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                                                                    Exhibit 10.6

                                 LOAN AGREEMENT

     This Loan Agreement, dated as of May 31, 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.   CREDIT FACILITY 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 prior to
     the end of the Advance Period, 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. This
     Agreement is not a revolving credit agreement and Borrower may not reborrow
     principal amounts repaid.

     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") as soon as practicable after, and in any
     event 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.

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            (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 Current
     Quarter. Bonus Interest which is unpaid shall accrue without further
     interest and 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 maximum 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;
provided, however, that the Jacksonville Portfolio must be included

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in the first such release. 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, 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 designates and appoints 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.

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            (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 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

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     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 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

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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.

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

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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, 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 as specified to Agent in
     writing;

            (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).

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     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, 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 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.

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     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.

     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 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 after 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;

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            (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.

     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;

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            (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 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.

                                       11
<Page>

     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) its 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.

     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 and expenses),
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,

                                       12
<Page>

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 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 and
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

                                       13
<Page>

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 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,

                                       14
<Page>

     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
     Lender hereunder (and under any and all other guaranties, documents,
     instruments and agreements executed in connection herewith) to the extent
     that such rights and obligations have been assigned by Lender pursuant to
     the assignment documentation between 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 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. 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 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:

                                       15
<Page>

            (a)     represent the sum of the understandings and agreements
     between Lender and Borrower concerning this credit (provided that Lender
     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.

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 or warranty contained in this Agreement.

                                       16
<Page>

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 its sole recourse against Borrower 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.

            (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 stockholders 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

                                       17
<Page>

                    (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 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 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 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:                  /s/ JEFFREY H. GOLDSTEIN
                                    ---------------------------------------
                                    Name: Jeffrey H. Goldstein
                                    Title: President

                              Address where notices to
                              Borrower are to be sent:

                              c/o Boston Capital Corporation
                              One Boston Place
                              Boston, MA  02108-4406
                              Attn: Marc N. Teal

                              LENDER

                              BCP FUNDING, LLC

                              By:                  /s/ JEFFREY H. GOLDSTEIN
                                 ------------------------------------------
                                 Name:  Jeffrey H. Goldstein
                                 Title: Senior Vice President and Treasurer of
                                        Boston Capital Partners II Corporation,
                                        sole General Partner of Boston Capital
                                        Companion Limited Partnership, Sole
                                        Member

                              Address where notices to
                              Borrower are to be sent:

                              c/o Boston Capital Corporation
                              One Boston Place
                              Boston, MA  02108-4406
                              Attn: Jeffrey H. Goldstein

                                       19
<Page>

                                       20
<Page>

                                                 EXHIBIT "A" to Loan Agreement
                                                 dated as of May 31, 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:

     "Advance Period" means the period ending October 15, 2003.

     "BUSINESS DAY" means any day other than a Saturday, Sunday or legal holiday
in the Commonwealth of Massachusetts.

     "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 less operating expenses of Borrower, provided that no fees to Affiliates
of Borrower shall be deducted; provided further that any cash receipts of
Borrower from any Released Property Investment shall not be included and the
operating expenses of Borrower shall be ratably allocated among Property
Investments and any Released Property Investments.

     "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

<Page>

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.

     "MATURITY DATE" means May 31, 2004, provided that Borrower may extend the
Maturity Date for one additional period of six months upon written notice to
Lender prior to May 31, 2004, provided no Default otherwise exists.

     "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                     12/9/2002              $    350,000
           Seattle Portfolio                    12/12/2002              $  8,975,982
           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 May 31, 2003
                                                 between BCP Funding LLC, as
                                                 Lender and Boston Capital Real
                                                 Estate Investment Trust, Inc.,
                                                 as

                                FORM OF LOAN NOTE

                                 PROMISSORY NOTE

$60,000,000                                                Boston, Massachusetts

                                                                    May 31, 2003

     FOR VALUE RECEIVED, the undersigned (the "Borrower") absolutely and
unconditionally promises to pay to BCP Funding, LLC (the "Lender") as Lender
under the 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 on the
unpaid principal amount hereof until paid in full in accordance with the
Agreement, plus additional amounts as specified in the Agreement.

     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 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 May 31, 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 May 31, 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:  Jeffrey H. Goldstein
                                       Title:

<Page>

                                                 EXHIBIT "4.1"to Loan Agreement
                                                 dated as of as of May 31, 2003
                                                 between BCP Funding LLC, as
                                                 Lender and Boston Capital Real
                                                 Estate Investment Trust, Inc.,
                                                 as Borrower

                              [NIXON PEABODY LOGO]

                                NIXON PEABODY LLP
                                ATTORNEYS AT LAW

                                CLOSING CHECKLIST

                           Last Updated: May 31, 2003

<Table>
<Caption>
                                                                     RESPONSIBLE
            OPERATIVE DOCUMENTS:                                       PARTY                    STATUS/COMMENTS
 <S>                                                                     <C>                    <C>
 1.  Loan Agreement                                                      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
</Table>

<Page>

<Table>
 <S>                                                                     <C>                    <C>
 3.  Pledge Agreement (LLC/LP Interests)                                 NP

 4.  Unconditional Guaranty (Limited Recourse)                           NP

 5   Pledge Agreement (REIT Shares)                                      NP

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

<Page>

                                                 EXHIBIT "7.8" to Loan Agreement
                                                 dated as of May 31, 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 10.7

                                PLEDGE AGREEMENT
                               (LLC/LP Interests)

     This PLEDGE AGREEMENT (this "PLEDGE AGREEMENT"), dated as of May 31, 2003,
is made and entered into Boston Capital Real Estate Investment Trust, Inc., a
Maryland corporation (the "PLEDGOR"), and among BCP Funding, LLC, a Delaware
limited liability company (the "PLEDGEE").

                              W I T N E S S E T H :
                              - - - - - - - - - -

     WHEREAS, the Pledgee, as the lender thereunder, has entered into that
certain Loan Agreement (as amended, supplemented or otherwise modified from time
to time, the "LOAN AGREEMENT"), of even date herewith, with Pledgor pursuant to
which the Pledgee has agreed to make loans to Pledgor, the proceeds of which are
to be used for the purposes described in the Loan Agreement;

     WHEREAS, the Pledgor is the record and beneficial owner of the Equity
Interests of the corresponding entities (each, an "ISSUER" and collectively, the
"ISSUERS") described in EXHIBIT A hereto (collectively the "PLEDGED EQUITY
INTERESTS");

     WHEREAS, the Pledgor is the record and beneficial owner of the promissory
notes and any other instruments evidencing such debt securities of the
corresponding companies described in EXHIBIT B hereto which are owned by such
Pledgor (collectively the "PLEDGED DEBT SECURITIES", and, together with the
Pledged Equity Interests, the "PLEDGED SECURITIES"); and

     WHEREAS, as security for the payment and performance of Pledgor's
obligations under the Loan Agreement, the Pledgee is requiring that Pledgor
execute and deliver this Pledge Agreement and grant the security interest
contemplated hereby.

     NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce the Pledgee to make loans under the Loan
Agreement, it is agreed as follows:

     (1)  DEFINITIONS. Unless otherwise defined herein, terms defined in the
Loan Agreement are used herein as therein defined, and the following shall have
(unless otherwise provided elsewhere in this Pledge Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):

     "ACT" shall have the meaning assigned to such term in SECTION 8(d) hereof.

     "AGREEMENT" shall mean this Pledge Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to this Agreement as the same may be in effect at the
time such reference becomes operative.

     "EQUITY INTERESTS" shall mean any shares of capital stock, limited
liability company interests, partnership interests or other equity interests of
any Person.

<Page>

     "EVENT OF DEFAULT" shall mean a Default under the Loan Agreement, or a
default or an event of default under any Loan Document.

     "ISSUER" shall have the meaning assigned to such term in the recitals
hereof.

     "OBLIGATIONS" shall have the meaning assigned to such term in SECTION 3
hereof.

     "PLEDGEE" shall have the meaning assigned to such term in the preamble
hereof.

     "PLEDGED COLLATERAL" shall have the meaning assigned to such term in
SECTION 2 hereof.

     "PLEDGED DEBT SECURITIES" shall have the meaning assigned to such term in
the recitals hereof.

     "PLEDGED EQUITY INTERESTS" shall have the meaning assigned to such term in
the recitals hereof.

     "PLEDGED SECURITIES" shall have the meaning assigned to such term in the
recitals hereof.

     "PLEDGOR" shall have the meaning assigned to such term in the preamble
hereof.

     (2)  PLEDGE. Pledgor hereby pledges to the Pledgee and grants to the
Pledgee, for the benefit of the Pledgee, a security interest in all of the
following (collectively, the "PLEDGED COLLATERAL":

          (a) the Pledged Securities, and the certificates, promissory notes and
     other instruments representing or evidencing its Pledged Securities, and
     all dividends, distributions, cash, instruments and other property or
     proceeds from time to time received, receivable or otherwise distributed in
     respect of or in exchange for any or all of its Pledged Securities;

          (b) all rights and privileges of Pledgor with respect to the
     securities and other property referred to in clause (a) above; and

          (c) all proceeds of any of the foregoing.

     (3)  SECURITY FOR THE OBLIGATIONS. This Agreement secures, and the Pledged
Collateral is security for, the prompt payment and performance of all
obligations of the Pledgor under the Guaranty, and all obligations of Pledgor
now or hereafter existing under this Agreement, including, without limitation,
all reasonable costs and expenses of the Pledgee in connection with preserving,
defending or enforcing the Pledged Collateral or the security interest granted
hereunder and all other reasonable costs and expenses of the Pledgee incurred in
connection with this Agreement (collectively, the "OBLIGATIONS").

     (4)  DELIVERY OF PLEDGED COLLATERAL. All certificates, promissory notes or
other instruments representing or evidencing the Pledged Securities listed on
EXHIBITs A and B hereto shall be delivered to and held by the Pledgee pursuant
hereto and shall be accompanied by duly executed instruments of transfer or
assignment in blank, including duly executed blank stock

                                        2
<Page>

powers, all in form and substance satisfactory to the Pledgee. The Pledgee shall
have the right, at any time after the occurrence and during the continuance of
an Event of Default, in its discretion and without notice to any Pledgor, to
transfer to or to register in the name of the Pledgee, or any of its nominees,
any or all of the Pledged Securities.

     (5)  REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants to
the Pledgee as follows:

          (a) The Pledgor is duly organized or formed, validly existing and in
     good standing under the laws of the State of Maryland, has the legal power
     and authority to own its properties and to carry on its business as now
     being and hereafter proposed to be conducted.

          (b) The Pledgor is, and at the time of delivery of the Pledged
     Securities to the Pledgee pursuant to SECTION 4 hereof will be, the sole
     holder of record and the sole beneficial owner of its respective Pledged
     Collateral, free and clear of any lien thereon or affecting the title
     thereto, except for the lien created by this Agreement.

          (c) The Pledged Equity Interests constitute a percentage of all of the
     issued and outstanding equity interests of the respective Issuer thereof as
     is set forth with respect to each such Issuer on EXHIBIT A attached hereto.
     All of the Pledged Equity Interests have been duly authorized, validly
     issued and are fully paid and non-assessable.

          (d) The Pledgor has the right and requisite authority to pledge its
     Pledged Collateral to the Pledgee, as provided herein.

          (e) None of the Pledged Securities has been issued or transferred in
     violation of the securities registration, securities disclosure or similar
     laws of any jurisdiction to which such issuance or transfer may be subject.
     The Pledgor's execution, delivery and performance of this Agreement and the
     pledge of its respective Pledged Collateral hereunder do not, directly or
     indirectly, violate in any material respect or result in a violation of any
     such laws.

          (f) The only assets of the Pledgor are the Pledged Securities. The
     Pledgor has no Indebtedness.

          (g) None of the Pledged Securities included in the Pledged Collateral
     is, as of the date of this Agreement, margin stock, and Pledgor shall,
     promptly after learning thereof, notify the Pledgee of any of its Pledged
     Collateral which is or becomes margin stock and execute and deliver in
     favor of the Pledgee any and all instruments, documents and agreements
     (including, but not limited to Forms U-1) necessary to cause the pledge of
     such margin stock to comply with all applicable laws, rules and
     regulations.

          (h) The Pledged Securities included in the Pledged Collateral are not
     certificated. The Pledged Securities included in the Pledged Collateral are
     comprised solely of general intangibles, as that term is defined in the
     Uniform Commercial Code as enacted in the Commonwealth of Massachusetts, as
     amended (the "UCC"). The Pledged

                                        3
<Page>

     Securities included in the Pledged Collateral are not securities as such
     term is defined in the UCC.

          (i)     With respect to the Pledged Debt Securities:

                  (i)     The obligors thereunder are not in default under the
          terms of the Pledged Debt Securities.

                  (ii)    All signatures on the Pledged Debt Securities are
          genuine.

                  (iii)   The Pledged Debt Securities are valid and enforceable
          against the obligors thereunder.

          (j) Subject to Section (20), No consent, approval, authorization or
     other order of any Person and no consent, authorization, approval, or other
     action by, and no notice to or filing with, any governmental departments,
     commissions, boards, bureaus, agencies or other instrumentalities, domestic
     or foreign, is required to be made or obtained by any Pledgor either (i)
     for the pledge of its Pledged Collateral pursuant to this Agreement or for
     the execution, delivery or performance of this Agreement by such Pledgor or
     (ii) for the exercise by the Pledgee of the voting or other rights provided
     for in this Agreement or the remedies in respect of the Pledged Collateral
     pursuant to this Agreement.

          (k) The pledge of the Pledged Collateral to the Pledgee pursuant to
     this Agreement will create a valid lien on and a perfected security
     interest in the Pledged Collateral pledged by the Pledgor, and the proceeds
     thereof, securing the payment of the Obligations, subject to no other lien
     or security interest.

          (l) This Agreement has been duly authorized, executed and delivered by
     the Pledgor and constitutes the legal, valid and binding obligation of the
     Pledgor enforceable in accordance with its terms.

     The representations and warranties set forth in this SECTION 5 shall
survive the execution and delivery of this Agreement.

     (6)  COVENANTS. The Pledgor covenants and agrees that until the payment in
full of the Secured Obligations:

          (a) The Pledgor will not sell, assign, transfer, pledge, or otherwise
     encumber any of its rights in or to any Pledged Collateral or any dividends
     or other distributions or payments with respect thereto or grant a lien on
     any thereof.

          (b) The Pledgor will, at its expense, promptly execute, acknowledge
     and deliver all such instruments and take all such action as the Pledgee
     from time to time may reasonably request in order to ensure to the Pledgee
     the benefits of the liens in and to the Pledged Collateral intended to be
     created by this Agreement, including the filing of any necessary Uniform
     Commercial Code financing statements, which may be filed by the Pledgee
     without the signature of the Pledgor.

                                        4
<Page>

          (c) The Pledgor will defend the title to the Pledged Collateral and
     the liens of the Pledgee, for the benefit of the Pledgee against the claim
     of any Person and will maintain and preserve such liens until the payment
     in full of the Obligations.

     (7)  PLEDGOR'S RIGHTS. As long as no Event of Default shall have occurred
and be continuing, and until written notice shall be given to the Pledgor in
accordance with SECTION 8 hereof:

          (a) Pledgor shall have the right, from time to time, to vote and give
     consents with respect to the Pledged Collateral or any part thereof for all
     purposes not inconsistent with the provisions of this Agreement, the
     Guaranty, the Loan Agreement, the Loan Documents and any other agreement;
     PROVIDED, HOWEVER, that no vote shall be cast, and no consent shall be
     given or action taken, which would have the effect of impairing the
     position or interest of the Pledgee in respect of the Pledged Collateral or
     which would authorize or effect (i) the dissolution or liquidation, in
     whole or in part, of any Issuer of Pledged Securities, (ii) the
     consolidation or merger of any Issuer of Pledged Securities with any other
     Person, (iii) the sale, disposition or encumbrance of all or substantially
     all of the assets of any Issuer of Pledged Securities, (iv) any change in
     the authorized number of shares, the stated capital or the authorized share
     capital of any Issuer of Pledged Securities or the issuance of any
     additional Equity Interests of any Issuer of Pledged Securities, (v) the
     alteration of the voting rights with respect to the Equity Interests of any
     Issuer of Pledged Securities, or (vi) any amendment to the partnership
     agreement of any Issuer.

          (b) All dividends, interest and principal paid on, and all other
     distributions in respect of any of the Pledged Securities, whenever paid or
     made, shall be delivered to the Pledgee as Pledged Collateral and shall, if
     recovered by any Pledgor, be received in trust for the benefit of and on
     behalf of the Pledgee, be segregated from the other property or funds of
     such Pledgor, and be forthwith delivered to the Pledgee as Pledged
     Collateral in the same form as so received (with any necessary
     endorsement).

     (8)  DEFAULTS AND REMEDIES. Upon the occurrence of an Event of Default and
during the continuation of such Event of Default, then or at any time after such
declaration and following written notice to Pledgor, the Pledgee (personally or
through an agent) is hereby authorized and empowered to do any and all of the
following in a commercially reasonable manner: transfer and register in its name
or in the name of its nominee the whole or any part of the Pledged Collateral,
to exchange certificates or instruments representing or evidencing Pledged
Securities for certificates or instruments of smaller or larger denominations,
to voting rights, exercise the voting rights with respect thereto, to collect
and receive all cash dividends and other distributions made thereon, to sell in
one or more sales after ten (10) days' written notice is sent by the Pledgor of
the time and place of any public sale or of the time after which a private sale
is to take place (which notice Pledgor agrees is commercially reasonable), but
without any previous notice or advertisement, the whole or any part of the
Pledged Collateral and to otherwise act with respect to the Pledged Collateral
as though the Pledgee were the out-right owner thereof; PROVIDED, HOWEVER, the
Pledgee shall not have any duty to exercise any such right of sale or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so. Any sale shall be made at a public or private sale at the
Pledgee's place of business, or at any

                                        5
<Page>

public building to be named in the notice of sale, either for cash or upon
credit or for future delivery at such price as the Pledgee may deem fair and
reasonable, and the Pledgee may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same thereafter in its own right free
from any claim of any Pledgor or any right of redemption. Each sale shall be
made to the highest bidder, but the Pledgee reserves the right to reject any and
all bids at such sale which, in its discretion, it shall deem inadequate.
Demands of performance, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer or agent of the Pledgee.

          (a) If, at the original time or times appointed for the sale of the
     whole or any part of the Pledged Collateral, the highest bid, if there be
     but one sale, shall be inadequate to discharge in full all the Obligations,
     or if the Pledged Collateral be offered for sale in lots, if at any of such
     sales, the highest bid for the lot offered for sale would indicate to the
     Pledgee, in its discretion, the unlikelihood of the proceeds of the sales
     of the whole of the Pledged Collateral being sufficient to discharge all
     the Obligations, the Pledgee may, on one or more occasions and in its
     discretion, postpone any of said sales by public announcement at the time
     of sale or the time of previous postponement of sale, and no other notice
     of such postponement or postponements of sale need be given, any other
     notice being hereby waived; PROVIDED, HOWEVER, that any sale or sales made
     after such postponement shall be after ten (10) days' notice to the
     Pledgor.

          (b) In the event of any sales hereunder, the Pledgee shall, after
     deducting all reasonable costs or expenses of every kind (including
     reasonable attorneys' fees and disbursements) for care, safekeeping,
     collection, sale, delivery or otherwise, apply the residue of the proceeds
     of the sales to the payment or reduction, either in whole or in part, for
     the benefit of the Pledgee, of the Obligations in accordance with the Loan
     Agreement.

          (c) In the event that it becomes necessary to comply with any Federal
     or State law or regulation or to make or file any registration thereunder
     in order for the Pledgee to exercise any of its rights hereunder, Pledgor
     expressly agrees to do or cause to be done all acts and prepare and execute
     all documents necessary to affect such compliance or registration, and to
     bear all reasonable costs in connection therewith. Pledgor agrees to
     indemnify and to hold the Pledgee harmless from and against any claim or
     liability; and to hold the Pledgee harmless from and against any claim or
     liability caused by (i) any omission or alleged omission to state a
     material fact required to be stated, or necessary to make the statements,
     in light of the circumstances in which they are made, not misleading (as
     required in any registration or prospectus) or (ii) a failure to register
     or comply with any such law or regulation.

          (d) If, at any time when the Pledgee shall determine to exercise its
     right to sell the whole or any part of the Pledged Collateral hereunder,
     such Pledged Collateral or the part thereof to be sold shall not, for any
     reason whatsoever, be effectively registered under the Securities Act of
     1933, as amended (the "ACT"), the Pledgee may, in its discretion (subject
     only to applicable requirements of law), sell such Pledged Collateral or
     part thereof by private sale in such manner and under such circumstances as
     is commercially reasonable and shall not be required to effect such
     registration or to cause the same to be effected. Without limiting the
     generality of the foregoing, in any such event the Pledgee

                                        6
<Page>

     in its discretion (i) may, in accordance with applicable securities laws,
     proceed to make such private sale notwithstanding that a registration
     statement for the purpose of registering such Pledged Collateral or part
     thereof could be or shall have been filed under said Act (or similar
     statute), (ii) may approach and negotiate with a single possible purchaser
     to effect such sale, and (iii) may restrict such sale to a purchaser who
     will represent and agree that such purchaser is purchasing for its own
     account, for investment and not with a view to the distribution or sale of
     such Pledged Collateral or part thereof. In addition to a private sale as
     provided above in this SECTION 8, if any of the Pledged Collateral shall
     not be freely distributable to the public without registration under the
     Act (or similar statute) at the time of any proposed sale pursuant to this
     SECTION 8, then the Pledgee shall not be required to effect such
     registration or cause the same to be effected but, in its discretion
     (subject only to applicable requirements of law), may require that any sale
     hereunder (including a sale at auction) be conducted subject to
     restrictions (i) as to the financial sophistication and ability of any
     Person permitted to bid or purchase at any such sale, (ii) as to the
     content of legends to be placed upon any certificates representing the
     Pledged Collateral sold in such sale, including restrictions on future
     transfer thereof, (iii) as to the representations required to be made by
     each Person bidding or purchasing at such sale relating to that Person's
     access to financial information about any Issuer of Pledged Securities and
     such Person's intentions as to the holding of the Pledged Collateral so
     sold for investment, for its own account, and not with a view to the
     distribution thereof, and (iv) as to such other matters as the Pledgee may,
     in its discretion, deem necessary or appropriate in order that such sale
     (notwithstanding any failure so to register) may be effected in compliance
     with the Uniform Commercial Code and other laws affecting the enforcement
     of creditors' rights and the Act and all applicable state securities laws.

          (e) Pledgor recognizes that the Pledgee may be unable to effect a
     public sale of any or all the Pledged Collateral and may be compelled to
     resort to one or more private sales thereof. Pledgor also acknowledges that
     any such private sale may result in prices and other terms less favorable
     to the seller than if such sale were a public sale. Pledgor agrees that
     such sale shall not be deemed to have been made in a commercially
     unreasonable manner because it was conducted as a private sale. The Pledgee
     shall be under no obligation to delay a sale of any of the Pledged
     Collateral for the period of time necessary to permit the registrant to
     register such securities for public sale under the Act, or under applicable
     state securities laws, even if any Pledgor would agree to do so.

          (f) Pledgor agrees, to the maximum extent permitted by applicable law,
     that following the occurrence and during the continuance of an Event of
     Default, it will not at any time plead, claim or take the benefit of any
     appraisal, valuation, stay, extension, moratorium or redemption law now or
     hereafter in force in order to prevent or delay the enforcement of this
     Agreement, or the absolute sale of the whole or any part of the Pledged
     Collateral or the possession thereof by any purchaser at any sale
     hereunder, and Pledgor waives the benefit of all such laws to the extent it
     lawfully may do so. No failure or delay on the part of the Pledgee to
     exercise any such right, power or remedy and no notice or demand which may
     be given to or made upon the Pledgee with respect to any such remedies
     shall operate as a waiver thereof, or limit or impair the Pledgee's

                                        7
<Page>

     right to take any action or to exercise any power or remedy hereunder,
     without notice or demand, or prejudice its rights as against any Pledgor in
     respect.

          (g) Pledgor further agrees that a breach of any of the covenants
     contained in this SECTION 8 will cause irreparable injury to the Pledgee,
     that the Pledgee has no adequate remedy at law in respect of such breach
     and, as a consequence, agrees that each and every covenant contained in
     this SECTION 8 shall be specifically enforceable against Pledgor, and
     Pledgor hereby waives and agrees not to assert any defenses against an
     action for specific performance of such covenants except for a defense that
     the Obligations are not then due and payable in accordance with the
     agreements and instruments governing and evidencing such obligations.

     The rights and remedies of the Pledgee under this Agreement shall be
cumulative and not exclusive of any rights or remedies which it would otherwise
have. In exercising such rights and remedies, the Pledgee may be selective, and
no failure or delay by the Pledgee in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.

     (9)  POWER OF ATTORNEY; PROXY. Upon and after an Event of Default and
during its continuance, Pledgor irrevocably designates, makes, constitutes and
appoints the Pledgee (and all Persons designated by the Pledgee) as its true and
lawful attorney (and agent-in-fact) and the Pledgee, or the Pledgee's agent,
may, without notice to any Pledgor, and at such time or times thereafter as the
Pledgee or said agent, in its discretion, may determine, in the name of any
Pledgor or the Pledgee, transfer any or all of the Pledged Collateral on the
books of the Issuer thereof, with full power of substitution in the premises;
endorse the name of any Pledgor upon any checks, notes, acceptance, money
orders, certificates, drafts or other forms of payment of security that come
into the Pledgee's possession; and do all acts and things necessary, in the
Pledgee's discretion, to fulfill the obligations of any Pledgor under this
Agreement.

     Upon the occurrence and during the continuance of any Event of Default
hereunder, the Pledgee, or its nominee, without notice or demand of any kind to
any Pledgor, shall have the sole and exclusive right to exercise all voting
powers pertaining to any and all of the Pledged Collateral (and to give written
consents in lieu of voting thereon) and may exercise such power in such manner
as the Pledgee, in its sole discretion, shall determine. THIS PROXY IS COUPLED
WITH AN INTEREST AND IS IRREVOCABLE. The exercise by the Pledgee of any of its
rights and remedies under this SECTION 9 shall not be deemed a disposition of
Pledged Collateral under Article 9 of the Uniform Commercial Code nor an
acceptance by the Pledgee of any of the Pledged Collateral in satisfaction of
any of the Obligations.

     (10) WAIVER. No delay on the Pledgee's part in exercising any power of
sale, lien, option or other right hereunder, and no notice or demand which may
be given to or made upon any Pledgor by the Pledgee with respect to any power of
sale, lien, option or other right hereunder, shall constitute a waiver thereof,
or limit or impair the Pledgee's right to take any action or to exercise any
power of sale, lien, option, or any other right hereunder, without notice or
demand, or prejudice the Pledgee's rights as against any Pledgor in any respect.

                                        8
<Page>

     (11) TERMINATION. This Agreement shall terminate and be of no further force
or effect at such time as the Obligations shall be paid and performed in full.
Upon such payment and performance in full of the Obligations, the Pledgee shall
deliver to the Pledgor the Pledged Collateral at the time subject to this
Agreement and then in the Pledgee's possession or control and all instruments of
assignment executed in connection therewith, free and clear of the liens hereof
and, except as otherwise provided herein, all of the Pledgor's obligations
hereunder shall at such time terminate.

     (12) LIEN ABSOLUTE. All rights of the Pledgee hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:

          (a) any lack of validity or enforceability of the Loan Agreement, the
     Guaranty, the Term Note, any other Loan Document or any other agreement or
     instrument governing or evidencing any Obligations or any of the Pledgor's
     or the Borrower's obligations under the Loan Documents;

          (b) any change in the time, manner or place of payment of, or in any
     other term of, all or any part of the Obligations or any of the Pledgor's
     or the Borrower's obligations under the Loan Documents, or any other
     amendment or waiver of or any consent to any departure from the Loan
     Agreement, the Term Note, the Guaranty, any other Loan Document or any
     other agreement or instrument governing or evidencing any Obligations or
     any of the Pledgor's obligations under the Loan Documents;

          (c) any exchange, release or non-perfection of any other collateral,
     or any release or amendment or waiver of or consent to departure from any
     guaranty, for all or any of the Obligations or any of the Pledgor's
     obligations under the Loan Documents; or

          (d) any other circumstance which might otherwise constitute a defense
     available to, or a discharge of, any Pledgor.

     (13) RELEASE. Except as provided for in any Loan Document, Pledgor
hereby waives notice of acceptance of this Agreement, and also presentment,
demand, protest and notice of dishonor of any and all of the Obligations or any
of the Pledgor's obligations under the Loan Documents, and promptness in
commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon any Pledgor. No act or
omission of any kind on the Pledgee's part shall in any event affect or impair
this Agreement. Pledgor consents and agrees that the Pledgee may at any time, or
from time to time, in its discretion:

          (a) renew, extend or change the time of payment, and/or the manner,
     place or terms of payment of all or any part of the Obligations; and

          (b) exchange, release and/or surrender all or any of the Collateral
     (including the Pledged Collateral), or any part thereof, by whomsoever
     deposited, which is now or may hereafter be held by the Pledgee in
     connection with all or any of the Obligations; all in such manner and upon
     such terms as the Pledgee may deem proper, and without notice to or further
     assent from any Pledgor, it being hereby agreed that Pledgor shall be and

                                        9
<Page>

     remain bound upon this Agreement, irrespective of the value or condition of
     any of the Collateral, and notwithstanding any such change, exchange,
     settlement, compromise, surrender, release, renewal or extension, and
     notwithstanding also that the Obligations may, at any time, exceed the
     aggregate principal amount thereof set forth in the Loan Agreement, or any
     other agreement governing any Obligations. Pledgor hereby waives notice of
     acceptance of this Agreement, and also presentment, demand, protest and
     notice of dishonor of any and all of the Obligations, and promptness in
     commencing suit against any party hereto or liable hereon, and in giving
     any notice to or of making any claim or demand hereunder upon any Pledgor.
     No act or omission of any kind on the Pledgee's part shall in any event
     affect or impair this Agreement.

     (14) REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made.

     (15) MISCELLANEOUS. This Agreement shall be binding upon Pledgor and its
successors and assigns, and shall inure to the benefit of, and be enforceable
by, the Pledgee and its successors and assigns. The Pledgee may assign or
otherwise transfer all or a portion of its rights and obligations under the Loan
Agreement (including, without limitation, all or any portion of the Term Loan)
to any assignee and such assignee shall thereupon because vested with all the
benefits in respect thereof granted to the Pledgee herein or otherwise. This
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws in effect in the Commonwealth of Massachusetts without giving
effect to principles of conflict of laws, and none of the terms or provisions of
this Agreement may be waived, altered, modified or amended except in writing
duly signed for and on behalf of the Pledgee and Pledgor. Neither the Pledgee,
nor any of its respective officers, directors, employees, agents or counsel
shall be liable for any action lawfully taken or omitted to be taken by it or
them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct.

     (16) SEVERABILITY. If for any reason any provision or provisions hereof
are determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.

     (17) NOTICES. All notices and other communications provided to any party
hereto under this Agreement shall be in writing or by telex or by facsimile and
addressed or delivered to such party at their addresses as follows:

IF TO THE PLEDGOR:

c/o Boston Capital Corporation
One Boston Place
Boston, MA 02108
Attn: Marc N. Teal
Fax: (617) 624-8999

                                       10
<Page>

With a copy to:

Nixon Peabody LLP
101 Federal Street
Boston, Massachusetts  02110
Attn: John H. Cornell III, Esq.
Fax:  (617) 345-1300

IF TO THE PLEDGEE:

c/o Boston Capital Corporation
One Boston Place
Boston, MA 02108
Attn: Marc N. Teal
Fax: (617) 624-8999

With a copies to:

Nixon Peabody LLP
101 Federal Street
Boston, Massachusetts  02110
Attn: John H. Cornell III, Esq.
Fax:  (617) 345-1300

and

Holland & Knight LLP
10 St. James Avenue
Boston, Massachusetts  02116
 Attn: William F. Machen, Esq.
Fax:  (617) 523-6850

                                       11
<Page>

Any notice, if mailed and properly addressed with postage prepaid, shall be
deemed given three Business Days after being sent; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answer back
confirmed in the case of telexes. The Pledgor and the Pledgee may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto.

     (18) SECTION TITLES. The Section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.

     (19) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.

     (20) PUBLIC OFFERING. Pledgee acknowledges that the Borrower filed a
registration statement on Form S-11 under the Act with the Securities and
Exchange Commission on September 2, 2003 relating to a public offering (the
"Offering") of up to 31,500,000 shares of the common stock, $.001 par value per
share of Borrower. Nothing in this Agreement shall be deemed to restrict the
Offering, which is expressly contemplated by the Pledgee and Pledgor.

     (21) CERTAIN UNDERLYING MORTGAGE INDEBTEDNESS. Pledgee acknowledges that
the Borrower owns, indirectly through one or more of its Subsidiaries, interests
in real estate which is subject to the mortgage indebtedness from institutional
lenders (the "Underlying Mortgage Loans"). Anything to the contrary in this
Agreement, the Loan Agreement, or any instrument or agreement required hereunder
or contemplated by the Loan Agreement notwithstanding, in the event that the
Pledgee seeks to exercise its rights as a secured party under this Agreement, in
no event shall Pledgee take or cause Borrower to take any action which violates
the Underlying Mortgage Loans or would result in additional liability of the
"key principals" or "non-recourse carve-out" guarantors under the Underlying
Mortgage Loans. A pledge or transfer in violation of transfer restrictions
imposed by the Underlying Mortgage Loans would result in guarantor liability and
a summary of certain of these restrictions is attached hereto as EXHIBIT C. In
the event that the Pledgee seeks to exercise its rights as a secured party under
this Agreement, Boston Capital Holdings Limited Partnership agrees to enter into
an advisory agreement with Pledgee or its designee, or take other action
reasonably requested by Pledgee to organize a limited partnership, limited
liability company or other entity in order to assume ownership of of the Pledged
Collateral (other than Released Property Investments) and otherwise cooperate in
structuring ownership of the Pledged Collateral in manner most advantageous to
Pledgee with a view toward compliance with the transfer restrictions imposed by
the Underlying Mortgage Loans.

     (22) RELEASES OF COLLATERAL. Upon the initial or any subsequent closing
of the initial public offering of shares in Pledgor and at the written election
of the Pledgor, the Lender shall release its security interest in a portion of
the Collateral constituting Pledgor's interest in a Property Investment,
including without limitation Borrower's interest in any of the Issuers, upon
repayment of all Loans, including any Prior Loans, made with respect to such
Issuer together with any accrued and unpaid Base Interest thereon as set forth
in the Loan Agreement, provided that there has not occurred and is not then
continuing any Default or Event of Default.

                                       12
<Page>

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       13
<Page>

     IN WITNESS WHEREOF, this Pledge Agreement has been duly executed under seal
as of the date first written above.

                                    PLEDGOR:

                                    BOSTON CAPITAL REAL ESTATE
                                    INVESTMENT TRUST, INC

                                    By:/S/ JEFFREY H. GOLDSTEIN
                                       ----------------------------------
                                       Name: Jeffrey H. Goldstein
                                       Title: President

[SEAL]

                                    PLEDGEE:

                                    BCP FUNDING, LLC

                                    By:/S/ JEFFREY H. GOLDSTEIN
                                       ----------------------------------
                                       Name: Jeffrey H. Goldstein
                                       Title: Senior Vice President and
                                               Treasurer of Boston Capital
                                               Partners II Corporation, sole
                                               General Partner of Boston Capital
                                               Companion Limited Partnership,
                                               Sole Member

The undersigned hereby execute this Agreement for purposes of agreeing to be
bound by Section 21.

                                    BOSTON CAPITAL HOLDINGS LIMITED
                                    PARTNERSHIP

                                    By:    Boston Capital Partners Corporation,
                                           its sole General Partner

                                    By:/S/ JEFFREY H. GOLDSTEIN
                                       ----------------------------------
                                       Name: Jeffrey H. Goldstein
                                       Title: Senior Vice President

                                       14
<Page>

                                    EXHIBIT A
                             to the Pledge Agreement

     Attached to and forming a part of that certain Pledge Agreement (LLC/LP
Shares) dated as of May 31, 2003 between BCP Funding LLC, as Pledgee and Boston
Capital Real Estate Investment Trust, Inc., as Pledgor.

<Table>
<Caption>
             ISSUER                                      TYPE OF INTEREST                     PERCENTAGE INTEREST
             ------                                      ----------------                     -------------------
<S>                                           <C>                                             <C>
BCMR Seattle, A Limited Partnership, a        Limited partner interest                         99%
Massachusetts limited partnership

BCMR Jacksonville, LLC, a Delaware            Limited liability company member interest       100%
limited liability company

BCMR Portland, LLC                            Limited liability company member interest       100%
</Table>

<Page>

                                    EXHIBIT B
                             to the Pledge Agreement

     Attached to and forming a part of that certain Pledge Agreement (LLC/LP
Shares) dated as of May 31, 2003 between BCP Funding LLC, as Pledgee and Boston
Capital Real Estate Investment Trust, Inc., as Pledgor.

<Table>
<Caption>
             ISSUER                         PRINCIPAL AMOUNT                  DATE OF NOTE               MATURITY DATE
             ------                         ----------------                  ------------               -------------
<S>                                  <C>                                  <C>                        <C>
None                                 None                                 None
</Table>

<Page>

                                    EXHIBIT C
                             to the Pledge Agreement

     Attached to and forming a part of that certain Pledge Agreement (LLC/LP
Shares) dated as of May 31, 2003 between BCP Funding LLC, as Pledgee and Boston
Capital Real Estate Investment Trust, Inc., as Pledgor.

       SUMMARY OF CERTAIN TRANSFER RESTRICTIONS IMPOSED BY THE UNDERLYING
                                 MORTGAGE LOANS

          1.  PORTLAND/SALT LAKE. Boston Capital Real Estate Investment Trust,
              Inc (the "REIT") is not a key principal or guarantor under the
              mortgage loan documents for the Portland/Salt Lake portfolio. The
              member interests in BCMR Portland, LLC may be transferred or
              pledged to any entity under common control with Boston Capital or
              any entity which is advised pursuant to a definitive arms length
              bona fide investment advisory agreement by Boston Capital or a
              Boston Capital affiliate. BCMR Portland, LLC has agreed with the
              non-recourse carve-out Guarantor not to take any action which
              would cause liability under his guaranty. A pledge or transfer in
              violation of transfer restrictions in the mortgage loan would
              result in guarantor liability.

          2.  SEATTLE. The REIT is neither a guarantor nor a key principal under
              the mortgage loan documents for the Seattle portfolio. Since the
              Investor is a limited partnership, the limited partner interest
              may be pledged or transferred without restriction. There is no
              requirement that the interest be transferred to a Boston Capital
              affiliate or entity advised by Boston Capital. If, as is
              contemplated, the limited partnership is replaced with an LLC and
              the role of BCMR Special, Inc. is eliminated, lender consent will
              be required, but there is no reason to believe that it should not
              be obtained. If ownership is transferred to an LLC then it is
              likely that the Lender will impose transfer and pledge
              restrictions similar to those in the Portland/Salt Lake portfolio.
              BCMR Seattle, A Limited Partnership and BCMR Special, Inc have
              agreed with the non-recourse carve-out Guarantor not to take any
              action which would cause liability under his guaranty. A pledge or
              transfer in violation of transfer restrictions in the mortgage
              loan would result in guarantor liability.

          3.  JACKSONVILLE. The REIT is a key principal and guarantor of the
              non-recourse carve-outs under the mortgage loans for two of the
              three properties in the Jacksonville portfolio. Boston Capital
              Holdings, L.P. or an Affiliate must continue to be the be the sole
              Advisor and own at least 51% or more of the interests in the REIT.
              Up to 49% of the interests in BCMR Jacksonville, LLC may be
              transferred, provided that the REIT must at all times remain the
              managing member of the LLC with all decision making rights. There
              is no requirement that the 49% interest be transferred to a Boston
              Capital affiliate or entity advised by Boston Capital. A pledge or
              transfer of more than a 49% interest would require lender consent
              even if the interests transferred to a

<Page>

              Boston Capital affiliate or entity advised by Boston Capital. BCMR
              Portland, LLC has agreed with the other non-recourse carve-out
              Guarantors not to take any action which would cause liability
              under their guarantees. A pledge or transfer in violation of
              transfer restrictions in the mortgage loan would result in
              guarantor liability.

                                        2
<Page>

                                        3

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