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                                                                    EXHIBIT 10.6

                                 LOAN AGREEMENT

     This Loan Agreement, dated as of August __ 2003 (the "AGREEMENT"), is
between BCP Funding, LLC, a Delaware limited liability company ("LENDER"), and
Boston Capital Real Estate Investment Trust, Inc., a Maryland corporation
("BORROWER"). Certain terms in this Agreement shall have the meanings set forth
in EXHIBIT A attached hereto.

                                    RECITALS

     WHEREAS, Lender has agreed to make loans available to Borrower (the "Line
of Credit") for the purpose of financing investments by the Borrower in
multi-family residential apartment complexes;

     NOW THEREFORE, in consideration of the recitals and of the representations,
warranties, covenants and conditions set forth below, and for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties agree as follows:

1.   LINE OF CREDIT AND INTEREST

     1.1       LOANS. Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties and covenants of
Borrower made herein, Lender agrees to make loans ("LOANS", each a "LOAN") to
Borrower at Borrower's request from time to time, PROVIDED that the maximum
aggregate principal amount of all Loans shall not exceed the Maximum Amount, and
PROVIDED, FURTHER, that at the time Borrower requests a Loan, and after giving
effect to the making or issuance thereof, there has not occurred and is not
continuing any Default or Event of Default. All requests for Loans shall be in
such form and shall contain such information as may be reasonably required by
Lender. The Obligations on account of the Loans shall be evidenced by a
promissory note (the "NOTE") substantially in the form of EXHIBIT 1.1 attached
hereto. Each advance of a Loan shall be specifically for the purposes
contemplated herein and shall be subject to all conditions specified in Sections
4 and 5.1 through 5.3 below.

     1.3       INTEREST. The Loans shall bear interest as follows:

               (a)  BASE INTEREST. Interest shall accrue in arrears on the
     outstanding principal balance of the Loans at an annual rate of 9.5% ("BASE
     INTEREST"), and shall be due and payable with respect to each calendar
     quarter (the "Current Quarter") within 30 days of the close of the Current
     Quarter to the extent of Cash Available for Debt Service for the Current
     Quarter and to the extent not paid shall accrue and be added to principal
     and shall thereafter bear Base Interest as set forth above. All outstanding
     principal and accrued Base Interest shall be due and payable on the
     Maturity Date.

               (b)  BONUS INTEREST. In addition to Base Interest, Borrower shall
     pay Lender additional interest on the outstanding principal balance of the
     Loans at an annual rate of 5.3% ("BONUS INTEREST"), which shall be due and
     payable with respect to the Current Quarter within 30 days of the close of
     the Current Quarter to the extent of Cash Available for Debt Service for
     the Current Quarter only after payment of Base Interest for the

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     Current Quarter. Bonus Interest which is unpaid shall accrue without
     further interest but shall not be added to the outstanding principal
     balance of the Loans or be considered in calculating Base Interest. Accrued
     Bonus Interest shall be payable quarterly solely from Cash Available for
     Debt Service for the Current Quarter only after payment of Base Interest
     and Bonus Interest for the Current Quarter. Anything to the contrary herein
     notwithstanding, the aggregate Bonus Interest payable under this Agreement
     shall in no event exceed the Cash Available for Debt Service on or before
     the Maturity Date after payment of all accrued Base Interest and any
     Accrued Bonus Interest which is not paid from Cash Available for Debt
     Service on or before the Maturity Date, shall not be due or payable.

               (c)  DEFAULT INTEREST. If an Event of Default shall occur, then
     at the option of Lender the unpaid principal balance of the Loans shall
     bear interest, to the extent permitted by law, compounded monthly at an
     interest rate equal to the Default Rate in effect on the day such Event of
     Default occurs, until all then existing Events of Default are cured or
     waived.

Except as otherwise stated in this Agreement, all interest and fees, if any,
will be computed on the basis of a 365-day year for the actual number of days
elapsed. Each quarterly payment of interest shall be accompanied by a statement
setting forth the determination of Cash Available for Debt Service for the
Current Quarter with respect to which such payment was made, which statement
shall be certified to be true, correct and complete by the Borrower to its best
knowledge.

     1.4       REPAYMENT TERMS. Borrower shall repay all amounts advanced and
outstanding under this Line of Credit as follows:

               (a)  Borrower shall pay all outstanding principal and all accrued
     Base Interest not later than the Maturity Date.

               (b)  Borrower may prepay amounts advanced and outstanding under
     this Line of Credit, at any time, without premium or penalty.

     1.5       PREPAYMENTS AND RELEASE OF PROPERTY INVESTMENTS. Upon the initial
or any subsequent closing of the initial public offering of shares in Borrower
and at the written election of the Borrower, the Lender shall release its
security interest in a portion of the Collateral constituting Borrower's
interest in a Property Investment, including without limitation Borrower's
interest in the Ownership Company through which it holds a Property Investment,
as more particularly set forth in the Security Agreement, upon repayment of all
Loans, including any Prior Loans, made with respect to such Property Investment
together with any accrued and unpaid Base Interest thereon, provided that there
has not occurred and is not then continuing any Default or Event of Default. Any
cash receipts of Borrower from any Property Investment which is released
pursuant this paragraph (a "RELEASED PROPERTY INVESTMENT") shall not be taken
into account in determining Cash Available for Debt Service from and after the
date of such release.

     1.6       SUBORDINATION. The Lender, for itself, its successors and assigns
and each successor holder of the Note or any interest in the Loans by its
acceptance thereof, likewise

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covenants and agrees, that notwithstanding any other provision of this Agreement
or the Note, the payment of the principal of and interest on each and all of the
Loans shall be subordinated in right of payment, to the extent and in the manner
hereinafter set forth, to the prior payment in full of all Senior Debt (as
hereinafter defined) at anytime outstanding. The provisions of this Section 1.6
shall constitute a continuing representation to all Persons who, in reliance
upon such provisions, become the holders of or continue to hold Senior Debt, and
such provisions are made for the benefit of the holders of Senior Debt, and such
holders are hereby made obligees hereunder the same as if their names were
written herein as such, and they or any of them may proceed to enforce such
provisions against the Lender or against the holder of any Loan without the
necessity of joining the Borrower as a party.

               (a)  PAYMENT OF SENIOR DEBT. In the event of any insolvency or
     bankruptcy proceedings, or any receivership, liquidation, reorganization or
     other similar proceedings in connection therewith, relative to the Borrower
     or to its property, or, in the event of any proceedings for voluntary
     liquidation, dissolution or other winding up of the Borrower or
     distribution or marshalling of its assets or any composition with creditors
     of the Borrower, whether or not involving insolvency or bankruptcy, then
     and in any such event all Senior Debt shall be paid in full before any
     payment or distribution of any character, whether in cash, securities or
     other property, shall be made on account of the Loans; and any such payment
     or distribution, except securities which are subordinated, and junior in
     right of payment to the payment of all Senior Debt then outstanding in
     terms of substantially the same tenor as this Section 1.6, which would, but
     for the provisions hereof, be payable or deliverable in respect of the
     Loans shall be paid or delivered directly to the holders of Senior Debt (or
     their duly authorized representatives), in the proportions in which they
     hold the same, until all Senior Debt shall have been paid in full, and
     every holder of the Note or any interest in the Loans by its acceptance
     thereof shall have designated and appointed the holder or holders of Senior
     Debt (and their duly authorized representatives) as his or its agents and
     attorneys-in-fact to demand, sue for, collect and receive such Senior Debt
     holder's ratable share of all such payments and distributions and to file
     any necessary proof of claim therefor and to take all such other action
     (including the right to vote such Senior Debt holder's ratable share of the
     Loans), in the name of the holders of the Note or any interest in the Loans
     or otherwise, as such Senior Debt holders (or their authorized
     representatives) may determine to be necessary or appropriate for the
     enforcement of this Section 1.6. The Lender and each successor holder of
     the Note or any interest in the Loans by its or his acceptance thereof
     agrees to execute, at the request of the Borrower, a separate agreement
     with any holder of Senior Debt on the terms set forth in this Section 1.6,
     and to take all such other action as such holder or such holder's
     representative may request in order to enable such holder to enforce all
     claims upon or in respect of such holder's ratable share of the Loans.

               (b)  NO PAYMENT ON LOANS UNDER CERTAIN CONDITIONS. In the event
                    that:

                    (i)     any default occurs in the payment of the principal
                    of or interest on any Senior Debt and during the continuance
                    of such default for a period up to 120 days and thereafter
                    if judicial proceedings shall have been instituted with
                    respect to such defaulted payment, or (if a shorter period)
                    until such

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                    payment has been made or such default has been cured or
                    waived in writing by such holder of Senior Debt; or

                    (ii)    the maturity of any Senior Debt is accelerated by
                    any holder thereof because of a default with respect thereto
                    and until such acceleration has been rescinded or said
                    Senior Debt has been paid;

     then and during the continuance of either of such events no payment of
     principal or interest on the Loans shall be made by the Borrower or
     accepted by any holder of the Loans who has received notice from the
     Borrower or from a holder of Senior Debt of either of such events.

               (c)  PAYMENTS HELD IN TRUST. In case any payment or distribution
     shall be paid or delivered to any holder of the Note or any interest in the
     Loans before all Senior Debt shall have been paid in full, in violation or
     contravention of the terms of this subordination, such payment or
     distribution shall be held in trust for and paid and delivered ratably to
     the holders of Senior Debt (or their duly authorized representatives),
     until all Senior Debt shall have been paid in full.

               (d)  SUBROGATION. Subject to the payment in full of all Senior
     Debt and until the Loans shall be paid in full, any holder of the Note or
     any interest in the Loans shall be subrogated to the rights of the holders
     of Senior Debt (to the extent of payments or distributions previously made
     to such holders of Senior Debt pursuant to the provisions of subsections
     (a) and (c) of this Section 1.6) to receive payments or distributions of
     assets of the Borrower applicable to the Senior Debt. No such payments or
     distributions applicable to the Senior Debt shall, as between the Borrower
     and its creditors, other than the holders of Senior Debt and the holders of
     the Loans, be deemed to be a payment by the Borrower to or on account of
     the Loans; and for the purposes of such subrogation, no payments or
     distributions to the holders of Senior Debt to which the holders of the
     Loans would be entitled except for the provisions of this Section 1.6
     shall, as between the Borrower and its creditors, other than the holders of
     Senior Debt and the holders of the Loans, be deemed to be a payment by the
     Borrower to or on account of the Senior Debt.

               (e)  SCOPE OF SECTION. The provisions of this Section 1.6 are
     intended solely for the purpose of defining the relative rights of the
     holder of the Note or any interest in the Loans, on the one hand, and the
     holders of the Senior Debt, on the other hand. Nothing contained in this
     Section 1.6 or elsewhere in this Agreement or the Note is intended to or
     shall impair, as between the Borrower, its creditors other than the holders
     of Senior Debt, and the holder of the Note or any interest in the Loans,
     the obligation of the Borrower, which is unconditional and absolute, to pay
     to the holder of the Note or any interest in the Loans the principal of and
     interest on the Loans as and when the same shall become due and payable in
     accordance with the terms thereof, or to affect the relative rights of the
     holder of the Note or any interest in the Loans and creditors of the
     Borrower other than the holders of the Senior Debt, nor shall anything
     herein or therein prevent the holder of the Note or any interest in the
     Loan from accepting any payment with respect to such Loan or exercising all
     remedies otherwise permitted by applicable law upon default

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     under such Loan, subject to the rights, if any, under this Section 1.6 of
     the holders of Senior Debt in respect of cash, property or securities of
     the Borrower received by the holder of the Note or any interest in the
     Loans.

               (f)  SURVIVAL OF RIGHTS. The right of any present or future
     holder of Senior Debt to enforce subordination of the Loans pursuant to the
     provisions of this Section 1.6 shall not at any time be prejudiced or
     impaired by any act or failure to act on the part of the Borrower or any
     such holder of Senior Debt, including without limitation; any forbearance,
     waiver, consent, compromise, amendment, extension, renewal, or taking or
     release of security of or in respect of any Senior Debt or by noncompliance
     by the Borrower with the terms of such subordination regardless of any
     knowledge thereof such holder may have or otherwise be charged with.

               (g)  AMENDMENT OR WAIVER. The provisions of this Section 1.6 may
     not be amended or waived in any manner which is detrimental to any Senior
     Debt without the consent of the holders of all then existing Senior Debt.

               (h)  SENIOR DEBT DEFINED. The term "SENIOR DEBT" shall mean (i)
     all Indebtedness of the Borrower for money borrowed from banks or other
     institutional lenders, including any extension or renewals thereof, whether
     outstanding on the date hereof or thereafter created or incurred, which is
     not by its terms subordinate and junior to or on a parity with the Loans
     and which is permitted hereby at the time it is created or incurred, and
     (ii) all guaranties by the Borrower which are not by their terms
     subordinate and junior to or on a parity with the Loans and which are
     permitted hereby at the time they are made, of Indebtedness of any
     Subsidiary if such Indebtedness would have been Senior Debt pursuant to the
     provisions of clause (i) of this sentence had it been Indebtedness of the
     Borrower. In making any loans which are (or the guaranties of which are)
     intended to be Senior Debt, the lenders or purchasers shall be entitled to
     rely as to the fact that such Indebtedness or guaranty is permitted hereby
     upon a certificate by the Borrower's President or Treasurer purporting to
     show such Indebtedness or guaranty will not result in the Borrower's
     failure to comply with the provisions of Section 7 hereof as of the date of
     the loan or guarantee.

     1.7.      AMENDMENT AND RESTATEMENT OF CERTAIN PRIOR LOANS. This Agreement
supersedes and replaces in their entirety all Prior Loan Agreements from and
after the date hereof with respect to the Prior Loans, and it is the intention
of the parties that the Prior Loans be treated for all purposes as made pursuant
to this Agreement as if this Agreement had been in effect on the dates the Prior
Loans were made, provided that no Prior Loan shall be treated as being in
default as of the date hereof and defaults under the Prior Loan Agreements, if
any, existing on the date hereof are hereby waived. The parties hereto
acknowledge and agree, however, that (i) this Agreement and all other loan
documents executed and delivered herewith do not constitute a novation, payment
and reborrowing or termination of the Prior Loans under the Prior Loan
Agreements as in effect prior to the date hereof, (ii) such Prior Loans are in
all respects continuing with only the terms being modified as provided in this
Agreement and the other loan documents, and (iii) all references in the other
the Prior Loan Agreements to this Agreement shall be deemed to refer without
further amendment to this Agreement.

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2.   FEES [INTENTIONALLY OMITTED].

3.   COLLATERAL

     3.1       SECURED LINE OF CREDIT. The Line of Credit shall be secured by
the security interests described in the Security Agreement of even date herewith
between Borrower and Lender (the "LENDER SECURITY AGREEMENT") and the Pledge
Agreement of even date herewith, between Borrower's parent company and Lender,
pursuant to which Borrower and Borrower's parent company assigns and grants
rights and interests in the Collateral described and as defined therein (the
"COLLATERAL").

     3.2       INVESTMENT SECURITIES. At such time as there exists an Event of
Default, Lender may transfer any equity interests which it holds as Collateral
into its name or that of its nominee and may receive the income and any
distributions thereon and hold the same as Collateral for Borrower's obligations
hereunder, or apply the same to any such obligation.

4.   CONDITIONS

     4.1       GENERAL CONDITIONS. Before Lender shall be committed to extend
any credit to Borrower under this Agreement, Lender must receive and approve (in
its unrestricted discretion) any documents and other items it may require as
conditions precedent to this Agreement, including, without limitation, those
items listed on the Closing Checklist attached hereto as EXHIBIT 4.1.

     4.2       SPECIFIC APPROVALS. Before Lender shall be committed to extend
any credit to Borrower under this Agreement to fund an acquisition by Borrower
of a proposed investment in an apartment complex (a "PROPERTY INVESTMENT,"
provided that such term shall not include any Released Property Investment),
Borrower shall prepare or cause to be prepared a term sheet for each proposed
Property Investment and shall submit the same for review to Lender. Borrower
shall furnish any other information reasonably requested by Lender. Borrower may
furnish Lender various tables and charts illustrating the potential results of
operations of a proposed Property Investment under various scenarios and various
hypothetical sale scenarios. Lender acknowledges any such illustrations would be
based upon assumptions as to future events which cannot be predicted with any
degree of certainty and based upon assumptions as to the future furnished by
third party development partners in Property Investments. There is no assurance
that the assumptions will be shown to be correct. Actual results will usually
vary and the variances may be material. Lender shall, in its sole and absolute
discretion, notify Borrower of its approval of a proposed Property Investment
within 10 days; provided, however, that Lender shall be under no obligation to
approve any particular proposed Property Investment.

     Borrower expressly agrees and acknowledges that Property Investments,
loans, financings or other financial transactions under or contemplated by this
Agreement shall comply with the precepts of Islamic Shari'ah as interpreted by
Lender as Borrower receives notice of such precepts from time to time. Upon any
such notification, Lender and Borrower shall cooperate in good faith and
implement such precepts in such manner as shall give effect to such precepts
while preserving the existing benefit of its bargain for each of Lender,

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Borrower, and any other participant in Property Investments and minimizing
disruption of the existing relationships, agreements and arrangements among such
parties. Lender, after consultation with, and consideration by, its Shari'ah
Committee, has the sole discretion to approve or disapprove the implementation
of such precepts and matters affected by such precepts, even if such decisions
could have an adverse effect on Borrower or any other participant in Property
Investments, provided the implementation of such precepts does not adversely
effect the economic relationship of Lender, Borrower and any other participant
in Property Investments, deprive the Borrower or any other participant in
Property Investments of the benefit of its bargain, or cause the Borrower and
any other participant in Property Investments to incur additional material
obligations or liabilities, and such approval or disapproval by Lender shall not
be unreasonably withheld, delayed or conditioned.

5.   DISBURSEMENTS, PAYMENTS AND COSTS

     5.1       REQUESTS FOR LOANS. Each request for a Loan shall be sent to
Lender at least three (3) Business Days prior to the date on which the Loan is
requested to be made and shall be made in writing in the form attached hereto as
EXHIBIT 5.1. Borrower shall make requests for Loans only with respect to
Property Investments approved by Lender in accordance with Section 4.2.

     5.2       AUTHORIZED SIGNERS. Borrower authorizes either (a)
Jeffrey H. Goldstein, President, or (b) Marc N. Teal, Senior Vice President, to
sign all Loan requests and other documents in connection with the administration
of the Loan. Borrower represents and warrants to Lender that the following
signatures are specimen signatures of the persons named in the preceding
sentence:

               NAME                            SIGNATURE

     Jeffrey H. Goldstein
                                               ---------------------------------

     Marc N. Teal
                                               ---------------------------------

     5.3       DISBURSEMENT OF LOAN. Each Loan made by Lender will be:

               (a)  deposited into Borrower's account at ______;

               (b)  made in immediately available funds; and

               (c)  entered into the Loan Account kept by Lender relating to the
     Loan (which shall be presumed correct in the absence of manifest error).

     5.4       PAYMENTS. Each payment by Borrower will be to Lender at Lender's
address shown below its signature hereto (or such other place as Lender may from
time specify in writing) in lawful currency of the United States of America, in
immediately available funds, without counterclaim or setoff and free and clear
of, and without any deduction or withholding for, any taxes or other payments.
All payments shall be applied first to the payment of all fees,

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expenses and other amounts due to Lender (excluding principal and interest),
then to accrued interest, and the balance on account of outstanding principal;
provided, however, that during the continuation of an Event of Default, payments
will be applied to the obligations of Borrower to Lender as Lender determines in
its unrestricted discretion. If any payment hereunder becomes due on a day which
is not a Business Day, the due date of such payment shall be extended to the
next succeeding Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment.

6.   REPRESENTATIONS AND WARRANTIES

     When Borrower signs this Agreement, and on a continuing basis until each
Lender is repaid in full, Borrower makes the following representations and
warranties:

     6.1       ORGANIZATION OF BORROWER. Borrower is a corporation duly formed
and existing under the laws of Maryland.

     6.2       AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder or contemplated hereby, are within Borrower's powers, have
been duly authorized, and do not conflict with its charter or other governing
documents.

     6.3       ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and
binding agreement of Borrower, enforceable against Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable; except to
the extent that enforceability may be limited by applicable Bankruptcy,
insolvency or other similar laws of general application relating to or affecting
the enforcement of creditors' rights from time to time in effect and by general
principles of equity.

     6.4       GOOD STANDING. In each state in which Borrower does business, it
is properly licensed and qualified, in good standing, and, where required, in
compliance with fictitious name statutes.

     6.5       NO CONFLICTS. This Agreement does not conflict with any law,
agreement, legal requirement or obligation to which Borrower is a party or by
which Borrower is bound.

     6.6       FINANCIAL INFORMATION. To the best of Borrower's knowledge, all
financial information of the Borrower provided to Lender is true in all material
respects.

     6.7       LAWSUITS. There is no lawsuit, tax claim or other dispute pending
or, to the best of Borrower's knowledge, threatened against Borrower which, if
lost, would impair Borrower's financial condition or ability to repay the Line
of Credit.

     6.8       NO EVENT OF DEFAULT. There is no event which is, or with notice
or lapse of time or both would be, an Event of Default under this Agreement.

     6.9       LOCATION OF BORROWER. Borrower's place of business (or, if
Borrower has more than one place of business, its chief executive office) is
located at the address listed under Borrower's signature on this Agreement.

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     6.10      BORROWER NOT A "FOREIGN PERSON." Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986 (the "Code"), as amended from time to time.

7.   COVENANTS

     Borrower agrees, so long as credit is available under this Agreement and
until each Lender is repaid in full:

     7.1       FINANCIAL INFORMATION. To provide the following financial
information and statements and such additional information as requested by
Lender from time to time:

               (a)  As soon as available but in no event more than 180 days
     after Borrower's fiscal year end, Borrower's annual consolidated financial
     statements. These financial statements which need not be audited must
     include a balance sheet, income statement, changes in financial position
     and cash flow statement.

               (b)  A quarterly unaudited balance sheet and income statement for
     Borrower, and such information as Lender may reasonably request, in no
     event more than 60 days following every fiscal quarter.

               (c)  Within five business days the delivery thereof to the
     Borrower, copies of any and all reports delivered by Subsidiaries of
     Borrower with respect to Property Investments.

               (d)  Such other information respecting the operations, activities
     and financial conditions of Borrower as Lender may from time to time
     reasonably request.

     7.2       NOTICES TO LENDER. To promptly notify Lender in writing of:

               (a)  any action, suit or proceeding instituted or threatened
     against Borrower, or arising out of or relating to any loan or investment
     activity, in or before any court, governmental or administrative body,
     agency, board or commission or any adverse regulatory action taken or, to
     the best of Borrower's knowledge, proposed to be taken by any governmental
     body or agency against Borrower which could materially adversely affect the
     Loans or Borrower;

               (b)  any substantial dispute between Borrower or any government
     authority;

               (c)  any material adverse change in Borrower's, or to Borrower's
     knowledge, any Property Investment's condition (financial or otherwise) or
     operations; and

               (d)  any change in Borrower's name, legal structure, jurisdiction
     of formation, or principal place of business.

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     7.3       BOOKS AND RECORDS. Borrower must maintain books and records
adequate to provide the information specified herein, and retain such books and
records and copies of the reports and statements for a period of at least four
(4) years after repayment of the Obligations. Borrower shall make such books and
records available for inspection or audit by Lender and its agents and
representatives at reasonable times upon three (3) Business Days' notice, during
normal business hours, for such matters as, without limitation, documentation,
loan and tax credit compliance monitoring.

     7.4       AUDITS. To allow Lender and its agents to inspect Borrower's
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of Borrower's properties, books or records is in the
possession of a third party, Borrower authorizes that third party to permit
Lender or its agents to have access to perform inspections or audits and to
respond to Lender's requests for information concerning such properties, books
and records at any reasonable time.

     7.5       COMPLIANCE WITH LAWS. To comply with all laws (including any
fictitious name statute and, including, without limitation, laws regarding
payment of taxes), regulations and orders of any government body with authority
over Borrower's business.

     7.6       COOPERATION. To take any action reasonably requested by Lender to
carry out the intent of this Agreement.

     7.7       INSURANCE. To maintain and keep in force and in adequate amounts
such insurance as is customary and usual for similarly situated companies in its
business and as Lender may reasonably require from time to time.

     7.8       LIMITATION ON INDEBTEDNESS. Except with the prior written consent
of Lender, Borrower will not create, incur, assume or suffer to exist, or in any
manner become or be liable directly or indirectly with respect to, any
Indebtedness except:

               (a)  Borrower's obligations hereunder and as contemplated hereby;

               (b)  Indebtedness for borrowed money existing on the date of this
     Agreement, listed and described, but only to the extent so listed and
     described on, EXHIBIT 7.8 attached hereto;

               (c)  Indebtedness for the purchase price of capital assets or
     investments in partnerships, or other indebtedness, if, and solely to the
     extent, approved by Lender in its unrestricted discretion;

               (d)  Indebtedness for taxes, assessments or governmental charges
     to the extent that payment therefor shall at the time not be due and
     payable; and

               (e)  Indebtedness on open account for the purchase of services,
     materials and supplies incurred by Borrower in the ordinary course of
     business (not as a result of borrowing), so long as all of such open
     account indebtedness shall be paid promptly and discharged when due or in
     conformity with customary trade terms and practices, except

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     for any such open account Indebtedness which is being contested in good
     faith by Borrower, as to which adequate reserves required by GAAP have been
     established and are being maintained and as to which no encumbrance has
     been placed on any property of Borrower.

     7.9       ADDITIONAL NEGATIVE COVENANTS. Not to, without Lender's prior
written consent (which may be withheld in Lender's unrestricted discretion):

               (a)  consent to any Sale or Refinancing or any other transfer,
     sale, assignment, encumbrance or pledge of any Property Investment;

               (b)  amend or modify the documents relating to any Property
     Investment in a manner which could adversely affect Lender;

               (d)  permit any change in control of the Property Investment;

     7.10      USE OF PROCEEDS. Borrower will use the proceeds of the Loans
solely for the purpose of making Property Investments approved by Lender.

8.   EVENTS OF DEFAULT

     EVENTS OF DEFAULT. Borrower will be deemed to be in default under this
Agreement upon the occurrence of any of the following events ("EVENTS OF
DEFAULT"):

     8.1       FAILURE TO PAY. Borrower fails to make a payment within ten (10)
Business Days after the due date under this Agreement.

     8.2       FALSE INFORMATION. Any representation or warranty made in this
Agreement or any security agreement required under this Agreement, or in any
report, certificate, financial statement or instrument furnished by Borrower in
connection herewith or therewith will prove to have been false or misleading
when made in any material respect.

     8.3       PERFECTED LIEN. Borrower takes any action, or fails to take any
action, which results in Lender's failure to have a valid, binding and
enforceable perfected security interest in or lien on any property covered by
any security agreement required under this Agreement or such security interest
or lien fails to be prior to the rights and interests of others.

     8.4       MATERIAL ADVERSE CHANGE. Any material adverse change occurs in
Borrower's condition (financial or otherwise) or result of operations of
Borrower or in Borrower's business that may reasonably result in (or with the
passage of time may reasonably cause) their inability to repay the Loans.

     8.5       BANKRUPTCY. Borrower files a Bankruptcy petition, a Bankruptcy
petition is filed against Borrower, or Borrower makes a general assignment for
the benefit of creditors. The default will be deemed cured if any Bankruptcy
petition filed against Borrower is dismissed within a period of sixty (60) days
after the filing; provided, however, that Lender will not be obligated to make
any Loan or extend any additional credit to Borrower during that period.

                                       11
<Page>

     8.6       RECEIVERS. A receiver or similar official is appointed for
Borrower's business, or the business is terminated.

     8.7       OTHER BREACH UNDER AGREEMENT. Borrower fails to comply with any
provision contained in this Agreement other than those provisions elsewhere
referred to in this Section and, with respect to any such failure which is
curable, does not cure that failure within a period of thirty (30) consecutive
days after written notice from Lender.

9.   REMEDIES

     If an Event of Default exists:

     9.1       At the option of Lender, Lender may, by written notice to
Borrower, declare the Loans and any and all other Indebtedness of Borrower to
Lender in connection with this Agreement (including interest, costs, expenses,
and Yield Maintenance Fee, if any), forthwith to be due and payable, whether or
not the Loans or the other indebtedness will be otherwise due and payable and
whether or not Lender will have initiated any other action for the collection of
the Loans, and whereupon the Loans and/or such other indebtedness will become
due and payable without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by Borrower.

     9.2       Lender may, in any order or priority as it may determine in its
unrestricted discretion, pursue any and all remedies available at law or in
equity for the collection of the Loans and enforcement of the provisions hereof,
subject to Section 12 hereof.

     9.3       No course of dealing on the part of Lender or any delay or
failure on the part of Lender to exercise any right, power or remedy will
operate as a waiver thereof or otherwise prejudice Lender's rights, powers and
remedies.

     9.4       If Borrower becomes the subject of any Bankruptcy or other
insolvency proceeding, all of Borrower's obligations under this Agreement shall
automatically become immediately due and payable upon the filing of the petition
commencing such proceeding, all without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character. Upon the occurrence of any other Event of
Default, all of Borrower's obligations under this Agreement may become
immediately due and payable without notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character, all at Lender's option, exercisable in its
unrestricted discretion.

     9.5       Lender shall have the right in its unrestricted discretion to
exercise its remedies under the Lender Security Agreement and take possession of
any of the Collateral not already in its possession, whether in person, by agent
or by court-appointed receiver, and to take any and all actions which Lender in
Lender's unrestricted discretion may consider necessary and appropriate to
protect Lender's security and to preserve Lender's rights under this Agreement,
including entering into, enforcing, modifying or canceling any contractual
arrangements, all on such terms and conditions as Lender may consider proper. If
Lender exercises any of the rights or remedies provided in this Section 9.5,
that exercise shall not make Lender, or cause Lender to be deemed

                                       12
<Page>

to be, a partner or joint venturer of any of Borrower or Borrower's affiliated
entities. All sums which are expended by Lender in connection with taking
possession of the Collateral and any actions to protect Lender's security or to
preserve Lender's rights under this Agreement shall be considered to be an
additional Loan bearing interest at the Default Rate and shall be secured by the
Collateral.

10.  ENFORCING THIS AGREEMENT; MISCELLANEOUS

     10.1      MASSACHUSETTS LAW. This Agreement is governed by, and shall be
interpreted in accordance with the laws of the Commonwealth of Massachusetts
(excluding its laws applicable to conflicts or choice of law).

     10.2      SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement shall nonetheless be and remain
enforceable. Lender retains all rights, even if it makes a Loan after a Default
or an Event of Default. If Lender waives a Default or Event of Default, it may
enforce any and all later Defaults and Event of Defaults. Any consent or waiver
under this Agreement must be in writing.

     10.3      COSTS AND EXPENSES. Borrower shall pay on demand all reasonable
expenses of Lender in connection with the preparation, administration (including
any out-of-pocket expenses, and expenses of examinations or audits contemplated
by Section 7.3 and 7.4 hereof, but excluding internal costs and expenses of
Lender typically incurred by financial institutions in the ordinary course of
administering loans of the type contemplated by this Agreement), default,
collection (after the occurrence and during the continuation of an Event of
Default), waiver or amendment of loan terms, or in connection with Lender's
exercise, preservation or enforcement of any of its rights, remedies or options
hereunder, including, without limitation, fees of outside legal counsel,
accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the
Loans or any collateral therefor, and the amount of all such expenses shall,
until paid, bear interest at the rate applicable to principal hereunder
(including any applicable Default Rate) and be an obligation secured by the
Collateral.

     10.4      COMPLIANCE WITH USURY LAWS. All agreements between Borrower,
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to
Lender for the use or the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof, PROVIDED,
HOWEVER, that in the event there is a change in the law which results in a
higher permissible rate of interest, then this Agreement shall be governed by
such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of Borrower and Lender in the execution and delivery
hereof to contract in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if under or from any
circumstances

                                       13
<Page>

whatsoever Lender should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between Borrower and Lender.

     10.5      [Intentionally omitted]

     10.6      REPLACEMENT DOCUMENTATION. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation hereof, the
Note or the Lender Security Agreement, and, in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation thereof, the Borrower
will issue, in lieu thereof, a replacement thereof of like tenor.

     10.7      SETOFF. Borrower hereby grants to Lender a lien, security
interest and right of setoff as security for all Obligations to Lender, whether
now existing or hereafter arising, upon and against all deposits, credits and
Collateral, now or hereafter in the possession, custody, safekeeping or control
of Lender or any entity under the control of Lender, or in transit to any of
them. At any time, without demand or notice, Lender may set off the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Obligations. ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY LENDER TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF A BORROWER OR GUARANTOR, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

     10.8      CONTINUING OBLIGATION; ASSIGNMENT; SURVIVAL

               10.8.1 CONTINUING OBLIGATION; ASSIGNMENT; SURVIVAL. Each of this
     Agreement and the Lender Security Agreement is a continuing obligation and
     shall be binding upon and inure to the benefit of and be enforceable by the
     parties hereto and their respective successors, transferees and assigns;
     provided that Borrower may not assign or delegate all or any part of this
     Agreement or the Lender Security Agreement without the prior written
     consent of Lender, which consent may be withheld in Lender's unrestricted
     discretion. Lender shall have the unrestricted right at any time or from
     time to time, and without each Borrower's consent, to assign all or any
     portion of its rights and obligations hereunder to one or more assignees
     (each, an "Assignee"), and Borrower agrees that it shall execute, or cause
     to be executed, such documents, including without limitation, amendments to
     this Agreement and to any other documents, instruments and agreements
     executed in connection herewith as Lender shall reasonably deem necessary
     to effect the foregoing. In connection with any such assignment, Borrower
     shall not be liable for any costs and expenses incurred by Lender or any
     Assignee. Upon the execution and delivery of appropriate assignment
     documentation, amendments and any other documentation required by Lender in
     connection with such assignment, and the payment by Assignee of the
     purchase price agreed to by the assigning Lender, such Assignee shall be a
     party to this Agreement and shall have all of the rights and obligations of
     a Lender hereunder (and under any and all other guaranties, documents,
     instruments and agreements executed in

                                       14
<Page>

     connection herewith) to the extent that such rights and obligations have
     been assigned by a Lender pursuant to the assignment documentation between
     a Lender and such Assignee, the assigning Lender shall be released from its
     obligations hereunder and thereunder to a corresponding extent. Lender may
     furnish any information concerning Borrower in its possession from time to
     time to prospective Assignees. All representations and warranties of
     Borrower contained herein shall survive the making of this Agreement. All
     covenants and agreements of Borrower contained herein shall continue in
     full force and effect from and after the date hereof until payment and
     performance in full of all Borrower's obligations hereunder. The agreements
     and obligations of Borrower pursuant to Sections 11.1 and 12.1 shall
     survive the termination of this Agreement.

               10.8.2 LENDER AS AGENT. Notwithstanding each Lender's
     unrestricted right to assign all or any portion of its rights and
     obligations hereunder, as set forth in paragraph 10.8 above, so long as any
     Obligations under this Agreement remain outstanding, Lender shall continue
     to administer the Loans, for itself or for its assigns, pursuant to the
     terms set forth herein, Borrower shall continue to repay all amounts
     advanced and outstanding hereunder to Lender in accordance with the
     provisions set forth in Section 1.4 hereof and any notices given under this
     Agreement shall continue to be given to Lender in accordance with Section
     10.11 hereof.

     10.9      PARTICIPATIONS. Each Lender shall have the unrestricted right at
any time and from time to time, and without the consent of or notice to Borrower
or any guarantor, to grant to one or more Lender, or other financial
institutions (each a "Participant") participating interests in Lender's
obligation to lend hereunder and/or any or all of the loans held by Lender
hereunder. In the event of any such grant by Lender of a participating interest
to a Participant, whether or not upon notice to Borrower, Lender shall remain
responsible for the performance of its obligations hereunder and Borrower shall
continue to deal solely and directly with Lender in connection with Lender's
rights and obligations hereunder. Lender may furnish any information concerning
Borrower in its possession from time to time to prospective Participants,
provided that Lender or such Lender shall require any such prospective
Participant to agree in writing to maintain the confidentiality of such
information.

     10.10     ONE AGREEMENT. This Agreement (including, without limitation, the
Exhibits hereto), the Note, the Lender Security Agreement and any related
security or other agreements executed and delivered in connection with this
Agreement, collectively:

               (a)  represent the sum of the understandings and agreements
     between Lender and Borrower concerning this credit (provided that Lenders
     may be a party to intercreditor or other agreements with other lenders or
     participants);

               (b)  replace any prior oral or written agreements between Lender
     and Borrower concerning this credit; and

               (c)  are intended by Lender and Borrower as the final, complete
     and exclusive statement of the terms agreed to by them concerning this
     credit.

                                       15
<Page>

In the event of any conflict between this Agreement, the Note and the Lender
Security Agreement or other agreements executed and delivered in connection with
this Agreement, this Agreement will prevail.

     10.11     NOTICES. All notices given under this Agreement must be in
writing and be given by personal delivery, overnight receipted courier (such as
Federal Express) or by certified United States mail, postage prepaid, return
receipt requested, sent to the party at its address appearing below its
signature. Notices are effective upon receipt or when proper delivery is
refused. Addresses for notice may be changed by any party by notice to any other
party in accordance with this Section. Service of any notice on Borrower is
effective service for all purposes, including service on its affiliates.

     10.12     HEADINGS. Article and Section headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.

     10.13     EXHIBITS. All Exhibits to this Agreement are incorporated herein
by this reference and are expressly made part of this Agreement.

     10.14     COUNTERPARTS. This Agreement may be executed in as many
counterparts as necessary or convenient, and by the different parties on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
agreement.

11.  INDEMNITY

     11.1      INDEMNIFICATION. Borrower agrees to indemnify, defend and hold
harmless Lender from and against any and all damages and expenses (including,
without limitation, reasonable attorneys fees and court costs) imposed upon or
incurred by Lender as a result of, in connection with or arising from any of the
following:

               (a)  any breach or default in performance by Borrower of any
     covenant, agreement or obligation to be performed pursuant to this
     Agreement which materially impairs the Collateral or Lender's priority
     interest in the Collateral; and

               (b)  any breach of any warranty or inaccuracy in any
     representation contained in this Agreement.

12.  LIMITED RECOURSE

     12.1      LIMITED RECOURSE.

               (a)  Subject to the provisions of this Section, Lender will
     neither seek or obtain a judgment against Borrower for payment of principal
     or interest under this Agreement and their sole recourse against Borrower
     or its General Partner for any default in the payment of principal and
     interest is limited to the Collateral. Nothing in this Agreement restricts
     Lender's recourse against the Collateral pursuant to the Lender Security
     Agreement.

                                       16
<Page>

               (b)  The limitation of liability set forth in this Section will
     be deemed void and have no force or effect if Borrower attempts to
     materially delay any action or claim by Lender of or on the Lender Security
     Agreement, the Collateral or any other collateral for the Loans that Lender
     is then entitled to take by reason of any Event of Default.

               (c)  The limitation of liability set forth in this Section will
     not prejudice or affect the rights of Lender to:

                    (i)     Name Borrower as a party defendant in any action,
               proceeding, reference or arbitration, subject to the limitations
               of this Section; or

                    (ii)    Assert any unpaid amounts on the Loans as a defense
               or offset to or against any claim or cause of action made or
               alleged against Lender by Borrower, any of its members or joint
               venturers or any guarantor in connection with the Loans; or

                    (iii)   Seek full recourse against the Collateral; or

                    (iv)    Collect or recover from Borrower any damages (such
               as, without limitation, loss of principal or interest), awards,
               costs or expenses incurred by Lender as a result of any
               encumbrance on the Collateral granted or consented to by Borrower
               without Lender's prior written consent, which consent Lender may
               withhold in its unrestricted discretion; or

                    (v)     Exercise self-help remedies such as setoff or
               foreclosure against or sale of any collateral or security; or

                    (vi)    Collect or recover an amount from Borrower equal to
               any sums of any type that are misapplied; or

                    (vii)   Enforce and collect or recover all sums owing under
               any indemnity by Borrower or any other party, any guaranties and
               agreements, and any similar rights to payment and performance
               executed or granted by Borrower or any other party in connection
               with the Loans; or

                    (viii)  Enforce any agreement of Borrower or any other party
               specifically stating that it is not subject to the limitation of
               liability contained in this Section; or

                    (ix)    Recover any expenses, damages (such as, without
               limitation, loss of principal or interest) or costs, including
               reasonable attorneys' fees (including the allocated costs for
               services of in-house counsel), that Lender may incur because of
               (a) any act or omission of Borrower that diminishes or threatens
               to diminish or the value of the Collateral, or (b) any act or
               omission of Borrower or General Partner that impairs Lender's
               ability to exercise any rights or pursue any remedies with
               respect to the Collateral, or (c) any act or omission of Borrower
               which results in Lender's failure to have a valid, binding and
               enforceable

                                       17
<Page>

               perfected security interest in or lien on any property covered by
               any security agreement contemplated by this Agreement or such
               security interest fails to be prior to the rights and interests
               of others, or (d) Borrower's or General Partner's fraud, willful
               misrepresentation, misapplication of funds or waste or
               intentional damage of or to any collateral for the Loan.

               (d)  Nothing contained in this Section impairs the validity of
     any of any security agreement contemplated by this Agreement, or any lien
     or security interest created or perfected by any of them or any lien or
     security interest created or perfected by any of them.

13.  WAIVER OF JURY TRIAL

     BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR
ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF LENDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS. EXCEPT AS
PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR LENDER TO ENTER INTO THIS AGREEMENT.

                        [signatures appear on next page]

                                       18
<Page>

This Agreement is executed as of the date stated at the top of the first page.

                                BORROWER

                                BOSTON CAPITAL REAL ESTATE
                                INVESTMENT TRUST, INC.

                                By:
                                      ----------------------
                                Name:
                                Title:

                                Address where notices to
                                Borrower are to be sent:

                                c/o Boston Capital Corporation
                                One Boston Place
                                Boston, MA 02108-4406
                                Attn:
                                     ----------------------

                                LENDER

                                BCP FUNDING, INC.

                                By:
                                      ----------------------
                                Name:
                                Title:

                                Address where notices to
                                Borrower are to be sent:

                                c/o Boston Capital Corporation
                                One Boston Place
                                Boston, MA 02108-4406
                                Attn:
                                     ----------------------

                                       19
<Page>

                                             EXHIBIT "A" to Loan Agreement
                                             dated as of August __, 2003 between
                                             BCP Funding LLC, as Lender and
                                             Boston Capital Real Estate
                                             Investment Trust, Inc., as Borrower

                                  DEFINED TERMS

     As used in the Loan Agreement to which this EXHIBIT A is attached, the
following terms shall have the following meanings:

     "BUSINESS DAY" means any day other than a Saturday, Sunday or legal
holiday.

     "CASH AVAILABLE FOR DEBT SERVICE" means for any period of time all of the
gross operating receipts actually received by Borrower from the Ownership
Companies derived from the operation of the Property Investments during such
period; provided that any cash receipts of Borrower from any Released Property
Investment shall not be included.

     "DEFAULT" means any act, omission, occurrence or circumstance that, with
either the passage of time, the giving of notice, or both, will become an Event
of Default.

     "DEFAULT RATE" means, the lesser of (a) 12% per annum or (b) the maximum
rate of interest which may be charged or collected in accordance with applicable
law.

     "GAAP" means generally accepted accounting principles and practices as set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. GAAP shall be consistently applied from one
accounting period to another.

     "INDEBTEDNESS" with respect to any Person means and includes, without
duplication (i) all items which, in accordance with GAAP, would be liabilities
on the balance sheet of such Person, but excluding anything in the nature of
capital stock or other equity, surplus capital and retained earnings, (ii) the
face amount of all Banker's acceptances and of all drafts drawn under all
Banker's acceptances and of all letters of credit issued by Lender for the
account of such Person and, without duplication, all drafts drawn thereunder,
(iii) the total amount of all indebtedness secured by any encumbrance to which
any property or asset of such Person is subject, whether or not the indebtedness
secured thereby shall have been assumed, and (iv) the total amount of all
indebtedness and obligations of others which such Person has directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), discounted with recourse or agreed (contingently
or otherwise) to purchase or repurchase or otherwise acquire, including, without
limitation, any agreement (a) to provide or supply funds to such other Person to
maintain working capital, equity capital, net worth or solvency, or (b)
otherwise to assure or hold harmless such other Person against loss in respect
of its obligations.

<Page>

     "MATURITY DATE" means, May 31, 2004.

     "MAXIMUM AMOUNT" means $60,000,000.

     "OBLIGATIONS" means any and all of the payment and performance obligations
and liabilities of Borrower to Lender, existing on the date of this Agreement or
arising thereafter, direct or indirect, absolute or contingent, matured or
unmatured, liquidated or unliquidated, or secured or unsecured.

     "OWNERSHIP COMPANIES" means each of the limited partnerships or limited
liability companies, whether or not wholly owned by Borrower, through which
Borrower owns or has an interest in, directly or indirectly, a Property
Investment.

     "PERSON" means an individual, estate, corporation, partnership, limited
liability company, association, joint stock company, trust, unincorporated
organization or other entity.

     "PRIOR LOAN AGREEMENTS" means all promissory notes, agreements, documents
or other instruments evidencing or securing the Prior Loans.

     "PRIOR LOANS" means the following advances made by Lender and its
Affiliates to Borrower and its Affiliates with respect to the acquisition of the
following Property Investments prior to the date of this Agreement:

<Table>
<Caption>
        PROPERTY INVESTMENT          DATE OF ADVANCE      AMOUNT OF ADVANCE
        -------------------          ---------------      -----------------
        <S>                               <C>                  <C>
        Seattle Portfolio                 12/19/2002           $  9,325,982
        Jacksonville Portfolio             4/17/2003                442,115
        Jacksonville Portfolio              5/2/2003                250,000
        Jacksonville Portfolio             5/12/2003                707,480
        Jacksonville Portfolio             5/20/2003             12,445,023
        Jacksonville Portfolio             5/28/2003             11,109,448
        Portland Portfolio                  5/2/2003                450,000
        Portland Portfolio                 5/28/2003             21,866,617
</Table>

     "LOAN ACCOUNT" means the account on the books of Lender in which will be
recorded Loans made by Lender to Borrower pursuant to this Agreement, payments
made on such Loans and other appropriate debits and credits as contemplated by
this Agreement.

     "SALE OR REFINANCING" means any sale or refinancing transaction by the
Borrower or a Subsidiary not in the ordinary course of its business, including,
without limitation, sales, exchanges or other dispositions of all or any portion
of any Property Investments, condemnations, recoveries of damage awards and
insurance proceeds (other than business or rental interruption insurance
proceeds) with respect to any Property Investments, or any refinancing of any
Property Investments.

                                       A-2
<Page>

     "SUBSIDIARY" means any Person of which the Borrower (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold at least 50%
of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer.

                                       A-3
<Page>

                                           EXHIBIT "1.1"to Loan Agreement
                                           dated as of as of August __, 2003
                                           between BCP Funding LLC, as
                                           Lender and Boston Capital Real Estate
                                           Investment Trust, Inc., as

                                FORM OF LOAN NOTE

$60,000,000                                                Boston, Massachusetts
                                                           _______________, 200_

     FOR VALUE RECEIVED, the undersigned (the "Borrower") absolutely and
unconditionally promises to pay to BCP Funding, LLC (the "Lender") as Lender
under the Loan Agreement (as hereinafter defined), the principal amount of Sixty
Million and 00/100 Dollars ($60,000,000) or such lesser amount as shall be
outstanding from time to time under the Agreement, together with interest
(computed on the basis of the actual number of days elapsed over a 365-day year)
on the unpaid principal amount hereof until paid in full in accordance with the
Agreement (as hereinafter defined).

     The entire unpaid principal of this Note together with any accrued interest
shall be payable on the dates specified in the Agreement.

     All payments under this Note shall be made to Lender at One Boston Place,
Boston, Massachusetts 02108-4406 (or at such other place as the Lender may
designate from time to time in writing) in lawful money of the United States of
America in federal or other immediately available funds. Borrower may prepay
this Note in whole or in part at any time without premium or penalty, except as
provided for in the Agreement.

     This Note is issued pursuant to, is entitled to the benefits of, and is
subject to the provisions of a certain Loan Agreement (herein, as the same may
from time to time be amended, restated or extended, referred to as the
"Agreement"), and the obligations and indebtedness of Borrower hereunder are
secured pursuant to the terms of that certain Security Agreement (the "Security
Agreement"), each of even date herewith between the undersigned and the Lender,
but neither this reference to the Agreement or the Security Agreement, nor any
provision thereof, shall affect or impair the absolute and unconditional
obligation of the undersigned maker of this Note to pay the principal of and
interest on this Note as herein provided.

     Upon an Event of Default, as defined in the Agreement, the aggregate unpaid
balance of principal plus accrued interest may become or may be declared to be
due and payable in the manner and with the effect provided in the Agreement.

<Page>

     The maker of this Note hereby waives presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.

     WITNESS the execution of this Note under seal on the date written above.

                                BOSTON CAPITAL REAL ESTATE
                                INVESTMENT TRUST, INC.

                                By:
                                     ---------------------
                                Name:
                                Title:

<Page>

                                               EXHIBIT "5.1"to Loan Agreement
                                               dated as of as of August __, 2003
                                               between BCP Funding LLC, as
                                               Lender and Boston Capital Real
                                               Estate Investment Trust, Inc., as
                                               Borrower

                              FORM OF LOAN REQUEST

                      LINE OF CREDIT REVOLVING LOAN REQUEST

To:       BCP Funding LLC

From:     Boston Capital Real Estate Investment Trust, Inc.

Date:
Date Loan to be Disbursed:
Amount:
Wiring Instructions:

Pursuant to the Loan Agreement, dated August __ 2003, ("Loan Agreement")
executed between Borrower and you, Borrower hereby requests the above-mentioned
Loan to be made by you as instructed herein.

All capitalized terms used herein shall have the meanings defined in the Loan
Agreement.

By its authorized signature below, Borrower hereby represents, warrants and
certifies to Lender that:

1.   There is currently outstanding no Default or Event of Default.

                        [Signatures appear on next page]

<Page>

                                BOSTON CAPITAL REAL ESTATE
                                INVESTMENT TRUST, INC.

                                By:
                                     ---------------------
                                Name:
                                Title:

<Page>

                                               EXHIBIT "4.1"to Loan Agreement
                                               dated as of as of August __, 2003
                                               between BCP Funding LLC, as
                                               Lender and Boston Capital Real
                                               Estate Investment Trust, Inc., as
                                               Borrower

                            [NIXON PEABODY LLP LOGO]
                                ATTORNEYS AT LAW

                                CLOSING CHECKLIST
                             Last Updated: ___, 2003

<Table>
<Caption>
                                                                   RESPONSIBLE
                   OPERATIVE DOCUMENTS:                               PARTY     STATUS/COMMENTS
-----------------------------------------------------------------------------------------------
 <S> <C>                                                                <C>     <C>
 1.  Loan Agreement (Capital Contribution Bridge Loan)                  NP
     Exhibit A to Loan Agreement - Defined Terms;
     Exhibit 1.1 to Loan Agreement - Form of Loan Note
     Exhibit 4.1 to Loan Agreement - Closing Checklist
     Exhibit 5.1 to Loan Agreement - Line of Credit Loan Request
     Exhibit 7.8 to Loan Agreement - Indebtedness

 2.  Loan Note (Exhibit 1.1 to Loan Agreement)                          NP

 3.  Security Agreement                                                 NP

 4.  UCC-1 Financing Statements:                                        NP
</Table>

<Page>

                                          EXHIBIT "7.8" to Loan Agreement
                                          dated as of August __, 2003
                                          between BCP Funding LLC, as Lender and
                                          Boston Capital Real Estate
                                          Investment Trust, Inc., as Borrower

                                  INDEBTEDNESS

 1.  The Prior Loans.

 2.  Obligations as "key principal" under the Mortgage Loans relating to
     Property Investments for purposes of incurring obligations for the
     so-called "non-recourse carve outs" under said loans.<Page>

                                                                    EXHIBIT 10.8

                          PROPERTY MANAGEMENT AGREEMENT

                                 ALDERWOOD PARK

     THIS AGREEMENT is made and entered into this 12th day of December, 2002, by
and between GFS Alderwood LLC (hereinafter referred to as the "OWNER") and
Pinnacle Realty Management Company, (hereinafter referred to as "Pinnacle").

                                    SECTION 1

                          APPOINTMENT OF MANAGING AGENT

     1.1    APPOINTMENT AND ACCEPTANCE: Owner hereby engages Pinnacle as its
sole and exclusive property manager to lease and manage the property described
in Section 1.2 upon the terms and conditions provided herein. Pinnacle accepts
the engagement and agrees to furnish the services of its organization in
accordance with the terms and provisions contained herein.

     1.2    DESCRIPTION OF PROJECT: The property to be managed by Pinnacle
under this Agreement (the "Project") is known as Alderwood Park, and is located
at 18031 36th Avenue West, Lynnwood, Washington 98037, consisting of the land,
buildings and other improvements constituting a 188-unit apartment complex.

     1.3    TERM: The initial term of this Agreement shall be for a period of
one year (the "Initial Term") commencing on the 12th day of December, 2002 to
the 31st day of December 31st, 2002. This Agreement shall be automatically
renewed for periods of one (1) month, unless this Agreement is terminated as
provided in Section 18 herein. The closing date shall be the date the Owner
takes title to the Project.

     1.4    MANAGEMENT OFFICE: Owner shall provide adequate space on the
Project for a management office, exclusively for the use of Pinnacle to conduct
the business of the management of the Project. Owner shall pay all reasonable
expenses related to such office as provided in the Plan (defined below),
including, but not limited to, furnishings, equipment, postage, office supplies,
electricity, other utilities, and telephone services.

     1.5    APARTMENT FOR ON-SITE STAFF: Owner shall provide suitable apartment
unit(s) within the Project for the use of the resident manager and such
assistant managers or maintenance personnel as Pinnacle and Owner may deem
reasonable under the circumstances and as provided in the Plan. Pinnacle, with
the approval of Owner, shall be entitled to provide such on-site staff
(employees) with such rental and utility concessions (reductions in rent or
utility charges) as Pinnacle and the Owner may deem necessary and appropriate
under the circumstances.

     1.6    BUDGET AND BUSINESS PLAN: Owner and Pinnacle have established a
budget and business plan for operation and management of the Project (the
"Plan"). The Plan shall act as a general guide for the management of the Project
by Pinnacle, and shall be updated and revised annually to reflect changes in
conditions and actual Project operation and submitted to Owner for Owner's
approval. Any expenditure in excess of $5,000.00 not specifically set forth in
the Plan shall require Owner's advance approval, except as provided in Section
4.2 hereof. Owner agrees that the Plan is a budgeting tool only and does not
constitute a guarantee of actual operating performance. The preliminary annual
budget will be provided to Owner by

<Page>

October 1st and will be attached hereto as Exhibit A, with the final budget due
to Owner by November 1st. The Plan shall include, at a minimum, the following:

     A.         MINIMUM LEASING GUIDELINES established jointly by Owner and
            Pinnacle, setting forth target rental rates and premiums for each
            unit type and amenity package, together with maximum leasing
            incentive allowances for promotional purposes. In no event will
            Pinnacle execute any lease (or any renewal or extension thereof) on
            terms which vary from the minimum leasing guidelines without
            notification to Owner.

     B.         CAPITAL IMPROVEMENT PLAN: Owner and Pinnacle have set forth a
            plan for implementing initial capital improvements to upgrade the
            rental units and correct maintenance items addressed during Owner
            and Pinnacle's pre-acquisition inspection of the property (if
            applicable). Should the capital plan fall within industry standards
            for normal property management duties, Pinnacle shall be responsible
            for obtaining bids, coordinating and scheduling the work at the
            property. A minimum of three (3) complete bids will be obtained for
            each Improvement Plan line item of more than $10,000.

                                    SECTION 2

                                  BANK ACCOUNTS

     2.1    BANK ACCOUNTS:

     (a)    Operating Account. Pinnacle will deposit all rents and other
     funds collected from the operation of the Project in an interest-bearing
     account established for the Project (the "Operating Account") in a
     financial institution approved by Owner. Any such rents and other funds
     received by Pinnacle on or before 2:00 p.m. on a Business Day shall be
     deposited on that same day. Any such rents or other funds received after
     2:00 p.m. or on a day that is not a Business Day shall be deposited on the
     next Business Day. Such account shall be in the name of the Owner and shall
     have such withdrawal restrictions as Owner's may require. Owner will be
     given written notice of the account number and location of the Operating
     Account. In accordance with Article 7, Pinnacle will pay out of the
     Operating Account the operating expenses of the Project and any other
     payments relating to the Project required by the terms of this Agreement or
     set forth in the Approved Annual Business Plan. If more than one account is
     required to operate the Project, each account will have a distinct name.

     (b)    Security Deposit Account. If required by Owner or law, tenant
     security deposits will be deposited by Pinnacle in a separate
     interest-bearing account established in the name of Owner and at a
     financial institution approved by Owner. Except to the extent prohibited by
     law or tenants' leases, all interest earned on this account will be
     distributed to Owner on a monthly basis. Pinnacle agrees to handle all
     tenant security deposits in accordance with all applicable laws and
     regulations and in compliance with the leases of the Project.

     (c)    Change of Banks. Owner may direct Pinnacle to change any depository
     bank or depository arrangement. Except with the prior written approval of
     Owner, Pinnacle shall not change any depository bank or arrangement or
     other banking relationship or procedure.

<Page>

     (d)    Access to Account. Owner will have access to any and all funds in
     the accounts described in Sections 2.1(a) and 2.1(b). Pinnacle's authority
     to draw against such accounts may be terminated at any time by Owner
     without notice to Pinnacle. No borrowing authority shall be permitted on
     any accounts established on behalf of Owner. All funds in such accounts
     shall be the exclusive Project of Owner. Only such personnel specifically
     designated by Pinnacle and approved by Owner shall have access to such
     accounts. All of Pinnacle's personnel who have access to such accounts
     shall be bonded and insured to the benefit of Owner against theft or fraud.
     No accounts maintained pursuant to this Agreement shall contain funds from
     any source other than the Project.

     2.2    INITIAL DEPOSIT TO SECURITY DEPOSIT ACCOUNTS: Immediately upon
commencement of this Agreement, Owner shall remit to Pinnacle such amounts as
may be necessary in order to fully fund all required tenant trust accounts.

     2.3    INITIAL DEPOSIT FOR RESERVES: Immediately upon commencement of this
Agreement, Owner shall remit to Pinnacle a sum to be deposited in the Operating
Account as an initial deposit representing the estimated disbursements to be
made in the first month following the commencement of this Agreement, plus an
adequate contingency reserve. The initial deposit may be funded from the first
month's rental receipts, at the option of Owner. Owner agrees to maintain such
contingency reserve at all times in the operating account so as to enable
Pinnacle to pay the obligations of Owner under this Agreement as they become
due. Owner and Pinnacle shall review the amount of the contingency reserve from
time to time and shall agree in writing upon a new contingency reserve when such
is required.

     2.4    PINNACLE'S OBLIGATION TO ADVANCE PAYMENTS: All purchases and other
obligations incurred in connection with the operation of the Project shall be
the sole cost and expense of Owner. All such purchases shall be made by Pinnacle
solely on behalf of Owner and not as a principal. Pinnacle shall be under no
duty to utilize or apply Pinnacle's own funds for the payment of any such debt
or obligation. In the event that there are insufficient funds in the operating
account, Pinnacle may, after notifying Owner and receiving prior written consent
from Owner, advance its own funds for such purpose, in which event Owner shall
promptly repay to Pinnacle all such sums expended, together with interest
calculated from the date of Pinnacle's advancement of funds to the date of
repayment from Owner.

     2.5    INTEREST ON OPERATING AND SECURITY DEPOSIT ACCOUNTS: Pinnacle shall
deposit Project funds into interest-bearing accounts. All interest earned on
such funds shall belong to Owner, except where state law requires interest
earned on security deposits to be paid to a tenant and shall not be considered
part of "gross receipts" of the property as hereinafter defined.

<Page>

                                    SECTION 3

                     COLLECTION OF RENTS AND OTHER RECEIPTS

     3.1    AUTHORITY OF PINNACLE: Pinnacle shall collect (and give receipts
for, if necessary) all rents, charges and other amounts received in connection
with the management and operation of the Project. All security deposits
(excluding non-reimbursable cleaning fees and the like) shall be deposited into
the trust account described in Section 2.1 above. All other receipts shall be
deposited into the operating account. Pinnacle shall not accept rent or other
deposits in the form of cash. Under no circumstances shall Pinnacle be liable to
Owner for any uncollected rents, other income or bad debt resulting from
operations, except those matters covered by section 11.5 herein.

     3.2    SPECIAL CHARGES: Pinnacle shall deposit into the operating account
charges paid by tenants for the late payment of rent, returned or non-negotiable
checks, and payments for credit report fees.

                                    SECTION 4

                      DISBURSEMENT FROM OPERATING ACCOUNTS

     4.1    OPERATING EXPENSES: From the operating account, Pinnacle is
authorized to pay or to reimburse Pinnacle for all expenses and costs of
operating the Project set forth in the Plan and for all other sums due Pinnacle
under this Agreement, including Pinnacle's compensation which is described and
set forth in Section 15 hereof, in accordance with the Plan. Owner has sole
responsibility for the timely payment of all authorized expenses of the Project.
Upon 30 days notice by Pinnacle to Owner that Pinnacle has used its own funds to
pay authorized Project expenses, Owner shall reimburse Pinnacle.

     4.2    EXTRAORDINARY EXPENSES: Unless specifically provided for in the
Plan, no single expenditure made for general maintenance or one-time contract
service in excess of $5,000.00 shall be allowable without prior written approval
of Owner. Pinnacle is required to submit a minimum of three (3) written bids for
all expenditures over $10,000.00. However, in the event of an emergency, owner
authorizes Pinnacle to authorize any reasonable expenditure which is necessary
or required because of danger to life or property, or which is immediately
necessary for the preservation and safety of the Project or the safety of the
tenants and occupants thereof, or if required to avoid the suspension of any
necessary service to the Project, or to comply with any applicable federal,
state, or local laws, regulations, or ordinances. Pinnacle shall, however,
before the end of the next business day, notify Owner in detail, concerning such
expenditures.

     4.3    SPECIFIC EXPENSES TO BE PAID BY PINNACLE ON OWNER'S BEHALF:
Pinnacle shall pay from the Project operating account, in accordance with the
business plan or as otherwise directed by Owner, all utility and maintenance
charges; all real property taxes and assessments; all premiums for liability and
casualty insurance; all monthly payments upon underlying secured real property
debt; Pinnacle's fees; all other operating and rental expenses set forth herein;
postage, copying, long distance charges and other expenses directly associated
with the property; the costs and expense of uniforms for employees (where
applicable) and the costs and expenses directly associated with the training of
Project employees.

     4.4    EXPENSES TO BE PAID DIRECTLY BY OWNER: In addition to income taxes
and gross receipt taxes (if any) incurred as a result of the operation of the
Project, Owner shall pay directly the following: N/A

<Page>

     4.5    FEES FOR LEGAL ADVICE: Owner shall pay reasonable expenses incurred
by Pinnacle in obtaining legal advice regarding compliance with any law
affecting the Project or activities related to the operation of the Project
within the budget established in the business plan. Pinnacle shall obtain the
prior consent of Owner for legal services expended in excess of the amounts set
forth in the business plan. If any expenditure for legal services also benefits
others for whom Pinnacle acts as a property manager, Owner's obligation shall be
limited to Owner's pro rata portion of such expense for legal services.

     4.6    NET PROCEEDS: To the extent that funds are available, and after
maintaining a cash contingency reserve amount as specified in Section 2.3,
Pinnacle shall transmit net cash proceeds to Owner at least monthly at a time
specified by Owner. Such periodic cash payments shall be remitted to the
following address:

            GFS Equity Management LLC
            c/o Goodman Financial Services
            2801 Alaskan Way, Suite 200
            Seattle, WA 98121

     4.7    PRIORITY OF PAYMENT: Should collected funds (excluding security
deposits deposited into trust accounts) be insufficient to satisfy the current
debts and obligations of the Project, such debts and obligations shall be paid
in the following order: First: third-party debt service payments, ground lease
payments, real estate taxes, personal property taxes, betterment assessments and
any other charges and liabilities which could become a lien against or result in
a forfeiture of the Property; Second: Project payroll, including state and
federal payroll taxes; Third: insurance premiums due in connection with
insurance maintained in accordance with Section 12; Fourth: charges by utility
companies (including, but not limited to, gas electric, water, sewer, garbage
and cable television); Fifth: bills and charges, if any, incurred by Manager for
Manager's services provided to Owner exclusive of the Management Fee and any
other fees due to Manager hereunder (if any); Sixth: the Management Fee;
Seventh: other bills and charges of third parties, and any and all claims and
demands of third parties and liabilities to third parties relating to the
Property or the operation thereof which Owner in its discretion determines to
pay from the Operating Account. Where the terms of any loan security agreement
with Owner conflict with the terms of this section, the terms of such loan
security agreement shall control, provide, the Owner has notified Agent of the
existence of any such condition.

<Page>

                                    SECTION 5

                           FINANCIAL AND OTHER REPORTS

     5.1    REPORTS: By the 10th business day of each month, Pinnacle shall
furnish to Owner a statement of receipts and disbursements from the operation of
the Project during the prior calendar or fiscal month. In addition, Pinnacle
shall, on a mutually acceptable schedule and at Owner's request, prepare and
submit to Owner such other reports as Owner shall specify and as may be required
pursuant to the terms of any of Owner's lenders, including, but not limited to
the following:

            a.) Weekly occupancy, leasing status and traffic reports.
            b.) Monthly market comparable rent survey.
            c.) Monthly bank reconciliation's.
            d.) Monthly financial operating reports to include balance sheet,
                aged payables, aged receivables, check register and rent roll.

     5.2    OWNER'S RIGHT TO AUDIT: Owner shall have the right to request
periodic audits of all applicable accounts managed by Pinnacle and the cost of
such audits shall be paid by Owner, as an expense of the Project. Such audits
may be made during normal business hours posted at the property with advance
notice by Owner. Per Owner request, Agent will engage an independent third party
firm to audit the annual records, as well as prepare partnership tax returns at
the expense of the property. Pinnacle cannot be held liable for the work product
performed by the auditor.

                                    SECTION 6

                                   ADVERTISING

     6.1    ADVERTISING: Pinnacle is authorized to advertise the Project and
vacant units within the Project for rent and employment, using periodicals,
signs, plans, brochures or displays, or such other means as Pinnacle may deem
proper and advisable. Pinnacle is authorized to place signs on the Project
advertising that units are available for rent, provided such signs comply with
applicable laws. The cost of such advertising shall be paid out of the operating
account, in accordance with the advertising budget or as approved by Owner. All
advertising shall make clear that Pinnacle is the manager and is not the Owner
of the Project. Pinnacle shall have the right to publish advertisements that
share space with other properties managed by Pinnacle. Provided, that the costs
of such advertising shall be prorated among the various projects.

                                    SECTION 7

                               LEASING AND RENTING

     7.1    PINNACLE'S AUTHORITY TO LEASE PROJECT: Pinnacle shall use its best
efforts to keep the Project rented by procuring tenants for the Project.
Pinnacle is authorized to negotiate, prepare and execute all rental agreements,
including all renewals and extensions of rental agreements, and to cancel and
modify existing rental agreements subject to the Plan. Pinnacle shall execute
all rental agreements as agent for the Owner. All costs of leasing shall be paid
out of the operating account, in accordance with the leasing budget or as
approved by Owner. No rental agreement shall be for a period in excess of one
(1) year without the written

<Page>

approval of Owner. The form of the rental agreement shall be agreed upon by
Owner and Pinnacle, and be acceptable to the lender for the Project.

     7.2    NO OTHER RENTAL AGENT: During the term of this Agreement, Owner
shall not authorize any other person, firm or corporation to negotiate or act as
leasing or rental agent with respect to any leases for commercial or residential
space in the Project. Owner agrees to promptly forward all inquiries about
leases or rental agreements to Pinnacle.

     7.3    RENTAL RATES: In accordance with the provisions of the Plan or as
otherwise directed by Owner, Pinnacle may establish and set or revise all rents,
fees or other deposits, and all other charges chargeable with respect to the
Project. Pinnacle shall be authorized to promote the occupancy of the Project by
granting rental concessions and other promotional bonuses to prospective and
current tenants, after first consulting with Owner as to the nature, quantity
and duration of such rental concessions and promotional bonuses.

     7.4    ENFORCEMENT OF RENTAL AGREEMENTS: Pinnacle is authorized to
institute, in Owner's name or in the name of Pinnacle, all legal actions or
proceedings for the enforcement of any rental term, for the collection of rent
or other income due to the Project, or for the eviction or dispossession of
tenants or other persons from the Project. Pinnacle is authorized to sign and
serve such notices as Pinnacle and Owner deem necessary for the enforcement of
rental agreements, including the collection of rent and other income. Pinnacle
may settle, compromise and release such legal actions or suits or to reinstate
such tenancies without the prior consent of Owner, if such settlement,
compromise, or release shall involve an amount in controversy of One Thousand
Dollars ($1,000), or less. Where the amount in controversy is in excess of One
Thousand Dollars ($1,000), Pinnacle shall first obtain the authorization of
Owner (written or oral) before entering into any compromise, settlement, or
release of such legal action. Any moneys for such settlements paid out by
Pinnacle shall be an operating expense of the Project. Reasonable attorney's
fees, filing fees, court costs and other necessary expenditures incurred in the
connection with such action shall be paid out of the Project operating account
or shall be reimbursed directly to Pinnacle by Owner. All funds recovered by
tenants shall be deposited into the Project operating account. Unless otherwise
directed by Owner, Pinnacle may select the attorney or attorneys to handle any
and all such litigation.

                                    SECTION 8

                                PROJECT EMPLOYEES

     8.1    PINNACLE'S AUTHORITY TO HIRE: Pinnacle is authorized to hire,
supervise, discharge and pay all servants, employees, contractors or other
personnel necessary to be employed in the management, maintenance and operation
of the Project so long as all payroll and related expenditures for such
personnel are within the Plan guidelines. All employees performing services
directly for the Project (excluding off-site property manager) shall be deemed
to be employees of Pinnacle. When requested by Owner, Pinnacle shall consult
with Owner in decisions relating to the hiring, promotion and termination of
Project employees.

                    8.2     OWNER TO REIMBURSE EMPLOYEE EXPENSES: All wages,
            fringe benefits, and all other forms of compensation payable to, or
            for the benefit of, employees of the Project (but not to property
            managers not employed directly by the Project) and all local, state
            and federal taxes and assessments (including, but not limited to,
            payments to and administration of fringe benefits, Worker's
            Compensation, Social Security taxes and Unemployment Insurance)
            incident to the employment of all such personnel, shall be treated
            as an operating expense of the Project and shall be paid by Pinnacle
            from Owner's funds, from the Project operating account subject to
            the Plan. Such payments shall also include all awards of back pay
            and overtime

<Page>

            compensation which may be awarded to any project employee in any
            legal proceeding, or in settlement of any action or claim which has
            been asserted by any such employee. Exhibit B sets forth the name
            of: (a) the senior executive personnel of Pinnacle who will be
            responsible for the performance of Pinnacle's duties under this
            Agreement (the "Executive Personnel"); and (b) Pinnacle's on-site
            building manager (the "Building Manager"). Any change in the
            Executive Personnel or Building Manager shall be subject to Owner's
            approval. Attached hereto as Exhibit C is a schedule (the
            "Reimbursable Employee Expense Schedule") that sets forth: (a) a
            list of Pinnacle's employees (including the Building Manager) who
            shall be employed on-site in the direct management and operation of
            the Project; (b) the respective titles and salary of each such
            employee; (c) the length of time that each such employee has been
            employed by Pinnacle; (d) whether each such employee works full or
            part-time (and if they work part-time, the number of hours they work
            per week); (e) the cost of salary and wages that may be charged to
            the Project for each such employee; and (f) whether each such
            employee is bonded or covered under Pinnacle's comprehensive crime
            insurance policy. The Reimbursable Employee Expense Schedule shall
            also identify any employees of Pinnacle who are not located at the
            Project but whose salaries may be charged to the Project pro rata
            based upon services actually rendered by such employees directly to
            the Project (in which event the Reimbursable Employee Expense
            Schedule shall set forth the salaries of such offsite employees and
            the maximum percentage thereof that may be charged to the Project).
            In no event shall Pinnacle be entitled to charge to the Project any
            employee-related expenses: (i) that relate to general or supervising
            management personnel, accountants or auditors; (ii) for which a
            separate fee is charged by Pinnacle pursuant to this Agreement or
            otherwise; or (iii) that are not specifically set forth on the
            approved Reimbursable Employee Expense Schedule. The expenses
            chargeable to the Project pursuant to the Reimbursable Employee
            Expense Schedule may be modified from time to time only as part of
            the a Plan or as otherwise agreed upon by Owner and Pinnacle in
            writing.

     8.3    PINNACLE'S AUTHORITY TO FILE RETURNS: Pinnacle shall do and perform
all acts required of an employer with respect to the Project and shall execute
and file all tax and other returns required under the applicable federal, state
and local laws, regulations and/or ordinances governing employment, and all
other statements and reports pertaining to labor employed in connection with the
Project and under any similar federal or state law now or hereafter in force. In
connection with such filings, Owner shall, upon request, promptly execute and
deliver to Pinnacle all necessary powers of attorney, notices of appointment and
the like. Owner shall be responsible for all amounts required to be paid under
the foregoing laws, and Pinnacle shall pay the same from the operating account.

     8.4    WORKER'S COMPENSATION INSURANCE/TAXES: Pinnacle shall, at Owner's
expense, maintain and administer a Worker's Compensation Insurance program
covering all liability of Pinnacle and the Project under established worker's
compensation laws and all other Federal and State labor laws, whether such laws
provide that such insurance shall be obtained from a third party carrier or from
a state fund and whether such payments shall be denominated as insurance
premiums or taxes.

                                    SECTION 9

                       OPERATIONS, MAINTENANCE AND REPAIR

<Page>

     9.1    PERFORMANCE OF REPAIRS: Pinnacle is authorized to make or cause to
be made, through Project employees, Pinnacle's employees, or through contracted
services, all ordinary repairs and replacements reasonably necessary to preserve
the Project in its present condition and for the operating efficiency of the
Project, and all alterations required to comply with rental agreement
requirements, government regulations or insurance requirements. In accordance
with the operating budget (the Plan) or as otherwise directed by Owner, Pinnacle
is also authorized to decorate the Project and the individual apartment units
and to purchase or rent, on Owner's behalf, all equipment, tools, appliances,
materials, supplies, uniforms and other items necessary for the management,
maintenance or operation of the Project. Such maintenance and decorating
expenses shall be paid out of the operating accounts.

     9.2    FEES FOR WORK PERFORMED BY PINNACLE'S EMPLOYEES: With Owner's prior
approval, Pinnacle may cause repairs and replacement work to be performed by
employees for Pinnacle. Owner shall pay to Pinnacle a reasonable fee for such
services based upon the then current hourly charges made and assessed by
Pinnacle for the performance of such services. Such charges shall be
approximately equal to Pinnacle's direct and indirect expenses associated with
the employment of such person. Such charges shall be reasonable and shall not be
more than charges made by qualified independent contractors performing similar
work, under similar circumstances, in the same geographical area as the Project.

     9.3    CONTRACTS, UTILITIES AND SERVICES: Pinnacle is authorized to
negotiate contracts for non-recurring items of expense, not to exceed $5,000.00.
Pinnacle shall enter into agreements for all necessary repairs, maintenance,
minor alterations, and utility services, and make contracts on Owner's behalf
for electricity, gas, telephone, fuel, water and such other services required
for the operation of the Project, in accordance with the Plan. All utility
deposits shall be the Owner's responsibility, except that Pinnacle may pay the
same from the operating accounts if directed to do so.

     9.4    LIMITATIONS ON CONTRACTS: Each such contract or agreement shall:
(a) be in the name of the Project, (b) not be more than twelve months without
Owner's prior written consent, (c) shall not contain any automatic renewal
provisions for periods of more than thirty (30) days, (d) be assignable, at
Owner's option, to Owner or Owner's nominee, (e) include a provision of
cancellation thereof by Owner or Pinnacle upon not more than thirty (30) days
written notice (if available), and (f) shall require that all contractors
provide evidence of sufficient insurance. If this agreement is terminated
pursuant to Section 18, Pinnacle shall, at Owner's option, assign to Owner or
Owner's nominee all contracts and agreements pertaining to the Project. Pinnacle
shall then notify Owner if any such contracting entity is either a subsidiary,
affiliate, or has any other relationship whatsoever to Pinnacle.

     9.5    PROPERTY TAX APPEALS: At the direction of, and with the approval of,
the Owner, Pinnacle shall engage a tax appeal professional to annually review
the tax assessment for possible abatement.

                                   SECTION 10

                        RELATIONSHIP OF PINNACLE TO OWNER

     Pinnacle is engaged independently in the business of property management
and acts hereunder as an independent contractor. Pinnacle shall act in a
fiduciary capacity with respect to the protection of and accounting for the
Owner's assets and shall serve the Owner's assets and shall serve the Owner's
interests at all time. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture, or any other relationship between the
parties to

<Page>

this Agreement, or as requiring Pinnacle to bear any portion of losses arising
out of or connected with the ownership or operation of the Project. Pinnacle
shall not, at any time during the term of this Agreement, be considered to be a
direct or indirect employee of Owner. Except as provided herein, neither party
shall have the power to bind or obligate the other party. Except as specifically
set forth in this Agreement, Pinnacle shall not act as the agent of Owner; and,
except as provided in this Agreement, Owner shall not act as the principal of
Pinnacle.

                                   SECTION 11

                           INDEMNIFICATION AND BONDING

     11.1   Pinnacle shall indemnify, hold harmless, protect and defend (with
counsel approved by Owner) the Owner from and against all loss, costs, expenses
and damages ("Damages") in any manner related to, arising out of or resulting
from:

     (a)    any acts of Pinnacle or Pinnacle's agents, servants or employees
     beyond the scope of its authority under this Agreement; or

     (b)    any negligence, willful misconduct of Pinnacle or Pinnacle's agents,
     servants or employees.

     If the circumstances or events described above are covered by Owner's
commercial general liability insurance, then Pinnacle's obligations under this
Section 11.1 shall apply only to the extent Owner's Damages are not fully paid
by Owner's commercial general liability insurance. Notwithstanding any other
provisions of this Agreement to the contrary, Pinnacle's obligations under this
Section 11.1 shall survive the expiration, termination or cancellation of this
Agreement.

     11.2   Subject to Section 26.4, Owner shall protect, defend, indemnify
and hold harmless Pinnacle from and against any and all Damages arising out of
the performance by Pinnacle of its obligations and duties hereunder in
accordance with the terms hereof with respect to the Project; provided, however,
that Owner does not hereby agree, and shall not be obligated, to so indemnify
Pinnacle from any Damages arising out of any act or omission of Pinnacle or any
of its agents, officers, employees or representatives, which act or omission
constitutes negligence, willful misconduct, or is outside the scope of
Pinnacle's authority as provided herein

     11.3   INDEMNIFICATION FOR VIOLATION OF LAW. Owner shall indemnify,
defend and save Pinnacle harmless from any and all claims, proceedings or
liabilities as well as all costs and expenses thereof, (including, but not
limited to, fines penalties, and reasonable attorneys fees) involving an alleged
or actual violation by Owner of any statute, rule or regulation pertaining to
the premises, property, the management or the operation of the Project, except
to the extent that such claim, proceeding or liability resulted from the
negligence or willful misconduct of Pinnacle.

                                   SECTION 12

                                    INSURANCE

     12.1   OWNER'S INSURANCE AND RIGHTS. Manager, as an operating expense of
the Property payable from the Operating Account, will obtain and keep in force,
in the name of the Owner, adequate property and commercial liability insurance
covering Owner as primary insured and, with respect to liability insurance,
Manager as additional insured. Manager shall provide Owner with copies of
policies or certificates of insurance relating to the Property. Such insurance
may be blanketed with other insurance carried by Manager or any affiliate of
Manager, in which case a pro rata share of the premiums will be chargeable to
the Property as an operating

<Page>

expense. The Parties intend that Owner's general liability insurance shall be
primary in responding to all premises liability claims. Nothing herein will be
construed as indemnifying Manager or its employees, contractors or agents
against any act or omission for which insurance protection is not available or
is not required hereunder to be carried by Owner and procured by Manager;
neither is the foregoing intended to affect the general requirement of this
Agreement that the Property will be managed, operated and maintained in a safe
condition and in a proper and careful manner. Owner will furnish whatever
information is reasonably requested by Manager for the purpose of placement of
insurance coverages and will aid and cooperate in every reasonable way with
respect to such insurance and any claim or loss thereunder. Owner will cooperate
with Manager and Owner's insurance carrier on loss control inspections,
responding to recommendations and other safety issues.

     12.2   MANAGER'S INSURANCE. Manager will maintain (as an operating expense
of the Property with respect to on-site employees only) Workers' Compensation
and similar insurance as required by law. Manager may maintain, at Manager's
expense, Commercial General Liability Insurance. Manager will maintain the
following insurance at its own expense (not chargeable to the Property):

                 i.   Automobile Liability - As to any vehicle owned, non-owned
                      or hired by Manager, used in connection with the Project,
                      $1,000,000 covering losses due to the insurer's liability
                      for bodily injury or property damage.

                ii.   Medical Expenses - $5,000 per person per accident.

               iii.   Uninsured/Underinsured Motorists' Coverage for any owned
                      car - $1,000,000.

                iv.   Comprehensive crime (including Employee Dishonesty)
                      insurance with limits and terms acceptable to Owner or a
                      fidelity bond acceptable to Owner.

                 v.   Excess Liability Coverage - $5,000,000.

The minimum A.M. Best's rating of each insurer is A-IX. Manager will furnish
Owner with certificates of insurance simultaneously with the execution of this
Agreement and whenever coverage is renewed or replaced, evidencing the aforesaid
coverage, which will include provisions to the effect that Owner will be given
at least 30 days' prior written notice of cancellation or non-renewal of or any
material change in any of the aforesaid policies. Owner will be named as an
additional insured with respect to all insurance policies required under (b) and
(d) above and as loss payee as respects (c) above. All liability policies shall
contain endorsements that (i) delete any employee exclusion on personal injury
coverage, (ii) include employees as additional insureds and (iii) contain
cross-liability, waiver of subrogation and such other provisions as Owner may
reasonably require.

12.3 CONTRACTORS' AND SUBCONTRACTORS' INSURANCE. Pinnacle will require
that all parties performing work on or with respect to the Project, including,
contractors, subcontractors and service vendors, provide evidence of insurance
coverage at such parties' expense, in the following minimum amounts:

          (a)  Workers' Compensation - Statutory amount.

          (b)  Employer's Liability - $500,000 each accident; $500,000
          disease-policy limit; $500,000 disease - each employee.

<Page>

          (c)  Automobile Liability - $1,000,000 covering losses due to the
          insurer's liability for bodily injury or Project damage.

          (d)  Medical Expenses - $5,000 per person per accident.

          (e)  Uninsured/Underinsured Motorists' Coverage- $1,000,000.

          (f)  Commercial General Liability: Bodily injury and Project damage -
          $1,000,000 combined single limit with Contractual Liability coverage.

          (g)  Excess Liability Coverage - $5,000,000 or such greater amount as
          is needed for the specific job.

          (h)  Transit Coverage - As needed for the specific job.

The minimum A.M. Best's rating of each insurer is A-IX. Pinnacle must obtain
Owner's written permission to waive any of the above requirements. Higher
amounts may be required by Owner if the work to be performed is deemed by Owner
to be hazardous. Pinnacle will obtain and keep on file a certificate of
insurance which shows that each such party is so insured. Owner will be named as
an additional insured with respect to Contractors' and Subcontractors' Auto
Liability, Commercial General Liability and Excess Liability policies. Pinnacle
will receive from vendors evidence of indemnification and hold harmless
provisions in favor of Owner and Pinnacle.

12.4 WAIVER OF SUBROGATION. Insofar as, and to the extent that, the following
provision may be effective without invalidating or making it impossible to
obtain insurance, Pinnacle and Owner agree that with respect to any hazard,
liability, casualty or other loss or claim which is covered by insurance then
being carried by either Owner or Pinnacle: (a) the party carrying such insurance
and suffering such loss releases the other party of and from any and all claims
with respect to such loss to the extent of the insurance proceeds paid with
respect thereto and specifically excepting from such release any deductible
required to be paid therewith; and (b) their respective insurance companies
shall have no right of subrogation against the other or their respective agents,
contractors, employees, licensees or invitees on account thereof.

                                   SECTION 13

                          PINNACLE ASSUMES NO LIABILITY

Pinnacle assumes no liability whatsoever for any acts or omissions of Owner or
any previous owners of the Project, or any previous property managers or other
agents of either Owner or Pinnacle. Pinnacle assumes no liability for any
failure of or default by any tenant in the payment of any rent or other charges
due Owner or in the performance of any obligations owed by any tenant to Owner
pursuant to any rental agreement or otherwise unless solely caused by willful
misconduct of Pinnacle. Nor does Pinnacle assume any liability for previously
unknown violations of environmental or other regulations which may become known
during the period this Agreement is in effect. Any such environmental violations
or hazards discovered by Pinnacle shall be brought to the attention of Owner in
writing and Owner shall be responsible for such violations or hazards. Pinnacle
also assumes no liability for any failure of computer hardware, software of
miscellaneous computer systems to accurately process data (including, but not
limited to, calculating, comparing, and sequencing).

<Page>

                                   SECTION 14

                      ASSIGNMENT OF RIGHTS AND OBLIGATIONS

     14.1   ASSIGNMENT: Pinnacle may, from time to time, assign its rights and
obligations under the terms and provision of this Agreement to a subsidiary of
Pinnacle, which shall be duly licensed and otherwise capable of performing the
services of Pinnacle under the terms and provisions of this Agreement with the
prior written consent of Owner.

     14.2   NOVATION: In the event of such assignment, notice shall be given
to Owner, and upon Owner's receipt of such notice, Owner shall look solely to
the assignee for the performance of all obligations of Pinnacle under the terms
and provisions of this Agreement.

                                   SECTION 15

                      PINNACLE'S COMPENSATION AND EXPENSES

     15.1   COMPENSATION: As compensation for the services provided by
Pinnacle under this Agreement (and exclusive of reimbursement of expense to
which Pinnacle is entitled hereunder), Owner shall pay Pinnacle the following
compensation:

     15.2   FOR MANAGEMENT SERVICES: Three and One-Half percent (3.5%) of the
total monthly gross receipts from the Project. Such compensation shall be
payable by the first day of the next succeeding month for the monthly gross
receipts for the current month. Payments due Pinnacle for periods of less than a
calendar month shall be prorated over the number of days for which compensation
is due.

     A.        The term "gross receipts" shall be deemed to include all rents
               and other income and charges from the normal operation of the
               Project, including, but not limited to, rents, parking fees, net
               laundry income, forfeited security deposits, pet deposits, other
               fees, and other miscellaneous income. Gross receipts shall not be
               deemed to include interest on reserve accounts, interest on other
               depository accounts and income arising out of the sale of real
               property or the settlement of fire or other casualty losses and
               items of a similar nature.

     15.3   ACTS OF GOD: In the event of a casualty loss due to Acts of God
and/or other insurance claims such as, without limitation, hurricanes,
tornadoes, earthquakes, fires or floods, where the Project lender allows
restoration of damage to the Project, if Owner engages Pinnacle to oversee such
restoration work under a separate written agreement, Owner agrees to pay
Pinnacle five percent (5%) of the total cost of the reconstruction project for
overseeing the project to completion provided that said fee is reimbursed in its
entirety under the provisions of Owner's insurance policy.

     15.4   CONSTRUCTION MANAGEMENT SERVICES: If Owner engages Pinnacle to
oversee Project Improvements, over and above routine maintenance, such
improvements shall be performed under a separate written agreement. Owner agrees
to pay Pinnacle five percent (5%) of the total cost of the improvements for
overseeing the improvement project to completion

     15.5   FOR OTHER ITEMS OF MUTUAL AGREEMENT: Should Owner wish Pinnacle
to perform services which are not otherwise governed by the terms and provisions
of

<Page>

this Agreement, the parties shall meet to discuss and to agree upon the
additional compensation to be paid by Owner to Pinnacle for such additional
services.

     15.6   INTEREST ON UNPAID SUMS: Any sums due Pinnacle under any
provision of this Agreement, and not paid within thirty (30) days after such
sums have become due, shall bear interest at the rate of twelve percent (12%)
per annum.

                                   SECTION 16

                               STRUCTURAL CHANGES

     Owner expressly withholds from Pinnacle any power or authority to make any
structural changes in any building, or to make any other major alterations or
additions in or to any such building or to any equipment in any such building,
or to incur any expense chargeable to Owner other than expenses related to
exercising the express powers vested in Pinnacle through this Agreement, without
the prior written consent of Owner. However, such emergency repairs as may be
required because of danger to life or property, or which are immediately
necessary for the preservation and safety of the Project or the safety of the
tenants and occupants thereof, or required to avoid the suspension of any
necessary service to the Project, or to comply with any applicable federal state
or local laws, regulations or ordinances, shall be authorized pursuant to
section 4.2 of this Agreement, and Pinnacle shall notify Owner appropriately.

                                   SECTION 17

                               BUILDING COMPLIANCE

     Pinnacle does not assume and is given no responsibility for compliance of
the Project or any building thereon or any equipment therein with the
requirements of any building codes or with any statute, ordinance, law or
regulation of any governmental body or of any public authority or official
thereof having jurisdiction, except to notify Owner promptly or forward to Owner
promptly any complaints, warnings, notices or summons received by Pinnacle
relating to such matters. Owner authorizes Pinnacle to disclose the Ownership of
the Project(s) to any such officials and agrees to indemnify and hold Pinnacle
its representative, servants, and employees harmless of and from all loss, cost,
expense and liability whatsoever which may be imposed by reason of any present
or future violation or alleged violation of such laws, ordinances, statutes or
regulations; provided, indemnity shall not be applicable if Pinnacle has actual
knowledge of any such violation or alleged violation but fails to give notice to
Owner, as provided under the terms and provisions of this Agreement.

                                   SECTION 18

                                   TERMINATION

     18.1   TERMINATION BY EITHER PARTY: This Agreement may be terminated by
either Owner or Pinnacle, with or without cause, anytime during or after the end
of the initial term by giving not less than thirty (30) days advanced written
notice to the other party.

     18.2   TERMINATION FOR CAUSE: Notwithstanding the foregoing, this
Agreement shall terminate in any event, and all obligations of the parties
hereunder shall cease (except as to liabilities or obligations which have
accrued or arisen prior to such termination, or which accrue pursuant to Section
18.3 as a result of such termination, and obligations to insure and indemnify),
upon the occurrence of any of the following events:

<Page>

            A. BREACH OF AGREEMENT: Ten (10) days after the receipt of notice by
     either party to the other specifying in detail a material breach of this
     Agreement, if such breach has not been cured within said ten (10) day
     period; or if such breach is of a nature that it cannot be cured within
     said ten (10) day period but can be cured within a reasonable time
     thereafter, if efforts to cure such breach has not commenced and/or such
     efforts are not proceeding and being continued diligently both during and
     after such ten (10) day period prior to the breach being cured. However,
     the breach of any obligation of either party hereunder to pay any moneys to
     the other party under the terms of this Agreement shall be deemed to be
     curable within ten (10) days. Termination of this Agreement shall be
     Owner's sole remedy for claims of breach of contract.

            B. EXCESSIVE DAMAGE: Upon the destruction of or substantial damage
     to the Project by any cause, or the taking of all or a substantial portion
     of the Project by eminent domain, in either case making it impossible or
     impracticable to continue operation of the Project.

            C. SALE OF PROJECT: In the event of the sale of the Project, this
     Agreement shall terminate upon the giving of not less than thirty (30) days
     written notice by Owner to Pinnacle.

            D. DEFAULT: Immediately upon the occurrence of any of the following
     events shall constitute an event of default by the party in respect of
     which such even occurs:

               1.   the failure of either party to pay any amounts required to
            be paid by it hereunder or to perform any of its obligations
            hereunder for a period of ten (10) days after the date on which
            notice of the failure has been given to the defaulting party by the
            other party;

               2.   the filing of a voluntary petition in bankruptcy or
            insolvency or a petition for reorganization under any bankruptcy or
            similar creditor relief law;

               3.   the consent to an involuntary petition in bankruptcy or the
            failure by such party to vacate, within sixty (60) days from the
            date of entry thereof, any order approving an involuntary petition;

               4.   the entering of an order, judgment or decree by any court of
            competent jurisdiction, on the application of a creditor,
            adjudicating such party as bankrupt or involvement or approving a
            petition seeking reorganization or appointing a receiver, trustee,
            conservator or liquidator of all or a substantial part of such
            party's assets, if such order, judgment or decree shall continue
            unstayed and in effect for a period of one hundred twenty (120)
            consecutive days;

               5.   the failure to fulfill any of the other covenants,
            undertakings, obligations or conditions set forth in this Agreement
            and the continuance of any such default for a period of ten (10)
            days after written notice of said failure; and

               6.   theft, fraud, or other knowing or intentional misconduct by
            Pinnacle or its employees or agents.

<Page>

     18.3   TERMINATION COMPENSATION: Any amounts accruing to Pinnacle prior
to such termination shall be due and payable when a final accounting, as set
forth in Section 18.6, is delivered in a form reasonably satisfactory to Owner.
To the extent that funds are available, and in any event prior to the
disbursement of payments (other than underlying mortgage obligations) to Owner,
such sums shall be payable from the operating accounts. Any amounts due in
excess of the funds available from the operating account shall be paid by Owner
to Pinnacle upon demand.

     18.4   OWNER RESPONSIBLE FOR PAYMENTS: Upon termination of or withdrawal
from this Agreement, Owner shall assume the obligations of any contract or
outstanding bill executed by Pinnacle under this Agreement for and on behalf of
Owner, if such bill was incurred by Pinnacle in accordance with the Plan or as
otherwise approved by Owner. In addition, Owner shall indemnify Pinnacle against
any obligations or liabilities which Pinnacle may have properly incurred on
Owner's behalf under this Agreement.

     18.5   ACCOUNTS: UNPAID BILLS: Pinnacle shall deliver to Owner, within
thirty (30) days (or sooner if required by law) after this Agreement is
terminated, any balance of moneys due Owner and tenant security deposits which
were held by Pinnacle with respect to the Project, as well as a final accounting
reflecting the balance of income and expenses with respect to the Project, as of
the date of termination or withdrawal, and all records, contracts, leases,
receipts for deposits, and other papers or documents which pertain to the
Project. Bills previously incurred but not yet invoiced shall be the
responsibility of and sent directly to Owner.

     18.6   FINAL ACCOUNTING: Since all records, contracts, leases, rental
agreements, receipts for deposits, unpaid bills, and other papers and documents
which pertain to the Project are deemed to be the property of the Owner, they
are to be delivered to Owner, upon the effective date of such termination,
Pinnacle may retain temporary possession of such records as may be necessary in
order to comply with the provisions of Section 18.5 and/or law.

     18.7   NON-INTERFERENCE WITH PINNACLE'S BUSINESS: Owner agrees that for a
period of six (6) months after termination of this Agreement, Owner will under
no circumstances hire any of Pinnacle's employees of special talent, or privy to
Pinnacle's confidential business information, or who have contributed notably to
the good will of Pinnacle's business or any broker, salesman or leasing agent to
perform any services which are in the scope of Pinnacle's business. In the event
of an actual or threatened breach of this covenant by Owner, Pinnacle shall be
entitled to an injunction restraining Owner from committing, or continuing to
commit, any such breach. Nothing herein stated shall be construed as prohibiting
Pinnacle from pursuing any other remedies available to Pinnacle for such breach
and threatened breach, including recovery of damages from Owner. On-site
employees are exempt from the provisions of this paragraph.

                                   SECTION 19

                                 REPRESENTATIONS

     19.1   OWNER'S REPRESENTATIONS AND WARRANTIES: Owner represents and
warrants as follows: (a) Owner has the full power and authority to enter into
this Agreement, and the person executing this Agreement is authorized to do so;
(b) there are no written or oral agreements affecting the Project other than the
tenant leases or rental agreements, copies of which have been furnished to
Pinnacle; (c) all permits for the operation of the Project has been secured and
are current; and (d) Owner is not aware of any violation of any building or
construction statute, ordinance, or regulation that will affect the operation of
the Project.

<Page>

     19.2   PINNACLE'S REPRESENTATIONS AND WARRANTIES: Pinnacle represents and
warrants as follows: (a) the officers of Pinnacle have the full power and
authority to enter into this Agreement; (b) there are not written or oral
agreements by Pinnacle that will be breached by, or agreements in conflict with,
Pinnacle's performance under this Agreement; and (c) where necessary, Pinnacle
will be duly licensed and able to perform all of the duties under this Agreement
at the effective date of this Agreement and shall comply with and abide by all
laws, rules, regulations, and ordinances pertaining thereto.

                                   SECTION 20

                                    HEADINGS

     All headings and subheadings employed within this Agreement are inserted
only for convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.

<Page>

                                   SECTION 21

                                  FORCE MAJEURE

     Any delays in the performance of any obligation of Pinnacle under this
Agreement shall be excused to the extent that such delays are caused by wars,
national emergencies, natural disasters, strikes, labor disputes, utility
failures, governmental regulations, riots, adverse weather, and other similar
causes not within the control of Pinnacle, and any time periods required for
performance shall be extended accordingly.

                                   SECTION 22

                               COMPLETE AGREEMENT

     This Agreement, including any specified attachments, constitutes the entire
agreement between Owner and Pinnacle with respect to the management and
operation of the Project and supersedes and replaces any and all previous
management agreements entered into and/or negotiated between Owner and Pinnacle
relating to the Project covered by this Agreement. No change to this Agreement
shall be valid unless made by supplemental written agreement executed and
approved by Owner and Pinnacle. Except as otherwise provided herein, any and all
amendments, additions or deletions to this Agreement shall be null and void
unless approved by Owner and Pinnacle in writing. Each party to this Agreement
hereby acknowledges and agrees that the other party has made no warranties,
representations, covenants or agreements, express or implied, to such party,
other than those expressly set forth herein, and that each party, entering into
and executing this Agreement has relied upon no warranties, representations,
covenants or agreements, express or implied, to such party, other than those
expressly set forth herein, or as set forth in an exhibit or appendix to this
Agreement.

                                   SECTION 23

                          RIGHTS CUMULATIVE: NO WAIVER

     No right or remedy herein conferred upon or reserved to either of the
parties to this Agreement is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy given under this Agreement or now or hereafter
legally existing upon the occurrence of an event of default under this
Agreement. The failure of either party to this Agreement to insist at any time
upon the strict observance or performance of any of the provisions of this
Agreement, or to exercise any right or remedy as provided in this Agreement,
shall not impair any such right or remedy or be construed as a waiver or
relinquishment of such right or remedy with respect to subsequent defaults.
Every right and remedy given by this Agreement to the parties to it may be
exercised from time to time and as often as may be deemed expedient by those
parties.

                                   SECTION 24

                          APPLICABLE LAW AND LITIGATION

     24.1   INTERPRETATION: The execution, interpretation and performance of
this Agreement shall in all respects be controlled and governed by the laws of
the State of the location of the Project. If any part of this Agreement shall be
declared invalid or unenforceable, Pinnacle or Owner shall have the option to
terminate this Agreement by giving written notice to the other party.

<Page>

     24.2   LITIGATION: In the event that either party shall bring an action
to enforce or to interpret the terms and provisions of this Agreement, the
substantially prevailing party in such action shall be entitled to receive court
costs and the reasonable fees and expenses of attorneys and certified public
accountants.

                                   SECTION 25

                                     NOTICES

     Any notices, demands, consents and reports necessary or provided for under
this Agreement shall be in writing and shall be delivered by hand, by nationally
recognized overnight express delivery service (all charges prepaid) for next day
delivery or by U.S. registered or certified mail, return receipt requested (all
postage prepaid) and shall be addressed as follows, or at such other address as
Owner and Pinnacle individually may specify hereafter in writing:

     PINNACLE:               PINNACLE REALTY MANAGEMENT COMPANY
                             401 Second Avenue South, Suite 110
                             Seattle, Washington  98104

     OWNER:                  GFS ALDERWOOD LLC
                             2801 Alaskan Way, #200
                             Seattle, WA 98121

     With copies to:         [BC-GFS LLC]
                             c/o Boston Capital Corporation
                             One Boston Place, 21st Floor
                             Boston, MA 02108-4406
                             Attention: Mark W. Dunne

Any notice or other communication sent or provided above shall be deemed given
(i) on the date of delivery, if by hand or (ii) on the date mailed, if sent by
overnight express delivery service or U.S. registered or certified mail notice
shall be deemed received on the date of receipt by the addressee or the date
receipt would have been effectuated if delivery were not refused. Each party
hereto may designate a new Notice Address by written notice to the other parties
in accordance with this Section 25. The inability to deliver a notice because of
a change of address of which proper notice was not given shall be deemed a
refusal of such notice.

                                   SECTION 26

     26.1   AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon the parties hereto and their respective personal
representatives, heirs, administrators, executors, successors and assigns.

     26.2   AGREEMENT IN COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be considered an original and all
shall constitute one and the same Agreement, binding upon all of the parties
hereto, notwithstanding that all of the parties may not be signatories to the
same counterpart.

     26.3   TIME PERIODS. In the event the time for performance of any
obligation hereunder expires on a day other than a Business Day, the time for
performance shall be extended to the next day that is a Business Day.

<Page>

     26.4   EXCULPATION. Pinnacle, and all persons claiming by, through or under
Pinnacle, shall look solely to Owner's interest in the Project for the
satisfaction of any claim now existing or hereafter arising or accruing against
the Owner, and in no event shall Owner be liable for any deficiency.

     26.5   CONFIDENTIALITY. Pinnacle and its employees and agents agree to keep
all information related to the Property and Owner confidential, except to the
extent necessary to carry out Pinnacle's obligations under this Agreement or as
may be required by law.

     26.5   PINNACLE'S AGREEMENT TO NOT COMPETE. During the term of this
Agreement, Pinnacle shall notify Owner, in writing, of the existence of any
property management services it provides to other clients within a three (3)
mile radius of the Project. Such notice to be given within a reasonable period
of time and to include the name of the Project and the effective date of
management. Pinnacle further agrees to not utilize the services of the same
Investment Manager for the Project on any other client of Pinnacle's properties
within a one-quarter mile radius of the Project.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

<Page>

     IN WITNESS WHEREOF, the parties hereto have affixed and caused to be
affixed their respective signatures as of the day and year first written above.

OWNER:                                           PINNACLE REALTY
MANAGEMENT CO.

By:  GFS ALDERWOOD LLC                           By:
     a Washington Limited Liability Company           /s/
                                                      ----------------------
                                                      Stan Harrelson
By:  BC-GFS LLC,                                 Its: President and CEO
     a Delaware Limited Liability Company
Its: Sole Member

By:  GFS EQUITY MANAGEMENT LLC
     a Washington Limited Liability Company
Its: Manager

By:  /s/
     --------------------
     John A. Goodman
Its: Manager

<Page>

                                    EXHIBIT A

                               PRELIMINARY BUDGET

<Page>

                                    EXHIBIT B

                              EXECUTIVE PERSONNEL

NORTHWEST REGION PRESIDENT:       Eric Schwabe

INVESTMENT MANAGERS OF RECORD:    Tom Daniels
                                  Mike Voorhees

NORTHWEST ACCOUNTING MANAGER:     Lorraine DeAsis

<Page>

                                    EXHIBIT C

REIMBURSABLE EMPLOYEE EXPENSE SCHEDULE

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