield,
Summit Meadow, Summit Sand Lake and Summit Windsor. Net proceeds
from four of the eight communities, equaling
$107.4 million, were placed in escrow with a qualified
intermediary in accordance with like-kind exchange income tax
rules and regulations.

During the year ended December 31, 2002, a
joint venture in which we held a 50% interest, sold a community
known as The Heights at Cheshire Bridge (318 apartment homes) to
an unrelated third party and the joint venture was dissolved.
Upon dissolution, we recognized a gain of $5.0 million on
the sale of the joint ventures assets.

During the year ended December 31, 2002, we
acquired a stabilized, luxury apartment community in the
Galleria sub-market of Dallas, Texas for cash in the amount of
$17.7 million. The community, now known as Summit San
Raphael, has 222 apartment homes and was constructed in 1999.

During the year ended December 31, 2001, we
sold one parcel of land and nine communities comprising 2,189
apartment homes for an aggregate sales price of
$167.6 million, resulting in an aggregate net gain on sale
of $34.4 million. The parcel of land was located in
Richmond, Virginia and the nine communities sold were the former
Summit Palm Lake, Summit Arbors, Summit Radbourne, Summit Lofts,
Summit Gateway, Summit Stony Point, Summit Deerfield, Summit
Waterford and Summit Walk. Net proceeds from three of the nine
communities, equaling $31.7 million, were placed in escrow
with a qualified intermediary in accordance with like-kind
exchange income tax rules and regulations.

During the year ended December 31, 2001, a
joint venture in which we hold a 25% interest, sold a community,
the former Summit Station, for $11.9 million. This sale
resulted in the recognition by the joint venture of a gain of
$1.1 million, of which we recorded $271,000 based on our equity
interest.

We did not acquire any communities during the
year ended December 31, 2001.

During the year ended December 31, 2000, we
sold seven communities comprising 1,676 apartment homes for an
aggregate sales price of $103.9 million, resulting in a
gain on sale of $38.5 million. The communities sold were
the former Summit Creekside, Summit Eastchester, Summit
Sherwood, Summit Blue Ash, Summit Park, Summit River Crossing
and Summit Village. Net proceeds from six of the seven
communities, equaling $78.1 million, were placed in escrow
with a qualified intermediary in accordance with like-kind
exchange income tax rules and regulations.

On August 1, 2000, we exercised our option
to purchase our joint venture partners interest in each of
two communities, Summit Sweetwater and Summit Shiloh, both
located in Atlanta, Georgia. The acquisition of these two
communities added 490 apartment homes to our portfolio at an
aggregate purchase price of $36.0 million. The acquisitions
were financed with the issuance of 96,455 common units valued,
in the aggregate, at $2.2 million and the payment of
$33.8 million in cash.

Communities Sold or Held for Sale

Subsequent to December 31, 2002, we executed
a contract for the sale of an apartment community, Summit
Fairways, located in Orlando, Florida. The assets of Summit
Fairways were recorded at the lower of cost or fair value less
costs to sell, or $14.9 million, as of December 31,
2002. The net income from Summit Fairways represented 1.0% of
our net income for the year ended December 31, 2002. Summit
Fairways was sold on March 5, 2003 for $18.8 million
as part of our strategy to exit our non-core markets. We expect
to record a gain on sale resulting from the disposition of
Summit Fairways. We expect to use the proceeds from the sale of
Summit Fairways to fund future acquisition and development
activity.

In accordance with SFAS No. 144, net income
and gain (loss) on disposition of real estate for communities
sold or considered held for sale after December 31, 2001
are reflected in our statements of operations as
discontinued operations for all periods presented.

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Below is a summary of discontinued operations for
all of the communities sold during 2002 excluding Summit
Breckenridge and joint venture communities, and including Summit
Fairways, for the year ended December 31, 2002, 2001 and
2000 (in thousands). Summit Breckenridge was properly classified
as held for sale prior to January 1, 2002 and, therefore,
its operations are included in income from continuing operations.

|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                                  |                        |                        
|                                                                                                  |                        | Year Ended December 31,
|                                                                                                  |                        |                        
|                                                                                                  |                        | 2002                    |        | 2001   |  | 2000
|                                                                                                  |                        |                         |        |        |  |     
|Property revenues:                                                                                |                        |                         |        |        |  |      |        |        |  |   |        |       
|                                                                                                  | Rental revenues        |                         | $      | 18,744 |  |      | $      | 23,670 |  |   | $      | 22,784 | 
|                                                                                                  | Other property revenue |                         |        | 1,457  |  |      |        | 1,763  |  |   |        | 1,730  | 
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Total property revenues                                                                           |                        |                         | 20,201 |        |  |      | 25,433 |        |  |   | 24,514 |       
|Property operating and maintenance expense                                                        |                        |                         | 7,002  |        |  |      | 8,375  |        |  |   | 7,533  |       
|Depreciation                                                                                      |                        |                         | 3,892  |        |  |      | 5,148  |        |  |   | 4,891  |       
|Interest and amortization                                                                         |                        |                         | 1,188  |        |  |      | 1,568  |        |  |   | 1,785  |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Income from discontinued operations before net
    gain on disposition of discontinued operations |                        |                         | 8,119  |        |  |      | 10,342 |        |  |   | 10,305 |       
|Extraordinary items                                                                               |                        |                         | (208   | )      |  |      |       |        |  |   |       |       
|Net gain on disposition of discontinued operations                                                |                        |                         | 64,907 |        |  |      |       |        |  |   |       |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Income from discontinued operations                                                               |                        | $                       | 72,818 |        |  | $    | 10,342 |        |  | $ | 10,305 |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       

Development Activity

Development communities in process as of
December 31, 2002 are summarized as follows (dollars in
thousands):

|                                            |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 
|------------------------------------------- |  | --------- | ----- | --------- |  | ------- | ------- | --------- |  | ------------ | ------- |  |  | - | ------ |  |  |  | ------- | 
|                                            |  |           |       | Total     |  |         |         | Estimated |  | Anticipated 
|                                            |  | Apartment |       | Estimated |  | Cost To |         | Cost To   |  | Construction
|Community                                   |  | Homes     |       | Costs     |  | Date    |         | Complete  |  | Completion  
|                                            |  |           |       |           |  |         |         |           |  |             
|Summit Roosevelt  Washington,
    D.C.     |  |           | 198   |           |  | $       | 49,600  |           |  | $            | 42,036  |  |  | $ | 7,564  |  |  |  | Q2 2003 | 
|Summit Stockbridge  Atlanta, GA            |  |           | 304   |           |  |         | 23,600  |           |  |              | 18,608  |  |  |   | 4,992  |  |  |  | Q3 2003 | 
|Summit Silo Creek  Washington,
    D.C.    |  |           | 284   |           |  |         | 41,700  |           |  |              | 17,430  |  |  |   | 24,270 |  |  |  | Q2 2004 | 
|Summit Las Olas  Ft. Lauderdale, FL        |  |           | 420   |           |  |         | 73,700  |           |  |              | 34,648  |  |  |   | 39,052 |  |  |  | Q3 2005 | 
|Other development and construction costs(1) |  |           |      |           |  |         |        |           |  |              | 26,541  |  |  |   |       |  |  |  |         | 
|                                            |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 
|                                            |  |           | 1,206 |           |  | $       | 188,600 |           |  | $            | 139,263 |  |  | $ | 75,878 |  |  |  |         | 
|                                            |  |           |       |           |  |         |         |           |  |              |         |  |  |   |        |  |  |  |         | 



|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(1) | Consists primarily of land held for development
    and other pre-development costs.

The estimated cost to complete the development
communities listed above of $75.9 million, our commitment
to purchase Summit Brickell for an estimated price ranging from
$50.5 million to $60.0 million and our commitment to
purchase land for Summit Brookwood for $10.6 million (see
the section entitled Commitments and Contingencies
below), represent substantially all of our material commitments
for capital expenditures as of December 31, 2002.

Factors
Affecting the Performance of our Development
Communities

As with any development community, there are
uncertainties and risks associated with the development of the
communities described above. While we have prepared development
budgets and have estimated completion and stabilization target
dates based on what we believe are reasonable assumptions in
light of current conditions, there can be no assurance that
actual costs will not exceed current budgets or that we will not
experience construction delays due to the unavailability of
materials, weather conditions or other events. We also may be
unable to obtain, or experience delays in obtaining, all
necessary zoning, land-use, building, occupancy, and other
required governmental permits and authorizations.

Other development risks include the possibility
of incurring additional costs or liabilities resulting from
increased costs for materials or labor or other unexpected costs
or defects in construction material, and the

35



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possibility that financing may not be available
on favorable terms, or at all, to pursue or complete development
activities. Similarly, market conditions at the time these
communities become available for leasing will affect the rental
rates that may be charged and the period of time necessary to
achieve stabilization, which could make one or more of the
development communities unprofitable or result in achieving
stabilization later than currently anticipated.


In addition, we are conducting feasibility and
other pre-development work for five communities. We could
abandon the development of any one or more of these potential
communities in the event that we determine that market
conditions do not support development, financing is not
available on favorable terms or at all, or we are unable to
obtain necessary permits and authorizations, or due to other
circumstances which may prevent development. There can be no
assurance that, if we do pursue one or more potential
communities, that we will be able to complete construction
within the currently estimated development budgets or that
construction can be started at the time currently anticipated.

Americans with Disabilities Act and Similar
Laws

Under the Americans with Disabilities Act, all
places of public accommodation are required to meet federal
requirements related to access and use by disabled persons. We
believe that our communities are substantially in compliance
with present requirements of the Americans with Disabilities Act
as they apply to multifamily dwellings. A number of additional
federal, state and local laws exist or may be imposed which also
may require modifications to our communities or regulate certain
further renovations with respect to access by disabled persons.
The ultimate amount of the cost of compliance with the Americans
with Disabilities Act or related legislation is not currently
ascertainable, and while these costs are not expected to have a
material effect on us, they could be substantial. Limitations or
restrictions on the completion of renovations may limit
application of our investment strategy in particular instances
or reduce overall returns on our investments.

Inflation

Substantially all of the leases at our
communities are for a term of one year or less. The short-term
nature of these leases generally serves to reduce the risk of
the adverse effect of inflation.

Commitments and Contingencies

The estimated cost to complete the four
development projects currently under construction was
$75.9 million as of December 31, 2002. Anticipated
construction completion dates of the projects range from the
second quarter of 2003 to the third quarter of 2005.

We carry terrorism insurance on all communities
that serve as collateral for mortgage debt, as well as on two
communities which do not serve as collateral for mortgage debt,
but which are located in Washington, D.C. The terrorism
insurance is subject to coverage limitations, which we believe
are commercially reasonable. No assurance can be given that
material losses in excess of insurance proceeds will not occur
in the future, or that insurance coverage for acts of terrorism
will be available in the future.

In January 2000, we entered into a real estate
purchase agreement with a third-party real estate developer.
Under the terms of the agreement, we have agreed to purchase
upon completion a Class A mixed-use community,
which will be called Summit Brickell, and is located in Miami,
Florida. We will purchase Summit Brickell upon the earlier of
one year after construction completion or the achievement of 80%
occupancy. We may extend this closing obligation for six months
after the initial purchase period. We expect to close on the
purchase of Summit Brickell in 2003. The final purchase price
will be determined based on budgeted construction costs plus a
bonus to the developer based on the capitalized income of the
property at the time of purchase. In the event there are net
cost savings during construction, a portion of such savings will
be used to reduce the purchase price and a portion will be paid
as an incentive to the developer pursuant to an agreed upon
formula. In the event there are net cost overruns during
construction, the developer will be responsible for funding such
overruns unless those overruns result from design change orders
which we request; such change order overruns will be added to
the purchase price. The purchase price is expected to range from
$50.5 million to $60.0 million. The purchase of Summit
Brickell is subject to customary closing conditions.

36



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##### 



We have issued a letter of credit in the amount
of $13.0 million, which will serve as a credit enhancement
to the developers construction loan. In the event that any
amount under the letter of credit is drawn upon, we shall be
treated as having issued a loan to the developer in the amount
of such draw. Any such loan will accrue interest at a rate of
eighteen percent (18%) per year.


On May 25, 2001, we contributed
$4.2 million for a 29.78% interest in a joint venture named
SZF, LLC, which owns substantially all of the interests in a
limited liability company that is developing, through a
third-party contractor, an apartment community in Miami,
Florida. The community will consist of 323 apartment homes and
17,795 square feet of office/retail space. The limited liability
company has also acquired an adjacent piece of land. The
construction costs are being funded through the equity that the
joint venture contributed to the limited liability company and
by a loan to that company from an unrelated third party. In the
event that construction costs exceed the construction loan
amount, we have agreed to advance the amount required to fund
such costs in excess of the construction loan. This advance
accrues a preferential return at the rate of eleven percent
(11%) per year to be paid from the distributions from the joint
venture. As of December 31, 2002, we had advanced
$2.2 million to SZF, LLC. Subsequent to December 31,
2002, we have advanced an additional $6.1 million to SZF,
LLC.

During 2002, we completed the development of
Summit Brookwood, a 359 unit apartment community located in
Atlanta, Georgia. As of December 31, 2002, we are the
lessee under a land lease related to the land on which Summit
Brookwood was constructed. We have exercised our purchase option
under the land lease to purchase the related land for
$10.6 million. We expect to finalize the purchase of the
land at Summit Brookwood during 2003 using cash and/or common
units in the Operating Partnership as consideration.

Summit has employment agreements with two of its
former executive officers, both of whom resigned from such
executive positions, but who remain as employees and have agreed
to provide various services to Summit from time to time through
December 31, 2011. Each employment agreement requires that
Summit pay to the former officers a base salary aggregating up
to $2.1 million over the period from July 2, 2001 to
December 31, 2011 (beginning with calendar year 2002, up to
$200,000 on an annual basis). Each employment agreement also
requires that Summit provide participation in its life insurance
plan, office space, information systems support and
administrative support for the remainder of each officers
life, and participation in Summits health and dental
insurance plans until the last to die of the officer or such
officers spouse. Either party can terminate the employment
agreements, effective 20 business days after written notice is
given. The full base salary amount due shall be payable through
2011 whether or not the agreements are terminated earlier in
accordance with their terms.

Funds from Operations

We consider Funds from Operations
(FFO) to be an appropriate measure of performance of
an equity REIT. We compute FFO in accordance with standards
established by the National Association of Real Estate
Investment Trusts (NAREIT). FFO, as defined by
NAREIT, represents net income (loss) excluding gains or
losses from sales of property and extraordinary items, plus
depreciation of real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures, all determined
on a consistent basis in accordance with GAAP. Our methodology
for calculating FFO may differ from the methodology for
calculating FFO utilized by other real estate companies, and
accordingly, may not be comparable to other real estate
companies. FFO does not represent amounts available for
managements discretionary use because of needed capital
expenditures or expansion, debt service obligations, property
acquisitions, development, dividends and distributions or other
commitments and uncertainties. FFO should not be considered as
an alternative to net income (determined in accordance with
GAAP) as an indication of our financial performance or to cash
flows from operating activities (determined in accordance with
GAAP) as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to
pay dividends or make distributions. We believe FFO is helpful
to investors as a measure of our performance because, along with
cash flows from operating activities, financing activities and
investing activities, it provides investors with an
understanding of our ability to incur and service debt and make
capital expenditures.

37



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##### 



Funds from Operations is calculated as follows
(dollars in thousands):

|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |          |        | 
|------------------------------------------------ | ----------------------------------------------------------- | ----------------------- | ---------- | ------- | ------ | ---- | ---------- | ------- | ------ | - | ---------- | -------- | ------ | 
|                                                 |                                                             |                        
|                                                 |                                                             | Year Ended December 31,
|                                                 |                                                             |                        
|                                                 |                                                             | 2002                    |            | 2001    |        | 2000
|                                                 |                                                             |                         |            |         |        |     
|Income available to common unitholders           |                                                             | $                       | 103,508    |         |        | $    | 64,896     |         |        | $ | 74,394     |         
|                                                 | Extraordinary items                                         |                         |            | 311     |        |      |            |        |        |   |            |         |       
|                                                 | Extraordinary items  Summit Management
    Company         |                         |            |        |        |      |            |        |        |   |            | 30       |       
|                                                 | Gain on sale of real estate assets                          |                         |            | (78,738 | )      |      |            | (34,435 | )      |   |            | (38,510  | )     
|                                                 | Gain on sale of real estate assets 
    joint ventures     |                         |            | (4,955  | )      |      |            | (271    | )      |   |            |         |       
|                                                 | Gain on sale of real estate assets 
    Management Company |                         |            |         |        |      |            |        |        |   |            | (238     | )     
|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|                                                 |                                                             | Adjusted income         |            |         | 20,126 |      |            |         | 30,190 |   |            |          | 35,676 | 
|Depreciation:                                    |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|                                                 | Real estate assets                                          |                         |            | 39,281  |        |      |            | 38,746  |        |   |            | 36,383   |       
|                                                 | Real estate joint ventures                                  |                         |            | 1,119   |        |      |            | 1,231   |        |   |            | 1,283    |       
|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|Funds from Operations                            |                                                             | $                       | 60,526     |         |        | $    | 70,167     |         |        | $ | 73,342     |         
|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|Recurring capital expenditures (1)               |                                                             |                         | (4,530     | )       |        |      | (4,889     | )       |        |   | (5,371     | )       
|Non-recurring capital expenditures (2)           |                                                             |                         | 1,088      |         |        |      | 4,588      |         |        |   | 2,965      |         
|Cash flow provided by (used in):                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|                                                 | Operating activities                                        |                         | $          | 70,721  |        |      | $          | 78,966  |        |   | $          | 83,388   |       
|                                                 | Investing activities                                        |                         |            | (5,590  | )      |      |            | 6,177   |        |   |            | (118,197 | )     
|                                                 | Financing activities                                        |                         |            | (64,592 | )      |      |            | (86,477 | )      |   |            | 33,827   |       
|Weighted average units outstanding 
    basic   |                                                             |                         | 30,936,881 |         |        |      | 30,795,910 |         |        |   | 30,696,729 |         
|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         
|Weighted average units outstanding 
    diluted |                                                             |                         | 31,107,404 |         |        |      | 31,106,137 |         |        |   | 30,897,346 |         
|                                                 |                                                             |                         |            |         |        |      |            |         |        |   |            |         



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Recurring capital expenditures are expected to be
    funded from operations and consist primarily of exterior
    painting, new appliances, vinyl, blinds, tile, wallpaper and
    carpet. In contrast, non-recurring capital expenditures, such as
    major improvements, new garages and access gates, are expected
    to be funded by financing activities.                                                                                                         
|   
|(2) | Non-recurring capital expenditures for the years
    ended December 31, 2002 and 2001 primarily consisted of
    major renovations and upgrades of apartment homes in the amounts
    of $280,000 in 2002 and $749,000 in 2001; $11,000 in 2002 and
    $157,000 in 2001 for access gates and security fences; $797,000
    in 2002 and $1.7 million in 2001 in other revenue
    enhancement expenditures; and $1.3 million in alternative
    landscaping mulch in 2001.

Item 7A.     Quantitative
and Qualitative Disclosures about Market Risk

See Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Market Risk beginning on
page 32 of this report.

Item 8.     Financial
Statements and Supplementary Data

Financial statements and supplementary data are
contained on the pages indicated on the Index to Financial
Statements on page 63 of this report.

Item 9.     Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure

Not applicable.

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PART III

Item 10.     Directors
and Executive Officers of Registrant

The Operating Partnership is managed by Summit,
in its capacity as the general partner of the Operating
Partnership. Consequently, the Operating Partnership has no
directors or executive officers. This Item 10 reflects
information with respect to the directors and executive officers
of Summit.

Directors

Terms
Expiring in 2003

James M. Allwin.Mr. Allwin has been a director of Summit since 1999. Mr.
Allwin is President of Aetos Capital, an independent investment
management firm. Prior to January 1, 1999, he was head of
the investment management business of Morgan Stanley Dean
Witter, which included Morgan Stanley Asset Management, Miller
Anderson & Sherrerd and the firms Private Equity
Funds: Capital Partners, Venture Capital and Real Estate. He was
a member of the Morgan Stanley Dean Witter Management Committee.
Mr. Allwin joined Morgan Stanley in 1976, and during the
course of his career, he also worked in areas such as corporate
finance, mergers and acquisitions and real estate. He is a
graduate of Yale University, where he served as a member of the
Investment Committee from 1997 to 2002, and a graduate of the
Amos Tuck School of Business Administration at Dartmouth
College, where he is a member of the Board of Overseers. He is a
member of the Investment Advisory Committee of the Howard Hughes
Medical Institute, the Chairmans Council of the Museum of
Modern Art in New York and the Board of Directors of The
National Mentoring Partnership. He is also Chairman of both the
Board of Trustees of Greenwich Academy and the Board of
Directors of Communities In Schools, Inc., the nations
largest non-profit stay-in-school program. Mr. Allwin is
50 years old.

William B. McGuire,
Jr.Mr. McGuire is Co-Chairman of
the Board of Directors of Summit. He has served as Co-Chairman
of the Board since December 1999 and formerly served as Chairman
of the Board from 1994 to December 1999. Prior to the formation
of Summit, Mr. McGuire served as a senior partner of the
predecessor to Summit and as a general partner of each of the
partnerships which transferred multifamily apartment communities
to Summit when it was formed. Mr. McGuire founded the
predecessor to Summit in 1972. Mr. McGuire also founded
McGuire Properties, Inc., a real estate brokerage firm in 1972.
Mr. McGuire acts as a consultant to Spectrum Properties
Inc., a company engaged in office management development and
leasing, and is on the Board of Advisors of IQMAX, a venture
capital company. He has been active in the following
professional and community organizations: Residential,
Multifamily and Urban Development Mixed Use Councils of the
Urban Land Institute; Charlotte Advisory Board of NationsBank of
North Carolina, N.A.; and The Charlotte City Club, serving on
its Board of Governors and as President. He was a trustee of the
North Carolina Nature Conservancy; a founder and director of
Habitat for Humanity of Charlotte; and the founder and President
of The Neighborhood Medical Clinic. Mr. McGuire is
58 years old.

William F. Paulsen.Mr. Paulsen is Co-Chairman of the Board of Directors of
Summit. He has held the position of Co-Chairman of the Board
since December 1999 and formerly held the position of Chief
Executive Officer from 1994 until July 2001. Mr. Paulsen
has been a director of Summit since 1994. Prior to the formation
of Summit, Mr. Paulsen was a senior partner and the Chief
Executive Officer of the predecessor to Summit and a general
partner of each of the partnerships which transferred
multifamily apartment communities to Summit when it was formed.
Mr. Paulsen joined the predecessor to Summit in 1981. He
was selected as North Carolina Entrepreneur of the Year in 1991.
In addition to his responsibilities with Summit,
Mr. Paulsen is a member of the Urban Land Institute. Until
December 2000, he also was a member of the Board of Directors of
The Beach Company, a private real estate developer in
Charleston, South Carolina. Mr. Paulsen is a trustee of The
Asheville School. He also served as a Vice President of the
Charlotte Apartment Association. Mr. Paulsen is 56 years
old.

Wendy Riches.Ms. Riches has been a director of Summit since November
2002. From 1999 to 2002, she held the position of President of
ARC Integrated Marketing, leading DArcys marketing
services network consisting of 32 agencies in 19 countries. From
1998 to 1999, Ms. Riches was employed by Hasbro, Inc. as

39



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President of global e-commerce and direct
marketing. Prior to joining Hasbro, she was employed by Ogilvy
& Mather from 1990 to 1998, during which time she served as
Executive Creative Director and Managing Director for OgilvyOne
and, subsequently, Chairman and Chief Executive Officer of
OgilvyOne North America and a member of the global Board of
OgilvyOne Worldwide. Ms. Riches chairs the Ethics and
Privacy Committee of the Board of Directors of the Direct
Marketing Association and is a member of the Board of Directors
of Columbia House Holdings, Inc. Ms. Riches is
59 years old.


Terms
Expiring in 2004

Henry H. Fishkind.Dr. Fishkind has been a director of Summit since 1994. He
is the President of Fishkind & Associates, Inc., a private
economic and financial consulting firm based in Orlando, Florida
that he founded in 1987. Dr. Fishkind is serving as a
member of the Florida Governors Economic Advisory Board
for a term from 2000 to 2004. He also served on this Economic
Advisory Board from 1979 to 1981. Dr. Fishkind is
53 years old.

James H. Hance, Jr.Mr. Hance has been a director of Summit since 1994. Mr.
Hance is Vice Chairman and Chief Financial Officer of Bank of
America and a member of the corporations Board of
Directors. He is responsible for the corporations Finance
Group, comprising the finance, accounting and control functions,
and for Treasury, including balance sheet management. He also is
responsible for Principal Investing, Investor Relations, the
Legal Department, Corporate Strategy and Management Services,
which provides for the corporations real estate needs. The
global payment business, which provides depository and treasury
services to customers worldwide, also reports to Mr. Hance.
Mr. Hance, a certified public accountant, spent
17 years with the Price Waterhouse accounting firm (now
PricewaterhouseCoopers) in Philadelphia and Charlotte. For six
years, he was a partner in the Charlotte office and served as
the audit partner responsible for the firms relationship
with NCNB Corporation (predecessor to NationsBank and Bank of
America). From August 1985 until December 1986, he was Chairman
and co-owner of Consolidated Coin Caterers Corp. in Charlotte.
He joined NCNB Corporation in March 1987. Mr. Hance is a
member of the Board of Directors of Caraustar Industries Inc.,
EnPro Industries, Inc. and Lance Inc. He is a trustee of
Washington University in St. Louis and is a member of Washington
Universitys National Council for the John M. Olin School
of Business. He is Chairman of the Board of Trustees of the
North Carolina Blumenthal Performing Arts Center. In addition,
he is a member of the Boards of The United Negro College Fund
and The Foundation for the University of North Carolina at
Charlotte, a member of the Society of International Business
Fellows and a director of ACE Guaranty RE and ACE Capital RE
Corporation. Mr. Hance is 58 years old.

Terms
Expiring in 2005

Steven R. LeBlanc.Mr. LeBlanc is President, Chief Executive Officer and a
director of Summit. He has been the President and a director
since July 1998 and the Chief Executive Officer since July 2001.
Mr. LeBlanc held the position of Chief Operating Officer
from July 1998 to July 2001. Prior to joining Summit,
Mr. LeBlanc served as President of Urban Growth Property
Trust from 1997 to 1998 where he developed the companys
strategic business plan, orchestrated the transition to REIT
status and initiated over $200 million in acquisitions and
developments. From 1992 to 1997, Mr. LeBlanc served in a
number of senior management positions with Archstone Communities
and the Security Capital Group where he implemented a
fully-integrated, operating company strategy focused on
long-term sustainable cash flow growth. While at these
companies, he was responsible for the acquisition and
development of 11,000 apartment homes and the purchase of land
for an additional 10,000 apartment homes. From 1984 to 1992,
Mr. LeBlanc was a partner and Senior Vice President with
Lincoln Property Company where he was a member of the senior
management team and was responsible for the management of 17,000
apartments, as well as the firms acquisition and
development activities throughout Texas and the Northeast.
Mr. LeBlanc is a member of the Board of Directors of the
National Multifamily Housing Council, St. Peters Homes and
Real Estate Round Table and a member of the Urban Land
Institute. Mr. LeBlanc is 45 years old.

Nelson Schwab III.Mr. Schwab has been a director of Summit since 1994. He has
been a Managing Director of Carousel Capital, a merchant-banking
firm based in Charlotte, North Carolina specializing in middle
market acquisitions, since 1996. Mr. Schwab served as
Chairman and Chief Executive Officer of

40



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##### 



Paramount Parks from 1992 to 1995.
Mr. Schwab is a member of the Boards of Directors of Silver
Dollar City, Inc., Griffin Corporation, Childrens First, Simpson
Performance Products, Burlington Industries, InServe Corp. and
Herschend Family Entertainment Corp. Mr. Schwab previously
served as the Chairman of the Carolinas Partnership, the
Charlotte Chamber of Commerce and the North Carolina Blumenthal
Performing Arts Center. He is currently a member of the Board of
Trustees of the University of North Carolina at Chapel Hill.
Mr. Schwab is 58 years old.


Executive
Officers Who Are Not Directors

Gregg D. Adzema.Mr. Adzema has been Executive Vice President and Chief
Financial Officer of Summit since December 2001. In this
capacity, he is responsible for overseeing Summits capital
markets, finance, accounting, benefits, investor relations,
public relations and market research activities. From September
1996 to December 2001, Mr. Adzema held several finance
positions with Summit, most recently Senior Vice President of
Finance and Accounting. Prior to joining Summit in September
1996, Mr. Adzema was employed by Arthur Andersen Real
Estate Advisory Services in Washington, D.C. He is a member of
the Urban Land Institute. Mr. Adzema is 38 years old.

Douglas E. Brout.Mr. Brout has been Executive Vice President of Investments
of Summit since December 2001. Since joining Summit in 1996,
Mr. Brout has been responsible for Summits
Acquisitions, Dispositions, Joint Ventures and Development
Pre-Sales group. During his tenure with Summit, he has
facilitated in excess of $1 billion in investment activity.
All of Summits development operations are also included in
Mr. Brouts department. Mr. Brout brings to
Summit over 20 years of experience fostered in diverse
segments of the commercial real estate and finance industry.
Prior to joining Summit, he worked for: Bear Stearns & Co.
as a vice president specializing in Real Estate Investment
Banking and Commercial Mortgage Securitization; Sentinel Real
Estate Corp. as a vice president, where he was responsible for
multifamily acquisitions throughout much of the United States;
and The Related Companies of New York, where he was also a vice
president handling numerous types of multifamily transactions.
Mr. Brout is a member of the Board of Directors of the
National Multifamily Housing Council. Mr. Brout is
43 years old.

Keith L. Downey.Mr. Downey has been Executive Vice President of
Construction of Summit since February 2002 and President of
Summit Apartment Builders, Inc. since 1996. Mr. Downey
joined Summit in 1985 as Development Manager responsible for
development opportunities in the Tampa Bay area. In 1989, Mr.
Downey assisted in the formation of Summit Apartment Builders,
Inc., which at that time was a general contracting operation
responsible for the construction of all of Summits
communities in Florida. Since joining Summit in 1985, Mr. Downey
has been responsible for the construction operations across
Summits entire portfolio, and has been directly involved
in the development and construction of over 8,000 apartment
homes in 35 communities. Prior to joining Summit,
Mr. Downey was Vice President for The Calibre Companies in
Atlanta, Georgia from 1980 to 1984, where he worked in a similar
development/construction role. From 1975 to 1979,
Mr. Downey was a construction superintendent, project
manager and partner in developing and constructing single family
homes in Atlanta. Mr. Downey is 50 years old.

Randall M. Ell.Mr. Ell has been Executive Vice
President of Property Operations of Summit and President of
Summit Management Company since June 2000. He is responsible for
all property management operations of Summits communities,
comprising over 16,000 apartment homes. From 1992 until June
2000, Mr. Ell was a Regional Vice President of Summit.
Prior to joining Summit in 1992, Mr. Ell was employed by
R&B Apartment Management, located in Northern Virginia, in
the capacity of Regional Vice President. Mr. Ell is
45 years old.

Michael L.
Schwarz.Mr. Schwarz has been an Executive
Vice President of Summit since 1994 and the Chief Operating
Officer of Summit since December 2001. He served as the Chief
Financial Officer of Summit from 1994 to December 2001. Prior to
joining Summit, Mr. Schwarz served as co-founder, Senior
Vice President and Chief Financial Officer of Industrial
Developments International, Inc. (IDI), a developer
of industrial real estate. While at IDI, Mr. Schwarz was
responsible for the companys capital markets activities,
accounting operations and information technology efforts. In
this capacity, Mr. Schwarz arranged over $500 million
in financing including IDIs initial capitalization.
Mr. Schwarz is responsible for Summits

41



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property operations, investment activities and
technology initiatives. He is a certified public accountant.
Mr. Schwarz served as the Chairman of the Board of The
Study Hall of Emmaus House, a non-profit educational facility
serving inner-city youths. Mr. Schwarz also sits on the Board of
The Beach Company, a private real estate developer in
Charleston, South Carolina. Mr. Schwarz is 42 years
old.


Section 16(a) Beneficial Ownership
Reporting Compliance

Section 16(a) of the Securities Exchange Act
of 1934, as amended (the Exchange Act), requires
Summits executive officers and directors, and persons who
are beneficial owners of more than 10% of a registered class of
the Operating Partnerships equity securities to file
reports of ownership and changes in ownership with the SEC.
Executive officers, directors and greater than 10% beneficial
owners are required by SEC regulations to furnish us with copies
of all Section 16(a) forms they file. To our knowledge,
based solely on a review of the copies of such reports furnished
to us by the executive officers, directors and greater than 10%
beneficial owners, all Section 16(a) filing requirements
were satisfied during 2002, except that Mr. Brout
inadvertently filed two Forms 4 late, each with respect to one
transaction, and each of the executive officers inadvertently
reported one transaction late.

Item 11.     Executive
Compensation

The Operating Partnership is managed by Summit,
in its capacity as its general partner. Consequently, the
Operating Partnership has no directors or executive officers and
pays no compensation. This Item 11 reflects compensation
paid to the directors and executive officers of Summit.

Director Compensation

During 2002, directors of Summit who were also
employees did not receive any fees for their services as
directors. Non-employee directors of Summit (the
Independent Directors) received an annual
directors fee of $22,000 in 2002. Each Independent
Director also received $1,000 for each regular meeting of the
Board of Directors attended, $1,000 for each special meeting of
the Board of Directors attended, $250 for each committee meeting
attended if held concurrently with a regular or special meeting
of the Board of Directors and $500 for each committee meeting
attended if not held concurrently with a regular or special
meeting of the Board of Directors. Pursuant to Summits
1994 Stock Option and Incentive Plan, as amended and restated,
or the 1994 Stock Plan, on May 21, 2002, each Independent
Director, except Ms. Riches, received a non-qualified stock
option, exercisable upon grant, to purchase 2,000 shares of
common stock at a price equal to the market price of the common
stock on the date of grant. Each Independent Director, except
Ms. Riches, also received on May 21, 2002, a
non-qualified stock option, exercisable upon grant, to purchase
an additional 3,000 shares of common stock at a price equal to
the market price of the common stock on the date of grant.
Messrs. McGuire and Paulsen also received similar stock
option grants for their services as directors. See
 Employment and Noncompetition Agreements
and Item 13, Certain Relationships and Related
TransactionsCertain Business Relationships and
Transactions with Management for additional information.

42



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##### 



Executive Compensation

Summary Compensation Table.The following table sets forth the
cash and non-cash compensation awarded to the Chief Executive
Officer and each of the other executive officers of Summit
during the fiscal year ended December 31, 2002, 2001 and
2000 (collectively, the Executive Officers).

Summary Compensation Table

|                            |                                                                                               |      |      |              |  |            |         |                        |  |           |         |               |  |              |   |       |     |  |         |         |  |  |   |         |      |  |       |       | 
|--------------------------- | --------------------------------------------------------------------------------------------- | ---- | ---- | ------------ |  | ---------- | ------- | ---------------------- |  | --------- | ------- | ------------- |  | ------------ | - | ----- | --- |  | ------- | ------- |  |  | - | ------- | ---- |  | ----- | ----- | 
|                            |                                                                                               |      |      |              |  |            |         |                        |  |          
|                            |                                                                                               |      |      |              |  |            |         | Long-Term Compensation |  |          
|                            |                                                                                               |      |      |              |  |            |         |                        |  |          
|                            |                                                                                               |      |      |              |  |            |         |                        |  |           |         |              
|                            |                                                                                               |      |      |              |  |            |         | Awards                 |  | Payouts   |         |              
|                            |                                                                                               |      |      |              |  |            |         |                        |  |          
|                            |                                                                                               |      |      | Annual       |  |            |         | Long-Term              |  |          
|                            |                                                                                               |      |      | Compensation |  | Restricted |         | Securities             |  | Incentive |         |              
|                            |                                                                                               |      |      |              |  | Stock      |         | Underlying             |  | Plan      |         | All Other    
|                            |                                                                                               |      |      | Salary       |  | Bonus      |         | Awards                 |  | Options   |         | (LTIP)      |  | Compensation
|Name and Principal Position |                                                                                               | Year |      | ($)(1)       |  | ($)        |         | ($)(2)                 |  | (#)       |         | Payouts($)(3) |  | ($)(4)(5)   
|                            |                                                                                               |      |      |              |  |            |         |                        |  |           |         |               |  |             
|Steven R. LeBlanc           |                                                                                               |      | 2002 |              |  |            | 440,000 |                        |  |           |        |               |  |              |  |       |     |  | 240,000 |         |  |  |  |         |      |  | 5,196 |      
|                            | President and                                                                                 |      |      | 2001         |  |            |         | 425,000                |  |           |         |              |  |              |   |      |     |  |         | 24,000  |  |  |   | 661,430 | (6)  |  |       | 4,204 | 
|                            | Chief Executive Officer                                                                       |      |      | 2000         |  |            |         | 294,000                |  |           |         | 205,119       |  |              |   |      |     |  |         |        |  |  |   |        |      |  |       | 3,831 | 
|Michael L. Schwarz          |                                                                                               |      | 2002 |              |  |            | 330,000 |                        |  |           |        |               |  |              |  |       |     |  | 120,000 |         |  |  |  |         |      |  | 5,147 |      
|                            | Executive Vice President                                                                      |      |      | 2001         |  |            |         | 320,000                |  |           |         | 64,000        |  |              |   |      |     |  |         | 19,000  |  |  |   | 390,595 | (7)  |  |       | 4,420 | 
|                            | and Chief Operating Officer                                                                   |      |      | 2000         |  |            |         | 236,000                |  |           |         | 182,683       |  |              |   |      |     |  |         |        |  |  |   |        |      |  |       | 3,831 | 
|Douglas E. Brout(8)         |                                                                                               |      | 2002 |              |  |            | 215,000 |                        |  |           | 110,348 |               |  |              |  |       |     |  | 80,000  |         |  |  |  |         |      |  | 5,196 |      
|                            | Executive Vice President                                                                      |      |      | 2001         |  |            |         | 215,000                |  |           |         | 122,980       |  |              |   | 5,797 | (9) |  |         | 100,000 |  |  |   | 46,779  | (10) |  |       | 4,416 | 
|                            | of Investments                                                                                |      |      |              |  |            |         |                        |  |           |         |               |  |              |   |       |     |  |         |         |  |  |   |         |      |  |       |       | 
|Keith L. Downey(11)         |                                                                                               |      | 2002 |              |  |            | 215,000 |                        |  |           |        |               |  |              |  |       |     |  | 80,000  |         |  |  |  |         |      |  | 4,673 |      
|                            | Executive Vice President of Construction and
    President of Summit Apartment Builders, Inc. |      |      |              |  |            |         |                        |  |           |         |               |  |              |   |       |     |  |         |         |  |  |   |         |      |  |       |       | 
|Randall M. Ell              |                                                                                               |      | 2002 |              |  |            | 215,000 |                        |  |           |        |               |  |              |  |       |     |  | 80,000  |         |  |  |  |         |      |  | 5,196 |      
|                            | Executive Vice President of                                                                   |      |      | 2001         |  |            |         | 215,000                |  |           |         | 33,110        |  |              |   |      |     |  |         | 13,000  |  |  |   | 58,487  | (12) |  |       | 4,416 | 
|                            | Property Operations and                                                                       |      |      | 2000         |  |            |         | 180,726                |  |           |         | 70,397        |  |              |   |      |     |  |         | 96,000  |  |  |   |        |      |  |       | 4,710 | 
|                            | President of Summit Management Company                                                        |      |      |              |  |            |         |                        |  |           |         |               |  |              |   |       |     |  |         |         |  |  |   |         |      |  |       |       | 
|Gregg D. Adzema(13)         |                                                                                               |      | 2002 |              |  |            | 200,000 |                        |  |           |        |               |  |              |  |       |     |  | 80,000  |         |  |  |  |         |      |  | 5,196 |      
|                            | Executive Vice President and                                                                  |      |      | 2001         |  |            |         | 175,000                |  |           |         | 30,420        |  |              |   |      |     |  |         | 50,000  |  |  |   | 39,775  | (14) |  |       | 4,416 | 
|                            | Chief Financial Officer                                                                       |      |      |              |  |            |         |                        |  |           |         |               |  |              |   |       |     |  |         |         |  |  |   |         |      |  |       |       | 



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Includes amounts deferred under Summits
    401(k) plan. Under the plan, employees generally are permitted
    to invest up to 17% of their salary on a pre-tax basis, subject
    to a statutory maximum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (2) | As of December 31, 2002,
    (a) Mr. LeBlanc held a total of 6,468 unvested shares
    of restricted stock valued at $115,130,
    (b) Mr. Schwarz held a total of 3,820 unvested shares
    of restricted stock valued at $67,996, (c) Mr. Brout
    held a total of 957 unvested shares of restricted stock valued
    at $17,035, (d) Mr. Downey held a total of 8,192
    unvested shares of restricted stock valued at $145,818,
    (e) Mr. Ell held a total of 572 unvested shares of
    restricted stock valued at $10,182 and (f) Mr. Adzema
    held a total of 2,789 unvested shares of restricted stock valued
    at $49,644. The values as of December 31, 2002 set forth in
    this footnote 2 and the other footnotes in this Summary
    Compensation Table are based on a closing price of $17.80 per
    share of Summits common stock on such date.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Pursuant to performance stock award agreements
    dated January 2, 1998 (except with respect to
    Mr. LeBlanc, whose performance stock award agreement was
    dated July 2, 1998) issued under the 1994 Stock Plan (the
    1998 Performance Stock Agreements), each Executive
    Officer had the opportunity to earn up to 225% of a target
    number of performance shares of common stock based upon
    Summits average annual total return (share appreciation
    and distributions) from the date of the applicable 1998
    Performance Stock Agreement to January 2, 2001. The amounts
    listed in the table above reflect the

43



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##### 



| |  |                                                                                                                                                                                                                  
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | value of the actual number of performance shares
    received by each Executive Officer based on the closing price of
    $25.5625 per share of Summits common stock on
    January 2, 2001, the date of payout.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Amounts represent matching contributions made by
    Summit to the Executive Officers account under the
    Companys 401(k) plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(5) | Pursuant to stock award agreements dated
    February 6, 2002 issued under the 1994 Stock Plan (the
    2002 Stock Award Agreements), each Executive Officer
    was awarded the opportunity to earn shares of common stock under
    the 1994 Stock Plan. The number of shares of common stock that
    the Executive Officer will be entitled to receive under the
    applicable 2002 Stock Award Agreement is based on the following
    schedule of dates and percentages: 15% on March 1, 2003; an
    additional 20% on each of March 1, 2004, 2005 and 2006; and
    the final 25% on March 1, 2007. The Executive Officer will
    receive the applicable number of shares on each date if he
    continues to be employed by Summit on such date. If the
    Executive Officers employment terminates for any reason
    other than death or disability, his right to receive the
    remaining unacquired shares will terminate. Upon the death or
    disability of the Executive Officer, or upon a change of
    control of Summit, the Executive Officer or his estate, as
    the case may be, will be entitled to immediately receive the
    remaining unacquired shares regardless of the schedule set forth
    above. Prior to the issuance of the shares to the Executive
    Officer on the relevant dates, the Executive Officer has no
    rights as a stockholder of Summit with respect to the shares,
    including the right to vote the shares and the right to receive
    dividends, and none of the unacquired shares are deemed
    outstanding. As of December 31, 2002, no shares had been
    issued pursuant to the 2002 Stock Award Agreements. Each
    Executive Officer was awarded the right to receive up to the
    aggregate number of shares of common stock listed below:

|                   |  |                  |        | 
|------------------ |  | ---------------- | ------ | 
|Executive Officer  |  | Number of Shares
|                   |  |                 
|Steven R. LeBlanc  |  |                  | 55,000 | 
|Michael L. Schwarz |  |                  | 27,500 | 
|Douglas E. Brout   |  |                  | 16,000 | 
|Keith L. Downey    |  |                  | 16,000 | 
|Randall M. Ell     |  |                  | 16,000 | 
|Gregg D. Adzema    |  |                  | 16,000 | 



|    |                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Mr. LeBlanc received 25,875 shares of common
    stock on January 2, 2001 under his 1998 Performance Stock
    Agreement. 19,407 of these shares vested prior to
    December 31, 2002 and the remaining 6,468 shares vested in
    January 2003 (the value of the unvested shares as of
    December 31, 2002 was $115,130). Dividends were paid on all
    such shares.
|   
|(7) | Mr. Schwarz received 15,280 shares of common
    stock on January 2, 2001 under his 1998 Performance Stock
    Agreement. 11,460 of these shares vested prior to
    December 31, 2002 and the remaining 3,820 shares vested in
    January 2003 (the value of the unvested shares as of
    December 31, 2002 was $67,996). Dividends were paid on all
    such shares. 
|   
|(8) | Mr. Brout was promoted to an executive
    officer position with Summit on December 20, 2001.                                                                                                                                                                                                                                                                            
|   
|(9) | Mr. Brout received 250 shares of restricted
    stock on January 17, 2001 under the 1994 Stock Plan which
    vest in three equal annual installments beginning on such date
    (the value of the unvested shares of such restricted stock as of
    December 31, 2002 was $1,477). Dividends are paid on all
    such shares of restricted stock.                      



|     |                                                                                                                                                                                                                                                                                                                                                                  
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Mr. Brout received 1,830 shares of common
    stock on January 2, 2001 under his 1998 Performance Stock
    Agreement. 1,373 of these shares vested prior to
    December 31, 2002 and the remaining 457 shares vested in
    January 2003 (the value of the unvested shares as of
    December 31, 2002 was $8,135). Dividends were paid on all
    such shares.
|    
|(11) | Mr. Downey was promoted to an executive
    officer position with Summit on February 6, 2002.                                                                                                                                                                                                                                                                    

44



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##### 





|     |                                                                                                                                                                                                                                                                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | Mr. Ell received 2,288 shares of common
    stock on January 2, 2001 under his 1998 Performance Stock
    Agreement. 1,716 of these shares vested prior to
    December 31, 2002 and the remaining 572 shares vested in
    January 2003 (the value of the unvested shares as of
    December 31, 2002 was $10,182). Dividends were paid on all
    such shares.  
|    
|(13) | Mr. Adzema was promoted to an executive
    officer position with Summit on December 20, 2001.                                                                                                                                                                                                                                                                    
|    
|(14) | Mr. Adzema received 1,556 shares of common
    stock on January 2, 2001 under his 1998 Performance Stock
    Agreement. 1,167 of these shares vested prior to
    December 31, 2002 and the remaining 389 shares vested in
    January 2003 (the value of the unvested shares as of
    December 31, 2002 was $6,924). Dividends were paid on all
    such shares.

Option Grants Table.The following table sets forth the options granted with respect
to the fiscal year ended December 31, 2002 to Summits
Executive Officers.

Option Grants in Last Fiscal Year

|                   |  |                   |           |                      |  |             |       |                       |  |                    |       |         |  |  |        |  |  |  |           |  |  |  |           | 
|------------------ |  | ----------------- | --------- | -------------------- |  | ----------- | ----- | --------------------- |  | ------------------ | ----- | ------- |  |  | ------ |  |  |  | --------- |  |  |  | --------- | 
|                   |  |                   |           |                     
|                   |  | Individual Grants |           | Potential Realizable
|                   |  |                   |           | Value at Assumed    
|                   |  | Number of         |           | Percent of           |  |             |       | Annual Rates of Stock
|                   |  | Securities        |           | Total Options        |  |             |       | Price Appreciation   
|                   |  | Underlying        |           | Granted              |  | Exercise or |       |                       |  | For Option Term(1)
|                   |  | Options           |           | to Employees         |  | Base Price  |       | Expiration            |  |                   
|Name               |  | Granted(#)        |           | in Fiscal Year       |  | ($/Sh)      |       | Date                  |  | 5% ($)             |       | 10% ($)
|                   |  |                   |           |                      |  |             |       |                       |  |                    |       |        
|Steven R. LeBlanc  |  |                   | 240,000(2 | )                    |  |             | 33.10 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 3,320,564 |  |  |  | 8,414,960 | 
|Michael L. Schwarz |  |                   | 120,000(3 | )                    |  |             | 16.55 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 1,660,282 |  |  |  | 4,207,480 | 
|Douglas E. Brout   |  |                   | 80,000(4  | )                    |  |             | 11.03 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 1,106,855 |  |  |  | 2,804,987 | 
|Keith L. Downey    |  |                   | 80,000(5  | )                    |  |             | 11.03 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 1,106,855 |  |  |  | 2,804,987 | 
|Randall M. Ell     |  |                   | 80,000(4  | )                    |  |             | 11.03 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 1,106,855 |  |  |  | 2,804,987 | 
|Gregg D. Adzema    |  |                   | 80,000(4  | )                    |  |             | 11.03 | %                     |  |                    | 22.00 |         |  |  | 2/6/12 |  |  |  | 1,106,855 |  |  |  | 2,804,987 | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The options will only have value if they are
    exercised, and that value will depend entirely on the share
    price on the exercise date. Potential realizable values are
    based on assumed compound annual appreciation rates specified by
    the SEC. These increases in value are based on speculative
    assumptions and are not intended to forecast possible future
    appreciation, if any, of Summits stock price.
|   
|(2) | These options vest as follows: 36,000 shares
    vested on March 1, 2003; 48,000 shares vest on
    March 1, 2004; 48,000 shares vest on March 1, 2005;
    48,000 shares vest on March 1, 2006; and 60,000 shares vest
    on March 1, 2007.                                                                                                                                                                                       
|   
|(3) | These options vest as follows: 18,000 shares
    vested on March 1, 2003; 24,000 shares vest on
    March 1, 2004; 24,000 shares vest on March 1, 2005;
    24,000 shares vest on March 1, 2006; and 30,000 shares vest
    on March 1, 2007.                                                                                                                                                                                       
|   
|(4) | These options vest as follows: 12,000 shares
    vested on March 1, 2003; 16,000 shares vest on
    March 1, 2004; 16,000 shares vest on March 1, 2005;
    16,000 shares vest on March 1, 2006; and 20,000 shares vest
    on March 1, 2007.                                                                                                                                                                                       
|   
|(5) | These options vest as follows: 12,000 shares
    vested on December 6, 2002; 16,000 shares vest on
    December 6, 2003; 16,000 shares vest on December 6,
    2004; 16,000 shares vest on December 6, 2005; and 20,000
    shares vest on December 6, 2006.                                                                                                                                                                        

45



---



##### 



Aggregated Option Exercises and Fiscal
Year-End Option Value Table.The
following table sets forth the aggregate number of options to
purchase shares of common stock exercised in 2002 and the value
of options to purchase shares of common stock held on
December 31, 2002 by Summits Executive Officers.

Aggregated Option Exercises in Fiscal Year
2002 and

Fiscal Year-End 2002 Option Values


|                   |  |             |        |              |  |                                |        |                           |  |  |                 |  |  |  |               | 
|------------------ |  | ----------- | ------ | ------------ |  | ------------------------------ | ------ | ------------------------- |  |  | --------------- |  |  |  | ------------- | 
|                   |  | Shares      |        |              |  | Number of Securities           |        | Value of Unexercised     
|                   |  | Acquired    |        |              |  | Underlying Unexercised         |        | In-the-Money Options     
|                   |  | on Exercise |        | Value        |  | Options at Fiscal Year-End (#) |        | at Fiscal Year-End ($)(1)
|Name               |  | (#)         |        | Realized ($) |  | Exercisable/Unexercisable      |        | Exercisable/Unexercisable
|                   |  |             |        |              |  |                                |        |                          
|Steven R. LeBlanc  |  |             |       |              |  |                                |       |                           |  |  | 304,600/284,400 |  |  |  | 58,500/14,625 | 
|Michael L. Schwarz |  |             | 30,000 |              |  |                                | 20,100 |                           |  |  | 103,600/155,400 |  |  |  | 46,800/11,700 | 
|Douglas E. Brout   |  |             |       |              |  |                                |       |                           |  |  | 42,400/142,400  |  |  |  | 3,120/3,120   | 
|Keith L. Downey    |  |             |       |              |  |                                |       |                           |  |  | 28,000/71,000   |  |  |  | 18,300/3,900  | 
|Randall M. Ell     |  |             |       |              |  |                                |       |                           |  |  | 69,200/127,800  |  |  |  | 8,320/2,080   | 
|Gregg D. Adzema    |  |             |       |              |  |                                |       |                           |  |  | 21,200/111,200  |  |  |  | 1,560/1,560   | 



|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(1) | Based on a closing price of $17.80 per share of
    common stock on December 31, 2002.

Employment and Noncompetition
Agreements

Summit has entered into employment agreements
with the Executive Officers (collectively, the Employment
Agreements). The Employment Agreement with Mr. LeBlanc has
a term through July 1, 2004, with such Employment Agreement
automatically extending thereafter for consecutive one-year
terms unless otherwise terminated pursuant to the provisions
thereof. The Employment Agreement with Mr. Schwarz had an
original term through February 16, 1996 and, thereafter,
automatically continues until otherwise terminated pursuant to
the provisions thereof. The respective Employment Agreements
with Messrs. Brout, Downey, Ell and Adzema continue until
either party gives advance notice to the other terminating the
employment relationship, which notice may be given without cause
and for any or no reason.

Each Employment Agreement provides that the
Executive Officers base salary will be reviewed on an
annual basis and may be increased or decreased, subject to the
limitation that the base salary of Mr. LeBlanc may not be
decreased below $410,000. The Employment Agreements also provide
that the Executive Officers will be paid such other amounts as
the Compensation Committee, in its discretion, determines to
award.

The Employment Agreements with
Messrs. LeBlanc and Brout also provide for certain
severance benefits. If Mr. LeBlancs employment is
terminated either by Summit without cause or by
Mr. LeBlanc for cause (each as defined in his
Employment Agreement) during the original term or any extended
term of his Employment Agreement, Mr. LeBlanc will be
entitled to receive his base salary, as in effect on the date of
termination, for the period ending on the later of July 1,
2004 or the first anniversary of the date of termination. Under
such circumstances, Mr. LeBlanc also will be entitled to
receive an amount equal to the bonus paid to him in the calendar
year immediately preceding such termination of his employment
with Summit. Upon the termination of Mr. LeBlancs
employment by reason of death or disability, his estate or he,
as the case may be, will be entitled to receive payments equal
to (a) his base salary, as in effect on the date of
termination, through the period ending on the later of
July 1, 2004 or the first anniversary of the date of
termination, plus (b) an amount equal to the bonus paid to him
in the calendar year immediately preceding such termination,
except that in the case of termination by reason of disability,
the amount of such payments shall be offset by the proceeds of
any disability plan awards provided by Summit. The Employment
Agreement with Mr. LeBlanc provides that if his employment is
terminated by Summit for cause or if he voluntarily
terminates his employment other than for cause (each
as defined in his Employment Agreement), no severance amount
will be payable. If Mr. Brouts employment is
terminated by Summit without cause, Mr. Brout
will be entitled to receive an amount equal to his monthly base
salary multiplied by the number of years, or portions thereof,
that Mr. Brout was employed by Summit prior to such
termination.

46



---



##### 



The Employment Agreements with
Messrs. Schwarz, Downey, Ell and Adzema do not provide for
any severance amounts to be payable upon the termination of
their employment with Summit. These Executive Officers and
Messrs. LeBlanc and Brout have severance agreements with
Summit that entitle them to severance benefits in certain
circumstances as described below.

Each of the Executive Officers also entered into
a noncompetition agreement with Summit, or an employment
agreement that includes substantially the same terms as these
noncompetition agreements (collectively, the
Noncompetition Agreements). Subject to certain
limited exceptions, the Noncompetition Agreements prohibit all
of the Executive Officers from engaging in any businesses prior
to their termination of employment, other than those of Summit,
without the prior written consent of the President of Summit.
The Noncompetition Agreements also prohibit the Executive
Officers for a two-year period following the termination of
their employment with Summit, from hiring certain key employees
of Summit or participating in any efforts to persuade such
employees to leave Summit and, for a one-year period following
the termination of their employment with Summit, from engaging
in any manner, directly or indirectly, in any business which
engages or attempts to engage in the acquisition, development,
construction, operation, management or leasing of any of
Summits then existing communities or development or
acquisition opportunities. Under the Noncompetition Agreements,
such Executive Officers are prohibited from disclosing trade
secrets and, for prescribed periods, other confidential
information of Summit.

Severance Agreements

Summit entered into severance agreements
(collectively, the Severance Agreements) with
(a) Mr. LeBlanc on July 1, 1998,
(b) Mr. Schwarz on April 2, 1997,
(c) Mr. Ell on June 1, 2000 and (d) each of
Messrs. Brout, Downey and Adzema on December 17, 2001.
The Severance Agreements provide for the payment of severance
benefits equal to three times such Executive Officers
annual base salary and cash bonus in the event of the
termination of such Executive Officers employment under
certain circumstances following a change in control
of Summit or a combination transaction involving a
consolidation or merger. The benefits payable under the terms of
the Severance Agreements are subject to reduction by the amount
of any severance benefits payable under applicable Employment
Agreements. In the event that any payment of severance benefits
to an Executive Officer, pursuant to the terms of his Severance
Agreement or otherwise (the Severance Payments),
would be subject to the excise tax imposed under
Section 4999 of the Internal Revenue Code, or any interest
or penalties with respect to such excise tax (collectively, the
Excise Tax), the Severance Agreements provide for an
additional payment such that the Executive Officer, after
deduction of any Excise Tax on the Severance Payments and any
federal, state and local income tax, employment tax and Excise
Tax on such additional payment, will receive an amount equal to
the Severance Payments.

Compensation Committee Interlocks and Insider
Participation

The Compensation Committee of Summits Board
of Directors currently consists of Ms. Riches and
Messrs. Allwin, Fishkind, Hance and Schwab. None of these
individuals has served as an officer or employee of Summit or
any of its subsidiaries. Mr. Hance is Vice Chairman and
Chief Financial Officer of Bank of America, a lending
institution that has provided financing and related services to
us on customary terms and conditions. Bank of America has
provided us with credit enhancements on certain of our apartment
communities financed with tax-exempt bonds and is a member of a
group of banks that provides our $225 million unsecured
credit facility. Bank of Americas commitment amount in
connection with such credit facility is $40 million. During
2002, Bank of America invested approximately $600,000 of its
$8.8 million commitment amount in certain historic tax
credit ventures with us. Bank of America is also the counter
party to a fixed-to-floating interest rate swap with a notional
amount of $50 million that we entered into during 2002.

Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

The following table sets forth the beneficial
ownership of common units for (a) the directors and the
executive officers of Summit, (b) the directors (including
Independent Directors) and executive officers of Summit as a
group, and (c) each of our limited partners that we believe
hold more than 5% beneficial interest in us. All

47



---



##### 



such beneficial interest are owned directly, and
the indicated person has sole voting and investment power. The
information in the following table was provided by the
unitholders listed and reflects their beneficial ownership known
by us as of December 31, 2002. On that date, there were
30,980,526 common units outstanding.


|                                                                 |  |                    |              |            |  |  |      |   
|---------------------------------------------------------------- |  | ------------------ | ------------ | ---------- |  |  | ---- | --
|                                                                 |  | Number of          |              | Percent of
|                                                                 |  | Common             |              | All       
|Name and Business Address                                        |  | Units Beneficially |              | Common    
|of Beneficial Owners*                                            |  | Owned(1)           |              | Units     
|                                                                 |  |                    |              |           
|Directors and Executive Officers                                 |  |                    |              |            |  |  |      |   
|William B. McGuire, Jr.                                          |  |                    | 620,313      |            |  |  | 2.0  | % 
|William F. Paulsen                                               |  |                    | 596,045      |            |  |  | 1.9  | % 
|Steven R. LeBlanc                                                |  |                    |             |            |  |  |     |   
|Michael L. Schwarz                                               |  |                    |             |            |  |  |     |   
|Douglas E. Brout                                                 |  |                    |             |            |  |  |     |   
|Keith L. Downey                                                  |  |                    | 1,723        |            |  |  |      | **
|Randall M. Ell                                                   |  |                    |             |            |  |  |     |   
|Gregg D. Adzema                                                  |  |                    |             |            |  |  |     |   
|James M. Allwin                                                  |  |                    |             |            |  |  |     |   
|Henry H. Fishkind                                                |  |                    |             |            |  |  |     |   
|James H. Hance, Jr.                                              |  |                    |             |            |  |  |     |   
|Wendy P. Riches                                                  |  |                    |             |            |  |  |     |   
|Nelson Schwab III                                                |  |                    |             |            |  |  |     |   
|All Directors and Executive Officers as a Group
    (13 persons) |  |                    | 1,218,081    |            |  |  | 3.9  | % 
|5% Holder                                                        |  |                    |              |            |  |  |      |   
|Summit Properties Inc.                                           |  |                    | 27,436,060(1 | )          |  |  | 88.6 | % 



| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | The address for each of the beneficial owners
    listed above is: c/o Summit Properties Inc., 309 East Morehead
    Street, Suite 200, Charlotte, North Carolina 28202.



|   |                       
|-- | ----------------------
|** | Less than one percent.



|    |                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes 309,805 common units that represent
    Summits general partnership interest in the Operating
    Partnership and 27,126,255 common units that represent
    Summits limited partnership interest in the Operating
    Partnership.

Item 13.     Certain
Relationships and Related Transactions

The Operating Partnership is managed by Summit,
in its capacity as general partner of the Operating Partnership.

Certain Business Relationships and
Transactions with Management

Relationships with Bank of
America.As discussed above,
Mr. Hance is Vice Chairman and Chief Financial Officer of
Bank of America, a lending institution that has provided
financing and related services to us on customary terms and
conditions. Bank of America has provided us with credit
enhancements on certain of our apartment communities financed
with tax-exempt bonds and is a member of a group of banks that
provides our $225 million unsecured credit facility. Bank
of Americas commitment amount in connection with such
credit facility is $40 million. During 2002, Bank of
America invested approximately $600,000 of its $8.8 million
commitment in certain historic tax credit ventures with us. Bank
of America is also the counter party to a fixed-to-floating
interest rate swap with a notional amount of $50 million
entered into during 2002.

Property Management
Fees.The Management Company provides
onsite and asset management services to apartment communities
held by partnerships in which affiliates of Messrs. McGuire
and Paulsen are general partners. During 2002, the Management
Company received management fees of $296,487 in the aggregate for

48



---



##### 



the performance of such services. The fees
charged by the Management Company to these partnerships were no
less than the fees charged to other third-party recipients of
such services.


Airplane Charter
Fees.From time to time, Summit
charters an airplane from SMT Aviation, which is 100% owned by
Mr. Paulsen. During 2002, Summit paid fees of approximately
$5,410 to SMT Aviation.

Employment Arrangements with
Messrs. McGuire and Paulsen.Summit entered into an amended and restated employment agreement
with Mr. McGuire on August 24, 2001 and with
Mr. Paulsen on April 3, 2001, each of which expires on
December 31, 2011. Each of the employment agreements
provides that the annual base salary of each of
Messrs. McGuire and Paulsen, effective as of
January 1, 2002 and for the balance of the term of such
agreement, will be $200,000 per year unless Mr. McGuire or
Mr. Paulsen, respectively, ceases to be an employee member
of the Board of Directors of Summit, in which case such annual
base salary shall be reduced to $175,000. Messrs. McGuire
and Paulsen also are entitled to participate in Summits
employee stock option plans and employee benefit plans. During
2002, each of Messrs. McGuire and Paulsen were paid a base
salary of $200,000. Summit granted each of Messrs. McGuire
and Paulsen options to purchase 5,000 shares of common stock, at
an exercise price of $22.34, which options vested on
May 21, 2002, the date of grant, and expire on May 21,
2012.

The employment agreements with
Messrs. McGuire and Paulsen also provide for certain
severance benefits. If the employment of Mr. McGuire or
Mr. Paulsen, respectively, is terminated by Summit or such
employee for any or no reason prior to the expiration of the
term of the agreement, Mr. McGuire or Mr. Paulsen will be
entitled to receive his base salary for the remainder of the
term of his agreement. In addition, all stock options and
restricted stock held by Mr. McGuire or Mr. Paulsen,
as the case may be, shall become fully vested upon such
termination and, subject to the terms of the 1994 Stock Plan,
all such stock options shall remain outstanding for the
remainder of their original terms. Under such circumstances, any
loan from Summit to Mr. McGuire or Mr. Paulsen, as the
case may be, pursuant to Summits Employee Loan Program
shall continue in place for the remainder of its term.

In addition, each of Messrs. McGuire and
Paulsen has entered into a noncompetition agreement with Summit.
Each noncompetition agreement contains substantially the same
terms as the noncompetition agreements of the Executive Officers
described above under Item 11, Executive Compensation
of Directors and Executive OfficersEmployment and
Noncompetition Agreements, except that each of
Messrs. McGuire and Paulsen is required to devote only a
portion of his respective business time to Summit.

Loans to Officers and Employees

The Board of Directors of Summit, including the
Compensation Committee thereof, believes that ownership of
Summits common stock by executive officers and certain
other qualified employees of Summit and its subsidiaries aligns
the interests of such officers and employees with the interests
of the stockholders of Summit. To further such goal of aligning
the interests of such officers and employees with the interests
of the stockholders of Summit, the Board of Directors on
September 8, 1997 approved and Summit instituted a loan
program. The Board of Directors has amended the terms of the
loan program from time to time since its inception. Pursuant to
the loan program, Summit has loaned amounts to or on behalf of
certain of Summits executive officers and key employees (a
Loan) for one or more of the following purposes:
(i) to finance the purchase of common stock on the open
market at then-current market prices; (ii) to finance an
employees payment of the exercise price of one or more
stock options to purchase shares of common stock granted to such
employee under the 1994 Stock Plan; or (iii) to finance the
annual tax liability or other expenses of an executive officer
related to the vesting of shares of common stock which
constitute a portion of a restricted stock award granted to such
executive officer under the 1994 Stock Plan. As a result of
recent legislation, Summit is no longer permitted to make loans
to its executive officers and, therefore, new issuances to
executive officers under the loan program have been terminated.
Loans in existence on July 30, 2002 are grandfathered so
long as there is no material modification to any term of those
Loans, including any renewal.

Pursuant to the loan program, at no time could
the maximum aggregate outstanding balance of Loans to an
executive officer exceed $500,000 (unless such limit was
otherwise waived by the Board of Directors or the Compensation
Committee), and at no time could the maximum aggregate
outstanding balance of Loans to a

49



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##### 



qualified employee exceed $200,000 (unless
similarly waived). The Board of Directors has chosen to increase
such limit for certain individuals. Prior to the termination of
the program for executive officers, the limits were $500,000 for
Mr. McGuire, $1,000,000 for Mr. Paulsen, $5,650,000
for Mr. LeBlanc, $3,050,000 for Mr. Schwarz, $1,650,000 for
Messrs. Brout, Downey and Ell, and $1,150,000 for
Mr. Adzema. Prior to such termination, Loans had been
extended to Messrs. McGuire and Paulsen and each of
Summits executive officers for the purpose of financing
the purchase of common stock or the payment of the annual tax
liability related to the vesting of shares of common stock which
constitute a portion of a restricted stock award.


Pursuant to the loan program, the relevant
executive officer or employee has executed a Promissory Note and
Security Agreement (Note) related to each Loan made
by Summit. Each Note bears interest at a rate established on the
date of the Note. In all cases, the interest rate is fixed and
the Note becomes due and payable in full no later than the tenth
anniversary of the Note (the Maturity Date). The
shares of common stock, which are the subject of a Loan, serve
as collateral (the Collateral Stock) for the Note
and will not be released to the relevant executive officer or
employee until such time as the Note has been paid in full. In
the past, shares of the Collateral Stock were released, from
time to time, by Summit to the relevant executive officer or
employee to the extent that the fair market value of the
remaining shares exceeded the outstanding principal balance by a
certain percentage determined by the Board of Directors.

Until the Maturity Date, the executive officer or
employee to whom a Loan has been extended will only be required
to repay such Loan through the application to the outstanding
Loan balance of all dividends and distributions related to the
Collateral Stock, first to interest, and the remainder, if any,
to outstanding principal. All of the outstanding Loans extended
by Summit are full recourse against the applicable executive
officer or employee. If the market price of Summits common
stock falls materially below the price at which the shares of
stock were purchased, the proceeds of the sale may not be
sufficient to repay the Loan. However, since the Loans are full
recourse, we have the right to collect any additional amount
owed directly from the executive officer or employee to the
extent such executive officer or employee is able to pay such
amount.

Generally, the outstanding principal balance of a
Loan becomes due and payable, among other circumstances, within
120 days after termination of the employment with Summit of
the executive officer or employee to whom such Loan has been
extended. However, as discussed above, the employment agreements
with Messrs. McGuire and Paulsen provide that any Loan from
Summit to Mr. McGuire or Mr. Paulsen, as the case may be,
shall continue in place for the remainder of its term in the
event of any such termination. In addition, Loans from Summit to
each of Mr. LeBlanc and Mr. Schwarz in the aggregate
original principal amounts of $1,961,065 and $927,310,
respectively, shall continue in place for their terms if such
executive officers employment is terminated by Summit
without cause or following a change in
control of Summit. As of December 31, 2002, the
aggregate outstanding principal balance of such Loans was
$1,690,655 for Mr. LeBlanc, with respect to which 68,663
shares of common stock serve as collateral, and $817,026 for
Mr. Schwarz, with respect to which 32,914 shares of Common
Stock serve as collateral.

From the inception of the loan program through
December 31, 2002, Summit extended Loans totaling
approximately $25,319,933 to its executive officers and
employees, including Loans with the aggregate original principal
amounts of $499,814 to Mr. McGuire, $999,995 to
Mr. Paulsen, $5,611,000 to Mr. LeBlanc, $2,976,840 to
Mr. Schwarz, $1,664,855 to Mr. Brout, $1,664,849 to
Mr. Downey, $1,664,586 to Mr. Ell, and $1,166,999 to
Mr. Adzema. At no time did the aggregate outstanding
balances of these Loans exceed the individual loan maximums set
forth above.



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Loans to Messrs. McGuire and Paulsen in the
    original principal amounts of $499,814 and $999,995,
    respectively, bear interest at 6.21% per year (made in January
    2000). As of December 31, 2002, the principal amount
    outstanding was $449,108 and $898,547 with respect to which
    26,280 and 52,579 shares of common stock serve as collateral,
    respectively.                                                                                                                                                               
| 
| | Loans to Mr. LeBlanc in the original
    principal amount of (i) $960,578 bear interest at 5.57% per
    year (made in August 1998), (ii) $1,000,487 bear interest
    at 4.71% per year (made in February 1999), (iii) $999,995
    bear interest at 6.21% per year (made in January 2000), and
    (iv) $2,649,940 bear interest at 4.65% per year (made in
    April 2002). As of December 31, 2002, the aggregate
    principal amount outstanding was $5,218,452 with respect to
    which 235,404 shares of common stock serve as collateral.

50



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##### 





|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Loans to Mr. Schwarz in the original
    principal amount of (i) $404,044 bear interest at 6.13% per
    year (made in January 1998), (ii) $55,838 bear interest at
    5.68% per year (made in July 1998), (iii) $17,425 bear
    interest at 5.56% per year (made in August 1998),
    (iv) $450,004 bear interest at 4.71% per year (made in
    February 1999), (v) $499,969 bear interest at 6.21% per
    year (made in January 2000), (vi) $57,750 bear interest at
    6.40% per year (made in May 2000), (vii) $99,973 bear
    interest at 6.33% per year (made in August 2000),
    (viii) $91,843 bear interest at 6.01% per year (made in
    November 2000), and (ix) $1,299,994 bear interest at 4.65%
    per year (made in April 2002). As of December 31, 2002, the
    aggregate principal amount outstanding was $2,797,711 with
    respect to which 125,905 shares of common stock serve as
    collateral.
| 
| | Loans to Mr. Brout in the original principal
    amount of (i) $90,000 bear interest at 5.27% per year (made
    in July 1999), (ii) $750,011 bear interest at 6.21% per
    year (made in January 2000), (iii) $125,032 bear interest
    at 5.07% per year (made in February 2001), and
    (iv) $699,812 bear interest at 4.74% per year (made in June
    2002). As of December 31, 2002, the aggregate principal
    amount outstanding was $1,559,338 with respect to which 77,868
    shares of common stock serve as collateral.                                                                                                                                                                                                                                                                                                                                                                                         
| 
| | Loans to Mr. Downey in the original
    principal amount of (i) $90,000 bear interest at 4.64%
    (made in January 1999), (ii) $15,000 bear interest at 5.27%
    (made in July 1999), (iii) $750,011 bear interest at 6.21%
    (made in January 2000), (iv) $109,843 bear interest at
    6.01% (made in November 2000), and (v) $699,995 bear
    interest at 4.65% (made in April 2002). As of December 31,
    2002, the aggregate principal amount outstanding was $1,554,994
    with respect to which 77,537 shares of common stock serve as
    collateral.                                                                                                                                                                                                                                                                                                                                                            
| 
| | Loans to Mr. Ell in the original principal
    amount of (i) $50,000 bear interest at 5.98% per year (made
    in April 1998), (ii) $50,000 bear interest at 4.64% per
    year (made in January 1999), (iii) $8,000 bear interest at
    6.30% per year (made in January 2000), (iv) $125,354 bear
    interest at 6.21% per year (made in January 2000),
    (v) $125,045 bear interest at 6.40% per year (made in May
    2000), (vi) $499,160 bear interest at 6.01% per year (made
    in November 2000), (vii) $107,032 bear interest at 5.07% per
    year (made in February 2001), and (viii) $699,995 bear
    interest at 4.65% (made in April 2002). As of December 31,
    2002, the aggregate principal amount outstanding was $1,595,654
    with respect to which 71,650 shares of common stock serve as
    collateral.                                                                                          
| 
| | Loans to Mr. Adzema in the original
    principal amount of (i) $85,000 bear interest at 5.68%
    (made in July 1998), (ii) $21,000 bear interest at 5.27%
    (made in July 1999), (iii) $250,004 bear interest at 6.21%
    (made in January 2000), (iv) $111,000 bear interest at
    5.07% (made in February 2001), and (v) $699,995 bear
    interest at 4.65% per year (made in April 2002). As of
    December 31, 2002, the aggregate principal amount
    outstanding was $1,109,379 with respect to which 51,323 shares
    of common stock serve as collateral.                                                                                                                                                                                                                                                                                                                                                      

Item 14.     Controls
and Procedures

(a) Evaluation of disclosure controls and
procedures.

As required by Rule 13a-15 under the
Securities Exchange Act of 1934, within the 90 days prior
to the date of this report, we carried out an evaluation under
the supervision and with the participation of our management,
including Summits Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon
that evaluation, Summits Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and
procedures are reasonably effective to ensure that information
required to be disclosed by us in the reports we file or submit
under the Exchange Act is recorded, processed and summarized and
reported, within the time periods specified in the Securities
and Exchange Commissions rules and forms. In connection
with the rules regarding disclosure controls and procedures, we
intend to continue to review and document our disclosure
controls and procedures, including our internal controls and
procedures for financial reporting, and may from time to time
make changes aimed at enhancing their effectiveness and to
ensure that our systems evolve with our business.

51



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##### 



(b) Changes in internal controls.

None

PART IV

Item 15.     Exhibits,
Financial Statement Schedules and Reports on
Form 8-K

(a) Financial Statements and Financial
Statement Schedule

The consolidated financial statements are listed
in the Index to Financial Statements on page 63 of this
Report.

(b) Reports on Form 8-K

On October 3, 2002, we filed a Current
Report on Form 8-K dated September 27, 2002, in
connection with an amendment to our Amended and Restated Credit
Agreement.

(c) Exhibits

As noted below, certain of the exhibits required
by Item 601 of Regulation S-K have been filed with
previous reports by the Company and are incorporated by
reference herein.

|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|No.     |       | Description
|        |       |            
|        | 3.1   |             |  | Amended and Restated Agreement of Limited
    Partnership of the Operating Partnership, dated as of
    May 23, 2000 (Incorporated by reference to Exhibit 3.1
    to the Operating Partnerships Current Report on
    Form 8-K filed on May 30, 2000, File
    No. 000-22411).                                                                                                                 
|        | 3.2   |             |  | Assignment and Assumption agreement, dated as of
    March 27, 2002, by and between the Operating Partnership
    and Summit (Incorporated by reference to Exhibit 3.2 to the
    Operating Partnerships Annual Report on Form 10-K for
    the fiscal year ended December 31, 2001, File
    No. 000-22411).                                                                                   
|        | 4.1.1 |             |  | Indenture dated as of August 7, 1997 between
    the Operating Partnership and First Union National Bank,
    relating to the Operating Partnerships Senior Debt
    Securities (Incorporated by reference to Exhibit 4.1 to the
    Operating Partnerships Current Report on Form 8-K
    filed on August 11, 1997, File No. 000-22411).                                                      
|        | 4.1.2 |             |  | Supplemental Indenture No. 1, dated as of
    August 12, 1997, between the Operating Partnership and
    First Union National Bank (Incorporated by reference to
    Exhibit 4.1 to the Operating Partnerships Amended
    Current Report on Form 8-K/A-1 filed on August 18,
    1997, File No. 000-22411).                                                                                    
|        | 4.1.3 |             |  | Supplemental Indenture No. 2, dated as of
    December 17, 1997, between the Operating Partnership and
    First Union National Bank (Incorporated by reference to
    Exhibit 4.1 to the Operating Partnerships Amended
    Current Report on Form 8-K/A-1 filed on December 17,
    1997, File No. 000-22411).                                                                                
|        | 4.1.4 |             |  | Supplemental Indenture No. 3, dated as of
    May 29, 1998, between the Operating Partnership and First
    Union National Bank (Incorporated by reference to
    Exhibit 4.2 to the Operating Partnerships Current
    Report on Form 8-K filed on June 2, 1998, File
    No. 000-22411).                                                                                                      
|        | 4.1.5 |             |  | Supplemental Indenture No. 4, dated as of
    April 20, 2000, between the Operating Partnership and First
    Union National Bank, including a form of Floating Rate
    Medium-Term Note and a form of Fixed Rate Medium-Term Note
    (Incorporated by reference to Exhibit 4.2 to the Operating
    Partnerships Current Report on Form 8-K filed on
    April 28, 2000, File No. 000-22411).
|        | 4.2.1 |             |  | The Operating Partnerships 6.95% Note due
    2004, dated August 12, 1997 (Incorporated by reference to
    Exhibit 4.3 to the Operating Partnerships Amended
    Current Report on Form 8-K/A-1 filed on August 18,
    1997, File No. 000-22411).                                                                                                                                            

52



---



##### 



|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                                          
|------- | ------ | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|No.     |        | Description
|        |        |            
|        | 4.2.2  |             |  | The Operating Partnerships 7.20% Note due
    2007, dated August 12, 1997 (Incorporated by reference to
    Exhibit 4.4 to the Operating Partnerships Amended
    Current Report on Form 8-K/A-1 filed on August 18,
    1997, File No. 000-22411).                                                                                                                                    
|        | 4.2.3  |             |  | The Operating Partnerships 6.63% Note due
    2003, dated December 17, 1997 (Incorporated by reference to
    Exhibit 4.2 to the Operating Partnerships Amended
    Current Report on Form 8-K/A-1 filed on December 17,
    1997, File No. 000-22411).                                                                                                                                
|        | 4.2.4  |             |  | 7.59% Medium-Term Note due 2009 in the principal
    amount of $25,000,000 issued by the Operating Partnership on
    March 18, 1999 (Incorporated by reference to
    Exhibit 4.1 to the Operating Partnerships Quarterly
    Report on Form 10-Q for the quarterly period ended
    March 31, 1999, File No. 000-22411).                                                              
|        | 4.2.5  |             |  | 8.50% Medium-Term Note due 2010 in the principal
    amount of $10,000,000 issued by the Operating Partnership on
    July 19, 2000 (Incorporated by reference to
    Exhibit 10.2 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended September 30,
    2000, File No. 001-12792).                                                                             
|        | 4.2.6  |             |  | 7.87% Medium-Term Note due 2003 in the principal
    amount of $17,000,000 issued by the Operating Partnership on
    October 20, 2000 (Incorporated by reference to
    Exhibit 4.2.8 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2000,
    File No. 001-12792).                                                                                  
|        | 4.2.7  |             |  | 8.037% Medium-Term Note due 2005 in the principal
    amount of $25,000,000 issued by the Operating Partnership on
    November 17, 2000 (Incorporated by reference to
    Exhibit 4.2.9 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2000,
    File No. 001-12792).                                                                                
|        | 4.2.8  |             |  | 7.04% Medium-Term Note due 2006 in the principal
    amount of $25,000,000 issued by the Operating Partnership on
    May 9, 2001 (Incorporated by reference to Exhibit 10.2
    to Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2001, File
    No. 001-12792).                                                                                    
|        | 4.2.9  |             |  | 7.703% Medium-Term Note due 2011 in the principal
    amount of $35,000,000 issued by the Operating Partnership on
    May 9, 2001 (Incorporated by reference to Exhibit 10.3
    to Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2001, File
    No. 001-12792).                                                                                   
|        | 10.1.1 |             |  | Articles of Incorporation of Summit (Incorporated
    by reference to Exhibit 3.1 to Summits Registration
    Statement on Form S-11, Registration no. 33-90706).                                                                                                                                                                                                                       
|        | 10.1.2 |             |  | Articles Supplementary to the Articles of
    Amendment and Restatement of Summit Properties Inc. designating
    8.95% Series B Cumulative Redeemable Perpetual Preferred
    Stock of Summit dated April 29, 1999 (Incorporated by
    reference to Exhibit 3.1 to Summits Quarterly Report
    on Form 10-Q for the quarterly period ended March 31,
    1999, File No. 001-12792).  
|        | 10.1.3 |             |  | Articles Supplementary to the Articles of
    Amendment and Restatement of Summit Properties Inc. designating
    8.75% Series C Cumulative Redeemable Perpetual Preferred
    Stock of Summit dated September 3, 1999 (Incorporated by
    reference to Exhibit 99.1 to the Operating
    Partnerships Current Report on Form 8-K filed on
    September 17, 1999, File No. 000-22411).
|        | 10.1.4 |             |  | Bylaws of Summit (Incorporated by reference to
    Exhibit 3.2 to Summits Registration Statement on
    Form S-11, Registration No. 33-90706).                                                                                                                                                                                                                                          
|        | 10.1.5 |             |  | First Amendment to Bylaws of Summit (Incorporated
    by reference to Exhibit 3.2 to Summits Quarterly
    Report on Form 10-Q for the quarterly period ended
    March 31, 2001, File No. 001-12792).                                                                                                                                                                                  
|        | 10.1.6 |             |  | Second Amendment to Bylaws of Summit
    (Incorporated by reference to Exhibit 3.3 to Summits
    Quarterly Report on Form 10-Q for the quarterly period
    ended March 31, 2001, File No. 001-12792).                                                                                                                                                                                 
|        | 10.2.1 |             |  | Articles of Incorporation of Summit Management
    Company (Incorporated by reference to Exhibit 10.2 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1999, File No. 001-12792).                                                                                                                                                                   

53



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##### 



|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ------ | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|No.     |        | Description
|        |        |            
|        | 10.2.2 |             |  | Bylaws of Summit Management Company (Incorporated
    by reference to Exhibit 10.3 to Summits Annual Report
    on Form 10-K for the fiscal year ended December 31,
    1999, File No. 001-12792).                                                                                                                                                                                                                                                                              
|        | 10.3   |             |  | Shareholder Rights Agreement, dated as of
    December 14, 1998, between Summit and First Union National
    Bank, as Rights Agent (Incorporated by reference to
    Exhibit 4.1 to Summits Registration Statement on
    Form 8-A, filed on December 16, 1998).                                                                                                                                                                                                                
|        | 10.4   |             |  | Summits 1994 Stock Option and Incentive
    Plan, as amended and restated (Incorporated by reference to
    Exhibit 4.5 to Summits Registration Statement on
    Form S-8, Registration No. 333-79897).                                                                                                                                                                                                                                                                        
|        | 10.5.1 |             |  | Summits 1996 Non-Qualified Employee Stock
    Purchase Plan (Incorporated by reference to Exhibit 10.5 to
    Summits Registration Statement on Form S-8,
    Registration No. 333-00078).                                                                                                                                                                                                                                                                                     
|        | 10.5.2 |             |  | First Amendment to Summits 1996
    Non-Qualified Employee Stock Purchase Plan (Incorporated by
    reference to Exhibit 10.5.2 to Summits Annual Report
    on Form 10-K for the fiscal year ended December 31,
    1999, File No. 001-12792).                                                                                                                                                                                                                                
|        | 10.5.3 |             |  | Second Amendment to Summits 1996
    Non-Qualified Employee Stock Purchase Plan (Incorporated by
    reference to Exhibit 10.5.3 to Summits Annual Report
    on Form 10-K for the fiscal year ended December 31,
    1999, File No. 001-12792).                                                                                                                                                                                                                               
|        | 10.5.4 |             |  | Third Amendment to Summits 1996
    Non-Qualified Employee Stock Purchase Plan (Incorporated by
    reference to Exhibit 10.5.4 to Summits Annual Report
    on Form 10-K for the fiscal year ended December 31,
    1999, File No. 001-12792).                                                                                                                                                                                                                                
|        | 10.6   |             |  | Indemnification Agreements, dated as of various
    dates, by and among Summit, the Operating Partnership, and each
    director and each of the following executive officers of Summit:
    Steven R. LeBlanc, Michael L. Schwarz, Randall M. Ell, Gregg D.
    Adzema, Douglas E. Brout and Keith L. Downey (Incorporated by
    reference to Exhibit 10.3 to Summits Quarterly Report
    on Form 10-Q for the quarterly period ended June 30,
    1999, File No. 001-12792).
|        | 10.7.1 |             |  | Employment Agreement dated February 15,
    1999, by and among William F. Paulsen, Summit and Summit
    Management Company, as restated on April 3, 2001
    (Incorporated by reference to Exhibit 10.1 to Summits
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 30, 2001, File No. 000-12792).                                                                                                                                                    
|        | 10.7.2 |             |  | Employment Agreement, dated February 15,
    1999, by and among William B. McGuire, Jr., Summit and
    Summit Management Company, as restated on August 24, 2001
    (Incorporated by reference to Exhibit 10.1 to Summits
    Quarterly Report on Form 10-Q for the quarterly period
    ended September 30, 2001, File No. 001-12792).                                                                                                                                       
|        | 10.7.3 |             |  | Employment Agreement between Summit and Michael
    L. Schwarz (Incorporated by reference to Exhibit 10.7.10 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1997, File No. 001-12792).                                                                                                                                                                                                                                                    
|        | 10.7.4 |             |  | Employment Agreement between Summit and Steven R.
    LeBlanc (Incorporated by reference to Exhibit 10.7.4 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2000, File No. 001-12792).                                                                                                                                                                                                                                                      
|        | 10.7.5 |             |  | Employment Agreement between Summit Management
    Company and Randall M. Ell (Incorporated by reference to
    Exhibit 10.2 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2000, File No. 001-12792).                                                                                                                                                                                                                                
|        | 10.7.6 |             |  | Employment Agreement between Summit Management
    Company and Gregg D. Adzema (Incorporated by reference to
    Exhibit 10.7.7 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2001,
    File No. 001-12792).                                                                                                                                                                                                                                 
|        | 10.7.7 |             |  | Employment Agreement between Summit Management
    Company and Douglas E. Brout (Incorporated by reference to
    Exhibit 10.7.8 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2001,
    File No. 001-12792).                                                                                                                                                                                                                                
|        | 10.7.8 |             |  | Addendum to Employment Agreement between Summit
    Management Company and Douglas E. Brout (Incorporated by
    reference to Exhibit 10.8.8 to Summits Annual Report
    on Form 10-K for the fiscal year ended December 31,
    2002, File No. 000-12792).                                                                                                                                                                                                                    

54



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##### 



|        |         |             |  |                                                                                                                                                                                                                                                                                                                                                                         
|------- | ------- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         |            
|No.     |         | Description
|        |         |            
|        | 10.7.9  |             |  | Employment Agreement, dated February 24,
    1994, by and among Keith L. Downey, Summit and Summit Management
    Company (Incorporated by reference to Exhibit 10.1 to
    Summits Quarterly Report on Form 10-Q for the quarterly
    period ended March 31, 2002, File No. 001-12792).                                                                              
|        | 10.8.1  |             |  | Noncompetition Agreement between Summit and
    William F. Paulsen (Incorporated by reference to
    Exhibit 10.5 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended March 31,
    2000, File No. 001-12792).                                                                                                                                 
|        | 10.8.2  |             |  | Noncompetition Agreement between Summit and
    William B. McGuire, Jr. (Incorporated by reference to
    Exhibit 10.7 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended March 31,
    2000, File No. 001-12792).                                                                                                                            
|        | 10.8.3  |             |  | Noncompetition Agreement between Summit and
    Michael L. Schwarz (Incorporated by reference to
    Exhibit 10.8.10 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1997,
    File No. 001-12792).                                                                                                                                   
|        | 10.8.4  |             |  | Noncompetition Agreement between Summit and
    Steven R. LeBlanc (Incorporated by reference to
    Exhibit 10.8.11 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1998,
    File No. 001-12792).                                                                                                                                    
|        | 10.8.5  |             |  | Noncompetition Agreement by and among Summit,
    Summit Management Company and Randall M. Ell (Incorporated by
    reference to Exhibit 10.4 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2000, File No. 001-12792).                                                                                                      
|        | 10.9.1  |             |  | Executive Severance Agreement between Summit and
    Michael L. Schwarz (Incorporated by reference to
    Exhibit 10.9.3 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1997,
    File No. 001-12792).                                                                                                                               
|        | 10.9.2  |             |  | Executive Severance Agreement between Summit and
    Steven R. LeBlanc (Incorporated by reference to
    Exhibit 10.9.6 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1998,
    File No. 001-12792).                                                                                                                                
|        | 10.9.3  |             |  | Executive Severance Agreement between Summit and
    Randall M. Ell (Incorporated by reference to Exhibit 10.3
    to Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2000, File
    No. 001-12792).                                                                                                                                 
|        | 10.9.4  |             |  | Amended Executive Severance Agreement between
    Summit and Gregg D. Adzema (Incorporated by reference to
    Exhibit 10.9.4 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2001,
    File No. 001-12792).                                                                                                                          
|        | 10.9.5  |             |  | Amended Executive Severance Agreement between
    Summit and Douglas E. Brout (Incorporated by reference to
    Exhibit 10.9.5 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 2001,
    File No. 001-12792).                                                                                                                         
|        | 10.9.6  |             |  | Executive Severance Agreement, dated
    December 17, 2001, by and between Summit and Keith L.
    Downey (Incorporated by reference to Exhibit 10.2 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2002, File
    No. 001-12792).                                                                                          
|        | 10.10.1 |             |  | Form of Promissory Note and Security Agreement
    between Summit and the employees named in the Schedule thereto
    (Incorporated by reference to Exhibit 10.14.3 to
    Summits Annual Report on Form 10-K for the fiscal year
    ended December 31, 1997, File No. 001-12792).                                                                                    
|        | 10.10.2 |             |  | Promissory Note and Security Agreement, dated
    January 31, 2000, evidencing a loan of $499,814 to William
    B. McGuire, Jr. for the purpose of purchasing shares of
    common stock of Summit (Incorporated by reference to
    Exhibit 10.1 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended March 31,
    2000, File No. 001-12792).
|        | 10.10.3 |             |  | Promissory Note and Security Agreement, dated
    January 31, 2000, evidencing a loan of $999,995 to William
    F. Paulsen for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.2 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2000, File
    No. 001-12792).     

55



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##### 



|        |          |             |  |                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -------- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |          |            
|No.     |          | Description
|        |          |            
|        | 10.10.4  |             |  | Promissory Note and Security Agreement, dated
    August 5, 1998, evidencing a loan of $960,578 to Steven R.
    LeBlanc for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.12.4 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1998, File No. 001-12792).                        
|        | 10.10.5  |             |  | Promissory Note and Security Agreement, dated
    February 2, 1999, evidencing a loan of $1,000,487 to Steven
    R. LeBlanc for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.12.10 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1998, File No. 001-12792).                   
|        | 10.10.6  |             |  | Promissory Note and Security Agreement, dated
    January 31, 2000, evidencing a loan of $999,995 to Steven
    R. LeBlanc for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.3 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2000, File
    No. 001-12792).                
|        | 10.10.7  |             |  | Promissory Note and Security Agreement, dated
    April 30, 2002, evidencing a loan of $2,649,940 to Steven
    R. LeBlanc for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.3 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2002, File
    No. 001-12792).                 
|        | 10.10.8  |             |  | Promissory Note and Security Agreement, dated
    January 28, 1998, evidencing a loan of $42,258 to Michael
    L. Schwarz for the purpose of paying tax liability associated
    with a restricted stock award (Incorporated by reference to
    Exhibit 10.14.1 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1997,
    File No. 001-12792).
|        | 10.10.9  |             |  | Promissory Note and Security Agreement, dated
    January 30, 1998, evidencing a loan of $361,785 to Michael
    L. Schwarz for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.3 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 1998, File
    No. 001-12792).               
|        | 10.10.10 |             |  | Promissory Notes and Security Agreements, dated
    various dates from July 29, 1998 to May 1, 2000,
    evidencing loans in the aggregate amount of $131,013 to Michael
    L. Schwarz (Incorporated by reference to Exhibit 10.11.9 to
    Summits Annual Report on Form 10-K for the fiscal year
    ended December 31, 2000, File No. 001-12792).                            
|        | 10.10.11 |             |  | Promissory Note and Security Agreement, dated
    February 2, 1999, evidencing a loan of $450,004 to Michael
    L. Schwarz for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.12.11 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1998, File No. 001-12792).                    
|        | 10.10.12 |             |  | Promissory Note and Security Agreement, dated
    January 31, 2000, evidencing a loan of $499,969 to Michael
    L. Schwarz for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.4 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2000, File
    No. 001-12792).               
|        | 10.10.13 |             |  | Promissory Note and Security Agreement, dated
    August 1, 2000, evidencing a loan of $99,973 to Michael L.
    Schwarz for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.3 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended September 30, 2000, File
    No. 001-12792).              
|        | 10.10.14 |             |  | Promissory Note and Security Agreement, dated
    November 7, 2000, evidencing a loan of $91,843 to Michael
    L. Schwarz for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.11.13 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2000, File No. 001-12792).                     
|        | 10.10.15 |             |  | Promissory Note and Security Agreement, dated
    April 30, 2002, evidencing a loan of $1,299,994 to Michael
    L. Schwarz for the purpose of purchasing shares of common stock
    of Summit (Incorporated by reference to Exhibit 10.1 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2002, File
    No. 001-12792).                

56



---



##### 



|        |          |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------- | -------- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |          |            
|No.     |          | Description
|        |          |            
|        | 10.10.16 |             |  | Promissory Notes and Security Agreements, dated
    various dates from April 1, 1998 through May 17, 2000,
    evidencing loans in the aggregate amount of $358,399 to Randall
    M. Ell for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.6 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2000, File
    No. 001-12792).
|        | 10.10.17 |             |  | Promissory Note and Security Agreement, dated
    November 7, 2000, evidencing a loan of $499,160 to Randall
    M. Ell for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.11.16 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2000, File No. 001-12792).                                                                      
|        | 10.10.18 |             |  | Promissory Note and Security Agreement, dated
    February 6, 2001, evidencing a loan of $107,032 to Randall
    M. Ell for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.1 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2001, File
    No. 001-12792).                                                                 
|        | 10.10.19 |             |  | Promissory Note and Security Agreement, dated
    April 30, 2002, evidencing a loan of $699,995 to Randall M.
    Ell for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.5 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2002, File
    No. 001-12792).                                                                    
|        | 10.10.20 |             |  | Promissory Notes and Security Agreements, dated
    various dates from July 1998 to February 2001, evidencing loans
    in the aggregate amount of $476,004 to Gregg D. Adzema for the
    purpose of purchasing shares of common stock of Summit
    (Incorporated by reference to Exhibit 10.11.18 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2001, File No. 001-12792).           
|        | 10.10.21 |             |  | Promissory Note and Security Agreement, dated
    April 30, 2002, evidencing a loan of $699,995 to Gregg D.
    Adzema for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.2 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2002, File
    No. 001-12792).                                                                   
|        | 10.10.22 |             |  | Promissory Notes and Security Agreements, dated
    various dates from July 1999 to February 2001, evidencing loans
    in the aggregate amount of $965,043 to Douglas E. Brout for the
    purpose of purchasing shares of common stock of Summit
    (Incorporated by reference to Exhibit 10.11.19 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2001, File No. 001-12792).          
|        | 10.10.23 |             |  | Promissory Note and Security Agreement, dated
    June 12, 2002, evidencing a loan of $699,995 to Douglas E.
    Brout for the purpose of purchasing shares of common stock of
    Summit (Incorporated by reference to Exhibit 10.6 to
    Summits Quarterly Report on Form 10-Q for the
    quarterly period ended June 30, 2002, File
    No. 001-12792).                                                                   
|        | 10.10.24 |             |  | Promissory Notes and Security Agreements, dated
    various dates from January 4, 1999 to November 7,
    2000, evidencing loans in the aggregate amount of $964,854 to
    Keith L. Downey (Incorporated by reference to Exhibit 10.3
    to Summits Quarterly Report on Form 10-Q for the
    quarterly period ended March 31, 2002, File
    No. 001-12792).                                                                
|        | 10.10.25 |             |  | Promissory Note and Security Agreement, dated
    April 30, 2002, evidencing a loan in the amount of $699,995
    to Keith L. Downey for the purpose of purchasing shares of
    common stock of Summit (Incorporated by reference to
    Exhibit 10.4 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).                                                     
|        | 10.10.26 |             |  | Amendment, dated December 29, 2000, to each
    of the Promissory Notes and Security Agreements dated prior to
    January 4, 2000 executed by William B. McGuire, Jr.,
    William F. Paulsen and the executive officers of Summit
    (Incorporated by reference to Exhibit 10.11.17 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 2000, File No. 001-12792).                         

57



---



##### 



|        |          |             |  |                                                                                                                                                                                                                                                                                                                                                                                           
|------- | -------- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |          |            
|No.     |          | Description
|        |          |            
|        | 10.10.27 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Steven R. LeBlanc related to the Promissory Note and Security
    Agreement dated August 5, 1998 (Incorporated by reference
    to Exhibit 10.13 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).   
|        | 10.10.28 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Steven R. LeBlanc related to the Promissory Note and Security
    Agreement dated February 2, 1999 (Incorporated by reference
    to Exhibit 10.14 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792). 
|        | 10.10.29 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Michael L. Schwarz related to the Promissory Note and Security
    Agreement dated August 6, 1998 (Incorporated by reference
    to Exhibit 10.8 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).   
|        | 10.10.30 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Michael L. Schwarz related to the Promissory Note and Security
    Agreement dated February 2, 1999 (Incorporated by reference
    to Exhibit 10.9 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792). 
|        | 10.10.31 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Michael L. Schwarz related to the Promissory Note and Security
    Agreement dated January 28, 1998 (Incorporated by reference
    to Exhibit 10.10 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).
|        | 10.10.32 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Michael L. Schwarz related to the Promissory Note and Security
    Agreement dated January 30, 1998 (Incorporated by reference
    to Exhibit 10.11 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).
|        | 10.10.33 |             |  | Second Amendment to Promissory Note and Security
    Agreement, dated May 16, 2002, by and between Summit and
    Michael L. Schwarz related to the Promissory Note and Security
    Agreement dated July 29, 1998 (Incorporated by reference to
    Exhibit 10.12 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended June 30,
    2002, File No. 001-12792).   
|        | 10.11.1  |             |  | Registration Rights Agreement, dated
    October 12, 1994, between Summit and PK Partners, L.P.
    (Incorporated by reference to Exhibit 10.15.1 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1997, File No. 001-12792).                                                                                                                        
|        | 10.11.2  |             |  | Registration Rights Agreement, dated
    February 8, 1994, by and among Summit and the Continuing
    Investors named therein (Incorporated by reference to
    Exhibit 10.13.2 to Summits Annual Report on
    Form 10-K for the fiscal year ended December 31, 1999,
    File No. 001-12792).                                                                                          
|        | 10.11.3  |             |  | Registration Rights Agreement, dated
    December 11, 1995, between Summit and Bissell Ballantyne,
    LLC (Incorporated by reference to Exhibit 10.2 to
    Summits Registration Statement on Form S-3,
    Registration No. 333-24669).                                                                                                                                                
|        | 10.11.4  |             |  | Registration Rights Agreement, dated
    January 10, 1996, by and among Summit, Joseph H. Call and
    Gary S. Cangelosi (Incorporated by reference to
    Exhibit 10.2 to Summits Registration Statement on
    Form S-3, Registration No. 333-24669).                                                                                                                                  

58



---



##### 



|        |         |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ------- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         |            
|No.     |         | Description
|        |         |            
|        | 10.11.5 |             |  | Registration Rights Agreement, dated
    February 20, 1997, by and among Summit, The Northwestern
    Mutual Life Insurance Company, J. Ronald Terwilliger, J. Ronald
    Terwilliger Grantor Trust, Crow Residential Realty Investors,
    L.P., Douglas A. Hoeksema, Randy J. Pace, Clifford A. Breining,
    TCF Residential Partnership, Ltd. and Trammell S. Crow
    (Incorporated by reference to Exhibit 10.2 to Summits
    Registration Statement on Form S-3, Registration
    No. 333-24669).
|        | 10.11.6 |             |  | Registration Rights Agreement, dated May 16,
    1995, by and among Summit and the individuals named therein
    executed in connection with the Crosland Acquisition
    (Incorporated by reference to Exhibit 10.15.6 to
    Summits Annual Report on Form 10-K for the fiscal
    year ended December 31, 1997, File No. 001-12792).                                                                                                                                                                  
|        | 10.11.7 |             |  | Registration Rights and Lock-up Agreement, dated
    October 31, 1998, by and among Summit, the Operating
    Partnership, and the holders named therein executed in
    connection with the Ewing Acquisition (Incorporated by reference
    to Exhibit 99.1 to Summits Registration Statement on
    Form S-3, Registration No. 333-93923).                                                                                                                                                            
|        | 10.11.8 |             |  | Registration Rights and Lock-up Agreement, dated
    as of March 6, 1998, by and between Summit and St. Clair
    Associates, L.P. (Incorporated by reference to Exhibit 99.1
    to Summits Registration Statement on Form S-3,
    Registration No. 333-75704).                                                                                                                                                                                                                                        
|        | 10.11.9 |             |  | Registration Rights and Lock-up Agreement, dated
    as of August 1, 2000, by and among Summit, Worthing
    Investors, LLC and Worthing Shiloh Investors, LLC (Incorporated
    by reference to Exhibit 99.2 to Summits Registration
    Statement on Form S-3, Registration No. 333-75704).                                                                                                                                                                                                            
|        | 10.12.1 |             |  | Amended and Restated Credit Agreement, dated as
    of September 26, 2000, by and among the Operating
    Partnership, Summit, the Banks listed therein, and First Union
    National Bank, as Administrative Agent (Incorporated by
    reference to Exhibit 10.1 to Summits Quarterly Report
    on Form 10-Q for the quarterly period ended
    September 30, 2000, File No. 001-12792).                                                                                                              
|        | 10.12.2 |             |  | Amendment No. 1 to Amended and Restated
    Credit Agreement, dated as of July 6, 2001, by and among
    the Operating Partnership, Summit and the lenders named therein
    (Incorporated by reference to Exhibit 10.4 to Summits
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 30, 2001, File No. 001-12792).                                                                                                                                                              
|        | 10.12.3 |             |  | Amendment No. 2 to Amended and Restated
    Credit Agreement, dated as of September 27, 2002, by and
    among the Operating Partnership, Summit and the lenders named
    therein (Incorporated by reference to Exhibit 10.3 to the
    Operating Partnerships Current Report on Form 8-K
    filed October 3, 2002, File No. 000-22411).                                                                                                                                                               
|        | 10.13.1 |             |  | Distribution Agreement, dated as of
    April 20, 2000, by and among the Operating Partnership,
    Summit and the Agents listed therein (Incorporated by reference
    to the Operating Partnerships Current Report on
    Form 8-K filed on April 28, 2000, File
    No. 000-22411).                                                                                                                                                                                                                   
|        | 10.13.2 |             |  | First Amendment to Distribution Agreement, dated
    as of May 8, 2001, by and among the Operating Partnership,
    Summit and the agents named therein (Incorporated by reference
    to Exhibit 10.2 to Summits Quarterly Report on
    Form 10-Q for the quarterly period ended March 31,
    2001, File No. 001-12792).                                                                                                                                                                              
|        | 10.14   |             |  | Swap Transaction, dated June 17, 2002,
    between the Operating Partnership and Bank of America, N.A.
    (Incorporated by reference to Exhibit 10.7 to Summits
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 30, 2002, File No. 001-12792).                                                                                                                                                                                                                                
|        | 12.1    |             |  | Statement Regarding Calculation of Ratios of
    Earnings to Fixed Charges for the Years Ended December 31,
    2002, 2001, 2000, 1999 and 1998 (filed herewith).                                                                                                                                                                                                                                                                                                                                         
|        | 21.1    |             |  | Subsidiaries of the Operating Partnership (filed
    herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 23.1    |             |  | Consent of Deloitte & Touche LLP (filed
    herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                    

59



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, Summit
Properties Partnership, L.P. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Charlotte, North Carolina on March 19, 2003.



| |                                               
| | ----------------------------------------------
| | SUMMIT PROPERTIES PARTNERSHIP, L.P.           
| | By: Summit Properties Inc., as General Partner
|
| | /s/ STEVEN R. LEBLANC                         
|
| |                                               

| |                                      
| | -------------------------------------
| | Steven R. LeBlanc                    
| | President and Chief Executive Officer

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated. Each person has signed
this report as an officer or director of Summit Properties Inc.,
in its capacity as general partner of Summit Properties
Partnership, L.P.

|                                                   |  |                                                                                                                             |  |               
|-------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | --------------
|Signatures                                         |  | Title                                                                                                                       |  | Date          
|                                                   |  |                                                                                                                             |  |               
|/s/ WILLIAM B. MCGUIRE, JR.William B. McGuire, Jr. |  | Co-Chairman of the Board of Directors                                                                                       |  | March 19, 2003
|/s/ WILLIAM F. PAULSENWilliam F. Paulsen           |  | Co-Chairman of the Board of Directors                                                                                       |  | March 19, 2003
|/s/ STEVEN R. LEBLANCSteven R. LeBlanc             |  | President, Chief Executive Officer and Director
    (Principal Executive Officer)                                           |  | March 19, 2003
|/s/ GREGG D. ADZEMAGregg D. Adzema                 |  | Executive Vice President and Chief Financial
    Officer (Principal Financial Officer and Principal Accounting
    Officer) |  | March 19, 2003
|/s/ HENRY H. FISHKINDHenry H. Fishkind             |  | Director                                                                                                                    |  | March 19, 2003
|/s/ HENRY H. FISHKINDHenry H. Fishkind             |  | Director                                                                                                                    |  | March 19, 2003
|/s/ JAMES H. HANCE, JRJames H. Hance, Jr           |  | Director                                                                                                                    |  | March 19, 2003
|/s/ NELSON SCHWAB, IIINelson Schwab, III           |  | Director                                                                                                                    |  | March 19, 2003
|/s/ JAMES M. ALLWINJames M. Allwin                 |  | Director                                                                                                                    |  | March 19, 2003
|/s/ WENDY RICHESWendy Riches                       |  | Director                                                                                                                    |  | March 19, 2003

60



---



##### 



CERTIFICATIONS

I, Steven R. LeBlanc, President and Chief
Executive Officer of Summit Properties Inc., General Partner of
Summit Properties Partnership, L.P., certify that:

1. I have reviewed this annual report on
Form 10-K of Summit Properties Partnership, L.P.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;

4. The registrants other certifying
officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) Designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) Evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) Presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) All significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) Any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying
officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.

Date: March 19, 2003

| |                        
| | -----------------------
| | /s/ STEVEN R. LEBLANC  
| |                        
| | Steven R. LeBlanc      
| | President and          
| | Chief Executive Officer

61



---



##### 



CERTIFICATIONS

I, Gregg D. Adzema, Executive Vice President and
Chief Financial Officer of Summit Properties Inc., General
Partner of Summit Properties Partnership, L.P., certify that:

1. I have reviewed this annual report on
Form 10-K of Summit Properties Partnership, L.P.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;

4. The registrants other certifying
officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) Designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) Evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) Presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) All significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) Any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying
officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.

Date: March 19, 2003

| |                             
| | ----------------------------
| | /s/ GREGG D. ADZEMA         
| |                             
| | Gregg D. Adzema             
| | Executive Vice President and
| | Chief Financial Officer     

62



---



##### 



INDEX TO FINANCIAL STATEMENTS

The following financial statements required to be
included in Item 15(a)(1) are listed below:

Summit Properties Partnership, L.P.

|                                                                                                                                                                          |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                                                                          |  | Page
|                                                                                                                                                                          |  |     
|Independent Auditors Report                                                                                                                                              |  |      | 64 | 
|Consolidated Balance Sheets as of
    December 31, 2002 and 2001                                                                                                          |  |      | 65 | 
|Consolidated Statements of Earnings for the Years
    Ended December 31, 2002, 2001 and 2000                                                                              |  |      | 66 | 
|Consolidated Statements of Partners Equity
    for the Years Ended December 31, 2002, 2001 and 2000                                                                      |  |      | 67 | 
|Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2002, 2001 and 2000                                                                            |  |      | 68 | 
|Notes to Consolidated Financial Statements                                                                                                                                |  |      | 69 | 
|The following financial statement schedule of
    supplementary data of Summit Properties Partnership, L.P.
    required to be included in Item 15(a)(2) is listed below:
|Schedule III  Real Estate
    and Accumulated Depreciation                                                                                                               |  |      | 90 | 

All other schedules are omitted because they are
not applicable or not required.

63



---



##### 



INDEPENDENT AUDITORS REPORT

Board of Directors and Unitholders of

Summit Properties Partnership, L.P.


We have audited the accompanying consolidated
balance sheets of Summit Properties Partnership, L.P. (the
Operating Partnership) as of December 31, 2002
and 2001, and the related consolidated statements of earnings,
partners equity, and cash flows for each of the three
years in the period ended December 31, 2002. Our audit for the
year ended December 31, 2002 also included the financial
statement schedule listed in the Index to Financial Statements
at Item 15. These financial statements and financial
statement schedule are the responsibility of the Operating
Partnerships management. Our responsibility is to express
an opinion on these financial statements and financial statement
schedule based on our audits.

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

In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of the Operating Partnership as of
December 31, 2002 and 2001, and the results of its
operations and its cash flows for each of the three years in the
period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

As discussed in Note 3 to the consolidated
financial statements, the Operating Partnership adopted
Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets, on January 1, 2002.

DELOITTE & TOUCHE LLP

Charlotte, North Carolina

January 30, 2003, except for the eleventh
paragraph of Note 7 and Note 16, as to which the date is
March 5, 2003


64



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS


(Dollars in thousands, except unit
amounts)


|                                                                            |                                                                                |                                                    |           |              |           |   |           |          |           | 
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | -------------------------------------------------- | --------- | ------------ | --------- | - | --------- | -------- | --------- | 
|                                                                            |                                                                                | December 31,                                       |           | December 31,
|                                                                            |                                                                                | 2002                                               |           | 2001        
|                                                                            |                                                                                |                                                    |           |             
|ASSETS                                                                      |                                                                                |                                                    |           |              |           |   |           |         
|Real estate assets:                                                         |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            | Land and land improvements                                                     |                                                    | $         | 191,456      |           |   | $         | 156,748  |          
|                                                                            | Buildings and improvements                                                     |                                                    |           | 980,263      |           |   |           | 883,373  |          
|                                                                            | Furniture, fixtures and equipment                                              |                                                    |           | 75,797       |           |   |           | 66,250   |          
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            |                                                                                | Real estate assets before accumulated depreciation |           |              | 1,247,516 |   |           |          | 1,106,371 | 
|                                                                            | Less: accumulated depreciation                                                 |                                                    |           | (158,158     | )         |   |           | (128,539 | )        
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            |                                                                                | Net operating real estate assets                   |           |              | 1,089,358 |   |           |          | 977,832   | 
|                                                                            | Net real estate assets  held for sale                                         |                                                    |           | 14,914       |           |   |           | 133,256  |          
|                                                                            | Construction in progress                                                       |                                                    |           | 139,263      |           |   |           | 137,474  |          
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            |                                                                                | Net real estate assets                             |           |              | 1,243,535 |   |           |          | 1,248,562 | 
|Cash and cash equivalents                                                   |                                                                                |                                                    | 2,353     |              |           |   | 1,814     |         
|Restricted cash                                                             |                                                                                |                                                    | 62,933    |              |           |   | 21,046    |         
|Investments in Summit Management Company and real
    estate joint ventures |                                                                                |                                                    | 5,355     |              |           |   | 3,159     |         
|Deferred financing costs, net                                               |                                                                                |                                                    | 6,008     |              |           |   | 6,925     |         
|Other assets                                                                |                                                                                |                                                    | 17,785    |              |           |   | 14,939    |         
|Other assets  held for sale                                                |                                                                                |                                                    | 55        |              |           |   | 1,491     |         
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|Total assets                                                                |                                                                                | $                                                  | 1,338,024 |              |           | $ | 1,297,936 |         
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|LIABILITIES AND PARTNERS
    EQUITY                                        |                                                                                |                                                    |           |              |           |   |           |         
|Liabilities:                                                                |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            | Notes payable                                                                  |                                                    | $         | 702,456      |           |   | $         | 694,334  |          
|                                                                            | Note payable  assets held for sale                                            |                                                    |           |             |           |   |           | 25,011   |          
|                                                                            | Accounts payable and accrued expenses                                          |                                                    |           | 33,280       |           |   |           | 21,525   |          
|                                                                            | Distributions payable                                                          |                                                    |           | 10,456       |           |   |           | 14,156   |          
|                                                                            | Accrued interest payable                                                       |                                                    |           | 4,936        |           |   |           | 7,000    |          
|                                                                            | Security deposits and prepaid rents                                            |                                                    |           | 2,464        |           |   |           | 3,213    |          
|                                                                            | Other liabilities  assets held for sale                                       |                                                    |           | 21           |           |   |           | 850      |          
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            |                                                                                | Total liabilities                                  |           |              | 753,613   |   |           |          | 766,089   | 
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|Partners common and preferred equity:                                      |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            | Series B preferred units 
    3,400,000 issued and outstanding                |                                                    |           | 82,713       |           |   |           | 82,713   |          
|                                                                            | Series C preferred units 
    2,200,000 issued and outstanding                |                                                    |           | 53,547       |           |   |           | 53,547   |          
|                                                                            | Partnership common units issued and outstanding:
    30,980,526 and 30,608,345 |                                                    |           |              |           |   |           |          |          
|                                                                            | General partner  outstanding: 309,805
    in 2002 and 306,083 in 2001.        |                                                    |           | 5,213        |           |   |           | 4,687    |          
|                                                                            | Limited partners  outstanding:
    30,670,721 in 2002 and 30,302,262 in 2001  |                                                    |           | 442,938      |           |   |           | 390,900  |          
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|                                                                            |                                                                                | Total partners equity                             |           |              | 584,411   |   |           |          | 531,847   | 
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         
|Total liabilities and partners equity                                      |                                                                                | $                                                  | 1,338,024 |              |           | $ | 1,297,936 |         
|                                                                            |                                                                                |                                                    |           |              |           |   |           |         

See notes to consolidated financial statements.

65



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.


CONSOLIDATED STATEMENTS OF EARNINGS


(Dollars in thousands, except per share
amounts)


|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |            |        |         | 
|---------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | --------------------------------------- | ------------------------------------------------- | ---------- | ------ | ------- | ------ | ---------- | ------ | ------- | ------ | ---------- | ------ | ------- | 
|                                                                                                                             |                                                               |                                        
|                                                                                                                             |                                                               | Year Ended December 31,                
|                                                                                                                             |                                                               |                                        
|                                                                                                                             |                                                               | 2002                                    |                                                   | 2001       |        | 2000   
|                                                                                                                             |                                                               |                                         |                                                   |            |        |        
|Revenues:                                                                                                                    |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Rental                                                        |                                         | $                                                 | 143,791    |        |         | $      | 154,167    |        |         | $      | 149,855    |       
|                                                                                                                             | Other property income                                         |                                         |                                                   | 10,182     |        |         |        | 11,569     |        |         |        | 11,090     |       
|                                                                                                                             | Interest                                                      |                                         |                                                   | 2,571      |        |         |        | 2,265      |        |         |        | 3,592      |       
|                                                                                                                             | Other income                                                  |                                         |                                                   | 478        |        |         |        | 891        |        |         |        | 618        |       
|                                                                                                                             | (Loss) interest income on compensation plans                  |                                         |                                                   | (101       | )      |         |        | (359       | )      |         |        |           |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             |                                                               |                                         | Total revenues                                    |            |        | 156,921 |        |            |        | 168,533 |        |            |        | 165,155 | 
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Expenses:                                                                                                                    |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Property operating and maintenance:                           |                                         |                                                   |            |        |         |        |            |        |         |        |            |       
|                                                                                                                             |                                                               | Personnel                               |                                                   |            | 11,948 |         |        |            | 11,703 |         |        |            | 10,508 |        
|                                                                                                                             |                                                               | Advertising and promotion               |                                                   |            | 2,604  |         |        |            | 2,141  |         |        |            | 2,452  |        
|                                                                                                                             |                                                               | Utilities                               |                                                   |            | 7,540  |         |        |            | 8,012  |         |        |            | 7,589  |        
|                                                                                                                             |                                                               | Building repairs and maintenance        |                                                   |            | 7,384  |         |        |            | 7,418  |         |        |            | 7,187  |        
|                                                                                                                             |                                                               | Real estate taxes and insurance         |                                                   |            | 19,131 |         |        |            | 18,057 |         |        |            | 16,079 |        
|                                                                                                                             |                                                               | Depreciation                            |                                                   |            | 35,848 |         |        |            | 33,933 |         |        |            | 31,710 |        
|                                                                                                                             |                                                               | Property supervision                    |                                                   |            | 4,541  |         |        |            | 4,943  |         |        |            | 5,025  |        
|                                                                                                                             |                                                               | Other operating expenses                |                                                   |            | 2,512  |         |        |            | 2,804  |         |        |            | 2,740  |        
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             |                                                               |                                         | Total property operating and maintenance expenses |            |        | 91,508  |        |            |        | 89,011  |        |            |        | 83,290  | 
|                                                                                                                             | Interest                                                      |                                         |                                                   | 33,315     |        |         |        | 38,301     |        |         |        | 36,880     |       
|                                                                                                                             | Amortization                                                  |                                         |                                                   | 1,282      |        |         |        | 1,414      |        |         |        | 1,056      |       
|                                                                                                                             | General and administrative                                    |                                         |                                                   | 6,133      |        |         |        | 6,958      |        |         |        | 4,752      |       
|                                                                                                                             | Liability adjustment and expense on compensation
    plans    |                                         |                                                   | (101       | )      |         |        | (359       | )      |         |        |           |       
|                                                                                                                             | Loss (income) on equity investments:                          |                                         |                                                   |            |        |         |        |            |        |         |        |            |       
|                                                                                                                             |                                                               | Summit Management Company               |                                                   |            | 308    |         |        |            | (448   | )       |        |            | 779    |        
|                                                                                                                             |                                                               | Real estate joint ventures              |                                                   |            | 49     |         |        |            | 171    |         |        |            | 399    |        
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             |                                                               |                                         | Total expenses                                    |            |        | 132,494 |        |            |        | 135,048 |        |            |        | 127,156 | 
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Income from continuing operations before gain on
    sale of real estate assets, impairment loss and extraordinary
    items |                                                               |                                         | 24,427                                            |            |        |         | 33,485 |            |        |         | 37,999 |           
|                                                                                                                             | Gain on sale of real estate assets                            |                                         |                                                   | 13,831     |        |         |        | 34,435     |        |         |        | 38,510     |       
|                                                                                                                             | Gain on sale of real estate assets 
    joint ventures       |                                         |                                                   | 4,955      |        |         |        | 271        |        |         |        |           |       
|                                                                                                                             | Impairment loss on investments in technology
    companies    |                                         |                                                   |           |        |         |        | (1,217     | )      |         |        |           |       
|                                                                                                                             | Extraordinary items                                           |                                         |                                                   | (103       | )      |         |        |           |        |         |        |           |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Income from continuing operations                                                                                            |                                                               |                                         | 43,110                                            |            |        |         | 66,974 |            |        |         | 76,509 |           
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Income from discontinued operations                           |                                         |                                                   | 8,119      |        |         |        | 10,342     |        |         |        | 10,305     |       
|                                                                                                                             | Extraordinary items                                           |                                         |                                                   | (208       | )      |         |        |           |        |         |        |           |       
|                                                                                                                             | Net gain from disposition of discontinued
    operations      |                                         |                                                   | 64,907     |        |         |        |           |        |         |        |           |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             |                                                               | Net income from discontinued operations |                                                   |            | 72,818 |         |        |            | 10,342 |         |        |            | 10,305 |        
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Net income                                                                                                                   |                                                               |                                         | 115,928                                           |            |        |         | 77,316 |            |        |         | 86,814 |           
|Distributions to Series B preferred
    unitholders                                                                          |                                                               |                                         | (7,608                                            | )          |        |         | (7,608 | )          |        |         | (7,608 | )         
|Distributions to Series C preferred
    unitholders                                                                          |                                                               |                                         | (4,812                                            | )          |        |         | (4,812 | )          |        |         | (4,812 | )         
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Income available to common unitholders                                                                                       |                                                               |                                         | 103,508                                           |            |        |         | 64,896 |            |        |         | 74,394 |           
|Income available to common unitholders allocated
    to general partner                                                      |                                                               |                                         | (1,035                                            | )          |        |         | (649   | )          |        |         | (744   | )         
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Income available to common unitholders allocated
    to limited partners                                                     |                                                               | $                                       | 102,473                                           |            |        | $       | 64,247 |            |        | $       | 73,650 |           
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|Per unit data:                                                                                                               |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Income from continuing operations 
    basic                 |                                         | $                                                 | 1.39       |        |         | $      | 2.17       |        |         | $      | 2.49       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Income from continuing operations 
    diluted               |                                         | $                                                 | 1.39       |        |         | $      | 2.15       |        |         | $      | 2.48       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Net income from discontinued
    operations  basic           |                                         | $                                                 | 2.35       |        |         | $      | 0.34       |        |         | $      | 0.34       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Net income from discontinued
    operations  diluted         |                                         | $                                                 | 2.34       |        |         | $      | 0.33       |        |         | $      | 0.33       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Net income  basic                                            |                                         | $                                                 | 3.75       |        |         | $      | 2.51       |        |         | $      | 2.83       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Net income  diluted                                          |                                         | $                                                 | 3.73       |        |         | $      | 2.49       |        |         | $      | 2.81       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Distributions to Series B preferred
    unitholders  basic   |                                         | $                                                 | (0.25      | )      |         | $      | (0.25      | )      |         | $      | (0.25      | )     
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Distributions to Series B preferred
    unitholders  diluted |                                         | $                                                 | (0.24      | )      |         | $      | (0.24      | )      |         | $      | (0.25      | )     
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Distributions to Series C preferred
    unitholders  basic   |                                         | $                                                 | (0.16      | )      |         | $      | (0.16      | )      |         | $      | (0.16      | )     
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Distributions to Series C preferred
    unitholders  diluted |                                         | $                                                 | (0.15      | )      |         | $      | (0.15      | )      |         | $      | (0.16      | )     
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Income available to common
    unitholders  basic            |                                         | $                                                 | 3.35       |        |         | $      | 2.11       |        |         | $      | 2.42       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Income available to common
    unitholders  diluted          |                                         | $                                                 | 3.33       |        |         | $      | 2.09       |        |         | $      | 2.41       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Distributions declared                                        |                                         | $                                                 | 1.76       |        |         | $      | 1.85       |        |         | $      | 1.75       |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Weighted average units  basic                                |                                         |                                                   | 30,936,881 |        |         |        | 30,795,910 |        |         |        | 30,696,729 |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           
|                                                                                                                             | Weighted average units  diluted                              |                                         |                                                   | 31,107,404 |        |         |        | 31,106,137 |        |         |        | 30,897,346 |       
|                                                                                                                             |                                                               |                                         |                                                   |            |        |         |        |            |        |         |        |           

See notes to consolidated financial statements.

66



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS
EQUITY


(Dollars in thousands)


|                           |                                                           |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |         |        |  
|-------------------------- | --------------------------------------------------------- | ----------------------------------------------- | ------ | --------- | - | ------- | ------ | -------- | - | ----- | ----- | ----- | --- | - | ------- | ------- | ------ | - | ------- | ------- | ------ | -
|                           |                                                           | Series B                                        |        | Series C  |   |         |        |          |   |      
|                           |                                                           | Preferred                                       |        | Preferred |   | General |        | Limited  |   |      
|                           |                                                           | Units                                           |        | Units     |   | Partner |        | Partners |   | Total
|                           |                                                           |                                                 |        |           |   |         |        |          |   |      
|Balance, December 31, 1999 |                                                           | $                                               | 82,718 |           |   | $       | 53,552 |          |   | $     | 4,555 |       |     | $ | 377,845 |         |        | $ | 518,670 |        
|                           | Distributions to common unitholders                       |                                                 |        |          |   |         |        |         |   |       |       | (537  | )   |   |         | (53,120 | )      |   |         | (53,657 | )     
|                           | Contributions from Summit Properties Inc. related
    to: |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |         |       
|                           |                                                           | Proceeds from dividend and stock purchase plans |        |           |  |         |        |          |  |       |       |       | 48  |   |         |         | 4,749  |   |         |         | 4,797  |  
|                           |                                                           | Exercise of stock options                       |        |           |  |         |        |          |  |       |       |       | 21  |   |         |         | 2,064  |   |         |         | 2,085  |  
|                           |                                                           | Repurchase of common stock                      |        |           |  |         |        |          |  |       |       |       | (80 | ) |         |         | (7,940 | ) |         |         | (8,020 | )
|                           |                                                           | Repurchase of common units                      |        |           |  |         |        |          |  |       |       |       | (18 | ) |         |         | (1,741 | ) |         |         | (1,759 | )
|                           |                                                           | Accrual of vested stock awards                  |        |           |  |         |        |          |  |       |       |       | 12  |   |         |         | 1,159  |   |         |         | 1,171  |  
|                           | Issuance of restricted stock grants                       |                                                 |        |          |   |         |        |         |   |       |       | (1    | )   |   |         | (115    | )      |   |         | (116    | )     
|                           | Amortization of restricted stock grants                   |                                                 |        |          |   |         |        |         |   |       |       | 8     |     |   |         | 756     |        |   |         | 764     |       
|                           | Issuance of employee notes receivable                     |                                                 |        |          |   |         |        |         |   |       |       | (108  | )   |   |         | (10,685 | )      |   |         | (10,793 | )     
|                           | Repayments of employee notes receivable                   |                                                 |        |          |   |         |        |         |   |       |       | 14    |     |   |         | 1,371   |        |   |         | 1,385   |       
|                           | Issuance of common units  purchase of
    communities    |                                                 |        |          |   |         |        |         |   |       |       | 22    |     |   |         | 2,195   |        |   |         | 2,217   |       
|                           | Net proceeds from preferred units                         |                                                 |        | (5        | ) |         |        | (5       | ) |       |       |      |     |   |         |        |        |   |         | (10     | )     
|                           | Distributions to preferred unitholders                    |                                                 |        |          |   |         |        |         |   |       |       | (124  | )   |   |         | (12,296 | )      |   |         | (12,420 | )     
|                           | Net income                                                |                                                 |        |          |   |         |        |         |   |       |       | 868   |     |   |         | 85,946  |        |   |         | 86,814  |       
|                           |                                                           |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |        
|Balance, December 31, 2000 |                                                           |                                                 | 82,713 |           |   |         | 53,547 |          |   |       | 4,680 |       |     |   | 390,188 |         |        |   | 531,128 |        
|                           | Distributions to common unitholders                       |                                                 |        |          |   |         |        |         |   |       |       | (569  | )   |   |         | (56,324 | )      |   |         | (56,893 | )     
|                           | Contributions from Summit Properties Inc. related
    to: |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |         |       
|                           |                                                           | Proceeds from dividend and stock purchase plans |        |           |  |         |        |          |  |       |       |       | 77  |   |         |         | 7,596  |   |         |         | 7,673  |  
|                           |                                                           | Exercise of stock options                       |        |           |  |         |        |          |  |       |       |       | 10  |   |         |         | 1,004  |   |         |         | 1,014  |  
|                           |                                                           | Repurchase of common stock                      |        |           |  |         |        |          |  |       |       |       | (2  | ) |         |         | (195   | ) |         |         | (197   | )
|                           |                                                           | Issuance of restricted stock grants             |        |           |  |         |        |          |  |       |       |       | (3  | ) |         |         | (262   | ) |         |         | (265   | )
|                           |                                                           | Amortization of restricted stock grants         |        |           |  |         |        |          |  |       |       |       | 8   |   |         |         | 740    |   |         |         | 748    |  
|                           |                                                           | Issuance of contingent stock grants             |        |           |  |         |        |          |  |       |       |       | (5  | ) |         |         | (458   | ) |         |         | (463   | )
|                           |                                                           | Amortization of contingent stock grants         |        |           |  |         |        |          |  |       |       |       | 6   |   |         |         | 624    |   |         |         | 630    |  
|                           | Issuance of employee notes receivable                     |                                                 |        |          |   |         |        |         |   |       |       | (39   | )   |   |         | (3,901  | )      |   |         | (3,940  | )     
|                           | Repayments of employee notes receivable                   |                                                 |        |          |   |         |        |         |   |       |       | 32    |     |   |         | 3,149   |        |   |         | 3,181   |       
|                           | Issuance of common units  purchase of
    communities    |                                                 |        |          |   |         |        |         |   |       |       | 19    |     |   |         | 1,881   |        |   |         | 1,900   |       
|                           | Redemption of common units  sale of
    communities      |                                                 |        |          |   |         |        |         |   |       |       | (176  | )   |   |         | (17,389 | )      |   |         | (17,565 | )     
|                           | Distributions to preferred unitholders                    |                                                 |        |          |   |         |        |         |   |       |       | (124  | )   |   |         | (12,296 | )      |   |         | (12,420 | )     
|                           | Net income                                                |                                                 |        |          |   |         |        |         |   |       |       | 773   |     |   |         | 76,543  |        |   |         | 77,316  |       
|                           |                                                           |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |        
|Balance, December 31, 2001 |                                                           |                                                 | 82,713 |           |   |         | 53,547 |          |   |       | 4,687 |       |     |   | 390,900 |         |        |   | 531,847 |        
|                           | Distributions to common unitholders                       |                                                 |        |          |   |         |        |         |   |       |       | (546  | )   |   |         | (54,050 | )      |   |         | (54,596 | )     
|                           | Contributions from Summit Properties Inc. related
    to: |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |         |       
|                           |                                                           | Proceeds from dividend and stock purchase plans |        |           |  |         |        |          |  |       |       |       | 91  |   |         |         | 9,048  |   |         |         | 9,139  |  
|                           |                                                           | Exercise of stock options                       |        |           |  |         |        |          |  |       |       |       | 19  |   |         |         | 1,837  |   |         |         | 1,856  |  
|                           |                                                           | Repurchase of common stock                      |        |           |  |         |        |          |  |       |       |       | (27 | ) |         |         | (2,639 | ) |         |         | (2,666 | )
|                           |                                                           | Issuance of restricted stock grants             |        |           |  |         |        |          |  |       |       |       |    |   |         |         | 22     |   |         |         | 22     |  
|                           |                                                           | Netdown of restricted stock grants              |        |           |  |         |        |          |  |       |       |       | (6  | ) |         |         | (613   | ) |         |         | (619   | )
|                           |                                                           | Amortization of restricted stock grants         |        |           |  |         |        |          |  |       |       |       | 10  |   |         |         | 968    |   |         |         | 978    |  
|                           | Issuance of employee notes receivable                     |                                                 |        |          |   |         |        |         |   |       |       | (78   | )   |   |         | (7,735  | )      |   |         | (7,813  | )     
|                           | Repayments of employee notes receivable                   |                                                 |        |          |   |         |        |         |   |       |       | 28    |     |   |         | 2,727   |        |   |         | 2,755   |       
|                           | Distributions to preferred unitholders                    |                                                 |        |          |   |         |        |         |   |       |       | (124  | )   |   |         | (12,296 | )      |   |         | (12,420 | )     
|                           | Net income                                                |                                                 |        |          |   |         |        |         |   |       |       | 1,159 |     |   |         | 114,769 |        |   |         | 115,928 |       
|                           |                                                           |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |        
|Balance, December 31, 2002 |                                                           | $                                               | 82,713 |           |   | $       | 53,547 |          |   | $     | 5,213 |       |     | $ | 442,938 |         |        | $ | 584,411 |        
|                           |                                                           |                                                 |        |           |   |         |        |          |   |       |       |       |     |   |         |         |        |   |         |        

See notes to consolidated financial statements.

67



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH
FLOWS


(Dollars in thousands)


|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |          |         |          |  
|-------------------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------- | -------- | ------- | ------- | ------ | -------- | ------- | ------- | ----- | -------- | ------- | -------- | -
|                                                         |                                                                                       |                                                                     
|                                                         |                                                                                       | Year Ended December 31,                                             
|                                                         |                                                                                       |                                                                     
|                                                         |                                                                                       | 2002                                                                 |                                                         | 2001     |         | 2000   
|                                                         |                                                                                       |                                                                      |                                                         |          |         |        
|Cash flows from operating activities:                    |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         | Net income                                                                            |                                                                      | $                                                       | 115,928  |         |         | $      | 77,316   |         |         | $     | 86,814   |        
|                                                         | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                      |                                                         |          |         |         |        |          |         |         |       |          |        
|                                                         |                                                                                       | Loss (income) on equity method investments                           |                                                         |          | 357     |         |        |          | (276    | )       |       |          | 1,178   |         
|                                                         |                                                                                       | Gain on sale of real estate assets 
    continuing operations       |                                                         |          | (13,831 | )       |        |          | (34,435 | )       |       |          | (38,510 | )       
|                                                         |                                                                                       | Gain on sale of real estate assets 
    discontinued operations     |                                                         |          | (64,907 | )       |        |          |        |         |       |          |        |         
|                                                         |                                                                                       | Gain on sale of real estate assets 
    joint ventures              |                                                         |          | (4,955  | )       |        |          | (271    | )       |       |          |        |         
|                                                         |                                                                                       | Impairment loss on investments in technology
    investments         |                                                         |          |        |         |        |          | 1,217   |         |       |          |        |         
|                                                         |                                                                                       | Depreciation and amortization                                        |                                                         |          | 41,943  |         |        |          | 41,836  |         |       |          | 39,387  |         
|                                                         |                                                                                       | Amortization of deferred settlement on interest
    rate swap        |                                                         |          | (545    | )       |        |          |        |         |       |          |        |         
|                                                         |                                                                                       | Increase in restricted cash                                          |                                                         |          | (814    | )       |        |          | (3,087  | )       |       |          | (3,633  | )       
|                                                         |                                                                                       | Increase in other assets                                             |                                                         |          | (1,460  | )       |        |          | (996    | )       |       |          | (631    | )       
|                                                         |                                                                                       | (Decrease) increase in accrued interest payable                      |                                                         |          | (2,097  | )       |        |          | (696    | )       |       |          | 711     |         
|                                                         |                                                                                       | Increase (decrease) in accounts payable and
    accrued expenses     |                                                         |          | 1,932   |         |        |          | (1,107  | )       |       |          | (2,187  | )       
|                                                         |                                                                                       | (Decrease) increase in security deposits and
    prepaid rents       |                                                         |          | (830    | )       |        |          | (535    | )       |       |          | 259     |         
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         |                                                                                       |                                                                      | Net cash provided by operating activities               |          |         | 70,721  |        |          |         | 78,966  |       |          |         | 83,388   |  
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|Cash flows from investing activities:                    |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         | Construction of real estate assets and land
    acquisitions                          |                                                                      |                                                         | (112,839 | )       |         |        | (117,080 | )       |         |       | (173,473 | )      
|                                                         | Acquisition of real estate assets                                                     |                                                                      |                                                         | (17,866  | )       |         |        |         |         |         |       | (33,373  | )      
|                                                         | Proceeds from sale of real estate assets                                              |                                                                      |                                                         | 139,920  |         |         |        | 147,980  |         |         |       | 105,131  |        
|                                                         | Capitalized interest                                                                  |                                                                      |                                                         | (10,360  | )       |         |        | (11,080  | )       |         |       | (11,117  | )      
|                                                         | Investment in real estate joint ventures                                              |                                                                      |                                                         | (9,075   | )       |         |        | (4,285   | )       |         |       |         |        
|                                                         | Distribution from real estate joint ventures                                          |                                                                      |                                                         | 540      |         |         |        |         |         |         |       |         |        
|                                                         | Proceeds from sale of real estate
    assets  joint ventures                         |                                                                      |                                                         | 11,202   |         |         |        |         |         |         |       |         |        
|                                                         | Contribution from historic tax venture partner                                        |                                                                      |                                                         | 600      |         |         |        |         |         |         |       |         |        
|                                                         | Recurring capital expenditures                                                        |                                                                      |                                                         | (4,530   | )       |         |        | (4,889   | )       |         |       | (5,371   | )      
|                                                         | Non-recurring capital expenditures                                                    |                                                                      |                                                         | (1,088   | )       |         |        | (3,943   | )       |         |       | (2,526   | )      
|                                                         | Corporate and other asset additions and office
    tenant improvements                |                                                                      |                                                         | (2,162   | )       |         |        | (645     | )       |         |       | (439     | )      
|                                                         | Decrease in notes receivable                                                          |                                                                      |                                                         | 68       |         |         |        | 119      |         |         |       | 2,971    |        
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         |                                                                                       |                                                                      | Net cash (used in) provided by investing
    activities |          |         | (5,590  | )      |          |         | 6,177   |       |          |         | (118,197 | )
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|Cash flows from financing activities:                    |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         | Net borrowings (repayments) on line of credit                                         |                                                                      |                                                         | 50,000   |         |         |        | (47,500  | )       |         |       | 63,500   |        
|                                                         | Proceeds from issuance of medium-term notes                                           |                                                                      |                                                         |         |         |         |        | 60,000   |         |         |       | 52,000   |        
|                                                         | Repayments of unsecured medium-term notes                                             |                                                                      |                                                         | (25,000  | )       |         |        | (30,000  | )       |         |       | (25,000  | )      
|                                                         | Repayments of unsecured notes                                                         |                                                                      |                                                         | (16,000  | )       |         |        |         |         |         |       | (15,000  | )      
|                                                         | Proceeds from issuance of mortgage note                                               |                                                                      |                                                         | 6,900    |         |         |        |         |         |         |       | 48,340   |        
|                                                         | Repayments of mortgage debt                                                           |                                                                      |                                                         | (11,912  | )       |         |        | (5,436   | )       |         |       | (8,548   | )      
|                                                         | Repayments of tax exempt bonds                                                        |                                                                      |                                                         | (340     | )       |         |        | (660     | )       |         |       | (1,025   | )      
|                                                         | Payment of deferred financing costs                                                   |                                                                      |                                                         | (549     | )       |         |        | (1,212   | )       |         |       | (2,481   | )      
|                                                         | Proceeds from termination of interest rate swap                                       |                                                                      |                                                         | 1,510    |         |         |        |         |         |         |       |         |        
|                                                         | Distributions to common unitholders                                                   |                                                                      |                                                         | (59,455  | )       |         |        | (56,252  | )       |         |       | (53,253  | )      
|                                                         | Distributions to Series B preferred
    unitholders                                   |                                                                      |                                                         | (7,608   | )       |         |        | (7,608   | )       |         |       | (7,608   | )      
|                                                         | Distributions to Series C preferred
    unitholders                                   |                                                                      |                                                         | (4,812   | )       |         |        | (4,812   | )       |         |       | (4,812   | )      
|                                                         | Issuance of employee notes receivable                                                 |                                                                      |                                                         | (7,813   | )       |         |        | (3,940   | )       |         |       | (10,793  | )      
|                                                         | Repayments of employee notes receivable                                               |                                                                      |                                                         | 2,755    |         |         |        | 3,181    |         |         |       | 1,385    |        
|                                                         | Contributions from Summit Properties related to:                                      |                                                                      |                                                         |          |         |         |        |          |         |         |       |          |        
|                                                         |                                                                                       | Net proceeds from dividend reinvestment and stock
    purchase plans |                                                         |          | 9,139   |         |        |          | 7,673   |         |       |          | 4,797   |         
|                                                         |                                                                                       | Exercise of stock options                                            |                                                         |          | 1,856   |         |        |          | 1,014   |         |       |          | 2,085   |         
|                                                         |                                                                                       | Issuance of restricted stock grants                                  |                                                         |          | (597    | )       |        |          | (728    | )       |       |          | 19      |         
|                                                         |                                                                                       | Repurchase of common units in operating
    partnership              |                                                         |          |        |         |        |          |        |         |       |          | (1,759  | )       
|                                                         |                                                                                       | Repurchase of Summits common stock                                  |                                                         |          | (2,666  | )       |        |          | (197    | )       |       |          | (8,020  | )       
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         |                                                                                       |                                                                      | Net cash (used in) provided by financing
    activities |          |         | (64,592 | )      |          |         | (86,477 | )     |          |         | 33,827   |  
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|Net increase (decrease) in cash and cash
    equivalents |                                                                                       |                                                                      | 539                                                     |          |         |         | (1,334 | )        |         |         | (982  | )       
|Cash and cash equivalents, beginning of year             |                                                                                       |                                                                      | 1,814                                                   |          |         |         | 3,148  |          |         |         | 4,130 |         
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|Cash and cash equivalents, end of period                 |                                                                                       | $                                                                    | 2,353                                                   |          |         | $       | 1,814  |          |         | $       | 3,148 |         
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|Supplemental disclosure of cash flow information:        |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         
|                                                         | Cash paid for interest, net of capitalized
    interest                               |                                                                      | $                                                       | 36,589   |         |         | $      | 40,550   |         |         | $     | 37,938   |        
|                                                         |                                                                                       |                                                                      |                                                         |          |         |         |        |          |         |         |       |         

See notes to consolidated financial statements.

68



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##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Unless the context otherwise requires, all
references to we, our or us
in this report refer collectively to Summit Properties
Partnership, L.P., a Delaware limited partnership (the
Operating Partnership), and its subsidiaries. All
references to Summit in this report refer to Summit
Properties Inc., a Maryland corporation and the sole general
partner of the Operating Partnership.

1.     ORGANIZATION
AND FORMATION

We were formed on January 14, 1994 to
conduct the business of developing, leasing and managing
multifamily apartment communities for Summit. On February 15,
1994, Summit completed an initial public offering of
10 million shares of common stock, par value $0.01 per
share. In connection with the initial public offering, we
consummated a business combination involving the partnerships
which owned 27 communities and the affiliated entities which
provided development, construction, management and leasing
services to each of the communities prior to the initial public
offering. A portion of the proceeds from the initial public
offering was used by Summit to acquire an economic and voting
interest in the Operating Partnership, which was formed to
succeed to substantially all of the interests of the property
partnerships in the communities and the operations of the Summit
entities. Summit became our sole general partner and majority
owner upon completion of the initial public offering. Summit is
a self-administered and self-managed equity real estate
investment trust (REIT).

Summit conducts all of its business through the
Operating Partnership and its subsidiaries. As of
December 31, 2002, Summit held 88.6% of our outstanding
partnership interests, consisting of a 1% general partner
interest and an 87.6% limited partner interest. Each common unit
may be redeemed by the holder for cash equal to the fair value
of a share of Summits common stock or, at our option, one
share of common stock (subject to adjustment). We presently
determine on a case-by-case basis whether we will cause Summit
to issue shares of common stock in connection with a redemption
of common units rather than paying cash. With each redemption of
common units for common stock, Summits percentage
ownership interest in the Operating Partnership will increase.
Similarly, when Summit acquires a share of common stock under
its common stock repurchase program or otherwise, it
simultaneously disposes of one of our common units. In addition,
whenever Summit issues shares of common stock for cash, Summit
will contribute any resulting net proceeds to us and we will
issue an equivalent number of common units to Summit.

Distributions to holders of common units are made
to enable distributions to be made to Summit stockholders under
Summits dividend policy. Federal income tax laws require
Summit, as a REIT, to distribute 90% of its ordinary taxable
income. We make distributions to Summit to enable it to satisfy
this requirement.

2.     BASIS OF
PRESENTATION

All significant intercompany accounts and
transactions have been eliminated in consolidation. We own 1% of
the voting stock and 99% of the non-voting stock of Summit
Management Company (the Management Company). The
remaining 99% of voting stock and 1% of non-voting stock are
held by one of the Co-Chairmen of Summits Board of
Directors. As a result of this stock ownership, we have a 99%
economic interest and the Co-Chairman has a 1% economic interest
in the Management Company. Because of our ability to exercise
significant influence, the Management Company is accounted for
under the equity method of accounting. The Management Company is
not considered material to our consolidated financial statements
taken as a whole.

3.     SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

Real Estate Assets and
Depreciation We
record our real estate assets at cost less accumulated
depreciation and, if necessary, adjust carrying value in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, by reviewing
whether the sum of the estimated future net cash flows
(undiscounted and without interest charges) from an asset to be
held and used is less than the book value of the asset. Assets
to be disposed of are recorded at the lower of carrying amount
or fair value less costs to sell. No impairment existed as of
December 31, 2002.

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Expenditures directly related to the acquisition,
development and improvement of real estate assets are
capitalized at cost as land, buildings and improvements or
furniture, fixtures and equipment. Improvements are categorized
as either non-recurring or recurring capitalized expenditures.
Non-recurring capitalized expenditures primarily consist of the
cost of improvements such as new garages, water submeters, gated
security access and improvements made in conjunction with major
renovations of apartment homes. Recurring capitalized
expenditures consist primarily of floor coverings, furniture,
appliances and equipment and exterior paint and carpentry. All
of these expenditures are capitalized and depreciated over the
estimated useful lives of the assets (buildings 
40 years; building improvements  5 to
15 years; land improvements  15 years;
furniture, fixtures and equipment  5 to 7 years).

Repairs and maintenance, such as landscaping
maintenance, interior painting and cleaning and supplies used in
such activities, are expensed as incurred. We record the cost of
all repairs and maintenance, including planned major maintenance
activities, recurring capital expenditures and non-recurring
capital expenditures as incurred and do not accrue for such
costs in advance.

Interest costs incurred during the construction
period are capitalized and depreciated over the lives of the
constructed assets. Interest capitalized was $10.4 million
in 2002, $11.1 million in 2001 and $11.1 million in
2000.

We capitalize the cost of our development
department to the projects currently under construction at a
rate of 3.0% of such construction costs. Such costs are then
depreciated over the lives of the constructed assets upon their
completion. Such costs capitalized were $3.4 million in
2002, $4.9 million in 2001 and $5.4 million in 2000.

Rental Revenue
Recognition We lease
our residential properties under operating leases with terms of
generally one year or less. Rental revenue is recognized on the
accrual method of accounting as earned, which is not materially
different from revenue recognition on a straight-line basis. Our
allowance for uncollectible rent was $80,000 at
December 31, 2002 and is presented in Other
assets in our consolidated balance sheets.

We lease our office and retail space under
operating leases with terms ranging from two to ten years.
Rental revenue for office and retail spaces is recognized on a
straight-line basis over the lives of the respective leases.
Future minimum rental payments to be received under our current
office leases are as follows (in thousands):

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 1,895  | 
|2004       |  |   | 1,899  | 
|2005       |  |   | 1,950  | 
|2006       |  |   | 1,882  | 
|2007       |  |   | 1,724  | 
|Thereafter |  |   | 5,682  | 
|           |  |   |        | 
|           |  | $ | 15,032 | 
|           |  |   |        | 

Of the amounts listed above, $6.1 million
represents amounts to be received from the Management Company,
which performs all management and leasing activities for us, as
well as management and leasing activities for third parties.

Cash and Cash
Equivalents For
purposes of the statement of cash flows, we consider all highly
liquid investments purchased with an original maturity of three
months or less to be cash equivalents.

Restricted
Cash Restricted cash
is comprised primarily of proceeds from apartment community
sales deposited with a qualified intermediary in accordance with
like-kind exchange income tax rules and regulations. Restricted
cash also includes resident security deposits, bond repayment
escrows and replacement reserve escrows.

Deferred Financing
Costs Deferred
financing costs include fees and costs incurred in conjunction
with long-term financings and are amortized on the straight-line
method over the terms of the related debt, which approximates
the effective interest method.

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Advertising
Costs We expense
advertising costs as incurred.

Equity Method
Investments We
consolidate investments, including joint ventures, in which we
have control, generally those in which we have a direct voting
interest of more than 50%. We record investments in which we
exercise significant influence under the equity method in
accordance with Accounting Principles Board (APB)
Opinion No. 18, The Equity Method of Accounting for
Investments in Common Stock, and AICPA Statement of
Position 78-9, Accounting for Investments in Real Estate
Ventures.

Per Unit
Data Basic earnings
per unit are computed based upon the weighted average number of
units outstanding during the respective period. The difference
between basic and diluted weighted
average units is the dilutive effect of Summits stock
options outstanding. The number of units added to weighted
average units outstanding for the diluted calculation was
170,523 in 2002, 310,227 in 2001 and 200,618 in 2000. Dilution
caused by these options decreased net income per unit by $0.02
in 2002 and 2001 and $0.01 in 2000.

Stock-Based
Compensation Summit
has a Stock Option and Incentive Plan and an Employee Stock
Purchase Plan (ESPP), which are described more fully
in Note 11. Through December 31, 2002, we applied APB
No. 25 and related interpretations in accounting for
Summits stock options and ESPP. Accordingly, no
compensation cost has been recognized for Summits stock
options granted or shares issued under the ESPP during the years
ended December 31, 2002, 2001 and 2000. Effective
January 1, 2003, we adopted the fair value recognition
provisions of SFAS No. 123, Accounting for
Stock-Based Compensation, prospectively to all stock
options granted, modified, or settled after January 1, 2003
as allowed by SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and
Disclosure. The ESPP was suspended effective July 2,
2002. The following table reflects the effect on net income and
earnings per share had the fair value based method been applied
to all options granted in each year (in thousands, except per
share amounts):

|                                                                      |  |      |         |      |  |      |        |   |  |   |        |  
|--------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                                      |  | 2002 |         | 2001 |  | 2000
|                                                                      |  |      |         |      |  |     
|Net income as reported                                                |  | $    | 115,928 |      |  | $    | 77,316 |   |  | $ | 86,814 |  
|Stock-based compensation determined under fair
    value based method |  |      | (1,452  | )    |  |      | (589   | ) |  |   | (432   | )
|                                                                      |  |      |         |      |  |      |        |   |  |   |        |  
|Pro forma net income                                                  |  | $    | 114,476 |      |  | $    | 76,727 |   |  | $ | 86,382 |  
|                                                                      |  |      |         |      |  |      |        |   |  |   |        |  
|Net income per unit as reported  basic                               |  | $    | 3.75    |      |  | $    | 2.51   |   |  | $ | 2.83   |  
|Net income per unit as reported 
    diluted                         |  |      | 3.73    |      |  |      | 2.49   |   |  |   | 2.81   |  
|Pro forma net income per unit  basic                                 |  | $    | 3.70    |      |  | $    | 2.49   |   |  | $ | 2.81   |  
|Pro forma net income per unit  diluted                               |  |      | 3.68    |      |  |      | 2.47   |   |  |   | 2.80   |  

Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.

Recently Adopted and Issued Accounting
Pronouncements In June
2001, the Financial Accounting Standards Board
(FASB) approved SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 142 requires
that upon adoption, amortization of goodwill will cease and
instead, the carrying value of goodwill will be evaluated for
impairment on an annual basis. Identifiable intangible assets
will continue to be amortized over their useful lives and
reviewed for impairment in accordance with SFAS No. 144. We
adopted SFAS No. 142 on January 1, 2002 and its adoption
had no effect on our financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144
which supersedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of and amends APB No. 30, Reporting
the Results of Operations  Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions. Along
with establishing a

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single accounting model, based on the framework
established in SFAS No. 121, for long-lived assets to be
disposed of by sale, this standard retains the basic provisions
of APB No. 30 for the presentation of discontinued
operations in the income statement but broadens that
presentation to include a component of an entity. SFAS
No. 144 requires operating results of communities we
consider held for sale, as well as those sold, to be included in
discontinued operations in our consolidated statements of
earnings prospectively from the date of adoption, which was
January 1, 2002. Although the adoption of SFAS No. 144
did not have a material impact on our financial position or
results of operations for the year ended December 31, 2002,
it did have a significant effect on the comparability of amounts
presented from year to year on the consolidated statements of
earnings.


In April 2002, the FASB issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44 and 64, and
Amendment of FASB Statement No. 13, and Technical
Corrections. This statement requires gains and losses from
the extinguishment of debt to be classified as extraordinary
only if they meet the criteria for extraordinary treatment set
forth in APB No. 30. The statement also amends SFAS
No. 13, Accounting For Leases, to require that
certain lease modifications that have economic effects similar
to sale-leaseback transactions be accounted for in the same
manner as such transactions. Finally, the statement makes
certain technical corrections, which the FASB deemed to be
non-substantive, to a number of existing accounting
pronouncements. The rescission of SFAS Nos. 4, 44 and 64 is
effective in 2003. The amendments to SFAS No. 13 are
effective for transactions occurring after May 15, 2002,
and all other provisions of the statement are effective for
financial statements issued on or after May 15, 2002. The
effect of adopting SFAS No. 145 for those items already
effective did not have a material impact on our financial
position or results of operations.

In December 2002, the FASB issued SFAS
No. 148. This statement amends SFAS No. 123 to provide
alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation. In addition, this statement amends the disclosure
requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee
compensation and the effect of the method used on reported
results. Effective January 1, 2003, we adopted the fair
value recognition provisions of SFAS No. 123, prospectively to
all stock options granted, modified, or settled after
January 1, 2003 as allowed by SFAS No. 148. We
estimate that the resulting expense recognized in 2003 will not
be material to our financial position and results of operations.

In November 2002, the FASB issued FASB
Interpretation No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. This Interpretation
elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations
under certain guarantees that it has issued. It also clarifies
that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. The disclosure requirements
of this Interpretation are currently effective and did not
affect our financial position and results of operations. The
initial recognition and initial measurement provisions of this
Interpretation are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002.

In January 2003, the FASB issued FASB
Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN 46). This
Interpretation requires that variable interest entities created
after January 31, 2003, and variable interest entities in
which an interest is obtained after that date, be evaluated for
consolidation into an entitys financial statements. This
interpretation also applies, beginning July 1, 2003 for us,
to all variable interest entities in which an enterprise holds
an interest that it acquired before February 1, 2003. We
are in the process of evaluating all of our investments and
other interests in entities under the provisions of FIN 46 and
have not yet determined the effect of its adoption on our
financial position and results of operations.

Reclassifications
Certain reclassifications have been made to the 2001 and 2000
financial statements to conform to the 2002 presentation.

4.     REAL ESTATE
JOINT VENTURES

We own a 25% equity interest in a joint venture
named Station Hill, LLC (Station Hill), in which we
and Hollow Creek, LLC, a subsidiary of a major financial
services company, are members. We are entitled to 25%

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of the joint ventures cash flow based on
our equity interest. If certain benchmarks are achieved in the
future, we would be entitled to a preferred return in excess of
25% of the cash flow. The operating agreement of the joint
venture provides that we will be entitled to 25% of the net
proceeds upon liquidation of Station Hill, although our interest
in the residual value of the joint venture could increase above
or decrease below 25%. Our interest in the residual value of the
joint venture could decrease below 25% only if we receive more
than 25% of cash flow at any time prior to liquidation. Any such
decrease would be limited to the extent of cash flow in excess
of 25%. Station Hill currently owns four communities and is
accounted for on the equity method of accounting and, therefore,
our 25% equity interest is presented in Loss
(income) on equity investments: Real estate joint
ventures in our consolidated statements of earnings.


The following are condensed balance sheets as of
December 31, 2002 and 2001 and condensed statements of
earnings for the years ended December 31, 2002 and 2001 for
Station Hill. The balance sheets and statements of earnings set
forth below reflect the financial position and operations of
Station Hill in its entirety, not just our interest in the joint
venture. Included in the statement of earnings information below
for the year ended December 31, 2001 are the results
through the date of disposition of a community formerly known as
Summit Station (230 apartment homes), which was sold by Station
Hill on August 1, 2001.

|                          |                                         |                |        |        |  |   |        |        | 
|------------------------- | --------------------------------------- | -------------- | ------ | ------ |  | - | ------ | ------ | 
|                          |                                         |               
|                          |                                         | Balance Sheets
|                          |                                         |               
|                          |                                         |               
|                          |                                         | (in thousands)
|                          |                                         | 2002           |        | 2001  
|                          |                                         |                |        |       
|Real estate assets, net   |                                         | $              | 72,255 |        |  | $ | 74,261 |       
|Cash and cash equivalents |                                         |                | 370    |        |  |   | 901    |       
|Other assets              |                                         |                | 373    |        |  |   | 283    |       
|                          |                                         |                |        |        |  |   |        |       
|                          | Total assets                            |                | $      | 72,998 |  |   | $      | 75,445 | 
|                          |                                         |                |        |        |  |   |        |       
|Mortgages payable         |                                         | $              | 58,731 |        |  | $ | 59,536 |       
|Other liabilities         |                                         |                | 580    |        |  |   | 575    |       
|Partners capital         |                                         |                | 13,687 |        |  |   | 15,334 |       
|                          |                                         |                |        |        |  |   |        |       
|                          | Total liabilities and partners capital |                | $      | 72,998 |  |   | $      | 75,445 | 
|                          |                                         |                |        |        |  |   |        |       

|                                                                |                               |                |       |       |        |   |        |       |        | 
|--------------------------------------------------------------- | ----------------------------- | -------------- | ----- | ----- | ------ | - | ------ | ----- | ------ | 
|                                                                |                               |               
|                                                                |                               | Statements of 
|                                                                |                               | Earnings      
|                                                                |                               |               
|                                                                |                               |               
|                                                                |                               | (in thousands)
|                                                                |                               | 2001           |       | 2000 
|                                                                |                               |                |       |      
|Revenues                                                        |                               | $              | 9,927 |       |        | $ | 11,829 |      
|Expenses:                                                       |                               |                |       |       |        |   |        |      
|                                                                | Property operating            |                |       | 3,757 |        |   |        | 4,260 |       
|                                                                | Depreciation and amortization |                |       | 2,965 |        |   |        | 3,071 |       
|                                                                | Interest                      |                |       | 3,960 |        |   |        | 4,338 |       
|                                                                |                               |                |       |       |        |   |        |      
|                                                                |                               | Total expenses |       |       | 10,682 |   |        |       | 11,669 | 
|Net (loss) income before gain on sale of
    real estate assets |                               |                | (755  | )     |        |   | 160    |      
|Gain on sale of real estate assets                              |                               |                |      |       |        |   | 1,082  |      
|                                                                |                               |                |       |       |        |   |        |      
|Net (loss) income                                               |                               | $              | (755  | )     |        | $ | 1,242  |      
|                                                                |                               |                |       |       |        |   |        |      

We formerly owned a 50% interest in a joint
venture which developed and operated an apartment community
located in Atlanta, Georgia known as The Heights at Cheshire
Bridge. This joint venture was accounted for under the equity
method of accounting and its operating results are presented in
Loss (income) on equity investments: Real estate
joint ventures in our consolidated statements of earnings.
We had the right to purchase our joint venture partners
interest in the joint venture, but decided subsequent to
December 31, 2001 not to exercise this option which expired
on January 17, 2002. Due to our decision not to purchase
our joint venture partners interest, we were required to
make a capital contribution of $6.8 million, which
represented 25% of the joint ventures total construction
loan amount. We made our contribution on

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February 15, 2002. This contribution did not
change our equity interest in the joint venture. On
September 27, 2002, the joint venture sold The Heights at
Cheshire Bridge to an unrelated third party and the joint
venture was dissolved. We received a preferred return on our
capital contribution in the amount of 9% per year compounded
annually through the sale date. We were entitled to 50% of the
income based on our equity interest, after all preferred return
payments were made. Upon dissolution, we recognized a gain of
$5.0 million on the sale of the joint ventures assets.


On May 25, 2001, we contributed
$4.2 million for a 29.78% interest in a joint venture named
SZF, LLC, which owns substantially all of the interests in a
limited liability company that is developing, through a
third-party contractor, an apartment community in Miami,
Florida. The community will consist of 323 apartment homes and
17,795 square feet of office/retail space. The limited liability
company has also acquired an adjacent piece of land. The
construction costs are being funded through the equity that the
joint venture contributed to the limited liability company and
by a loan to that company from an unrelated third party. In the
event that construction costs exceed the construction loan
amount, we have agreed to advance the amount required to fund
such costs in excess of the construction loan. This advance
accrues a preferential return at the rate of eleven percent
(11%) per year to be paid from the distributions from the joint
venture. As of December 31, 2002, we had advanced
$2.2 million to SZF, LLC. Subsequent to December 31,
2002, we have advanced an additional $6.1 million to SZF,
LLC. Upon completion of construction, which is expected to occur
during 2004, the joint venture will pay, or refinance, the
construction loan. In the event the limited liability company
defaults on the construction loan, we have the right, under
certain circumstances, to cure the defaults, keep the
construction loan in place and complete construction of the
community. We are serving as the managing member of the joint
venture, which owns substantially all of the limited liability
company, and Summit Management Company will be the property
management company for the project after construction is
completed. This project is accounted for on the equity method of
accounting. The balance sheet and income statement information
of SZF, LLC is not material to our consolidated financial
statements taken as a whole.

On April 1, 2002, we entered into a joint
venture with a major financial services institution (the
investor member) to redevelop Summit Grand Parc in
Washington, D.C., formerly the United Mine Workers Building, in
a manner to permit the use of federal rehabilitation income tax
credits. The investor member will contribute approximately
$2.2 million in equity to fund a portion of the total
estimated costs for the project and will receive a preferred
return on this capital investment and an annual asset management
fee. As of December 31, 2002, the investor member had
contributed $200,000. The investor members interest in the
joint venture is subject to put/call rights during the sixth and
seventh years after Summit Grand Parc is placed in service. The
investor member is obligated to fund the balance of its
investment in the joint venture after the completion of a cost
certification process which is scheduled to be completed during
the first half of 2003. If the cost certification is not
completed to the satisfaction of the investor member, then the
investor member will be released from its obligations to fund
its remaining investment and would be entitled to a refund of
any funds previously invested, as well as an agreed upon return
of such previously invested funds. In such an event, we would
expect to replace this equity investment with funds from other
financing sources. This joint venture is consolidated into our
financial statements.

On July 24, 2002, we entered into a joint
venture with a major financial services institution (the
investor member) to redevelop Summit Roosevelt in
Washington, D.C., formerly the Hadleigh apartment hotel, in a
manner to permit the use of federal rehabilitation income tax
credits. The investor member will contribute approximately
$6.6 million in equity to fund a portion of the total
estimated costs for the project and will receive a preferred
return on this capital investment and an annual asset management
fee. As of December 31, 2002, the investor member had
contributed $400,000. The investor members interest in the
joint venture is subject to put/call rights during the sixth and
seventh years after Summit Roosevelt is placed in service. There
are some contingencies remaining (such as final completion of
the redevelopment and final certification of the historic
renovations by the National Park Service) before the investor
member is obligated to fund the balance of its investment in the
joint venture. If these contingencies are not met by the agreed
upon deadlines, then the investor member will be released from
its obligations to fund its remaining investment and would be
entitled to a refund of any funds previously invested, as well
as an agreed upon return of such previously invested funds.

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In such an event, we would expect to replace this
equity investment with funds from other financing sources. This
joint venture is consolidated into our financial statements.


5.     PROPERTY
MANAGEMENT AND RELATED PARTY TRANSACTIONS

In conjunction with our formation, construction,
management and leasing activities for third parties were
transferred to the Management Company and its wholly-owned
subsidiary, Summit Apartment Builders, Inc. (the
Construction Company).

The Management Company also provides property
management services to our communities. Total fees for
management services provided to our communities were
$6.0 million in 2002, $6.5 million in 2001 and
$5.7 million in 2000.

Third party apartment homes under management were
1,105 in 2002, 1,004 in 2001 and 1,723 in 2000. Property
management fees from third parties as a percentage of total
property management revenues were 11.6% in 2002, 12.4% in 2001
and 16.1% in 2000.

In addition, the Management Company provides
management services to apartment communities held by
partnerships in which certain of Summits directors are
general partners. The Management Company received management
fees of $252,000 in 2002 and $253,000 in each of 2001 and 2000
for the performance of such services.

Construction Company revenue consists of fees on
contracts with us. Revenue from construction contracts was
$2.0 million in 2002, $2.7 million in 2001 and
$2.5 million in 2000. The Construction Companys
profits on these contracts are eliminated in consolidation
against our investment in real estate. We had amounts payable to
the Construction Company of $3.0 million as of
December 31, 2002 and $7.0 million as of
December 31, 2001. This amount is included in
Accounts payable and accrued expenses in the
accompanying consolidated balance sheets. Also included in the
accompanying consolidated balance sheets under the caption
Other assets is a receivable from the Construction
Company of $334,000 as of December 31, 2002 and
$3.0 million as of December 31, 2001 as a result of
construction advances.

Summit and the Management Company lease office
space from three of our communities. Scheduled rental payments
to be received from the Management Company by these three
communities through the respective lease expiration dates, the
latest of which is September 30, 2010, are
$6.1 million.

The consolidated statements of earnings of the
Management Company and the Construction Company are summarized
below (in thousands):

|                                         |                                            |                |      |       |       |      |     |       |        |   |      |       |        | 
|---------------------------------------- | ------------------------------------------ | -------------- | ---- | ----- | ----- | ---- | --- | ----- | ------ | - | ---- | ----- | ------ | 
|                                         |                                            | 2002           |      | 2001  |       | 2000
|                                         |                                            |                |      |       |       |     
|Revenues:                                |                                            |                |      |       |       |      |     |       |        |   |      |      
|                                         | Management fees charged to our communities |                | $    | 6,022 |       |      | $   | 6,473 |        |   | $    | 5,735 |       
|                                         | Third party management fee revenue         |                |      | 787   |       |      |     | 913   |        |   |      | 1,103 |       
|                                         | Construction revenue                       |                |      | 2,031 |       |      |     | 2,701 |        |   |      | 2,494 |       
|                                         | Gain on sale of real estate assets         |                |      |      |       |      |     |      |        |   |      | 238   |       
|                                         | Other revenue                              |                |      | 261   |       |      |     | 455   |        |   |      | 372   |       
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      
|                                         |                                            | Total revenues |      |       | 9,101 |      |     |       | 10,542 |   |      |       | 9,942  | 
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      
|Expenses:                                |                                            |                |      |       |       |      |     |       |        |   |      |      
|                                         | Operating                                  |                |      | 8,240 |       |      |     | 9,177 |        |   |      | 9,398 |       
|                                         | Depreciation                               |                |      | 575   |       |      |     | 319   |        |   |      | 313   |       
|                                         | Amortization                               |                |      | 294   |       |      |     | 298   |        |   |      | 303   |       
|                                         | Interest                                   |                |      | 300   |       |      |     | 300   |        |   |      | 677   |       
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      
|                                         |                                            | Total expenses |      |       | 9,409 |      |     |       | 10,094 |   |      |       | 10,691 | 
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      
|(Loss) income before extraordinary items |                                            |                | (308 | )     |       |      | 448 |       |        |   | (749 | )    
|Extraordinary items                      |                                            |                |     |       |       |      |    |       |        |   | (30  | )    
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      
|Net (loss) income                        |                                            | $              | (308 | )     |       | $    | 448 |       |        | $ | (779 | )    
|                                         |                                            |                |      |       |       |      |     |       |        |   |      |      

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6.     NOTES
PAYABLE

Notes payable consist of the following (in
thousands):

|                                                            |                                            |                       |                 |                       |          |          |          |        
|----------------------------------------------------------- | ------------------------------------------ | --------------------- | --------------- | --------------------- | -------- | -------- | -------- | -------
|                                                            |                                            |                       |                 |                      
|                                                            |                                            | Interest              |                 | Principal Outstanding
|                                                            |                                            | Rate as of            |                 | December 31,         
|                                                            |                                            | December 31,          |                 |                      
|                                                            |                                            | 2002                  |                 | 2002                  |          | 2001    
|                                                            |                                            |                       |                 |                       |          |         
|Fixed Rate Debt                                             |                                            |                       |                 |                       |          |         
|                                                            | Mortgage Loan                              |                       | 6.76%           |                       | $133,909 |          | $137,321
|                                                            | Mortgage Loan                              |                       | 8.00%           |                       | 8,040    |          | 8,161   
|                                                            | Mortgage Notes                             |                       | 6.75% to 7.82%  |                       | 126,322  |          | 143,967 
|                                                            | Tax Exempt Mortgage Note repaid in 2002    |                       | 6.95%           |                       |         |          | 3,918   
|                                                            |                                            |                       |                 |                       |          |         
|                                                            |                                            | Total Mortgage Debt   |                 |                       |          | 268,271  |          | 293,367
|                                                            |                                            |                       |                 |                       |          |         
|                                                            | Unsecured Debt:                            |                       |                 |                       |          |          |         
|                                                            | 7.87% Medium-Term Notes due December 2003  |                       | 7.87%           |                       | 17,000   |          | 17,000  
|                                                            | 8.037% Medium-Term Notes due November 2005 |                       | 8.04%           |                       | 25,000   |          | 25,000  
|                                                            | 7.04% Medium-Term Notes due May 2006       |                       | 7.04%           |                       | 25,000   |          | 25,000  
|                                                            | 7.59% Medium- Term Notes due March 2009    |                       | 7.59%           |                       | 25,000   |          | 25,000  
|                                                            | 8.50% Medium- Term Notes due July 2010     |                       | 8.50%           |                       | 10,000   |          | 10,000  
|                                                            | 7.703% Medium- Term Notes due May 2011     |                       | 7.70%           |                       | 35,000   |          | 35,000  
|                                                            | 6.63% Notes due October 2003               |                       | 6.63%           |                       | 30,000   |          | 30,000  
|                                                            | 6.95% Notes due August 2004                |                       | 6.95%           |                       | 50,000   |          | 50,000  
|                                                            | 7.20% Notes due August 2007                |                       | 7.20%           |                       | 50,000   |          | 50,000  
|                                                            | Unsecured notes repaid in 2002             |                       | 7.21%           |                       |         |          | 41,000  
|                                                            |                                            |                       |                 |                       |          |         
|                                                            |                                            | Total Unsecured Debt  |                 |                       |          | 267,000  |          | 308,000
|                                                            |                                            |                       |                 |                       |          |         
|                                                            |                                            | Total Fixed Rate Debt |                 |                       |          | 535,271  |          | 601,367
|                                                            |                                            |                       |                 |                       |          |         
|Variable Rate Debt                                          |                                            |                       |                 |                       |          |         
|                                                            | Unsecured Credit Facility                  |                       | LIBOR + 100 bps |                       | 144,000  |          | 94,000  
|                                                            | Mortgage Note                              |                       | LIBOR + 170 bps |                       | 6,900    |          |        
|                                                            | Tax Exempt Bond                            |                       | 3.05%           |                       | 10,565   |          | 22,193  
|                                                            |                                            |                       |                 |                       |          |         
|Total Variable Rate Debt                                    |                                            |                       |                 | 161,465               |          | 116,193 
|                                                            |                                            |                       |                 |                       |          |         
|Total outstanding indebtedness before hedge
    adjustments |                                            |                       |                 | 696,736               |          | 717,560 
|Hedge adjustments                                           |                                            |                       |                 | 5,720                 |          | 1,785   
|                                                            |                                            |                       |                 |                       |          |         
|Total Outstanding Indebtedness                              |                                            |                       |                 | $702,456              |          | $719,345
|                                                            |                                            |                       |                 |                       |          |         

The one-month London Interbank Offered Rate
(LIBOR) as of December 31, 2002 was 1.38%.

Mortgage
Loans The 6.76%
mortgage loan requires monthly principal and interest payments
on a 20-year, 8-month amortization schedule with a balloon
payment due at maturity in October 2008.

The 8.00% mortgage loan requires monthly
principal and interest payments on a 30-year amortization
schedule with a balloon payment due at maturity in September
2005.

Fixed Rate Mortgage
Notes The fixed rate
mortgage notes bear interest at fixed rates ranging from 6.75%
to 7.82% and require either monthly interest payments only or
monthly interest and principal payments over the lives of the
notes which have maturities that range from the year 2005 to
2010. The weighted average interest rate and debt maturity as of
December 31, 2002 for these mortgage notes were 7.16% and
5.0 years.

Variable Rate Mortgage
Note The variable rate
mortgage note requires interest only payments until its maturity
on July 1, 2005. We have two one-year extension options
available to us under the variable rate mortgage note.

Medium-Term
Notes On
April 20, 2000, we commenced a new program for the sale of
up to $250.0 million aggregate principal amount of
medium-term notes (MTNs), due nine months or more
from the date of

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issuance. We had notes with an aggregate
principal amount of $112.0 million outstanding in
connection with this MTN program as of December 31, 2002.


On May 29, 1998, we established a program
for the sale of up to $95.0 million aggregate principal
amount of MTNs due nine months or more from the date of
issuance. We had notes with an aggregate principal amount of
$25.0 million outstanding in connection with this MTN
program as of December 31, 2002. As a result of the
commencement of the $250.0 million MTN program, we cannot
issue any additional notes under the $95.0 million MTN
program.

The medium-term notes require that we comply with
certain affirmative, negative and financial covenants. We were
in compliance with these covenants as of December 31, 2002.

Unsecured
Notes The unsecured
notes consist of $30.0 million of notes due 2003,
$50.0 million of notes due 2004 and $50.0 million of
notes due 2007. The unsecured notes require semi-annual interest
payments until the end of the respective terms. The unsecured
notes require that we comply with certain affirmative, negative
and financial covenants. We were in compliance with these
covenants as of December 31, 2002. The interest rate
reflected above for the unsecured notes repaid during 2002
represents the average interest rate of the unsecured notes
repaid.

Unsecured Credit
Facility We have a
syndicated unsecured line of credit in the amount of
$225.0 million which matures on September 26, 2004.
The credit facility provides funds for new development,
acquisitions and general working capital purposes. Loans under
the credit facility bear interest at LIBOR plus 100 basis
points. The spread component of the aggregate interest rate will
change in the event of an upgrade or downgrade of our unsecured
credit rating of BBB- by Standard & Poors Rating
Services and Baa3 by Moodys Investors Service. Amounts are
borrowed for thirty, sixty or ninety day increments at the
appropriate interest rates for such time period. Therefore,
amounts are borrowed and repaid within those thirty, sixty or
ninety day periods. The credit facility is repayable monthly on
an interest only basis with principal due at maturity of each
thirty, sixty or ninety day increment.

The credit facility had an average interest rate
of 2.69% in 2002, 4.99% in 2001 and 7.20% in 2000 and an average
balance outstanding of $135.9 million in 2002,
$113.5 million in 2001 and $119.8 million in 2000. In
addition, the maximum outstanding principal amount was
$175.0 million in 2002, $146.5 million in 2001 and
$174.0 million in 2000. As of December 31, 2002, the
outstanding balance of the credit facility was
$144.0 million, leaving $81.0 million of remaining
availability on the $225.0 million commitment.

The credit facility also provides a bid
sub-facility equal to a maximum of fifty percent of the total
facility ($112.5 million). This sub-facility provides us
with the choice to place borrowings in fixed LIBOR contract
periods of thirty, sixty, ninety and one hundred eighty days. We
may have up to seven fixed LIBOR contracts outstanding at any
one time. Upon proper notifications, all lenders participating
in the credit facility may, but are not obligated to,
participate in a competitive bid auction for these fixed LIBOR
contracts.

On September 27, 2002, we entered into an
amendment to the credit agreement related to our unsecured line
of credit which modified certain definitions and financial
covenants that we are required to meet at the end of each fiscal
quarter. We were in compliance with these covenants and all
other covenants included in the credit agreement as of
December 31, 2002.

Variable Rate Tax Exempt
Bond The average
effective interest rate of the variable rate tax exempt bond was
2.90% for the year ended December 31, 2002. This bond bears
interest at various rates set by a remarketing agent at the
demand note index plus 0.50%, set weekly, or the lowest
percentage of prime which allows the resale at a price of par.
The bond contains covenants which require that we lease or hold
for lease 20% of the apartment homes for moderate-income
residents. The bond requires maintenance of a letter of credit
or surety bond (credit enhancement) aggregating to
$10.8 million as of December 31, 2002. The credit
enhancement provides for a principal amortization schedule which
approximates a 25-year term during the term of the credit
enhancement.

Real estate assets of 20 communities with a net
book value of $398.4 million serve as collateral for the
various secured debt agreements.

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Extraordinary
items  The
extraordinary items during the year ended December 31, 2002
resulted from prepayment penalties incurred on two mortgages
that were repaid during the period. The extraordinary items
represent $0.01 per unit for the year ended December 31,
2002.


The aggregate maturities of all debt (excluding
fair value adjustments of hedged debt instruments) for each of
the years ending December 31 are as follows (in thousands):

|           |  |            |         |            |  |            |         |               |  |            |         |           |  |       |       |  |  |   |        |  |  |   |         |  |  |   |         | 
|---------- |  | ---------- | ------- | ---------- |  | ---------- | ------- | ------------- |  | ---------- | ------- | --------- |  | ----- | ----- |  |  | - | ------ |  |  | - | ------- |  |  | - | ------- | 
|           |  | Fixed Rate |         | Fixed Rate |  | Fixed Rate |         | Variable Rate |  | Tax Exempt |         | Unsecured |  |      
|           |  | Mortgage   |         | Mortgage   |  | Unsecured  |         | Mortgage      |  | Variable   |         | Credit    |  |      
|           |  | Loans      |         | Notes      |  | Notes      |         | Note          |  | Rate Bonds |         | Facility  |  | Total
|           |  |            |         |            |  |            |         |               |  |            |         |           |  |      
|2003       |  | $          | 3,780   |            |  | $          | 1,722   |               |  | $          | 47,000  |           |  | $     |      |  |  | $ | 220    |  |  | $ |        |  |  | $ | 52,722  | 
|2004       |  |            | 4,044   |            |  |            | 1,841   |               |  |            | 50,000  |           |  |       |      |  |  |   | 220    |  |  |   | 144,000 |  |  |   | 200,105 | 
|2005       |  |            | 11,944  |            |  |            | 28,856  |               |  |            | 25,000  |           |  |       | 6,900 |  |  |   | 220    |  |  |   |        |  |  |   | 72,920  | 
|2006       |  |            | 4,467   |            |  |            | 23,735  |               |  |            | 25,000  |           |  |       |      |  |  |   | 220    |  |  |   |        |  |  |   | 53,422  | 
|2007       |  |            | 4,779   |            |  |            | 21,828  |               |  |            | 50,000  |           |  |       |      |  |  |   | 9,685  |  |  |   |        |  |  |   | 86,292  | 
|Thereafter |  |            | 112,935 |            |  |            | 48,340  |               |  |            | 70,000  |           |  |       |      |  |  |   |       |  |  |   |        |  |  |   | 231,275 | 
|           |  |            |         |            |  |            |         |               |  |            |         |           |  |       |       |  |  |   |        |  |  |   |         |  |  |   |         | 
|           |  | $          | 141,949 |            |  | $          | 126,322 |               |  | $          | 267,000 |           |  | $     | 6,900 |  |  | $ | 10,565 |  |  | $ | 144,000 |  |  | $ | 696,736 | 
|           |  |            |         |            |  |            |         |               |  |            |         |           |  |       |       |  |  |   |        |  |  |   |         |  |  |   |         | 

7.     ACQUISITIONS
AND DISPOSITIONS

During the year ended December 31, 2002, we
sold eight communities comprising 2,399 apartment homes for an
aggregate sales price of $211.8 million, resulting in an
aggregate net gain on sale of $78.7 million. The aggregate
carrying value of real estate assets sold was
$122.4 million. Net proceeds from four of the eight
communities, equaling $107.4 million, were placed in escrow
with a qualified intermediary in accordance with like-kind
exchange income tax rules and regulations. In the event that the
proceeds from these property sales are not fully invested in
qualified like-kind property during the required time period, a
special distribution may be made or company level tax may be
incurred. The eight communities sold were the former Summit
Breckenridge, Summit New Albany, Summit Pike Creek, Summit
Mayfaire, Summit Meadow, Summit Stonefield, Summit Sand Lake and
Summit Windsor. For the most part, these communities were
located outside of our core markets. The disposition of Summit
Breckenridge, Summit New Albany and Summit Pike Creek completed
our exit of the Richmond, Virginia, Columbus, Ohio and
Wilmington, Delaware markets.

During the year ended December 31, 2002, a
joint venture in which we held a 50% interest, sold a community
known as The Heights at Cheshire Bridge to an unrelated third
party and the joint venture was dissolved.

On July 1, 2002, we acquired a stabilized,
luxury apartment community in the Galleria sub-market of Dallas,
Texas for cash in the amount of $17.7 million. The
community, now known as Summit San Raphael, has 222 apartment
homes and was constructed in 1999. The following summary of
selected unaudited pro forma results of operations presents
information as if the purchase of Summit San Raphael had
occurred at the beginning of each period presented. The pro
forma information is provided for informational purposes only and

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is not indicative of results that would have
occurred or which may occur in the future (in thousands, except
per unit amounts):


|                                            |         |                         |         |      |  |      |         |      |  |   |         |      | 
|------------------------------------------- | ------- | ----------------------- | ------- | ---- |  | ---- | ------- | ---- |  | - | ------- | ---- | 
|                                            |         |                        
|                                            |         | Year Ended December 31,
|                                            |         |                        
|                                            |         | 2002                    |         | 2001 |  | 2000
|                                            |         |                         |         |      |  |     
|Total revenues                              |         | $                       | 158,095 |      |  | $    | 170,934 |      |  | $ | 167,344 |     
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|Income from continuing operations           |         |                         | 43,339  |      |  |      | 67,885  |      |  |   | 77,111  |     
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|Net income                                  |         |                         | 116,157 |      |  |      | 78,227  |      |  |   | 87,416  |     
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|Income from continuing operations per unit: |         |                         |         |      |  |      |         |      |  |   |         |     
|                                            | Basic   |                         | $       | 1.40 |  |      | $       | 2.20 |  |   | $       | 2.51 | 
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|                                            | Diluted |                         |         | 1.39 |  |      |         | 2.18 |  |   |         | 2.50 | 
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|Net income per unit:                        |         |                         |         |      |  |      |         |      |  |   |         |     
|                                            | Basic   |                         |         | 3.75 |  |      |         | 2.54 |  |   |         | 2.85 | 
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     
|                                            | Diluted |                         |         | 3.73 |  |      |         | 2.51 |  |   |         | 2.83 | 
|                                            |         |                         |         |      |  |      |         |      |  |   |         |     

During the year ended December 31, 2001, we
sold one parcel of land and nine communities comprising 2,189
apartment homes for an aggregate sales price of
$167.6 million, resulting in an aggregate net gain on sale
of $34.4 million. Net proceeds from three of the nine
communities, equaling $31.7 million, were placed in escrow
with a qualified intermediary in accordance with like-kind
exchange income tax rules and regulations and were fully
invested in qualified like-kind property during the required
time period. The parcel of land was located in Richmond,
Virginia and the nine communities sold were the former Summit
Palm Lake, Summit Arbors, Summit Radbourne, Summit Lofts, Summit
Gateway, Summit Stony Point, Summit Deerfield, Summit Walk and
Summit Waterford.

During the year ended December 31, 2001,
Station Hill, LLC, in which we own a 25% interest, sold a
community, the former Summit Station, for $11.9 million.
This sale resulted in the recognition of a gain on sale by the
joint venture of $1.1 million, of which we recorded
$271,000. The purchaser of Summit Station assumed an
$8.3 million mortgage and paid the balance of the purchase
price in cash.

We did not acquire any communities during the
year ended December 31, 2001.

During the year ended December 31, 2000, we
sold seven communities comprising 1,676 apartment homes for an
aggregate sales price of $103.9 million, resulting in a
gain on sale of $38.5 million. Net proceeds from six of the
seven disposition communities, equaling $78.1 million, were
placed in escrow with a qualified intermediary in accordance
with like-kind exchange income tax rules and regulations and
were fully invested in qualified like-kind property during the
required time period. The communities sold were the former
Summit Creekside, Summit Eastchester, Summit Sherwood, Summit
River Crossing, Summit Blue Ash, Summit Park and Summit Village.

On August 1, 2000, we purchased our joint
venture partners interest in each of two communities,
Summit Shiloh (182 apartment homes) and Summit Sweetwater (308
apartment homes), for an aggregate purchase price of
$36.0 million. We formerly owned a 49% interest in each of
two separate joint ventures that developed these communities.
The acquisitions were primarily financed with the issuance of
96,455 common units valued at $2.2 million and the payment
of $33.8 million in cash.

The following summary of selected unaudited pro
forma results of operations presents information as if the
purchase of our joint venture partners interest in each of
Summit Sweetwater and Summit Shiloh had occurred at the
beginning of the year ended December 31, 2000. The pro
forma information is provided for

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informational purposes only and is not indicative
of results that would have occurred or which may occur in the
future (in thousands, except per unit amounts):


|                                          |         |      |         |      | 
|----------------------------------------- | ------- | ---- | ------- | ---- | 
|                                          |         | 2000
|                                          |         |     
|Total revenues from continuing operations |         | $    | 168,093 |     
|                                          |         |      |         |     
|Income from continuing operations         |         |      | 74,852  |     
|                                          |         |      |         |     
|Net income                                |         |      | 86,157  |     
|                                          |         |      |         |     
|Net income per unit:                      |         |      |         |     
|                                          | Basic   |      | $       | 2.81 | 
|                                          |         |      |         |     
|                                          | Diluted |      |         | 2.79 | 
|                                          |         |      |         |     

In accordance with SFAS No. 144, net income
and gain (loss) on disposition of real estate for
communities sold or considered held for sale after
December 31, 2001 are reflected in our consolidated
statements of earnings as discontinued operations
for all periods presented and those communities sold or
considered held for sale prior to December 31, 2001 remain
in continuing operations. In addition, we have
determined to separately reflect the assets and liabilities of
communities held for sale or sold in the current period as
Net real estate assets  held for sale,
Other assets  held for sale, Note
payable  held for sale, and Other
liabilities  held for sale in the balance
sheets for all periods presented. Subsequent to
December 31, 2002, we executed a contract for the sale of
an apartment community, Summit Fairways, located in Orlando,
Florida. The assets of Summit Fairways were recorded at the
lower of cost or fair value less costs to sell, or
$14.9 million, as of December 31, 2002. The net income
from Summit Fairways represented 1.0% of our net income for the
year ended December 31, 2002. Summit Fairways was sold on
March 5, 2003 for $18.8 million as part of our
strategy to exit our non-core markets. We expect to use the
proceeds from the sale of Summit Fairways to fund future
acquisition and development activity. We expect to record a gain
resulting from the sale of Summit Fairways.

Below is a summary of discontinued operations for
all communities sold during 2002 excluding Summit Breckenridge
and joint venture communities, and including Summit Fairways as
of December 31, 2002 (in thousands). Summit Breckenridge
was properly classified as held for sale prior to
January 1, 2002 and, therefore, its operations are included
in income from continuing operations.

|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                                  |                        |                        
|                                                                                                  |                        | Year Ended December 31,
|                                                                                                  |                        |                        
|                                                                                                  |                        | 2002                    |        | 2001   |  | 2000
|                                                                                                  |                        |                         |        |        |  |     
|Property revenues:                                                                                |                        |                         |        |        |  |      |        |        |  |   |        |       
|                                                                                                  | Rental revenues        |                         | $      | 18,744 |  |      | $      | 23,670 |  |   | $      | 22,784 | 
|                                                                                                  | Other property revenue |                         |        | 1,457  |  |      |        | 1,763  |  |   |        | 1,730  | 
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Total property revenues                                                                           |                        |                         | 20,201 |        |  |      | 25,433 |        |  |   | 24,514 |       
|Property operating and maintenance expense                                                        |                        |                         | 7,002  |        |  |      | 8,375  |        |  |   | 7,533  |       
|Depreciation                                                                                      |                        |                         | 3,892  |        |  |      | 5,148  |        |  |   | 4,891  |       
|Interest and amortization                                                                         |                        |                         | 1,188  |        |  |      | 1,568  |        |  |   | 1,785  |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Income from discontinued operations before net
    gain on disposition of discontinued operations |                        |                         | 8,119  |        |  |      | 10,342 |        |  |   | 10,305 |       
|Extraordinary items                                                                               |                        |                         | (208   | )      |  |      |       |        |  |   |       |       
|Net gain on disposition of discontinued operations                                                |                        |                         | 64,907 |        |  |      |       |        |  |   |       |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       
|Income from discontinued operations                                                               |                        | $                       | 72,818 |        |  | $    | 10,342 |        |  | $ | 10,305 |       
|                                                                                                  |                        |                         |        |        |  |      |        |        |  |   |        |       

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8.     INCOME
TAXES

In accordance with partnership taxation, each
partner is responsible for reporting its share of taxable income
or loss. Accordingly, no provision has been made for federal,
state or local income taxes in the accompanying consolidated
financial statements.

SFAS No. 109, Accounting for Income
Taxes, requires a public enterprise to disclose the
aggregate difference in the basis of its net assets for
financial and tax reporting purposes. The carrying value
reported in our consolidated financial statements exceeded the
tax basis by $296.1 million as of December 31, 2002.

9.     NOTES
RECEIVABLE FROM EMPLOYEES

Summits Board of Directors believes that
ownership of its common stock by its executive officers and
certain other qualified employees aligns the interests of these
officers and employees with the interests of Summits
stockholders. To this end, Summits Board of Directors
approved, and Summit instituted, a loan program. As a result of
recent legislation, Summit is no longer permitted to make loans
to its executive officers and, therefore, new issuances to its
executive officers under the loan program have been terminated.
Under the terms of the loan program, Summit lent amounts to
certain of its executive officers and other qualified employees
to (a) finance the purchase of Summits common stock
on the open market at then-current market prices,
(b) finance the payment of the exercise price of one or
more stock options to purchase shares of Summits common
stock, or (c) finance the annual tax liability or other
expenses of an executive officer related to the vesting of
shares of common stock which constitute a portion of a
restricted stock award granted to the executive officer. The
relevant officer or employee has executed a promissory note and
security agreement related to each loan extended. Each
outstanding note bears interest at a rate established on the
date of the note, is full recourse to the officers and employees
and is collateralized by the shares of Summits common
stock which are the subject of the loans. If the market price of
Summits common stock falls materially below the price at
which the shares of stock were purchased, the proceeds of the
sale of the common stock may not be sufficient to repay the
loan. During the three months ended June 30, 2002, Summit
issued $6.7 million of loans to six executive officers. As
of December 31, 2002, we had loans receivable in the amount
of $19.5 million which were collateralized by 939,586
shares of Summits common stock valued at $16.7 million.
The proceeds from the shares that serve as collateral for the
loans would not be sufficient to repay the loans in full.
However, since the loans are full recourse, we have the right to
collect any additional amount owed directly from the officer or
employee to the extent such officer or employee is able to pay
such amount. We had loans receivable in the amount of
$14.5 million as of December 31, 2001.

10.     COMMITMENTS
AND CONTINGENCIES

The estimated cost to complete four development
projects currently under construction was $75.9 million as
of December 31, 2002. Anticipated construction completion
dates of the projects range from the second quarter of 2003 to
the third quarter of 2005.

We carry terrorism insurance on all communities
that serve as collateral for mortgage debt, as well as on two
communities which do not serve as collateral for mortgage debt,
but which are located in Washington, D.C. The terrorism
insurance is subject to coverage limitations, which we believe
are commercially reasonable. No assurance can be given that
material losses in excess of insurance proceeds will not occur
in the future, or that insurance coverage for acts of terrorism
will be available in the future.

We rent office space in several locations. Rental
expense amounted to $271,000 in 2002, $108,000 in 2001, and
$108,000 in 2000 ($871,000 in 2002, $882,000 in 2001 and
$848,000 in 2000 including amounts recorded by the Management
Company).

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Future minimum rental payments to be made for
those operating leases (including those of the Management
Company) that have initial or remaining non-cancelable lease
terms in excess of one year are as follows (in thousands):

|                          |  |   |       | 
|------------------------- |  | - | ----- | 
|Years Ending December 31, |  |  
|                          |  |  
|2003                      |  | $ | 881   | 
|2004                      |  |   | 790   | 
|2005                      |  |   | 813   | 
|2006                      |  |   | 837   | 
|2007                      |  |   | 862   | 
|Thereafter                |  |   | 2,371 | 
|                          |  |   |       | 
|                          |  | $ | 6,554 | 
|                          |  |   |       | 

Of the amounts shown above, $6.1 million of
the total minimum rental payments are for the Management
Companys lease of office space in Summit Grandview,
$14,000 of the total minimum rental payments are for our Austin
City Teams lease of office space in Summit Las Palmas and
$4,000 of the total minimum rental payments are for our Raleigh
City Teams lease of office space in Summit Westwood.

In January 2000, we entered into a real estate
purchase agreement with a third-party real estate developer.
Under the terms of the agreement, we have agreed to purchase
upon completion a Class A mixed-use community,
which will be called Summit Brickell, and is located in Miami,
Florida. We will purchase Summit Brickell upon the earlier of
one year after construction completion or the achievement of 80%
occupancy. We may extend this closing obligation for six months
after the initial purchase period. We expect to close on the
purchase of Summit Brickell in 2003. The final purchase price
will be determined based on budgeted construction costs plus a
bonus to the developer based on the capitalized income of the
property at the time of purchase. In the event there are net
cost savings during construction, a portion of such savings will
be used to reduce the purchase price and a portion will be paid
as an incentive to the developer pursuant to an agreed upon
formula. In the event there are net cost overruns during
construction, the developer will be responsible for funding such
overruns unless those overruns result from design change orders
which are requested by us; such change order overruns will be
added to the purchase price. The purchase price is expected to
range from $50.5 million to $60.0 million. The
purchase of Summit Brickell is subject to customary closing
conditions. We have issued a letter of credit in the amount of
$13.0 million, which will serve as a credit enhancement to
the developers construction loan. In the event that any
amount under the letter of credit is drawn upon, we shall be
treated as having issued a loan to the developer in the amount
of such draw. Any such loan will accrue interest at a rate of
eighteen percent (18%) per year.

On May 25, 2001, we contributed
$4.2 million for a 29.78% interest in a joint venture named
SZF, LLC, which owns substantially all of the interests in a
limited liability company that is developing, through a
third-party contractor, an apartment community in Miami,
Florida. The community will consist of 323 apartment homes and
17,795 square feet of office/retail space. The limited liability
company has also acquired an adjacent piece of land. The
construction costs are being funded through the equity that the
joint venture contributed to the limited liability company and
by a loan to that company from an unrelated third party. In the
event that construction costs exceed the construction loan
amount, we have agreed to advance the amount required to fund
such costs in excess of the construction loan. This advance
accrues a preferential return at the rate of eleven percent
(11%) per year to be paid from the distributions from the joint
venture. As of December 31, 2002, we had advanced
$2.2 million to SZF, LLC. Subsequent to December 31,
2002, we have advanced an additional $6.1 million to SZF,
LLC.

During 2002, we completed the development of
Summit Brookwood, a 359 unit apartment community located in
Atlanta, Georgia. As of December 31, 2002, we are the
lessee under a land lease related to the land on which Summit
Brookwood was constructed. We have exercised our purchase option
under the land lease to purchase the related land for
$10.6 million. We expect to finalize the purchase of the
land at Summit Brookwood during 2003 using cash and/or common
units in the Operating Partnership as consideration.

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Summit has employment agreements with two of its
former executive officers, both of whom resigned from such
executive positions, but who remain as employees and have agreed
to provide various services to Summit from time to time through
December 31, 2011. Each employment agreement requires that
Summit pay to the former officers a base salary aggregating up
to $2.1 million over the period from July 2, 2001 to
December 31, 2011 (beginning with calendar year 2002, up to
$200,000 on an annual basis). Each employment agreement also
requires that Summit provide participation in its life insurance
plan, office space, information systems support and
administrative support for the remainder of each officers
life, and participation in its health and dental insurance plans
until the last to die of the officer or such officers
spouse. Either party can terminate the employment agreements,
effective 20 business days after written notice is given. The
full base salary amount due shall be payable through 2011
whether or not the agreements are terminated earlier in
accordance with their terms.

Summit has employment agreements with all of its
executive officers. The employment agreements for two of
Summits executive officers provide for the payment of
severance benefits in certain circumstances. For one executive
officer, these benefits generally provide for the payment of the
executive officers annual base salary for a period ending
on the later of July 1, 2004 or the first anniversary of
the termination date of such executive officers
employment. For the other executive officer, if such
officers employment is terminated without
cause, the executive officer will be entitled to receive
an amount equal to such officers monthly salary multiplied
by the number of years (pro rated for partial years) that such
officer was employed by us prior to termination. In addition,
most of the executive officers have severance agreements that
provide for the payment of severance benefits of up to three
times such officers annual base salary and cash bonus in
the event of the termination of the officers employment
under certain circumstances following certain change in
control or combination transactions involving
a consolidation or merger. The benefits payable under the terms
of the severance agreements are subject to reduction by the
amount of any severance benefits that may be payable under
applicable employment agreements.

We are obligated to redeem each common unit in
the Operating Partnership at the request of the holder for cash
equal to the fair market value of one share of Summits
common stock, except that we may elect to cause Summit to
acquire each common unit presented for redemption for one share
of Summits common stock (subject to adjustment).

11.     EMPLOYEE
BENEFIT PLANS

Profit Sharing Plan

Summit has a defined contribution plan pursuant
to Section 401(k) of the Internal Revenue Code. The
employees of Summit, the Operating Partnership and its
subsidiaries are eligible to contribute to the plan beginning on
the first day of the second calendar quarter after they are
employed. Our matching contributions begin on the same date as
the employees contributions and are equal to one-half of
each employees contribution up to a maximum of 3% of each
employees compensation. We made aggregate contributions of
$376,000 in 2002, $329,000 in 2001 and $349,000 in 2000.

Stock Option Plan

In 1994, Summit established the 1994 Stock Option
and Incentive Plan under which 1,000,000 shares of Summits
common stock were reserved for issuance and under which
employees of Summit, the Operating Partnership and its
subsidiaries are eligible to participate. The incentive plan was
amended and restated in 1998 to, among other things, increase
the number of shares reserved for issuance from 1,000,000 to
3,000,000 shares. The plan provides that the option price shall
not be less than the fair market value of the shares at the date
of grant. The options have ten-year lives and vest in three or
five annual installments on the anniversaries of the date of
grant, except for shares granted to Summits directors,
which vest on the date of grant. We apply APB Opinion
No. 25 and related interpretations in accounting for
Summits stock options. Accordingly, no compensation cost
has been recognized for Summits stock options.

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A summary of changes in common stock options for
the three years ended December 31, 2002 is as follows:

|                                   |                                  |         |          |                  |  |  |       |       | 
|---------------------------------- | -------------------------------- | ------- | -------- | ---------------- |  |  | ----- | ----- | 
|                                   |                                  |         |          | Weighted Average
|                                   |                                  | Options |          | Exercise Price  
|                                   |                                  |         |          |                 
|                                   | Outstanding at December 31, 1999 |         |          | 1,350,271        |  |  | $     | 17.81 | 
|Granted to employees and directors |                                  |         | 241,000  |                  |  |  | 20.02 |      
|Exercised                          |                                  |         | (136,500 | )                |  |  | 18.01 |      
|Forfeited                          |                                  |         | (186,050 | )                |  |  | 17.59 |      
|                                   |                                  |         |          |                  |  |  |       |      
|                                   | Outstanding at December 31, 2000 |         |          | 1,268,721        |  |  |       | 18.24 | 
|Granted to employees and directors |                                  |         | 270,000  |                  |  |  | 24.51 |      
|Exercised                          |                                  |         | (63,414  | )                |  |  | 17.86 |      
|Forfeited                          |                                  |         | (10,700  | )                |  |  | 16.50 |      
|                                   |                                  |         |          |                  |  |  |       |      
|                                   | Outstanding at December 31, 2001 |         |          | 1,464,607        |  |  |       | 19.43 | 
|Granted to employees and directors |                                  |         | 745,000  |                  |  |  | 22.01 |      
|Exercised                          |                                  |         | (121,600 | )                |  |  | 18.44 |      
|Forfeited                          |                                  |         | (69,075  | )                |  |  | 19.15 |      
|                                   |                                  |         |          |                  |  |  |       |      
|                                   | Outstanding at December 31, 2002 |         |          | 2,018,932        |  |  |       | 20.45 | 
|                                   |                                  |         |          |                  |  |  |       |      

Exercise prices for options outstanding as of
December 31, 2002 ranged from $16.50 to $24.56. The
weighted average remaining contractual life of those options is
7.4 years.

Options to purchase 1,003,733, 848,408 and
635,221 shares of Summits common stock were exercisable as
of December 31, 2002, 2001 and 2000. The weighted average
exercise price for the shares exercisable as of
December 31, 2002, 2001 and 2000 was $19.11, $18.82 and
$18.35.

The fair value of options granted in 2002 was
$1.89 per share and was estimated on the date of grant using the
Black Scholes option-pricing model with the following
weighted-average assumptions: dividend yield of 7.51%, expected
volatility of 20.2%, risk free interest rate of 4.71% and
expected lives of 5.4 years.

The fair value of options granted in 2001 was
$2.06 per share and was estimated on the date of grant using the
Black Scholes option-pricing model with the following
weighted-average assumptions: dividend yield of 8.05%, expected
volatility of 20.6%, risk free interest rate of 5.03% and
expected lives of 4.8 years.

The fair value of options granted in 2000 was
$1.80 per share and was estimated on the date of grant using the
Black Scholes option-pricing model with the following
weighted-average assumptions: dividend yield of 8.98%, expected
volatility of 21.1%, risk free interest rate of 6.51% and
expected lives of 4.4 years.

In addition, the stock option and incentive plan
provides for the grant of stock to employees. Summit granted
1,773 shares of restricted stock under this plan in 2002. The
market value of the restricted stock granted in 2002 totaled
$35,000 and was recorded as unamortized restricted stock
compensation and is shown as a separate component of
Partners equity. During 2002, 6,046 shares of restricted
stock were surrendered by grantees to satisfy the income tax
liability related to the stock grants. Summit granted 26,184
shares of restricted stock under the plan in 2001. The market
value of the restricted stock granted in 2001 totaled $647,000.
During 2001, there were 12,202 shares of restricted stock
forfeited by employees no longer employed by a Summit entity and
14,933 shares of restricted stock surrendered to satisfy the
income tax liability of the grantees related to the restricted
stock grants. The aggregate market value of these forfeited and
surrendered shares was $503,000 in 2001. Summit granted 64,499
shares of restricted stock (net of 4,000 shares forfeited and
7,856 shares surrendered to satisfy the income tax liability of
grantees) valued at $1.2 million under the plan in 2000.
Unearned compensation associated with the restricted stock is
being amortized to expense over the vesting periods, which range
from three to five years. We recognized expense relative to the
stock grants of $173,000 in 2002, $98,000 in 2001 and $300,000
in 2000.

During the year ended December 31, 2001,
Summit issued 94,818 shares of restricted stock valued at
$2.4 million pursuant to its Performance Stock Award Plan.
One-half of these shares, valued at $1.2 million, vested on
January 2, 2001, the date of grant, and was accrued and
recorded as a component of partners equity

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as of December 31, 2000. The remaining
balance of $1.2 million was recorded as a component of
partners equity during 2001. Grantees surrendered 11,747
shares in 2002 and 18,263 shares in 2001 with a market value of
$295,000 during 2002 and $463,000 in 2001 to satisfy their
income tax liability associated with the shares issued to them
under the Performance Stock Award Plan. The remaining shares
vested in two equal annual installments on January 2, 2002
and January 2, 2003.


Employee Stock Purchase Plan

In 1996, Summit established a non-qualified
employee stock purchase plan (ESPP) which allowed
its employees to purchase up to $25,000 of common stock per
year. The price of the shares of the common stock purchased was
the lesser of 85% of the closing price of such shares either on
(a) the first day of each six month purchase period, or
(b) the last day of each six month purchase period.
Transactions under the ESPP were suspended effective
July 2, 2002.

Total shares issued under the plan were 13,933 in
2002, 8,695 in 2001 and 88,848 in 2000. The market value of the
shares issued was $341,000 in 2002, $229,000 in 2001 and
$1.8 million in 2000. Through December 31, 2002, we
applied APB Opinion No. 25 and related interpretations in
accounting for our stock options and ESPP. Accordingly, no
compensation cost has been recognized for Summits stock
options granted or shares issued under the ESPP during the years
ended December 31, 2002, 2001 and 2000. Effective
January 1, 2003, we adopted the fair value recognition
provisions of SFAS No. 123 prospectively to all stock
options granted, modified, or settled after January 1,
2003. Refer to the table in Note 3 which reflects the effect on
net income and earnings per share had the fair value based
method been applied to all options granted in each year.

Effective January 1, 2003, we will begin to
recognize as an expense the fair value of all options granted on
or after January 1, 2003. We estimate that the resulting
expense recognized in 2003 will not be material to our financial
position or results of operations.

12.     DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN

Summit has a dividend reinvestment and stock
purchase plan (DRIP). Direct stock purchases under
the DRIP were suspended effective October 31, 2002 and
dividend reinvestment under the DRIP was suspended effective
November 15, 2002. The DRIP provided both new investors and
existing holders of Summits stock (including common stock
and other classes of stock which may be outstanding from time to
time) with a method to purchase shares of common stock under the
Stock Purchase Program component of the plan. The plan also
permitted stockholders to designate all, a portion or none of
the cash dividends on their newly purchased common stock and
cash dividends on their existing stock for reinvestment in more
shares of common stock through the Dividend Reinvestment Program
component of the plan. With respect to reinvested dividends and
optional cash payments, shares of common stock were purchased
for the plan at a discount ranging from 0% to 5% (established
from time to time) from the market price, as more fully
described in the prospectus relating to the plan. Common stock
was purchased by the plans agent (Wachovia Bank) directly
from Summit or in open market or privately negotiated
transactions, as determined from time to time, to fulfill
requirements for the plan.

13.     BUSINESS
SEGMENTS

We develop, operate and acquire
Class A luxury apartment communities primarily
in markets with high growth potential. We develop apartments
solely for our own use and do not perform development activities
for third parties. All of our communities target middle to upper
income, prestige-conscious residents who expect outstanding
service and the latest in apartment design technology, as well
as convenience. Our communities provide amenities including
swimming pools, clubhouses, exercise rooms and Peak
Services. Peak Services include, but are not limited to,
Same Day Maintenance Service and Emergency Maintenance available
24 hours a day, business services, package acceptance and
delivery, a video library and loaner living accessories. All of
our communities market themselves through media advertising. Due
to the similarities of our communities and their similar
economic characteristics as exhibited through similar long-term
financial

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performance, our communities have been aggregated
into one reportable segment as allowed in accordance with SFAS
No. 131, Disclosures about Segments of an Enterprise
and Related Information.


14.     PREFERRED
UNITS

As of December 31, 2002, we had outstanding
3.4 million preferred units of limited partnership interest
designated as 8.95% Series B Cumulative Redeemable
Perpetual Preferred Units. We may redeem these preferred units
on or after April 29, 2004 for cash at a redemption price
equal to the holders capital account, or at our option,
shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock, or a combination of cash
and shares of Summits 8.95% Series B Cumulative
Redeemable Perpetual Preferred Stock. Holders of the
Series B preferred units have the right to exchange these
preferred units for shares of Summits Series B
preferred stock on a one-for-one basis, subject to adjustment:
(a) on or after April 29, 2009, (b) if full quarterly
distributions are not made for six quarters, or (c) upon
the occurrence of specified events related to our treatment or
the treatment of the preferred units for federal income tax
purposes. Distributions on the Series B preferred units are
cumulative from the date of original issuance and are payable
quarterly at the rate of 8.95% per year of the $25.00 original
capital contribution. We made distributions to the holders of
the Series B preferred units in the aggregate amount of
$7.6 million during each of the years ended
December 31, 2002 and 2001.

As of December 31, 2002, we had outstanding
2.2 million preferred units of limited partnership interest
designated as 8.75% Series C Cumulative Redeemable
Perpetual Preferred Units. We may redeem the preferred units on
or after September 3, 2004 for cash at a redemption price
equal to the holders capital account. The holder of the
Series C preferred units has the right to exchange these
preferred units for shares of Summits Series C
preferred stock on a one-for-one basis, subject to adjustment:
(a) on or after September 3, 2009, (b) if full
quarterly distributions are not made for six quarters,
(c) upon the occurrence of specified events related to our
treatment or the treatment of the preferred units for federal
income tax purposes, or (d) if the holdings in the
Operating Partnership of the Series C unitholder exceed 18%
of the total profits of or capital interest in the Operating
Partnership for a taxable year. Distributions on the
Series C preferred units are cumulative from the date of
original issuance and are payable quarterly at the rate of 8.75%
per year of the $25.00 original capital contribution. We made
distributions to the holder of the Series C preferred units
in the aggregate amount of $4.8 million during each of the
years ended December 31, 2002 and 2001.

15.     DERIVATIVE
FINANCIAL INSTRUMENTS

We are exposed to capital market risk, such as
changes in interest rates. To manage the volatility relating to
interest rate risk, we may enter into interest rate hedging
arrangements from time to time. On January 1, 2001, we
adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. SFAS
No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It
requires that entities recognize all derivatives as either
assets or liabilities in the consolidated balance sheet and
measure those instruments at fair value. The cumulative effect
of adopting SFAS No. 133 was not material to our financial
statements.

On June 13, 2002, we terminated an interest
rate swap with a $30.0 million notional amount. Under SFAS
No. 133, as a result of the termination, we de-designated
the $30.0 million swap as a fair value hedge against
certain fixed rate debt. We will amortize as a reduction of
interest expense $1.5 million, which represents the difference
between the par value and carrying amount of the fixed-rate debt
obligation, over the remaining term of the debt obligation,
which matures on December 15, 2003. Interest expense was
reduced by $545,000 in 2002 as a result of amortizing this
difference.

On June 14, 2002, we entered into an
interest rate swap with a notional amount of $50.0 million,
relating to $50.0 million of 7.20% fixed rate notes issued
under our MTN program. Under the interest rate swap agreement,
through the maturity date of August 15, 2007, (a) we
have agreed to pay to the counterparty the interest on a
$50.0 million notional amount at a floating interest rate
of three-month LIBOR plus 241.75 basis points, and (b) the
counterparty has agreed to pay to us the interest on the same
notional amount at the fixed

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rate of the underlying debt obligation. The
floating rate as of December 31, 2002 was 3.8175%. The fair
value of the interest rate swap was an asset of
$4.8 million as of December 31, 2002. The swap has
been designated as a fair value hedge of the underlying fixed
rate debt obligation and has been recorded in Other
assets in the accompanying balance sheets. We assume no
ineffectiveness as the interest rate swap meets the short-cut
method conditions required under SFAS No. 133 for fair
value hedges of debt instruments. Accordingly, no gains or
losses were recorded in income relative to our underlying debt
and interest rate swap.


16.     COMMON STOCK
REPURCHASE PROGRAM

Summit has a common stock repurchase program,
originally approved by its Board of Directors in March of 2000,
pursuant to which Summit is authorized to purchase up to an
aggregate of $56.0 million of currently issued and
outstanding shares of its common stock. All repurchases have
been, and will be, made on the open market at prevailing prices
or in privately negotiated transactions. This authority may be
exercised from time to time and in such amounts as market
conditions warrant. The following is a summary of stock
repurchases under the common stock repurchase program (dollars
in thousands, except per share amounts):

|                                |  |             |         |             |  |               |        |  |  |   |       | 
|------------------------------- |  | ----------- | ------- | ----------- |  | ------------- | ------ |  |  | - | ----- | 
|                                |  |             |         |             |  | Average Price
|                                |  | Number      |         | Value       |  | per Share    
|                                |  | of Shares   |         | of Shares   |  | of Shares    
|Year Ended December 31,         |  | Repurchased |         | Repurchased |  | Repurchased  
|                                |  |             |         |             |  |              
|2000                            |  |             | 279,400 |             |  | $             | 5,533  |  |  | $ | 19.80 | 
|2001                            |  |             | 8,800   |             |  |               | 197    |  |  |   | 22.38 | 
|2002                            |  |             | 151,300 |             |  |               | 2,666  |  |  |   | 17.62 | 
|                                |  |             |         |             |  |               |        |  |  |   |       | 
|Total as of December 31, 2002   |  |             | 439,500 |             |  |               | 8,396  |  |  |   | 19.10 | 
|Subsequent to December 31, 2002 |  |             | 422,200 |             |  |               | 7,472  |  |  |   | 17.70 | 
|                                |  |             |         |             |  |               |        |  |  |   |       | 
|Total as of March 5, 2003       |  |             | 861,700 |             |  | $             | 15,868 |  |  | $ | 18.41 | 
|                                |  |             |         |             |  |               |        |  |  |   |       | 

Summit had $40.1 million of remaining
availability for repurchases under the program as of
March 5, 2003.

17.     IMPAIRMENT
LOSS

Management considers events and circumstances
that may indicate impairment of an investment, including
operating performance and cash flow projections. In 2001,
management determined that our investments in BroadbandNOW!,
Inc. and YieldStar Technology LLC were impaired and that such
impairment was other than temporary. As a result, we recorded an
impairment loss in the amount of $1.2 million, which
represents our entire investment in these two technology
companies. We have no other technology company investments.

18.     SUPPLEMENTAL
CASH FLOW INFORMATION

Non-cash investing and financing activities for
the years ended December 31, 2002, 2001 and 2000 are as
follows:



| |    |                                                                                                                                                                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | We sold eight communities during the year ended
    December 31, 2002. The purchaser of one of the communities
    assumed the related outstanding debt balance associated with
    such community of $11.3 million.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | B. | We sold nine communities during the year ended
    December 31, 2001. The respective purchasers of two of the
    communities assumed the related outstanding debt balances
    associated with such communities of $16.4 million in the
    aggregate. The respective purchaser of two of the communities
    redeemed 741,148 common units valued at $17.6 million as
    partial consideration in the transaction.



| |    |                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | C. | We purchased our joint venture partners
    interest in each of two communities during the year ended
    December 31, 2000 at an aggregate purchase price of
    $36.0 million. The acquisitions were primarily financed
    with the issuance of 96,455 common units in the aggregate valued
    at $2.2 million as well as the payment of
    $33.8 million in cash in the aggregate.

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| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | D. | Summit granted 1,773 shares of restricted stock
    valued at $35,000 during 2002. There were 6,046 shares of
    restricted stock surrendered to satisfy the income tax liability
    of grantees during 2002. Summit granted 26,184 shares of
    restricted stock valued at $647,000 during 2001. There were
    12,202 shares of restricted stock forfeited and 14,933 shares of
    restricted stock surrendered to satisfy the income tax liability
    of the grantees during 2001. The aggregate value of shares
    forfeited and surrendered in 2001 was $503,000. Summit granted
    64,499 shares of restricted stock (net of 4,000 shares forfeited
    and 7,856 shares surrendered to satisfy the income tax liability
    of the grantees) valued at $1.2 million in 2000.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | E. | Summit issued 13,658 shares of common stock in
    exchange for 13,658 common units during the year ended
    December 31, 2002. The value of these shares of common
    stock was $285,000. Summit issued 150,679 shares of common stock
    in exchange for 150,679 common units during the year ended
    December 31, 2001. The value of these shares of common
    stock was $4.0 million. Summit issued 55,677 shares of
    common stock in exchange for 55,677 common units during the year
    ended December 31, 2000. The value of these shares of
    common stock was $1.1 million.
|
| | F. | We accrued distributions payable of
    $10.5 million as of December 31, 2002,
    $14.2 million as of December 31, 2001 and
    $13.5 million as of December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                         

19.     FAIR VALUE
DISCLOSURE OF FINANCIAL INSTRUMENTS

The following disclosures of estimated fair value
were determined by management using available market information
and appropriate valuation methodologies. However, considerable
judgment is necessary to interpret market data and develop the
related estimates of fair value. Accordingly, the estimates
presented are not necessarily indicative of the amounts that
could be realized upon disposition of the financial instruments.
The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair
value amounts. The fair value estimates presented are based on
information available to management as of December 31, 2002
and 2001. Although management is not aware of any factors that
would significantly affect the estimated fair value amounts,
such amounts have not been comprehensively re-valued for
purposes of these financial statements since that date, and
current estimates of fair value may differ significantly from
the amounts presented.

Cash and cash equivalents, rents receivable,
accounts payable, accrued expenses, security deposits, other
liabilities, tax exempt bond indebtedness and our credit
facility are carried at amounts which reasonably approximate
their fair values as of December 31, 2002 and 2001 due to
either the short-term nature or variable interest rates
associated with such balances.

Fixed rate mortgage debt and fixed rate unsecured
notes with a carrying value of $535.3 million had an
estimated aggregate fair value of $587.1 million as of
December 31, 2002. Fixed rate mortgage debt and fixed rate
unsecured notes with a carrying value of $601.4 million had
an estimated aggregate fair value of $625.2 million as of
December 31, 2001. Rates currently available to us for debt
with similar terms and maturities were used to estimate the fair
value of this debt. The fair market value of long-term fixed
rate debt is subject to changes in interest rates. Generally,
the fair market value of fixed interest rate debt will increase
as interest rates fall and decrease as interest rates rise.

The fair value of the interest rate swap
described in footnote 15, Derivative Financial
Instruments, was $4.8 million as of December 31,
2002.

88



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##### 



20.     GEOGRAPHIC
CONCENTRATION (UNAUDITED)

Our 51 completed communities are located in the
following markets:

|                           |  |           |        |                |  |          |     |   |  |  |     |  
|-------------------------- |  | --------- | ------ | -------------- |  | -------- | --- | - |  |  | --- | -
|                           |  | Number of |        | Apartment      |  | 2002    
|                           |  | Apartment |        | Homes         |  | % of    
|Market                     |  | Homes     |        | % of Portfolio |  | Revenues
|                           |  |           |        |                |  |         
|Washington, D.C.           |  |           | 2,406  |                |  |          | 16  | % |  |  | 20  | %
|Atlanta, Georgia           |  |           | 3,275  |                |  |          | 21  | % |  |  | 19  | %
|Southeast Florida          |  |           | 1,715  |                |  |          | 11  | % |  |  | 15  | %
|Raleigh, North Carolina    |  |           | 2,582  |                |  |          | 17  | % |  |  | 14  | %
|Charlotte, North Carolina  |  |           | 1,901  |                |  |          | 12  | % |  |  | 12  | %
|Dallas, Texas              |  |           | 1,581  |                |  |          | 10  | % |  |  | 9   | %
|Austin, Texas              |  |           | 856    |                |  |          | 6   | % |  |  | 5   | %
|Orlando, Florida           |  |           | 510    |                |  |          | 3   | % |  |  | 3   | %
|San Antonio, Texas         |  |           | 250    |                |  |          | 2   | % |  |  | 2   | %
|Philadelphia, Pennsylvania |  |           | 352    |                |  |          | 2   | % |  |  | 1   | %
|                           |  |           |        |                |  |          |     |   |  |  |     |  
|                           |  |           | 15,428 |                |  |          | 100 | % |  |  | 100 | %
|                           |  |           |        |                |  |          |     |   |  |  |     |  

21.     QUARTERLY
FINANCIAL INFORMATION (UNAUDITED)

Quarterly financial information for the years
2002 and 2001 is as follows (in thousands, except per unit
amounts):

|                                                                                                          |  |                              |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|--------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ |  |  | - | ------ | 
|                                                                                                          |  |                             
|                                                                                                          |  | Year Ended December 31, 2002
|                                                                                                          |  |                             
|                                                                                                          |  | First                        |        | Second  |  | Third   |        | Fourth 
|                                                                                                          |  | Quarter                      |        | Quarter |  | Quarter |        | Quarter
|                                                                                                          |  |                              |        |         |  |         |        |        
|Revenues                                                                                                  |  | $                            | 39,449 |         |  | $       | 39,113 |         |  | $ | 38,533 |  |  | $ | 39,826 | 
|Income from continuing operations before gain on
    sale of real estate assets and extraordinary items   |  |                              | 6,578  |         |  |         | 6,669  |         |  |   | 5,749  |  |  |   | 5,431  | 
|Income from discontinued operations before gain
    on sale of real estate assets and extraordinary items |  |                              | 2,555  |         |  |         | 2,388  |         |  |   | 1,955  |  |  |   | 1,221  | 
|Gain on sale of real estate assets, including
    joint ventures                                          |  |                              |       |         |  |         | 9,634  |         |  |   | 22,323 |  |  |   | 51,736 | 
|Distributions to preferred unitholders in
    Operating Partnership                                       |  |                              | 3,105  |         |  |         | 3,105  |         |  |   | 3,105  |  |  |   | 3,105  | 
|Income available to common unitholders                                                                    |  |                              | 6,030  |         |  |         | 15,586 |         |  |   | 26,918 |  |  |   | 54,974 | 
|Income available to common unitholders per
    unit  basic                                               |  |                              | 0.20   |         |  |         | 0.50   |         |  |   | 0.87   |  |  |   | 1.78   | 
|Income available to common unitholders per
    unit  diluted                                             |  |                              | 0.19   |         |  |         | 0.50   |         |  |   | 0.86   |  |  |   | 1.78   | 

|                                                                                                                                                        |  |                              |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ |  |  | - | ------ | 
|                                                                                                                                                        |  |                             
|                                                                                                                                                        |  | Year Ended December 31, 2001
|                                                                                                                                                        |  |                             
|                                                                                                                                                        |  | First                        |        | Second  |  | Third   |        | Fourth 
|                                                                                                                                                        |  | Quarter                      |        | Quarter |  | Quarter |        | Quarter
|                                                                                                                                                        |  |                              |        |         |  |         |        |        
|Revenues                                                                                                                                                |  | $                            | 42,532 |         |  | $       | 43,545 |         |  | $ | 43,131 |  |  | $ | 39,325 | 
|Income from continuing operations before gain on
    sale of real estate assets and distributions to preferred
    unitholders in Operating Partnership |  |                              | 9,949  |         |  |         | 9,768  |         |  |   | 8,860  |  |  |   | 4,908  | 
|Income from discontinued operations before gain
    on sale real estate assets                                                                          |  |                              | 2,538  |         |  |         | 2,648  |         |  |   | 2,568  |  |  |   | 2,588  | 
|Gain on sale of real estate assets                                                                                                                      |  |                              |       |         |  |         | 10,782 |         |  |   | 2,788  |  |  |   | 20,865 | 
|Distributions to preferred unitholders in
    Operating Partnership                                                                                     |  |                              | 3,105  |         |  |         | 3,105  |         |  |   | 3,105  |  |  |   | 3,105  | 
|Income available to common unitholders                                                                                                                  |  |                              | 9,382  |         |  |         | 18,875 |         |  |   | 11,383 |  |  |   | 25,256 | 
|Income available to common unitholders per
    unit  basic                                                                                             |  |                              | 0.30   |         |  |         | 0.61   |         |  |   | 0.37   |  |  |   | 0.83   | 
|Income available to common unitholders per
    unit  diluted                                                                                           |  |                              | 0.30   |         |  |         | 0.60   |         |  |   | 0.37   |  |  |   | 0.82   | 

89



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##### 



SCHEDULE III

SUMMIT PROPERTIES PARTNERSHIP, L.P.

REAL ESTATE AND ACCUMULATED
DEPRECIATION


December 31, 2002


(Dollars in thousands)


|                          |  |              |        |               |  |                 |        |  |  |   |        | 
|------------------------- |  | ------------ | ------ | ------------- |  | --------------- | ------ |  |  | - | ------ | 
|                          |  |              |        |              
|                          |  |              |        | Initial Costs
|                          |  |              |        |              
|                          |  |              |        |               |  | Buildings      
|                          |  | Related      |        |               |  | and            
|Apartments                |  | Encumbrances |        | Land          |  | Improvements(6)
|                          |  |              |        |               |  |                
|Reunion Park by Summit    |  | $            |       |               |  | $               | 991    |  |  | $ |       | 
|Summit Arboretum          |  |              | 18,796 |               |  |                 | 4,080  |  |  |   | 24,403 | 
|Summit Ashburn Farm       |  |              |       |               |  |                 | 2,438  |  |  |   |       | 
|Summit Aventura           |  |              |       |               |  |                 | 6,367  |  |  |   |       | 
|Summit Ballantyne         |  |              | (2     | )             |  |                 | 3,328  |  |  |   |       | 
|Summit Belcourt           |  |              | 9,018  |               |  |                 | 3,600  |  |  |   | 16,788 | 
|Summit Belmont            |  |              | (4     | )             |  |                 | 974    |  |  |   |       | 
|Summit Brookwood          |  |              |       |               |  |                 | 10,600 |  |  |   |       | 
|Summit Buena Vista        |  |              | 24,067 |               |  |                 | 4,670  |  |  |   | 30,499 | 
|Summit Camino Real        |  |              | 15,886 |               |  |                 | 7,120  |  |  |   | 41,985 | 
|Summit Club at Dunwoody   |  |              |       |               |  |                 | 2,934  |  |  |   | 24,510 | 
|Summit Crest              |  |              |       |               |  |                 | 1,211  |  |  |   |       | 
|Summit Crossing           |  |              |       |               |  |                 | 768    |  |  |   | 5,174  | 
|Summit Deer Creek         |  |              |       |               |  |                 | 3,537  |  |  |   |       | 
|Summit Del Ray            |  |              | (2     | )             |  |                 | 3,120  |  |  |   |       | 
|Summit Doral              |  |              |       |               |  |                 | 3,099  |  |  |   |       | 
|Summit Fair Lakes         |  |              | 48,340 |               |  |                 | 9,521  |  |  |   |       | 
|Summit Fair Oaks          |  |              |       |               |  |                 | 4,356  |  |  |   | 17,215 | 
|Summit Fairview           |  |              |       |               |  |                 | 404    |  |  |   |       | 
|Summit Fairways           |  |              |       |               |  |                 | 2,819  |  |  |   |       | 
|Summit Foxcroft           |  |              | 6,900  |               |  |                 | 925    |  |  |   | 3,797  | 
|Summit Glen               |  |              | (2     | )             |  |                 | 3,652  |  |  |   |       | 
|Summit Governors Village |  |              |       |               |  |                 | 1,622  |  |  |   |       | 
|Summit Grandview          |  |              |       |               |  |                 | 2,527  |  |  |   |       | 
|Summit Grand Parc         |  |              |       |               |  |                 | 7,700  |  |  |   |       | 
|Summit Highland           |  |              | (2     | )             |  |                 | 1,374  |  |  |   |       | 
|Summit Hunters Creek     |  |              |       |               |  |                 | 2,193  |  |  |   |       | 
|Summit Lake               |  |              |       |               |  |                 | 1,712  |  |  |   |       | 
|Summit Largo              |  |              |       |               |  |                 | 3,074  |  |  |   |       | 
|Summit Las Palmas         |  |              | (2     | )             |  |                 | 4,480  |  |  |   | 25,504 | 
|Summit at Lenox           |  |              |       |               |  |                 | 10,800 |  |  |   | 22,997 | 
|Summit Norcroft           |  |              | (2     | )             |  |                 | 1,453  |  |  |   |       | 
|Summit On the River       |  |              | (2     | )             |  |                 | 3,212  |  |  |   |       | 
|Summit Overlook           |  |              |       |               |  |                 | 2,376  |  |  |   |       | 
|Summit Peachtree          |  |              |       |               |  |                 | 3,453  |  |  |   |       | 
|Summit Plantation         |  |              | (2     | )             |  |                 | 7,440  |  |  |   | 18,485 | 
|Summit Portofino          |  |              |       |               |  |                 | 3,864  |  |  |   | 24,504 | 
|Summit Reston             |  |              |       |               |  |                 | 5,434  |  |  |   | 26,255 | 
|Summit Russett(7)         |  |              |       |               |  |                 | 5,723  |  |  |   |       | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                          |  |             |        |                            |  |                 |        |          |  |   |        |  |  |   |        | 
|------------------------- |  | ----------- | ------ | -------------------------- |  | --------------- | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                          |  |             |        |                           
|                          |  |             |        | Gross Amount at Which     
|                          |  | Costs       |        | Carried at Close of Period
|                          |  | Capitalized |        |                           
|                          |  | Subsequent  |        |                            |  | Buildings       |        |         
|                          |  | to          |        |                            |  | and             |        |         
|Apartments                |  | Acquisition |        | Land                       |  | Improvements(6) |        | Total(1)
|                          |  |             |        |                            |  |                 |        |         
|Reunion Park by Summit    |  | $           | 13,792 |                            |  | $               | 997    |          |  | $ | 13,786 |  |  | $ | 14,783 | 
|Summit Arboretum          |  |             | 686    |                            |  |                 | 4,080  |          |  |   | 25,089 |  |  |   | 29,169 | 
|Summit Ashburn Farm       |  |             | 12,473 |                            |  |                 | 2,438  |          |  |   | 12,473 |  |  |   | 14,911 | 
|Summit Aventura           |  |             | 26,451 |                            |  |                 | 6,368  |          |  |   | 26,450 |  |  |   | 32,818 | 
|Summit Ballantyne         |  |             | 23,953 |                            |  |                 | 3,347  |          |  |   | 23,934 |  |  |   | 27,281 | 
|Summit Belcourt           |  |             | 629    |                            |  |                 | 3,600  |          |  |   | 17,417 |  |  |   | 21,017 | 
|Summit Belmont            |  |             | 11,972 |                            |  |                 | 984    |          |  |   | 11,962 |  |  |   | 12,946 | 
|Summit Brookwood          |  |             | 33,924 |                            |  |                 | 14,320 |          |  |   | 30,204 |  |  |   | 44,524 | 
|Summit Buena Vista        |  |             | 934    |                            |  |                 | 4,670  |          |  |   | 31,433 |  |  |   | 36,103 | 
|Summit Camino Real        |  |             | 1,112  |                            |  |                 | 7,120  |          |  |   | 43,097 |  |  |   | 50,217 | 
|Summit Club at Dunwoody   |  |             | 493    |                            |  |                 | 2,934  |          |  |   | 25,003 |  |  |   | 27,937 | 
|Summit Crest              |  |             | 31,398 |                            |  |                 | 2,532  |          |  |   | 30,077 |  |  |   | 32,609 | 
|Summit Crossing           |  |             | 802    |                            |  |                 | 768    |          |  |   | 5,976  |  |  |   | 6,744  | 
|Summit Deer Creek         |  |             | 18,814 |                            |  |                 | 3,846  |          |  |   | 18,505 |  |  |   | 22,351 | 
|Summit Del Ray            |  |             | 15,965 |                            |  |                 | 5,402  |          |  |   | 13,683 |  |  |   | 19,085 | 
|Summit Doral              |  |             | 20,684 |                            |  |                 | 3,136  |          |  |   | 20,647 |  |  |   | 23,783 | 
|Summit Fair Lakes         |  |             | 38,662 |                            |  |                 | 9,552  |          |  |   | 38,631 |  |  |   | 48,183 | 
|Summit Fair Oaks          |  |             | 1,182  |                            |  |                 | 4,356  |          |  |   | 18,397 |  |  |   | 22,753 | 
|Summit Fairview           |  |             | 6,316  |                            |  |                 | 537    |          |  |   | 6,183  |  |  |   | 6,720  | 
|Summit Fairways           |  |             | 15,591 |                            |  |                 | 2,819  |          |  |   | 15,591 |  |  |   | 18,410 | 
|Summit Foxcroft           |  |             | 912    |                            |  |                 | 925    |          |  |   | 4,709  |  |  |   | 5,634  | 
|Summit Glen               |  |             | 13,883 |                            |  |                 | 3,693  |          |  |   | 13,842 |  |  |   | 17,535 | 
|Summit Governors Village |  |             | 15,568 |                            |  |                 | 1,643  |          |  |   | 15,547 |  |  |   | 17,190 | 
|Summit Grandview          |  |             | 48,734 |                            |  |                 | 2,620  |          |  |   | 48,641 |  |  |   | 51,261 | 
|Summit Grand Parc         |  |             | 35,808 |                            |  |                 | 8,512  |          |  |   | 34,996 |  |  |   | 43,508 | 
|Summit Highland           |  |             | 6,737  |                            |  |                 | 1,374  |          |  |   | 6,737  |  |  |   | 8,111  | 
|Summit Hunters Creek     |  |             | 18,038 |                            |  |                 | 2,195  |          |  |   | 18,036 |  |  |   | 20,231 | 
|Summit Lake               |  |             | 28,895 |                            |  |                 | 2,511  |          |  |   | 28,096 |  |  |   | 30,607 | 
|Summit Largo              |  |             | 15,365 |                            |  |                 | 3,077  |          |  |   | 15,362 |  |  |   | 18,439 | 
|Summit Las Palmas         |  |             | 599    |                            |  |                 | 4,480  |          |  |   | 26,103 |  |  |   | 30,583 | 
|Summit at Lenox           |  |             | 10,626 |                            |  |                 | 11,157 |          |  |   | 33,266 |  |  |   | 44,423 | 
|Summit Norcroft           |  |             | 11,194 |                            |  |                 | 1,634  |          |  |   | 11,013 |  |  |   | 12,647 | 
|Summit On the River       |  |             | 21,830 |                            |  |                 | 3,212  |          |  |   | 21,830 |  |  |   | 25,042 | 
|Summit Overlook           |  |             | 26,321 |                            |  |                 | 4,074  |          |  |   | 24,623 |  |  |   | 28,697 | 
|Summit Peachtree          |  |             | 29,778 |                            |  |                 | 4,476  |          |  |   | 28,755 |  |  |   | 33,231 | 
|Summit Plantation         |  |             | 18,246 |                            |  |                 | 7,440  |          |  |   | 36,731 |  |  |   | 44,171 | 
|Summit Portofino          |  |             | 945    |                            |  |                 | 3,864  |          |  |   | 25,449 |  |  |   | 29,313 | 
|Summit Reston             |  |             | 2,367  |                            |  |                 | 6,088  |          |  |   | 27,968 |  |  |   | 34,056 | 
|Summit Russett(7)         |  |             | 28,627 |                            |  |                 | 5,723  |          |  |   | 28,627 |  |  |   | 34,350 | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                          |  |              |        |              |  |          |             |             |  |  |       |  |  |  |            | 
|------------------------- |  | ------------ | ------ | ------------ |  | -------- | ----------- | ----------- |  |  | ----- |  |  |  | ---------- | 
|                          |  |              |        |              |  |          |             | Depreciable
|                          |  | Accumulated  |        | Date of      |  | Date     |             | Lives in   
|Apartments                |  | Depreciation |        | Construction |  | Acquired |             | Years      
|                          |  |              |        |              |  |          |             |            
|Reunion Park by Summit    |  | $            | (1,107 | )            |  |          | 6/99-9/00   |             |  |  | 4/99  |  |  |  | 5-40 years | 
|Summit Arboretum          |  |              | (3,606 | )            |  |          | 1996        | (5)         |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Ashburn Farm       |  |              | (1,002 | )            |  |          | 2/99-9/00   |             |  |  | 7/98  |  |  |  | 5-40 years | 
|Summit Aventura           |  |              | (6,383 | )            |  |          | 6/94-12/95  |             |  |  | 12/93 |  |  |  | 5-40 years | 
|Summit Ballantyne         |  |              | (3,953 | )            |  |          | 7/96-12/98  |             |  |  | 12/95 |  |  |  | 5-40 years | 
|Summit Belcourt           |  |              | (2,362 | )            |  |          | 1994        | (5)         |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Belmont            |  |              | (5,768 | )            |  |          | 1/86-5/87   |             |  |  | 1/86  |  |  |  | 5-40 years | 
|Summit Brookwood          |  |              | (204   | )            |  |          | 10/00-12/02 |             |  |  | 12/99 |  |  |  | 5-40 years | 
|Summit Buena Vista        |  |              | (4,216 | )            |  |          | 1996        | (5)         |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Camino Real        |  |              | (5,924 | )            |  |          | 1998        | (5)         |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Club at Dunwoody   |  |              | (3,582 | )            |  |          | 1997        | (5)         |  |  | 5/98  |  |  |  | 5-40 years | 
|Summit Crest              |  |              | (1,757 | )            |  |          | 10/99-9/01  |             |  |  | 9/97  |  |  |  | 5-40 years | 
|Summit Crossing           |  |              | (1,874 | )            |  |          | 1985        | (5)         |  |  | 5/95  |  |  |  | 5-40 years | 
|Summit Deer Creek         |  |              | (1,693 | )            |  |          | 2/99-6/00   |             |  |  | 1/98  |  |  |  | 5-40 years | 
|Summit Del Ray            |  |              | (5,250 | )            |  |          | 1/92-2/93   |             |  |  | 1/92  |  |  |  | 5-40 years | 
|Summit Doral              |  |              | (2,395 | )            |  |          | 12/97-11/99 |             |  |  | 12/96 |  |  |  | 5-40 years | 
|Summit Fair Lakes         |  |              | (4,723 | )            |  |          | 6/97-8/99   |             |  |  | 12/96 |  |  |  | 5-40 years | 
|Summit Fair Oaks          |  |              | (3,738 | )            |  |          | 1990        | (5)         |  |  | 12/97 |  |  |  | 5-40 years | 
|Summit Fairview           |  |              | (3,604 | )            |  |          | 3/82-3/83   |             |  |  | 3/82  |  |  |  | 5-40 years | 
|Summit Fairways           |  |              | (3,496 | )            |  |          | 9/95-12/96  |             |  |  | 8/95  |  |  |  | 5-40 years | 
|Summit Foxcroft           |  |              | (1,731 | )            |  |          | 1979        | (5)         |  |  | 5/95  |  |  |  | 5-40 years | 
|Summit Glen               |  |              | (4,881 | )            |  |          | 5/90-8/92   |             |  |  | 4/90  |  |  |  | 5-40 years | 
|Summit Governors Village |  |              | (2,151 | )            |  |          | 8/97-12/98  |             |  |  | 7/97  |  |  |  | 5-40 years | 
|Summit Grandview          |  |              | (3,490 | )            |  |          | 7/98-12/00  |             |  |  | 3/98  |  |  |  | 5-40 years | 
|Summit Grand Parc         |  |              | (43    | )            |  |          | 4/00-12/02  |             |  |  | 6/99  |  |  |  | 5-40 years | 
|Summit Highland           |  |              | (3,501 | )            |  |          | 3/86-1/87   |             |  |  | 11/85 |  |  |  | 5-40 years | 
|Summit Hunters Creek     |  |              | (1,646 | )            |  |          | 3/99-3/00   |             |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Lake               |  |              | (4,211 | )            |  |          | 9/96-1/99   |             |  |  | 4/96  |  |  |  | 5-40 years | 
|Summit Largo              |  |              | (1,566 | )            |  |          | 10/98-3/00  |             |  |  | 10/98 |  |  |  | 5-40 years | 
|Summit Las Palmas         |  |              | (3,376 | )            |  |          | 1998        | (5)         |  |  | 12/98 |  |  |  | 5-40 years | 
|Summit at Lenox           |  |              | (4,691 | )            |  |          | 1965        | (5)         |  |  | 7/98  |  |  |  | 5-40 years | 
|Summit Norcroft           |  |              | (3,717 | )            |  |          | 2/90-11/97  |             |  |  | 12/89 |  |  |  | 5-40 years | 
|Summit On the River       |  |              | (4,469 | )            |  |          | 8/95-6/97   |             |  |  | 10/94 |  |  |  | 5-40 years | 
|Summit Overlook           |  |              | (1,258 | )            |  |          | 1/00-12/01  |             |  |  | 2/99  |  |  |  | 5-40 years | 
|Summit Peachtree          |  |              | (1,458 | )            |  |          | 2/00-9/01   |             |  |  | 4/98  |  |  |  | 5-40 years | 
|Summit Plantation         |  |              | (7,026 | )            |  |          | 1/94-11/97  |             |  |  | 4/96  |  |  |  | 5-40 years | 
|Summit Portofino          |  |              | (4,887 | )            |  |          | 1995        | (5)         |  |  | 1/97  |  |  |  | 5-40 years | 
|Summit Reston             |  |              | (8,972 | )            |  |          | 1987        | (5)         |  |  | 4/94  |  |  |  | 5-40 years | 
|Summit Russett(7)         |  |              | (4,059 | )            |  |          | 7/95-6/00   |             |  |  | 11/94 |  |  |  | 5-40 years | 

90



---



##### 



|                   |       |              |        |               |  |                 |       |         |  |  |        |         | 
|------------------ | ----- | ------------ | ------ | ------------- |  | --------------- | ----- | ------- |  |  | ------ | ------- | 
|                   |       |              |        |              
|                   |       |              |        | Initial Costs
|                   |       |              |        |              
|                   |       |              |        |               |  | Buildings      
|                   |       | Related      |        |               |  | and            
|Apartments         |       | Encumbrances |        | Land          |  | Improvements(6)
|                   |       |              |        |               |  |                
|Summit San Raphael |       |              |       |               |  |                 | 2,442 |         |  |  | 15,366 |        
|Summit Sedgebrook  |       |              |       |               |  |                 | 2,392 |         |  |  |       |        
|Summit Shiloh I    |       |              |       |               |  |                 | 1,592 |         |  |  | 12,125 |        
|Summit Shiloh II   |       |              |       |               |  |                 | 396   |         |  |  |       |        
|Summit Simsbury    |       |              | (3     | )             |  |                 | 650   |         |  |  | 4,570  |        
|Summit Square      |       |              |       |               |  |                 | 2,757 |         |  |  |       |        
|Summit St. Clair   |       |              | (2     | )             |  |                 | 3,024 |         |  |  | 24,040 |        
|Summit Sweetwater  |       |              |       |               |  |                 | 3,013 |         |  |  | 18,627 |        
|Summit Touchstone  |       |              | (3     | )             |  |                 | 766   |         |  |  | 5,568  |        
|Summit Turtle Rock |       |              | 10,214 |               |  |                 | 2,500 |         |  |  | 14,074 |        
|Summit Valleybrook |       |              |       |               |  |                 | 7,300 |         |  |  |       |        
|Summit Westwood    |       |              | (2     | )             |  |                 | 1,989 |         |  |  |       |        
|                   |       |              |        |               |  |                 |       |         |  |  |        |        
|                   | Total |              |        |               |  |                 | $     | 177,772 |  |  | $      | 376,486 | 
|                   |       |              |        |               |  |                 |       |         |  |  |        |        

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                   |       |             |        |                            |  |                 |       |          |  |  |        |           |  |  |        |           | 
|------------------ | ----- | ----------- | ------ | -------------------------- |  | --------------- | ----- | -------- |  |  | ------ | --------- |  |  | ------ | --------- | 
|                   |       |             |        |                           
|                   |       |             |        | Gross Amount at Which     
|                   |       | Costs       |        | Carried at Close of Period
|                   |       | Capitalized |        |                           
|                   |       | Subsequent  |        |                            |  | Buildings       |       |         
|                   |       | to          |        |                            |  | and             |       |         
|Apartments         |       | Acquisition |        | Land                       |  | Improvements(6) |       | Total(1)
|                   |       |             |        |                            |  |                 |       |         
|Summit San Raphael |       |             | 185    |                            |  |                 | 2,442 |          |  |  | 15,551 |           |  |  | 17,993 |          
|Summit Sedgebrook  |       |             | 22,042 |                            |  |                 | 2,478 |          |  |  | 21,956 |           |  |  | 24,434 |          
|Summit Shiloh I    |       |             | 253    |                            |  |                 | 1,591 |          |  |  | 12,379 |           |  |  | 13,970 |          
|Summit Shiloh II   |       |             | 3,619  |                            |  |                 | 534   |          |  |  | 3,481  |           |  |  | 4,015  |          
|Summit Simsbury    |       |             | 727    |                            |  |                 | 650   |          |  |  | 5,297  |           |  |  | 5,947  |          
|Summit Square      |       |             | 16,607 |                            |  |                 | 3,775 |          |  |  | 15,589 |           |  |  | 19,364 |          
|Summit St. Clair   |       |             | 490    |                            |  |                 | 3,024 |          |  |  | 24,530 |           |  |  | 27,554 |          
|Summit Sweetwater  |       |             | 301    |                            |  |                 | 3,012 |          |  |  | 18,929 |           |  |  | 21,941 |          
|Summit Touchstone  |       |             | 864    |                            |  |                 | 766   |          |  |  | 6,432  |           |  |  | 7,198  |          
|Summit Turtle Rock |       |             | 525    |                            |  |                 | 2,500 |          |  |  | 14,599 |           |  |  | 17,099 |          
|Summit Valleybrook |       |             | 30,274 |                            |  |                 | 8,958 |          |  |  | 28,616 |           |  |  | 37,574 |          
|Summit Westwood    |       |             | 22,787 |                            |  |                 | 2,042 |          |  |  | 22,734 |           |  |  | 24,776 |          
|                   |       |             |        |                            |  |                 |       |          |  |  |        |           |  |  |        |          
|                   | Total |             | $      | 708,980                    |  |                 | $     | 194,276  |  |  | $      | 1,068,962 |  |  | $      | 1,263,238 | 
|                   |       |             |        |                            |  |                 |       |          |  |  |        |           |  |  |        |          

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                   |       |              |        |              |   |          |             |             |  |  |       |  |  |  |            |  | 
|------------------ | ----- | ------------ | ------ | ------------ | - | -------- | ----------- | ----------- |  |  | ----- |  |  |  | ---------- |  | 
|                   |       |              |        |              |   |          |             | Depreciable
|                   |       | Accumulated  |        | Date of      |   | Date     |             | Lives in   
|Apartments         |       | Depreciation |        | Construction |   | Acquired |             | Years      
|                   |       |              |        |              |   |          |             |            
|Summit San Raphael |       |              | (285   | )            |   |          | 1999        | (5)         |  |  | 7/02  |  |  |  | 5-40 years | 
|Summit Sedgebrook  |       |              | (3,406 | )            |   |          | 6/96-5/99   |             |  |  | 1/96  |  |  |  | 5-40 years | 
|Summit Shiloh I    |       |              | (1,038 | )            |   |          | 10/99       | (5)         |  |  | 8/00  |  |  |  | 5-40 years | 
|Summit Shiloh II   |       |              | (92    | )            |   |          | 6/01-3/02   |             |  |  | 11/00 |  |  |  | 5-40 years | 
|Summit Simsbury    |       |              | (1,785 | )            |   |          | 1985        | (5)         |  |  | 5/95  |  |  |  | 5-40 years | 
|Summit Square      |       |              | (6,427 | )            |   |          | 3/89-8/90   |             |  |  | 2/89  |  |  |  | 5-40 years | 
|Summit St. Clair   |       |              | (3,781 | )            |   |          | 1997        | (5)         |  |  | 3/98  |  |  |  | 5-40 years | 
|Summit Sweetwater  |       |              | (1,630 | )            |   |          | 12/99       | (5)         |  |  | 8/00  |  |  |  | 5-40 years | 
|Summit Touchstone  |       |              | (2,030 | )            |   |          | 1986        | (5)         |  |  | 5/95  |  |  |  | 5-40 years | 
|Summit Turtle Rock |       |              | (2,096 | )            |   |          | 1995        | (5)         |  |  | 11/98 |  |  |  | 5-40 years | 
|Summit Valleybrook |       |              | (405   | )            |   |          | 10/00-12/02 |             |  |  | 9/00  |  |  |  | 5-40 years | 
|Summit Westwood    |       |              | (2,791 | )            |   |          | 10/97-5/99  |             |  |  | 9/97  |  |  |  | 5-40 years | 
|                   |       |              |        |              |   |          |             |             |  |  |       |  |  |  |            | 
|                   | Total |              | $      | (159,536     | ) |          |             |             |  |  |       |  |  |  |            |  | 
|                   |       |              |        |              |   |          |             |             |  |  |       |  |  |  |            | 



|    |                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The aggregate cost for federal income tax
    purposes at December 31, 2002 is $808.2 million. The
    amounts reflected above represent amounts for real estate
    communities only.                                  
|   
|(2) | Encumbered by fixed rate mortgage of
    $133.9 million.                                                                                                                                                                
|   
|(3) | Encumbered by fixed rate mortgage of
    $8.0 million.                                                                                                                                                                  
|   
|(4) | Collateral for $10.8 million of letters of
    credit which serve as collateral for $10.6 million in
    tax-exempt bonds.                                                                                              
|   
|(5) | Property purchased; date reflects year
    construction was completed.                                                                                                                                                  
|   
|(6) | Includes buildings, building improvements,
    furniture, fixtures and equipment.                                                                                                                                       
|   
|(7) | Community was presented in two phases in prior
    years. Date acquired represents date first phase was acquired.
    Date of construction represents range from start of first phase
    to completion of second phase.

91



---



##### 



SUMMIT PROPERTIES PARTNERSHIP, L.P.

REAL ESTATE AND ACCUMULATED
DEPRECIATION


(Dollars in thousands)


A summary of activity for real estate assets and
accumulated depreciation is as follows:

|                             |                              |                         |        |           |   |      |        |           |   |  |         |           |  
|---------------------------- | ---------------------------- | ----------------------- | ------ | --------- | - | ---- | ------ | --------- | - |  | ------- | --------- | -
|                             |                              |                        
|                             |                              | Year Ended December 31,
|                             |                              |                        
|                             |                              | 2002                    |        | 2001      |   | 2000
|                             |                              |                         |        |           |   |     
|REAL ESTATE ASSETS(1):       |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             | Balance at beginning of year |                         | $      | 1,266,068 |   |      | $      | 1,255,657 |   |  | $       | 1,135,008 |  
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             | Acquisitions                 |                         |        | 17,866    |   |      |        |          |   |  |         | 35,343    |  
|                             | Improvements                 |                         |        | 6,417     |   |      |        | 9,478     |   |  |         | 8,582     |  
|                             | Developments                 |                         |        | 130,291   |   |      |        | 152,137   |   |  |         | 158,180   |  
|                             | Disposition of property      |                         |        | (157,404  | ) |      |        | (151,204  | ) |  |         | (81,456   | )
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             |                              |                         | (2,830 | )         |   |      | 10,411 |           |   |  | 120,649 |          
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             | Balance at end of year       |                         | $      | 1,263,238 |   |      | $      | 1,266,068 |   |  | $       | 1,255,657 |  
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          
|ACCUMULATED DEPRECIATION(1): |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             | Balance at beginning of year |                         | $      | 155,242   |   |      | $      | 145,500   |   |  | $       | 127,803   |  
|                             | Depreciation                 |                         |        | 39,282    |   |      |        | 38,746    |   |  |         | 36,436    |  
|                             | Disposition of property      |                         |        | (34,988   | ) |      |        | (29,004   | ) |  |         | (18,739   | )
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          
|                             | Balance at end of year       |                         | $      | 159,536   |   |      | $      | 155,242   |   |  | $       | 145,500   |  
|                             |                              |                         |        |           |   |      |        |           |   |  |         |          



|    |                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes only apartment communities and does not
    include fixed assets used in property development, construction
    and management of apartment communities.

92