<PAGE>

                                                                     EXHIBIT 4.2

                          [FORM OF FIXED RATE SECURITY]

REGISTERED                                                  PRINCIPAL AMOUNT
NO._________                                                $___________________
CUSIP NO._____________

                              BRE PROPERTIES, INC.

           Medium-Term Note Due Nine Months or More From Date of Issue


     [Unless this Security is presented by an authorized representative of The
Depository Trust Company, a New York corporation, 55 Water Street, New York, New
York ("DTC"), to BRE Properties, Inc., a Maryland corporation (herein called the
       ---
"Company," which term includes any successor person under the Indenture referred
 -------
to on the reverse hereof), or its agent for registration of transfer, exchange
or payment, and any Security issued is registered in the name of Cede & Co., or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.

     Unless and until it is exchanged in whole or in part for securities in
certificated form, this Security may not be transferred except as a whole by DTC
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor of DTC or
to a nominee of such successor of DTC.]/1/

     [If applicable, this Security will contain information required by U.S.
Federal Income Tax "Original Issue Discount" rules, as that term is defined in
the Internal Revenue Code of 1986, as amended.]

<TABLE>
     <S>                                             <C>
     Original Issue Date:                            Redeemable at Company's Option: Yes __  No __
     Maturity Date:                                    Initial Redemption Date:
     Interest Rate:                                    Initial Redemption Price:
     Interest Payment Dates:                           Initial Redemption Percentage:
     Regular Record Dates:                             Annual Redemption Percentage Reduction:
                                                     Redemption Limitation Date:
                                                       Indexed Note: Yes__ No__
                                                     Amortizing Note: Yes__ No__
                                                       Amortization Schedule:

     Original Issue Discount Note: Yes __ No __      Book-Entry:
     Total Amount of OID (%):                        Certificated:
     Issue Price (percentage of principal):          Specified Currency:
     Yield to Maturity (%):                          Minimum Denomination if other than $1,000:
     Initial Accrual:                                  Authorized Denomination:
     Initial Accrual Period OID (%):                   (if other than U.S. Dollars)
     (Constant - Yield Method)                       Sinking Fund:  Yes__ No__
                                                     Option of Holder to Elect Repayment: Yes__ No__
                                                     Optional Repayment Dates:
                                                     Reopening of Notes Previously Issued : Yes__ No__
</TABLE>



--------------------------------

/1/ Insert if Global Security




<PAGE>

Other /Additional Provisions:

         BRE PROPERTIES, INC., a corporation duly organized and existing under
the laws of the State of Maryland (hereinafter called the "Company", which term
                                                           -------
includes any successor corporation under the Indenture referred to below), for
value received, hereby promises to pay to ________________, or registered
assigns, the principal sum of ___________________ Dollars ($______________) on
the Maturity Date specified above (except to the extent redeemed or repaid prior
to such date) and to pay interest thereon, if any, from the Original Issue Date
specified above or from the most recent Interest Payment Date (as defined below)
to which interest has been paid or duly provided for, on the principal amount
hereof at the Interest Rate per annum specified above (computed on the basis of
a 360-day year of twelve 30-day months), semi-annually in arrears on the
Interest Payment Date, commencing with the Interest Payment Date next succeeding
the Original Issue Date specified above, and at Maturity, until the principal
hereof is paid or duly provided for. Unless otherwise specified on the face
hereof, the "Interest Payment Dates" shall be June 15 and December 15 of each
             ----------------------
year. The "Regular Record Dates" shall be June 1 for a June 15 Interest Payment
           --------------------
Date and December 1 for a December 15 Interest Payment Date and the date that is
15 calendar days immediately preceding any other Interest Payment Date, whether
or not such date shall be a Business Day. Unless this Security is a Security
which has been issued upon transfer of, in exchange for, or in replacement of, a
Predecessor Security (as hereinafter defined), interest on this Security shall
accrue from the Original Issue Date indicated above. "Predecessor Security" of
                                                      --------------------
any particular Security means every previous security evidencing all or a
portion of the same debt as that evidenced by such particular Security and, for
the purposes of this definition, any Security authenticated and delivered under
Section 306 of the Indenture in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security. If this Security has been
issued upon transfer of, in exchange for, or in replacement of, a Predecessor
Security, interest on this Security shall accrue from the last Interest Payment
Date to which interest was paid on such Predecessor Security or, if no interest
was paid on such Predecessor Security, from the Original Issue Date indicated
above. The interest so payable, and paid or duly provided for, on any Interest
Payment Date shall, as provided in the Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date specified above (whether or not a
Business Day) next preceding such Interest Payment Date. Notwithstanding the
foregoing, (a) if the Original Issue Date of this Security is after a Regular
Record Date and before the corresponding Interest Payment Date, interest so
payable for the period from and including the Original Issue Date to but
excluding such Interest Payment Date shall be paid on the next succeeding
Interest Payment Date to the Holder hereof on the related Regular Record Date;
and (b) interest payable at Maturity shall be paid to the Person to whom
principal is payable.

         Except as otherwise provided in the Indenture, any interest not
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice of which shall be given to Holders
of Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

         Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Security as specified above, this
Security shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."

         The principal of, premium, if any, and interest, if any, on, this
Security is payable by the Company in the Specified Currency specified above. If
this Security is denominated in a Foreign Currency, in the event that the
Foreign Currency is not available for payment at a time at which any payment is
required hereunder due to the imposition of exchange controls or other
circumstances beyond the Company's control or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
the Company may, in full satisfaction of its obligation to make such payment,
make instead a payment in an equivalent amount of US dollars, determined by the
Exchange Rate Agent, as defined below, on the basis of the Market Exchange Rate
for such Foreign Currency on the second Business Day prior to such payment date
or, if such Market Exchange Rate is not then available, on the basis of the most
recently available

<PAGE>

Market Exchange Rate; provided, however, that if such Specified Currency is
replaced by the Euro, the payment of principal of (and premium, if any) or
interest, if any, on this Security denominated in such currency shall be
effected in the Euro in conformity with legally applicable measures taken
pursuant to, or by virtue of, the treaty establishing the European Community, as
amended by the treaty on European Unity. The "Exchange Rate Agent" will
initially be J.P. Morgan Trust Company, National Association, but may be such
other person as designated by the Company from time to time. The "Market
Exchange Rate" for the Specified Currency means the noon dollar buying rate in
The City of New York for cable transfers for the Specified Currency as certified
for customs purposes by (or if not so certified, as otherwise determined by) the
Federal Reserve Bank of New York. Any payment made under such circumstances in
U.S. dollars or the Euro where the required payment is in a Specified Currency
other than U.S. dollars or the Euro, respectively, will not constitute an Event
of Default (as defined in the Indenture).

         If the Specified Currency is a composite currency and if such composite
currency is unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control, then the Company will be entitled to
satisfy its obligations to the Holder of this Security by making such payment in
U.S. dollars. The amount of each payment in U.S. dollars shall be computed by
the Exchange Rate Agent on the basis of the equivalent of the composite currency
in U.S. dollars. The component currencies of the composite currency for this
purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that were components of the composite
currency as of the last day on which the composite currency was used. The
equivalent of the composite currency in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by the
Exchange Rate Agent on the basis of the most recently available Market Exchange
Rate for each such Component Currency, or as otherwise specified on the face
hereof.

         If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.

         All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Security.

         [Until this Security is paid in full or payment therefor in full is
duly provided for, the Company will at all times maintain a Paying Agent (which
Paying Agent may be the Trustee) in The Borough of Manhattan in The City of New
York. The Company has initially appointed J.P. Morgan Trust Company, National
Association as the Paying Agent at its corporate trust offices at the J.P.
Morgan Trust Company, National Association, in care of JPMorgan Chase Bank,
Institutional Corporate Trust Securities Window, 55 Water Street, Room 234,
North Building, New York, New York 10041].

         If this Security is a Global Security: Unless stated to the contrary on
the face hereof, this Security is issuable only in registered form without
coupons in Book-Entry form represented by one or more global notes (each a
"Global Security") registered in the name of Cede & Co., or in the name of
another nominee of The Depository Trust Company (the "DTC"). The single global
security will represent all notes issued on the same day and having the same
terms, including, without limitation, the same interest payment dates, rate of
interest, maturity and redemption or repayment provisions, if any.

         Payments of principal, premium, if any, and interest, if any, on this
Security will be made to DTC or its nominee, as Holder of this Security, by wire
transfer of immediately available funds.

         If this Security is not a Global Security: Payment of interest, if any,
on this Security will be made on any Interest Payment Date (other than at
Maturity) by check mailed to the Person entitled thereto at such Person's last
address as it appears in the Security Register or, in the case of a Holder of
$10,000,000 (or, if the specified currency is other than U.S. dollars, the
equivalent thereof in the specified currency) or more in aggregate principal
amount of Securities of this series whether having identical or different terms
and provisions, by wire transfer of immediately

                                       3

<PAGE>

available funds if the applicable Holder has delivered appropriate wire transfer
instructions in writing to the Paying Agent not later than 15 calendar days
prior to the applicable Interest Payment Date and, unless revoked by written
notice to the Paying Agent received by the Paying Agent on or prior to the
Regular Record Date immediately preceding the applicable Interest Payment Date,
shall remain in effect with respect to any further payments with respect to this
Security payable to such Holder. Payment of principal of, premium, if any, and
interest, if any, on this Security at Maturity will be made in immediately
available funds, upon presentation and surrender of this Security and in the
case of any repayment on an optional repayment date, upon submission of a duly
completed election form, if and as required by the provisions relating to
repayment of the securities at the option of the Holder, at the office or agency
maintained by the Company for that purpose in The Borough of Manhattan, The City
of New York, which at the date hereof is the corporate trust office of the
Trustee located at the J.P. Morgan Trust Company, National Association, in care
of JPMorgan Chase Bank, Institutional Trust Securities Window, 55 Water Street,
Room 234, North Building, New York, New York 10041.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Any payment on this Security due on any day which is not a Business Day
need not be made on such day, but may be made on the next succeeding Business
Day with the same force and effect as if made on the due date and no additional
interest shall accrue on the amount so payable for the period from and after
such date. For purposes of this Security, "Business Day" means any day that is
                                           ------------
not a Saturday or Sunday and that is not a legal holiday or a day on which
banking institutions are generally authorized or obligated by law, regulation or
executive order to close in the City of New York, New York or any other place
where the principal of, premium, if any, and interest on, the Security is
payable.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature or its duly
authorized agent referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture (as defined on
the Reverse of Note) or be valid or obligatory for any purpose.

                                        4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:
                                             BRE PROPERTIES, INC.


                                             By: _______________________________
                                                 Frank C. McDowell
                                                 President and Chief Executive
                                                 Officer

ATTEST:



_____________________________________
Edward F. Lange, Jr.
Executive Vice President, Chief Financial
Officer and Secretary



TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.

J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,
   as Trustee


By:____________________________________
    Authorized Signatory

                                        5

<PAGE>

                                [Reverse of Note]

                              BRE PROPERTIES, INC.

                           MEDIUM-TERM FIXED RATE NOTE

                 DUE NINE MONTHS OR MORE FROM THE DATE OF ISSUE

General

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), of the series hereinafter specified
                            ----------
and issued under an Indenture dated as of June 23, 1997, as amended by a First
Supplemental Indenture dated as of April 23, 1998 (as further amended or
supplemented from time to time, the "Indenture"), between the Company and J.P.
                                     --------
Morgan Trust Company, National Association (successor to Chase Manhattan Bank
and Trust Company, National Association), as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), and
 -------
reference is hereby made to the Indenture, and the Officers' Certificate filed
with the Trustee on December 6, 2001 pursuant to Section 301 of the Indenture
creating the series designated on the face hereof, for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
acceptance of this Security shall be deemed to constitute the consent and
agreement by the Holder hereof to all of the terms and provisions of the
Indenture. This Security is one of the series of the Securities designated
above, of the Company, which series is limited initially to an aggregate
principal amount of $300,000,000 or the equivalent thereof in one or more
foreign or composite currencies, provided, however that the series may be
reopened, without the consent of the Holders, for the issuance of additional
Securities as may be authorized by the Company from time to time. The Securities
of this series may mature at different times, bear interest, if any, at
different rates, be redeemable at different times or not at all, be repayable at
the option of the Holder at different times or not at all, be issued at an
original issue discount and be denominated in different currencies.

         The Securities are issuable in registered form without coupons, unless
otherwise specified on the face hereof, and will be either (a) book-entry
securities represented by one or more global securities recorded in the
book-entry system maintained by DTC or any successor to DTC in its capacity as
depository for the Securities (the "Depository") or (b) certificated securities
issued to and registered in the names of, the beneficial owners or their
nominees.

Covenants

         The Company shall be subject to the covenants and agreements contained
in the Indenture with respect to the Securities.

Events of Default

         If an Event of Default, as defined in the Indenture, with respect to
Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.

Modification and Waivers; Obligation of the Company Absolute

         The Indenture permits, with certain exceptions as therein provided, the
Company, when authorized by or pursuant to a board resolution, and the Trustee
to enter into an indenture or indentures supplemental to the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of the Securities of a series or of
modifying in any manner the rights of the Holders of the Securities of a series
under the Indenture, with the consent of the Holders of not less than a majority
in principal amount of all outstanding Securities of each series affected by
such supplemental indenture, by act of said Holders delivered to the Company and
the Trustee. The Indenture also contains provisions permitting the Company to
omit in any particular instance to comply with any term, provision or condition
set forth in the covenants contained in the Indenture, if

                                       6

<PAGE>

before or after the time for such compliance the Holders of at least a majority
in principal amount of all outstanding Securities of such series, by act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect. Certain past defaults under the
Indenture and their consequences may be waived under the Indenture by the
Holders of not less than a majority in principal amount of the outstanding
Securities of a series, on behalf of the Holders of all Securities of such
series.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
(subject to Sections 305 and 307 of the Indenture) interest on, and any
Additional Amounts in respect of, this Security on the respective due dates
prescribed.

Defeasance and Covenant Defeasance

         The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness on this Security and (b) certain restrictive covenants and
certain Events of Default, upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Security.

Redemption

         If so provided on the face hereof, the Company may at its option redeem
this Security in whole or from time to time in part in increments of $1,000, or
any other integral multiple of an authorized denomination specified on the face
hereof, (provided that any remaining principal amount of this Security shall not
be less than $1,000 or such other minimum authorized denomination hereof) on or
after the date designated as the Initial Redemption Date on the face hereof at
100% of the unpaid principal amount hereof or the portion thereof redeemed
multiplied by a percentage (the "Redemption Percentage"), together with accrued
interest, if any, to the Redemption Date. The Redemption Percentage shall
initially be equal to the Initial Redemption Percentage specified on the face
hereof and shall decline at each anniversary of the Initial Redemption Date by
the amount of the Annual Redemption Percentage Reduction specified on the face
hereof, until the Redemption Percentage is equal to 100%. The Company may
exercise such option by causing the Trustee to mail a notice of such redemption
not less than 30 nor more than 60 calendar days prior to the applicable
Redemption Date to each Holder of the Securities of this series to be redeemed.
In the event of redemption of this Security in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If less than all of the Securities of this series
issued on the same day with the same terms are to be redeemed, the Securities to
be redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate.

Sinking Fund

         Unless otherwise specified on the face hereof, this Security will not
be subject to, or entitled to the benefit of any sinking fund.

Repayment at Holder's Option

         If so provided on the face hereof, this Security will be repayable
prior to the Maturity Date at the option of the Holder, in whole or in part and
in increments of $1,000 (provided that any remaining principal amount of this
Security surrendered for partial repayment shall not be less than the minimum
authorized denomination hereof), on or after the date designated as an Optional
Repayment Date on the face hereof at 100% of the unpaid principal amount to be
repaid, plus accrued unpaid interest, if any, to the Repayment Date. In order
for this Security to be repaid, the Trustee must receive at the applicable
address of the Trustee set forth below or at such other place or places of which
the Company shall from time to time notify the Holder of the within Security,
not less than 30 nor more than 60 calendar days prior to an Optional Repayment
Date, this Security and, in the case of a certificated note,

                                        7

<PAGE>

with the form below entitled "Option to Elect Repayment" duly completed, or, in
the case of a Global Security, repayment instructions from the applicable
beneficial owner to the Depository and forwarded by the Depository. Any such
election shall be irrevocable. The address to which such deliveries are to be
made is the corporate trust office of the Trustee located on the date hereof at
101 California Street, Suite 3800, San Francisco, CA 94111-5830 (or at such
other place as the Company shall notify the Holders of the Securities of this
series). All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Security for repayment will be determined by the
Company, whose determination will be final and binding. Upon any partial
repayment, this Security shall be cancelled and a new Security or Securities for
the remaining principal amount hereof shall be issued in the name of the Holder
of this Security. Beneficial owners of Global Securities electing to have all or
a portion of their book-entry Securities repaid must instruct the participant
through which they own their interest to direct DTC or its nominee as Holder of
the Security to exercise the repayment option on their behalf.

Authorized Denominations

         Unless otherwise provided on the face hereof, this Security is issuable
only in registered form without coupons. Unless a different minimum authorized
denomination is set forth on the face hereof, this Security is issuable in
minimum denominations of (i) if the Specified Currency of this Security is U.S.
dollars, U.S. $1,000 and in any larger amount in integral multiples of $1,000,
and (ii) if the Specified Currency of this Security is a currency other than
U.S. dollars (a "Foreign Currency"), the equivalent in such Foreign Currency
determined in accordance with the Market Exchange Rate (as defined below) for
such Foreign Currency on the Business Day immediately preceding the date on
which we accept an offer to purchase a Security, of U.S. $1,000 (rounded to an
integral multiple of 1,000 units of the Foreign Currency), and in any larger
amount in integral multiples of 1,000 units.

Registration of Transfer

         Upon surrender for registration of transfer of this Security at the
corporate trust office of the Trustee in The Borough of Manhattan, The City of
New York, a new Security or Securities of this series in authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, as provided in the Indenture and subject to the
limitations provided therein and to the limitations described below, without
charge except for any tax or other governmental charge imposed in connection
therewith.

         If this Security is a Global Security, this Security is exchangeable
for definitive Securities in registered form only if (x) the Depository notifies
the Company that it is unwilling or unable to continue as Depository for this
Security or if at any time the Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, if so required
by applicable law or regulation, and, in either case, the Company does not
appoint a successor Depository with respect to this Security within 90 days
after receiving such notice or after becoming aware that the Depository has
ceased to be so registered as a clearing agency, (y) the Company in its sole
discretion determines that this Security shall be exchangeable for definitive
Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect to the Securities represented hereby has occurred and is
continuing and beneficial owners representing a majority in aggregate principal
amount of the outstanding Securities represented by the Global Security advise
the Depository to cease acting as depository. If this Security is exchangeable
pursuant to the preceding sentence, it shall be exchangeable for definitive
Securities in registered form, bearing interest at the same rate, having the
same date of issuance, redemption provisions, Maturity Date and other terms and
of authorized denominations aggregating a like amount.

         If this Security is a Global Security (as specified above), this
Security may not be transferred except as a whole to a nominee of the
Depository, or by a nominee of the Depository to the Depository, or to a
successor of the Depository or to a nominee of such successor of the Depository.
Except as provided above, owners of beneficial interests in this Global Security
will not be entitled to receive physical delivery of Securities in definitive
form and will not be considered the Holders hereof for any purpose under the
Indenture.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                       8

<PAGE>

No Personal Recourse

         No recourse shall be had for the payment of the principal of, premium,
if any, or interest, if any on, this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or any of its
respective successor corporations (or other entities), whether by virtue of any
constitution, statute or rule of law, or by any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.

Defined Terms

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

Governing Law

         This Security shall be governed by and construed in accordance with the
law of the State of New York, without regard to principles of conflicts of laws,
except to the extent that the Trust Indenture Act shall be applicable.

                                        9

<PAGE>

                            OPTION TO ELECT REPAYMENT

               TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
                   AT THE OPTION OF THE HOLDER AND THE HOLDER
                          ELECTS TO EXERCISE SUCH RIGHT

         The undersigned hereby irrevocably requests and instructs the Company
to repay the within Security (or the portion thereof specified below), pursuant
to its terms, on the Optional Repayment Date first occurring after the date of
receipt by the Company of the within Security as specified below (the "Repayment
Date"), at a Repayment Price equal to 100% of the principal amount thereof,
together with interest to the Repayment Date, to the undersigned,
______________________________________, at ___________________________________
(please print or typewrite name and address of the undersigned).

         For this option to elect repayment to be effective, the Company must
receive, at the applicable address of the Paying Agent set forth in the within
Security or at such other place or places of which the Company shall from time
to time notify the Holder of the within Security, at least 30 but not more than
60 calendar days prior to an Optional Repayment Date, either (i) this Security,
with this "Option to Elect Repayment" form duly completed, or (ii) a telegram,
telex, facsimile transmission, or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States of America setting forth (a) the
name, address and telephone number of the Holder of the Security, (b) the
principal amount of the Security and the amount of the Security to be repaid,
(c) a statement that the option to elect repayment is being irrevocably
exercised thereby, and (d) a guarantee stating that the Security to be repaid
with the form entitled "Option to Elect Repayment" on the addendum to the
Security duly completed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and such Security and form duly completed are received by the Company by
such fifth Business Day).

         If less than the entire principal amount of the within Security is to
be repaid, specify the portion thereof (which shall be an integral multiple of
$1,000) which the holder elects to have repaid: $_____________.

         If less than the entire principal amount of the within Security is to
be repaid, specify the denomination or denominations (which shall be $1,000 or
an integral multiple thereof) of the Security or Securities to be issued to the
holder for the portion of the within Securities not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid): $______________.

Date: ___________________

                  Notice: The signature to this Option to Elect
                   Repayment must correspond with the name as
                  written on the face of the within Security in
                     every particular without alteration or
                      enlargement or any change whatsoever.

                                       10

<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM - as tenants in common

         TEN ENT - as tenants by the entireties

         JT TEN - as joint tenants with right of survivorship and not as tenants

         in common UNIF GIFT MIN ACT - __________________ Custodian ____________
                                          (Custodian)                  (Minor)
         Under Uniform Gifts to Minors Act





         _________________________
                  (State)

         Additional abbreviations may also be used though not in the above list.


         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
         transfer(s) unto

Please Insert Social Security or
Other Identifying Number of Assignee

_______________________________

____________________________________________________________
____________________________________________________________
____________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL
ZIP CODE OF ASSIGNEE)


the within Security of BRE PROPERTIES, INC. and all rights thereunder and does
hereby irrevocably constitute and appoint __________________ attorney to
transfer the said Security on the books of the within-named Company, with full
power of substitution in the premises.

Dated:_________________________

                                                               _________________
                                    Signature Guaranteed:  _____________________


NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Security in every particular, without
alteration or enlargement or any change whatsoever.

                                       11