U.S. Economic and Institutional ApartmentMarket Overview and Outlook

Special Client WebcastOctober 13, 2011

A boutique brokerage platform dedicated to serving the needs of institutional and major

private multifamily investors.

MISSION STATEMENT “At Institutional Property Advisors, our mission is to help

institutional and major private investors maximize returns and achieve their broader objectives through market analysis, acquisition, management and sale of multifamily assets.”

INSTITUTIONAL MULTIFAMILY ADVISORS

Will BalthropeTexas

John C. BrownAtlanta

Gregory S. HarrisSouthern California

Ronald Z. HarrisSouthern California

Still Hunter, IIISouth Florida

Stanford W. JonesNorthern California

Peter K. KatzPhoenix

Evan P. KristolSouth Florida

Jamie B. MayCentral &

Southwestern Florida

Victor W. NollettiNortheast/

Mid Atlantic

Philip SaglimbeniNorthern California

Salvatore SaglimbeniNorthern California

Steward I. WestonSouthern California

Steve B. WittenNortheast/

Mid Atlantic

ECONOMIC OVERVIEW and OUTLOOK

Retail Sales excl. auto & gas 5% above pre-recession peak

The Private Sector added 1.78 million jobs in the past 12 months

Worker Productivity up 8% from pre- recession levels

Corporate Profits 17% above previous peak from 3Q06

Exports expand 7.3% annually, make up 13% of GDP compared to 2% contributed by residential investment

Oil prices down near $80 per barrel range

U.S. GDP higher than 2006 levels

10-Year Treasury at 2.08%

Core Inflation at 1.95% compared to 2.4% in 2007

2011 Economic Tug-of-WarPositives Headwinds

Debt Ceiling Contention and credit downgrade lowers global confidence as Public Debt reaches 96% of GDP

Market Volatility Index (VIX) up 40% since August 1 to 33.0

Unemployment Rate at 9.1% compared to 5% in 2007

Underemployment Rate at 16.5%

Consumer Confidence is now 60% below pre-recession peak

Single-Family Home Sales 29% below the 2005 peak

Single-family Home Prices down 29% from the 2005 peak

Eurozone Crisis/Uncertainty persist (geopolitical, commodity prices)

As of October 10, 2011Sources: Marcus & Millichap Research Services, BLS, BEA, ISM, U.S. Census Bureau

U.S. Retail Sales Have Recovered From Dramatic Drop – Further Growth Hindered

* Through AugustSources: Marcus & Millichap Research Services, U.S. Census Bureau

Y-o-

Y C

hang

e

$180

$200

$220

$240

$260

$280

01 03 05 07 09 11*

Ret

ail S

ales

(Bil.

)

Long-Term Total Retail Sales Monthly Retail Sales Excl. Auto and Gas

Rec

essi

ons

-15%

-10%

-5%

0%

5%

10%

15%

20%

71 75 79 83 87 91 95 99 03 07 11*

+5%

Capital Spending by Corporate America Key to Sustainable Recovery – Profit Trend Positive Indicator

-30%

-15%

0%

15%

30%

2000

Q220

01Q2

2002

Q220

03Q2

2004

Q220

05Q2

2006

Q220

07Q2

2008

Q220

09Q2

2010

Q220

11Q2

$0

$500

$1,000

$1,500

$2,000

Corporate ProfitsFixed Investment in Equipment and Software

YOY

Cha

nge

in In

vest

men

t

Sources: Marcus & Millichap Research Services, BEA

Corporate Profits (B

illions)

U.S. Employment Gains Have been Broad YOY Sector Change Through September 2011

Sources: Marcus & Millichap Research Services, BLS

U.S. Employment Sectors Absolute Change % Change

Prof. & Business Services 561,000 3.4%Education & Health Services 450,000 2.3%Trade, Transport & Utilities 325,000 1.3%Manufacturing 196,000 1.7%Leisure & Hospitality 120,000 0.9%Natural Resources & Mining 80,000 11.0%Other Services 64,000 1.2%Construction 37,000 0.7%

Total Gain 1,833,000 Financial Activities (13,000) -0.2%Information (41,000) -1.5%Government (289,000) -1.3%

Total Loss (343,000)

-900

-450

0

450

900

Mar-08

Sep-08

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Non-Farm Employment

Reduced Reliance on Temporary Staff A Positive Trend, but Weak Hiring Momentum a Major Concern

-30%

-15%

0%

15%

30%

1991

1995

1999

2003

2007

2011

*-6%

-3%

0%

3%

6%

Temporary EmploymentNon-farm Employment

Tem

pora

ry E

mpl

oym

ent (

Y-o-

Y C

hang

e)

* Through SeptemberSources: Marcus & Millichap Research Services, BLS

Non-farm

Employm

ent (Y-o-Y Change)

Temporary Non-Farm2008-2009: -652,800 -8.7M2010: +310,300 +900,000Ann.2011*: +106,930 +1.4M

Net

Job

Cha

nge

(000

’s)

2011 YOY Employment Ranking by Metro Absolute Change

Top 15 Markets

YOY*Abs Chg

YOY*% Chg

Houston 69,700 2.7%

Dallas-Ft. Worth 49,500 1.7%

New York 42,800 1.2%

Boston 37,873 1.6%

Seattle-Tacoma 31,700 1.9%

Phoenix 29,500 1.8%

San Jose 28,300 3.3%

Detroit 26,400 1.5%

Minneapolis 24,200 1.4%

Milwaukee 19,300 2.4%

San Diego 15,600 1.3%

New Jersey 15,300 0.4%

San Antonio 15,100 1.8%

St. Louis 14,600 1.1%

Miami 14,600 1.5%

U.S. Total 1,259,000 1.0%

Bottom 15 Markets

YOY*Abs Chg

YOY*% Chg

Jacksonville 4,200 0.7%

Charlotte 4,100 0.5%

Los Angeles 3,900 0.1%

Sacramento 3,600 0.4%

Oakland-East Bay 2,100 0.2%

Fort Lauderdale 2,000 0.3%

New Haven-FC 741 0.1%

Las Vegas -300 0.0%

Denver -2,800 -0.2%

Washington, D.C. -4,400 -0.1%

Columbus -5,600 -0.6%

Inland Empire -9,200 -0.8%

Indianapolis -10,300 -1.2%

Philadelphia -15,200 -0.6%

Atlanta -32,700 -1.4%

U.S. Total 1,259,000 1.0%

* Through August 2011Sources: Marcus & Millichap Research Services, BLS

20-34 Year Olds Share of Job Losses/Gains

* Through SeptemberSources: Marcus & Millichap Research Services, BLS

All Other Age Groups

63%

20-34 Yr Olds37%

All Other Age Groups

32%

20-34 Yr Olds68%

2008-2009 Share of Job Losses 2010-2011* Share of Job Gains

-5.2 Million

1.4 Million-3.1 Million

0.7 Million

$150

$175

$200

$225

$250

2003

2004

2005

2006

2007

2008

2009

2010

2011

*

Single-Family Condo

* Through AugustSources: Marcus & Millichap Research Services, National Association of Realtors

Y-O-Y Change

-5%-3%

Med

ian

Pric

e (0

00s)

Single-Family Housing and Condo Market Yet to Enter Sustainable Recovery

-40%

-20%

0%

20%

40%

60%

80%

2003

2004

2005

2006

2007

2008

2009

2010

2011

*

Single-Family Condo

+8%

+20%

Y-O-Y Change

Year

-Ove

r-Ye

ar C

hang

e

Median Home Prices Existing Home Sales

Une

mpl

oym

ent R

ate

and

Cor

e C

PI

* Unemployment rate through September, CPI and capacity utilization through AugustSources: Marcus & Millichap Research Services, U.S. Census Bureau, BLS, Federal Reserve Board

Capacity U

tilizationLimited Pricing Power, Weak Housing, Stagnant Wages: Keeping Short-Term Inflation at Bay, Giving the Fed Time

0%

3%

6%

9%

12%

15%

71 75 79 83 87 91 95 99 03 07 11*65%

70%

75%

80%

85%

90%

Unemployment Rate Core CPI Capacity Utilization

-6%

-3%

0%

3%

6%

Curren

t*

1981

-1982

1973

-1975

2001

1990

-1991

Recession Job Losses Recovery Year 1Recovery Year 2Recovery Year 3

Employment Growth to Gain Momentum in 2011 and 2012 – Even If Just Catching up to Long-Term Average

* Next year = 2010 job growth, Following 2 years = 2011-2012 job growthEmployment growth based on employment for the 12 months after the contraction periodSources: Marcus & Millichap Research Services, BLS

Cha

nge

Historical Avg. Emp. Growth

1.7M0.9M

2.5M

APARTMENT MARKET FUNDAMENTALS

OVERVIEW and OUTLOOK

U.S. Apartment Vacancy by Region 3Q 2011 Rate and YOY Change

Sources: Marcus & Millichap Research Services, Reis

West 4.9%

-150 Bps

Midwest 5.4%

-160 Bps

Southwest 7.1%

-260 Bps

South Atlantic

6.2% -220 Bps

Northeast 4.1%

-90 Bps

-3.0

-1.5

0.0

1.5

3.0

1Q00

3Q00

1Q01

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

1Q09

3Q09

1Q10

3Q10

1Q11

3Q11

-100

-50

0

50

100Job Growth Net Absorption

Indu

stri

al S

tart

s (in

mill

ions

)Quarterly Job Growth

vs. Apartment Units AbsorbedJo

b G

row

th (M

illio

ns)

Sources: Marcus & Millichap Research Services, Reis, BLS

Units A

bsorbed (000s)

U.S. Apartment Absorption by Class

-100

-50

0

50

100

150

200

00 01 02 03 04 05 06 07 08 09 10 11*

Class A Class B/C

Num

ber o

f Uni

ts (0

00s)

* Trailing 12-month period through 3QSources: Marcus & Millichap Research Services, Reis

Apartment Market Improvement Expected to Continue; Recovery Pace Moderating

0

50

100

150

200

250

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11*

11**

12**

0%

2%

4%

6%

8%

10%Completions Class A Vacancy Class B/C Vacancy

Num

ber o

f Uni

ts (0

00s)

Average Vacancy R

ate

* Vacancy as of 3Q11, Completions 3Q YTD annualized;** ForecastSources: Marcus & Millichap Research Services, Reis

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

00 01 02 03 04 05 06 07 08 09 10 11* 12*

Class A Class B/C

Y-o-

Y C

hang

e

Sources: Marcus & Millichap Research Services, Reis

Apartment Effective Rent Trends

* Through 3Q 2011 annualized; 2012 Forecast

National Apartment Rank by Metro Class A Vacancy Rate

Top 15 Metros Vacancy

YOY Bps.Chg.

New Haven-FC 2.0% 20

New York 2.8% -30

Minneapolis 3.3% -240

San Jose 3.3% -120

Louisville 3.8% -140

Milwaukee 3.8% -210

Portland 3.9% -220

New Jersey 4.3% -90

Oakland-East Bay 4.4% -70

Cleveland 4.6% -170

San Francisco 4.6% -130

Columbus 4.7% -170

Sacramento 4.7% -170

Dallas-Ft. Worth 4.8% -320

San Diego 4.9% -150

U.S. Average 5.6% -220

Bottom 15 Metros Vacancy

YOY Bps.Chg.

Austin 5.9% -380

Indianapolis 5.9% -280

Charlotte 6.0% -380

Salt Lake City 6.1% -100

Inland Empire 6.1% -170

St. Louis 6.1% -180

Palm Beach 6.2% -150

Phoenix 6.6% -310

Orlando 6.7% -250

Atlanta 6.8% -260

San Antonio 6.8% -280

Las Vegas 7.5% -310

Jacksonville 7.7% -430

Tucson 7.9% -270

Houston 8.0% -330

U.S. Average 5.6% -220

All vacancies as of 2Q 2011Sources: Marcus & Millichap Research Services, Reis

National Apartment Rank by Metro Class A – Class BC Vacancy Rate Spread

Top 15 Metros

Class A Vac.

Class B/C Vac.

Bps.Spread

Columbus 4.7% 9.9% 520

Atlanta 6.8% 10.8% 400

Jacksonville 7.7% 11.3% 360

Oklahoma City 5.1% 8.6% 350

Phoenix 6.6% 9.8% 320

Houston 8.0% 11.2% 320

Charlotte 6.0% 8.3% 230

Dallas-Ft. Worth 4.8% 7.1% 230

Tampa 5.5% 7.8% 230

Orlando 6.7% 8.7% 200

Palm Beach 6.2% 8.1% 190

Indianapolis 5.9% 7.7% 180

Tucson 7.9% 9.6% 170

Detroit 5.1% 6.7% 160

Cincinnati 5.0% 6.5% 150

U.S. Average 5.6% 6.1% 50

All vacancies as of 2Q 2011Sources: Marcus & Millichap Research Services, Reis

Bottom 15 Metros

Class A Vac.

Class B/C Vac.

Bps.Spread

Denver 5.0% 4.7% -30

Oakland-East Bay 4.4% 4.1% -30

Chicago 5.5% 4.9% -60

Seattle-Tacoma 5.4% 4.8% -60

Orange County 5.1% 4.4% -70

Minneapolis 3.3% 2.6% -70

Portland 3.9% 3.2% -70

Washington, D.C. 5.4% 4.5% -90

Philadelphia 5.2% 4.2% -100

Inland Empire 6.1% 5.1% -100

Salt Lake City 6.1% 5.0% -110

Boston 5.1% 3.9% -120

San Francisco 4.6% 3.2% -140

Los Angeles 5.4% 3.9% -150

San Diego 4.9% 3.0% -190

U.S. Average 5.6% 6.1% 50

Alan W. GeorgeExecutive Vice President & CIO

Equity Residential

Thomas W. ToomeyPresident & CEO

UDR, Inc.

INSTITUTIONAL APARTMENT INVESTMENT

TRENDS and STRATEGIES

Commercial Delinquency Rates by Lender Type

0%

3%

6%

9%

12%

4Q19

964Q

1997

4Q19

984Q

1999

4Q20

004Q

2001

4Q20

024Q

2003

4Q20

044Q

2005

4Q20

064Q

2007

1Q20

082Q

2008

3Q20

084Q

2008

1Q20

092Q

2009

3Q20

094Q

2009

1Q20

102Q

2010

3Q20

104Q

2010

1Q20

112Q

2011

CMBS (30+ days and REO) Life Companies (60+ days)Fannie Mae (60+ days) Freddie Mac (90+ days)Banks & Thrifts (90+ days)

Del

inqu

ency

Rat

es

Delinquency rates at the end of each periodSources: Marcus & Millichap Research Services, Mortgage Bankers Association

Apartment Mortgage Originations by Dollar Volume

3% 5%4% 6% 7%7%11%

18%3%

3%

8%

6%

9%

7%5%

9%

1%

1%

1%

2%78%

62%

44%

0%

25%

50%

75%

100%

2009 2010 1H 2011

Govt. Agency

CMBS

Insurance

Nat'l Bank

Private/Other

Reg'l/Local Bank

Non-Bank Financial

Int'l Bank

Sources: Marcus & Millichap Research Services, Real Capital Analytics

Perc

ent o

f Tot

al

Apartment Investment Trends Dollar Volume

* YTD 3Q EstimateSources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics

$0

$40

$80

$120

$160

00 01 02 03 04 05 06 07 08 09 10 YTD3Q10

YTD3Q11*

$1M - $9.99M $10M - $19.99M $20M+

$120.9 Bil.

$45.0 Bil.

$22.9 Bil. $26.8 Bil.

$41.4 Bil.

Tota

l Dol

lar V

olum

e (B

il.)

-140%

-70%

0%

70%

140%

$1-$10M $10-$20M $20M+

2003-2009 2010 2011

Y-o-

Y C

hang

e

Sources: Marcus & Millichap Research Services, Real Capital Analytics, CoStar Group, Inc.

U.S. Apartment Sales Activity Trailing 12 months as of Q3

-160%

-80%

0%

80%

160%

$1-$10M $10-$20M $20M+

2003-2009 2010 2011

Change in Number of Transactions Change in Dollar Volume

Y-o-

Y C

hang

e

$50

$75

$100

$125

$150

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

*

$1M-$10M $10M-$20M $20M+

Med

ian

$/U

nit (

Ths.

)Apartment Pricing Trends by Tranche

Median $/Unit

* Through 3Q 2011Sales $1 million and greaterSources: Marcus & Millichap Research Services, Costar Group, Inc., Real Capital Analytics

5%

6%

7%

8%

9%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

*

$1M-$10M $10M-$20M $20M+

Ave

rage

Cap

Rat

e

* Through 3Q 2011Sales $1 million and greaterSources: Marcus & Millichap Research Services, Costar Group, Inc., Real Capital Analytics

Apartment Cap Rate Trends by Tranche

U.S. Apartment Cap Rates by Class

4%

5%

6%

7%

8%

9%

00 01 02 03 04 05 06 07 08 09 10 11*

Class AClass B/CPreferred Markets

Ave

rage

Cap

Rat

e

* Through 3Q 2011 EstimateSales $1 million and greaterAssumes properties less than 10 years old at time of sales to be Class A,properties older than 10 years assumed to be Class B/CPreferred Markets Include: NY, DC, BOS, SD, LA, OC, SJ, SF, SEASources: Marcus & Millichap Research Services, CoStar Group, Inc.

5%

6%

7%

8%

9%

3Q 04

1Q 05

3Q 05

1Q 06

3Q 06

1Q 07

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

3Q 10

1Q 11

3Q 11

*

Primary Secondary Tertiary

Ave

rage

Cap

Rat

e

* Preliminary EstimateSales $5 million and greaterSources: Marcus & Millichap Research Services, Real Capital Analytics

Re-Pricing of Risk by Quality Reflected in Apartment Cap Rate Trends by Market

U.S. Apartment Buyer Composition $20m+

4% 2% 2% 2% 4% 5% 2% 2%

9%6%

9% 9% 8%11% 5% 13%

20%

17%17%

15%11%

6%

12%

6%

20%

20%3%2%

3%3%

5%

3%

8%

4%

7%19%

17%18%

34% 44% 26%

9%

22%

21%

49%56% 52%

41%35%

44%

67%

39%30%

3%0%

25%

50%

75%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011*

Private

Institutional

Foreign

Public

Equity Fund

User/Other/Unknown

* Through AugustSales $20 million and greaterSources: Marcus & Millichap Research Services, Real Capital Analytics

Perc

ent o

f Sal

es V

olum

e

U.S. Public REIT Valuation Indices vs. S&P 500

0

225

450

675

900

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11*

S&P 500All REITsApartment REITs

* Through October 11Index: December 1993 = 100Sources: Marcus & Millichap Research Services, NAREIT, Standard & Poor’s

Inde

x (D

ec. 1

993

= 10

0)

Peak-Trough Trough-CurrentS&P 500: -51% +71% All REITs: -68% +129%Apt. REITs: -68% +214%

Apartment Cap Rate Trends Average Cap Rates vs. 10-Year Treasury

0%

3%

6%

9%

12%

2001

2003

2005

2007

2009

2011

*

Class A Cap Rate10-Year Treasury Rate

Ave

rage

Rat

e

10-Yr Treasury Long-Term Avg.

Cap Rate Long- Term Avg.

400

bps 90

bps

400

bps

0%

3%

6%

9%

12%

2001

2003

2005

2007

2009

2011

*

Class B/C Cap Rates10-Year Treasury Rate

Ave

rage

Rat

e

Cap Rate Long- Term Avg.

550

bps

450

bps450

bps 12

0 bp

s

10-Yr Treasury Long-Term Avg.

360

bps

* Cap rates estimated through 3Q 2011, Treasury rate through October 10Includes sales $1M+Sources: Marcus & Millichap Research Services, CoStar Group, Inc.

U.S. Economic and Institutional ApartmentMarket Overview and Outlook

Special Client WebcastOctober 13, 2011